Today, November 6, 2014, marks the first day that insurance companies are allowed by CMS to market plans for 2015!
First out of the gate today is Bluechoice Healthplan of South Carolina, who just sent us plan brochures for the 2015 plan year. For 2015, Bluechoice has renamed its product line – all individual plans will now be sold under the “Blue Options” name. We hope this will help prevent confusion, as we have encountered many situations where providers thought that clients on individual Bluechoice health plans were covered by the Bluechoice Medicaid plan.
Why choose Bluechoice SC 2015 health plans?
BlueChoice HealthPlan offers Blue Option to individuals and families seeking health coverage in South Carolina. BlueChoice HealthPlan has more than 30 years of experience providing security to South Carolinians. Bluechoice’s service, value and quality are evident in all Blue Option plans.
– 23 Plan designs to fit your budget: 4 Gold, 12 Silver, 6 Bronze plans and 1 Catastrophic plan available to SC residents.
– Expanded statewide doctor and hospital network
– Vision and dental coverage included for all
– 24/7 phone access to doctors and nurses
– Nationally recognized health plan for service and member satisfaction
– Life management services including legal, financial and self-help
Click the link below to view Bluechoice South Carolina 2015 Plans:
Breaking News out of DC! We have just learned that the Department of Health and Human Services has released preliminary guidance on Self Funded Large group plans that exclude hospitalization coverage, yet still meet Minimum Value criteria due to flaws in the MV calculator. This subject has recently made big news in the large group health insurance sector.
According to various sources, DHHS intended to act fast to remedy this situation, and based on guidance released today, they did! In order to provide as much info as possible (it’s been a long day helping people here at SChealthconnector – and this news arrived late this evening!) we are going to cut to the chase and provide the text of the guidance we received below. Stay tuned for more detailed analysis. At first glance, however, it appears HHS may allow employers to keep these plans (already in effect) while allowing employees to access marketplace tax credits! Big news, indeed!
I. PURPOSE AND OVERVIEW
The Department of Health and Human Services (HHS) and the Department of
the Treasury (including the Internal Revenue Service) (collectively, the Departments)
have become aware that certain group health plan benefit designs that do not provide
coverage for in-patient hospitalization services are being promoted to employers. A
plan that fails to provide substantial coverage for these services would fail to offer
fundamental benefits that are nearly universally covered, and historically have been
considered integral to coverage, under typical employer-sponsored group health plans.
Promoters of these plans contend that the plans satisfy minimum value within the
meaning of the Affordable Care Act (including section 36B(c)(2)(C)(ii)of the Internal
Revenue Code (Code) and final HHS regulations under section1302(d)(2)(C) of the
Affordable Care Act (referred to in this notice as minimum value or MV)), as determined
through use of the on-line MV Calculator referred to in final HHS regulations and
proposed Treasury regulations.
Questions have been raised as to whether plans that fail to provide substantial
coverage for in-patient hospitalization services should satisfy the requirements for
providing minimum value. Concerns have been raised as to whether the continuance
tables underlying the MV Calculator (and thus the MV Calculator) produce valid
actuarial results for unconventional plan designs that exclude substantial coverage for
in-patient hospitalization services. These concerns include that the standard population
and other underlying assumptions used in developing the MV Calculator and associated
continuance tables are based on typical self-insured employer-sponsored plans,
essentially all of which historically have included coverage for these services, and that
designing a plan to exclude such coverage could substantially affect the composition of
the population covered by discouraging enrollment by employees who have, or
anticipate that they might have, significant health issues. It has been suggested that
these and other effects resulting from excluding substantial coverage of in-patient
hospitalization services may not be adequately taken into account by the MV Calculator
and its underlying continuance tables. Similar concerns have been raised regarding the
possibility of using the MV calculator to demonstrate that an unconventional plan design
that excludes substantial coverage of physician services provides minimum value.
The Departments believe that plans that fail to provide substantial coverage for
in-patient hospitalization services or for physician services (or for both) (referred to in
this notice as Non-Hospital/Non-Physician Services Plans) do not provide the minimum
value intended by the minimum value requirement and will shortly propose regulations
to this effect with a view to being in a position to finalize such regulations during 2015
and make them applicable upon finalization. Accordingly, employers should consider
the consequences of the inability to rely solely on the MV Calculator (or any actuarial certification or valuation) to demonstrate that a Non-Hospital/Non-Physician Services
Plan provides minimum value for any portion of any taxable year ending on or after
January 1, 2015, that follows finalization of such regulations. However, solely in the
case of an employer that has entered into a binding written commitment to adopt, or has
begun enrolling employees in, a Non-Hospital/Non-Physician Services Plan prior to
November 4, 2014 based on the employer’s reliance on the results of use of the MV
Calculator (a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan), the
Departments anticipate that final regulations, when issued, will not be applicable for
purposes of Code section 4980H with respect to the plan before the end of the plan
year (as in effect under the terms of the plan on November 3, 2014) if that plan year
begins no later than March 1, 2015.
Pending issuance of final regulations, an employee will not be required to treat a
Non-Hospital/Non-Physician Services Plan as providing minimum value for purposes of
an employee’s eligibility for a premium tax credit under Code section 36B, regardless of
whether the plan is a Pre-November 4, 2014 Non-Hospital/Non-Physician Services
An employee or family member who is offered coverage under an eligible
employer-sponsored plan that offers affordable MV coverage for the employee may not
receive premium tax credit assistance under Code section 36B for coverage in a
qualified health plan. An applicable large employer (as defined in Code section
4980H(c)(2)) may be liable for a section 4980H assessable payment if one or more of
its full-time employees receives a premium tax credit.
Under Code section 36B(c)(2)(C)(ii), a plan provides MV if the plan’s share of the
total allowed costs of benefits provided under the plan is at least 60 percent of the
costs. Section 1302(d)(2)(C) of the Affordable Care Act provides that in determining the
percentage of the total allowed costs of benefits provided by a group health plan or
health insurance coverage under the Code, as well as under the Public Health Service
Act (PHSA), regulations promulgated by the Secretary of HHS under section 1302(d)(2),
addressing actuarial value, apply.
HHS published final regulations under section 1302(d)(2) on February 25, 2013
(78 FR 12834), effective on April 26, 2013. For plans required to cover the essential
health benefits (EHB), the HHS regulations define the percentage of the total allowed
costs of benefits as (1) the anticipated covered medical spending for EHB (as defined in
45 CFR 156.110(a)) paid by a health plan for a standard population, (2) computed in
accordance with the plan’s cost-sharing, and (3) divided by the total anticipated allowed
charges for EHB coverage provided to a standard population. 45 CFR 156.20.
The preamble also states that MV is measured based on the provision of EHBs to a
standard population based on typical self-insured group health plans and that, in
determining MV, plans may take into account those benefits covered by the employer
that are covered in any one of the state EHB-benchmark plans. See 45 CFR
Proposed regulations under Code section 36B on MV published by Treasury and
the IRS on May 3, 2013 (78 FR 25909), apply these rules in defining the standard
population for MV purposes and the MV percentage. The proposed Code section 36B
regulations provide that the MV percentage is determined by dividing the plan’s
anticipated spending (based on the plan’s cost-sharing) for EHB under any one state
benchmark plan by the total cost of EHBs for the standard population and converting
the result to a percentage. Proposed 26 CFR 1.36B-6(c). Neither the final HHS
regulations nor the proposed Code section 36B regulations require employer-sponsored
self-insured and insured large group plans to cover every EHB category or conform their
plans to an EHB benchmark that applies to individual and small group market plans.
The HHS regulations allow MV to be determined using an MV Calculator
(available at http://cciio.cms.gov/resources/regulations/index.html) or a safe harbor
established by HHS and the IRS. Under the regulations, plans with “nonstandard”
features that are incompatible with the MV Calculator or a safe harbor may determine
MV through an actuarial certification from a member of the American Academy of
Actuaries. A plan in the small group market provides MV if it meets the requirements for
any of the levels of metal coverage defined at 45 CFR 156.140(b) (bronze, silver, gold,
The proposed Code section 36B regulations require plans to determine MV by
using either a safe harbor or the MV Calculator. Employers using the MV Calculator
may, however, supplement the MV Calculator by obtaining actuarial valuation of a
plan’s nonstandard features.
III. INTENDED APPROACH
A. Proposed Amendments to Regulations Relating to Minimum Value
HHS intends to promptly propose amending 45 CFR 156.145 to provide that a
plan will not provide minimum value if it excludes substantial coverage for in-patient
hospitalization services or physician services (or both). Treasury and the IRS intend to
issue proposed regulations that apply these proposed HHS regulations under Code
section 36B. Accordingly, under the HHS and Treasury regulations, an employer will
not be permitted to use the MV Calculator (or any actuarial certification or valuation) to
demonstrate that a Non-Hospital/Non-Physician Services Plan provides minimum value.
It is anticipated that the proposed changes to regulations will be finalized in 2015
and will apply to plans other than Pre-November 4, 2014 Non-Hospital/Non-Physician
Services Plans on the date they become final rather than being delayed to the end of
2015 or the end of the 2015 plan year. As a result, a Non-Hospital/Non-Physician Services Plan (other than a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan) should not be adopted for the 2015 plan year. (As noted above, it is anticipated that the proposed changes to regulations, when finalized, will not apply to
Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plans until after the end of
the plan year beginning no later than March 1, 2015. The Departments anticipate that
final rulemaking will be completed on or about that date.)
Pending issuance of final regulations, in no event will an employee be required to
treat a Non-Hospital/Non-Physician Services Plan as providing MV for purposes of an
employee’s eligibility for a premium tax credit under Code section 36B, regardless of
whether the plan is a Pre-November 4, 2014 Non-Hospital/Non-Physician Services
B. Employer Duty to Inform Employees
An employer that offers a Non-Hospital/Non-Physician Services Plan (including
a Pre-November 4, 2014 Non-Hospital/Non-Physician Services Plan) to an employee
(1) must not state or imply in any disclosure that the offer of coverage under the Non-Hospital /Non-Physician Services Plan precludes an employee from obtaining a premium tax credit, if otherwise eligible, and (2) must timely correct any prior disclosures that stated or implied that the offer of the Non-Hospital/Non-Physician Services Plan would preclude an otherwise tax-credit-eligible employee from obtaining a premium tax credit. Without such a corrective disclosure, a statement (for example, in a summary of benefits and coverage) that a Non-Hospital/Non-Physician Services Plan provides minimum value will be considered to imply that the offer of such a plan precludes employees from obtaining a premium tax credit. However, an employer that also offers an employee another plan that is not a Non-Hospital/Non/-Physician Services Plan and that is affordable and provides MV is permitted to advise the employee that the offer of this other plan will or may preclude the employee from obtaining a premium tax credit.
FOR FURTHER INFORMATION
The Departments have coordinated on the guidance and other information
contained in this notice, and HHS is concurrently issuing parallel guidance. Questions
concerning the information contained in this notice may be directed to HHS at 301-492-
5153 or the IRS at 202-317-7006. Additional information for employers regarding the
Affordable Care Act is available at www.healthcare.gov, www.irs.gov/ACA, and