There are a few important parts of this re-adoption that you need to be aware of as they will affect your business...
1. The definition of an Employee has changed to the following: Employee means an Employee of the Policyholder under the common-law standard as described in 26 CFR 31.3401(c)-1. A common-law employee is one who receives a W2. An individual and his or her legal spouse when the business is owned by the individual or by the individual and his or her legal spouse, partners in a partnership, two percent shareholders in a Subchapter S corporation, sole proprietors and independent contractors are not employees of the Policyholder. Employee also excludes a leased employee.
It might be best to define who is NOT an employee:
Individual and spouse when one or both own the business
Partners in a partnership
2% shareholders in S-corp
2. To have a group plan there must be at least 1 common law (W2) employee covered.
Owner and Employees can only buy a small employer plan if at least 1 employee enrolls
Husband and wife business can buy a small employer plan if the business has at least 1
common law (W2) employee who enrolls
The employee cannot be a waiver
3. How we count our Employees to determine Market size (Small or Middle Market):
The following calculation must be used to determine if an employer employs at least 1 but not more than 50 Employees.
For purposes of this calculation:
- Employees working 30 or more hours per week are full-time Employees and each full-time Employee counts as 1;
- Employees working fewer than 30 hours per week are part-time and counted as the sum of the hours each part-time Employee works per week multiplied by 4 and the product divided by 120 and rounded down to the nearest whole number.
Add the number of full-time Employees to the number that results from the part-time Employee calculation. If the sum is at least 1 but not more than 50 the employer employs at least 1 but not more than 50 Employees.
Please note: Small Employer includes an employer that employs more than 50 full-time Employees if the employer’s workforce exceeds 50 full-time employees for no more than 120 days during the calendar year and the Employees more than 50 who were employed during such 120-day or fewer period were seasonal workers.
It is important to note:
Business days during the preceding Calendar Year
Calculation, same as Pay or Play Calculation:
Each ee working 30 hours / week =1
For each ee working < 30
Add hours; multiply by 4
Add the results from 1 and 2
The seasonal exception
To establish coverage, it remains 25 hours for full time, but Market size is 30 hours
4. Voluntary Out of Network Charge provision has changed:
Allowed Charge means an amount that is not more than the lesser of:
- the allowance for the service or supply as determined by [Carrier] using the method
specified below; or
- the negotiated fee schedule.
[Carrier must specify the method used to determine the allowed charge and explain how a covered person may learn the allowed charge for a service the [Covered Person] may receive.]
For charges that are not determined by a negotiated fee schedule, the [Covered Person] may be billed for the difference between the Allowed Charge and the charge billed by the Provider.
These are the most important parts for this readoption, please note that this was finalized in mid-October 2016 and all the carriers have not at this point come out with their guidelines as to how they will be implementing these changes. To date, only Aetna has made official announcements relating to the Out of Network provisions and a new Small Employer Certification.