GIMS Benefits Newsletter -
DECEMBER 2006
 1. Message From Mark
2. Reform Review
>Effective 10/01/06
-Fair Share
Contribution
>Effective 01/01/07
-Equitable
Coverage; Dependent Coverage; HIRD
>Effective 07/01/07
-Free Rider
Assessment; Section 125; HIRD; Individual Responsibility
3. Connecticut Changes Access to Imaging
Services Effective
10/01/06
Message
from Mark
 As
you wrap up this year and begin planning for the coming year, I extend
you my personal thanks for your loyalty to us as clients. You
are
appreciated! I hope you have had an opportunity to
avail
yourselves of our website as a resource for your benefit
needs.
If you have not, please take a few moments to familiarize yourself with
it at www.YourRightArm.com.
This service has been designed to be a resource for your business.
As a valued client, I believe in providing a concierge level of service
to meet your Group Employee Benefits needs. As the
benefits
environment becomes more complex you can count on us to be there for
you with the appropriate advice and strategy. Consumer Driven
Health Plans (CDHP) and their funding methods (HRA, HSA
and FSAs)
are becoming a part of the local landscape of benefits. These
benefit designs will be incorporated as a part of the
comprehensive annual analysis of your entire Group Employee Benefits
package.
You can rely on us to keep you informed and up to date. As a member of
your management team responsible for your benefits, my objective is for
you to spend as little time as possible in this area - because your
expertise is necessary to focus on your business. May this new year be
your most profitable to date.
There are many changes occurring in Health
Care Reform
on a national and regional basis. In this newsletter there are some
things that I believe you need to be aware of regarding your group
health plan beginning January 1, 2007. These comments are specific to
our Massachusetts based clients and those with Massachusetts locations
due to the enactment of Mass HealthCare Reform. Other states are
watching as it rolls out here. Technical corrections and
changes
are occurring daily as the new Universal Health Care bill moves forward.
Reform
Review
 Effective
October 1, 2006
Fair
Share Contribution
Employers
who do not make a “fair and reasonable
contribution” to health coverage will be assessed
an amount not to exceed $295/employee/year. Final regulations state
that employers are making a “fair and reasonable
contribution” if:
At least 25% of the business’s full time (35+ hrs/wk)
employees are enrolled in the business’s group health plan; or
The employer offers to pay at least 33% of the individual premium for
its full time employees.
Under
the regulations, part-time, seasonal and temporary workers are not
counted when determining the 25% enrollment test or the 33%
contribution test.
However, part-time workers are counted in
determining whether an employer has 11+ FTEs. For example, an
employee
who works half the hours of a full-time employee would be considered
0.5 FTE. Moreover, if an employer does not make a fair and
reasonable
contribution to health coverage for its full time employees, the
employer will be required to pay the assessment on both its part-time
and full-time workers. The assessment will be pro-rated based
on the
actual number of hours worked.
(Applies to fully and self-insured
accounts).
Effective January 1, 2007
Equitable
Coverage
Required by all employers with fully insured
accounts. Employers must make available
to any full-time employee any fully-insured insurance product that they
offer to any other full-time employee. Employers are
prohibited from
making a lower premium contribution to a lower-wage full-time employee
than they do for a higher-wage full-time employee for the same
product. Employers may have different contribution
policies for
workers covered by collective bargaining agreements.
Dependent
Coverage
Required by all employers with fully insured accounts. Employers must
cover dependents until the day before their 26th
birthday or to 2 years after loss of dependent status, under the IRS
code, whichever comes first.
Health
Insurance Responsibility Disclosure
Required by all Employers (fully and self-insured accounts) with 11 or
more employees are required to collect signed statements from employees
who decline coverage. The employer must retain the form for 3 years and
provide it to the state upon request.
Effective July 1, 2007
Free
Rider Assessment
Required for employers with 11 or more full-time equivalent employees
(fully insured and self-insured groups). Employers who do not comply
with the Section 125 mandate (described
below) will be assessed a penalty if (1) their employees access the
Uncompensated Care Pool (UCP) a total of 5 times per year or one
employee accesses the UCP 3 times in one year and (2) the total claims
billed to the UCP exceed $50,000. The Division of Health Care Finance
and Policy will promulgate regulations relative to the surcharge. Draft
regulations set the penalty at 10-55% of the cost of care, depending on
the size of the employer, the number of visits or admissions paid for
by the UCP, compliance with the Health Insurance Responsibility
Disclosure requirements, and whether the employer was subject to the
assessment during the prior year. (Applies to fully and self-insured
accounts).
Section
125 Plans
Required for employers with 11 or more full-time equivalent employees
(fully insured and self-insured groups). Employers must establish a
Section 125 Plan in accordance with
regulations to be promulgated by the Connector. The plan must
be
filed
with the Commonwealth Connector. Employers do not need to make a
contribution to the Section 125 plan but must arrange for the payroll
deduction. Employers that comply with the Section 125 mandate
will not
be liable under the "free rider" assessment.
Health
Insurance Responsibility Disclosure
Required by all Employers (fully and self-insured accounts)
with 11 or more employees are required to annually report to the state
compliance with Section 125 mandate.
Individual
Responsibility
Requires individuals to obtain and maintain health insurance coverage
beginning July 1, 2007. In 2007, the penalty for non-compliance is the
loss of the individual's Massachusetts State Income tax exemption for
tax year 2007. In subsequent years, the penalty for
non-compliance will be equal to 50% of the monthly premium of an
“affordable product” as defined by regulation. The
Connector Board will develop affordability standards.
An individual can obtain an exemption from the mandate if affordable
coverage is not available. Uninsured individuals, who are deemed to be
able to afford insurance, will have extensive appeal rights.
Get
more info...
Connecticut
Changes Access to Imaging Services
Effective October 1, 2006
Public Act 06-180 was signed into law on June 7, 2006, establishing
co-payment maximums and an annual maximum on in-network high cost
radiology services.
The mandate states that effective October 1, 2006:
- All health insurance policies will have a
co-payment of not greater than $75 per service for in-network magnetic
resonance imaging (MRI) or computed axial tomography (CAT), to a
maximum of $375
- All health insurance policies will have a
co-payment of not greater than $100 per service for in-network positron
emission tomography (PET), to a maximum of $400.
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