BCBST certification and rebates

BlueCross to Conduct Online Certification to Assist with Affordable Care Act Compliance

In order to comply with the medical loss ratio (MLR) provision and market reforms as required by the Affordable Care Act[1], BlueCross will again collect information about its group customers.  BlueCross will conduct an online certification for all fully insured groups with medical coverage expected to be effective as of January 1, 2014.

 

Medical Loss Ratio

The Affordable Care Act requires insurance issuers, like BlueCross, to achieve certain minimum medical loss ratios by market segment.  For fully insured group coverage, these segments are determined by the size of the group.  The small group segment includes groups with 100 or fewer average employees; large groups are those with 101 or more average employees.

If an issuer has an MLR below the minimum threshold for an entire segment, a rebate must be provided to the groups that fall into that particular segment.  The rebate requirement will be applicable to fully insured groups that have medical coverage. 

A rebate, if any, that is required based on the MLR for the 2014 reporting year will be distributed no later than September 1, 2015.  This is a month later than prior years’ rebate timing due to the impact that the Affordable Care Act’s premium stabilization provisions – effective in 2014 – have on MLR calculations.

Market Reforms

Market reforms[2] is a broad term used when discussing various Affordable Care Act changes that will be implemented in 2014.  These include changes to small group rating where only age, location, family size and tobacco use – in addition to plan design and network – may be used to differentiate premiums for members of small groups.  This is known as modified community rating.

Another market reform is the Affordable Care Act’s Essential Health Benefits (EHB) provision, which also includes significant changes that will be implemented in 2014.  Coverage in the small group market will be required to cover 10 categories of benefits, and plans must have an actuarial value within certain ranges, known as metal level plans.  All plans – including large group and self-funded plans – will have limitations on cost-sharing parameters like out-of-pocket maximums.[3]

For market reforms, a small group is defined as one with 50 or fewer average employees and large group is one with 51 or more employees.  These size breaks apply for 2014 and 2015.  In 2016, group size for market reforms will be the same as MLR – 100 or fewer for small group and 101 or more for large group.

Counting Employees[4]

Regulations have defined “group size” for the purposes of MLR reporting and market reforms as the average number of employees employed over the prior calendar year.  This is not the same as the number of employees enrolled in coverage, or the number eligible to enroll.  The online certification will request this average for calendar year 2013 in order to determine which size segment applies to each group.

The average is determined by calculating the average number of employees employed on business days in calendar year 2013 including full-time, part-time, and seasonal employees.  For each business day, each employee is counted as one employee – even if the employee does not work full-time.  All employees are counted regardless of their eligibility for – or enrollment in – the group health plan.

Only employees should be counted.  A sole proprietor and his or her spouse, partners in a partnership and their spouses, and shareholders of a corporation (who do not also qualify as common law employees) are not considered employees of the business and should not be included in the calculation.  Contract workers should be counted if they meet the IRS standard for common-law employees.

Some employers own multiple businesses.  If the businesses are treated as a single employer under Internal Revenue Code (IRC) section 414(b), (c), (m), or (o), they should be combined for the purposes of counting employees.  This is commonly referred to as aggregation rules.  Employers with questions about aggregation rules are urged to contact their legal counsel or tax professional.

Changes in this Year’s Certification

This year’s certification will follow the same general format as last year.  For the most part, the information gathered has not changed.

Similar to last year’s certification, a question will be asked about the types of individuals enrolled in the group health plan.  A group health plan whose subscribers consists only of a sole proprietor and his or her spouse, partners in a partnership and their spouses, or shareholders of a corporation (who do not also qualify as common law employees) will be included with the individual market segment for MLR reporting and rebate purposes.

BlueCross will contact groups in this category to examine options for continuing coverage in 2014.

Certification Information to be Mailed to Groups

BlueCross will send group administrators a letter by U.S. mail with more information about the certification process.  Groups receiving a letter will be those expected to have coverage in effect on January 1, 2014.  New groups effective after January 1, 2014 will provide group size information with their new business paperwork.

If a group’s business address has changed and BlueCross has not been notified, please contact BlueCross immediately in order for this important letter to reach the group in a timely manner.  The tentative timeframe for the mailing is late December 2013.

The letter will include a web address group administrators can enter into their internet browser which will direct them to the certification.  In addition to the group size information, the group administrator or other authorized employee will be required to enter a few pieces of identifying information for contact and reporting purposes.

In the event the group cannot complete the online certification, they may direct their broker or insurance agent to do so.  There will be a place within the certification for brokers to record their contact information in addition to providing the contact information for the group’s employee or owner who provided the information to complete the certification.

Completing this certification is instrumental in BlueCross complying with the Affordable Care Act.  Thank you in advance for your cooperation and assistance.

[1] The Patient Protection and Affordable Care Act, Public Law 111-148, was enacted on Mar. 23, 2010. The Health Care and Education Reconciliation Act, Public Law 111-152, was enacted on Mar. 30, 2010. They are collectively known as the Affordable Care Act. 

2 Grandfathered plans are not required to comply with the market reforms listed in this section.  BlueCross may implement some Affordable Care Act provisions across all lines of business – including grandfathered plans – for administrative ease.

3 For more information about the EHB provision, please refer to the Mar. 18 and June 3, 2013 Health Care Reform Updates.

4 For more information about counting employees and other Affordable Care Act provisions that vary based on group size, please refer to the June 17, 2013 Health Care Reform Update.

 


BlueCross BlueShield of Tennessee, Inc., an Independent Licensee of the BlueCross BlueShield Association.

 

[1] The Patient Protection and Affordable Care Act, Public Law 111-148, was enacted on Mar. 23, 2010. The Health Care and Education Reconciliation Act, Public Law 111-152, was enacted on Mar. 30, 2010. They are collectively known as the Affordable Care Act. 

[2] Grandfathered plans are not required to comply with the market reforms listed in this section.  BlueCross may implement some Affordable Care Act provisions across all lines of business – including grandfathered plans – for administrative ease.

[3] For more information about the EHB provision, please refer to the Mar. 18 and June 3, 2013 Health Care Reform Updates.

[4] For more information about counting employees and other Affordable Care Act provisions that vary based on group size, please refer to the June 17, 2013 Health Care Reform Update.

BlueCross to Conduct Online Certification to Assist with Affordable Care Act Compliance

In order to comply with the medical loss ratio (MLR) provision and market reforms as required by the Affordable Care Act[1], BlueCross will again collect information about its group customers.  BlueCross will conduct an online certification for all fully insured groups with medical coverage expected to be effective as of January 1, 2014.

 

Medical Loss Ratio

The Affordable Care Act requires insurance issuers, like BlueCross, to achieve certain minimum medical loss ratios by market segment.  For fully insured group coverage, these segments are determined by the size of the group.  The small group segment includes groups with 100 or fewer average employees; large groups are those with 101 or more average employees.

 

If an issuer has an MLR below the minimum threshold for an entire segment, a rebate must be provided to the groups that fall into that particular segment.  The rebate requirement will be applicable to fully insured groups that have medical coverage. 

 

A rebate, if any, that is required based on the MLR for the 2014 reporting year will be distributed no later than September 1, 2015.  This is a month later than prior years’ rebate timing due to the impact that the Affordable Care Act’s premium stabilization provisions – effective in 2014 – have on MLR calculations.

 

Market Reforms

Market reforms[2] is a broad term used when discussing various Affordable Care Act changes that will be implemented in 2014.  These include changes to small group rating where only age, location, family size and tobacco use – in addition to plan design and network – may be used to differentiate premiums for members of small groups.  This is known as modified community rating.

 

Another market reform is the Affordable Care Act’s Essential Health Benefits (EHB) provision, which also includes significant changes that will be implemented in 2014.  Coverage in the small group market will be required to cover 10 categories of benefits, and plans must have an actuarial value within certain ranges, known as metal level plans.  All plans – including large group and self-funded plans – will have limitations on cost-sharing parameters like out-of-pocket maximums.[3]

 

For market reforms, a small group is defined as one with 50 or fewer average employees and large group is one with 51 or more employees.  These size breaks apply for 2014 and 2015.  In 2016, group size for market reforms will be the same as MLR – 100 or fewer for small group and 101 or more for large group.

 

 

Counting Employees[4]

Regulations have defined “group size” for the purposes of MLR reporting and market reforms as the average number of employees employed over the prior calendar year.  This is not the same as the number of employees enrolled in coverage, or the number eligible to enroll.  The online certification will request this average for calendar year 2013 in order to determine which size segment applies to each group.

 

The average is determined by calculating the average number of employees employed on business days in calendar year 2013 including full-time, part-time, and seasonal employees.  For each business day, each employee is counted as one employee – even if the employee does not work full-time.  All employees are counted regardless of their eligibility for – or enrollment in – the group health plan.

 

Only employees should be counted.  A sole proprietor and his or her spouse, partners in a partnership and their spouses, and shareholders of a corporation (who do not also qualify as common law employees) are not considered employees of the business and should not be included in the calculation.  Contract workers should be counted if they meet the IRS standard for common-law employees.

 

Some employers own multiple businesses.  If the businesses are treated as a single employer under Internal Revenue Code (IRC) section 414(b), (c), (m), or (o), they should be combined for the purposes of counting employees.  This is commonly referred to as aggregation rules.  Employers with questions about aggregation rules are urged to contact their legal counsel or tax professional.

 

Changes in this Year’s Certification

This year’s certification will follow the same general format as last year.  For the most part, the information gathered has not changed.

 

Similar to last year’s certification, a question will be asked about the types of individuals enrolled in the group health plan.  A group health plan whose subscribers consists only of a sole proprietor and his or her spouse, partners in a partnership and their spouses, or shareholders of a corporation (who do not also qualify as common law employees) will be included with the individual market segment for MLR reporting and rebate purposes.

 

BlueCross will contact groups in this category to examine options for continuing coverage in 2014.

Certification Information to be Mailed to Groups

BlueCross will send group administrators a letter by U.S. mail with more information about the certification process.  Groups receiving a letter will be those expected to have coverage in effect on January 1, 2014.  New groups effective after January 1, 2014 will provide group size information with their new business paperwork.

 

If a group’s business address has changed and BlueCross has not been notified, please contact BlueCross immediately in order for this important letter to reach the group in a timely manner.  The tentative timeframe for the mailing is late December 2013.

 

The letter will include a web address group administrators can enter into their internet browser which will direct them to the certification.  In addition to the group size information, the group administrator or other authorized employee will be required to enter a few pieces of identifying information for contact and reporting purposes.

 

In the event the group cannot complete the online certification, they may direct their broker or insurance agent to do so.  There will be a place within the certification for brokers to record their contact information in addition to providing the contact information for the group’s employee or owner who provided the information to complete the certification.

 

Completing this certification is instrumental in BlueCross complying with the Affordable Care Act.  Thank you in advance for your cooperation and assistance.

 

[1] The Patient Protection and Affordable Care Act, Public Law 111-148, was enacted on Mar. 23, 2010. The Health Care and Education Reconciliation Act, Public Law 111-152, was enacted on Mar. 30, 2010. They are collectively known as the Affordable Care Act. 

2 Grandfathered plans are not required to comply with the market reforms listed in this section.  BlueCross may implement some Affordable Care Act provisions across all lines of business – including grandfathered plans – for administrative ease.

3 For more information about the EHB provision, please refer to the Mar. 18 and June 3, 2013 Health Care Reform Updates.

4 For more information about counting employees and other Affordable Care Act provisions that vary based on group size, please refer to the June 17, 2013 Health Care Reform Update.

 


BlueCross BlueShield of Tennessee, Inc., an Independent Licensee of the BlueCross BlueShield Association.

 

[1] The Patient Protection and Affordable Care Act, Public Law 111-148, was enacted on Mar. 23, 2010. The Health Care and Education Reconciliation Act, Public Law 111-152, was enacted on Mar. 30, 2010. They are collectively known as the Affordable Care Act. 

[2] Grandfathered plans are not required to comply with the market reforms listed in this section.  BlueCross may implement some Affordable Care Act provisions across all lines of business – including grandfathered plans – for administrative ease.

[3] For more information about the EHB provision, please refer to the Mar. 18 and June 3, 2013 Health Care Reform Updates.

[4] For more information about counting employees and other Affordable Care Act provisions that vary based on group size, please refer to the June 17, 2013 Health Care Reform Update.