COBRA Notice and Additional Information

When a group health plan administrator sends out the COBRA model election notice, it may include, in or along with, additional information about the Health Insurance Marketplace, according to federal departments.

The federal Departments of Labor, Health and Human Services and the Treasury report that plan administrators may include other information about the marketplace (or exchange), such as:

• how to obtain assistance with enrollment in the marketplace or exchange (including special enrollment);
• the availability of financial assistance;
• information about marketplace websites and contact information;
• general information regarding particular products offered on the marketplace; and
• other information that may help in choosing between COBRA and other coverage options.

The federal departments indicate that COBRA election notices are required to be easily understood by the average plan participant, and therefore, should not be too lengthy or difficult to understand.

This information is contained in “FAQs about Affordable Care Act Implementation (Part 32),” which was released on June 21, 2016. For more information, follow this link.

COBRA generally applies to all group health plans maintained by private-sector employers with 20 or more employees, or by state or local governments. COBRA does not apply to plans sponsored by the federal government or by churches and certain church-related organizations.

Benchmark Plan Election Rules

Federal departments issued final rules to ensure that Essential Health Benefits are not subjected to annual and lifetime dollar limits, as mandated by the Affordable Care Act (ACA).

The final rules require that, for plans years beginning on or after Jan. 1, 2017, large group insurers and self-funded plans that are not required to provide Essential Health Benefits* (including ERISA self-funded plans) must define the Essential Health Benefits provided in their plan consistent with one of the following:

• one of the 51 EHB benchmark plans in a state or Washington, D.C., or
• one of the three Federal Employee Health Benefit Programs.

As a result of the rules, both large group insurers and self-funded plans will, in effect, be selecting a benchmark plan or federal program to support their application of any annual or lifetime dollar limits contained in their plan. The rules apply regardless of the size of the self-funded plan and regardless of grandfathered status. The federal Departments of the Treasury, Labor and Health and Human Services issued the final rules on Nov. 18, 2015. For more information on such benchmark plans or federal programs, follow this link.

Please note: Starmark® health plan designs do not include any dollar maximums to ensure compliance with the ACA mandate prohibiting annual and lifetime dollar limits. Therefore, election of a benchmark plan or federal program would appear to be unnecessary for self-funded plans administered by Starmark.

*ERISA self-funded plans do not have to include 10 categories of benefits known as Essential Health Benefits (EHBs). However, if such self-funded plans do include EHBs, they are prohibited from imposing lifetime or annual dollar limits on these benefits. Certain non-ERISA self-funded plans may be required by applicable state laws to provide Essential Health Benefits.

 

Employers to Receive PCORI Fee Mailing

By the end of this week, Starmark^® employers with a self-funded health plan design who are required to pay the Patient-Centered Outcomes Research Institute (PCORI) fee will receive a letter via mail providing their group’s “average covered lives” during the plan year ending in 2015 (using the Snapshot Count method).

As a courtesy, the Broker of Record will receive a duplicate copy of the letter sent to their group(s). The letter will also be posted to the Document Center on the Starmark website for the employer, the Broker of Record and the broker’s managing general agent to view.

The Patient Protection and Affordable Care Act and associated regulations requires health insurance issuers and plan sponsors of self-funded group health plans to file and pay an annual PCORI fee.

Plan sponsors of self-funded health plan years ending in 2015, are required to send the fee to the IRS on Form 720 by July 31, 2016.

Click here to view a sample letter