mroberts

We just covered this topic last week. There's a thread under the Health Plan subject. If you are only requiring the employees to pay for a modest part of the health insurance premiums, there's not that many people who are going to decline coverage if they do not have coverage elsewhere. I would recommend strong communication about why this change needs to be done and what it means to not have any medical insurance.

Just out of curiosity, why would the company have 2 open enrollments per year? Rates are standardly guaranteed for 12 months. If you're allowing employees to enter the plan mid-renewal, you will probably be experiencing adverse selection. Was the insurance carrier on board with the 2 open enrollment periods?

Obviously going to the far extreme of the equation and looking at the plan as completely voluntary, yes adverse selection would be a good reason to require mandatory participation. The poster only indicates that contributions are required and this could mean that employees only have to pay 10% of the premium equivalency rates.

Just out of curiosity, why the demand for mandatory participation? While this act isn't illegal (as mbozek indicates it can be a condition of employment), it could definitely raise some red flags and draw attention. The last thing you really want is your plan to be audited by the IRS.

I think a good place to start would be to contact your disability carrier. Without knowing the plan specifics, there's not much we can really tell you. By the way, what exactly is a "vaginal" leave?

LTC carriers always make the argument that many of the people who utilize long term care services are under 65, however, unless the company is going to pick up at least a decent chunk of the tab, don't even waste your time offering it because younger people generally don't sign up for it. The advantages of signing up for it when you're younger is that you're locked in at that rate for life (assuming the carrier does not increase the rates over the whole block). The older you are when you sign up, the higher the rate. Do I think it's a good benefit? It depends. The most important thing to realize is that LTC is for asset protection. If people don't have a lot of assets, which a lot of people under age 40 do not, why waste your money on a LTC policy when you could be putting it towards developing assets? I know arguments can be made of quality of care and all the jazz, but that's people wanting to make a sale talking.

I think people are making this whole HIPAA thing harder than it has to be. If I am interpreting the post correctly it sounds like the HIPAA notice is what prompted this employee's request. If the employee wants data from claims he incurred back before 2000 why wouldn't he just call the insurance company and get it? Better yet, why does he even want it?

That's what I was thinking. Unless this employee somehow got amnesia and he can't remember his address or social security number, what's he looking for?

To put in bluntly, groups under 10 lives usually get screwed when it comes to health insurance. And especially in your case since the average age of your employees is almost 60. To further complicate matters, each of your employees is in a different state, which rules out any local health plan for small groups where undewriting might not be an issue. Realize whatever statistics you're looking at are taking companies like IBM, United Airlines and other mammoths into the equation. These companies probably have an average age in the low 40's and have maximum leverage when negotiating their renewals. Are your premiums extremely high? Yes, but looking at the situation, I'm not surpirsed where they are. One option you might want to look at is having each of your employees go to the local Chamber of Commerce and see if health insurance can be obtained through them via some community plan. Your employees will have to pay for the cost of the insurance out of their own pocket, but you can always make up for it in their paycheck. And if it works, it will definitely be less expensive than $16,000 per year.

I somewhat agree with Kip's point on the auto & home since not every one of your employees is necessarily going to get the best rate that he or she could in the marketplace. But I think the group setting could really help out your employees for long term care and universal life due to lax underwriting requirements. Additionally, the cost of these products through the employer tend to be less for the majority of your employees and allow for guaranteed issue amounts, something that individual products do not have. As a side note, I wouldn't go gung ho on Group Universal Life. While it's nice in theory, realize that if any of your employees want supplemental life only and do not want to contribute additional funds to the cash accumulation account, this plan is going to be more expensive (usually about 25%) than your average supplemental life plan in the marketplace. And while the guaranteed interest rate sounds nice these days based on what's out there, realize it's just a matter of time before your employees will be able to earn similar interest rates at their local bank since things will inetivably turn around in the economy.

I would just stop collecting premiums and call it a day. The premiums are going to be minimal at best for dependent child life insurance.

If you're fully-insured, why not just ask your health insurance carrier for a draft? If you are self-insured and just looking for a fully-insured plan document to use as reference, do you have a national carrier (BCBS, Aetna, CIGNA, UHC) paying your claims? If so, I'm sure they wouldn't mind providing you with a draft.

This is going to be determined by the plan document. Most PPO's do not allow employees or dependents to go out-of-network and have claims reimbursed as if they were in-network ones. Since the dependent is no longer a full-time student by the plan's definition, what does the contract or SPD say about an employee or any other dependent that goes out-of-network?

Not right. Once coverage has lapsed, the employee is on his or her own. As far as updating the policy goes, you will PROBABLY be ok as long as you can show that you are not targeting specific employees out on disability with this change and are creating the new policy for the benefit of the company as a whole. If you have union employees, this could definitely change things around. I would talk to an attorney before putting this new policy in place.

Most companies usually terminate employees after 6 or 12 months of disability because of the dilemma you brought up. Paying a disabled employee's medical insurance indefinitely can be extremely costly! Upon terminating the employee, he or she needs to be offered COBRA.

It sounds like you have a scheduled dental plan, which sets a reimbursement level for just about every covered dental procedure. This plan would not be treated any differently than a passive PPO plan or an indemnity plan. Therefore, it should be subject to COBRA.

If it's a true open enrollment you can do it. I would ask the HR Manager for proof that you can't. That always seems to work a little better.

First, it would need to be determined if there is going to be any lapse in coverage. Additionally, chances are that the employer is going to be looking for comparable coverage mid year, not something totally different. Therefore, I would only allow employees currently enrolled in this old vision plan enrollment into the new plan.

The only place you're going to find an answer to this question is in the CBA. The agreement should document all the parameters of the benefits being offered.

The group probably wasn't using the FEIN's for medical insurance, but was most likely using them for other facets of the business. GBurns brings up some good points that an employer can't just dust off an old FEIN and bring it into play. How does the new carrier underwrite business for groups under 50 lives in Florida? Is there a maximum increase underwriting can impose based on individual health questionnaires?

Whenever it comes to a benefit endorsed by the employer, an employee can file a claim under ERISA. Whether or not it has merit and whether or not he or she is going to win the case is going to be determined by the courts. Was the SPD provided to the employee? Did he or she follow the claims appeal process?

Most states, however, do not simply have a 10% maximum they can load on rates. Many states allow loads of up to 100%. Additionally, when it comes to plan designs, there can be very distinct differences between the under 50 market and the over 50 market. While the plan selected still has to comply with what the insurance carrier has filed with the state, groups over 50 are usually allowed to select richer plan designs and are not typically "forced" to change current plan designs (although with experience being as bad as it sounds in this example they may have been). For example, here in Rochester, NY, Aetna has come into the market and offered groups under 50 lives plans that have additional hospital deductibles and are less attractive to what the other carriers are offering. It is priced accordingly, however, this is a plan most employers are not going to even consider offering since the perception is that the benefits are worse than what they can get from BCBS.

Since you're in NY and if you're talking about a DBL claim, handbooks are not provided by carriers to employees for this coverage. If a claim was denied, the insurance carrier would have sent the employee the declination notice and the necessary steps to appeal the decision. Since this is a state-mandated coverage, information on the claims appeal process can also be obtained on-line or via the phone from the Worker's Compensation Board.

I'm surpirsed this worked to your advantage. Even groups under 50 lives are usually required to fill out a group medical questionnaire that asks about all the company's employees and if there are any known health conditions. If information provided on this questionnaire was false, then there could be some very serious problems once the carrier finds out what happened. As far as long-term implications go, it's really hard to say. It depends on how the insurance company is going to underwrite the group during future renewals. If this group is truly going to be community-rated and the experience will not be looked at, financially this could potentially save money. The problem you have now is no future renewal leverage. Not that you had a ton when you had 108 lives, but groups under 50 usualy have very little say in plan design (other than here are a couple options) and the renewals tend to be higher all the way around. And this will hold true for the two healthy groups. Only time will tell if this helps you out financially or not. From an agent perspective, I tend to think nothing was done that was either unethical or illegal unless information was either falsified or intentionally supressed. Maximum rates are designed to protect those companies that would not be able to afford insurance if there was no cap in place.

If you have an employee who moves out of an HMO network area and no other coverage is offered through the company for out of area employees, most carriers will require that the employee elect a traditional or indemnity plan only. If the employee is enrolled in an HMO plan and moves out of area, but the company does offer a PPO or comparable coverage for employees not residing around corporate, then that employee has the right to elect one of the other plans.