healthcare

The Check’s in the Mail — MLR Premium Rebate Checks and What Do We Do with Them

Some BBG employer clients are reporting that they have received MLR rebate checks from their carrier.

What are MLR rebate checks and why do only some employers receive them?

Affordable Care Act rules stipulate that insurance carriers must spend a certain percentage of health insurance premiums on medical claims and other specified related activities. This is referred to as a Medical Loss Ratio (MLR).

The MLR ratio for small groups is 80/20, For large groups it’s 85/15.

If an insurance company spends less than the MLR amount designated by Obamacare then the insurance company must rebate the unspent portion back to the employer sponsoring the plan.

Wondering what to do if you are one of those employers receiving an MLR rebate check?

There are rules established by the Department of Labor governing distribution. Employers must use these as guide when allocating and distributing the rebate dollars. The rules can be found here http://dol.gov/ebsa/newsroom/tr11-04.html.

In a nutshell:

Employer groups are required to treat the rebate as a plan asset.  Uses may include, but are not limited to, reducing future premiums or premium increases, or rebating a portion back to the subscribers.  The rebate is required to be used for the benefit of the subscribers in one of the following ways:

• To reduce subscribers’ portion of the annual premium for the subsequent policy year for all subscribers covered under any group health policy offered by the plan;
• To reduce subscribers’ portion of the annual premium for the subsequent policy year for only those
subscribers covered by the group health policy on which the rebate was based; or
• To provide a cash refund only to the subscribers who were covered by the group health policy on which the rebate is based.

A more thorough review of what to do with MLR Rebate Checks can be found by clicking here How Employers Should Handle MLR Rebates

Clients can contact BBG for assistance.

Example Rebate Check

IRS Announces HSA/HDHP Limits for 2018

 

 

Perhaps this is early but you can file it.

IRS Announces HSA-HDHP Limits for 2018

 

 

Who knows where the federal healthcare regulations are going, but if the Republicans (and the President) pass anything it will likely affect the group market by:

  • Removing the cost share regulations
  • Reduce the reporting requirements
  • Allow carriers to create more types of plans

We will report on those types of things when/if the Senate releases their proposed version of a new healthcare bill .

Medicare Eligible Employees/Dependents…. Don’t Assume You Can Waive Part B

Medicare can be tricky when it is coordinating with Group Health Coverage.

This is especially true when Medicare enrollees WAIVE Part B coverage, thinking that they don’t need it because they have Group Health Coverage.

Our message to those people is BE CAREFUL. You must be certain that if you waive Part B coverage that you are not opening yourself up to claims exposure.

Never assume that a Group Health Plan will step in and cover claims.

Since CMS clearly states that the INDIVIDUAL is responsible to know (not the employer nor the insurance company) the Medicare coordination with other coverage, it is critical to be careful and do the research.

Here are some examples where things get tricky:

  • When an employer has fewer than 20 employees, Medicare is primary. With some insurance companies they do not even pay claims if Medicare does not approve. If one does not enroll in Part B, that means NOTHING is approved by Medicare. Translation: Costs that would have gone to Part B are not approved by Medicare and not approved by the insurance company. This is a big problem.
  • When an employer has fewer than 100 employees, Medicare that is DUE TO DISABILITY is primary. The same rules apply.
  • When someone is on COBRA and Medicare, Medicare is primary no matter how many employees the employer has. If the member on COBRA waives Part B, they face potential liability. People could easily assume that the rules would be the same as when they were active on the plan (vs COBRA), but that would be a mistake.

While we at BBG will help our clients get the right answer and try to fix things if someone has assumed the wrong thing, we urge everyone who is Medicare eligible to engage to find the right answers. We are not responsible for errors in Medicare enrollment, but we can be a resource for assistance.

No one should assume that waiving Medicare Part B coverage will be just fine. Getting the right answers and keeping the documentation is critical if you waive Part B.

Medicare 101

Now That ACA Remains in Place Maybe We Should Keep An Eye On This Recent HHS Letter to Governors.

“……We are seeking to empower states with new opportunities that will strengthen their health insurance markets.”

Thomas E. Price, M.D., The Secretary of Health and Human Services (HHS), A Letter To Governors, dated March 13, 2017

 

On March 13, 2017, the Department of Health and Human Services (HHS) sent a letter to state governors to highlight Section 1332 of the Affordable Care Act (ACA). Beginning in 2017, Section 1332 allows states to apply for a State Innovation Waiver from certain ACA requirements.

With the lawmakers firmly stuck in the healthcare mud, one wonders if some states might start to make health insurance changes on their own. Under a little known provision of the Affordable Care Act (Section 1332) called the State Innovation Waiver, states have the ability to make changes by applying for waivers from certain major provisions of the law beginning this year (2017).  These waivers are intended to allow states the flexibility to pursue innovative strategies for providing their residents with access to high quality, affordable health insurance, while retaining some of the consumer protections of the ACA.

Examples of things that may be waived include:

  • Establishment of qualified health plans (QHPs);
  • Consumer choices and insurance competition through the Exchanges;
  • Premium tax credits and cost-sharing reductions for plans offered within the Exchanges;
  • The employer shared responsibility rules; and
  • The individual mandate.

While this provision and Price’s recent letter on the subject seemingly flew under the radar, you have to wonder if we might start to see some states initiating their own changes to Obamacare. If this is going to happen, we’ll likely start hearing about it in the next few months.  Sometime this summer is when carriers submit rate increases or announce intentions to withdraw from the individual market all together.  Analysts are predicting both to happen.  It’s anticipated carriers will request huge rate increases — sticker shock on steroids — for individual plans on and off exchange.  And, more carriers are expected to be leaving the individual market.  Aetna and UnitedHealthcare are already out, and Bloomberg recently reported that Anthem (BlueCross and Blue Shield in 14 states) is leaning toward exiting in most if not all of its markets.

I doubt anyone really knows where all this is going, or where it will end up. Maybe some states will act, maybe not.

One thing that’s almost certain: Access to employer sponsored health plans will be more important than any time since Obamacare (ACA) became law.

Here’s a link to more info:  HHS Promotes ACA Section 1332 Waivers

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