Health Plans and Related Benefits Categories and FAQs


Communication with Plan Participants
Will Christian Brothers Services (CBS) provide the annual written statement of health insurance coverage to the IRS and the individual participants in the plan?
Yes, we will be supplying the proper notices as necessary.

When will the Summary of Benefits and Coverage (SBC) and Uniform Glossary be made available to the plan sponsors and participants? Yes, we are finalizing these now and distribution should begin shortly.

Determining Large Employer Status
If an employee who normally works 30 or more hours per week is out on unpaid FMLA, how would you calculate their hours? Would you add in the hours they would "normally" work or would you deduct those weeks/months from the total and divide by less than 12 months or 52 weeks?
An employer has two choices in this situation: either the period of unpaid leave should be cut out of the measurement period altogether for determining the average hours of service or the employee can be credited with deemed hours during the period of leave based on the average weekly rate at which the employee was credited with hours of service during the rest of the measurement period.

Do you recommend the calculation be based on 130 hours worked per month or 30 hours worked per week? Why?
If the employee has relatively consistent hours week to week, it is probably easier to do the calculation based on 130 hours per month. If hours vary week to week, it may make more sense to use weekly.

We have about 90 employees full and part-time. Do we need to provide coverage?
If you have over 50 full-time equivalent employees, you must offer coverage to your full-time employees or pay the "no coverage" penalty, which will be equal to $2,000 for each full-time employee you have in excess of 30 employees. The penalty will only apply if you fail to offer coverage AND have an employee who receives subsidized coverage on an exchange.

We have 16 employees, four employees have Christian Brothers Employee Benefit Trust (CBEBT) health insurance, and the remaining 12 have opted out. We pay 100% of the employee-only CBS health premium to the opted out employees to put toward their other coverages - a significant benefit. Do we need to change anything with the new regulations?
Assuming you are not part of a controlled group, you don't have to provide coverage because you have fewer than 50 employees. However, if you are paying 100% for coverage, the CBEBT requires that all employees enroll in the plan due to your small employer status. You need to contact us immediately to discuss.

Penalties
Can You Explain the Employer Penalties?
The Affordable Care Act (ACA) imposes two possible penalties on large employers: a "no coverage" penalty and a "weak coverage" penalty. Large employers are those employers with 50 or more full-time employees in the previous calendar year. The "no coverage" penalty is applied to a large employer who fails to offer "minimum essential coverage" to substantially all its full-time employees. The "weak coverage" penalty is applied to a large employer who offers coverage, but the coverage is either not affordable or does not meet minimum value.

When is our school at risk for penalties? Please give examples if the employee goes to the exchange.
Assuming you are a large employer, you are only at risk if you do not offer affordable coverage that meets minimum value. As long as you are doing that, you are not at risk for any penalties. Here are a few examples, all assuming the employer passes the 50 employee threshold:

EXAMPLE 1: You have 65 employees, of which 10 work 35 hours per week, which you define as part-time. You provide coverage only to the 55 employees you consider full-time. Because the Affordable Care Act (ACA) defines full-time as an employee working 30 or more hours per week, you have failed to provide coverage to "substantially all" your full-time employees. If one of your full-time employees enrolls in an exchange and receives a subsidy, you will be subject to the no coverage penalty which is equal to $2,000 for each full-time employee in excess of 30 full-time employees. In this case the penalty will be $70,000 ($2,000 x 35).

EXAMPLE 2: You provide coverage to substantially all your full-time employees. The employees are required to pay $200 per month for employee-only coverage. You have a number of employees who earn $20,000 per year. The cost of coverage ($2,400) exceeds 9.5% of their W-2 wages ($20,000 x 9.5% = $1,900) and is therefore not affordable for them under the ACA. If one of your full-time employees enrolls in an exchange and receives a subsidy, you will be subject to the weak coverage penalty, which is equal to $3,000 for each employee who enrolls in an exchange and receives a subsidy.

EXAMPLE 3: You provide coverage to substantially all of your full-time employees. The coverage is affordable. However, as a result of high copays and deductibles, the coverage you provide fails to meet the minimum value requirement. If one of your full-time employees enrolls in an exchange and receives a subsidy, you will be subject to the weak coverage penalty, which is equal to $3,000 for each employee who enrolls in an exchange and receives a subsidy.

Will our school be penalized if the employee refuses the school's insurance? Or goes directly to the exchange?
Only if you are a large employer not offering affordable coverage that provides minimum value. If you offer coverage to 95% of your full-time employees and that coverage is both affordable (employee-only coverage costs an employee no more than 9.5% of his household income) and meets minimum value, then you will not be subject to either the no coverage penalty or the weak coverage penalty even if you have an employee that declines your coverage and instead receives coverage on an exchange.

How will we know if an employee is using the exchange coverage? Does it matter?
Exchanges will notify employers that an employee has been determined eligible to receive an exchange subsidy. The notification will identify the employee, indicate that the employee has been determined eligible to receive an exchange subsidy, indicate that employer may be liable for an employer mandate penalty, and notify the employer of the right to appeal the determination. These notices will be useful in giving employers an opportunity to correct erroneous exchange information and protect against erroneous penalty notices from the IRS.

It will not matter if you are either a small employer or offer substantially all of your full-time employee's affordable coverage that meets the minimum value requirements.

In regards to the 2014 rule stating we have to offer health care to the employee's dependents as well, does the "weak coverage" penalty apply to the dependents or just the employees? In other words is it sufficient to offer dependent coverage even though the employee will pay the entire premium on the dependents or does it have be "affordable" and therefore, not exceed 9.5% of the employee's household income?
The question of affordability (i.e., whether the cost of coverage exceeds 9.5% of the employee's household income) is based on the cost of employee-only coverage. Although the employer must offer dependent coverage, it does not have to be affordable.

If an employee has coverage through a state-assistance (welfare) program, are they forced to go to the Exchange or on the school's coverage? Is the school penalized?
The employer could be penalized if: (i) the employee is a full-time employee; (ii) the employer is a large employer; (iii) the employee purchases subsidized coverage on an exchange (whether forced on not); and (iv) either the employer doesn't offer coverage to substantially all its full-time employees or the coverage offered is not affordable for the employee (or fails to meet minimum value). See above questions regarding affordability.

If the school pays 50% of the premium for full-time employees, do we meet the requirement for offering affordable health care coverage? Also, do we have to offer coverage to part-time employees? The determination of affordability is made on an employee-by-employee basis. Coverage must be affordable for every employee, which means the amount an employee must pay for employee-only coverage cannot exceed 9.5% of the employee's household income (for ease, an employer can use the employee's W-2 wages, rate of pay or even the federal poverty level to determine affordability). So the fact that you pay 50% of the premium is not the relevant inquiry. What is relevant is how much the remaining cost to the employee is compared to his income. The 60% amount you are referring to is the second part of the test - whether the coverage meets minimum value. To avoid the weak coverage penalty, coverage must be affordable, as discussed above and must also meet "minimum value". To meet minimum value, the plan must cover at least 60% of allowed costs (in other words, the employee's share of the cost through things like co-pays and deductibles cannot exceed 40%).

You do not have to provide coverage to part-time employees. Only employees working 30 hours or more each week have to be offered coverage.

Part-time employees do not receive medical coverage. If they want it, they must pay full premium. Can we be penalized? No, an employer only needs to offer affordable coverage to its full-time employees - those working 30 or more hours each week.

I have employees who work between 30-39 hours /week. We consider them part-time and do offer them benefits but they pay 20% of the premium. Our full-time employees (those who work 40 hours/week pay 10% of the premium. Will we need to offer those that work 30-39 hours/week the benefit at the same percentage as the full-time employees?
The new law requires employers to treat employees working 30 or more hours per week as full-time employees and offer them coverage. However, employers can charge different amounts so long as they always meet the affordable coverage requirements and do not discriminate.

I also have per diem employees who cover fill in due to vacation, leaves, etc. and are not offered benefits. If they should work for someone who may be out a couple of months, will I have to extend medical coverage to them and then cancel it once they go back to per diem?
It will depend on how long they work in full-time employment. Coverage or eligibility is for those regularly scheduled to work 30 or more hours each week during the applicable look back period.

If an employer employs per diem, casual, or seasonal employees who work variable hours, will they be entitled to healthcare coverage with us if they also average 30-hours over the designated point in time? If so, do they remain on our coverage if their hours substantially drop below the average of 30 over that same designated period of time in the next year?
Health and Human Services (HHS) is to provide guidelines and calculators to determine if seasonal employees are or are not eligible for coverage.

Controlled Group Questions
Please help clarify what constitutes a controlled group? Does 501(c)(3) status for each entity exclude this as a possibility, or is it dependent upon control exerted by the board of the "parent" entity?
Whether you are part of a controlled group should be determined on a good faith basis. Most benefit lawyers advise relying on IRS Notice 89-23 for this purpose, which provides:

"The controlled group includes each entity of which at least 80% of the directors, trustees or other individual members of the entity's governing body are either representatives of or directly or indirectly control, or are controlled by, the contributing employer. In addition, an entity is included in the same controlled group as the contributing employer if such entity provides directly or indirectly at least 80% of the contributing employer's operating funds and there is a degree of common management or supervision between the entities. A degree of common management or supervision exists if the entity providing the funds has the power to appoint or nominate officers, senior management or members of the board of directors (or other governing board) of the entity receiving the funds. A degree of common management or supervision also exists if the entity providing the funds is involved in the day-to-day operations of the entity."

We have a small elementary school with less than 50 employees. The Sisters also have a larger high school in a different city. Both of these schools are incorporated separately. We are hearing that even though they are separate, this law requires we combine the number employees, which means our small school will be subject to this law. Is this true?
The answer depends on whether you are a large employer or not. Since you have fewer than 50 employees, you will be considered a large employer for this purpose only if you are part of a controlled group that has 50 or more full-time equivalent employees. See first question in this section for determining whether you are part of a controlled group.

We are a monastery with 20 secular employees eligible for coverage. Our monthly premium invoice has a "group ID" number. Are we considered part of a controlled group, i.e., we are part of Christian Brothers Employee Benefit Trust (CBEBT) insurance program, or are we a small employer? You are considered a small employer unless you are part of a controlled group. (See first question in this section for determining whether you are part of a controlled group.) Your group ID is an internal number we assign to each of our members and has no bearing on whether or not you are part of a controlled group. Being part of the CBEBT does not make you part of a controlled group.

Are groups determined by unique Tax ID #s or by affiliation? Each Tax ID represents a different non-profit corporation, however each non-profit has the same Board of Trustees made up of our leadership council. We are asking this question since the answer will affect the size of the group and the criteria for different sized groups. Whether or not you have a unique Tax ID# has no bearing on whether you are part of a controlled group. (See first question in this section for determining whether you are part of a controlled group.) If you are part of a controlled group, then all the members of the group are counted in determining whether you have 50 or more full-time equivalent employees and therefore are a large employer.

Waiting Periods
What is Christian Brothers Employee Benefit Trust's (CBEBT) recommendation for plans that have a 90-day waiting period? What language is recommended to meet the Affordable Care Act (ACA) compliance?
Under ACA, a plan cannot apply a waiting period that exceeds 90 days. Coverage cannot even be delayed to the first of the month after satisfying the requirement. Therefore, if you wish to use a 90 day waiting period, you must state that an employee will begin to receive coverage immediately upon satisfaction of that period. The Christian Brothers Employee Benefit Trust (CBEBT) recommends you choose the first day of the following month, following a 30 or 60 day probationary period.

If you choose a look-back period of 12 months, does that mean when you hire a new employee they are not eligible to enroll for an entire year?
No, the look-back period is only for purposes of counting employees. No employee can have a waiting period longer than 90 days.

Coverage Of Religious
Some plans have religious and lay on the plan. What is the negative impact of this arrangement? Do religious need to be in a separate plan to avoid any negative impact?
We believe the religious should be on a separate plan than that of the lay employees, as the religious members are not considered employees and should not be counted or treated as such for the Affordable Care Act (ACA) purposes.

I understand the rollout has been more troublesome than anyone in the Obama administration may have projected. How does Obamacare most directly affect religious communities, especially as we dwindle to numbers under 12?
We do not believe members of religious orders are considered employees for this purpose. Therefore, your order is not required to provide coverage for its members. Consistent with Canon Law, most orders do provide coverage in one form or another.

One change which may affect religious communities is the expansion of Medicaid coverage in 2014. Currently, only certain categories of individuals are covered (e.g., children, pregnant women, adults in families with dependent children, individuals with disabilities and elderly). Income and asset limitations apply. Effective in 2014, Medicaid coverage will be extended to very low-income "childless adults" (states can phase in earlier). There will be no asset limitation; eligibility will be based solely on income. The income cutoff will be 133% of federal poverty level ($15,282 in 2013 for single members, slightly higher in Alaska and Hawaii). For additional information on the expansion of Medicaid coverage, please visit: http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Eligibility/Eligibility.html

Our older Sisters are covered under Medicare, but we also have younger Sisters on permanent Visa's, as well as on the R-1 Visa. How does the Affordable Care Act (ACA) affect those Sisters? Do we need to purchase health insurance for them as well? And if they are not citizens of the U.S., can we even get insurance for them, as recently, we had a sister who did not qualify because she wasnot a US citizen.
First, we do not believe members of religious orders are considered employees for this purpose, so therefore your order does not have to provide coverage to its members because they are not employees.

Second, the individual Sisters are "required" to have "minimal essential coverage" or pay a penalty. Minimum essential coverage can be provided through a governmental sponsored plan such as Medicare or Medicaid, an employer sponsored plan, an individual insurance policy, a grandfathered plan or other coverage such as a state benefits health risk pool approved by the Secretary of Health and Human Services (HHS). Importantly, this requirement does not apply to individuals whose gross income for a year is below the filing threshold for filing a federal income tax return for that year. This exclusion should exempt most religious as few of them make enough taxable income to be required to file a Form 1040 each year. For 2013, single individuals are not required to file a federal income tax return unless their gross income for the year exceeds $10,000 (slightly higher for members age 65 or older). If an individual religious had gross income in excess of the filing threshold and was therefore required to file a Form 1040 for that year, the religious would be subject to the excise tax penalty for failure to have essential medical coverage. However, individuals who fail to pay the required excise tax are not subject to the penalties that normally apply to income taxes. In particular, the IRS cannot assess any liens to collect the tax. The only apparent practical way for the IRS to collect the excise tax is by the reduction of income tax refunds.

When counting employees, are the Brothers included with the lay employees? For example, if we have two employees and 400 Brothers, will the Affordable Care Act (ACA) consider us a small or large employer?
No, our contention is members of the Order are not employees. Therefore, assuming you are not part of a controlled group, you're a small employer.

Are members of the community, with health insurance provided by the community, considered employees of the community? How will those community members be treated, tax-wise, when reporting must be done on health care plans costing more than $10,000 per year? Are there any other conditions unique to religious communities in relation to the Affordable Care Act (ACA)?
Our position is that members of a religious order are not employees and therefore are not subject to the Affordable Care Act (ACA).

Help For Small Non-Profits?
Do we get any penalty breaks for being a non-profit or under a church plan as tax-exempt filer? We are exempt from filing the 990.
No, the penalties apply to all employers without exception.

What is in the new bill to help tiny, impoverished non-profits afford health care insurance? I thought there was supposed to be something to help?

Small Employer Tax Credit:
Small employers with fewer than 25 employees and annual average wages below $50,000, may be eligible for a tax credit equal to 35% (25% for tax-exempt employers). Effective 2014, the credit increases to 50% (35% for tax-exempt employers), but only applies to coverage purchased through an Exchange.

SHOP Exchange Program:
The Affordable Care Act (ACA) requires states to create Small Business Health Options Programs (SHOP Exchanges) to help small employers access affordable insurance for their employees. The SHOP requirements go into effect in 2014, however there is a one-year delay for full implementation. In states that are relying on the federal exchange (rather than setting up their own exchanges), employees will not be able to choose from among multiple plans; there will be a single plan for employees. States have the option of delaying as well. The full requirement is set to go into effect in 2015.

Other Coverage Questions
Should we expect major changes in coverage, processing or participation at the parish level? If so, what changes should we expect?
No, you will not see many changes unless the Diocese decides to implement some.

When should we have an open enrollment period to cover employees due to new health care reform act - October-December? Our fiscal year is July 1 through June 30.
If your plan year is on a calendar year basis, we would recommend you offer open enrollment in the fall for coverage to be effective on January 1st.

We have an employee who is turning age 26 in April 2014, when does she need to pick up coverage through our school?
It depends upon when her current coverage is due to terminate. Under most plans this would be on the date the person turns 26 (or the end of the month during which the person turns 26.) We recommend she make application during the month in which she turns 26.

Will Christian Brothers Employee Benefit Trust (CBEBT) offer our school less expensive plan designs to offer health coverage at a reduced cost?
We can offer several different options. Please contact us so we can determine what your interests are.

Can an employee switch plans if there is a reduction offered in January 2014 (Example: A Plan - most expensive, B Plan - less expensive, C Plan - cheaper plan with higher deductible)?
If an employer is going to offer more than one option, we would recommend it have an open enrollment period each year to allow employees to choose which plan they enroll into.

Could Christian Brothers Employee Benefit Trust take the one-month payment holiday and spread it over the whole 12 months instead of June 2014?
No, this would have a negative effect on underwriting and future rating.

How will the Affordable Care Act (ACA) affect health benefit coverage? Will it increase our medical coverage? Up to what age can I cover my children in my plan?
You can cover children to age 26. Costs can potentially increase under ACA due to the numerous fees being imposed. Coverage may increase in order to meet the requirements of ACA.

Will it cost more in terms of the monthly deductions?
Potentially.

Will I be able to include my in-laws or parents in the new health care plan?
No, the Affordable Care Act (ACA) does not extend coverage to these individuals.

Will Christian Brothers Employee Benefit Trust offer plan options through any exchanges? If so, what exchanges?
We are currently creating products to be available on private exchanges.

Can a dependent be encouraged to go to an exchange because of the availability of subsidies?
Yes, although the subsidies phase out as the employee's income increases.

What are the 2013 Federal Poverty Guidelines?
Household Size 100% 133% 150% 200% 300% 400%
1 $11,490 $15,282 $17,235 $22,980 $34,470 $45,960
2 15,510 20,628 23,265 31,020 46,530 62,040
3 19,530 25,975 29,295 39,060 58,590 78,120
4 23,550 31,322 35,325 47,100 70,650 94,200

Will plans through the Christian Brothers Employee Benefit Trust (CBEBT) add coverage for pediatric dental and vision services to come into compliance with the Affordable Care Act (ACA)?
Because the CBEBT is a self-funded church plan, it is not subject to this provision of ACA.

Contraceptive Coverage
At a January 1, 2014 renewal, will Christian Brothers Employee Benefit Trust (CBEBT) be able to provide our clients coverage without the coverage in the Health and Human Services (HHS) Mandates?
Answer: The trustees of the CBEBT are exploring all avenues to avoid having to provide coverage for contraceptives and sterilizations inconsistent with Church teachings. On September 24, 2013, the CBEBT, Christian Brothers Services and several of the Little Sisters of the Poor Homes, both for themselves and more than 200 other similarly situated employers that have adopted the CBEBT, filed a class action lawsuit in the U.S. District Court for Colorado against the three federal agencies responsible for administering the Affordable Care Act. The lawsuit seeks a determination that the contraceptive mandate does not apply to any employer participating in the CBEBT.

Which agency will make the judgment on whether an entity (Diocese, other, or even Christian Brothers Employee Beenfit Trust (CBEBT) will be given a religious exemption from the objectionable parts of the Affordable Care Act (ACA)?
The determination of whether an organization is a "religious employer" and therefore exempt from the contraceptive mandate or an "eligible organization" and possibly eligible for an accommodation, is to be determined by the organization itself since this is largely a factual issue. It should do so before it would otherwise be subject to the mandate, which is generally January 1, 2014, for most calendar plans.

Must we, as a member of the Christian Brothers Employee Benefit Trust (CBEBT), make any sort of application for the religious exemption? If so, to whom and how?
As indicated above, whether an organization is a "religious employer" and therefore eligible for the exemption from the contraceptive mandate is to be determined by the organization. We will be asking each organization participating in the CBEBT to notify us if they are a "religious employer" or "eligible organization."

Other
Can you explain "grandfathered status" as it relates to the Affordable Care Act (ACA)?
A grandfathered plan is generally one that was in existence on March 23, 2010, the date of ACA's enactment. However, plans can lose their grandfathered status if they make any of the following changes:
  • eliminate all or substantially all of the benefits to diagnose or treat a particular condition;
  • increase the coinsurance percentage;
  • increase the deductible or out-of-pocket limit in effect on March 23, 2010, by more than the percentage of medical inflation since March 2010 plus 15%;
  • increase any fixed-amount copayment in effect on March 23, 2010, by more than the greater of: (1) $5 (as increased for medical inflation), or (2) the percentage of medical inflation plus 15%;
  • decrease the employer contribution rate for any tier of coverage (e.g., self-only, family coverage) in effect on March 23, 2010, by more than 5 percentage points; or
  • make certain changes in annual limits (including changes to add either a new annual limit or a new annual limit that is less than the prior lifetime limit, or changes to decrease an annual limit).
    In order for grandfathered status to be maintained, any summary of benefits provided to participants must include a notice regarding the plan's grandfathered status, and the plan sponsor must maintain records regarding the terms of the plan in effect on March 23, 2010.
Is there a tax penalty on anyone, regardless of income, if they do not get health insurance?
Individuals whose gross income for a year is below the filing threshold for filing a federal income tax return for that year are not subject to the penalty.

Will the Christian Brothers Employee Benefit Trust's (CBEBT) plan be considered a "Gold Plan" and would it be treated in that way?
We are still waiting on Health and Human Services (HHS) guidelines to determine this. In any event, we feel confident all plans offered under the CBEBT will meet the minimum value necessary to be considered a qualified plan.

We are under the impression beginning in January, a fee for each employee will be levied by the insurance company (the quoted amount was $63.00) in addition to the premium to help implement the Healthcare Act. Is this correct? Ifso, is there an explanation for this charge?
Yes, effective January 1, 2014 a new fee of $63 per head will apply. The fee is intended to help stabilize the individual market. It is likely that the people who will initially seek coverage once the new rules are in place will be the sickest individuals. Insurers who end up with a disproportionate share of high cost individuals will be eligible for reimbursement. The Christian Brothers Employee Benefit Trust (CBEBT) Trustees have approved the modification of future rates to include these fees.

Can you review the procedure for determining whether an employee has insurance and the ramifications to both the employer and the employee should the employee decide they do not want the insurance?
The size of the employer, i.e., if they have 50 or more full-time equivalents, will determine which parts of the Affordable Care Act (ACA), apply - if any. Assuming you have over 50 full-time equivalents, you must either "play" by offering a plan that meets minimum values at an affordable cost or "pay" a penalty as defined by Health and Human Services (HHS).

If the employee is offered affordable insurance that meets the minimum value requirements, but declines, the employee may be subject to a penalty tax unless he or she secures other "minimum essential coverage." Minimum essential coverage can be provided through a governmental sponsored plan such as Medicare or Medicaid, an employer sponsored plan (including a plan sponsored by the employer of employee's spouse), an individual insurance policy, a grandfathered plan or other coverage such as a state benefits health risk pool approved by the Secretary of HHS.

Are insurance plans which begin in July, 2013 and end in July, 2014 subject to any Healthcare Act implementations taking place in January, 2014?
Yes, certain aspects of the Affordable Care Act (ACA) apply to all plans regardless of their plan year or calendar year status. Some aspects of ACA are dependent upon plan status. Christian Brothers Employee Benefit Trust will work to determine who is affected, and when. More Information

Will Christian Brothers Employee Benefit Trust (CBEBT) provide a list to plan sponsors showing what regulations under the Affordable Care Act (ACA) the Trust is not subject to?
Yes, as soon as we have finalized instructions/guidelines from Health and Human Services (HHS), we will provide.

When is the next webinar?
The next webinar will take place on October 10th, 2013 from 1:00 p.m. to 2:00 p.m. Central Time. Details about this webinar are still developing, and this will not be a repeat of previous Healthcare Reform Update webinars. For more information and registration, please visit mycbs.org. All webinares are FREE to members.

Are there any websites that can give information and updates on what has been approved?
There are many websites that provide information on the Affordable Care Act (ACA), including ours -- cbservices.org.
In addition, the following websites may also be helpful:
 
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