Employment Practices Liability Insurance: Crucial for Small Businesses, Too

According to a recent study by Business Wire, more than 65 percent of small business owners expressed concern that their workers would file an employment-related charge against them. However, studies also reveal that a mere 1.2 percent of businesses have Employment Practices Liability (EPL) coverage.

High Price Tag

Employment-related claims can be extremely costly, especially in cases that drag on for years. With a slow economy and increasing adoption of worker-friendly laws, these cases are on the rise – in fact, discrimination claims are reaching their peak, with more than $376 million awarded to employees in 2009. Many small businesses cannot afford to pay these costs and keep their company afloat.

What Puts Small Businesses at Risk?

Understandably, it can be much more difficult for small businesses to defend themselves against employment-related claims because they tend to have fewer resources and a different work environment. Small businesses are particularly at risk for employment-related claims for the following reasons:

• Many have a minimal staff and lack of in-house counsel and/or full human resources department to rely on.
  
• Overall lack of extensive recordkeeping on employee performance.
  
• More intimate working environments may cause personal riffs during layoffs.
  

An Affordable Solution

Fortunately, with employment-based lawsuits on the rise and the economy's sluggish upward climb, EPL coverage is becoming more affordable. More companies are beginning to offer EPL insurance policies with comprehensive coverage to smaller businesses to protect them in tough times. In fact, EPL insurance is becoming so important to the success of small businesses that it is being offered at more affordable prices and being tailored specifically for those smaller companies. With employment charges costing upwards of $40,000, EPL coverage may a smart choice for you. Talk to your GDI Insurance Agency broker to learn if this risk transfer option is right for your business.◊ Call GDI 888-991-2929 we offer complete HR solutions for our clients free of charge. Employee manuals, Osha compliant safety programs, and more! A GDI Insurance Broker Works Harder for you!

 

Save on Auto Insurance, Save on Home Insurance, Mercury Insurance!

Mercury Insurance Group

GDI is happy to announce our appointment by Mercury Insurance Group.

Mercury Insurance offers many lines of insurance. Mercury Auto Insurance, Mercury Home Insurance, as well as Mercury Business Insurance, and Mercury Apartment Owners Insurance.

At GDI we pride ourselves in offering our clients choices for their insurance programs. With the addition of Mercury Auto Insurance and Mercury Home Insurance products GDI truly has the best coverage, and lowest rates for Auto insurance and the lowest rates for home insurance in CA!

GDI does business all over the country but with Mercury Auto insurance and Mercury Home insurance, if you live in Turlock, Denair, Hilmar, Ceres, Modesto, Oakdale, Patterson, Livingston, Merced, Tracy, Ripon, Manteca or anywhere in between the Sierras and the Ocean we have the lowest rates for Car Insurance, and Home Insurance.

No need to call Progressive to get a half dozen quotes. Just call GDI and get the Progressive quotes, as well as several dozen other quotes right now from GDI. Have you ever wondered if you called Progressive and got a better quote from Mercury Auto Insurance or Mercury Home Insurance how you would buy the insurance from Mercury? You would have to call and start all over again.

If you call GDI you will get all the lowest rates for your Auto insurance and the lowest rates for your Home Insurance from companies like Mercury Insurance, Progressive, Allied, Nationwide, Travelers, Safeco, and a dozen other companies and be able to buy insurance without having to call another insurance company. One call to GDI does it all!

Or since you are reading this blog on our website, just click on the contact us, or get a quote button and one of our GDI brokers will give you a call and give you quotes right now.

Saving money on auto insurance and saving money on home insurance is that easy;

just call GDI 888-991-2929

Thanks

Grant Davis
GDI Insurance Agency, Inc

 

Work Place Wellness Low-Cost Activities That Work, Grant Davis GDI

 

 

Workplace Wellness: Low-Cost Activities That Work

Wellness issues important to you – brought to you by Grant Davis your GDI Insurance Agency Broker.

Workplace wellness programs that support employees and the environment that they work in have been shown to be a good return on investment. Workplace wellness programs can be extensive and sometimes expensive. However, there are ways for small employers to make positive changes at little or no cost.

Program Activities

Nutrition Activities

Fruit and Vegetable Consumption

1. Provide healthy eating reminders and prompts to employees via multiple means (i.e. e-mail, posters, payroll stuffers, etc.).
   
2. Offer appealing, low-cost fruits and vegetables in vending machines and in the cafeteria.
   
3. Provide cookbooks, food preparation, and cooking classes for employees' families.
   
4. Ensure onsite cafeterias follow healthy cooking practices and set nutritional standards for foods served that align with the U.S. Dietary Guidelines for Americans.
   
5. Offer healthy foods at meetings, conferences, and catered events.
   
6. Use point-of-decision prompts as a marketing technique to promote healthier choices.
   
7. Provide healthy cooking demonstrations that teach skills (i.e. fruit and vegetable selection and preparation).
   
8. Provide taste-testing opportunities at the workplace.
   
9. Offer employee-led campaigns, demonstrations or programs.
   
10. Offer local fruits and vegetables at the workplace (i.e. workplace farmer's market or community-supported agriculture drop-off point).
    
11. Use competitive pricing (price non-nutritious foods in vending machines and cafeterias at higher prices).
    
12. Provide protected time and dedicated space away from the work area for breaks and lunch.
    
13. Make kitchen equipment available to employees.
    
14. Provide an opportunity for onsite gardening if possible.
    

 

Sweetened Beverage Consumption

1. Make water available throughout the day.
   
2. Offer appealing, low-cost healthful drink options in vending machines and the cafeteria.
   
   1. Modify worksite vending contracts to increase the number of healthy options.
      
   2. Price non-nutritious beverages at a higher cost.
      
   3. Use point-of-decision prompts to promote healthier choices.
      

   
    

   Portion Control
   

   1. Label foods to show serving size and/or nutritional content.
      
   2. Provide food models, food scales for weighing and pictures to help employees assess portion size.
      
   3. Offer appropriate portion sizes at meetings, workplace events and in the cafeteria.
      

   
    

   Breastfeeding
   

   1. Support nursing mothers by providing them rooms for expressing milk in a secure and relaxed environment, a refrigerator for storage of breast milk, policies that support breast feeding, and lactation education programs.
      
   2. Offer flexible scheduling and/or onsite or near-site child care to allow for milk expression during the workday.
      
   3. Adopt alternative work options (i.e. teleworking, part-time, extended maternity) for breast-feeding mothers returning to work.
      
   4. Educate personnel on the importance of supporting breast-feeding co-workers.
      

   
    

   T.V. & Food Advertising
   

3. Place TVs in non-eating areas of the workplace.
   
4. Limit food advertising in the cafeteria (i.e. print and other media).
   

   
    

   Physical/Weight Management Activities
   

   1. Allow access to on- and off- worksite gyms and recreational activities before, during, and after work hours.
      
   2. Offer and encourage participation in after work recreation or leagues.
      
   3. Provide cash incentives or reduced insurance costs for participation in physical activity and/or weight management or maintenance activities.
      
   4. Provide shower and/or changing facilities onsite.
      
   5. Provide outdoor exercise areas such as fields and trails for employee use.
      
   6. Provide bicycle racks in safe, convenient, and accessible locations.
      
   7. Offer onsite fitness opportunities, such as group classes or personal training.
      
   8. Provide an onsite exercise facility.
      
   9. Set up programs that have strong social support systems and incentives, such as:
      

• Buddy or team physical activity goals
  
• Programs that involve workers and family
  
• Programs to encourage physical activity, such as pedometer walking challenges
  
• Explore discounted or subsidized memberships at local health clubs, recreation centers, or YMCAs
  

1. Offer flexible work hours to allow for physical activity during the day.
   
2. Support physical activity breaks during the workday, such as stretching or walking.
   
3. Host walk-and-talk meetings.
   

 

 

13. Map out onsite trails or nearby walking routes and destinations.

14. Have employees map out their own biking or walking route to and from work.

15. Post motivational signs at elevators and escalators to encourage stair usage.

16. Provide exercise/physical fitness messages and information to employees.

17. Provide or support recreation leagues and other physical activity events onsite or in the community.

18. Start employee activity clubs such as walking or bicycling clubs.

19. Provide onsite child care facilities to facilitate physical activity.

20. Sponsor a bike to work day and reward employees who participate.

21. Set up a box and solicit fitness and health tips.

 

General Health Education Activities

1. Have a current policy outlining the requirements and functions of a comprehensive workplace wellness program.
   
2. Have a wellness plan in place that addresses the purpose, nature, duration, resources required, participants in, and expected results of a workplace wellness program.
   
3. Orient employees to the wellness program and give them copies of the physical activity, nutrition, and tobacco use policies.
   
4. Promote and encourage employee participation in the physical activity/fitness and nutrition education/weight management program.
   
5. Provide health education information to employees.
   
6. Have a committee that meets at least once a month to oversee the wellness program.
   
7. Offer regular health education presentations on various physical activity, nutrition, and wellness-related topics. Ask voluntary health associations, healthcare providers, and/or public health agencies to offer onsite education classes.
   
8. Host a health fair as a kick-off event or as a celebration for completion of a wellness campaign.
   
9. Designate specific areas to support employees such as diabetics and nursing mothers.
   
10. Conduct preventive wellness screenings for blood pressure, body composition, blood cholesterol, and diabetes.
    
11. Provide confidential health risk appraisals.
    
12. Offer onsite weight management/maintenance programs for employees.
    
13. Add weight management/maintenance, nutrition, and physical activity counseling as a member benefit in health insurance contracts.
    

 

Tobacco Cessation

1. Establish a company policy prohibiting tobacco use anywhere on the property.
   
2. Provide prompts/posters to support no tobacco use policy.
   
3. Policy supporting participation in smoking cessation activities during duty time (flex-time).
   
4. Provide counseling through an individual, group, or telephone counseling program onsite.
   
5. Provide counseling through a health plan sponsored individual, group, or telephone counseling program.
   

Provide cessation medications through health insurance.

Cal Osha Safety Program Check List, Call Your GDI Broker To Set Up Your Plan

Safety Program "Quick-Check"

Please fill out this form and call a GDI Insurance Broker to help you set up your Cal Osha program!  GDI waves its fees for this an other services for our clients!  888-991-2929

This is a quick survey of the various written programs or topics required by OSHA. The goal of this evaluation is to help determine what topics have received attention, and to what degree those topics have been addressed within Your Company _____. This is not intended to be a complete list of the various OSHA requirements; instead it is a summary of the major issues typically identified in an audit.

Safety Program Topic	Written Plan or Work Instruction	Integration Level	Training Saturation
Accident Reporting & Investigating Process	Yes No NA	1 2 3 4 5	1 2 3 4 5
Audit & Inspection Forms	Yes No NA	1 2 3 4 5	1 2 3 4 5
Bloodborne Pathogens Exposure Control Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Compressed Gas Cylinder Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Confined Space Entry Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Cutting, Welding & Brazing Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Electrical Safety Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Emergency Action Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Ergonomics Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Fall Protection Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Fire Prevention Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Fire Protection Equipment	Yes No NA	1 2 3 4 5	1 2 3 4 5
Flammable & Combustible Liquid Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Hand Tool Safety Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Hazard Communication Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Hearing Conservation Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Housekeeping Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Indoor Air Quality Control Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Lab Safety Policy	Yes No NA	1 2 3 4 5	1 2 3 4 5
Ladder Safety Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Liquid Petroleum Gas (LPG) Safety Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Lockout/Tagout Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Machine Safeguarding Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Material Handling Equipment Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Means of Egress Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Medical Surveillance Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Personal Protective Equipment Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Process Safety Management	Yes No NA	1 2 3 4 5	1 2 3 4 5
Powered Industrial Trucks Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Recordkeeping Practices & Requirements	Yes No NA	1 2 3 4 5	1 2 3 4 5
Respiratory Protection Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Safety & Health Management System Policy	Yes No NA	1 2 3 4 5	1 2 3 4 5
Safety Committee Organizational Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Safety Signs & Colors Program	Yes No NA	1 2 3 4 5	1 2 3 4 5
Spray Finishing Operations Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Toxic Substances Control Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Walking-Working Surface Maintenance Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5
Workplace Violence Prevention Plan	Yes No NA	1 2 3 4 5	1 2 3 4 5

The Impact of Health Care Reform on Workers Compensation

Although occupational medicine was not a direct target of federal health care reform and is therefore left to the states, the passage of federal reform will certainly have a variety of consequences, both explicit and subtle, on workers' compensation insurance over the next several years. While experts can only speculate whether these changes will ultimately be positive or negative regarding workers' compensation for employers, there are several reasonable arguments that suggest a bit of both.
Obligatory insurance could mean that chronic diseases will be better controlled, decreasing the severity of work-related claims. Further, employees with insurance generally file fewer workers' compensation claims, possibly implying that the reform will also decrease the total number of claims.
On the other hand, the increased volume of employees requiring treatment could lead to decreased availability of care, delays in workers' compensation-related treatments and less willingness by providers to participate in occupational medical networks.

Other provisions of health care reform could affect workers' compensation. The sizeable adjustments in Medicare reimbursement levels may pressure providers to shift costs – possibly signifying higher costs per claim as the changes begin to take their toll. The absence of the pre-existing care exclusion means less incentive for employees to claim that certain conditions are work-related, but greater demand on employers for workplace and job accommodations, a source of new exposures.Whatever the ultimate impact of the reform, each employer will need to stay alert and work with an insurance professional to capture advantages and navigate legislation.■

Timelines.

Regulations.

Questions and Answers.

GDI Your Health Care Reform Partner

There are countless rules and regulations governing the health care reform legislation, many of which are quite complex. Our expert team will help meet your compliance obligations because we stay up to date on the reform regulations that affect your employee benefit program. With provisions taking effect from now until 2018, we will be your health care reform source every step of the way.

 

 

 

 

 

 

 

 

 

 

 

Stay Virtually Connected

We deliver documents on command, all from the convenience of your unique Web-based client portal. These tools allow you to access and share valuable resources, including health care reform information, surveys and employee benefits resources.

 

TABLE OF CONTENTS

 

 

 

 

 

Legislative Brief

Health Care Reform Timeline........................................................... 3-7

2010 Provisions

Small Business Health Care Tax Credit: Steps to Determine Eligibility....................................................................................... 8

Health Care Reform: Grandfathered Plans.......................................... 9-11

Health Care Reform: Extension of Dependent Coverage...................................................................................... 12-13

 

Employee Communications: Know Your Employee Benefits

Health Care Reform: The Who, What and When................................. 14

2010 Provisions

Extension of Dependent Coverage up to Age 26..................................15

 

MyWave^® HR

Legislative Guides...........................................................................16

 

 

 

On March 23, 2010, President Obama signed into law the health care reform bill, the Patient Protection and Affordable Care Act. This legislation, along with the Health Care and Education Reconciliation Act of 2010, makes sweeping changes to the U.S. health care system. These changes will be implemented over the next several years.

This Legislative Brief provides a timeline of the implementation of key reform provisions that affect employers and individuals. Please read below for more information and contact GDI Insurance Agency, Inc. with any questions about how you can prepare for health care reform.

 

2010

Expanded Insurance Coverage

The health care reform law contains some provisions designed to provide improvements in access to health care coverage this year.

 

• Extended Coverage for Young Adults. Group health plans and health insurance issuers offering group or individual health insurance coverage that provides dependent coverage of children must make coverage available for adult children up to age 26. There is no requirement to cover the child of a dependent child. This requirement will apply to grandfathered and new plans.
  

  The Reconciliation Act added a new tax provision related to health insurance coverage for these adult children. Effective March 30, 2010, amounts spent on medical care for an eligible adult child can be excluded from taxable income.
  

  Note: a "grandfathered plan" is one in which an individual was enrolled on March 23, 2010, and to which there is no change to existing coverage. Many requirements of the new law do not apply to grandfathered plans and nothing in the law requires individuals terminate coverage in which they were enrolled when the law was passed. A plan can still be a grandfathered plan even if family members or new employees are allowed to join.
  

• Access to Insurance for Uninsured Individuals with Pre-Existing Conditions. The health care reform bill provides for the establishment of a temporary high risk health insurance pool program to provide health insurance coverage for certain uninsured individuals with pre-existing conditions. The program will end when the health insurance exchanges, set to be established in 2014, are operational.
  
• Identifying Affordable Coverage. The Secretary of Health and Human Services is required to establish an Internet website through which residents of any state may identify affordable health insurance coverage options in that state. The website will also include information for small businesses about available coverage options, reinsurance for early retirees, small business tax credits, and other information of interest to small businesses. So-called "mini-med" or limited-benefit plans will be precluded from listing their policies on this website.
  
• Reinsurance for Covering Early Retirees. The new law requires the establishment of a temporary reinsurance program to provide reimbursement to participating employment-based plans for a portion of the cost of providing health insurance coverage to early retirees and their spouses, surviving spouses and dependents. This program will end on January 1, 2014.
  

 

Health Insurance Reform

The new law also imposes requirements on health insurance issuers to reform certain insurance practices and improve the coverage available.

 

 

• Eliminating Pre-Existing Condition Exclusions for Children. Group health plans and health insurance issuers may not impose pre-existing condition exclusions on coverage for children. This provision will apply to all employer plans and new plans in the individual market.
  This provision will also apply to adults in 2014.
  
• Coverage of Preventive Health Services.
  Group health plans and health insurance issuers offering group or individual health insurance coverage must provide coverage for preventive services. These plans also may not impose cost sharing requirements for preventive services.
  
• Prohibiting Rescissions. The health care reform law is designed to prohibit abusive rescissions of coverage by insurance companies when an individual gets sick as a way of avoiding covering the cost of the individual's health care needs. Group health plans and health insurance issuers offering group or individual insurance coverage may not rescind coverage once the enrollee is covered, except in cases of fraud or intentional misrepresentation. Plan coverage may not be cancelled without prior notice to the enrollee. This provision applies to all new and existing plans.
  
• Limits on Lifetime and Annual Limits. In general, group health plans and health insurance issuers offering group or individual health insurance coverage may not establish lifetime limits on the dollar value of benefits for any participant or beneficiary or impose unreasonable annual limits on the dollar value of benefits for any participant or beneficiary. This requirement applies to all plans. Annual limits will also be prohibited beginning in 2014.
  

  
   

Health Plan Administration

In addition to any administrative changes required by the coverage improvements described above, health plans will be subject to increased administrative duties under health care reform.

• Improved Appeals Process. Group health plans and health insurance issuers offering group or individual health insurance coverage must implement an effective appeals process for appeals of coverage determinations and claims. At a minimum, plans and issuers must:
  
  • have an internal claims process in effect;
    
  • provide notice to enrollees, in a culturally and linguistically appropriate manner, of available internal and external appeals processes, and the availability of any applicable office of health insurance consumer assistance or ombudsman to assist them with the appeals processes; and
    
  • allow enrollees to review their files, to present evidence and testimony as part of the appeals process, and to receive continued coverage pending the outcome of the appeals process.
    

  The internal claims process must initially incorporate the current claims procedure regulations issued by the Department of Labor in 2001. Plans and issuers must also implement an external review process that meets applicable state requirements and guidance that is to be issued.
  

• Nondiscrimination Rules for Fully-Insured Plans. Fully-insured group health plans will now have to satisfy nondiscrimination rules regarding eligibility to participate in the plan and eligibility for benefits. These rules prohibit discrimination in favor of highly compensated individuals. This section does not appear to apply to grandfathered plans.
  

  
   

Medicare/Medicaid

The health care reform law will further affect individuals by making certain changes to Medicare and Medicaid.

• Rebates for the Medicare Part D "Donut Hole." Currently, there is a gap in Medicare prescription drug coverage. The coverage gap falls between $2,830 and $6,440 in total drug spending. The health care reform bill provides a $250 rebate check for all Medicare Part D enrollees who enter the "donut hole." Beginning in 2011, a 50 percent discount on brand-name drugs will be instituted and generic drug coverage will be provided in the donut hole. The donut hole gap will be filled by 2020.
  
• Medicaid Flexibility for States. States are given a new option under the health care reform law to cover additional individuals under Medicaid. States will be able to cover parents and childless adults up to 133 percent of the Federal Poverty Level (FPL).
  

  
   

Fees and Taxes

With a total estimated cost of over $900 billion dollars, the reform of the nation's health care system comes with additional costs and fees. These fees will also be implemented over the next several years. However, health care reform also includes some subsidies, in the form of tax credits, to help individuals and businesses pay for coverage.

• Small Business Tax Credit. The first phase of the small business tax credit for qualified small employers begins in 2010. These employers can receive a credit for contributions to purchase health insurance for employees. The credit is up to 35 percent of the employer's contribution to provide health insurance for employees. There is also up to a 25 percent credit for small nonprofit organizations. When health insurance exchanges are operational, tax credits will increase, up to 50 percent of premiums.
  
• Indoor Tanning Services Tax. One additional tax imposed by the health care reform law is a 10 percent tax on amounts paid for indoor sun tanning services.
  

  
   

2011

Expanded Insurance Coverage

• Voluntary Long-Term Care Insurance Options. The health care reform law creates a long-term care insurance program for adults who become disabled. Participation will be voluntary and the program is to be funded by voluntary payroll deductions to provide benefits to adults who become disabled.
  

  
   

Health Plan Administration

• Improving Medical Loss Ratios. Health insurance issuers offering group or individual health insurance coverage (including grandfathered health plans) must annually report on the share of premium dollars spent on health care and provide consumer rebates for excessive medical loss ratios.
  
• Reporting Health Coverage Costs on Form W-2. Beginning in 2011, employers will be required to disclose the value of the health coverage provided by the employer to each employee on the employee's annual Form W-2.
  
• Standardizing the Definition of Qualified Medical Expenses. The health care reform law conforms the definition of "qualified medical expenses" for HSAs, FSAs and HRAs to the definition used for the itemized tax deduction. Amounts paid for over-the-counter medicine with a prescription still qualify as medical expenses. Costs for over-the-counter medications obtained without a prescription would not qualify.
  
• Cafeteria Plan Changes. The new law creates a Simple Cafeteria Plan to provide a vehicle through which small businesses can provide tax‐free benefits to their employees. This plan is designed to ease the small employer's administrative burden of sponsoring a cafeteria plan. The provision also exempts employers who make contributions for employees under a simple cafeteria plan from pension plan nondiscrimination requirements applicable to highly compensated and key employees.
  

  
   

Medicare/Medicaid

• Medicare Part D Discounts. In order to make prescription drug coverage more affordable for Medicare enrollees, the new law will provide a 50 percent discount on all brand-name drugs and biologics in the "donut hole." It also begins phasing in additional discounts on brand-name and generic drugs to completely fill the donut hole by 2020 for all Part D enrollees.
  
• Additional Preventive Health Coverage. The new law provides a free, annual wellness visit and personalized prevention plan services for Medicare beneficiaries and eliminates cost-sharing for preventive services beginning in 2011.
  

  
   

Fees and Taxes

• Increased Tax on Withdrawals from HSAs and Archer MSAs. The health care reform law will increase the additional tax on HSA withdrawals prior to age 65 that are not used for qualified medical expenses from 10 to 20 percent. The additional tax for Archer MSA withdrawals not used for qualified medical expenses would increase from 15 to 20 percent.
  

  
   

2013

Health Plan Administration

• Administrative Simplification. Beginning in 2013, health plans must adopt and implement uniform standards and business rules for the electronic exchange of health information to reduce paperwork and administrative burdens and costs.
  
• Limiting Health Flexible Savings Account Contributions. The new health care law will limit the amount of contributions to health FSAs to $2,500 per year, indexed by CPI for subsequent years.
  

  
   

Fees and Taxes

• Eliminating Deduction for Medicare Part D Subsidy. Currently, employers that maintain prescription drug plans for their Medicare Part D eligible retirees are entitled to a tax deduction. This deduction will be eliminated in 2013.
  
• Increased Threshold for Medical Expense Deductions. The health care reform law increases the income threshold for claiming the itemized deduction for medical expenses from 7.5 percent of income to 10 percent. However, individuals over 65 would be able to claim the itemized deduction for medical expenses at 7.5 percent of adjusted gross income through 2016.
  
• Additional Hospital Insurance Tax for High Wage Workers. The new law increases the hospital insurance tax rate by 0.9 percentage points on wages over $200,000 for an individual ($250,000 for married couples filing jointly). The tax is also expanded to include a 3.8 percent tax on net investment income in the case of taxpayers earning over $200,000 ($250,000 for joint returns).
  
• Medical Device Excise Tax. The law also establishes a 2.3 percent excise tax on the first sale for use of a medical device. Eye glasses, contact lenses, hearing aids, and any device of a type that is generally purchased by the public at retail for individual use are excepted from the tax.
  

  
   

2014

Coverage Mandates

• Individual Coverage Mandates. The health care reform legislation requires most individuals to obtain acceptable health insurance coverage or pay a penalty, beginning in 2014. The penalty will start at $95 per person for 2014 and increase each year. The penalty amount increases to $325 in 2015 and to $695 (or up to 2.5 percent of income) in 2016, up to a cap of the national average bronze plan premium. After 2016, dollar amounts are indexed. Families will pay half the penalty amount for children, up to a cap of $2,250 per family. Individuals may be eligible for an exemption from the penalty if they cannot obtain affordable coverage.
  
• Employer Coverage Mandates. Employers with 50 or more employees that do not offer coverage to their employees will be subject to penalties if one employee receives a government subsidy for health coverage. The penalty amount is up to $2,000 annually for each full-time employee, excluding the first 30 employees. Employers who offer coverage, but whose employees receive tax credits, will be subject to a fine of $3,000 for each worker receiving a tax credit, up to an aggregate cap of $2,000 per full-time employee. Employers will be required to report to the federal government on health coverage they provide.
  

  
   

Health Insurance Exchanges

The health care reform legislation provides for health insurance exchanges to be established in each state in 2014. Individuals and small employers will be able to shop for insurance through the exchanges. Small employers are those with no more than 100 employees. If a small employer later grows above 100 employees, it may still be treated as a small employer. Large employers with over 100 employees are to be allowed into the exchanges in 2017. Workers who qualify for an affordability exemption to the coverage mandate, but do not qualify for tax credits, can use their employer contribution to join an exchange plan.

 

Health Insurance Reform

Additional health insurance reform measures will be implemented beginning in 2014. Specifically, health insurance companies will not be permitted to:

• Refuse to sell or renew policies due to an individual's health status;
  
• Exclude coverage for treatments based on pre-existing health conditions;
  
• Charge higher rates due to heath status, gender or other factors (premiums will be able to vary based only on age (no more than 3:1), geography, family size, and tobacco use);
  
• Impose annual limits on the amount of coverage an individual may receive; or
  
• Drop coverage because an individual chooses to participate in a clinical trial for cancer or other life-threatening diseases or deny coverage for routine care that they would otherwise provide just because an individual is enrolled in such a clinical trial.
  

  
   

Fees and Taxes

• Individual Health Care Tax Credits. The new law makes premium tax credits available through the exchanges to ensure people can obtain affordable coverage. Credits are available for people with incomes above Medicaid eligibility and below 400 percent of poverty level who are not eligible for or offered other acceptable coverage. The credits apply to both premiums and cost-sharing.
  
• Small Business Tax Credit. The second phase of the small business tax credit for qualified small employers will be implemented in 2014. These employers can receive a credit for contributions to purchase health insurance for employees, up to 50 percent of premiums.
  
• Health Insurance Provider Fee. The health care reform law imposes an annual, non-deductible fee on the health insurance sector, allocated across the industry according to market share. The fee does not apply to companies whose net premiums written are $25 million or less.
  

  
   

2018

High-Cost Plan Excise Tax

A 40 percent excise tax is to be imposed on the excess benefit of high cost employer-sponsored health insurance (also known as a "Cadillac tax"). The annual limit for purposes of calculating the excess benefits is $10,200 for individuals and $27,500 for other than individual coverage. Responsibility for the tax is on the "coverage provider" which can be the insurer, the employer, or a third-party administrator. There are a number of exceptions and special rules for high coverage cost states and different job classifications.

 

 

This GDI Insurance Agency, Inc. Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

 

 

Content © 2010 Zywave, Inc. Images © 2000 Getty Images, Inc. All rights reserved.

ES 4/10

 

Determine if you may qualify for the Small Business Health Care Tax Credit by following these three simple steps from the IRS.

 

 

 

This GDI Insurance Agency, Inc. Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

 

Images copyright © 2000-2004 Getty Images, Inc. All rights reserved.

 

EXECUTIVE SUMMARY

 

In March 2010, President Obama signed sweeping health care legislation into law. The health care reform law contains many provisions that will affect your business and your employees. The extent of the impact will depend, in part, on whether you maintained a health care plan on March 23, 2010, the date the primary legislation was enacted. If your company sponsored a plan on that date, it is considered a "grandfathered" plan.

• Grandfathered plans are group health plans or health insurance coverage in which an individual was enrolled on March 23, 2010, the date of enactment of the legislation.
  
• These plans can avoid many of the new health care reform provisions.
  
• The "grandfathered" protections still apply even if family members join current coverage or new employees join a current plan.
  

This GDI Insurance Agency, Inc. Legislative Brief provides information to help you understand what makes a plan "grandfathered." It also describes the provisions that do not apply to grandfathered plans, as well as major provisions that do apply. Please read below for more information.

 

HOW HEALTH CARE REFORM AFFECTS GRANDFATHERED PLANS

 

Grandfathered Plans

The new health care reform law provides that certain provisions of the law will not apply to group health plans or health insurance coverage in which an individual was enrolled on March 23, 2010, the date the legislation was passed. The legislation refers to these plans as "grandfathered health plans." The law states that a grandfathered plan will retain its grandfathered status even if the covered individual renews the coverage after March 23, 2010, family members are allowed to enroll or new employees (and their families) are allowed to enroll.

Be aware that it is unclear what could take a health care plan out of the "grandfathered" status. Significant change to the plan design could do so and therefore, employers need to be cautious in redesigning any current plans. We are waiting for further guidance on what will and will not have an impact on a plan's grandfathered status. We will continue to keep you updated as the Department of Labor, IRS and Department of Health and Human Services provide guidance.

 

Health Care Reform Rules that Do Not Apply to Grandfathered Plans

The grandfathering provision of the health care reform law specifically exempts grandfathered plans from certain requirements of the law. Grandfathered health plans are exempt from the following requirements:

• Coverage of Preventive Health Services. Effective for plan years beginning on or after September 23, 2010, group health plans and health insurance issuers offering group or individual health insurance coverage must provide coverage for certain preventive health services without imposing cost-sharing requirements.
  
• Patient Protections. Effective for plan years beginning on or after September 23, 2010, the health care reform law puts the following rules in place for patients:
  
  • Group health plans and health insurance issuers offering group or individual health insurance coverage that require designation of a participating primary care provider must permit each participant, beneficiary and enrollee to designate any available participating primary care provider (including a pediatrician for children).
  • Group health plans and health insurance issuers offering group or individual health insurance coverage that provide emergency services may not impose preauthorization or increased cost-sharing for emergency services (in or out of network).
    
  • Group health plans and health insurance issuers offering group or individual health insurance coverage that provide obstetrical/gynecological care and require a designation of a participating primary care provider may not require preauthorization or referral for obstetrical/gynecological care.
    
• Nondiscrimination Rules for Fully-Insured Plans. Effective for plan years beginning on or after September 23, 2010, fully insured plans must satisfy the requirements of Internal Revenue Code section 105(h)(2). That section provides that a plan may not discriminate in favor of highly compensated individuals as to eligibility to participate and that the benefits provided under the plan may not discriminate in favor of participants who are highly compensated individuals.
  
• Quality of Care Reporting. Within two years of the date of enactment, reporting requirements will be developed for group health plans and health insurance issuers offering group or individual health insurance coverage. The reports will relate to benefit and reimbursement structures that are designed to improve health outcomes, prevent hospital readmissions, improve patient safety, reduce medical errors and implement health and wellness activities.
  
• New Appeals Process. Effective for plan years beginning on or after September 23, 2010, group health plans and health insurance issuers offering group or individual health insurance coverage must implement an effective appeals process for appeals of coverage determinations and claims.
  
• Insurance Premium Restrictions. Effective for plan years beginning on or after January 1, 2014, premiums charged for health insurance coverage in the individual or small group market may not be discriminatory and may vary only by individual or family coverage, rating area, age and tobacco use, subject to certain restrictions.
  
• Guaranteed Issue and Renewal of Coverage. Effective for plan years beginning on or after January 1, 2014, health insurance issuers offering health insurance coverage in the individual or group market in a state must accept every employer and individual in the state that applies for coverage and must renew or continue in force the coverage at the option of the plan sponsor or the individual.
  
• Nondiscrimination Based on Health Status. Effective for plan years beginning on or after January 1, 2014, group health plans and health insurance issuers offering group or individual health insurance coverage may not establish rules for eligibility or continued eligibility based on health status-related factors. Wellness programs must meet nondiscrimination requirements.
  
• Nondiscrimination in Health Care. Effective for plan years beginning on or after January 1, 2014, group health plans and health insurance issuers offering group or individual insurance coverage may not discriminate against any provider operating within their scope of practice. However, this provision does not require a plan to contract with any willing provider or prevent tiered networks. Plans and issuers also may not discriminate against individuals based on whether they receive subsidies or cooperate in a Fair Labor Standards Act investigation.
  
• Comprehensive Health Insurance Coverage. Effective for plan years beginning on or after January 1, 2014, health insurance issuers that offer health insurance coverage in the individual or small group market must provide the essential benefits package required of plans sold in the health insurance exchanges.
  
• Limits on Cost-Sharing. Effective for plan years beginning on or after January 1, 2014, group health plans may not impose cost-sharing or out-of-pocket costs in excess of certain limits. Out-of-pocket expenses may not exceed the amount applicable to coverage related to HSAs and deductibles may not exceed $2000 (single coverage) or $4000 (family coverage). These amounts are indexed for subsequent years.
  
• Coverage for Clinical Trials. Effective for plan years beginning on or after January 1, 2014, group health plans and health insurance issuers offering group or individual insurance coverage must permit certain enrollees to participate in certain clinical trials, must cover routine costs for clinical trial participants and may not discriminate against participants.
  

  
   

Special Effective Date for Collectively Bargained Plans

Collectively bargained multi-employer and single-employer plans in effect on March 23, 2010 are not subject to the health care reform rules described above until the termination date of the last of the collective bargaining agreement relating to the coverage. There is some debate as to whether the exemptions for grandfathered plans will continue to apply after that date. The health care reform law provides, however, that a collectively bargained plan is permitted to be amended early for some or all of the new rules. This voluntary amendment will not be treated as a termination of the collective bargaining agreement that might otherwise subject the plan to an earlier compliance deadline.

 

Major Health Care Reform Rules that Do Apply to Grandfathered Plans

The Health Care and Education Reconciliation Act of 2010 (the Reconciliation Bill) repealed some of the exemptions that were originally intended for grandfathered plans. Therefore, the provisions described below apply to both grandfathered and new health plans. Keep in mind that this is a description of major provisions that affect health plans, not an exhaustive list of how health care reform might affect your company.

• Extension of Dependent Coverage. Effective for plan years beginning on or after September 23, 2010, group health plans must provide coverage for adult dependent children up to age 26 if the child is not eligible to enroll in other employer-provided coverage (other than in a grandfathered plan). Effective March 30, 2010, employer-provided health insurance coverage provided to these adult children is tax-free to employees.
  
• Elimination of Lifetime and Annual Limits. Effective for plan years beginning on or after September 23, 2010, group health plans and health insurance issuers offering group or individual health coverage may not establish lifetime limits on the dollar value of essential benefits. Group health plans may also not establish unreasonable annual limits. In 2014, all annual limits are eliminated.
  
• Elimination of Pre-existing Condition Exclusions. Effective for plan years beginning on or after September 23, 2010, pre-existing condition exclusions may not be applied to enrollees under age 19. Pre-existing condition exclusions are eliminated for all enrollees in 2014.
  
• Limits on Rescissions. Effective for plan years beginning on or after September 23, 2010, coverage may not be rescinded, except in the case of fraud or intentional misrepresentation of material fact. Policyholders must be notified prior to cancellation.
  
• Limits on Waiting Periods. Effective for plan years beginning on or after January 1, 2014, group health plans and health insurance issuers offering group or individual health insurance coverage may not require a waiting period of more than 90 days.
  
• Summary of Benefits. Beginning 24 months after enactment of the health care reform law, insurers and plans sponsors of self-funded plans must provide a summary of benefits to participants and applicants. The law sets out specific content and format guidelines.
  
• Reporting Medical Loss Ratio. Effective for plan years beginning on or after September 23, 2010, health insurance issuers offering group or individual health insurance coverage must annually report the percentage of premiums spent on non-claim expenses. Beginning January 1, 2011, insurers must provide rebates if more than the applicable percentage is spent on non-claims costs.
  

 

This GDI Insurance Agency, Inc. Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

 

Content © 2010 Zywave, Inc. Images © 2000 Getty Images, Inc. All rights reserved.

On March 23, 2010, President Obama signed into law the health care reform bill, the Patient Protection and Affordable Care Act. This legislation, along with the Health Care and Education Reconciliation Act of 2010, makes sweeping changes to the U.S. health care system, including an extension of health insurance coverage to young adult children up to age 26. Though many of the changes will be implemented over the next several years, the extension of coverage to young adult children takes effect in as little as six months from enactment.

 

This Legislative Brief provides a summary of the provisions of the law requiring the extension of dependent health insurance coverage. Please read below for more information and contact GDI Insurance Agency, Inc. with any questions.

 

What Does The Law Require?

Group health plans and health insurance issuers offering group or individual health insurance coverage that provides dependent coverage of children must make coverage available for adult children up to age 26, regardless of the child's marital or student status. Parents can decide whether to add adult children to their plan. There is no requirement, however, to cover the child of a dependent child. The mandate applies to plans in existence on the date the law was passed ("grandfathered plans") and new plans. The cost of coverage, as well as reimbursement of medical expenses, is not taxable to the employee or the child with dependent coverage. The new law also allows self-employed people who buy their own insurance to deduct the cost of covering adult children up to age 26.

 

Though the coverage requirement ends on the child's 26th birthday, employers can continue to offer this benefit until the end of the plan year with preferential tax treatment on the extension. The law does not control the price of the coverage nor limit how much of the cost of this new coverage can be passed on to employees. The insurer can decide how much to charge for the coverage. Likewise, the employer can decide how much, if any, to subsidize. That is, employers can pass some or all of the added cost on to employees individually or even as a group.

 

To Whom Does The Law Apply?

Insurers and all health plans that provide dependent coverage of children will be required to permit an adult child to stay on family policies until age 26. "Child" means an individual who is a son, daughter, stepson, stepdaughter or eligible foster child of the taxpayer/employee.

 

What Is The Effective Date Of The Law?

The extension of dependent coverage provision takes effect for plan years beginning on or after September 23, 2010. That means that for October plans, the start date would be October 1, 2010. Plans that run on a calendar-year basis must cover an employee's dependent child up to age 26 starting on January 1, 2011. Plans that begin July 1 must cover dependents up to age 26 starting on July 1, 2011.

 

For grandfathered plans, before January 1, 2014, the provision will apply only with respect to dependent children not eligible for coverage under another employer's health plan. On and after January 1, 2014, the provision applies to all plans regardless of a dependent child's eligibility for coverage under another employer health plan. For collective bargaining agreements, the provision becomes effective upon termination of the last collective bargaining agreement in effect on March 23, 2010.

 

What If State Laws Differ From Federal Law?

More than two-thirds of states have passed laws that require insured group health plans to cover dependents after

they turn 18 years old, often into their mid to late 20s and in some cases later. For example, in New Jersey, unmarried children can stay on a parent's plan until they are 31 years old. Such state mandates, including those requiring coverage past age 26, will continue to apply.

 

What Are the Tax Effects Of State Laws Which Require Coverage Longer Than The Federal Law?

 

The Health Care and Education Reconciliation Act of 2010 amended federal tax law so that employers can offer tax-free health insurance coverage to adult children of employees during those taxable years in which the children are age 26 or under for the entire taxable year. It does not matter whether those children are tax dependents for federal income tax purposes. Often, adult children that obtain coverage pursuant to state law are not tax dependents for federal income tax purposes. In the event state laws mandate coverage past age 26, federal tax law requires employers to impute as income, to employees covering children who are not tax dependents, the fair market value of health insurance coverage provided to such non-tax dependents for those taxable years in which a covered child turns 27 or older, or that employees pay for it on an after tax basis.

 

Since the change in the federal tax code is not retroactive, the fair market value of coverage provided between January 1, 2010 and March 30, 2010 for a child who was not a tax dependent continues to be taxable income. Employers will still need to treat such coverage as imputed taxable income to the employee for this time period and must report it as such on the employee's Form W-2, unless it was paid for on an after tax basis.

 

What Should Employers Do Now?

 

Employers face a myriad of issues related to the requirement to extend health insurance coverage to adult children. Some of the issues of which employers should be aware and should consider taking immediate action include:

 

• Confirming coverage changes with TPAs, insurers and stop-loss providers;
  
• Determining the cost impact to the employer (e.g., how much will insurers charge for the additional coverage);
  
• Determining whether and how to charge the employee for coverage (e.g., determining how much, if any, of the cost of extended coverage to pass along to the employee);
  
• Revising plan documents, enrollment materials, SPDs and other employee communications;
  
• Reviewing payroll practices for imputing income and withholding taxes, and making necessary adjustments;
  
• Considering establishing who is and who is not a tax dependent (e.g., employee certification);
  
• Reviewing vendor agreements to determine the need to coordinate communication and notice responsibilities with insurers; and
  
• Reviewing COBRA treatment of individuals, especially in states where extended coverage is optional.
  

 

Regulations implementing this new mandate are forthcoming. GDI Insurance Agency, Inc. will keep on top of developments regarding this and other legislative initiatives and will work to keep you informed.

 

 

This GDI Insurance Agency, Inc. Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

 

Content © 2010 Zywave, Inc. Images © 2000 Getty Images, Inc. All rights reserved.

 

JS 4/10

 

 

 

Health Care Reform:
The Who, What and When

 

Here is a look at some of the major health care reform provisions that you will see over the next decade.

 

2010

Employers: Small businesses can receive tax credits if purchasing insurance for employees.

Insurers:
Cannot impose pre-existing condition exclusions on coverage for children. Must cover preventive services without copays. Cannot remove coverage when a person becomes ill. Cannot impose lifetime coverage limits.

Uninsured: Individuals with pre-existing conditions receive immediate access to coverage through a high-risk pool. Dependent children can remain on parents' plans until age 26.

Early retirees:
Employers will be able to participate in a reinsurance program to help provide coverage for retirees and their spouses, surviving spouses and dependents over age 55 and not eligible for Medicare.

Medicare Part D enrollees: A $250 rebate check received for those entering the "doughnut hole" gap in coverage in 2010. Rebate payable by April 1, 2011.

 

2011

Insurers: Required to spend at least 80 percent of premiums on medical services.

Medicare Part D enrollees: Receive a 50 percent discount on brand-name prescription drugs when in doughnut hole coverage gap.

Those with health care savings accounts: Federal tax on those who spend health care savings account money on ineligible medical expenses increases to 20 percent.

Over-the-counter drugs: Except for insulin, OTC drugs without a prescription are not reimbursable from an FSA or HRA, and are not a tax-free reimbursement from an HSA.

W-2:
The value of your health coverage must be disclosed on your W-2 form.

 

2012-2013

Taxpayers: Medicare payroll taxes increase to 2.35 percent for individuals earning more than $200,000 and families earning more than $250,000.

Those with flexible savings accounts: A federal limit of $2,500 for individual pretax contributions per year.

 

2014

Employers: Companies with 50 or more employees must provide affordable coverage or pay a penalty.

Insurers: Prohibited from refusing to sell or renew policies. Cannot deny coverage for adults with pre-existing conditions. Limits ability to set prices on the basis of sex, health status or other factors. Prohibited from imposing annual limits.

Uninsured: Most Americans required to buy health insurance or pay fines of $95 per individual and up to $285 per family. Families will pay half the amount for children. Families can receive subsidies to buy insurance if they earn no greater than four times the federal poverty level (about $88,000 per year for a family of four). Individuals and small businesses can buy packages through state exchanges.

 

2015

Uninsured: Penalties for not carrying insurance increase to $325 per individual and up to $975 per family. Families will pay half the amount for children.

 

2016

Uninsured: Penalties for not carrying insurance increase to $695 per individual and up to $2,250 per family or 2.5 percent of taxable family income – whichever is greater. Families will pay half the amount for children.

 

2018

Taxpayers: A 40 percent excise tax imposed on high-cost employer-provided policies ($10,200 for individual coverage or $27,500 for family coverage).

 

2020

Medicare Part D Enrollees:
Prescription drug coverage gap eliminated.

 

This brochure is for informational purposes only and is not intended to replace the advice of an insurance professional. Know Your Employee Benefits is written and produced for GDI Insurance Agency, Inc.. © 2010 Zywave, Inc.

 

 

 

 

 

 

Health Care Reform: Extension of Dependent Coverage to Age 26

The recently passed health care reform legislation makes sweeping changes to the U.S. health care system, including an extension of health insurance coverage to young adult children up to age 26.

 

Who is Eligible?

The extension of dependent coverage applies to plans in existence on the date the health care reform legislation was passed (grandfathered plans) and new plans. Coverage must be made available to qualifying young adults up to age 26 whose parents carry private group or non-group health coverage.

Qualifying young adults include sons, daughters, stepsons, stepdaughters, adopted children or eligible foster children of the parent, regardless of the qualifying young adult's marital status. It does not matter whether the qualifying young adults are tax dependents for federal income tax purposes. Parents may decide whether to add adult children to their plan, but there is no requirement to cover the child of a dependent child.

 

Tax-Free Coverage

Effective March 30, 2010, health coverage provided for an employee's children under 27 years of age is generally tax-free to the employee. Although the coverage requirement ends on the child's 26^th birthday, employers can continue to offer the benefit on a tax-advantaged basis until the end of the taxable year in which the child turns 26.

The Internal Revenue Service announced that these changes immediately allow employers with cafeteria plans – plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits – to permit employees to begin making pretax contributions to pay for the expanded benefit. This guidance also applies to health FSAs and health reimbursement arrangements (HRAs).

 

When Does the Dependent Coverage Extension Begin?

The extension of dependent coverage provision takes effect for plan years beginning on or after September 23, 2010. That means that for October plans, the start date would be October 1, 2010. Plans that run on a calendar-year basis must cover an employee's young adult child up to age 26 starting on January 1, 2011. Plans that begin July 1 must cover dependents up to age 26 starting on July 1, 2011. Some insurers have said that they will begin to extend dependent coverage prior to September 23, 2010, for individuals who would otherwise lose coverage.

 

For grandfathered plans, before January 1, 2014, the extension of coverage will apply only with respect to dependent children not eligible for coverage under another employer's health plan. On and after January 1, 2014, the provision applies to all plans regardless of a dependent child's eligibility for coverage under another employer health plan.

 

How Much Will it Cost?

The provision does not specify how a parent's premium costs will be affected by having a qualified young adult remain on their policy. Currently, employers who provide health coverage determine the portion of the premium to be paid by employees. Because young adults tend to be healthier than older age groups, covering a young adult dependent may be less expensive than the premium cost for covering a spouse or another older adult.

 

What if My State Already Extends Coverage to Young Adults?

More than two-thirds of states already have laws that require insured group health plans to cover dependents past age 18, often into their mid to late 20s and in some cases later. For example, in New Jersey, unmarried children can stay on a parent's plan until age 31. Such state mandates, including those requiring coverage past age 26, will continue to apply. Also, the favorable tax treatment applies only for adult children through the tax year in which they turn 26 and does not vary depending on state requirements. Employees in states that extend coverage past age 18, but not all the way to age 26, will now be able to take advantage of the federal extension.

 

This brochure is for informational purposes only and is not intended to replace the advice of an insurance professional. Know Your Employee Benefits is written and produced for GDI Insurance Agency, Inc.. © 2010 Zywave, Inc.

 

 

GDI gives its clients free human resource programs!