What are the minimum Participation and Contribution requirements for employer small group health plans?

Steve Shorr VIDEO Explanation of Participation Rules Pre – ACA

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Kaiser Recertification Booklet 
Rev May 2019

​EDD California Employers Guide #DE44  

• Forms & Publications EDD
  • Report of Wages (DE 9): &
  • Employee Listing  (DE 9C):
    
    • 
  • dir.ca.gov/faq_minimum wage
    • shouse law.com/minimum-wage-law
  • Employing Family Members Publication # DE 231
  • dir.ca.gov/faq_overtime exemptions
• FORMS REQUIRED TO GIVE NEW EMPLOYEES
  • Health Insurance Enrollment
  • MMCHR.com
  • EDD New Hire Registry
  • SHRM
  • Form W-2, Wage and Tax Statement  Employer Files on behalf of employee
• More workplace protections in 2022 New laws will shield employee health, safety and wages, but some ‘job killer’ bills were axed Los Angeles Times
  • California’s new workplace laws: COVID-19 safety, family leave and more LA Times 12.31.2020
• Social Security Forms

FAQ’s

“Enforcement – Participation – Recertification – #Actively @ Work”

• I may have to lay off some of my employees or cut their hours – including mine, because of the COVID 19 & Quarantine.  If I cut my hours or have no hours altogether, and continue paying the Kaiser medical insurance, am I or any of my laid off employees still covered as long as continue to pay the insurance?
  • The first thing to check and ask, is how many hours?
    Under Health Care Reform 30 hours is full time.20 hours for part time.
    I need to double check. Since you are with Kaiser, it appears that they automatically include Part Time 20 hours and don’t ask you to make a choice on their application. If so, any employees still working 20 hours don’t have an issue.
    I will email you privately the last Kaiser Employer Application we have for you.
    • We’ve only received a bulletin on this issue so far from Blue Shield.
      We will post any further guidance here. See also our page on how Insurance Companies are handling claims & testing for Corona Virus.
    • Eligibility and billing questions
      Question:
      Will Blue Shield of California continue to enforce active at-work provisions for fully insured employer groups that have reduced their workforce or workforce hours?
      • Answer:
        The terms of our group service agreements continue to apply to employee eligibility for coverage. Please refer to the agreement and note that there are provisions in most group service agreements that may allow for continued coverage for members who are impacted by a temporary suspension of work or temporary reduction of hours in certain circumstances, such as a layoff, furlough, or approved leave of absence. This may be permitted under the employer’s policies regarding coverage, under the following conditions:
  • If the subscriber ceases active work because of a disability due to illness or bodily injury, or because of an approved leave of absence or temporary layoff, payment of dues for that subscriber shall continue coverage in force in accordance with the employer’s policy regarding such coverage.
  • If the employer is subject to the California Family Rights Act of 1991 and/or the federal Family and Medical Leave Act of 1993, and the approved leave of absence is for family leave pursuant to such Acts, payment of dues for that subscriber shall keep coverage in force for the duration(s) prescribed by the Acts. The employer is solely responsible for notifying employees of the availability and duration of family leaves.
  • Please also note that employees who lose eligibility for coverage due to a reduction of hours or suspension of work may have the right to continue coverage under COBRA or Cal-COBRA. Please refer to your group service agreement for additional information.
  • Question:
    For groups in industries affected by COVID-19 closures, will Blue Shield of California provide a grace period other than the usual 30 days for premium billing?
    • Answer:
      We are evaluating every decision or request from the State and Federal Government and our senior sales leaders are meeting daily to make proposals and decide on next steps.
      For now, we’re referring all clients back to their existing contracts and highlighting provisions [see our page on how to read an EOC Evidence of Coverage] that help in a time like this. blueshieldca.com/broker_newsletter
  • FAQ from Gallagher
    • If we use a measurement/stability period safe harbor, which hours do we have to count when calculating the number of hours worked in the measurement period?
      For hourly employees, you must calculate actual hours of service and hours for which payment is made or due for vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.
      For non-hourly employees, you are permitted to calculate the number of hours of service using one of three methods. You may apply different methods for different classifications of non-hourly employees, so long as the classifications are reasonable and consistently applied.
      The three methods are:
      • 1. Counting actual hours of service (as in the case of hourly employees) and hours for which payment is made or due for vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence; or
      • 2. Using a days-worked equivalency method whereby the employee is credited with eight hours of service for each day the employee is credited with at least one hour of service (including hours of service for which no services were performed); or
      • 3. Using a weeks-worked equivalency of 40 hours of service per week for each week the employee is credited with at least one hour of service (including hours of service for which no services were performed).
    • However, you cannot use the days-worked or weeks-worked equivalency method if the result would be to substantially understate an employee’s hours of service (e.g. employees working three 10-hour days).
    • Excerpt of Bulletin from CA Department of Insurance
      What if I cannot pay my insurance premiums?
      • The Department of Insurance is Requesting a 60-day grace period to pay insurance premiums
        Consumers should contact their insurance company if they need additional time to pay their premium.
        insurance.ca.gov/press-releases
        insurance.ca.gov/press-releasesBilling Grace Period Notice
        insurance.ca.gov/Coronavirus
  • Q:Can an employee who loses eligibility (e.g. hours reduced, furloughed employee, etc.) retain eligibility if I (the employer) still pays employer contributions?
    • A: For large and small groups:
      • • As long as the group and employee are current on their monthly payments, Kaiser Permanente will allow employees that would otherwise have lost eligibility to remain on the plan.
        • Kaiser Permanente reserves the right to change this policy at any time.  Aetna’s FAQ for groups 100+ and self insured
        Small Group 2 – 100
  • In reviewing your Kaiser EOC Evidence of Coverage – it’s up to the employer to make the rules for who is eligible!
    Group eligibility requirements
    You must meet your Group’s eligibility requirements, such as the minimum number of hours that employees must work. Your Group is required to inform Subscribers of its eligibility requirements.
  • Nope, it’s not that simple. See page 13 of the 2019 Group Administrators Handbook. Kaiser’s rules go back to what is required under Health Care Reform- Employee Definition – see above.
  • On the other hand:
    Also in the EOC, under SPD disclosure section:
    The EOC does not explain in detail Group’s eligibility requirements (other than the Health Plan eligibility requirements that appear in the “Premiums, Eligibility, and Enrollment” section).
    The plan administrator must include Group’s eligibility information in the Group’s SPD Summary Plan Description
    Note:
    Health Plan does not impose preexisting condition exclusions or waiting periods, or require that employees be actively at work at the time of enrollment. Therefore, the EOC does not contain a notice of preexisting condition exclusions, waiting periods, or actively-at-work requirements.
  • Google research on definition of actively at work
    The prohibition of actively-at-work clauses is part of the HIPAA nondiscrimination rule’s effort to protect employees from discrimination based on a health factor.one digital.com/correctly-administer-actively-work-clause/
    ***I believe they are talking about the employees health… On the other hand we are all quarantined because of whose health?
    Mayor Garcetti of Los Angeles said Department of Water and Power will shut off services for the businesses that don’t comply with the “safer at home” ordinance. ktla.com/
  • Mayor Garcetti Video update 3.24.2020 & written summary
    Stay at Home Order 3.21.2020 County of LA
    Safer at Home FAQ’s
  • Guidance from Sequoia on changing documents to comply and avoid “actively at work” issues.sequoia.com benefits-continuation-during-a-furlough/
  • Considering the Governor & Insurance Commissioner ordered all insurance companies to pay for Corona Virus testing at no co pay or deductible
    All the Insurance Companies – issuing bulletins on how great they are at getting you testing, coverage and how to protect yourself. See link above for our Corona Virus page.
    Covered CA opened up a Special Enrollment to allow anyone without Insurance to buy it now!
    I just can’t see the group carriers cancelling coverage!

Related Pages in Participation & Contribution Requirements Section

• Participation & Premium Contribution Requirements
  • Documents to show bonafide Employer in business
  • Enforcement -no index
    • 90 Day Maximum Waiting Period?
      • Late Enrollee – Triggers – Qualifying Events
    • Employer Group Association Plans – Trump’s Executive Order – CA prohibition
  • Management Carve Outs – §2716 – Similarly Situated
    • Common Ownership – Affiliated Companies – Corporations