Issue: # 121
| March 30, 2015
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Dear :
First Quarter 2015 is now wrapping up! Renewal increases were manageable basically most with a "single digit" increase. Check out the section below on the new 4 tier Rating System that Employers with less than 50 employees are now subject to. Employers have to not only pay attention to the bottom line of the price increase, but with the new pricing methodology in place, we are finding that "Full Family" plans are subject to the largest increase.
If you have Harvard Pilgrim as your carrier, pay close attention to the new Prescription Drug format. All small group renewals will be released with the new formula, but, you can still have the "old formula", you just have to pay more for it.
Generally speaking, all the carriers have made further "tweaks" to their plans and have introduced new plan designs. The nuances of all the plans are complex and its a challenge to stay on top of. Pay attention to limited networks, coinsurance levels, co-payments ON TOP of deductibles, and co-insurance on Prescription drugs!
Don't forget that July 1 will be the start date of the new Massachusetts Mandated Sick Pay Plan. See more details below. Most of our clients have group short term disability plans in place, this new law concentrates on the first 40 hours only, so it will have little impact on group plans.
For good news, please ask us about the Mass. State Wellness Credit. Especially our clients that are manufacturers. If you are spending money on "safety" then you can take advantage of this credit. Check out the video below of the most recent wellness fair. Take advantage of up to $10,000 in a State Tax credit.
If you have any questions send us an e-mail and if you think anyone would benefit from this information,. please forward the newsletter to them.
| Latest Wellness Fair video |
Thanks
Bill Randell CLU ChFC Vanessa Costa CLU ChFC
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Harvard Pilgrim new 4/5 tiered Prescription Plan
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Insurance carriers continually try to invent new ways to pass on higher cost claims to subscribers with corresponding higher out-of-pocket costs to cut down on utilization. Harvard-Pilgrim has recently introduced a new twist to the Prescription Drug co-pays. You can select either a 4 or 5 tier schedule with the first tiers having traditional co-payments, however the last tier has a co-payment equal to 20% of the cost of the drug to a maximum of $250. Pricing is extremely competitive with this PCS option, but you need to be very careful that employees and dependents are not taking the higher priced specialty drugs in this category prescriptions.
Here is the listing for Harvard-Pilgrim specialty prescriptions.
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Massachusetts voters approved a ballot referendum Nov. 4, 2014, that requires businesses to allow their workers to earn sick leave takes effect July 1, 2015. Under the measure, employers with: - 11 or more employees must let workers earn up to 40 hours of paid sick leave each calendar year.
- 10 or fewer employees also must allow workers to earn 40 hours per year but the sick days don't have to be paid.
Both full-time and part-time employees are eligible to earn the sick time, under the measure. Under the new law, for every 30 hours worked, an employee accrues one hour of sick time-up to 40 hours. New workers start accruing from the first day of employment, but the leave can't be used until the worker has been employed for 90 days. The accrued but unused leave doesn't have to be paid on termination.
Sick time may be used if employees are ill or have a medical appointment, or if they must care for an ill family member. They also must be permitted to use sick time to receive assistance related to domestic violence.
Employees may carry over up to 40 hours of unused sick time to the next year, under the measure, but employers aren't required to permit use of more than 40 hours of sick time in any calendar year.
Employers that already provide their employees paid time off under a PTO (paid time off), vacation or other paid leave policy are not required to provide any additional paid sick time under the new law, provided they permit employees to use at least 40 hours per calendar year for the purposes covered under the law. Furthermore, this law does not override any employer's obligations under any collective bargaining agreement, contract or benefit plan with more generous provisions.
For even the smallest company, this means that effective July 1, they will have to start tracking employees' time worked so they will know how much sick time they have accrued.
Most of our clients have Group Short Term Disability in place. Remember, group disability applies only to the EMPLOYEE. It does not provide benefits for family members, or to take care of family members. In order to receive benefits, the Employee must be deemed disabled by a physician. Most group policies have a one week waiting period for maternity, sickness. surgery, etc. So, this does not interfere with the new Mass Sick Pay Policy which applies to the first week only.
Where we may see some overlap is with benefits paid for accidents. Typically accident benefits are paid on the very first day. So, if an employee opts to use Mass Sick Pay benefits and files a disability claim, the insurance carrier will offset or reduce the benefit paid out by Mass Sick Pay. This will only apply to the first week of benefits! After one week, if the employee is still certified as disabled, then the group plan kicks back in.
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Mandatory four tiered rates in small group (under 50)
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In the small group marketplace (under 50 employees), employers had the ability to pick the most advantageous premium structure that worked best for the group. The pricing strategy was determined primarily by the makeup of the "family" level. Meaning, if you had 10 family plans and 7 of them were employees and spouses, no children, we would recommend a 3 tier system which included a rate for " two people". In the same example, if there were 14 true full families, then the traditional 2 tier system of Single - Family, would work best. At every renewal we would examine the demographics of your group and make a recommendation.
Now, in 2015 due to National Health Care Reform, a 4 tier rate pricing structure will be released as follows:
* Single
* Employee and Spouse
* Employee and Child or Children
* Full Family
Lets examine a small group renewal of 4 people to see the impact of the new pricing tiers. The group is made up one single, one employee and spouse, one employee and child, and one full family. Lets compare the old renewal strategy vs. the new 2015:
- Single: 400 per month
- Family: 1000 per month
- Total Monthly: 3,400
The new 2015 renewal rates will look like this:
- Single: 440
- Employee/child (chidren): 770
- Employee/spouse: 880
- Family: 1320
- Total monthly: 3,410
When you examine the total monthly premium, this group received a very small increase from $3,400 to $3,410 per month, how would the employer in this example calculate the weekly employee deductions?
Basically the "family" premiums are hit the hardest. Advantage Benefits can review this new pricing strategy with you and make recommendations.
The Affordable Care Act (ACA) mandates new rules about how insurance carriers calculate premiums for small group business (1-50 eligible employees). As of September 5, all insurance carriers have been informed of how this must be done beginning January 1, 2015. Although the new methodology is premium neutral, there are a few differences from our current methodology.
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Annual well-care physicals again!
We say this all the time, but this is most under-utilized benefit by all our companies and employees. A typical visit with blood tests is probably worth anywhere from $400 to $600.
An employee who opts not to have the annual physical is not taking advantage of this $500 benefit that you and your employee pay for. If this employee has a spouse and two children, then the money left on the table exceeds $2,000.
More importantly, however, annual physicals provide the opportunity to catch a sickness/illness in the early stages to avoid larger claims later. Lower claims mean lower premiums!
In addition, we get more questions/problems with annual physicals on a month to month basis more then any other issue. There is NO Co-payment due for an annual physical but we find many doctors offices ask for one. We have also seen the Labs ( Quest diagnostics) ask for a credit card as well.
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