Category Archives: Broker Updates

Cigna – IRS and HHS Issue Proposed Regulations on Individual Mandate

IRS and HHS Issue Proposed Regulations on Individual Mandate

On January 30, 2013, the Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) issued two sets of proposed regulations related to the individual mandate provision of the Patient Protection and Affordable Care Act (PPACA).

The individual mandate requires most individuals to have minimum essential coverage or pay a penalty beginning in 2014. The penalty is now called a shared responsibility payment. Some individuals may qualify for an exemption so they will not be required to have coverage or pay a penalty.

The proposed regulations confirm the individual mandate requirements and outline the process for requesting an exemption. The proposed regulations cover:

  • What qualifies as minimum essential coverage
  • How penalties will be determined and paid
  • Who is exempt from paying the penalty
  • When individuals can apply for an exemption

1. What Qualifies as Minimum Essential Coverage An individual is considered to have minimum essential coverage for any month in which he or she is enrolled in one of the following types of coverage for at least one day:

  • An employer group health plan
  • An individual health insurance policy
  • A government plan such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE or veterans coverage
  • Student health coverage
  • Medicare Advantage plan
  • State high risk pool coverage
  • Coverage for non-U.S. citizens provided by another country
  • Refugee medical assistance provided by the Administration for Children and Families
  • Coverage for AmeriCorp volunteers

All these types of plans qualify as minimum essential coverage, and there are no additional coverage requirements that must be met.
2. How Penalties will be Determined and Paid
The first penalties will be due when individuals file their 2014 tax returns in 2015. A penalty is determined by calculating the greater amount of either a flat dollar amount or set percentage of income. The annual penalties for 2014 through 2016 are noted below. Beginning in 2017, penalties will increase based on the cost of living.

  • 2014: Greater of $95 per adult and $47.50 per child under age 18 (maximum of $285 per family) or 1% of income over the tax-filing threshold
  • 2015: Greater of $325 per adult and $162.50 per child under age 18 (maximum of $975 per family) or 2% over the tax-filing threshold
  • 2016: Greater of $695 per adult and $347.50 per child under age 18 (maximum of $2,085 per family) or 2.5% over the tax-filing threshold
  • If the penalty applies for less than a full calendar year, the penalty will be 1/12 of the annual amount per month without coverage.

3. Who is Exempt from Paying the Penalty for Not Having Coverage
Individuals who meet the following criteria will not pay a penalty if they do not have minimum essential coverage:

  • Individuals who cannot afford coverage. Coverage is considered unaffordable if an individual’s contribution toward minimum essential coverage is more than 8% of the annual household income. The monthly contributions are calculated at 1/12 the annual household income to determine if they exceed the 8%.
  • Taxpayers with income below the tax filing threshold, which is the amount required to file a federal tax return
  • Individuals who qualify for a hardship exemption. This exemption is available to individuals who are not eligible for Medicaid because their state chose not to expand Medicaid, or to individuals who have a personal or financial hardship that keeps them from being able to afford coverage.
  • Individuals who have a gap in minimum essential coverage of less than three consecutive months in a calendar year
  • Members of religious groups that object to coverage on religious principles
  • Members of health care sharing ministries. These are non-profit religious organizations where members share medical costs.
  • Individuals in prison
  • Individuals who are not U.S. citizens
  • Members of Native American tribes

U.S. citizens residing in a foreign country are typically exempt from having minimum essential coverage if they meet certain requirements, such as residing abroad for an entire calendar year. And, residents of U.S. territories (Guam, American Samoa, Northern Mariana Islands, Puerto Rico, and Virgin Islands) are automatically deemed to have minimum essential coverage.
4. When Individuals Can Apply for an Exemption
There are times when a person may request exemption. The Exchange will review the application, issue a certificate of exemption and notify the IRS. Other types of exemptions are claimed when individuals file their federal income tax returns.

  • Religious and hardship exemptions are only available when applying through an Exchange.
  • Individuals who cannot afford coverage, who experience short coverage gaps, who are not U.S. citizens and who have household incomes below the filing threshold may apply for an exemption through the IRS.
  • Members of a health care sharing ministry, individuals in prison and members of Native American tribes may apply for an exemption through either an Exchange or through the IRS when filing a federal tax return.

Comments regarding the HHS regulations are due by March 18, 2013. Comments regarding the IRS regulations are due by May 2, 2013 and a public hearing is scheduled for May 29, 2013

Horizon BCBSNJ Brief Notes V. 22, No. 904: How small employer health care exchanges impact you

Horizon BCBSNJ Brief Notes V. 22, No. 904: How small employer health care exchanges impact you and the insurance industry
Applies to: Small employer market (two to 50 employees)

How small employer health care exchanges impact you and the insurance industry

Two issues to consider and a call to action

The Affordable Care Act (ACA) requires that Small Business Health Options Programs (SHOPs), commonly called exchanges, be established in all states starting in 2014. Also, the ACA requires insurers that offer small group coverage in the state market outside the exchange to participate in that state’s federal SHOPs exchange in 2014 and beyond.

Horizon Blue Cross Blue Shield of New Jersey supports expanding access to health care coverage, but believes that SHOPs should be phased in after 2014.

Please consider these two issues:

1. Getting SHOPs up and running is highly complex. Under SHOPs, health plans will need to make major operational changes in basic billing and enrollment. This will divert resources from what should be a top priority ensuring individual exchanges work effectively, especially with Open Enrollment less than nine months away.

2. Many key operational details to support enrollment, plan management and financial services are still missing. Horizon BCBSNJ believes it will take more than a year after the release of specifications for health plans and states to make all the major changes needed for SHOPs to work.

A call to action:

We ask that you contact the Obama Administration and your Congress person and urge them to phase in SHOPs after 2014. Contacts in the Obama Administration are:

  • Marilyn Tavenner, CMS Acting Administrator.
  • Jeanne Lambrew, White House Deputy Assistant to the President for Health Policy.

You may find your representative in the House of Representatives here.

If you have questions, please contact your Horizon BCBSNJ sales executive or account manager

Also see:
BB2013SHOPS (Size: 979 Kb )

Horizon BCBSNJ Brief Notes V. 22, No. 902, Important Changes to Small Group Coverage Options

Horizon BCBSNJ Brief Notes V. 22, No. 902, Important Changes to Small Group Coverage Options
January 30, 2013 Vol. 22 No. 902

Applies to: Small employer market (two to 50 employees)

Important Changes to Small Group Coverage Options
Horizon Blue Cross Blue Shield of New Jersey is committed to providing quality, affordable health care coverage to support your new sales and retention efforts. That’s why Horizon BCBSNJ is streamlining our current health and prescription drug product portfolio to include select small employer products.

See attached PDF

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HorizonSmall Group Changes (Size: 172 Kb )

Aetna Announces Leadership Changes

Aetna announces leadership change in line with growth strategy

We are facing a period of unprecedented change and opportunity in the health care system. Today we are announcing a new operating model and the associated leadership changes that are designed to position us well to capitalize on the opportunities ahead.

Our new operating model aligns us more closely to our customers, will make us more effective at capitalizing on emerging opportunities related to health reform, and will help us transform to a more consumer-oriented company. We want to share this new organizational model and leaders with you

National Businesses is a new organization that will be led by Joe Zubretsky, now our senior executive vice president and chief financial officer. National Businesses combines some of Aetna’s most prominent businesses. This change reinforces our commitment to transform the network model by aligning provider and payer incentives to improve the quality and affordability of health care.

The organization will include: National Accounts, Care Management, Medical Cost Analytics, National Networks, Pharmacy, Behavioral Health, Vision, Prodigy and Payflex. Joe will continue to lead Emerging Businesses (including Accountable Care Solutions, ActiveHealth Solutions, Medicity and iTriage), Workers Compensation, Cofinity, Enterprise Strategy and Business Development.

This appointment reflects the significant contributions Joe has made to both Aetna’s financial strength and strategic direction since he joined Aetna in 2007.

Local and Regional Businesses is a new organization that will be led by executive vice president Karen Rohan. This change underscores that health care is local and will help us more fully prepare for our proposed acquisition of Coventry. This organization will include the individual, small group and middle market businesses, the regions, strategic development and product, and health care exchanges. It also will include Life Insurance, Disability, Dental, Voluntary, Student Health and the Consumer Platform/CarePass. Karen also will continue her role as the head of our Coventry integration team. Since joining Aetna in 2012, Karen has become an increasingly valuable member of the leadership team and made significant contributions to our growth strategy.

Today we also are announcing the retirement of executive vice president Frank McCauley, who will continue to work with Chairman and CEO Mark Bertolini on a number of important initiatives, including preparing the company for health reform, until he retires later this year.

We also have named Shawn Guertin to succeed Joe Zubretsky as Aetna’s chief financial officer, with responsibility for Finance and Investments.

There are no changes to our Government Businesses or International Businesses.

United Healthcare – Affordable Care Act – Information

The Affordable Care Act (ACA) brings significant and sweeping changes to how Americans access and pay for health care. And while change is good, it can be challenging. We are navigating these changes together. Our goal at UnitedHealthcare is simple: To help you understand what health reform means to you and your clients.

As regulations, mandates and laws become effective over the next months and years, it’s important to know where to begin and what to focus on as you prepare your clients. To help you get started, please see the attached.

Please refer to the United for Reform Resource Center for updates and more detailed information at

Also see:
UnitedReformBrochure (Size: 288 Kb )

Cigna – Preparing for health care reform’s Comparative Effectiveness Research Fee

Preparing for health care reform’s Comparative Effectiveness Research Fee

The health care reform law includes a new Comparative Effectiveness Research Fee (CERF) for insurers and self-insured plans to fund research that determines the effectiveness of various forms of medical treatment. The Internal Revenue Service (IRS) issued its final rule on this provision on December 5, 2012.

The fee applies on the first day of the policy/plan year beginning on or after October 2, 2011 and continues to apply through policy/plan years ending before October 1, 2019. (These dates are based upon the federal government’s fiscal year of October 1 through September 30.)

The fee is classified as a tax, and it will be reported and paid to the IRS via Form 720 Federal Excise Tax Return. Currently, Form 720 is a quarterly reporting form, and is being revised by the government to account for this annual fee. We expect to receive updated forms and filing instructions and will keep you informed.

The fee is based on the average covered lives for the applicable 12-month policy/plan year and is payable on July 31 of the calendar year that follows the year in which the policy/plan year ends.

For more information about this fee and how it may impact employers, please visit Cigna’s dedicated CERF website to find your complimentary CERF Toolkit:

In your toolkit, you will find:

  • CERF Fact Sheet (printout!)
  • Detailed payment schedule by renewal date (printout!)
  • Details about the fee specific to the employer’s situation, including how it will be collected and used
  • Sample eligibility reports, log-in information and report-generation instructions for self-service access
  • Links to news alerts and government resources about this fee

Horizon BCBSNJ Brief Notes V. 22, No. 900

Horizon BCBSNJ Brief Notes V. 22, No. 900
Nationwide Dental Network for Blue Cross and Blue Shield Customers.

Applies to: All markets

Nationwide Dental Network for Blue Cross and Blue Shield Customers

Seamless in-network access to dentists means greater convenience, savings in all 50 states

Horizon Blue Cross Blue Shield of New Jersey and a consortium of Blue Cross and Blue Shield plans announced an initiative that creates one of the nation’s largest networks of dentists. The solution, National Dental GRID, links the dental networks of most of the nation’s Blue plans to provide customers with a hassle-free solution for stronger access and in-network discounts across the country.

The National Dental GRID and National Dental GRID + are industry-leading dental network solutions for group customers. Now, our dental customers with employees in multiple states can have the convenience of savings and peace of mind that’s instantly made possible by this impressive, shared national network.

  • The National Dental GRID will be offered to 51+ PPO groups.
  • The National Dental GRID + network is a broader network that will be offered to small group DOP, and 51+ DOP groups.

The national dental network solutions are free from access fees that add up for customers using leased networks. This means better pricing for the groups that purchase dental benefits for their employees, in addition to the network savings the employees receive. And for dentists, it means more patients because they are in network for participating Blue plans nationwide.

Multi-state employers expect a simple, uniform experience across all locations where employees work  and it’s one of the key advantages of the network. Customers reap the advantages of a national network solution without any changes to the way they currently work with their Home

  • Member benefits Home plan ID cards, Explanation of Benefits (EOBs) and plan benefits continue to be managed by the Home plan.
  • Group benefits  All account management services are received from the Home plan.
  • Additional benefits  Customer service, web access and claims processing take place through the Home plan.

Attached for your reference are questions and answers to help your clients understand the nationwide dentist networks.

Also see:
2013BNationalDentalGrid (Size: 752 Kb )