Blogs September 2016

Question: An employee has asked to be added to our medical insurance midyear because his coverage through his wife's plan is changing. His wife’s severance package provided several months of free COBRA coverage, but the subsidy is expiring and they would have to pay the COBRA premiums themselves to continue on her plan. So our employee wants to enroll himself and his wife in our plan. What events allow a midyear enrollment and what is the timeframe for adding the employee once the request is made?

Answer: Under HIPAA special enrollment rights, an employee must be given the opportunity to enroll in the group health plan midyear under certain circumstances. Group health plans are required to provide special enrollment periods during which individuals who previously declined health coverage for themselves or their dependents may be allowed to enroll (without waiting for the next open enrollment period). 

Special enrollment rights occur when:

• An individual loses coverage under the other group health plan or other health insurance coverage due to loss of eligibility (such as an employee and/or his or her dependents losing coverage under the spouse’s plan due to employment status change, death, divorce or legal separation, or moving out of the plan’s service area).
• An individual loses coverage under the other group health plan because the employer terminates the plan or stops all employer contributions to the plan. If the other coverage is COBRA, however, special enrollment does not have to be offered until the COBRA continuation period is exhausted.
• An individual becomes a new dependent through marriage, birth, adoption, or being placed for adoption.
• An individual loses coverage under a State Children’s Health Insurance Program (CHIP) or Medicaid, or becomes eligible to receive premium assistance under those programs for group health plan coverage.

When one of the above events occurs, a special enrollment opportunity may be triggered. The employee requesting special enrollment must have had the other health coverage when he or she previously declined coverage under your plan. Special enrollees must be given at least 30 days from the date of the event to enroll. For events related to Medicaid or CHIP, the minimum special enrollment period is 60 days. Coverage must take effect no later than the first of the month following the date the special enrollment request is made. If the event is birth or adoption of a child, coverage must take effect retroactively on the date of the birth, adoption (or placement for adoption).

Questions about your company's benefits enrollment strategy? Email us at info@vitamail.com.

Who does this apply to?
This requirement applies to all employers with prescription drug benefits within their group health plans. 

What action must I take? 
Must be provided to participants prior to October 15, 2016.

Overview
U.S. Department of Health and Human Services regulations require annual notice to all plan participants regarding the Medicare Part D Prescription benefit “creditability” of your group health plan.  This notice must be provided prior to October 15 to coincide with the annual Medicare open enrollment period which runs from October 15 to December 7.  This notification provides Medicare-eligible employees with important information to help determine whether they need to enroll in Medicare Part D.  In 2011, the Medicare open enrollment period was altered by an amendment to the Social Security Act that was part of the Patient Protection and Affordable Care Act (PPACA).  Prior to that amendment, the disclosure deadline and open enrollment period was November 15.

Again?  Didn’t I just do this in January/February? 
Not quite.  Same law, different requirement.  In addition to this annual employee disclosure requirement each fall, plan sponsors must report creditability information directly to the Centers for Medicare and Medicaid Services (CMS) within 60 days of the first day of the ERISA plan year.  Many Vita benefits clients have a January 1 ERISA plan year (which may – or may not – coincide with your renewal or policy year); so for many employers, the deadline is the end of February.

How Do We Know If Our Prescription Benefit Is “Creditable”?
A prescription drug plan is considered "creditable" if the prescription drug benefits are expected to pay as much as or more than standard Medicare Part D prescription drug coverage. If a plan will not pay out as much as Medicare prescription drug plans pay, it is considered "non-creditable".

If you are a Vita Benefits Group client, you can confirm the creditability of your own plan by referring to your ERISA Welfare Plan Summary Plan Description (SPD). 

Employer Action Item
The ERISA SPD that Vita provides for your welfare plans has been designed to incorporate all of the necessary disclosure language for the Medicare Part D Creditability requirement.  If you have distributed this SPD to your employees in 2016 (or since October 15 of last year), you are already in compliance with the annual disclosure requirement.  If you have not already distributed the latest SPD, now would be a good time to do so!

If you prefer to send a separate Medicare Part D creditability notice, you may use the sample documents (model notices) available through the Center for Medicare & Medicaid Services website. There you can find sample documents for plans that are creditable or non-creditable for Medicare Part D purposes.  Please note that the vast majority of group health plans include prescription benefits that are creditable. 

Questions about the Medicare Part D annual disclosure? Email us at info@vitamail.com.

Question:
What is the EEO-1 report, which companies need to file it, and where do we get the data for the report?

Answer:
The EEO-1 report is a compliance survey mandated by Title VII of the Civil Rights Act. All employers with 15 or more employees are covered by Title VII and are required to keep employment records as specified by Equal Employment Opportunity Commission (EEOC) regulations. Based on the number of employees and federal contract activities, certain large employers are required to file an EEO-1 report on an annual basis. The survey requires company employment data to be categorized by race/ethnicity, gender, and job category. You can review a sample copy of the EEO-1 form and instructions here.

The EEO-1 survey must be filed annually by September 30. All companies that meet the following criteria are required to file the EEO-1 report each year:

• Companies subject to Title VII of the Civil Rights Act of 1964, as amended, with 100 or more employees; or
• Companies subject to Title VII of the Civil Rights Act of 1964, as amended, with fewer than 100 employees if the company is owned by or corporately affiliated with another company and the entire enterprise employs a total of 100 or more employees; or
• Federal government prime contractors or first-tier subcontractors subject to Executive Order 11246, as amended, with 50 or more employees and a prime contract or first-tier subcontract amounting to $50,000 or more.

The employment data used for the report should be obtained from one pay period in July, August, or September of the current survey year. The report requires employment data only for full-time and part-time employees, not applicant or independent contractor data. Employees must be counted by sex and race or ethnic category for each of the 10 occupational categories and subcategories. The EEOC provides further guidance about the EEO-1 filing here.

Questions about the EEO-1 filing? Email us at info@vitamail.com.

Topics: group health insurance, Danielle Capilla, applicable large employers, variable-hour employee,

Questions about benefits for variable hour employees? Email us at info@vitamail.com.