GENERAL QUESTIONS
1. What is an HSA (Health Savings Account)?
2. Can I save money by not using a health insurance broker?
3. Can I change brokers if I want to?
4. What is the age limit for a dependent child? What if my child is a full-time student?
5. How much does an employer have to contribute toward group medical
premiums to qualify for group coverage?
6. We just received our new ID cards for our employees, but the ID
number is no longer the social security number of the employee. Why is that?
COBRA
7. What happens if an employer group cancels group medical coverage
altogether or goes out of business?
8. What happens if the employer forgets to notify the employee of the
right to elect COBRA? Can the employee still elect coverage after the fact?
9. When counting the 20 employees needed for COBRA eligibility, do I
need to consider seasonal employees?
10. Whose responsibility is it to notify the employee of their right to
continue under COBRA?
11. I have less than 20 employees. I am still subject to COBRA?
STATE CONTINUATION
12. What is State Continuation?
13. Am I responsible to pay the premium for a terminated employee through the end of the termination month?
HIPAA
14. What is HIPAA, does it affect small group health plans?
15. As an employer and sponsor of a group health plan, must I offer the medical coverage to everyone I employ? What if the employee is very sick?
16. If an employee lost their medical coverage because their spouse changed jobs, can he sign up for the medical coverage offered through us?
General Questions
1. What is an HSA (Health Savings Account)?
An HSA or Health Savings Account is a tax-exempt account where funds grow to pay for medical expenses. They are designed to help give control back to the consumer and lower healthcare costs. HSAs are used by consumers who have a high deductible health insurance plan to pay the cost of medical expenses not covered by their insurance plan until the deductible is met. For a complete explanation of HSAs and how they work, visit the HSA Bank website.
2. Can I save money by not using a health insurance broker?
No, small group insurance coverage in Texas can only be issued through a licensed broker, and there is no additional cost to your business or your employees. Each month that you pay the premium for your insurance coverage, the insurance company pays a small percentage of your premium cost as a commission directly to the broker.
3. Can I change brokers if I want to?
Yes, and if you are not receiving the full service you deserve, then you should change brokers. This is done very simply with an Agent Of Record Letter, and can be done at any time. There is no impact to your insurance coverage and no reason to wait until your renewal date. Your broker should be working hard for your business, handling employee additions, terminations, renewals and resolving all claim issues or disputes for you and your employees quickly and efficiently. If you are not happy with the service your broker is providing, please contact us to provide an Agent Of Record Letter to you, and we can implement our full service program immediately.
4. What is the age limit for a dependent child?
What if my child is a full-time student? Since new legislation in 2001, unmarried dependent children (and qualifying grandchildren) can be covered until their 25th birthday, regardless of student status. This law only applies to health plans in Texas, so self-funded, partially self-funded, ERISA plans or business written outside of Texas may have different age or status limits.
5. How much does an employer have to contribute toward group medical premiums to qualify for group coverage?
Most carriers that provide small group coverage in Texas require the employer to pay 50% of the employee only premium. Aetna requires the employer to pay 75%. The employee can pay 100% of other coverages that are considered voluntary, such as dental and life insurance.
6. We just received our new ID cards for our employees, but the ID number is no longer the social security number of the employee. Why is that?
HIPAA laws now require insurance carriers to assign unique member ID numbers in order to preserve members’ privacy and to protect
members from identity theft and fraud.
COBRA
7. What happens if an employer group cancels group medical coverage altogether or goes out of business?
If during the continuation period an employer ceases to provide any group health plan to any employee then the period of continuation ends on the date that all coverage ceases.
8. What happens if the employer forgets to notify the employee of the right to elect COBRA?
Can the employee still elect coverage after the fact? Assuming that the employer is the plan administrator, a failure on the part of the employer to provide notice may be deemed an affirmative election of COBRA by the qualified beneficiaries. Furthermore, the running of the continuation period may be deemed not to have begun until notice is given.
9. When counting the 20 employees needed for COBRA eligibility, do I need to consider seasonal employees?
All full-time, part-time and other employees as defined by Section 401(c)(1) of the Internal Revenue Code are treated as employees for COBRA. If covered by the plan, agents and sub-contractors must also be counted. The rule is that there must have been 20 or more employees on a typical business day during the past year. This can be interpreted to mean that the employer must have had 20 or more employees on at least 50 percent of working days during the past year.
10. Whose responsibility is it to notify the employee of their right to continue under COBRA?
The plan administrator (usually the employer) must notify employees of their rights under COBRA.
11. I have less than 20 employees. I am still subject to COBRA?
No. However, you are subjected to Texas State Continuation laws, see next section below. Simply put, this requires that you offer terminated employees the option to continue coverage for an additional 6 months.
State Continuation
12. What is State Continuation?
The Texas State Continuation law that requires employers to offer former employees and their dependents continuation of health coverage when they no longer are active under the employer’s health plan. State Continuation is an employer/employee relationship for employers with fewer than 20 employees. See full eligibility requirements and details on the Humana website.
13. Am I responsible to pay the premium for a terminated employee through the end of the termination month?
Yes. Senate Bill 51 requires that the employer pay the premium through the end of the month of termination. It also requires that the insurance company be notified in the actual month that the termination occurred. If they are not notified until the following month, then the employer is required to pay the premium for the terminated employee in that month as well. Group policyholders are liable for an enrollee’s or individual insured’s premiums payments from the time the person ceases to be eligible for coverage until the end of the month, in which the group policyholder notifies the HMO or insurer that the person is no longer part of the group and eligible for coverage. For example, when an employee terminates on 08/20/05 and the employer notifies the carrier on 09/06/05, the employer is responsible for paying premium for the entire month of September.
HIPAA
14. What is HIPAA, does it affect small group health plans?
HIPAA is the Health Insurance Portability and Accountability Act, enacted by the U.S. Congress in 1996. It regulates employer provided health care plans and includes provisions relating to eligibility, waiting periods, preexisting conditions, as well as privacy and security standards. You can rely on STIbenefits to ensure that your programs are compliant with HIPAA regulations and all other applicable legislation.
15. As an employer and sponsor of a group health plan, must I offer the medical coverage to everyone I employ?
What if the employee is very sick? If the employee meets the criteria already established for eligibility, then you must offer coverage to that individual and any of his qualified dependents. HIPAA specifies that qualified employees cannot be refused coverage because of medical conditions or health history.
16. If an employee lost their medical coverage because their spouse changed jobs, can he sign up for the medical coverage offered through us?
Yes, loss of coverage through employment termination is a qualifying event under HIPAA that makes your employee eligible to enroll in your
employee benefit plan.