From Blue Shield today:
From Blue Shield today:
The City of San Francisco’s Office of Small Business just sent a reminder: you must file your Health Care Security Ordinance (HCSO) report for 2015, by April 30, 2016 or face a $500/quarter late filing fee.
Note: Private employers who employed fewer than 20 employees for all of 2015 (or non-profit employers that employed fewer than 50), do not need to file. Stop here.
If you are filing for the first time, or need assistance collecting data or running reports, please contact Allpointe as soon as possible so that we can help you in advance of the deadline.
Covered California, the new health insurance marketplace, or “exchange” announced today that six carriers would participate in the 2014 SHOP for small businesses of 2 to 50 employees:
Rates are pending approval by state regulatory agencies, and Covered California’s release only gives examples for a single, 40-year old employee. You can download the booklet and accompanying press release here.
Yet unanswered is the question of whether these plan options will offer limited provider networks, as we have seen with the individual marketplace.
Small employers will be able to choose to purchase health coverage for employees inside the Covered CA marketplace, or they may go directly to carriers as they do today. Depending on the business demographics and needs, either may be a viable financial strategy to provide competitive benefits to employees. We look forward to helping small business owners determine the right choice for their business.
Small businesses and individuals will be receiving a rebate from Blue Shield by August 1st. Employers, please review the details here, about valid ways to return these refunded premiums to your employees. Reducing the cost of future insurance coverage is a legitimate use of the rebate.
From Blue Shield:
Medical Loss Ratio Rebates and Notifications
Last month, we informed you that Blue Shield reported its 2012 Medical Loss Ratio (MLR) by market segment to the Department of Health and Human Services (HHS). We are now sharing our rebate information with you.
Blue Shield did not meet the MLR thresholds for the following market segments:
- Individual and Family plans regulated by the Department of Insurance (DOI)
The MLR threshold for this market segment is 80%. Blue Shield reported an MLR of 78.0%. The Individual and Family plan MLR was 2% below the 80% threshold. As a result certain subscribers will receive premium rebates by August 1, 2013. The 2% of premium revenue equals $13.3 million that will be returned to 226,034 Individual and Family plan subscribers who were enrolled in the Blue Shield Life plans that did not meet the MLR threshold. The average rebate amount per subscriber is about $59.
- Small Business plans (50 or fewer employees) regulated by the Department of Managed Health Care (DMHC)
The MLR threshold for this market segment is 80%. Blue Shield reported an MLR of 76.6%. The Small Business MLR was 3.4% below the 80% threshold. As a result, certain subscribers will receive dues rebates by August 1, 2013. The 3.4% of dues revenue equals $24.5 million that will be returned to 29,232 Small Business policyholders who were enrolled in the Blue Shield plans that did not meet the MLR threshold. The average rebate amount per Small Business policyholder is about $827.
Chris Rauber is asking those questions at the San Francisco Business Times, and apparently, so is much of the San Francisco business community. Well summed up by Jim Lazarus of the San Francisco Chamber of Commerce:
Among the problem area, according to Lazarus:
- The federal individual mandate is not met by Healthy San Francisco.
- The health reimbursement accounts now used by some San Francisco businesses to comply with the local mandate won’t be available next year.
- Healthy San Francisco, after Jan. 1, will be primarily an “avenue of last resort” for individuals, including undocumented residents, who don’t qualify for other programs. “Some may be willing to stay in the program and pay the penalty” for not having individual insurance, Lazarus speculated.
Not to worry, says Mayor Lee.
Chad Terhune of the LA Times reports that Anthem Blue Cross and Blue Shield of California will be required to issue rebates to small businesses this August, for failing to meet the minimum 80% medical loss ratio threshold in 2012, as required under the Affordable Care Act.
Blue Shield of California insures 29,000 small businesses in California, while Anthem Blue Cross is the largest small business insurer in the state, covering 45,000 small businesses. Your Allpointe broker will be contacting you once specific dollar amounts are released.
Beginning in 2014, the Affordable Care Act will require a maximum 90-day waiting period for new hires to join a group medical plan. California has taken this a step further: Governor Brown signed AB 1083 into law near the end of 2012, reducing that maximum waiting period further — to 60 days. Let’s take that a step further, as the practical application for small business effectively makes the maximum waiting period one month or 30 days. Why is this? Well, currently every carrier for small groups uses a “first of the month following completion of the waiting period” as the eligibility date for a new hire.
If new employee Jane Smith begins work on March 15, 2014 and her employer has a 60-day waiting period, her effective date in the current system would be … June 1, 2014. Seventy-seven days after her date of hire, or 17 days beyond the maximum waiting period.
We expect the carriers to adapt their plan contracts upon plan renewals in 2014, to help small employers adapt to the new requirements. Kaiser Permanente officials have stated they will offer three waiting period options for plans that renew on or after January 1, 2014:
We expect other carriers to offer the same or similar options.
Many of our small group clients in competitive industries already have a first of the month following date of hire policy, but others will need to prepare and adapt.
One of the provisions of the Patient Protection and Affordable Care Act (PPACA) initially looked like it could be a huge boon to small businesses: a tax credit for dollars spent on employee health care. Kaiser Health News has a very good summary of the tax credit, here.
We wrote about this back in April; six months later, as we talk to clients throughout the Bay Area and California, most small businesses do not qualify. We attribute this primarily to the high cost of living in California’s urban areas, and because the tax credit phases out based on two criteria: number of employees over 10, and average salary over $25,000 annually. Combine those two and we are finding that our clients either do not qualify at all, or the credit is so small so as not to be worth the effort of applying for it.
A factor that often gets missed is that the average salary criterion is measured by FTE – Full Time Equivalent, not just average annual salary. So, your 30-hour/week, $40,000/year employee in fact does not fall within the threshold.