Q: What happens to an eligible individual’s Health Savings Account (HSA) if they change jobs and the new employer does not offer an HSA qualified High Deductible Health Plan (HDHP)?
A: The HSA belongs to the account owner, and they can continue to use it for qualified medical expenses. However, the account owner cannot make further contributions to the account because they no longer meet the requirements of an eligible individual.
Q: I have an officer who has been transitioning into retirement for the past few years. He does some work for the board that amounts to a few hours a month and may also come into the office occasionally. Will this impact his life insurance through the MBA?
A: The MBA Life Plan requires that employees work a minimum of 20 hours per week to be considered eligible. If a covered employee terminates employment, retires or reduces their hours below the plan’s 20 hour per week minimum they must be provided a written Eighteen Month Continuation election notice within 14 days to comply with Minnesota Statute 61A.091 (www.revisor.mn.gov/statutes/?id=61A.092). The former covered employee must respond to the election notice within 60 days of the later of the date their coverage under the MBA Group Plan expires or from the date they receive the election notice. If the former employee fails to respond to the election notice within the required 60 days or fails to make their monthly premium payment to their former employee by the end of each month, their coverage will be terminated. Please inform MBA in a timely manner of an employee’s terminations and/or election to continue their coverage.
Q: I have Basic Life insurance through the MBA Life Plan and would like to know if I can list my minor child as a beneficiary? What happens if I don’t name a beneficiary?
A: If a beneficiary is a minor at the time the insurance proceeds are payable, the proceeds will be disbursed in one of the following ways:
If there is no named beneficiary, the proceeds will generally be paid to the first of the following: the surviving spouse; surviving children in equal shares; surviving parents in equal shares; surviving siblings in equal shares; the estate.
Q: I have a High Deductible Health Plan (HDHP) and own a Health Savings Account (HSA). My spouse is over 65 and receives Medicare and Social Security Benefits. Can the account owner be reimbursed from the HSA for the spouse’s co-pays and other medical expenses?
- To the legal guardian of the minor beneficiary’s financial assets;
- To an adult responsible for the well-being of the minor beneficiary if permitted under any applicable Uniform Transfer to Minor Act; or
- The insurance proceeds will be held by the carrier until the minor beneficiary is of legal age (based upon state law) to receive the payment.
A: The spouse’s qualified expenses can be reimbursed from the HSA because the spouse’s other coverage does not affect the account owner’s eligibility. However, the spouse is not eligible to open or contribute to his or her own HSA.
Q: I heard that our MBA Life Plan is adding two benefits beginning January 1, 2018 for Travel Assistance and Funeral Planning and Concierge. Would you tell me more about these benefits?
A: That’s correct. The MBA Life Plan will include these two new benefits as part of our life plan:
Travel Assistance – Help with pre-trip information such as immunizations, VISA/Passport requirements, exchange rates, embassy/consular referral & travel/tourist advisories. Emergency personal services are also available including message relay, emergency travel arrangements, assistance with lost or stolen luggage or possessions and legal assistance.
Funeral Planning & Concierge – 24/7 advisor assistance with funeral planning and access to a nationwide database that will provide a report of local funeral homes and their current pricing and services to allow families the ability to negotiate and avoid excessive expenses.
For more information, please refer to “No Additional Cost Services” on the MBA’s website under the Group Insurance tab or contact Connie Mack, Sr. Plan Administrator/Insurance Agent, at email@example.com.
Q: At what age can we add our first child to the MBA Dental Plan? Also, does the plan cover fluoride treatments and sealants for children?
A: Children may be added at the time the eligible employee becomes effective or may be added anytime up to 30 days following the child’s third birthday.
Fluoride treatments are covered one time per 12-month period and help protect teeth against future tooth decay. It is also found in drinking water and toothpaste. Sealants are covered one time per lifetime for permanent first and second molars of eligible dependent children through the age of 15. Sealants are plastic coatings that protect difficult-to-reach pits and grooves on the chewing surfaces of the teeth from the bacteria that cause tooth decay.
Q: What can you tell me about the Cadillac Tax for healthcare that is to take place in 2018?
A: The “2018 Cadillac Tax” was delayed to 2020. Currently, congressional leaders propose to postpone, not repeal, the tax’s start date from 2020 to 2025. This is a permanent, annual tax on high-cost employer-sponsored health coverage. Cost of coverage includes the total contributions paid by both employer and employees. The tax is 40 percent of the cost of health coverage that exceeds predetermined threshold amounts. The thresholds are updated before the tax takes effect in 2020 and indexed for inflation in future years. The thresholds are currently at $10,800 for individuals and $29,500 for a family starting in 2020. While this tax was originally non-tax deductible, the December 2015 changes made it tax deductible for employers who pay it.
Here’s an example of how it works based on current threshold amounts. (Note that these threshold amounts will be indexed before the tax takes effect in 2020.)
A $12,000 individual plan would pay an excise tax of $480 per covered employee:
$12,000 - $10,800 = $1,200 above the $10,800 threshold
$1,200 x 40 percent = $480
A $32,000 family plan would pay an excise tax of $1,000 per covered employee:
$32,000 - $29,500 = $2,500 above the $29,500 threshold
$2,500 x 40 percent = $1,000
Q: Our MBA Dental Plan gives us the option to choose a dentist from the Delta Dental PPO, the Delta Dental Premier Network or Out-of-Network. The premium cost remains the same regardless of the network utilized, but can you tell me how the savings differ by network?
A: Delta Dental offers the nation’s largest network of dental providers, delivering greater access to care and more cost savings. Here’s how the savings differ:
Exceptional Savings – Delta Dental PPO: lowest out-of-pocket cost; significant discounts; no balance billing and no paperwork.
Great Savings – Delta Dental Premier: largest network; low out-of-pocket cost; moderate discounts; no balance billing and no paperwork.
No Savings – Out-of-Network: highest out-of-pocket cost; balance billing; no discounts.
To find a network dentist, go to www.DeltaDentalMN.org. For more information about the MBA Dental Plan, contact Connie Mack at firstname.lastname@example.org.
Q: We currently give each of our employees $500 annually towards their dental expenses. What would be the benefit of offering a group dental plan?
A: The money you are giving to your employees is after tax. A group plan would provide before tax benefits for the employee as well as any dependents that they may wish to cover. A group plan also affords the opportunity for discounted rates on all dental services. The MBA Dental Plan has four plan options ranging from $1,000 to $2,000 annual maximums per person with preventive care covered at 100 percent. The cost to cover your employee under one of these options ranges from $393 to $532 annually. You could save money and provide greater benefits! Please contact me and I can walk you through your options.
Q: How will my benefits be paid if I receive both preventive and non-preventive care at my visit? Also, could you give me some examples of what is considered preventive care?
A: If you receive both types of care (preventive and non-preventive) at your visit, the preventive services will be covered at 100%. You’ll pay a share of the costs for the non-preventive services. Preventive services generally can help keep you healthy: screen for certain types of cancer, immunize you against disease, and are received once per year as recommended by your doctor. The Affordable Care Act defines what’s considered preventive care. You can learn more about what’s covered on the Health & Human Services website at HHS.gov/healthcare and by searching for “preventive services.”
Q: I have a small group medical plan eligibility question. Can you please tell me what type of entity qualifies as a small group?
A: The following type of entity qualifies as a small group:
- Must be headquartered and actively engaged in business in Minnesota.
- Must employ at least one common-law employee to whom the coverage will be made available. For instance, if the entity is a sole proprietorship or partnership under which the only enrollees would be “non-bona fide” partners (and/or their dependents), or a corporation under which the only enrollees would be non-common law employee-shareholders/owners, then the entity is not eligible for group coverage.
- Must employ at least one common-law employee and fewer than 51 full-time equivalent employees.
- Must offer coverage to all eligible employees working the defined hours-per-week requirement without any additional classification restrictions. The defined hours-per-week requirement must be at least 20 hours per week.
- Must have at least one eligible employee enrolled in the group plan. (Check your contract; some carriers might require two employees.)
- Must contribute at least 50% of the premium for employee coverage and there must be a minimum participation of 75% of all eligible employees (after eligible waivers are excluded). These two requirements do not apply during the annual open enrollment for small employers from November 15 to December 15.
Q: The employees of our bank have individual and family medical insurance plans they purchased directly through Blue Cross/Blue Shield of Minnesota. Blue Cross recently sent letters advising members they will be discontinuing all individual and family insurance plans sold to members in Minnesota and their last day of coverage will be December 31, 2016. I’ve heard that the cost of individual coverage with other carriers will be way up next year. We have less than 50 employees and would like to know what options we might have through Minnesota Bankers Association to select a group plan that would meet our needs.
A: Carriers of individual coverage in Minnesota have had poor claims experience, and rates are likely to be much higher in 2017. At the MBA, we broker group plans for Medica, HealthPartners and Blue Cross/Blue Shield. We are also the exclusive seller of the Iowa Bankers Group Plan in Minnesota. Most of the banks in Iowa buy this plan and we now have over 1,000 Minnesota bank employees covered as well.
We have great options for Minnesota banks and their employees. Please contact Connie Mack and she can walk you through your options.
Q: What are the 2017 limits and maximums for Health Savings Accounts?
A: The IRS 2017 contribution limits for HSAs, out-of-pocket maximums and minimum deductible levels for HSA-eligible plans are as follows:
2017 Minimum Deductibles: This is unchanged from 2016: Individual – $1,300; Family – $2,600
2017 Maximum Out-of-Pocket: This is unchanged from 2016: Individual – $6,550; Family – $13,100
2017 Maximum Annual Contribution Limits
Individual – $3,400 (2016 limit is $3,350)
Family – $6,750 (unchanged)
“Catch-Up” amount for 55+ account holders is $1,000 (unchanged)
Here’s additional guidance for designing an HSA-compliant health plan that has “embedded” deductibles:
Embedded Deductible – It is permissible to have an individual member (embedded) deductible on family policies as long as the individual deductible is not less than the minimum family deductible amount established by the HSA law ($2,600 in 2017).
Q: Our dental plan is through the Minnesota Bankers Association. We chose to add coverage for orthodontics to our plan for dependent children. Would you please confirm the age limit for orthodontic treatment?
A: Orthodontic treatment is the movement of teeth by means of active appliances to correct the position of mal-occluded or mal-positioned teeth. Coverage for orthodontics is subject to a separate lifetime maximum of $1,000.00 per covered dependent child and limited to those orthodontic treatment plans commenced on or after the covered dependent child’s 8th birthday and prior to the dependent child’s 19th birthday.
Q: I heard there were recent legislative changes and updates under the Affordable Care Act (ACA). What should I know?
A: Congress passed the following changes as part of the Consolidated Appropriations Act:
- Health insurance premium tax delay – known to some as the “Health insurance industry fee” or the “Health insurer tax,” the insurer premium tax is suspended for one year in 2017. The tax applies to fully insured plans.
- Cadillac tax delay – The Cadillac tax (also known as the excise tax) was scheduled to take effect in 2018. The tax would apply to certain high-cost, employer-sponsored health plans. New legislation pushes the effective date of the Cadillac tax out two years from 2018 to 2020. There are questions and challenges that both regulators and Congress face in trying to implement this excise tax. A new provision shows the tax would be a deductible expense. In addition, other details about the tax are being reviewed and a full repeal is still a possibility.
- Medical device excise tax – This 2.3% tax on medical devices was originally implemented in 2013. It is now suspended for two years through 2017.
Q: We have an employee who is dropping coverage for their dependent child. Are we required to offer continuation to that dependent?
A: Not every loss of coverage under a health plan is considered a qualifying event. For instance, if this employee decides to drop coverage for a dependent who is still eligible under the health plan, the employer is not required to offer continuation to that dependent because this is not a qualifying event.
Q: The PACE Act was recently revised. We have a group of 65 employees and already received a renewal based on being a small group. Will we get a revised renewal?
A: Background: On October 8, 2015, President Obama signed the Protecting Affordable Coverage for Employees (PACE) Act, revising the definition of small employer. Under the Affordable Care Act, the definition of small employer would have encompassed employers with 1–100 employees beginning on January 1, 2016. The signing of the PACE Act retains the definition of small employer as an employer with an average of 1–50 employees (on business days during the preceding calendar year).
How does this impact your group? Groups with more than 50 employees that previously received a small group (community-rated) offer will need to be revised as a large group offer, which may result in changes. If your group also received an early renewal effective date (e.g. 12/1/2015) you may also want to ask if your renewal can reflect your original January 1, 2016, renewal effective date.
Q: When will we see annual Medicare Part D creditable coverage (or noncreditable coverage) notices and is there any filing that the employer needs to do?
A: Most carriers will be mailing the Medicare Part D creditable coverage notices in September to all fully insured employers and their subscribers and to self-insured customers who have purchased the service. The notices are required by law and are designed to help Medicare-eligible individuals decide whether to retain their current prescription drug coverage, or to enroll in Medicare prescription drug coverage.
The employer must now file their notices directly with the Centers for Medicare and Medicaid Services (CMS). You can complete the Online Disclosure to CMS Form through the CMS website and refer to the "Disclosure to CMS Form" section for more information. Disclosure should be completed annually no later than 60 days from the beginning of a plan year (contract year, renewal year), within 30 days after termination of a prescription drug plan, or within 30 days after any change in creditable coverage status.
Q: I heard that the definition of small groups will be changing. Can you tell me the new definition, how we determine our group size, and how small groups differ from large groups?
A: In response to the Affordable Care Act (ACA), Minnesota will be changing the definition of a small group in 2016. Currently, a bank with 50 or fewer employees eligible for health insurance is considered a small group. However, effective January 1, 2016, a small group will be defined as a business with 100 or fewer full-time equivalent employees (FTEEs).
According to the ACA, the following factors are used to calculate an employer’s total number of FTEEs:
- Full-time employees – Under the final regulations, for purposes of determining full-time employee status, 130 hours of service in a calendar month is treated as the monthly equivalent of at least 30 hours of service per week.
- Part-time employees – Prorated (total hours worked by all PT employees in a month, divided by 120).
- Seasonal employees – Not counted for those working up to 120 days per year.
- Temporary agency employees – Generally counted as an employee of the temporary agency.
- Franchise employees/common ownership – All employees across the entities are counted in one sum.
Unlike large group plans that are rated based on a group’s experience, all small group plans are community-rated. Under “community rating,” all people covered by the same type of health insurance policy are charged the same age-rated premium based on the health and demographic profile of the geographic region covered under a particular policy. The ACA also requires the insured health plan to provide certain Essential Health Benefits for small groups.
Q: I have an employee retiring in a few months. What are their options with the group insurance plans?
A: That will depend on your enrolled plans and provisions.
Disability plans typically terminate immediately when you cease active work due to termination or retirement. Under certain conditions, conversion to an individual plan is allowed with Long Term Disability if your termination is not due to retirement.
If you have a group life plan, you are usually able to continue the coverage with your employer for 18 months. This is allowed under Minnesota continuation laws. After 18 months, there may be options allowing conversion to an individual plan with the carrier. Premium costs can be rather significant but may be a good option if there are health issues with the employee.
Under group dental plans, the employee may be able to elect COBRA continuation. Typically, coverage terminates after 18 months. However, some employers allow retired employees to remain on their group dental plan.
Q: Would you please tell me what kinds of chiropractic care are covered under most health plans?
A: Here are the kinds of chiropractic care that are usually covered and not covered. To learn more, talk to your doctor about your treatment to help you learn if your care is considered active treatment or maintenance care.
Chiropractic care that is covered:
Generally, chiropractic care that is called active treatment is covered. This is corrective treatment for a condition that is expected to get better over a short period of time. This care usually begins with frequent visits to the chiropractor that are reduced and ended as your condition improves.
Chiropractic care that is not covered:
Maintenance care are services that are not expected to make measurable or sustainable improvement within a reasonable period of time; a type of care that is not covered unless medically necessary and part of specialized maintenance therapy for your condition.
Q: We have dental coverage with the MBA Dental Plan and I'm questioning at what age we need to add children to our plan.
A: Dependent children are covered from birth up to the age of 26. A child may be added to the Program at the time the eligible employee originally becomes effective or may be added any time up to 30 days following the child's 3rd birthday. If a child is born or adopted after the employee's original effective date, such child may be added anytime between birth (or date of adoption) and 30 days following the child's 3rd birthday. In the event that the child is not added by 30 days following their 3rd birthday, that child may be added only if there is a Family Status Change or at an open enrollment.