It’s MLR Rebate Time Again!
The ACA requires insurers to submit an annual report to HHS to account for plan costs. If the insurer does not meet the medical loss ratio standards, this means too large a portion of the premiums charged in the previous year went towards the insurer’s administration, marketing, and profit, instead of going toward paying claims and quality improvement initiatives. In such case, the insurer must provide rebates to policyholders. For 2023, insurers must distribute rebates to employer plan sponsors between August 1, 2023, and September 30, 2023.
Employers should keep in mind that if they receive a rebate, there are strict guidelines as to how the rebate may be used or distributed. Generally, any portion of the rebate that is considered ERISA plan assets (e.g., the portion attributable to participant contributions) must be returned to participants in some form within 90 days of receipt.
For more information, download a copy of our publication, Medical Loss Ratio Rebates: A Guide for Employers.
Does an employee or their dependent experience a qualifying event when they relocate to another city, state, or country?
District of Columbia
Prohibition on Short-Term Disability Offsetting Extended AgainNovember 07, 2023
On October 11, 2023, Mayor Muriel Bowser signed the Short-Term Disability Insurance Benefit Protection Clarification Congressional Review Emergency Amendment Act of 2023 (DC Act 25-228) into law.
DC Act 25-228 extends the prohibition of short-term disability policies reducing benefits (also known as offsetting benefits) based on an insured’s receipt of DC Paid Family and Medical Leave benefits. The prohibition applies to fully insured policies regardless of where the policy is issued but does not apply to self-insured plans. As previously reported, this prohibition was initially effective in May 2021 on a temporary basis and has been extended multiple times since. Under the new Emergency Amendment Act, the prohibition will remain in place for at least 225 more days until June 1, 2024.
Ohio Extends Coverage for Dependents Under Dental and Vision PoliciesNovember 07, 2023
Gov. DeWine recently signed Ohio’s budget bill, HB33, which included provisions amending dependent coverage under dental and vision policies issued in the state in Section 1751.14. The bill extends coverage for unmarried dependents up to age 26 under certain conditions.
To qualify for the extension of coverage, a dependent must meet the following criteria:
- Be the unmarried natural child, stepchild, or adopted child of the subscriber.
- Reside in Ohio or be enrolled as a full-time student at an accredited institution of higher education.
- Be ineligible for coverage under their own employer plan.
- Be ineligible for Medicaid or Medicare.
The amendment applies to fully insured dental or vision plans delivered, issued, renewed, or amended in Ohio beginning January 1, 2024. It is important to note that this amendment does not require an employer to newly offer coverage to dependent children, nor does it extend coverage to the children of a dependent (e.g., grandchildren of the subscriber). Employers are not required to contribute to the premium for the extended period of coverage.
Employers that sponsor insured plans should be aware of this law and should consult with their carrier(s) for additional information.
WA Paid Family and Medical Leave (PFML) 2024 Premium Rate AnnouncedNovember 07, 2023
The Washington Employment Security Department announced in October that the 2024 WA PFML total premium rate will be 0.74% of wages up to the 2024 Social Security cap of $168,600. The new rate is a decrease of the current rate of 0.8% and will become effective on January 1, 2024.
The total contribution of 0.74% is split between employers and employees, depending on the size of the employer. Employers with 50 or more employees working in the state of Washington will contribute up to 28.57% of 0.74%, and their Washington state employees will pay 71.43% of 0.74%. Employers with fewer than 50 employees working in the state of Washington are not required to contribute the employer portion of the premium. However, they must still withhold the employee premium or pay the employees' premiums on their behalf.
Employers with at least one employee working in the state of Washington should notify their employee(s) who work in Washington regarding the new 2024 rate and coordinate with their payroll vendors to update the new rate to be applied on January 1, 2024. (Employers are not allowed to retroactively withhold premiums from employees.)
Washington PFML provides medical and family leave for eligible employees. For additional information, please refer to the state’s dedicated PFML site.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.