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2016 Changes for New York Employers with 51-100 Employees

 Story Content Provided by UnitedHelathcare on 5/23/15

As of January 1, 2016 the definition of a small group under the Affordable Care Act (ACA) will change to include employers with up to 100 employees upon their effective date. This change applies to non-grandfathered plans across all carriers, and impacts both our UnitedHealthcare and Oxford platforms. If you have a fully-insured large group medical client impacted by this definition change, they will need to take action. Our goal is to keep you informed of changes when information becomes available, so that you can guide your clients to make decisions about their health benefits plan.

Medical renewal coverage options for New York employers with 51-100 employees

1. Change Plan Year and Early Renew medical coverage on December 1, 2015
New York employers with 51-100 employees have the option to move their 2015 coverage effective date to December 1, 2015. This will allow these employers to lock in rates and benefits through November 30, 2016.

  • To select a December 1 effective date, New York employers must complete and submit a New York Employer Plan Year/Policy Year Change Request Form.
  • Employers will be responsible for notifying their employees of plan coverage changes 30 days in advance of the new policy effective date and for distributing a new Summary of Benefits and Coverage (SBC) document
  • Contract year benefit accumulation periods will start over on December 1, 2015. Calendar year benefit accumulation periods will reset on January 1, 2016.
  • The employer's 2016 effective date will be December 1, 2016. Any employer experiencing a reclassification based on group size will need to purchase a small group policy in 2016.

Employers with June & July 2015 Effective Dates – Take Action Now
To change the effective date to December 1, our New York employers with a June 2015 effective date must complete and submit a New York Employer Plan Year/Policy Year Change Request Form by June 15, 2015. Employers with a July effective date must submit the form by July 15, 2015.This applies to both renewing and new business.

Employers with August through November 2015 Effective Dates
The December 1 plan option will be presented to you to share with your clients that have less than 100 employees as part of their annual renewal materials and discussions. More details will be shared in the next few months.

Employers Who Have Already Renewed Their 2015 Coverage
You will receive a letter to present to your clients with less than 100 employees who renewed their coverage between January and May 2015. This letter will provide details on an option for a new policy with an effective date of December 1, 2015.

Employers Who Have or Are Interested in Specialty Benefit Coverage
The new definition of a small group does not apply to our specialty business, however New York employers with 51-100 employees have the following savings options:

  • Current Specialty Customers: Opportunity to align specialty and medical coverage effective dates to December 1, 2015 to receive a 24-month specialty rate guarantee at renewal.
  • New Specialty Customers: Opportunity to add a specialty product and align medical and specialty coverage effective dates to December 1, 2015 to receive a 24-month specialty rate guarantee.

2. Move to a small group (adjusted community rated) product at the group's next renewal in 2016.
Employers moving into the small group market segment during 2016 will receive information about small group plan options at least 30 days in advance of the group's renewal. Groups ranging in size from 1 employee to 100 employees will be pooled together for purposes of determining small group premium rates. Employer groups located within the Oxford service area will be offered a policy for an Oxford small group plan; employer groups in Upstate New York will be offered a UnitedHealthcare small group plan design.1

New York Group Size Counting Methodology Changes for 2016

New York is changing the employee group size counting methodology used for new and renewing business effective on or after January 1, 2016. New York currently uses the number of eligible employees to count group size. As of January 1, 2016, New York will use a full-time equivalent (FTE) methodology. This change could impact which market segment your clients fall into for rating and product availability purposes. (Note that this methodology change does not apply to specialty business.)

Please use the information below as a guideline to derive the correct FTE group size calculation for 2016. Based on the FTE total, your client may or may not be impacted by the upcoming small group definition change. Clients with 1-100 FTEs will be required to purchase a small group product in 2016. Clients with 101 or more FTEs will continue on their large group policies in 2016.

An excel-based calculator is available to help you and your clients calculate FTE. The FTE Calculator may be accessed here. More information is also available on the "Adjusted Community Rating" page within the Health Reform Provisions section of www.uhc.com/reform.

For purposes of determining the number of full-time equivalent employee count:

  • The number of employees means the average number of employees employed full-time (at least 30 hours/week in any given month), by the company on business days during the preceding calendar year.
  • In addition to the number of full-time employees noted above, for any month otherwise determined, include for such month the number of full-time employees divided by the aggregate number of hours of service of all employees who are not full-time employees for the month by 120.
  • Employers should exclude employees who were seasonal workers who worked 120 days or fewer in the preceding calendar year.

Calculate your [Year of Renewal Date - minus 1 (YYYY)] Year-to-Date Full Time Equivalent Employees

1. For each month during [Year of Renewal Date - minus 1 (YYYY)], count all full-time employees. A full-time employee is one who works an average of 30 or more hours per week. When counting employees please note that employees and part time employees includes:

  • Union and non-union employees
  • Employees who are part of a class of employees that are not covered or are covered by another carrier o Employees who have waived coverage
  • Employees located in other states
  • All employees working for entities under common control under a single employer

2. For each month during [Year of Renewal Date - minus 1 (YYYY)], count all HOURS worked by part-time employees and divide by 120. Exclude hours worked by a) full-time employees counted under (1) and b) seasonal workers who worked 120 days or fewer days. Include seasonal workers who worked in excess of 120 days. A seasonal worker is one who performs labor or services on a seasonal basis as defined by the Secretary of Labor, including retail workers employed only during the holiday season.

3. Add the number resulting from (2) to the number resulting from (1) for each month during [Year of Renewal Date - minus 1 (YYYY)].

4. Add all resulting figures from (3) together and divide by the number of months of data that were used.

[Year of Renewal Date - minus 1 (YYYY)] Full Time Equivalent Total (Whole number only):_____________

For new businesses that were not in existence during the previous calendar year, the calculation of group size is based on the average number of employees the employer is reasonably expected to employ on business days in the current calendar year.

The enclosed Questions and Answers for Employer Sponsored Plans in New York with 51–100 Employees document can be used with your clients to help explain upcoming changes for 2016. If you have questions, or would like more information or training, please contact your sales representative.

1 Please be aware that in downstate New York, small group coverage is primarily offered on our Oxford licenses. The Oxford New York service area includes Ulster, Sullivan, Dutchess, Orange, Putnam, Rockland, Westchester, Bronx, New York, Queens, Kings, Richmond, Nassau and Suffolk Counties. The UnitedHealthcare North Shore-LIJ Advantage plans are available to small group employers located in Nassau, Suffolk and Queens counties through UnitedHealthcare Insurance Company of New York. Employers located in Upstate New York will have access to UnitedHealthcare small group products.

UnitedHealthcare dental coverage underwritten by UnitedHealthcare Insurance Company, located in Hartford, Connecticut, UnitedHealthcare Insurance Company of New York, located in Islandia, New York, or their affiliates. Administrative services provided by DBP Services (NY only), United HealthCare Services, Inc. or their affiliates. The New York Select Managed Care Plan is underwritten by UnitedHealthcare Insurance Company of New York located in Islandia, New York. Administrative services provided by DBP Services.

UnitedHealthcare vision coverage provided by or through UnitedHealthcare Insurance Company, located in Hartford, Connecticut, UnitedHealthcare Insurance Company of New York, located in Islandia, New York, or their affiliates. Administrative services provided by Spectera, Inc., United HealthCare Services, Inc. or their affiliates.

Life and Disability products are provided by Unimerica Life Insurance Company of New York. Life and Disability products are provided on policy forms LASD-POL-LIFE NY (05/03) and LASD-POL-ADD/DIS NY (05/03). Unimerica Life Insurance Company of New York is located in New York, NY.

These policies include exclusions, limitations, reductions of benefits, and terms under which the policy may be continued in force or discontinued. For costs and complete details of the coverage, call or write your insurance agent or the company.