Archive for the ‘Voluntary Benefits’ Category
What Are the Implications of Loss of “Grandfathering” Under PPACA
BBCG has been asked to comment on “grandfathering” under the 2010 healthcare reform statute and the recent interim final rules issued by HHS. Please see our prior post for the interim final rules discussion (http://bocabenefits.com/blog/?p=840). Below are some thoughts.
If a healthplan loses its “grandfathered” status under PPACA, then participants in these plans will gain two additional new and substantial benefits (i.e., assuming they did not exist prior):
- Coverage of recommended prevention services with no cost sharing; and
- Patient protections such as guaranteed access to OB-GYNs and pediatricians
Clearly, adding no-cost access for preventative services has significant cost implications (e.g., no co-pay for primary care visits, etc., changes both the cost structure and the frequency of service assumptions). How that is passed along will be determined by the funding vehicle in place (i.e., fully insured, partially insured, self-funded, etc.). In the case of OB-GYN and PEDS, many plans already cover these as primary care (i.e., service dependent). Cost implications may be somewhat less for that requirement. Plans must independently evaluate what the requirements will cost. Also should be judicious in accepting “quick and dirty” carrier underwriter/rep estimates which might be biased in the carrier’s favor (e.g., a high estimate to lock a client company into grandfathering, and therefore that carrier, versus a lower estimate which would allow an employer to change carriers once grandfathering was relinquished).
The question for employers is the trade-off between the extra costs noted above and the incremental flexibililty to modify the plan and/or carrier. Loss of grandfathering may still be the most efficacious course of action for many employers.
The Affordable Care Act requires all health plans– including grandfathered health plans – to provide certain new protections for plan years on or after September 23, 2010. The reforms that apply include:
- No lifetime limits on coverage for all plans
- No rescissions of coverage when people get sick and have previously made an unintentional mistake on their application
- Extension of parents’ coverage to young adults under 26 years old
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Interpretation of Interim Final Rules Issued by HHS on PPACA Grandfathering
HHS issued rules on what actions would trigger a loss of “grandfathering” status under PPACA Monday, June 14, 2010. Those rules become effective today Thursday, June 17, 2010 concurrent with their publication in the Federal Register. Below is a summary of interpretation of the final interim rules as BBCG understands them. Many employers remain on the fence regarding the trade-off between plan changes flexibility and the accelerated PPACA requirements if “grandfathering” is reqlinquished. HHS esimates indicate that many employers will voluntarily give up “grandfathered” status in return for more control of their plans (versus the additional PPACA compliance requirements).
Changes that will result in loss of grandfathered status:
• Significant cut or reduction in benefits (e.g., elimination of benefits to cover care for a particular condition)
• Increase in co-insurance rates
• Significant increase in cost-sharing co-payment charges (defined as no more than the greater of $5 (indexed annually for medical inflation) or a percentage equal to medical inflation component of CPI plus 15%; estimated to be approximately 19% total currently)
• Significant increase in deductibles (exceeding medical inflation component of CPI plus 15%)
• Significant reduction in employer contributions (exceeding 5% of prior employer contribution)
• Tightening of an existing or adding a new annual dollar limit (unless replacing a lifetime
dollar limit with an annual dollar limit at least as high as the lifetime limit)
• Merger, acquisition or similar business restructuring – if principle purpose is to
cover new individuals under the grandfathered plan
• Switching carriers under an insured plan (unless the insured plan is covered by a collective bargaining agreement. Does not apply to changes in administrators (i.e., TPA’s) for “ASO” (i.e., self-insured Administrative Services Only type plans).
• Moving employees to a grandfathered plan with lesser benefits
Please email us if we can assist with your current brokerage requirements. Note that employers cannot change carrriers under insured plans (including partially self-insured, minimum premium, etc.) without triggering a loss of “grandfathered” status but that the additional PPACA compliance requirements may still be justified if pricing, service, and/or plan provisions under an existing carrier relationship are felt to be inadequate for your needs.
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Probability of Some Form of Disability During a Career Is 30%. Are You Properly Protected?
Many persons with significant incomes and personal/family cashflow requirements rely on insufficient means to protect themselves against the potential of loss of their greatest asset: their income earning capacity. Many who actually do have disability insurance (“DI”) are not quite sure how all the pieces work (i.e., the myriad policy definitions and provisions) and are not sure that they have optmized the coverage for their specific financial needs. BBCG can provide high quality professional assistance. Below are just a few statistics to justify the seriousness of not considering DI just as important as all other financial planning.
2008 Social Security “Quick Facts”
• 3 in 10: these are the chances of a young worker today becoming seriously
disabled before reaching retirement.
• 52: this is the average age of a disabled worker receiving SSDI benefits.
• 2.8 million: this is the number of disabled workers in their 20s, 30s and 40s
receiving SSDI benefits.
• 1.9 million: this is the number of disabled workers’ spouses and children
who also received SSDI payments in 2008.
• $1,064: this is the average monthly SSDI benefit for all disabled workers.
• More than 90%: this is the amount of disabled workers receiving SSDI who
do not qualify for workers’ compensation (i.e., non-occupational based causes of disability).
Disability Rate Increases More Rapidly For Women Than Men
Consider the cashflow needs of the two income family (i.e., the income protection of both spouses).
The overall rate of disability among women workers is growing much more rapidly than among men. The percentage of female workers receiving SSDI payments in 2009 (5.1%) was 55% higher than 10 years earlier (3.3% in 1998), while the number of male workers receiving SSDI grew by 37% during the same period, from 3.8% to 5.2%.
(Above Data Sources: “2010 CDA LONG-TERM DISABILITY CLAIMS REVIEW” of the Council for Disability Awareness)
DI Is Not A One Size Fits All Product
Your profession, individual financial situation and present/anticipated asset base are all considerations into which product provision must be factored. Insurance broker experts in DI are required more often than not for this type of assistance. The end result should be a customized product tailored for you and your family. We have DI specialists at the ready to work with you. Click here to email us for assistance in developing a DI approach for your specific needs.
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PPACA Interim Final Regulations Issued Today June 14, 2010
HHS Releases Final Interim Guidance on “Grandfathering”
Today, the Departments of Health & Human Services, Labor, and Treasury issued long-awaited interim final regulations that specify how “grandfathered” status will be defined and maintained. Regulators spelled out which actions or changes will (and will not) cause a plan to lose its “grandfathered” status.
These interim final regulations will still require analysis by carriers, consultants and employers relative to their implications and effect on employer-sponsored healthplan change decisions. We expect substantial industry opinions in the next day or so. HR and benefits professionals should keep a close eye on these developments.
Please contact us via email if you have questions about the interim final regulations. BBCG will be receiving guidance from carriers, and their attorneys, which may be valuable to you.
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How Much Is Your Company Paying for Payroll Services?
Many employers want to change payroll companies due to cost considerations but feel restrained due to things like a perceived workman’s compensation financing advantage with the large payroll companies. Click here to see the 1st MSC discussion on alternatives that exist for employers who want to explore more cost-effective approaches.
You can also go directly to BBCG’s earlier discussion on this issue by clicking here.
BBCG has established a strategic relationship with a Sarasota-based company which is an acknowledged leader in the “pay-as-you-go” workman’s compensation financing approach. Employers who are concerned about having to establish new reserves or being subject to audits if they move their payroll services away from a large service company have alternatives about which they may not be aware.
Click here for a comparison of large payroll service company services and costs.
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PPACA Cautions for Employers from BBCG
Two items about which employers need to be aware as they make healthplan policy decisions:
1. It appears unlikely that the COBRA subsidy will be re-implemented retroactively. There is serious opposition on the part of budget-conscious Democrats in Congress to extend the subsidy, making its passage problematic. At least for the time being, those going into a COBRA status need to be charged the full amount. In the unlikely event that the subsidy is retroactively implemented, COBRA participants can be reimbursed.
2. It is critical that employers keep up to date on rules that are about to be promulgated relative to what changes are allowable relative to retaining the “grandfathered” status of their existing employer-sponsored plans. Plan changes that add cost or reduce benefits to employees may cause a plan to loose its “grandfathered” status thus making it required to immediately abide by all PPACA provisions (i.e., as opposed to the 2014 statutory date). Information on these rules will likely be public shortly.
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Will Someone You Know or Employ Be Traveling Abroad — What Happens to Health Coverage?
Click On the Below Graphic for Auto-Browse/Purchase Service
Free and Non-Binding Unless User Actually Makes Application
Most people are not aware that the vast majority of health care coverage (i.e., health insurance policies, employee sponsored plans, Medicare, etc.) actually stops at the U.S. border. Many people are virtually “bare” (i.e., without insurance) during their stay overseas – although admittedly, most think otherwise. In some cases, there is minimal emergency or medevac coverage via a domestic plan. However, when substantial services are required immediately in a foreign country often the result is significant out-of-pocket costs. The suprise is often daunting to the traveler, family and/or friends.
There are many different categories of persons abroad, from the tourist, to the short-term business traveler, to the long-term expatriate. Within those categories there are often specialized needs for diffent groups depending on their length of stay and purpose abroad. For a broader discussion of the different sub-groups click here.
For an employer with personnel deployed abroad and promising extended health coverage, the cost of using a domestic employer sponsored health plan to pay the costs incurred in a foreign country rarely is the most cost-effective method of providing coverage for those individuals. [Note: for employers with 3 or more persons deployed abroad and 50 or more active employees in the U.S., BBCG has another portfolio of long-term and short-term international healthcare products provided by CIGNA International. We have found that those products may have more appeal to the corporate purchaser.]
For tourists, there is often a false sense of protection perceived in the typical travel insurance provided via their travel/tour operator. Rarely are the limits high enough to offset a major medical event. They are designed for emergency care with limits that rarely reach $50,000. An emergency heart by-pass procedure in Rome is going to cost a lot more than that!
IMG Global, as the managing general underwriter for Sirius International Insurance Group, has developed a uniquely high level of specialized expertise in meeting the needs of different types of travelers abroad. Please click on the graphic above for detailed information on international insurance designed for various travelers. You can also make application directly from that link for most products.
If you have additional questions, please click here for a direct email link to BBCG.
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Health Care Reform (PPACA) Update Web Meeting June 17, 2010
If you are an employer or senior management person trying to keep up with the provisions of PPACA, you are likely very frustrated as are many others. It is a moving target with interpretations and interim rules emerging almost daily. I noted in today’s St. Pete Times comments made following a seminar hosted by the Tampa Chamber on the details of PPACA. Even the normally informed “experts” are a little behind the curve and major employers are struggling with decisions due to incomplete guidance.
CIGNA has been holding a series of web meetings hosted by both their own employees and outside experts. The last one had two attorneys who specialize in PPACA as presenters and who were excellent in terms of their level of knowledge and current information. Following the presentation, a web conference operator moderates individual telephone questions directly to the presenters for specific questions and answers.
You do not need to be a CIGNA client to take advantage of this resource. Even if you just “lurk” without asking any questions, you will be brought up to speed on many details that might not otherwise be available to you. BBCG encourages you to register via the below link and join the web meeting at 2 P.M. June 17, 2010.
Click here for the CIGNA registration web page and link to additional health reform information available from CIGNA.
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United Healthcare Individual Medical Auto-Quote Function at BBCG
For those persons who prefer to do business with a long-established insurance carrier in the individual healthcare market, BBCG offers United Healthcare’s “UnitedHealthOne” (f/k/a Golden Rule) products. Various traditional, high deductible, point-of-service and HSA products are available. Please feel free to use this service to explore options that you feel might meet your needs.
Please click on the above Golden Rule icon to open the auto-quoting page. This is a free and non-binding service unless the user actually submits an application.
This service is in addition to the similar auto-quote function provided by BBCG via the CIGNA individual/small group market segment per our earlier blog entry at http://bocabenefits.com/blog/?p=588.
Both CIGNA and United Healthcare offer individual products as solutions to the “To Age 26” gap many college seniors may face while waiting for eligibility under one of their parent’s health plans.
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CIGNA Individual Plans Now Available Via Auto-Quote Function
In addition to the UnitedHealthOne (f/k/a Golden Rule) individual products auto-quote function from United Healthcare , BBCG now has a similar auto-quote function available for CIGNA products. Just click on the CIGNA logo above to open the quoting window.
Like the UnitedHealthOne products, CIGNA products also address the “To Age 26” issue for graduating college seniors.
This is a free and non-binding process unless an application is actually submitted by the user.
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