QUESTION: Our company’s major medical plan offers a choice of self-only or family coverage. Dependent coverage is provided under the family coverage option for participants’ children who have not yet reached age 26. May our plan impose an additional premium surcharge for children who are older than age 18?
ANSWER: A premium surcharge for coverage of children over age 18 is not permitted because your plan would be impermissibly varying the terms for dependent coverage of children based on age. The Affordable Care Act (ACA) requires group health plans that provide dependent coverage of children to make such coverage available for a child until age 26. In addition, the terms and conditions under which dependent coverage is provided for children cannot vary based on age, except for children who are age 26 or older. This rule is known as the “uniformity requirement.”
Although your plan may not impose a surcharge for these children, revising or repricing the plan’s coverage tiers without making the structure age-based may allow your company to accomplish the same financial goals. For example, a plan design in which the cost of coverage increases for tiers with more covered individuals would not violate the ACA’s age 26 mandate, so long as the increase applies without regard to the age of any child. Although you did not specify whether your plan is grandfathered, it is important to note that changing coverage tiers can adversely affect a plan’s status as a grandfathered plan.
LEAWOOD, Kansas – NueSynergy, Inc., one of the nation’s fastest growing employee benefits and billing administrators in the country, is pleased to announce its preferred partnership with INSURICA, one of the largest privately-held independent agencies in the United States.
“NueSynergy continues to drive the consumer-directed health care industry forward with an employer-centric focus. As INSURICA looks to its future, it’s important for us to work with a preferred partner who shares our values and commitment to our existing and prospective clients,” said Ann Moses, Vice President and Branch Leader of INSURICA.
NueSynergy continues to achieve exceptional business results with innovative products like its COBRAcare+ administration. With COBRAcare+, NueSynergy works with INSURICA to take the extra step to check available health coverage and compare it to the employer’s COBRA benefits and premium cost. If the COBRA-eligible individual selects a coverage option other than COBRA, one of INSURICA’s licensed agents will help get them set up – and the employer no longer has an obligation to fulfill. It’s a true win-win for the individual and the employer.
“NueSynergy has concentrated on expanding our overall infrastructure as we continue to expand our nationwide presence,” said Josh Collins, president of NueSynergy. “As we continue to focus on proactive benefits solutions for employer clients, we look to trusted partners like INSURICA to build new client relationships.”
NueSynergy is known for industry-leading service, innovative technology, and excellence in providing full-service administration of consumer-driven and traditional account-based plans to employers of all sizes and sectors. Headquartered in Leawood, Kansas, NueSynergy also has locations in Arizona, Florida, Idaho, North Carolina, Virginia, Washington, and Rzeszów, Poland.
NueSynergy offers a fully integrated suite of administration services, which include Health Savings Account (HSA), Health Reimbursement Arrangement (HRA), Flexible Spending Account (FSA), Lifestyle Savings Account (LSA), and COBRAcare+ administration as well as SpouseSaver Incentive Account, Combined Billing, Direct Billing, and Specialty Solutions. For more information, visit www.NueSynergy.com.
Placing over $1 billion in annual premiums for their clients, INSURICA is among the 50 largest insurance brokers in the United States and is currently the 42nd largest privately-held independent agency in the country.
Headquartered in Oklahoma City, INSURICA employs more than 700 colleagues in 35+ offices located throughout Oklahoma, Alabama, Arizona, Arkansas, California, Colorado, Florida, Mississippi, and Texas. INSURICA is constantly looking to expand their network with partners who bring additional value and expertise to the enterprise and our clients. For more information, visit www.INSURICA.com.
QUESTION: As required, our company’s group health plan has extended COBRA election and payment deadlines due to the COVID-19 emergency. How do we handle these deadlines once the outbreak period ends?
ANSWER: As you note, certain COBRA deadlines have been extended—but for no longer than one year—by disregarding (tolling) the COVID-19 “outbreak period,” which began March 1, 2020, and is set to end on July 10, 2023. Agency guidance issued in March 2023 provided examples illustrating the effect of the outbreak period’s end on COBRA election and premium payment deadlines:
Electing COBRA. If a participant experiences a qualifying event and is provided a COBRA election notice on or before July 10, 2023, the individual’s 60-day period to elect COBRA begins to run on July 10, 2023 (making the deadline September 8, 2023). If the qualifying event occurs after July 10, 2023, there is no extension, and the 60-day period is measured from the date the COBRA election notice is provided. Although not expressly addressed, it appears that if a qualifying event occurs on or before July 10, 2023, and the COBRA election notice is provided after that date, the COBRA election deadline would be measured from the provision of the notice.
Paying COBRA Premiums. The guidance provides an example of a COBRA election made on October 15, 2022, retroactive to October 1, 2022. The initial COBRA payment, covering premiums from October 2022 through July 2023 must be made no later than 45 days after July 10, 2023 (i.e., August 24, 2023), with subsequent payments due according to the regular COBRA timeline (the first day of each month of coverage, with a 30-day grace period).
In addition to COBRA deadlines, the end of the outbreak period also affects certain other plan-related deadlines, including those for claims and appeals and HIPAA special enrollments. The agencies have noted that nothing in the Code or ERISA prevents group health plans from continuing to extend deadlines and have encouraged plans to do so—at least for a while—as the outbreak period comes to an end. Keep in mind, however, that any extension beyond what is required should be cleared with plan insurers and stop-loss insurers, as applicable.
In response to the end of the COVID-19 emergency, the IRS has issued a notice modifying its 2020 guidance regarding the COVID-19 testing and treatment benefits that can be provided by a high-deductible health plan (HDHP). Under the 2020 guidance, HDHPs can provide those benefits without a deductible or with a deductible below the applicable HDHP minimum deductible (self-only or family), thereby allowing individuals to receive coverage under HDHPs that provide such benefits on a no- or low-deductible basis without any adverse effect on HSA eligibility. Agency FAQs issued earlier this year indicated that the 2020 guidance would apply until further guidance was issued. This latest notice provides that, due to the end of the COVID-19 emergency, the relief described in the 2020 guidance is no longer needed and will apply only for plan years ending on or before December 31, 2024.
The notice also addresses the status of certain items and services as preventive care under the Code’s HSA eligibility rules. According to the notice, the preventive care safe harbor under those rules does not include COVID-19 screening (i.e., testing), effective as of the notice’s publication date. The notice acknowledges that the preventive care safe harbor includes screening services for certain infectious diseases but also observes that screenings for “common and episodic illnesses, such as the flu” are not included and concludes that COVID-19 differs from the types of diseases on the list. The notice further provides that—consistent with recent agency FAQs regarding the impact of the trial court’s decision in the Braidwood case—items and services recommended with an “A” or “B” rating by the United States Preventive Services Task Force (USPSTF) on or after March 23, 2010, are treated as preventive care under the HSA eligibility rules, whether or not they must be covered without cost sharing under the preventive services mandate. Thus, if the USPSTF were to recommend COVID-19 testing with an “A” or “B” rating, then that testing would be treated as preventive care under the HSA eligibility rules, regardless of whether coverage without cost-sharing is required under the preventive services mandate.
Our new enhanced Cobra solution. COBRAcare+ is a complimentary, cost-saving service offered exclusively by NueSynergy. Participants will get improved engagement through our COBRAcare+ advisory line where they will be guided by a licensed agent to compare COBRA benefits vs. alternative indiviudal health coverage options including subsidies.