Rev Up for Fourth Quarter with Cornerstone! Here’s What You Need to Know

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Renewal season is nearly upon us. With it comes the inevitable time crunch convergence of renewals and open enrollment. Here are a few planning tips for your group business.

Renewals

Most renewals are released after the Department of Insurance approves 2022 rating for all product types. This is usually anytime between September and November. Most are released in October. Here’s the schedule we have so far (updates will come as we get them):

CARRIER

Product

Expected Timeline

Aetna

AFA

Tentative – 60 days prior

Anthem

Grandmothered/Transitional

Tentative – mid-to-end of September

ACA

Tentative – mid-October

SOCA MEWA

Tentative – early-to-mid October

OFB MEWA

Tentative – October

Humana

All

TBD – usually 60 days out

MMO

Grandmothered/Grandfathered

Targeting 1st week in September

ACA

TBD

COSE MEWA

Targeting 1st week in September

UHC

AllSavers

60 days prior to renewal

Transition / ACA

75-90 days prior to renewal

Ohio Chamber MEWA

60-75 days prior to renewal

If your client has an ACA plan and no major health issues, you can get base rates with a member-level census. Hopefully, the numbers are encouraging enough for the group to go ahead and do FormFire. More on this later.

Beat the rush! Remember, your client doesn’t have to wait for their renewal to get applications done in FormFire. Start your January clients updating FormFire in September or stagger a few each week from September to October. We have confirmed that all major carriers are accepting applications up to 120 days old for January 1 effective dates.

But we get it, clients want to see how the renewal looks before doing FormFire. This delay starts a chain reaction that we see over and over.

Here is a GIF summary of this process:

via GIPHY

Review the Following Steps to See How Delaying FormFire Creates a Tsunami of Avoidable Issues:

  • After waiting for the renewal and reviewing, the group decides they want medically underwritten quotes. They start FormFire in late October.
  • It takes two weeks to get all the employees in FormFire after herding all the stragglers. Plus, the system is a little slower at this time because everyone is doing it at the same time.
  • Some brokers submit their quote requests just before Thanksgiving, usually Monday or Tuesday before leaving town.
  • Nobody seems to understand why it takes 5 to 7 business days to get quotes back even though everyone is doing the exact same thing at the exact same time.
  • A small handful of brokers call on Monday after Thanksgiving weekend requesting status updates for their cases submitted the prior week. Let us give the answer now to save a phone call later­­––no, we don’t have the quote back yet.
  • Quote comes back in the first week of December, broker reviews numbers and requests rate relief which takes anywhere from 2 to 5 days, depending on the carrier.
  • Final rates are negotiated about the second week of December and can be presented to the client.
  • Some clients get frustrated by the amount of time that it takes and that they only have a few days left to decide when they’re either stuck with a tough renewal or must change carriers around the holidays. Inexplicably, if you can find a solution with savings, those same clients don’t seem to get upset at all.
  • Oops! People changed their election during employee meetings­­­­––usually one of the stragglers. For underwritten quotes, that means another couple of nail-biting days waiting for the underwriter to confirm if the rates will stay the same or change? Will the group change carriers?
  • It’s January 2. Employees call in wondering where their ID card is so they can fill prescriptions or make a dental appointment. They wonder aloud to their employer if they even have insurance. The employer calls the broker to make sure because now they are wondering too.

Every. Single. Year.

Consider These Passive-Aggressive Approaches to Motivate Customers to Change

  • When they say, “I want to wait until the renewal comes out.” What you want to say is, “Great. Let’s plan our meeting to review results in mid-December. It’s only going to take you a day or two to make decisions on plan design, figure out what to charge employees, and schedule employee meetings, right?”
    Or you could say, “If we wait that long to do FormFire, that puts our timeline for getting quotes into December. Are you sure you want to wait that long?”
  • When they say, “It’s only going to take us a couple of days to complete FormFire.” You shake your head and smile, saying, “You’re such a glass-is-half-full kind of person. I like that about you.”
    Or you could say, “Could your company offer a drawing for a $25 gift card to encourage employees to complete FormFire by the deadline? We also don’t recommend giving more than five total days including a weekend because people tend to forget if you give them too much time.”
  • Try this proactive approach: “I’m . . . [insert a line from below] . . . in late December so I want to get ahead of your renewal this year. Can we track back the timeline for getting your renewal completed before Thanksgiving?”

. . . having some medical procedures . . .

. . . going back to rehab . . .

. . . going to enjoy the holidays with my family . . .

. . . running away with the circus . . .

. . . working on planning our time better so we don’t both stress out . . .

Maybe don’t use any of these tips, we’re just trying to have some fun with this. But please DO think about how you can strategize now with customers to meet their needs better, faster, and with the best possible health insurance options available.

Bona Fide, Practical, Time-Tested Tips for Planning Your Renewals and Fourth Quarter Quoting

As soon as a carrier releases ACA rates, you can get those numbers with just a member-level census. Similarly, as soon as a carrier releases their base rates for underwritten products, you can get those numbers with just a census. Unfortunately, most ACA rates will not be released until the end of September, early October.

Why bother with base rates at all? Because you can quickly rule out underwritten products if, after reviewing the rates, you see that your current/renewal rates are either in-line with or below the base rates, OR, it can demonstrate for your client what they might be leaving on the table by not shopping with their medical information.

Remember, base rates are “best-case scenario” if a group is perfectly healthy. If you compare base rates to your underwritten renewal and there’s not much difference, you and the client can decide if completing FormFire makes sense. But brokers, please know that carriers want the chance at your healthy groups! If you want to help your groups, shopping healthy cases gives the market a good idea of where their rates need to be to win new business.

All major carriers in Ohio normally accept applications dated 120 days from the January effective date. Cornerstone confirms this each year. This means that FormFire applications can be started on September 1 or after. Please make sure the Client Detail page in FormFire is set to collect medical Information or you will have an embarrassing call later.

Consider building employee meeting materials and client spreadsheets for the upcoming year right now. The new EB3 benefit booklet builder tool can help you build out professional looking packets for employees, while also putting together annual notices, SPDs, the client POP document, and exploring alternative contribution strategies to review with customers. Learn more at www.crnstone.com/eb3.

We want you to remember that your Cornerstone representative is here and happy to help you wherever you are in the planning cycle of renewing and selling business. Updates about the timing on renewals and the release of 2022 rates will come out in our Monday Minute as soon as we are notified. Contact your Cornerstone representative with any questions.

Medical Insurance Carrier Coordination with Prescription Drug Discount Programs

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The high cost of prescription drugs is a serious problem for consumers. Health insurers either own or contract with pharmacy benefit managers (PBMs) to administer covered prescription drugs in their benefit plans. In addition to processing drug claims, PBMs also negotiate with both the drug manufacturers and the retail pharmacies to determine the cost of a particular drug to the plan sponsor and ultimately the consumer.

The pricing methodologies adopted by PBMs remain complex and opaque. Components include administration and clinical fees, retail markup, MAC lists, manufacturers rebates, and more. The end result is that the final cost of a drug can and does vary wildly; the same drug is never priced the same between insurance carriers. The adoption of high deductible health plans has brought this issue to the forefront. It is quite common for a member to see the cost for a drug change dramatically when their employer changes insurance carriers.

Enter prescription drug discount programs, which have become very popular with the advent of high deductible benefit plans. Programs offered by GoodRx, Clever RX, WellRx, and many others are routinely used by consumers to shop prescription drug prices. Their easy-to-use applications put the price of any prescription drug front and center for comparison purposes. Consumers often use these tools to compare what their own insurance plan is charging for a given drug.

Now that I have discovered that the cost of my drug is less with the discount card than it is with my insurance company, what are my options? If I use the discount card, will my insurance company credit my out-of-pocket expense towards my deductible? How does that work? Cornerstone surveyed our carrier partners to find out.

Cornerstone carrier partners Anthem, Aetna, Medical Mutual, Humana, and UnitedHealthcare will all allow members to use discount drug programs and file a paper claim to get deductible credit.

The amount that the member pays out-of-pocket can be applied if the prescription is a covered benefit and the dispensing pharmacy is in network. A paper claim must be submitted to the insurance company.

The drug in question must be covered on the members prescription drug list and all applicable clinical programs or plan provisions must be satisfied (PA, step therapy, and quality limits). Only the amount the member pays out-of-pocket will be applied to the deductible/out-of-pocket.

Prescription drugs can be expensive, but your clients have options. Cornerstone’s broker advisors are available to help you determine how best to serve your clients who are faced with the high costs of medications. Contact your representative today for more information.

Update to the Surprise Billing Legislation from Late 2020

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In late 2020, we reported the good news that the State of Ohio has passed legislation to curtail “surprise billing.” This was great news given that many of the major carriers in the state were paying claims out-of-network for peripheral services related to emergencies, anesthesia, radiology, and pathology services, which are not subject to patient choice in most instances.

The appeals process for these non-network claims to be paid at the in-network benefit level also became more stringent causing a lot of member, client, and broker dissatisfaction, expense, and time to resolve. The new state-based legislation opened pathways to require both insurance companies and providers to come to an agreement on reasonable payments to remove this burden on patients going forward.

The state legislation, however, did not impact air ambulances because they are regulated by the Federal Aviation Administration. While playing a critical role in life and death situations, air ambulances have extremely high costs, which in turn have become a huge patient burden since nearly all are run by out-of-network providers. After the insurance companies paid these claims out-of-network and up to the “reasonable and customary” amount, a Health Affairs study published in April 2020 found that patients received balance bills with a median cost of $21,698!

While there is a lot of frustration and debate about the most recent coronavirus relief package signed by Congress, the $900-billion deal included a nugget that will genuinely help patients in this situation, though not until 2022. The provision forbids surprise bills from hospitals, doctors, and air ambulances. Starting in 2022, providers and insurers will have to settle bills through arbitration under Federal law as well.

The next year will still present challenges for patients who need air transportation. In the meantime, our recourse as brokers is to help members in these situations as much as possible. We must place pressure on insurers to negotiate arrangements that don’t penalize members and on elected officials when and if those negotiations fall through.

Check out this article from Kaiser Health News for additional information about updates to cost transparency.

Resources

https://www.claimsjournal.com/news/national/2021/01/04/301271.htm

https://www.healthaffairs.org/doi/10.1377/hlthaff.2019.01484

What are the “Transparency in Coverage Regulations”?

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Initially proposed in 2019, a final rule released on October 29, 2020, by the Department of Health and Human Services (HHS), the Department of Labor (DOL), and the Department of the Treasury delivered on President Trump’s executive order on Improving Price and Quality Transparency in American Healthcare to Put Patients First. These regulations are intended to improve price transparency, as required by the Affordable Care Act (ACA).

Transparency in coverage refers to an ACA provision that requires health plans and insurers to disclose certain cost-sharing information to participants, beneficiaries, enrollees, and, in some cases, the public through an internet-based self-service tool and, upon request, in paper form. These disclosures are required for an initial list of 500 items and services for plan years that begin on or after January 1, 2023, with all items and services to be disclosed for plan years that begin on or after January 1, 2024. The requirements apply to most fully insured and self-insured group health plans, and to insurers, but “Grandfathered” health plans, excepted benefits, and short-term limited duration insurance are exempt. HRAs, health FSAs are generally exempt as well. It is important to note that “Grandmothered” health plans are required to comply.

Here are some highlights:

  • Estimated Cost-Sharing. Plans and insurers must disclose the estimated amount that the individual must pay for a covered item or service under the plan’s terms (including deductibles, coinsurance, and copayments).
  • Accumulated Amounts. The amount of financial responsibility that an individual has already incurred when the request for cost-sharing information is made (i.e., deductible or out-of-pocket limit) must also be disclosed.
  • In-Network Negotiated Rates. Plans and insurers must also disclose the amount they or a third-party administrator have contractually agreed to pay an in-network provider for a covered item or service, such as negotiated rates (including for prescription drugs) and underlying fee schedules that result from using a formula (e.g., 150 percent of the Medicare rate) as a dollar amount.
  • Out-of-Network Allowed Amount. The maximum amount that would be paid for an item or service furnished by an out-of-network provider.
  • Items and Services List. A list of the covered items and services must be disclosed when an item or service is subject to a bundled payment arrangement.
  • Notice of Prerequisites to Coverage. Individuals must receive a notice informing them that a specific item or service may be subject to a “prerequisite,” which is defined as concurrent review, prior authorization, and step-therapy or fail-first protocols.
  • Disclosure Notice. A notice with several specific disclosures, including a statement about balance billing and disclaimers about differences in actual and estimated charges.
  • Public Disclosures. Plans and insurers must make extensive price transparency disclosures to the public in machine-readable files updated monthly. The disclosures must show negotiated rates for covered items and services between the plan or insurer and in-network providers, as well as historical payments to, and billed charges from, out-of-network providers. (In a change from the proposal, a separate machine-readable file must set forth prescription drug information.) These disclosures are required for plan years beginning on or after January 1, 2022.

As your general agency partner, we want to provide the most updated and relevant industry information that could affect your business and your clients. As always, please reach out to us with any questions.

Check out this article from Kaiser Health News for additional information about updates to cost transparency.

Social Security Spotlight: Social Security Offices Closed to the Public

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Social Security offices have been closed to public visits since March 2020 and will probably continue to be closed into the New Year until the rates of infection subside.

Most employees are working from home and a limited number of employees go into offices to process mail and to other internal work. You cannot visit Social Security Administration offices for an in-person interview. However, a lot can be handled online, like change of address, direct deposit, claim status, and filing retirement/disability claims and appeals if you have set up a “My Social Security” account on their website. You can also schedule phone appointments to file claims through the national 800 number (800-772-1213). However, appointments may not be available for weeks or months, if at all.

Filing online is easiest for retirement and disability benefits. I offer this service for retirement and disability clients who want an expert to handle their case. When I assist you, the claim information is sent to one of several intake centers throughout the United States. Social Security will send you a hard copy application to sign and return and your retirement claim is usually processed in 30 days or less.

You can call local offices with other questions on important issues. Local office numbers can be found at www.ssa.gov on the “Contact Us” page (on the home page) and “Locate an Office”. Simply enter your ZIP code and the local office address and phone number will be provided.

Social Security available to handle most situations, albeit some slower than others due to necessary precautions. They have prioritized workloads. Hopefully things will change some time soon in 2021 and we can all get back to the new normal!

Wishing you all a safe and healthy holiday season and looking forward to 2021!

About Dennis Heywood

Denny’s career with Social Security provides an in-depth, working knowledge of the Social Security Administration’s internal organization and processes. An expert in all phases of SSA programs: retirement, survivor, disability, and Medicare, Denny has expertise with the complex Social Security regulations based on more than 40 years of experience.

ss-help.com

Client Retention Strategies that Actually Work: Advice from Your Friendly Neighborhood Marketing Specialist

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How you continue to communicate after the sale is vitally important for maintaining lasting client relationships. Many businesses spend most of their marketing dollars on lead generation and finding new clients, but did you know that acquiring a new customer can cost five times more than retaining an existing customer? Part of a successful marketing strategy is maintaining your long-term client relationships and ensuring that you continue to deliver on the promises you made when you recruited them.

Retention is important and the proof is in the data. According to Yotpo, 60 percent of customers will tell family and friends about a brand they are loyal to. Good customer service and fostering successful relationships with existing clients will, no-doubt, set you apart from the competition. Your clients’ interest and their loyalty depends on how you communicate and what value you offer after the sale.

Here are our top five tips for creating and maintaining long-term client relationships with retention marketing strategies.

At the Root of Connection is Communication

Consider your own experiences with the businesses you are loyal to. What sets them apart from their competitors? Sure, the product they are selling plays a big role, but what about their customer service? Were the representatives attentive? Did they personalize your experience?

As with most relationships, the key is communication. Check in on your clients: How are they doing? What are their current pain points? How can you make their life easier? Do you have anything in mind that could improve their health insurance experience?

It is especially important to determine your client’s pain points. Just as you would ask them questions before you jump into your sales pitch, you want to employ similar tactics when checking in. What are they struggling with? What kind of experience are they looking for? For an individual client, for example, they may struggle with understanding health insurance terminology and how the system works, or maybe they have budget concerns that make it difficult for them to find a plan on their own. Recognize these pain points and tailor your messaging, both at the point of sale and beyond, to match those needs. If a client was concerned about budget at the point of sale, perhaps your mid-year communication should be a check in for how well the plan they chose has worked for their financial concerns. Get to know your clients and understand what they need from you so that you can continue providing high-quality service.

It is important to personalize your communication. Instead of sending a generic email to all your current clients at once, take some time to contact them individually and give them the time and attention they deserve for being your client.  But the key with this communication is brevity. No one wants to wait a long time to have their issues resolved.

Mind your Ps and Qs

While there are plenty of elegant digital communication opportunities available to you, a simple, hand-written note can go a long way. Keep a box of stationary handy so that you can write “thank you” notes to your clients after a positive interaction. Keep the message simple and show your gratitude for their business.

Personalized notes show enthusiasm for your partnership and tend to stand out more than an email. For example, if you meet with a client for an annual review of their plan, it’s important to follow up with a “thank you” note about how grateful you are for their business. After all, without your clients, your boat doesn’t float.

(Hint: A “thank you” note may also be a great way to request a referral from existing clients.)

Stand Out in a World Where Content is King

It is estimated that the average person is exposed to up to 10,000 ads every day, a large increase from up to 5,000 ads per day in 2007  (Yankelovich). That’s a lot of exposure, which means many messages are lost in the shuffle. You need your name to stand out among the noise, even after you have made the sale.

Though your current clients have already committed to your services, it is still important to make sure your message stands out against the competition. Keep your clients in the know about your business, how you are staying on top of trends in the market, how you interact with your community as a whole, and how you continue to adapt.

In the digital world, there are countless marketing tools you can use to maintain positive retention results. Can you guess what we’re going to suggest first?

Website

That’s right. A well-constructed and easy-to-navigate website is also a must to encourage your clients to come back for your services. According to Accenture, 48 percent of all consumers have left a business’s website and purchased elsewhere because the website wasn’t easy to navigate. We have sung the praises of websites for years, but that’s because a well-designed and responsive website is a must-have for all businesses. Even if your business is small or runs entirely on referrals, you need a website. You need a clear way for potential and current clients to get in contact with you, whether that is through a “Contact” page, an online chat option, or a “Get a Quote” form.

Getting a website up and running is simpler than you may think.  Plenty of web developers are available to help you get started with a site or update your existing site to be more user friendly. There are also a number of point and click tools online like Squarespace, Weebly, and Wix, which are specifically designed to help those with no web design experience to put together a simple, functional website.

Social Media

Do not overlook the reach of social media as well. According to a 2019 survey conducted by Pew Research Center, around 7-in-10, or 69 percent, of total U.S. adults use Facebook to connect with friends, family, and, now, businesses. Having a social media profile makes you even more accessible to not only potential clients, but current clients as well. Through social media, clients can reach you through chat, keep up with company updates on your profile, and make a personal connection with you throughout the year. Facebook, LinkedIn, and YouTube are excellent places to start. For more information about social media for your business, check out the Build Your Brand webinar we presented with 2060 Digital earlier this year.

Newsletter

You can also consider offering your expertise is through a weekly or monthly newsletter. Include blog posts from your website, links to reputable sources, an update from your business, behind-the-scenes shots of your company at work, and so on. You also want to think outside of the box. What health and wellness topics can you highlight? Maybe you can try to run a Caption Contest in your newsletter and offer a $5 gift card to the winner. If you are an employee benefits broker, consider spotlighting your clients’ businesses in your newsletter.

What is working and what isn’t

Creating content that draws the attention of your clients will require trial and error. Keep an eye on your open rates and your clicks to get a better understanding of the kind of content your clients are interested in seeing. High open rates and high click rates mean the content you are providing is of interest to your clients.

There are plenty of resources out there to get you started, but in a digital world, good content is king. Don’t overlook it.

Invest in Your Clients’ Health Insurance Education

As their health insurance agent, you can give your clients the tools they need to make informed decisions about their health insurance. When you educate your clients, you give them the power to advocate for themselves and become better shoppers.

In a 2015 survey by PolicyGenius entitled “Seeing Health Insurance and Healthcare.gov Through the Eyes of Young Adults,” it was reported that only four percent of Americans are able to correctly define all four terms that determine how much they would personally pay for medical services and drugs they receive under their health insurance plan (co-insurance, deductible, out-of-pocket maximum, and co-pay).

Through webinars, ebooks, worksheets, etc., you can provide your clients with guidance on the finer points of health insurance. Consider a vendor like GoToWebinar or Zoom to conduct a monthly webinar series about the basics of health insurance or use the “Live” tool on Facebook to hold live Q&A sessions with your followers. Websites like Canva can be a great tool for putting together marketing materials like flyers, ebooks, and worksheets when you don’t have much experience with design.

You can also take the guesswork out of the education process and send out a survey to your clients to determine what information would be most helpful for them when they’re choosing a new health insurance plan.

*Cough Cough* Check Out the Build Your Brand Webinar Series *Cough Cough*

It’s important to continually educate yourself on fundamental marketing strategies that can help you not only attract clients, but keep them. Cornerstone’s Build Your Brand webinars are focused on helping you level up your marketing. We have archived all of the 2020 webinars on the Cornerstone Resource Center for your convenience. Look out for more information regarding the 2021 series, coming soon!

 

Client retention is a metric of your business’s health and your long-term success. You have the clients—now what are you doing to keep them interested? If you are focusing only on lead generation rather than fostering the relationships you have already built, then you are missing out on a very important piece of your business.

Cornerstone is available to help you come up with a client recruitment and retention strategy that build long-lasting relationships and improves your bottom line. Contact us today to find out what we can do to help.

Additional Resources

Customer Retention Statistics and Predictions (Review 42)

What the Heck is ICHRA?

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As if insurance lingo was not quirky enough—PPO, HMO, ACO, EOB, PCP, etc.—now this? Before you get too frustrated, ICHRA may just be the answer for employers struggling with insurance administrative burdens and high costs. Remember, if you’re not ahead of the game, that means you’re behind and your competition might just steal your precious income.

What exactly is ICHRA? Individual Coverage Health Reimbursement Arrangement (ICHRA)—whew, that’s a mouthful so we will just stick with ICHRA (“ick-rah”). In June of 2019, the U.S. Departments of the Treasury, Health and Human Services (HHS), and Labor finalized new regulations to expand the usability of HRAs. This emerging concept of the ICHRA model is based on reimbursing employees for insurance rather than purchasing it for them. The biggest benefit? ICHRA allows employers to reimburse employees tax-free for individual health insurance or Medicare.

HHS and the Centers for Medicare and Medicaid Services (CMS) project that by 2029, roughly 800,000 employers will offer ICHRA, covering more than 11 million employees. This is a projection we should all pay very close attention to.

ICRHA may be a good option for employers struggling to provide affordable coverage, who no longer wish to administer complex group health benefit plans, who are considering dropping their group plan, who want to “baby-step” into the world of benefits (i.e., start-up companies), who want to cover normally ineligible classes of employees (i.e., part-time workers), or those who are not meeting participation guidelines.

ICHRA provides budget control by implementing fixed costs and eliminating future rate increases. The responsibility of the employer for health risks is now transferred to the employee and there are no participation rules. Employees have the flexibility to choose coverage that best fits their needs and their plans are portable no matter where they go. The premiums reimbursed by the employer are tax free to both the employee and the employer and the plans are still serviced by an insurance professional who ensures that the set-up, administration, and compliance issues are properly addressed at all times.

But there are two sides to every story right? There may be some downsides to these types of plans. Although the individual market is slowly returning and more options are available today than in the past few years, network issues, plan benefits, and the impact to any possible subsidies must be carefully considered. There are a number of compliance and tax issues as well, many of which may require a third-party administrator to handle. These are just a few of the situations that a professional benefits consultant will still need to appropriately guide their clients through.

In any productive needs analysis situation, there are many important considerations, from the overall goals of the employer, to budgets, to unintended repercussions to employees, and more. If you would like to explore these new options further, consult your Cornerstone representative today.

Employee Benefit Extensions for the COVID-19 Pandemic: COBRA, FSA, HRA, and More

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This post was submitted by Navia Benefit Solutions. In February 2020, FlexBank Administrators, a trusted and tenured provider of pre-tax benefits, COBRA administration, and compliance solutions, announced its partnership with Navia Benefit Solutions, a nationwide consumer-directed benefits provider of health, life, and compliance solutions.

On April 29, 2020, the Department of Labor, Revenue, and Treasury (the “Departments”) issued benefit extensions for certain group health plans, disability and other welfare plans, and pension plans during the COVID-19 National Emergency.

The goal of the benefit extensions is to minimize the possibility of individuals losing benefits because of a failure to comply with an applicable timeframe.

There are eight benefit timeframes that have been extended. We go into detail about each one below and provide examples to illustrate how the benefit extensions will work. You can also download our benefit extensions infographic for a snapshot of the extensions and new timeframes.

Navia COVID-19 Timeline Extensions

Outbreak Period

The term “Outbreak Period” is used to define the period of time affected by the extensions.

  • The Outbreak Period started on March 1, 2020 when President Trump declared a National Emergency in response to COVID-19.
  • The Outbreak Period will end 60 days AFTER the National Emergency is declared over.
  • For example, the National Emergency became effective March 1, 2020 and if President Trump announces on May 31, 2020 that the National Emergency is over, the Outbreak Period will be March 1 to July 31, 2020 (National Emergency timeline plus 60 days).

The Outbreak Period goes from the beginning of the national emergency through the end of the 60 days after the national emergency is declared over. During the Outbreak Period , standard election and filing time frames are essentially on “pause” and then resume after the Outbreak Period ends.

Timeframe Extensions Disregard the “Outbreak Period”

On March 13, 2020, President Trump issued the Proclamation on Declaring a National Emergency Concerning the Novel Coronavirus Disease (COVID-19) Outbreak and by separate letter declared a national emergency under the Stafford Act effective March 1, 2020.

As a result of the National Emergency, the Departments recognized that participants and beneficiaries covered by group health plans, disability or other employee welfare benefit plans, and employee pension plans may find it difficult to meet or comply with certain pre-established timeframes. Similarly, the Departments recognized that group health plans may have difficulty in complying with certain notice obligations.

Essentially, this guidance requires benefit plans to disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency, or such other date announced by the Agencies in a future notice (the “Outbreak Period”).  To the extent there are different Outbreak Period end dates for different parts of the country, the Departments will issue additional guidance.

8 New Benefit Extensions and How they Work

Please note the date used in the examples for the “end of the national emergency” is just an example date to help illustrate how the extension timeframes work. We do not yet know when the end of the emergency will be declared.

(1) HIPAA special enrollment period

Generally, group health plans (GHPs) must allow individuals to enroll in the GHP if enrollment is requested within 30 days of the occurrence of the event (or within 60 days, in the case of the special enrollment rights added by the Children’s Health Insurance Program Re-authorization Act of 2009).

Example: Assume the end of the national emergency is April 30, 2020. During open enrollment, Randy declines coverage in his employer’s GHP.  On March 31, 2020, Randy’s wife gives birth.  Randy would like to enroll himself, his wife, and his child in his employer’s plan.  Open enrollment does not begin until November 15, 2020.  Since the timeframe beginning March 1, 2020, through the Outbreak period is disregarded, Randy now has until July 29, 2020, to enroll, provided that he pays the premiums for any period of coverage.  Practical Point: If Randy waits until July 29, 2020, to exercise his special enrollment rights, neither the employer or the carrier would know to provide coverage to Randy and his family until his election is made. 

(2) COBRA Election Period

COBRA generally provides a qualified beneficiary 60 days to elect COBRA continuation coverage under a group health plan.

Example: Assume the end of the Outbreak Period is June 30, 2020.  Sandy is terminated on February 25, 2020.  Sandy’s specific rights notice is mailed on March 1, 2020.  Sandy’s 60-day COBRA election period would end on April 29, 2020 but since the timeframe beginning March 1, 2020, through the Outbreak Period is disregarded, Sandy has until August 29, 2020 to elect COBRA.

<<Need help managing COBRA? Learn how Navia can help>>

(3) COBRA Premium Payments

COBRA continuation coverage may be terminated for failure to pay premiums timely. A premium is considered timely paid if it is made not later than 30 days after the first day of the coverage period.

Example: Assume the end of the Outbreak Period is July 31, 2020.  Jim is enrolled and making timely payments on COBRA as of March 31, 2020.  He does not make April’s premium payment within the 30-day payment grace period.  Because the 30-day grace period is disregarded through the Outbreak Period, Jim has until August 30, 2020 to make April, May, June, July, and August’s premium payments.

(4) COBRA Notices – Qualifying Event

Notice requirements prescribe time periods for individuals to notify the plan of certain qualifying events or a determination of disability.  Notice requirements also prescribe the time period for employers to notify the plan of certain qualifying events.

Example: Assume the end of the Outbreak Period is September 30, 2020. Bob is enrolled in COBRA with his spouse Tricia.  Bob and Tricia divorce on April 1, 2020.  Bob has the obligation to notify the plan sponsor/administrator of the divorce within 60 days which will trigger a dependent level COBRA offer for Tricia.  Because the 60-day notice requirement is disregarded through the Outbreak Period, Bob has until November 29, 2020 to notify the plan sponsor/administrator of the divorce.

(5) Benefit Plan Claims Filing Procedure Timeframe (FSA/HRA)

The date within which individuals must file a claim under the plan’s claims procedures.

Example: Employer, Teresa Co., provides her employees an FSA benefit.  Teresa Co.’s plan runs January through December with a ninety-day claims run-out period ending March 31, 2020.  The national emergency is effective March 1, 2020.  In this example assume the national emergency ends May 31, 2020.  As of March 1, 2020, Teresa Co’s participants had 30 days until the claims run-out deadline—due to the guidance, that timeframe is disregarded until the end of the national emergency plus 60 days.  Therefore, plan participants new claims run-out deadline is August 29, 2020.  August 29, 2020, is reached by assuming May 31, 2020, is end of the national emergency, plus 60 days, plus the 30 days disregarded from March to March 31st.

(6) ERISA Adverse Benefit Determination Appeals Deadlines

The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure.

FSA Example 1: Assume the end of the national emergency is May 31, 2020.  Tim, an FSA participant, receives a denial of his FSA claim on March 15, 2020.  Tim normally has 180 days from March 15, 2020, to file an appeal.  Since the timeframe beginning March 1, 2020, through the Outbreak period is disregarded, Tim now has until January 26, 2021 to file his appeal.  In this example the January 26, 2021, is determined by assuming the end of the national emergency is May 31, 2020.  Add sixty more days to get to July 30, 2020 (the outbreak period) plus the 180 days to appeal.

HRA Example: Assume the end of the national emergency is April 30, 2020. Bob, an HRA participant, receives a denial of his HRA claim on January 28, 2020.  Bob normally has 180 days from January 28, 2020, to appeal his denial.  Since the timeframe beginning March 1, 2020, through the Outbreak period is disregarded, Bob now has until November 24, 2020, to file his appeal.  In this example November 24, 2020, is determined by assuming the end of the national emergency is April 30, 2020, plus sixty days, plus 148 days (180 – 32 days following January 28 to March 1st). 

(7)  ERISA External Review

The date within which claimants may file a request for an external review after receipt of an adverse benefit determination or final internal adverse benefit determination.

Example: Assume the national emergency ends April 30, 2020. Megan receives a denial on March 15, 2020.  Normally, Megan has four months from March 15, 2020, to file a request for external review.  Since the timeframe beginning March 1, 2020, through the Outbreak period is disregarded, Megan now has until October 29, 2020, to file her request.  In this example October 29, 2020, is determined by assuming the end of the national emergency is April 30, 2020, plus sixty days, plus four months.

(8) Deadline to Submit Additional Information for External Review

The date within which a claimant may file information to perfect a request for external review upon a finding that the request was not complete.

Example: Assume the national emergency ends April 30, 2020. Natalie receives notice of an incomplete external review request on March 15, 2020.  Normally, Natalie has four months from March 15, 2020 to perfect her request.  Since the timeframe beginning March 1, 2020, through the Outbreak period is disregarded, Natalie has until October 29, 2020, to perfect her request.  In this example October 29, 2020, is determined by assuming the end of the national emergency is April 30, 2020, plus sixty days, plus four months.

Navia’s commitment to providing high-quality service has never been more important and we will continue to find ways to help during these difficult times. Please check back regularly for updates. Stay safe and healthy.

FormFire: Essential Technology in the Small Group Market

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Cleveland-based FormFire, has been a fixture in the Ohio health insurance marketplace since its introduction more than ten years ago. Today, the company offers their services in 24 states. Brokers take advantage of FormFire technology to price, place, and enroll small group medical products with Aetna, Anthem, Medical Mutual, UnitedHealthcare, Humana, and other medical carriers in Ohio.

FormFire’s most valuable application is their process for supporting medically underwritten small group health insurance products. The company was, arguably, originally created for that purpose. The Affordable Care Act (ACA) became law in 2010 and its rules around small group medical plans certainly threatened to end the entire concept of underwriting with Individual Medical Questionnaires (IMQs). In Ohio, the adoption of transitional plans (also known as Grandmothered plans) essentially saved the small group marketplace by allowing most small employer groups to keep their current plan and not subject themselves to the community-rated ACA products.

Fast forward to 2020 and you will find that the Ohio small group market offers a large number of medically underwritten products. Aetna’s Aetna Funding Advantage, Humana Level Funding, and UnitedHealthcare’s All Savers products are offered using a “level funding” approach. More recently, Medical Mutual, Anthem, and UnitedHealthcare are offering Multiple Employer Welfare Arrangement (MEWA) products that require IMQs. While FormFire’s IMQs are accepted by all of these carriers, the Anthem SOCA MEWA and Medical Mutual COSE MEWA require that groups are priced and enrolled through FormFire. For brokers who want to compete in today’s small group market in Ohio, access to FormFire is essential.

The expense of maintaining a FormFire account can be prohibitive to brokers who have a small block of group medical business or who are building their group practice. Some small group carriers have offered limited access to their own products through FormFire. Cornerstone can help by offering better pricing for full access to FormFire. Insurance markets are rapidly moving into the digital age and producers need to embrace the technology available to them.

Contact your Cornerstone broker advisor to get started.

How to Determine Medicare Creditable Coverage

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What is Medicare creditable coverage and why does it affect me as an employer?

As part of the Medicare Modernization Act of 2003, the Medicare Part D prescription drug program was created. The law requires that each employer offering prescription drug benefits as part of their employee benefit plan must notify any Medicare-eligible participant and the federal government if the coverage offered is at least as good as the standard Medicare prescription drug plan. If the benefit the employer offers is at least that valuable, the plan is deemed “creditable.”

Notification to these participants is critical as that same law created a “late enrollment penalty” for those who did not have creditable coverage for 63 days or longer prior to their initial enrollment period for their Medicare prescription drug benefit. This will help those affected determine whether or not to stay on the employer plan or enroll in a Medicare Part D drug plan.

So as an employer, what do I need to do?

Every employer who offers a plan covering prescription drugs must file their status (creditable or non-creditable) to the Centers for Medicare and Medicaid Services (CMS) each year no later than 60 days after the start of their plan year. For example, the majority of health plans renew on January 1 of each year, which means they will need to file by March 1. To notify CMS of the plan’s status, the plan sponsor/employer needs to complete this form by entering their contact information and the federal tax identification number and completing the certification. The process is quite simple.

Employers are also responsible for notifying each plan option’s credibility status (note: many plans have more than one health plan option) to all active employees, plan participants, and any covered retirees that may be Medicare eligible.

Keep in mind, Medicare does not always apply to those 65 years or older. There are other extenuating circumstances why someone may be eligible for Medicare and since you may not be aware of any that qualify for other reasons, it is best to send the announcement to all covered persons. This notice must be delivered prior to October 15 each year, so that any person who wishes to enroll for Medicare may do so during that calendar year’s Medicare open enrollment period. Many employers tend to include the creditable status in their open enrollment packets or to new hires as they come on board. The point is, make sure all participants receive the information no later than October 15.

How will I know if our plan is creditable or non-creditable?

If your group plan is fully insured, the insurance carrier will be able to verify if the drug benefit is or is not creditable. Since every carrier is different in the handling of these notices, your agent should assist you as plan status may change each year even if there have been no changes to benefits.

Employers may also check plans status by using guidance from CMS or an independent actuary can be hired to value the benefits appropriately.

What if my plan is not deemed creditable? Are there penalties?

There is no requirement that employers offer creditable coverage and no penalty exists today if they do not. You are only required to a) notify the government annually and b) notify all active employee plan participants and covered retirees that could be Medicare eligible. We recommend that new hires (as they come onboard) are also made aware of the current plan’s Medicare creditable status. Medicare-eligible beneficiaries will be able to decide if they would like to enroll in a higher value Medicare Part D plan if the employer plan is indeed determined non-creditable.

How can I get assistance throughout this process to make sure I stay compliant?

This may be a complex and intimidating task for employers who are busy running their businesses. Our licensed advisors are equipped with the knowledge and resources you need to keep your employers informed and keep their business compliant. If you have questions about creditable coverage or questions about any other compliance issues, please contact your Cornerstone representative today.

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