CalCPA ProtectPlus

Though not mandated to go into effect until January 1, 2011, the Group Insurance Trust has chosen to adopt early the provisions of the Patient Protection and Affordable Care Act (“health care reform”) that affect young adults. Much in the news of late, these provisions are intended to provide wider coverage at lower cost to dependent adult children up to the age of 26 regardless of student status or income. Subscribers should be aware that these changes affect medical insurance only and have no bearing on either Delta Dental coverage or their Vision Service Plan.

Historically, ProtectPlus has offered subscribers coverage of student dependents until the age of 25, if students maintained a minimum of nine units. Under the new rules, those dependents who were covered as of May 31, 2010 can retain their coverage until the first day of the month following their 26th birthday. In addition, they will no longer have to verify their student status. Those who are currently 25 years old and who were not previously eligible, or who lost their eligibility will be allowed to enroll during a special enrollment period immediately preceding October 1, 2010. Further written notification of the special enrollment period will be mailed to subscriber firms in early August.

Under the old ProtectPlus rules, dependents over the age of 19 who were not students but were dependent on their parents for at least 50 percent of their support could enroll in ProtectPlus, but were charged the single employee premium rate. Those in this category have already been folded into their parents’ coverage at the subscriber and child(ren), or family rate. Banyan Administrators has already sent a notice to this effect to benefits managers at firms with affected employees and as of June 1, 2010 premiums were adjusted to reflect these changes.

Subscribers who have children between the ages of 19 and 26 should be proactive about letting their firm benefits administrator know that they have one or more dependents who will qualify under the new rules, especially if those dependents were not previously covered. Forms to enroll these dependents will be sent out in August, so be sure to watch for them, or check online (www.cpaprotectplus.com).

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The federal health care reform law will have a substantial impact on employers. Here are the main issues  that employers will want to be aware of:  

 1. Keeping the same coverage  

Employers will be able to avoid some of the law’s requirements by keeping their coverage the same after the law’s effective date (March 23, 2010). Unfortunately, it is very unclear at this time what kinds of minor changes will alter coverage, or keep it the same; this will be clarified in later regulation.  

 Changes that must be made to all plans include:  

• waiting periods for coverage must be less than 90 days; 
• no lifetime benefit maximum limits;
• dependent coverage for adult children up to age 26; and
• no annual limits on certain types of benefits (unless permitted by later-issued regulation).

2. New benefit and other plan changes If an employer does not keep its coverage the same, employers will need to make additional changes such as:  

• extending 100 percent coverage for preventive care;
• removing any prior authorization requirement or increased cost-sharing for emergency
• services (regardless of whether the services are provided in or out of network);
• no pre-existing limitation for children under age 19; and
• coverage of routine patient costs in clinical trials for life-threatening diseases.

3. FSA/HRA/HSA changes The law also will require changes to these types of accounts. In 2011, employees will no longer be able to receive pre-tax reimbursements from their FSA, HRA or HSA for non-prescribed over-the-counter medications, and the excise tax for nonqualified HSA withdrawals will increase from 10 percent to 20 percent. In 2013, employee contributions to FSAs will be capped at $2,500 annually, with the cap adjusted annually to the Consumer Price Index.  (continue reading…)