| March 10, 2011 | Comments (0)

PROPOSED AMENDMENTS TO 211 CMR 66.00 – SMALL GROUP HEALTHINSURANCE: The MassAHU is a state association and chapter of the National Association of Health Underwriters (NAHU).  MassAHU’s membership is comprised of independent, licensed insurance professionals who specialize primarily in health insurance and employee benefits representing thousands of businesses and hundreds of thousands of families and individuals across the Commonwealth.  Our association and members have been and continue to be active participants in healthcare reform both on the state and federal levels.

MassAHU would like to voice the following concerns regarding the proposed amendments to 211 CMR 66.00, Small Group Health Insurance. After thoughtful review, we have concluded that these amendments will   encumber small business recovery in Massachusetts, placing undue stress on our small business community, negatively impacting employers and their employees alike.

Reference 66.09: Chapter 288 instructs the DOI to adopt regulations in order to carry out the provision of SECTION 29, which include requiring all carriers, as defined in M.G.L c. 176J, to submit small group rate filings for enhanced review by the Division. Our concern is that there are significant unintended consequences to employers as a result of the regulations.  The time frame included in the regulations – 90 day notice from health plans to the DOI and 45 day response by the DOI – is unworkable for the following reasons:

  • If renewal rates and subsequent premiums are not released until 45 days prior to the coverage effective date, this will put significant strain on EMPLOYERS and EMPLOYEES.  While well intended, this provision boxes an employer into an unrealistic and near impossible execution timeline.  The unintended consequences of shortening the cycle of both the incumbent and alternative market review will severely limit an employer’s effectiveness in properly identifying and communicating the most appropriate insurance solution to both leadership and their covered population.  Moreover, given the added complexity of complying with new State and Federal reforms and market realities (e.g. tiered networks), we would recommend more, not less time be provided for an employer to get it right. 
  • Assuming an employer decision can be made prior to  the effective date of coverage, the challenge to communicate such changes to employees, enroll them in new plans,  ensure timely  delivery of identification cards – avoiding disruption and/or confusion in their ability to seek medical care, purchase prescriptions, obtain referrals, etc. remains.
  • As you know, Federal requirements under PPACA (Patient Protection & Affordable Care Act) state that employees need to be notified 60 days in advance of any material plan changes.  Under the above proposed amendment to 211 CMR 66.00 – small group health insurance an employer will find themselves in violation of the Federal requirement unless they defer making a plan change to some date   post the  effective date of coverage.   To remedy this, an employer may decide to postpone making a change in benefits for one or more months.  This creates its own set of problems:
    • Off-anniversary changes are not allowed by many health plans, thereby locking the employer into the current plan for another year, often at rates that may be unaffordable to both the employer and employee(s).  In other words, not making a change on anniversary means a loss of any window of opportunity to modify the current plan with the current carrier  further prohibiting an employer from benefiting  from product innovation resulting from Chapter 288 (e.g. lower cost, Tiered Networks)
    •  If the employer wishes to move to a new health carrier, the employer will still need to renew the current plan for one or more months, requiring multiple communications with employees, multiple changes to the payroll system, and increased cost to the employer by having to pay the renewing plan for one or more months.
    • Changing a plan off-anniversary often signifies a change in the employer’s policy year, impacting other complimentary plans such as Flex Spending Accounts, Health Reimbursement Arrangements, etc., and also requiring changes to their Summary Plan Description and federal filing under ERISA or other laws.  All of this is an increased cost to the employer.
    • Regardless of whether a change is made with the current or new health carrier, deductible provisions of the new plan may mean additional out of pocket expense to the employees, as new deductible accumulation periods may have to be met with the change in policy year dates.  Further, if there is an FSA plan in place, employees will not be allowed to change their FSA elections even if their health plan deductible/copayments change once they have made their annual elections.

 MassAHU strongly recommends that the time frame under the regulations i be revised empowering the employer to make an educated and appropriate decision on coverage and cost.  In addition, this will permit the employer to effectively and strategically execute and communicate this coverage.  If action to rectify the unintended consequences identified in our testimony is not taken, Employers will likely face multiple distracting impediments to the renewal process.

MassAHU urges the Division of Insurance to meet with the health plans to come up with a timeline and a process which will work better for all concerned parties in the future.  Though we prefer longer, we believe that the time frame needs to be adjusted for rates to be available minimally at 60 days prior to effective date of coverage (renewal).  Although this still fails to address compliance with federal requirements, it will move us closer to the way we have been able to do business in the past.  With a full 60 days’ notice, most brokers are committed to helping their employer clients make decisions and communicate them to employees a full 30 days prior to renewal.

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