Understanding Key Health Insurance Terms

Category: Employee Benefits

Understanding Key Health Insurance Terms

Posted On: November 23, 2020 | Categorized as: Employee Benefits

Understanding Key Health Insurance Terms The language of health insurance can be confusing but understanding some key terms will help your employees comprehend the basics of your organization’s plan, allowing them to make smart decisions that will benefit their family. Rather than feeling confused, encourage them to review the following key terms and ask questions when necessary. Premium - sometimes referred to as contributions, payroll deductions, or per pay costs, are the amount employees pay each month for covered health insurance. Copay - the fixed amount the employee pays for health care services, such as $25 for a doctor's visit. After your copay, the insurance pays the balance of the bill. Deductible - a fixed dollar amount the employees pay each plan year for health care services before their health insurance begins to pay. Coinsurance - the percentage of costs the employee will pay. If your organization’s plan has a…


Final Rules on Coverage Transparency

Posted On: November 16, 2020 | Categorized as: Compliance, Employee Benefits

Final Rules on Coverage Transparency On October 29, 2020, the Internal Revenue Service (IRS), Department of Labor (DOL), and the Department of Health and Human Services (HHS) (collectively, Departments), released final rules on coverage transparency, in order to provide health coverage recipients with an estimate of their potential cost-sharing liability for health related services prior to the receipt of care. The final rules require group health plans and insurance issuers in the individual and group markets to disclose cost-sharing information and negotiated rates in electronic or paper form. The final rules also allow issuers to reward plan enrollees with “shared savings payments,” without running afoul of medical loss ratio (MLR) requirements. Issuers are permitted to provide employees who use lower-priced providers with a percentage of the savings relative to a benchmark. Effective Dates Public Disclosure of Negotiated Rates and Historical Allowed Amounts: January 1, 2022 Disclosure of Cost Information: January…


6 Self-Funding Strategies to Suit Your Needs

Posted On: November 12, 2020 | Categorized as: Employee Benefits

Self Funded Plan printed on keyboarded key

6 Self-Funding Strategies Self-funding is nothing new as it has been a common form of health plan financing since 1974. Self-funding provides great flexibility with plan designs and provides freedom from most state laws. In fact, over 60% of US employees are covered under a self-insured medical plan. Under self-funded arrangements, the employer assumes all the risk of claims with backup protection from stop-loss coverage and retains the savings over fully insured. Employers partner with TPA and other vendors to provide claims administration, case management and network access. Employers with as many as 50 employees can consider self-funding, however we see employers with 100 or more participating in this funding arrangement. Advantages and Benefits The employer, which is also known as the plan sponsor in a self-funded arrangement, can determine the plan design that best suits the needs of their employees. Regulatory is defined at federal only, not state. The…


3 ACA Reporting Errors and The Pandemic’s Impact

Posted On: October 22, 2020 | Categorized as: Compliance, Employee Benefits

3 ACA Reporting Errors and The Pandemic’s Impact As we approach the end of 2020, we must consider how the various enrollment fluctuations due to the COVID-19 Pandemic will impact the ACA Employer Mandate and the already tedious 1095/1094 ACA Reporting. The IRS recently granted a March 2nd deadline extension for the 1095 reporting and this extra time will likely be needed for employers to accurately audit their data as we are expecting to see additional errors due to furloughs, layoffs and coverage extensions. Prior to filing, employers should audit their reporting for the following common errors to avoid an unnecessary penalty letter. Enrollment Changes and Code Errors For each month an employee is offered coverage and one of codes 1B through 1E is entered in line 14, an employee should have a dollar amount indicated in line 15. If there are blank entries this could trigger a penalty for…


Have You Received an MLR Rebate Check? What To Do Next?

Posted On: October 9, 2020 | Categorized as: Compliance, Employee Benefits

Have You Received an MLR Rebate Check? What To Do Next? The Affordable Care Act requires health insurance carriers to spend at least 80-85 percent of premium dollars on medical care and healthcare quality improvement. If the carrier does not meet this medical loss ratio (MLR) obligation, it must give affected customers a rebate.  Rebates must be distributed by the carriers each year by September 30. Any employer that receives a refund then needs process and distribute within 90 days to avoid triggering ERISA trust requirements. For your convenience we have included more information regarding this topic in our compliance bulletin, including: How should the rebate be divided? Are former plan participants entitled to a share in the rebate? How may the employer use the rebate? How should the rebate be provided? Additional Q&As on how the rebate should be used If you have any questions about distribution or how…


Judge Rules for HHS in Price Transparency Case

Posted On: June 25, 2020 | Categorized as: Employee Benefits

Judge Rules for HHS in Price Transparency Case

Judge Rules for HHS in Price Transparency Case A federal judge ruled against the American Hospital Association (AHA) on Tuesday in its lawsuit attempting to block an HHS rule pushing for price transparency. The judge ruled in favor of the department, which requires hospitals to reveal private, negotiated rates with insurers beginning Jan. 1.  The AHA stated they are requesting an expedited review as they are concerned with the significant burden this will place on hospitals when resources are already stretched thin as a result of the pandemic and increased patient care needed.  Click here to read the full brief.  



IRS Releases Two New COVID-19 Notices

Posted On: May 13, 2020 | Categorized as: Employee Benefits, HR Consulting

IRS Releases Two New COVID-19 Notices To provide additional relief to Americans during these challenging times, the IRS released Notice 2020-29 and 2020-33. These notices provided new relaxed rules for 2020 for making elections under Cafeteria plans, using amounts during a grace period or carryover period changes to the method determining the carryover amounts under Health Flexible Spending Accounts (FSAs)  and clarifying which premiums can be reimbursed under Individual Coverage Health Reimbursement Arrangements (ICHRAs). Notice 2020-29 In Notice 2020-29, the IRS provides for increased flexibility with respect to mid-year elections under a cafeteria plan during calendar year 2020 related to employer sponsored health coverage, Health FSAs and Dependent Care Assistance Plans (DCAPs). This notice also provides increased flexibility with respect to grace periods and carryover periods to apply unused amounts in health FSAs to medical care expenses incurred through December 31, 2020, and unused amounts in dependent care assistance programs…


Open Enrollment and Outcomes Based Health Screenings Options During COVID-19

Posted On: May 5, 2020 | Categorized as: Employee Benefits

open enrollment options

Open Enrollment and Outcomes Based Health Screenings Options During COVID-19 Due to the COVID-19 outbreak, employers who were planning on offering on-site health screenings tied to payroll deductions are unfortunately being forced to consider other options.  Thankfully, the screening vendors have been flexible with delaying screening dates. As an employer, if you were offering premium discounts based on screening results, you must decide what to do with your payroll deductions and incentives now that screenings will not be occurring before the start of your new plan year. What options do employers with outcomes based wellness plans have? Many employers have expressed interest in keeping the current payroll deduction rates in place for a few more months. Unfortunately, under HIPAA’s rules regarding health contingent wellness programs, this option is not allowed.  Members must be given the opportunity to screen and earn incentives at least once every 12 months. To comply with…


Final Rule on the Extension of Certain Timeframes for Employee Benefit Plans Due to COVID-19

Posted On: May 4, 2020 | Categorized as: Compliance, Employee Benefits

On March 13, 2020, President Trump issued the Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak and by separate letter made a determination, under Section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, that a national emergency exists nationwide beginning March 1, 2020, as the result of the COVID-19 outbreak. The Department of Labor (DOL) and the Department of the Treasury (Treasury) issued a final rule that extends certain timeframes under the Employee Retirement Income Security Act (ERISA) and Internal Revenue Code (IRC) for group health plans, disability, and other welfare plans, pension plans, and participants and beneficiaries of these plans during the COVID-19 national emergency. The timing extensions are issued to help alleviate problems faced by health plans to comply with strict ERISA and IRC timeframes and problems faced by participants and beneficiaries in exercising their rights under health plans…


Paycheck Protection Program and Health Care Enhancement Act

Posted On: April 29, 2020 | Categorized as: Compliance, Employee Benefits

PPP blocks

Paycheck Protection Program and Health Care Enhancement ActIn response to the spread of the 2019 novel coronavirus (COVID-19), President Trump signed the Paycheck Protection Program and Health Care Enhancement Act (PPPHCEA) into law on April 24, 2020. The PPPHCEA is phase 3.5 in Congress' response to the COVID-19 pandemic following the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, and the Families First Coronavirus Response Act (FFCRA). The PPPHCEA is a $484 billion package that increases amounts authorized and appropriated for the Paycheck Protection Program (PPP) discussed in our April 2, 2020, and April 13, 2020, Advisors for emergency economic injury disaster loans (EIDL) and for emergency grants under the CARES Act. The PPPHCEA also provides additional funding for health care providers.PPP FundingThe PPP was established under the CARES Act to provide small employers with an incentive to keep workers on their…


Relaxed Life, Disability and Long-Term Care Insurance Underwriting

Posted On: April 28, 2020 | Categorized as: Employee Benefits

As a result of the COVID-19 National Emergency, insurance companies have adapted to help individuals easily secure protection and obtain insurance without a medical exam that requires a nurse to visit your home or office. This is a TEMPORARY change that will likely end when social distancing can stop. How This Can help You:  You may get approved for the insurance products listed below without having to complete a medical exam or provide fluids during the underwriting process: Term and & Permanent Insurance Age 18-65: Up to $5,000,000 of death benefit Age 66-70: Up to $3,000,000 of death benefit Long-Term Care Insurance No limit on monthly LTC benefit Disability Insurance Age 18-45: No limit on monthly benefit Simplified Application Process Go to the insurance carrier’s online submission tool with Innovative to complete the electronic application. Electronically sign any necessary forms for your application. The insurance carrier will schedule and conduct…


Gov. Murphy Signs Executive Order Granting Grace Periods for Insurance Premium Payments

Posted On: April 14, 2020 | Categorized as: Compliance, Employee Benefits

Gov. Murphy Signs Executive Order Granting Grace Periods for Insurance Premium Payments On April 9, 2020, New Jersey Governor Phil Murphy signed Executive Order No. 123, extending grace periods during which certain insurance companies, including health and dental insurers, life insurers, and property and casualty insurers, will not be able to cancel policies for nonpayment of premiums. Grace Periods for Small Group Employer (0-50 EE’s) Grace period may be initially applied to April or May premium as the policyholder determines and will continue for 60 days from that date. Coverage MUST remain in force and claims must be paid not pended. If a carrier has already provided a grace period for April premium, the time period for which a grace period has already been granted shall be applied toward the emergency grace period. Grace period only applies to policyholders that were in good standing with their insurance carrier on March 1,…


CARES Act: Impact on Employee Benefits

Posted On: April 7, 2020 | Categorized as: Compliance, Employee Benefits

CARES Act: Impact on Employee Benefits On March 27, 2020, Congress passed, and the President signed, an unprecedented 2 trillion-dollar stimulus and relief package into law, named the Coronavirus Aid, Relief, and Economic Security Act or the CARES Act. This act provides direct stimulus relief to corporations and individuals. While there are many facets to this act, this brief serves to highlight the changes to employee benefits due to the CARES Act. Expanded COVID-19 Testing The Families First Coronavirus Response Act (FFCRA) required group health plans and insurers to provide coverage of certain diagnostic COVID-19 testing and related services without cost-sharing and without preauthorization. The CARES Act expands on these provisions: All testing for COVID-19 must be covered without cost-sharing for fully insured and self-funded plans. In addition to tests approved by the FDA, this includes tests for which: the developer has requested, or intends to request, an emergency use…


COVID-19 Employer Considerations Regarding Employment Decisions and Plan Coverage Changes

Posted On: April 7, 2020 | Categorized as: Employee Benefits, HR Consulting

Due to the recent national health crisis in our country, many employers are considering the best way to handle a temporary economic turndown to best position themselves for recovery once the pandemic ceases and businesses can begin to return to some sense of normalcy. In addition, many employers are also navigating the benefit coverage changes being made by their insurance carrier(s) or by state and/or federal mandates which may include cost considerations, plan document revisions and employee notifications. Below are some explanations regarding various workplace employment options and health plan considerations. Employer/Employee Relationship One of the decisions employers are faced with is how to handle their workforce. Employers and insurance companies are using many terms to describe employer/employee relationships such as reduction in hours. furlough, temporary layoff, and permanent layoff. Many employers desire to keep employee benefits intact during this period. It is important to understand the differences and how…


Telemedicine Wait Times

Posted On: April 2, 2020 | Categorized as: Employee Benefits

In light of the recent COVID-19 (coronavirus) outbreak. The CDC recommends leveraging telemedicine for your unique medical needs to help limit the spread of the virus by eliminating the risk of exposure to the ER, urgent care, and primary care offices. They are recommending members schedule their virtual visits rather than remain in the virtual waiting room for an unknown period of time. For more information, download PDF here.  Please contact the Innovative Benefit Planning team if you have any further questions.


COVID-19: Carrier Enhancements

Posted On: March 17, 2020 | Categorized as: Employee Benefits

COVID-19: Carrier Enhancements March 17th, 2020 Due to the outbreak of COVID-19 in the United States, the CEO’s of major US health insurance companies met at the White House on March 10, 2020 and agreed to waive costs for certain services such as the COVID-19 test, telemedicine services and prescription refill limitations. Whether you are an employer sponsoring a fully-insured or self-funded plan, it is important to understand the insurance companies response to how certain benefits are being enhanced to address this global pandemic.  For the fully-insured health plans these changes are happening automatically.  Self-funded plans thus far have the option to adopt these enhancements. On March 11th, The Internal Revenue Service advised that high-deductible health plans (HDHPs) can pay for COVID-19 related testing and treatment, without jeopardizing their status. This also means that an individual with an HDHP that covers these costs may continue to contribute to a health…


Ways Employers Can Deal With Employee Student Loan Debt

Posted On: February 25, 2020 | Categorized as: Employee Benefits, Retirement Plans

Ways Employers Can Deal With Employee Student Loan Debt February 25th, 2020 Student debt has increased dramatically in recent years, creating a financial burden on employees’ ability to save for retirement. Many employers have begun implementing programs to help employees manage student loan debt. Millennials (and their families) are often burdened with significant student loan debt. More than 70 million millennials make up 50% of today’s workforce, and that number is growing. Also, many older workers in the “sandwich generation” are saving for their children’s college. Both of these scenarios provide opportunities for employers to design programs that help employees reduce their financial stress (which often affects productivity), as well as make the company more attractive to talented candidates. To review your options, feel free to contact Innovative Benefit Planning. We have extensive experience guiding clients through these decisions, and would be more than happy to help.


The ACA’s Cadillac, HIT and Medical Device Taxes Are Repealed; PCORI Fee Extended for 10 More Years

Posted On: December 24, 2019 | Categorized as: Compliance, Employee Benefits

On December 20, 2019, the President signed a $1.4 trillion spending bill that will fund the federal government through September 30, 2020. The bill signed by the President specifically includes the repeal of three major taxes that fund the Affordable Care Act (ACA), including the “Cadillac” tax, the health insurance tax (HIT), and the medical device tax. The excise, or “Cadillac,” tax is a provision of the 2010 ACA law that assesses employer penalties for offering health plans exceeding a certain value, expected to take effect in January 2022. While the Cadillac tax was designed to penalize high-value plans, analyses showed that even moderately priced plans stood to be affected by its implementation. The Cadillac tax has been unpopular with both lawmakers and employers, and its implementation has been repeatedly delayed. With this spending bill, the tax has been fully repealed and will not take effect. Not only does the…


IRS Extends ACA Reporting Deadline for Furnishing Statements for 2019 from January 31 to March 2, 2020

Posted On: December 3, 2019 | Categorized as: Compliance, Employee Benefits

In Notice 2019-63, the IRS extended the 2020 deadline for employers and insurers to furnish individual statements on 2019 health coverage and full-time employee status (Forms 1095-B and 1095-C) from January 31 to March 2. The notice also extends the good-faith penalty relief to 2019 for incorrect or incomplete reports due in 2020. In the Notice, the IRS did not extend the due date for filing the 1094 and 1095 forms with the IRS. If filing by paper, forms are due February 28, 2020, or March 31, 2020, if filing electronically. Please remember that filers can still take advantage of an automatic 30-day extension of the IRS filing deadline by submitting Form 8809 before the relevant due date. IRS indicated that it will continue to require the Filing of Form 1095-B and the completion of Part III of Form 1095-C for 2019. Notice 2019-63 also extends the good-faith relief to 2019. This relief applies to missing and inaccurate taxpayer identification numbers…


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