Options for employers, and what Health Net is doing
The Affordable Care Act requires that employers notify current employees about the health insurance marketplaces (Marketplaces) by October 1, and notify employees hired after that date at the time of hire. The notice includes stating whether a group health plan meets the minimum value standard.
The minimum value standard is applicable to plans effective January 1, 2014 and later. However the notice has to go out in 2013, causing confusion for many about whether to report minimum value for current 2013 coverage or planned 2014 coverage. Initial guidance from regulators has not been clear.
Health Net provided this update on reporting minimum value status of our plans to our brokers to help them and their clients. We also outlined options employers have in meeting the notification requirement.
(Note: This information provides only a general reference and summary information. We are not providing legal advice or advocating a specific approach. As always, we recommend that our group customers consult with their tax advisors and legal counsel.)
Background on minimum value
The Department of Labor (DOL) issued model notices in May 2013 to help employers communicate required information about their health coverage plans and the Marketplaces to their employees. Part B of the model notice asks employers who provide health coverage to state whether they offer health plans that meet the minimum value standard.
To meet the minimum value standard, the total allowed benefits costs covered by the lowest-cost plan that an employer offers must be no less than 60 percent. If that plan does not meet the standard, the notification must tell employees that they may be eligible for a federal premium tax credit if they buy health coverage through a state or the federal health insurance marketplace.
Health Net minimum value plans
Small Business Group Plans: Every new, non-grandfathered Health Net small business group plan effective 2014 will include essential health benefits and meet the minimum value standard.
Large Group Plans: We expect that the majority of our 2014 large non-grandfathered group plans will meet the minimum value standard. If a group’s health plan will not meet the minimum value standard, our Account Management team will reach out in advance of the renewal date to help explore options.
Health Net will let our group customers know whether the minimum value standard is met for plans effective January 1, 2014. We will publish this information in each Summary of Benefits and Coverage (SBC), and also note that the plan provides minimum essential coverage.
Employer options for reporting minimum value status include:
Indicate whether the minimum value standard is met based on the plans effective in 2014. Minimum value is necessary for 2014 and later plan coverage – not coverage being offered or renewed in 2013.
(Note: In reply to an audience question during a DOL-facilitated webcast on September 18, 2013, DOL representatives indicated that it is acceptable for employers to check the last box in Part B of the model notice if their 2014 plans meet the minimum value standard. Health Net confirmed this in a follow-up telephone call to the Employer Benefits Security Administration question line.)
Calculate minimum value for 2013 plans using the calculator provided by the Centers for Medicare & Medicaid Services:
Choose whether to answer questions 13-16 of the model notice. The form notes that these questions are optional.
Also good to know – the DOL has confirmed that employers will not be fined if they did not provide the Marketplace notification to employees by October 1, 2013.