Kaiser and Molina Discuss American Rescue Plan’s Effect on Marketplace

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Official Kaiser Holding Statement for Brokers and Employer Groups Regarding American Rescue Plan Act (ARPA).

On March 11, 2021, President Biden signed into law the most recent COVID-19 relief package, the American Rescue Plan Act of 2021 (ARPA). This COVID-19 relief package covers a wide range of issues and includes new COBRA continuation coverage election, notice, and premium assistance requirements. 

The premium assistance will be 100% of the total cost of federal and/or state COBRA continuation health coverage and will be available for eligible individuals starting April 1, 2021 through September 30, 2021. ARPA provides for an extended COBRA election period and requires the COBRA administrators (typically a third-party administrator (TPA) chosen by an employer group health plan sponsor or, in the case of a multi-employer plan, a multi-employer trust) to issue:

        •  Notices to eligible individuals describing the premium assistance and

        •  Extended COBRA election notices. 

COBRA administrators also must provide a notice of expiration before the premium assistance expires.

In most cases, the premium for eligible individuals will be funded through a payroll tax credit against employers’ quarterly taxes. The premium tax credit is payable to the employer maintaining the group health plan, or to the plan itself for multi-employer plans.  

We are seeking additional information on the circumstances in which the tax credit is payable to Kaiser Permanente, e.g. when the group health plans are small employers with under 20 employees; churches.

Customers should seek advice from their tax accountant, attorney, consultant or broker to determine their eligibility for this tax credit. Kaiser Permanente is currently reviewing all aspects of ARPA and will process COBRA elections consistent with the requirements of this new law. 

Legal Alert: COBRA Subsidies and COVID-19: Who Gets the Credit?

The United States Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) enables qualified beneficiaries who lose health benefits due to a qualifying event to continue group health benefits.

The American Rescue Plan Act of 2021 (ARPA) provides for a 100% COBRA premium subsidy for individuals who were involuntarily terminated or whose hours were reduced and who enroll in COBRA coverage from April 1, 2021 to September 30th of 2021. The subsidy is not available for:

  • Individuals who voluntarily terminate employment (i.e., they quit or resign),
  • Involuntarily terminated employees (or employees whose hours are reduced – voluntarily or involuntarily) who:
    • are eligible for or become eligible for other group coverage (other than excepted benefits)
    • are eligible for or become eligible for Medicare
    • reach their maximum coverage period.

The employer pays the premium and recoups the money through a refundable tax credit against the taxpayer’s (employer’s) Medicare tax.

For fully insured group health plans subject to COBRA (20 or more employees), the employer receives the credit.
For self-funded group health plans (any size) the employer receives the credit.
For fully insured group health plans sponsored by employers with less than 20 employees and subject to state continuation/mini-COBRA, the insurer receives the credit.
For coverage under a multiemployer/union plan, the plan receives the credit.

Early versions of the ARPA legislation contained language suggesting that insurance carriers (for employers of any size with fully insured plans) would receive that credit. This led to speculation that employers would have to negotiate with the carrier to receive credits for the premiums they paid on behalf of employees and former employees on COBRA. This is no longer the case based on the final language of ARPA.

DICKERSON INDIVIDUAL MARKETPLACE

Extended Access Opportunity to Enroll in More Affordable Coverage Through HealthCare.gov

Building on the success of the current 2021 special enrollment period in response to the COVID-19 Public Health Emergency, and acknowledging that the COVID-19 public health emergency (PHE) continues to constitute exceptional circumstances that are sufficient to qualify individuals for an exceptional circumstances SEP, CMS will extend access to a 30-day SEP on HealthCare.gov until August 15, 2021. Members need to re-select their current plan or select a new plan from April 2- August 15 to see savings this year. (CA members have the entire year).

Increased subsidies will begin inApril and members will see premiums reduce by as much as 100%. If a member doesn’t opt in this SEP, they will still see tax credits on their federal income tax return next year. Click here for more.

A Notice to LA Care Covered CA Partners – 2020: 1095-A Correction

We are notifying LA Care Covered CA partners that incomplete 1095-A forms were released in preparation for 2020 Tax Filing.  Covered California has since resolved this issue. L.A. Care Covered and Covered CA anticipate all 2020 1095-A forms will be corrected and mailed out by April 5th.  If members have not received their corrected 2020 1095-A form by Aril 8th, members may call Covered CA at 800-300-1506 For questions regarding filing their 1095-A form, please refer members to their tax professional. We sincerely apologize for the inconvenience this has caused.

Molina Healthcare American Rescue Plan FAQs

Frequently Asked Questions for HealthCare.gov Enrollments

When will the increased subsidies be available?
  • Extra tax credits will be available to preview and opt into beginning April 1st on HealthCare.gov
  • 2021 Special Enrollment Period (SEP) in response to the Covid-19 pandemic runs from 2/15 through 5/15
  • New enrollments and plan switches can only occur through 5/15
  • Individuals can opt into the additional subsidies at any point throughout the year outside of the SEP period
  • These expanded subsidies will be available to clients with on-exchange plans throughout all of 2021 and 2022
What does a member need to do to take advantage of these new subsidies?
  • Currently HealthCare.gov states they will NOT automatically update premium tax credits on behalf of current enrollees, so members will need to go back into their account and opt in to determine their APTC eligibility
Does a member need to opt in by the 15th of the month for the new subsidies to take effect by the 1st of the following month?
  • No, the subsidy redetermination process follows the same deadline guidelines as the current Pandemic SEP, so a member needs to opt in by the end of the month for the subsidies to take effect the first of the following month, e.g. April 30th for a May 1 start date
What happens if a member doesn’t opt into the expanded subsidies in 2021?
  • Tax credits will be reconciled when on-exchange members file their 2021 taxes in 2022
What happens if a member isn’t enrolled in an on-exchange plan for 2021, can they still get the new subsidies?
  • Members have to move to an on-exchange plan by 5/15 in order to be eligible to receive the expanded APTC. Off-exchange plans do not qualify for APTC reconciliation on their taxes.
What if a member is on-exchange plan for 2021, but didn’t provide their income because they didn’t qualify for subsidies at the time, will they qualify for subsidies now?
  • They will need to update their income on-exchange and opt-in to have their income verified on their taxes
What impact will this have on consumers?
  • The subsidy increases are large enough that people with incomes at:
  • 100-150% of the FPL will have $0 monthly premiums if they select most Bronze plans or 1st or 2nd lowest cost Silver plan in their region
  • 150-250% of the FPL could see their subsidies increase by 50-70%
  • 250-400% of the FPL could see their subsides increase by 30-50%
  • Greater than 400% of the FPL will be eligible for subsidies for the first time ever if their insurance costs exceed 8.5% of their income (Gross or net)
What about members under 100% FPL?
  • Unless these members received Unemployment Insurance during one week of 2021 they will not be eligible for
What plan determines how much subsidies a consumer will receive under the new law?
  • The second lowest cost Silver plan in a region will continue to be the benchmark plan for subsidies
If an employer offers dependent coverage without financial help for those dependent premiums can those dependents now qualify for the expanded APTC?
  • At this time the new law does not change the eligibility for dependents who are offered coverage as long as the coverage offered to the employee only is considered affordable, which not means it has to cost less than 8.5% of their household income
What happens if a member received Unemployment Insurance in 2021?
  • Individuals who are approved for or receive an Unemployment Insurance benefit during any week in 2021 will have their income treated as 133% of the Federal Poverty Level (FPL) for purpose of calculating their tax credit eligibility, regardless of their total annual income
  • This means they will be eligible for $0 monthly premium if they select most Bronze or the two lowest cost Silver plans
  • These subsidy increases will expire after 2022 and will revert to current levels
Will this law change deductibles or out-of-pocket maximums?
  • No, not unless a member enrolls into a different plan. If they enroll into a different plan type with Molina we are working to get any out of pocket costs already paid credited to your new plan’s accruals towards the deductible and out of pocket maximum.
Will this law change the CSR (Cost Sharing Reduction) Silver plans?
  • No, the FPL guidelines for these plans will not change under this law
If a member changes plans or opts into the new subsidies will this change the Agent or Record on file?
  • No, the AOR should stay the same. The AOR would only change if another broker assists the member with their plan change or redetermination and the member updates the AOR.
What about members’ 2020 taxes if they received too many subsidies?
  • Members will not be required to back additional subsidies they received on their 2020 taxes
  • If they have already filed their taxes and paid back 2020 subsidies, they should file an amendment
What about members on COBRA?
  • ARP will allow up to six months of temporary COBRA subsidies to cover 100% of the premium cost, beginning no earlier than April 1, 2021 and ending no later than September 30, 2021, depending on current COBRA eligibility
Where can I find more info from Molina on the ARP?
  • Go to www.molinamarketplace.com and click on the banner that says “Your premium may be lower due to recently passed legislation, See how you might benefit”
Where can I order Molina marketing materials?
For more information on Washington Healthplanfinder and Covered CAARP implementation:

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DICKERSON INDUSTRY NEWS UPDATE

Democrats Eye Medicare Negotiations to Lower Drug Prices

Democrats, newly in control of Congress and the White House, are united behind an idea that Republican lawmakers and major drugmakers fiercely oppose: empowering the Department of Health and Human Services to negotiate the prices of brand-name drugs covered by Medicare. But they do not have enough votes without Republican support in the Senate for the legislation they hope will lower the price consumers pay for prescription drugs. That raises the possibility that Democrats will use a legislative tactic called reconciliation, as they did to pass President Joe Biden’s covid relief package, or even eliminate the Senate filibuster to keep their promise to voters. Click here for the whole story.

Most Californians get 2 weeks of paid sick leave under new COVID-19 law

Millions of California workers will get up to two weeks of supplemental paid sick leave to take time off to get vaccinated, isolate themselves from potential exposure to the coronavirus, or deal with the effects of COVID-19, under a bill signed by Gov. Gavin Newsom Friday.

“Paid sick leave gives workers the time they need to care for themselves and loved ones while keeping their coworkers, families and communities safe,” Newsom said in a statement. “”Even as case rates and hospitalizations decline and vaccinations ramp up, we can’t let our guard down and must do all we can to stop this virus from spreading.” Click here for the whole story.