| Issue: # 50 | April 21, 2010 |
*******Client Alert - Healthcare Update
Warning for Employers renewing 2nd Qtr 2010
Cobra Subsidy Extended *******
As most of you are aware, there are major problems with the Massachusetts Division of Insurance (DOI) and the Major HMO's in the state for groups with 50 employees and less. Until the issues are resolved, we will continue to send out these brief alerts.
As of today the April, May & June rates submitted to the DOI by the major HMO's still have not been approved for groups between 1 and 50 employees. Initially, the carriers stopped issuing quotes, but now they resumed the process. However, the rates being released are not guaranteed, the carriers are noting them as "interim Rates."
This is where it gets confusing. The carriers are using different formulas to determine the interim rates. For example, Blue Cross and Tufts are using base rates from 2009. This means if you renew in June 2010, the interim rate will be based on a June 2009 rate table. So, there is quite a material difference between a June 2009 and June 2010 rate.
One of our clients was originally released a 16% increase for June 2010, but now just yesterday, Blue Cross released their new interim rate - It was a slight rate decrease since it was based on June 2009. This rate decrease was released with a disclaimer that it is just temporary. When the issue with the DOI is finalized, the new rates will then be released and a retroactive adjustment will be made!
On the other hand, Fallon and Harvard are using a March 2010 rate for the interim rate. So, with this methodology, the difference should not be so material. However, we also just heard that these carriers may change to the 2009 table!
Regardless, since there are no rates that are truly guaranteed as of this very moment, it is very difficult for you, the business owner, to make a decision on your April, May or June renewal. We will have to re-examine the renewal in another month or two, or whenever final guaranteed rates are available. We will work with you to get through this period of volatility.
If you do not renew in April, May or June, you have nothing to worry about. For those who do, you may see wide fluctuations in your bill, but in the end you will pay for 2nd qtr of 2010 approved rates. Please budget accordingly.
On another note, as we mentioned last week, another vote was taken on Cobra. The COBRA subsidy that ended March 31, 2010 has been extended through May 31st, 2010.
If you have any questions, send us an e-mail. We hope you find these newsletters helpful, please forward to anyone who may find this of interest. To learn more about Advantage Benefits click here. Your referrals are greatly appreciated!
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