Affordable Care Act: 90-Day Waiting Period Limitations and Technical Amendments

March 2014 – The U.S. Department of Labor (DOL), Treasury, and Health and Human Services recently published final regulations for the implementation of a 90-day limit on waiting periods for employee health coverage. The full DOL News Release can be found here.

We’ve created a brief summary of these new guidelines to help you understand the changes and who they affect:  

Who: Employers, as they prepare to comply with group health plan mandates

What:

• Clarification of the definition of a “waiting period,” and what individuals are eligible
• The law prevents a waiting period that exceeds 90 days after an employee becomes eligible for health coverage (employers may choose a shorter waiting period, or no waiting period)

When: 2014 Group Health Plan renewal periods

Some key provisions of the new regulations include:

Waiting Period:  “A period that must pass before coverage for an employee or dependent that is otherwise eligible to enroll under the terms of a group health plan can become effective.” Being considered “otherwise eligible” to enroll in a plan means having met the plan’s substantive eligibility conditions. These conditions include being in an eligible job classification, achieving licensure requirements specified in the plan’s terms, or satisfying a reasonable and bona fide employment-based orientation period.

Bona-Fide Employment-Based Orientation:  The final regulations do not address the duration an employer may use for a “reasonable or bona fide” orientation period. However, proposed regulations have been introduced limiting this timeframe to one month. The measurement of a month seems to be convoluted, but we expect this rule to stick with a 30-day limitation. 

Cumulative Hours-of-Service:  Plan Sponsors can make eligibility contingent upon a 1,200-hour-cumulative-hours-of-service rule. This means an employee must first meet the specific number of cumulative hours set within Plan Documents before their waiting period begins (which may not exceed 90 days, as outlined above).   

Certificate of Coverage (COC):  Carriers and Plan Sponsors will be required to provide COCs to terminated employees through December 31, 2014. This applies to all plans, because some plans may not be subject to the pre-existing conditions rule in 2014, based on the group plan renewal date.

Potential Landmines:  Language within the guidance reads: “Eligibility Conditions based solely on the lapse of a time period are not permissible beyond 90 days. Other conditions of eligibility under a group health plan are generally allowed, unless the condition is designed to avoid compliance with the 90-day waiting period limitation.” In order to illustrate that an employer is not implementing any of the aforementioned “Substantive Eligibility Conditions” strictly to avoid the 90-day waiting period limitation, it would be a wise decision for employers to use these rules for ALL employment related benefits, such as vacation accrual, PTO, and 401k plan participation.

When these rules become effective, (upon 2014 plan renewal) any employee wait period cannot exceed 90 days, even if it began prior to the employer’s 2014 plan renewal. 

For questions related to your renewal or how these requirements affect your heath coverage offerings, contact me.

Maintain privacy through records disposal

Careful document disposal curbs identity theft.

Identity theft is a major problem that is growing each year. Criminals want to use your name, date of birth, Social Security number, and other personal or account information to steal your identity. You can minimize the chances of being an identity theft victim by using safe and secure methods to dispose of important, confidential, or sensitive paper or electronic media storage devices, such as computers, CDs, and flash drives.

Set a goal to keep your information secure and avoid identity theft by taking advantage of free community shred events to dispose of your information. These events take place throughout the year, particularly during the month of April to support Earth Day and the deadline to file income taxes. Listen to your local news, read your local paper, or search the Internet to find an event in your community. You can eliminate a major source of identity theft by participating in these events.

With all the publicity about identity theft — the fastest-growing consumer crime in the country — paying a few dollars a month to add a rider to your homeowner's policy, or as a stand-alone, may be worth considering if it will buy you peace of mind. Coverage typically costs from $20 to $100 a year, and covers some of the expenses you will incur as a result of dealing with identity theft. 

The shredded paper is recycled in an environmentally friendly way into secondary paper products such as paper towels and tissue. In addition, environmentally safe electronics recycling contributes toward a zero landfill goal. You’ll feel good about helping the environment in addition to protecting your identity. When choosing an electronic device recycler, look for e-Steward and R2 certifications. The vendor should be fully committed to data erasure and recycling efforts for e-waste.

Paper or electronic storage device disposal/recycling

Whether you’re shredding paper or having data from a defective or obsolete electronic device destroyed, make sure you choose a recycler that:

• follows the privacy laws and standards
• understands your data security needs
• uses the proper destruction methods for shredding or sanitization and disposal, based on your security needs
• is an environmentally friendly recycler

Submitted by Dawn Alcorn and Debi Baker

Lightning – or power surge? I’m not worried; I’m covered

Lightning and power surge can 

cause damage

In the old days – I am 54 and have been in the insurance business since 1987 – a lightning claim investigation was a pretty simple process. I would simply review whatever resources were available and determine if a thunderstorm had passed through the area on the day the loss occurred. If a storm could be verified, the loss claim was validated.

Lacking other facts to go on, it’s possible that some validated lightning loss claims could have come from other causes. Today, thanks to weather satellites and the World Wide Web, lightning strikes can be verified with pinpoint accuracy.

Why should this matter to you?

Lightning can strike at a considerable distance from your premises and – through the electrical distribution lines that serve your building – result in a power surge that damages your equipment just as a direct lightning strike would.

Because damage was not caused by a direct lightning strike to your premises, it may not be covered by your property policy. But when you purchase equipment breakdown coverage, you don’t need to worry; the damage caused by lightning, or lightning-related surge, is covered.

More information is available about the science of lightning and ways to protect your property:

• The National Weather Service dispels common myths about lightning.
• Eastern Kentucky University’s Smart Computing site offers tips for preventing power surge damage to computers.
• The Illinois Emergency Management Agency has a Lightning Safety Awareness Guidebook.

See our recent post on predicted cost and claim increases in 2014, due to extreme weather patterns like lightning and hail, and how to protect your business, home, and wallet. 

Submitted by Wayne Pinney

President Obama Will Sign Flood Insurance Relief Bill

Read our original post about the bill here: 
Congress Votes To Delay Flood Insurance Hikes

Last week, we wrote a post focused on the decision by both the U.S. Senate and House of Representatives to pass versions of a bill that would reverse certain measures of the 2012 Flood Insurance Reform Act, delaying significant rate hikes in federal flood insurance rates. These delays would mean continuation of a welcome cap on premiums for hundreds of thousands of homeowners.

Since clearing Congress, the bi-partisan bill has now been sent to President Obama, who White House officials say will sign it.

Critics say Washington is caving to pressure to undo some of the overhauls made to correct the budget crisis, for a program that is not fiscally sound or viable in the near term, which may be a detriment to taxpayers in the future. But for homeowners in flood zones, this comes as welcome news and a relief to their wallets.

Read more about the recent update here: http://www.insurancejournal.com/news/national/2014/03/16/323451.htm

2014 Insurance Claims Predicted To Increase

More than 5.6 million people hold flood 
insurance policies in over 21,800 communities 
across the country

Floods. Tornadoes. Hurricanes. Fire. Hail. Damages and spending on weather disasters and a changing climate have been on the rise since 1980 and are projected to increase, in part due to climate change. We Coloradans experienced the catastrophic effects that severe weather can have on our homes, business, and communities last September when we received an average year’s worth of rain in seven short days. The cleanup effort in the aftermath of the flood described as “biblical” by the National Weather Service is just the beginning of costs associated with such severe weather. 

Are you fully covered? Review your policy and make sure it protects you in case Mother Nature decides to impress us again in 2014.

Statistics show the reality that we’re seeing a change in weather patterns. Experts predict more severe weather this year than last, indicating the possibility of higher costs to individuals and communities nationwide, as weather-related claims have risen steadily over the last several years.

Global reinsurance firm, Munich Re, released a report focusing on what it says is a decades-long, increasingly severe series of such events and the costlier insured losses that have accompanied them. They found that the number of weather-related loss events in North America over the last three decades has "nearly quintupled," experiencing the largest increases in weather-related losses of any country. From tornadoes to hurricanes to wildfires, the continent is vulnerable to “every type of hazardous weather peril,” especially because there are no long mountain chains crossing its middle that might break up hot and cold air.

“When global warming combines with natural weather cycles,” the report states, “the risk of severe weather is intensified, and these factors will result in even larger loss costs from natural peril events than what we have seen so far.”

Experts predict extreme weather patterns to
increase in 2014 

The severe flooding and fires that affected many of our communities, families, and friends in Colorado in 2013 serve as a reminder as to why it’s important to make sure our homes, businesses, cars, and medical care are properly covered in case of catastrophe. We can look at what's happened and use that as a bit of a guide going forward. We should prepare for the weather risk changes that lie ahead.

Colorado was also struck by hailstorms last summer. Almost 70,000 total claims were filed due to the disaster, and nearly half of those claims were for vehicles. The Rocky Mountain Insurance Information Association (RMIIA) estimated that more than $85 million of the damages from those storms were vehicle-related.

Hail claims are an example of optional coverage that compensates policyholders for weather-related damage. Statistics show that about 75 percent of all U.S. drivers add comprehensive coverage to a policy. A policyholder may consider skipping a comprehensive policy in order to get a cheaper quote, but in light of recent reports on increasingly severe weather across the U.S., choosing comprehensive coverage is likely a smart move.

In terms of optional coverage, comprehensive is one of the last you should give up.  It only amounts to a small portion of your auto insurance bill, but covers a lot of events, especially weather that can be unpredictable.

It’s smart to be proactive with your agent to make sure you are prepared for weather-related problems that may arise. Review catastrophes from the past year, and consider how preparedness would have helped give you peace of mind. To us at Pure Risk Solutions, that means preparing for the coming year, protecting our families, making sure the things we love most – our families, our businesses, our homes, our dreams – are well cared for and protected from weather and other things that are out of our control.

Are your home and car fully covered in case of more extreme weather this summer? For a review of your policy, call or visit us online.

John Jacquat: (303) 834-1001