Good Neighbor Insurance (dev.gninsurance.com and www.gninsurance.com) is continuing to update our clients on the new health insurance laws. There are six major coverage options for those in the US and even though some of the rules and regulations are similar for all many differences are there and it all depends on how old you are and for whom you work. Many critical details of this new insurance law will be clarified in the months and years to come.
These six major coverage options are:
(1) Individual or family coverage (private health care plans)
(2) Employee/employer group option for small businesses (typically under 50 employees)
(3) Employee/employer group option for large businesses (typically larger than 50 employees)
(4) Exchange options through the state you are residing in (fully integrated 1-1-2014 and are quasi-government and private insurance coverage combined)
(5) Medicare (which include Parts A, B, C, and D) for those 65 years onwards
(6) Full government health plans like Medicaid, CHIP, TRICARE, VA and other coverage plans as may be designated by the Department of Health and Human Services based mostly on financial criteria and/or military service
Change in PPACA Grandfathered Guidance
Q – How do you think this will affect the rates that carriers can quote if the plan will be a grandfathered plan? I see that BCBS on their renewals has the grandfathered plan at approximately 7% lower costs than the renewal rate for the same plan if not grandfathered. Isn’t the government great with the timing of this as we are at the renewal decision for most plans?
A – Yes, the timing was impeccable. The rates should be lower, since the market reforms won’t be included.
Q – Can they change every year (like when going out to bid) or is it just a one time thing?
A – They can change each year and even off renewal as long as they don’t violate any of the other grandfather rules.
Q – I have a group under 100 lives. They were previously with CIGNA (HMO/PPO) and moved to a trust with UHC as of 7-12010. The group was NOT considered grandfathered, because the trust plan was not in existence here in AZ as of the March 23rd date. The group is a school and has some seasonal, and some part-time employees.
My question is, with the new amendment, does that alter the status of this particular trust product, or of the group? How do they need to address their status, and do they need to alter their coverage for the employees that were not previously covered on their plan?
A – It does not alter the need for the group to have been in place on March 23 to be grandfathered. The group still had to exist on March 23 to be considered grandfathered.
Dependent Child Age 25
Q – If a dependent child that is 25 is covered as of November 1 under a non-grandfathered plan is now offered a group plan thru her employer; does she have to be removed as a dependent from her father’s plan in order to be covered, or can she refuse the employer plan since benefits are not as good?
A – NO, the regulation that they can’t have coverage through their own or a spouse’s employer is specific to grandfathered plans. She can refuse her employers coverage at this time.
Q – When considering non-discrimination rules, can an employer “discriminate” based on
years of service?
A – No
Q – I have questions regarding the “Notice to Employees” regarding the existence of the
Exchange part of HCR. I think this part goes into effect 1/1/11, according to BCBS.
1. Does this apply to grandfathered plans?
2. How does an employer notify employees?
3. Are there any notification samples to be used?
4. When does the employer notify employees, 1/1/11 or at plan renewal?
A – This isn’t required by law until 2013.
Requires employers to inform employees of their coverage options through a written notice that includes the following information:
*Description of Exchange services and contact information for requesting assistance *That the employee may be eligible for a premium tax credit through the Exchange, if the
employer plan is less than 60% actuarial value and the employee purchases a qualified plan through the Exchange.
*That if the employee purchases a qualified plan through the Exchange, the employee may lose any employer contribution toward health benefits and such contributions may be excludable from income.
Requires employers to provide such notices at the time of hiring (or, with respect to current employees, not later than 3/1/13). (PPACA § 1512; FLSA § 18B)
And… from PPACA: SEC. 1512. EMPLOYER REQUIREMENT TO INFORM EMPLOYEES OF COVERAGE OPTIONS. The Fair Labor Standards Act of 1938 is amended by inserting after section 18A (as added by section 1513) the following: SEC. 18B. NOTICE TO EMPLOYEES. (a) IN GENERAL.—In accordance with regulations promulgated by the Secretary, an employer to which this Act applies, shall provide to each employee at the time of hiring (or with respect to current employees, not later than March 1, 2013), written notice—
(1) informing the employee of the existence of an Exchange, including a description of the services provided by such Exchange, and the manner in which the employee may contact the Exchange to request assistance;
(2) if the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, that the employee may be eligible for a premium tax credit under section 36B of the Internal Revenue Code of 1986 and a cost sharing reduction under section 1402 of the Patient Protection and Affordable Care Act if the employee purchases a qualified health plan through the Exchange; and
(3) if the employee purchases a qualified health plan through the Exchange, the employee will lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes. (b) EFFECTIVE DATE.—Subsection (a) shall take effect with respect to employers in a State beginning on March 1, 2013.
Q – We have a 60+ life group with a dual option plan with one carrier, and considering
moving to another. Both plan offerings are 100% plans and we’ve matched as close as
possible, but there still are some differences: specialist copay higher, out-of-network
deductible and out-of-pocket higher. Etc… In order to remain grandfathered we have to
be within the allowable percentage difference correct?
A – Correct
HSA Grandfathered Plans
Q – Regarding HSA grandfathering – it appears I can increase or decrease the Health Savings Account contribution and it will have no bearing on the grandfathering regulations, is that correct?
A – HSA accounts are a supplement to the HDHP, not the health plan itself, so you can make changes to them, just not the HDHP.
Lifetime Limit Max
Q – I have a group that has a $10,000 limit per transplant for organ procurement. Would this fall under the lifetime max limit and have to come off?
A – No, the elimination of lifetime and the phasing out of annual limits, only applies to “essential benefits” and transplants are not on that list.
Medical Loss Ratio
Q – Does the NAIC believe that stop loss insurance is not subject to minimum medical loss ratio requirements?
A – The MLR requirement applies to the group health insurance plan, not the stop-loss plan that accompanies it.
Q – If an employee wants to enroll their dependent child under age 26 who is employed and could have his own health insurance, is the employer required to accept the dependent?
A – Yes; non-grandfathered plans must offer coverage to dependents under age 26, even if they have access to other coverage.
Q – How does the passage of Arizona Proposition 106 affect (a group’s) current health insurance coverage and possible alternative plans? Is the grandfathering provision cancelled?
A – All Proposition 106 did is leave the option of how to pay for care up to the individual. It has nothing to do with grandfathering. It says an individual cannot be mandated to buy private insurance or participate in a government plan. They have the right to pay the provider directly if they choose (without a private, semi-government, or government plan).
Self-funded Groups/Urgent Care Copay
Q – In the area of self-funded groups, if a group presently does not have a separate co-pay for Urgent care visits and wants to designate a co-pay that is higher than the co-pay the
group is currently paying (it was never written into the self funded plan, so it was covered
same as an office visit co-pay of $30), would adding an urgent care co-pay to the contract
take them out of their “grandfathered status?” They are looking at $100 co-pay for
urgent care for the coming year. In the past, there was not a specified amount and it fell
under the office visit co-pay, which the company feels is too low.
A – If on March 23, whether the plan dictated or not, they were paying a lower co-pay for urgent care, to increase the co-pay more than the greater of $5 or 15%, plus medical trend will cause the loss of grandfathered status.
Tax Credit for Small Business
Q – Are there any tax credits for health insurance for small business in 2011?
A – Yes, as of right now the small business tax credit will again be available next year.
Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, http://onlineglobalhealthinsurance.com/my-travel-guard.asp , information with him at all times when he travels Keep our blog close by you, www.gntravelinsurance.com, for continual updates on the changes with the US health care system.