2010 updates; FAQ and Answers

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Questions and answers about the new health insurance law – Part 11

Wednesday, December 29th, 2010

Good Neighbor Insurance (www.gnazhealth.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.

Discrimination Rules

Q – When considering non-discrimination rules, can an employer “discriminate” based on

years of service?

A – No

Exchange Notification

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.

Questions are:

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.

Grandfathering Amendment

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.

Non-grandfathered Plans

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?

(Non-grandfathered plan)

A – Yes; non-grandfathered plans must offer coverage to dependents under age 26, even if they have access to other coverage.

Proposition 106

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.

Tags: health insurance law
Posted in 2010 updates; FAQ and Answers |

Questions and answers about the new health insurance law – Part 9

Wednesday, November 10th, 2010

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

The president signed the Patient Protection and Affordable Care Act (PPACA) into law on March 23, 2010. Additionally, he signed the Health Care and Education Reconciliation Act of 2010 on March 30, 2010, which made amendments to the PPACA law. The president’s signature on the reform bills triggered a series of major changes to the health care system that will affect every American. There were several changes that became effective upon President Obama’s signature. The rest of the changes are scheduled to become effective at varying times over the next several years.

The law is wide-reaching and encompasses more than 2,700 pages and many more pages of expected new regulation. Many of the specific details are yet to be finalized by federal agencies and state officials. This guide outlines some of the major sections of the law, and we’ve indicated when guidelines are pending from the United States Department of Health and Human Services (HHS) and other federal or state agencies. These guidelines will help all health insurance companies comply more completely with the reforms.

Adult Children Coverage

Q – Can you explain students and the new coverage until 25, even if married scenario?

A – Actually, the coverage is to age 26. All “adult children” are eligible for enrollment in their parent’s plans as of the first day of the first plan year following 9/23/2010. The only exception is for grandfathered plans, if the “adult child” has coverage through another employer sponsored plan (their own or a spouses) they are excluded. The special enrollment must be 30 days long and there is a DOL Model Notice that must be distributed.

Q – Is your interpretation that all plans including grandfathered plans have to insure the young adult up to age 26 – only exception to the grandfathered plans is they don’t have to offer to the young adult that is eligible for group coverage elsewhere. Does this mean all others under 26, have to be offered the coverage grandfathered or not?

A – Yes, all plans that include dependent coverage anyway, including grandfathered plans, must offer coverage to adult children to age 26. The exception is that grandfathered plans need not offer it to adult children if they have coverage through their own employer or their spouse’s employer.

Creditable Coverage

Q – Is a Short Term Medical plan considered “creditable coverage” under HIPAA?

A – If the STM issues a certificate of creditable coverage. Not all STM’s issue certificates.

Essential Benefits and Individual Plans

Q – When are Individual plans required to incorporate the Essential Benefits?

A – For 2010, Essential Benefits are only addressed in conjunction with the annual limits. This applies to all group plans and non-grandfathered individual plans. However, if the benefit is not part of the individual policy it is currently not required to be included, but if it is, the annual limits come into play.

Q – Maternity is not mandatory on Individual plans because the benefit is not part of the policy, correct?

A – At this time that is correct.

High Risk Pools

Q – Can people who meet the requirements purchase insurance today from the high risk pool in AZ?

A – There is no high risk pool in AZ, the only high risk pool available to Az residents is the federal pool. www.pcip.gov

Q – And am I reading correctly, if he/she was on a Short Term plan, those are not considered credible coverage?

A – Depends, some STM’s are creditable and some are not. If a Certificate of Creditable Coverage is available from the issuer, then it’s creditable.

Q – I have a client that has RA and her COBRA payments are killing her- could she go either without insurance or a limited benefit plan for 6 months and then join this pool?

A – To go on the high risk pool, she must be 6 months bare – limited medical would be okay, but STM would depend on whether it’s a creditable plan.

The Pre-existing Conditions Insurance Plan (Federal High Risk Pool)

Regulations further explain that in order to be eligible to enroll, the individual must be without creditable coverage for the 6 months prior to applying for PCIP.

Eligibility for the PCIP Program (§ 152.14)

Under section 1101(d) of the Affordable Care Act and subparagraphs (1), (2) and (3) of § 152.14(a) of this interim final rule, an individual is eligible to enroll in a PCIP if he or she: (1) Is a citizen or national of the United States or is lawfully present in the United States as determined in accordance with section 1411 of the Affordable Care Act; (2) has not been covered under creditable coverage, as defined in section 2701(c)(1) of the Public Health Service Act as of the date of enactment, during the 6-month period prior to the date on which he or she is applying for coverage through the PCIP; and (3) has a pre-existing condition, as determined in a manner consistent with guidance issued by the Secretary. We further provide in § 152.14(a)(4) that an individual must be a resident of a State that falls within the service area of a PCIP.

Since both limited benefit and short term plans are not considered creditable coverage, having those types of plans will not compromise the individual ’ s eligibility for PCIP.

Below is the definition of creditable coverage:

“What is creditable coverage?

Most health coverage is creditable coverage, such as coverage under a group health plan (including COBRA continuation coverage), HMO, individual health insurance policy, Medicaid or Medicare.

Creditable coverage does not include coverage consisting solely of excepted benefits, such as coverage solely for limited-scope dental or vision benefits”

PPACA Summary of Benefits

The 60-day advance notice issue has proven to be a bit confusing. Section 2715 of PPACA relates to summary of benefits, which is not required until 24 months from enactment (March 2012 – this is a NEW form). Interim Final Regulations specifically state that PHSA (Public Health Services Act – originally enacted in 1944) section 2715(d)(4), which “requires a plan or issuer to give 60 days advance notice to an enrollee before any material modification will become effective” may apply. This is talking about the Summary of Material Modifications. There may need to be additional guidance, but as the article makes clear, employers must still comply with the Summary of Material Modifications requirement.

HSAs, FSAs, HRAs and Archer MSAs

Currently, if employees use funds from an HSA or Archer MSA for nonqualified
medical expenses, they are subject to an excise tax (10 percent
for HSAs, 15 percent for MSAs). This tax increases to 20 percent on January 1, 2011.

Limited Benefit Plans

Q – Do you know if the Limited Benefit Plans are considered as creditable coverage on the High Risk program?

A – Creditable Coverage that is recognized by the Federal high risk pool, is coverage for which the individual receives a certification of creditable coverage. Generally, these are not provided by limited medical plans.

Medicare

Q – Under the new Health Care Reform plan will Medicare still be around? Will there still be Medicare replacement policies?

A – There are going to be a number of changes to Medicare (specifically the Medicare Advantage plans), but yes, it will still exist.

Over the Counter Drugs – HSAs, FSAs, HRAs and Archer MSAs

PPACA will bring changes to what is considered a qualified medical expense for FSAs,
HSAs, HRAs and Archer MSAs.

Beginning January 1, 2011, OTC drugs will no longer be considered qualified medical expenses for any of those health accounts

o Insulin is the one exception to this rule
o For any other OTC drug, employees cannot use funds from any of those accounts, unless it is prescribed by a physician

Patient Protection

Q – On the patient protection – the notice states “when applicable”…and for plans and issuers that require or allow for the designation of a primary care provider…or provide coverage for OB or Gyn care and require the designation… So, this notice only has to go out if the plan has these, such as an HMO?

A – That is correct. If the plan does not require designation of a primary care physician, there is no need for this notice.

Real Estate Sales Tax

Q – I received something that stated “Did you know that if you sell your house after 2012, you will pay a 3.8% tax on it? That’s $3,800 on a $100,000 home, etc. When did this happen? It’s in the healthcare bill”. Is this true, or bogus?

A – This is bogus. The additional 3.8% that they are referring to is the additional Medicare Contribution for individuals earning more than $200,000 and joint filers earning more than $250,000 on certain unearned income(i.e. rents and royalties).

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care, www.gninsurance.com ,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.

Tags: Arizona insurance, health insurance law
Posted in 2010 updates; FAQ and Answers |

Questions and answers about the new health insurance law – Part 7

Wednesday, October 13th, 2010

Good Neighbor Insurance (www.gninsurance.com and www.gnazhealth.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-state/federal government and private insurance coverage combined)

(5) Medicare (which include Parts A, B, C, and D) for those 65 years onwards

High Risk Pools

Q – Can people who meet the requirements purchase insurance today from the high risk pool in AZ?

A – There is no high risk pool in AZ, the only high risk pool available to Az residents is the federal pool. www.pcip.gov

Q – And am I reading correctly, if he/she was on a Short Term plan, those are not considered credible coverage?

A – Depends, some STM’s are creditable and some are not. If a Certificate of Creditable Coverage is available from the issuer, then it’s creditable.

Q – I have a client that has RA and her COBRA payments are killing her- could she go either without insurance or a limited benefit plan for 6 months and then join this pool?

A – To go on the high risk pool, she must be 6 months bare – limited medical would be okay, but STM would depend on whether it’s a creditable plan.

The Pre-existing Conditions Insurance Plan (Federal High Risk Pool)

Regulations further explain that in order to be eligible to enroll, the individual must be without creditable coverage for the 6 months prior to applying for PCIP.

Eligibility for the PCIP Program (§ 152.14)

Since both limited benefit and short term plans are not considered creditable coverage, having those types of plans will not compromise the individual ’ s eligibility for PCIP.

Below is the definition of creditable coverage:

“What is creditable coverage?

Most health coverage is creditable coverage, such as coverage under a group health plan (including COBRA continuation coverage), HMO, individual health insurance policy, Medicaid or Medicare.

Creditable coverage does not include coverage consisting solely of excepted benefits, such as coverage solely for limited-scope dental or vision benefits”

PPACA Summary of Benefits

Patient Protection

A – That is correct. If the plan does not require designation of a primary care physician, there is no need for this notice.

Penalties

Q – Can you clarify the “carve out” penalties and when they will become effective for “grandfathered” and “non-grandfathered” health plans?

A – If a plan fails the highly compensated test for plan years beginning after September 23, 2010, the penalty is $100 per day per incident. This does NOT apply to grandfathered plans.

Adult Children Coverage

Q – Can you explain students and the new coverage until 25, even if married scenario?

Creditable Coverage

Q – Is a Short Term Medical plan considered “creditable coverage” under HIPAA?

A – If the STM issues a certificate of creditable coverage. Not all STM’s issue certificates.

Medicare

Q – Under the new Health Care Reform plan will Medicare still be around? Will there still be Medicare replacement policies?

A – There are going to be a number of changes to Medicare (specifically the Medicare Advantage plans), but yes, it will still exist.

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and travel health care information with him at all times when he travels (check out his diving travels at www.douggulleson.com). Keep our blog close by you, www.gntravelinsurance.com , for continual updates on the changes with the US health care system.

Tags: Arizona insurance, health insurance law, US health insurance
Posted in 2010 updates; FAQ and Answers |

Questions and answers about the new health insurance law – Part 6 (mostly about employer/group coverage below)

Friday, October 1st, 2010

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-state/federal government and private insurance coverage combined)

(5) Medicare (which include Parts A, B, C, and D) for those 65 years onwards

Grandfathered Status

Q – I am hearing from some carriers that the Waiver Procedure for the limited medical plans, also may contain guidance that will waive the provision which mandates that Grandfathered Plan Status is lost if you change insurance carriers, have you heard any confirmation on this?

A – Not true, DOL reiterated that changing carriers will cause you to lose grandfathered status on their webinar earlier this week.

Q – A group has a health plan that includes optional benefits, (like supplemental accident, preventive care buy-up, enhanced diagnostic x-ray and lab benefit, etc.); if the group changes one of those optional benefits, does that cause loss of grandfather status? I’m guessing at this point, any change to any benefit, even outside of the core benefit plan is a trigger?

A – If the benefit is actually part of the health plan, then I would agree – they are reducing benefits and thus would loose their grandfathered status. If they are offered independent of the health plan, there would be no impact.

Q – We have a renewal to handle for a group that currently has two separate plans which, at the present time, both offer the same benefits. One is specifically for the owners and the other is for key employees only excluding all other employees. In order for the key employee plan to continue to carve-out, I understand they can make only minor changes and not change carriers. But how about the owners’ plan? I know that the owners’ plan would lose their grandfathered status if we switched carriers but would this change affect the other plan’s status in anyway?

A – The owners plan would loose grandfathered status and be subject to testing. It would not impact the other plan.

Q – When do client administrators need to send the Grandfather Plan memo to employees?

A – It should be distributed with the first open enrollment following September 23, 2010.

Q – If the carrier gives you a 15% increase and you don’t change your contribution, does that automatically make you non-grandfathered because you passed on the increase? In addition, what if your contribution is a flat dollar amount. If that dollar amount doesn’t change but you get an increase?

A – Plans are allowed to increase premiums, so as long as the contribution is not lowered, they will remain grandfathered. A defined contribution plan is not specifically discussed.

Non-Grandfathered Plans

Q – In the minimum design requirements for Non-Grandfathered plans, is there allowed to be more than a $2,000 deductible option for employer groups? I have a group asking and I am not familiar with this provision.

A – This provision doesn’t come into play until 2014.

Non-Discrimination

Q – We have a group with over 50 employees who pays 100% of employee cost. The dependent contribution is based off of employee compensation. They are planning on passing on some or most all of the increase for their December renewal to the dependent portion. They want to remain grandfathered. I advised that if they change the contribution on any of the tier’s more than 5% they lose their grandfathered status. The group has read material that it’s only if the employee portion contribution changes more than 5%. Who’s right?

A – The following information is from a legal analysis from Groom Law Group: “Decrease in Employer Contribution: A policy or plan will lose grandfather status if an employer (or employee association) decreases its contribution rate toward the cost of any tier of coverage (e.g., self or family) by more than 5% below the contribution rate on March 23, 2010.”

Q – I have a non-grandfathered health plan that will offer 2 levels of benefits. The core plan is a $3,000 deductible which everyone will get, and the employer will pay 99% of the employee premium, and 0% for dependents. Is there a problem if the employer also offers say a $1,500 deductible and allows any employee to choose that plan if they pay 100% of the difference?

A – As long as both plans are offered on a non-discriminatory basis, (i.e. everyone gets the same contribution and has the same waiting period), this is not a problem, even if the highly-compensated drift toward one of the two plans.

Non-Profits

Q – Is there anything in this bill that non-profits do not have to comply with? Are they eligible for anything in the tax-credit part, even though they do not pay normal taxes?

A – The legislation is applicable to all plans, so if the non-profit has a plan either fully-insured or self-insured, the law is applicable.

The tax-credit is available to non-profits (a smaller tax credit) assuming they meet all of the other criteria.

Tax-Credit

Q – Does an employer who may qualify for the tax-credit have to apply for it, or do they just claim it at tax filing? Also can an employer who otherwise would be eligible for the Arizona State tax-credit program potentially receive both credits?

A – They just complete the information on tax form 8941. The tax-credits are not mutually exclusive.

Model Notices

Q – Is it acceptable for employers to provide the new set of HCR model notices to employees by email?

A – PPACA says that the employees must be notified, but does not specify HOW they must be notified. Other DOL items to be distributed require a 12 point font and that the recipient has easy access to a computer and the web. Assuming both of these are applied to the model notices, the presumption is that this is an acceptable means of distribution.

Q – Can the insurer can be requested to provide these model notices? I have an email from an insurance carrier that gives me the idea that it is the insurers’ responsibility?

A – While it would be great if the insurance carrier provides the model notices, it is the responsibility of the plan and the issuer. So, if the carrier does not, it is the plan sponsors responsibility as well. In addition, even if the carrier does give the notice to the plan sponsor, it is the plan that must make certain it is distributed in the approved manner to the appropriate parties, i.e. “in a prominent manner”.

Premium Tax/Tax Credit

Q – If the employer pays 100% or 50% of the employee premium, under the new bill is the employee now being taxed on the premium the employer is paying?

A – No.

Q – How does a non-profit implement the tax credit? They have done the preliminary 3 step and have determined they would benefit but since they don’t pay taxes, how do they get their money?

A – It will actually be part of their 2010 tax return when they file.

Q – When is the Summary of Material Modification Notice required?

A – If a group health plan or health insurance issuer makes any material modification in any of the terms of the plan or coverage involved that is not reflected in the most recently provided summary of benefits and coverage, the plan or issuer shall provide notice of such modification to enrollees not later than 60 days prior to the date on which such modification will become effective. The summary of Material Modifications is not a PPACA requirement. This requirement has been in existence for years.

Over the Counter Drugs – HSAs, FSAs, HRAs and Archer MSAs

PPACA will bring changes to what is considered a qualified medical expense for FSAs,
HSAs, HRAs and Archer MSAs.

Beginning January 1, 2011, OTC drugs will no longer be considered qualified medical expenses for any of those health accounts

o Insulin is the one exception to this rule
o For any other OTC drug, employees cannot use funds from any of those accounts, unless it is prescribed by a physician

HSAs, FSAs, HRAs and Archer MSAs

Participation Laws

Q – Do you have any more information on the 50% participation requirement that small businesses need to comply with? A client wants to know how the health reform is impacting this rule.

A – PPACA has nothing to do with the participation requirement – this is a carrier requirement and the carriers can continue to require at least 50% participation. However, in 2014, if the group has more than 50 ees, there may be a penalty to the employer if an employee seeks coverage in the Exchange instead of through the employers plan.

Q – Under last week’s Q & A regarding the mandate for coverage in 2014, why would the employer be penalized if the employee was able to obtain coverage from the exchange – the employee is covered per the mandate?

A – If the employee purchases through the Exchange and gets a tax credit or cost-sharing subsidy, the employer’s plan may be deemed “unaffordable” and the employer is penalized for each employee getting a tax credit or subsidy through the exchange.

Real Estate Sales Tax

Miscellaneous

Q – Does an employer have to report what they were paying for benefits on the actual payroll stubs along with the W-2’s? Also, which model notice needs to be the prevalent one?

A – There is no requirements that the benefit costs appear on payroll stubs.

Regarding which model notice, the Age 26 language must be “prominent”.

Q – Do the group benefits (or individual) that are going to be required to be “reported” on someone’s W-2 form for health benefits, going to be considered part of their salary and subject to being taxed or not?

A – This is not taxable at this time.

Q – Currently an employer is required to pay 50% of the employee rate, is the percentage expected to change?

A – This is a carrier requirement, not a legislative issue.

Q – In 2014, what if an employer offers insurance to an employee and they refuse the coverage because they don’t want to pay the additional premium?

A – There is an individual mandate in 2014, so if they don’t purchase coverage somewhere, they will be penalized. If they go to the Exchange and buy coverage AND qualify for a tax credit or cost-sharing reduction, the employer would be penalized.

Q – A group I have has 2 group policies; 1 is for owners, and the other for management. In the owner’s policy, if they take a draw instead of a paycheck, will they have to claim their health premiums as income?

A – This is a question for the CPA.

Q – Companies with less than 50 employees don’t have to offer insurance to their employees, but many choose to set up group plans. I understand that the number designated as “small group” is going to change to companies employing over 100, so would that mean that companies with less than 100 employees would not have to offer insurance?

A – Employer penalties begin at 50 full-time employees (FTE) in 2014.

Doug Gulleson loves to scuba dive overseas and makes sure he has his US health care and overseas health care information with him at all times when he travels (check out his diving travels at www.douggulleson.com). Keep our blog close by you, www.gntravelinsurance.com , for continual updates on the changes with the US health care system.

Tags: Arizona insurance, health insurance law, US health insurance
Posted in 2010 updates; FAQ and Answers |

Frequent questions we get asked about the new health insurance law – Part 5

Monday, August 2nd, 2010

These six major coverage options are:

(1) Individual or family coverage

(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

Note: updated 8-1-2010

Note 2: This information is not intended to be legal advice but based on current interpretations that may change depending on new federal and state rulings.

Preventative Services:

Q – Will in-force policies have to comply by covering Preventative with no cost sharing?

A – Only non-grandfathered plans must comply with this market reform.

Q – Will all size cases have to change their contract to comply with the list of Preventative Services?

A – Yes, if not grandfathered.

Q – Will these Preventative Services be covered the same way while under an HSA?

A – The legislation does not differentiate between HDHP and other health plans.

Q – Is this for group policies, or individual as well?

A – The preventative services apply to both Individual and Group non-grandfathered policies.

Q – Are these changes for under 65 plans only, or will they apply to senior plans like Medicare Advantage?

A – The changes apply to under 65 plans only.

Pre-existing Condition:

Q – I am a 50% disabled veteran with a condition that prevents me from buying insurance. The condition is covered by the VA Hospital but ALL other non-related issues are not.

The only insurance I have ever had was through my wife’s employer. She has been retired nearly ten years.

I noticed on the application for the High Risk Pool, that one of the questions is about government coverage including the Veterans Administration. Will I qualify for this program? Will they cover everything but what is covered by VA?

A – Unfortunately, there are very few details available until you apply and get either an acceptance or rejection from HHS. I would go ahead and apply and see if you are accepted.

Grandfathered Status – Tax Credit:

Q – If you opt to stay with your plan, which would put you into the “grandfathered” status, would you still be eligible for the small business tax credit?

A – Yes, as long as all other eligibility criteria is met.

Q – If you have individual coverage, is there any incentive to stay on an individual plan, or at some point in time, should we be telling our clients or prospects to create a group if they have a business so they can cash in on the tax credit? I have someone right now who owns a dental office and he is asking about reform and his situation. Currently, they do not offer coverage to their employees?

A – Individual plans like group plans can be grandfathered. The same situations between offering group and individual will continue to exist (except the guaranteed issue factor after 2014) i.e., the need for an employer contribution, meeting participation requirements, etc. Remember small employers are not going to be penalized if they don’t offer a group plan. But, the only way to receive the small business tax credit is with a group plan. If the only reason for creating the group is the tax credit, they should probably be certain they meet the necessary criteria.

Q – Beginning Sept. 23, 2010, employers are required to allow employees to add dependents up to the age of 26, EVEN WITH Grandfathered plans? If so, is September 23, 2010 considered an “open enrollment” period where employees can add older dependents? Or can older dependents only be added at the company’s open enrollment period?

A – The requirement that plans allow “children” to age 26 back onto the parents plan is effective the first day of the plan year following September 23, 2010 (so for calendar year plans January 1, 2011). This also applies to grandfathered plans (the difference is that if the “child” has coverage available through their own employer, the grandfathered plan does not have to let them on.) There will be a 30 day enrollment period – generally coinciding with open enrollment.

Q – As long as employers keep their EXACT same plan at renewal, this 105(h) code DOES NOT come into play (except for the dependents age 26 rule)?

A – 105(h) and the “to age 26” rules are not related (except by the fact they were both included in PPACA), but this is accurate the 105(h) does not come into play on grandfathered plans.

Carve-outs:

Q – This IRS code affects ALL businesses, big and small? Although some rules (like mandatory health insurance) don’t affect business with less than 50 employees, the IRS 105(h) code affects all businesses from implementing “carve-out” plans?

A –The highly compensated test also applies to small employers. However, carve-outs could continue to exist, if the carve-out favors the non-highly compensated.

Q – With the 105(h) code, are employers (or is the business) required to “cover” the same percentage of health insurance premiums for all employees? I have several groups that offer insurance to all of their employees, but the upper management usually covers 100% of employee and dependent premiums, while only covering 50% of the employee’s premium (and 0% of the dependents, would this still be okay under 105(h)?

A – If there are two different contribution levels, then each separate level would be tested as if it were a separate plan. Generally, this would cause one of the two (if not both) to fail the highly compensated test.

Q – There’s some concern and lack of information on the anti-discrimination – are carve outs still allowed?

A – Technically “carve-outs” are not disallowed; but the plan must be able to pass the IRC 105(h) test or there’s a sizable penalty to the employer (if fully insured, if self insured the benefit becomes taxable to the highly compensated employee).

Q – It seems if the employee works less than 30 hours a week, they do not have to be considered eligible for employer based benefits?

A – This is true however, in 2014 when you “count” employees to determine if there are 50 or more, you count hours, but you do not have to offer coverage to part-time (<30 hours) or seasonal.

Q – Specifically: I have a client who has close to 200 employees—home health agency. They provide benefits for only their admin staff and none of the other employees. To what rules are they subject?

A – If they don’t remain grandfathered, they’ll need to pass 105(h).

Q – Some of their caretakers work for more than one agency, how does that affect the employer if they work the 30 hours?

A – The determination of part-time versus full-time is still relative to just that employer (may be an issue if there’s common ownership).

Q – If a group is under 50, and they are not required to offer health insurance to their employees, can they still do a “carve out”?

A – As long as they can meet the highly compensated test in IRC 105(h).

Miscellaneous

Q – What is PPACA and DHHS?

A – Patients Protection and Affordable Care Act (PPACA)

Department of Health and Human Services (DHHS)

Doug Gulleson totally adores scuba diving and travels overseas throughout the year with his underwater camera in one hand and a cup of coffee in the other. He knows through experience never to leave home without his travel insurance and credit card too. Visit Good Neighbor Insurance at www.gninsurance.com/travel-A/international_travel_insurance.asp for international travel and www.gnazhealth.com for Arizona insurance coverage.

Tags: Arizona insurance, FAQ, US health insurance
Posted in 2010 updates; FAQ and Answers |

Frequent questions we get asked about the new health insurance law – Part 4

Friday, July 30th, 2010

These six major coverage options are:

(1) Individual or family coverage

(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 based mostly on financial criteria

Note: updated 8-14-2010

Note 2: This information is not intended to be legal advice but based on current interpretations that may change depending on new federal and state rulings.

Grandfathered Status

Q – When will management carve-outs no longer be allowed?

A – Non-grandfathered plans must comply with IRS 105(h) the first day of the first plan year following 9/23/10.

Q – What about a grandfathered plan?

A – If the carve-out plan remains grandfathered – they are exempt from the “highly compensated test”.

Q – Will all employees have to be offered the same plan or can there be choices?

A – If not grandfathered, there can be choices, but the offerings must be available to all eligible employees and each component will be tested on-its-own. If grandfathered, the choices in place on 3/23/2010 may remain.

Q – What can an employer who presently has a management carve-out plan do if the vast majority of his employees are paid minimum wage (and are rather transient)?

A – Either keeps the current plan grandfathered or put in a 90 day wait to eliminate the employees who do not remain employed longer than 90 days.

Q – Will the new laws regarding the elimination of carve out plans affect PEO’s as well, or are they immune to these changes?

A – There are no laws eliminating carve out plans. There are regulations that apply to discriminating in favor of the highly compensated, but carve outs (depending on how they are structured and if they maintain their grandfathered status) may or may not be impacted by the highly compensated rules. Either way, the same rules apply to PEO’s – the exception would be if it is under a collective bargaining agreement or self-funded.

High Risk Pool

Q –Can I find the High Risk Plan options online?

A – No, the plan design is not available online. When an individual applies (via the U.S. mail) they will receive an acceptance with the appropriate rate and plan design at that time.

Pre-Existing Medical Condition(s)

Q –Are there any provisions that effect children covered under their parents private insurance related to pre-existing conditions being covered?

A – That is under the Patients Bill of Rights, but it affects children under the age of 19 and plan years beginning after 9/23/2010 (unless the plan is grandfathered), which applies to both group and individual insurance plans.

Q –Can parents cover children up to age 26, and after 9/23/2010 they can cover children under 19 without pre-existing conditions on both group and individual policies?

A – Yes, on the first day of the plan year following 9/23/2010, assuming the plan is not grandfathered.

Miscellaneous

Q – Does the reform address the specific limits for Physical Therapy?

A – Department of Health and Human Services (DHHS) has identified Rehabilitative Services as an “essential benefit”.

Preventative Services Update

DHHS identified the preventative services for which there will be no cost sharing beginning with the first day of the plan year following September 23, 2010. Below are the services included:

Screening for abdominal aortic aneurysm
Screening and counseling to reduce alcohol misuse
Aspirin to prevent CVD
Screening for bacteriuria
Screening for high blood pressure
Mammography
Chemoprevention of breast cancer
Interventions to support breast feeding
Screening for cervical cancer
Screening for chlamydial infection
Screening for cholesterol abnormalities
Screening for colorectal cancer
Chemoprevention of dental caries
Screening for depression
Screening for diabetes
Counseling for a healthy diet
Supplementation with folic acide
Screening for gonorrhea
Screening for hearing loss
Screening for hemoglobinopathies
Screening for hepatitis B
Screening for HIV
Screening for congenital hypothyrodism
Screening for Anemia
Iron supplements in Children
Screening and Counseling for Obesity
Screening for Osteoporosis
Screening for PKU
Screening for Rh incapatability (during pregnancy
Counseling for STIs
Screening for Syphilis
Counseling for tobacco use
Screening for visual acuity in children

Additional Information

Another topic that has been in the news this week is the PPACA requirement that employers report aggregate costs of employer-sponsored benefit coverages on employees’ W-2s for tax years beginning after December 31, 2010. Please remember there have yet to be guidelines issued on this topic.

Payroll systems need to be updated for this change by January 2011 to accommodate employees who terminate during the year and are, thus, entitled to request their W- Form early. Please note: the aggregate cost of an employee’s health benefits will not be included in the employee’s taxable income. This is for reporting purposes only to accommodate various studies and begin preparation for the “Cadillac tax” in 2018.

The coverage costs (whether under an insured or self-insured plan) that must be reported under the new requirement include:
• Medical plans
• Prescription drug plans
• Dental and vision plans, unless they are “stand alone” plans (i.e., an employee may elect only dental or
only vision and is not required to also enroll in medical coverage)
• Executive physicals
• Certain On site clinics
• Medicare supplemental policies
• Employee assistance programs

The benefits exempt from Form W2 reporting requirements include:

• Long term care, accident or disability income benefits
• Voluntary specific disease or illness policies, and hospital indemnity insurance paid with after-tax dollars.
• Archer MSA or HSA contributions of the employee or the employee’s spouse
• Salary reduction contributions to a Health FSA

Doug Gulleson totally adores scuba diving and travels overseas throughout the year with his underwater camera in one hand and a cup of coffee in the other. He knows through experience never to leave home without his travel insurance and credit card too. Visit Good Neighbor Insurance at www.gnazhealth.com and www.gninsurance.com/tripcancellation for Arizona and international travel insurance coverage.

Tags: Arizona insurance, health insurance law
Posted in 2010 updates; FAQ and Answers |

Frequent questions we get asked about the new health insurance law – Part 3 (mostly about employer/group coverage below)

Thursday, July 8th, 2010

These six major coverage options are:

(1) Individual or family coverage

(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 based mostly on financial criteria

Note: Last updated: 8-20-2010

Note: Mostly about group/employer – employee insurance below

Non-Discrimination

Q – Varying health plan rules based on salary, requires all group health plans to comply with the IRS section 105h rules that prohibit discrimination in favor of highly comp individuals. Nondiscrimination rules regarding participation and benefit eligibility.

Do you know if this means groups cannot have different waiting periods?

A – If there are different waiting periods, each separate waiting period must be tested independently to determine compliance.

Q – No discrimination between hourly and salaried employees, does this mean no discrimination in plan design or a group covering only salaried and not hourly, or both?

A – Both, IRS Section 105(h) say that 70% of the employees must be covered or 80% covered with 70% eligible.

Q – Group renews 11-1-2010. They have two classes: Management and non-management/hourly. Currently they pay 90% of premium for managers and 50% of their hourly employee’s premium. Managers are all on one plan design, non-management on the other less rich plan.

If they lose their grandfather status- I understand both classes will be tested separately, right? And, in order to avoid non discrimination problems: – Will the waiting period need to be the same?

A – Yes, to both, assuming they want to be in compliance

Q – Will the contribution need to be the same?

A – Yes, assuming they want to be in compliance

Q – Who monitors?

A – IRS

Dependent Coverage

Q – I have a group that the owner’s son graduated from college last year, has relocated to another state, is working and has group health insurance offered to him through his employer. The question came up whether they (the owner) can add him on to their family plan since he is less than 26 years of age. I reviewed the regulations and did not find anything definitive that would answer the question. He is not an IRS dependent, unmarried, age 22, has a full time job, has group insurance. The owner said that since they are already paying for family coverage, their thought was that with the new legislation, they could just add him back as a dependent. Can the employee add him to their group plan?

A – No. This rule does not go into effect until plan years beginning after September 23, 2010. In addition, if the owner’s plan is “grandfathered” because the son has coverage through his employer, the grandfathered plan is not required to add him back.

Q – One company asked if there has been any clarification on the Act concerning the re-instatement of a dependent, who is under the age of 26, but had been termed last year when he completed undergraduate school?

A – The legislation says that group and individual plans must cover dependents (not as defined by the IRS) to age 26. This is effective first day of the plan year following 9-23-2010. For those under age 26 who’ve previously aged off of a group plan the group will need to have an open enrollment of 30 days to allow these dependents back onto the plan. This open enrollment may coincide with the regular group open enrollment. In addition, a special notice to the plan participants is required. Again, this is effective for plan years beginning after 9-23-2010

Q – I have a friend that is insured with CIGNA on a large group account. In June, CIGNA removed their 19 year old son as he had graduated and lost student status effective June 1. Their account renewed July 1, 2010, and she was not advised the son could be added back on the family medical plan, due to the dependent, HCR guidelines. I know most of the Companies are honoring as of June 1, allowing the dependent to be on the health plan if they were already on and would normally lose coverage, due to graduation. Can you tell me if CIGNA will allow her son to be put back on for coverage now?

A –While most carriers didn’t remove college students in May, they didn’t extend that to high school graduates. Unfortunately, this rule is actually effective the first day of the plan year following 9-23-2010, so next June 1.

Miscellaneous

Q – 60 day notification of plan changes, how can this be? We all know we don’t even get renewal rates until 60 days prior.

A – This is for the carrier to notify groups or individual policy holders of a product change.

High-Risk Pool

Q – If someone is looking for other insurance (and is currently insured by another carrier) he would not qualify for a high risk pool and be allowed to be insured so he can switch carriers would he?

A – Correct, the applicant must be 6 months bare to be eligible for the high risk pool.

Q – Also if he is under 26 and was on his parent’s group plan he could not get on if he is currently insured right?

A – Whether or not he’s insured has nothing to do with going onto his parents plan. It depends on 2 things; is the plan grandfathered (if so, and he currently has coverage available through his employer) he cannot go onto the plan or, if the plan is not grandfathered or he does not have coverage available through his own employer…the parents plan doesn’t have to allow him on until the first plan year following 9-23-2010.

Q – Isn’t September when the new law goes into effect that an individual can get insurance but they go into a high risk pool only if they were uninsured for 6 months?

A – The high risk pool is supposed to be available for enrollments beginning July 1, with an effective date of August 1

Q – Can a person apply through the HRP if they have a rider or an exclusion on their current plan?

A – They can apply if they have been 6 months bare, but another requirement is that they provide proof they were unable to get insurance – for the proof they can provide either a decline or documentation that a specific condition was not covered. This would be as valid as a decline….but the 6 months bare remains.

Q – Can a person apply through the HRP if they have a rider or an exclusion on their current plan?

Grandfathered Plans

Q – Since the regulations were just released on grandfathering plans, what can groups do who have already renewed between March and June? Can they go back and grandfather their plans?

A – Groups that renewed or otherwise changed their plans; and the changes caused a lose in “grandfathered” status are able to “revoke” these changes. We are currently surveying the carriers for the exact manner to be utilized to process these revocations. Upon survey results, this information will be distributed to all BGA producers.

Q – According to what we have read, as of 2014 reform is going to limit out-of-pocket max and deductibles. We have seen where out-of-pocket max will be protected by grandfathering but have not seen anything definitive on the deductibles. We are being conservative and if a group already has a $2,500 or $3,000 deductible we have been talking grandfathering basics to them to hopefully protect that. Any thoughts?

A – The number we’ve seen most for deductibles in 2014 is $2,000, but again that will not apply to plans that are grandfathered. So, certainly, anyone who has a deductible greater than $2,000 and wants to keep it, should make every effort at staying grandfathered.

Q – Regarding rates on non-grandfathered plans, are they going to go way up in 2014, but grandfathered plans might fare better?

A – Because grandfathered plans are not required to implement all of the market reforms (only a few), the rates for a grandfathered plan should be lower in 2014. That doesn’t mean the carriers won’t make changes, which may cause the loss of grandfathered status anyway.

Q – I had a question on the Grandfathering of the Health Reform Bill …. I have a group with 15 Salaried Employees (120 hourly employees not covered). The Broker and I discussed the renewal but I indicated that the group could lose the “Grandfather” status by making changes to the plan designs offered. Additionally, there could be a penalty to the Employer in 2014 for not covering these 120 hourly employees. I have two questions:

1. When would the penalty for not covering these employees be imposed on the employer if no “Grandfather” status is in place?

A – If the plan is not grandfathered and thus is subject to 105(h); and subsequently fails the test. The penalty (beginning this year) is $100 per day for each individual with respect to which the failure relates.

Q – 2. In 2014, the Employer will have to cover these 120 employees for medical. If the penalty is imposed in 2014, why is the Grandfathering status important?

A – The highly compensated test and penalty is applicable in 2010 (plan years beginning after 9-23-2010). In 2014, the employer may or may not need to offer coverage to the additional 120 – if they are above 400% of FPL, there’s no tax credit available and thus, no penalty if one of their employees purchases through the Exchange. The penalty is only applicable if a group, with greater than 50 employees, has at least one purchasing through the exchange and receiving a tax credit. Otherwise, there is no penalty.

Q – If a group has a more favorable contribution structure for the highly compensated compared to the rank and file, we have been having them stay grandfathered to protect that. Again have not seen contribution structure addressed directly but we do consider it favoring. Are we wrong?

A –To maintain different contribution strategies between highly compensated and non-highly compensated, the plan must stay grandfathered. While, not prohibited, if there are different contribution structures, each structure must be tested on its own merit and in all likelihood, one will fail the test.

Q – Do the grandfather conditions apply to small groups?

A – All size groups, as well as individual plans.

Q – Under the Internal Revenue Code Section 105(h) does it mean that management carve-out plans would no longer be allowed in order to pass plan discrimination testing?

A – Assuming the management staff is also the top 5 highly compensated and the plan loses it’s grandfathered status, that’s correct it will not be in compliance.

Below is information on Grandfathered Status, as well as, Discrimination under PPACA.

Retiree health plans, stand alone dental and vision plans are exempt from all of the provisions of PPACA.

Q – With small group, 10 or fewer employee’s, is there any difference being grandfathered or not?

A –The size of the group has nothing to do with whether or not a group maintains grandfathered status. The market reforms and discrimination issues apply to all non-grandfathered groups.

Q – Having “grandfathered status” doesn’t seem like a big deal. Is there really any great advantage having grandfathered status, and it seems like in 6 months to a year the status will be obsolete unless the November elections turn things around.

A –For a discriminatory or carve out plan maintaining grandfathered status is essential to continue operating the plan in this manner.

Q – What do you think is the greatest concern regarding grandfathered status with individual plans?

A – The cost of the market reforms in 2014.

Q – If a group renewed on March 1st this year, is the Grandfathered Plans model notice not an issue until next anniversary?

A – Correct – not an issue this was before the date of enactment.

Q – Just had an interesting conversation with a carrier and was informed by a supervisory person that even though we grandfathered the plan this year effective 8-1-2010 they will not be able to stay grandfathered because they will NOT be offering the current plans and will be replacing all plans to the reformed plans, therefore eliminating the grandfathered status next year

A – Absolutely true…if the carrier makes changes to cause the loss of grandfathered status, the client has no option.

Applicable to all Plans INCLUDING Grandfathered

Section 2708 – no waiting periods in excess of 90 days

Section 2711 – no lifetime limits (no annual limits)

Section 2712 – rescissions only in the event of fraud

Section 2714 – extension of dependent coverage to age 26 (for groups only-applicable if the adult child is not eligible for coverage through their own employer)

Group Plan Deductibles

Q – We have a group – not a carve-out, thank goodness! – that has received some very competitive quotes from alternate carriers. One of the options would have the group purchasing a $2,500 deductible but offering the employees a zero deductible. How would this situation come 2014, when there will be legislation limiting the amount of deductibles on group plans? If the ceiling is around $2,000 as expected, this plan would exceed this limitation. But if it is not passed on to the employee, it shouldn’t be a problem, no?

A – The current understanding is that in 2014 the deductible amount an employee will pay will be limited to $2000, so the plan could have a greater deductible, but the employees cost would be at $2000…but, a lot can change by 2014.

Temporary Reinsurance Program

Q – Do you know anything about a bill that supposedly passed about Temporary Reinsurance Program?

A – The temporary reinsurance program is for groups that offer coverage to early retirees.

Tax Credit

Q – Is the small employer tax credit – refundable?

A – If there is no tax liability, I don’t know if it’s refundable but it can be carried over.

Q – Can it be used towards future liabilities?

A – Yes.

Highly-Compensated

Q – If a group already has a plan but adds an additional plan – what is subject to the Highly Compensated test?

A – If the current plan is grandfathered then only the new plan is subject to the test. If the original plan is no longer grandfathered, both plans must be tested.

Q – If a group has 3 plans and they drop 1 of the 3 what happens with the highly compensated testing?

A – If the other plans make no changes causing them to no longer be grandfathered, no testing is necessary.

Q – Can you clarify the “carve out” penalties and when they will become effective for “grandfathered” and “non-grandfathered” health plans?

A – If a plan fails the highly compensated test for plan years beginning after September 23, 2010, the penalty is $100 per day per incident. This does NOT apply to grandfathered plans.

Grandfathered plans are EXEMPT from the following:

Section 2713 – no cost sharing on preventative

Section 2715 – uniform explanation of coverage and standardized definitions

Section 2716 – prohibition of discrimination based on compensation

Section 2719 – internal and external appeals process

Section 2701 – affordability test

Section 2702 – guaranteed availability

Section 2703 – guaranteed renewability

Section 2705 – guaranteed issue

Section 2707- comprehensive health insurance coverage

Section 2709 – coverage for individuals participating in clinical trials

There are a variety of other Sections from which grandfathered plans are exempt, but they deal with quality of care, etc. One of the most critical sections to be concerned about right now is Section 2716 – discrimination in favor of the highly compensated. This is especially true if you have a group carve-out plan.

Another component of the Rules issued last week is the ability for a plan that made changes between 3-23-2010 and 6-17-2010; and those changes would cause the plan to lose it’s grandfathered status, to revoke those changes. We are surveying the carriers to find out the process for these revocations.

Group ONLY

To maintain grandfathered status, a plan must include a statement that the plan believes it is a grandfathered health plan within the meaning of section 1251 of the Patient Protection and Affordable Care Act and must provide contact information for questions and complaints. The DOL model language can be found at: http://www.dol.gov/ebsa/grandfatherregmodelnotice.doc .

Non- Discrimination Rules for Insured Plans

PPACA mandates that group plans satisfy the requirements of 105(h) of the Internal Revenue Code – prohibition on discrimination in favor of the highly compensated). Insured plans are now subject to this testing. Also, if you have a plan with multiple waiting periods, each waiting period group must be tested on it’s on.

The following information is necessary to perform this test:

All employees

All eligible employees

Compensation for all employees

Who is an officer

Who is a shareholder and the percent of company stock they own

Date of hire

Age

FTE, PT or seasonal identifier

Anyone covered by a collective bargaining agreement

The eligibility test is as follows:

The plan must pass one of 3 coverage tests:

- 70% of all employees must benefit under the plan

- the plan must benefit 80% of the eligible’s and 70% of the employees are eligible

- the plan benefits a non-discriminatory classification of employees

If a plan provides different benefits to different groups of employees, each benefit structure (i.e. waiting period) must be tested as if a separate plan.

Doug Gulleson totally adores scuba diving and travels overseas throughout the year with his underwater camera in one hand and a cup of coffee in the other. He knows through experience never to leave home without his travel insurance and credit card too. Visit Good Neighbor Insurance at www.gnazhealth.com and www.gninsurance.com/tripcancellation for Arizona and international travel insurance coverage.

Tags: Arizona insurance, health insurance law, US health insurance
Posted in 2010 updates; FAQ and Answers |

Frequent questions we get asked about the new health insurance law – Part 2

Wednesday, June 16th, 2010

Good Neighbor Insurance is continuing to update our clients on the new health insurance laws. It may seem confusing at first but as we “walk” through these laws we will learn the “upside” and the “downside” of their impact on us. With all the changes on the horizon, one of the most common questions asked us at Good Neighbor Insurance, www.gninsurance.com, is “What do these health care laws mean to me?” The simplest answer is: It all depends on how old you are and for whom you work.

Note: Last updated: 6-15-2010

Guaranteed Issue on Children

Q – I believe one of the parts to the new healthcare legislation is guaranteed issue for children less than 19 years of age. Is this correct? If so, when does it go into effect?

A – All group and individual health plans, including self-insured plans, will have to cover pre-existing conditions for children 19 and under for plan years beginning on or after six months after date of enactment. Grandfathered status applies for group health plans. Six months after enactment is 9-23-2010, for plan years 10-1-2010 and after.

This is the verbiage from the legislation which is not the same as guaranteed issue, but that certainly is the guideline we expect from Department of Health and Human Services.

Q – Can a waiver (for example, allergy) be placed on a child under 19 under this new law?

A – Beginning 9-23-2010 – no, children under age 19 will not have pre-existing condition exclusions.

Pre-existing Condition

Q – I have a client that is looking for insurance for himself and his child, with pre-existing issues (cleft pallet). When do the changes take place and are some companies changing their standards early. Should this client apply for individual health insurance? If so, which company should I use?

A – If the child is 19 and under, all group and individual health plans, included self-insured plans, will have to cover pre-existing conditions for plan years beginning on or after six months after date of enactment. (9-23-2010) – in other words, for a guaranteed issue product on this child, you’ll need to wait until the end of September for them to apply. Thus far, no carriers have announced they will implement this early.

Q – If an adult child has a pre-existing condition, is there anything to be aware of?

A – The rules on pre-ex are unclear at this time, but the assumption is that they may still have the pre-existing period.

Q – I have a client who said that beginning in October of this year, insurers can no longer increase group health insurance rates based on a child. Can you confirm? I have a client that has a child with leukemia and we expect their group rates to increase substantially in March of 2011?

A – PPACA states that there will no longer be pre-existing condition exclusions for individuals under age 19 effective for plans up on or after September 23rd. This applies to all markets and grandfathered group health plans. HHS has announced its intent to issue regulations clarifying: (1) children with preexisting conditions could not be denied access to their parent’s coverage; and (2) insurers would not be allowed to insure a child, but exclude coverage for the child’s pre-existing condition. So, the short answer is if final regulations come out as expected AND the child is less than 19, there should be no impact on rates for this child.

Preventive Care on Individual Plans

Q – Do you know when the carriers are mandated to start covering all preventive care on individual plans?

A – The carriers aren’t required to cover all preventive care without cost sharing. However, this year we will receive guidelines on specific preventive care to be covered with no cost sharing – this is effective for plans years beginning 6 months after enactment. For groups this means the first plan year following 9-23-2010, (i.e. October 1 renewals and beyond). For individual, since there is no specific “plan year” this is subject to guidelines.

Q – Can you explain what you mean by “plan years beginning”? Does that mean any policy that is applied for after 9-23-2010?

A – This includes not only policies applied for after that point, but also renewal dates after that time (unless the grandfathered status applies) i.e. for a group with an October 1 renewal date, this would be applicable.

Dependent Coverage for Adult Children

Q – Is there anything stating that an adult child can get on his/her parent’s plan, if the employer sponsored group plan they have access to is too expensive?

A – No, there is nothing to that effect.

Q – The “tax-free employer coverage for children who are not otherwise tax dependents”, something to do with children not turning 27 as of the end of year. I don’t understanding how this applies, and what do I need to do about it?

A – The age “27″ showed up in a document from the IRS about the tax treatment of adult children on plans. The legislation only requires plans to cover adult children (as long as they don’t have coverage through their own employer) to age 26.

Q – What plans are required to extend dependent coverage up to age 26?

A – The Affordable Care Act requires plans and issuers that offer dependent coverage to make the coverage available until a child reaches the age of 26. Both married and unmarried children qualify for this coverage. This rule applies to all plans in the individual market and to new employer plans. It also applies to existing employer plans unless the adult child has another offer of employer-based coverage (such as through his or her job). Beginning in 2014, children up to age 26 can stay on their parent’s employer plan even if they have another offer of coverage through an employer.

Q – Why is there a special exception for group plans in existence on March 23, 2010?

A – The goal is to cover as many young adults under the age of 26 as possible with the least amount of burden. If a young adult is eligible to purchase other employer-based health insurance such as through her job, the law does not require the parent or parents’ plan to enroll that child if the parents’ plan is a grandfathered health plan (i.e., in existence on March 23, 2010). Of course, all group plans have the option to cover all adult children until the age of 26 or beyond. In 2014, this exception will no longer apply. ***This is from the department of HHS: http://www.hhs.gov/ociio/regulations/adult_child_faq.html

Q – What happens if they already have family coverage but there is an exclusion rider already in place on their policy for one of the children? Does the exclusion policy go away and they rate up on this condition the next plan year?

A – This is unclear at this time – we anticipate clarification from HHS that rate-ups will not be allowed, but thus far this has not been addressed and the carriers have yet to come up with procedures.

Q – Can an employer refuse to cover a dependent if they had been on the mother’s group health coverage, and graduated from college in mid May? The mother’s employer (a school district) refused to allow the dependent to continue coverage under the mother’s plan even though the dependent is under 26.

A – There are two possible issues with this situation. First, depending on the carrier, they may or may not have allowed college graduates to remain on the plan before actual required implementation (6 months following date of enactment); second, because the mother is a teacher she may be on a State program that is not subject to this legislation. Without additional details, we have no way of knowing the exact reasoning.

High Risk Pool

Q – The date of 9-23-2010 for being the effective date of the high risk pool; is this the date that starts the clock so to speak, or is this the date people qualify if they have not had coverage 6 months prior to this date?

A – Actually 9-23-2010 is not the effective date of the high risk pool; it is July 1, 2010. This is the date the High Risk Pool goes “live”, so in order to qualify for the pool at inception, an individual cannot be covered today.

Q – Regarding the High Risk Pool, and the mandatory 6 month “no previous coverage” rule… Can that “no coverage” be voluntary? Or does there have to be proof that an applicant has been denied coverage?

A – There have not been clear guidelines, but thus far, there’s nothing to indicate that the coverage had to be denied.

Q – If proof has to be shown, what if an applicant wants to use the high risk pool because although they have coverage, it doesn’t cover a specific medical condition (it’s been waived)? Do they have a chance to apply within the high risk pool, if they voluntarily go without coverage for 6 months?

A – They can’t have coverage at this time. It appears, the “without coverage” can be voluntary.

Highly Compensated Employees

Q – When the government starts to do an audit to see if there is discrimination for the highly compensated employees getting coverage, what is the penalty? Is it the $3,000?

A – For a fully insured plan the penalty is $100 per day for each affected insured to a maximum of $500,000.

Federal Funds for Retirees

Q – On the AARP Bulletin of May 10, the bullet-point states “Commercial insurance – The federal government will provide funds from June 2010-December 2013 to help employer plans cover early retirees ages 55 to 64 and to reduce retiree cost.” Does this mean that a group has to have retirees on their medical plan?

A – If a plan allows early retirees (between the ages of 55 -65) to remain on their plan, there are funds to help offset the claims. If one of the early retirees has a claim in excess of $15,000, the government has a program that will reimburse between $15,000 – $90,000 to the health plan. The purpose is to make the plan more affordable. This provision is effective June 1, 2010 and details on how to file for the reimbursement are expected shortly.

Tax Credit

Q – If a group has fewer than 25 employees and average wages are under $50,000, would they qualify for the insurance credit?

A – At first glance yes, as long as the client is also paying at least 50% of the employees premium.

Q – If a small business with fewer than 50 employees qualifies for the tax credit, in the year 2014 that business MUST purchase their health insurance from the exchange. Is this correct?

A – Yes that is correct – subsidies and tax credits will only be available through the Exchange.

Miscellaneous

Q – The IRS document (Tax Treatment Dependents to Age 27) talks about until age 26 and up to age 27. Is 27 the new age to use?

A – No – the age 27 has nothing to do with the reform legislation – this is just the IRS tax treatment info.

Q – Has the healthcare reform caused rates to increase, decrease or stabilize?

A – At this time, none of the market reforms have really been implemented, so we’ve yet to see the impact on rates.

Q – If HSAs are to be phased out in the next few years, do you agree that we should be advising clients to consider max funding them now?

A – There is nothing in the legislation that requires HSA’s to be phased out. In fact, several time limits in the legislation are based on those of an HSA.

Exchange

Q – Are brokers involved and paid for placing business in the exchange?

A – Yes – there’s actually specific language in the legislation to include agents and brokers in the exchange.

Q – Will brokers be able to bring their clients to the new Health Exchanges?

A – The legislation is written to allow agents and brokers to sell through the Exchange.

Q – Will brokers be able to collect commissions on a monthly basis, as we do now, to bring their clients to the exchange?

A – Brokers will be compensated to sell through the Exchange but the manner and amount is yet to be disclosed.

Q – What kind of commissions? Small group is 5% to 7%?

A – Unknown at this time.

Part-Time Employees

Q – Under the new legislation does an employer have any obligations to part-time employees? How is the legislation defining a part-time vs. full-time employee? I understand that in determining if a group has 50 or more employees, part-timers are counted in the numbers?

A – There are neither requirements nor penalties to the employer for NOT offering coverage to part-time staff. A FTE is now defined as 30 hours per week or more.

U.S. Departments of Health and Human Services, Labor, and Treasury Issue Regulation on “Grandfathered” Health (Group) Plans under the Affordable Care Act

Grandfathered plans may increase deductible and out-of-pocket limits, but only to a certain limit. Essentially, the maximum percentage is defined as “the increase in medical care component of the Consumer Price Index since March 23 plus 15 percentage points”.

With respect to copayments, a plan would maintain it’s grandfathered status if it increased copayments up to $5 or a percentage equal to medical inflation plus 15 percentage points, whichever is greater.

Also, employers cannot decrease the percentage of contribution that they pay (as of March 23) by more than 5 percentage points and retain their grandfathered status.

Changing from one carrier to another would result in a plan losing it’s grandfathered status.

Finally, retiree-only health care plans are automatically exempt from health care reform requirements

Voluntary Long Term Care

Q – Is specific information available on the “voluntary” long-term care” insurance?

A – Yes, the premium will be about $50 per month and the employee must contribute for at least 5 years to receive a benefit. The benefit is projected to be $50 per day, but there’s nothing about length of the benefit.

Q – Is it true ALL employers MUST automatically enroll all employees who do not opt out, beginning 1-1-2011?

A – Yes.

Q – Is dependent coverage available to employees?

A – This is unknown.

Q – With no underwriting?

A – Yes.

Q – Subject to pre-taxing?

A – This is unknown.

Q – Is it true that no benefits will be paid during the first 5 years of the program?

A – Yes.

Doug Gulleson loves to scuba dive overseas and he makes sure he always takes his Amex card AND international travel insurance. Visit Good Neighbor Insurance at www.gnazhealth.com Arizona and US coverage or if you are going overseas grab one of our travel plans at www.gninsurance.com/tripcancellation/ .

Tags: FAQ, health insurance law, US health insurance
Posted in 2010 updates; FAQ and Answers |

Frequent Questions We get Asked About the New Health Insurance Law – Part 1

Wednesday, April 28th, 2010

Below are sample questions from clients along with answers. We also have set up a category called “Understanding the new insurance law” on our blog site at www.gntravelinsurance.com or here at www.gntravelinsurance.com/category/us-health-insurance/2010-health-insurance-law-information/ .

NOTE: This article was updated on 5-7-2010 with additional Questions and Answers.

General

Q – Do you know if the change to FSA/Health Saving Accounts – Over the Counter Drugs – takes effect Jan. 1, 2011 or upon plan year following Jan. 1, 2011?

A – This is effective the first tax year following 2010 – so Jan 1, 2011.

Dependents

Q – Can groups start re-enrolling dependents under 26 immediately? Are there any limitations? I thought I read if the dependent has access to coverage through a spouse’s employer, he or she cannot get on their parents’ plan.

A – This provision is effective for plan years beginning on or after six months after enactment (9/23/2010). We are presuming this means dependents can only be added at open enrollment and the first plan year affected will be 10/1/2010 plans. The dependent cannot have access to another employer-sponsored plan either through their own or a spouse’s employer.

Q – My understanding is that any child 26 or under is now able to be on their parents policy. I was wondering if this is correct? If it is effective as of now? If there are any stipulations in order for it to be done?

A – Right now most of the carriers have said if an adult child under age 26 is currently on the plan (either individual or group) they may stay on that plan until age 26. However, if an adult child has already aged off the plan, i.e. last year they graduated from college and were no longer eligible – there is no clarification that they must be allowed back onto their parents plan. The law does not go info effect until the first plan year after September 23, 2010; however, most of the carriers are implementing this provision immediately.

Pre-Existing Conditions – High Risk Pool (starting 7-1-2010 and ending on 12-31-2013)

Q - Adults who cannot get health coverage due to a pre-existing condition can join a high risk pool. How would they go about getting that done?

A – There is supposed to be a “state” high risk pool effective July 1, 2010. The individual wanting to join must not have had coverage for the previous 6 months due to a pre-existing condition. No details on the pool are available at this time.

Q – By removing preexisting clause can someone on a group policy shop around for individual coverage and a better rate or does that person with the preexisting condition have to go into the high risk pool?

A – Yes, they can go into the high risk pool but by going off of the group plan they will lose the employer contribution. The high risk pool is only available from July 1, 2010 until Jan 1, 2014 (the same time pre-existing conditions go away and Exchanges begin). Also, to be eligible for the high risk pool the enrollee must be without coverage for the previous 6 months (or longer) and have a pre-existing condition.

Q – I have a current client that was asking about options for her, due to the new legislation since she has preexisting conditions? I was not sure how it applied. I thought it was not active until the year 2014.

A – Pre-existing conditions will not be eliminated for adults until 2014. However, there will be a high risk pool as of July 1, 2010. The high risk pool is for individuals who have not had coverage for at least 6 months and have a pre-existing condition. No information on how to enroll in the high risk pool is available at this time.

Q – Pre-existing beginning 6/14/2010 coverage will be available to individuals who have been uninsured for at least 6 months through high risk pool programs in every state. Does this mean if someone is on a portability plan they can now go on a regular plan, regular individual rates 6/14/2010?

A – What they are talking about is the “high risk pool” that’s going to be available as of 7/1/2010. This pool will either be operated by the State or if the State chooses, they may utilize the Federal high risk pool. But, the person must be 6 months bare. Recent clarification indicates that if an individual has health insurance (it appears of any kind) they cannot access the high risk pool. The belief is this includes a HIPAA portability product – so no, they would not have access.

Q – Will the High-Risk pool have rates similar to normal individual insurance or closer to the HIPAA plans we see in place today?

A – From what we understand the rates on the High-Risk pool will be based on what the IRS identifies as Average Premium for each state, possibly times a multiplier. The 2010 Average Premium Rates for Arizona are $4,495 Individual, $10,239 Group.

Q – I am still getting children under 19 declined for Pre-existing, is this not in place yet for AZ?

A – This provision is effective plan years beginning 6 months after enactment – September 23, 2010. There is a definite possibility it will be implemented by some carriers earlier, but thus far, has not been implemented.

Q – Does pre-existing condition also refer to any condition, for example overweight, which the medical insurer finds unacceptable?

A – Yes, obesity is considered a pre-existing condition.

Q – Do you know what will happen with individuals that are covering their children and have a rider on their policy for one child’s pre-existing condition? Will carriers still be allowed to issue riders (waivers)? If not, what happens to the riders that are in place now?

A – Effective 6 months after enactment (9/23/10 – possibly first plan year following) carriers will NOT be allowed to rider conditions for policies on children under age 19. We have no guidance on current riders. Please keep in mind, we expect HHS Secretary to take this a step further and issue guidelines that the intent of the law was to have guarantee issue on these children, so it will be immaterial -if that happens, they can simply buy a new plan.

Q – People on Significa can’t go to the high risk pool without being bare for 6 months, correct? Or do they qualify because the company is leaving the state?

A – This is correct – they must have gone bare for 6 months.

Q – If you are uninsured for at least six months, are healthy, and then get pregnant – are you then eligible for the High Risk Pool Plan and will the pregnancy be covered?

A – Probably, the High Risk pool is meant to cover all pre-existing conditions.

Grandfathered plans

Q – On a group of 600+ that renews on 7/1/2010 that is going to make a couple of benefit changes to the two plans, how will this affect their grandfather privilege? Also, what is the advantage of having this status? Don’t all groups have to comply with the new provisions in the health care bills, or if I have this status I don’t have to comply with some provisions until a certain year? I was reading that the Reconciliation bill pretty much eliminated this status anyways; can you please help me understand this?

A – Reconciliation eliminated the “grandfather” ability on a couple of provisions, but not on the entire plan. However, if you do anything more than add/delete members, the plan loses its grandfathered status.

Q – Would changes in employer contributions affect grandfathering?

A – No, if an employer chooses to contribute at a higher or lower percentage, it will not impact grandfathered status.

Q – Do you think employer contributions can change and still maintain grandfathered status?

A – Yes, it is our understanding that can happen.

Tax Credit/Income for Businesses

Q – For qualified clients under 25 employees… How do they apply for this government credit? Is there paperwork that needs to be completed? Or do we even know the process yet?

A – There has been no direction given on the process to apply for this tax credit. However, since it is a tax credit, we presume it will be done via either a line item or additional form submitted when the 2010 Corporate taxes are filed.

Q – I’m not sure if I follow the definition of “insurance costs.” Can qualified employers still receive a credit AND deduct premium payments (for all employees)?

A – The employer cannot take the full deduction for premiums paid if a portion of those premiums are offset by credits.

Q – Have you heard anything on Group coverage that is non-union base? Is there an immediate 40% tax increase on all groups that are non-union based?

A – This 40% tax on “Cadillac plans” does not go into effect until 2018.

Q – What is the interpretation of having to report the value of healthcare benefits on the W-2 in 2011? Will it be taxable as income for 2011?

A – In 2011 Employers will have to report the value of heath benefits; however, the tax on “Cadillac plans” does not begin until 2018.

Q – If an employer only changes their plan year and does nothing to plan design, will it impact their “grandfathered” status?

A – The legislation is silent on this situation. However, since there are no changes to plan design the presumption is that it would not impact their “grandfathered” status.

Employers paying Individual Plans

Q – What impact is on the employers who pay for individual plans for their employees? Will they be penalized for not having a group plan or does this qualify?

A – There is no mandate that employers sponsor a group health plan. However, if any of the employees go to the exchange AND receive a tax credit – yes, the employer will have a penalty.

Discrimination Rules

Q – I’d like to get some clarification on the nondiscrimination rules; “plans cannot base an employee’s eligibility or continued eligibility on hourly or annual salary”. Does this mean the AMOUNT of hourly or salaried wages? Or, could it mean that an employer could no longer offer coverage to salaried employees only?

A – This does refer to the amount of the wage – the plans must meet IRS section 105(h) discrimination rules for highly compensated.

Q – Can a customer continue to contribute to premiums based on Position (Management, Sr. Management, All other as an example)?

A – They can contribution based on class, however must meet IRS Sec 105(h) non-discrimination rules.

CLASS Act

Q – Any simple explanation of the CLASS act in the legislation?

A – CLASS is a voluntary long term care insurance program designed to assist participants to maintain home and community living arrangements. It is effective Jan 1, 2011.

There is no underwriting except based on age to determine premiums and eligibility for the program. Enrollment is automatic through the employer, if the employer offers the program. Employees must opt-out if they do not wish to enroll. Employees may opt out at anytime and qualified individuals who are eligible to enroll may do so at anytime. To be eligible, the participant must be 18 years or older, receive taxed wages or taxed self-employment income, and be actively employed.

Miscellaneous Questions

Q – Are there any rules included in the reform that require an employer to contribute premium toward dependent coverage?

A – No rules specific to premium contributions for dependents. However, if an employee pays more than 9.5% of their wages for the health plan, it is considered “unaffordable” and the employer may be subject to a penalty.

Q – If you have a short term policy, will that disqualify you from “going bare”?

A – From what we understand, because a short term policy is a “comprehensive medical policy” yes it will disqualify a person.

Q –If a company that employs 100 people did a carve-out for the health of just 25 people, are they eligible for any funding/credits (if the average salary is under $50k) for the group on the carve-out, or are those credits only available if there are less than 25 employees?

A – The tax credit is only available to employers with less than 25 employees (not just 25 on the plan); so they are not eligible.

Q – Are there any laws that impact employers of more than 100 to date?

A – Yes, the 2010 reforms (i.e., covering dependents to age 26, no lifetime max, etc.) apply to these employers too.

Q – (Example) married daughter is covered on mom and dad’s policy and she has a baby, is there any obligation for the insurance company to pick up the newborn child (grandparents do not have legal guardianship)?

A – No.

Q – Do you know when the carriers are mandated to start covering all preventive care on individual plans?

A – The legislation reads….for plan years beginning 6 months after enactment (9/23/2010). In addition, only specific (yet to be identified) will be subject to no cost sharing.

NOTE: Employer information from health care reform

Effective immediately (March 23, 2010), employers must now provide nursing mothers reasonable unpaid break time to express milk, for a period of up to one year following a child’s birth.

NOTE: Carriers offering to extend dependent eligibility ahead of health care reform schedule

This month, April 2010, several carriers announced their intent to extend eligibility to young adults (up to age 26) who are currently covered on their parents’ plan. The carriers making this announcement include: Aetna, Humana and UnitedHealthCare. The processes to be followed have not yet been identified. Once these are identified, we will communicate accordingly.

Doug Gulleson loves to scuba dive overseas and makes sure he always takes his Amex card AND international travel insurance. Visit Good Neighbor Insurance at www.overseashealthinsurance.com/short-term.asp for your next overseas trip health coverage and get a FREE quote or call one of our agents at 480-633-9500.

Tags: health insurance law, US health insurance
Posted in 2010 updates; FAQ and Answers |

Archive for the ‘2010 updates; FAQ and Answers’ Category

Questions and answers about the new health insurance law – Part 11

Questions and answers about the new health insurance law – Part 9

Questions and answers about the new health insurance law – Part 7

Questions and answers about the new health insurance law – Part 6 (mostly about employer/group coverage below)

Frequent questions we get asked about the new health insurance law – Part 5

Frequent questions we get asked about the new health insurance law – Part 4

Frequent questions we get asked about the new health insurance law – Part 3 (mostly about employer/group coverage below)

Frequent questions we get asked about the new health insurance law – Part 2

Frequent Questions We get Asked About the New Health Insurance Law – Part 1

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