Yearly Archives: 2014

  • They’re in control…but not quite, or at least not enough. Is that a good thing?

    December 31, 2014

    With some upset victories, California Democrats knew what it felt like in Congress as they lost their super majorities in both California houses.  When a series of special elections finishes next year they will be one vote short in the Senate and two in the Assembly.

  • OSHA’s New Reporting and Recordkeeping Rule Goes into Effect on January 1, 2015 | California Employee Benefits

    December 29, 2014

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    www.thinkhr.com

    peopleOn September 11, 2014, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) announced a final rule which updates the reporting and record-keeping requirements for injuries and illnesses, found at 29 C.F.R. 1904. The rule goes into effect on January 1, 2015.

    Changes to record-keeping requirements

    Under OSHA’s record-keeping regulation, certain covered employers are required to prepare and maintain records of serious occupational injuries and illnesses using the OSHA 300 Log. However, there are two classes of employers that are partially exempt from routinely keeping injury and illness records:

    • Employers with 10 or fewer employees at all times during the previous calendar year; and
    • Establishments in certain low-hazard industries.

    The new rule maintains the exemption for employers with fewer than 10 employees. However, the new rule has an updated list of industries that will be partially exempt from keeping OSHA records. The previous list of partially exempt industries was based on the old Standard Industrial Classification (SIC) system and injury and illness data from the Bureau of Labor Statistics (BLS) from 1996, 1997, and 1998. The new list of partially exempt industries in the updated rule is based on the North American Industry Classification System (NAICS) and injury and illness data from the Bureau of Labor Statistics (BLS) from 2007, 2008, and 2009. As a result, many employers who were once exempted from OSHA’s recordkeeping requirements are now required to keep records. A list of newly covered industries can be found at www.osha.gov/recordkeeping2014/reporting_industries.html.

    Changes to the reporting requirements

    In addition to revising the record-keeping requirements, the new rule expands the list of severe injuries and illnesses that employers must report to OSHA. Under the previous rule, employers were required to report the following events to OSHA:

    • All work-related fatalities.
    • All work-related hospitalizations of three or more employees.

    Under the new rule, employers must report the following events to OSHA:

    • All work-related fatalities.
    • All work-related in-patient hospitalizations of one or more employees.
    • All work-related amputations.
    • All work-related losses of an eye.

    For any fatality that occurs within 30 days of a work-related incident, employers must report the event within eight hours of finding out about it.

    For any in-patient hospitalization, amputation, or eye loss that occurs within 24 hours of a work-related incident, employers must report the event within 24 hours of learning about it.

    Employers do not have to report an event if the event:

    • Resulted from a motor vehicle accident on a public street or highway, except in a construction work zone; employers must report the event if it happened in a construction work zone.
    • Occurred on a commercial or public transportation system (airplane, subway, bus, ferry, street car, light rail, train).
    • Occurred more than 30 days after the work-related incident in the case of a fatality or more than 24 hours after the work-related incident in the case of an in-patient hospitalization, amputation, or loss of an eye.

    Employers do not have to report an in-patient hospitalization if it was for diagnostic testing or observation only. An in-patient hospitalization is a formal admission to the in-patient service of a hospital or clinic for care or treatment.

    Employers do have to report an in-patient hospitalization due to a heart attack, if the heart attack resulted from a work-related incident.

    What to report

    Employers reporting a fatality, inpatient hospitalization, amputation, or loss of an eye to OSHA must report all of the following information:

    • The name of the establishment.
    • The location of the work-related incident.
    • The time of the work-related incident.
    • The type of reportable event (i.e., fatality, inpatient hospitalization, amputation, or loss of an eye).
    • The number of employees who suffered the event.
    • The names of the employees who suffered the event.
    • The contact person and his or her phone number.
    • A brief description of the work-related incident.

    How to report

    Employers can use the following three options to report an event:

    • Call the nearest OSHA Area Office during normal business hours.
    • Call the 24-hour OSHA hotline (800-321-OSHA or 800-321-6742).
    • Report an incident electronically (OSHA is developing a new means of reporting events electronically, which will be released soon and will be accessible on OSHA’s website).

    Conclusion

    It is recommended that employers familiarize themselves with the final rule and train personnel accordingly. All employers under OSHA jurisdiction, even those who are exempt from maintaining injury and illness records, are required to comply with the new severe injury and illness reporting requirements.

    Read More …

  • When is a medical plan not a medical plan? When it is a dental plan…Exchange counts off

    December 29, 2014

    The Department of Health and Human Services has admitted that it made a mistake in counting the total enrollment under the Affordable Care Act by 380,000…because it counted dental plans as medical plans.  This allowed them to hit the “magic number” extolled by the administration of 7 million enrollees, thus hitting their target and claiming enrollment a success.  Secretary Burwell apologized, saying “this mistake was unacceptable (but) the fact that we have quickly corrected the numbers should give people confidence”

  • Proposed 2016 Benefit and Payment Parameters | California Benefits Broker

    December 26, 2014

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    Posted by Linda Rowings

    2016healthcareThe Department of Health and Human Services (HHS) has issued its proposed Benefit and Payment Parameters for 2016. While these amounts and dates are not yet final, they may be of help for planning purposes. At this time, HHS expects:

    • Open enrollment for coverage through the Marketplace in 2016 will be from October 1 through December 15, 2015 (with coverage effective as of January 1, 2016).
    • The transitional reinsurance fee for 2016 is likely to be $27 per covered life. Filing for 2016 would be due November 15, 2016, with $21.60 per covered life due January 15, 2017, and $5.40 per covered life due November 15, 2017.
    • The out-of-pocket limits for health plans that are not high deductible plans related to HSAs would be $6,850 for single coverage and $13,700 for family coverage (with a maximum out-of-pocket for any family member of $6,850).
    • The federally facilitated exchange fee would remain at 3.5% of premium.
    • A special enrollment period would be available at renewal for individuals enrolled in non-calendar year plans.
    • Retirees and COBRA participants could be covered through a Small Business Health Options Program (SHOP) plan.
    • The current benchmark plans for essential health benefits would remain in effect for 2016, with new benchmark plans based on 2014 benefits and enrollment in effect for 2017.

    A draft of an updated AV calculator and methodology for 2016 also are available. While this will help you stay forward-thinking, don’t forget about taking steps to ensure you are prepared to meet the Patient Protection and Affordable Care Act (PPACA) requirements that begin in 2015 and those which must be completed in 2014. For a complete checklist, download UBA’s PPACA Advisor, “Preparing for 2015 – Key PPACA Requirements”.

    Read More …

  • It was not well suited to their needs – so they are filing suit against it – GOP vs. Obama

    December 23, 2014

    They didn’t like the bill, now they don’t like the fact that it is not happening fast enough.  Accusing President Obama of “making up his own laws” (John Boehner) by delaying the employer mandate, the Republicans are also considering filing a suit over the recent decision to provide deportation relief.  They’re not related, except insofar as it concerns the Chief Executive.  House Minority Leader Nancy Pelosi was a bit upset : “the fact is, this lawsuit is a bald faced attempt to achieve what Republicans have been unable to achieve through the political process.  The legislative branch cannot sue simply because they disagree with the way a law passed by a different Congress has been implemented…the lawsuit is an embarrassing loser.”

  • Hand Washing Helps Defeat the Flu | Petaluma Benefits Broker

    December 22, 2014

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    www.thinkhr.com

    handsH3N2 influenza viruses led to record numbers of deaths in the 2004, 2008, and 2013 flu seasons. Doctors are concerned because this type of virus appears to be dominating the 2015 flu season. Employers should stress optimal health and hand-washing behaviors in their workplaces to avoid the threat of flu and keep their workplaces healthy and germ-free.

    The United States Centers for Disease Control (CDC) reports a majority of cases so far this flu season are H3N2 viruses. When these types of viruses are the most prevalent in a flu season, the result is often more severe illness with greater instances of hospitalization and death. This year the CDC is finding that the flu vaccine’s ability to protect against H3N2 viruses is not as strong as was hoped when the vaccine was being formulated. This reduced protection is the result of mutation in about half of the H3N2 viruses since the season began. The CDC still recommends the vaccine as vaccinated people will likely have a more mild illness if they do become ill. This warning will help employers to see the need to augment vaccination with other preventive health measures.

    Effective hand washing is essential to prevent the spread of infectious disease. The bacteria, viruses, and other microbes that spread infection usually are not visible to the naked eye. Everyone should care about the spread of harmful organisms because everyone has the potential to unknowingly spread them to a person with a compromised immune system. Examples of those with compromised immune systems include family members, particularly children and the elderly, or co-workers coping with illnesses like cancer, heart disease, or diabetes.

    Hands should be washed frequently. You may be surprised to discover how many times you inadvertently touch your face in the course of a day, which is often the method that introduces contaminates to our bodies through our eyes, nose, or mouth. At a minimum, wash your hands several times per day to lessen the risk of inadvertently spreading harmful organisms.

    Wash hands both before, during, and after food preparation as well as before eating, treating a wound, or adjusting contact lenses. Hands may need to be washed multiple times during food preparation. For example, Salmonella is a bacteria that can be found on raw meats and vegetables, and is a serious concern in the United States. According to the CDC, each year over one million people acquire the illness, leading to 19,000 hospitalizations and 380 deaths. In addition to cooking food properly and cleaning work surfaces, Salmonella  abatement requires hands to be cleaned before handling cooked meat or other ingredients to prevent the transfer of organisms from raw items.

    To minimize the spread of respiratory infections and diarrheal illness, wash hands after using the toilet, coughing, blowing your nose, changing a diaper, or touching garbage, soiled laundry, shoes, an animal, or anything touched by an animal. This preventive step lessens the amount of germs transferred to key boards, handrails, door knobs, or toys.

    Soap and Water

    Soap and clean running water are two elements of optimal hand washing. The surfactants in soap lift soil and microorganisms from the hands, enabling the running water to carry the undesirable elements away without posing the risk of recontamination caused by standing water. Water of cool or warm temperature works equally well in removing undesirable organisms. Another helpful part of the process is the mechanical action created when hands are scrubbed or rubbed together continuously.

    Best practice for hand washing requires wetting the hands, turning the water off to prevent waste, applying soap, and spreading the soap across all surfaces of your hands for 20 seconds, being sure to include fingernails, back of hands, and wrists. Importantly, don’t rush the hand-washing process. Often parents will teach children to wash hands to the time it takes to sing the A-B-C song or another jingle that reliably takes 20 seconds. After scrubbing for 20 seconds, rinse hands thoroughly under running water. If the faucet is not operated by a sensor, use a towel or your elbow to turn it off in a manner avoiding hand recontamination. Finally, dry hands with a clean cloth, new disposable towel, or air blower.

    Alcohol as an Alternative

    An alcohol-based sanitizer can be an effective alternative to soap and water where a sink or clean water is unavailable. Examples of locations where sanitizer may be practical include conference rooms, break rooms, reception areas, or just outside of restroom doors.

    According to the CDC, effective use of waterless hand sanitizer requires an alcohol-based solution containing at least 60 percent alcohol. For hand sanitizers to be effective, it’s important that enough solution is used, that it stays on the skin and is not wiped or washed off prematurely, and that the solution is allowed to thoroughly dry on the skin.

    Similar to the use of soap and water, mechanical action or friction caused by scrubbing or rubbing hands together is essential for waterless hand sanitizer to stop the spread of microorganisms. Additionally, the hands must be free of organic matter prior to applying hand sanitizer. Using the appropriate amount of sanitizer requires placing enough sanitizer to cover a dime in the palm of one hand. Hands must then be rubbed together in a manner that covers all surfaces, including the back of the hands, until they are dry.

    Read More …

  • Gruber stake is Uber mistake…Obamacare architect shares too much

    December 22, 2014

    A series of videos have been released of various conferences and conversations involving Jonathan Gruber, who was one of the writers of the original ACA legislation, and they are not flattering…to anyone involved.  A sampling:

    “Lack of transparency is a huge political advantage.  Basically, call it the stupidity of the American voter of whatever, but basically that was really, really critical to getting things to pass”

    “This bill was written in a tortured way to make sure the Congressional Budget Office did not score the mandate as taxes (because) if CBO scored the mandate as taxes, the bill dies” (even though President Obama kept insisting the mandate was not a tax)

    “If you had a law which…made explicit that healthy people pay in and sick people get money, it would not have passed”

    “If you’re a state and you don’t set up an exchange, that means your citizens don’t get tax credits” (which is enlightening given that the Supreme Court is hearing on this issue right now, while the Obama administration is insisting that the Federal Exchange can offer subsidies)

    “It turns out politically (the employer subsidy) is really hard to get rid of…and the only way we could get rid of it was first by mislabeling it, calling it a tax on insurance plans (referring to the nascent Cadillac tax) rather than a tax on people when we all know it’s a tax on people who hold those insurance plans”  “What that means is the tax that starts out hitting only 8% of the insurance plans essentially amounts over the next 20 years essentially getting rid of the exclusion for employer sponsored plans…this was the only political way we were ever going to take on one of the worst public policies in America”

  • 2015 Cost-of-Living Adjustments | Petaluma Employee Benefits

    December 18, 2014

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    Posted by Linda Rowing

    moneyMany employee benefit limits are automatically adjusted each year for inflation (this is often referred to as an “indexed” limit). The Internal Revenue Service and the Social Security Administration have released a number of indexed figures for 2015.

    Limits of particular interest to employers include the following.

    For health and Section 125 plans:

    • The health flexible spending account (HFSA) maximum employee contribution is increasing to $2,550.
    • The maximum out-of-pocket limit that applies to non-grandfathered group health plans that are not coupled with a health savings account (HSA) will be $6,600 per individual and $13,200 per family.
    • The maximum out-of-pocket for a high deductible health plan coupled with an HSA will increase to $6,450 per individual and $12,900 per family.
    • The minimum deductible for a high deductible health plan coupled with a health savings account (HSA) will increase to $1,300 per individual and $2,600 per family.
    • The maximum HSA contribution will increase to $3,350 for individual coverage and $6,650 for family coverage. The catch-up contribution (available to those aged 55 and older) remains at $1,000.

    For qualified plans:

    • The annual deferral for 401(k), 403(b), and most 457(b) plans will increase to $18,000.
    • The catch-up contribution limits (available to those aged 50 and older) will increase to $6,000.
    • The threshold for “highly compensated employees” will increase to $120,000.
    • The threshold for an officer to have “key employee” status remains at $170,000
    • The annual compensation limit will increase to $265,000

    Social Security/Medicare Withholding:

    • The taxable wage base will increase to $118,500
    • The OASDI tax rate remains at 6.2%
    • The Medicare tax rate remains at 1.45%

    Request a quick reference chart from your local UBA Partner Firm.

    Read More …

  • SHOP until you drop…it…sales are not what were expected on Exchange group plan

    December 18, 2014

    The attention was all paid to the individual plans that suddenly made health care “affordable” – if you received a subsidy (from which the federal government is backpedaling furiously).  But alongside the individual plans the government decided that doing group insurance was a necessity…and it is the only vehicle that allows for the receipt of the small group health insurance tax credit.  This was supposed to help sales, even though the first two years of the program qualification was open for any plan, and barely taken (especially in California).  So now there is no surprise to find that the sale of the SHOP plan has not met expectations.  Difficulty in service, the lack of flexibility in choice, narrow networks and other problems do not make it palatable in the market, and thus less than 12,000 businesses signed up in the first 8 months.

  • Identify yourself…unless of course you can’t figure out how to do it – HIPD suspended

    December 17, 2014

    It seemed like a good idea at the time…have all plans of a certain size set up a Health Plan Identification Number.  But then, the day before it was to go into effect, the federal government suspended action.  It appears even the sharpest business people who tried to simply register a number had too much difficulty in doing so.  A report was made to the DOL saying that it should be set up for additional consideration.  More ACA delays…

  • Premium Reimbursement Arrangements Redux – the closing of an old loophole

    December 16, 2014

    For many years, some “consultants” (and one in particular) have been telling employers that they can cancel their group policies, set up a Code Section 105 (IRC 105(h)) reimbursement plan that works with brokers to help select individual health policies and get the premium tax credits for Marketplace coverage.  This is NOT permissible according to the new FAQ issued by the Department of Labor.  There are several reasons given, which should finally close the door:

    1)    The arrangements are considered to be group health plans and thus no tax credit allowed

    2)    Just because an employer is not involved with plan selection/purchase does not prevent the arrangement from being a group health plan

    3)    Such arrangements are subject to market reform (under four separate notices) which prohibits annual limits and requires preventive care be offered without cost sharing.  “Such employer health care arrangements cannot be integrated with individual market policies to satisfy the market reforms and, therefore, will violate PHS Act sections 2711 and 2713 among other provisions which can trigger penalties such as an excise tax.

  • Supreme Court Agrees to Rule on Availability of Premium Tax Credits | CA Benefits Broker

    December 15, 2014

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    Posted by Linda Rowings

    SupremeCourtPremium tax credits are only available to individuals who obtain health coverage through a Marketplace. A dispute has arisen as to whether the IRS has the ability to interpret PPACA to allow the subsidy to individuals who obtain coverage through any Marketplace, or whether the language of PPACA limits eligibility to those who have obtained coverage through a state Marketplace. The U.S. Supreme Court has agreed to rule on whether premium tax credits may only be available to individuals who receive tax subsidies as a result of being enrolled in a state exchange. In the meantime, the IRS has stated that it will continue to issue tax credits to individuals in both state and federally-run Marketplaces.

    If the Supreme Court decides the IRS rule that tax credits are available regardless of what type of Marketplace is in place, the current system will remain in effect. However, if it rules that tax credits are only legally available to individuals enrolled in state Marketplaces, that decision will have significant consequences, since only about one-third of the states are running their own Marketplace, while the federal government runs the Marketplace for the remaining states. If premium tax credits are only allowed in states with their own Marketplace, most Americans will become ineligible to receive the tax credits. Well over half of the people currently enrolled in a Marketplace are receiving a tax credit. Additionally, an employer owes the play or pay penalty only if an employee receives a tax credit.

    If the Supreme Court rules that premium tax credits are only available to individuals enrolled in state Marketplaces, employers should expect that states that have chosen to provide coverage through the federally-run Marketplaces will be under pressure to transition to state Marketplaces from those who have benefited from the subsidized Marketplaces. Those that are benefiting from subsidized coverage include the individuals receiving premium tax credits, hospitals that are experiencing less unreimbursed care, and insurers that have invested in providing coverage through the Marketplaces. Similarly, states that have state Marketplaces may be pressured to move to a federally-run Marketplace by employers trying to avoid penalties. Debate is already occurring as to what, exactly, is needed to qualify as a state Marketplace should a state wish to move in that direction. Employers with employees located in multiple states could have to manage a situation in which some employees are eligible for tax credits and others are not.

    The decision of the Supreme Court is expected in late June 2015.

    To get the latest information on other federal developments including plan designs being disallowed—such as employer reimbursement of premiums for individual coverage, incentivizing employees in poor health to enroll in the marketplace, and more—download UBA’s PPACA Advisor, “Agencies Disallow Several Plan Designs; Other Federal Developments”.

    Read More …

  • Premium Reimbursement under the Affordable Care Act – DOL issues FAQs about the rules

    December 15, 2014

    First there was no problem.  Then the ACA was passed.  Still no problem.  Then someone realized that employers and employees may be taking advantage of existing rules that allowed a tax exemption for the payment or receipt of individual health insurance.  So on September 13, 2013 the IRS and DOL issued “guidance” (interpretation) about what was going to be allowed…and what was not.  The new rules basically said that an HRA could not be used to pay for individual health insurance premiums, Flexible Spending Accounts could not be used for the same reason, and any premium paid directly by an employer for an employee would be a taxable event.  Not so good…but they weren’t done.  Now the Department of Labor has gone further (and why?) and issued two new FAQs in this regard…
    Under the newest new rules, even where an employer offers employees the cash to reimburse for the purchase of an individual market policy, it is now in violation of ACA market reforms.  In other words, it is not only a taxable event, but is considered a part of a plan and thus must meet requirements under ERISA and thus Public Health Service laws…which means that violation of the law now also means the payment of an excise tax.

    In a further note, the DOL has made it clear that an employer who offers an employee with high risk claims the choice between enrollment in its standard plan and cash is in violation of the Affordable Care Act, HIPAA, and ERISA…a triple threat.  It constitutes discrimination (no kidding)  “In the Department’s view, cash or coverage arrangements offered only to employees with a high claims risk are not permissible benign discrimination”  The discrimination rule applies whether the cash payment is pre or post tax, the employer is involved in the selection or purchase of a product or not, or even if the employee obtains any individual health insurance.

  • And they stay busy…Supreme Court also weighs in on retiree health benefits

    December 12, 2014

    Retirees are being promised that they will be able to continue their health coverage for the rest of their lives, or until they turn 65 and qualify for Medicare…or until the employer changes their mind.  In the case M&G Polymers USA LLC vs. Tackett the collective bargaining agreement allowing for lifetime coverage has been challenged.  Rules about what must be said or what must be inferred when the agreement is otherwise silent are all under consideration here.

  • Medicine Safety Reminders for Cold and Flu Season | CA Employee Benefits

    December 11, 2014

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    (NewsUSA)

    MedicinesRisksAmericans catch approximately 1 billion colds each year, and the Centers for Disease Control and Prevention estimates that as many as 20 percent of people in the U.S. will get the flu this cold and flu season. A majority of people (seven in 10) will use over-the-counter (OTC) medicines to treat their symptoms, and many of these medicines contain acetaminophen.

    Acetaminophen is the most common drug ingredient in America, found in more than 600 prescription (Rx) and OTC medicines, including pain relievers, fever reducers and many cough, cold and flu medicines. It’s safe and effective when used as directed, but taking more than the maximum daily dose of 4,000 milligrams is an overdose and can lead to liver damage.

    The Acetaminophen Awareness Coalition (AAC), a group of leading health, health care provider and consumer organizations, is reminding consumers to double-check their medicine labels to avoid doubling up on acetaminophen this winter.

    “Cold and flu season is a very important time to remind patients to be diligent about reading their medicine labels and knowing the ingredients in their medicines,” said Anne Norman, APRN, DNP, FNP-BC, Associate Vice President of Education at the American Association of Nurse Practitioners, a founding organization of the AAC. “People may use a medicine to treat their cold or flu symptoms on top of a medicine they are already taking, not realizing that both might contain acetaminophen.”

    The AAC’s Know Your Dose campaign reminds consumers to follow four medicine safe-use steps:

    1. Always read and follow the medicine label.

    2. Know if medicines contain acetaminophen, which is listed on the front panel of packaging and in bold type or highlighted in the “active ingredients” section of OTC medicine labels, and sometimes listed as “APAP” or “acetam” on Rx labels.

    3. Never take two medicines that contain acetaminophen at the same time.

    4. Ask your health care provider or a pharmacist if you have questions about dosing instructions or medicines that contain acetaminophen.

    Read More …

  • It’s not just politics – the Supremes may be singing the same tune soon

    December 10, 2014

    The Supreme Court has agreed to review a challenge to the tax subsidies allowed under the Affordable Care Act.  There have been a number of lower court decisions which have taken both sides of the issues, so the wisdom of Solomon (or our own Supreme being) will be called upon to decide whether or not the subsidies called for in the ACA are legal or not.  At issue is the wording of the health care reform law saying that individuals qualify for tax credits only when they buy insurance on a marketplace “established by the state”  Thus those in California are legal, but those written through the federal exchange marketplace may not be.  The IRS issued a rule saying that consumers can claim tax credits no matter where they live and the Obama administration says the IRS approach is consistent with the law’s aims.  OK.  For now, however, the ACA stays in place…the court is expected to file their decision in June 2015.

  • The “Play or Pay” Package | California Benefits Broker

    December 8, 2014

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    Posted by Linda Rowings

    payorplayThe employer-shared responsibility (“play or pay”) requirements do not apply to small employers and have been delayed until 2016 for most mid-sized employers. This raises the question – what exactly is included in the play or pay requirement, which a small employer may be able to ignore and that mid-size employer may not need to meet until later?

    Employer-shared responsibility includes five basic requirements that must be met by a large employer to avoid penalties:

    1. The employer must offer minimum essential coverage to at least 95% of its full-time employees (under a transition rule, for 2015 the requirement is to offer minimum essential coverage to 70% of full-time employees).
    2. The employer must offer affordable, minimum value coverage to its full-time employees.
    3. The employer must consider an employee as full-time for health coverage purposes if the employee averages 30 or more hours work per week.
    4. The employer must offer minimum essential coverage to natural and adopted dependent children until the end of the month in which the child reaches age 26 (under a transition rule, this requirement is generally delayed to 2016).
    5. The employer must offer employees the opportunity at least once a year to elect or decline coverage under the group health plan (with an exception to the required opportunity to decline coverage for particularly generous coverage).

    Employers that are small enough that the play or pay requirements do not apply, or have been delayed, still must meet many requirements under the Patient Protection and Affordable Care Act, such as the limit on waiting periods, but they need not meet the criteria of the play or pay package to avoid penalties. Caution: fully insured plans must meet both state and federal requirements, so small and mid-size employers with insured plans should make sure that their plans meet state insurance law requirements. For example, some states have adopted the 30-hour threshold for eligibility, and some require that coverage be offered to spouses and children.

    Note: for purposes of this blog piece, “small” means that the employer had fewer than 50 full-time or full-time equivalent employees in its controlled group during the prior calendar year. “Mid-size” means the employer had 50 to 99 full-time or full-time equivalent employees in its controlled group during the 2014 calendar year and has not materially reduced benefits, eligibility or contributions from the level in effect on February 9, 2014. Mid-size employers will need to provide reporting on available coverage for 2015, even though the actual employer shared responsibility requirements generally will not be effective for mid-size employers until 2016.

    To help employers understand the pay or play provisions of the PPACA, download UBA’s white paper, “The Employer’s Guide to Play or Pay”. For help further help making pay or play decisions under PPACA, request UBA’s compliance and decision guides for small and large employers.

    Read More …

  • What Might They Do – Congress Progress or Regress or Simply Recess the ACA

    December 8, 2014

    Revisit the employer mandate – not likely
    Revisit the individual mandate – less likely than that
    Repeal the medical device tax (now 2.3% of the cost of devices
    Revisit what constitutes “full time” employment
    Repeal federal reimbursements for companies who lose money on the ACA
    Eliminate the Independent Payment Advisory Board (once known as the death panels)
    Lower the subsidies being offered for “affordable” individual health coverage
    Creation of a new copper plan (we don’t have enough metals now)
    Provide alternatives (since they are in a leadership position)

  • The Elections, New Selections and Directions

    December 5, 2014

    Theories now abound, about what was lost, why, who will care and who will not and what this will portend for the 2016 Presidential race.  President Obama lost a majority in the House in the last mid terms, and now he has lost a majority in the Senate, but not a super majority (which would be required to overturn the Affordable Care Act).  Republicans are now in what should be a happy spot, but it is also a rough one.  Now it is not enough to just criticize what comes from the White House – they must make proposals of their own, and they must be substantive.  So will we see a radical change on immigration policy, health care, and other hot button issues?  Not likely, but then there is always the strategy of  “death by a thousand cuts” – and it is likely that Republicans will do what they can to weaken the ACA at the very least.  It’s the least they can do.

  • UBA 2014 Health Plan Survey Executive Summary Now Available | California Employee Benefits

    December 5, 2014

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    Posted by Bill Olson

    CTA Survey smallSince 2005, United Benefit Advisors® (UBA) has surveyed thousands of employers across the nation regarding their health plan offerings, their ongoing plan decisions in the face of significant legislative and marketplace changes, and the impact of these changes on their employees and businesses. The UBA survey represents the nation’s largest health plan benchmarking survey and the most comprehensive source of reliable benchmarking data.

    As always, the survey revealed several noteworthy trends and developments that bear scrutiny and the ongoing attention of employers interested in making the most informed health care plan decisions possible. For example, among the most striking trends revealed by the survey, employers have overwhelmingly opted for early renewals of their plans—a delay tactic that helped them avoid costly Patient Protection and Affordable Care Act (PPACA)-compliant plans and manage costs. Another cost management tactic employers are using is to increase out-of-pocket costs for employees, with a “new normal” emerging for these higher cost thresholds.

    Employers typically continue to offer one preferred provider organization (PPO) health plan option to employees, while also still widely offering family coverage. In addition, wellness program adoption seems to be in a holding pattern, as pending litigation and regulatory changes swirl on these offerings. Among employers providing wellness programs, health risk assessments and incentives are increasingly common offerings.

    Plans in the Northeast U.S. continue to be the richest—and most expensive—and are at risk of being subject to the looming Cadillac tax. Government employees have the most generous plans with the highest costs—and they pay the least toward their overall coverage costs. Conversely, construction industry employees cost the least to cover but those employees pay the most toward costs.

    Regarding cost increases, the smallest employers (0 to 49 employees) saw the lowest increases, a surprising break for them due to an unusual option they had over larger employers to remain with non-PPACA-compliant plans. In short, this was a reprieve for a group that usually faces the highest increases. Self-funding of plans, particularly among small employers, has not yet surged, but is still anticipated to do so as employers run out of other avoidance strategies.

    The prevalence of consumer-driven health plans (CDHPs) continues to grow, as does employee enrollment in these plans, despite lower contributions to health savings accounts (HSAs)?(which are often tied to CDHPs to entice participation). And, finally, prescription drug plans are increasingly offering four or more tiers, along with ever-increasing copays—a trend that might fall off as they must all eventually tie to out-of-pocket maximums under PPACA.

    For more information to help you benchmark your health plan, download the 2014 UBA Health Plan Survey Executive Summary or contact a local UBA Partner for a customized benchmarking report.

    Read More …

  • Surprise! With more people being covered, more are using insurance…for emergencies

    December 4, 2014

    The law of unintended consequences…always the most dangerous legal game. This time we are happy that the Affordable Care Act has caused an increase in the number of insured individuals, who have promptly taken advantage of their new found coverage, and caused a major increase in the use of emergency rooms. While this is a nationwide trend (The American College of Emergency Physicians said nearly half of those ER docs queried showed a rise in the number of ER visits this year and 86% expect an increase over the next three years), there are also more detailed local results. In Orange County the ER patient load has risen by an average 4.4% since January 2014, while it had been flat the previous 4 years. UC Irvine is up 10.9%, Kaiser Orange County up 11% and Fountain Valley 7.6%. Many of these are Medi Cal, many are with private insurance, but it is all up, all over…One temporizing thought came from Marc Futernick, president elect of the California Chapter of the American College of Emergency Physicians. “Some of this may be a temporary phenomenon and could change as people begin to use their coverage better…but to the extent that the health plans and networks are sending people to the ER it’s not going to change”

  • Supreme Indifference…Same Sex marriage proceeds because the USSC is not wedded to the idea of a declaration of their intentions

    December 3, 2014

    Seven rulings from three federal circuit Courts of Appeals addressed same sex marriage in five states, and this was bundled for consideration to the United States Supreme Court. In October, just after convening for their new term, the Supreme Court declined to address these issues, and thus the original appellate rulings remain in force.

  • Nondiscrimination Rules for Benefits Plans | Petaluma Benefits Broker

    December 3, 2014

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    InformationQuestion:
    What are the Employee Retirement Income Security Act (ERISA) rules about nondiscrimination in benefits plan designs to assist with creating benefit class carve-outs?

    Answer:
    Under the Health Insurance Portability and Accountability Act (HIPAA, which is governed by ERISA) and I.R.C. § 125 plan rules, employers are allowed to offer different contribution levels or benefit coverage levels based upon legitimate nondiscriminatory business classifications.

    For example, part-time and full-time employees, employees working in different geographic locations, and employees with different dates of hire or lengths of service can be treated as different groups (benefit classes) of similarly situated individuals. Plans that favor highly compensated employees may violate the nondiscrimination provisions that § 125 cafeteria plans are subject to or I.R.C. § 105(h) if the plans are self-funded. Additionally, employers must keep in mind whether any carve-outs they are considering could create an unintended discriminatory impact. The onset of the Affordable Care Act has added new regulations for insured plans, mirroring those currently found in § 105(h) regarding nondiscrimination in health and welfare plans but these regulations are on hold pending additional guidance from the Internal Revenue Service.

    Due to the complexity of testing plans for compliance with the nondiscrimination rules of I.R.C. § 105(h), any employer considering offering health benefits to only certain classes of employees should carefully review all of the provisions of that section and its accompanying regulations, work closely with the benefits broker to structure the plan design and seek the advice of a knowledgeable benefits law attorney for specific guidance on its particular plan.

    Read More …

  • The Tail Wagging the Dog…Why does Covered California continue to get preferred treatment?

    December 2, 2014

    It is set up with the endorsement and cooperation of the California government. They were allowed to dictate the terms of coverage that carriers could offer. They were allowed to bully the carriers into keeping their costs down, which resulted in a “narrowing” of networks, which has caused all sorts of confusion in the market. And now…they are facing calls for a state investigation of its contracting practices, after disclosure of the release of $184 million in contracts that did NOT involve competitive bidding.

    Covered California was given the ability to negotiate no bid contracts to meet necessary deadlines in 2010…but now it is 2014 and they are continuing to use this ability to meet “deadlines” – but what are they? Recently, Covered California awarded $184 million in no bid contracts, which coincidentally included deals worth millions to a firm with workers having strong ties to the Covered California Executive Director Peter Lee. The new no bid contracts represent 20% of the amount of money Covered California has awarded to outside agencies. According to Peter Lee, he needed to move fast and “needed experienced individuals who could go toe to toe with health plans and bring to our consumers the best possible insurance value” So he couldn’t bid it? He has had four years…

  • Speaking of affordability, what happened to that part of the “Affordable” Care Act?

    December 1, 2014

    A new poll from the AP and NORC Center for Public Affairs Research shows that 1 in 4 privately insured adults say they doubt they could pay for a major unexpected illness or injury. The biggest worry, of course, is the high deductible they chose to keep premiums down.

  • Group Health Plans That Do Not Cover Inpatient Hospital or Physician Services | Petaluma Employee Benefits

    November 28, 2014

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    Posted by Linda Rowings

    groupHealthBeginning in 2015, large employers must offer affordable, minimum value coverage to their full-time employees or potentially pay a penalty. Some companies have been marketing a plan that they state satisfies the minimum value requirement (an actuarial value of 60%), based upon a calculator provided by the Department of Health and Human Services (HHS), even though the plan does not cover inpatient hospital charges. In Notice 2014-69, HHS and the IRS state that plans that do not provide substantial coverage for physician and inpatient hospital services will not be considered minimum value plans, and that the result obtained through the HHS calculator should not be considered valid since that calculator was built on the assumption that a traditional plan design would be used. The agencies do recognize that some employers have already implemented these plans based on the calculator results, and the Notice states that a limited exception will be available to those employers. To be able to use the exception:

    1. The employer must have had a binding written commitment (such as a signed agreement) in place before November 4, 2014, to adopt this type of a plan, or it must have begun to enroll employees in this type of a plan before that date.
    2. The plan must have a plan year (generally, an effective date) that begins on or before March 1, 2015.
    3. The employer must not state or imply in any employee communications that availability of the plan that does not provide coverage for inpatient hospital stays or physician services will prevent the employee from receiving a premium tax credit, and it must correct any previous communications to that effect (note that this may mean that a Summary of Benefits and Coverage may need to be reissued).

    Employees who are offered coverage under one of these “non-hospital/non-physician services plans” will be eligible to receive a premium tax credit, as long as the other criteria to receive a tax credit are met. However, employers that can meet the limited exception will be considered to have offered minimum value coverage for the 2015 plan year and will not owe a penalty for the 2015 plan year even if the employee receives a premium tax credit. Beginning in 2016 non-hospital/non-physician services plans will not be considered minimum value for any employers, so employers that qualify for the limited exception will be subject to penalties on employees who receive a premium tax credit unless they offer more complete coverage.

    This notice only applies to plans that claim to offer minimum value coverage even though they do not provide significant coverage for inpatient hospital and physician services. Although some have reported that “skinny” and “MEC” plans are no longer allowed, that is not correct. Plans that limit coverage to preventive care (often referred to as “skinny” or “MEC” plans) are permitted and appear to meet the criteria to be considered “minimum essential coverage.” Employers may continue to offer a non-hospital/non-physician services plan, and that plan likely will meet the requirement to offer minimum essential coverage, but it will not meet a requirement to offer minimum value coverage.

    To get the latest information on other plan designs being disallowed—such as employer reimbursement of premiums for individual coverage, incentivizing employees in poor health to enroll in the marketplace, and more—download UBA’s PPACA Advisor, “Agencies Disallow Several Plan Designs; Other Federal Developments”.

    Read More …

  • What is Affordable just got less so – IRS issues new limits on “affordability”

    November 26, 2014

    The definition has been 9.5%. The new definition is 9.56%. What does it mean?

    For purposes of “pay or play” it means that the contribution made by an employee for the “employee only” share of the premium cannot exceed 9.56% of their annual wages.

    For purposes of qualifying for a subsidy on the state exchange (Covered California), an employee must have paid more than 9.56% of their annual wages for their share of the “employee only” share of the premium

  • The ACA will save money…unless you live in Minnesota (which may be trending)

    November 25, 2014

    The top selling medical plan on the MN Sure Exchange is Preferred One. Earlier this month the Minnesota Department of Commerce announced that Minnesota would continue to have among the “lowest health insurance rates in the country” with an increase of only 4.5% — but Preferred One has announced new rates that will see an average increase of 63% due to “high claims costs” (which more than a few were predicting would be the result of the ACA rules on issuing coverage without medical review and without limitations on pre existing medical conditions)

  • Transitional Reinsurance Fee Filing Date Extended to December 5 | CA Benefits Broker

    November 24, 2014

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    Posted by Linda Rowings

    self fundedThe Centers for Medicare and Medicaid Services (CMS) extended the deadline for group health plans to provide their 2014 transitional reinsurance fee (TRF) submission. Filing is now due by 11:59 p.m. on December 5, 2014. The January 15, 2015, and November 15, 2015, deadlines to pay the fee remain the same. For more information on the TRF, see our recent blog. For the answers to nearly 30 questions about filing, due dates, calculation methods, payment, submission and more, CLICK HERE to Request UBA’s “Frequently Asked Questions about the Transitional Reinsurance Fee (TRF)”.

    Read More ..

  • What’s in a number? Senate Budget Committee updates Senator Dirksen’s maxim on ACA

    November 24, 2014

    Senator Everett Dirksen said in the Sixties “a billion here, a billion there, pretty soon you’re talking about real money” Such has been the confounding and conflicting analyses surrounding the Affordable Care Act. The last review by the Congressional Budget Office predicted that the ACA would reduce the federal deficit by $100 billion. Now the Senate Budget Committee has projected that the ACA will increase the federal deficit by $130 billion. Of course, that was according to the Republican members of that committee…

  • We Knew it and the Carriers Knew it – did anyone else know it? Sicker people have enrolled in ACA plans

    November 21, 2014

    So when you offer new, affordable coverage on a guaranteed basis is it possible that those who have been waiting for the opportunity to get such coverage and use it will actually enroll? As suspected, the answer is yes. The New York Times reports that two new studies using prescription drug data found that exchange policies cover older people with more chronic illnesses than employer policies. As Prime Therapeutics Chief Marketing Officer Michael Showalter said “We originally suggested this may be a sicker population. What I can tell you officially today is that this really is a sicker population”

  • Independent Contractor vs Employee | CA Benefits Broker

    November 20, 2014

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    By K. Michael Ward
    The Wilson Agency
    A UBA Partner Firm

    whichAs a business professional who is trying to classify a worker, it is important to remain compliant with the IRS regulations that determine whether an individual providing services to your organization should be classified as an independent contractor or an employee.

    Furthermore, the “employer mandate” section of the Patient Protection and Affordable Care Act (PPACA) requires companies with 50 or more employees to either provide adequate and affordable coverage to their workers or pay tax penalties. United Benefit Advisors (UBA) has developed a guide to help employers determine how many employees they have for several purposes under PPACA. Those who think they are exempt need to make sure they are counting employees correctly so they’re not surprised with penalties.

    The guide provides the definitions of full-time employees, how to count part-time employees on a pro-rata basis, how to treat seasonal employees, who the law considers an “employee,” counting hours correctly, determining average hours worked, penalties that result if a “large employer” doesn’t offer coverage, applying the requirement to offer coverage, paying the penalty, and eligibility for the Small Business Health Options Program (SHOP).

    Your UBA Partner Firm can help you find the compliance solutions specific to the issues your company is facing. Visit the UBA website to learn more.

    Why does it matter?

    Not correctly classifying an individual as an employee can lead to an employer being required to pay taxes, such as unemployment tax, that would have been required of the employer if the individual had been correctly classified. The organization may also be held liable for overtime pay, resulting in a costly expense for the organization. In certain situations, the issue can escalate leading to civil lawsuits against the employer.

    How do I know how to classify individuals?

    Generally, an individual is an independent contractor if the employer controls only the final result of the work and not when, where and how it will be done. Therefore, employers cannot demand that independent contractors work a “9-5” schedule in their office. If the person is an independent contractor, they are free to perform the work on a beach at 4 a.m., as long as they produce the services for which they were hired.

    An individual may also be classified as an employee if the company provides the majority of the equipment used to perform the services. Independent contractors will generally work with their own equipment and are unlikely to be reimbursed for any equipment purchases required to perform the job.

    Some others factors to take into consideration are the time period of hire and whether the individual provides services that are integral to the business. If an individual has been hired on an indefinite basis, versus for a specific project or time period, and/or provides key services, then the employee may be classified as an employee.

    There are a variety of other nuances that can determine whether an individual is an independent contractor or an employee. Therefore, it is advised that you speak with a professional before taking action that could have an adverse effect on your business.

    Read More …

  • Save at Wal Mart! They’re cutting prices by cutting benefits!

    November 19, 2014

    While saying that the cut represents only 2% of their employee population, have you seen how many people that involves? Yes 30,000 employees working less than 30 hours per week at Wal Mart will see their benefits eliminated effective January 1. This follows moves made by Home Depot, Walgreen’s, Trader Joe’s and Target. Wal Mart had previously cut back its program in 2011 to eliminate coverage of associates working fewer than 24 hours per week. Of course, these people will need somewhere to go…so look for more subsidies on the exchanges.

  • Can Employers Assist Employees with Premiums for Individual Plans? | CA Employee Benefits

    November 18, 2014

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    Posted by Carol Taylor

    peopleOn November 6, 2014, the collective Departments of Health and Human Services (HHS), Labor (DOL) and the Treasury released three Frequently Asked Questions (FAQs) directed at employer payment plans for the purchase of individual insurance. While the departments had previously released several other pieces of guidance about these arrangements, this latest round exclaimed an emphatic no!

    The other releases on the topic started well over a year ago. However, there are still agents and administrators that have insisted either Section 125 (Cafeteria Plans) or Section 105 (Reimbursement Arrangements) of the IRS code allowed employers to deduct premiums in a pretax manner or reimburse for individual premiums. Several of the administrators touting these plans even went as far as claiming they were so confident in their interpretation of the regulations, that they would pay any fines incurred because of their advice that these plans were compliant. This latest round of clarification was a resounding comply or pay fines.

    Any employer payment that provides cash reimbursement for the purchase of an individual market policy is not compliant with the Patient Protection and Affordable Care Act (PPACA), whether the employer treats the money as pretax or post-tax to the employee. It is interesting to note that the latter provision has not been present in other regulatory releases, but is new with this round. While it is not clear at the moment how that would apply, a post-tax amount would put the insured in a precarious position, subject to fines and payback of subsidies on their own, since the additional income could lower the subsidy that they would otherwise qualify for, without the assistance from the employer.

    Likewise, if a Section 105 reimbursement plan is set up for the purchase of individual policies, these plans are deemed noncompliant. The basis for this determination is the employer’s involvement of the plan, even though they may not have assisted the individual with their plan selection, they are still taking part by contributing cash for the policy purchase.

    Another question delves into compensating employees that have a high claims risk to enroll in a Marketplace plan versus joining the group health plan offered by the employer. This scenario involves other factors that are prohibited, such as discriminating due to a health factor and eligibility rule discrimination. These plans also fail due to the employer-provided payment for purchase of an individual plan.

    In all of these scenarios, since they would be deemed a group health plan, they would be subject to the market reforms such as unlimited lifetime maximum benefits, preventive care coverage at no cost share and other aspects of the law. This could also open the door for lawsuits against the employer if the individual policy failed to pay a claim for the insured.

    The FAQs reference the fines that would apply in these instances under Section 4980D. In the May 2014 release from the IRS, they spelled out the excise fines as $100 per day, per employee or $36,500 annually. However, these fines are an excise tax in the amount of $100 per day with respect to each individual to whom such failure relates. So, if the employer were to contribute to dependents’ coverage, the fines would also be incurred for each dependent per day, in addition to the employee.

    It is always best to get a plan into compliance as quickly as possible. With many of these having been put into place earlier this year, there is still time to correct at least part, but not all, of the issues. Speak with your tax counsel as quickly as possible to get your plans into compliance. Your local United Benefit Advisors office, with their vast compliance resources, can also assist you with these issues.

    Read More …

  • California has conceived a new law – no cost contraception

    November 18, 2014

    Governor Brown signed into law SB 1053 which ensures access to no cost contraception services for both men and women. The Affordable Care Act already requires insurers to cover FDA approved contraception without co payments. Now the new law will require no cost coverage for vasectomies and other male contraceptive devices.

  • On the other hand, look at how much money they saved…

    November 17, 2014

    The ACA is expected to lower uncompensated hospital care by $5.7 billion this year. The Washington Post said this comes as a direct result of the fact that more people have health insurance coverage to pay for care.

  • Arrow Benefits Group on the Cover of North Bay Business Journal

    November 13, 2014

    NBBJ_arrow_cover

  • Healthcare.gov disaster was also expensive – $2.1 billion and counting

    November 13, 2014

    According to a Bloomberg Government analysis, the cost is $2.1 billion, which exceeds the most recently provided government estimate, which was $834 million. Wasn’t it Senator Dirksen who said, “a billion here and a billion there and pretty soon you’re talking about real money”

  • Reference-Based Pricing and Cost-Sharing Limits | California Benefits Broker

    November 12, 2014

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    Posted by Linda Rowings

    CTA Survey smallThe Department of Labor (DOL), the IRS, and the Department of Health and Human Services (HHS) have jointly issued a FAQ that addresses how “reference-based pricing” works with the Patient Protection and Affordable Care Act’s (PPACA) restrictions on out-of-pocket maximums. PPACA limits the out-of-pocket maximum a non-grandfathered plan may impose, and generally requires that co-pays, coinsurance, and deductibles be counted toward this limit. However, premiums, balance billed amounts for non-network providers, and non-covered services do not need to be applied to the out-of-pocket limit. (For 2015, the limits are $6,600 per individual or $13,200 per family.) The new FAQ explains how the out-of-pocket limit applies to plans that use reference-based pricing–i.e., a design under which the plan pays a fixed amount for a particular procedure (such as a knee replacement), which certain providers have agreed to accept as full payment.

    The FAQ states that the agencies will permit the reference price to be treated as the in-network price, as long as the plan uses a reasonable method to provide adequate access to quality providers who are willing to accept the reference price. The agencies will determine whether a plan that uses reference-based pricing (or a similar network design) is using a reasonable method to ensure adequate access to quality providers based on:

    • The Type of Service. Plans may treat providers that accept the reference price as the sole network providers only for those services for which consumers have enough time to make an informed choice of provider. For example, this design is not appropriate for emergency services.
    • Reasonable Access. Plans should ensure the availability of an adequate number of providers that accept the reference price. Considerations include network adequacy approaches developed by the states, geographic distance measures, and patient wait times.
    • Quality Standards. Plans should ensure that an adequate number of providers accepting the reference price meet reasonable quality standards.
    • Exceptions Process. Plans should offer an easily accessible exceptions process when access to a provider that accepts the reference price is unavailable or would compromise the quality of services for a particular individual because, for example, of the patient’s other medical issues.

    Disclosure. Plans should provide, automatically and free of charge, information about the pricing structure, including the services to which it applies and the exceptions process. In addition, the plan should provide specified information, such as provider lists, upon request.

    For more information to help you benchmark your health plan’s out of pocket limits with other employers of similar size, industry and geography, pre-order the 2014 UBA Health Plan Survey Executive Summary which will soon be available with the latest data from nearly 17,000 plans.

    Read More …

  • Don’t have an I-Phone? Well Apple has other needs handled with their new Health Kit

    November 12, 2014

    Apple is launching a mobile health tracking system that will enable people to gather information on their health via their iPhone or the new Apple Watch. Tired of the Fit Bit? Now you can get to the core of the problem. Not only will they track, but you can send the information to an online health record accessed by your primary care physician immediately. So will this be an additional means of moving from an employer based health insurance system to consumer?

  • Can the IRS really police all the penalties? Not without funding…though they disagree

    November 11, 2014

    The IRS Commissioner John Koskinen said the IRS is not getting the funding they need to deal with the new filing requirements regarding compliance with the individual mandate. They have asked for $430 million which includes $300 million to build out needed systems. Regardless, they will plow ahead (given that they have no choice)

  • Requirement to Obtain a Health Plan Identifier (HPID) Delayed | California Employee Benefits

    November 10, 2014

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    By Linda Rowings

    expectDelaysOn Friday, October 31, 2014, the Department of Health and Human Services (HHS) quietly updated its Health Plan Identifier information page to delay the requirement that insurance carriers and self-funded health plans obtain a health plan identifier (HPID). The delay is in effect until further notice.

    Plans that have already obtained their HPID do not need to take any action. Those that do not yet have the number do not need to complete the process.

    This delay does not affect the Transitional Reinsurance Fee (TRF) filing — that submission remains due November 15, 2014. For the answers to nearly 30 questions about TRF filing, due dates, calculation methods, payment, submission and more, CLICK HERE to Request UBA’s “Frequently Asked Questions about the Transitional Reinsurance Fee (TRF)”.

    Read More …

  • Now you see it – Now you don’t – what about my subsidy? Many to lose them

    November 10, 2014

    It is estimated by CMS (which runs Medicare and MediCal) that nearly half a million people could lose subsidies or health insurance coverage they obtained through the ACA. Of this round number, 363,000 could lose the subsidy due to an inability to verify qualifying income and 115,000 could have their policies cancelled because they could not prove immigration status

  • California Nonexempt Employee Meal Breaks | Arrow Benefits Group

    November 7, 2014

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    breakfast2Question:

    Can California nonexempt employees waive lunch breaks? What are the requirements for the two rest breaks for an 8-hour shift?

    Answer:

    In California, if employees work more than 6 hours in a workday, they may not waive their meal period. According to the California Labor Code, an employer may not employ an employee for a work period of more than 5 hours per day without providing the employee with a meal period of no less than 30 minutes.

    However, if the total work period per day of the employee is no more than 6 hours, the meal period may be waived by mutual consent of both the employer and employee. An employer may not employ an employee for a work period of more than 10 hours per day without providing the employee with a second meal period of no less than 30 minutes. However, if the total hours worked is no more than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee only if the first meal period was not waived.

    In California, employees are entitled to a 10-minute paid rest period for every 4 hours worked. Each rest period is supposed to take place as close to the middle of each 4-hour work period as possible.

    Example of Meal and Rest Periods in an 8-Hour Shift

    John Doe is scheduled to work 8 a.m. to 4:30 p.m. He is allowed two 10-minute paid rest periods and one 30-minute unpaid meal period during his 8-hour shift. John Doe takes his rest and meal periods as follows, in compliance with California meal and rest period requirements:

    10:15 a.m.: 10-minute rest period
    12:30 p.m. to 1 p.m.: 30-minute unpaid meal period
    3:30 p.m.: 10-minute rest period

    John Doe received his meal period before the end of the 5th working hour and both his rest periods in the middle of each 4 hours worked.

    Sources:

    www.dir.ca.gov/dlse/faq_mealperiods.htm
    www.dir.ca.gov/dlse/faq_restperiods.htm

    Read More …

  • Hospitals want to do a Wallet ectomy – new rules on paying bills up front

    November 7, 2014

    As people that have insurance are responsible for a bigger portion of their medical bills, hospitals are more concerned about collecting. Now 41% of Americans have deductibles of $1,000 or more, which is up from 10% in 2006. Add to those covered by their employers with the newly covered 7 million or so, almost all of whom chose high deductible health plans. Hospitals total cost of uncompensated care reached $46 billion in 2012, which is equal to 6% of their expenses. So now many hospitals try to get patients to pay up front 30 to 50% of what they will owe and some offer discounts for paying early.

  • Marketplace Notice is not an Annual Notice – but must be provided

    November 6, 2014

    When the Exchange plans (now called Marketplace plans) were begun, the government required that all employers let employees know of its existence and some details. There was some confusion, as employers assumed (and the government did not make it clear either way) that the notice had to be provided annually. Actually, it does not – it only needs to be given to employees when they become eligible for benefits offered by the employer.

  • New Rules – Cafeteria Plan Mid Year Changes

    November 5, 2014

    IRS Notice 2014-55 permits a cafeteria plan to allow an employee to revoke their election under the cafeteria plan regarding medical insurance coverage at such time as they are eligible for and elect to enroll in a Marketplace (Exchange) plan

    What they did not say in their notice is that someone should carefully consider whether they are getting a better deal by buying coverage with after tax dollars vs. pre tax dollars, and also what the value of any subsidy they may receive would be to offset the difference. Note that the subsidy is NOT available to those that have coverage available through their employer

  • New Limits

    November 4, 2014

    HSA for 2015: the annual contribution limits are raised to $3,350 for self only and $6,650 family

    The minimum annual required deductible is raised from $1,250 to $1,300

    PCORI Tax: raised from charge for 10/1/14 to 10/1/15 from $2 per member per year to $2.08

    Medicare Part B premiums will remain unchanged

  • Breast cancer awareness month events | Petaluma Benefits Broker

    October 14, 2014

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    petaluma breast cancerDuring the month of October, many businesses and individuals are doing their part to increase awareness on treating and preventing breast cancer, and to raise funds in the fight against the disease. Here are a few fun events you can attend to help the cause.

    Thursday, Oct. 16

    Getting Things Off My Chest: After surviving breast cancer, Melanie Young wrote her first book, “Getting Things Off My Chest: A Survivor’s Guide to Staying Fearless & Fabulous in the Face of Breast Cancer,” a witty and practical guide to help newly diagnosed women remain focused and able to make smarter choices throughout their recovery. On Thursday, Oct. 16, Young will be the guest speaker at the North Bay Cancer Alliance event at the Flamingo Resort in Santa Rosa. Registration begins at 6 p.m for the 6:30 p.m event. Suggested donation is $15. Partial proceeds from book sales will benefit the Alliance. For more information, call Pat Nees at 528-0282, or visit northbaycancer.org.

    Saturday, Oct. 18

    Sisters 5K Walk/Run: This event kicks off at Sisters Boutique in Yountville with a high-heel dash at 8:30 a.m., followed at 9 a.m. by a 5K run/walk and a post-5K celebration. The event will include food and wine, shopping opportunities, swag bags and a silent auction. Tickets are $35 for the 5K, $20 for the celebration, benefiting CaringBridge, Breast Cancer Emergency Fund and Pink Heals Napa Valley. Details at sisterscrushbreastcancer.org.

    Saturday, Oct. 18

    Graton Ridge Cellars Pink Party: In its 6th year of celebrating Breast Cancer Awareness Month, Graton Ridge Cellars will be bringing out the pink boas for everyone who purchases wine at the event. A portion of wine sales will be donated to Sutter North Bay Women’s Health Center in Santa Rosa. Whether you can attend or not, the winery is encouraging everyone to send in the name and photo of loved ones affected by breast cancer so they can add it to their “Pretty in Pink” Wall of Fame. Admission is $10 per person, and the event starts at 11 a.m. Visit gratonridge.com for more information.

    Friday, Oct. 24

    Healthy Habits for Healthy Breasts: As part of its Women’s Night Out series, Kaiser Permanente Santa Rosa hosts a free presentation about reducing risk for breast cancer. It will cover factors that could affect breast cancer risk and the impact of lifestyle. Keynote speakers are Loie Sauer, M.D. and Paula Kelleher, NP. Check-in begins at 6 p.m. in conference rooms E-3, E-4, and E-5, Medical Building East at 401 Bicentennial Way, with presentation 6:30-8:30 p.m. Register at surveymonkey.com/s/H5DS98C. More information: bit.ly/KaiserOctNightOut.

  • HR/Benefits Industry Leader Announces New Company Name – Arrow Benefits Group

    October 7, 2014

    UBA Partner Continues Legacy of Elevating Industry Standards

    Petaluma, CA—For over 30 years, the names and reputations of Jordan Shields and Keith McNeil have been synonymous with leading the path for change and improving the Benefits industry. Now called Arrow Benefits Group (formerly The SSM Group), their team remains the 3rd largest benefits company in the North Bay. “We humanize Human Resources,” says Shields, “This is an exciting time of change in our industry and people need the right team of specialists to guide them.” Benefits are about people’s lives, hopes, and dreams. Arrow Benefits Group takes these ideals seriously – protecting over 900 clients. Shields and McNeil, along with two generations of family and a team of industry experts, continue their mission to build solutions uniquely tailored to match their clients’ needs. They have re-branded the company to better tell their story including the addition of several new divisions. Watch Our New Company Video & Testimonials Here & Contact us with Any Questions!

    Arrow Benefits Group “is not tied to any other corporate organization,” explains McNeil, “we own the company—we own the work and represent the bottom line for clients.” To take good care of people, you need this kind of accountability and flexibility. Everything at Arrow is done in-house without middlemen, and each team member is fully empowered to craft any solution needed in a specific “Blueprint” for each client. Arrow provides a diverse array of employer services related to employee benefits management and compliance including: a new HR division with 10 experienced human resource consultants, Third Party Administrator (TPA) doing COBRA, Flex, self-funded dental/vision, and an “Umbrella” program incorporating the practices and experience of a diverse range of expert health insurance agents, which complements their large brokerage team.

    HR advocates throughout their careers, Shields and McNeil have shaped many industry advancements practiced today. McNeil was one of the founders and developers of Enwisen, which is the premier benefits communication platform now used by Fortune 500 sized companies such as 20th Century Fox, ConAgra and Unisys. He has served on multiple industry boards and co-founded the “Task Force on Lowering Health Insurance Costs,” a resource for large employers and brokers. Shields is the former Chairman and long-time board member of United Benefit Advisors (UBA) one of the largest benefits consulting and brokerage firms in the country. He has also served on numerous prestigious industry boards. Highly active within the community and youth based organizations, Shields has authored several articles and books about the benefits industry.

    We’ve worked with Arrow Benefits Group for so long because of the outstanding service level they provide. They really understand what we’re trying to do, and they help us meet the needs of our employees. I’ve been very pleased with their technical expertise, especially how they ensure we’re in compliance.

    —Bob Gotelli, Director of Human Resources, Bank of Marin

    See all our latest videos and testimonials on our newly updated website! Please feel free to contact us with any questions—we’re here to speak with you anytime you need us.


     

    About Arrow Benefits Group

    Committed to the community and elevating the industry—Arrow Benefits Group is the North Bay office of United Benefit Advisors (UBA), just north of San Francisco. UBA is one of the largest benefits consulting and brokerage firms in the country, with over 200 offices throughout North America and the United Kingdom. We provide a global reach with local support.

    We work very personally as advisors determining specific needs, prioritizing goals, and providing technology tools that will streamline costs and improve overall benefits packages. The Arrow Benefits Group employs a formal and sophisticated process, supported by data and HR analytics that save time and money while building a blueprint and living benefit model, continually adaptable to changing needs.

    ###

  • How Do Insurance Companies Test for Nicotine? | California Employee Benefits

    September 26, 2014

    By Chris Sherwood

    doctor_stethoscope

    Introduction

    When applying for life insurance, and in some cases health insurance, certain lifestyle habits may end up costing you more each months in premiums. One of these habits is smoking or other nicotine use. Employers who provide health insurance as part of their benefits package may also charge more in premiums for smokers. Even if you mark non-smoker on your application form, many insurance companies require a medical exam before offering coverage. Lying about smoking habits on your insurance application can cause an immediate denial of coverage.

    Samples

    All nicotine tests are done using a bodily sample. Although nicotine can be tested through saliva and hair, most commonly nicotine is tested in urine or blood samples. This is because, in most cases, a blood or urine sample is a regular part of a physical examination for insurance.

    Results

    Most nicotine tests are done using competitive immunoassay. In this testing process, testing strips are coated with a substance that acts as a cotinine antigen. The urine is mixed with a gold antibody, which will color the antigen line once the two come in contact with each other. Once the testing strip is placed in contact with the urine and antibody mixture, the mixture will absorb into the strip. If cotinine is present in the urine, the cotinine will prevent the antibody from coloring the antigen line, resulting in a positive test result. If no cotinine is present in the urine, the antibody will freely color the antigen line, resulting in a negative result.

    Length of Time

    Although nicotine can only be tested in the blood for a few hours after using, due to its fast metabolism by the liver, the resulting metabolite cotinine can remain much longer in your urine and blood. In fact, according to the Foundation for Blood Research, cotinine can be tested in your system for up to 10 days before dropping back to the level of a non-smoker. For those who have smoked for many years, it may take even longer to drop to normal.

    Reasoning

    Insurance companies base their premiums off of health risks. The higher chance you will need to access your coverage (such as through healthcare costs or death), the more money they will eventually have to pay out to cover those costs. According to the American Heart Association, more than 444,000 deaths in the United States alone can be attributed to nicotine use through cigarette smoking. Nicotine use also increases rates for heart disease, and even some forms of cancer, both of which are expensive to treat. To make up for the increased financial risk of using nicotine, insurance companies charge more to these individuals for insurance.

    Read More …

  • Did you really think they wouldn’t figure a way out – insurers trick the sick

    September 26, 2014

    They’re not stupid, you know. They have found ways to avoid risk and make profits for a long time. Still can, apparently. Carrier critics are now up in arms (belatedly) about the new practices that are burdening those who are trying to take advantage of what President Obama promised. Over 300 patient advocacy groups recently wrote the new HHS Secretary with their concerns saying that the insurer practices “are highly discriminatory against patients with chronic health conditions and may…violate the (law’s) nondiscrimination provisions” Well, not exactly. Create a large bill and expect a lot of space within which to find loopholes, of which they took advantage. Among their concerns are difficulties consumers face in trying to get a full picture of the plans available on the exchange (true in part, but they discount the value of agents in helping people find what they need), narrowing of networks (also required because of the demands of states such as California to control costs), and cutbacks in what are considered to be preferred drugs which must be listed to be covered (no prohibition against that, so carriers “took a shot”) as well as converting some to co-insurance rather than using co-payments.

  • Mid-Year Qualifying Events and Tag-Along Rule | California Benefits Broker

    September 22, 2014

    calendar

    Question:
    If an employee is adding a new baby to his healthcare plan, can this employee also add his spouse at the same time?

    Answer:
    Please review your plan documents to determine whether your Section 125 cafeteria plan allows for mid-year election changes. If so, an employee would generally be allowed to add his or her spouse to the plan if the employee has a mid-plan year qualifying event such as the birth of a child. This is called the “tag along” rule.

    Read More …

  • California Paid Sick Leave | Arrow Benefits Group

    September 19, 2014

    On September 10, 2014, California Governor Jerry Brown signed into law the Healthy Workplaces, Healthy Families Act of 2014 (A.B. 1522). The law requires California employers to provide employees at least three paid sick days (24 hours) per year. With the signing, California joins Connecticut as one of only two states that require employers to provide paid sick leave. The law goes into effect on July 1, 2015.

    Who is covered by the law?

    California’s paid sick leave law generally applies to all employers and employees; however, the law does not apply to individuals who provide in-home supportive services (as defined by the state Welfare and Institutions Code), certain air carrier employees such as flight deck or cabin crew members subject to the federal Railway Labor Act (45 U.S.C. 181 et seq.), or employees covered by a valid collective bargaining agreement that expressly provides for paid sick days.

    Employee eligibility

    Eligible employees must work in California for 30 or more days within a year from the commencement of employment. Therefore, an employee who was employed prior to July 1, 2015 (the effective date of the law), will start to accrue paid sick leave on July 31, 2015, assuming the employee worked every day in July.

    Leave accrual

    Employees accrue one hour of paid sick leave for every 30 hours worked. Employees who are exempt from overtime requirements (administrative, executive, or professional employees under a wage order) are deemed to work 40 hours per workweek, unless the employee’s normal workweek is less than 40 hours, in which case the employee will accrue paid sick leave based upon the normal workweek. Employers may limit accrual to 24 hours of paid sick leave per year.

    Employers must allow employees to carry over all unused accrued paid sick leave to the following year;   however, employers are not required to allow employees to accrue more than 48 hours of paid sick leave.

    Employers’ current leave policies

    Employers with existing paid leave or paid time off policies are not required to provide additional leave to their employees if their policies:

    1. Satisfy the law’s accrual, usage, and carry over requirements; and
    2. Provide no less than 24 hours of paid sick leave annually.

    Cash out

    Employees are not entitled to be paid for accrued unused sick leave upon termination, resignation, retirement, or other separation from employment. However, if an employee separates from an employer and is rehired by the employer within one year from the date of separation, previously accrued and unused paid sick days must be reinstated. The employee is entitled to use those previously accrued and unused paid sick days and to accrue additional paid sick days upon rehiring.

    Request for leave

    Employees may request leave verbally or in writing. If the need for paid sick leave is foreseeable, the employee must provide reasonable advance notification. If the need for paid sick leave is unforeseeable, the employee must provide notice of the need for the leave as soon as practicable.

    Use of leave

    Employees may use accrued paid sick days beginning on the 90th day of employment, after which day the employee may use paid sick days as they are accrued. An employer may lend paid sick leave to an employee in advance of accrual at the employer’s discretion.

    An employee may use paid sick leave for the diagnosis, care, or treatment of an existing health condition of, or preventive care for, the employee or the employee’s family member. In addition, an employee who is a victim of domestic violence, sexual assault, or stalking may use paid sick leave for any of the following:

    • To seek medical attention for injuries caused by domestic violence, sexual assault, or stalking.
    • To obtain services from a domestic violence shelter, program, or rape crisis center as a result of domestic violence, sexual assault, or stalking.
    • To obtain psychological counseling related to an experience of domestic violence, sexual assault, or stalking.
    • To participate in safety planning and take other actions to increase safety from future domestic violence, sexual assault, or stalking, including temporary or permanent relocation.

    Employers may not require as a condition of using paid sick time that the employee search for or find a replacement worker to cover the days during which the employee uses paid sick days.

    Employers may set a reasonable minimum increment of paid sick leave, not to exceed two hours, for the use of paid sick leave.

    Prohibited conduct

    Pursuant to the law, employers may not:

    • Deny an employee the right to use accrued sick leave; or
    • Discharge, threaten to discharge, demote, suspend, or in any manner discriminate against any employee for:
      • Using accrued sick leave.
      • Attempting to exercise the right to use accrued sick leave.
      • Filing a complaint or alleging a violation of the law.
      • Cooperating in an investigation or prosecution of an alleged violation.
      • Opposing any policy or practice that is prohibited under the law.

    The law establishes a rebuttable presumption of unlawful retaliation for any adverse employment action occurring within 30 days of an employee engaging in the protected activity just described.

    Notice

    At the time of hiring, new employees must be provided a notice (as part of the Wage Theft Prevention Act notice), informing them of their rights to paid sick leave and their right to file a complaint with the Labor Commissioner in the event of a violation of the law.

    Employers must also provide employees with written notice of their available amount of paid sick leave, or paid time off an employer provides in lieu of sick leave, on either the employee’s itemized wage statement or in a separate writing provided on the designated pay date with the employee’s payment of wages.

    Posting requirement

    Employers are required to display a poster, created by the Labor Commissioner, in each workplace that summarizes the requirements of the law. Employers that violate the posting requirement may be subject to a civil penalty of up to $100 per offense.

    Recordkeeping

    Employers must keep records documenting the hours worked and the paid sick leave accrued and used by an employee for three years. These records must be made available to employees for inspection within 21 days of a verbal or written request.

    If an employer fails to maintain adequate records, it will be presumed that the employee is entitled to the maximum number of hours accruable under the law, unless the employer can prove otherwise by clear and convincing evidence.

    Enforcement and penalties

    The Labor Commissioner is responsible for enforcing the paid sick leave law. If after an investigation the Labor Commissioner finds that a violation of the law has occurred, the commissioner may order appropriate relief (including reinstatement, backpay, payment of sick days unlawfully withheld, and administrative penalties) for violations. If paid sick days were unlawfully withheld, the employee may recover the dollar value of the paid sick days withheld, or $250 multiplied by three — whichever is greater — up to an aggregate penalty of $4,000. If a paid sick leave-related violation results in other harm to the employee or person (such as discharge from employment), the administrative penalty will include $50 for each day that the violation occurred or continued, up to $4,000.

    The Labor Commissioner or the Attorney General may also bring a civil action on behalf of an aggrieved employee against anyone who violates the law. In such case the employee may be awarded relief similar to that discussed above.

    Steps to take now

    While the law does not go into effect until July 1, 2015, employers should:

    • Review and, if necessary, update their current paid sick leave and/or paid time off policies to ensure compliance with the law.
    • Review and, if necessary, update their recordkeeping protocols to ensure compliance with the law.
    • Monitor the Labor Commissioner’s website for developments in the law (regulatory releases, required posters, model notices, guidance documents, FAQs, etc.).
    • Train supervisory, managerial, human resources, and payroll personnel on the law’s requirements.

    Read More …

  • EEOC Files Suit Over Wellness Program | Petaluma Employee Benefits

    September 15, 2014

    Posted by Linda Rowings

    EEOC files suit over wellness

    The Equal Employment Opportunity Commission (EEOC) has sued an employer because the penalty it applied for not participating in its wellness program was, in the eyes of the EEOC, so high that participation was not, as a practical matter, “voluntary.” Under EEOC rules, an employer may conduct medical examinations, which includes obtaining medical histories and blood draws, only in limited situations. One of those permitted situations is a voluntary wellness program. Because the program did not qualify as “voluntary,” the questions employees were asked about their health on a health risk assessment, a blood draw, and a range of motion assessment violated the Americans with Disabilities Act (ADA), according to the EEOC’s Complaint.

    This is the first lawsuit brought by the EEOC challenging the incentives of an employer’s wellness program. The situation that created the complaint is a bit unusual, because the employee was terminated shortly after complaining about the wellness program. However, the EEOC also seems disturbed by the terms of the program itself. The program was designed so that the company paid 100% of the health insurance premium for employees who participated in the wellness program and paid nothing toward the premium of any employee who did not participate. The EEOC has described this penalty as “steep” and “enormous.” It remains to be seen whether the court will agree with the EEOC that the penalty violates the ADA rules, but employers considering significant penalties for non-compliance with, or incentives for participating in, a wellness program should understand that their design could lead to an EEOC charge or lawsuit.

    As a reminder, in addition to the ADA requirements, wellness programs need to comply with PPACA’s rules for these programs. Under the 2014 rules, wellness programs are either “participatory” or “health-contingent.” A participatory program is one that either has no reward or penalty (such as providing free flu shots) or simply rewards participation (such as a program that reimburses the cost of a membership to a fitness facility or the cost of a seminar on nutrition). As long as a participatory program is equally offered to all similar employees, no special requirements will apply to the program.

    A number of rules apply to “health-contingent” wellness programs. Health-contingent wellness programs are programs that base incentives or requirements in any way on an employee’s health status. Health status includes things like body mass index (BMI), blood glucose level, blood pressure, cholesterol level, fitness level, regularity of exercise, and nicotine use. A wellness program with health-contingent requirements must meet all of these requirements:

    • Be reasonably designed to promote health or prevent disease
    • Give employees a chance to qualify for the incentive at least once a year
    • Cap the incentive at 30% of the cost of coverage if the incentive does not relate to non-use of tobacco and to 50% of the cost of coverage if the incentive relates to non-use of tobacco
    • Provide a reasonable alternative way to qualify for the incentive
    • Describe the availability of the alternative method of qualifying for the incentive in written program materials

    The case was filed in Wisconsin against Orion Energy Systems

  • How to Add a Grandchild to Insurance | Petaluma Benefits Broker

    September 12, 2014

    By Brian Connolly

    Grandparents acting as primary caregivers for their grandchildren has become a growing trend. According to “The Examiner,” each health insurance company generally has its own set of rules regarding the inclusion of grandchildren to a health insurance plan. While some companies may offer the service for any grandparent over the age of 55, others may require you to be the legal guardian of the child before allowing you to add them to your insurance policy. With persistence, tenacity and a willingness to do the research, practically any grandparent can find out if their grandchild is eligible to join their health insurance plan.

    Step 1

    Call the number listed on your monthly health insurance billing statement to speak with a live representative of your health insurance provider. Ask to speak with a policy manager or other specialized employee who can answer specific questions on policy matters.

    Step 2

    Ask if you can add your grandchild to your current health insurance policy and under what conditions or terms the service will be available. You may be asked to visit a local office of your insurance provider to fill out the necessary forms.

    Step 3

    Fill out the insurance policy modification form and include the details and information of your grandchild. Include their full name, age, ethnicity, social security number and any other required data asked about your grandchild. If required, bring in your grandchild for any necessary blood or urine test that may be necessary to complete the application.

    Step 4

    Receive your confirmation insurance packet in the mail and store your child’s health insurance card next to yours in your wallet, purse or other secure location. If desired, guide your grandchild through the specific benefits and terms of their health insurance policy.

    Tips

    If your insurance company denies your request to add your grandchild to the policy, contact your local Medicaid office to see if he is eligible to join the government-enrolled health program.

    Read More …

  • PTO as a Partial No – How do Employers Apply the Rules? New California Appellate Decision

    September 12, 2014

    In Thea v. General Atomics the California appellate court reaffirmed and clarified the vacation rule.  In this case, the company offered exempt employees accrued PTO, and requires them to use their PTO hours when they are absent from work for partial or full days.  Deductions are made from accrued PTO for partial day absences of any length.  They continue to accrue PTO and their full salary during this “leave” They are not required to use PTO if their work week exceeds 40 hours, however.

    The plaintiff said the rule for partial day deductions was unlawful, violating the law prohibiting forfeiture of wages (including accrued vacation or annual leave).  The trial court disagreed with the plaintiff and upheld the rule for the employer.  On appeal the California court agreed.

  • California Employment Law Update – August 2014 | CA Benefits Broker

    September 9, 2014

    Unfair Immigration-Related Practices

    On June 28, 2014, California Governor Jerry Brown signed legislation (A.B. 2751) amending recently enacted California law that prohibits employers from retaliating against undocumented workers who engage in protected activity.

    Among other things, the law:

    Expands the definition of “unfair immigration-related practice” to include threatening to file or filing of a false report or complaint with any state or federal agency.
    Prohibits an employer from discharging or in any manner discriminating, retaliating, or taking any adverse action against an employee because the employee updates or attempts to update personal information based on a lawful change of name, Social Security number, or federal employment authorization document.

    The law goes into effect on January 1, 2015.

    Read 2014 CA A.B. 2751

    Read More …

  • New Guidelines on Pregnancy Discrimination – Because They Have not Outlined this Enough

    September 9, 2014

    It’s exactly what you expected.  Don’t do it – in triplicate.  Any evidence that an employer knew of a pregnancy (office gossip and whatever) and then made an employment decision based on it, or in advance made a decision based on stereotypes about applicants is prohibited.  And don’t even think about considering an applicant or employee’s past pregnancy or someone’s capacity to become pregnant.  No kidding…but they found the EEOC found a need to repeat it.

    No leave policies with gender based distinctions, no accommodations different for one employee temporarily unable to perform a job than another, and all benefits and infertility insurance coverage must be the same for everyone.  You knew this already, right?

  • Filing for California SDI | CA Employee Benefits

    September 5, 2014

    Question:

    How does an employee file for California state disability benefits (SDI) when going on leave in California?

    Answer:

    The process for filing for California State Disability is really up to the employee and the employee’s physician. The employer can provide resource information, but should refrain from taking actual action on behalf of the employee. Information about the process and enrollment instructions may be found on the California Employment Development Department (EDD) website at http://www.edd.ca.gov/disability/di_how_to_file_a_claim.htm.

    Read More …

  • Buy the Insurance…Or Else…Unless We Change the Rules and Make it Easier to Avoid

    September 5, 2014

    The penalty is the greater of 1% of family income or $95 per year (but they reduced that to $47.50 for children)  if you do not have health insurance this year.  But now, federal officials have decided to cap the potential liability to $2,448 per person, based on the national average annual premium for a bronze level health plan.  So you’re in trouble if you do not buy…just not as much trouble as you may have feared.

     

  • Pay and WARN Notice | California Benefits Broker

    August 9, 2014

    Question: May an employer who is closing a plant pay out employees in lieu of a 60-day Worker Adjustment and Retraining Notification Act (WARN) notice?

    Answer: The Worker Adjustment and Retraining Notification Act (WARN) requires a 60-day written notice and does not contain a provision for an alternate option. Best practice is to provide the 60-day notice. While we would not recommend taking the approach of payment in lieu of notice, the Department of Labor does discuss this situation on their website and a link to this information is contained as a source. Please consult with a labor attorney for the best advice to manage this particular situation.

    The damages for violating WARN are back pay and benefits up to 60 days. According to the Department of Labor, if an employer paid these amounts but did not provide 60-day notice, while they have technically violated WARN they have also already paid the WARN damages. Keep in mind that employers should be aware that WARN allows for voluntary payments of wages and benefits to be offset against damages awarded for violations of the act. However, if these payments were required by another law, contract, or company policy or practice, the employer cannot use them to offset WARN damages.

    Read More …

  • Another Measure of Success or Failure – The Hits Keep Coming for the ACA

    August 6, 2014

    In April, the President told the national that Exchange enrollment was at 8 million, exceeding expectations and at lower costs than anticipated.  Those statistics were selective.

    As of April, 20% of those enrolled in the Exchange had still not paid their premium.

    A Kaiser Foundation study shows that only 57% of the number are really insured and they considered those who once had coverage to be previously insured even though there were not at the time of the Exchange enrollment.  The problem here is that the poll was only of 742 individuals and even then there was anticipated deviation of +/- 4 points.

    Using the Kaiser statistics combined with the payment notes, this would drop the actual new enrollment to about 3.9 million.  By this time, the CBO estimated that the enrollment should be at 19 million and CMS estimated 26 million.  So…

  • Drafting Opposition for Obamacare Due to Drafting Error in Legislation

    August 5, 2014

    So one court said “no” and the other said “yes” and in the end it will be up to the Supreme Court…again.  Remember when the President could do what he wished?  Well, that was back in the days of Washington and Adams…when things were hectic (which explains why we are still going through this four years later) Congress wrote the ACA to say that subsidies would be provided through “an exchange established by the State” – so when the Feds moved in, the opposition was also on the move.  The problem, of course, is that the law was drafted to give the states incentives to set up the exchanges (money!), but when 36 did not take them up on the offer something had to be done.  They did the right thing…but without permission.

  • FMLA Leave Designation and Notice | Petaluma Benefits Broker

    August 5, 2014

    Question: Is an employer still required to issue a Family and Medical Leave Act (FMLA) notice to an employee if the employer decides to continue paying the employee while on leave?

    Answer: Even if the company has a policy that exceeds the rights and benefits of the Family and Medical Leave Act (FMLA), we recommend designating the leave as FMLA, concurrent with your internal policy, assuming the reason for leave qualifies under the FMLA. If you do not do this, you may find yourself in a situation where an employee takes leave under your internal policy and then asks for an additional 12 weeks under the FMLA. FMLA is a protection leave providing job and benefit security for a specific period of time, so whatever wage replacement an employer chooses to pay employees while on leave is separate from FMLA.

    Additionally, not providing the notice if you have knowledge that the reason would qualify for FMLA might constitute an interference with an employee’s FMLA rights. Employers must provide an employee notice of their rights within five business days of learning of the need for leave. We also caution that if a practice is implemented to pay one employee while on leave, it should be replicated for every employee on leave.

    Read More …

  • Benefits Continuation While on Leave | Petaluma Employee Benefits

    August 1, 2014

    Question: We pay half of our employees’ benefits. If the employee is out on Family and Medical Leave Act (FMLA) leave, does the employer still have to pay their half, or can we require the employee to pay 100 percent?

    Answer: The employer must continue to pay their portion of the premium.

    The regulation requires employers to maintain health benefits at the same level for the duration of the leave as the employee was at prior to going on leave. Additionally, this also means if the employee was previously paying for a portion of their premium, they should continue to do so while on leave.

    If the leave is exhausted and the employer extends additional time to the employee based on an internal policy, health benefits are not required to be continued at that point unless the employer has a policy or practice of doing so for other employees, in which case it would then be best practice to document that practice as a policy.

    Read More ..

  • State Base Loses Face but is Courted Well with New Decisions

    August 1, 2014

    First, many state based exchanges are having difficulty surviving

    Second, a federal appeals court just ruled that the federal exchange cannot offer subsidies

    Cover Oregon is nearly broke but taking prisoners, “claiming that it actually did succeed in building a functioning website – but the state’s Democratic governor killed it for political reasons”

    In Massachusetts, a local daily slammed Governor Patrick for ‘again deciding to reward the incompetence of the vendor that was supposed to set up the state’s new Health Connector website (CGI) but this time to the tune of $35 million

    And Massachusetts was supposed to be the model for the nation…

    The US Court of Appeals for the District of Columbia, meanwhile, said the IRS went too far in extending subsidies to those buying insurance from the federal exchange.  Subsidies are therefore no longer allowed to be provided through these exchanges (for the record, California would be exempt here, as we have a state based exchange).  The case is Halbig v. Burwell but in it, the court said “we reach this conclusion, frankly, with reluctance.  At least until states that wish to can set up Exchanges (note – there aren’t any now) our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal Exchanges and for health insurance markets more broadly”  In the dissent, it was stated that “this case is about Appellants’ not so veiled attempt to gut the Patient Protection and Affordable Care Act (ACA)”  (duh)  The White House demurs (of course) saying that ‘while this ruling is interesting to legal theorists, it has no practical impact” on individuals’ ability to currently receive tax credits for their health care.  The Press Secretary said “you don’t need a fancy legal degree to understand Congress intended” for qualified individuals to receive tax credits regardless of who was administering the exchange.

    Family Medical Leave Act redefines Family to include Gender Neutral Marriages

    The Department has proposed to move from a “state of residence” requirement to recognize same sex marriages to “place of celebration” which makes things quite a bit simpler, and easier

    The proposed definitional change means that eligible employees will be able to:

    1. Take FMLA leave to care for their same sex spouse with a serious health condition
    2. Take qualifying exigency leave due to their same sex spouse’s covered military service
    3. Take military caregiver leave for their same sex spouse

  • San Francisco Update – you’re not going to like it

    July 28, 2014

    Also note that increases in the amount you must pay per employee increases in 2015.  For larger employers (100 or more employees) the amount is $2.48 per hour and for smaller employers (20-99 employees) will be $1.65 per hour.

    What is the Waiting Period Exactly?  Different Interpretations and Now a Final Federal Rule

    The maximum waiting period allowed before offering coverage to a full time employee was established as 90 days by the federal Affordable Care Act.  Then California said it was 60 days, but the restriction was imposed on carriers and not employers.  Some carriers have said it does not apply, certifying that federal law overrides the California statute, and are not enforcing this law.  Other carriers took it seriously but said their systems couldn’t handle it, so they gave their employer groups the option of “first of the month following date of hire” or “first of the month following 30 days”  And now the federal government has come up with final regulations concerning their original 90 day waiting period, allowing a “one month orientation period” before the 90 day count begins.  Of course, the caveat is that the government knows these periods are commonplace but would not be used to “violate the spirit” of the 90 day waiting period.  The start date for the new federal rules is January 1, 2015.

    Just to confuse matters further (which has now become a hallmark of the ACA), the “pay or play” rules have a different formulation for consideration of a coverage offer, saying that an employer MUST offer coverage to eligible employees no later than the first day of the fourth full calendar month of employment.

  • Hobby Lobby Ruling Cooling ACA Ardor Contra to Initial Perception but Congressional Reception is Cooler Still | California Employee Benefits

    July 25, 2014

    The case was Burwell vs Hobby Lobby.  To put it simply, the Supreme Court ruled that “closely held (sorry General Motors) for profit companies can, on religious grounds, opt out of a federal requirement to provide certain contraception coverage.  Of course, they did not exactly define what “closely held” meant (but as Justice Potter Stewart once said “I’ll know it when I see it”).  Publicly traded companies, of course, are not.

    With a little more ambiguity, the Supreme Court gave temporary relief to Wheaton College, ruling “it does not for now have to comply with the Obama administration’s requirement that it fill out a form to register religious objections to providing some types of contraceptive coverage mandated by the Affordable Care Act”  What is odd about this is that the male justices tried to sneak it through, but the female justices were furious, claiming that, while they were a part of the Hobby Lobby decision, this did not mean that they were opening the door for other exemptions, especially those that had not been fully heard.

    Consequences?  Well other than changing employee handbooks, trying to explain moral and religious convictions to employees, the potential erosion of ACA credibility and the opening of further “religious grounds” challenges for other federal laws, not much.  There are also at least four dozen similar faith based lawsuits now under consideration.  But in this case…

    No sooner was the Supreme Court ruling issued that Democrats released a bill to overturn it.  They developed this to “ensure that women have access to coverage for birth control even if they work for businesses that have religious objections”. In other words, they want the ACA to do what it said it would (meaning covering contraception) and they won’t listen to the Supreme Court say otherwise.  The bill failed.

    One legal firm, commenting on the ruling, said “the Court indicated it may not provide the Administration much leeway in its implementation of the ACA where such implementation impacts and is led by other Federal rights”

    Note that the ruling does not apply to state laws, which means that fully insured plans are essentially exempt from the Court ruling because they are subject to state and not federal regulations (for the most part)

    Overall, the general implications, or lack of same, are:

    1. The decision is limited to coverage of contraception without cost sharing under the ACA preventive care mandate
    2. The Supreme Court did not address the application of the decision to publicly traded companies
    3. Employees may still be able to access all FDA approved forms of contraception without cost sharing, but not without additional regulatory action
    4. Plan funding may limit an employer with sincere religious objections from “carving out” certain types of contraception

  • Length of Maternity Leave in California | California Benefits Broker

    July 24, 2014

    Question: How long is maternity leave in California? How long do we have to hold a position for an employee on maternity leave?

    Answer: It is possible for a pregnant California employee to be out on qualifying leave for up to seven months.

    Example:

    An employee goes out on Pregnancy Disability Leave (PDL) for the maximum term of four months (or 17-1/3 weeks), and her leave under the Family and Medical Leave Act (FMLA) runs concurrently.
    Once the PDL ends, she is still eligible for up to 12 weeks of leave under California’s Family Rights Act (CFRA), which could result in up to seven months total away from her job.

    If an employee has not yet been employed for at least 12 months, the employee is not eligible for FMLA or CFRA; however, the employee is eligible for the full PDL allocation as of her date of hire.

    If an employee is out on PDL, FMLA, or CFRA, an employer is required to reinstate the employee to her original position (or a comparable one) once the leave is complete (assuming the employee has not exceed the allowable leave time). While an employer may temporarily fill the position while an employee is on leave, once the leave ends, the employee should be placed into the same position or one with equivalent pay, benefits, seniority, etc. Generally, there are very few exceptions to the reinstatement requirement.

    If existing employees are filling in while she is out, or if a temporary employee is hired, it should be made clear to that employee that this is a temporary situation and that once the employee returns, there should be no expectation that the temporary arrangement continue.

    Read More …

  • Glitches leave safety net in stitches – can we subsidize people federally? | California Employee Benefits

    July 24, 2014

    A pending court ruling may say that the subsidies being provided to those who qualify for them due to their income status are illegal.  The Affordable Care Act originally intended to have the “exchanges” (now known as “marketplaces”) providing subsidized individual medical coverage run by the states, and said so in their law (“exchange established by the state”)  When 36 states decided they couldn’t, or wouldn’t, do it, the federal government set up their own exchange (which did not go too well, if memory serves).  Now it may turn out that they weren’t supposed to do that…and if that is the case, whither goes the ACA?  Well, we’re not sure, but in California the Exchange (Covered California) continues to go strong.

  • Changing from Hourly to Salaried in California | Petaluma Benefits Broker

    July 22, 2014

    Question:
    Can we change our hourly employees to salaried? If so, what is the minimum pay for salaried employees in California?

    Answer:
    An employer may pay employees who were previously paid an hourly wage a fixed salary and retain the nonexempt classification, but should be aware of laws surrounding overtime and meal/break requirements ensuring they are not in violation of the Fair Labor Standards Act (FLSA). It is possible to pay nonexempt (hourly) employees on a salary basis and some employers choose to do so for ease of payroll administration. However, this does not release the employer from an obligation to pay one and one-half times the equivalent hourly wage for any hours over eight in one workday (in California) or over 40 hours in one workweek. Even if you pay nonexempt employees a salary you must still pay them overtime for any qualifying hours.

    Read More …

    Sources:

    http://thinkhrcomply.com/ClassificationTools/OvertimeEligible

    http://www.dol.gov/elaws/overtime.htm

    https://www.dir.ca.gov/iwc/wageorderindustries.htm

  • What is the Waiting Period Exactly? Different Interpretations and Now a Final Federal Rule | California Benefits Broker

    July 18, 2014

    The maximum waiting period allowed before offering coverage to a full time employee was established as 90 days by the federal Affordable Care Act.  Then California said it was 60 days, but the restriction was imposed on carriers and not employers.  Some carriers have said it does not apply, certifying that federal law overrides the California statute, and are not enforcing this law.  Other carriers took it seriously but said their systems couldn’t handle it, so they gave their employer groups the option of “first of the month following date of hire” or “first of the month following 30 days”  And now the federal government has come up with final regulations concerning their original 90 day waiting period, allowing a “one month orientation period” before the 90 day count begins.  Of course, the caveat is that the government knows these periods are commonplace but would not be used to “violate the spirit” of the 90 day waiting period.  The start date for the new federal rules is January 1, 2015.

     

    Just to confuse matters further (which has now become a hallmark of the ACA), the “pay or play” rules have a different formulation for consideration of a coverage offer, saying that an employer MUST offer coverage to eligible employees no later than the first day of the fourth full calendar month of employment.   Got all that?

  • San Francisco Update – you’re not going to like it | California Employee Benefits

    July 17, 2014

    Also note that increases in the amount you must pay per employee increases in 2015.  For larger employers (100 or more employees) the amount is $2.48 per hour and for smaller employers (20-99 employees) will be $1.65 per hour.

  • Hobby Lobby Ruling Cooling ACA Ardor Contra to Initial Perception but Congressional Reception is Cooler Still

    July 16, 2014

    The case was Burwell vs Hobby Lobby.  To put it simply, the Supreme Court ruled that “closely held (sorry General Motors) for profit companies can, on religious grounds, opt out of a federal requirement to provide certain contraception coverage.  Of course, they did not exactly define what “closely held” meant (but as Justice Potter Stewart once said “I’ll know it when I see it”)

    Publicly traded companies, of course, are not.

     

    With a little more ambiguity, the Supreme Court gave temporary relief to Wheaton College, ruling “it does not for now have to comply with the Obama administration’s requirement that it fill out a form to register religious objections to providing some types of contraceptive coverage mandated by the Affordable Care Act”  What is odd about this is that the male justices tried to sneak it through, but the female justices were furious, claiming that, while they were a part of the Hobby Lobby decision, this did not mean that they were opening the door for other exemptions, especially those that had not been fully heard.

     

    Consequences?  Well other than changing employee handbooks, trying to explain moral and religious convictions to employees, the potential erosion of ACA credibility and the opening of further “religious grounds” challenges for other federal laws, not much.  There are also at least four dozen similar faith based lawsuits now under consideration.  But in this case…


    No sooner was the Supreme Court ruling then Democrats said they have developed legislation to override it, to “ensure that women have access to coverage for birth control even if they work for businesses that have religious objections”  In other words, they want the ACA to do what it said it would (meaning covering contraception) and they won’t listen to the Supreme Court say otherwise.

  • Glitches leave safety net in stitches – can we subsidize people federally? | California Employee Benefits

    July 15, 2014

    A pending court ruling may say that the subsidies being provided to those who qualify for them due to their income status are illegal.  The Affordable Care Act originally intended to have the “exchanges” (now known as “marketplaces”) providing subsidized individual medical coverage run by the states, and said so in their law (“exchange established by the state”)  When 36 states decided they couldn’t, or wouldn’t, do it, the federal government set up their own exchange (which did not go too well, if memory serves).  Now it may turn out that they weren’t supposed to do that…and if that is the case, whither goes the ACA?  Well, we’re not sure, but in California the Exchange (Covered California) continues to go strong.

  • What part of “Affordable” don’t these people understand? Struggling to pay premiums… | California Employee Benefits

    June 27, 2014

    In a recent poll conducted by the Kaiser Family Foundation, it was found that 57% of those who purchased a plan through the new exchanges (and that doesn’t count new enrollees in the private market, which also had gains) were not previously insured.  Despite the availability of subsidies, however, 40% of those who bought the plan and qualify for subsidies are still struggling to pay the monthly premium.  Interesting findings include the statistic that 39% reported that the premiums for their new plans were higher than before, and also that 46% said there were not confident that they would be able to cover the expenses required under the plan design they chose.

  • Changes in the Exchange – More Diversity to allay Perversity in Enrollment | California Benefits Broker

    June 26, 2014

    A new Assembly bill passed 68-2 to encourage the state to make changes to the Covered California board.  Blaming the non-diverse board population consisting solely of health care and insurance administrators for some of the failures of the first Covered California rollout, there is now a call for more diversity, in the hopes that people from different industries and cultures will be more sensitive to the needs of prospective enrollees.  The question is whether the enrollment failure was a lack of sufficient education which would have been better handled by more culturally sensitive board members, or whether it was a matter of too much, too soon, in too overwhelming a context, with carriers, consumers and consultants simply ill prepared to handle it all (and what makes anyone think they will handle it any better next time?)

  • Major Risk goes way of minor tragedies – California quietly ends protection for uninsured | Petaluma Employee Benefits

    June 25, 2014

    With the original rules, those who applied for individual coverage could be denied.  As a backstop, they could apply for the Major Risk Medical Insurance Plan which, though affordable, only covered up to $75,000 of claims in a given year, and had a waiting list, as there was a maximum allowed for enrollment due to funding limits (set by receipts from the tobacco fund).  Now the state of California has decided that MR MIP is no longer needed, with the advent of guarantees under the Affordable Care Act.  So the only question now is…has the tobacco money gone up in smoke or do they have some other health needs it may fund in this state?

  • CBO can’t make it a go and now throw in the towel on scoring Obamacare

    June 24, 2014

    There has always been a lot of credence (and a lot of press) devoted to the true value, or true cost of the Affordable Care Act.  Now, the objective CBO, the one on which many rely to give the “facts” about the cost of various pieces of legislation, has said that “scoring” Obamacare has become impossible.  “The provisions that expand insurance coverage established entirely new programs or components of programs that can be isolated and reassessed.  In contrast, other provisions of the ACA significantly modified existing federal programs and made changes to the Internal Revenue Code”  This came in a footnote at the end of the CBO April report.

  • Exchanges allow the exchange of company responsibility for that of the employees

    June 5, 2014

    There is an employer mandate…except when there isn’t. Retirees are not protected under the ACA mandate pertaining to employers. Meanwhile, the mandate for employees continues. But there is help for them – they can always go to the exchange when they are dumped by their plan. In Detroit, Emergency Manager Kevyn Orr fought to send retirees to the exchanges for health insurance as part of the city’s plan to exit bankruptcy. Of course, they gave them some money, and some of them qualify for Medicare. The city said they would give $125 to $300 per month to retirees over age 65 who do not qualify for Medicare, $125 to spouses who aren’t eligible for Medicare with a household income below $75,000, and $175 for retirees under 65. Not enough to cover the cost, but hey, you’re retired!

    In Chicago, a ten year agreement requiring the city to share health care costs with retirees has ended. Mayor Rahm Emmanuel is moving forward on a three year phased in plan to cut the retiree health care subsidy for retirees from 55% to 0. Those who retired prior to 8/23/89 will keep their subsidies for a lifetime.

    In Sheboygan County, Wisconsin, the Board of Commissioners simply voted to stop covering retiree health care and send them to the exchange effective January 1, 2014

  • Two sides of the story…will rates go up or down in 2015 – theories abound (here’s a summary)

    June 5, 2014

    Premiums will increase because –

    1) First round premium setting was overly aggressive
    2) Markets with limited competition could see larger increases because they can
    3) Some carriers with insufficient market share could leave the market, reducing competition
    4) Pressure to expand provider networks
    5) Insurers will react to reduced funding levels for reinsurance in 2015

    Then again, maybe they won’t be so bad after all –

    1) Growth in health care costs slow through 2012 (though picked up in 2013)
    2) Enrollment in Exchange plans should be higher in 2015 than in 2014
    3) Cost sharing in the silver tier (most often selected) is high enough to cut utilization
    4) Increasing size and attractiveness of non group markets could intensify with competition

  • There are the subsidies, and there is the sub testing that was not sub-posed to miss anything

    June 5, 2014

    The Washington Post reported that internal documents show that the government may be paying incorrect subsidies to more than 1 million Americans for their health plans in the new federal insurance marketplace. Oops…

  • What is a risk corridor and why do we care? It makes you want to run down the hall and hide

    June 5, 2014

    The Affordable Care Act contains a “risk corridor” provision which is designed to limit the losses of insurance companies who end up taking an inordinate amount of “risk” due to the ACA (in California, that would mainly be Anthem Blue Cross). This year, the Obama administration has, according to the Los Angeles Times “quietly adjusted” the corridor “to potentially make billions of additional taxpayer dollars available to the insurance industry”

  • The “affordable” part seems unlikely given the “out of pocket” maximum – and now is higher

    June 5, 2014

    This and other surprises in store where “more” is the word of the day:

    1) A higher out of pocket maximum – from $6,350 per year to $6,600
    2) A higher penalty for failure to comply with Pay or Play – from $3,000 to $3,120 per person
    3) A higher penalty for failing to offer coverage at all (groups of 50+) from $2,000 to $2,080
    4) That’s for 2015 – the fines will be higher still in 2016, as will the out of pocket limit

  • HSA, FSA get carried away over amounts carried over – new IRS guidance | California Insurance Broker

    June 5, 2014

    The IRS issued new rules allowing FSA participants to carry over (with the permission of the employer) unused amounts up to $500 each plan year. There are considerations with regard to simultaneous HSA participation, however, and the IRS has clarified those rules as well. Now the IRS has made some clarifications:

    An individual who is covered by a general purpose medical FSA is ineligible to contribute
    to an HSA, even if the individual’s medical FSA balance consists solely of unused amounts
    carried over from the prior plan year (even if they are exhausted during the year, the
    individual is ineligible to make any HSA contribution for the year

    The individual may contribute to a general purpose FSA if they have an unused balance IF

    1) The individual waives or declines a carryover of unused amounts from a general purpose
    FSA to the subsequent plan year; or

    2) The cafeteria plan offers an HSA compatible FSA (limited benefits) and the individual
    elects to carry over unused amounts to the HSA compatible FSA for the subsequent
    plan year; or

    3) The cafeteria plan is designed to automatically enroll those who elect a high
    deductible health plan coverage for the following plan year in an HSA compatible
    FSA (including carryover amounts)

  • If you build it, they will come…unless they are there already

    June 5, 2014

    A McKinsey study has shown that a large majority of people signing up are already paying for their coverage – and that number is 78%. Yes, only 22% of Obamacare signups are paid, previously uninsured enrollees. Not all of them have yet paid, either. So it helps a lot of people (that is the “affordable” part) but not everyone has sought “care”

  • Some came running…but they should have walked first…four state exchanges will bite the dust

    June 5, 2014

    So far four states have spent $474 million on state healthcare exchanges that are considered to be in shambles and so the final price tag for saving them may go even higher. The federal government must now decide whether to throw more money at them or let them fail. These exchanges are in Massachusetts, Oregon, Nevada and Maryland. That leaves 9, but Washington has many identified flaws and the head of the Hawaii exchange is calling on the state to shut it down. So we are at a 50% potential failure rate? According to the Los Angeles Times, federal prosecutors in Oregon have “issued subpoenas to Oregon’s health insurance exchange as part of a grand jury investigation into the spectacular failure of the state’s system, which was never able to enroll consumers online even though it spent more than $248 million in taxpayer money on the operation”

  • Shared Responsibility has Pared Reliability as Hardships are Exempted

    June 5, 2014

    While medical coverage is mandated, it doesn’t mean that everyone can afford it. Subsidies are provided, Medi-Cal might be available, but there are still those in the middle, even those getting subsidies, where the payment offered is not enough. There are now a number of categories in which subscribers may fall and be allowed to reduce or avoid payment while still being covered. Some make sense (homeless or evicted, received utility shutoff, filed for bankruptcy, had medical expenses you couldn’t pay, caring for an aging or ill family member). The odd ones, however, are these:

    “You received a notice saying that your current health insurance plan is being cancelled and
    you consider the other plans available unaffordable”; and

    “you experienced another hardship in obtaining health insurance”

    Nothing like leaving things open ended…

  • But who will be paying? Costs increase in the industry but not all have paid their premiums

    June 5, 2014

    Granted, these are figures coming from Republicans, and granted, it is too soon to tell exactly who will pay for what they bought, but early figures show that just two thirds of those who signed up for coverage under the ACA had paid their premiums by April 15

  • When the Costs Come Rolling In…What the ACA Costs is now becoming clear

    June 5, 2014

    In 1965, after passage of the national Medicare Act, health care expenses increased dramatically, as pent up demand among seniors was slaked and they began to use services that were previously denied them due to inability to afford. The same was anticipated to happen with the Affordable Care Act. Despite the increase in the “insured pool” the problem was that those joining the pool were those who had delayed medical care. Early reports show this is the case, as several sources have reported skyrocketing costs in the health care industry. The good news is that this helps the economy…but at what cost, as these charges will come back to the carriers that sponsor coverage, and thus to the companies and consumers who pay premiums. The Washington Examiner expressed its alarm by saying the acceleration comes after years of “Obama and his allies…crediting a showdown in the rate of growth for health care to payment reforms imposed by the law” Yes that was true in the beginning, but now we are seeing the true expansion…and the true costs. As reported in the Huffington Post (admittedly not the most unbiased of reportage) “Who could have predicted that a recovering economy, higher incomes and a rise in the number of people with health coverage brought about by Obamacare would increase how much Americans are spending on medical care? Well, pretty much anyone”

  • New HSA Limits for 2015 | California Healthcare Reform

    May 5, 2014

    The annual limitation for individuals will be raised to $3,350 and for families $6,650.  The definition of a high deductible plan moves to $1,300 deductible for self only coverage and $2,600 for family coverage, with “out of pocket” expenses not to exceed $6,450 and $12,900.

  • So Speaking of Costs…How Badly will the ACA Affect the Medical Insurance Market?

    May 5, 2014

    An analysis of the first two months of claims data from the federal and state marketplaces show that new enrollees are more likely to use expensive specialty drugs to treat conditions such as HIV/AIDS and hepatitis C than those with job based insurance. It’s only two months, but…and the experts are naysayers and supporters agree with them and so on…but it should be watched

  • When will the cost projections be final? CBO updates again…after just two months

    May 5, 2014

    The Congressional Budget Office has changed their mind…again…and says that the ten year cost projection for the Affordable Care Act will be $100 billion less than they thought recently The White House took credit (of course) saying “this report demonstrates the Affordable Care Act is working. It shows that marketplace health care costs have gone down because premium estimates have gone down. Additionally, the effort to constrain health care costs more broadly is showing continued momentum, as evidenced by the further deduction in projected Medicare spending” Of course, the cost is still enormous – $1.383 trillion over the next decade

  • Let Begin the Liberal Woes – against their usual predatory foes (yes, the insurance companies)

    May 5, 2014

    According to Consumer Watchdog, the major insurance carriers and the association that represents them (California Association of Health Plans) have collectively given $25 million of policyholder money to a campaign against the upcoming ballot initiative to limit the amount carriers may raise their rates. The “Justify Rates” ballot measure requires carriers to get permission from the state before raising rates like auto and home insurance companies

    Actually, and interestingly, it’s not the rate increases so much, but the fact that carriers continue to raise their rates while they have excessive reserves. Consumer Watchdog cited Blue Shield, a non profit which has $3.68 billion in reserves now, which is 1,667% more than required. Then again there is all the advertising, such as Kaiser’s “Thrive” campaign at a cost of $40-50 million per year. Also noted are “excessive” executive pay (a common complaint) and the fines that carriers have paid due to inappropriate claims actions – and we all get to pay.

  • There is Enrollment…but then there is payment and more numbers behind the numbers

    May 5, 2014

    Due to the late surge, enrollment in Covered California, the public exchange in this state, has hit 1.4 million, which exceeded expectations. So far about 85% of them have paid, and 88% of those enrolled qualified for subsidies. Another 1.5 million enrolled under Medi-Cal.

    Of those enrolled, target populations of those 18-34 and Latinos, both of which had slow starts, have increased considerably and are at 29% and 28% of the overall enrollment.

  • It’s not just medical coverage…the ACA affects other things (of course)

    May 5, 2014

    According to the RAND research organization, the costs of auto insurance (which has a medical payment component), Workers Compensation and general liability insurance will all go down slightly because, as more become enrolled on medical plans, the pressure on those other coverages drops, and thus their prices. RAND estimates a price reduction of up to 5% – but then immediately hedges and says there is a lot of uncertainty about these numbers. It then turned around and said that, with over 8 million new covered people, malpractice costs could soar. As goes enclosure, so goes exposure.

  • What went wrong in other places…State Exchanges look to recoup losses

    May 5, 2014

    California is seen as the shining star among the 13 exchanges, but that may be damning with faint praise, given the shambles some of the states made of the entire Affordable Care rollout. In Oregon, they are deciding whether to give up and go federal or hiring a new contractor to fix the technology. In Massachusetts, they admit there is a lot of work to be done for the next rollout this fall and the governor is busily tempering expectations. California still comes under scrutiny, not because of the system, but because they have found it necessary to narrow the provider networks. They have extended deadlines for enrollment in Washington, and Vermont may get an overhaul. As for Maryland, call an MD.

  • It was only a matter of time…before the scapegoats go…Kathleen Sebelius resigns

    May 5, 2014

    No it wasn’t her fault, but someone has to take the blame, so HHS Secretary Kathleen Sebelius chose the day after the close of the individual open enrollment period to make way for a replacement. What’s ironic is that she is leaving on a high note, since it appears, at least for now, that the final rollout of the Affordable Care Act is at least a moderate success, with possible enrollment exceeding 7.5 million (yet all the major networks, in announcing the resignation, all characterized the beginning of the rollout to be “rocky”) Her successor will be a long established Washington player, current OMB Director Sylvia Mathews Burwell. David Yepsen of the Paul Simon Public Policy Institute, said, however “If the Obama people thought this was going to calm the waters, I think they misread it. I think it’s just going to embolden Republicans” The latest Kaiser Family Foundation poll says that 46% still have an unfavorable view of the law and 38% have a favorable view. Senate Majority Leader Mitch McConnell said “Secretary Sebelius may be gone, but the problems with this law and the impact it’s having on our constituents aren’t. Obamacare has to go, too”

  • Making it easier to get there, at taxpayer expense – another San Francisco mandate

    May 5, 2014

    So there was a rule about bicycle commuting, and there was a rule saying that groups of 20 had to offer some form of commuter ease…but now San Francisco is making mandatory for groups of 50 or more employees something they should have found easy to do already – provide tax free commuter reimbursement to their employees. For those who work 20 hours or more per week, employers must provide the following options:

    1. Pre tax benefit: employer allows employees to exclude their transit or vanpool costs from taxable income (which federal law has allowed for many years)
    2. Employer provided subsidy for transit or vanpools, up to $75 per month
    3. Employer provided transit
    4. Alternate commuter benefit provided by employers

  • It’s a Success! But at what cost? The Affordable Care Act in the final days

    May 5, 2014

    There was a huge push, and in the end the final enrollment exceeded projections in both California and nationally, but the national toll polled well for our state. But…we still don’t know how many “new enrollees” were found, and what they found. Many of the newly enfranchised enrolled in Medicaid, which will cost us. Many enrolled in the individual exchanges, at a cost of $10 billion in tax credits, an average of $2,890 for each of the 3.5 million people who qualified for a subsidy as of March 1 So the final results are still to be counted, and more subsidies may be coming our way. How long will they be sustained, and what of the newly enfranchised?

  • One more change…one more time – a change in the ACA dealing with deductibles

    May 5, 2014

    Just when we’re all set and the mid terms seem ready to go…they have made one more change. President Obama signed the “Protecting Access to Medicare Act of 2014” which immediately repeals the deductible limits imposed under the ACA for non grandfathered plans purchased in the small group insurance market (and what does this have to do with Medicare?) Thus small employers can purchase higher deductibles than the limits which had been allowed of $2,000 – the funny thing, of course, is that carriers have already done this, citing the actuarial studies that “value” plans in terms of the overall liability limit and not the deductible

  • Inflation debate among inflated claims freighted with doubt about who’s in and who’s out

    May 5, 2014

    The rates are a guessing game. Just do a comparison between what exists and what is being touted now as part of the Affordable Care Act and you can see the gaps are too large. So it is no surprise that Wellpoint, parent of Anthem Blue Cross of California, is threatening double digit rate increases in 2015. The Consumer Watchdog Campaign has said that Wellpoint has done better than any other carrier in terms of new enrollment, and thus should not be talking about rate increases. So…we have the Insurance Rate Public Justification and Accountability Act on the November ballot in California. Great…so increasing mystery will be shrouded in greater bureaucratic misery and enigmas multiply as everyone seeks to justify their position.

  • Special legal training…where the Obama Affordable Care Act could still derail

    May 5, 2014

    The last legal challenge remaining to the Affordable Care Act is a missing clause in the statute, which means, to some, that the subsidies now made available to make individual health insurance more affordable actually illegal. This issue has been kicking around for some time, but now the case has been brought to the US Court of Appeals in Washington, DC. According to Michael Cannon, director of health policy studies at the Cato Institute, “they miscalculated…everyone assumed that all states would establish exchanges” and “this was a drafting error that was made nine times. That tells you, no, this wasn’t an error. It was done deliberately.”

  • It’s complicated…the government giveth and taketh away on FSA and HSA

    May 5, 2014

    Yeah, it should be simple. First we had the FSA. Then we had the HSA. Then we had the IRS say that an FSA had to be limited to dental and vision while the HSA could cover medical, dental and vision all together. Then the government said we could have grace periods of up to ten weeks for the FSA. That wasn’t too hard, but there were some unanswered questions. Then the government decided that a grace period wasn’t enough, and now employers have the option of rolling over $500 of unused funds to the next plan year. Finally the IRS decided they had had enough…and had to step in and provide a slew of rules (oh boy):

    1. Individual covered by general health FSA (bureau speak for regular old FSA) may not make contributions to an HSA (yes, we already knew that). This includes, however, someone who has coverage in an FSA solely as the result of a carryover of unused amounts in a health FSA from the prior year
    2. Individual covered by general health FSA solely as the result of a carryover of unused amounts in the FSA from the previous year may not contribute to an HSA even for months in the plan year after the health FSA no longer has any amounts available to pay or reimburse medical expenses
    3. Individual who participates in general health FSA and elects, for the following year, to participate in an HSA compatible limited purpose FSA (meaning dental and vision only) may choose to have any unused amounts from the general health FSA carried over to the HSA compatible limited purpose health FSA. There is no requirement that the unused amounts in the general health FSA only be carried over to a general health FSA
    4.  Individual who participates in general health FSA and elects, for the following year, to participate in an HSA compatible limited purpose FSA and have any unused amounts from the general purpose health FSA carried over to the HSA compatible health FSA is eligible to contribute to an HSA during the following year if the individual is otherwise HSA eligible
    5.  A cafeteria plan that offers both a general health FSA and an HSA compatible limited purpose health FSA may be drafted or amended to automatically treat an individual who elects coverage in a High Deductible Health Plan for the following year as enrolled in the HSA compatible limited purpose health FSA and carry over any unused amounts from a general health FSA to the HSA compatible limited purpose health FSA for the following year
    6. A cafeteria plan may be drafted or amended to provide that if an individual participates in a general health FSA that provides for a carryover of unused amounts, the individual may elect prior to the beginning of the following year to decline or waive the FSA carryover for the following year. In that case, the individual who declines the FSA carryover under the terms of the Cafeteria Plan may contribute to an HSA during the following year if the individual is otherwise HSA eligible

    Got it? Yes, it’s complicated. We are ready to help you as soon as we decipher it.

  • What are we waiting for? And what is the waiting period anyway? New rules…

    May 5, 2014

    The Affordable Care Act provided a maximum 90 day waiting period for coverage of employees (California has updated this and made it 60 days, both as of the anniversary date of existing group coverage). What’s in a word, or expression, or name? Some highlights, which are left open to interpretation as to how this should all be instituted (26 CFR Part 54)

    1. A group health plan or health insurance issuer offering group health insurance coverage shall not apply any waiting period that exceeds 90 (60) days
    2. Applies to both grandfathered and non grandfathered plans
    3. Eligibility conditions that are based solely on the lapse of a time period would be permissible for no more than 90 days
    4. The eligibility condition is not considered to be designed to avoid compliance with the 90 day waiting period limitation if the cumulative hours of service requirement does not exceed 1,200 hours
    5. Waiting period still defined as that which must pass before coverage for an individual who is otherwise eligible to enroll under the terms of a group health plan can become effective
    6. Waiting period limitation generally doesn’t require the plan sponsor to offer coverage to any particular individual or class of individuals. Instead the final regulations prohibit requiring otherwise eligible individuals to wait more than 90 days before coverage becomes effective
    7. Other conditions are generally permissible under these regulations unless the condition is designed to avoid compliance with the 90 day waiting period limitation

  • And then there’s the other stuff (and when does this end?)…

    May 5, 2014

    Carriers will be able to more easily qualify for the reinsurance pool that was intended to pay back the insurers for “losses” they experience by working with the Affordable Care Act

    Not only will it be easier, but the new budget asks for another $5.5 billion in spending to reimburse the carriers, which Republicans are naturally calling a bailout for insurers. A handful of Republican lawmakers have introduced legislation to repeal the so called risk corridors

    Unions, universities and some other self funded employers will not have to pay the $63 fee required to cover the reinsurance fund

    We finally have rules that define how employers with more than 50 employees must report their information (more on that later) to the government with respect to coordination with the “pay or play” initiative

  • The Democrats are in the House…just not as many – the supermajority is lost in CA

    May 5, 2014

    A pair of high profile corruption cases have cost Democrats their supermajority in the state Senate after little more than a year “in charge” – Senator Calderon has taken a paid leave of absence fighting federal corruption charges (we pay him while he is fighting scandal?) and Senator Wright is in the wrong (or is he?)

  • The Republicans are getting Koched up…speeding down denial river

    May 5, 2014

    Ads against the Affordable Care Act, many sponsored by the Koch-fueled Americans for Prosperity group, have been labeled untrue by Senate Majority Leader Harry Reid – “despite all the good news, there’s plenty of horror stories being told. All of them are untrue, but they’re being told all over America. Those tales turned out to be just that – tales, stories, made up from whole cloth”

  • Show me the money – is it a bailout, a fallout or a sellout? Money to carriers for support

    May 5, 2014

    Humana and Wellpoint (Anthem Blue Cross) each stand to gain $5.5 billion next year to cover losses from Obamacare due to the risk corridors they have “supported” by taking on more risk than others in an effort to “balance the budget” when it comes to providing coverage under the new ACA rules. Yes, they complained about the new law…but why? Senator Marco Rubio, who has made a one man campaign (besides his own for President) against the Affordable Care Act said “the risk of a bailout has always been high…as many of us predicted, these exchanges have not attracted enough young and healthy people to sign up”

  • Florida casts ACA sunshine – will it continue to play – can Florida decide another election?

    May 5, 2014

    Florida had a special election for Congress in the 13th District. Republican David Jolly was pretty happy to win over Democrat Alex Sink, whose candidacy, you know, sunk. The New York Times said this is “an expensive triumph in the GOP fight against President Obama’s health care plan (and it) will embolden Republicans as they head into the midterm election and bolster their message that the nation disapproves of the Affordable Care Act and President Obama’s leadership” The Brookings Institute said of this contest “The Florida election is a test case of the power of Obamacare…Democrats put a lot of effort into winning this race, and the loss suggests this will be a tough fall for the national party” The New York Times said the win is “devastating at a time when Democrats are desperate to change the prevailing story line that 2014 could cost them the Senate, with the House already out of reach” Of course, it may be too much to consider as Politico reports “Democrats can’t even agree whether Obamacare was the reason for their crushing loss” The Wall Street Journal suggests that the ACA is likely to hurt Democrats in competitive races this fall, but for the GOPO to further capitalize on the issue, Republicans should draw up legislation that both highlights and remedies perceived flaws in the law…so the GOP should craft legislation

  • The Exchange will work no matter the cost…so if you spend it they will come?

    May 5, 2014

    The proposed budget asks for another $600 million to help run the federal marketplace, call centers and other outreach efforts. The Health and Human Services Department is not concerned about budget passage, however…if they don’t get the money they have already said they have the authority to transfer funds from existing accounts or tap the agency’s non recurring expense fund, which allows the agency to take money from expired accounts and use it for information technology and other capital investments. Of course, it is important that they spend money on the marketplace…since the budget also contains a reduction of $402 billion for Medicare, Medicaid and other federal health programs. The budget already requests $77.1 billion

  • Then we get the details…and denials

    May 5, 2014

    Kathleen Sebelius, Secretary of HHS, held the line on the mandate despite the President not holding the line on the mandate saying that the date is not dated and unabated and thus everyone must enroll by March 31…or else.

  • No date on the mandate or womandate or whatever date you want – another ACA amendment

    May 5, 2014

    Millions of people may be exempt from the individual mandate – the CMS issued guidance on December 19, 2013 “indicating that individuals whose policies are canceled because the coverage is not compliant with the Affordable Care Act qualify for a hardship exemption if they find other options to be more expensive, and are able to purchase catastrophic coverage. This hardship exemption will continue to be available until October 1, 2016 to those individuals whose non compliant coverage is canceled and who meet the requirements specified in the guidance” – in other words, the Act is supposed to be “affordable” but if it is not because the policy was changed, even though the change was supposed to be about quality, we are OK to overlook it, because we were kidding about forcing quality on people despite its potential unaffordability? OK…and in public testimony

  • More ACA Delays…but the train may have left the station

    May 5, 2014

    Now that the states and the carriers have made all the changes required under the Affordable Care Act, the President has responded to public pressure and said that quality is no longer a priority and he did not mean what he said about cancelling the individual policies. First he extended the deadline for changes to individual plans to March 31, but now he will extend it another three years. That avoids both mid term election fallout and goes into the next Presidential election as well. That’s nice…but the changes have already been made. Who is going to follow this mandate when the carriers have already announced and made the changes? Under the proposed rule, consumers may continue to purchase the previously disallowed “skimpy plans” until October 2016 and can keep them until September 2017 Representative Fred Upton said “the administration cannot run fast enough away from its broken promises” and House Oversight Chairman Darrell Issa said “this move is a cynical ploy that delays thousands of insurance policy cancellations under after the elections”

  • No we really mean it…wait, there’s another delay…will we ever agree on this law?

    May 5, 2014

    Just in time for the mid term elections, President Obama has seen his way clear to allowing an extension of those plans that did not meet the standards of his signature health insurance law for another two years. The main idea was to ensure that plans meet certain minimum standards and include “essential health benefits” That was a good idea…but the plans that did not meet those standards cost less than those that do…and there was a major media fallout regarding the difference between quality of coverage and quantity of money. So the President caved…in response to political pressures. So now there is a two year extension to the cancellation of those policies. The problem is that the bus may have left the station (surely there is a better metaphor here) and the carriers, at least in California, that have already dropped those policies and replaced them with newer ones at the Administration’s behest are probably loathe to go back…especially since the open enrollment deadline for new plans, coincident with the expiry of the old plans, is only March 31.

  • The list is smaller, but they can’t seem to manage it – more Exchange problems

    April 4, 2014

    For the second time since the launch, Covered California has taken down its physician directories because they are full of errors, unreliable, not up to date, and even the doctors themselves don’t know which list they’re on…in addition to showing doctors as fluent in languages they do not speak, doctors being mislabeled, etc.  Oh, and they aren’t doing any better on the national website either…and somehow they have noticed that there are not enough doctors to fill the onslaught of new demand (hey, didn’t we say that four years ago?)

    The problem, of course, is exacerbated by the narrowing of networks in California.  Insurance Commissioner David Jones said “it’s a little early for anyone to know how widespread and deep this problem is.  There are a lot of economic incentives for health insurers to narrow their networks (Mr. Jones, what economic incentives?  Covered California asked for this in an attempt to bring rates down), but if they go too far, people won’t have access to care.  Network adequacy will be a big issue in 2014”  One doctor called it a “phantom network”  Larry Levitt, of the Kaiser Family Foundation, said “insurers have made the judgment that people prefer lower premiums to broader networks”

  • You’ll Never Get Away with it – the Republicans saw this one coming

    April 4, 2014

    Employers who thought they would be able to cut their financial exposure by reducing the number of hours below the required 30 hour minimum may be surprised by the fact that the House is not surprised by this maneuver.  House Majority Leader Eric Cantor said the House will soon consider legislation aimed at lowering the minimum.

  • Calls for Malls within Prison Walls…Health Insurance Marketplace Pro’s for Cons

    April 4, 2014

    In Oregon, it is estimated that $6.5 billion per year would be saved if prisoners in state and county jails were enrolled in state medical exchanges.  Proponents of this change say “they’ll likely get treatment for mental illness, substance abuse and other conditions that lead them to a life of crime” says the Professional Insurance Agents Association.  So prisoners are not required to enroll in coverage (the new mandate) but now the prisons will take advantage of what has been created…and so we shift the responsibility from one part of the government to the other.

  • You’re Covered – but there may be no one there to treat you

    April 4, 2014

    The LA Times printed a story saying that new enrollees are getting faulty information about which providers are covered, getting little help from swamped insurers to answer questions, and even what they can find shows that the numbers of participating doctors has been cut dramatically…perhaps too much so.  Dave Jones, Insurance Commissioner, said with simple understatement “It’s a little early for anyone to know how widespread and deep this problem is”

    Yeah…and we knew that was coming.  Why didn’t the carriers or the politicians?

  • Another Delay in Pay or Play – when will they stop tinkering – after four years

    April 4, 2014

    Employers with 50 to 99 employees will NOT have to comply with Pay or Play in 2015, a delay of an additional year on top of the original delay for all groups that put off compliance until January 1, 2015.  While these groups will be required to report on those who are covered, they do not have to comply with the rules until 2016. In addition, groups of over 100 employees are being given a graduated schedule for compliance – employers will need to offer coverage to 70% of full time employees in 2015 and 95% in 2016 and later years or they will, as is always threatened, be subject to penalties.  There are, of course, conditions:

    1)    The employer has on average at least 50 full time employee equivalents but fewer than 100 on business days during 2014

    2)    From February 9 to December 31, the employer does not reduce the size of its workforce or overall hours of service in order to avoid complying with the Pay or Play mandate in 2015

    3)    Any health care benefits offered by the employer on February 9 must not be eliminated or materially reduced.  The employer must continue to offer coverage during this coverage maintenance period at nearly the same cost sharing levels through the last day of the plan year beginning on or after January 1, 2015

    4)    Employers who are eligible for the one year delay will need to complete a form certifying that they meet the transitional relief requirements.  This form will be included with IRC Section 6056 health insurance reporting once they are published

    John Boehner responded, of course – “Once again, the president is giving a break to corporations while individuals and families are still stuck under the mandates of his health care law.  And, once again, the president is rewriting law on a whim”  “Another day, another lawless exemption” said the Wall Street Journal.  J. Mark Iwry, deputy assistant Treasury secretary for health policy (now there’s a title), defended the administration and said they have broad authority to grant transition relief under a section of the Internal Revenue Code that directs the Treasury Secretary to prescribe all needful rules and regulations for the enforcement of tax obligations…which has often been used to postpone the application of new laws that would cause unreasonable administrative burdens or costs to taxpayers (oh)

  • The SHOP Flop – what if they wrote a group plan and nobody cared?

    April 4, 2014

    Incentives are low, some of the states only have one carrier, rates are not necessarily all that low, networks are being cut, and the small group tax incentive is seldom used – much as it has been seldom used since it was first allowed in 2010 with the passage of the ACA.  “even if the process was automated on the website, it still wouldn’t be appealing because of the portfolio” says a spokesperson from the National Association of Health Underwriters

  • It’s the Spin that I’m in…what does the CBO know?

    April 4, 2014

    The Congressional Budget Office has released a report predicting that the subsidies now allowed for individual health policies will create a “disincentive for people to work” because the subsidies taper off as they earn more.  So while some have decried the incipient practice of employers cutting their employees to below 30 hours to avoid the mandate, the CBO is saying many employees will willingly cut back because it is in their economic interest to do so.  Paul Ryan, the Budget Committee Chair, said he is troubled because “to begin working, getting the dignity of work, getting more opportunities, raising their income, joining the middle class – this means fewer people will do that”  He also noted that with Baby Boomers retiring in large numbers this disincentive to work will have “jaw dropping implications for the economy and debt reduction”  The CBO Director said the Affordable Care Act “will reduce the total number of hours worked in the economy by between one and a half and two percent from 2017 to 2024”

    In response the White House said such reductions were not really a problem.  Chairman of the Council of Economic Advisors Jason Furman said ObamaCare allows greater choice for workers to scale back their hours to spend more time with their children, or to leave their jobs to launch a small business or startup  “This is not businesses cutting back on jobs.  This is people having new choices”

  • It’s a matter of perspective – are they raising rates because they must or because they must do it now before it’s too late – Blue Cross decision

    April 4, 2014

    Anthem and its parent company Wellpoint have given $12.9 million to defeat a California ballot initiative that would require carriers to get approval for rate hikes – while they have proposed a 25% increase in the rates of individual policies held by over 300,000 members in California.

  • Was the law ill conceived? The Supremes weigh in to stop in the name of love – contraception

    April 4, 2014

    On January 31 the US Supreme Court temporarily exempted a religious non profit organization from the federal health care law’s mandate that insurance plans include free coverage of contraceptives.  This is not the end of the Court’s involvement in such issues, as they hear two cases in March involving non profit corporations whose owners oppose abortion.

  • Here have some more…but can you pay it back? More funding for Covered California

    April 4, 2014

    Now they are really covered…with $1.1 billion in federal funds alone.  Let’s not forget the money they got from foundations and other sources.  So it keeps piling in and they keep piling on, but can they pay it back by tacking on an administration fee?  Starting in 2016?  With enrollment below the numbers they need?  Do we sound skeptical?

  • They’re in control…but not quite, or at least not enough. Is that a good thing?

    December 31, 2014

    With some upset victories, California Democrats knew what it felt like in Congress as they lost their super majorities in both California houses.  When a series of special elections finishes next year they will be one vote short in the Senate and two in the Assembly.

  • OSHA’s New Reporting and Recordkeeping Rule Goes into Effect on January 1, 2015 | California Employee Benefits

    December 29, 2014

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    www.thinkhr.com

    peopleOn September 11, 2014, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) announced a final rule which updates the reporting and record-keeping requirements for injuries and illnesses, found at 29 C.F.R. 1904. The rule goes into effect on January 1, 2015.

    Changes to record-keeping requirements

    Under OSHA’s record-keeping regulation, certain covered employers are required to prepare and maintain records of serious occupational injuries and illnesses using the OSHA 300 Log. However, there are two classes of employers that are partially exempt from routinely keeping injury and illness records:

    • Employers with 10 or fewer employees at all times during the previous calendar year; and
    • Establishments in certain low-hazard industries.

    The new rule maintains the exemption for employers with fewer than 10 employees. However, the new rule has an updated list of industries that will be partially exempt from keeping OSHA records. The previous list of partially exempt industries was based on the old Standard Industrial Classification (SIC) system and injury and illness data from the Bureau of Labor Statistics (BLS) from 1996, 1997, and 1998. The new list of partially exempt industries in the updated rule is based on the North American Industry Classification System (NAICS) and injury and illness data from the Bureau of Labor Statistics (BLS) from 2007, 2008, and 2009. As a result, many employers who were once exempted from OSHA’s recordkeeping requirements are now required to keep records. A list of newly covered industries can be found at www.osha.gov/recordkeeping2014/reporting_industries.html.

    Changes to the reporting requirements

    In addition to revising the record-keeping requirements, the new rule expands the list of severe injuries and illnesses that employers must report to OSHA. Under the previous rule, employers were required to report the following events to OSHA:

    • All work-related fatalities.
    • All work-related hospitalizations of three or more employees.

    Under the new rule, employers must report the following events to OSHA:

    • All work-related fatalities.
    • All work-related in-patient hospitalizations of one or more employees.
    • All work-related amputations.
    • All work-related losses of an eye.

    For any fatality that occurs within 30 days of a work-related incident, employers must report the event within eight hours of finding out about it.

    For any in-patient hospitalization, amputation, or eye loss that occurs within 24 hours of a work-related incident, employers must report the event within 24 hours of learning about it.

    Employers do not have to report an event if the event:

    • Resulted from a motor vehicle accident on a public street or highway, except in a construction work zone; employers must report the event if it happened in a construction work zone.
    • Occurred on a commercial or public transportation system (airplane, subway, bus, ferry, street car, light rail, train).
    • Occurred more than 30 days after the work-related incident in the case of a fatality or more than 24 hours after the work-related incident in the case of an in-patient hospitalization, amputation, or loss of an eye.

    Employers do not have to report an in-patient hospitalization if it was for diagnostic testing or observation only. An in-patient hospitalization is a formal admission to the in-patient service of a hospital or clinic for care or treatment.

    Employers do have to report an in-patient hospitalization due to a heart attack, if the heart attack resulted from a work-related incident.

    What to report

    Employers reporting a fatality, inpatient hospitalization, amputation, or loss of an eye to OSHA must report all of the following information:

    • The name of the establishment.
    • The location of the work-related incident.
    • The time of the work-related incident.
    • The type of reportable event (i.e., fatality, inpatient hospitalization, amputation, or loss of an eye).
    • The number of employees who suffered the event.
    • The names of the employees who suffered the event.
    • The contact person and his or her phone number.
    • A brief description of the work-related incident.

    How to report

    Employers can use the following three options to report an event:

    • Call the nearest OSHA Area Office during normal business hours.
    • Call the 24-hour OSHA hotline (800-321-OSHA or 800-321-6742).
    • Report an incident electronically (OSHA is developing a new means of reporting events electronically, which will be released soon and will be accessible on OSHA’s website).

    Conclusion

    It is recommended that employers familiarize themselves with the final rule and train personnel accordingly. All employers under OSHA jurisdiction, even those who are exempt from maintaining injury and illness records, are required to comply with the new severe injury and illness reporting requirements.

    Read More …

  • When is a medical plan not a medical plan? When it is a dental plan…Exchange counts off

    December 29, 2014

    The Department of Health and Human Services has admitted that it made a mistake in counting the total enrollment under the Affordable Care Act by 380,000…because it counted dental plans as medical plans.  This allowed them to hit the “magic number” extolled by the administration of 7 million enrollees, thus hitting their target and claiming enrollment a success.  Secretary Burwell apologized, saying “this mistake was unacceptable (but) the fact that we have quickly corrected the numbers should give people confidence”

  • Proposed 2016 Benefit and Payment Parameters | California Benefits Broker

    December 26, 2014

    Tags: , , , , ,

    Posted by Linda Rowings

    2016healthcareThe Department of Health and Human Services (HHS) has issued its proposed Benefit and Payment Parameters for 2016. While these amounts and dates are not yet final, they may be of help for planning purposes. At this time, HHS expects:

    • Open enrollment for coverage through the Marketplace in 2016 will be from October 1 through December 15, 2015 (with coverage effective as of January 1, 2016).
    • The transitional reinsurance fee for 2016 is likely to be $27 per covered life. Filing for 2016 would be due November 15, 2016, with $21.60 per covered life due January 15, 2017, and $5.40 per covered life due November 15, 2017.
    • The out-of-pocket limits for health plans that are not high deductible plans related to HSAs would be $6,850 for single coverage and $13,700 for family coverage (with a maximum out-of-pocket for any family member of $6,850).
    • The federally facilitated exchange fee would remain at 3.5% of premium.
    • A special enrollment period would be available at renewal for individuals enrolled in non-calendar year plans.
    • Retirees and COBRA participants could be covered through a Small Business Health Options Program (SHOP) plan.
    • The current benchmark plans for essential health benefits would remain in effect for 2016, with new benchmark plans based on 2014 benefits and enrollment in effect for 2017.

    A draft of an updated AV calculator and methodology for 2016 also are available. While this will help you stay forward-thinking, don’t forget about taking steps to ensure you are prepared to meet the Patient Protection and Affordable Care Act (PPACA) requirements that begin in 2015 and those which must be completed in 2014. For a complete checklist, download UBA’s PPACA Advisor, “Preparing for 2015 – Key PPACA Requirements”.

    Read More …

  • It was not well suited to their needs – so they are filing suit against it – GOP vs. Obama

    December 23, 2014

    They didn’t like the bill, now they don’t like the fact that it is not happening fast enough.  Accusing President Obama of “making up his own laws” (John Boehner) by delaying the employer mandate, the Republicans are also considering filing a suit over the recent decision to provide deportation relief.  They’re not related, except insofar as it concerns the Chief Executive.  House Minority Leader Nancy Pelosi was a bit upset : “the fact is, this lawsuit is a bald faced attempt to achieve what Republicans have been unable to achieve through the political process.  The legislative branch cannot sue simply because they disagree with the way a law passed by a different Congress has been implemented…the lawsuit is an embarrassing loser.”

  • Hand Washing Helps Defeat the Flu | Petaluma Benefits Broker

    December 22, 2014

    Tags: , , ,

    www.thinkhr.com

    handsH3N2 influenza viruses led to record numbers of deaths in the 2004, 2008, and 2013 flu seasons. Doctors are concerned because this type of virus appears to be dominating the 2015 flu season. Employers should stress optimal health and hand-washing behaviors in their workplaces to avoid the threat of flu and keep their workplaces healthy and germ-free.

    The United States Centers for Disease Control (CDC) reports a majority of cases so far this flu season are H3N2 viruses. When these types of viruses are the most prevalent in a flu season, the result is often more severe illness with greater instances of hospitalization and death. This year the CDC is finding that the flu vaccine’s ability to protect against H3N2 viruses is not as strong as was hoped when the vaccine was being formulated. This reduced protection is the result of mutation in about half of the H3N2 viruses since the season began. The CDC still recommends the vaccine as vaccinated people will likely have a more mild illness if they do become ill. This warning will help employers to see the need to augment vaccination with other preventive health measures.

    Effective hand washing is essential to prevent the spread of infectious disease. The bacteria, viruses, and other microbes that spread infection usually are not visible to the naked eye. Everyone should care about the spread of harmful organisms because everyone has the potential to unknowingly spread them to a person with a compromised immune system. Examples of those with compromised immune systems include family members, particularly children and the elderly, or co-workers coping with illnesses like cancer, heart disease, or diabetes.

    Hands should be washed frequently. You may be surprised to discover how many times you inadvertently touch your face in the course of a day, which is often the method that introduces contaminates to our bodies through our eyes, nose, or mouth. At a minimum, wash your hands several times per day to lessen the risk of inadvertently spreading harmful organisms.

    Wash hands both before, during, and after food preparation as well as before eating, treating a wound, or adjusting contact lenses. Hands may need to be washed multiple times during food preparation. For example, Salmonella is a bacteria that can be found on raw meats and vegetables, and is a serious concern in the United States. According to the CDC, each year over one million people acquire the illness, leading to 19,000 hospitalizations and 380 deaths. In addition to cooking food properly and cleaning work surfaces, Salmonella  abatement requires hands to be cleaned before handling cooked meat or other ingredients to prevent the transfer of organisms from raw items.

    To minimize the spread of respiratory infections and diarrheal illness, wash hands after using the toilet, coughing, blowing your nose, changing a diaper, or touching garbage, soiled laundry, shoes, an animal, or anything touched by an animal. This preventive step lessens the amount of germs transferred to key boards, handrails, door knobs, or toys.

    Soap and Water

    Soap and clean running water are two elements of optimal hand washing. The surfactants in soap lift soil and microorganisms from the hands, enabling the running water to carry the undesirable elements away without posing the risk of recontamination caused by standing water. Water of cool or warm temperature works equally well in removing undesirable organisms. Another helpful part of the process is the mechanical action created when hands are scrubbed or rubbed together continuously.

    Best practice for hand washing requires wetting the hands, turning the water off to prevent waste, applying soap, and spreading the soap across all surfaces of your hands for 20 seconds, being sure to include fingernails, back of hands, and wrists. Importantly, don’t rush the hand-washing process. Often parents will teach children to wash hands to the time it takes to sing the A-B-C song or another jingle that reliably takes 20 seconds. After scrubbing for 20 seconds, rinse hands thoroughly under running water. If the faucet is not operated by a sensor, use a towel or your elbow to turn it off in a manner avoiding hand recontamination. Finally, dry hands with a clean cloth, new disposable towel, or air blower.

    Alcohol as an Alternative

    An alcohol-based sanitizer can be an effective alternative to soap and water where a sink or clean water is unavailable. Examples of locations where sanitizer may be practical include conference rooms, break rooms, reception areas, or just outside of restroom doors.

    According to the CDC, effective use of waterless hand sanitizer requires an alcohol-based solution containing at least 60 percent alcohol. For hand sanitizers to be effective, it’s important that enough solution is used, that it stays on the skin and is not wiped or washed off prematurely, and that the solution is allowed to thoroughly dry on the skin.

    Similar to the use of soap and water, mechanical action or friction caused by scrubbing or rubbing hands together is essential for waterless hand sanitizer to stop the spread of microorganisms. Additionally, the hands must be free of organic matter prior to applying hand sanitizer. Using the appropriate amount of sanitizer requires placing enough sanitizer to cover a dime in the palm of one hand. Hands must then be rubbed together in a manner that covers all surfaces, including the back of the hands, until they are dry.

    Read More …

  • Gruber stake is Uber mistake…Obamacare architect shares too much

    December 22, 2014

    A series of videos have been released of various conferences and conversations involving Jonathan Gruber, who was one of the writers of the original ACA legislation, and they are not flattering…to anyone involved.  A sampling:

    “Lack of transparency is a huge political advantage.  Basically, call it the stupidity of the American voter of whatever, but basically that was really, really critical to getting things to pass”

    “This bill was written in a tortured way to make sure the Congressional Budget Office did not score the mandate as taxes (because) if CBO scored the mandate as taxes, the bill dies” (even though President Obama kept insisting the mandate was not a tax)

    “If you had a law which…made explicit that healthy people pay in and sick people get money, it would not have passed”

    “If you’re a state and you don’t set up an exchange, that means your citizens don’t get tax credits” (which is enlightening given that the Supreme Court is hearing on this issue right now, while the Obama administration is insisting that the Federal Exchange can offer subsidies)

    “It turns out politically (the employer subsidy) is really hard to get rid of…and the only way we could get rid of it was first by mislabeling it, calling it a tax on insurance plans (referring to the nascent Cadillac tax) rather than a tax on people when we all know it’s a tax on people who hold those insurance plans”  “What that means is the tax that starts out hitting only 8% of the insurance plans essentially amounts over the next 20 years essentially getting rid of the exclusion for employer sponsored plans…this was the only political way we were ever going to take on one of the worst public policies in America”

  • 2015 Cost-of-Living Adjustments | Petaluma Employee Benefits

    December 18, 2014

    Tags: , , , ,

    Posted by Linda Rowing

    moneyMany employee benefit limits are automatically adjusted each year for inflation (this is often referred to as an “indexed” limit). The Internal Revenue Service and the Social Security Administration have released a number of indexed figures for 2015.

    Limits of particular interest to employers include the following.

    For health and Section 125 plans:

    • The health flexible spending account (HFSA) maximum employee contribution is increasing to $2,550.
    • The maximum out-of-pocket limit that applies to non-grandfathered group health plans that are not coupled with a health savings account (HSA) will be $6,600 per individual and $13,200 per family.
    • The maximum out-of-pocket for a high deductible health plan coupled with an HSA will increase to $6,450 per individual and $12,900 per family.
    • The minimum deductible for a high deductible health plan coupled with a health savings account (HSA) will increase to $1,300 per individual and $2,600 per family.
    • The maximum HSA contribution will increase to $3,350 for individual coverage and $6,650 for family coverage. The catch-up contribution (available to those aged 55 and older) remains at $1,000.

    For qualified plans:

    • The annual deferral for 401(k), 403(b), and most 457(b) plans will increase to $18,000.
    • The catch-up contribution limits (available to those aged 50 and older) will increase to $6,000.
    • The threshold for “highly compensated employees” will increase to $120,000.
    • The threshold for an officer to have “key employee” status remains at $170,000
    • The annual compensation limit will increase to $265,000

    Social Security/Medicare Withholding:

    • The taxable wage base will increase to $118,500
    • The OASDI tax rate remains at 6.2%
    • The Medicare tax rate remains at 1.45%

    Request a quick reference chart from your local UBA Partner Firm.

    Read More …

  • SHOP until you drop…it…sales are not what were expected on Exchange group plan

    December 18, 2014

    The attention was all paid to the individual plans that suddenly made health care “affordable” – if you received a subsidy (from which the federal government is backpedaling furiously).  But alongside the individual plans the government decided that doing group insurance was a necessity…and it is the only vehicle that allows for the receipt of the small group health insurance tax credit.  This was supposed to help sales, even though the first two years of the program qualification was open for any plan, and barely taken (especially in California).  So now there is no surprise to find that the sale of the SHOP plan has not met expectations.  Difficulty in service, the lack of flexibility in choice, narrow networks and other problems do not make it palatable in the market, and thus less than 12,000 businesses signed up in the first 8 months.

  • Identify yourself…unless of course you can’t figure out how to do it – HIPD suspended

    December 17, 2014

    It seemed like a good idea at the time…have all plans of a certain size set up a Health Plan Identification Number.  But then, the day before it was to go into effect, the federal government suspended action.  It appears even the sharpest business people who tried to simply register a number had too much difficulty in doing so.  A report was made to the DOL saying that it should be set up for additional consideration.  More ACA delays…

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