CA Waiting Period Update & Federal Changes on the Horizon: August 20, 2014

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August 15, 2014 California Governor Jerry Brown signed into law legislation SB 1034 to better align California’s health coverage waiting period requirements with federal law. The intent of the bill is to resolve confusion between California and Federal law and to better conform to the waiting period provisions of the Affordable Care Act. While the ACA had established a 90-day waiting period for employers, California originally established a 60-day waiting period in 2014.

 

Therefore, as new plans begin or plans renew on or after January 1, 2015, employers will have the following options for waiting periods (depending on the medical carrier):

  1. First of the month following date of hire,
  2. First of the month following 30 days, or
  3. First of the month following 60 days.

 

Please check with your medical carrier for details or we can assist you to ensure you have the best option for your group.  If your group would like to change your waiting period for first of the month following 60 days, as your plan’s current waiting period was changed upon your renewal in 2014 to a lesser waiting period, this MAY be an option in 2015 (depending on carrier), or you can change upon your next renewal.

 

Federal action on waiting periods-in this case orientation periods – is also occurring at the federal level. In a final rule released in June 25, 2014 the Internal Revenue Service, the Employee Benefits Security Administration, and the Health and Human Services Department are authorizing an employer (who is offering ACA defined credible coverage) to have a “bona fide orientation period that occurs before the 90 waiting period begins. That means an employer that offers health coverage to employees could have an additional month of time before adding a new hire onto their health policy if there is a bona fide reason for an orientation period.

 

Under the final regulations, a group health plan and a health insurance issuer offering group health insurance coverage may not apply any waiting period that exceeds 90 days. The regulations define “waiting period” as the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective. Being otherwise eligible to enroll in a plan means having met the plan’s substantive eligibility conditions (such as, for example, being in an eligible job classification, achieving job-related licensure requirements specified in the plan’s terms, or satisfying a reasonable and bona fide employment-based orientation period.

 

The proposed regulations provided that one month would be the maximum allowed length of any reasonable and bona fide employment-based orientation period. During an orientation period, the regulators envisioned that an employer and employee could evaluate whether the employment situation was satisfactory for each party, and standard orientation and training processes would begin. Under the proposed regulations, if a group health plan conditions eligibility on an employee’s having completed a reasonable and bona fide employment-based orientation period, the eligibility condition would not be considered to be designed to avoid compliance with the 90-day waiting period limitation if the orientation period did not exceed one month and the maximum 90-day waiting period would begin on the first day after the orientation period.

 

The federal orientation period rule becomes effective on all group policies issued or renewed after January 1, 2015.

 

Click here for the Federal Register Notice.

 

Reference:  CAHU News Agents Can Use (August 20, 2014)

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

“To Grandmother or Not to Grandmother…That is the Question!”

Now that SB 1446, “Grandmothering” bill has been signed, it allows small employers (50 or fewer employees) with non-grandfathered health insurance policies in effect as of December 31, 2013, the option to renew their existing coverage for one year, rather than be required to move to 2014 ACA compliant plans.

 

Did you know that not all carriers are responding to “Grandmothering” the same way? Should you “Grandmother” your small group’s plan options, or are 2014 ACA plans lower in premium and a better fit for your group?   You can count on your MNJ Insurance Solutions Sales Team to inform you of the new law, compliance updates, how your client’s current carrier is or is not acknowledging “Grandmothering,” along with developing the right sales strategy for your company.

 

In order to prepare an analysis, we will need the following:

  1. Company Name, Company zip code, and SIC code,
  2. Census (include employee name, spouse’s name, children up to age 26 name, date of birth for covered members, and home zip codes),
  3. Copy of current plan design, current RAF (Risk Adjustment Factor), and rates, and
  4. Copy of renewal, renewal RAF and rates.

 

We are here to help explore these options with you, as we want to earn your business!

 

Do Not Delay…to Request a Quote Analysis or to learn more about MNJ Insurance Solutions Value-Added benefits, please contact us at (714) 716-4303.

Grandmothering Bill Signed (SB 1446): July 7, 2014

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California Senate Bill 1446 (“SB 1446″) was signed by Governor Brown on July 7, 2014, to provide some small employers with non-grandfathered health insurance plans in effect as of December 31, 2013, the option to renew their existing coverage for one year, rather than be required to move to new ACA-compliant coverage by the end of 2014.    The employer is not eligible if they are enrolled in ACA compliant plans.  Grandfathered plans (plans that were in force prior to March 23, 2010) are NOT impacted by SB 1446.

 

The new law provides employers with 50 or fewer employees the ability to renew their small group health plan if the policy was in effect as of December 31, 2013, and still in force at the time SB 1446 was signed into law as of July 7, 2014.  Plans that meet this definition are now referred to as “Grandmothered” plans.  SB 1446 will permit these Grandmothered plans to continue to renew until January 1, 2015 and those policies to remain in force until December 2015.  This change moves state law closer to recent federal policy changes, allowing for a longer transition period to ACA–compliant plans.  SB 1446 has an urgency measure, that provides the new law to take effect immediately after signing.

 

The small group policies affected by SB 1446 must still include many ACA and state-based mandated benefits, such as preventive healthcare coverage without copays or deductibles, no lifetime caps on benefits, maternity care, coverage for autism, and the elimination of gender discrimination in setting premiums.  The insurance carriers will be handling “Grandmothering” different, depending on their position they opt in the market.  Please refer to UpdatedCarriersGrandmotheringGuide_20140711B (1) (1) for more details.

 

The new law also requires insurers who offer “Grandmothered” plans for renew to provide notice to the group contract holder regarding the option to renew that states:

“New health care coverage options are available in California.  You currently have health care coverage that is not required to comply with many new laws.  A new health benefit plan may be more affordable and/or offer more comprehensive benefits.  New plans may also have limits on deductibles and out-of-pocket costs, while your existing plan may have no such limits.

You have the option to remain with your current coverage for one more year or switch to new coverage that complies with the new laws.  Covered California, the state’s new health insurance marketplace, offers small employers health insurance from a number of companies through tis Small Business Health Options Program (SHOP).  Federal tax credits are available through the SHOP to those small employers that qualify.  Talk to Covered California (1-877-453-9198), your plan representative, or your insurance agent to discuss your options.”

 

Please contact MNJ Insurance Solutions at (714) 716-4303 to discuss your group’s current plan and options.  We can evaluate Grandmothered plan options and rates, and compare them to the ACA-compatible plans to explore both options and rates.

 

Reference: CAHU News Agents can Use (July 7, 2014), “Grandmothering Bill Signed: Takes Immediate Effect”

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.

COBRA Notices Updated by DOL: May 2, 2014

Did you know that on May 2, 2014, the Department of Labor (DOL) issued updates to the Model General Notice and COBRA Election Notice?  Are you confident that you are providing the correct notices in a timely manner to your eligible employees and qualified beneficiaries? The Obama administration announced updates to model notices that employers must provide to employees, informing workers of their eligibility to continue health care coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA).  The Department of Labor (DOL) on May 2, 2014, released a new model general notice form and model election notice form for providing COBRA notices to employees, and a related notice of proposed rulemaking on the COBRA notice requirements, published in the May 7 edition of the Federal Register.​ Federal agencies also released an updated model notice regarding premium assistance under Medicaid and the Children’s Health Insurance Program (CHIP).

The updated notices let employees and qualified beneficiaries know that if they are eligible for COBRA continuation coverage, they also have an option to purchase coverage through the Affordable Care Act’s (ACA) Health Insurance Marketplace, as the government-run exchange is formally known.  Employees directed to Covered California/public exchange, may qualify for federal subsidies depending on income, and are less likely to opt to pay the full premium to continue with their former employer’s health coverage through COBRA. Regardless of the availability of Covered California/public exchange, employers with 20 or more are still required to comply with COBRA.  Ultimately, the decision of continuation of medical coverage will depend on what is best for the individual/family. For more information on COBRA Continuation Coverage, see the resources below.

or Employees

For Employers

Posters and Flyers

Video

Reference:  As seen at http://www.dol.gov/ebsa/COBRA.html dated August 1, 2015.

 

This content is provided for informational purposes only.  While we have attempted to provide current, accurate and clearly expressed information, this information is provided “as is” and MNJ Insurance Solutions makes no representations or warranties regarding its accuracy  and completeness.  The information provided should not be construed as legal or tax advice or as a recommendation of any kind.  External users should seek professional advice form their own attorneys and tax and benefit plan advisers with respect to their individual circumstances and needs.