As part of the new PPACA legislation (aka “Obamacare” and “health care reform”), insurance carriers are now required to return premiums to employers if they fail to meet the minimum criterion of spending 80% of the collected premiums on actual health care services. This percentage is also known as the Medical Loss Ratio, or MLR. Most California carriers have been at or above 80% in the small group market, but for 2011, Anthem Blue Cross (and United Healthcare) fell a couple of percentage points short.
If you are a small employer with an Anthem Blue Cross group plan, you likely received several confusing notices, and a relatively small rebate check in the past month. While it might be easiest to simply deposit that into the corporate checking account and forget about it, know that the Department of Labor is very much interested in making sure those funds are treated properly (fines of up to $1,000 per employee).
Anthem released a spreadsheet to help you calculate whether and how much of that rebate check is intended to for the employer, and how much for employees enrolled in the health plans. But before your eyes gloss over, or you schedule a half-day meeting with your bookkeeper, payroll provider, and CPA, we recommend you consider this case study, provided by the National Association of Health Underwriters. Since the rebate portion due to employees is generally very small, we think Option 2 in the case study will be the best way for most small employers to comply with the DOL rules.
If you think arranging for a healthy lunch to benefit employees, paired with a lunch & learn topic from a local nutritionist is a good solution, well, we agree. And we would be happy to connect you with a couple of nutritionists that we know and like, who would do that type of presentation / conversation at no cost to you.
Takeaways for you:
- If your employees contributed to the cost of their Anthem Blue Cross coverage in 2011, you will need to comply with the rebate rules (a portion must benefit them)
- There is a hard way and an easy way to do this
- The DOL and HHS departments have stated that good faith efforts to comply will not be penalized in the first year
- Please contact us if you need additional guidance