It’s MLR Rebate Time Again!
The ACA requires insurers to submit an annual report to HHS accounting for plan costs. If the insurer does not meet the medical loss ratio standards, they must provide rebates to policyholders. Rebates must be distributed to employer plan sponsors between August 1, 2022, and September 30, 2022. 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. The plan asset portion of a rebate generally must be applied within 3 months of receipt by the employer, or the amount would need to be held in trust to comply with ERISA’s requirements.
For more information, please see our recent FAQ.
Medicare Part D Notice to Employees Deadline Is Today, October 14, 2022
Employers must notify individuals who are eligible to participate in their medical plan whether the plan’s prescription drug coverage is “creditable” or “non-creditable” as compared to Medicare Part D coverage.
As a reminder, the Medicare Part D notice of creditable coverage should be distributed to employees by October 14, 2022. This notice serves to inform Medicare-eligible individuals of whether or not their employer group coverage is creditable. That information is necessary to help such individuals avoid paying higher premiums (also known as late enrollment penalties) for Medicare Part D coverage.
Employers should consult with their service providers to determine whether their coverage is creditable using either the simplified determination method or actuarial analysis. Also, keep in mind that CMS provides a model notice for employers.
For further information, download Medicare Part D Disclosures Guide.
Is a supplemental life plan offered to employees subject to ERISA’s requirements even if employees pay the full premiums post-tax?
Office of Insurance Regulation Issues Emergency Order following Hurricane Ian
October 11, 2022
On September 28, 2022, the Office of Insurance Regulation (OIR) issued an emergency order regarding the suspension of rules due to the state of emergency created by Hurricane Ian. The order is directed at entities regulated by the OIR, including life and health insurers.
The order extends the time limit for an insured to perform any required act or transmit information or funds regarding certain health or life insurance contracts, which required action on or after September 28, 2022, to November 28, 2022. The order also prohibits the accrual or assessment of interest, penalties, or other charges resulting from the extensions. The extensions do not apply to new policies effective on or after September 28, 2022.
The order also prohibits insurers from canceling or failing to renew certain health or life insurance policies or contracts except at the written request or concurrence of the policyholder during the time period between September 28, 2022, and November 28, 2022. Furthermore, insurers must withdraw all notices of cancellation that affect a state resident and are issued or mailed within ten calendar days preceding September 28, 2022, and reissue these notices on or after November 28, 2022. In such situations, the order requires the insurer to extend the coverage through November 28, 2022 (or a later date specified by the insurer). According to the order, the premium for such an extended term of coverage shall be the appropriate pro rata portion of the premium for the entire term of the policy. This rule does not apply to new policies effective on or after September 28, 2022.
The order is directed at insurers, but employers may want to be aware of the temporary relief measures and should contact their insurers for further information.
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.