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FEDERAL JAN 2024  SMALL GROUP ANNUAL OPEN ENROLLMENT WAIVER

FEDERAL JAN 2024 SMALL GROUP ANNUAL OPEN ENROLLMENT WAIVER

Federal Open Enrollment (FOE)

Great news, during FOE groups will not be subject to any enrollment participation requirements!

FOE will run from 11/15 through 12/15. ​See below for submission timelines:

  • 12/1 effective date groups must be entered by 11/24
  • 1/1 effective date groups must be entered by 12/15​

A little-known requirement but most important under the Affordable Care Act (ACA) is that Health Insurers must waive their minimum employer-contribution and employee-participation rules once a year. ACA requires a one-month Special Open Enrollment Window for January 1st coverage.

The special open enrollment period occurs November 15th through December 15th of each year, allowing eligible small group employers to enroll for coverage effective January 1st of the following year.

Background

The ACA has a section in it called the “guaranteed issuance of coverage in the individual and group market.” It stipulates that “each health insurer that offers health insurance coverage in the individual or group market in the state must accept every employer and individual in the state that applies for such coverage.” The section also states that this guaranteed issuance of coverage can only be offered during (special) open enrollment periods and that plans can only be offered to applicants that live in, work in, or reside in the plan’s service area(s).

Participation and Contribution Requirements

In many states (including California and Nevada), carriers can decline to issue group health coverage if fewer than 70% of employees elect to enroll in coverage. Some carriers may have even tighter participation requirements.

Generally speaking, employees with other coverage (Medicare, other group coverage, individual coverage through the Exchange, etc.) are removed from the participation requirement calculation – though it varies by insurance carrier.

Furthermore, employer contribution rules require employers to contribute a certain percentage of premium costs for all employees in order to attain group health coverage. Some businesses struggle to meet these contribution requirements for a variety of financial reasons.

Problem Solved: Special Open Enrollment Period

Many employers want to offer coverage to their employees but are denied because they struggle to meet participation and/or contribution requirements. Employers cannot force employees to enroll in coverage unless the employer pays for 100% of the employees’ premiums, which many employers cannot afford. Even with moderate to generous employer contributions, many employers still find young and lower-income employees waiving coverage. 

The U.S. Department of Health & Human Services provides final guidance on this in regulation 147.104(b)(1): “In the case of health insurance coverage offered in the small group market, a health insurance issuer may limit the availability of coverage to an annual enrollment period that begins November 15 and extends through December 15 of each year in the case of a plan sponsor that is unable to comply with a material plan provision relating to employer contribution or group participation rules.”

If your employer groups are struggling with participation and/or contribution, the Special Open Enrollment Window is the time to enroll them in coverage.

For more help with the Special Open Enrollment Window contact us at info@medicalsolutionscorp.com or (855)667-4621.

Put You & Your Employees in Good Hands

Get In Touch

For more information on PEOs or a customized quote please submit your contact. We will be in touch ASAP.

2024 Open Enrollment Checklist

2024 Open Enrollment Checklist

2024 Open Enrollment Checklist

To download this entire document as a PDF, click here: Open Enrollment eBook

This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice.  Readers should contact legal counsel for legal advice. 

In preparation for open enrollment, Employers should review their plan documents in light of changes for the plan year beginning Jan 1, 2024. Below is an Employer 2024 Open Enrollment Checklist including some administrative items to prepare for in 2024.

Change has been constant for employer plans in the last few years. Unfortunately, 2023 was no exception. As they prepare for 2024 open enrollment, employers must incorporate new requirements affecting the design and administration of their health plans for plan years beginning on or after Jan. 1, 2024. Those changes include items that are adjusted for cost of living changes each year, – e.g., the cost-sharing limits for high deductible health plans (HDHPs), contribution limits to health savings accounts (HSAs), as well as new requirements due to legislative and regulatory updates, such as the expiration of COVID-19 mandates, to name a few.

Employers should ensure their health plan is updated and communicate benefit changes to participants through an updated summary plan description (SPD) or a summary of material modifications (SMM) for the 2024 plan year.

As a general best practice, employers should confirm that their open enrollment materials contain certain required participant notices and consider including some periodic notices, such as the Medicare Part D creditable/non-creditable coverage notice, in their open enrollment materials.

PLAN DESIGN CHANGES

ACA Mandates 

Affordability Requirements 

Under the ACA’s employer shared responsibility rules (the “pay or play” rules), applicable large employers (ALEs) (those with 50 or more full-time employees or the equivalent) are required to offer affordable, minimum value health coverage to their full-time employees (and dependent children) or risk paying a penalty. 

Under the ACA, an ALE’s health coverage is considered affordable if the employee’s required contribution to the plan does not exceed 9.5% of the employee’s household income for the taxable year (as adjusted each year). The adjusted percentage is 9.12% for 2023.

The affordability percentage for plan years that begin on or after Jan. 1, 2024, will be 8.39%.  That is another reduction demonstrating the need for ALEs to monitor the affordability percentage each year so they can confirm that at least one of the health plans offered to full-time employees satisfies the ACA’s affordability standard (typically by the use of one of the optional safe harbors – federal poverty level, W-2 or rate of pay).

Out-of-pocket Maximum

Under the ACA, non-grandfathered health plans (which apply to almost all employer plans) are subject to limits on cost sharing for essential health benefits. Confirm that out-of-pocket maximum limits for your health plan comply with the ACA’s limits for the 2024 plan year. 

Plan years beginning on or after Jan. 1, 2024:

  • $9,450 for self-only coverage
  • $18,900 for family coverage

Note, the out-of-pocket maximum limits for HDHPs compatible with HSAs must be lower than the ACA’s limits. For the 2024 plan year, the out-of-pocket maximum limits for HDHPs are $8,050 for self-only coverage and $16,100 for family coverage. 

Preventive Care Benefits 

doctor examining a baby being held by mother

The ACA requires non-grandfathered health plans to cover certain preventive health services without imposing cost-sharing requirements (e.g., deductibles, copayments, or coinsurance) when in-network healthcare providers supply the services. The preventive care services covered by the requirements are based on the following:

  • Evidence-based items or services that have a rating of A or B in the current recommendations of the United States Preventive Services Task Force (USPSTF).
  • Immunizations for routine use in children, adolescents, and adults that are currently recommended by the Centers for Disease Control and Prevention.
  • Evidence-informed preventive care and screenings are included in the Health Resources and Services Administration (HRSA) guidelines for infants, children, and adolescents.
  • Evidence-informed preventive care and screenings are included in HRSA-supported guidelines for women.

There needs to be some clarity. An ongoing court case has raised some uncertainty about using the USPSTF recommendations. However, guidance from federal agencies will permit employers to use those factors without the risk of penalties for the time being. Therefore, employers should monitor future developments regarding the ACA’s preventive care mandate, which is expected by the end of 2023.

Coverage For COVID-19 Vaccines, Testing And Treatment

Because the COVID-19 public health emergency has ended (see Alert here), health plans are no longer required to cover COVID-19 diagnostic tests and related services without cost sharing or other medical management requirements. Health plans are still required to cover recommended preventive services (under the ACA requirements), including COVID-19 immunizations, without cost sharing, but this coverage requirement can now be limited to in-network providers.

 

patient getting temperature taken by doctor

For plan years ending after Dec. 31, 2024, an HSA-compatible HDHP is no longer permitted to provide COVID-19 testing and treatment benefits without a deductible (or with a deductible below the minimum deductible for an HDHP). Therefore, employers should

  • Determine whether health plans will impose cost-sharing requirements, prior authorization, or other medical management requirements on COVID-19 testing for the upcoming plan year.
  • Determine whether health plans will continue covering COVID-19 immunizations without cost sharing from all healthcare providers or whether this first-dollar coverage will be limited to in-network providers.
  • Confirm that HDHPs that do not have a calendar year as the plan year will not pay benefits for COVID-19 testing and treatment before the annual minimum deductible has been met for plan years ending after Dec. 31, 2024.
  • Notify plan participants of any changes for the 2024 plan year regarding COVID-19 testing and vaccines through an updated SPD or SMM.

Health FSA Contributions

The IRS issued a memorandum on claims substantiation (see Article here) for health FSAs. The memorandum clarifies that health FSA expenses are not considered properly substantiated if employees self-certify expenses, if the plan uses sampling, if only amounts over a certain level are substantiated, or if charges from favored providers are not substantiated. Employers should, therefore, review the health FSA substantiation procedures to make sure they comply with IRS rules. 

HDHP and HSA Limits for 2024

2024 Health Savings Account Limits announced

If you offer an HDHP to your employees that is compatible with an HSA, you should confirm that the HDHP’s minimum deductible and out-of-pocket maximum comply with the 2020 limits. The IRS limits for HSA contributions and HDHP cost-sharing increase for 2024. The HSA contribution limits will increase effective Jan. 1, 2024, while the HDHP limits will increase effective for plan years beginning on or after Jan. 1, 2024.

  • Check whether your HDHP’s cost-sharing limits need to be adjusted for the 2024 limits.
  • If you communicate the HSA contribution limits to employees as part of the enrollment process, these enrollment materials should be updated to reflect the increased limits that apply for 2024.

The following table contains the HDHP and HSA limits for 2024 as compared to 2023. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.

Type of Limit20242023Change
HSA Contribution LimitSelf-only$4,150$3,850Up $300
Family$8,300$7,750Up $550
HSA Catch-up Contributions (not subject to adjustment for inflation)Age 55 or older$1,000$1,000No change
HDHP Minimum DeductibleSelf-only$1,600$1,500Up $100
Family$3,200$3,000Up $200
HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums)Self-only$8,050$7,500Up $550
Family$16,100$15,000Up $1,100

HDHP Design Option – Telehealth  

At the beginning of the COVID-19 pandemic, Congress temporarily relaxed the rules for HDHPs to allow them to provide benefits for telehealth or other remote care services before plan deductibles were met without jeopardizing HSA eligibility.  That relaxed rule currently applies for plan years beginning before Jan. 1, 2025. 

  • Determine whether HDHPs will waive the deductible for telehealth services for the plan year beginning in 2024
  • Communicate plan changes for the upcoming year to participants through an updated SPD or SMM

Mental Health Parity – Required Comparative Analysis For NQTLs  

The Mental Health Parity and Addiction Equity Act (MHPAEA) requires parity between a group health plan’s medical/surgical benefits and its mental health or substance use disorder (MH/SUD) benefits. These parity requirements apply to financial requirements and treatment limits for MH/SUD benefits. In addition, any nonquantitative treatment limitations (NQTLs) placed on MH/SUD benefits must comply with MHPAEA’s parity requirements. For example, NQTLs include prior authorization, step therapy protocols, network adequacy, and medical necessity criteria. 

MHPAEA requires health plans and issuers to conduct comparative analyses of the NQTLs used for medical/surgical benefits compared to MH/SUD benefits. This analysis must contain a detailed, written, and reasoned explanation of the specific plan terms and practices and include the basis for the plan or issuer’s conclusion that the NQTLs comply with MHPAEA. Plans and issuers must make their comparative analyses available to specific federal agencies or applicable state authorities upon request. 

  • Employers should request that health plan issuers (or third-party administrators) confirm that comparative analyses of NQTLs will be updated, if necessary, for the plan year beginning in 2024 and make the analysis available to the employee.

Open Enrollment Notices

Employers who sponsor group health plans should provide certain benefits notices in connection with their open enrollment periods. Some of these notices must be provided at open enrollment time, such as the Summary of Benefit and Coverage (SBC). Other notices, such as the WHCRA notice, must be distributed annually. Although these annual notices may be provided at different times throughout the year, employers often include them in their open enrollment materials for administrative convenience. 

In addition, employers should review their open enrollment materials to confirm that they accurately reflect the terms and cost of coverage. In general, any plan design changes for 2024 should be communicated to plan participants through an updated SPD or an SMM. 

Summary Of Benefits And Coverage


The ACA requires health plans and health insurance issuers to provide an SBC to applicants and enrollees each year at open enrollment or renewal. Federal agencies have provided a template for the SBC, which health plans must use. 

  • Note that for self-funded plans, the plan administrator is responsible for providing the SBC. For insured plans, the issuer usually prepares the SBC. If the issuer prepares the SBC, an employer is not required to also prepare an SBC for the health plan, although the employer may need to distribute the SBC prepared by the issuer. 

Medicare Part D Notices

Group health plan sponsors must provide a notice of creditable or non-creditable prescription drug coverage to Medicare Part D-eligible individuals covered by, or who apply for, prescription drug coverage under the health plan. The notice alerts the individuals about whether their prescription drug coverage is at least as good as Medicare Part D coverage. The notice generally must be provided at various times that cannot always be anticipated, including when an individual enrolls in the plan and each year before Oct. 15 (when the Medicare annual open enrollment period begins). Therefore, the best practice is to provide it annually at open enrollment, as that will ensure timely compliance. Model notices are available on the Centers for Medicare and Medicaid Services’ website

Annual CHIP Notices 

Group health plans covering residents in a state that provides a premium subsidy to low-income children and their families to help pay for employer-sponsored coverage must send an annual Children’s Health Insurance Program (CHIP) notice about the available assistance to all employees in that state. The U.S. Department of Labor (DOL) has provided a model notice.

Initial COBRA Notices 

 COBRA applies to employers with 20 or more employees who sponsor group health plans. Group health plan administrators must provide an initial COBRA notice to new participants and certain dependents within 90 days after plan coverage begins. The initial COBRA notice may be incorporated into the plan’s SPD. Because the COBRA election-period will not start until this notice is provided, it is helpful to many employers to include a copy in the open enrollment materials as a backup. 

woman holding a small cartoon heart over her chest

Notices Of Patient Protections 

Under the ACA, group health plans and issuers that require the designation of a participating primary care provider must permit each participant, beneficiary, and enrollee to designate any available participating primary care provider (including a pediatrician for children). Additionally, plans and issuers that provide obstetrical/gynecological care and require a designation of a participating primary care provider may not require preauthorization or referral for such care. If a health plan requires participants to designate a participating primary care provider, the plan or issuer must provide a notice of these patient protections whenever the SPD or similar description of benefits is provided to a participant. If an employer’s plan is subject to this notice requirement, they should confirm that it is included in the plan’s open enrollment materials. This notice may be included in the plan’s SPD. Model language is available from the DOL. 

Grandfathered Plan Notices 

If an employer has a grandfathered plan, they should include information about its grandfathered status in plan materials describing the coverage under the plan, such as SPDs and open enrollment materials. Model language is available from the DOL. 

Notices Of HIPAA Special Enrollment Rights 

At or before enrollment, an employer’s group health plan must provide each eligible employee with a notice of their special enrollment rights under HIPAA. This notice may be included in the plan’s SPD.

HIPAA Privacy Notices  

The HIPAA Privacy Rule requires covered entities (including group health plans and issuers) to provide a Notice of Privacy Practices (or Privacy Notice) to everyone who is the subject of protected health information (PHI). Health plans are required to send the Privacy Notice at certain times, including to new enrollees at the time of enrollment. Also, at least once every three years, health plans must either redistribute the Privacy Notice or notify participants that the Privacy Notice is available and explain how to obtain a copy. Self-insured health plans are required to maintain and provide their own Privacy Notices. However, special rules apply for fully insured plans, where the health insurance issuer, not the plan itself, is primarily responsible for the Privacy Notice.

woman holding a piece of paper with "HIPPA" on it

Special Rules for Fully Insured Plans 

The plan sponsor of a fully insured health plan has limited responsibilities with respect to the Privacy Notice, including the following:

  • If the sponsor of a fully insured plan has access to PHI for plan administrative functions, they are required to maintain a Privacy Notice and to provide the notice upon request.
  • If the sponsor of a fully insured plan does not have access to PHI for plan administrative functions, they are not required to maintain or provide a Privacy Notice.
  • A plan sponsor’s access to enrollment information, summary health information, and PHI that is released pursuant to a HIPAA authorization does not qualify as having access to PHI for plan administration purposes.

Model Privacy Notices are available through the Department of Health and Human Services.

WHCRA Notices 

Plans and issuers must provide notice of participants’ rights to mastectomy-related benefits under the WHCRA at the time of enrollment and annually. The DOL’s compliance assistance guide includes model language for this disclosure.

SARs 

Plan administrators required to file  Form 5500 must provide participants with a narrative summary of the information in Form 5500, called a summary annual report (SAR). A model notice is available from the DOL. 

Group health plans that are unfunded (that is, benefits are payable from the employer’s general assets and not through an insurance policy or trust) are not subject to the SAR requirement. The plan administrator generally must provide the SAR within nine months of the close of the plan year. If an extension of time to file Form 5500 is obtained, the plan administrator must furnish the SAR within two months after the close of the extension period. 

Wellness Program Notices 

Group health plans that include wellness programs may be required to provide certain notices regarding the program’s design. As a general rule, these notices should be provided when the wellness program is communicated to employees and before employees provide any health-related information or undergo medical examinations. These notices are required in the following situations:

  • HIPAA Wellness Program Notice—HIPAA imposes a notice requirement on health-contingent wellness programs offered under group health plans. Health-contingent wellness plans require individuals to satisfy standards related to health factors (e.g., not smoking) to obtain rewards. The notice must disclose the availability of a reasonable alternative standard to qualify for the reward (and, if applicable, the possibility of waiver of the otherwise applicable standard) in all plan materials describing the terms of a health-contingent wellness program. The DOL’s compliance assistance guide includes a model notice that can be used to satisfy this requirement.
  • ADA Wellness Program Notice—Employers with 15 or more employees are subject to the Americans with Disabilities Act (ADA). Wellness programs that include health-related questions or medical exams must comply with the ADA’s requirements, including an employee notice requirement. Employers must give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared, and for what purpose, as well as the limits on disclosure and the way information will be kept confidential. The U.S. Equal Employment Opportunity Commission (EEOC) has provided a sample notice to help employers comply with this ADA requirement.

ICHRA Notices 

Employers may use individual coverage HRAs (ICHRAs) to reimburse their eligible employees for insurance policies purchased in the individual market or Medicare premiums. Employers with ICHRAs must notify eligible participants about the ICHRA and its interaction with the ACA’s premium tax credit. In general, this notice must be provided at least 90 days before the start of each plan year. Employers may provide this notice at open enrollment time if it is at least 90 days before the beginning of the plan year. A model notice is available for employers to use to satisfy this notice requirement.

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Enhance Your Employee Benefits Package.  A competitive benefits package is key to keeping and attracting top talent.  Assess your current benefits package and consider making necessary adjustments to include options, such as expanded mental health support, for example. 

GENERAL HR  

Review Employee Records.  The fourth quarter is a good time to review your employee records and check record retention guidelines. Don’t forget to dispose of outdated termination and outdated job applications properly. With W2s around the corner, make sure all addresses and information are updated.

Develop and Distribute Your 2024 Calendar.  Create and distribute a calendar outlining important dates, vacation time, pay dates, and company-observed holidays for 2024. 

Review and Update Employee Handbook. Review your employee handbook to make sure it is up-to-date and addresses areas, such as employment law mandates, new COVID-related policies, guidelines for remote working, privacy policies, compensation and performance reviews, social media policies, attendance, and time-off, break periods, benefits, and procedures for termination, discipline, workplace safety, and emergency procedures.

PLEASE NOTE: This Checklist is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. This information is for general reference purposes only. Because laws, regulations, and filing deadlines are likely to change, please check with the appropriate organizations or government agencies for the latest information and consult your employment attorney and/or benefits advisor regarding your responsibilities. In addition, your business may be exempt from certain requirements and/or be subject to different requirements under the laws of your state. (Updated Sept 3, 2023)

Contact us at (855) 667-4621 or email us at info@medicalsolutionscorp.com

 

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NYS DFS 2024 Rates Approved

NYS DFS 2024 Rates Approved

Earlier today, the long-awaited NYS Dept of Financial Services approved 2024 health insurance rate requests. And it was worth it with small groups stabilized.  Small group rates increased by 7.4% and  12.4% for individuals.

As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers. Despite only 3 months of mature claims data experience for 2023  health insurers’ original requests were noticeably above the average of 22%/individuals and 15.3% for small groups.

State Department of Financial Services officials asserted the rising cost of medical care — including in-patient hospital stays and rapid increases in drug prices — continued to be the main driver of health insurance premium increases. The final approved rates for 2024 would keep health insurers’ profit provisions at 1%, state officials added, noting they sought to limit those returns in light of ongoing inflationary pressures harming consumers. That said, in anticipation of spikes in claims submissions + overall inflation, a larger-than-average increase is needed. This is in addition to increases in pricing by hospitals, consolidated IPA groups, and pharmaceuticals.

Rate Factors

The state noted that the premiums increase main drivers are medications.  “Rising medical costs and inflation continue to put upward pressure on premiums,” said Superintendent Harris. “With our rate actions announced today, we continue to prioritize the financial well-being of consumers while ensuring that New Yorkers have access to a robust, stable health insurance market.”  Also, DFS, recognizing the continued uncertainty of the pandemic’s effect on consumers’ healthcare costs and the economy, held insurers’ profit provisions to a low 1%. 

Health Insurers

Oxford/Unitedhealthcare, notably, got only a 4.7% rate increase approval for next year. This is a sharp reduction from the original 15.5% request in part to disagreed anticipated costs, held reserves, overall market pricing, and reinsurance gained from ACA’s Risk Corridor.  See more info here, https://medicalsolutionscorp.com/risk-adjustment-reinsurance-and-risk-corridors/.

Small Group Market   

Almost 800,000 New Yorkers are enrolled in small group plans, which cover employers with up to 100 employees. Insurers requested an average rate increase of 15.3% in the small group market, which DFS cut by 52% to 7.4% for 2024, saving small businesses $607 million. A number of small businesses also will be eligible for tax credits that may lower those premium costs even further, such as the Small Business Health Care Tax Credit.

DFS SMALL GROUP MARKET RATE ACTIONS   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*Indicates the Company will offer products on the NY State of Health Marketplace in 2024.

PEO Alternatives to Small Group

Before you consider renewing automatically, you should first find out what is a PEO so that you can know exactly what to expect from it. PEOs are large-group markets underwritten.  With the right PEO, you will be able to manage your business’s demand for growth and your employees as well.

Clients on average save 15-40% off the small group market. If you are looking for a complete insurance solution for your business, go to our website and check out our business insurance solutions. Contact us for more information today.

Learn how a PEO can make a difference for your group. For more information on how Employer-Sponsored Insurance and a PEO can make a difference for your small business please contact us at info@medicalsolutionscorp.com or 855-667-4621.

 

 

 

 

Put You & Your Employees in Good Hands

Get In Touch

For more information on PEOs or a custiomized quote please submit your contact. We will be in touch ASAP. 

2024 Open Enrollment Checklist

2023 Open Enrollment Checklist

2023 Open Enrollment Checklist

To download this entire document as a PDF, click here: Open Enrollment eBook

This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice.  Readers should contact legal counsel for legal advice. 

In preparation for open enrollment, Employers should review their plan documents in light of changes for the plan year beginning Jan 1, 2023. Below is an Employer 2023 Open Enrollment Checklist including some administrative items to prepare for in 2023. 

Health plan sponsors should also confirm that their open enrollment materials contain certain required participant notices, when applicable—for example, the summary of benefits and coverage (SBC). There are also some participant notices that must be provided annually or upon initial enrollment. To minimize costs and streamline administration, employers should consider including these notices in their open enrollment materials.

PLAN DESIGN CHANGES

Out-of-pocket Maximum

Effective for plan years beginning on or after Jan. 1, 2014, non-grandfathered health plans are subject to limits on cost-sharing for essential health benefits (EHB). The ACA’s out-of-pocket maximum applies to all non-grandfathered group health plans, including self-insured health plans and insured plans.

  • $9,100 for self-only coverage and $18,200 for family coverage out-of-pocket maximum.
  •  $7,500 for self-only coverage and $15,000 for family coverage HSA Maximum.

Preventive Care Benefits 

The ACA requires non-grandfathered health plans to cover certain preventive health services without imposing cost-sharing requirements (that is, deductibles, copayments or coinsurance) for the services. Health plans are required to adjust their first-dollar coverage of preventive care services based on the latest preventive care recommendations. If you have a non-grandfathered plan, you should confirm that your plan covers the latest recommended preventive care services without imposing any cost-sharing.  

More information on the recommended preventive care services is available through the U.S. Preventive Services Task Force and www.HealthCare.gov.

Health FSA Contributions

The ACA imposes a dollar limit on employees’ salary reduction contributions to a health flexible spending account (FSA) offered under a cafeteria plan. An employer may impose its own dollar limit on employees’ salary reduction contributions to a health FSA, as long as the employer’s limit does not exceed the ACA’s maximum limit in effect for the plan year. 

The ACA set the health FSA contribution limit at $2,500. For years after 2013, the dollar limit is indexed for cost-of-living adjustments. For 2023 plan years, the health FSA limit is $3,050. The DFSA Rollover Maximum is $610. 

  • Communicate the health FSA limit to employees as part of the open enrollment process.

HDHP and HSA Limits for 2023

If you offer an HDHP to your employees that is compatible with an HSA, you should confirm that the HDHP’s minimum deductible and out-of-pocket maximum comply with the 2020 limits. The IRS limits for HSA contributions and HDHP cost-sharing increase for 2023. The HSA contribution limits will increase effective Jan. 1, 2023, while the HDHP limits will increase effective for plan years beginning on or after Jan. 1, 2023.

  • Check whether your HDHP’s cost-sharing limits need to be adjusted for the 2023 limits.
  • If you communicate the HSA contribution limits to employees as part of the enrollment process, these enrollment materials should be updated to reflect the increased limits that apply for 2023.

The following table contains the HDHP and HSA limits for 2023 as compared to 2022. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.

Type of Limit20232022Change
HSA Contribution LimitSelf-only$3,850$3,650Up $50
Family$7,750$7,300Up $100
HSA Catch-up Contributions (not subject to adjustment for inflation)Age 55 or older$1,000$1,000No change
HDHP Minimum DeductibleSelf-only$1,500$1,400No change
Family$3,000$2,800No change
HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums)Self-only$7,500$7,050Up $50
Family$15,000$14,100Up $100

 

ACA EMPLOYER MANDATE AND OTHER REQUIREMENTS 

 

Applicable Large Employer Status (ALE)

Under the ACA’s employer penalty rules, applicable large employers (ALEs) that do not offer health coverage to their full-time employees (and dependent children) that is affordable and provides minimum value will be subject to penalties if any full-time employee receives a government subsidy for health coverage through an Exchange.

To qualify as an ALE, an employer must employ, on average, at least 50 full-time employees, including full-time equivalent employees (FTEs), on business days during the preceding calendar year. All employers that employ at least 50 full-time employees, including FTEs, are subject to the ACA’s pay or play rules.

  • Determine your ALE status for 2023
  • Calculate the number of full-time employees for all 12 calendar months of 2022. A full-time employee is an employee who is employed on average for at least 30 hours of service per week.
  • Calculate the number of FTEs for all 12 calendar months of 2022 by calculating the aggregate number of hours of service (but not more than 120 hours of service for any employee) for all employees who were not full-time employees for that month and dividing the total hours of service by 120.
  • Add the number of full-time employees and FTEs (including fractions) calculated above for all 12 calendar months of 2022.
  • Add up the monthly numbers from the preceding step and divide the sum by 12. Disregard fractions.
  • If your result is 50 or more, you are likely an ALE for 2023.

Identify Full-time Employees

All full-time employees must be offered affordable minimum-value coverage.  A full-time employee is an employee who was employed on average at least 30 hours of service per week. The final regulations generally treat 130 hours of service in a calendar month as the monthly equivalent of 30 hours of service per week. The IRS has provided two methods for determining full-time employee status—the monthly measurement method and the look-back measurement method.

  • Determine which method you are going to use to determine full-time status
  • The monthly measurement method involves a month-to-month analysis where full-time employees are identified based on their hours of service for each month. This method is not based on averaging hours of service over a prior measurement method. Month-to-month measuring may cause practical difficulties for employers, particularly if there are employees with varying hours or employment schedules, and could result in employees moving in and out of employer coverage on a monthly
  • The look-back measurement method allows an employer to determine full-time status based on average hours worked by an employee in a prior period. This method involves a measurement period for counting/averaging hours of service, an administrative period that allows time for enrollment and disenrollment, and a stability period when coverage may need to be provided, depending on an employee’s average hours of service during the measurement 

Audit FTEs for FMLA Compliance

Audit your FTEs to determine if you have reached or exceeded 50 employees and are required to comply with the Family Medical Leave Act (FMLA) in 2022. Employers covered by the FMLA are obligated to provide their employees with certain important FMLA notices, so both employees and the employer have a shared understanding of the terms of the FMLA leave. Note that FMLA compliance requirements are different from ACA compliance. 

Offer of Coverage 

An ALE may be liable for a penalty under the pay or play rules if it does not offer coverage to “substantially all” (95%) full-time employees (and dependents) and any one of its full-time employees receives a premium tax credit or cost-sharing reduction for coverage purchased through an Exchange. For employees who are offered health coverage that is affordable and provides minimum value are generally not eligible for these Exchange subsidies.  The IRS lowered the 2023 employer health plan affordability threshold, or cost-sharing limit, to 9.12% of an employee’s income. The threshold in 2022 was 9.61%. 

  • Offer minimum essential coverage to all full-time employees
  • Ensure that at least one of those plans provides minimum value (60% actuarial value)
  • Ensure that the minimum value plan offered is affordable to all full-time employees by ensuring that the employee contribution for the lowest cost single minimum value plan does not exceed 78% of an employee’s earnings based on the employee’s W-2 wages, the employee’s rate of pay, or the federal poverty level for a single individual.

Reporting of Coverage

The ACA requires ALEs to report information to the IRS and to employees regarding employer-sponsored health coverage on Form 1095-C. The IRS will use the information that ALEs report to verify employer-sponsored coverage and to administer the employer-shared responsibility provisions (Code Section 6056).

In addition, the ACA requires every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs and any other entity that provides minimum essential coverage (MEC) to file an annual return with the IRS and individuals reporting information for each individual who is provided with this coverage (Code Section 6055). 

  • Determine which reporting requirements apply to you and your health plans
  • Determine the information you will need for reporting and coordinate internal and external resources to help compile the required data for the   1094-C and 1095-C
ACA RequirementDeadline
1095 forms delivered to employeesJan. 31 (extended to March 2)
Paper filing with IRS*Feb. 28
Electronic filing with IRSMarch 31

Comparative Effectiveness Research Fee (PCORI)

Sponsors of self-funded plans and health insurance issuers of fully insured plans are required to pay a fee each year, by July 31st, to fund comparative effectiveness research. Fees will increase to $2.45 per covered life in 2021 and are next due July 31, 2022.

W-2 Reporting

Healthcare Reform requires employers to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2. This reporting requirement was originally effective for the 2011 tax year. However, the IRS later made reporting optional for 2011 for all employers.

The IRS further delayed the reporting requirement for small employers (those that file fewer than 250 Forms W-2) by making it optional for these employers until further guidance is issued. For the larger employers, the reporting requirement was mandatory for the 2012 Forms W-2 and continues.

ACA DISCLOSURE REQUIREMENTS

Summary of Benefits and Coverage 

The ACA requires health plans and health insurance issuers to provide an SBC to applicants and enrollees to help them understand their coverage and make coverage decisions. Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including those who are newly eligible for coverage and special enrollees).

The SBC template and related materials are available from the Department of Labor (DOL).

  • In connection with a plan’s 2023 open enrollment period, the SBC should be included with the plan’s application materials. If coverage automatically renews for current participants, the SBC must generally be provided no later than 30 days before the beginning of the new plan year.
  • For self-funded plans, the plan administrator is responsible for providing the SBC. For insured plans, both the plan and the issuer are obligated to provide the SBC, although this obligation is satisfied for both parties if either one provides the SBC. Thus, if you have an insured plan, you should confirm that your health insurance issuer will assume responsibility for providing the SBCs.
  • SBCs must be given to anyone who enrolls in benefits, during or outside of open enrollment.. Generally, provide no later than 30 days before the start of the plan year.
  • Self-funded plans: Plan sponsor is responsible for SBC distribution.

Grandfathered Plan Notice

If you have a grandfathered plan, make sure to include information about the plan’s grandfathered status in plan materials describing the coverage under the plan, such as SPDs and open enrollment materials. Model language is available from the DOL. 

Notice of Patient Protections

Under the ACA, non-grandfathered group health plans and issuers that require designation of a participating primary care provider must permit each participant, beneficiary and enrollee to designate any available participating primary care provider (including a pediatrician for children). Also, plans and issuers that provide obstetrical/gynecological care and require a designation of a participating primary care provider may not require preauthorization or referral for obstetrical/gynecological care.

If a non-grandfathered plan requires participants to designate a participating primary care provider, the plan or issuer must provide a notice of these patient protections whenever the SPD or similar description of benefits is provided to a participant. If your plan is subject to this notice requirement, you should confirm that it is included in the plan’s open enrollment materials. Model language is available from the DOL.

 

OTHER NOTICES 

Group health plan sponsors should consider including the following enrollment and annual notices with the plan’s open enrollment materials. 

  • Initial COBRA Notice 

The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to employers with 20+ employees that sponsor group health plans.  Plan administrators must provide an initial COBRA notice to new participants and certain dependents within 90 days after plan coverage begins. The initial COBRA notice may be incorporated into the plan’s SPD.  A model initial COBRA notice is available from the DOL.

  • Notice of HIPAA Special Enrollment Rights

At or prior to the time of enrollment, a group health plan must provide each eligible employee with a notice of his or her special enrollment rights under HIPAA.  This notice may be included in the plan’s SPD. Notice must be given to participants before or at the time of group health plan enrollment. Model language for this disclosure is available on the DOL’s website.

  • Annual CHIPRA Notice

Group health plans covering residents in a state that provides a premium subsidy to low-income children and their families to help pay for employer-sponsored coverage must send an annual  notice about the available assistance to all employees residing in that state. The DOL has provided a model notice.

  • WHCRA Notice

Plans and issuers must provide notice of participants’ rights to mastectomy-related benefits under the Women’s Health and Cancer Rights Act (WHCRA) at the time of enrollment and on an annual basis.  Model language for this disclosure is available on the DOL’s website.

  • NMHPA Notice

Plan administrators must include a statement within the Summary Plan Description (SPD) timeframe describing requirements relating to any hospital length of stay in connection with childbirth for a mother or newborn child under the Newborns’ and Mothers’ Health Protections Act. Model language for this disclosure is available on the DOL’s website.

  • Medicare Part D Notices

Group health plan sponsors must provide a notice of creditable or non-creditable prescription drug coverage to Medicare Part D eligible individuals who are covered by, or who apply for, prescription drug coverage under the health plan. This creditable coverage notice alerts the individuals as to whether or not their prescription drug coverage is at least as good as the Medicare Part D coverage. The notice generally must be provided at various times, including when an individual enrolls in the plan and each year before Oct. 15th (when the Medicare annual open enrollment period begins).  Model notices are available on the Centers for Medicare and Medicaid Services’ website.

  • HIPAA Privacy Notice

The HIPAA Privacy Rule requires covered entities (including group health plans and issuers) to provide a Notice of Privacy Practices (or Privacy Notice) to each individual who is the subject of protected health information (PHI). Health plans are required to send the Privacy Notice at certain times, including to new enrollees at the time of enrollment. Also, at least once every three years, health plans must either redistribute the Privacy Notice or notify participants that the Privacy Notice is available and explain how to obtain a copy.

Self-insured health plans are required to maintain and provide their own Privacy Notices. Special rules, however, apply for fully insured plans. Under these rules, the health insurance issuer, and not the health plan itself, is primarily responsible for the Privacy Notice.

Model Privacy Notices are available through the Department of Health and Human Services

  • Summary Plan Description (SPD)

Plan administrators must provide an SPD to new participants within 90 days after plan coverage begins. Any changes that are made to the plan should be reflected in an updated SPD booklet or described to participants through a summary of material modifications (SMM).

Also, an updated SPD must be furnished every five years if changes are made to SPD information or the plan is amended. Otherwise, a new SPD must be provided every 10 years. 

Summary Annual Report

Plan administrators that are required to file a Form 5500 (> 100 participants in plan) must provide participants with a narrative summary of the information in the Form 5500, called a summary annual report (SAR). The plan administrator generally must provide the SAR within nine months of the close of the plan year. If an extension of time to file the Form 5500 is obtained, the plan administrator must furnish the SAR within two months after the close of the extension period.

Wellness Program Notices 

Group health plans that include wellness programs may be required to provide certain notices regarding the program’s design. As a general rule, these notices should be provided when the wellness program is communicated to employees and before employees provide any health-related information or undergo medical examinations.

  • HIPAA Wellness Program Notice—HIPAA imposes a notice requirement on health-contingent wellness programs that are offered under group health plans. Health-contingent wellness plans require individuals to satisfy standards related to health factors (for example, not smoking) in order to obtain rewards. The notice must disclose the availability of a reasonable alternative standard to qualify for the reward (and, if applicable, the possibility of waiver of the otherwise applicable standard) in all plan materials describing the terms of a health-contingent wellness program. Final regulations provide sample language that can be used to satisfy this requirement.
  • ADA Wellness Program Notice—Employers with 15+ employees are subject to the Americans with Disabilities Act (ADA). Wellness programs that include health-related questions or medical examinations must comply with the ADA’s requirements, including an employee notice requirement. Employers must give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential. The Equal Employment Opportunity Commission (EEOC) has provided a sample notice to help employers comply with this ADA requirement.

 

 

 

Enhance Your Employee Benefits Package.  A competitive benefits package is key to keeping and attracting top talent.  Assess your current benefits package and consider making necessary adjustments to include options, such as expanded mental health support, for example. 

GENERAL HR  

Review Employee Records.  The fourth quarter is a good time to review your employee records and check record retention guidelines. Don’t forget to dispose of outdated termination and outdated job applications properly. With W2s around the corner, make sure all addresses and information are updated.

Develop and Distribute Your 2023 Calendar.  Create and distribute a calendar outlining important dates, vacation time, pay dates, and company-observed holidays for 2023. 

Review and Update Employee Handbook. Review your employee handbook to make sure it is up-to-date and addresses areas, such as employment law mandates, new COVID-related policies, guidelines for remote working, privacy policies, compensation and performance reviews, social media policies, attendance, and time-off, break periods, benefits, and procedures for termination, discipline, workplace safety, and emergency procedures.

PLEASE NOTE: This information is for general reference purposes only. Because laws, regulations, and filing deadlines are likely to change, please check with the appropriate organizations or government agencies for the latest information and consult your employment attorney and/or benefits advisor regarding your responsibilities. In addition, your business may be exempt from certain requirements and/or be subject to different requirements under the laws of your state. (Updated Oct. 3, 2022)

Contact us at (855) 667-4621 or email us at info@medicalsolutionscorp.com

 

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NYS 2023 Final Rates Approved

NYS 2023 Final Rates Approved

Yesterday, NYS Dept of Financial Services approved 2023 health insurance rate requests yesterday. Small group rates increased by 7.9% and  9.7% for individuals.

As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers see original –2023 NY Small Group Carrier Rate Filings.  Despite only 3 months of mature claims data experience for 2022  health insurers’ original requests were noticeably above the average of 16.5%/individuals and 19% for small groups. For example, regulators last year approved average rate increases of 3.7% for individuals and 7.6% for small group plans. Over 1.1 million New Yorkers are enrolled in individual and small group plans impacted by the rate increases, the state agency noted.  

The recent COVID-19 surge irony reflected a lower cost utilization due to COVID-19. The average medical-loss ratio, which represents the portion of premiums spent on medical claims and quality improvement, was 70% in recent years years. That said, in an anticipation of spikes in claims submissions + overall inflation, a larger than average increase is needed. This is in addition to increases in pricing by hospitals, consolidated IPA groups, and pharmaceuticals.

Rate Factors

The state noted that the premiums increase main drivers are medications.  “Rising medical costs and inflation continue to put upward pressure on premiums,” said Superintendent Harris. “With our rate actions announced today, we continue to prioritize the financial wellbeing of consumers while ensuring that New Yorkers have access to a robust, stable health insurance market.”  Also, DFS, recognizing the continued uncertainty of the pandemic’s effect on consumers’ health care costs and the economy, held insurers’ profit provisions to a historically low 0.5%. 

Health Insurers

Oxford/Unitedhealthcare, notably, got only a 6% rate increase approval for next year. This is a sharp reduction from the original 16.8% request in part by disagreed anticipated costs, held reserves, overall market pricing, and reinsurance gained from ACA’s Risk Corridor.  See more info here, https://medicalsolutionscorp.com/risk-adjustment-reinsurance-and-risk-corridors/.

Small Group Market   

Almost 850,000 New Yorkers are enrolled in small group plans, which cover employers with up to 100 employees. Insurers requested an average rate increase of 16.5% in the small group market, which DFS cut by 52% to 7.9% for 2023, saving small businesses $632.4 million. A number of small businesses also will be eligible for tax credits that may lower those premium costs even further, such as the Small Business Health Care Tax Credit.

DFS SMALL GROUP MARKET RATE ACTIONS   

NYS DFS Approval 2023 Health Insurance Rates

*Indicates the Company will offer products on NY State of Health Marketplace in 2023.

PEO Alternatives to Small Group

Before you consider renewing automatically, you should first find out what is a PEO so that you can know exactly what to expect from it. PEO’s are large-group markets underwritten.  With the right PEO, you will be able to manage your business’s demand for growth and your employees as well.

Clients on average save 15-40% off the small group market. If you are looking for a complete insurance solution for your business, go to our website and check out our business insurance solutions. Contact us for more information today.

Learn how a PEO can make a difference for your group. For more information on how Employer-Sponsored Insurance and a PEO can make difference for your small business please contact us at info@medicalsolutionscorp.com or 855-667-4621.

 

 

 

 

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For more information on PEOs or a custiomized quote please submit your contact. We will be in touch ASAP. 

FEDERAL JAN 2024  SMALL GROUP ANNUAL OPEN ENROLLMENT WAIVER

FEDERAL JAN 1st SMALL GROUP ANNUAL OPEN ENROLLMENT WAIVER

A little-known requirement but most important under Affordable Care Act (ACA) is for Health Insurers must waive their minimum employer-contribution and employee-participation rules once a year. ACA requires a one-month Special Open Enrollment Window for January 1st coverage.

The special open enrollment period occurs November 15th through December 15th of each year, allowing eligible small group employers to enroll for coverage effective January 1st of the following year.

Background

The ACA has a section in it called the “guaranteed issuance of coverage in the individual and group market.” It stipulates that “each health insurer that offers health insurance coverage in the individual or group market in the state must accept every employer and individual in the state that applies for such coverage.” The section also states that this guaranteed issuance of coverage can only be offered during (special) open enrollment periods, and that plans can only be offered to applicants that live in, work in, or reside in the plans’ service area(s).

Participation and Contribution Requirements

In many states (including California and Nevada), carriers can decline to issue group health coverage if fewer than 70% of employees elect to enroll in coverage. Some carriers may have even tighter participation requirements.

Generally speaking, employees with other coverage (Medicare, other group coverage, individual coverage through the Exchange, etc.) are removed from the participation requirement calculation – though it varies by insurance carrier.

Furthermore, employer contribution rules require employers to contribute a certain percentage of premium costs for all employees in order to attain group health coverage. Some businesses struggle to meet these contribution requirements for a variety of financial reasons.

Problem Solved: Special Open Enrollment Period

Many employers want to offer coverage to their employees, but are denied because they struggle to meet participation and/or contribution requirements. Employers cannot force employees to enroll in coverage unless the employer pays for 100% of the employees’ premiums, which many employers cannot afford. Even with moderate to generous employer contributions, many employers still find young and lower-income employees waiving coverage. This was even more evident in 2019 with the ACA’s federal Individual Mandate non-compliance penalty reduced to $0.00.

The U.S. Department of Health & Human Services provides final guidance on this in regulation 147.104(b)(1): “In the case of health insurance coverage offered in the small group market, a health insurance issuer may limit the availability of coverage to an annual enrollment period that begins November 15 and extends through December 15 of each year in the case of a plan sponsor that is unable to comply with a material plan provision relating to employer contribution or group participation rules.”

If your employer groups are struggling with participation and/or contribution, the Special Open Enrollment Window is the time to enroll them in coverage.

For more help with the Special Open Enrollment Window contact us at info@medicalsolutionscorp.com or (855)667-4621.

Put You & Your Employees in Good Hands

Get In Touch

For more information on PEOs or a customized quote please submit your contact. We will be in touch ASAP.