IMPORTANT NOTE FOR CA RESIDENTS & EMPLOYER GROUPS REGARDING Health Insurance UNDER – THE “AFFORDABLE CARE ACT” (“ACA” aka “Obamacare”):
Paul M. League, QFP, CFP® is a CERTIFIED Agent for Covered CA Exchange-Marketplace & SHOP (Group) Health Insurance Plans since October 2013. Therefore, we can fully assist all CA Residents and Employer Groups in enrolling into Health Insurance Plans (i.e., plans for Individuals & Families (“IFP”) and Employer Groups (“SHOP”)).
Note: for IFP Plans (non-group), only those plans purchased via the Covered CA Exchange-Marketplace offer Tax Credits/Subsidies (“APTC”) that reduce Health Plan premiums (costs) on a monthly basis. To obtain quotes on the now Standardized, 4 Metallic Health Plans available within the Exchange-Marketplace, please provide us with the following:
- your complete residence address with zip code
- names, contact email, dates of birth, and social security numbers for each person to be covered, and
- your reasonable estimate of Household Income for the tax year you are seeking coverage.
For Small Employer GROUP Plans 2-50 Employees (via SHOP, Private Marketplaces or Direct Insurer), please complete the CENSUS and scan and email that back to us for processing, which will be followed with a full Proposal that compares plans, benefits and rates.
For Large Group Plans with 51+ Employees, we also design Self-Funded, ASO Plans—perhaps the most cost effective delivery model for Group Health, Dental, Vision and Life Insurance available in the market today. Please contact us for assistance at: 800.482.5347.
If you currently already have programs in place and are looking for alternative competitive solutions, then please also include: a Company Census, Benefits details on all plans you wish to have quoted, your most recent billing or renewal notice, and your most current Quarterly Wage & Tax Report (this provides necessary “eligibility” criteria).
Rest assured that our offices have been in the Group business for 32+ years and we do have the hands on experience needed to properly address your needs and those of your valued Employees.
Cafeteria Section 125 Plans:
Today, most Employers should not install or continue a Group Health Plan without also installing a Cafeteria Section 125-Full Flexible Benefits Program. WHY? In order for Employers to be able to continue in the full or partial support of the costs of these plans for their valued employees cost reduction is a necessity. A “Cafeteria Plan” allows Employers & Employees to move certain eligible expenses from after-tax to PRE-TAX. The result is substantial savings to both parties in Taxes (see here for details of such Plans: “Cafeteria Section 125 Programs.”
Note: for purposes of dependent care FSAs, the child is always treated as the qualifying child of the custodial parent. There are several examples included in the IRS Notice 2006-86 available by clicking here. If the special rule outlined above does not apply, the tie-breaking rule applies to the provisions listed above as a group, rather than on a section-by-section basis. Therefore, if a child is treated as the qualifying child of one taxpayer for one purpose (e.g., earned income credit), the child may not be treated as the qualifying child of any other taxpayer for any other purpose (e.g., child tax credit, the child and dependent care credit, and/or exclusion under a dependent care FSA).
IMPORTANT NOTE: under the ACA (“Obamacare”) many of the following rules have changed to one degree or another. Please contact us for details for your particular circumstances and also first review the following: ACA (“Obamacare”)
THE FOLLOWING IS PROVIDED MAINLY FOR EDUCATIONAL & HISTORICAL PERSPECTIVE
The 2 Cardinal Rules of Group Underwriting & Acceptance by Any Given Insurer:
- PARTICIPATION RULES: Group size (i.e. the number of employees to be covered) feeds into this w1ith smaller companies typically being required to have 100% participation by most Insurer’s – though, not all. Insurers typically require you to include at least 75% of your employees (some go as low as 50%) and do not include in this “percentage test” employees who waive coverage due to being covered elsewhere (i.e., on a spouses plan who works for another employer) for eligibility requirements.
- CONTRIBUTION RULES: Insurer’s require Employer premium sharing or contributions on behalf of their employees to obtain “Group” Health Insurance except for some “Voluntary” plans (like Life, LTD, Dental, Cancer Plans, etc.). Most will require a minimum of a 100% Employer contribution on 2-5 Life Groups, 75% at 6-10 or 15, then 50% at 15+. There are, however, many Insurers who presently allow for as little as a 50% contribution on any size Group. For those Employers who choose to contribute 100% of the employee premium ALL eligible employees must enroll. “Late Enrollees” are treated under special rules that allow the Insurer 3 options: fully exclude the late enrollee; or, waive coverage on only the pre-existing condition but for only up to 12 months; or, accept without any waiver at all.
Group Laws Affecting Employer Groups (Mainly in CA but Also In Certain Federal Cases):
HIPAA – the Health Insurance Portability & Accountability Act (Federal Law).
CA AB 1790 – allows employers to include, as eligible employees, those working as few as 20 hours per week in their group benefits plans. The number of employees to be counted towards eligibility is based on employee eligibility to participate in the Group Health Plan on 50% of the employer’s business days in the preceding calendar year). Many new Laws continue to be passed as well as amended. Please contact us for the most up to date information in these areas.
AB 1672 – Landmark legislation requiring group health insurers to accept small employer groups (defined as those with 2-50 employees) regardless of any negative health histories (i.e., insurers can no longer decline a case based upon medical factors alone). The legislation also regulates the range of premiums that insurers can charge such groups based upon insurer published SERR rates (Standard Employee Risk Rates), limiting them to a range, based on other underwriting criteria, from 10% above to up to 10% below the SERR rates (this is known as the “RAF” or Risk Adjustment Factor). Pre-existing exclusionary clauses of up to a maximum of 6-months are permitted (in PPO or Indemnity Plans – N/A in HMOs), with credit against such periods for prior private health insurance coverage (group or non-group) that covered any insured for at least 180 days, and without a gap in such coverage greater than 180 days.
IRS Notice 2006-86 (2006): The IRS recently published Notice 2006-86 which clarifies the applicability of “tie-breaking rule” for determining which taxpayer may claim a qualifying child when two or more taxpayers claim the same child for a taxable year. The Notice applies to the head of household filing status under § 2(b), the child and dependent care credit under § 21, the child tax credit under § 24, the earned income credit under § 32, the exclusion for dependent care assistance under § 129, and the dependency deduction under § 151.
The tie-breaking rule provides the following–if one or none of the taxpayers claiming the child is the child’s parent, the child is treated as the qualifying child of (i) the taxpayer who is the child’s parent, or (ii) if none of the taxpayers is the child’s parent, the taxpayer with the highest adjusted gross income for that taxable year.
Special Rule for Non-Custodial Parents: A child may be treated as the qualifying child of the non-custodial parent, for certain purposes, if:
- If both taxpayers of the qualifying child are the child’s parents who do not file a joint return, the child is treated as the qualifying child of the parent with whom the child resides for the longer period of time during the taxable year. If the child resides with both parents for the same amount of time during the taxable year, the child is treated as the qualifying child of the parent with the higher adjusted gross income for that taxable year.
- the child is in the custody of one or both parents for more than one-half of the calendar year;
- the child receives over one-half of the child’s support during the calendar year from the child’s parents;
- the parents (a) are divorced or separated under a decree of divorce or separate maintenance, (b) are separated under a written separation agreement, or, (c) live apart at all times during the last 6 months of the calendar year; and
- the custodial parent releases the claim to the exemption to the non-custodial parent in a written declaration that the non-custodial parent attaches to the non-custodial parent’s tax return. If, however, the special rule applies, a child may be treated as the qualifying child of two taxpayers. As such, the non-custodial parent may claim the child as a qualifying child for purposes of the child tax credit under § 24 and the dependency deduction under § 151; however, for purposes of determining the head of household filing status, the earned income credit, the dependent care credit or the exclusion from income for dependent care FSAs, the non-custodial parent may not claim the child as a qualifying child. For these purposes, only the custodial parent (or other eligible taxpayer) may claim the child as a qualifying child. “Custodial parent” is defined as the parent having custody of the child for the greater portion of the calendar year, and “non-custodial parent” as the parent who is not the custodial parent.
California Senate Bill 719 of 1997, or the Continuation Benefits Replacement Act (“CAL-COBRA”), requires Health Plans to offer continuation coverage to enrolled employees and their family members following their loss of coverage due to termination of employment, reduction in work hours, divorce, death, loss of dependent child status or Medicare entitlement. It is the Employers responsibility to notify the Insurer of these “qualifying events” and the Insurers to then notify the covered party. Severe penalties exist for non-compliance with the provisions and requirements of this new law.
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