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C.L. "BUTCH" OTTER
DEPARTMENT OF INSURANCE
700 West State Street, 3rd Floor
P.O. Box 83720
Boise, Idaho 83720-0043
WILLIAM W. DEAL
Idaho Carrier Questions and Answers, Part 5 – September 25, 2013
The following questions have been received by the Idaho Department of Insurance regarding the Idaho Health Insurance Exchange and SHOP (Idaho Exchange), the filing process, Qualified Health Plan standards, and other related topics. The answers are intended to offer guidance on current issues based on the DOI’s current understanding of applicable federal and state law requirements. If you have any concerns regarding the accuracy of any of the guidance, please contact Wes Trexler at the DOI by phone or email at 208-334-4315 or email@example.com. The DOI will continue to release additional information and revise these responses as needed.
- How do new federal regulations and the exchange change how Idaho carriers determine if an employer qualifies as
a small group in 2014?
A. For small groups not participating in the Small Business Health Options Program (SHOP), Idaho’s definition of a small employer and method of counting employees, found in Idaho Code section 41-4703(28), will continue to apply in 2014 and 2015. As of January 1, 2016, the federal method of counting employees, provided by the IRS at 26 USC 4980H, will apply, and small employers will be defined as those employing 1-100 employees. For small groups participating in the SHOP, the federal method of counting employees will apply as of January 1, 2014; however, small employer size will continue to be capped at 50 until January 2016.
- While Idaho insurance code section 41-4708(3)(f)(i)
requires insurers to offer to cover dependents, are small groups required to provide coverage to spouses and children
dependents of employees?
A. Idaho code does not require small employers to provide coverage to spouses or dependents of employees, so small employers may provide coverage to employees only, or to no one. Federal regulations also do not impose a requirement for small employers to offer coverage. To participate in the SHOP, the small employer is required only to provide coverage to full time employees, and is not required to provide coverage to spouses or dependents.
- What Idaho and federal regulatory requirements apply to large groups regarding coverage of spouses and children
A. Idaho regulations do not require large employers to offer coverage to employees, spouses or dependents. The new federal regulation requires large employers, as of January 1, 2015 (per IRS notice 2013-45), to offer coverage to full time employees and their dependents. If coverage is not provided, the large employer will be assessed a tax penalty as defined in IRS code 26 USC § 4980H.
- Since the market reforms include guaranteed availability, must an individual health carrier continue to actively
market or offer the Idaho Individual High Risk Pool plans?
A. Individual health carriers will no longer be required to offer Individual High Risk Pool plans for new coverage beginning January 2014 since the eligibility requirements as provided in Idaho Code section 41-5510 cannot be met. Eligibility through subsections 41-5510(1)(a) and (c) can no longer be met beginning January 2014 due to the guaranteed availability provisions of the market reforms as found in 45 CFR 147.104. The Health Coverage Tax Credit program which is needed for eligibility to the High Risk Pool plans under subsection 41-5510(1)(d) expires December 2013, and therefore individuals will no longer be eligible for the pool through 41-5510(1)(d) after that date.
Idaho Code subsection 41-5510(1)(b) requires the carrier to offer a High Risk Pool plan if the carrier refuses to issue a “substantially similar” plan at a premium lower than the premium for a High Risk Pool plan. The Department has concluded that the non-grandfathered, EHB compliant plans that will be offered both in and outside the Idaho Exchange are not substantially similar to plans available through the High Risk Pool (they will contain richer benefits, have no annual or lifetime benefit caps, lower out of pocket maximums, etc.). Therefore carriers will not be obligated to offer a High Risk Pool plan under 41-5510(1)(b) for coverage years beginning January 1, 2014.
Individuals already enrolled in a High Risk Pool plan will have the option during the open enrollment period as well as upon renewal of the High Risk Pool plan to either remain in the High Risk Pool plan or to enroll in a new individual plan in or outside the Exchange.
- While federal regulations do not provide a special enrollment period upon the expiration of a short-term health
insurance policy since it is not deemed Minimum Essential Coverage, should carriers allow individuals to transfer
to a full EHB compliant health plan at that time?
A. While under federal or state law there is not a mandatory special enrollment period upon the expiration of a short-term policy, a carrier is permitted to offer such an enrollment period if so desired. The DOI highly recommends that carriers advise all short-term policy holders prior to January 1, 2014, that a short-term health policy does not qualify as Minimum Essential Coverage, and therefore the policyholder may be subject to the individual mandate tax penalty unless an EHB compliant health plan is purchased during the open enrollment period.
- At what time and under what conditions should an individual or small group health policy be re-rated after a change
in primary address?
A. For plans issued in the individual Exchange or the SHOP, the premium charged to an individual who changes address to a new rating area but remains within the same service area will not change until renewal. For off-Exchange plans, the issuer has the option to change the premium rate of an individual who changes address to a new rating area but remains within the same service area at either the beginning of the next month after the move or upon renewal. If an individual moves outside the service area for the enrolled plan, a special enrollment period is triggered; the individual must select a new plan and pay the new premium upon enrollment.
- Must employers provide notice to their employees concerning the Exchange and their new coverage options?
A. All employers were required per the Affordable Care Act to send each employee a notice by October 1 2013, stating whether the employer provided health coverage to the employee and informing the employee of the new Exchange marketplace, the potential eligibility for a tax credit, and that the purchase of coverage through the Exchange might end any employer contribution towards health insurance. Originally, a penalty was to be assessed for employers who failed to comply. However, the U.S. Department of Labor announced September 11, 2013, that there is no penalty for not sending the notices. Employers may still wish to send notices in order to avoid repeated inquiries from employees or Exchange assisters on whether health insurance is available. Official guidance on this including model notices can be found at Department of Labor’s Technical Release No. 2013-02.
About the Department of Insurance
The Idaho Department of Insurance has been regulating the business of insurance in Idaho since 1901. The mission of the Department is to equitably, effectively and efficiently administer the Idaho Insurance Code and the International Fire Code. For more information, visit www.doi.idaho.gov.