What Should an Employer do with Undeliverable 1095-C Forms?

Predicting Health Insurance Rates for 2016 in Illinois

Predicting Health Insurance Rates for 2016 in Illinois

By Robert Slayton

One good thing that came out of the Affordable Care Act is that any insurance company that is going to raise premiums more than 10 percent for individual or small group medical plans is required to file with the Federal Government. This information is made public so we can review it.
Unlike other states, Illinois has no authority to prevent the increases from being implemented as requested (this isn’t necessarily a bad thing, but just the way it is in Illinois). Based upon those rate increase requests, we have a pretty good idea of who will be the competitive players in the market for 2016.

BCBS of IL has requested increases from 12.83% to 38.24% for ACA plans. As a result, BCBS of IL is eliminating the Blue PPO (large PPO network) option in 2016 for ACA plans. All members on this plan will be migrated to the smaller Blue Choice network (which has about 40% of the doctors/hospitals as the larger network). This will impact approximately 173,000 people. Also expect BCBS to eliminate other plans that have been unprofitable.

If you are on a transitional plan, (plans written after 3/23/2010 to 12/31/2014) you may see increases of over 46%.

Coventry, Humana, and Health Alliance have also requested increases. If you look at the table below, it shows, generally, which increase impacts which plan. If you are on a subsidized plan, you will not see as dramatic of an increase if your income has stayed the same. Subsidies are based upon the second lowest silver plan. The assumption is that this plan will be more expensive in 2016 therefore providing you with a bigger subsidy. For everyone else, it will be a choice of paying the increase or keeping cable.

Aetna (who owns Coventry), Land of Lincoln Health, and IlliniCare are not listed as requesting a rate increase even though I’ve heard rumblings that some have. If we go with the assumption that they will increase rates less than 10%, then these will be some of the players who will win business away from BCBS.

One unknown is Land of Lincoln Health. I’ve had conversations with a board member who says the financials look good (doesn’t mean that they made a profit as it is difficult for any start up to make a profit in the first several years). If they continue to perform as they have, I’d say they will be the company most move to.

Expect all insurance companies to modify the plans they offer. We probably won’t know what these will look like until open enrollment begins on 11/1.

Below are the rates increase requests for ACA compliant plans.

For Transitional plans, here’s the rate table.

IRS Issues Draft Instructions for Forms 1094-C and 1095-C for 2015

Below was written by Larry Grudzien. In my opinion, it is best to have someone help with these filings for this year. Most payroll companies will do it (if you sign up by September/October timeframe). There are also a number of companies who will help (I have 5 on my desk that will do it). If you want help, let me know and I can direct you to an appropriate service. You can also rely on Larry's expertise in this matter.

By Larry Grudzien, Attorney-At-Law
708-717-9638, larry [at] larrygruidzien [dot] com                  

August 9, 2015

On August 6, 2015, IRS released draft instructions for Forms 1094-C and 1095-C for 2015. The following is an overview of important provisions to consider in the completion of the forms:

 1. Who Must File:

 If an employer is offering health coverage to employees other than under a self-insured plan, such as through an insured health plan or a multiemployer health plan, the issuer of the insurance or the sponsor of the plan providing the coverage is required to furnish the information about their health coverage to any enrolled employees, and the employer should not complete Form 1095-C, Part III for those employees.

 2. One Form 1095-C for Each Employee of Each Employer:

 For each full-time employee of an employer, there must be only one Form 1095-C filed for employment with that employer. For example, if an employer separately reports for each of its two divisions, the employer must combine the offer and coverage information for any employee who worked at both divisions during the calendar year so that a single Form 1095-C is filed for the calendar year for that employee which reports information for all twelve months of the calendar year from that employer.

 In contrast, a full-time employee who works for more than one employer that is a member of the same Aggregated ALE Group (that is, works for two separate ALE Members) must receive a separate Form 1095-C from each employer, unless the ALE Member is not treated as the employer for any calendar month in the calendar year as described later.

 For any calendar month in which a full-time employee works for more than one ALE Member of an Aggregated ALE Group, only one ALE Member is treated as the employer and only that ALE Member reports for that employee for that calendar month (and the other ALE Member is not required to report for that employee for that calendar month). If under these rules, an ALE member is not required to report for an employee for any month in the calendar year, the employer is not required to report for that full-time employee for that calendar year.

 3.   Form 1094-C, Column (c) Total Employee Count for ALE member:

 An employer must choose to use one of the following days of the month to determine the number of employees per month and must use that day for all months of the year: (1) the first day of each month; (2) the last day of each month; (3) the first day of the first payroll period that starts during each month; or (4) the last day of the first payroll period that starts during each month (provided that for each month that last day falls within the calendar month in which the payroll period starts). If the total number of employees was the same for every month of the entire calendar year, enter that number in line 23, column (c) "All 12 Months" or in the boxes for each month of the calendar year. If the number of employees for any month is zero, enter 0.

 4.  Form 1095-C,  line 14:

 An employer offers health coverage for a month only if it offers health coverage that would provide coverage for every day of that calendar month. Thus, if an employee terminates  coverage before the last day of the month, the employee does not actually have an offer of coverage for that month. See Line 16, code 2B later for how the employer may complete  Line 16 in the event an employee terminates coverage before the last day of the month.

 5.   Form 1095-C, line 14:

 For reporting offers of coverage for 2015, an employer relying on the multiemployer arrangement interim guidance should enter code 1H on line 14 for any month for which the employer enters code 2E on line 16 (indicating that the employer was required to contribute to a multiemployer plan on behalf of the employee for that month and therefore is eligible for multiemployer interim rule relief). For reporting for 2015, Code 1H may be entered without regard to whether the employee was eligible to enroll in coverage under the multiemployer plan. For 2016 and future years, reporting for offers of coverage made through a multiemployer plan may be reported in a different manner.

 6.  Form 1095-C, Line 14:

 An offer of COBRA continuation coverage that is made to a former employee upon termination of employment is reported as an offer of coverage using the appropriate indicator code on line 14 only if the former employee enrolls in the coverage. If the former employee does not enroll in the coverage (even if a spouse or dependent of the former employee independently enrolls in the coverage), code 1H (No offer of coverage) should be entered for any month for which the offer of COBRA continuation coverage applies.

 An offer of COBRA continuation coverage that is made to an active employee (for instance, an offer of COBRA continuation coverage that is made due to a reduction in the employee's  hours that resulted in the employee no longer being eligible for coverage under a plan) is reported in the same manner and using the same code as an offer of that type of coverage to any other active employee.

 7.   Form 1095-C, Line 16:

 If an employee is in an initial measurement period, enter code 2D (employee in a section 4980H(b) Limited Non-Assessment Period) for the month, and not code 2B (employee not a full-time employee). For an employee in a section 4980H(b) Limited Non-Assessment Period for whom the employer is also eligible for the multiemployer interim rule relief for the month code 2E, enter code 2E (multiemployer interim rule relief) and not code 2D (employee in a Limited Non Assessment period.

 8.   Form 1095-C, Line 16:

 Enter code 2E for any month for which the multiemployer interim guidance applies for that employee. Under the interim guidance regarding multiemployer arrangements,  an employer is treated as offering health coverage to an employee if the employer is required by a collective bargaining agreement or related participation agreement to make contributions for that employee to a multiemployer plan that offers, to individuals who satisfy the plan's eligibility conditions, health coverage that is affordable and provides minimum value, and that also offers health coverage to those individuals' dependents or is eligible for the section 4980H transition relief regarding offers of coverage to dependents.

 Codes 2F through 2H: Although employers may use the section 4980H affordability safe harbors to determine affordability for purposes of the multiemployer interim guidance, an employer eligible for the relief provided in the multiemployer interim guidance for a month for an employee should enter code 2E (multiemployer interim rule relief), and not a code for the section 4980H affordability safe harbors (codes 2F, 2G, or 2H).

 9.   Form 1095-C, Part III:

 If two or more employees employed by the same employer are spouses or employee and dependent, and one employee enrolled in a coverage option under the plan that also covered the other employee(s) (for example, one employee spouse enrolled in family coverage that provided coverage to the other employee spouse and their employee dependent child), the enrollment information should be reflected only on the Form 1095-C for the employee who enrolled in the coverage (but would report the other employee family members as covered individuals.

 10.  Form 1095-C, Part III:

 This part may be completed by an employer offering self-insured health coverage for any other individual who enrolled in the coverage under the plan for one or more calendar months of the year but was not an employee for any calendar month of the year, such as a non-employee director, a retired employee who retired in a previous year, a terminated employee receiving COBRA continuation coverage who terminated employment during a previous year, and a non-employee COBRA beneficiary (but not including an individual who obtained coverage through the employee's enrollment, such as a spouse or dependent obtaining coverage when an employee elects COBRA continuation coverage that is family coverage). If the Form 1095-C is used with respect to an individual who was not an employee for any month of the calendar year, Part II must be completed by using Code 1G in the "All 12 Months" box or the box for each month of the calendar year

 11.    Employee, Definition:

 For this purpose, an employee is an individual who is an employee under the common-law standard for determining employer-employee relationships. An employee does not include a sole proprietor, a partner in a partnership, an S corporation shareholder who owns at least 2-percent of the S corporation, a leased employee within the meaning of section 414(n) of the Code, or a worker that is a qualified real estate agent or direct seller. If an employee is an employee of more than one employer of the same Aggregated ALE Group during a calendar month, the employee is treated as an employee of the employer for whom the employee has the greatest number of hours of service for that calendar month; if the employee has an equal number of hours of service for two or more employers of the same Aggregated ALE Group for the calendar month, those employers must treat one of the employers as the employer of that employee for that calendar month.

 12.    Limited Non-Assessment Period, Definition:

 A Limited Non-Assessment Period generally refers to a period during which an ALE Member  will not be subject to an assessable payment under section 4980H(a), and in certain cases section 4980H(b), for a full-time employee, regardless of whether that employee is offered health coverage during that period.

 The first five periods described below are Limited Non-Assessment Periods only if the employee is offered health coverage by the first day of the first month following the end of the period, and are Limited Non-Assessment Periods for section 4980H(b) only if the health coverage that is offered at the end of the period provides minimum value.

 First Year as ALE Period. January through March of the first calendar year in which an employer is an ALE, but only for an employee who was not offered health coverage by the employer at any point during the prior calendar year. For this purpose, 2015 is not the first year an employer is an ALE, if that employer was an ALE in 2014 (notwithstanding that transition relief provides that no employer shared responsibility payments under section 4980H will apply for 2014 for any employer).

 Waiting Period under the Monthly Measurement Method. If an employer is using the monthly measurement method to determine whether an employee is a full-time employee, the period beginning with the first full calendar month in which the employee is first otherwise (but for completion of the waiting period) eligible for an offer of health coverage and ending no later than two full calendar months after the end of that first calendar month.

 Waiting Period under the Look-Back Measurement Method. If an employer is using the look-back measurement method to determine whether an employee is a full-time employee and the employee is reasonably expected to be a full-time employee at his or her start date, the period beginning on the employee's start date and ending not later than the end of the employee's third full calendar month of employment.

 Initial Measurement Period and Associated Administrative Period under the Look-Back Measurement Method. If an employer is using the look-back measurement method to determine whether a new employee is a full-time employee, and the employee is a variable hour employee, seasonal employee or part-time employee, the initial measurement period for that employee and the administrative period immediately following the end of that initial measurement period.

 Period Following Change in Status that Occurs During Initial Measurement Period Under the Look-Back Measurement Method. If an employer is using the look-back measurement method to determine whether a new employee is a full-time employee, and, as of the employee's start date, the employee is a variable hour employee, seasonal employee or part-time employee, but, during the initial measurement period, the employee has a change in employment status such that, if the employee had begun employment in the new position or status, the employee would have reasonably been expected to be a full-time employee, the period beginning on the date of the employee's change in employment status and ending not later than the end of the third full calendar month following the change in employment status. If the employee is a full-time employee based on the initial measurement period and the associated stability period starts sooner than the end of the third full calendar month following the change in employment status, this Limited Non-Assessment Period ends on the day before the first day of that associated stability period.

 First Calendar Month of Employment. If the employee's first day of employment is a day other than the first day of the calendar month, then the employee's first calendar month of employment is a Limited Non-Assessment Period.

 13.   Offer of Health Coverage, Definition

 An employer makes an offer of coverage to an employee if it provides the employee an effective opportunity to enroll in the health coverage (or to decline that coverage) at least once for each plan year. An employer makes an offer of health coverage to an employee for the plan year if it continues the employee's election of coverage from a prior year but provides the employee an effective opportunity to opt out of the health coverage. If an employer provides health coverage to an employee but does not provide the employee an effective opportunity to decline the coverage, the employer is treated as having made an offer of health coverage to the employee only if that health coverage provides minimum value and does not require an employee contribution for the coverage for any calendar month of more than 9.5 percent of a monthly amount determined as the mainland federal poverty line for a single individual for the applicable calendar year, divided by 12.

 For purposes of reporting, an offer to a spouse includes an offer to a spouse that is subject to a reasonable, objective condition, regardless of whether the spouse meets the reasonable, objective condition. For example, an offer of coverage that is available to a spouse only if the spouse certifies that the spouse does not have access to health coverage from another employer is treated as an offer of coverage to the spouse for reporting purposes. Note that this treatment is for reporting purposes only, and generally will not affect the spouse's eligibility for the premium tax credit if the spouse did not meet the condition and therefore did not have an actual offer of coverage.

 An employer offers health coverage for a month only if it offers health coverage that would provide coverage for every day of that calendar month. For reporting purposes, this means that an offer of coverage does not occur for a month if an employee's employment terminates before the last day of a calendar month and the health coverage also ends before the last day of that calendar month (or for an employee who did not enroll in coverage, the coverage would have ended if the employee had enrolled in coverage).

 An employer offers health coverage to an employee if it, or another employer in the Aggregated ALE Group, or a third party such as a multiemployer or single employer Taft-Hartley plan, a multiple employer welfare arrangement (MEWA), or, in certain cases, a staffing firm, offers health coverage on behalf of the employer.

 For a copy of the instructions, please click on the link below:

http://www.irs.gov/pub/irs-dft/i109495c--dft.pdf  

Opportunities to Purchase a Health Insurance Plan after Open Enrollment

The grid below comes from BCBS of IL (but applies to ALL states) and articulates what is considered a special enrollment, who is impacted, the timeline, and when a new policy would be effective. If you are unsure, ALWAYS talk to me as this chart doesn’t cover all circumstances.

NOTE: You can always purchase a Short Term Medical policy outside of open enrollment and special enrollment periods. Contact me for more information.

NOTE2: You can sign up for Medicaid at any time if you qualify (there are no enrollment periods).

Qualifying events can initiate a Special Enrollment Period (SEP) under the Affordable Care Act (ACA), and may allow your clients a window of time to select a new benefit policy or make a change to an existing policy. Here are events, enrollment dates and effective dates that may trigger an SEP. Categories that warrant special enrollment periods may be added in the future if other appropriate circumstances, as determined by CMS, become known.

Qualifying Event	Enrollment Period	Effective Date
Applicable to both Marketplace and non-Marketplace (on- and off-Exchange) Policies
Gaining/losing a dependent through birth/adoption/foster care/placement for adoption	60 days	Date of event
Gaining a dependent through marriage		First day of the following month after the event
Loss of Minimum Essential Health Coverage (MEC)*
Loss of eligible coverage from: Legal separation/divorce Cessation of dependent status (aging out) Death Termination or reduction of working hours with employer
Loss of coverage through an HMO due to relocation (applicable to both group and individual markets)
Incurs claim that meets or exceeds lifetime limits on all benefits
COBRA coverage ends
Employer ceases contributions either to subscriber or dependents	60 days	First day of the following month after the event
Permanent move		If the selection of the plan happens between first and fifteenth – the effective date is the first of the next month. If the selection of the plan happens after the fifteenth – the effective date is the first of the second following month.
Newly eligible/ineligible for advanced payments of tax credits or change in eligibility from cost-sharing reductions
Qualified Health Plan (QHP) substantially violates a material provision of its contract
Enrollment in QHP is made in error
Applicable to non-Marketplace (off-Exchange) Policies Only
Enrollment in non-calendar year policy ends	30 days	Date of event
Applicable to Marketplace (on-Exchange) Policies Only
Native American status	60 days	Eligible to enroll or change QHP policies on monthly basis
Attaining citizenship		Date of event
Demonstration of exceptional circumstances, as determined by the Exchange		Date of event

*Does not include loss of MEC due to failure to make premium payment and situations for allowable rescissions.

Individual Health Insurance Exchange (Marketplace) Subscribers and the 90 Day Grace Period to Pay Your Premium

Below is how BCBS of IL will handle claims for those people who have gotten a health insurance plan on the Exchange (Marketplace) AND receive a subsidy (Advance Premium Tax Credit).

It is my understanding that most other insurance carriers will be following a similar methodology, hence why I am posting this.

This is NOT for Small Group SHOP plans.

Blue Cross and Blue Shield of Illinois Providers Notified of ACA Grace Period Provision Providers will be receiving information in the Blue Cross and Blue Shield of Illinois (BCBSIL) provider newsletter about the Affordable Care Act (ACA) provision that allows Health Insurance Marketplace enrollees who receive the advance premium tax credit (APTC), a three-month grace period to pay their premium — provided they have already paid at least one month’s premium in full. It is important to note that not all members who purchase coverage on the Marketplace will receive the tax credit. During the three-month grace period, members are eligible for covered services under their plan.

The provision requires all payers to complete claims (for covered services rendered) in the first month of the grace period. For covered services rendered during months two and three, payers must either pay or hold claims for processing once the payments have been received. Notification of Eligibility Providers will be informed through eligibility and benefits verification when a member has entered into a grace period during months two and three of the grace period. All preauthorization letters will encourage providers to confirm whether the member is in a grace period prior to providing services. Claims Processing Payment for all allowable services provided during the first month of the grace period will be the responsibility of BCBSIL, subject to member cost sharing. During the second and third months of the grace period, BCBSIL will pend the claims the member incurs during this period. If the member pays all outstanding premium payment(s) in full, claims incurred during this period will process according to the member’s benefits. If the member has not paid premiums in full by the end of the grace period, BCBSIL will terminate the member’s policy retroactive to the first day of month two of the grace period. BCBSIL will deny any claims pended in months two and three of the grace period. Pharmacy Claims A member’s pharmacy claims will be denied during months two and three. If the member retroactively pays the premium in full, they may submit claims for prescriptions dispensed during this time to BCBSIL. If a member elects to receive a 90-day supply of a prescription during month one of the grace period, the member will receive the full 90-day prescription and BCBSIL will pay this claim. Member Responsibility for Payment We are encouraging providers to notify their patients that they will be responsible for payment of any outstanding claims for the full cost of provided services, if their health care coverage terminates at the end of the grace period.

2015 Cost-Sharing Limits for ACA Compliant Plans

Below is from BCBS of Illinois. Note the link to the final rule. Also note that if the health insurance provider cannot meet the Medal requirements (for Bronze, Silver, Gold) with such a low deductible, then they are allowed to make it higher than the limit. This is what we are seeing in the market today.

From BCBS of Illinois

Legislative Update 
2015 Cost-Sharing Limits

The U.S. Department of Health and Human Services’ Notice of Benefit and Payment Parameters for 2015 final rule set the following cost-sharing parameters for 2015.

• Out-of-pocket Maximum: The maximum annual limit on cost sharing will be $6,600 for self-only coverage and$13,200 for family coverage. As a reminder, if a plan is non-grandfathered, out-of-pocket member expenses for in-network essential health benefits (EHBs) cannot exceed these out-of-pocket limits.

• Deductible Limit for Small Groups (1-50): The maximum annual limit on small group deductibles will be$2,050 for self-only coverage and $4,100 for family coverage. As a reminder, non-grandfathered small group plans must cap deductibles for in-network EHBs at these amounts.

• Pediatric Dental Coverage: Stand-alone pediatric dental plans covering pediatric dental EHBs will have cost-sharing limits of $350 for coverage of one child and $700 for coverage of two or more children.

This communication is intended for informational purposes only. It is not intended to provide, does not constitute, and cannot be relied upon as legal, tax or compliance advice. The information contained in this communication is subject to change based on future regulation and guidance.

What Do I do after March 31st if I still want a health insurance plan?

This Q & A comes from BCBS and is important to understand. If you don't sign up by March 31 2014 open enrollment deadline, you WON'T be able to purchase a health plan (except a short term medical which imposes a pre-existing condition clause), except by one of the below reasons.

See below.

Q What if a person’s situation changes and he needs health care coverage? Can he go to the Marketplace outside of the open enrollment period?

A  If a person loses his job or has another qualifying life event, he may qualify for a special enrollment period on the Marketplace. A person will qualify if:

• He loses minimum essential coverage, including through divorce.
• He gains a dependent or becomes a dependent through marriage, birth, adoption or placement for adoption or foster care.
• He becomes a citizen, national or lawfully present individual.
• He is eligible to enroll but didn’t because of a mistake, misrepresentation or inaction of an officer, employee or agent of the Marketplace.
• The plan he enrolled in substantially violated a material provision of its contract with the individual.
• He becomes newly eligible for premium tax credits or cost-sharing assistance.
• He becomes ineligible for premium tax credits or cost-sharing assistance.
• He makes a permanent move and has access to new health plans.
• He is a member of an American Indian tribe (American Indians can enroll in a plan or change plans one time each month).
• He demonstrates to the Marketplace that he has other extenuating circumstances that qualify him for special enrollment.
• When any of these situations happen, he will have 60 days to go to the Marketplace to enroll in a health insurance plan or change plans.