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Private Health Care Exchange

This is the Private Health Care Exchange category of the Broad REach Benefits blog. At Broad Reach Benefits, we focus on employers that have between 30 and 500 benefit eligible employees. We’re employee benefit specialists, not a big box brokerage firm or payroll company with a sales force peddling policies.

What Employers Need to Know About Medicaid Redeterminations

In 2020, the U.S. Congress passed the Families First Coronavirus Response Act in response to the COVID-19 pandemic, requiring states to maintain Medicaid coverage for most enrollees during the public health emergency (PHE). During this period, individuals receiving Medicaid did not have to reapply to remain eligible for benefits. In December 2022, the 2023 Consolidated Appropriations Act was passed, uncoupling Medicaid redeterminations from the PHE and establishing a timeline for states to restart the Medicaid redetermination process. As a result, as many as 15 million Americans may soon no longer be eligible for Medicaid because of redeterminations, according to U.S. Department of Health and Human Services estimates.

Medicaid provides health insurance to millions of eligible Americans with limited income and resources. Each state administers its own Medicaid program, and enrollees must apply annually to qualify for Medicaid benefits. This process is known as redetermination, renewal or recertification. The Medicaid redetermination process helps evaluate whether Medicaid enrollees are eligible for continued health coverage. Eligibility for continued health coverage depends on various factors, including changes in age, disability status, household size and income. States were able to resume annual Medicaid renewals starting April 1, 2023. This means coverage terminations have resumed for Medicaid enrollees who have been redetermined by state agencies as ineligible for Medicaid, resulting in the loss of their health care coverage. The precise date of resuming coverage terminations will vary by state.

A Primer on Stop-loss Contracts

Stop-loss insurance is coverage self-funded employers purchase to manage their health care costs and protect against unexpected or catastrophic claims by establishing a limit for the amount they pay in health claims. This coverage is not a form of medical insurance, and employers can add stop-loss insurance to an existing …

By |May 15th, 2023|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, Medical, Private Health Care Exchange, U.S. Department of Labor, Wellness|Comments Off on What Employers Need to Know About Medicaid Redeterminations
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Over Half of U.S. Private-sector Workers Are Enrolled in HDHPs

More than half (55.7%) of American private-sector workers were enrolled in high deductible health plans (HDHPs) in 2021, according to the Kaiser Family Foundation’s recent 2022 Employer Health Benefits Survey. The 5.3% increase from 2020 is the highest on record, and 2021 is the eighth straight year an increase has occurred.

The top three states with the highest HDHP enrollment were Maine (76.2%), Tennessee (68.7%) and Nebraska (67.6%), all of which were not seen breaking the top 10 in HDHP enrollment in 2020.

HDHPs are on the rise because of the growing costs of health insurance. These plans create a more flexible way for someone to spend their health care dollars and require more active involvement in the management of health care spending. HDHPs also allow enrolled individuals to set aside pre-tax dollars for out-of-pocket health care expenses when combined with health savings accounts and health reimbursement arrangements.

What’s Next?

Employers continue to prioritize HDHP plans over preferred provider organization (PPOs) and health maintenance organization (HMOs), most likely due to cost savings in a time of economic uncertainty. Employers must consider implications of their offerings in the midst of a tight labor market.

To stay in tune with employee needs, employers should stay up to date with HDHP trends in the upcoming years.

Contact Alera Group for more information on trends near you.

By |March 8th, 2023|Broad Reach Benefits, Employee Benefits, Human Resources, Medical, Private Health Care Exchange, Voluntary Benefits|Comments Off on Over Half of U.S. Private-sector Workers Are Enrolled in HDHPs
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Legal Alert- IRS Issues Affordability Percentage Adjustment for 2022

The Internal Revenue Service (IRS) has released Rev. Proc. 2021-36, which contains the inflation adjusted amounts for 2022 used to determine whether employer-sponsored coverage is “affordable” for purposes of the Affordable Care Act’s (ACA) employer shared responsibility provisions and premium tax credit program. As shown in the table below, for plan years beginning in 2022, the affordability percentage for employer mandate purposes is indexed to 9.61%.  Employer shared responsibility payments are also indexed.

Code Section 4980H(a) 4980H(b) 36B(b)(3)(A)(i)
Description Coverage not offered to 95% (or all but 5) of full-time employees. Coverage offered, but unaffordable or is not minimum value. Premium credits and affordability safe harbors.
2022* $2,750 $4,120 9.61%
2021 $2,700 $4,060 9.83%
2020 $2,570 $3,860 9.78%
2019 $2,500 $3,750 9.86%
2018 $2,320 $3,480 9.56%
2017 $2,260 $3,390 9.69%
2016 $2,160 $3,240 9.66%
2015 $2,080 $3,120 9.56%
2014** $2,000 $3,000 9.50%

*Section 4980H(a) and (b) penalties 2022 are projected.

**No employer shared responsibility penalties were assessed for 2014.

Under the ACA, applicable large employers (ALEs) must offer affordable health insurance coverage to full-time employees. If the ALE does not offer affordable coverage, it may be subject to an employer shared responsibility payment. An ALE is an employer that employed 50 or more full-time equivalent employees on average in the prior calendar year. Coverage is considered affordable if the employee’s required contribution for self-only coverage on the employer’s lowest-cost, minimum value plan does not exceed 9.61% of the employee’s household income in 2022 (prior years shown above). An ALE may rely on one or more safe harbors in determining if coverage is affordable: W-2, Rate of Pay, and Federal Poverty Level.

If the employer’s coverage is not affordable under one of the safe harbors and a full-time …

By |September 21st, 2021|Affordable Care Act, Compliance, Disability, Employee Benefits, Employee Benefits Adviser, Employee Communications, Human Resources, IRS, Legislation, Medical, Private Health Care Exchange, U.S. Department of Labor, Wellness|Comments Off on Legal Alert- IRS Issues Affordability Percentage Adjustment for 2022
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IRS Releases Second Quarter Form 720 for PCORI Fee Payments

Employers that sponsor self-insured group health plans, including health reimbursement arrangements (HRAs) should keep in mind the upcoming July 31, 2021 deadline for paying fees that fund the Patient-Centered Outcomes Research Institute (PCORI).  As background, the PCORI was established as part of the Affordable Care Act (ACA) to conduct research to evaluate the effectiveness of medical treatments, procedures and strategies that treat, manage, diagnose or prevent illness or injury.  Under the ACA, most employer sponsors and insurers are required to pay PCORI fees until 2029, as it only applies to plan years ending on or before September 30, 2029.

The amount of PCORI fees due by employer sponsors and insurers is based upon the number of covered lives under each “applicable self-insured health plan” and “specified health insurance policy” (as defined by regulations) and the plan or policy year end date.  This year, employers will pay the fee for plan years ending in 2020.

The fee is due by July 31, 2021 and varies based on the applicable plan year as follows:

  • For plan years that ended between January 1, 2020 and September 30, 2020, the fee is $2.54 per covered life.
  • For plan years that ended between October 1, 2020 and December 31, 2020, the fee is $2.66 per covered life.

For example, for a plan year that ran from July 1, 2019 through June 30, 2020 the fee is $2.54 per covered life. The fee for calendar year 2020 plans is $2.66 per covered life. The insurance carrier is responsible for paying the PCORI fee on behalf of a fully insured plan.  The employer is responsible for paying the fee on behalf of a self-insured plan, including an HRA.  In general, health FSAs are not subject …

By |May 19th, 2021|Employee Benefits, Employee Communications, Human Resources, IRS, Medical, Private Health Care Exchange, U.S. Department of Labor, Voluntary Benefits|Comments Off on IRS Releases Second Quarter Form 720 for PCORI Fee Payments
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DOL Releases Model Notices and Other Resources Related to COBRA Premium Assistance

On April 7, 2021, the U.S. Department of Labor (DOL) released a link to its webpage dedicated to the COBRA premium assistance authorized under the American Rescue Plan Act, 2021 (ARPA), the third COVID-19 stimulus bill.  The webpage includes model notices, frequently asked questions, and related information.  With the exception of the model notices, the guidance appears targeted towards impacted workers, leaving many employer-related questions unanswered.  This alert summarizes the recent guidance and model notices.

What does ARPA Provide and Who is an Assistance Eligible Individual?

Among other things, the ARPA provides a 100% subsidy for COBRA premiums for group health plans (other than health FSAs) from April 1, 2021 through September 30, 2021 for assistance eligible individuals (AEIs).  AEIs are employees and their family members who are:

  • eligible for, and enroll in, COBRA (or state mini-COBRA) due to a reduction in hours or involuntary termination of employment;
  • not eligible for other group health plan coverage or Medicare; and
  • still within their maximum COBRA continuation coverage period (generally, 18 months).

AEIs include individuals newly eligible for COBRA between April 1, 2021 and September 30, 2021, individuals who were in their COBRA election period as of April 1, 2021, and individuals who would be AEIs but whose COBRA coverage lapsed due to non-payment prior to April 1, 2021.  AEIs also include any qualified beneficiaries, such as family members, who did not elect COBRA continuation coverage when first eligible.  Generally, this means an employee (and their qualified beneficiaries) with a COBRA start date on or after November 1, 2019, would have one or more months of eligibility for the COBRA subsidy.  Therefore, employers should identify any employees involuntarily terminated or whose hours were reduced on or after October …

By |April 8th, 2021|Broad Reach Benefits, Employee Benefits, Employee Benefits Adviser, Employee Communications, Health Care Reform, Human Resources, Medical, Private Health Care Exchange, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on DOL Releases Model Notices and Other Resources Related to COBRA Premium Assistance
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Health Plan Rules—Treating Employees Differently

Some employers may want to be selective and treat employees differently for purposes of group health plan benefits. For example, employers may consider implementing the following plan designs:

-A health plan “carve-out” that insures only select groups of employees (for example, a management carve-out);

– Different levels of benefits for groups of employees; or
– Varied employer contribution rates based on employee group.

In general, employers may treat employees differently, as long as they are not violating federal rules that prohibit discrimination in favor of highly compensated employees. These rules currently apply to self-insured health plans and arrangements that allow employees to pay their premiums on a pre-tax basis. The nondiscrimination requirements for fully insured health plans have been delayed indefinitely.

Employers should also confirm that any health plan rules do not violate other federal laws that prohibit discrimination. In addition, employers with insured plans should confirm that carve-out designs comply with any minimum participation rules imposed by the carrier.

Health Plan Design—General Rules

Nondiscrimination Tests

In general, a health plan will not have problems passing any applicable nondiscrimination test when the employer treats all of its employees the same for purposes of health plan coverage (for example, all employees are eligible for the health plan, and the plan’s eligibility rules and benefits are the same for all employees). However, treating employees differently may make it more difficult for a health plan to pass the applicable nondiscrimination tests. Examples of plan designs that may cause problems with nondiscrimination testing include:

  • Only certain groups of employees are eligible to participate in the health plan (for example, only salaried or management employees);
  • The health plan has different employment requirements for plan eligibility (for example, waiting periods and entry dates) for different employee groups;
  • Plan benefits …
By |April 5th, 2021|Broad Reach Benefits, Compliance, Employee Benefits, Employee Communications, Health Care Reform, Legislation, Long-Term Care, Medical, Private Health Care Exchange, Section 125, U.S. Department of Labor, Voluntary Benefits, Wellness|Comments Off on Health Plan Rules—Treating Employees Differently
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How Many Years Is A One Year Extension? DOL Clarifies its Disaster Relief Guidance

The Department of Labor (DOL) has released Notice 2021-01, which clarifies the end date for the relief provided in April 2020 under Notice 2020-01. Per the latest guidance, individuals (and plans) are granted relief based on their own fact-specific timeframes and, therefore, may still take advantage of the relief beyond February 28, 2021 until the earlier of (a) 1 year from the date they were first eligible for relief, or (b) 60 days after the announced end of the COVID-19 National Emergency.

As background, in April 2020 the DOL announced that certain deadlines under ERISA were suspended starting March 1, 2020 until 60 days after the announced end of the COVID-19 National Emergency or such other date determined by the agencies (the “Outbreak Period”). The following deadlines applicable to participants and beneficiaries are tolled (paused) during the Outbreak Period:

  • The 30-day period (or 60-day period, if applicable) to request a HIPAA special enrollment;
  • The 60-day period for electing COBRA continuation coverage;
  • The date/deadline for making COBRA premium payments;
  • The deadline for individuals to notify the plan of a COBRA qualifying event or determination of disability;
  • The deadline within which employees can file a benefit claim, or a claimant can appeal an adverse benefit determination, under the group health plan or disability plan claims procedures described in the plan;
  • The deadline for claimants to file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination; and
  • The deadline for a claimant to file information to perfect a request for external review upon finding that the request was not complete.

Certain deadlines impacting employers/plan sponsors were also extended, such as the deadline to provide a COBRA election notice, …

By |March 1st, 2021|Broad Reach Benefits, Compliance, Employee Benefits, Human Resources, Legislation, Medical, Private Health Care Exchange, U.S. Department of Labor|Comments Off on How Many Years Is A One Year Extension? DOL Clarifies its Disaster Relief Guidance
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Carrier Premium Credits and ERISA Fiduciary Obligations

Due to COVID-19 and state and local stay-at-home orders, utilization of group medical and dental insurance benefits is down.  As a result, some carriers recently notified employers that they will be issued premium credits. When asking how these premium credits should be treated by the employer, we often compare then to the ACA’s medical loss ratio (MLR) rebates.  While these premium credits are not MLR rebates, a similar decision must be made to determine whether they, like MLR rebates, are ERISA plan assets.

Background

As background, the Affordable Care Act’s MLR rule requires health insurers to spend a certain percentage of premium dollars on claims or activities that improve health care quality, otherwise they must provide a rebate to employers. At the same time the U.S. Department of Health and Human Services issued the MLR rule, the U.S. Department of Labor (DOL) issued Technical Release 2011-04 (TR 2011-04), which clarifies how rebates should be treated under ERISA.  Under ERISA, anyone who has control over plan assets, such as the plan sponsor, has fiduciary obligations and must act accordingly.

Clearly, the premium credits we are seeing are not subject to the MLR rule; however, a similar analysis applies.   TR 2011-04 clarified that insurers must provide any MLR rebates to the policyholder of an ERISA plan.  However, while the DOL’s analysis was focused on MLR rebates, it recognized that distributions from carriers can take a variety of forms, such as “refunds, dividends, excess surplus distributions, and premium rebates.”  Regardless of the form or how the carrier describes them, to the extent that a carrier credit, rebate, dividend, or distribution is provided to a plan governed by ERISA, then the employer must always consider whether it is a “plan asset” …

By |May 18th, 2020|Compliance, Employee Benefits, Employee Benefits Adviser, Employee Communications, Legislation, Medical, Private Health Care Exchange, U.S. Department of Labor, Voluntary Benefits|Comments Off on Carrier Premium Credits and ERISA Fiduciary Obligations
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IRS Releases Draft 2019 ACA Reporting Forms and Instructions

IRS Releases Draft 2019 ACA Reporting Forms and Instructions

 The IRS has released draft forms and instructions for the 2019 B-Series and C-Series reporting forms (Forms 1094-B, 1095-B, 1094-C and 1095-C) used by employers and coverage providers to report certain information to full-time employees and the Internal Revenue Service (IRS).

As background, the Affordable Care Act (ACA) added Sections 6055 and 6056 to the Internal Revenue Code. These sections require employers, plans, and health insurance issuers to report health coverage information to the IRS and to participants annually. Section 6055 reporting requirements apply to insurers, employers that sponsor self-insured group health plans, and other entities that provide minimum essential coverage (such as multiemployer plans). Section 6056 reporting requirements apply to “applicable large employers” or “ALEs” (generally, employers with 50 or more full-time employees) and require reporting of health care coverage provided to the employer’s full-time employees.

Reporting under Sections 6055 and 6056 involves two sets of forms:  the “B-Series” (Forms 1094-B and 1095-B); and the “C-Series” (Forms 1094-C and 1095-C).  Each includes a transmittal form (Form 1094-B or 1094-C), which serves as a cover page and provides aggregate information, and an individualized form (Form 1095-B or 1095-C) for each employee for whom the employer is required to report.

The forms for calendar year 2019 are due to employees by January 31, 2020. Forms are due to the IRS by February 28, 2020 if filing by paper and by March 31, 2020 if filing electronically.  The forms that must be filed and distributed depend on whether the employer is an ALE and the type of coverage provided. Employers filing 250 or more of a particular form are required to file with the IRS electronically. The following table summarizes the responsible …

By |November 15th, 2019|Health Care Reform, Medical, Private Health Care Exchange, Retired, Wellness|Comments Off on IRS Releases Draft 2019 ACA Reporting Forms and Instructions
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IRS Extends Deadline for Furnishing Form 1095, Extends Good-Faith Transition Relief

The Internal Revenue Service (IRS) has released Notice 2018-94, extending the deadline for furnishing 2018 Forms 1095-B and 1095-C to individuals from January 31, 2019 to March 4, 2019, as well as penalty relief for good-faith reporting errors.

The due date for filing the forms with the IRS was not extended and remains February 28, 2019 (April 1, 2019 if filed electronically). Despite the repeal of the “individual mandate” beginning in 2019 as part of the Tax Cuts and Jobs Act, the ACA’s information reporting requirements remain in effect, as the IRS uses the reporting to administer the employer mandate and premium tax credit program. The IRS is studying whether and how the reporting requirements under section 6055 (relating to insurance companies and self-insured plans) should change, if at all, for future years.

The instructions to Forms 1094-C and 1095-C allow employers to request a 30-day extension to furnish statements to individuals by sending a letter to the IRS with certain information, including the reason for delay.   However, because the Notice’s extension of time to furnish the forms is as generous as the 30-day extension contained in the instructions, the IRS will not formally respond to requests for an extension of time to furnish 2018 Forms 1095-B or 1095-C to individuals.

Employers may still obtain an automatic 30-day extension for filing with the IRS by filing Form 8809 on or before the forms’ due date. An additional 30-day extension is available under certain hardship conditions. The Notice encourages employers who cannot meet the extended due dates to furnish and file as soon as possible and advises that the IRS will take such furnishing and filing into consideration when determining whether to abate penalties for …

By |December 3rd, 2018|Health Care Reform, Human Resources, Legislation, Private Health Care Exchange|Comments Off on IRS Extends Deadline for Furnishing Form 1095, Extends Good-Faith Transition Relief
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