What is the NJ Small Employer Health Benefits Program Act?
Enacted in 1992, the New Jersey Small Employer Health Benefits Program Act (SEH Act) (N.J.S.A. 17B:27A-17 et seq) has provided significant protections to New Jersey small employers since 1994.� Through the years, the SEH Act has been amended by State laws as well as Federal laws.� Since 1996, standards regarding privacy and security of health information have been governed by the federal Health Insurance Portability and Accountability Act (HIPAA).� Various mandated requirements of the federal Patient Protection and Affordable Care Act (PPACA) became effective starting in 2010 with the most recent requirements becoming effective beginning in January 2014.�
Can I purchase small group coverage if I am a self-employed husband and wife with no other employees?
No, a business with only husband and wife does not qualify under the new federal law requirements.�
Does the employer have to contribute a certain amount of premium?
The employer must contribute at least 10% of the total group�s premium.
Am I required by law to provide health benefits for my employees?
You are not required by law to provide coverage to your employees if you are a small employer. However, if you provide small group health coverage, you are then subject to comply with the requirements of state and federal laws. Only ALEs (Applicable Large Employers) are subject to the Employer Shared Responsibility provision under section 4980H of the Internal Revenue Code (added to the Code by the Affordable Care Act). An ALE, defined in the text of the ACA, is an employer who averaged at least 50 full-time employees (including full-time equivalent employees (FTEs)) on business days during the preceding calendar year.
How does a carrier determine the rates for my group?
Rates are first based on the plan of benefits selected. Age, geography and family status are the only factors used in determining the premium for each group. Gender is no longer a factor under ACA. Carriers use modified community rates for small employer plans. Rates are not based upon the actual or expected claims history of any particular person or persons in the small employer group. In addition, carriers do not rate based on gender and there is no special rate for smokers versus non-smokers. Prior to 2014 carriers rated policies based on the average of all their employees and dependents. This is known as a composite rate. Starting in 2014, carriers were required to use separate rates for each employee and their dependents. This is known as age rating. Carriers now use a child rate for ages 0 through 20. This is incrementally increasing every year from age 21 through 64. Age 64 and over remains the same. Medicare carve out rates have been eliminated. Each carrier must set its rates so that its highest rate is not more than 2 times its lowest adult rate for a specific individual plan. (This is referred to as a 2:1 rate band.)
Will my rates change if I deal directly with the insurance carrier instead of using a broker?
The initial and renewal rates will remain the same whether you go directly to the insurance carrier or use a broker.
Under the Federal definition, an �Employee" means an individual who is an employee under the common law standard as described in 26 CFR 31.3401(c)-1. For purposes of determining whether an employer is a small employer, employee excludes an individual and his or her spouse when the business is owned by the individual or by the individual and his or her spouse, a sole proprietor, a partner in a partnership, and more than a two percent shareholder in a Subchapter S corporation as well as immediate family members of such individuals. Employee also excludes a leased employee.
Do I include employees from other companies that I own?
All persons treated as a single employer under subsection (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as one employer. In the case of an employer that was not in existence during the preceding Calendar Year, the determination of whether the employer is a small or large employer shall be based on the average number of Employees that it is expected that the employer will employ on business days in the current Calendar Year.
When is an employer subject to the Medicare Secondary Provision (TEFRA/DEFRA)?
The working aged Medicare Secondary Provision applies only to group health plans of employers with 20 or more employees and to multi-employer and multiple employer group health plans in which at least one employer employs 20 or more employees. This requirement is met if an employer has 20 or more full-time and/or part-time employees for each working day in each of 20 or more calendar weeks in the current or preceding year.
When is an employer subject to COBRA?
All employers who had 20 or more employees on 50% of its typical business days during the preceding calendar year are subject to COBRA. The only exceptions are: (a.) The federal government has its own rules regarding continuation coverage and (b.) Church plans (within the meaning of Section 414(e) of the Internal Revenue Code. Full-time and part-time employees count regardless of their eligibility for the group health plan. Under the 2001 Final Regulations, part-time employees are counted as a fraction of a full-time employee.
Am I required to cover a certain percentage of eligible employees?
Yes, this is known as the 75% participation requirement. Credits are available to go towards this requirement. If an employer pays 100% of the cost of coverage, a carrier cannot require greater than 75% participation.
Which employees can waive coverage and be credited towards the group participation requirement?
The law does not allow a carrier to impose a participation requirement of more than 75% of all eligible employees. There is no participation requirement for dependents. A carrier shall count as covered under the small employer's health benefits plan, for the purpose of satisfying employee participation requirements, a full time employee who:
-Is covered as an employee or dependent under any fully insured health benefits plan offered by the small employer
-Is covered under Medicare
-Is covered under Medicaid or NJ FamilyCare
-Is covered under another group health benefits plan
-Is covered under a spouse's group health benefits plan
-Is covered under Tricare; or with respect to Small Business Health Options Program coverage only, is covered under an individual plan.
The term employee means an individual who is an employee under the common-law standard. See � 31.3401(c)-1(b). For purposes of this paragraph (a)(15), a leased employee (as defined in section 414(n)(2) [26 USCS � 414(n)(2)]), a sole proprietor, a partner in a partnership, a 2-percent S corporation shareholder, or a worker described in section 3508 [26 USCS � 3508] is not an employee.
Can a small employer cover part-time employees who work less than 25 hours per week?
No, they are not eligible employees.
How do I know if I qualify as a small employer?
An employer that satisfies the requirements of either part one or part two of the definition below is a small employer in New Jersey. "Small employer" means: Any person, firm, corporation, partnership, or political subdivision that is actively engaged in business that employed an average of at least one but not more than 50 eligible employees on business days during the preceding calendar year and who employs at least one eligible employee on the first day of the plan year;
An employer with a business location in the state of New Jersey who employed an average of at least one but not more than 50 employees on business days during the preceding calendar year; and who employs at least one employee on the first day of the plan year. With respect to parts one and two of the definition above, any person treated as a single employer under subsection (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of 1986 (26 U.S.C. � 414) shall be treated as one employer.
Note the emphasis to eligible employees in part one of the definition and to employees in part two of the definition.
Can I have different waiting periods for certain employees?
Waiting periods cannot exceed 6 months. Different classes can be established on bona fide conditions of employment, such as hours worked, salary, title, etc.
Can I offer different plans by class of employee?
Different classes can be established on bona fide conditions of employment, such as hours worked, salary, title, etc. By offering a specific plan or plans for a particular class of employees that class of employee will not be eligible to enroll for other plans offered to other classes employees.
Is there a limit to the number of employees that can work outside of NJ?
The majority of its eligible employees must work in a physical location in New Jersey in order for the employer to be eligible to purchase Small Employer Health Program health benefits plans for the group. An employee that works from his or her home located outside of New Jersey is not considered to be working in New Jersey, even if the employer�s offices are located in New Jersey.
What is an Open Access POS plan?
Open access point of service adds an additional option to the classic POS plan's referral policies. As in an HMO, you can decide to have your primary care physician refer you to in-network specialists and facilities. This option provides the lowest co-pay level. As an added benefit, open access POS plans also let you 'self-refer' to in-network specialists and facilities at what the insurance companies call 'discounted rates.' When you 'self-refer,' you see a doctor, specialist or use a health care facility without having a written referral from your physician.
What is MOOP (Maximum Out-of-Pocket)?
"Maximum out of pocket" means the annual maximum dollar amount that a covered person must pay as copayment, deductible, and coinsurance for all covered services and supplies in a calendar year. All amounts paid as copayment, deductible, and coinsurance shall count toward the maximum out of pocket. Once the maximum out of pocket has been reached, the covered person has no further obligation to pay any amounts as copayment, deductible, and coinsurance for covered services and supplies for the remainder of the calendar year. Under ACA, prescription copays and deductibles must be applied to MOOP.
ACA MOOP limits:
2016 - $6,550/Individual $13,100/Family
2017 - $7,150/Individual $14,300/Family
Must I offer continuation coverage to an employee and their dependents?
You must offer continuation coverage to an employee and their qualified beneficiaries upon the occurrence of certain qualifying events (Such as termination of employment, divorce or legal separation, dependent ceasing to be a dependent, reduction of hours, etc.)
Can a carrier cancel my coverage if someone covered has large claims?
A carrier cannot terminate a small group�s coverage based upon the claims experience of the group or a covered individual.
What is the range of deductibles that I can have?
A carrier may offer a range of deductibles for the standard health plans from $250 to $5,000 per covered person. A carrier can offer a HMO plan with a deductible range of $250 to $2,500.
What is the range of coinsurances that I can have?
A carrier may offer a range of coinsurances for the standard health plans from 60% to 90%. A carrier can offer a HMO plan with coinsurance ranges of 50% to 90%.
What is in-network vs. out-of-network benefits?
The amount of benefits paid to a covered person is based on whether a provider of services participates in a network or not. Health care providers in a carrier�s network have agreed with the carrier to a negotiated rate of payment. Any charges in excess of the negotiated rate of payment cannot be billed to the insured person. When a covered person chooses to receive covered services out-of-network, the person is responsible for any charges that the health care provider may bill that exceed what the carrier considers to be reasonable and customary. This is known as �balance billing�. These excess charges do not count toward satisfying any deductible or MOOP requirements in the standard health benefits plan.
What is Dependent Under 31?
The law permits children who no longer qualify to be eligible under a group health plan the option of continuing or enrolling in a parent's group health benefits plan until the child reaches his or her 31st birthday, marries, has a child, moves out-of-state (and does not become a full-time student), enrolls in other group or individual health coverage, or becomes entitled to Medicare.
What is a preexisting condition limitation?
Under the Affordable Care Act, health insurance companies can't refuse to cover you or charge you more just because you have a �pre-existing condition� � that is, a health problem you had before the date that new health coverage starts. They also can�t charge women more than men.
Health insurers can no longer charge more or deny coverage to you or your child because of a pre-existing health condition like asthma, diabetes, or cancer. They cannot limit benefits for that condition either. Once you have insurance, they can't refuse to cover treatment for your pre-existing condition.
How are preexisting conditions limited for groups of 5 or fewer eligible employees?
A health benefits plan issued to a small employer with five or fewer eligible employees, as determined on the effective date of the plan and on each subsequent policy anniversary, may contain preexisting condition exclusion. However, a preexisting condition exclusion shall not exclude coverage for a period of more than 180 days following the enrollment date, and shall relate to conditions, whether physical or mental, manifesting themselves during the six months immediately preceding the enrollment date of the enrollee and for which medical advice, diagnosis, care or treatment was recommended or received during the six months immediately preceding the enrollment date.
A late enrollee is someone who declined coverage when he or she was first eligible to enroll, and decides to enroll at a later date. Late enrollees are subject to a 6-month preexisting condition limitation period. However, if you were covered under another group health plan or a government program at the time of eligibility and enroll within 30 days of your coverage terminating (involuntarily), you will not be subject to any preexisting condition limitation period. This limitation will not apply to anyone who enrolls within 30 days following his or her marriage/civil union/domestic partnership, or the birth, adoption or placement for adoption of his or her child.
What is the annual NJ certification form?
At the time of application, the determination of whether an employer is a small employer shall be based upon the small employer's completed New Jersey Small Employer Certification form. Small employer carriers shall require each small employer covered by a small employer health benefits plan issued by the small employer carrier to that small employer to complete each year the New Jersey Small Employer Certification form. This form shall be sent to the small employer for completion no earlier than 150 days prior to the renewal of the small employer's health benefits plan.
Must I notify a carrier if I am terminating my policy?
A carrier is only required to honor prospective termination requests, not retroactive termination requests. If you make a prospective request to terminate the policy, the carrier will terminate the policy as of the date you specify. You are liable for payment of premiums for the period of time during which the contract remains in force, but the carrier will refund any premiums you have already paid for time period exceeding the date of termination. With respect to requests for retroactive termination, the carrier will terminate your policy on the date the carrier receives the notice, and the refund premium for any remaining days.
What are Domestic Partners and Civil Unions?
New Jersey law currently recognizes domestic partnerships and civil unions in addition to marriages between individuals of opposite gender. Civil unions may be created only among individuals of the same gender. Two individuals of the same gender may form domestic partnerships or of opposite genders, but for purposes of health coverage, only same-gender domestic partnerships are considered. Note that same gender domestic partnerships are no longer formed as a matter of law in New Jersey as of February 19, 2007.
In general, the rights of spouses and partners of civil unions are the same for purposes of health coverage under New Jersey law. If an employer offers dependent coverage to employees, the employer must permit an employee to cover a civil union partner. Employers do not have to offer coverage to domestic partners when offering coverage to spouses or partners of civil unions. However, when an employer opts to offer coverage to domestic partners, the employer must treat all domestic partners consistently. Neither an employer nor a carrier may discriminate in the coverage of a child the employee claims as a dependent based on whether the child becomes a dependent of the employee pursuant to birth, adoption, marriage, civil union or domestic partnership.