Category Archives: Obamacare Affordable Care Act

Obamacare California: The Big Picture For Coverage In California

California Marketplace

What is really happening in the Obamacare California Marketplace?

By Marc Derendinger

Let me start by framing this up in a big picture:  The changes to the California health insurance industry can be characterized as a restructuring of the existing market, not a destruction.  Under the new structure (Obamacare) California private insurers continue to operate and will offer services through the following channels:

  • Existing distribution network
  • Private healthcare exchanges
  • Public healthcare exchanges (individual & small business)

It’s news to many, but there is truly no “government Obamacare plan” in California. In some respects, this is a private market solution to public needs:  For example, private health plan insurers who participate in the public exchanges are serving three markets needs:

  1. Applicants who earn over 400% of the Federal Poverty Level (FPL)
  2. Applicants who earn between 139%- 400% of FPL
  3. Medi-Cal (up to 138% of FPL) 

In the new Obamacare California health plan structure, the healthcare exchange serves the function of “a starting point” for all 3 markets, and can be useful later in moving families off Medi-Cal and transitioning them back to the “premium-paying” world. It does not replace the private market, rather it complements it. Under the current system, it is a costly leap for Medi-Cal recipients to enter the private pay insurance world.  Time will tell if the new structure helps reduce costs or is negated by the cost of new subsidies.

Do you qualify for lower rates with a Premium Assistance Subsidy?  Find out here.

There are additional details covered by the Obamacare Rate Guide and California Buyer Guide, but you should also seek out your local Certified Insurance Agent. There is no additional cost and the benefit to you is access to professional guidance, as you use your new plan or in the event you wish to change plans later.   Compare the new health plans here:  CoveredCA-ComparisonChart and Paper Application.

Editor’s Note:  Marc Derendinger has 30-years experience in the California health insurance marketplace and serves on the agent advisory group for the State of California Department of Healthcare Services California Partnership for Long-term Care.  His insurance brokerage is located in San Jose and advises many well-known organizations e.g. San Jose Police Officers’ Association, City of Campbell, City of Santa Clara, plus individuals and family businesses throughout Northern California.California License No. 0563986

 

 

 

 

 

 

Coverage California ACA Buyer Guide: Covered California

The Regular Open Enrollment (2015) is Complete, but the 2016 Open Enrollment begins November 1st

By Marc Derendinger  

The purpose of this Coverage California Buyer Guide is to help individuals, families, and early retirees take full advantage of the Affordable Care Act (ACA) Open Enrollment and Special Enrollment seasons, and avoid mistakes that could cost you money and opportunity under Covered California (Obamacare) and the private market.  This is a good reference article, so retain it until you need it.

Remember, Open Enrollment begins November 1st, but you may qualify to enroll sooner under a Qualifying Event Special Enrollment provision of the Affordable Care Act (ACA).  We published an introductory article about Special Enrollments here.

Buyer beware, because changes are coming to certain PPO networks.  If you did not use a Certified Agent last year, now is a good time to find one…they are a free service of Covered California and the good ones can help guide you through the network provider “game of hide & seek” that is being played by California health insurance companies, at the expense of California residents.

Health plans take on a new design structure, with new metallic” plans. (If you already know about metal plans and want to skip ahead to more advanced topics in this series, click here)

Unless you are insulated from all these changes through your participation in a Grandfathered plan, by 2014-2016 you will start to see insurance talk about “metals,” including Kaiser members (for more information on Obamacare vs. Kaiser, Click Here.)   For example, Bronze plans cover an average of 60% of costs, meaning that, on average, you will be responsible for paying 40% of your health care costs.  Also, most services covered by the Bronze plan are subject to a deductible or amount you must pay out-of-pocket before the plan will cover costs.

Download a PDF of the Metallic plans here:  CoveredCA Health Plan Benefits Summary

While the Bronze plan has the cheapest monthly premium, Silver Plans provide a lower risk of out-of-pocket costs, making it a better value for most people. Silver 70 plans cover an average of 70% of costs, meaning that, on average, you will be responsible for 30% of your healthcare costs.  Most common covered services under the Enhanced Silver Plan do not have a deductible.

The higher the metal value, the higher the value of benefits covered under the plan.  Hence, Gold plans expect to cover an average of 80% of the cost of medical services and Platinum, an average of 90%.  Higher benefits also lead to higher premiums, so talk to a certified professional to analyze all your options.  Under California law, only Certified Insurance Agents can compare your options under Medi-Cal vs. Covered California public exchanges vs. private market plans.  There is no added cost when you use these experts.

Insurers Will Battle Within Metal Tiers

If you are looking to benefit from lower prices in a new competitive market, I suggest starting with the Silver Tier, where five insurance companies (in Santa Clara County) compete for your business (see our Obamacare Rate Guide for examples).  Since they offer similar plans within the metal tier, companies are forced to compete on price and provider network.

For additional employer requirements under the Affordable Care Act legislation click here.  For rate comparisons of new group health plans, click here.  For non-group e.g. individual family plans click this link.

Got questions? Frustrated with the Affordable Care Act?  Life’s too short to waste time with all this:  Request free consumer assistance from Certified Insurance Agents, below:

https://coveragecalifornia.eventbrite.com/

Editor’s Note:  Marc Derendinger has 30-years experience in the California health insurance marketplace and serves on the agent advisory group for the State of California Department of Healthcare Services California Partnership for Long-term Care.  His insurance brokerage is located in San Jose and advises many well-known organizations e.g. San Jose Police Officers’ Association, City of Campbell, City of Santa Clara, plus individuals and family businesses throughout Northern California.California License No. 0563986

 

 

 

 

 

Keeping It Simple: Why Obamacare Is Not Delayed e.g. OMB 1210-0149 Healthcare Exchange Disclosure Notice

 

[Attention: Small Employers should read about huge penalties beginning August 2015]

[Attention: Anthem Blue Cross plan holders should read Anthem cancels CovCA plans for majority of California beginning 2018]

This is a form 1210-0149 update to a previously published Coverage California article  (for the latest Coverage California article about looking for affordable coverage, click here), and the update focuses on some key points in distributing a special notice to employees i.e. the so-called Obamacare Healthcare Exchange disclosure notice omb no. 1210-0149, which was required by almost all employers by October 1, 2013.  Don’t overlook the fact that on an ongoing basis, it must be distributed to new employees in a timely manner e.g. 14 days.  Read on or get help by registering with Eventbrite…

As the individual marketplace continues to deteriorate, the small group market has gained a firmer footing, including stable PPO networks and easier participation rules with Kaiser and traditional PPO plans.  Is it time to review available small group plans?   Reserve your appointment early for Open Enrollment, which begins this November.  Find local assistance in San Jose, Santa Clara and the San Francisco bay area or via telephone, throughout Northern and Southern California..

or view online pricing, free of charge

Key Points For Small Business Employers (Technical Notice 2013-02)

VSP Individual Plan Application Link

VSP Quotations

Employers must provide a notice of coverage options to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status.  This means just about everybody:

  • Current employees:  Employers must provide this notice by October 1, 2013.
  • New Hires:  Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013.
  • Timing: The notice should be provided within 14 days of an employee’s start date.
  • Distribution Method: The notice may be provided by 1st class mail or it may provided electronically if the requirements of the Department of Labor’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met.

 Download Healthcare Exchange Notice OMB 1210-0149

  1. Employers with an existing health plan must use this form:
  2. Employers with no existing health plan must also comply, and would use this alternate plan.
  3. In Spanish (no existing health plan) and Spanish (existing health plan)español

What happens if you do not comply?  Are there penalties for noncompliance with this healthcare exchange notice rule?  On September 11, 2013 the Department of Labor EBSA website provided an update to answer this question.  While the short answer is there is no specific DOL penalty fine (currently) for failing to comply, that is not to say California law will let you off the hook so easily.  Play it safe and distribute the notice on time.

For additional employer requirements under the Affordable Care Act legislation click here.  For rate comparisons of new group health plans, click here.  For non-group e.g. individual family plans click this link.

Remember, Open Enrollment begins November 15th:  Changes are coming to certain PPO networks.  If you did not use a Certified Agent last year, now is a good time to find one.

Finally, some good news…

Announcing the new VSP Individual Plan, great for the self-employed who can often write-off the premiums (but usually not the cost of self-insuring vision care).

Watch the VSP’s new vision care video for Individuals, Families, Retirees, and especially, the self-employed:VSP Video

Small Biz Employers With Kaiser Plans Have 5pm, August 30, 2013 Deadline

This is an important reminder that Employers with 1 to 50 employees who sponsor a California Kaiser Permanente Group Health Plan have until 5:00pm PST Friday August 30, 2013 to file the Kaiser-Early-Renewal-Intent-Form.

 What Is The Kaiser Intention To Renew Early Form?

Simply stated, this form (Kaiser Small Business Form No. 60141913 (August 2013) informs Kaiser that you want 35 more days to think about their offer to change your anniversary date.   There is no commitment on your part.  We recommend you submit the form, as it changes nothing in your current arrangement with Kaiser, but it does buy you until October 4, 2013 to think about their offer.

 Which Employers Should Consider An Early Renewal?

  • Employers with a Non-Grandfathered Kaiser small group plan
  • And contract renewal dates in the first half of the year
  • And who have not made a prior renewal date change in 2013.

 I have Submitted The Form Already, What Happens Next?

Over the next few days (until October 4th), you have the opportunity to decide if you want to go through with a contract anniversary date change.  If you wish to proceed, then you must file an additional form by October 4, 2013, titled the Kaiser-Early-Renewal-Confirmation-Form, which confirms your intent to renew early for December 1, 2013.

 What Is The Advantage To Changing My Renewal Date?

First, employers with Grandfathered plan status probably should not change their anniversary date, unless your advisor/broker has recommended it.  All other eligible employers would consider the following factors:

  • Is your existing RAF (risk adjustment factor) 1.1 or .90?
  • Is it important to delay your renewal to keep costs down?
  • Is it not worth the hassle to delay the inevitable?

Remember, there are additional important issues to consider, and Kaiser warns that a group will bear all responsibility for its decision to accept the offer for early renewal including but not limited to the group’s compliance with the ACA and ERISA (see related story)..

Talk with your broker for answers, or leave us a comment at the end of the article.

Employers Dilemma- Early Renewal or Not?

A follow-up to this story was published in October can be be read here. Many insurance brokers (and insurers) are suggesting that Employers re-date the plan anniversary (aka “Early Renewal”) to delay certain aspects of Obamacare Affordable Care Act rules and possible penalties (see our related story). Is this a good idea?  Are there pros and cons to using a “plan anniversary date change” strategy?

At Coverage California, we present alternative points of view. The following article came from Benecomplink.com, which argues that merely changing the renewal date of the insurance policy, does not necessarily change the plan anniversary date under ERISA:

“Changing the renewal date on an insurance policy with the plan’s carrier does not change the plan year. Changing a renewal date to December may be allowed by the insurance company, but if the plan sponsor/employer does not change the plan year, their plan year may continue to be a calendar year. From a legal perspective, “plan year” is the year designated in the plan document. Plan years are set by board resolutions and reinforced by plan documents and the filing of 5500 forms.. ” [Full article available at Benecomplink]

 

Employer Plan administrators should seek professional advice from their advisors.  For a limited time, we offer a limited number of free Q&A sessions.  For details, refer to the Eventbrite invitation at this link::  Reserve Q&A time.

 

Public Exchange Notice- Employees Must Be Told

Employers Must Provide The Correct Public Exchange Notice to Employees

Employers must comply by providing the correct public exchange notice of coverage options to each employee, regardless of whether employees are part-time, full-time, enrolled or not enrolled at all.

Public Exchange Notice Disclosure Requirement

President Obama Signs Healthcare Legislation

[Related Story: Huge Penalties for Reimbursing employees for individual health insurance policies]

It is remarkable to note that the DOL public exchange notice disclosure forms read like a sales pitch to join the public exchange. Some industry observers have speculated about the motive behind this notice: Is it to provide neutral information on coverage options, or rather is it an attempt to raid plan participants and shift them to the public exchange?

“When key parts of the health care law take effect in 2014, there will be a new way to buy health insurance:  The Health Insurance Marketplace,” states a required regulatory notice, which all employees must receive from their employers beginning October 2013, as required by the Fair Labor Standards Act.

Regulatory notice OMB No. 1210-0149 goes on to disclose basic information about the new Health Insurance Marketplace, including how to save money on health insurance premiums in the marketplace etc.

As the individual marketplace continues to deteriorate, the small group market has gained a firmer footing, including stable PPO networks and easier participation rules with Kaiser and traditional PPO plans.  Is it time to review available small group plans?   Reserve your appointment early for Open Enrollment, which begins this November.  Find local assistance in San Jose, Santa Clara and the San Francisco bay area or via telephone, throughout Northern and Southern California..

View online pricing, free of charge

Sample Public Exchange Notice From DOL- 

To satisfy the content requirements for FLSA section 18B, employers may refer to the Department of Labor’s website www.dol.gov/ebsa/healthreform.   To save you some time from reading through the DOL website maze, I have included links below.  Note: There is one model for employers who do not offer a health plan and another model for employers who offer a health plan to some or all employees.  Employers may use one of these models, as applicable, or a modified version, provided the notice meets the content requirements described in Regulatory notice OMB No. 1210-0149.

The above public exchange notices are in PDF format. If you prefer an MS Word version for easy Edit & Print, use these versions: FLSAwithoutplans (employers who do not currently offer a plan) or FLSAwithplans (for employers who do have an existing medical plan).

There are additional requirements and upcoming ACA deadlines that affect small employer health plans: Read about them in a related article, 4 Actions Employers Must Complete By October 1st.

For additional employer requirements under the Affordable Care Act legislation click here.

 Finally, some good news…

Announcing the new VSP Individual Plan, great for the self-employed who can often write-off the premiums (but usually not the cost of self-insuring vision care).

Watch the VSP’s new vision care video for Individuals, Families, Retirees, and especially, the self-employed:VSP Video

4 Actions Employers Must Complete By October 1, 2013

Employers Must Act Soon (deadlines apply to all future new hires):

[Employers also read Huge Penalties for Reimbursing employees for their Individual Health Insurance Policies]

  1. This Department of Labor (DOL) regulation may surprise small employers who do not yet offer employee healthcare coverage:  The requirement hits them, too. Basically, the DOL requires that employers with as few as one employee hand out a disclosure form, even for 1099 employees. Further, the DOL has adopted different notices for different employer situations.  Make sure you are using the correct notice: Read more here.
  2. COBRA Notices- Amend existing COBRA notices to include new Department of Labor required language for employer COBRA disclosures.  Your COBRA administrator or vendor should be updating this notices.
  3. Move the money:  It is time to allocate monies you received in July, on behalf of your employees i.e. the Medical Loss Ratio (MLR) rebates.  Can you keep the refund?  Read our article about this very question.
  4. Download and properly distribute Summary Benefit Coverage forms by the appropriate deadline.  For a quick reference, download a free PDF Summary of SBC Requirements, which outlines employer requirements and deadlines. Kaiser employers read a related article here.

As the individual marketplace continues to deteriorate, the small group market has gained a firmer footing, including stable PPO networks and easier participation rules with Kaiser and traditional PPO plans.  Is it time to review available small group plans?   Reserve your appointment early for Open Enrollment, which begins this November.  Find local assistance in San Jose, Santa Clara and the San Francisco bay area or via telephone, throughout Northern and Southern California..

Eventbrite - Shopping For Obamacare And Better Covered California Insurance

or view online pricing, free of charge

Should Employer Keep Health Insurance Rebate?

Last year, Anthem Blue Cross of California started shipping health insurance rebate checks to employers and individuals, ahead of the August 1st deadline. Now, small business owners, bookkeepers, and human resource professionals are asking a lot of good questions about Obamacare in California::

Q. Who is eligible for a health insurance rebate?

A. Any subscriber who had an active, fully insured health insurance policy during the prior calendar year is eligible for a health insurance rebate, including subscribers who ended their coverage or started their coverage at any point during the current plan year

 

Q. If my company paid 100% of the insurance premiums, can we keep the full refund?

A. Generally yes, assuming the policyholder is the employer (e.g. not a trust) and premium payments can be sourced back to the employer (and if plan documents and other agreements don’t say anything to the contrary).  Refer to DOL Technical Release 2011-04 for more conditions.  http://www.dol.gov/ebsa/newsroom/tr11-04.html

 

Eventbrite - Shopping For Obamacare And Better Covered California Insurance

or view online pricing, free of charge

Q. If my company paid less than 100% of the insurance premiums, can we keep the full refund?

A. Existing guidance says no.  If the plan sponsor is the policyholder, determining the plan’s portion, if any, may depend on provisions in the plan or the policy or on the manner in which the plan sponsor and the plan participants have shared in the cost of the policy.  If the participants and the employer each paid a fixed percentage of the cost, a percentage of the health insurance rebate equal to the percentage of the cost paid by participants would be attributable to participant contributions, then any portion of a rebate constituting plan assets must be handled in accordance with the fiduciary responsibility provisions of Title I of ERISA.  http://www.dol.gov/ebsa/newsroom/tr11-04.html

 

Q. What if the employee refund is so insignificant, the refund amount is smaller than the cost to refund the money to participants?

A. Existing guidance says in deciding on an allocation method, the plan fiduciary may properly weigh the costs to the plan and the ultimate plan benefit as well as the competing interests of participants or classes of participants provided such method is reasonable, fair and objective.

Spend Your Health Insurance Rebate On A New Benefit

VSP Individual & Family Plan

For example, if a fiduciary finds that the cost of distributing shares of a rebate to former participants approximates the amount of the proceeds, the fiduciary may properly decide to allocate the proceeds to current participants based upon a reasonable, fair and objective allocation method.4 Similarly, if distributing payments to any participants is not cost-effective (e.g., payments to participants are of de minimis amounts, or would give rise to tax consequences to participants or the plan), the fiduciary may utilize the rebate for other permissible plan purposes including applying the rebate toward future participant premium payments or toward benefit enhancements.  http://www.dol.gov/ebsa/newsroom/tr11-04.html

 

Q. What are the MLR employee Refund Options for Employers

A. Department of Labor guidance suggests if a portion of your refund check belongs to employees, you have options:

1.  You may issue a refund check to the employee

2.  You may use the money to pay future premiums on behalf of the employee

3.  In some cases you may use the money to purchase new benefit enhancements

 

http://www.dol.gov/ebsa/newsroom/tr11-04.html

 

Q. How quickly must I distribute the employee’s share?

A. Department of Labor guidance emphasizes the importance of using the premiums “within three months of receipt by the policyholder” to avoid an additional level of compliance issues under ERISA.

http://www.irs.gov/uac/Medical-Loss-Ratio-(MLR)-FAQs

 

Q. Are rebate amounts a matter of public record?

A. The total amount insurers must pay in rebates becomes public information after the MLR report is filed with the Department of Health and Human Services (HHS). Please note that the rebate amounts paid to each employer or individual are not made public. However, regulations also provide that the issurers (usually the insurance company e.g. Anthem, Blue Shield) must provide notice of rebates, if any, to current group health plan subscribers.

http://www.dol.gov/ebsa/newsroom/tr11-04.html

 

Q. What are the tax implications of MLR insurance premium refunds?

A. The DOL refuses to take a position on tax implications, and refers everyone back to the IRS.  The IRS has issued a FAQ on this topic:  http://www.irs.gov/uac/Medical-Loss-Ratio-(MLR)-FAQs

 

As the individual marketplace continues to deteriorate, the small group market has gained a firmer footing, including stable PPO networks and easier participation rules with Kaiser and traditional PPO plans.  Is it time to review available small group plans?   Reserve your appointment early for Open Enrollment, which begins this November.  Find local assistance in San Jose, Santa Clara and the San Francisco bay area or via telephone, throughout Northern and Southern California..

Eventbrite - Shopping For Obamacare And Better Covered California Insurance

or view online pricing, free of charge