Health Care Reform: The Individual Mandate

Under the Affordable Care Act, the individual mandate requires all citizens and legal residents of the United States to have “minimum essential coverage” insurance b y January 1, 2014.  People who do not have qualified health insurance or government health plan, like Medicare or Medicaid, must obtain health insurance or pay a penalty tax called the “shared responsibility payment.”

People have “minimum essential coverage” if they have:

  • Government-sponsored plan (i.e. Medicare, Medi-Cal)
  • Employer-sponsored plan
  • Individual plan

U.S.-issued expatriate plans provide minimum essential coverage for expatriate employees and their dependents regardless of where they are located in the world.

People can choose to buy health insurance “on-exchange” or “off-exchange” plans that open in 2014.  Some people can also receive federal premium assistance on an exchange, depending on household income.  NOTE:  There is a specific Open Enrollment period for which individuals can apply for coverage on/off the exchange, and individuals can no longer enroll at any time throughout the year (as done in prior years to Health Care Reform).

ACA-graphic-3If a person does not have minimum essential coverage, the IRS will collect a tax penalty from him/her.  The monthly tax penalty is described as 1/12th of the greater of:

  • For 2014:  $95 per uninsured adult in the household (capped at $285 per household) or 1% of the household income over the filing threshold.
  • For 2015: $325 per uninsured adult in the household (capped at $975 per household) or 2% of the household income over the filing threshold.
  • For 2016:  $695 per uninsured adult in the household (capped at $2,085 per household) or 2.5% of the household income over the filing threshold.

The penalty will be half of the amount for people under age 18.  Beginning in 2017, the penalties will be increased by the cost-of-living adjustment.

There are a few exceptions to the penalty, including:

  • Religious reasons,
  • Not present in the United States,
  • In prison,
  • Not able to pay for coverage that is more than 8% of the household income,
  • An income that is below 100% of the Federal Poverty Level,
  • Having a hardship waiver, or
  • Not covered for less than three months during the year.

See the following sites for more details:

The Requirement to Buy Coverage Under the ACA

IRS Individual Shared Responsibility Provision

 

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.

The YouToons Get Ready for Obamacare

 

 

I am sure you will agree that the Kaiser Family Foundation did an excellent job with this short video summary of PPACA and what is yet to come.

Please contact us at MNJ Insurance Solutions at (714) 716-4303 if you have any questions or if you would like assistance with your health insurance needs.

 

Understanding the Metal Levels in the Affordable Care Act (“ACA”)

With so many options to consider in small group employer plans, deciding on the best health care plan can be confusing. The affordable care act has made many changes to how the carriers create their plan designs. The insurance plans now use the following category levels: bronze, silver, gold, or platinum, based on how they cover the cost of care.

What do the metal levels mean?

The ACA plans must include a core set of benefits, called Essential Health Benefits (“EHB”), including but not limited to the following: coverage for emergency room care, hospital stays, maternity and newborn care, prescription drugs, and preventive care. Plans and each tear pay different amounts of the total cost of an insured’s care.  For example, bronze plans have the lowest monthly premiums, but the insured pays more when they utilize health care services.  Platinum plans have the highest monthly premiums, but members pay the lowest cost share amounts when they utilize health care services.

The Four Metal Levels:

metal tiers

Bronze: health care plan pays 60%, member pays 40%.

Silver: health care plan pay 70%, member pays 30%.

Gold: health care plan pays 80%, member pays 20%.

Platinum: health care plan pays 90%, member pays 10%.

The metal level impacts not only the premiums, but also how much the member pays for services rendered, such as hospital visits or prescription drugs. Beyond the required essential health benefits, different plans may offer coverage for other services as well. It is important to note, not all metal plans are the same.

 

Important things to consider when selecting a health insurance plan:

  • It is important to look at the health insurance carrier’s network and see if your doctor is a participating provider. Most carriers offer a full network, reduce network, and or a reduced reduce network plan option.
  • It is important to research your prescriptions with the carrier and network you are considering, as the carriers include different prescription formulary lists.
  • If you go to the doctor often or need regular prescriptions, a gold or platinum plan may be a good option to consider. While these plans cost more, the plan pays more of the cost when you utilize the benefits.
  • If you do not go to the doctors very often or take regular prescriptions, a silver or bronze plan may be a good option to consider. These plans cost less per month in premiums, but they also pay less cost when you need to utilize the benefits. So, when selecting silver or bronze, it is important to know that you will pay more out of pocket when seeking medical care than you would if you were insured on gold or platinum plans.

As you can see, there are a lot of things to consider when selecting the right plans to offer your group. At MNJ insurance solutions, we are here to help you evaluate the various plans, networks, and options to meet your needs and budget.

Please contact us at 714-716-4303 if you would like more information.

 

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.

Are You Compliant with your Required Model Notices?

Model Notices under Health Care Reform

The Affordable Care Act requires group health plans to provide a number of informational notices to employees and other individuals eligible for benefits under the plan.  Model notices that may be used to satisfy certain notice requirements are available from the U.S. Department of Labor.

 

Included is a list of Model Notices and documents that may be required:

Summary of Benefits and Coverage (SBC) and Uniform Glossary:   Group health plans and health insurance issuers offering group health insurance coverage are required to provide participants and beneficiaries a summary of benefits and coverage (SBC) containing specific information about the plan and coverage, as well as a Uniform Glossary of Terms commonly used in health insurance coverage, as several points during the enrollment process and upon request.  The following templates, instructions, and related materials are available for use in connection with coverage beginning before January 1, 2014:

Templates, Instructions, and Related Materials – Currently Applicable (SBCs Before 1/1/2017)

Templates, Instructions, and Related Materials – Proposed (SBCs On or After 1/1/2017)

 

Notice of Coverage Options (Health Insurance Exchange Notice): All employers covered by the Fair Labor Standards Act are required to provide each new full-or part-time employee a written notice with information about a Health Insurance Exchange (Marketplace).  There are two different Notices under this requirement, one notice is for employers who offer coverage, and the other notice is for employers who do NOT offer group coverage.  The initial distribution was required no later than October 1, 2013.  However, in addition to the initial distribution of the Coverage Option Notice, an employer is required to provide it at the time of hiring, within 14 days of the employee’s start date.  The notice may be distributed by first-class mail, or electronically if certain requirements are met.  Model language is available from the DOL:

Notices listed below are categorized by the Grandfathered or Non-Grandfathered Status of your Health Plan.

If your Plan is Grandfathered, the following Health Plan Notices are required:

1.  Grandfathered Model Notice; en español

2.  Dependent to Age 26 Notice (Coverage for Adult Children); en español

3.  Patient Protection Model Notice; en español

4.  Lifetime Limits on Essential Health Benefits; en español

5.  Patient Protections Notice-Prohibition on Rescissions

6.  Internal Claims and Appeals and External Review Decisions

If your Plan is Non-Grandfathered, the above Health Plan Notices (#2-6 are required)

 

Finally, all Plans-Grandfathered and Non-Grandfathered alike-must also provide the following ERISA Notices:

  1. Summary Plan Description (SPD) – An Employer must provide the SPD to plan participants within 90 days of the participant enrolling in the plan.  An updated SPD must be furnished every 5 years if changes are made to SPD information or the plan is amended (otherwise, it must be furnished every 10 years).
  2. Summary of Material Modification (SMM) – Within 60 days of adoption of a material reduction in covered services or benefits (alternatively, notice may be provided with plan information that is furnished at regular intervals of not more than 90 days, if certain conditions are met).
  3. Plan Documents – Copies must be furnished within 30 days of a written request, and the plan administrator must make copies available for examination at its principal office (the DOL can also request any documents relating to the plan).
  4.  WWCRA_NoticeWomen’s Health & Cancer Rights Act (WHCRA) Notices – Upon enrollment in a plan that provides coverage for medical and surgical benefits related to a mastectomy, and annually thereafter.
  5. CHIP_Model_Notice(Children’s Health Insurance Program Reauthorization Act);
  6. HIPAA Notice (for self-insured plans) (Contact your agent for assistance);
  7. Medicare Part D Creditable Coverage Disclosure Notice or Non-Creditable Coverage Disclosure Notice – Annually prior to October 15th, upon request, and at various other times as required under the law.  An online disclosure to the Centers for Medicare & Medicaid Services (CMS) is also required annually, no later than 60 days from the beginning of a plan year, and at certain other times
  8. Mental_Health_Parity (Mental Health Parity Act) – Upon request for a plan offering medical/surgical benefits and mental health or substance use disorder benefits
  9. Michelle’s Law Notice – With any notice regarding a requirement for certification of student status under a plan that bases eligibility for coverage on student status (and that provides dependent coverage beyond age 26).
  10. Newborns’ and Mothers’ Health Protection Act Notice – must be included in the SPD for a plan providing maternity or newborn infant coverage.

 

 Other Helpful Documents:
Initial COBRA Model Notice (Updated for Healthcare Reform)
COBRA Model Election Notice | en español  (updated for Healthcare Reform)

 

For more information and evaluation of your current benefits, please contact MNJ Insurance Solutions at (714) 716-4303.

 

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.

Small Group Rating on New ACA Plans Beginning in 2014

The Affordable Care Act (“ACA”) and new state laws great new rules for how small group health plan rates will be calculated in 2014 and beyond for small groups. These changes are different than how small group has been rated prior to ACA. For non-grandfathered small group plans, insurance must maintain a single risk pool for coverage in the small group market, and there will be no medical underwriting.

For grandfathered plans, rates in 2014 will be calculated using the same methodology used in 2013 (i.e. age bands, dependent coverage, etc.). For non-grandfathered plans, including “metal tier” plans available on and off-exchange, rates can vary based only on the following factors:

  • Standard age curve: this age curve expands the number of age bands from 7 to 40 5H bands, requires all ensures to use the same age curve, and limits the oldest adult rate to no more than three times the youngest adult rate (defining adults as 21 and older).
  • Family coverage: the cost of family coverage will be calculated by adding together the premium rate for each family member using the standard age curve. Insurance can charge no more than three oldest children under the age 21 per family. This approach to establishing family coverage is called the “member level rating,” as opposed to family to your rating, which is based on the employees age and family coverage category.
  • Geographic area: rates can be higher for people who live in areas with high medical costs. The number of geographic right areas in California will jump from 9 to 19 into thousand 14, and they must be standardized across the insurers. In 2015, small group plans in California will be rated based on employer ZIP Code, whereas in the past, rates for most curious were based on employee home ZIP Code.

Example: Family with six children

 Dad, age 55  Mom, age 52  Child, age 24  Child, age 20  Child, age 17  Child, age 14  Child, age 10  Child, age 5

Based on the medical plan selected, the new member level family rating would be calculated as follows:

Premium for dad, age 55, plus

Premium for mom, age 52, plus

Premium for child, age 24 (as family member’s age 21 and older are eight rated separately),

plus Premium for child, age 20,

plus Premium for child, age 17,

plus Premium for child, age 14 (as previously mentioned, insurance can charge for no more than the three oldest children under age 21 per family)

The additional children, age 10 and age 5, are not rated for this family’s premium.

Add each premium together and that is the new family rate under ACA for small groups.

 

NOTE: Birthday billing rates will adjust for age at contract renewal, along with the carriers trend increase for the small risk pool.

NOTE:  As of January 1, 2016, small group rating will be for group sizes of 1-100, which will significantly change the 51-100 mid-sized employer’s rating and benefit offerings.

For more information, download Final Rule on Rate Review

 

MNJ Insurance Solutions can offer you affordable healthcare coverage for California employer groups of any size.  Please contact us for a complementary quote from various insurance carriers at 714-716-4303.

 

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.

Employer’s Requirements for Summary of Benefits and Coverage (SBC)

Group business – SBC distribution requirements

Under its final rule of the Patient Protection and Affordable Care Act, U.S. health insurers and group health plan providers must provide a summary of benefits and coverage (SBC) to participants and beneficiaries who are eligible to enroll or re-enroll in group health coverage through an open enrollment period. The SBC must be distributed on the first day of an open enrollment period that begins on or after September 23, 2012, or on the first day of the plan year on or after September 23, 2012, for special enrollees and those newly eligible for coverage.

NOTE: you can access the forms discussed here in the other resources section below.

 

Listed below are the specifics on SBC distribution for Employers:

New group business, upon selection of the benefit plan:

  • Employers must provide the SBCs within seven (7) business days of a request for information related to a specific plan.

Renewals for Group business – basics of SBC distribution requirements:

  • The employer has seven (7) business days, starting the day they receive the benefit confirmation to issue an SBC.
  • The employer has seven (7) business days from the date the benefit selection is finalized to distribute to eligible employees and dependents.
  • If renewal benefits are submitted late, eligible employees and dependents must receive SBC no later than the renewal date.
  • When the renewal is automatic and renewal has not been issued at least thirty (30) days prior to the renewal date, then the SBC must be issued within seven(7) business days of the date the benefits were finalized.

Specifics of SBC distribution:

  • Must be provided any time requested by the group administrator,
  • Open enrollment period – Must be provided with open enrollment materials,
  • If the employer does not have an open enrollment period, SBCs must be provided at least thirty (30) days prior to the renewal date,
  • When the renewal is automatic and the renewal has not been issued at least thirty (30) days prior to the renewal date, then the SBC must be issued within seven (7) business days of the date the benefits are finalized,
  • SBCs must be provided any time it is requested by a member for plan years beginning on or after September 23, 2012, and
  • SBC must be distributed to new hire eligible employees after renewal dates, beginning in or after September 23, 2012.

 

Material modification (does not include switching carriers at renewal):

The proposed regulations clarify that if a group health plan or health insurer makes a mid-year material modification to coverage that affects the content of an SBC, the group health plan or health insurer is your must provide a 60-day advance notice to enrollees. However, the 60-day advance notice rule does not apply to modifications made at renewal/annual open enrollment. A “material modification” is the same as a material modification under ERISA Section 102 (any change to the coverage offered that independently or in conjunction with other contemporaneous changes would be considered by the typical plan participant to be an important change, including changes that enhance or reduce benefits, increase premiums or cost-sharing, or impose new referral requirements).

 

Uniform glossary of terms:

The proposed rules require that group health plans and health insurance make a Uniform Glossary of Terms available to participants and beneficiaries. The Uniform Glossary may not be modified and must be provided in paper and electronic form on request by a participant or beneficiary within seven (7) days. (A paper version of the uniform glass right must be available on request).

The proposed rules includes a list of health-coverage related terms and medical terms that will need to appear in the Uniform Glossary, which in addition, must include other terms that the Secretary of HHS determines are important to define, so that Individuals and Employers may compare and understand the terms of coverage and medical benefits (including any exceptions to those benefits).

 

Penalties for noncompliance of SBC distribution:

Employers that sponsor group health plan should start working with your broker to compile the information necessary to meet the SBC requirements.

A group health plan or health insurance insurer that willfully fails to provide an SBC will be subject to a fine of up to $1000 per enrollee who does not receive the SBC.

 

Additional resources:  ACA SBC Regulations and Guidance

 Regulations and Guidance

 

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.

Finding Creative Solutions to 2014 PPACA Mandates: “Early Renewal” Strategy for Small Groups

MNJinsurance-Signs

In addition to avoiding some of the changes in small group benefits, some insurers are advising their group clients to “Early renew” and have a new effective date of December 1, 2013, thereby avoiding the more expensive January 1, 0214 changes until later in 2014.  If a policy is renewed before January 1, 2014, this allows individuals to effectively postpose the impact of PPACA changes and rating.

 

Reasons to Consider a December 1, 2013 Effective Date (“Early Renewal”) Versus Waiting Until 2014

As a “Trusted Advisor,” we need to take a more strategic look at the Group Employee Benefits package, including plan design, ensuring the right networks of doctors and hospitals, calculating employer contribution, meeting participation requirements, and of course, providing affordable options that fit within the Employer and Employees’ budget.

Beginning January 1, 2014, all carriers have had to make changes to their plan portfolio options. For small group, the carriers had to ensure they included the 10 Essential Benefits, including pediatric dental and vision, were meeting a minimum actuarial value of 60%, 70%, 80%, 90%, and were required to significantly change the rating structure, just to name a few.

It is important to evaluate and market your benefits for either November 1, 2013 or December 1, 2013 for the following reasons:

  •  Lock in Q4 pre-community or member-level rated rates.
  • Evaluate if your client has the best, preferred Risk Adjustment Factor  (“RAF”) available.  The carriers are getting aggressive.
  • Access to current known plan options.
  • Buy more time to evaluate the impact of PPACA, including physician networks and hospitals, community rating/member level rating, and plan designs, as this is ALL changing in 2014.
  • And most IMPORTANT: Be proactive and evaluate your options!

 

How Small Group Rating in 2014 and Beyond Differs from prior to ACA:

Rating 2013 2014 and Beyond
RAF .90 – 1.10 No longer available as plans renew on or after January 1, 2014.
Age Bands 7 different age bands Single year age bands, with the exception of those 0-20 years of age and 64+
Rate differentials between younger and older No Limit 3:1
Member-level rating One rate for family, regardless of age or number of children (based on employee age band) Separate rates for employee, spouse, EACH child 21 or older, and rate for the oldest 3 children under the age of 21.
Rating areas in CA 9 19

 

Listed below is a brief summary of how the small group carriers in California are planning on handling early renewals as of May 3, 2013.   As you know, things may change, however, we will do our best to keep you informed.

  • Aetna: Employers will have the option of renewing in 2013 to postpose the date they need to comply with ACA.
  • Anthem Blue Cross:  will offer small groups the opportunity to purchase a new agreement and adjust their renewal cycle, allowing eligible small group employers to stay on a 2013 benefit plan until later in 2014.  Groups accepting this offer would have their medical renewal month adjusted to December 2013 and rates adjusted to correspond with the new renewal cycle.
  • California Choice: Groups with a renewal month of January through November 2013 may change their renewal effective date to December 1, 2013.
  • Health Net: Employers will have the option of renewing in December 2013 to postpose the date they need to comply with ACA.  Sharp: Details pending
  • United HealthCare: For groups renewing January-June 2014, they can request and early effective date. The group will need to complete a UHC Attestation Form and it must be submitted directly to UHC by June 15, 2013.

 

Information above is not a guarantee, and may be subject to change.  Please note: Different rules apply to large group (see Transitional Relief for more details).

 

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.