Inflation-Adjusted ERISA Penalties – DOL

The Department of Labor recently released their inflation-adjusted penalties for ERISA, the Family Medical Leave Act, and the Genetic Information Nondiscrimination Act. The chart below shows some of the more common penalties assessed from DOL audits.   Failure to provide a summary of benefits and coverage$1,105 per employee Failure to inform employees of CHIP coverage opportunities$112 per employee per day Failure to comply with FMLA notice requirements$166 per employee per day Failure to comply with certain GINA requirements$112 per employee per day Failure to provide an SPD or plan documents$110 per employee per day Failure to provide documents to the DOL upon request$149 per day, not to exceed $1,496 per request Failure to file an annual 5500 form$2,097 per day The new ERISA penalties serve as important reminders to employers who sponsor benefit plans.  Many employers either think they are too small to be audited (not true), or that the medical carriers adhere to all the rules and furnish employees with what is required (not true).  It is for this reason that we have taken on the responsibility to protect our clients by providing them with the proper notices and instructions to maintain...

Blue Shield and Sutter Health sign 3 year contract

Sutter Health and Blue Shield of California have come to an agreement on a three year renewal of their provider contact through Dec. 31st, 2019.  The contract is for all coverage – Individual, Group, Medi-Cal, and Medicare.  Keep in mind that not all providers or facilities are available to all plans, so please double check with www.sutterhealth.org and www.blueshieldca.com for in-network specifics.  Sutter Health participates in Blue Shield’s PPO plan through Covered CA, but please check for specifics on each respective...

Eliminating Dependent Coverage? COBRA Rules, and the Employer Shared Responsibility Provision

With healthcare premiums continuously increasing year over year, many employers are searching for options to help reduce their benefit costs. A seemingly quick fix would be to eliminate dependent coverage, but you may want to consider eliminating dependent contribution rather than not offering coverage at all. First and foremost, the circumstances are different for Small Groups in comparison to Applicable Large Employers. If you are considered an ALE, with 51 or more full time equivalent employees, then you are required to offer dependent coverage by law, or you may face an employer shared responsibility penalty. Please note that the definition for Small Group plans has been expanded to include up to 100 employees, so it is possible to be an Applicable Large Employer and still offer Small Group plans (51-100 employee size). Per the Affordable Care Act, and the ‘pay or play’ provision, the definition of ‘dependent’ only applies to children under the age of 26. Spouses are not considered dependents, nor are step children or foster children. There are two types of penalties you may face if you do not offer proper coverage as an ALE. If you DO NOT offer minimum essential coverage to at least 95% of your full time equivalent employees and their dependents then you may face a penalty if at least one of your employees obtains premium assistance from the public marketplace (Covered CA). If just one of your employees receives premium assistance, then you are liable for a $2,000 penalty for each employee, after the first 30 employees. [Total employees – 30, multiplied by $2,000] If you DO offer minimum essential coverage...

California Choice HSA Options – Q4 2016

As the majority of group renewals are fast approaching, I wanted to outline the different HSA options available to CaliforniaChoice clients.  For the fourth quarter of 2016, there are twelve different HSA eligible medical policies from five different carriers. (Listed Below – Please note that not all plans are available in all 19 regions) Note that there are not any PPO HSA options available to CaliforniaChoice clients at the moment.  You may assume that Anthem’s EPO policy would be a close fit, but beware the limited network without any out-of-network coverage, aside from emergencies.   While the private exchange offers employees the flexibility to choose various plans without the need for employers to meet specific participation requirements, the only way to offer a PPO HSA currently is outside of CaliforniaChoice.  For employers that wish to concurrently offer a PPO alongside Kaiser, you must have a minimum of 5 non-Kaiser employees that wish to enroll, which make up at least 25% of eligible enrollees. While the state’s public exchange, Covered CA, has setup a mirrored network of health plans that offer the same participation flexibility as CaliforniaChoice, they are only offering six HMO HSA policies from three carriers: Kaiser, Sharp, and Western Health. As premiums continue to increase, and plans become more limited and standardized, small group shoppers are losing their flexibility within private exchanges.  We can only hope that the insurance carriers and partners will loosen the reins in 2017. Deductible – A specified amount of money that you must pay before an insurance company will contribute towards a claim. Out of Pocket Max – The most you will have to...

HSA Eligible Medical Policies

As insurance premiums continue to rise, you may find yourself exploring coverage options you may not have considered in the past.  One of which is an HSA eligible policy that has risen in popularity over the years for multiple reasons.    Health Savings Accounts are associated with high deductible health plans – a plan with an annual deductible no less than $1,300, and an annual out-of-pocket maximum not to exceed $6,550; the overall cost of an HSA eligible policy can be less than other plans, while it still provides you with the same catastrophic coverage. Health Savings Accounts allows the account holder to pay for current health care expenses and save for those in the future.  Payments towards qualified medical expenses are withdrawn tax-free, and interest earned on deposits also accrue tax deferred.  Funds roll-over each year, and the account belongs to the individual and follows the individual throughout his/her career.  An HSA eligible policy can be purchased on both the individual and group marketplace, providing full flexibility. Contributions are tax-deductible or are deducted directly from payroll pre-tax. Employers may also offer to contribute towards an HSA, and contributions are excludable from an employee’s income and are not subject to federal income tax, Social Security or Medicare taxes.  In addition, employer contributions are deductible as a business expense to the company.  Employers may choose to contribute a set amount or make ‘matching’ contributions.  The IRS sets annual limits on the amounts that may be contributed to the HSA.  If funded from both the employer and employee, it is important to ensure that the total contributions remain within the annual IRS...

Steps to check if your medical and employee benefit broker has an insurance license

  Below I will describe how to check if your insurance broker is licensed in CA. In every state the process is very similar. As a consumer it is not your responsibility to check the creditability of your insurance broker, however I would urge you do so that you do not end up with the wrong insurance policy in the future. Step One: For CA employers, search by license number. If you would prefer you can search by the insurance broker’s name. Step two: Once you find your insurance broker’s name it is important that you verify that their license is “Active.” If their license is “Active” at least you know that your broker is current with the state continuing education and should be familiar with all of the products they are recommending. Tip: If the insurance company that your broker is recommending is not on the list of “Insurance Company Appointments” then it is likely your broker is selling you an insurance policy for that company for the first time. However, if your insurance broker works for an insurance agency then it is likely that the insurance policy will be placed under the managing broker. If you ever want to confirm who your broker is on your insurance policy, call the broker and ask to see the Master Application for any group insurance benefits (medical, dental, vision, life and disability insurance). For individual insurance plans many times there is a broker attestation or broker details section that clearly identifies who was the writing broker or broker of record for your insurance policy. If you are ever unsatisfied with your current insurance broker and...