Yearly Archives: 2015

  • Stop-loss Contract Periods Explained | Petaluma Benefits Broker

    May 29, 2015

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    By Michael Humphrey, MLHR, Sr.
    Employee Benefits Advisor at The Wilson Agency
    A UBA Partner Firm

    ContractIn last week’s blog, we explained the different types of stop-loss insurance. This week we will go over another important aspect of stop-loss: contract periods. Stop-loss contract periods are perhaps the most complicated aspect of understanding how stop-loss insurance works. A contract term will define the period when a claim is incurred and when it is paid. Contract terms are set up as such because claims incurred within a year are often not paid until the next year due to the lag of time between when they are incurred (have the medical appointment) and when the paperwork gets submitted by the provider’s office. Let’s take a look at the three most common types of contracts:

    12/12 – This covers only claims incurred and paid within the policy year. This type of contract is typically only used for the initial year of coverage.

    12/15 – This covers claims incurred within the policy year and paid within three months after the policy year ends. This type of contract is often referred to as a “run-out policy.”

    15/12 – This covers claims paid within the policy year that are incurred during the policy year and the three months before the policy year begins. This type of contract is often referred to as a “run-in policy.”
    When negotiating the terms of the contract, it is extremely important to ensure that the contract period you have chosen will give you adequate coverage. If not, you may end up with thousands of dollars of uncovered claims. Be sure to work with your benefit advisor to ensure coverage issues such as these are identified and preemptively managed.

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  • EAP and COBRA explained | Petaluma Employee Benefits

    May 26, 2015

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    Is an employee assistance program (EAP) a COBRA-eligible benefit?

    Employee assistance programs (EAPs) that offer medical benefits such as direct counseling and treatment, rather than just referrals for counseling and treatment, are regulated under the Employee Retirement Income Security Act (ERISA) and therefore subject to reporting and notice requirements under the act. Additionally, if the EAP provides direct counseling or other “medical benefits” to its participants, the plan is subject to the Consolidated Omnibus Budget Reconciliation Act (COBRA). If the EAP does not provide services directly, but provides only referrals and facilitation of obtaining these services, then it is not considered a group health plan and is not subject to COBRA regulations. If the plan is subject, the applicable COBRA premium will be based on cost to provide service and employers may rely on the actuarial method. The applicable premium can include an additional administrative fee of 2 percent allowable under the act.

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  • Finally Fixed – Medicare no longer on a year to year basis

    May 20, 2015

    For several years Congress has been forced to fix the Medicare “sustainable growth rate formula” so that doctors could continue to receive a fair amount for services performed. Each year there is a threat, begun with the passage of the Affordable Care Act, that doctor fees will be cut by 21%. Doctors aren’t paid substantially by Medicare as it is, and the 21% pay cut threatened access for patients, as many doctors threatened to stop taking Medicare patients. Congress passed a series of one year “fixes” but now the President has signed a bipartisan bill that eliminates the cut once and for all.

  • Two PPACA Taxes Might Get the Ax | CA Employee Benefits

    May 19, 2015

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    By Jennifer Kupper
    In-house Counsel for iaCONSULTING, a UBA Partner Firtaxm

    Health Insurance Providers Fee

    Section 9010 of the Patient Protection and Affordable Care Act (PPACA) imposes a fee on each covered entity engaged in the business of providing health insurance for United States health risks. This is known as the Health Insurance Providers (HIP) fee or the Health Insurers Tax (HIT) tax. The first filings were due from covered entities by April 15, 2014, and the first fees were due September 30, 2014. Self-insured plans are not covered entities for the purpose of the HIP Fee. The HIP fee is an important revenue source for PPACA, amounting to $8 billion in 2014 and rising to $14.3 billion by 2018. While fully insured plans are not directly responsible for the HIP fee, the Congressional Budget Office was correct when it indicated that it would be “largely passed through to consumers in the form of higher premiums.” Some premiums have increased as much as 4.5%.

    Introduced in the House by Rep. Charles Boustany, Jr. (R-La.) and Rep. Kyrsten Sinema (D-Ariz.) on February 12, 2015, for the third time in as many years, H.R. 928 is titled To repeal the annual fee on health insurance providers enacted by the Patient Protection and Affordable Care Act. The bill has one provision: “The Patient Protection and Affordable Care Act is amended by striking section 9010.” There are currently 225 co-sponsors. A similar measure was introduced in the Senate. S. 183, the Jobs and Premium Protection Act, was referred to the Senate Finance Committee and currently has 31 co-sponsors.

    Cadillac Tax

    Internal Revenue Code Section 4980I imposes an excise tax on “high cost plans” effective 2018. This tax is commonly known as the “Cadillac Tax,” dubbed for its fee on “richer” benefits.

    Generally, and one must speak generally because regulations have not been issued, if a group health plan’s cost for applicable coverage goes beyond the statutory thresholds, then a 40% excise tax will be assessed on the excess amounts. The annual thresholds are $10,200 ($850per month) for individual coverage and $27,500 ($2,291.67 per month) for coverage other than individual coverage. The Cadillac Tax applies to fully insured and self-funded plans.

    It is reported that nearly half of employer-sponsored health plans could trigger the tax. One reason for this is that larger groups must sponsor a base plan that meets minimum value in order to avoid a potential PPACA Employer Shared Responsibility tax (IRC Section 4980H(b)). Another reason is that “applicable coverage” includes major medical coverage, including prescription drug costs; contributions to medical flexible spending accounts (FSAs), health savings accounts (HSAs), health reimbursement arrangements (HRAs), and Archer medical savings accounts (MSAs), if certain conditions are met; coverage for on-site medical clinics; retiree coverage; coverage only for a specified disease or illness; and hospital indemnity or other fixed indemnity insurance.

    On February 11, 2015, Rep. Frank Guinta (R-N.H.) introduced H.R. 879, Ax the Tax on Middle Class Americans’ Health Plans Act. The bill has 31 co-sponsors and was referred to the House Ways and Means Committee.

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  • Proposed Rule on Wellness Programs under the Americans with Disabilities Act | CA Benefits Broker

    May 14, 2015

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    By Danielle Capilla,
    Chief Compliance Officer at United Benefit Advisors

    apple and tapeFederal agencies recently released a Proposed Rule to amend regulations and provide guidance on implementing Title I of the Americans with Disabilities Act (ADA) as it relates to employer wellness programs.

    Title I of the ADA applies to employers with 15 or more employees, prohibits discrimination against people with disabilities, and requires equal opportunity in promotion and benefits, among other things. Under the Proposed Rule, wellness programs that are part of or are provided by a group health plan or by a health insurance issuer (carrier) offering group health insurance in conjunction with a group health plan are required to provide a notice and describe the use of incentives. In the Proposed Rule, “group health plan” refers to both insured and self-insured group health plans. All of the other proposed changes relate to “health programs,” which include wellness programs regardless of whether they are offered as part of or outside of a group health plan or group health insurance coverage. The term “incentives” includes financial and in-kind incentives for participation such as awards of time off, prizes, or other items of value.

    Rules for wellness programs have been in effect since 2007, with additional rules that went into effect for the 2014 plan year under the Patient Protection and Affordable Care Act (PPACA). 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.

    Health-contingent wellness programs are either classified as “activity only” or “outcome based.” 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:

    • Give employees a chance to qualify for the incentive at least once a year
    • Cap the incentive at 30 percent of the total cost of employee-only coverage under the plan, including both the employee and employer contributions, with a 50 percent cap for tobacco cessation or reduction
    • Be reasonably designed to promote health or prevent disease
    • Provide that the full reward must be available to all similarly situated individuals with a “reasonable alternative” method of qualifying for the incentive for some individuals
    • Describe the availability of the alternative method of qualifying for the incentive in written program materials

    The ADA restricts employers from obtaining medical information from employees by generally prohibiting them from making disability-related inquiries or requiring medical examinations, with an exception for voluntary medical examinations for wellness programs. The Proposed Rule announced that federal agencies decided that allowing certain incentives related to a wellness program, while limiting them to prevent economic coercion that could make the program involuntary, is the best way to achieve the purposes of the wellness program provisions of both the ADA and HIPAA.

    Download UBA’s PPACA Advisor, “Proposed Rule on Wellness Programs Under the Americans with Disabilities Act” for comprehensive information on how the Proposed Rule:

    • Defines “voluntary”
    • Addresses the disclosure of medical information
    • Limits incentives
    • Defines when smoking cessation programs would be subject to incentive limitations
    • Would protect individually identifiable health information

    The Proposed Rule requested comments from the industry on wellness programs generally as well as providing a list of specific topics on which it seeks input.

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  • Wellness rules…well, we had them but EEOC went back to the well

    May 13, 2015

    The EEOC has made a series of proposed rules, attempting to clarify what does and does not constitute a permissible wellness program in light of ADA (Americans with Disabilities Act) and due to a recent series of dustups where the EEOC has ruled that the wellness programs run by some companies were not meeting what they considered to be proper standards. The proposal makes some changes to current rules:

    1) Program must be reasonably designed to promote health or prevent disease – thus it must not be overly burdensome or a subterfuge for violating the ADA

    2) To be truly voluntary an employer cannot require an employee to participate in such a program and may not deny coverage under any of its group health plans or limit the extent of such coverage, nor take any adverse action against employees who refuse to participate

    3) Employer must provide a notice clearly explaining what medical information will be obtained, how used, who will receive it and the methods used to prevent disclosure

    4) Incentives for participation are acceptable provided the total allowable incentive available under all programs does not exceed 30% of the total cost of employee only coverage which generally is the maximum allowable incentive available under HIPAA and the ACA

    5) Medical information collected through an employee health programs may only be provided to a covered entity under the ADA in aggregate terms so as to protect the identity of specific individuals

  • Region Matters When It Comes to HSA Funding, CDHP Adoption | CA Employee Benefits

    May 12, 2015

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    By Bill Olson
    Chief Marketing Officer at United Benefit Advisors

    regionWe’ve already discussed Health Savings Account (HSA) activity at length, looking first at the correlation between generous HSA contributions and increased enrollment in consumer-driven health plans (CDHPs). Second, we looked at how HSAs have performed in recent years across different industries. Now, we’ll look closer at HSA activity across different regions of the country, based on the results of the 2014 UBA Health Plan Survey.

    New England, which typically has the most generous health care packages overall, sees only average HSA contributions of $685 for singles and $1,342 for families. California, on the other hand, has the most generous HSA contributions for singles at $808, yet the lowest enrollment in CDHPs: only 11.3 percent of plans in California were CDHP plans and only 8.1 percent of employees were enrolled in them.

    “Market dominance of Kaiser and a strong HMO preference in California offsets the rate relief offered by CDHPs, making the high deductible not worthwhile,” says Brian M. Goff, President & CEO of Insurance Solutions, a UBA Partner Firm.

    Moving to the middle of the country, we find the lowest HSA employer contributions in the South Central region: $360 for singles and $554 for families. North Central states, which have the highest offering of CDHP plans in the country at 36 percent with more than 40 percent of employees enrolled in such plans, also saw average HSA contributions, although still more than South Central.

    “Since the North Central region is largely comprised of Anthem BCBS states, carrier motivations play into these stats,” says Mark Sherman, Principal of LHD Benefit Advisors, another UBA Partner Firm. “Specifically, low regional interest in HMOs and Anthem BCBS’ purchase of Lumenos, a CDHP marketing specialist, made it easy for employers to move from a PPO to a CDHP.”

    “In the Midwest, we still see some employers continuing to offer higher HSA contributions or lower premium contributions as a way to entice employees to these cost-saving plans,” says Andrea Kinkade, President/Benefit Advisor at UBA Partner Firm Kaminsky & Associates, Inc. “At the end of the day, employers typically have a budget that they work within,” says Kincade. “Either employee payroll deductions (premiums) increase or employer HSA contributions decrease to keep benefit costs within the budget.”

    For the latest health plan cost trends, download the UBA Health Plan Survey Executive Summary. To benchmark your plan to others in your region, industry or size bracket, contact a UBA Partner near you to run a custom benchmarking report.

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  • Integrated Community Services | Arrow Benefits Group

    May 7, 2015

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    We are very excited to announce that Arrow Benefits Group was one of the sponsors in the recent Blue Jean Ball fundraiser at the San Rafael Marin JCC recently.  The Integrated Community Services’ mission is to provide a wide range of community based services for individuals with disabilities.  They help with employment, housing, recreation or simply just information. ICS are a distinguished local non profit agency with whom Arrow Benefits are proud to be in partnership with.

    If you would like to learn more about what the ICS accomplishes or if you would like to donate to help them continue their work, please click here.

  • Top 5 Questions about Medicare Secondary Payer Rules | California Benefits Broker

    May 4, 2015

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    medicareUnder federal regulations, Medicare is a secondary payer for many individuals who have an employer group health plan available to them, either as an employee or the dependent spouse or child of the employee. Generally the Medicare Secondary Payer rules prohibit employers with more than 20 employees from in any way incentivizing an active employee age 65 or older to elect Medicare instead of the group health plan, which includes offering a financial incentive. Although premium payment arrangement rules under the Patient Protection and Affordable Care Act (PPACA) provide a limited circumstance for reimbursing Medicare premiums, this option is not feasible for employers with more than 20 employees due to Medicare Secondary Payer rules.

    Q1. Who is affected by Medicare Secondary Payer rules?

    A1. Medicare-eligible individuals age 65 or over whose employer group health plan is based on the current employment of the individual or spouse, by an employer that employs 20 or more employees, are protected by the Medicare Secondary Payer rules unless the active employee elects Medicare. Health insurance plans for retirees, or spouses of retirees, are not affected because retirement is not “current employment.” Individuals who are eligible for Medicare based on disability or end-stage renal disease (ESRD) are also affected.

    Q2. What are employers with 20 or more employees required to offer their Medicare-eligible older employees?

    A2. Employers are required to offer employees age 65 or over the same group health plan coverage offered to younger workers. Workers with Medicare-eligible spouses must be offered the same spousal benefits as employees with spouses that are not Medicare-eligible.

    Q3. Are employees who are Medicare eligible required to elect their group health coverage or Medicare?

    A3. Employees can elect, at their discretion, Medicare or the group health plan as their primary health insurer. Employees that elect their group health plan will then have secondary Medicare coverage if they enroll in Medicare. Their employer cannot induce them or provide incentives to select Medicare as their primary coverage.

    Q4. If an employee elects Medicare as his or her primary insurer, may the employee enroll in a group health plan for secondary coverage?

    A4. No, this is prohibited.

    Q5. How does Medicare know if an individual has the option of enrolling in a group health plan through their employer?

    A5. The Centers for Medicare and Medicaid (CMS) mails questionnaires to individuals before they become entitled to benefits under Medicare Part A or enroll in Medicare Part B to determine if they are eligible for primary coverage under another plan.

    For more of the top questions and answers about reporting requirements, determining if you have 20 employees for Medicare Secondary Payer purposes, whether you can reimburse Medicare premiums, and penalties for rule violations, view UBA’s PPACA Advisor, “What You Need To Know About Medicare Secondary Payer Rules”.

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  • Wraparound Excepted Benefits to Launch with Two Pilot Programs | CA Employee Benefits

    April 27, 2015

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    By Danielle Capilla
    Chief Compliance Officer at United Benefit Advisors

    ChangesAheadHealth plan sponsors would be permitted to offer wraparound coverage to employees purchasing individual health insurance in the private market, including the Marketplace, in limited circumstances, under a new Final Rule issued by the Department of Labor (DOL) and other federal agencies. The Final Rule, published March 18, 2015, sets forth two narrow pilot programs for the limited wraparound coverage. One pilot program allows wraparound benefits only for multi-state plans (MSPs) in the Health Insurance Marketplace. The second pilot program allows wraparound benefits for part-time workers who enroll in an individual policy or in Basic Health Plan (BHP) coverage for low-income individuals, which was established under the Patient Protection and Affordable Care Act (PPACA). The wraparound coverage would be an excepted benefit. Excepted benefits are generally exempt from certain requirements of federal laws, including ERISA, the IRS Code, and parts of PPACA.

    General requirements. To be allowable by either pilot program, the wraparound coverage must be specifically designed to provide meaningful benefits such as: (1) coverage for expanded in-network medical clinics or providers; (2) reimbursement for the full cost of primary care; or (3) coverage of the cost of prescription drugs not on the formulary of the primary plan. The limited wraparound coverage must not provide benefits only under a coordination-of-benefits provision and must not consist of account-based reimbursement arrangements.

    The annual cost of coverage per employee (and any covered dependent, defined as any individual who is or may become eligible for coverage under terms of a group health plan because of a relationship to a participant) must not exceed the greater of: (1) the maximum permitted annual salary reduction contribution toward health flexible spending arrangements (FSAs) ($2,550 for 2015); or (2) 15 percent of the cost of coverage under the primary plan, including both employer and employee contributions toward coverage. The wraparound coverage is also subject to non-discrimination rules that prohibit preexisting condition exclusions, favoring of highly compensated individuals, and discrimination based on health status.
    For more information on MSP coverage standards, part-time employee standards, reporting and qualifying dates for the pilot programs, download UBA’s free PPACA Advisor, “Wraparound Excepted Benefits to Launch with Two Pilot Programs”.

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