Small Group 51-100 Transition

As of January 1st, 2016 the definition of small group has been expanded to include groups with 51-100 full time equivalent employees.  For groups that will be making the transition, the changes are significant and should be reviewed in detail with a small group specialist.  Since 70-80% of renewals will take effect in Q4 of 2016, it is imperative that you consider all options as soon as possible to familiarize yourself with the new ACA mandates. Rating Regions – Large group rating regions vary by each carrier. Small group consists of 19 regions that are standardized for all carriers. Rating Structure – Large group rates are composite (same rate for each member) and are generated based on the average of employee ages, tiers, genders, and zip codes. Small group rates are determined on a member level based on employer location, where employees and dependents are rated independently.  While age bands can vary by carrier, you will typically see the same rates for age 0-20, one band for each year between 21-63, and one band for age 64+.  Dependents under the age of 21 will be rated individually, up to 3 children. In addition, the ACA has imposed a 3:1 ratio for small group rates.  The rate difference between the youngest to oldest may not exceed a 3 to 1 ratio. The biggest rate increases will hit groups with good medical and SIC risk, and employees with dependents age 20+.  Conversely, young employees may experience rate decreases. Carriers release one set of rates and all groups receive the same standardized rates based on the enrollee’s age.  Rate negotiations are not...

Common Summary Plan Description (SPD) Mistakes

Subject to ERISA (Employee Retirement Income Security Act) the SPD (Summary Plan Description) is one of the most important documents that participants under a health benefit plan must receive.  The Department of Labor has increased its company audits, and more often than not employers are failing to provide their employees an SPD.   Some may consider the information distributed by their insurance carrier as sufficient evidence of coverage and benefits to satisfy their SPD distribution requirement.  Unfortunately, this is not the case, and the responsibility lies solely in the lap of the plans administrator (the employer that sponsors the group plan).   Every employer that sponsors a group health plan must comply with this important ERISA requirement, or they run the risk of facing a hefty fine.  Penalties of up to $110/day per participant or beneficiary for failing to provide an SPD or plan document within 30 days of receiving a request.  The penalty accrues daily from the inception of the policy, not from the date of notification to furnish.   It is considered a best practice to distribute the SPD to employees and maintain proper records that each beneficiary has in fact acknowledged receipt.  This can be accomplished by employing an online administration system that can track and organize specific notices, and ensure compliance under ERISA.   To learn more about how we can assist your company reduce its risk of an audit, and eliminate the risk of arbitrary penalties -please contact us via telephone or...

2016 Covered CA Open Enrollment

It’s almost that time of year again.  Open Enrollment begins November 1st, 2015 and continues through January 31st, 2016. Individuals that are currently enrolled and wish to continue coverage without any changes can simply continue to pay as billed. No further action is necessary. Beginning October 12th, individuals can make changes to their existing application and shop for new plans.  Any changes made will not be transmitted to the carriers until Novemeber 1st. Submissions from November 1st through December 15th will reflect a January 1st start date. Submissions from December 16th through January 15th will reflect a February 1st start date. Submissions from January 16th through January 31st will reflect a March 1st start...

ACA Reporting Requirements

Applicable Large Employers (ALEs) must report information to the IRS regarding the health care coverage offered to full-time employees and full-time equivalent employees (FT/FTE). Once you’ve collected all the necessary information from your workforce, you must complete the three documents required for ACA compliance: the 1094-C, 1095-C, and the Written Statement to each employee. Form 1094-C Employer Transmittal Accounts for each of the following, per 2015 calendar month: Full-time employees Total headcount Whether Minimum Essential Coverage was offered Whether an applicable 4980H “Safe Harbor” was used Deadline for documents to be mailed: February 29, 2016 Deadline for document to be transmitted digitally: March 21, 2016 Form 1095-C Employee Statement Accounts for each of the following, per 2015 calendar month: Proof of offer of coverage (with code) Employee’s share of the lowest cost monthly premium Whether an applicable 4980H “Safe Harbor” was used Deadline for documents to be mailed: February 29, 2016 Deadline for document to be transmitted digitally: March 21, 2016 Written Statement of Each Covered Employee The employer’s name, address, and contact information The information for the employee on the return being filed Deadline for Statement Sent to Employee: January 31,...

4 Things to Know About the Affordable Care Act

The ACA is designed to reduce healthcare costs, expand coverage for the uninsured, and increase quality of care for people. The ACA can be confusing, making it difficult for many businesses to comply with the law’s requirements. In 2016, almost all businesses will be required to comply. To avoid hefty fines, here are four things to know about the requirements so you can remain compliant and penalty free in 2016: Are you an Applicable Large Employer (ALE)? If so, your business is subject to ACA requirements! To be considered an ALE, your company has to have 50+ full-time employees and full-time equivalent employees (FT/FTE). Calculating your total number of employees is difficult. That’s because the ACA classifies “full time” employment as 30 hours a week of work or more. Make sure to include both full-time employees as well as those who work the equivalent of full-time hours. Your business must offer “affordable” health insurance of “minimum value” to your employees: “Affordable” Health Insurance is less than 9.5% of annual household income. You can calculate the 9.5% from employees’ W2 wages, hourly pay rate, or the Federal Poverty Level for an individual. “Minimum Value” means employer-sponsored health plans must be designed to pay at least 60% of the total cost of medical services. You need to submit three key documents to guarantee compliance. If you’re an ALE, collected all the necessary info from your workforce, and made the necessary calculations, then it’s time to complete the three documents required for ACA compliance: the 1094-C, 1095-C, and the Written Statement to each...