Health Insurance Flexibility Encouraged
Coronavirus Cancellation Policy Recommendations
Department of Insurance Issues Coronavirus Coverage Bulletin
Extended Relief for Non-ACA-compliant Small Group and Individual Policies and Plans
IRS Provides Tax Relief for Victims of Severe Storms, Tornados and Straight-Line Winds
Alabama Enacts Data Breach Notification Law
Law on Group Health Coverage for Autism Spectrum Disorder Amended
Extension of Non-PPACA-compliant Small Group and Individual Policies and Plans
On Oct. 1, 2015, Insurance Commissioner Ridling issued Bulletin No. 2015-06. The bulletin encourages insurers and vision care providers to review their plan form filings and provider contracts to ensure compliance with the terms of recently adopted Ala. Act No. 2015-481 (SB 270, 2015 Regular Session).
As background, on June 11, 2015, Gov. Bentley signed SB 270 into law. The law prohibits insurers of vision care services from limiting a vision care provider's ability to set fees for services and materials, to participate in specific vision care plans and to choose sources of suppliers in certain circumstances. The law also prohibits vision care providers from charging more to an insurer than the customary rates of those vision care providers and requires reasonable reimbursements for vision care services and materials to vision care providers. The Alabama Department of Insurance may adopt rules to implement this law.
The law became effective June 11, 2015.
On June 11, 2015, Gov. Bentley signed SB 296 into law. The law places restrictions on the terms of certain health insurance policies, health maintenance organization plans and other health benefit plans with respect to dental services. The new law prohibits a policy or plan from setting fees for services that are not covered by the plan or policy and provides certain exceptions. Specifically, an insurance policy, plan or contract providing for third-party payment or prepayment of health or medical expenses issued after Jan. 1, 2016 may not require a dental care provider to provide service to a covered person at a fee set by the policy or plan unless the services are covered by the policy or plan. The law becomes effective Sept. 1, 2015.
On June 11, 2015, Gov. Bentley signed SB 270 into law. The law prohibits insurers of vision care services from limiting a vision care provider's ability to set fees for services and materials, to participate in specific vision care plans and to choose sources of suppliers in certain circumstances. The law also prohibits vision care providers from charging more to an insurer than the customary rates of those vision care providers and requires reasonable reimbursements for vision care services and materials to vision care providers. The Department of Insurance may adopt rules to implement this law. The law is effective immediately.
On Jan. 26, 2015, a federal district court ruled that Alabama's prohibitions against permitting same-sex marriage are unconstitutional. Previously, the court ruled that Alabama's prohibitions against recognizing out-of-state same-sex marriages are unconstitutional. The court blocked the state from enforcing these prohibitions, but stayed both rulings until Feb. 9, 2015 (Strawser v. Strange, S.D. Ala., No. 1:14-cv-00424, 1/26/15; Searcy v. Strange, S.D. Ala., No. 1:14-cv-00208, 1/23/15). On Feb. 9, 2015, the U.S. Supreme Court denied the application for a continued stay. Therefore, it appears that same-sex marriage is legal in Alabama.
The rapid changes in state marriage laws have important effects for individuals in Alabama and for employers administering state tax rules. They are less significant for purposes of administering federal tax and benefit rules due to the Supreme Court's Windsor decision and subsequent agency guidance recognizing all same-sex spouses regardless of state of residence. Employers in Alabama should work closely with their attorneys and tax advisors to ensure plan design compliance in light of the ongoing developments in this area.
This will most likely mean that group health insurance policies issued in Alabama will need to amend their plan documents to offer coverage to same-sex spouses. We are expecting further guidance from the state and will report such in future editions of Compliance Corner.
On Oct. 2, 2014, the U.S. DOL’s Wage and Hour Division and the Alabama Department of Labor signed a memorandum of understanding to work together to identify misclassification of employees as independent contractors. Alabama joins other states which already have such an agreement in place, including California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington. The issue of misclassification of workers has been emphasized over the last few years due to the potential for these workers to be denied access to health insurance, benefits, family and medical leave, overtime compensation, minimum wage and unemployment insurance. Due to health care reform, there is even greater focus on employers properly identifying workers who must be offered employer-sponsored health insurance if they are working at least 30 hours per week, or the employer may be at risk for a penalty under the employer mandate.
On July 28, 2014, the Alabama Department of Insurance issued Bulletin No. 2014-03. The bulletin provides guidance regarding calculation of composite rates for Alabama-issued policies for policy years beginning on or after Jan. 1, 2015. As background, final rules issued by HHS March 11, 2014, provided for a two-tiered federal calculation method for composite rates (one tier for each covered adult age 21 or older and a second tier for each covered child under age 21). However, the same final rule permitted states to substitute their own alternative to the federal methodology by seeking approval from HHS. This bulletin issued by the state of Alabama is confirmation that the state has sought such alternative certification and it was approved. In this case, the state requested to use a four-tiered calculation: employee, employee + spouse, employee + children and employee + family.
This means that while health insurance carriers issuing small group market plans in the state will continue to provide per-member billing, they may choose to provide family composite premiums on an optional basis. If they do so, the carrier must follow the state's four-tiered approved alternative method. If a carrier offers the family composite methodology, it must make it available for each small employer in the market.
The bulletin provides definitions for each rating tier, as well as the factors to be used when determining the final premium charged for each employee. Importantly, the bulletin does not apply directly to small employers, although this information is important for all employers to understand. Small employers in Alabama may use composite rates rather than per member rates to determine the percentage of the premium paid by the employer versus employee contribution levels for policies issued in 2015 if the carrier has opted to follow this alternative calculation method. The bulletin is effective immediately.
On April 2, 2014, Gov. Bentley signed SB 123 into law, creating Act 2014-219. The law suspends the Alabama Health Insurance Plan (AHIP), which is the state's high-risk pool. The law includes an exception that would allow the AHIP to reopen if federal law ever requires the state of Alabama to offer guaranteed-issue health coverage to eligible individuals.
COVID-19 Insurance Updates
COVID-19 Insurance Updates
Insurance Updates Regarding COVID-19
Grandmothered Plans Extended
One-Year Extension for Grandmothered Plans
Information on AHPs
Extension of Non-ACA-Compliant Plans
HHS Approves Alaska's Section 1332 Waiver from Several ACA Requirements
Updates to Coverage for Primary Care Provider, Pediatrician and OB-GYN Services
On July 20, 2016, Gov. Walker signed HB 372 into law, which provides updates to coverage requirements for services provided by primary care providers (PCPs), obstetricians and gynecologists (OB-GYNs) and pediatricians. On PCPs and pediatricians, plans that provide coverage through networks of providers must allow plan participants to access out-of-network providers. Such plans may require higher copayments, deductibles or premiums for out-of-network providers. Also, if a plan requires participants to designate a PCP, participants may choose any available PCP (which, effective Oct. 16, 2016, includes a pediatrician) to receive appropriate specialty care. On OB-GYNs, effective Oct. 16, 2016, plans that provide coverage for OB-GYN services and require participants to select a PCP must allow female participants to receive OB-GYN care from participating providers that specialize in OB-GYN services without requiring prior authorization or referrals. Employers with fully insured plans in Alaska should be aware of the new law and requirements.
On July 11, 2016, Gov. Walker signed SB 53 into law. The new law contains two separate requirements for fully insured plans in Alaska. The first requirement relates to coverage for autism spectrum disorder. Under current law, coverage must include treatment prescribed by a licensed physician or psychologist. Under the new law, that list includes treatment prescribed by an advanced practice registered nurse practitioner. The second requirement relates to coverage of services provided by midwives. Specifically, under the new law, plans that provide coverage for services performed for women during pregnancy and childbirth (and for a period of time following childbirth) must provide coverage for the same services performed by advanced practice registered nurses, so long as the services performed are within the practice scope of certified midwives (also sometimes referred to as ‘certified nurse midwives’). The law is effective July 7, 2016. Overall, the law adds no new employer compliance obligations, but employers with fully insured plans in Alaska should be aware of the changes.
On July 11, 2016, Gov. Walker signed SB 142 into law. The new law relates to coverage for certain anti-cancer treatment for fully insured plans in Alaska. Under the new law, plans that provide coverage for anti-cancer medications that are injected or administered intravenously by a health care provider and such medications administered directly by the plan participant (such as orally administered or self-injected medications) cannot apply higher cost-sharing (including co-insurance, co-payments or deductibles) than the plan applies to injected or intravenously anti-cancer medications. This is the case regardless of the plan’s formulations or benefit category design or determination. For purposes of the new law, “anti-cancer medications” include drugs or biologics used to kill, slow or prevent the growth of cancerous cells or to treat related side effects. The new law is effective for plans beginning (or renewed) on or after Jan. 1, 2017. The law includes no new employer compliance obligations, but employers with fully insured plans in Alaska should be aware of it.
On June 14, 2016, Gov. Walker signed HB 234 into law, creating Chapter 17. Under the new law, plans that provide coverage for mental health benefits must provide coverage for those benefits delivered through telehealth services by Alaska-licensed health care providers. The law applies to plans offered, issued, delivered or renewed in Alaska on or after Sept. 11, 2016. The new law does not add new employer obligations, but fully insured Alaska employers should be aware of the coverage requirements.
On March 24, 2016, the Alaska Division of Insurance published Bulletin 16-04. The bulletin relates to an extension of non-PPACA-compliant small group policies and plans. As background, the federal government previously announced a transition policy that allows insurers (if allowed by the state) to renew non-grandfathered non-PPACA-compliant plans, so long as the transitional coverage does not extend beyond Dec. 31, 2017.
Bulletin 16-04 states that the Division will allow insurers the option to renew non-PPACA-compliant policies if coverage has been continuously in effect since Dec. 31, 2013. Those policies may continue to be renewed on or before Oct. 1, 2017, provided the policy will terminate by Dec. 31, 2017. Insurers may early renew or issue coverage for periods less than one year if a policy terminates prior to Dec. 31, 2017 and the employer wants coverage through the end of the calendar year.
The bulletin presents two options for insurers that elect to extend non-PPACA-policies. Under the first option, an insurer may permit employer-sponsored groups currently enrolled in the insurer’s non-PPACA-compliant plan to continue to renew their coverage. Under the second option, the insurer may provide an additional opportunity to renew coverage in its non-PPACA-compliant plan to an employer-sponsored group that is currently enrolled in the insurer’s non-PPACA-compliant plan but has indicated its intent to non-renew at the end of the plan year.
Alaska small employers that are interested in renewing a non-PPACA-compliant plan should work with their advisors and insurers.
On Aug. 13, 2015, the Alaska Department of Labor and Workforce Development signed a memorandum of understanding (MOU) with the DOL. The MOU is meant to announce that the state and the DOL will work together to prevent the improper classification of employees as independent contractors or other non-employee workers. The MOU states that the two entities will share information and coordinate enforcement in an effort to protect employee/worker rights under both federal and state law. The MOU arose as a result of the DOL’s Misclassification Initiative. According to the press release, Alaska is one of 25 states to sign such an MOU with the DOL.
Alaskan employers should review their employment practices to ensure that individuals are properly classified as either employees or independent contractors. The proper classification is important for purposes of PPACA’s employer mandate, as well as many other federal and state laws and calculation of employment taxes. Because the classification analysis is based on the specific facts and circumstances surrounding an employer’s situation, employers should work with outside counsel to resolve any questions.
On Feb. 23, 2015, the Alaska Division of Insurance issued a press release relating to a special enrollment period (SEP) for the Alaska health insurance exchange. As background, on Feb. 20, 2015, the federal government announced it would allow a SEP related to the federal tax penalty for consumers in states with health exchanges run by the federal government. The press release states that Alaskans who "first became aware of, or understood the implications of, the shared responsibility payment in connection when preparing their 2014" federal income taxes will have the opportunity to avoid the penalty in 2015 by signing up for coverage during a SEP between March 15 and April 30. To qualify for the SEP, Alaskans must certify that they filed their tax returns and paid the penalty for not having coverage in 2014.
The news release does not require any new compliance obligations or otherwise affect employers in Alaska. However, employers will want to be aware of the news release should employees have questions relating to SEP opportunities in the exchange.
On Feb. 18, 2015, the Alaska Division of Insurance published Bulletin B 15-05. The bulletin applies to insurers and relates to coverage of services relating to behavior analysis and other autism service providers, as required by Alaska law. According to the bulletin, denying a claim solely on the basis that a behavioral analyst is not licensed in Alaska is a violation of Alaska law. An insurer’s failure to promptly pay such claims may also result in late payment interest penalties.
Although the bulletin applies to insurers, employers in Alaska should be aware of the bulletin and the coverage requirements relating to behavior analysis and autism service providers, particularly those that may not be licensed in Alaska.
On Oct 17, 2014, the U.S. Supreme Court denied Alaska’s request for a stay in a case, Parnell v. Hamby, Case No. 3:14-cv-00089-TMB (D. Alaska Oct. 12, 2014) challenging Alaska’s ban on same-sex marriage. As background, in 1998 Alaska voters passed a constitutional amendment that defines “marriage” as between one man and one woman. That constitutional amendment has been the subject of recent litigation. Earlier this month, a federal district court in Alaska ruled that the amendment is unconstitutional. That decision paved the way for same-sex couples to begin marrying in Alaska. However, the state requested a stay on the decision and over the course of a few days, that request made its way to the U.S. Supreme Court. As a result of the stay’s denial, same-sex marriage is now legal in Alaska. Although no specific guidance has been released, the ruling most likely means that group health insurance policies issued in Alaska will be required to cover same-sex spouses. NFP Benefits Compliance will continue to monitor the issue and report on any additional guidance in future editions of Compliance Corner.
On July 2, 2014, the Alaska Division of Insurance updated a document titled “2015 Alaska ACA Form and Rate Guidance.” The update relates to Alaska’s approach for composite rating requirements in the small group market. As background, final rules issued by HHS March 11, 2014, provided for a two-tiered federal calculation method for composite rates (one tier for each covered adult age 21 or older and a second tier for each covered child under age 21). However, the same final rule permitted states to substitute their own alternative to the federal methodology by seeking approval from HHS.
The Alaska document states that Alaska has been approved for and will implement a four-tiered rating structure, including employee, employee plus spouse, employee plus children, and employee plus family. This means that while insurers issuing small group market plans in the state will continue to provide per-member billing, they may choose to provide family composite premiums on an optional basis. If so, the insurer must follow the state’s four-tiered alternative method. If an insurer offers the family composite methodology, it must make it available for each small employer in the market, regardless of size. Tiered composite premium rates must be set at the beginning of the plan year and do not change through the year, even if the distribution of employees among the tier levels changes.
The tiered-composite methodology applies to Alaska small employer premium rates for plans offered outside of the federally facilitated exchange in Alaska beginning Jan. 1, 2015. Those offered on the exchange must use per-member premium ratings.
The document provides definitions for each rating tier, as well as the factors and methodology to be used when determining the final premium charged for each employee. Importantly, the bulletin does not apply directly to small employers, although this information is important for all employers to understand. If the insurer has opted to follow the four-tiered alternative calculation method, small employers in Alaska may use composite rates rather than per-member rates to determine the percentage of premium paid by the employer versus the employee.
On March 28, 2014, the Alaska Division of Insurance issued Bulletin B14-03. The bulletin
relates to the March 5, 2014, CMS announcement of a two-year extension to the transitional
policy for non-PPACA-compliant health benefit plans (as covered in the March 11, 2014, edition
of Compliance Corner). The bulletin states that Alaska will allow insurers to renew
non-grandfathered plans according to the extended CMS transitional policy in both the
individual and small group markets. Alaska employers that have had their plans cancelled should
consult with insurers on whether those plans can be continued in light of the CMS announcement
and the department’s directive.
Bulletin B14-03 »
Executive Order on Prescription Drug Coverage During COVID-19
FAQ Regarding the Fair Wages and Healthy Families Act
Insurance Updates Regarding COVID-19
Mini-COBRA Law Now Applies to Employers with Fewer Employees
New State Coverage Continuation Requirement for Small Employers
Plans Must Provide Coverage of Pain Medicine, Substance Abuse and Urology Through Telemedicine
Arizona's Industrial Commission Releases New Guidance Regarding Paid Sick Leave Law
New Law Mandates Employee Sick Leave
On Nov. 8, 2016, Arizona voters approved “The Fair Wages and Healthy Families Initiative,” also known as Proposition 206. Beginning July 1, 2017, the law requires that most Arizona employees accrue paid sick leave.
Specifically, the law requires employers with at least 15 employees to provide employees with up to 40 hours of paid sick leave during a calendar year, excluding those employed by governmental entities. Employers with less than 15 employees are required to provide up to 24 hours of paid leave during a calendar year.
Employees accrue one hour for every 30 hours worked for a maximum of 40 hours paid sick leave over the course of one year and can roll over days to the following year, but employers are not required to provide more than 40 hours of paid sick leave in a calendar year. New employees can start accruing paid sick time on their first day of employment and may use accrued sick leave after an initial 90 day probationary period. The sick leave can be used for an employee’s own medical or health condition or to care for a “family member” as defined by the law.
Certain recordkeeping and notices are required (some prior to the effective date of the law). Employers must comply with the new law by July 1, 2017.
Arizona Adopts Declaration of Independent Contractor Status
Earlier this year, Gov. Ducey signed into law HB 2114, which appears to be the first state law to provide certainty for the status of independent contractors and the businesses that hire them in the form of a signed declaration. Under the law, independent contractors may sign a Declaration of Independent Business Status (DIBS) that acknowledges the contractor operates as an independent business, is not entitled to unemployment status, is responsible for all taxes related to such compensation and responsible for licensing and registration related to services performed. Additionally, the independent contractor must certify that he/she meets at least six of the 10 criteria for independent status. The DIBS is optional but creates a rebuttable presumption for the status of the independent contractor.
On May 17, 2016, Gov. Ducey signed SB 1363 into law, creating Chapter 278. The law expands existing insurance coverage requirements for health care services provided through telemedicine to apply to services received in all of Arizona, rather than services received in a rural region of Arizona only. This law is effective on Jan. 1, 2018.
On April 5, 2016, Gov. Ducey signed HB 2306 into law, creating Chapter 100. The law requires insured group health plans to cover lawful health care services performed by health care providers, regardless of whether they are related (e.g., familial relationship) to plan participants, if this coverage would be provided for plan participants who are not related to their health care providers. This law applies to policies issued, delivered or renewed on or after July 1, 2017.
On March 25, 2016, the Arizona Department of Insurance announced in a press release that insurers in the individual and small group major medical health insurance markets can choose to renew transitional policies through Dec. 31, 2017. As discussed in the March 8, 2016, edition of Compliance Corner, CMS announced an extension for small group transitional policies. Such policies are not required to be in compliance with certain PPACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit. The policy must have been in place on Dec. 13, 2013.
Additionally, insurers that offer this short term extension of coverage are required to send each policyholder (the employer for a group policy) a renewal notice that explains the offer to continue the transition policy to the end of 2017.
On March 17, 2016, Gov. Ducey signed HB 2264 into law. The law mandates that insured group health plans that cover prescription eye drops to treat glaucoma or ocular hypertension must also cover refills for these eye drops under certain conditions. This law applies to policies issued, delivered or renewed on or after Jan. 1, 2018.
On Oct. 16, 2015, the Arizona Department of Insurance published an announcement on the impact of the PACE Act in Arizona. According to the announcement, Arizona will retain its existing definition of ‘small group’ insurance under ARS Sec. 20-2301(A)(21), which states that ‘small employer’ means an employer who employs at least two but not more than 50 eligible employees on a typical business day during any one calendar year. The PACE Act repeals a PPACA requirement that mandated states to define ‘small employer’ to be an employer with between one and 100 employees. Employers in the 51-100 group should work with their carriers concerning next steps with regard to their contract or policy.
On June 19, 2015, the Arizona Department of Insurance published Regulatory Bulletin 2015-05, which summarizes significant newly enacted legislation relating to insurance in Arizona. Only one piece of legislation impacts health insurance coverage: SB 1288.
SB 1288 was signed April 1, 2015, creating Chapter 159. This law relates to prescription drug coverage and medication synchronization. Under the law, policies that provide prescription drug coverage may not deny coverage and must prorate the cost-sharing rate for a prescription drug if it is dispensed by a pharmacy for less than the standard refill amount. For that to apply, the covered individual must request enrollment into a medication synchronization program and must request less than the standard refill amount for the purpose of synchronizing their medications. For this purpose, ‘medical synchronization’ is defined as the coordination of medication refills for a patient taking two or more medications for a chronic condition that are being dispensed by a single pharmacy to facilitate the synchronization of the patient’s medication for the purpose of improving medication adherence. Chapter 159 is effective for plans and policies issued or renewed on or after Jan. 1, 2017.
The new law does not create additional employer compliance obligations, but employers will want to be aware of the new law in case questions arise relating to prescription drug coverage for employees enrolled in fully insured plans.
On March 27, 2015, the Arizona Department of Insurance (DOI) published a bulletin titled "Determination for 2016 Transition to Affordable Care Act-Compliant Policies." As background, in 2013 and again in 2014, the federal government announced a policy that permitted insurers to continue to renew non-PPACA-compliant policies in the small group market. On May 8, 2014, the Arizona DOI determined that it would allow insurers to renew such policies through policy years beginning on or before Oct. 1, 2015. According to the new bulletin, the DOI is allowing renewals in the small group market through Oct. 1, 2016. Further, the extension applies to policies sold to large businesses of 51-100 employees currently in the large group market but that, for policy years beginning on or after Jan. 1, 2016, will be redefined as small businesses purchasing insurance in the small group market. The bulletin also clarifies that while insurers are not required to extend non-PPACA-policies, they now have the option to do so through Oct. 1, 2016.
The bulletin is directed toward insurers, but Arizona employers should be aware of the bulletin, particularly if they are sponsoring a plan that is considered non-PPACA-compliant. Those employers should work with the insurer to determine if the non-PPACA-compliant plan will be extended.
On Oct. 16, 2014, the U.S. District for the District of Arizona, in Majors v. Horne, No. 2:14-cv-00518-JWS (D. Ariz. 2014), found the state’s same-sex marriage ban unconstitutional and blocked the state from enforcing the ban. Subsequently, Attorney General Horne directed county clerks of court to comply with this ruling. This will most likely mean that group health insurance policies issued in Arizona will need to amend their plan documents to offer coverage to same-sex spouses. We are expecting further guidance from the state and will report such in future editions of Compliance Corner.
On April 30, 2014, Gov. Brewer signed HB 2078 into law. The law ensures cost-sharing under health insurance policies for orally administered cancer drugs equal to that allowed for injected or intravenous treatments administered by a health care provider. This mandate only applies if the policy provides coverage both for cancer treatment medications that are injected or administered intravenously (by a health care provider) and for patient‑administered cancer treatment medications. Insurers are prohibited from increasing the copayment, deductible or coinsurance amounts for covered injectable or intravenous treatments in order to avoid compliance with the cost-sharing mandate. However, the copayment, deductible or coinsurance amounts may be increased if the increase is applied generally to other medical or pharmaceutical benefits and not to circumvent the cost‑sharing mandate. This law applies to policies issued, delivered or renewed on or after Jan. 1, 2016.
On May 8, 2014, Department of Insurance Director Marks issued press release 14-01. The notice is related to the March 5, 2014, CMS announcement of a two-year extension to the transitional policy for non-PPACA-compliant health benefit plans (as covered in the March 11, 2014, edition of Compliance Corner). The Arizona Department of Insurance states that insurers that renewed existing plans, on or before Dec. 31, 2013, that otherwise would have been modified or cancelled under PPACA, may renew that coverage. Previously, through guidance in December 2013, the Arizona department had allowed insurers to early renew such policies. Since renewal of these non-PPACA-compliant plans is optional for carriers, Arizona employers that early renewed should consult with their carriers on whether the carriers will renew these plans.
Coronavirus-Related Bulletins Issued
Insurance Regulatory Suspension
Self-Funded MEWA Rules
New Bulletin on Identification of Plan’s Funding Status on Insurance ID Cards
Rules on Mammography Coverage Amended
Health Insurance Coverage for Medically Necessary Foods
Injected or Intravenously Administered Cancer Treatment Medication
An Act to Regulate the Prior Authorization Procedure for Treatment of Terminal Illness
On Dec. 18, 2015, the Arkansas Insurance Department issued Bulletin No. 15A-2015, amending the definition of small employer for purposes of the MLR requirement pursuant to passage of the PACE Act. In light of the PACE Act’s passage, and since Arkansas law is currently consistent with federal law (as amended), for plan years that begin on or after Jan. 1, 2016, Arkansas defines small employers as those who employ on average 2-50 employees on business days during the preceding calendar year. Large employers will be defined as those who employed an average of at least 51 employees on business days during the preceding calendar year. Arkansas will not be applying the state option to extend the definition of small group to those employing 1-100. A bulletin issued by the federal CMS clarified that issuers may use the definition of 50 employees as the upper threshold, rather than 100 employees, for purposes of MLR rebates. However, subsequent guidance issued by CMS on Dec. 17, 2015, (see article in the Jan. 12, 2016, edition of Compliance Corner) allowed states to delay implementation of the lower threshold until the 2017 reporting year. It is unclear at this time if Arkansas will be updating this bulletin to reflect the newest CMS guidance.
It is important to note that the PACE Act deals only with from which market (small or large) an employer must buy its plan. It does not alter in any way the PPACA employer mandate that requires an employer with 50 or more full-time equivalent employees to offer an affordable, minimum value plan or face penalties. That federal requirement continues.
On Oct. 8, 2015, the Arkansas Insurance Department issued Bulletin 15-2015 in response to the passage of the federal PACE Act. The bulletin states that Arkansas will continue to follow the definition of small employer group previously announced in AID Bulletin 3-2012, which defines a small employer as having at least two but no more than 50 employees. It is important to note that the PACE Act deals only with from which market (small or large) an employer must buy its plan. It does not in any way alter the PPACA employer mandate that requires an employer with 50 or more full-time equivalent employees to offer an affordable, minimum value plan or face penalties.
On Sept. 25, 2015, the Arkansas Insurance Department issued Bulletin No. 13-2015, which provides guidance on submitting quarterly index rate changes for small employer non-grandfathered health benefit plans and small employer stand-alone dental plans. Specifically, this bulletin applies only to carriers desiring to change their index rate or plans in the small employer pool, which excludes grandfathered and transitional plans.
As background, on Feb. 18, 2014, the CCIIO issued a bulletin providing guidance on allowable quarterly changes to small employer group index rates. Pursuant to 45 CFR Section 156.80(d)(3)(iii) and the bulletin, each state is allowed to determine when and how often to accept changes for small employer group plans, subject to the qualification that rates cannot change more frequently than quarterly. This bulletin clarifies Arkansas’ position on the matter of small employer group index rates.
The bulletin states that small employer rates and plans can change as frequently as quarterly using one of the two methods specified. The bulletin also provides a submission schedule for quarterly filings. Carriers must submit annual filings according to the applicable timelines and requirements issued by the Department.
Although the bulletin is directed toward carriers, Arkansas employers with small groups should take notice of the bulletin and work with their carriers to determine how often their rates could change.
On Sept. 11, 2015, the Arkansas Insurance Department issued Bulletin No. 11-2015. Due to the uniqueness of Arkansas's insurance marketplace, the department has chosen to enforce different standards than the CCIIO on the form and manner of notices that are required to be provided when a health insurer discontinues or renews a product.
As background, on July 7, 2015, the CCIIO issued a bulletin providing guidance on federal standard notices of product discontinuation and renewal in connection with the open enrollment period for the 2016 plan year. However, states are allowed to implement different standards.
Arkansas has decided to implement the following notice timing standards:
Additionally, Arkansas has decided to allow issuers the flexibility in designing their own renewal and discontinuation notices. The notices for enrollees of individual and small group plans, not including Private Option eligible enrollees, must clearly explain the options for renewing or obtaining coverage both in and outside of the FFM.
Employers who are renewing a group health policy or who have purchased a plan that is being discontinued by an insurer, should be aware of the timeframe in which the insurer will provide notice to them.
On Aug. 4, 2015, Rule 109 was issued by Arkansas Insurance Commissioner Kerr. Ark. Code Ann. § 23-99-417(a)(1) and Ark. Code Ann. § 23-99-417(e) give the Commissioner authority to promulgate a rule governing payment standards by health benefit plans for orthotic devices, orthotic services, prosthetic devices and prosthetic services.
As background, various members of the orthotic and prosthetic industry requested the Arkansas Insurance Department to update orthotic and prosthetic coverage reimbursement rates in fully insured health benefit plans to 80 percent of current CMS rates. The current law in Ark. Code Ann. § 23-99- 417(a)(1) ties the reimbursement rates to 80 percent of 2009 CMS Medicare coverage levels.
Rule 109 updates the orthotic and prosthetic coverage reimbursement rate from 80 percent of 2009 CMS rates to 80 percent of current levels. It also develops an automatic mechanism to tie yearly orthotic and prosthetic reimbursement levels to current CMS rates without amending the rule on a yearly basis.
The rule takes effect Oct. 19, 2015.
On June 15, 2015, HHS conditionally approved Arkansas’ application for a state-based health insurance marketplace. Arkansas will provide a SHOP exchange for 2016 and an individual exchange for 2017. The state’s marketplace is currently a state partnership model in conjunction with the federal government. If the state meets the conditions outlined by HHS, Arkansas will transition to a solely state-based exchange.
On Feb. 18, 2015, Gov. Hutchinson signed HB 1161 into law, creating Act 101. Under this law, concierge health plans or arrangements are no longer considered health insurance under the insurance code or the HMO subchapter, which means that they are not subject to the jurisdiction of the Arkansas Insurance Department. For this purpose, a ‘concierge service arrangement’ is defined as a contractual agreement between a licensed health care provider and an individual to provide select medical services under a medical arrangement for an established fee. The Act requires the concierge plan to provide the following notice to concierge contract holders clarifying that the plan may not constitute the minimum essential health benefits individuals must maintain in order to avoid PPACA’s individual mandate penalty:
Notice: A concierge service arrangement is not an insurance policy, and the select medical services as specified under a concierge service arrangement may not constitute the minimum essential health benefits under federal healthcare laws established by Pub. L. No. 111-148, as amended by Pub. L. No. 111-152, and any amendments to, or regulations or guidance issued under, those statutes existing on January 1, 2015. Medical services provided under a concierge service arrangement may not be covered by or coordinated with your health insurance and you may be responsible for any payment for medical services not covered by health insurance under your insurer's statement of benefits policy.
Typically such concierge service arrangements have been considered on par with insurance because they are payable whether or not medical care is provided. Thus, they fall under the general “no reimbursement of insurance premiums” rule that applies to health FSAs and HSAs and should not be reimbursed on a pre-tax basis. It is unclear whether this new law in Arkansas will permit employees to pay for such coverage on a pre-tax basis. Further guidance would be welcome. The law is effective July 22, 2015.
On March 10, 2015, Gov. Hutchison signed SB 4 into law, creating Act 374. The law provides a person with a terminal illness the right to try investigational drugs or medicine from a medical authorization level. The law does not change any underlying and already present insurance coverage exclusion for investigational or experimental drugs. The law provides that an insurance company may, but is not required to, provide coverage for an investigational drug, biological product or device and shall not deny coverage for an item or service that is otherwise covered by an insurance contract between the eligible person and an insurance company. The law is effective July 22, 2015.
On April 2, 2015, Gov. Hutchison signed HB 1894 into law, creating Act 959. The law prohibits vision care plans and insurers providing vision benefits from requiring a vision provider to apply a discount to an insured or enrollee for noncovered services or noncovered materials. The law also prohibits vision care plans and insurers providing vision benefits from restricting or limiting the vision care provider's choice of optical labs or choice of sources and suppliers of services, assuming the selected lab follows or accepts the participating provider requirements. The law is effective July 22, 2015.
On April 6, 2015, Gov. Hutchison signed SB 318 into law, creating Act 1106. The law makes significant changes to the prior authorization provisions in the Arkansas Insurance Code by repealing earlier provisions and replacing them with a new subchapter in Ark. Code Ann. Section 23-99-901. The new requirements strengthen provider rights and notice under prior authorization requirements by health insurers. Act 1106 addresses urgency and emergency authorizations and nonmedical review requirements and restrictions and requires health insurers to publish written clinical criteria and processes for prior authorizations to the public portion of its website. The law is effective July 22, 2015.
On April 6, 2015, Gov. Hutchison signed SB 466 into law, creating Act 1109. The law requires health insurers and HMOs providing prescription drug coverage to post and maintain on their websites their prescription drug coverage, out-of-pocket cost information, deductibles, prior authorization procedures and appeals system. The law is effective July 22, 2015.
On April 7, 2015, Gov. Hutchison signed SB 927 into law, creating Act 1134. The law addresses health insurers and HMOs offering health plans outside the exchange as to the insurer or HMO meeting the “reasonable assurance” standard by CMS for the provision of pediatric dental coverage. Act 1134 provides that a health insurer meets the reasonable assurance standard of providing pediatric dental if a pediatric dental plan is available for purchase on the exchange and if the consumer is notified of the requirement of having to purchase pediatric dental in the EHB plan. The law becomes effective July 22, 2015.
On May 26, 2015, the Arkansas Insurance Department issued Bulletin 9-2015 summarizing legislation enacted in 2015 pertaining to Insurance. The bulletin covers general insurance provisions such as technical amendments and legislation pertaining only to insurers and financial matters. The bulletin also summarizes property and casualty, group health and life legislation, producer legislation and funeral financial legislation. The provisions most applicable to employers have been summarized in previous articles in this edition of Compliance Corner.
On April 1, 2015, SB 133 was signed into law, creating Act 887. The law requires plans to provide coverage for health care services provided through telemedicine, provided certain requirements and parameters are met. Importantly, for employer-sponsored group health plans a plan cannot apply annual or lifetime dollar maximums for telemedicine services other than maximums that apply to all covered services. Plans also cannot apply benefit limits, coinsurance, copayments or deductibles to telemedicine services unless benefit limits, coinsurance, copayments and deductibles apply to other covered services. Employers sponsoring high-deductible health plans should be diligent when adding required telemedicine coverage to their plans so HSA eligibility is not adversely affected for participants. The law is effective for plans delivered, issued, reissued or extended on or after Jan. 1, 2016.
On March 26, 2015, a federal judge granted an injunction in response to suits filed by attorneys general in the states of Arkansas, Louisiana, Texas and Nebraska. The injunction suspends enforcement of the DOL’s final rule related to same-sex spouses in those states. The final rule, which went into effect for 46 other states on March 27, 2015, expanded the definition of spouse under the FMLA to include same-sex spouses who were legally married in a place that recognizes such marriages, regardless of their place of residence (please see the March 10, 2015 edition of Compliance Corner for more information). The attorneys general argue that the DOL’s final rule puts states in the position of either violating state law or federal regulation.
Subsequently, on March 31, 2015, the DOL confirmed in a request for hearing court filing that they will not enforce the rule in the four states covered by the decision, stating:
“[W]hile the preliminary injunction remains in effect, the [DOL does] not intend to take any action to enforce the provisions of the Family and Medical Leave Act (FMLA) . . . against the states of Texas, Arkansas, Louisiana, or Nebraska, or officers, agencies, or employees of those states acting in their official capacity, in a manner that employs the definition of the term “spouse” contained in the February 25, 2015, final rule . . . .”
The court’s injunction temporarily suspends enforcement until a final ruling is made. Oral arguments occurred April 13. In the meantime, employers with operations in these four states should be aware that FMLA requests (or, if not requested, the employer’s knowledge that an FMLA request might be a factor) for the care of a same-sex spouse due to a serious health condition or other FMLA-qualifying reason, will require the assistance of outside legal counsel specializing in employment law until this issue is resolved. Finally, four pending cases before the U.S. Supreme Court, with a decision expected in June, may also indirectly resolve this issue (See the Feb. 10, 2015 Compliance Corner, specifically articles for Kentucky, Tennessee, Michigan and Ohio).
On Nov. 25, 2014, a federal district court ruled that Arkansas's same-sex marriage ban is unconstitutional and blocked Arkansas from enforcing the ban. However, the court stayed its ruling pending final disposition of any appeal (Jernigan v. Crane, E.D. Ark., No. 4:13-cv-00410, 11/25/14). As a reminder, the federal government recognizes same-sex marriages in states that permit such marriages. As a result of the stay, same-sex marriage remains on hold in Arkansas. NFP Benefits Compliance will continue to monitor the issue and report on any additional guidance in future editions of Compliance Corner.
On Sept. 30, 2014, the Arkansas Insurance Department issued Bulletin No. 13-2014 requiring that insurers who have decided to discontinue health plans must provide notification 90 days prior to the discontinuation of coverage. Further, all health plans that will renew coverage must provide notice at least 60 days prior to the date of the renewal of coverage. There are special circumstances in the case of policies sold or discontinued on the federally facilitated marketplace (FFM). The Department also addresses the forms that insurers may use when notifying individuals and small group plans of their options for renewing or obtaining coverage both inside and outside of the FFM. While this notice is primarily directed towards insurers, it is helpful for small employers to be aware of the notices they may receive as the annual open enrollment period gets closer, so they may take appropriate action to either renew the existing coverage or switch to alternative coverage.
Los Angeles County Supplemental Paid Leave
San Jose Paid Sick Leave Related to COVID-19: Additional Guidance
San Francisco Public Health Emergency Leave
State Disability Insurance and Paid Family Leave Benefits Related to COVID-19
Los Angeles Supplemental Paid Sick Leave Due to COVID-19
San Jose Paid Sick Leave Related to COVID-19
New Notices Encouraging Carriers to Provide Prompt Services During COVID-19 Pandemic
Notice Requesting Carriers Provide 60-day Grace Period for Insurance Premium Payments
Covered California Announces Special Enrollment Window for All Californians
City of Emeryville Guidance on COVID-19 and the City’s Paid Sick Leave Law
City of San Francisco Announces Program to Fund COVID-19-Related Paid Sick Leave
OLSE Guidance on Use of SF Paid Sick Leave During COVID-19 Pandemic
Coverage for Coronavirus
Family, Medical, and Disability Leave Poster Revised
San Francisco HCSO Rates for 2020
Coverage for Standard Fertility Preservation Services
Cost-Sharing Limit for Air Ambulance Services
Telemedicine Parity Required
FSA Notice Requirement
Extension of Paid Family Leave Benefits
Expansion of Paid Family Leave Benefits
CA Passes Law to Avoid Misclassification of Employees
State Individual Mandate
Revised Definition of Domestic Partner
Employers Required to Provide Retirement Plan
Oakland Minimum Wage Ordinance for Hotel Workers
Drug Formulary Limitations
SDI and PFL Benefits Revised for 2019
Limit on Prescription Costs
San Francisco HCSO Rates for 2019
Coverage for Oral Anti-Cancer Medications Revised
San Francisco Paid Sick Leave Ordinance Revised
Supreme Court Rules in Independent Contractor Misclassification Case
San Francisco: Employer Annual Reporting Due
State Disability Insurance and Paid Family Leave Benefits Revised for 2018
San Francisco HCSO Rates for 2018
Lead Poisoning Screening
Law Mandates Prescription Drug Price Transparency
Small Employers Required to Provide Unpaid Leave for Baby Bonding
Amendments Made to California State-Based SHOP Regulations
Labor Commissioner’s Office Releases New Paid Sick Leave FAQs
Los Angeles: Sick Leave Law Revised
San Francisco: Employer Annual Reporting Due
New Ordinance Mandates Paid Parental Leave for San Francisco Employees
State Disability Rates Revised for 2017
San Francisco HCSO Health Care Expenditure Rates Increased for 2017
New Law Mandates Paid Sick Leave for Santa Monica Employees
Out-Of-Network Coverage and Cost-Sharing
On Sept. 23, 2016, Gov. Brown signed AB 72 into law. This new legislation amends the California Health & Safety Code to address reimbursement for out of network (OON) providers who provide services at in-network facilities. California joins several other states, including New York, Connecticut and Florida, which offer consumers protections against surprise OON bills, as well as a process for providers and insurers to resolve payment disputes for OON care.
The legislation provides that if an insured receives services covered by his/her health plan by an OON provider at an in-network facility, the insured is only obligated to pay the OON provider the cost sharing amount that he/she would otherwise be obligated to pay had the same covered service been provided by an in-network provider. In addition, the OON provider is prohibited from billing or collecting any amount beyond the insured’s cost sharing obligation, unless the insured has a plan that includes an OON benefit and the insured consents in writing to receive services from the OON provider at least 24 hours in advance of the episode of care. At the time consent is provided, the OON provider must give the insured a written estimate of his/her total out-of-pocket cost of care.
A health plan must pay an OON provider who provides covered services to an insured at an in-network facility the greater of the average contracted rate or 125 percent of the amount Medicare reimburses for the same or similar service. Payment made by the plan to the OON provider will constitute payment in full unless either party uses the independent dispute resolution process or other means to resolve the dispute. The Department of Managed Health Care will establish a new independent dispute resolution process for resolving payment disputes between OON providers and payers.
AB 72 is effective July 1, 2017.
Contraceptives: Annual Supply
On Sept. 23, 2016, Gov. Brown signed SB 999 into law. This law enables doctors and other health-care providers to prescribe up to a 12-month supply of FDA-approved, self-administered hormonal contraceptives such as birth control pills, the ring and the patch. In addition, it authorizes pharmacists to dispense, at a patient’s request, up to a 12-month supply of FDA-approved contraceptives at one time and it requires health care service plans and health insurance policies to cover the costs of a 12-month prescription. Currently, women are allowed to fill at most a 90-day prescription of birth control at one time.
SB 999 becomes effective Jan. 1, 2017.
Premium Rate Change Notice
On Sept. 23, 2016, Gov. Brown signed SB 908 into law. This law is meant to help alert consumers whenever state regulators consider increases to their health insurance premiums to be too high. Under current law, the California Department of Managed Health Care and the California Department of Insurance review premium rate increases proposed by insurers and health plans that each agency regulates. When the agencies conclude that an increase is unjustified, they can ask the insurer to rescind the increase, but the company is not legally obligated to comply. The agencies’ only recourse is to post the information on their websites.
Under this new legislation, insurers are required to send written notices to policyholders advising them that regulators found their small group premium rate increases to be unreasonable or unjustified. The notices must be sent at least 60 before the policy renewal date, or 10 days before the start of the next health insurance open enrollment period, thereby giving consumers time to shop for a new plan.
SB 908 is effective Jan. 1, 2017.
Autism and Pervasive Developmental Disorders
On Sept. 23, 2016, Gov. Brown signed AB 796 into law, which amends California’s Lanterman Developmental Disabilities Services Act. Under that law, every health care service plan contract and health insurance policy issued in California must provide coverage for behavioral health treatment for pervasive developmental disorder or autism until Jan. 1, 2017. This new legislation simply deletes the sunset date in the Lanterman Act and extends the operation of these provisions indefinitely, thereby creating a new state-mandated program that will provide services for people with developmental disabilities, including autism.
AB 796 is effective Jan. 1, 2017.
Notice of Timely Access to Care
On Sept. 23, 2016, Gov. Brown signed SB 1135 into law. The new legislation requires health plans and insurers in California to notify consumers and health care providers about a patient’s right to timely care and language assistance. Under current law, consumers have the right to timely access to care and care in their preferred language. However, very few people know these consumer protections exist. Therefore, this new law requires health plans and insurers to communicate these rights through existing documents and communication channels, such as:
In addition, SB 1135 requires health plans and insurers in California to provide doctors, hospitals and other health providers with information about timely access requirements.
SB 1135 is effective July 1, 2017.
On Aug. 25, 2016, Gov. signed SB 923 into law. This law prohibits health plans and insurers in the individual and small group markets from changing the cost-sharing design during the plan year except when required by state or federal law. Under current law, health plans and insurers are prohibited from changing the premium rates in a given “rate year.” This new law extends that protection to a plan’s cost-sharing design as well. For purposes of this legislation, cost-sharing refers to what the copays or coinsurance are for a specific benefit: For example, the copay for a generic drug is $10 or $25; the copay for the brand name drug is $20 or $50 while the coinsurance for a hospital stay is 20 percent of the cost.
SB 923 is effective on Jan. 1, 2017.
Earlier this year, Gov. Brown signed SB 10 into law. SB 10 expands health care coverage to all Californians, regardless of immigration status, by permitting the state to apply for a federal waiver that would allow undocumented immigrants and their non-US born children to buy coverage through Covered California, the state’s health insurance marketplace, by using their own money. PPACA explicitly excludes undocumented immigrants from receiving health coverage through federally-funded programs, including Covered California. This law removes that barrier by directing the state to apply for a waiver under PPACA Section 1332. If granted, the waiver would make it possible for undocumented adults to review and purchase plans from Covered California. These individuals will remain ineligible to receive subsidies.
While the law is effective immediately, the requirement to offer qualified health plans to undocumented individuals on the state’s exchange does not become operative until Jan. 1, 2018, for coverage beginning Jan. 1, 2019. This allows the state time to apply for and receive a Section 1332 waiver.
On Oct. 8, 2015, California Gov. Jerry Brown signed AB 1305 into law. This law imposes a maximum out-of-pocket (OOP) limit for an in individual participant enrolled in family coverage that is no greater than the maximum OOP limit for self-only coverage for that insurance product. Essentially, this means that for all fully-insured plans sitused in California, an individual enrolled in family coverage will not be required to pay more than what he/she would pay in OOP expenses if he/she were enrolled in self-only coverage under the same insurance product. In other words, the self-only OOP maximum is “embedded” in the family coverage. This OOP maximum requirement went into effect on Jan. 1, 2016.
Additionally, AB 1305 requires embedded deductibles. This means that if a family plan includes a deductible, the plan may not impose a greater deductible on an individual participant in family coverage than the deductible for self-only coverage. For individual and small group plans, the embedded deductible requirement became effective Jan. 1, 2016, and for large group plans, this requirement becomes effective Jan. 1, 2017.
AB 1305 does pose a compliance concern for employers offering fully-insured HSA-compatible HDHP coverage in California if that coverage offers a self-only deductible or OOP maximum amount that is below the minimum federal deductible required for family HDHP coverage.
As background, PPACA imposes OOP maximums on individual and group health plans. For 2016, those maximum limits are $6,850 for self-only coverage, and $13,700 for family coverage. Furthermore, to be eligible to contribute to an HSA, federal law requires that an individual be covered under an HDHP that meets certain deductible thresholds (and those are indexed each year). For 2016, an HDHP must have a minimum deductible of $1,300 for self-only coverage and $2,600 for family coverage.
However, in light of this new law, let’s consider a fully-insured HSA-compatible plan with a deductible and OOP maximum of $1,500 for individual coverage and $3,000 for family coverage. AB 1305 requires that the family HSA benefit have an embedded OOP maximum of $1,500 for individuals since the OOP maximum is $1,500 for individuals; despite the fact that federal law requires that in order to be considered as a qualified HDHP for HSA purposes, the family deductible has to be no lower than $2,600. This contradicts federal rules. Therefore, in order to satisfy AB 1305 requirements and at the same time comply with federal HSA-HDHP rules, fully-insured HSA-compatible HDHP plans in California have increased their self-only OOP maximums to meet the family $2,600 deductible threshold.
Changes may be forthcoming to resolve this potential problem, and NFP Benefits Compliance will provide an update if the legislation is revised. Also, it’s worth noting that AB 1305 does not apply to grandfathered plans; rather it applies to non-grandfathered individual and group health care service plan contracts that provide for essential health benefits.
As a reminder, employers covered by San Francisco's Health Care Security Ordinance (HCSO) are required to submit the 2015 Employer Annual Reporting Form to the Office of Labor Standards Enforcement (OLSE) by April 30, 2016. Failure to submit the form may result in penalties of $500 per quarter. If you were not covered by the HCSO in any quarter of 2015, you do not need to submit the form, and no further action is required.
Employers can check whether they are required to complete the form by completing a short survey on the first page of the Annual Reporting Form. Employers that were not covered by the HCSO in 2015 will be directed to a web page indicating that they do not need to complete the remainder of the 2015 Employer Annual Reporting Form.
On April 11, 2016, Gov. Jerry Brown signed AB 908 into law. The law will bolster the Paid Family Leave (PFL) program for all California workers by increasing the PFL wages available to workers who take time off to care for ill family members or bond with a new child.
Under the current California PFL law, California workers may receive 55 percent of their wages for up to six weeks. However, starting Jan. 1, 2018, those wages will increase as follows:
In addition to PFL wage increases, the new law eliminates the one-week waiting period for PFL claims. The 6-week period for PFL benefits will not change.
The California Employment Development Department (EDD) recently announced that the 2016 employee contribution rate for State Disability Insurance will remain at 0.9 percent. The taxable wage base from which the contributions will be taken will increase from $104,378 to $106,742 for calendar year 2016 and the maximum cost to an employee will be $960.68.
For claims beginning on or after Jan. 1, 2016, weekly benefits range from $50 to a maximum of $1,129. To qualify for the maximum weekly benefit amount ($1,129) an individual must earn at least $26,070.92 in a calendar quarter during the base period.
Finally, effective Jan. 1, 2016, the tax rate for employers, partners and self-employed individuals who choose coverage in California's temporary disability insurance program is 4.67 percent.
The San Francisco Health Care Security Ordinance (HCSO) requires covered employers to satisfy an employer spending requirement by making health care expenditures for their covered employees, among other reporting and notice requirements. For more information on what constitutes covered employers/covered employees, please visit the San Francisco HCSO website, linked below.
The health care expenditure rate varies depending on the size of the employer and increases slightly each year. As of Jan. 1, 2016, the health care expenditure rate for employers with 100 or more employees will be $2.53 per hour payable (up from $2.48 per hour payable in 2015). For employers with 20 to 99 employees, the expenditure rate will increase to $1.68 per hour payable (up from $1.65 per hour payable in 2015).
The San Francisco Office of Labor Standards Enforcement (OLSE) is responsible for enforcing the employer requirements of the HCSO.
Beginning Jan. 1, 2016, the city of San Francisco requires that at least 80 percent of the required amount of health care expenditures for each covered employee must be made as irrevocable expenditures. An irrevocable health care expenditure is a health care expenditure that has not been retained by and cannot at any time be recovered by or returned to the employer. For more information on what constitutes a revocable and irrevocable expenditure, please visit the HCSO website.
All covered employers are required by the HCSO to post an official notice regarding the HCSO in a conspicuous place at any workplace or job site where any covered employee works. The HCSO has released a new 2016 Official OLSE Notice (note: the Notice is 8.5” x 14”). Covered employers should ensure the new version of the notice is displayed at applicable job sites. A copy of the new 2016 Notice can be found here.
On Sept. 28, 2015, Gov. Brown signed AB 1515, which clarifies and corrects sections in the insurance code and restores the requirement that interest be applied to claim payments under non-health disability policies when a payment is made more than 30 days after receipt of the claim. In addition, the law updates the California Department of Insurance’s contact information on notices and disclosures for consumers by requiring these disclosures to include the Department of Insurance’s website address. In addition, the law aims to increase the department’s efficiency in processing and approving administrative settlements by allowing the commissioner to delegate settlement authority for minor non-insurer cases to a deputy commissioner. Finally, AB 1515 makes several other changes that include increasing conformity to the National Association of Insurance Commissioner’s Model Laws.
AB 1515 is effective January 1, 2017.
On Oct. 9, 2015, Gov. Brown signed AB 387 into law. The new law is intended to improve the department's ability to approve draft disability policies by extending the period of time allowed for the department to review the policy forms and any associated risks and premium rates from 30 to 120 calendar days. Moreover, it authorizes the commissioner to develop new guidelines to streamline the file review process for life and disability insurance forms and then to publish these procedures on the department’s website for public review. The legislature hopes that by providing clearer guidelines for insurers to follow when submitting policies for approval, and increasing time allowed to review and approve policies, the new law will improve the overall process and reduce confusion for consumers and the industry.
On Oct. 6, 2015, Gov. Brown signed SB 575 into law, giving consumers new protections concerning non-forfeiture benefits under their long-term care contracts. The new law protects consumers, specifically the elderly and their caregivers, by requiring long-term care insurers to provide annual notification of the availability of non-forfeiture benefits and contingent benefits to the insured and the insured's designated backup contact. The notification must include the availability of the non-forfeiture benefit, the dollar amount of the non-forfeiture benefit and the name, address and telephone number of the insurer for questions about the benefit. Insurers must send the first annual revised notice to affected policyholders by July 1, 2016.
On July 16, 2015, Gov. Brown signed into law AB 987, which amends the Fair Employment and Housing Act (FEHA) to provide protection for employees who make a request for an accommodation of a disability or religious beliefs. Existing law requires an employer to provide reasonable accommodation for, among other things, a person’s disability and religious beliefs and prohibits discrimination against any person who has either opposed any practices forbidden under the act or filed a complaint. This bill would also prohibit an employer from retaliating or otherwise discriminating against a person for requesting accommodation of his or her disability or religious beliefs, regardless of whether the accommodation request was granted.
AB 987 was initiated in reaction to Rope v. Auto-Chlor System of Washington, Inc., a 2013 decision from a California appellate panel. In that case the employee requested a leave of absence to donate a kidney to his sister five months prior to the surgery. Two months before the surgery the employee was terminated. He sued for associational disability discrimination under FEHA, but the appellate panel affirmed dismissal of his suit, holding that "a mere request—or even repeated requests—for an accommodation, without more" does not constitute protected activity sufficient to support a claim for retaliation in violation of FEHA. AB 987 amends the statute to establish that "[a] request for reasonable accommodation based on religion or disability constitutes protected activity … such that when a person makes such a request, he or she is protected against retaliation for making the request."
The changes to FEHA take effect Jan. 1, 2016.
On July 14, 2015, Gov. Brown signed AB 1541 into law. The new law amends Section 1798.81.5 of the California Civil Code that requires employers to protect employees' and applicants' personal information for accessing online accounts. Existing law requires employers to implement and maintain reasonable security procedures and practices to protect state residents' personal information from unauthorized access, destruction, use, modification and disclosure. Current law defines ‘personal information’ as first name/initial and last name in combination with data such as a Social Security number, where the name or data are unencrypted. AB 1541 expands the definition of personal information to include username or e-mail address in combination with a password or security question and answer that permits access to online accounts. Personal information will not include information lawfully made available to the public from government records.
The new law takes effect Jan. 1, 2016.
On July 27, 2015, California’s Office of Administrative Law voted to approve an emergency regulation submitted by the California Department of Insurance. The regulation amends Title 10 of the California Code of Regulations that requires health insurers to maintain adequate medical provider networks that meet the needs of their policyholders, maintain accurate provider directories and requires disclosure of out-of-network providers who may participate in a patient’s planned care.
The amended provisions include:
While the new regulations apply to insurers, employers should understand the new safeguards and provisions that will be included under their group insurance policy.
The emergency regulation is effective from July 27, 2015, to Oct. 27, 2015, with the expectation of further legislative action.
On June 17, 2015, Gov. Brown signed SB 125 into law. The law provides that for plan years starting on or after Jan. 1, 2016, employer size will be determined using the federal method of calculating full-time equivalent employees for employer mandate purposes. When determining whether an employer is eligible for a small or large group policy, the employer will need to calculate the number of full-time employees working 30 hours or more per week. They will then need to total the number of hours by all non-full-time employees and divide by 120. The sum of the two calculations will yield the employer’s number of full-time equivalents. If an employer has 100 or fewer full-time equivalent employees, they will be considered a small employer. Finally, it is important to note that when determining size, the employer must include employees of all related employers.
On March 5, 2015, the California Fair Employment and Housing Council amended the California Family Rights Act, which is the state’s version of FMLA.
Existing California law is already similar to FMLA in that it provides up to 12 weeks of unpaid job protected leave for employees who have worked for the employer for at least 12 months and at least 1,250 hours in the last 12 month period. Under both laws, the employee must have a qualifying reason for leave. Qualifying reasons include birth, adoption, foster care or serious health condition of an employee or family member.
The amendments more closely align the state’s regulations with FMLA. The amended provisions include:
The regulations include a revised certification form. There is a new posting requirement; however, the revised poster is not yet available. The amendments are effective July 1, 2015.
The California Division of Labor Standards Enforcement recently posted guidance related to the state’s new paid sick leave law on its website in the form of frequently asked questions. The guidance provides clarification on rehired employees. If an employee is rehired within one year by the same employer, the employee’s previously accrued hours are restored. Additionally, the rehired employee’s 90 day waiting period is waived if they met the requirement during their previous employment period.
The guidance also states that employers are required to provide individualized notice to new employees hired after Jan. 1, 2015. Existing employees must receive a notice by July 8, 2015.
As discussed in the Sept. 23, 2014 edition of Compliance Corner, eligible employees must accrue at least one hour of paid sick leave for every 30 hours worked beginning July 1, 2015. Effective Jan. 1, 2015, employers must notify employees of the new law effective by posting the new employment poster.
On Sept. 30, 2014, Gov. Brown signed AB 1710 into law. Existing law requires businesses that maintain computerized personal information to notify affected individuals of a security breach in which their information was accessed by an unauthorized person. The new law, which took effect Jan. 1, 2015, requires the business to provide the affected individuals with 12 months of appropriate identify theft prevention and mitigation services.
The California Office of Labor Standards Enforcement (OLSE) has released the 2015 Health Care Security Ordinance (HCSO) expenditure rates. Effective Jan. 1, 2015, employers with 100 or more employees will be required to spend $2.48 per hour, which is an increase from the 2014 rate of $2.44 per hour. For-profit employers with 20 to 99 employees, as well as nonprofit employers with 50 to 99 employees, will be required to spend $1.65 per hour, which is an increase from the 2014 rate of $1.63. For-profit employers with one to 19 employees and nonprofit employers with one to 49 employees continue to be exempt from the HCSO requirement.
The OLSE has also implemented new rules regarding expenditure methods. Effective Jan. 1, 2015, at least 60 percent of the employer’s HCSO expenditures must be irrevocable expenditures, meaning the amount paid by the employer cannot be recovered or returned to the employer. Examples of irrevocable expenditures are insurance premiums, contributions to the City Option and HSA contributions. An example of a revocable expenditure is a contribution to an HRA in which the employer allocates the funds as a debit in its accounting, but does not actually pay the funds into a separate account on the employee’s behalf.
Effective Jan. 1, 2016, at least 80 percent of the employer’s expenditures must be irrevocable with that amount increasing to 100 percent Jan. 1, 2017.
The California Employment Development Department has released the 2015 withholding rates for the State Disability Insurance (SDI) program. The withholding rate is 0.9 percent, which is a decrease from the 2014 rate of 1.0 percent. The maximum wage limit is $104,378, which is an increase from the 2014 limit of $101,636. The maximum annual contribution for an employee is $939.40, which is a decrease from the 2014 limit of $1,008.80.
On Sept. 25, 2014, Gov. Brown signed SB 1182 into law, which requires insurers to provide large group clients deidentified claims data annually upon request. For this purpose, a large group client is defined as an employer who has at least 1,000 covered lives, of which at least 500 are covered by that insurer; or a multiemployer trust with at least 500 covered lives, of which at least 250 are covered by that insurer.
The new law also requires the Department of Managed Health Care and the Department of Insurance to post the following information on its website for at least 60 days prior to the implementation of an insurer’s significant rate increase:
On Sept. 25, 2014, Gov. Brown signed AB 1962 into law, which will apply the federal medical loss ratio rebate requirements to dental policies issued in California. The law is effective Jan. 1, 2018.
On Sept. 25, 2014, Gov. Brown signed SB 1052 into law. The new law requires insurers that provide prescription drug benefits with one or more drug formularies to post the formularies on the insurer’s website. Any changes to the formularies must be updated on at least a monthly basis. The Department of Managed Health Care and the Department of Insurance will develop a template for this purpose prior to Jan. 1, 2017.
On Sept. 25, 2014, Gov. Brown signed SB 1053 into law, which mandates certain coverage related to contraceptive services and devices. As background, PPACA requires non-grandfathered group health plans to provide coverage for contraception with no cost-sharing for participants. The new law requires all group health plans (both grandfathered and non-grandfathered) that provide coverage for hospital, medical and surgical expenses to provide coverage for:
As required by PPACA, non-grandfathered plans may not impose any cost-sharing for these services and devices. The same coverage shall be provided to spouses and dependents as is provided to employees. There is an exemption for religious employers. The law is effective for policies issued or renewed on or after Jan. 1, 2016.
On Sept. 25, 2014, Gov. Brown signed SB 1053 into law. Effective for plan years starting on or after Jan. 1, 2016, group health insurance policies must provide coverage for all FDA-approved contraceptive methods for women. Covered contraceptive methods include drugs, devices and products available over the counter as prescribed by the participant’s health care provider; voluntary sterilization procedures; and patient education and counseling related to contraception. Additionally, health insurance policies must provide coverage for follow-up services related to covered drugs, devices, products and procedures including management of side effects, counseling for continued adherence and device insertion and removal. Non-grandfathered plans may not impose any cost-sharing amounts on these covered services.
An exemption is available for plans sponsored by a religious employer. For this purpose, “religious employer” is defined as an entity for which the inculcation of religious value is the purpose of the entity, the entity primarily serves and employs persons who share the religious tenets of the entity, and the entity is a nonprofit organization under IRC Section 6033(a)(3)(A).
On Sept. 25, 2014, Gov. Brown signed SB 1182 into law. Under the new law, health insurers will be required to provide large group policyholders with aggregate de-identified claims information on an annual basis. The information shall be available upon request and at no charge to the policyholder.
On Sept. 10, 2014, Gov. Brown signed AB 1522 into law. The new law requires employers to provide certain employees with paid sick leave. Employees are eligible if they work 30 days or more in the first year of employment. Eligible employees will accrue at least one hour of paid sick leave for every 30 hours worked. The paid sick leave accrues from the date of hire, but an employee may not be able to use the accrued hours until the 90th day of employment. Accrued hours carry over to subsequent years. An employer may limit an employee’s use of paid sick leave to 24 hours, or three days, per year. Employees may use paid sick leave for the purpose of diagnosis, care or treatment of an existing health condition; preventive care for an employee or family member; or leave related to the fact that the employee is a victim of domestic violence, sexual assault or stalking. The law is effective July 1, 2015.
On Aug. 15, 2015, Gov. Brown signed SB 1034 into law. The new law will bring the state’s mandated 60-day maximum waiting period in line with federal requirements by increasing the maximum waiting period to 90 days for policies issued in California. Effective Jan. 1, 2015, group health plans subject to California insurance mandates may impose a maximum waiting period of 90 days. The change creates some confusion for both employer plan sponsors and insurance carriers who have adjusted plan designs to accommodate the previous 60-day maximum requirement. It is not yet known how carriers will respond to the law. They may choose to leave the 60-day maximum waiting period as is in their group product offerings.
The DOL and the California Department of Insurance will present a free two-day compliance seminar for employer plan sponsors on Sept. 9 and 10, 2014. The seminar will be held in Los Angeles and cover a number of topics, including the employer mandate, other health care reform requirements, the California marketplace, FMLA, COBRA, California insurance mandates and fiduciary responsibility.
On July 14, 2014, the San Diego City Council approved a sick pay ordinance that will apply to employers who have an employee performing work within the San Diego city limits. Employees must accrue one hour of paid sick leave for every 30 hours worked within the city, up to a maximum accrual of 40 hours per year. Unused hours will carry over to the next year, but are not required to be paid out upon termination of employment. Employees may use the paid sick leave hours for their own health care appointments or illness, to care for an ill family member or an absence related to domestic violence. The law is effective April 1, 2015. Employers will be required to post a notice informing employees of the new benefit, as well as provide a notice to new employees hired after April 1, 2015.
On June 16, 2014, Gov. Brown signed SB 20 into law. The new law provides that policies sold in the individual market on or after Jan. 1, 2014, shall limit enrollment to an annual enrollment period and special enrollment periods. The annual enrollment period for coverage effective Jan. 1, 2015, will be Nov. 15, 2014, to Feb. 15, 2015. The annual enrollment period for subsequent years will be Oct. 15 to Dec. 7 of the preceding calendar year. While the law only applies to individual policies, employers may be interested in what options are available for employees.
On July 7, 2014, Gov. Brown signed SB 1446 into law. The new law relates to the March 5, 2014, CMS announcement of a two-year extension to the transitional policy for non-PPACA-compliant health benefit plans (as covered in the March 11, 2014, edition of Compliance Corner). The California Department of Insurance and the Department of Managed Health Care will permit insurers to renew noncompliant policies, but on a more restrictive basis than was provided by CMS. The law allows insurers to renew non-grandfathered small employer policies that were in effect on Dec. 31, 2013, and that are still in effect on July 7, 2014, to be renewed until Jan. 1, 2015, and to continue to be in force until Dec. 31, 2015. Such policies would not be subject to the federal and state requirements related to community rating, the prohibition of pre-existing condition exclusions and coverage of essential health benefits.
On June 10, 2014, the California Court of Appeals, Second Appellate District issued a ruling in Rea v. Blue Shield of California, B244314, 2014 WL 2584433 (Cal. Ct. App. June 10, 2014). At issue was the fact that the Blue Shield policy excluded residential treatment for anorexia nervosa. The court reversed an earlier decision by a trial court and ruled that anorexia nervosa was a mental condition and, as such, was covered by the California Mental Health Parity Act. The act requires medically necessary treatment for mental conditions. Thus, the court ordered Blue Shield to provide coverage for residential treatment for anorexia nervosa when it was determined to be medically necessary for the insured.
In California, HMO's and managed care organizations (including Blue Shield) are governed by the Department of Managed Health Care, while all other insurers are governed by the Department of Insurance. On June 11, 2014, Insurance Commissioner Dave Jones issued a press release announcing that the ruling will apply to all insurance policies issued in California. Employers sponsoring group health insurance policies in California should review the exclusions of their plan and work with the carrier to make any necessary amendments regarding coverage of residential treatment for anorexia nervosa.
On May 16, 2014, the California Department of Insurance issued a notice summarizing the state's security breach notification requirements. The law applies to entities that conduct business in California and own or license computerized data that contains personal information, including employers. A state resident must be notified if it is reasonably believed that his/her unencrypted personal information was acquired by an unauthorized person (i.e., security breach). If more than 500 residents are affected, the entity must also submit a copy of the breach notification to the California attorney general.
On March 26, 2014, the California Metropolitan Transportation Commission approved the
launch of the Bay Area Commuter Benefits Program. The program implements SB 1339, which was
signed into law in September 2012. Bay Area employers with 50 or more full-time employees
(those working 30 hours or more per week) will be required to provide commuter benefits to
covered employees (those working 20 hours or more per week). It applies to employers in the
following counties: Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo and Santa
Clara, as well as the southern portion of Sonoma County and the southwestern portion of
Employers must register via the program website and offer one of four commuter benefit options, listed below, by Sept. 30, 2014.
On Dec. 4, 2013, Section 2274.53 was added to Title 10 of the California Administrative
Code. The new regulations provide additional information on the grace period that insurers
must provide employer policyholders for payment of group health policies. Under existing
rules, employers have a 30-day grace period in which to submit payment. The new rules
clarify that the 30-day period begins the day following the last day of coverage for which
the insurer has received payment. If payment is made on or before the last day of the grace
period, the insurer shall continue coverage beyond the grace period without interruption.
This is an important clarification for employers because nonpayment of premium is one of
the few reasons that an insurer may refuse to renew a group policy. Section 2274.53 is
effective Jan. 1, 2014.
The maximum benefit under the state-mandated disability insurance program has increased
from $1,067 to $1,075 per week. The change is effective for claims beginning on or after
Jan. 1, 2014. As background, California is one of a handful of states that require
disability insurance coverage for employees performing work in the state.
On Dec. 20, 2013, the City and County of San Francisco Office of Labor Standards Enforcement posted new frequently asked questions related to the Health Care Security Ordinance. The new guidance clarifies that employer contributions toward excepted benefits constitute valid health care expenditures to satisfy the employer's spending requirement under the ordinance — including contributions for dental insurance, vision insurance, medical indemnity insurance, long-term, nursing home, home health or community-based care insurance, and insurance limited to a specific disease or illness. Contributions to a stand-alone dental or vision HRA would also count as valid health care expenditures.
COVID-19 Insurance Updates
Emergency Rule Regarding Telehealth
Special Enrollment Period on Exchange Extended
COVID-19 Insurance Updates
COVID-19 Insurance Updates
Special Enrollment Period on Exchange
Emergency Rules Granting Paid Sick Leave for Eligible Workers Amended
Insurance Updates Regarding COVID-19
Emergency Rules Grant Paid Sick Leave for Eligible Workers
Surprise Billing Law Effective January 1, 2020
Cost of Prescription Insulin Drugs Capped
Task Force Formed to Study Implementation of Family Medical Leave Insurance Program
State Coverage Option for Individuals
Special Enrollment Period Available for Consumers Enrolled in Trinity Healthshare
Data Privacy Requirements for Employers
Coverage of Drugs to Treat Opioid Addiction Required
Pharmacist Health Care Services Coverage
Step Therapy Prohibited for Stage Four Metastatic Cancer Drugs
Division Releases Bulletin on Telehealth and Telemedicine
On April 24, 2015, the Colorado Division of Insurance published Bulletin No. B-4.83. The new bulletin is directed toward insurers and relates to preventive services that must be covered at zero cost-sharing by health benefit plans in Colorado.
As background, PPACA requires certain preventive care to be covered with no cost-sharing requirements (e.g., copayments, deductible, coinsurance, etc.) if provided by an in-network provider. The U.S. Preventive Services Task Force (USPSTF), the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention and the Health Resources Services Administration (HRSA)) provide recommendations as to which preventive services are included under the PPACA requirement. The recommendations are ongoing and generally become applicable no later than the plan year that begins on or after the one-year anniversary of the recommendation. In addition to federal law, Colorado also requires certain preventive services to be covered at zero cost-sharing.
The bulletin provides insurers with the most recent recommendations and Colorado preventive service coverage mandates, including recommendations issued in 2013 and 2014. The bulletin has three attachments with charts listing the preventive services. Attachment A contains the USPSTF recommendations which take effect April 24, 2015. These include alcohol misuse and counseling, breast cancer preventive medications and lung cancer screenings. Attachment B contains the preventive services mandated by Colorado law (not included in the USPSTF’s recommendations). These include chicken pox vaccinations, colorectal screening and cervical cancer vaccine. Attachment C contains the HRSA women’s’ preventive services guidelines, which includes gestational diabetes screening, human papillomavirus testing and breastfeeding supplies.
Although the bulletin applies only to insurers, Colorado employers should review the bulletin to better understand which services and benefits under their group health plans will be considered preventive care that should be provided with zero cost-sharing to covered employees.
On April 16, 2015, Gov. Hickenlooper signed SB 15-015 into law. The new law relates to health benefit plan coverage for autism spectrum disorder (ASD). Under the new law, group health plans offered in Colorado must provide coverage for ASD that is substantially equivalent to benefits for a physical illness and must not contain any limits on the number of services or visits. ASD is defined by reference to “The Diagnostic and Statistical Manual of Mental Disorders” and generally includes autistic and Asperger’s disorders.
Although the new law does not create any additional obligations for employers, Colorado employers with fully insured plans should reach out to insurers to discuss the new coverage requirements. The new law is effective for plans issued, delivered or renewed on or after Jan. 1, 2017 (although the law encourages insurers to comply as soon as possible).
On March 20, 2015, Gov. Hickenlooper signed HB 15-1029 into law. The new law relates to telehealth coverage of health benefit services. According to the new law, insurers cannot require plan participants to have in-person contact with health care providers if services can be provided appropriately through telehealth. ’Telehealth’ is defined as the delivery of health care services through telecommunication systems, including information, electronic and communication technologies to facilitate the assessment, diagnosis, treatment, education or self-management of a person’s health care. Importantly, ’telehealth’ does not include communications via health care services via telephone, facsimile or email systems. The new law is effective for plans and policies issued or renewed on or after Jan. 1, 2017. While the new law applies only to insurers, employers will want to be aware of the law to assist employees that may have questions with respect to coverage of telehealth services.
On March 13, 2015, the Colorado Division of Insurance (DOI) issued a press release and FAQ related to phasing out non-PPACA-compliant group health plans in Colorado. Specifically, health insurance plans for small employers that do not meet PPACA requirements will not continue into 2016. Previously, the DOI allowed insurers in Colorado to continue non-PPACA-compliant plans for small groups (employers with two to 50 employees) through Dec. 31, 2015. The allowance was intended to permit time for transition to PPACA-compliant plans. The bulletin states that insurers will notify small employers that hold non-PPACA-compliant plans of the discontinuation of the plans, as well as information about available options (including whether the insurer will offer PPACA-compliant plans). The notices must be provided no later than 90 days in advance of the expiration date of the policy (180 days if the insurer is leaving the Colorado insurance market). Importantly, according to the bulletin, insurers may not automatically enroll a current policyholder into a new plan from that insurer. The DOI FAQs provide additional clarification on both the phase-out process and the insurer notices. Employers with non-PPACA-compliant plans should be aware of the press release and FAQs, and should work with insurers on identifying their options going forward.
On March 10, 2015, the Colorado Division of Insurance (DOI) issued a news release related to exchange special enrollment periods (SEPs) and federal income tax penalties. As background, on Feb. 20, 2015, the federal government announced it would allow a special enrollment period related to the federal tax penalty for consumers in states with health exchanges run by the federal government. According to the news release, Colorado’s exchange is not run by the federal government, and therefore Colorado may make its own decisions related to SEPs. The bulletin states that DOI will not allow a SEP for 2015 health insurance coverage for individuals who will have to pay a tax penalty for not having health insurance in 2014. The press release describes the various factors weighed in coming to that conclusion.
The SEP generally relates to individual coverage, and does not directly affect employers. However, employers should be aware of the press release, should employees have questions related to federal tax penalties or exchange enrollment. The press release includes phone numbers individuals who have questions relating to special enrollments may call for information.
On Jan. 28, 2015, The Colorado Division of Insurance published Bulletin No. B-4.82. The new bulletin is meant to clarify the Division's position regarding consumer cost-sharing variations for prescription drug benefits. The bulletin states that certain cost-sharing structures for prescription drug benefits may constitute discrimination that would violate Colorado insurance law. As an example, the Division will view the placement of most or all drugs used to treat a specific condition on the highest cost tiers as discrimination against those individuals who have chronic conditions that require treatment with such drugs. The bulletin also describes other prescription drug plan cost-sharing arrangements that may be problematic under Colorado law. The bulletin does not apply to grandfathered plans, transitional plans, large group plans and HSA-qualified HDHPs, and is intended to apply for plan years beginning on or after Jan. 1, 2016.
The bulletin does not affect Colorado employers' compliance obligations, but is a good resource for understanding how prescription drug plans must be structured in Colorado both on and off the state health insurance exchange.
On Nov. 25, 2014, the State of Colorado Civil Rights Commission adopted revisions to its rules and regulations relating to employment discrimination. Specifically, 3 CCR Sec. 708-1 was revised to include new rules relating to the prohibition on employment discrimination against qualified employees and applicants based on sex. The rules also include pregnancy discrimination. While most of the revisions relate to employment law (such as hiring or firing, selection and promotion and retirement), some relate to fringe benefits. Under the revisions, employer contributions for fringe benefits cannot discriminate based on sex. “Fringe benefits” include insurance, pension and retirement, welfare programs, profit-sharing, bonus plans and leave. In addition, employers cannot condition fringe benefits on employees’ status as “head of household” or “principal wage earner” for their family if this condition adversely affects employees based on sex. The revisions are effective Dec. 15, 2014.
On Sept. 9, 2014, the Colorado Division of Insurance issued Bulletin No. B-4.78. The bulletin clarifies that employers with grandfathered small group health plans that no longer qualify as small employers under Colorado’s current law may be allowed to continue such plans until Dec. 31, 2015. The choice to continue the plans is up to the insurer — they are under no obligation but may choose to do so. Colorado employers with small group plans should consult with their insurer in determining whether the plan will be continued pursuant to the bulletin.
On Aug. 21, 2014, the Colorado Division of Insurance issued Bulletin No. B-4.77, a new bulletin relating to health benefit plan premium payment grace period considerations for consumers, providers and insurers. As background, Colorado law provides for a 31-day grace period for consumers with individual or small group health benefit plans who are not receiving the advance payment tax credit (APTC) and who have missed a premium payment, and a 90-day grace period for individuals receiving the APTC. Grace periods do not apply to the payment of the first month’s premium. During the 90-day grace period, carriers must cover claims incurred during the first month and may pend claims incurred during the second and third months. Insurers must also give notice to consumers that the claims may be denied if no further premium payments are received, and issue a 30-day advance notice before terminating the policy due to nonpayment of premiums.
The bulletin clarifies that insurers must always honor and pay claims incurred during the first month of the grace period, regardless of whether the consumer is receiving the APTC or not. Consumers are liable for the premium until the policy has been terminated in compliance with the 30-day advance notice requirement. The bulletin also clarifies notice requirements between the insurer, provider and consumer with respect to the second and third months of the grace period, in which the insurer may pend claims. If a provider receives a notice that a consumer is in those second or third months, the provider may make arrangements with the consumer – prior to delivering services – to ensure that the provider receives payment for services during those months (including collection of full or partial payment from the consumer). If the provider requires full or partial payment, and the consumer pays all past-due premiums and the insurer pays the pended claims, the provider must refund all payments received from the consumer to the extent the payments exceed the consumer’s responsibility.
Although the new bulletin does not add compliance requirements for employers or plans, employers should be aware of the bulletin in case issues arise with respect to grace periods and claim payments.
On June 9, 2014, Colorado’s health insurance exchange, “Connect for Health Colorado,” announced in a press release that it has approved its budget for the 2014–15 fiscal year. To help fund the state’s exchange in future years, the budget includes transitional funding authorized by 2013 Colorado legislation, allowing the exchange to set a $1.80 per member per month health insurance carrier assessment. Other states have implemented similar assessments or user fees as a way to fund state exchanges going forward. The approved budget reduced the assessment to $1.25 per member per month. The assessment appears to apply to all health insurance policies issued in Colorado from July 1, 2014, through June 30, 2015. Thus, all health insurance policies – individual and small and large group – issued on or off the exchange in Colorado will be subject to the $1.25 per member per month assessment. While the press release and assessment relate to insurers, the assessment may be passed on to employers and individuals via increased premium rates.
The Colorado Division of Insurance recently promulgated regulations that require the inclusion of a two- to three-page supplement to the PPACA-required SBC for each plan provided to state residents. The SBC supplements must be distributed with SBCs and contain additional information about deductibles, covered cancer screenings, pre-existing condition rules, balanced billing and binding arbitration clauses. The regulations require insurance carriers to produce and distribute the SBC supplement for fully insured plans. Self-insured plans are exempt from the requirement. While Colorado employers have no obligation to produce or distribute the SBC, they should be aware of the additional requirement.
On July 25, 2014, the U.S. District Court for the District of Colorado, in Burns v. Hickenlooper, No. 1:14-cv-01817-RM-KLM (D. Colo. 2014), ruled that Colorado's constitutional and statutory prohibitions against same-sex marriage are unconstitutional. The court blocked the state from enforcing the prohibitions, but stayed its ruling until Aug. 25, 2014, thereby allowing time for the state to appeal the decision. Previously, on July 9, 2014, (as reported in the July 15, 2014, edition of Compliance Corner) a Colorado state court also ruled that the state's same-sex marriage ban is unconstitutional (but also stayed its ruling). So for now, the same-sex marriage prohibitions in Colorado remain in effect, pending the outcome of the appeals.
On July 9, 2014, the Colorado District Court for Adams County, in Brinkman v. Long, struck down Colorado's ban on same-sex marriage. The Colorado law passed by voters in 2006 defines "marriage" as only between a man and a woman. The court struck down the law as an unconstitutional violation of due process and equal protection. The court stayed the ruling, meaning that same-sex marriages cannot take place in Colorado while the case is appealed. The issue of same-sex marriage appears to be headed to the U.S. Supreme Court, as other similar cases have already made their way further up in the appellate process. NFP Benefits Compliance will continue to monitor developments on this case, as same-sex marriage has significant implications for employers and their health benefit plan offerings.
On June 30, 2014, the Colorado Division of Insurance issued Bulletin No. B-4.76, which relates to short-term, limited duration health benefit plans and special enrollment periods. The purpose of the bulletin is to inform carriers and consumers that short-term, limited duration health benefit plans do not qualify as minimum essential coverage (MEC) under PPACA's individual mandate and that loss or termination of a short-term health plan does not trigger a special enrollment period that would allow a consumer to purchase a PPACA-compliant health benefit plan outside of an open enrollment period. The bulletin states that all carriers that sell or issue short-term health plans must include on all marketing materials and the policy's face page a statement that the plan does not qualify as MEC and that a termination or other loss of a short-term plan does not constitute a special enrollment right for other coverage.
On May 19, 2014, the Colorado Division of Insurance issued Bulletin No. B-4.75. The bulletin is directed toward insurers, and contains the notices that must be delivered to consumers (i.e., employers) with non-PPACA-compliant health benefit plans that an insurer has elected to continue into 2015. Previously, the division announced, in Bulletin No. B-4.73, that it will allow insurers to continue such non-PPACA-compliant plans through 2015, as allowed by a March 4, 2014, CMS announcement of a two-year extension to their transitional policy on the issue.
The new bulletin clarifies that insurers do not have to continue non-PPACA-compliant plans, but that if they choose to do so, they must use the notices attached to the bulletin. The notices must be distributed to policyholders no later than 30 days prior to the start of any limited or special enrollment period. The bulletin contains no employer requirements, but employers should be aware of the bulletin, particularly if they have previously had their plans cancelled. Employers in this situation should reach out to insurers to determine if their plans can be continued in light of the division's position.
On May 5, 2014, the Colorado Division of Insurance issued Bulletin No. B-4.73, which relates to the March 4, 2014, CMS announcement of a two-year extension to the transitional policy for non-PPACA-compliant health benefit plans (as covered in the March 11, 2014, edition of Compliance Corner). The bulletin formalizes a May 2, 2014, division press release on the same topic. According to the bulletin, the division will allow insurance carriers to continue non-PPACA-compliant health plans through 2015. Since continuation of cancelled plans is optional, Colorado employers that had their plans cancelled should consult with their carriers on whether those plans can be continued in light of the bulletin.
On May 5, 2014, the Colorado Division of Insurance issued Bulletin No. B-4.74, which relates to the definition of "renewed" as it applies to health insurance. According to the bulletin, carriers and consumers (e.g., employers) should refer to the policy contract language first whenever any questions concerning the term "renewed" arises. Absent a specific definition in the contract, though, "renewed" means a policy renewed upon the occurrence of the earliest of:
The bulletin further expounds on the definition. Colorado employers should be aware of the definition, since it applies in several different contexts with respect to plan offerings, including the renewal date upon which federal and state regulations may take effect. Employers should review their policy contract and familiarize themselves with the appropriate definition of "renewed."
On May 2, 2014, the Colorado Division of Insurance issued a press release relating to the
March 4, 2014, CMS announcement of a two-year extension to the transitional policy for
non-PPACA-compliant health benefit plans (as covered in the March 11, 2014, edition of
Corner). According to the press release, the Division of Insurance will allow
insurance carriers to continue non-PPACA-compliant health plans through 2015. Since
continuation of cancelled plans is optional, Colorado employers that had their plans
cancelled should consult with their carriers on whether those plans can be continued in
light of the press release.
Bulletin No. B-4.71 »
On April 3, 2014, the Colorado Division of Insurance issued Bulletin No. B-4.71. The new
bulletin relates to the minimum benefit for applied behavioral analysis (ABA) treatment for
autism spectrum disorder for children, and is meant to clarify the minimum amount of such
treatment that carriers must provide. Specifically, all group health insurance policies
must provide, at a minimum, $34,000 annually in ABA therapy benefits for children through
age 8, and $12,000 for children age 9 to age 19, regardless of the number of visits
required to reach those benefit amounts. If the minimum ABA therapy benefits of $34,000 or
$12,000, as applicable, have not been provided when the minimum number of visits has been
reached, additional visits must be authorized until the $34,000 or $12,000 minimums have
been provided. The current number of visits established by rule is 550 visits for a child
through age 8 and 185 visits for a child aged 9 to 19. Although the bulletin is directed
toward insurers, employers with fully insured plans in Colorado should be aware of the
Bulletin No. B-4.71 »
On April 3, 2014, the Colorado Division of Insurance issued Bulletin No. B-4.72. The new
bulletin is meant to clarify that limited benefit plans, hospital indemnity or other fixed
indemnity plans should not be marketed or represented as substitutes for health benefit
plans, and that such plans do not provide sufficient coverage to qualify as minimum
essential coverage for purposes of PPACA. The bulletin reminds insurers that such plans are
not major medical insurance or comprehensive policies and do not provide the necessary
PPACA-compliant coverage, and therefore may leave a consumer or individual liable for the
individual mandate penalty under PPACA. Insurers selling these limited benefit or indemnity
plans that are marketed as a substitute for or equivalent to a PPACA-compliant plan may be
inviting liability under Colorado’s misleading and deceptive practice laws. In
addition, insurers who sell limited benefit plans must provide notice that the plan does
not provide minimum essential coverage as mandated by PPACA. The bulletin provides required
language that must be included on the policy’s front page. Although the bulletin is
directed toward insurers, employers will want to be aware of the bulletin and the
appropriate types of coverage that will be considered sufficient for purposes of
Bulletin No. B-4.72 »
On Jan. 14, 2014, the Colorado Division of Insurance issued Bulletin No. B-4.69. The bulletin is directed toward insurers, and is meant to help clarify the meaning of "reasonable assurance" for purposes of ensuring an individual's (in the individual market) or employer's (in the small group market) possession of pediatric dental coverage as an essential health benefit (EHB) under PPACA. As background, individual and small group policies sold both inside and outside of the exchange now must cover EHBs, which includes pediatric dental coverage. Carriers offering health benefit plans inside the exchange do not have to provide pediatric dental coverage as long as a certified stand-alone pediatric dental plan is available for purchase on the exchange.
On the other hand, carriers offering plans outside the exchange must have reasonable assurance that the purchaser already has pediatric dental EHB coverage prior to issuing a plan that does not contain such coverage. According to the bulletin, the division has created two methods to ensure compliance with the reasonable assurance standard. The first is through an application developed by the division that allows an applicant to certify that pediatric dental coverage has been obtained under another plan (and the carrier may require the applicant to provide proof). The second is through the sale of exchange-certified "child only" pediatric dental policies at low or no cost to individuals and families that have no children. The bulletin states that these new policies allow purchasers to obtain the required pediatric dental coverage with full knowledge that the benefit will never be needed or used. The proof of purchase of that policy meets the reasonable assurance requirement.
Small employers in Colorado should review the bulletin to better understand the reasons for
the pediatric dental coverage requirement, and the reasons why a carrier may be asked to
provide reasonable assurances if purchasing a small group plan outside the exchange.
Bulletin No. B-4.69 »
Premium Grace Period Required
Financial Protections for Health Care Providers and Consumers
Access Health Announces Special Enrollment Period Due to Coronavirus Emergency
Governor Issues Coronavirus Public Health Emergency Response Order
Insurance Department Calls for Premium Grace Period
Coronavirus Outbreak and Testing Bulletin
Guidance Regarding Health Insurance Tax Repeal
Paid Family Leave Law Enacted
Guidance on Stop-Loss Insurance Policies
Clarification of Infertility Treatment Mandates
Connecticut to use AV Calculator
Association Health Plan Regulation of Out-of-state Plans
Association Health Plan Restrictions
Requirements for Short-term, Limited-Duration Health Policies
Act Mandates Coverage of Essential Health Benefits and Expands Health Benefits for Women, Children and Adolescents
Moratorium on Health Insurance Tax Impacts Carrier Rates
Limits on Participant Payments for Prescription Drugs at the Point of Sale
Treatment of Substance Abuse and Opioid Addiction
Coverage and Definition of Infertility Expanded
Coinsurance in HMO Plan Designs
Reminders on Plan Prescription Drug Formularies
On June 7, 2016, Gov. Malloy signed SB 262 into law, creating Public Act No. 16-195. This law expands the reasons an eligible employee may take leave under the Connecticut Family and Medical Leave Act (CTFMLA). In addition to the reasons currently listed in the CTFMLA, eligible employees may take leave due to a qualifying exigency (as defined by federal FMLA regulations) arising out of the fact that the spouse, son, daughter or parent of the employee is on active duty, or has been notified of an impending call or order to active duty, in the armed forces.
Under the law, in such circumstances private employees may take up to 16 work weeks of unpaid time off during any 24 month period. In order to qualify, a private employee must work for an employer with at least 75 employees and have been employed by the employer for at least 12 months and worked at least 1,000 hours during that time.
The law is effective immediately.
On June 2, 2016, Gov. Malloy signed HB 5233 into law, creating Public Act No. 16-82. This law requires certain individual and fully-insured group health insurance policies to cover, at the option of the covered woman, mammograms provided by breast tomosynthesis. Breast tomosynthesis is a three-dimensional mammographic method. By law, such policies must cover baseline mammograms for women age 35 through 39, and annual mammograms for women age 40 or older. This law is effective Jan. 1, 2017.
On May 27, 2016, Gov. Malloy signed HB 5053 into law, creating Public Act No. 16-43. The law requires insured group health plans that are delivered, issued, renewed, amended or continued on or after Jan. 1, 2017, to provide coverage for prescription drugs without prior authorization when they are in their formularies and are approved for treating drug overdoses. This law contains various provisions on opioid abuse prevention and treatment and related issues. Thus, there are various effective dates, starting as soon as upon the passage of this law.
On May 27, 2016, Gov. Malloy signed HB 5591 into law, creating Public Act No. 16-29. This law establishes the Connecticut Retirement Security Program to improve the retirement security of workers in the state who do not have access to an employer-sponsored retirement plan or payroll deduction individual retirement account (IRA).
The law's requirements apply to all “qualified employers,” defined as private sector employers that employ at least five people each of whom was paid at least $5,000 in wages in the preceding calendar year. “Covered employees” are those who have worked for a qualified employer for a minimum of 120 days and are at least age 19 years old.
The law creates the Connecticut Retirement Security Authority (“the Authority”), which has been given the task of establishing the program, which will consist of Roth IRAs for eligible private-sector employees. The individual Roth IRAs will be established and maintained through the Authority's program or a third-party entity in the business of establishing and maintaining IRAs.
Under the program, qualified employers must automatically enroll each covered employee within 60 days after the employer provides the employee with the informational material on the program the bill requires. If the employee does not affirmatively opt in (contribution options are provided) the employer must enroll the employee with a contribution of at least 3 percent but not more than 6 percent of the employee's taxable wages (up to normal IRS limits). A covered employee may opt out of the program by electing a contribution level of zero. Employers will not be required to match contributions.
Finally, the law contains penalties for employers that fail to remit contributions or that fail to enroll employees.
The program is expected to be implemented by Jan. 1, 2018. Some sections of this law are effective immediately and others are effective July 1, 2016.
On March 2, 2016, the Connecticut Insurance Department published Bulletin HC-111 regarding health insurance coverage for preventative services and the repeal and replacement of Bulletin HC-100 issued on Nov. 3, 2014. The bulletin is directed toward insurers and health care centers operating in Connecticut.
The revised bulletin still addresses health insurance coverage for preventative services. The bulletin clarifies requirements under the federal health care reform law and reconciles these requirements with Connecticut mandates for fully insured non-grandfathered group health plans, effective Jan. 1, 2015. A discussion of the interaction between federal and state mandates follows:
On Feb. 16, 2016, the Connecticut Insurance Department published Bulletin HC-110 regarding the one-year moratorium on the fee on health insurance providers (called “covered entities”). The bulletin is directed toward insurers, and states that they must suspend the collection of the fee for the 2017 calendar year.
As background, PPACA instituted the fee to help fund the cost of PPACA implementation and exchanges. This fee applies to any "covered entity" engaged in the business of providing health insurance to U.S. citizens, residents and certain other persons present in the U.S. Put simply, this fee only applies to insurers, and the regulations specifically exclude self-insured plans (although it does apply to fully insured limited-scope dental, vision and retiree-only plans, which are exempt from most PPACA requirements). On Dec. 18, 2015, President Obama signed the Consolidated Appropriations Act, 2016 into law, which includes a one-year moratorium on the fee from Jan. 1, 2017, through Dec. 31, 2017.
The bulletin informs carriers that if they have approved group rates for plan years beginning in 2016 that they are directed to refile such rates for second, third and fourth quarter of 2016 to remove the fee for the portion of the plan year in 2017. For groups with plan years beginning Feb. 1, 2016, and Mar. 1, 2016, carriers are directed to provide a credit or refund of the 2017 fee to the employer group in the 2016 plan year. Filings should be submitted no later than Mar. 1, 2016.
While the suspension of this tax does not require any employer action, employers may see a decrease in costs since most insurers passed the fee onto the plan through rate increases.
On Feb. 5, 2016, the Connecticut Insurance Department published Bulletin HC-109 to provide guidance as to the maximum copayment amounts for health insurance plans. The bulletin rescinds Bulletin HC-94, Maximum Copays and Filing Issues, that was issued on Mar. 10, 2014.
As background, in December 2015, the Insurance Department conducted a data call to determine reasonable levels of copayment amounts regarding specified categories of benefits. The maximum copays are set to not exceed 50 percent of the 90 percentile of claims for the category. For the home health care category, 25 percent was used in lieu of 50 percent to reflect the statutory requirement in Conn. Gen. Stat. Section 38a-493 and Section 38a-520 that coinsurance cover at least 75 percent of the charges. The maximum copay for routine radiology does not apply to advance radiology services that are subject to the limits set forth in Conn. Gen. Stat. Section 38a-511 and Section 38a-550.
The following indicates the revised maximum copays and the copays will be effective for all policies issued or renewed on or after Jan. 1, 2017.
The maximum copays for the following categories of benefits were not part of the most recent data call and will remain at the current allowable levels.
Plans that use coinsurance may not impose an enrollee cost sharing amount that exceeds 50 percent. This applies both for in and out of network benefits. There is no restriction on the differential of the coinsurance level between in and out of network benefits. The level of coinsurance must be consistent for all services within a service category except for plans utilizing tiered networks.
On Oct. 9, 2015, the Connecticut Insurance Department published Bulletin HC-106 regarding rate filings for small employer plans. The bulletin is directed toward insurers, and states that the change to the definition of small group in CGS 38a-564, as amended by Section 17 of Public Act No. 15-247, will be postponed.
Conn. Gen. Stat. §38a-564 defines ‘small employer’ as up to 100 employees, but provides the Commissioner the ability to postpone implementation of that definition. In order to be consistent with federal law as a result of passage of the PACE Act, the Department has decided that the small group definition will remain 1-50 employees.
The bulletin informs carriers that they may modify previously approved small group rates for 2016 to the extent the revised rates would be more favorable to the marketplace. The bulletin is effective immediately.
On Aug. 13, 2015, Insurance Commissioner Wade issued Bulletin HC-104. The bulletin repeals and replaces Bulletin HC-64 (dated Jan. 20, 2006) and clarifies Connecticut’s mandated coverage for infertility treatment under Conn. Gen. Stat. § 38a-509 and § 38a-536 to reflect changes brought about under PPACA.
Specifically, the bulletin removes the age limit for the infertility treatment coverage mandate. This means health insurance plans sold in Connecticut will no longer be allowed to limit coverage of medically necessary infertility treatment to individuals under age 40.
The bulletin also addresses the general use of age-based benefit restrictions and refers to HHS guidance on what is considered a potentially discriminatory benefit design. Based on HHS guidance stating that age limits are discriminatory when applied to services that have been found clinically effective for all ages, Connecticut has determined infertility treatment may be clinically effective for all ages and is therefore requiring carriers to remove age limits on infertility benefits for policies issued or renewed on or after Jan. 1, 2016.
On June 30, 2015, Gov. Malloy signed SB 1085 into law. The law amends Section 38a-514 to expand services for mental or nervous conditions that certain health plans must cover. The law mandates that each group health plan cover the diagnosis and treatment of mental or nervous conditions on the same basis as medical, surgical or other physical conditions. Among other things, the law also requires plans to cover:
Moreover, a group policy may not prohibit an insured from receiving, or a provider from being reimbursed for, multiple screening services as part of a single-day visit to a health care provider or multicare institution (e.g., hospital, psychiatric outpatient clinic, or free standing facility for substance use treatment).
Finally, the law amends Section 38a-514 to substitute the term “benefits payable” for “covered expenses” as it pertains to the mental or nervous conditions coverage provisions. Under this law, these are the usual, customary, and reasonable charges for medically necessary treatment or, in the case of a managed care plan, the contracted rates.
The law applies to fully insured group health plans issued or renewed on or after Jan. 1, 2016.
On June 30, 2015, Gov. Malloy signed SB 949 into law. The law updates Connecticut’s data security laws and adds stringent new requirements to protect an individual’s confidential information.
The law creates the requirement for a comprehensive information security program. By October 1, 2017, health insurers, HMOs, and certain entities regulated by the Connecticut Insurance Department (e.g. pharmacy benefits managers and TPAs), must implement and maintain a comprehensive information security program to safeguard an insured’s and enrollee’s personal information. It specifies program requirements including encryption of personal information and disciplinary procedures for employees who violate the security policies, requires the program to be updated at least annually and requires the entities to offer at least one year of free identity theft prevention and mitigation services if there is an actual or suspected breach.
The law also adds a 90-day deadline for data breach reporting, which is applicable to anyone who conducts business in Connecticut. Generally, it requires the person to notify impacted state residents of a breach within 90 days after discovering it and offer at least one year of free identity theft prevention and mitigation services.
Both of these updates are effective Oct. 1, 2015.
On June 23, 2015, Gov. Malloy signed SB 467 into law, requiring group health plans to cover telehealth services to the extent that they cover the services through in-person visits between an insured person and a health care provider. Telehealth services shall only be provided through real-time, interactive, two-way communication technology. It does not include the use of a fax machine, audio-only telephone texting or e-mail. The law also requires that a telehealth provider obtain a patient’s informed consent at the first telehealth interaction to provide services and inform the patient about the treatment methods and limitations of treating a person through telehealth.
The law applies to fully insured group health plans issued or renewed on or after Jan. 1, 2016.
On July 2, 2015, Gov. Malloy signed HB 6772 into law, which amends Section 52-321a. The amendments exempt from creditors’ claims interests in or amounts payable to participants and beneficiaries of certain allocated or unallocated group annuity contracts purchased by an ERISA-covered plan.
To qualify for the exemption, a group annuity contract must be issued to an employer or pension plan to provide employees or retirees with defined retirement benefits. In addition, the original retirement benefits must be protected under ERISA or Pension Benefit Guaranty Corporation and the group annuity contract must not be protected by ERISA or the PBGC on or after the effective date of the group annuity contract.
As background, under Section 52-321a, creditors cannot claim interests in and payments from certain accounts, including certain retirement accounts, simplified employee pension plans and medical savings accounts.
The law is effective Oct. 1, 2015.
On June 30, 2015, Gov. Malloy signed SB 1502 into law, which provides in Section 413 that the labor commissioner must establish the procedures needed to implement a paid family and medical leave (FML) program.
By Oct. 1, 2015, the labor commissioner must contract with a consultant to create an implementation plan for the FML program and to perform an actuarial analysis and report on the employee contribution level needed to ensure a sustainable FML program.
On June 15, 2015, Insurance Commissioner Wade issued Bulletin HC-102. The bulletin clarifies Connecticut's mandated coverage for hearing aids under Conn. Gen. Stat. § 38a-490b and § 38a-516b in relation to changes brought about under PPACA. Specifically, the bulletin addresses the general use of age-based benefit restrictions and refers to HHS guidance on what is considered a potentially discriminatory benefit design. Based on HHS guidance stating that age limits are discriminatory when applied to services that have been found clinically effective for all ages, the state has determined hearing aids may be clinically effective for all ages and is therefore requiring carriers to remove the age limits on hearing aid benefits for policies issued or renewed on or after Jan. 1, 2016.
On July 8, 2015, Insurance Commissioner Wade issued Bulletin HC-103 to be read in conjunction with Bulletin HC-95 dated Mar. 17, 2014. The bulletin provides guidance on provisions that will not be approved in a stop-loss policy issued by an accident and health insurer, which insures the employer or its group health plan and not the enrollees covered by the plan. Policies issued or renewed on or after Jan. 1, 2016 may not contain the following provisions:
Employers who sponsor a self-insured plan with stop-loss coverage should review their stop-loss contract and work with their attorney and carrier to remove such provisions.
On June 22, 2015, Gov. Malloy signed Substitute SB No. 428 into law, creating Public Act 15-56. The law extends workplace harassment, discrimination and retaliation protection already available to employees covered by the Connecticut Fair Employment Practices Act to unpaid interns.
The law defines “intern” as “an individual who performs work for an employer for the purpose of training,” and imposes specific conditions that must be satisfied before the position qualifies as an internship covered by the new law. Those requirements are:
If any of these criteria is not met, the individual is not an “intern” under the new statute.
While the new law does not require benefit coverage for an unpaid intern, it requires employers to review their practices relating to interns. Since the law also implicates non-benefits laws, such as employment and labor law, employers should work with outside counsel in ensuring compliance. The law is effective Oct. 1, 2015.
On May 26, 2015, Gov. Malloy signed SB 1029 into law, creating Public Act No. 15-7. The law makes minor changes to the state statute concerning uncontested dissolutions of marriage. While employers are not directly impacted by the changes, it is worth noting that changes in the law provide for an expedited divorce or legal separation if certain factors are met. The law permits a couple to file a joint petition in the judicial district in which one of the party resides for a dissolution of marriage or legal separation and waives certain time periods if agreement on all terms of the dissolution of marriage or legal separation is reached.
Connecticut is one of the few states which recognize legal separation. Employers sponsoring group health plans, especially those subject to COBRA, should be familiar with whether their plan allows an employee to drop a spouse’s coverage due to legal separation and whether COBRA is triggered at that time. Further, employers should ensure they have communicated the proper timeframes (typically 60 days) for the employee to notify the employer that a divorce or legal separation has occurred. Employers accomplish this by distributing a COBRA Initial Notice within 90 days of the coverage effective date to both the covered employee and covered spouse. This becomes even more important for those employees entering into a uncontested legal separation or dissolution of marriage where the timeline for the proceedings occurs on an expedited basis and failure to notify the employer on a timely basis can result in a denial of COBRA coverage. The law is effective Oct. 1, 2015.
On May 19, 2015, Gov. Malloy signed SB 426 into law, creating Public Act No. 15-6. The law limits employer access to employee social media, email and other online accounts. The law prohibits employers from requesting or requiring an employee or job applicant to 1) provide the employer with a user name, password or other way to access the employee's or applicant's personal online account 2) authenticate or access such an account in front of the employer; or 3) invite, or accept an invitation from, the employer to join a group affiliated with such an account. Employers are prohibited from firing, disciplining or otherwise retaliating against an employee who 1) refuses to provide this access or b) files a complaint with a public or private body or court about the employer's request for access or retaliation for refusing such access. Employers may not refuse to hire an applicant because the applicant would not provide access to his or her personal online account. ‘Personal online account’ is defined as any online account an employee or applicant uses solely for personal purposes, including, but not limited to email, social media and retail-based web sites.
Employees and applicants are permitted to file a complaint with the Connecticut Labor Commissioner, who can impose civil penalties of up to $25 for initial violations against job applicants and $500 for initial violations against employees. Penalties for subsequent violations can be up to $500 for violations against applicants and up to $1,000 for violations against employees.
The new law is effective Oct. 1, 2015.
On Feb. 18, 2015, the State of Connecticut Insurance Department released Bulletin HC-90-15, which primarily affects carriers issuing health insurance policies in the state for individual and small group plans. A couple of points may interest employers, however. Specifically, the bulletin clarified that the state benchmark plan used for 2014 and 2015 will be extended for use during 2016. All non-grandfathered small employer plans both inside and outside the state exchange are required to provide coverage for essential health benefits as outlined in the state benchmark plan. Further, for small group plans offered beginning Jan. 1, 2016, the state will conform to the federal rating requirements with the exception of geographic rating areas. Connecticut was approved to establish eight rating areas by county for the small group market. As a reminder, gender differences, industry and group size, tobacco use, administrative expense differentials and network cost differentials will no longer be permitted in the Connecticut small group market for rating purposes. Finally, rating for family members will be performed in accordance with the final rule, which states that the family rate is the sum of the rates for the employee, spouse, children aged 21 or older and the rates for the three oldest children under age 21.
On Dec. 1, 2014, the Connecticut Insurance Department issued Bulletin No. HC-101 in order to clarify the Department’s policy on insurance benefits payable for work-related injuries or sicknesses and for policies providing for disability income protection, accident only benefits or travel health policies. The following provisions must be followed for such policies:
On Nov. 3, 2014, the State of Connecticut Insurance Department issued Bulletin No. HC-100, which addresses health insurance coverage for preventative services. The bulletin clarifies requirements under the federal health care reform law and reconciles these requirements with Connecticut mandates for fully insured non-grandfathered group health plans, effective Jan. 1, 2015. A discussion of the interaction between federal and state mandates follows:
On Aug. 20, 2014, the Connecticut Insurance Department issued Bulletin HC-99, which rescinds and replaces Bulletin HC-96 issued earlier this year. This updated bulletin clarifies that the current dollar limits provided under the state’s autism mandate are pre-empted by federal law under PPACA. As a result, the insurance commissioner is requesting that all carriers remove the limits to any applied behavioral analysis benefits.
Employers with fully insured policies issued in Connecticut should note that since this would be a material modification of plan provisions, employers should ensure that the issuer will notify plan participants of the removal of the annual dollar limits. If the issuer is not performing the notification, employers subject to ERISA should provide notification to plan participants within 210 days of the close of the plan year in order to comply with the SMM. This SMM should then be attached to the plan’s SPD and provided in tandem with the SPD going forward for any new plan participants.
On June 6, 2014, Gov. Malloy signed SB 10 into law, creating Public Act 14-97. The act prohibits insured group health policies issued in the state from imposing copayments greater than $20 for certain comprehensive ultrasound breast screenings. By law, policies must cover a comprehensive breast ultrasound screening if 1) a mammogram shows heterogeneous or dense breast tissue based on the American College of Radiology's Breast Imaging Reporting and Data System or 2) a woman is at an increased risk for breast cancer because of family history, her own breast cancer history, positive genetic testing or other indications determined by her physician or advanced practice registered nurse.
The act also prohibits insured group health policies that provide coverage for occupational or physical therapy from applying copayments greater than $30 per visit for in-network occupational or physical therapy services.
The act is effective Jan. 1, 2015, for insured policies, including HMO plans, issued in Connecticut. Due to ERISA, these state insurance benefit mandates do not apply to self-insured group health plans.
New COVID-19 Bulletin on Pre-Authorization Requirements, Telehealth, Non-Cancellation for Nonpayment of Premiums, and Catastrophic Plans
Health Insurance Coverage for Coronavirus
Coverage for Initial Depression Screenings
Contraceptive Coverage Mandate
Efforts to Improve Efficiency of Claim Submissions and Payments
Prescription Drug Cost Sharing Limit
Step Therapy Protocol Exceptions
Coverage for Treatment of Back Pain
Mandated Coverage for In Vitro Fertilization and Other Fertility Services
Revised Regulations Related to MEWAs
Stop-Loss Policies Extended to Small Employers
Pharmacy Gag Clauses Prohibited
Coverage for Pediatric Autoimmune Neuropsychiatric Disorders
Prior Authorization Requirements Restricted for Certain Prescriptions
Experimental Treatment Coverage
Mandated Coverage for Certain Infertility Treatments
Coverage of Drug and Alcohol Dependencies
Coverage for Cancer Treatment
2018 FFE State Partnership Exchange
Network Disclosure and Transparency
On July 13, 2016, Gov. Markell signed HB 381 into law. The new law requires utilization review entities (which include health insurers, health benefit plans and health service corporations) to detail any pre-authorization requirements and restrictions readily accessible on its website and in written/electronic form upon request for participants, health care providers, government entities and the general public. Any change in the procedures must be communicated prior to the effective date.
Utilization review entities must process clean pre-authorizations for non-emergency pharmaceuticals within two calendar days; three calendar days for those related to health care services and submitted electronically; and five calendar days for those related to health care services and not submitted electronically.
A pre-authorization shall be valid for one year from the date that the health care provider receives the authorization, dependent upon continued coverage and eligibility of the participant.
There is no requirement of employers, but it is helpful for plan sponsors to understand how their insured group health plans and participants will be impacted by the amended procedures.
The new law is effective Jan. 1, 2017.
On March 23, 2016, the Delaware Department of Insurance issued Bulletin No. 86. The bulletin provides guidance regarding the Gender Identity Nondiscrimination Act of 2013, which prohibits insurers from discriminating against an individual because of gender identity. The department interprets the act along with the Unfair Trade Practices Act and the ACA to prohibit a carrier from excluding, denying or otherwise limiting coverage for medically necessary services, as determined by a medical provider, based on the individual’s gender identity if the service would be covered for another participant. Further, a carrier may not impose a general exclusion for gender dysphoria or gender identity disorder.
Carriers must provide coverage, including under a group health policy,for medically necessary surgeries or treatments related to gender transition. Importantly, the 2016 state benchmark plan includes an exclusion for “change of sex surgery,” which the department warns is a violation of the law. The bulletin and its guidance are effective immediately.
On Feb. 1, 2016, Insurance Commissioner Stewart adopted final regulations related to HB 69, which was passed July 2015. As background, HB 69, effective Jan. 1, 2016, requires group health insurance policies issued in Delaware to provide coverage for telehealth and telemedicine. For this purpose, “telehealth” is defined as the use of information and communication technologies (including telephone, remote monitoring devices and other electronic means) to support clinical health care, provider consultation and patient education. Telemedicine is defined as the delivery of health care services by real time two-way audio, visual or telecommunications (including video conferencing). The health care provider must be practicing within his or her scope of practice.
The regulations prohibit an insurer from placing additional restrictions on telehealth services, such as preauthorization, medical necessity or homebound requirements that are not placed on similar non-telehealth services. The regulations are effective Feb. 11, 2016.
On Dec. 10, 2015, the Delaware Department of Insurance amended Bulletin No. 51 regarding the state’s mini-COBRA requirements for small employers. The amended bulletin includes a revised model notice for employers to distribute to terminated employees notifying them of their right to continuation.
On Oct. 15, 2015, Insurance Commissioner Stewart issued Bulletin No. 79 related to the definition of small group under state law. Delaware insurance statutes define a small group as an employer with up to 50 employees. Because the federal provision mandating the change of small group to 100 employees is no longer in effect as a result of the PACE Act, Delaware will keep the definition of small group at 50 employees. Thus, groups with 51 to 100 employees will continue to be rated as large groups and will not be required to switch to the small group market in 2016.
On Sept. 29, 2015, Insurance Commissioner Stewart announced the 2016 approved rates for qualified health plans in the state exchange. The average rate increases for individual policies range from 16.9 percent to 22.4 percent compared to 2015 rates, depending on the insurer, and -0.5 to 12.7 percent for small groups. Premium rates for small groups purchasing coverage through the SHOP will vary by age, but average from $250.48 per month for a bronze plan to $359.75 for gold. While the individual policy offerings do not affect employers, it may be helpful for employers to understand what is available through the exchange when responding to employee questions. Also, small employers with up to 50 employees have the option of purchasing group coverage through the SHOP. Please consult your advisor with any questions.
On Sept. 1, 2015, the Delaware Department of Insurance issued Bulletin No. 76, which clarifies the state’s requirements related to individual hospital or other fixed indemnity policies.. For any policies issued on or after Jan. 1, 2015, the policies must meet the following criteria to be in compliance with federal and state law:
Employers who make such coverage available to employees should be aware of the new requirements.
On July 7, 2015, Gov. Markell signed HB 69 into law. The new law requires group health plans to provide coverage for health care services provided through telemedicine. ‘Telemedicine’ is defined as the delivery of health care services by means of real time two-way audio, visual or other telecommunications or electronic communications and includes the assessment, diagnosis, consultation, treatment, education, care management and self-management of a patient’s health care. The plan may not impose a higher deductible, copayment or coinsurance amount for telemedicine services than would apply if the same service were provided through in-person consultation. The law is effective for policies issued or renewed on or after Jan. 1, 2016.
On June 15, 2015, HHS conditionally approved Delaware’s application for a state-based health insurance marketplace for individual and SHOP coverage. The state’s marketplace is currently a partnership. If the state meets the conditions outlined by HHS, the state-based marketplace would be effective for 2016.
On May 21, 2015, Insurance Commissioner Stewart announced that Aetna Health, Inc. and Highmark Blue Cross Blue Shield Delaware will offer employers with 51 to 100 employees the opportunity to renew their group health insurance policies at large group rates for policy plan years beginning on or before Oct. 1, 2016. This is in response to Commissioner Stewart’s Bulletin No. 75 providing carriers with such an option. Employers with 51 to 100 employees who do not take advantage of the opportunity provided by Aetna Health, Inc. and Highmark Blue Cross Blue Shield Delaware will be switched to a small group policy for plan years beginning on or after Jan. 1, 2016. The change in the definition of ‘small group’ is mandated by PPACA and includes modified community rating and mandated coverage for the essential health benefit categories.
On Sept. 2, 2014, Gov. Markell signed HB 294 into law. The new law requires that an employer take all reasonable steps to destroy personal identifying information that is no longer to be retained by the employer. The term personal identifying information includes an employee’s name (or first initial and last name) in combination with his or her signature, date of birth, social security number, passport number, driver’s license number, state identification number, insurance policy number, financial services account number, bank account number, credit card number, debit card number or any other financial or confidential health information. The employer must shred, erase or otherwise destroy or modify personal identifying information to make it entirely unreadable or indecipherable through any means. The law became effective Jan. 1, 2015.
On Sept. 30, 2014, the Delaware Department of Insurance issued Bulletin No. 72, which reminds insurers that they must provide certain coverage related to tobacco cessation. As part of PPACA’s preventive service mandate, insurers must provide the following coverage for non-grandfathered group health plans:
These services must be provided with no cost-sharing for the participant and without requiring prior authorization. While the bulletin is directed at insurers, sponsors of group health policies should be mindful of the tobacco cessation programs that are available to participants under the plan.
On July 31, 2014, Gov. Markell signed SB 185 into law. The new law will prohibit employers with four or more employees from discriminating against employees based on a disability. The law previously applied to employers with 15 or more employees, which is consistent with the federal ADA. Small employers in Delaware will want to review their employment and leave policies to ensure that they are in compliance by providing reasonable accommodations for employees who require them. Reasonable accommodations may include making facilities accessible, modifying equipment and making reasonable changes in schedules or duties. While there is a posting requirement for applicable employers, the Delaware Department of Labor, Division of Industrial Affairs, has not yet revised the poster. They are expected to do so prior to the law’s Jan. 31, 2015, effective date.
On June 30, 2014, Insurance Commissioner Stewart issued Bulletin No. 71. The bulletin reminds insurers that they must pay clean claims related to emergency services submitted by non-network providers within 30 days of receipt. The 30-day requirement applies regardless of whether the insurer or the provider has petitioned for arbitration. Further, the claim must be paid at the highest allowable charge for each emergency care service permitted by the insurer for any provider (including both network and non-network providers) during the 12-month period prior to the date of service for the claim in question.
On March 13, 2014, Delaware Insurance Commissioner Karen Weldin Stewart issued a statement
related to the March 5, 2014, CMS announcement of a two-year extension to the transitional
policy for non-PPACA-compliant health benefit plans (as covered in the March 11, 2014,
edition of Compliance Corner). Commissioner Stewart stated that Delaware state law
does not allow for the extension of non-PPACA-compliant plans.
Declaration of Emergency Leave
Order on COVID-19 Coverage
Revised FAQs on Insurance Issues Related to COVID-19
Paid Family Leave Poster and Resources Published
Employer Reporting Responsibility Related to Individual Health Insurance Mandate
Enforcement of Employer Commuter Benefit Requirement
Universal Paid Leave
Protecting Pregnant Workers Notice
Universal Paid Leave Guidance
Coverage of Women’s Preventive Care Services
Universal Paid Leave Act
Specialty Drug Copayment Limitation Act
On March 3, 2016, the District of Columbia (DC) council enacted DC Act 21-324, which extends temporary provisions of the DC law to permit time off as a reasonable accommodation for pre-birth complications. The law is meant to protect employees who are absent from work because of such pre-birth complications or other pregnancy-related conditions. The extension is temporary, taking effect on April 20, 2016, and expiring on Dec. 1, 2016. Employers should work with outside counsel in developing and implementing their leave policies to meet the DC rules for pregnant employees.
On Feb. 18, 2016, the District of Columbia (D.C.) Council enacted D.C. Act 21-314. The new law temporarily amends the Protecting Pregnant Workers Fairness Act of 2014 to require an employer to make a reasonable accommodation for an employee whose ability to perform the functions of their job is affected by a pre-birth complication. The new law prohibits employers from taking adverse action against employees who are absent from work as a result of pre-birth complications. The new law is effective Feb. 18, 2016, until May 18, 2016. The council is considering legislation to make the amendments permanent. While the law does not specifically address benefits, D.C. employers that have pregnant employees affected by a pre-birth complication should consider state and federal regulations that may require the employer to continue health coverage during any leave relating to the pregnancy. Because those situations implicate other areas of law, including labor and employment, employers should work with outside counsel in addressing leave and benefit policies with respect to pregnant employees.
On Feb. 18, 2016, the D.C. Council enacted D.C. Act 21-322. The new law temporarily amends the D.C. Accrued Sick and Safe Leave Act of 2008 to clarify that certain employees (those in the building and construction industry) covered by a collective bargaining agreement (CBA) are exempt from the paid leave requirements if the CBA states so. Specifically, to exempt those types of employees, the CBA must expressly waive the requirements “in clear and unambiguous terms.” The new law is effective for 225 days after Congress approves the law (which is expected on April 29, 2016). Employers in the building and construction industry that have previously entered into a CBA should review the CBA to see if the new law has any affect and the employer’s paid sick leave policies (including continuation of benefits during the leave). If questions arise, employers should work with outside counsel, since the issue involves other areas of law, such as labor and employment, which are beyond the scope of benefits.
On Oct. 20, 2015, the District of Columbia (DC) Department of Insurance published Bulletin 15-IB-07-10/20. The new bulletin relates to the definition of “small employer” under DC law, and states that as a result of the PACE Act, DC will retain the definition of small employer as an employer with 50 or fewer employees. The bulletin and definition apply for plan years that begin on or after Jan. 1, 2016. The bulletin also rescinds Bulletin 15-IB-05-04/28, “Small Employer” Transitional Policy for the 2016 Plan Year (issued April 28, 2015, and covered in the May 5, 2015, edition of Compliance Corner). The bulletin contains contact information for questions or concerns relating to the bulletin. Employers in the 51-100 group in DC should also work with their carriers concerning next steps with regard to the bulletin.
On Sept. 17, 2015, DC Act 21-90 took effect. Enacted June 17, 2015, Act 21-90 is called the “Healthy Hearts of Babies Act of 2015.” Under the new law, insurers must provide coverage for critical congenital heart disease screenings for newborns delivered in hospitals, maternity centers or in homes. Specifically, ‘critical congenital heart disease’ means a group of heart defects that cause serious, life-threatening symptoms and require intervention within the first day or first year of life. Under the law, screening must be performed using pulse oximetry (noninvasive procedures used to measure blood oxygen levels) until additional alternative tests are adopted by the American Academy of Pediatrics. The new law contains no new requirements for employers, but employers should be aware of the changes should questions arise relating to coverage of newborn congenital heart disease screenings.
On Sept. 17, 2015, DC Act 21-91 took effect. Enacted June 17, 2015, Act 21-91 is called the “Access to Contraceptives Amendment Act of 2015.” Under the new law, plans that provide coverage for prescription drugs must provide coverage for up to a 12-month supply of such drugs at one time. Specifically, ‘contraceptives’ means drugs or drug regimens approved by the U.S. FDA for the purpose of preventing pregnancy.
On May 2, 2015, District of Columbia (DC) Act 20-593 took effect. The act, called the “Reproductive Health Non-Discrimination Amendment Act of 2014,” amends DC law to ensure that individuals are protected from discrimination based on an individual’s or dependent’s reproductive health decisions. As background, DC Code Sec. 2-1401.05 prohibits employers from discriminating against an employee (in employment decisions and benefits offerings) on the basis of pregnancy, childbirth, related medical conditions or breastfeeding. Act 20-593 amends that Code section by adding “reproductive health decisions” to the list of protections. That term is defined as a decision by an employee or an employee’s dependent (including a spouse) related to the use or intended use of a particular drug, device or medical service, including those related to contraception or fertility control or the planned intended initiation or termination of a pregnancy. The act was originally signed into law Jan. 23, 2015, but did not take effect until May 2, 2015, due to DC’s legislative process, which requires U.S. Congressional review.
On April 28, 2015, the District of Columbia (DC) Department of Insurance published Bulletin 15-IB-05-04/28 which relates to the change in the definition of ‘small employer’ for purposes of group health insurance coverage in DC.
As background, on Jan. 1, 2016, under PPACA that definition changes from 1-50 employees to 1-100 employees. According to the bulletin, DC has adopted a transitional policy for small employers, as allowed by the CCIIO (outlined in a March 5, 2014, CCIIO bulletin, which allows transition relief for non-PPACA-compliant plans with years beginning on or before Oct. 1, 2016). The CCIIO transitional policy allows small employers with between 51-100 employees to renew their existing policies and remain in the large group market without violating PPACA. The bulletin is meant to explain the details of DC’s transitional policy and how it interacts with PPACA.
According to the bulletin, for employers with 51-100 employees the department will allow insurers to renew their current policies through policy years beginning on or before Oct. 1, 2016. Employers with 51-100 employees can continue to purchase large group market policies through Dec. 31, 2015. Under the transitional policy those large group policies may be renewed by Oct. 1, 2016. Importantly, all new policies sold to small employers (those with 1-100 employees) after Jan. 1, 2016, must comply with applicable PPACA and DC requirements. The bulletin includes a reminder that it is up to the insurer’s discretion as to whether a particular policy will be renewed under the small employer transitional policy. Thus, DC employers in the 51-100 group should work with their insurers to determine if they will be allowed to renew under DC’s transitional policy.
The new bulletin contains no new obligations for employers. However, DC employers, particularly those with 51 – 100 employees, will want to be aware of the transitional policy.
On Dec. 17, 2014, the District of Columbia (DC) Department of Insurance, Securities and Banking published Bulletin 14-IB-01-12/17. The new bulletin is addressed to health insurers and relates to health insurance coverage sold to associations and MEWAs located in DC, as well as health insurance coverage sold to small DC employers by captive insurers domiciled outside of DC.
Regarding association coverage, the federal government (CMS) previously issued guidance in 2011 relating to PPACA’s individual and group insurance mandates when insurance is sold to, or through, associations. Under that guidance, CMS states that in most association situations, the group health plan exists at the individual employer level and not at the association-of-employers level. Thus, in these situations, the size of each individual employer participating in the association determines whether that employer’s coverage is subject to the small or large group market rules (most PPACA insurance mandates apply only to small groups).
A 'mixed' association is where different members have coverage that is subject to the individual, small, and/or large group market rules, as determined by each employer member’s status. According to the bulletin, an association cannot aggregate the employees of the member employers in an attempt to qualify as a large employer. Accordingly, each employer member of a mixed association must receive coverage that complies with the requirements arising out of their own status as an individual, small employer or large employer. Further, since under DC law individual and small group health plans must be sold only through DC Health Link (the DC-established health insurance exchange), each small employer association member must purchase insurance through DC Health Link.
Regarding MEWAs and captives, if a MEWA solicits or provides health benefits to one or more employers domiciled in DC, the MEWA is subject to DC insurance laws (regardless of whether the MEWA is regulated under ERISA or is domiciled in DC). DC law does allow an exemption for MEWAs maintained or established by a single employer that are self-insured (and that are not considered a governmental plan). The bulletin further describes allowable situations for fully insured MEWAs, including requirements for MEWAs that establish a trust in order to provide group health benefits.
Lastly, the bulletin addresses captive insurers, MEWAs and associations that are acting as insurers—selling or otherwise issuing or making available health insurance policies to more than one small employer located in DC. In that situation, the captive insurer, MEWA or association will be deemed to be engaged in the business of selling health insurance in DC, and therefore must obtain a certificate of authority from the Department. In addition, DC law requires a policy, certificate or coverage for a health benefit plan offered to a DC employer to be filed with the and approved by the Department—including coverage issues to an out-of-DC trust or association or by a captive.
Employers considering obtaining coverage through an association, MEWA or captive arrangement should carefully review the bulletin to better understand their rights and obligations relating to the coverage.
On Oct. 23, 2014, District of Columbia (DC) Mayor Gray signed into law the Protecting Pregnant Workers Fairness Act of 2014, creating DC Act 20-458. The new law provides new protections for employees whose ability to perform job functions is limited by pregnancy, childbirth or a related medical condition. The new law applies to DC employers, and requires employers to make modest changes to accommodate the physical limitations of a normal, healthy pregnancy unless doing so would cause an undue hardship. Some examples of accommodations include the provision of more frequent or longer breaks, acquisition or modification of equipment or seating, restrictions on heavy lifting, a temporary transfer to a light duty position or a modified work schedule. The law also requires employers to provide a private, non-bathroom space to a breastfeeding mother to express milk. Importantly, employees may not be forced to use leave if a reasonable accommodation is available.
The new law also places notice requirements on the employer. Employers must post information relating to the new protections in a conspicuous place and distribute notices to new employees upon hire and existing employees within 120 days of the law’s effective date. Penalties apply for employers that willfully violate any of the law’s requirements: $1,000 for the first offense, $1,500 for the second offense, and $2,000 for each subsequent offense.
The new law may impact employee benefit offerings and employer leave policies. DC employers should work with outside counsel in developing policies and procedures that comply with the new law, particularly since the new law also affects areas outside of employee benefits. The new law takes effect after a 30-day Congressional review period and publication in the DC Register (which has not yet occurred).
On Oct. 23, 2014, the District of Columbia (DC) Department of Insurance issued Bulletin 06-IB-004-8/29 which addresses summary and disclosure notices for supplemental health insurance policies marketed in DC. The purpose of the bulletin is to clarify that limited benefit health plans, hospital indemnity or other supplemental health policies may not be marketed or represented as substitutes for health benefit plans, and that such plans do not provide sufficient coverage to qualify as minimum essential coverage for purposes of PPACA’s individual mandate. According to the bulletin, insurance carriers may not bundle various benefits or coverages together into a fixed indemnity plan to be marketed to consumers as meeting the federal requirements of a health benefit plan, since they do not constitute major medical coverage. Carriers are also prohibited from representing, naming or including in the name of any new fixed indemnity health plan the terms “bronze”, “silver”, “gold” or “platinum” tier level of health coverage or any other PPACA-compliant health benefit term, such as “essential” benefits. Finally, the bulletin explains that carriers selling hospital indemnity or other fixed indemnity policies must provide notice that those policies do not provide the minimum essential coverage mandated by PPACA, and that consumers may be liable for a federal tax penalty unless they purchase a plan that does meet the minimum essential coverage requirement.
The bulletin contains a list of plan types that are and are not considered to provide supplemental benefits. Although the bulletin is directed towards insurance carriers, DC employers should be aware of the bulletin.
On June 18, District of Columbia (D.C.) Mayor Gray signed into law B20-0776, creating Act 20-356. As background, under federal and D.C. law, DC Health Link must be self-sustaining by Jan. 1, 2015 (federal funding is longer available after that date). Previously, on May 22, 2014, Mayor Gray signed a law (Act 20-329) amending the Health Benefit Exchange Authority Establishment Act of 2011, which relates to funding DC Health Link (D.C.'s health insurance exchange). Act 20-329 enacted, on an emergency and temporary basis, a tax on all health-related insurance products sold in Washington, D.C., based on a percentage (expected to be around 1 percent) of an insurer's gross receipts and is assessed annually. The tax is intended to help fund DC Health Link going forward.
Act Number 20-356 extends the assessment for an additional 225 days. In the meantime, the D.C. council expects to enact a permanent version of the assessment. Employers should be aware of the new tax since it may ultimately result in higher premiums, both on and off the DC Health Link. The new law does not, however, create additional compliance or other obligations for Washington, D.C., employers.
On May 22, 2014, District of Columbia (D.C.) Mayor Gray signed into law B20-0775, creating Act Number A20-0329. The new law amends an existing law, the Health Benefit Exchange Authority Establishment Act of 2011, which relates to funding DC Health Link (D.C.'s health insurance exchange). Generally, under federal and D.C. law, DC Health Link must be self-sustaining by Jan. 1, 2015 (federal funding is longer available after that date). The law enacts a tax on all health-related insurance products sold in Washington, D.C., which is based on the insurer's gross receipts and is assessed annually. The tax is intended to help fund DC Health Link going forward.
Employers should be aware of the new tax, since it may ultimately result in higher premiums through the exchange. The new law does not, however, create additional compliance or other obligations for Washington, D.C. employers.
On Feb. 27, 2014, the District of Columbia (DC) Department of Insurance, Securities and Banking issued Bulletin 13-IB-01-30/15 REVISED. The bulletin revises a bulletin issued on March 15, 2013, relating to insurance coverage denials based on gender identity or expression (covered in the March 26, 2013, edition of Compliance Corner). As background, DC makes it illegal to refuse to insure, continue insuring or limit the insurance coverage of an individual based on gender identity or expression. Health insurers had 90 days (from March 26, 2013) to update policy forms to come into compliance.
The revised bulletin adds some clarifications relating to discriminatory practices. First, the Department of Insurance takes the position that “gender dysphoria” (also known as “gender identity disorder”) is a recognized medical condition under health insurance policies covering medical and hospital expenses, regardless of whether explicitly referenced. Second, persons diagnosed with gender dysphoria fall squarely within the protected class of “gender identity or expression.” As a result, attempts to limit or deny medically necessary treatments for gender dysphoria, including gender reassignment surgeries, will be considered discriminatory. This means treatment for gender dysphoria, including gender reassignment surgeries, is a covered benefit, and individuals diagnosed with gender dysphoria are entitled to receive medically necessary benefits and services under individual and group health insurance policies that cover medical and hospital expenses.
While the bulletin is directed toward insurers, DC employers will want to be aware of
the department’s positions, particularly if they sponsor fully insured group
plans that are issued in DC.
On Jan. 2, 2014, District of Columbia (D.C.) Mayor Gray signed into law the “Earned Sick and Safe Leave Amendment Act of 2013.” The new law amends the Accrued Sick and Safe Leave Act of 2008 by expanding the scope of employees, strengthening the remedies and establishing an outreach program to inform the public about the act. Generally, employers must grant covered employees paid leave on an annual basis; the amount of leave depends on the size of the employer. For example, an employer with 100 or more employees must provide one hour of paid leave for every 37 hours an employee works (with a seven-day per year cap). Employers with 25-99 employees must provide one paid leave hour for every 43 hours worked (with a five-day cap), and those with 24 or fewer employees must provide one paid leave hour for every 87 hours worked (with a three-day cap).
The new law expands the group of covered workers to include tipped restaurant employees, regardless of the employer’s size, who can now earn one hour of paid leave for every 43 hours worked (with a five-day cap). The law also expands the definition of employer to include any entity that directly or indirectly employs or exercises control over the wages, hours or working conditions of employment (including through the use of temporary workers or a staffing agency). The law allows employees to begin accruing leave on their date of hire (although they do not become eligible to use the paid leave until after 90 days of employment). Finally, the new law also requires the employer to reinstate an employee’s leave where the employee is re-hired within one year of termination or where the employee is transferred out of D.C. and is later transferred back in to D.C.
The effective date of the new law is unclear. Although it is supposed to take effect by
the end of February 2014, the law will not actually be applicable until a budget
statement regarding the impact of the law is included in an approved D.C. budget (which
could be as late as 2015). D.C.’s Department of Employment Services is expected
to issue more guidance at some point, and has said that the act will not likely take
effect until 2015. Employers, though, should review their employment policies and
prepare to begin tracking leave.
Premium Payment Leniency Requested
Early Prescription Refill Mandate
Civil Air Patrol Leave
On March 25, 2016, Gov. Scott signed Senate Bill No. 422 into law. This law addresses the provision of abuse-deterrent drugs. Specifically, plans that provide coverage for abuse-deterrent opioid analgesic drug products:
The law is effective on Jan. 1, 2017. Employers that sponsor plans that provide such drug products should work with their insurers to ensure compliance with this law.
On April 14, 2016, Gov. Scott signed House Bill No. 221 into law. This law requires plans to provide coverage for treatment of down syndrome when the participant is younger than age 18 or older than age 18 and attending high school, if they were diagnosed as having developmental disabilities before reaching age eight.
The law also requires issuers to provide coverage for emergency services regardless of whether those services are performed by participating or nonparticipating health-care providers. Additionally, issuers cannot require prior authorization for emergency services. This portion of the law is very similar to PPACA’s requirement that emergency services be covered without regard to whether provided in or out of network; note though, that this requirement would apply to plans insured in Florida whether the plan is grandfathered under PPACA or not.
This law is effective July 1, 2016.
Beginning July 1, 2015, Florida employers with 15 or more employees cannot discriminate on the basis of pregnancy. This prohibition comes after the Florida Supreme Court ruled in 2014 in Delva v. Cont’l Group, Inc., 137 So. 3d 371 (Fla. 2014) that pregnancy discrimination is a form of sex discrimination under Florida employment law. As a result, employers cannot fail or refuse to hire, discharge or otherwise discriminate in compensation or terms, conditions and privileges of employment on the basis of pregnancy. The law does allow employers to take an action based on pregnancy if such action is justified based on a bona fide occupational qualification that is necessary for job performance. The law also allows employers to abide by the terms of bona fide employee benefit plans that measure earnings by production as long as the terms are not designed to evade the pregnancy discrimination laws.
On Jan. 13, 2015, the DOL and the state of Florida signed a memorandum of understanding announcing that they will work together to prevent the improper classification of employees as independent contractors or other nonemployee workers. The agreement states that the two entities will share information and coordinate enforcement in an effort to protect employee rights by reducing the practice of misclassification of employees.
The agreement arose as part of the DOL Misclassification Initiative. Sixteen other states have signed similar agreements: Alabama, California, Colorado, Connecticut, Hawaii, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, Montana, New York, Utah and Washington. Employers should be aware of the increased attention given to the misclassification issue by the DOL and by state agencies. This is an important issue for all size employers, but specifically large employers who are subject to the employer mandate must identify full-time employees and offer them affordable, minimum value coverage, or else pay a penalty. Misclassification of employees can significantly impact the potential liability under the employer mandate for these employers.
On Jan. 5, 2015, the stay on enforcement of same-sex marriages in Florida expired, making same-sex marriage legal in Florida as of Jan. 6, 2015. As background, in August of 2014, Federal District Court Judge Hinkle ruled in Brenner v. Scott (999 F. Supp. 2d 1278, 2014) that the Florida same-sex marriage ban is unconstitutional. However, at that time, he issued a stay on enforcement of same-sex marriage, pending appeal. Florida appealed this decision to the 11th Circuit, and on Dec.3, 2014, the 11th Circuit denied a request to extend the stay. On Dec. 19, 2014, the Supreme Court also refused to issue an injunction that would lift the stay. On Jan. 1, 2015, Judge Hinkle directed clerks in Florida to issue same-sex marriage licenses beginning Jan. 6, 2014.
On Aug. 26, 2014, the Florida Office of Insurance Regulation issued Informational Memorandum OIR-14-05M. The bulletin provides guidance regarding calculation of composite rates for Florida-issued policies for policy years beginning on or after Jan. 1, 2015. As background, final rules issued by HHS March 11, 2014, provided for a two-tiered federal calculation method for composite rates (one tier for each covered adult age 21 or older and a second tier for each covered child under age 21). However, the same final rule permitted states to substitute their own alternative to the federal methodology by seeking approval from HHS. This bulletin issued by the Florida Office of Insurance Regulation is confirmation that the state has sought such alternative certification and it was approved. In this case, the state requested to use a four-tiered calculation: employee, employee plus spouse, employee plus children and employee plus family.
This means that while health insurance carriers issuing small group market plans in the state will continue to provide per-member billing, they may choose to provide family composite premiums on an optional basis. If they do so, the carrier must follow the state's four-tiered approved alternative method. If a carrier offers the family composite methodology, it must make it available for each small employer in the market.
The bulletin provides definitions for each rating tier, as well as the factors to be used when determining the final premium charged for each employee. Importantly, the bulletin does not apply directly to small employers, although this information is important for all employers to understand. Small employers in Florida may request composite rates from the insurance carrier, rather than per member rates, to determine the percentage of the premium paid by the employer versus employee contribution levels for policies issued in 2015 if the carrier has opted to follow this alternative calculation method. The bulletin is effective for policy years beginning on or after Jan. 1, 2015.
On Aug. 21, 2014, the U.S. District Court for the Northern District of Florida, Tallahassee Division, in Brenner v. Scott, 298 F.R.D. 689 (N.D. Fla. 2014), ruled that Florida’s constitutional and statutory prohibitions against same-sex marriage are unconstitutional. The court blocked the state from enforcing the prohibitions, but stayed its ruling until stays have been lifted in three other pending cases, plus 90 days, allowing time for the state to seek a longer stay or a stay from the U.S. Court of Appeals for the Eleventh Circuit or the U.S. Supreme Court. The court did allow one of the plaintiffs to receive a corrected death certificate reflecting a same-sex marriage spouse no later than Sept. 22, 2014, or 14 days after the information needed is provided. The court also ordered the clerk of court in Washington County, FL, to issue a marriage license for another plaintiff within 21 days after the stay of this order expires. However, for now the same-sex marriage prohibitions in Florida remain in effect pending the outcome of the appeals.
Prior Coronavirus Directives Winding Down
Consumer Protections During Coronavirus Pandemic
Utilization Review Requirements Suspended
Coronavirus Preparedness Directive
Georgia Telehealth Act
Insurers Are Encouraged to be Lenient with Deadlines for Policyholders Impacted by Hurricane Irma
Fire Departments Must Provide Cancer Insurance
Plans Must Provide Hearing Aids for Children
Synchronization of Prescription Drug Refills
Available Paid Sick Leave Must be Usable to Care for Immediate Family Members
IRS Provides Tax Relief for Victims of January Severe Weather in Georgia
Insurance Directive Reinforces No Cost Sharing Related to Preventive Colonoscopy
On Nov. 2, 2016, Commissioner of Insurance Hudgens issued Directive 16-EX-6 to all Georgia insurers related to in-network preventive colorectal screenings. CMS and other federal agencies have provided sufficient guidance to establish that all services directly related to a preventive colonoscopy are to be provided without cost sharing. The actual findings of the screening have no bearing on the cost sharing. Yet, it has come to the Commissioner’s attention that issues continue to occur as to the breadth of coverage including improper cost sharing, denials of claims, or improper balance billing.
This directive clarifies that it is the insurer’s responsibility to adjust the claim promptly, fairly and accurately once it is determined that the claim is related to the preventive colonoscopy screening. Failure of insurers to make proper adjustments in a timely manner will be viewed as unfair claims settlement practices.
Insurers are also tasked with developing educational materials for insureds highlighting different concepts that include (but are not limited to) the differences between diagnostic and preventive, cost sharing and no cost sharing, in or out-of-network, and providing helpful guidance regarding referrals for preventive colorectal screenings.
Although this directive is aimed at insurers, it is important for employers to be aware of what insurers may be doing and what they are now directed to do.
On April 27, 2016, Gov. Deal signed HB 965 into law, amending Chapter 24 of Title 33 of the Official Code of Georgia Annotated. This makes a change to plan requirements regarding drug treatment for those suffering from stage four advanced, metastatic cancer.
The amendment provides that health benefit plans issued, delivered or renewed in Georgia cannot limit or exclude coverage for drugs that are approved by the federal Food and Drug Administration to treat stage four advanced, metastatic cancer by requiring that plan participants first fail to respond successfully to a different drug or drugs or prove a history of failure of such drug or drugs. “Stage four advanced, metastatic cancer” means cancer that has spread from the cancer's original or primary sites to nearby tissues, lymph nodes or other areas or parts of the body.
This law applies to fully-insured plans issued, delivered or renewed on or after July 1, 2016.
On Nov. 6, 2015, Commissioner of Insurance Hudgens issued Bulletin 15-EX-3 related to the Georgia definition of small group in light of passage of the PACE act. As background, the PACE act was signed into federal law Oct. 7, 2015, and repealed PPACA’s mandated small-group expansion. As a result of the PACE act, the federal government will continue to define small groups as those with 1-50 employees. As Georgia is no longer required to expand the definition of small group to 1-100 employees, this bulletin confirms that the small employer definition in Georgia is 1-50 employees and the counting methodology for grouping purposes is limited to full time equivalent employees (which, while not entirely clear, would appear to include part-time hours, similar to the counting procedures that apply under PPACA’s employer mandate). The bulletin also confirms that insurers will continue to utilize eligible employees for participation rate purposes.
On July 14, 2015, the Georgia Department of Revenue (DOR) issued guidance for same-sex couples regarding filing tax returns. Effective June 26, 2015, the state of Georgia authorizes and recognizes same-sex marriages due to the U.S. Supreme Court decision in Obergefell v. Hodges. Therefore, same-sex marriages that were previously recognized for federal income tax purposes are now recognized by Georgia for state income tax purposes. For employers, this means the cost to cover same-sex partners under employer-provided benefit plans is not taxable for state purposes.
The guidance states that improper tax treatment will be corrected through the tax return process and the filing of amended returns. Therefore, while employers should no longer withhold income tax from amounts that would now be subject to pre-tax treatment, employers should not have to adjust for over-withholding of state taxes related to employer-provided benefits provided to same-sex couples.
On Aug. 11, 2015, Commissioner of Insurance Hudgens issued Directive 15-EX-3 related to patient access to eye care. The directive reinforces that insurers must allow covered persons to obtain eye services from providers who are otherwise licensed to provide such services. Some insurers have been limiting coverage to services performed or products sold by certain providers only. The directive points to the recent Georgia Supreme Court case of Spectera, Inc. v. Wilson (749 S.E.2d 704 (2013)). Based on that case, a provider may provide all the services for which he or she is licensed and may receive provider panel reimbursement from an insurer as long as the service is otherwise covered by the insurance policy. Although this directive is aimed at insurers, it is important for employers to be aware that insurers cannot restrict the access to eye care in this manner.
On June 17, 2015, Insurance and Safety Fire Commissioner Hudgens issued Bulletin 15-EX-2 related to the new autism spectrum disorder coverage requirement under HB 429, as previously reported in the May 19, 2015 edition of Compliance Corner. In the Bulletin, Commissioner Hudgens clarifies that insurers may impose a cap of $30,000 on claims paid for applied behavior analysis for the purpose of treating a person with autism spectrum disorder. This cap only applies to applied behavior analysis and does not apply to other treatments which may be required by HB 429 (such as therapy services or counseling).
The autism spectrum disorder requirements are effective for fully insured plans issued or renewed on or after July 1, 2015.
On April 29, 2015, Gov. Deal signed HB 429 into law, amending Chapter 24 of Title 33 of the Official Code of Georgia Annotated. The new law makes two significant changes relating to health insurance coverage.
First, plans cannot restrict coverage for prescribed, medically appropriate treatments for participants who are diagnosed with a terminal condition. ‘Terminal condition’ is defined as any physician-diagnosed illness, health condition or disease that is expected to result in death in two years or less. The health benefit plan shall not refuse to pay/reimburse for the treatment (including for any drug or device) as long as such end-of-life care is consistent with best practices for treatment of the terminal condition and such treatment is supported by peer-reviewed medical literature.
In addition, plans must provide coverage related to autism spectrum disorders for any plan participants who are six years of age or younger. Specifically, plans must provide coverage for any assessments, evaluations or tests by a licensed physician or psychologist for diagnosis and any treatment for any such disorders diagnosed. This includes counseling, habilitative, rehabilitative and therapy services. Coverage for prescription drugs to treat autism spectrum disorders must be determined in the same manner as coverage for prescription drugs to treat other illnesses or conditions covered by plans. This provision does not apply to employers that have 10 or fewer employees. Therefore, fully-insured Georgia employers with more than 10 employees should be aware of the new terminal condition and autism spectrum disorder coverage requirements, and should work with insurers if any issues arise.
These two changes are effective July 1, 2015.
On Jan. 29, 2015, Insurance and Safety Fire Commissioner Hudgens issued Executive Directive 15-EX-2 related to hospital and other fixed indemnity insurance products. The state has implemented new procedures and enforcement to align with federal requirements for such policies. As background, in May 2014, CMS issued final regulations related to fixed indemnity insurance products. An individual fixed indemnity policy would be exempt from PPACA's coverage mandates (regarding, for example, essential health benefits, annual dollar limits and maximum out-of-pocket limits) if it qualified as a HIPAA-excepted benefit. To qualify as an excepted benefit:
To qualify as an excepted benefit:
For new policies issued with an effective date beginning on or after Jan. 1, 2015, the Georgia Department of Insurance requires that the participant certify that they have other coverage that qualifies as MEC. There is a safe harbor extension until no later than May 1, 2015 for issuers that filed policy form amendments by Oct. 1, 2014 (to allow previously approved amendments to be finish the their use for the year). For coverage that is already in force or that will take effect later in 2015, the notice and attestation requirements would apply to the first renewal application with an effective date on or after Oct. 1, 2016.
An employer offering fixed indemnity products to employees should review them carefully for compliance.
On Aug. 1, 2014, Insurance and Safety Fire Commissioner Hudgens issued Bulletin 14-L&H-1 outlining Georgia's small group health composite rating for use in preparing 2015 small group health rates. As background, in March HHS established the federal composite rating methodology, a two-tier rating system. At that time, HHS also authorized states to utilize a different composite rating strategy, provided they are submitted to and approved by HHS. Georgia has exercised this option by introducing a four-tier small group rating methodology. A carrier is not required to provide family composite rates, but if it does, it must make it available to each small employer in the market.
The methodology for developing small group premiums in Georgia and allocating them to participants is as follows:
Note that the federally facilitated SHOP will not use composite premium methods for the 2015 plan year. The federally facilitated SHOP plans to use the federal composite premium method for the 2016 plan year.
Reiteration of COVID-19-Related Insurance Guidance
Insurance Division Requests Regarding COVID-19
Voting Leave Repealed
Revised Disability Compensation Notice
Restrictions on Short-Term, Limited-Duration Policies
Transitional Policies Extended
Adoption of ACA Mandates
Family Leave Expansion
Network Access and Adequacy
Transitional Policies Extended
Section 1332 State Innovation Waiver Approved
2017 TDI Rates
Mandated Coverage for 12-Month Contraceptive Supplies
On July 5, 2016, Gov. Ige signed SB 2319 into law. Effective for policies issued or renewed on or after Jan. 1, 2017, group health plans must provide coverage for contraceptive supplies for up to a 12-month period.
Mental Health Coverage to Include Dietician Services
On June 29, 2016, Gov. Ige signed SB 2854 into law. Effective July 1, 2016, group health insurance policies must provide coverage for mental health services provided by licensed dietitians treating eating disorders.
On July 5, 2016, Gov. Ige signed HB1897 into law. Effective for plan years beginning on or after Jan. 1, 2018, group health insurance policies must provide coverage for sexually transmitted disease screenings, including screening for human immunodeficiency virus and acquired immunodeficiency syndrome.
On June 29, 2016, Gov. Ige signed SB 2854 into law. Health insurance policies that provide coverage for children of participants must provide coverage for certain child health supervision services from birth to age five years. Covered services include developmental assessment, immunizations, lab tests and medical examinations. Existing law provides that the services may be provided by physicians, supervised by physicians or delivered by nurses. The new law adds physician assistant delivered services to the list of covered benefits. The new law is effective for plan years starting on or after Jan. 1, 2017.
On June 29, 2016, Gov. Ige signed HB 2084 into law, which prohibits insurers from discriminating in terms of eligibility or coverage based on an individual’s actual or perceived gender identity, Prohibited discrimination includes denying or limiting coverage for services related to gender transition if the plan otherwise covers the services when not related to gender transition. Plans are also prohibited from limiting coverage for a service to a single gender. The law is effective for plan years starting on or after Jan. 1, 2017.
On April 26, 2016, Gov. Ige signed SB 2775 into law. The new law authorizes the state to file an application for a Section 1332 State Innovation Waiver. As discussed in the Jan. 12, 2016, edition of Compliance Corner, states may apply for a waiver from certain provisions of PPACA, including the health insurance marketplace for individuals, SHOP, premium tax credits, employer mandate and individual mandate. To be approved, the state must present an alternative strategy that will provide coverage that is at least as comprehensive as the existing federal provision, keep care at least as affordable and not increase the federal deficit.
Hawaii’s proposed alternative would be to waive the SHOP, maintain the individual marketplace and align the ACA with the state’s Prepaid Health Care Act, which places requirements on employers related to the offer of coverage to employees.
If approved, the waiver would be effective Jan. 1, 2017.
The Hawaii Department of Labor and Industrial Relations, Disability Compensation Division, announced its 2016 rates for state disability insurance. Effective Jan. 1, 2016, the maximum weekly benefit amount is $570, an $18 increase from 2015. The maximum employee contribution rate remains 0.5 percent. However, the maximum weekly wage base increases to $982.36 (up from $951.23 in 2015), which means a maximum weekly deduction of $4.91 (up from $4.76 in 2015).
On Oct. 30, 2015, Insurance Commissioner Ito issued Memorandum 2015-3H related to the definition of “small group” under state law. Hawaii insurance statutes define a “small group” as an employer with up to 50 employees. Since the federal provision mandating the change of the definition of small group to 100 employees is no longer in effect as a result of the PACE Act (signed into law on Oct. 7, 2015), Hawaii will keep its definition of small group at 1 - 50 employees. Thus, groups with 51 to 100 employees will continue to be rated as large groups and will not be required to switch to the small group market in 2016.
On Oct. 5, 2015, the Hawaii Department of Commerce and Consumer Affairs Insurance Division released 2016 final rates for qualified health plans in the exchange. The premium rates for individuals vary by age, but on average increased 34.4 percent for Kaiser as compared to 2015 rates and 27.3 percent for HMSA. There are six insurers offering coverage through the SHOP and the rate increases range from -18.9 percent to 22.6 percent.
The state’s exchange was previously state-based and called the Hawaii Health Connector. Effective for 2016, the exchange will now be federally facilitated through www.healthcare.gov.
While the individual policy offerings do not affect employers, it may be helpful for employers to understand what is available through the exchange when responding to employee questions. Also, small employers with up to 50 employees have the option of purchasing group coverage through the SHOP. Please consult your advisor with any questions.
On July 14, 2015, Gov. Ige signed SB 791 into law. The new law requires group health plans to provide coverage for the diagnosis and treatment of autism for children under age 14. The coverage may be subject to a deductible, coinsurance or copayment but cannot be less favorable than the cost sharing provisions for medical services under the plan. Coverage for applied behavioral analysis shall be subject to a maximum benefit of $25,000 per year. Coverage may be excluded for services provided out of state, custodial care, care provided by a family or household member, experimental care or clinically in appropriate services or supplies. The insurer must distribute a notice summarizing the coverage with 2016 plan materials. The law is effective for policies issued or renewed on or after Jan. 1, 2016.
On July 6, 2015, Gov. Ige signed HB 261 into law. The new law requires insurers to post the plan’s drug formulary on a public website. The information must also be available through a toll-free number. Any change in coverage, such as an addition of a new drug or removal of an existing drug, must be posted within 72 hours of the change effective date. The law is effective for policies issued or renewed on or after Jan. 1, 2017.
On July 6, 2015, Gov. Ige signed HB 174 into law. The new law requires group health plans to provide coverage for medically necessary orthodontic services for the treatment of orofacial anomalies resulting from birth defects. The maximum benefit per treatment phase is $5,500, which will be indexed for inflation in later years. The coverage may be subject to a deductible, coinsurance or copayment but cannot be less favorable than the cost sharing provisions for medical services under the plan. Coverage cannot be denied on the basis that the treatment is habilitative or non-restorative in nature. The insurer must distribute a notice summarizing the coverage with 2016 plan materials. The law is effective for policies issued or renewed on or after Jan. 1, 2016.
On June 15, 2015, Hawaii’s state-based marketplace, known as Hawaii Health Connector, is discontinuing its SHOP and will not accept applications. Small employers wishing to enroll in coverage should contact a broker to apply.
The Hawaii Department of Labor and Industrial Relations, Disability Compensation Division, announced its 2015 rates for state disability insurance. Effective Jan. 1, 2015, the maximum weekly benefit amount is $552, a $6 increase from 2014. The maximum employee contribution rate remains 0.5 percent. However, the maximum weekly wage base increases to $951.23 (up from $940.05 in 2014), which means a maximum weekly deduction of $4.76 (up from $4.70 in 2014).
On Sept. 2, 2014, the Hawaii Department of Commerce and Consumer Affairs Insurance Division issued a press release announcing the publication of a new consumer guide for small groups. Employers who sponsor a small group health plan in Hawaii will now be able to compare rates among the state’s five carriers: Hawaii Medical Service Association, Kaiser Permanente, University Health Alliance, Hawaii Medical Assurance Association and Family Health. The guide is a result of Act 66, which requires carriers to publish such rates in an effort to promote transparency and create competition.
On June 30, 2014, Gov. Abercrombie signed SB 1233 into law. The new law permits employees to take an unpaid leave of absence up to seven days per calendar year for bone marrow or peripheral blood stem cell donation and up to 30 days for organ donation. It applies only to private employers that employ 50 or more employees. To be eligible for the leave, the employee must be employed by the employer for at least one year prior to the leave. An employer may require that the employee use up to three days of earned but unused paid leave time. Upon return, the employee must be restored to the same or equivalent position. The law is effective June 30, 2014.
In a related action, Gov. Abercrombie signed HB 2400 into law on June 30, 2014. The state statute related to temporary disability benefits was revised to include organ donation under the definition of disability. This means that an employee who is on a leave of absence and unable to perform his/her work duties due to organ donation will be eligible for partial salary replacement through the temporary disability benefit program. This law is effective July 1, 2014.
On July 1, 2014, Gov. Abercrombie signed SB 2820 into law. The new law revises the state's insurance code to comply with and reflect the provisions of PPACA. The law is effective July 1, 2014. Among the provisions are:
On July 3, 2014, Gov. Abercrombie signed SB 2469 into law. The law revises the state's requirement related to telemedicine. All statutory references to telemedicine have been changed to telehealth. Any policy issued by a mutual benefit society or health maintenance organization must provide coverage for telehealth services. Reimbursement for such services must be equivalent to reimbursement for the same services provided via face-to-face contact between a health care provider and a patient.
The term "telehealth" is defined as the use of telecommunicatios – including real-time video conferencing-based communication, secure interactive or non-interactive Web-based communication and secure asynchronous information exchange – to transmit patient medical information, including diagnostic-quality digital images and laboratory results for medical interpretation and diagnosis, for the purposes of delivering enhanced health care services and information to parties separated by distance, establishing a physician-patient relationship, evaluating a patient or treating a patient. The law is effective July 3, 2014.
On June 6, 2014, Hawaii Insurance Commissioner Gordon Ito announced that insurers will be allowed to renew noncompliant individual and small group non-grandfathered plans with policy years beginning on or before Oct. 1, 2016. This is related to the March 5, 2014, CMS announcement of a two-year extension to the transitional policy for non-PPACA-compliant health benefit plans (covered in the March 11, 2014, edition of Compliance Corner). The department will allow insurers to renew noncompliant individual and small group non-grandfathered plans with policy years beginning on or before Oct. 1, 2016. Such plans must have existed before Oct. 1, 2013 and would not be required to provide coverage for essential health benefits during the transition period.
On May 30, 2014, Hawaii Insurance Commissioner Gordon Ito issued a press release related to a proposed rate increase by Hawaii Medical Service Association (HMSA). HMSA had submitted a proposed increase of 13.1 percent for its small employer group community rated policies. After review, Commissioner Ito approved a rate increase of 8.9 percent, which represents approximately a 5 percent increase due to medical costs and 4 percent due to PPACA fees and taxes.
Extension of Transitional Health Insurance Plans
Temporary Waiver of Pharmacy Benefit Requirements
Temporary Waiver of Telehealth Restrictions
Idaho Insurers will Provide Coronavirus Coverage
Conditional Renewal for Non-ACA-Compliant Plans Extended
Rule Amended to Allow Medicare Supplemental Coverage Regardless of Age
Abortifacient Drugs No Longer Prohibited From Being Prescribed Through Telemedicine
Conditional Extension of Renewal for Non-PPACA-Compliant Plans
On June 28, 2016, the Idaho Department of Insurance released the final version of Bulletin 16-04. The bulletin relates to third-party payment of premiums or cost-sharing expenses. According to the bulletin, carriers must accept third-party payments (towards premiums and cost-sharing-expenses) from individuals (such as family and friends), religious institutions and other not-for-profit organizations, if the assistance is provided on the basis of the individual’s financial need, the institution/organization is not a health care provider and is not financially interested. An example of financial interest would be if the institution/organization receives funding from entities with a pecuniary interest in the payment of health insurance claims.
If the third-party payments meet those requirements, the carrier must accept those payments (both towards premiums and cost-sharing expenses) and those payments must count toward deductibles and out-of-pocket maximums as if the insured made the payment directly. This is effective as of the date of the bulletin as to those health insurance policies regulated under Title 41 of the Idaho Code.
The bulletin applies to carriers, but employers will want to be aware of the bulletin, should issues arise with respect to third-party payments of employee-related premiums and other cost-sharing expenses.
On Apr. 19, 2016, Idaho Department of Insurance Director Cameron issued Bulletin No. 16-03 related to the Feb. 29, 2016, CMS announcement of an additional extension to the transitional policy for non-PPACA-compliant health benefit plans (as covered in the March 8, 2016, edition of Compliance Corner). The Department of Insurance previously announced – in Bulletin No. 13-05- that insurers in Idaho could renew non-PPACA-compliant plans, as long as certain conditions are met. Bulletin No. 14-01 allowed a two-year CMS extension for Idaho insurers, and explained additional requirements for insurers. Such policies are not required to be in compliance with certain PPACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit. Bulletin No. 16-03 now allows these plans to be further extended through December 31, 2017.
The transitional policy permits issuers in the individual and small group markets to renew non-grandfathered policies that had plan or policy years beginning on or before December 31, 2013. Such coverage may now be renewed for plan or policy years starting between January 1, 2014 and October 1, 2017, so long as all policies end by December 31, 2017.
The Bulletin provides the following consumer protections. It addresses accumulation periods for deductibles and out-of-pocket maximums for plans who calculate them on a plan year, rather than on a calendar year basis. This is key because a carrier must not apply accumulation periods consisting of fewer than 12 months, even when the policy period is less than 12 months. To solve this, carriers may either have a longer than 12-month accumulation period or overlapping 12-month accumulation periods.
Finally, the bulletin includes a reminder that these plans must still comply with the following ACA provisions:
Small employers that are interested in renewing their non-PPACA-compliant plan should work with their advisors and insurers.
On Oct. 15, 2015, the Idaho Department of Insurance issued a news release on their decision on small employer group size. Idaho will retain its existing definition of ‘small employer’ as groups of up to 50 employees.
As background, PPACA included a provision to change the definition of small employer from 1-50 to 1-100 employees effective Jan. 1, 2016. On Oct. 1, 2015, the US Congress passed HR 1624, called the PACE Act. The PACE Act repeals the mandated small-group expansion from groups of up to 50 employees to groups of up to 100 employees. Thus, unless a state has expanded its definition of small employer, PPACA’s insurance mandates would not apply to employers in the 51-100 group in that state.
On Aug. 6, 2015, the DOL announced an MOU with the Idaho DOL aimed at protecting employees’ rights by preventing misclassification. Under the MOU, both agencies may share information and coordinate law enforcement to ensure that workers are properly classified and that employers are not infringing on rights by misclassifying a worker into independent contractor or other non-employee status. Idaho joins 24 other states who have signed similar agreements with the DOL.
Idaho employers should review their employment practices to ensure that individuals are properly classified as either employees or independent contractors. The proper classification is important for purposes of PPACA’s employer mandate, as well as many other federal and state laws and calculation of employment taxes. Because the classification analysis is based on the specific facts and circumstances surrounding an employer’s situation, employers should work with outside counsel to resolve any questions.
On Oct. 7, 2014, in Latta v. Otter, No. 14-35420 (9th Cir. 2014), the U.S. Court of Appeals for the 9th Circuit found Idaho’s same-sex marriage ban unconstitutional. A stay was granted by the U.S. Supreme Court giving the state an opportunity to plead as to why it should be allowed to appeal. That stay was dissolved on Oct. 15, 2014.
The rapid changes in state marriage laws have important effects for individuals in Idaho and for employers administering state tax rules. They are less significant for purposes of administering federal tax and benefit rules due to the Supreme Court's Windsor decision and subsequent agency guidance recognizing all same-sex spouses regardless of state of residence. Employers in Idaho should work closely with their attorneys and tax advisors to ensure plan design compliance in light of the ongoing developments in this area.
This will most likely mean that group health insurance policies issued in Idaho will need to amend their plan documents to offer coverage to same-sex spouses. We are expecting further guidance from the state and will report such in future editions of Compliance Corner.
On July 8, 2014, CMS approved Idaho’s proposed small group composite premium rating method. As background, final rules issued by HHS on March 11, 2014, provided for a two-tiered federal calculation method for composite rates (one tier for each covered adult age 21 or older and a second tier for each covered child under age 21). However, the same final rule permitted states to substitute their own alternative to the federal methodology by seeking approval from HHS. On June 10, 2014, the Idaho Department of Insurance submitted a request to use a four-tiered calculation: employee, employee plus spouse, employee plus children and employee plus family.
This means that while health insurance carriers issuing small group market plans in Idaho will continue to provide per-member billing, they may also choose to provide family composite premiums on an optional basis. If they do so, the carrier must follow the state's four-tiered approved alternative method. Carriers will have the flexibility to choose which (if any) small group products will permit employers the composite premium option.
The bulletin provides definitions for each rating tier, as well as the factors to be used when determining the final premium charged for each employee. Composite rates would be determined at the time the policy is issued and at renewal, and would not vary during the policy year. Any tobacco surcharge is excluded from the composite rate and added to the applicable individual’s premium.
Importantly, the bulletin does not apply directly to small employers, and is important for all employers to understand. Small employers in Idaho may request composite rates, rather than per-member rates, from the insurance carrier to determine the percentage of the premium paid by the employer versus employee contribution levels for policies issued in 2015 if the carrier has opted to follow this alternative calculation method. The bulletin is effective for policy years beginning on or after Jan.1, 2015.
On May 9, the Idaho Department of Insurance issued Bulletin No. 14-02 related to pediatric dental coverage. As background, PPACA requires that non-grandfathered individual and small group policies provide coverage for all 10 categories of essential health benefits, including pediatric dental care. If the qualified health plan is purchased from the marketplace, the plan is not required to provide pediatric dental care if there is at least one exchange-certified stand-alone dental plan available through the marketplace in the service area. If the qualified health plan is purchased outside of the marketplace, coverage of pediatric dental care may be excluded if, prior to the issuance, the carrier becomes reasonably assured that an individual has obtained such coverage through an exchange-certified stand-alone dental plan.
The bulletin clarifies that an individual or small employer who purchases a qualified health plan through the state marketplace, Your Health Idaho, is not required to purchase separate pediatric dental coverage. If an individual or small employer purchases a qualified health plan outside of the marketplace, the carrier must include a written disclosure as part of the application materials stating that the plan does not include coverage for pediatric dental care and instructions for how to purchase such coverage. The carrier must not require that the consumer purchase such coverage.
On May 1, 2014, Idaho Department of Insurance Director Deal issued Bulletin No. 14-01. The bulletin is related to the March 5, 2014, CMS announcement of a two-year extension to the transitional policy for non-PPACA-compliant health benefit plans (as covered in the March 11, 2014, edition of Compliance Corner). The department will allow insurers to renew noncompliant individual and small group non-grandfathered plans with policy years beginning on or before Oct. 1, 2016.
On March 26, 2014, Gov. Otter signed HB 475 into law. The new law requires that
the state exchange portal be constructed in a way that allows consumers to
comparison shop without entering personal information. Passwords, login and
personal information would not be required until an application is submitted.
Additionally, the application for premium assistance must include a warning
that consumers should estimate income carefully and that underestimating income
could result in an overpayment of premium assistance and an owed amount to the
IRS. The law is effective July 1, 2014.
HB 475 »
Chicago Enhances Paid Sick Leave Ordinance
COVID-19 Emergency Rules
COVID-19 and Health Insurance Coverage
COVID-19 and Health Insurance Coverage
FAQ Released About Insurance Coverage and COVID 19
Guidance on Short-Term Limited-Duration Insurance
Extension for Grandmothered Plans
Review of Federal Regulation of Association Health Plans and State Law
Extension of Non-ACA-Compliant Small Group and Individual Policies and Plans
Synchronization of Prescription Drug Refills
Treatment of Serious Mental Illness
Disclosure of Genetic Information
New Law Mandates Coverage for PANDAS and PANS
Cook County Publishes Procedural Rules for Sick Leave Ordinance
Extension of Non-PPACA-Compliant Small Group and Individual Policies and Plans
New Law Amends Employee Sick Leave Act
New County Ordinance Mandates Employee Sick Leave
On Oct. 5, 2016, the Cook County Commissioners passed the Cook County Earned Sick Leave Ordinance 16-4229, which enacts Cook County Code Chapter 42, Human Relations, Article 1. This ordinance creates paid sick leave provisions that provide paid sick and safe leave to employees performing more than 80 hours of work in Cook County for an employer within any 120-day period. Further, these requirements may sound familiar because this ordinance is very similar to the Chicago Minimum Wage Ordinance, which was reported on in the July 26, 2016, Compliance Corner. Note, the Cook County Commission on Human Rights will administer and enforce this ordinance.
The ordinance requires employers to provide employees with one hour of paid sick and safe leave for every 40 hours worked, excluding those employed in construction work who are covered by a collective bargaining agreement, Indian tribes and government employers.
Employees may accrue a maximum of 40 hours paid sick leave over the course of one year and can roll over up to half of his or her unused accrued earned sick leave to the following year, up to a maximum of 20 hours. If an employer is subject to FMLA, each of the employer's covered employees shall be allowed, at the end of his or her 12-month accrual period, to carry over up to 40 hours of his or her unused accrued earned sick leave, in addition to the allowed 20 hour carryover, to use exclusively for FMLA eligible purposes. New employees can use accrued sick leave after an initial six month probationary period, and employers that offer combined leave benefits such as Paid Time Off (PTO) are exempt from these requirements so long as employees could accrue and use up to five days (40 hours) of PTO within a calendar year.
Certain notices and postings are required. Employers must comply with the new law starting on July 1, 2017.
Employer Data Breach Obligations
On May 6, 2016, Gov. Rauner signed HB 1260 into law, creating Public Act 99-0503, which amends the Illinois Personal Information Protection Act (PIPA). The legislation amends the PIPA by broadening the definition of "personal information" and requiring entities that are required to give notice to HHS to also provide a copy of the notice to the Illinois Attorney General’s office.
The data breach statute now defines personal information to include:
Illinois employers should review and update, as necessary, their data breach notification plans to ensure the obligations of this amended law are met.
This law is effective on Jan. 1, 2017.
New Law Mandates Employee Sick Leave
On Aug. 19, 2016, Gov. Rauner signed HB 6162 into law, creating Public Act 99-0841 or the Employee Sick Leave Act. This law is intended to provide flexibility for caregivers by providing that employees may use personal sick leave benefits provided by the employer for absences due to an illness, injury or medical appointment of the employee's family member. Family member includes: child, spouse, sibling, parent, mother-in-law, father-in-law, grandchild, grandparent or steppare