ACA 90 Day Maximum Waiting Period for Small and Large Groups

Effective January 1, 2014, a group health plan or health insurance issuer offering group health insurance coverage shall not apply any waiting period that exceeds 90 actual days.

Please note the following administrative guidelines per insurer:

AETNA: the waiting period will change to a maximum of 60 days at the first renewal on or after January 1, 2014.

AMERIHEALTH: is not administering; it is the employer's responsibility to monitor.

HORIZON BCBS OF NJ: the employer must advise of their new hire waiting period election at renewal or potentially be subject to penalties if an employee is made to wait for more than 90 days for coverage. 

NIPPON: for groups w/51+ employees, the benefit waiting period will change at renewal.

UNITEDHEALTHCARE/OXFORD: for small groups, the benefit waiting period will automatically change:

• If the existing waiting period exceeds 90 days, it will change to 90 days.
• If it exceeds 60 days with the first of the month administration, it will change to 60 days.
• If it exceeds two months with the first of the following month administration, it will change to two months.

UnitedHealthcare Groups w/51+ employees: the benefit waiting period will change at renewal, and UHC will require the employer to confirm they are in agreement.

We will continue to provide information from the insurers as it becomes available.

Keeping Your Current Health Plan Under the Transitional "Fix" to the Affordable Care Act

President Obama made a 'game-changing' announcement yesterday to the implementation of the health care law that ALL of our small group and individual medical clients need to be aware of, when he stated that Americans MAY keep their current health plan vs. being forced into new Affordable Care Act (ACA) compliant plans in 2014. 

This announcement intends to provide a one-year only transitional period to small groups and individuals who were not going to be able to renew their current medical plans in 2014, as all plans had been cancelled and replaced by ACA compliant ones (so as to include 'Essential Health Benefits' such as pediatric dental and vision, be mapped to ACA defined metallic actuarial tiers--Platinum, Gold, Silver, Bronze, and include rating changes per insured/dependent per age, location, and tobacco in some states) as required by the law. As groups and individuals started receiving notifications from insurers stating they could not keep their current health plan, despite the promise they could when the President rolled out the health care law, the push for this type of late change--be it possibly too late--came to the forefront. 

To clarify, none of the small group medical policyholders in NJ, PA or NY were going to be allowed to keep their current plans as all were developed prior to the ACA regulations above which go in effect on January 1st; insurers had to launch replacement, compliant plans--and rates to go alongside them (again, per per insured/dependent by age and location, per child up to 3 children under the age of 21, and per child over age 21, with tobacco use factored in to rates in certain states) since rates in the Health Insurance Marketplace must match those outside, to follow the law. The plan changes and ratings that had been rolled out so far showed higher out-of-pocket maximums, meaning higher exposure for insureds, higher rates due to pediatric dental and vision premiums and/or due to age/location rating vs blended group rating, less plan choice flexibility as insurers reduced plan portfolios to manage changes and some insurers opted out of Marketplace participation, and administrative challenges due to rates varying per person within a group.

With this new information, we now have to wait on the state governors and insurance commissioners for response, as the insurers cannot make any decisions until guided at the state level. 

It is likely states could decide to move forward and not change what has already been put into motion to comply with this late amendment, as states like California, Idaho, Kentucky, Virginia and Washington have already announced.

As such, at this time, we urge all policyholders with January renewal dates who wish to keep their current health plans not to make any decisions on electing new ACA compliant plans for January 1st, as we want to be sure to provide the rates, information, and details on whether or not you can keep existing plans before making any plan decisions for the coming year.

If you have already made a request to 'early renew' your plan as of December 1, 2013, we will communicate as soon as we have information as to how such requests will be handled in consideration of yesterday's news.

If you have not done so already, please sign up to follow us on Facebook, Twitter, or LinkedIn, or, please bookmark our News page and check it daily, as we will continue to keep you updated via these outlets as updates are received.

6 Points for Small Businesses to Consider before dropping their Group Health Plan and having employees instead purchase coverage via the individual 'marketplaces' created by the Affordable Care Act (also known as the individual 'exchanges'):

·      Loss of Business Expense Deductions: Employer contributions to a group health plan are deductible business expenses.

·      Added Salary Expenses: If employers drop coverage, employees are likely to request a pay raise to recapture the amount the employer contributed to the cost of group health insurance.

·      Increased Tax Liability: Increased wages raise employer tax liability; FICA and unemployment costs go up when employee wages are increased.

·      Higher Costs: Premiums paid for coverage through the individual marketplace must be paid with post-tax income; this means paying an extra 25%-30%; by contrast, group health insurance premiums can be paid pre-tax which means employee-paid portions of group premiums provide a 25%-30% savings for an employee (and the employer pays lower taxes/FICA/Unemployment as a result paying all on a lower salary).While some employees may qualify for premium subsidies through the individual marketplace, those subsidies will not cover the full cost of coverage. In addition, subsidies are based on total household income resulting in less of a chance for an employee to qualify (and an even lesser chance if they get a raise from the employer to pay premiums!)

·      Decreased Ability to Attract and Retain Employees: Studies show that health insurance is listed as employees’ #1 concern. Employee retention rates might be impacted by employers not offering group coverage--an employee with less income and higher expenses can result in an unhappy employee. 

·      Employers Are Affected Too: A business owner without a group health plan must also purchase individual coverage, often without a subsidy, using post-tax income, and must select a plan option (where there is less choice and plan flexbility, and oftentimes smaller networks) via the marketplace.

The Health Insurance Marketplaces Are Open: What Does It All Mean?

8 things to know about the Health Insurance Marketplaces, which opened today in every state:

• There are 2 Marketplaces in each state: an Individual and Small Employer (called “SHOP”) Marketplace.
• 34 states have Federally-Facilitated Marketplaces (called FFM and FF-SHOP); the remaining states and the District of Columbia are running their own Marketplaces
• The Individual Marketplaces are for individuals wish to purchase health coverage starting January 1st, 2014; the FF-SHOP Marketplaces are open to view plans/rates only, but small employers are not able to purchase a plan online for a 1/1/14 start date until 11/1/13 due to system delays . Further, employers who purchase coverage in the FF-SHOP can only offer 1 plan to all employees vs. offering multiple plans if they purchase coverage outside of the FF-SHOP
• Individual health insurance options purchased via the Marketplace start 1/1/14 so while individuals may wish to view rates and plans today, they may want to wait until late November or early December before finalizing a plan option for 1/1/14, as employment may change or options for coverage may change by that time. Individuals should only be sure to purchase coverage by 12/14/13 if needed for 1/1/14
• Plans and rates in the Marketplace MUST be the same as those available outside of the marketplace; further, plans and rates do not change if you list an agent on your policy or if you don’t list an agent
• If you currently have health insurance through your employer, your spouse’s employer, your parent’s employer, TRICARE, Medicare, or a Veterans’ Health plan, then there’s nothing you need to do. You are covered with ‘minimal essential’ coverage as required by the Affordable Care Act and you will not be assessed a penalty in 2014.
• If you do not have access to affordable, minimal coverage, then you should go to www.healthcare.gov to shop plan options for 1/1/14, as the requirement to have health insurance by 1/1/14 under the Affordable Care Act  likely applies to you. Further, you may be able to qualify for a premium tax credit if your income meets certain standards (meaning the plan may cost you less than the rate you see online) and you may qualify for a cost-share reduction in benefits (meaning you may have better coverage than what the plan you select shows). 
• Individuals and small employers purchasing through the FFM or FF-SHOP who wish to have an agent listed on their policy, which does not cost anything nor does it change the coverage in any way, can list “Lisa Keith of Princeton HR Solutions LLC", as “agent” using NPN 7547222  under the ‘Get Help’ section.

Important Information regarding the "Employee Notice of Coverage Options" per the Affordable Care Act (ACA)

The Department of Labor (DOL) has issued temporary guidance about the Employee Notice of Coverage Options, formerly the "Notice of the Exchange":

• The Notice is applicable to all employers that are subject to the Fair Labor Standards Act (FLSA). This includes most employers, regardless of size.
• Employers must submit the Notice to all current employees by October 1, 2013, and to new hires within 14 days of their employment start date, at least for 2014.
• The Notice must be provided free of charge, in writing, and delivered either by mail or electronically, in accordance with ERISA standards for electronic delivery. 
• The Notice must be provided to all full-time and part-time employees, regardless of whether the employer sponsors coverage or if the employee is enrolled in an employer-sponsored medical plan. 
• The Notice does not need to be sent to dependents.
• The Notice must inform employees that if their plan is not "affordable" or does not meet "minimum value" standards (as set by the ACA), they may be eligible for a subsidy on the Exchange (also referred to as the Marketplace). Employers must indicate on the Notice whether their plan meets these criteria by checking a box that states, “If checked, this coverage meets the minimum value standard, and the cost of this coverage to you is intended to be affordable, based on employee wages.”

For purposes of the Notice, "Minimum Value" can be assessed by using the Dept. of Health and Human Services' (HHS) minimum value calculator. An example of a plan that meets the Minimum Value standard would have a deductible of $5,000, coinsurance of 70%, an Out of Pocket (OOP) maximum of $6,350, and pharmacy coverage. 

"Employer Mandate" also known as 'Play or Pay' of the ACA delayed until 2015

The Dept of Treasury announced late on Tuesday the decision to delay the Employer 'Play or Pay' rules of the Affordable Care Act (ACA) to 2015.

While this is good news for the many employer groups who were not prepared for, familiar with, or ready to implement this provision (that requires groups with 50+ FTEs to provide 'affordable' and 'minimal' coverage or pay a per employee penalty of $2k to $3k per offense), it is important to clarify the only provisions of the ACA to be delayed are as follows:

• 6055: Individual Mandate reporting
• 6056: Play or Pay reporting
• 4980H: Play or Pay Employer rules

The following ACA provisions (among others) continue to apply:

• Individual Mandate:  presumably, the IRS will monitor compliance through self-certification on each individual's tax return

• Marketplace ("Exchange") Notices:  at this time employers are still required to send the marketplace notice to all employees no later than 10/1/13

• Health Insurance Reforms: the reforms such as the maximum 90-day waiting period  that are set to go in effect the 1st of the month during which the plan renews after 1/1/14 all still apply

• PCORI Fee: this is still due at the end of the month if you have a calendar plan year or a plan year that ended October or November 2012.

• Transitional Reinsurance Fee    

• W-2 reporting    

• The limit on Health FSA salary reductions

If you have any questions on the ACA please visit the 'Resources' page of our site or www.healthcare.gov

Federal COBRA, State Continuation, and Medicare as Secondary Payer (MSP): important differences in how small employers must count their workers to determine eligibility

Federal COBRA, State Continuation, and Medicare as Secondary Payer (MSP): important differences in how small employers must count their workers to determine eligibility

Federal COBRA gives certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. Employers with 20 or more employees are usually required to offer COBRA coverage and to notify their employees of the availability of such coverage.  But what if your group has 'around' 20 employees, or, has a mix of full and part-time employees--how do you determine if you are subject to COBRA? According to the US DOL:

Group health plans for employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year are subject to COBRA.  Both full and part-time employees are counted to determine whether a plan is subject to COBRA.  Each part-time employee counts as a fraction on an employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full-time. 

In states like NJ, NY, PA and DE, when a small employer is not subject to Federal COBRA they are instead subject to state continuation provisions which are modeled after COBRA and sometimes provide richer benefits (as in NY where the length of continuation of health coverage is 36 months) or provide a lesser benefit (as in PA where continuation is only 9 months).

In determining if the small employer group health plan is secondary (pays claims second) for Medicare eligible employees and their dependents, the way the small employer counts employees is different, per CMS: 

For beneficiaries age 65 or over who have Group Health Plan (GHP) coverage because of their current employment or their spouse’s current employment, Medicare is the secondary payer. A GHP is any health plan that is for, or contributed to by, an employer of 20 or more employees that provides medical care, directly or through other methods, such as insurance or reimbursement, to current or former employees and their families.


The "20 or more employees" threshold is met when an employer has 20 or more full-time and/or part-time employees for each working day in each of 20 or more calendar weeks in the current calendar year or the preceding calendar year. The 20 calendar weeks do not have to be consecutive. The requirements of the MSP Law are based on the number of employees, not the number of individuals covered under the plan.

It's important to note that for plans that do not meet the above (employers with up to 19 employees) that Medicare is the primary payer for eligible employees and/or their spouses which means they must have both parts A and B active even if continuing to stay on the GHP (for secondary coverage) as otherwise claims for inpatient (part A) or outpatient (part B) will be denied by the GHP.