Consumer Driven Plans:

Consumer driven plans (CDHP) have become the fastest growing products in the healthcare benefits industry for a very good reason. For companies that receive proper education, communication, implementation and have developed a long term benefit strategy; consumer driven plans can be a significant cost savings for both the employer and employees.

CDHP have been on the market for several years and have introduced the power of the American consumer into our third party payer system. These plans spark incentive for patients to ask questions, understand how utilization affects the bottom line, and participate in their own health management. We have seen a steady increase in provider education and comprehension of these plan designs. Today, doctors understand patients needs as it relates to benefits, answer questions they normally would not been prepared to and have taken an active role in adjusting their revenue management systems to accommodate the new adjudication of claims and payments.

Consumer driven plans come in the form of high deductible or hybrid options that offer a lower premium in comparison to HMO and PPO plan offerings. Plans can be coupled with various qualified accounts such as health savings, health reimbursement and flexible spending. Depending on the creativity of your benefit plan design; there may be opportunity for an employer to save money while providing 100% healthcare coverage to employees.

 

ARRA Legislation Update: 

If an employee loses his or her job, employers subject to COBRA or any State continuation coverage law (mini-COBRA), must offer the employee and any family members covered by his or her group health plan (qualified beneficiaries) the opportunity to purchase the insurance coverage.  However, many unemployed individuals and family members cannot afford the cost of the continuation coverage.  As discussed below, the American Recovery and Reinvestment Act of 2009 (ARRA) provides a 65% subsidy covering the cost of premiums for all involuntarily terminated workers and related qualified beneficiaries.  COBRA premium assistance may now last up to 15 months for everyone covered by the extension.

New York State Specific Information:

Under Federal regulation employers with more than 20 (eligible) employees are required to comply with Federal COBRA Laws, however in the State of New York, employers with under 20 employees are required to comply with New York State Coverage Continuation (which mirrors Federal COBRA regulation).  With the passing of the ARRA law, it has changed the way many of us administer our COBRA or New York State Coverage Continuation. 

 

Notification Responsibility:

If you have employees impacted by any of the recent changes or extensions, it is your responsibility to contact these employees in writing and advise them of their rights.  Due to the timeline of the passing of this law along and the multiple extensions, each individual situation will differ based on the employee’s termination date.

Financial Responsibility:

If you have 20 or more employees, and have former employees that are eligible for an ARRA subsidy, you are currently paying 65% of the employee's premium (for the eligible duration) and in turn will obtain a credit on your 941 payroll filing (dollar for dollar) from the government.  If you have less than 20 employees, and have former employees that are eligible for an ARRA subsidy, the insurance carrier will pay 65% of the employee's premium (for the eligible duration) and the insurance carrier then receives reimbursement from the government.  For companies of all sizes, you may be collecting the 35% from your ARRA eligible COBRA participants or the insurance carrier may be billing the 35% directly (based on a combination of insurance carrier criteria as well as preference).

The Department of Labor (DOL) has provided model notices that may be helpful when reaching out to employees that may have been impacted by the ARRA.  Click here for more information:
 
http://www.dol.gov/ebsa/cobra.html.