Archive for Covered California

The “Skinny” as a strategy…

As the implications of health care reform become more apparent, large employers are increasingly grappling with coverage options to avoid the penalties. Over the past few months, there has been considerably more attention paid to the problems faced by the staffing industry and similar employers as these temporary and variable hour employees are generally common law employees of the organization, and ultimately such companies are on the hook as it relates to offering health coverage.

One option some employers are looking at is the offer of a “no minimum value plan” – this is a group health plan that provides medical care, but may not satisfy the 60% minimum value threshold. Granted, if an employer offers such a plan that is not minimum value, an employee may apply for a tax credit at the exchange and this could trigger a $3,000 penalty ($3,000 for any full-time employee that receives a tax credit), but this penalty would be lower than the penalty associated with not offering any health plan at all (the $2,000 penalty/every full-time employee).

These types of plans are starting to make their way into the market for just this reason – as a viable alternative to staffing companies and/or other companies that operate in a similar fashion. At the end of the day, it allows employers to satisfy the coverage requirement under the Patient Protection and Affordable Care Act (PPACA) and avoid the hefty penalty associated with that option. So, it minimizes the risk financially. Also, if employees accept the “skinny” plan, they will not be penalized with the individual tax penalty currently in effect for not having coverage – in some respects, a win-win for both parties.

Some employers are using a modified version of this strategy. These employers offer employees two options: (1) a skinny plan, and (2) a richer option with a premium contribution cost that just barely meets the 9.5% wage threshold, which few low income employees are expected to take. This strategy enables employees to opt for the skinny plan that they can afford, while the offer of the richer option immunizes the employer from the play or pay penalties.

A third strategy is to simply offer the richer option and allow it to be unaffordable. For example, the plan could be offered on a fully contributory (i.e., employee pays all) or nearly fully contributory basis. This strategy avoids the “no offer” penalty, although the employer is still liable for the “unaffordable” penalty, but only with respect to those employees granted a premium tax credit.

Keep in mind, these strategies are aggressive. There are those who argue the skinny plans will not provide sufficient coverage to satisfy the “minimum essential” coverage criteria, but under the current regulations, it seems a possibility. Eventually, these plans may not pass muster, but for now there is nothing definitive against going this route so it is something to consider.

Posted in: Business Insurance, Covered California, Health Care Reform (ACA)

Leave a Comment (0) →

Obama Administration Announces More Delays for Employer Mandate to 2016

The Obama administration announced today that it will extend the deadline for the implementation of the health care mandate for medium sized businesses to 2016.

Employers with 50 – 99 workers are given a two year reprieve on offering health care to their full-time employees. Requirements for companies with 100 or more workers are reduced by 25%.

Larger employer (over 100 employees) are also seeing their requirement to offer health care to their full-time employees reduced from 95% to 70%.

The administration claims that stratifying the two phase-ins for businesses across America will ease the financial and administrative burdens for employers who have not offered health insurance benefits in the past.

The move today was well received by the majority of the business community.  Most believe the postponements will allow employers additional time to understand the applicable rulings that will affect their businesses.

For the full Washington Post Article, click here

Posted in: Business Insurance, Covered California, Health Care Reform (ACA)

Leave a Comment (0) →

Obamacare rules on equal coverage delayed: NY Times

WASHINGTON (Reuters) – The Obama administration is delaying enforcement of a provision of the new healthcare law that prohibits employers from providing better health benefits to top executives than to other employees, the New York Times reported on Saturday.

Tax officials said they would not enforce the provision this year because they had yet to issue regulations for employers to follow, according to the Times.

Internal Revenue Service spokesman Bruce Friedland said employers would not have to comply until the agency issued regulations or other guidance, the newspaper reported.

The IRS was not immediately available to confirm the Times story.

The rollout of the Affordable Care Act, known as Obamacare, has been marked by a number of delays in implementing certain parts of the law. In November, the administration announced a one-year delay in online insurance enrollment for small businesses.

Technical problems with the enrollment website plagued its launch on October 1, but they have largely been fixed and more than 2 million people have signed up for private insurance. The White House hopes to have 7 million people sign up by March 31, the deadline for coverage under Obamacare.

The law, adopted in 2010, says employer-sponsored health plans must not discriminate “in favor of highly compensated individuals” with respect to either eligibility or benefits.

IRS officials said they were wrestling with complicated questions like how to measure the value of employee health benefits, how to define “highly compensated” and what exactly constitutes discrimination, the Times reported.

The ban on discriminatory health benefits was to take effect in 2010. Administration officials said then that they needed more time to develop rules and that the rules would be issued well before this month, when other major provisions of the law took effect.

A similar ban on discrimination, adopted more than 30 years ago, already applies to employers that serve as their own insurers. The new law extends that policy to employers that buy insurance from commercial carriers.

(Writing by Eric Beech; editing by Gunna Dickson)

Posted in: Business Insurance, Covered California, Health Care Reform (ACA)

Leave a Comment (0) →

Major Carriers Revise Payment Deadlines

A backlog of Obamacare customers attempting to make their first premium payment on new health exchange plans has prompted several major insurers to revise their original deadline of Jan. 10.

Blue Cross Blue Shield operations in Texas and Illinois, along with three more BCBS plans that are part of the Health Care Service Corp, are now accepting premium payments through Jan. 30. So are all plans sold through HealthCare.gov, the insurer said, with retroactive coverage to Jan. 1 being issued to consumers in 26 states.

Meanwhile WellPoint—the nation’s second-biggest insurer—is allowing consumers until Jan. 15 to make payments.

Kristin Binns, a spokesperson for the carrier, told Bloomberg the extra five days will allow consumers a chance to access their benefits as quickly as possible, while allowing for the backlog created by the surge in applications late last month.

“Our goal is to ensure our members can access their benefits as early as possible in 2014,” Binns said. “To make that happen and accommodate the late December application surge, we will not be rejecting any January policies where payment has been received by Jan. 15.”

Jan. 15 will also function as a premium payment deadline for state-run exchanges in California, Oregon and Washington.

While Health Care Service Corp. said in a statement it had already received “a significant volume of payments,” anecdotal evidence from other carriers suggests many consumers are still attempting to pay their premiums.

And the problem isn’t just affecting insurers.

In Wichita Fall, Texas, producer Kelly Fristoe has been receiving calls since Christmas from clients who were on hold for two to three hours attempting to pay their premiums.

“There’s a snowball effect at the insurance companies; they’re just backlogged,” Fristoe said. “When you sign up on the 24th, that doesn’t give the insurance company enough time to process your payment, print your ID card and get it back to you in an already overwhelmed postal system.”

Fristoe said he found a temporary solution in advising clients to call the Spanish helpline for Blue Cross Blue Shield, where operators also spoke English. However, Fristoe believes “the word got out because now there’s long holds there as well.”

Some carriers like Aetna Inc., however, say they are still considering Friday to be the payment deadline.

New deadlines issues by carriers and state exchanges so far include:

Covered California—Jan. 15

Washington Healthplanfinder—Jan. 15

Cover Oregon—Jan. 15

Kaiser Permanente—Jan. 15

WellPoint Inc.—Jan. 15

Independence Blue Cross Blue Shield—Jan. 28

Blue Cross Blue Shield of Texas—Jan. 30

Blue Cross Blue Shield of Illinois—Jan. 30

Blue Cross Blue Shield plans through HealthCare.gov—Jan. 30

Health Care Service Corp—Jan. 30

Humana—Jan. 31

Posted in: Covered California, Health Care Reform (ACA)

Leave a Comment (0) →

Covered CA Launches Self Service Website for Small Business – Press Release

 

FOR IMMEDIATE RELEASE Media Line: (916)   205-8403
Dec. 2, 2013  

COVERED CALIFORNIA LAUNCHES SELF-SERVICE WEBSITE FOR THE SMALL BUSINESS HEALTH OPTIONS PROGRAM

Small Businesses Can Enroll for Coverage That Begins As Soon As January 1st

LOS ANGELES, Calif. — Covered California™ today officially launched the full self-enrollment function of the Small Business Health Options (SHOP) online marketplace.  This significant new function on the Covered California website will enable small businesses to fully enroll for coverage that may begin as early as Jan. 1, 2014.

“Small businesses now have new options to provide more choice for their employees and new affordable options for their business,” said Covered California Executive Director Peter V Lee.  “Covered California has created the Small Business Health Options Program (SHOP) to help the small business owners to get the best value for themselves and their employees.  Since October more than 1,500 small business owners have begun the process of exploring whether the SHOP program is right for them.”

Small-business owners with one to 50 eligible employees may now enroll in Covered California’s Small Business Health Options Program (SHOP) plans for coverage effective Jan. 1, 2014.  Like the health insurance plans in Covered California’s individual market, Covered California’s SHOP plans were negotiated to bring a standardized set of benefits, a robust provider network, and a broad choice of health insurance plans with competitive pricing to employers and their employees.

Previously, small business employers have been able to register online, check their eligibility and work with a Certified Insurance Agent to obtain a quote.  The new system enhancements now allow online enrollment functionality for SHOP, including online quoting, the ability to submit an online application at www.coveredca.com in real-time, and the ability for employers to initiate electronic open enrollment for their employees.

Many Small-business owners qualify for a federal tax credit to help offset contributions toward employee premiums. Beginning in 2014, the only way for small-business owners to access the tax credits is to purchase insurance through Covered California’s SHOP. Small businesses are eligible for a federal health care tax credit if they have fewer than 25 full-time-equivalent employees for the tax year, pay employees an average of less than $50,000 per year and contribute at least 50 percent of their employees’ premium cost. Employers with 10 or fewer full-time-equivalent employees with wages averaging $25,000 or less per year are eligible for the maximum amount of tax credits.

“The tax credits available to small business through Covered California make quality coverage more affordable,” said Lee. “For example, a beauty shop with 10 full-time employees and total wages of $250,000 that purchases insurance through Covered California’s SHOP may be eligible for a $35,000 tax credit in 2014. We know that the tax credit is meaningful for a lot of small business that have been struggling to obtain quality, affordable coverage for their employees.”

In addition to purchasing coverage on the Covered California website, Covered California SHOP plans are sold through licensed agents who are trained and certified by Covered California.  Since registration opened in August, more than 22,000 licensed agents have signed up to become certified to sell Covered California products, with more than 7,000 agents currently certified and available to help individual consumers and small employers in the Covered California marketplace.

The increased website functionality also includes a number of new features available for the Certified Insurance Agent community, such as the ability to create an online profile for an individual consumer or small employer; the ability to start and submit an application on behalf of an individual or small employer; and, the ability to process and manage employer online enrollment applications for SHOP.

About the Small Business Health Options Program (SHOP)

The Affordable Care Act includes provisions to encourage small businesses to offer health coverage for their employees by making insurance more affordable and easier to purchase. Covered California has created the Small Business Health Options Program (SHOP) to facilitate the purchase of affordable health insurance for small-business owners.

SHOP is a second marketplace—separate from the one for individuals—and is designed to give employers and their employees more options for health coverage.  Using this marketplace, small-business owners can shop for health insurance in ways that offer convenience and choice, which is comparable to how large companies shop for employee health insurance today.

In 2014, health insurance companies participating in SHOP are: Blue Shield of California, Chinese Community Health Plan, Health Net, Kaiser Permanente, Sharp Health Plan and Western Health Advantage.  These plans will be sold through Certified Licensed Insurance Agents trained and certified by Covered California.

Small businesses are not required to buy insurance for their employees. SHOP is completely voluntary, and small businesses will not be penalized for non-participation. Small businesses can enroll in a SHOP plan year round.

About Covered California

Covered California is the state’s marketplace for the federal Patient Protection and Affordable Care Act. Covered California, in partnership with the California Department of Health Care Services, was charged with creating a new health insurance marketplace in which individuals and small businesses can get access to affordable health insurance plans. With coverage starting in 2014, Covered California helps individuals determine whether they are eligible for premium assistance that is available on a sliding-scale basis to reduce insurance costs or whether they are eligible for low-cost or no-cost Medi-Cal. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Small businesses can purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits.

Covered California is an independent part of the state government whose job is to make the new market work for California’s consumers. It is overseen by a five-member board appointed by the Governor and the Legislature. For more information on Covered California, please visit www.CoveredCA.com.

Posted in: Business Insurance, Covered California

Leave a Comment (0) →

Covered California Upholds Original Deadline – Press Release

Dear Colleagues and Interested Parties:

 

FOR IMMEDIATE RELEASE Media Line: (916) 205-8403
Nov. 21, 2013  

COVERED CALIFORNIA UPHOLDS ORIGINAL DEADLINE FOR ENDING HEALTH PLANS THAT DON’T MEET LAW’S STANDARDS

Strong Enrollment in New Health Insurance Marketplace a Factor in Decision

SACRAMENTO, Calif. — As consumer enrollment continues to grow, the Covered California™ Board unanimously voted today to uphold its Dec. 31, 2013, deadline for health insurance companies to discontinue plans that don’t meet basic standards. The board cited that extending the deadline offers no benefit to the consumer and may create confusion about accessing affordable health care coverage through Covered California. 

The board, consistent with President Barack Obama’s recommendations, also urged Covered California staff to implement helpful tools for consumers currently enrolled in affected plans, to better understand their options.

The decision to maintain the original deadline also confirms the state exchange’s commitment to transitioning Californians into plans that are compliant with the reforms of the Patient Protection and Affordable Care Act, protecting consumers from double deductibles and stabilizing the risk pool to control costs for consumers beginning in 2014.

Additionally, Covered California is implementing five key strategies to sustain, if not increase, its enrollment momentum and help affected consumers:

  • Extending the deadline for enrollment for coverage taking effect on Jan. 1, 2014, from Dec. 15, 2013, to Dec. 23, 2013, and extending the deadline for payments due from Dec. 26, 2013, to Jan. 5, 2014. 
  • Establishing a telephone hotline for consumers to resolve enrollment questions. The hotline, (855) 857-0445, will be available beginning Monday, Nov. 25.
  • Sending information directly to nearly 1.13 million affected individuals that provides clear options for coverage. The information will be sent from Covered California and the individual’s current insurance provider.
  • Collecting and reporting data, on a regular basis, showing the impacts of conversion for individuals.
  • Engaging consumers in their communities through the thousands of Certified Insurance Agents, Certified Enrollment Counselors and Certified Educators now deployed statewide.

“The consumer is front and foremost in Covered California’s policy decision process. These new strategies will provide consumers a better enrollment experience, more flexibility in the selection of a plan and, most importantly, increased knowledge with which to make the best health coverage choice possible,” said Covered California Executive Director Peter V. Lee. 

The board and Covered California staff discussed options for maintaining or extending the deadline after President Obama last week gave state insurance exchanges flexibility on when policies that were not grandfathered and are not compliant with the Affordable Care Act could be ended.

About Covered California

Covered California is the state’s marketplace for the federal Patient Protection and Affordable Care Act. Covered California, in partnership with the California Department of Health Care Services, was charged with creating a new health insurance marketplace in which individuals and small businesses can get access to affordable health insurance plans. With coverage starting in 2014, Covered California helps individuals determine whether they are eligible for premium assistance that is available on a sliding-scale basis to reduce insurance costs or whether they are eligible for low-cost or no-cost Medi-Cal. Consumers can then compare health insurance plans and choose the plan that works best for their health needs and budget. Small businesses can purchase competitively priced health insurance plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits.

Covered California is an independent part of the state government whose job is to make the new market work for California’s consumers. It is overseen by a five-member board appointed by the Governor and the Legislature. For more information on Covered California, please visit www.CoveredCA.com.

###

Posted in: Business Insurance, Covered California, Health Care Reform (ACA), Personal Insurance

Leave a Comment (0) →

Innovative ways through the ACA provisions for employers

Employers are continuing looking for solutions that help manage there businesses more efficiently and also navigate the provisions of the Affordable Care Act (ACA).  If it make sense, employers should consider looking at alternative funding options – like Self Funding or Level Premium programs.

For those of you looking at these options, below are the provisions that do and don’t apply.

ACA Provisions That Do Apply:

  • Minimum Value Plans
  • Unlimited lifetime maximums
  • Out of pocket & deductible limits
  • Kids to age 26
  • Summary of Benefits and Coverages (SBC’s)
  • 60-Day Notice of Material Modification
  • 90-Day waiting period (exempt from California’s 60 Day)
  • W-2 reporting & plan transparency reporting to HHS
  • PCORI Fees & Transitional Reinsurance Fee
  • Discrimination based on health status

ACA Provisions That Do Not Apply:

  • Minimum Loss Ratio (MLR)
  • Comply with 3:1 pricing guidelines
  • Geographical rating areas
  • State or Federal review of premium adjustments
  • Annual Health Insurance Tax (HIT)
  • Provide Essential Health benefits “EHB”
    • Minimum Value is required so no loss of benefit
    • Self-funded plans typically provide richer benefits than fully insured plans

Interested in learning more?  Please contact us at 916-932-2864 – as we are happy to help.

Posted in: Business Insurance, Covered California, Health Care Reform (ACA)

Leave a Comment (0) →

Exchange Model Notices – EMPLOYER ACTION REQUIRED!

On May 8, the U.S. Department of Labor issued employer notices regarding the Health Insurance Exchanges (Marketplaces).

In a nutshell, employers have until October 1, 2013 to decide whether they will offer or not offer insurance coverage to their employees.

Below are links to two forms: one for employers offering coverage and those which will not. The notice text must be used and there are penalties for not distributing them by October 1, 2013, the date open enrollment in the exchanges is set to begin.

        Notices were also released regarding COBRA:

 
Please contact us if you have any questions, we’re happy to assist!
 

Posted in: Business Insurance, Covered California, Health Care Reform (ACA), News You Can Use

Leave a Comment (0) →

Covered California Takes A Major Step To Launching SHOP

COVERED CALIFORNIA TAKES MAJOR STEP TOWARD LAUNCHING NEW HEALTH CARE OPTIONS FOR SMALL BUSINESS

Contract Awarded to Pinnacle Claims Management, Inc. to Administer Innovative, Affordable Marketplace

Sacramento, Calif. — The Covered California Board has approved Irvine-based Pinnacle Claims Management, Inc. (PCMI) to administer its Small Business Health Options Program (SHOP). The program will offer approximately 375,000 California small businesses unprecedented access to a considerable array of affordable health coverage options for its employees. California is one of a few states nationally that will be able to offer small businesses an array of health insurance options for their employees come this fall.  This contract is supported by federal funds provided under the Affordable Care Act, and continued funding will be provided by Covered California administrative revenue starting in 2015.

“We are excited to partner with PCMI in this historic moment when we can help thousands of small businesses provide affordable health care for their employees,” said Peter V. Lee, Executive Director for Covered California. “PCMI has demonstrated the requisite knowledge of California’s small business community and has shown us they can move quickly and effectively in providing all the services we require to help Covered California get up and running this fall.”

Small employers participating in the SHOP will be able to provide their employees with a broader choice of health plans that generally has only been available to large employers. Certain small businesses — those with 25 or fewer full-time equivalent employees paid an average annual wage of less than $50,000 — may be eligible to receive a 50 percent small business health care tax credit for coverage purchased through the SHOP.

Through SHOP, employers will be able to pick the level of support for their employees, and in turn employees will be able to pick from those options the specific health plan that is right for them and their families. All plans will provide a standardized set of benefits and cost sharing to make it easy for employers and employees alike to make apples-to-apples comparisons.

PCMI and its affiliates have more than 15 years of experience providing employer- sponsored health benefit management services, with a current client base of some 800 small employer groups in California and Arizona.

The contract with PCMI will cost an estimated $50 million over the three year term and includes the initial implementation of the program’s administration functions and ongoing operating costs. PCMI will provide eligibility, enrollment, marketing and fulfillment services, as well as agent and general agent sales management, financial management and the small business call center services.

“PCMI is thrilled to work with Covered California on this endeavor and to be part of this historic change in health care. We are looking forward to helping Covered California provide the services that will support employers and their employees as they enroll in the health plans offered through Covered California,” said David Zanze, President of PCMI.

Covered California will provide for health plan selection, certification and ongoing management of plan relationships, lead marketing efforts and provide policy guidance.

About Covered California

California was the first state to create a health benefit exchange following the passage of federal health care reform. Covered California is charged with creating a new insurance marketplace in which individuals and small businesses can get access to health insurance. With coverage starting in 2014, Covered California will help individuals compare and choose a health plan that works best for their health needs and budget. Financial help will be available from the federal government to help lower costs for people who qualify on a sliding scale. Small businesses will be able to purchase competitively priced health plans and offer their employees the ability to choose from an array of plans and may qualify for federal tax credits.

Covered California is an independent part of the state government whose only job is to make the new market work for California’s consumers, and is overseen by a five-member board appointed by the Governor and Legislature.

For more information on Covered California, please visit www.CoveredCA.com.

 

Posted in: Business Insurance, Covered California, Health Care Reform (ACA), News You Can Use

Leave a Comment (0) →

Anyone, Anyone…Small Business Tax Credits??

What You Need to Know about the Small Business Health Care Tax Credit…

How will the credit make a difference for you?

For tax years 2010 through 2013, the maximum credit is 35 percent for small business employers and 25 percent for small tax-exempt employers such as charities. An enhanced version of the credit will be effective beginning Jan. 1, 2014. Additional information about the enhanced version will be added to IRS.gov as it becomes available. In general, on Jan. 1, 2014, the rate will increase to 50 percent and 35 percent, respectively.

Here’s what this means for you. If you pay $50,000 a year toward workers’ health care premiums – and if you qualify for a 15 percent credit, you save … $7,500. If you save $7,500 a year from tax year 2010 through 2013, that’s total savings of $30,000. If, in 2014, you qualify for a slightly larger credit, say 20 percent, your savings go from $7,500 a year to $12,000 a year.

Even if you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments are more than the total credit, eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit. That’s both a credit and a deduction for employee premium payments.

There is good news for small tax-exempt employers too. The credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.

And finally, if you can benefit from the credit this year but forgot to claim it on your tax return there’s still time to file an amended return.

Click here if you want more examples of how the credit applies in different circumstances.

Can you claim the credit?

Now that you know how the credit can make a difference for your business, let’s determine if you can claim it.

To be eligible, you must cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees. You must also have fewer than 25 full-time equivalent employees (FTEs). Those employees must have average wages of less than $50,000 a year.

Let us break it down for you even more.

You are probably wondering: what IS a full-time equivalent employee. Basically, two half-time workers count as one full-timer. Here is an example, 20 half-time employees are equivalent to 10 full-time workers. That makes the number of FTEs 10 not 20.

Now let’s talk about average wages. Say you pay total wages of $200,000 and have 10 FTEs. To figure average wages you divide $200,000 by 10 – the number of FTEs – and the result is your average wage. The average wage would be $20,000.

Also, the amount of the credit you receive works on a sliding scale. The smaller the business or charity, the bigger the credit. So if you have more than 10 FTEs or if the average wage is more than $25,000, the amount of the credit you receive will be less.

If you need assistance determining if your small business or tax exempt organization qualifies for the credit, try this step-by-step guide.

How do you claim the credit?

You must use Form 8941, Credit for Small Employer Health Insurance Premiums, to calculate the credit. For detailed information on filling out this form, see the Instructions for Form 8941.

If you are a small business, include the amount as part of the general business credit on your income tax return.

If you are a tax-exempt organization, include the amount on line 44f of the Form 990-T, Exempt Organization Business Income Tax Return. You must file the Form 990-T in order to claim the credit, even if you don’t ordinarily do so.

Don’t forget … if you are a small business employer you may be able to carry the credit back or forward. And if you are a tax-exempt employer, you may be eligible for a refundable credit.

Still have questions?  Give us a call at 916-932-2357 – anytime!

Source: www.irs.gov

Posted in: Business Insurance, Covered California, Health Care Reform (ACA), News You Can Use

Leave a Comment (0) →