What Is Allowed as a Recission of Group Health Coverage Under Health Reform?

The federal health care reform law changed the way health plans and issuers approach rescissions in both the group and individual markets. 

It’s important to understand what constitutes a “rescission” for federal health care reform, as opposed to another type of coverage termination. A rescission is broadly defined as a retroactive termination of a member’s coverage. There are some important exceptions from this broad definition. For example, termination of coverage because of nonpayment of premium or contribution (either by the group or the member) is not a rescission. It is not considered a “rescission” when the member’s coverage is retroactively canceled to the last paid-to date if the member pays no premiums or contribution for periods of time after termination of employment or eligibility. The member’s coverage can be retroactively canceled to the last paid-to date.

 If a group health plan or carrier is faced with a “rescission,” certain restrictions apply for plan years that start on or after September 23, 2010.   The federal health care reform law does not allow the plan or carrier to rescind coverage, except in cases of fraud or intentional misrepresentation of material fact as specified in the contract. Examples of this include intentional misrepresentations of marital status or dependent eligibility.  When a policy or coverage is rescinded due to intentional misrepresentation of material fact or fraud, the plan or issuer must:

o Provide notice of the rescission 30 days in advance

o When providing notice carriers must inform the group or member of the opportunity to appeal the determination to rescind (as outlined in regulations for the appeals provision)

For group health plans, group policyholders control otice of membership eligibility. Therefore, when a member is removed from coverage, a carrier must be notified by the group .

MetLife’s 9th Annual Study of Employee Benefits Trends

MetLife’s new Study of Employee Benefits Trends is full of the latest – and sometimes surprising – insights about employers and their employees think about benefits. And, it delivers unique perspective on how the benefits landscape is changing.

Download the Study

For example, you know that successful companies depend on a strong foundation of loyal and productive employees.

However, this year’s Study reveals:

  • A workforce that has grown more dissatisfied
     and disloyal, to the point where a startling one in
     three employees hope to be working elsewhere
     in the next 12 months.
  • Yet, employers, perhaps focused on expense
     control and lulled by a period of low turnover,
     assume employees feel as loyal today as they
     did three years ago.

Benchmarketing Tool

Quickly compare benefits objectives and offerings — as well as employee attitudes — to those of similar companies and employee populations. View, print and download your results for your next presentation.

Take the Benchmarking Tool Tour!  Then visit the tool 

What is Next for Health Reform?

(Reuters) – One year ago, President Barack Obama signed into law a sweeping healthcare overhaul to fulfill a long-standing Democratic pledge to ensure healthcare coverage for all Americans.

Passage of the law was a major legislative victory for Obama and helped change the political landscape, but not always in the way Democrats had hoped. Republicans strongly opposed the law and successfully worked public skepticism about it into sweeping election victories in November.

Here’s a look at the uncertain future of the reform law.

REPEAL, DEFUND AND TAKE APART

Republicans, who say the law gives the federal government too much control and does little to reduce costs, have pushed a repeal bill through the U.S. House of Representatives after they took control in January. Full repeal, however, is unlikely unless Republicans successfully take control of the Senate and the White House in next year’s presidential elections.

The Democratic-led Senate will not go along with repeal and Obama would veto any such bill. Democrats argue the law’s reforms will slow the growth of healthcare costs while improving care and reducing the ranks of the uninsured.

A Republican move to withhold funds to stop implementation of the law will meet similar resistance from Senate Democrats.

That leaves Republicans the option of picking apart the law regulation by regulation. This strategy could be more successful.

Already, a revenue raising provision requiring businesses to file Internal Revenue Service forms on purchases and service totaling more than $600 a year is likely to be repealed with support from both parties.

The bill passed the House, and the Senate is expected to follow. The bill adjusts insurance purchase subsidies for middle income people as a way to cover the $22 billion cost of rescinding the so-called 1099 reporting provision.

COURT CHALLENGES

A number of states have challenged the constitutionality of the law’s requirement that most Americans obtain health insurance or pay a penalty. The rulings have been divided, and the issue is certain to end up before the U.S. Supreme Court.

A U.S. District Court judge in Florida ruled the entire law unconstitutional, while a U.S. judge in Virginia ruled the insurance mandate unconstitutional and upheld the rest of the law. Other courts have dismissed cases or have found the law’s mandate to purchase insurance constitutional.

The U.S. Supreme Court could decide as early as next year. Senate Finance Committee Chairman Max Baucus, who played a leading role in writing the healthcare law, and other healthcare advocates believe the law will be upheld.

Conservative critics give better than even odds that the Supreme Court will overturn the law.

If the court does decide that the coverage mandate violates the Constitution, many experts believe the judges would most likely strike down just that provision and leave the rest of the law intact.

A decision striking down the purchase mandate but leaving intact provisions requiring insurers to cover everyone regardless of medical history would wreak havoc on the insurance industry and send premiums soaring.

The law’s major provisions establishing state insurance exchanges, imposing coverage mandates and requirements that insurers can no longer exclude or charge more for preexisting conditions take effect in 2014. That would give lawmakers time to act on any court decision.

STATE ISSUES

Despite the court challenges and stiff Republican opposition, the federal government is moving ahead with implementation that mostly falls on the states.

A number of state governors, primarily Republicans, have balked at the added cost of the law to already tight budgets. States must set up insurance exchanges to help consumers and small businesses purchase insurance. States also have to maintain their Medicaid coverage for the poor until the program is expanded in 2014 to cover millions more low income people.

The Medicaid healthcare program is run by the states with federal financial aid, and many governors are looking to cut Medicaid spending to help balance budgets that took a huge hit during the economic recession.

The federal government will pick up the cost of expanded Medicaid coverage for three years, but many states worry about future added costs.

Some states are dragging their feet on establishing the insurance exchanges that are to go into effect in 2014, leaving it to the federal government to step in and operate them.

SAVING THE HEALTHCARE LAW

Democrats note the popular Social Security retirement and Medicare healthcare programs for the elderly also faced stiff political opposition from conservative Republicans and survived legal challenges.

If the healthcare law survives the constitutional challenge, most likely the current political opposition will begin to subside and the law will remain on the books.

Most Americans did not think the costly U.S. healthcare system was working well before the new law. Costs were soaring and millions were going without coverage.

Polling data show that while people are skeptical about the law, most do not want to see it scrapped entirely.

Republicans have yet to put forward a proposal to replace the current law and are not likely to take a comprehensive approach. Instead they most likely would take it step-by-step, starting with limits on medical malpractice lawsuits. They also would push to allow insurers, who are regulated at the state level, to sell policies across state lines.

© Thomson Reuters 2009 All rights reserved

EDD Reporting Changes

As of January 1, 2011, the Employment Development Department (EDD) is requiring annual reports to be submitted on a quarterly basis. This change will allow EDD and employers to identify overpayments and any amounts due more quickly, which will result in faster refunds.

What’s Changing

DE-6 and DE-7 forms have been replaced by new DE-9 and DE-9C forms.

  • DE- 9  (formerly form DE-6) Quarterly Contribution Return and Report of Wages Form
    Employers will use this form to report Unemployment Insurance, Disability Insurance, taxable wages and contributions
  • DE-9C (formerly from DE-7) Quarterly Contribution Return and Report of Wages Continuation Form
    Employers use this form to report employee wages and personal income tax withheld

For additional information, please visit the links below:

For FAQ’s regarding Payroll tax changes in 2011, click here.
http://www.edd.ca.gov/Payroll_Taxes/FAQ_-_2011_Payroll_Tax_Reporting_Changes.htm

To download Payroll tax forms and instructions, click here.
http://www.edd.ca.gov/Payroll_Taxes/Forms_and_Publications.htm#Forms

Anthem Individual Rate Hike July 1, 2011

Anthem Blue Cross Life and Health Insurance Company (Anthem) has agreed to a request by the California Department of Insurance to modify its pending rate filing, and will move ahead with revised premium increases effective July 1, 2011. 

They will begin notifying members affected by the July 1 rate change as early as mid-April.  Anthem is doing so following the end of a 60-day postponement requested by the state insurance commissioner.   

As part of the agreement, they will delay certain benefit changes in our original filing from a July 1, 2011 implementation to a January 1, 2012 implementation. In addition, the average premium increase will be slightly lower, averaging 9.1%, vs. the 9.8% in the company’s original rate filing.  An estimated 80,000 California customers will receive rate decreases per the original filing.