Medical Loss Ratio (MLR) Rebates

Your company may have recently received information from your health insurance carrier regarding a Medical Loss Ratio Rebate.  As part of the Health Care Reform legislation it requires a certain percentage of the employers premiums go towards medical claims versus administration expenses.  In addition, Massachusetts has its own regulations and for small groups in Massachusetts it is 90%.  Your company may be entitled to a rebate check if your health insurance carrier contributed less than 90% of your group’s premium toward medical claims.   

There are two different ways the employer may use the refund.  The employer may keep the amount given to them and use it toward future premium costs.  Or the employer may give the refund back to the employees.  The health insurance carriers have begun to mail out the rebate checks to Massachusetts employers.  If you are unsure of how to distribute the refund, please visit the link below to the Department of Labor’s website for additional information.  Please visit “The Best Bottom Line” to remain up to date on health care reform as well as other HR related topics.  Please feel free to contact our office at (978)-777-6554 with any questions you may have.

http://www.dol.gov/ebsa/newsroom/tr11-04.html.

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Repeal of Massachusetts Fair Share Contribution

On July 12, 2013, Governor Deval Patrick signed the 2013/2014 Massachusetts budget that includes the repeal of the Massachusetts Fair Share Contribution for employers.  This announcement from the Governor comes only a week after President Obama delayed the implementation of the Employer Mandate until 2015.  The Massachusetts Fair Share Contribution penalizes employers with 11 or more employees who do not comply with the state’s regulation to provide their employees with an affordable health insurance plan.  If employers did not offer their employees an affordable plan then employers would be subject to a fine of $295 per employee on an annual basis. 

The Patrick Administration felt that the repeal of the Massachusetts Fair Share Contribution will coincide with the Federal Employer Mandate regulation even though it will not take effect until 2015.  To remain up to date with the most recent health care reform regulations, please visit our blog The Best Bottom Line”.  If you have any questions about health care reform or the most recent Supreme Court rulings and how they may pertain to your company, please contact our office at 978.777.6554.

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Implementation Delay for Employer Mandate & Update on Supreme Court Rulings

The White House Administration announced on July 2, 2013, that they would be delaying the Employer Mandate portion of Healthcare Reform legislation until 2015.  The Employer Mandate requires employers with 50 or more full-time or full-time equivalent employees to offer a health insurance plan to employees that is affordable and meets the minimum actuarial value established by the Federal government.  Employers that do not comply with this regulation will be subject to fines and penalties.  A key component of the regulation is additional reporting requirements to the government by employers.  The government has acknowledged the complexity of these reporting requirements for employers and has decided to delay the implementation for one year.  The government hopes to provide employers with further guidance sometime this summer. This announcement leaves unchanged other provisions of the law such as the individual mandate which requires most Americans to carry health insurance.  Employees will still be allowed to buy their own health insurance through a state exchange; with the only change being that their employers won't be penalized next year if they do so.

Another important ruling was handed down by the U.S. Supreme Court on June 26, 2013.  This ruling identifies Section 3 of the Defense of Marriage Act to be unconstitutional.  Section 3 did not permit the marriage between two individuals of the same gender.  Same-sex marriages were recognized as legal by 12 states and the District of Columbia at the time of the ruling.  The decision does not force same-sex marriage on the states, which choose not to recognize same-sex marriage.  The impact of the ruling on employee benefit plans is significant.

For employer’s who operate in a state that currently allows or acknowledges same sex marriage, the following rules will apply. 

• Employers who offer a benefits program must not discriminate between spouses of the same sex or spouses of the opposite sex in regards to the benefits that are offered.  Spouses of the same sex are now entitled to the same benefits. 
• Employees and their spouse who participate in their company’s Section 125 plan are now eligible to receive their spouse’s contribution on a pre-tax basis.  
• Employers will now be responsible to offer continuation of coverage (COBRA) to an eligible spouse. 
• The same sex spouse will also now be entitled to their partner’s 401(k) benefit if he or she should happen to pass away. 
• Employees must be permitted to take family and medical leave to care for an ill same-sex spouse.

The healthcare and benefits industry will be constantly changing over the next several months.  To make sure your company is up to date with the latest rulings and regulations, please visit our Best Bottom Line articles for the most up to date information.  Please feel free to contact our office as well with any questions regarding these two significant announcements.

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