COBRA New Notice

COBRA New Notice

COBRA New Notice


Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), an individual who was covered by a group health plan on the day before the occurrence of a qualifying event (such as a termination of employment or a reduction in hours that causes loss of coverage under the plan) may be able to elect COBRA continuation coverage upon that qualifying event.  Individuals with such a right are referred to as qualified beneficiaries.

Under COBRA, group health plans must provide covered employees and their families with certain notices explaining their COBRA rights. A group health plan must provide each covered employee and spouse (if any) with a written notice of COBRA rights “at the time of commencement of coverage” under the plan (general notice). A group health plan must also provide qualified beneficiaries with a notice which describes their rights to COBRA continuation coverage and how to make an election (election notice).

General Notice: The general notice must be furnished to each covered employee (and their spouse if covered under the plan) not later than the earlier of: (1) 90 days from the date on which the covered employee or spouse first becomes covered under the plan or, if later, the date on which the plan first becomes subject to the continuation coverage requirements; or (2) the date on which the administrator is required to furnish an election notice to the employee or to his or her spouse or dependent.

Election Notice: The election notice must be provided to the qualified beneficiaries within 14 days after the plan administrator receives notice that a qualifying event has occurred.
Some qualified beneficiaries may want to consider and compare health coverage alternatives to COBRA continuation coverage, such as coverage that is available through the Health Insurance Marketplace (Exchange). Qualified beneficiaries may be eligible for a premium tax credit (a tax credit to help pay for some or all of the cost of coverage in plans offered through the Exchange) and cost-sharing reductions (amounts that lower out-of-pocket costs for deductibles, coinsurance, and copayments), and may find that Exchange coverage is more affordable than COBRA.

The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) specifies that an employer that maintains a group health plan in a State that provides premium assistance for the purchase of coverage under a group health plan is required to notify each employee of potential opportunities currently available for premium assistance in the State in which the employee resides.

The Department of Labor has model notices that plans may use to satisfy the requirement to provide the general notice and election notice under COBRA, and the notice regarding premium assistance under CHIPRA. The COBRA model election notice was revised on May 8, 2013 to help make qualified beneficiaries aware of other coverage options that would soon become available in the Marketplace. Recently the DOL issued a Notice of Proposed Rulemaking, as well as updated versions of the model general notice and model election notice that reflect that the Exchange is now open and that better describes special enrollment rights in Exchange coverage.  The DOL is also issuing a revised CHIPRA notice with similar updates related to Marketplace coverage.

Link to the COBRA model notices:
Link to the CHIPRA model notice:

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COBRA New Notice

COBRA Special Enrollment July

COBRA Special Enrollment July  cobra-insurance

COBRA members have a  special enrollment period extension according to new CMS guidance.  If you have individuals eligible for, or currently enrolled in COBRA you can enroll them on the Individual Exchange through June 30th 2014. Direction from The NY State of Health confirms that current COBRA Eligible Individuals have been granted a one-time open enrollment window.

Therefore, anyone who does not like his or her current COBRA coverage or cost, can now switch to Individual Exchange!

Qualifying Events for Exchange Marketplace after Open Enrollment:

A Special Enrollment Period (SEP) is the time outside of Open Enrollment that allows individuals and families facing special circumstances (Qualifying Life Events) to enroll in a Qualified Health Plan. Eligible individuals have 60 days to enroll after their Qualifying Life Event. 

 Individual or dependent loses minimum essential coverage due to: job loss; employer no longer offers coverage; divorce; death of a spouse; becoming ineligible for Medicaid or Child Health Plus; expiration of COBRA; or health plan is decertified

 Marriage, birth, adoption, or placement for adoption

 Gaining status as a citizen, national, or lawfully present individual

 Consumer is newly eligible or ineligible for tax credits and/or cost sharing reductions

 Permanent move to an area that has different health plan options

 Marketplace staff or contractor enrollment error

 Qualified Health Plan violated a provision of its contract

 American Indians can enroll or change plans one time per month throughout the year

 Other exceptional circumstances, as defined by HHS

To ensure your clients get great health insurance get in Contact us at (855)667-4621!

SEP ACA for Individuals and Families

Find us on the Health Insurance Marketplace where you may qualify for help to pay for your health insurance

Union Plans and Obamacare

Union Plans and Obamacare

The Con Ed lockout this Summer couldn’t come at a more heady time.  I’m not referring to the obvious temperature swelter  but more to the employee health benefits that are at the back bone of virtually every recent Labor dispute.  With the Con Ed dispute, Management’s  has acquiesced on the health insurance .  “Con Ed did accede to “public pressure” on Sunday by reinstating health insurance for the 8,500  members of Local 1-2 of the Utility Workers Union of America, a company spokesman said. The workers have been collecting unemployment benefits for two weeks but had to pay for their own prescription medicine and doctor visits because the company cut off health coverage when the old contract expired, at midnight June 30.”

Interestingly, Unions are major stakeholders in Healthcare as their benefits have been traditionally rich incentives attracting to workers.  However, with A.C.A. (Affordable Care Act) otherwise known as Obamacare their health programs are very much in danger of additional taxation or  member withdrawal.  Unions estimate these provisions will raise the cost of health coverage by an additional $1,000 a year.   In fact, a Union members may fare better on the Individual Mandated Exchange with projected individual direct insurance dropping 70% things will open up.  A lower/middle income member will likely qualify for an additional discount credit.  A more affordable health plan just may be a possibility.

There are other reasons the Individual Health Plan may be better:

  • Unions as other self insured group must now comply with added benefits for  preventive care, maternity care, Age 26 dependent care, pre-existing condition waivers.
  • No Annual Limits on essential benefits by 2014
  • No Lifetime Limits
  • No more mini-med plans – discount health plans are prohibited.  The movie John Q , based on a true story, where a father is told his son’s transplant will not be covered based on th elicited mini-med plan covering him up to $20,000. Large companies such as McDonald’s have also sponsored mini meds.
  • Cadillac Tax – By 2018 a 40% excise tax on health plans that exceed $10,200(single) and $27,500 (family).

The original Cadillac Tax was pushed back by  the behest of Unions to 2018 from the  original proposed 2014 date. Most Unions with generous health care packages would not be complaint within that time frame.

However, not all is grim for Unions.  HHS has issued waivers to 1,625 plans covering 3,914,356 individuals were exempt from these mandates through 2014.  According to Heartland  “More than half of the approximately four million individuals receiving waivers are union members, including 82.9 percent of those covered in the most recently updated list of waivers.”

With current administration posts coming from Union there wouldn’t be much surprise if these allowances continue.  Would it be that bold to predict for Union Members  in 2014  will be allowed to use their  Individual Exchange income tax credits for their Union benefits packages? Small businesses may not be as lucky.


The Health Care Reform Bill

The Health Care Reform Bill


The President earlier today has signed The Health Care and Education Affordability Reconciliation Act of 2010, a historic health care reform that’s been 14 months in the making.  This is after Sunday’s Congressional passage by the slim margins of 219-212.

The Bill for the most part follows the President’s version of the Reform Health Bill which tweaked measures such as elimination of Nebraska’s politically wrangled special  Medicaid deal, delays on Cadillac Tax enactment and the establishment of a new Health Insurance Rate Authority to give guidance and oversight to states and monitor insurance market behavior. “If a rate increase is unreasonable and unjustified, health insurers must lower premiums, provide rebates, or take other actions to make premiums affordable.”  The 21% Medicare cuts to providers were rescinded.

The $940 billion over 10 year bill wont see most significant provisions until 2014.
Here’s a quick rundown of some of the expected changes.

Changes This Year:

  • Children under 19 with certain pre-existing conditions could not be barred from coverage.
  • Dependent children will be allowed to continue coverage on their parents’ plans until age 26 as long as they are not eligible for coverage from an employer. Previously, this applied only to full-time students usually up to the age of 23. Dependents previously dropped because they no longer met the old coverage requirements can be picked up by parents’ plans. At least some insurers will be charging adult children the full rate for an individual rather than including them in the family or employee and child rate. This may or may not be beneficial depending on the situation.
  • Subsidies for Medicare Advantage will be cut but the so called donut hole under the Medicare Drug Plan would be closed. Seniors getting a prescription drug benefit under Medicare will get $250 later this year under the reconciliation bill. And starting this year, Medicare beneficiaries can get some free preventive services like routine cancer screenings.
  • The bill creates a temporary pool for “high risk” uninsured. That is, individuals who currently have no coverage due to a pre-existing condition, and who have been uninsured for at least six months, would qualify for coverage under a government plan until the other provisions regulating coverage for pre-existing conditions kick in.
  • There will be no lifetime limits on coverage paid out under insurance plans.
  • Certain tax credits will also go into effect for small businesses.

Long Term Changes:

  • Some medical devices will be newly taxed. Same with drug makers.
  • Beginning in 2013, income over $200,000 for individuals and $250,000 a year for couples would be hit with a 2.35 percent Medicare payroll tax instead of the existing 1.45 percent rate. Those upper incomes would also see 3.8 percent more in taxes on unearned income such as stock dividends and interest income above the thresholds.
  • By 2013, employers will have to redesign their flexible spending accounts to impose a $2,500 annual limit on contributions. There is no limit now, though employers typically impose limits between $4,000 and $5,000.
  • In 2014, citizens will be required to have acceptable coverage or pay a penalty of $95, $325 in 2015, $695 (or up to 2.5 percent of income) in 2016. Families will pay half the amount for children, up to a cap of $2,250 per family. After 2016, penalties are indexed to Consumer Price Index.
  • in 2014, a new affordability test will kick in that could result in employers facing assessments unless they redesign their plans. If the premium paid by an employee exceeds 9.5% of their income and the employee uses federal health insurance premium subsidies to purchase coverage through new state health insurance exchanges, the employer would have to pay an assessment of $3,000 for that employee.
  • In 2014, employers with at least 50 employees that do not offer coverage will pay a tax of $2,000 for each employee without coverage. However, in determining the assessment, an employer’s first 30 employees would be excluded from the calculation. Taking the case of an employer with 100 employees that did not offer coverage, for example, its assessment would be 70 times $2,000.
  • So-called Cadillac health plans would also get dinged. Employer-sponsored plans worth $10,200 for individuals and $27,500 for families would be hit with a 40% excise tax starting in 2018.

Individual Mandate:

  • All individuals will be required to have health insurance, with some exceptions, beginning in 2014. Those who do not have coverage will be required to pay a yearly financial penalty of the greater of $695 per person (up to a maximum of $2,085 per family), or 2.5% of household income, which will be phased-in from 2014-2016. Exceptions will be given for financial hardship and religious objections; and to American Indians; people who have been uninsured for less than three months; if the lowest cost health plan exceeds 8% of income; and if the individual has income below the poverty level ($10,830 for an individual and $22,050 for a family of four in 2009).
  • Premium subsidies will be provided to families with incomes between 100-400% of the poverty level (or $22,050 to $88,200 for a family of four in 2009) to help them purchase insurance through the Exchanges. These subsidies will be offered on a sliding scale basis and will limit the cost of the premium to between 2% of income for those between 100-133% of the poverty level to 9.8% of income for those between 300- 400% of the poverty level.

Employer Requirements:
There is no employer mandate but employers with more than 50 employees will be assessed a fee of $2000 per full-time employee (excluding the first 30 employees from the assessment)

  • Employers that offer coverage will be required to provide a free choice voucher to employees with incomes below 400% of the poverty level if their share of the premium cost is between 8-9.8% of income and who choose to enroll in a plan in an Exchange. Employers that offer a free choice voucher will not be subject to the above penalty.
  • Large employers (more than 200 employees) that offer coverage will be required to automatically enroll employees into the employer’s lowest cost premium plan if the employee does not sign up for employer coverage or does not opt out of coverage.
  • No employer may impose a waiting period that exceeds 90 days

Small Business Tax Credit

  • Provides a two year tax credit to small businesses (less than 25 employees) with aver annual wages of less than $40,000 that purchase health insurance with the tax credit.
  • For tax years 2010 to 2013, the tax credit would be up to 35% of the employer’s contribution toward the employee’s health insurance premium if the employer contributes at least 50% of the total premium cost.
  • For tax years 2014 and later, for eligible businesses that purchase through the Exchanges, the tax credit would be up to 50% of the employer’s contribution toward the employee’s premium if the employer contributes at least 50% of the employee’s total premium cost.
  • The full credit will be available to employers with 10 or few employees and average annual wages of $25,000 and less, the credit phases out as firm size and wages increase.

American Health Benefit Exchanges

  • States will create the American Health Benefits Exchanges where individuals can purchase insurance and separate exchanges for small employers to purchase insurance. These new marketplaces will provide consumers with information to enable them to choose among plans. Premium and cost-sharing subsidies will be available to make coverage more affordable.
  • subsidies will only be available to those without other coverage or whose share of the premium for coverage offered by an employer exceeds 9.8% of their income. Small businesses with up to 100 employees can purchase coverage through the Exchange.
  • the Office of Personnel Management, which administers the Federal Employees Health Benefit Program, will contract with private insurers to offer at least two multi-state plans in each Exchange, including at least one offered by a non-profit entity. In addition, funds will be made available to establish non-profit, member-run health insurance CO-OPs in each state
  • Plans in the Exchanges will be required to offer benefits that meet a minimum set of standards. Insurers will offer four levels of coverage that vary based on premiums, out-of-pocket costs, and benefits beyond the minimum required plus a catastrophic coverage plan.
  • Premium subsidies will be provided to families with incomes between 100-400% of the poverty level (or $22,050 to $88,200 for a family of four in 2009) to help them purchase insurance through the Exchanges. These subsidies will be offered on a sliding scale basis and will limit the cost of the premium to between 2% of income for those between 100-133% of the poverty level to 9.8% of income for those between 300- 400% of the poverty level.
  • Cost-sharing subsidies will also be available to people with incomes between 100-200% of the poverty level to limit out-of-pocket spending.
  • Broker Role – HHS Secretary is required to “establish procedures under which a State may allow agents and brokers to enroll individuals” in Exchanges.
  • Beginning in 2014, the legislation allows states the option of merging the individual and small group markets within the Exchanges.

A more comprehensive chart is available through NAHU (National Association of health Underwriters).

Several states have already challenged this law as an over extension of Federal powers.  Additionally, the requirement of mandating an individual to buy insurance is not so clear.

Many additional questions will arise such as:

-How will plans with Federal minimum standards reconcile with progressive states like NY that have numerous state mandates already?
-Afterall, a Healthy NY plan can operate commercially without mandates that an ordinary group plan must comply with?
-What happens to community rated states like NY?
-Will they drop this rating methodology altogether?
-Since there will be no longer pre-existing conditions is it just cheaper for an individual to just withdraw pay the penalty and then hop in when in need of coverage?

Lastly and importantly, the bending of the cost curve is weak. There is language, however, on attacking fraud & billing abuses as well successful Pharmaceutical concession for Medicare Part D.  But Rome was not built in a day and this lays the foundation for a path of extending coverage to as many people as possible. Heavy topics such as Tort Reform, exorbitant malpractice insurance, federal medical reimbursements cuts must wait for another day.

COBRA Subsidy Extended AGAIN

COBRA Subsidy Extended AGAIN

President Obama Tuesday night signed into law legislation that provides a stopgap, 31-day extension of federal subsidies of COBRA health care premiums.
The Senate approved this on a 78-19 vote, while the House cleared it last week.

Under H.R. 4691, the 65%, 15-month premium subsidy for laid-off workers is extended to those involuntarily terminated from March 1 through March 31.

Without the extension, employees laid off after Feb. 28 would have been ineligible for the subsidy.

With unemployment at a 25-year high, more than 14 million are eligible for subsidized COBRA, according to Hewitt.

According to USA Today, unemployed workers who signed up in March lost their subsidy on Dec. 1, and thousands more were facing the end of subsidized premiums within the next few weeks.

Additionaly, the measure  will allow employees to receive the subsidy if they first lost group coverage due to a reduction in hours and then were terminated after enactment of the legislation, if certain conditions are met.

The latest extension is just a 31-day stop gap measure. The Senate is currently considering HR 4213, the “American Workers, State, and Business Relief Act,” that would include extending the premium subsidy to employees laid off through December 31, 2010.

Happy 2010!

Happy 2010!

Happy Holidays!

As we enter 2010 we want to include some timely information on year end health reform and its possible impacts.

Right before Christmas, The Senate has passed 60-39 its version of a health care reform bill that, if enacted, will impact your business benefits plan more than any federal law in the past half century.  The Senate’s bill must still be merged with legislation passed by the House before President Obama could sign a final bill in the new year.

Most measures are expected to take place in 2014.  As for the impact on small businesses, The Senate would exempt companies with fewer than 50 workers from having to offer insurance. The House excuses companies with annual payrolls of less than $500,000; firms that are bigger would pay a fee equivalent to a portion of their payroll costs if they don’t offer insurance. That payment would rise to 8 percent of payroll for the largest firms.

Brief Comparison of Senate and House Health Reform Bills

The 10-year, $871 billion health reform bill is designed to extend insurance coverage to 31 million uninsured Americans.

Barring any major changes, the final health care reform bill is expected to:

  • Require most employers to contribute to the cost of employee coverage or pay into a health fund, while small businesses would be exempt or receive tax credits.
  • Require everyone to carry insurance, with discounts for people who cannot afford it and penalties for people who refuse to buy coverage.
  • Create a new marketplace or “Exchange” for individuals and small businesses to comparison-shop for insurance.
  • Levy a new excise tax on high-value health plans.
  • Provide insurance discounts for those earning less than 400 percent of the federal poverty level (about $73,000 for a family of three).
  • Impose new restrictions on insurance practices, such as prohibiting the denial of coverage because of pre-existing conditions, and increase the Medicare payroll tax on high-income people.

Most of these changes will likely be phased in beginning of 2013 and continue up until 2016, although changes to health care Flexible Spending Accounts could occur in 2011. The legislation would place an annual limit of $2,500 on the amount of funds employees can contribute to FSAs.

For more on specifics and timing of the pending legislation, please see Health Care Reform Frequently Asked Questions for employers by clicking here.

It’s important to remember that any dramatic changes would not be immediate. However, there are some things employers can do right now in preparation for the passage of a bill. The most important of these are to stay informed, follow developments and involve your benefits staff and partners.

Employers may also want to begin evaluating their employee demographics and assessing their current health plan design.

  • Do you have a balanced health care plan?
  • Will you be subjected to the 40% “Cadillac Tax”?
  • Will you be subject to pay or play penalties?
  • Can you take advantage of Exchange options if low-income employees would receive greater subsidies?
  • What would be the overall impact to your budget?

Health care reform is estimated to cost between $890 billion and $1 trillion over 10 years. It would be paid for by a combination of savings to Medicare and Medicaid, along with new sources of revenue from tax changes.

Once a bill is signed into law, we will help our clients with the practical implications of the legislation and its potential impact to organizations.

Our agency has strived to be ahead of the curve and keep our clients within budget regardless. We realize your organization – now more than ever – needs up-to-date information, industry-leading expertise and the assurance a reliable benefits partner can bring to your business.   We thank you all for reading our material, referring us business and most of all believing in us!

Once again thank you and we wish you and your family a wonderful Holiday Season!