Category Archives: PPACA

3 Actions To Keep Affordable Health Coverage- Private Insurance

The previous articles covered Part I and Part II, and this final segment describes the 3rd of 3 Actions To Keep Affordable Health Coverage- Private Insurance. [Small Employers should read about huge penalties beginning August 2015]

  • Going directly to the insurance carrier (Kaiser Permanente, Anthem Blue Cross, Blue Shield of California, Cigna, HealthNet and others) is easier than going through Covered California and the prices are virtually identical under California law.
  • In our opinion, the only reason one would choose the Covered California exchange (Part II of story) over your 3rd option (private insurance) is the likelihood of receiving a subsidy or Advance Premium Tax Credt. Otherwise, CoveredCA is not worth the hassle, due to the burden of providing tax forms, proof of California residency, employment information etc.
  • Deadlines: Regardless of your choice among the 3 Actions To Keep Affordable Health Coverage, the 60 day limit applies.

    Time is of the essence to find or keep affordable health coverage while looking for a new job, and you must take action fast. Read more about Special Events here or request assistance.  

    Need Temporary Health Insurance?   CLICK TO QUOTE

In conclusion of this 3-part article, the easiest part of this process is choosing a plan, and the hardest is getting the triggering loss of coverage form to the carrier (the specific document and method vary by health plan). Don’t risk losing your effective date, use a competent broker who is licensed and certified to help you compare your options under all 3 alternatives above, and will help you submit a properly completed application to the health plan of your choice!

Certified Insurance Agents are a free service to consumers under the ACA and California law. However, the best certified agents will also help you compare your private insurance (PPO, HMO) options vs. your CoveredCA options.  Find a local office of one of these broker-agents, in order to keep affordable health coverage while looking for a job.

Click to return to Part I or Part II of this article.

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.

 

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