A provision in the federal health reform law requires carriers to accept all small business customers, even if they don’t meet minimum participation or contribution requirements, during an annual open enrollment period from November 15 through December 31. Small businesses who enroll for coverage during this period will be given a January 1 effective date. So if your group enrollment has fallen too low and you are in danger of cancellation, this is a safety net for you.
In addition, if you are not happy with your individual plans due to the small networks and Rx formularies, this may be a perfect time to get into the small group product line.
About 75-80% of the small business group insurance market have Grandmothered health plans. They were given this status as a way to delay compliance with the Affordable Care Act, (ACA also known as Obamacare). These groups will be renewing in the last quarter of 2015 and now have to face several changes that could impact their rates.
These same provisions will effect groups of 50-100 starting with renewals in 2016. Plus these larger groups must be tracking for 1094-C and 1095-C filing for 2015.
First you will see the plans all have new names, reflecting the “metal levels” of Platinum, Gold, Silver and Bronze. This refers to the level of benefits and percentage of coinsurance to comply with the ACA. A welcome change is that all of the Rx deductibles and copays will apply toward the out of pocket maximum exposure of the insured.
There is a new rate structure that rates each individual including dependents based on their own age. So all eligible dependents will need to provide date of birth. You will likely see big rate increases for younger employees. You will only have to deal with age changes on your plan’s anniversary, not at actual birthday, which should save a little time. The group’s rate will be based on the employer zip code, not the employee.
There will be no longer be Risk Adjustment Factors. If your group was at .90 this will add to your rates and if you were at 1.10 you will see positive results.
Social Security numbers are required for insurance companies to do their new mandatory reporting to the IRS for insured status.
Pediatric dental benefits are required for all dependents age 0-19, regardless of whether the group offers group dental coverage. This will increase costs for any dependents in this age category.
Waiting period options have been expanded back to ACA level options rather than the more stringent California options. Employers with some carriers may have as long as a 90 day waiting period, but this requires the use of a bona fide, employment-based affiliation (orientation) period for new employees. The orientation period cannot exceed 30 days. The waiting period for new employees would begin the day after the orientation period has been completed.
If an orientation period is applied, the date of hire on the application must be the day the employee becomes a regular, full-time employee, which is the first day after the completion of the orientation period. I advise caution with this option as it will likely effect other benefits and procedures within the firm. You would need to update your employee handbook as well as make other changes to benefits.
We have found that first of the month following 60 days is the most convenient for employers.
Brokers will also be talking to you about the SPD or Summary Plan Description that needs to be provided to your employees. Yes, I know you are already providing the SBC (Summary of Benefits & Coverage) and the EOC (Evidence of Coverage booklet). Most small group insurers do not provide the SPD because this mandate is upon the employer. If you do not want to pay a fee to have this prepared you can get a copy off of the DOL website. You will need to start here.
There is a lot to do this time around, so allow extra time to meet with your broker at renewal this year!