BCBSNC- COBRA Changes Effective May 1, 2012

As of May 11, 2012 BCBSNC’s contract with Ceridian to administer Federal COBRA services will end and BCBSNC will begin to handle this internally for all groups by May 1, 2012. Currently with Ceridian, group administrators are required to notify them when a member loses coverage & Ceridian in turn sends a packet to the member notifying them of their COBRA rights. If the member elects COBRA coverage, they are billed by Ceridian, the group administrator must notify BCBSNC to get the member back on the group bill, & Ceridian reimburses the group for the member’s premium. In addition the group administrator initially needs to notify BCBSNC of the termination for the member so they are taken off of the bill as an active employee & if they elect COBRA they are put back on in a two step process. This creates a lot of extra work for the group administrator, who already more than likely handles multiple duties.

Hopefully with this change it will be much simpler for groups, members, & the carrier. Beginning in May, the process will go like this: member loses coverage, group notifies BCBSNC to remove member from active coverage on group, BCBSNC sends packet to member, if member elects they get billed by BCBSNC. The most important advantage for groups with this change is that they will no longer have to front the premium for the COBRA member on their group invoice & wait for reimbursement from Ceridian. BCBSNC will be billing the COBRA member directly, therefore taking the group out of the equation. This will happen at no cost for the groups. BCBSNC will bill the 2% admin fee to the COBRA member, just as Ceridian does. BCBSNC will be notifying current COBRA members with Ceridian of the change as well as mailing COBRA groups a list of their participants to make sure all is accurate. Existing COBRA members appearing on a group’s invoice will disappear once BCBSNC begins billing the member directly. For questions on this process, contact your BCBSNC agent or the BCBSNC COBRA service number at 1-888-694-7860.

COBRA & NC State Continuation

COBRA and North Carolina State Continuation

What is it?          

When a member of a group insurance plan loses coverage, they are offered the opportunity to remain covered by that plan for a designated amount of time, 18-36 months depending on the reason for losing coverage, as long as they pay the full monthly premium amount. Reasons for losing coverage include: resignation, termination for reasons other than gross misconduct, lay-off, or reduction of hours to part-time. A family member covered on an employee’s group can also be eligible to continue if they lose coverage due to divorce or a child aging out of being an eligible dependent, or when they lose coverage if the employee’s eligibility ends for one of the reasons above.

How does it work?         

Once the coverage ends, the member(s) will receive a packet of information, either from the group employer directly or a designated company which administers the continuation benefits, notifying the person of their continuation rights & member has a certain number of days to elect continuation.

Federal COBRA guidelines can be viewed here.

North Carolina State Continuation guidelines can be viewed here.

The Basics of a Health Insurance Plan

Useful definitions:

Coinsurance- percentage divided between patient and insurance company to pay a remaining claim after the deductible is met. The insurance company will pay a certain percentage, 60% for example, leaving the remaining 40% to the responsibility of the member. There are coinsurance maximum amounts designated by each plan that will limit the out of pocket cost for a member in a benefit year. This amount is usually several thousand dollars and when the maximum is reached the member’s responsibility is complete and the insurance carrier would then pay for 100% of the remaining cost for deductible/coinsurance related claims for that benefit year.

Copay- amount you pay at an office visit, primary or specialist. The primary copay can range from $5 to $50. The specialist copay is usually twice the primary amount. Plans also have copays for prescriptions and these amounts are determined by what type of drug you are taking: generic, brand name, or specialty medication. Generics are known to be a much more affordable option for patients when available compared to brand name drugs.

Deductible- amount of money, usually ranging from $250 to $10,000 (though most are between $1,000 and $5,000) that would be applicable for any major service such as surgery, hospital stay, outpatient procedures, etcetera as designated by your plan.

EOB (explanation of benefits)- statement member receives from carrier for each processed claim providing information about how the claim was paid and what amount, if any, is due from member to provider.

Open enrollment- designated period of time that a member has to make plan changes for the following benefit year without penalty or requiring a qualifying event.

Premium-  cost of the insurance plan which member must pay to carrier to keep policy in place.

Preventive Care- services considered to be critical to the monitoring of general health or prevention of diseases for all members. Most plans will pay for these services in full with no cost to the member as an incentive to promote preventive care and awareness of general health. This is an opportunity to see your primary care physician once a year to have a physical and check blood pressure and cholesterol, etc. Similarly, dental plans cover a preventive exam and cleaning with your dentist once every six months.

Types of health plans:

PPO- this is the “traditional” plan most people are used to. It has coverage for in and out of network, though out-of-network coverage is less, and also copays for doctor visits and prescriptions. There is also a deductible & coinsurance percentage for major claims.

HDHP/HSA- gaining popularity, this type of plan has 2 key parts. The high deductible health plan (HDHP) at the insurance carrier & a health savings account (HSA) at the bank of the member’s choice. Together, these two components give the member tax benefits & very good coverage after the deductible is met. Preventive is free, but all other services including prescriptions are paid by the member to accumulate the deductible amount. Once the deductible is reached, the health plan pays the coinsurance percentage. It is usually recommended that the member have a plan that pays 100% after deductible, which ensures the member’s cost is better controlled each benefit year. Think of the HSA as a tax sheltered money market account that can be used for medical purposes. It can be used to reach the deductible, pay for qualified medical expenses for family members (even those not on the member’s health plan), dental expenses, and prescription glasses/contacts/sunglasses. A complete list of qualified medical expenses can be found at the IRS website as they designate the rules of this type of account. They also establish deposit limits for the account each calendar year.

HRA- a Health Reimbursement Account is an option for employer’s when offering group benefits to their employees. Essentially, it is an account set up to pay the members back if they incur a certain amount of medical costs that are deductible/coinsurance based. For example, if a group plan previously had a $1,000 deductible and then changes to a $2,500 deductible. The employer can set up the HRA to pay members back if they incur a deductible charge over $1,000. The theory behind this type of plan is that most members do not meet the deductible and therefore an employer can obtain a full year of lower premiums by having a higher deductible plan.

Welcome

Welcome to the Marc Jessup Insurance blog! We have served Eastern North Carolina for twenty-five years by providing health, dental, life, short and long-term disability, and long-term care insurance to individuals and employers. The price tag on employee benefit packages continues to increase each year. Equally on the rise is the desire of employees to obtain the most worth from those benefits. Most companies make great efforts to provide those values, but may have limits due to the demanding nature of their business. We aim to provide ways to accomplish benefits’ objectives for our groups. Our expertise has earned the trust of many clients through the years and our staff of professionals create personalized benefit packages that meet the needs of your company and workers. We stay informed on developments with continuing education, cutting edge resources, including Zywave technology, and a vast community of insurance resources.

Our intent for these blog entries will be to provide up-to-date, valuable information on the insurance industry, primarily with regards to healthcare reform. By using this advanced technology in today’s modern market, we can deliver the information you need to know in a fast, efficient method. We will be a trusted source of simple, unbiased information. As we all navigate through the complex world of healthcare reform in the years to come, we will make announcements to keep you informed on how each piece of new legislation could impact you & your family. In addition, we will be providing general information as related to healthcare, insurance, and developing and maintaining a healthy lifestyle in hopes of not just improving your knowledge of the insurance realm, but also your health in general which has a direct impact on your medical costs. All of these value-added services we provide intend to improve employee satisfaction, reduce consumer costs, increase efficiency, and improve the quality of care with the overall goal of capitalizing on your benefits.