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Employer News | June 2012
Employer News | June 2012

Annual Group Information Form: Answers to Your Frequently Asked Questions

My group is very small with only a few employees, why do I have to fill out the form?
Due to various state and federal regulations, Excellus BlueCross BlueShield is required to obtain certain information regarding your group on an annual basis. As your health insurance provider, we know this information as it relates to the members you have with us, but we may not have an accurate understanding of this information as it applies to all of your employees. As you will see below, regulations differ with regard to the type and level of information needed.

Federal Mental Health Parity and Addiction Equity Act
Depending on your group size, you may be required to make changes to the mental health and substance abuse benefits covered by your group policy as a result of the federal Mental Health Parity and Addiction Equity Act enacted in late 2008.

The law requires that health plans provide expanded mental health and substance abuse benefits for insured and self-funded large groups. However, unlike New York law, group size is determined by the average “total” number of employees. A group with an average of 51 or more total employees during the prior calendar year is considered “large.”

This means that in New York, a small group with 50 or fewer eligible employees, but with an average of 51 or more total employees, is subject to the federal Mental Health Parity and Addiction Equity Act.

This is why we now must ask you for counts of your eligible employees and average total employees.

Patient Protection and Affordable Care Act
Section 2718 of the Public Health Service Act, as added by the Patient Protection and Affordable Care Act, requires health insurance issuers to submit a medical loss ratio report to the Secretary and requires insurers to issue a rebate to enrollees if the issuer’s medical loss ratio is less than the applicable percentage established in section 2718(b) of the Patient Protection and Affordable Care Act. There is a medical loss ratio reported for small groups and a medical loss ratio reported for large groups.

New York State Community Rating
Under the New York insurance law, all small groups must be community rated. This means that the premium rate that a small group pays is based on the average claims experience of all small groups enrolled with a particular health insurance company. In order to level the playing field, all insurance companies must provide information to the New York State Department of Financial Services that identifies small groups vs. large groups. This is part of a process to stabilize community rates for all small groups in New York. Therefore, it is important that we accurately identify all small groups that offer one of our insurance plans.

What if my company is no longer in business?
If your business is no longer active, you do not need to complete the form but we do need you to note that on the form and return it.  

What happens if I do not return the form?
Since much of the information on this form is needed in order to comply with state and regulatory requirements, we will not be able to renew your coverage if the form is not returned.    

Where do I find my group number and sub group number?
You should be able to locate your group and sub group numbers on your bill or annual rate notice.  If you cannot locate it you may leave this blank.  Since we have your customer number we will be able to locate your group that way.

What is ERISA?
The Employment Retirement Income Security Act of 1974 is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans.  Most plans are governed by ERISA with the exception of non-federal governmental plans and some church plans.

Why do you need to know if my plan is governed by ERISA or not?
It is important that you know whether you are governed by ERISA or not because if rebates are due, under the medical loss ratio provision of the Patient Protection and Affordable Care Act, the plan sponsor (employer group) will be responsible for the distribution of the funds to their employees.  The majority of group health plans are governed by ERISA, even very small ones.  Whether or not you are governed by ERISA dictates how that money needs to be distributed.  If you are unsure whether your plan is governed by ERISA or not you should consult your legal counsel or accountant to assist you in making the determination.  

For additional information regarding ERISA, please visit:

U.S. Department of Labor: ERISA Information

Guidance on Rebates for Group Health Plans Paid Pursuant to the Medical Loss Ratio Requirements of the Public Health Service Act

What is an ERISA plan year and why do you need to know this?
ERISA plan year is the calendar, policy, or fiscal year on which the records of the plan are kept. This information is important because if you are governed by ERISA, mandates under the Patient Protection and Affordable Care Act will apply at the next plan year after the effective date.  

I am a small group and don’t offer a retirement and/or pension plan so why wouldn’t I check no for the ERISA question?
ERISA does not only govern how retirement and/or pension plans are to be handled. ERISA covers pension plans and welfare benefit plans (e.g., employment-based medical and hospitalization benefits, apprenticeship plans, and other plans described in section 3(1) of Title I). Plan sponsors must design and administer their plans in accordance with ERISA. Title II of ERISA contains standards that must be met by employee pension benefit plans in order to qualify for favorable tax treatment. Noncompliance with these tax qualification requirements of ERISA may result in disqualification of a plan and/or other penalties.

What is a medical loss ratio?
A medical loss ratio is the percentage of premium dollars insurers spend to provide covered medical services and improve the quality of health care for their members.

What are the medical loss ratio requirements under the PPACA?
The medical loss ratio provision under PPACA requires health insurance plans to report on various expenses, meet minimum medical loss ratio thresholds and provide rebates in the event that the minimum medical loss ratio is not achieved.

For additional information regarding medical loss ratio as it relates to PPACA, please refer to our FAQ under the medical loss ratio reporting section. 

What is a SIC Code?
Standard Industrial Classification codes are four- to seven-digit numerical codes assigned by the U.S. government to business establishments to identify the primary business of the establishment. The OSHA website should assist you in determining your SIC code.  

If you are unable to locate your SIC code, you may leave this question blank.  

What is my next renewal date?
Your next renewal date is the date when your plan will renew and your rates will change.  This usually coincides with your open enrollment, but that is not always the case.  

What is a tier?
Tier refers to the rate structure that you have set up for your group.  For example, if you have two sets of rates for your group, you are a two tier, if you have three sets of rates, you are a three tier, and if you have four sets of rates, you are a four tier.  In the applicable boxes, please indicate how much you contribute to the premium for each tier.  

What is the monthly tier contribution?
The monthly tier contribution is how much you contribute to the monthly health insurance premium for your employees.  Often, employer groups contribute different amounts to the various tiers.  If this is the case, you will need to enter a different amount in each of the tiers.  If you contribute the same to each tier, please note the amount for each applicable tier.  

What does contribution effective date and end date mean?
The contribution effective date and end date are the dates for which your employer contribution strategy runs.  For example, if you choose to contribute 50 percent to the premium of your employees for the time period of January 1, 2012, to December 31, 2012, your contribution effective date is January 1, 2012, and your contribution end date is December 31, 2012.   

If I do not have medical coverage with your company, do I still have to complete this form?
The form is automatically mailed or emailed to groups that have medical or medical and dental coverage with us.  If you only have dental coverage with us, you will receive the form prior to your renewal.  The form must be completed before your renewal can be released.

 

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