W-2 Reporting Requirement Deferred

The Internal Revenue Service  has announced that they will defer the PPACA requirement for employers to report the cost of coverage and employee W-2 forms untill 2012.  It will be optional for employers to report this in 2011.  The amounts reported will remain as not subject to taxation.

The Treasury Department and the IRS have determined that this relief is necessary to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with the new reporting requirement. The IRS will be publishing guidance on the new requirement later this year.

The draft IRS form can be accessed at: http://www.irs.gov/pub/irs-utl/draft_w-2.pdf

Is it Better To Keep Your Plan as a Grandfathered Health Plan?

What is a  “Grandfathered” Health Plan?  It is a group health plan or individual coverage that was already in effect on March 23, 2010, the date of Health Reform enactment.  In general, the law allows a       grandfathered plan to continue as is without losing its grandfathered status. New employees may enroll in a grandfathered plan, and current participants may stay on or change coverage to add dependents to a grandfathered plan.

The passage of the PPACA Health Reform could cause a loss of grandfathered status for plans that were in effect as of March 23, 2010 due to the following conditions: 

  • Increase in employee contributions that are greater than 15% plus inflation
  • Decrease in employer contributions by more than 5%
  • Increase in coinsurance or copays that are greater than 15% plus inflation
  • Reduction in or addition of annual dollar limits  

The passage of the PPACA Health Reform will affect plans renewing and effective after September 23, 2010.  If you have a plan that is renewing after that date your plan could lose its status as a grandfathered plan if there is a:

  • Change in carrier
  • Purchase of or merger with another plan to avoid compliance 
  • Elimination of benefits to treat a specific condition

 Why would any group want to keep its grandfathered status?  Remember benefits that must be implemented due to PPACA Health Reform are not required to added prior to 2014.  Retaining grandfathered status to 2014 may prevent a larger increase in premiums due to benefits that must be added and restrictions that must be eliminated, which will probably increase the costs of the health plan.  Additionally grandfathered plans are not subject to discrimination rules, meaning higher levels of benefits for certain classes of employees can still be allowed. 

 Parts of the Health Reform legislation will be implemented over the next few years, with all plans to be in compliance by 2014.  It is highly unlikely that groups will be able to retain their grandfathered status until 2014, as increases in premiums and changes to employee expectations will force change.  For any renewals prior to 2014, carriers will most likely ask the employer to sign a letter verifying their status as either grandfathered or non-grandfathered. 

Certain changes must be made to all plans, regardless of grandfathering status, as of renewals after September 23, 2010, including: 

  • Elimination of Lifetime Benefit Limits
  • Elimination of annual limits for specific benefits, such as durable medical equipment
  • Elimination of pre-existing condition limitations for children to age 19
  • Children to age 26 must be considered as eligible dependents, unless they are covered by their employer plan
  • Reporting the dollar value of benefits on an employee W-2

 Some of these changes have recently been signed into California state law by Governor Schwarzenegger.

 Please remember that all the legislation will be subject to revision as changes in Washington transpire.  We will, as always, keep you informed of changes as they occur.

2011 Benefit Plan Costs to Hold Steady

A new study by The Segal Company reveals that the increases to health plan costs for the next year will not be as high as previously anticipated..  Their  14th annual survey of health plan cost trends  shows  that the 2011 rates for most benefit plan costs trends will hold steady compared to  2010 levels.

“After several years of declining trends, it appears that 2008 was the bottom of a downward pattern, with cost trend rates returning to an upward direction in 2009,” states Edward A. Kaplan, senior-vice president and Segal’s national health practice leader.  He adds that “a  new, potentially short-term driver of health plan cost trend is the cost of compliance with the [Patient Protection and] Affordable Care Act. More than three-quarters of those we surveyed said that the Act’s impact would result in an increase in overall health plan trend of more than 1%”.

The research shows the 2011 projected trend rates for preferred provider organizations (PPOs)/point-of-service (POS) plans are expected to hit 10.6%, compared to 10.5% in 2010.

Please refer to the stuudy for details.

Health Net drops rates for California Small Group | Changes for Oct & Nov 2010!

Effective 10/1! Health Net has made the following changes:  

  • Stanislaus County – Silver rates will go from a 15% discount to a 25% discount
  • HSA 4000 rates will be lowered 10% statewide
  • HSA 4500 rates will be lowered 15% statewide
  • PPO 40-V rates will be lowered 15% in Los Angeles, Inland Empire, and Orange counties (rating regions 5,6, and 8)
  • HRA rates will be lowered 10% statewide
  • Salud HMO rates will be lowered 5%
  • PPO plan rates in Los Angeles County (rating region 8) will be lowered 8% (this excludes PPO 40-V, HSA 4000, and HSA 4500 whose rates will drop 10-15%) 

Effective 11/1! Health Net is making the following area changes:  

  • El Dorado PPO (split between rating regions 1 and 2 – El Dorado and Marin, Merced, Nevada, etc.) will move to rating region 9 – Alameda, Fresno and Santa Clara counties
  • Marin PPO (rating region 2 ) will move to rating region 7 – San Diego and Imperial counties
  • Contra Costa, Placer and Sacramento PPO (rating region 3) will move to rating region 9
  • Yolo HMO and PPO (rating region 2) will move to rating region 9
  • Fresno (rating region 9) and Tulare (rating region 1) HMO will move to rating region 7 – San Diego
  • Santa Cruz Silver Network (once created) rates will be discounted 25% off the full network

SIC 10% Discount

Industry Description SIC Code
Furniture 2500 -2599
Stone, Clay, Glass 3200 – 3299
Steel, Metal Work 3300 – 3399
Industry Machine (Computer Related) 3500 – 3599
Electronic 3600 – 3699
Measurement Instruments 3800 – 3899
Wholesale Durable Goods 5000 – 5099
Banks 6000 – 6099
Real Estate 6500 – 6599
High Tech 7371 – 7379
Amusements & Recreation 7900 – 7999
Engineering & Other Professional Groups 8700 – 8799

 

 

 

 

 

 

  

 PPO MEDICAL RATING REGIONS 

Region 1          Includes the following El Dorado ZIP codes: 95613-14, 95619, 95623, 95629, 95633-36, 95643, 95651, 95656, 95664, 95684, 95709, 95720-21, 95726-27, 95735, 96142, 96150-58 only, and Amador, Butte, Calaveras, Colusa, Glenn, Humboldt, Lake Mendocino, Monterey, Napa, Plumas, Shasta, Sierra, Sutter, Tehama, Tulare, Tuolumne and Yuba counties 

Region 2          Includes the following El Dorado ZIP codes: 95667, 95672, 95682 and 95762 only, and Marin, Mariposa, Merced, Nevada, San Benito, San Joaquin, Santa Cruz, Solano, Sonoma, Stanislaus and Yolo counties 

Region 3          Contra Costa, Kings, Madera, Placer, Sacramento, San Francisco and San Mateo counties 

Region 4          Kern, Santa Barbara and Ventura counties 

Region 5          Includes the Los Angeles ZIP codes beginning with 906-912, 915, 917, 918, and 935 only, Riverside and San Bernardino counties 

Region 6          Orange and San Luis Obispo counties 

Region 7          San Diego and Imperial counties 

Region 8          Includes the Los Angeles ZIP codes beginning with 900-905, 913-914 and 916 only 

Region 9          Alameda, Fresno and Santa Clara counties 

HMO MEDICAL RATING REGIONS 

Region 1          Includes the following El Dorado ZIP codes: 95613-14, 95619, 95623, 95629, 95633-36, 95643, 95651, 95656, 95664, 95684, 95709, 95720-21, 95726-27, 95735, 96142, 96150-58 only, Napa and Tulare counties 

Region 2          Includes the following El Dorado ZIP codes: 95667, 95672, 95682 and 95762 only, and Marin, Merced, Nevada, San Joaquin, Santa Cruz, Solano, Sonoma, Stanislaus and Yolo counties 

Region 3          Contra Costa, Kings, Madera, Placer, Sacramento, San Francisco and San Mateo counties 

Region 4          Santa Barbara and Ventura counties 

Region 5          Includes the Los Angeles ZIP codes beginning with 906-912, 915, 917, 918, and 935 only, Riverside and San Bernardino counties 

Region 6          Kern and Orange counties 

Region 7          San Diego

Region 8          Includes the Los Angeles ZIP codes beginning with 900-905, 913-914 and 916 only

Region 9          Alameda, Fresno and Santa Clara counties

This document is not intended to be authoritative, and its accuracy is not guaranteed. It is believed to be correct at the time of its printing. Any questions about official interpretations of the law should be directed to legal counsel.

Assurant recognized as high quality Dental-Life-Disabilty carrier

assurant dental insuranceEvery insurance carrier claims to be “Leading the Industry”. 

Just because a company “says” they lead the industry, doesn’t make it true, but when other Independent Organizations say that Assurant Employee Benefits . . . it is easy to understand they earned it! 

  • is “Significantly above the Industry Average for timeliness” (JHA Disability Broker Study, 2009)
  • is “A Model Carrier for the establishment of an online claims management system that enables us to better serve claimants”  (Celent, 2008)
  • has a Dental Claims Center that is “Recognized as a ‘Center of Excellence’ …an award that goes to the top 10 Percent of 20,000 call centers through measurements of efficiency and effectiveness” (Purdue University, 2006)
  •  ”Among True Group Carriers, AEB ranked #1 in Overall Satisfaction…in Providing Service that exceeds Expectations…In being Easy to do Business with…and in Percentage of Policyholders willing to recommend us” (LIMRA Plan Administrator Satisfaction Study, 2009)
  • is Significantly Higher than Average in Overall Experience”  (JHA Disability Broker Study, 2009)