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In compliance with California’s Assembly Bill (AB) 1163, Kaiser Permanente will notify brokers at least 45 days prior to the effective date of material changes to a contract with them.
These requirements don’t apply to mutually agreed upon changes or those required by state or federal law. See legislature.ca.gov for more information.
Several laws were enacted during the 2018 California legislative session that could impact your business.
For more information, see our health care legislative overview.
An important COBRA message from Kaiser Permanente
In 1986, Congress passed the Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provisions to provide individuals temporary continuation of health coverage at group rates. The law generally covers health plans offered by employers with 20 or more employees.
The Department of Labor’s Employee Benefits Security Administration has issued final federal COBRA regulations clarifying the timing and content of the federal COBRA notices that all employers are required to provide to their federal COBRA enrollees. The regulations prompted us to review the billing and collection services that we perform to help ensure that we’re doing everything we can to facilitate compliance with these regulations.
Kaiser Permanente in Northern and Southern California performs billing and collection services for some customers, and, we’ve created a monthly report that lists:
Employer groups will receive a Kaiser Permanente federal COBRA and Cal-COBRA activity report by the end of each month in which there is COBRA membership or activity. If there is no COBRA membership or activity for the reporting period, no report will be sent.
The employer group is responsible for complying with all COBRA responsibilities, including notifying qualified beneficiaries of federal COBRA rights, determining eligibility periods, and processing federal COBRA elections. If applicable, the employer group may have received a signature agreement that delegates the COBRA billing and collection functions to Kaiser Permanente. The new Employer Group Application has also been modified to include the signature agreement provision.
For more information regarding employer requirements under federal COBRA regulations, your clients should consult their legal advisor. These regulations are available at www.dol.gov/dol/topic/health-plans/cobra.htm.
Effective January 1, 2009, California law AB 2589 requires health plans and insurers to annually disclose to the governing boards of public agency employer groups any compensation paid to agents, brokers, or other individuals as part of the group’s contract. Each report must include:
In addition, the report provides the following information:
These reports will be almost identical to the federal ERISA 5500 Schedule A Disclosure Reports. (Public agencies are exempt from ERISA reporting requirements.) Reporting is required annually, so you and your public agency clients can expect to receive a Broker Compensation Disclosure Report each year within 60 days of the end of the contract year. The first reports will be mailed in the first quarter of 2010. You’ll also receive a copy of the report sent to each of your public agency clients to keep for your records.
For more information
Reports by enrollment unit have been eliminated
You and your clients will find it easier to use the ERISA 5500 Schedule A report this year due to these changes.
Youll continue to get commission statements from the Broker Administration Department and premium audits are still available through the California Service Center. If you have questions or concerns, please contact nicholas.r.bambico@kp.org at or 858-637-2572.
The Employee Retirement Income Security Act of 1974 (ERISA) was enacted primarily to assure pension equality, but it also protects the interests of group life insurance plan participants and beneficiaries. Under ERISA, group health insurance plans must be established pursuant to a written instrument, the Summary Plan Description (SPD), which describes the benefits provided under the plan, names the persons responsible for the operation of the plan, and spells out the arrangements for funding and amending the plan. Schedule A is a financial statement used to report premiums, fees, and broker commission payments to an agent or broker and is an attachment to IRS Form 5500. Employers subject to ERISA are required to file Form 5500 according to ERISA section 104. Insurance companies are required to provide schedule information per ERISA section 103 (a)(2).
Kaiser Permanente provides employers with a 5500 Broker Compensation Disclosure Report outlining the amount of monetary (e.g., commissions, bonuses or fees) and non-monetary compensation (e.g., gifts, meals, etc.) paid to a broker. We do this to assist employers in complying with government reporting. A copy of the employers 5500 Broker Compensation Disclosure Report is mailed to the broker of record.
If you have questions about the 5500 Broker Compensation Disclosure Report, call the Client Services Unit at 800-752-4737.
A Form 1099-MISC is sent each January to 1099 reportable brokers who have earned $600 or more in commissions during the reporting period year. If you havent received a Form 1099-MISC and believe you should, contact the Kaiser Financial Services Operation hotline at
510-987-1754 or the Broker Compensation Services at 800-440-2323.
If a health plan’s prescription drug coverage is as good as or better than Medicare Part D, it’s considered “creditable.” Employers who offer prescription drug coverage to Medicare-eligible individuals are required to notify their beneficiaries unless they are enrolled in a Part D plan. Employers are also required to notify the Centers for Medicare & Medicaid Services (CMS) whether or not their coverage is creditable.
Updates to cost share for some mental health and chemical dependency services
To comply with requirements of the Mental Health Parity and Addiction Equity Act (MHPAEA), we’ve made changes to cost share for some mental health and chemical dependency services. As 2015 contracts renew or are amended, we’re revising Evidence of Coverage (EOC) documents to reflect those updates. The changes don’t affect rates or access to care.
For details on what’s new for large and small groups, see below.
When it’s prescribed by a plan physician, we cover care at licensed residential treatment facilities in our service area. Facilities must provide 24-hour individualized treatment for chemical dependency or mental health. The following services are covered when they’re above the level of custodial care at one of these facilities:
Additionally, the non-Medicare EOCs’ cost-share disclosures will be revised as follows (for the purpose of this notification, “non-Medicare EOCs” means all EOCs other than Senior Advantage EOCs):
We’ve already made the coverage and cost share changes reflected in this notice. When members receive services, they’ll pay the cost share shown in this notice. If your EOC doesn’t currently reflect the changes described above, you may see these changes in your EOC at renewal. If you have any questions about changes we’ve made to meet MHPAEA requirements, please contact your Kaiser Permanente representative.
Unless otherwise specified, the changes in this notification only apply to non-Medicare EOCs. For the purpose of this notification, “non-Medicare EOCs” means all EOCs other than Kaiser Permanente Senior Advantage when Medicare is secondary coverage.
Global changes
The following changes affect EOCs for all plans:
This change also applies to Medicare EOCs.
Additional changes to specific plans
Plan names vary slightly by year. Names also are different for plans sold through CaliforniaChoice® .
|
Plan names |
Change |
|---|---|
|
Gold 80 HRA 2000/30 (2015) Gold 2000/30 Deductible HMO + HRA (2014) |
Cost share for chemical dependency day treatment and intensive outpatient programs is 20% coinsurance (up to a maximum of $5 per day), not subject to the plan deductible. |
|
Silver 70 HMO 1000/40 (2015) Silver 1000/40 Deductible HMO (2014) Silver HMO B (CaliforniaChoice 2015) |
Cost share for chemical dependency day treatment and intensive outpatient programs is 30% coinsurance (up to a maximum of $5 per day), not subject to the plan deductible. |
|
Silver 70 HMO 1500/45 (2015) Silver HMO C (CaliforniaChoice 2015) |
|
|
Silver 1500/45 Deductible HMO (2014) |
Mental health and chemical dependency outpatient services are not subject to the plan deductible. |
|
Bronze 60 HMO 5000/60 (2015) Bronze 5000/60 Deductible HMO (2014) Bronze HMO B (CaliforniaChoice 2015) |
Cost share for chemical dependency day treatment and intensive outpatient programs is 30% coinsurance (up to a maximum of $5 per day), not subject to the plan deductible. |
|
Bronze 60 HSA 3500/30 (2015) Bronze 3500/30 Deductible HMO + HSA (2014) Bronze HMO A (CaliforniaChoice 2015) |
Cost share for chemical dependency day treatment and intensive outpatient programs is 30% coinsurance (up to a maximum of $5 per day), not subject to the plan deductible. |
|
$40/$2,000 Deductible HMO Plan HSA (2014, 2015)
|
Cost share for chemical dependency day treatment and intensive outpatient programs is 30% coinsurance (up to a maximum of $5 per day), not subject to the plan deductible. |
|
$40/$3,000 Deductible HMO Plan HSA (2014, 2015) |
Cost share for chemical dependency day treatment and intensive outpatient programs is 30% coinsurance (up to a maximum of $5 per day), not subject to the plan deductible. |
|
$30/$3,000 HSA-Qualified Deductible HMO Plan (2014, 2015) |
Cost share for chemical dependency day treatment and intensive outpatient programs is 30% coinsurance (up to a maximum of $5 per day), not subject to the plan deductible. |
|
$30/$1,500 Deductible HMO Plan with HRA (2014, 2015) |
Cost share for chemical dependency day treatment and intensive outpatient programs is 20% coinsurance (up to a maximum of $5 per day), not subject to the plan deductible. |
|
$30/$2,500 Deductible HMO Plan with HRA (2014, 2015) |
Cost share for chemical dependency day treatment and intensive outpatient programs is 20% coinsurance (up to a maximum of $5 per day), not subject to the plan deductible. |
We’ve already made the coverage and cost share changes reflected in this notice. When members receive services, they’ll pay the cost share shown in this notice. If your EOC doesn’t currently reflect the changes described above, you may see these changes in your EOC at renewal. If you have any questions about changes we’ve made to meet MHPAEA requirements, please contact your Kaiser Permanente representative.
Give your clients the information they need to stay on top of the latest changes to health care law. Effective January 2009,* California law SB 1168 protects coverage for dependent students on leave. A similar federal law, HR 2851, goes into effect in October, as contracts renew. Here’s what your clients need to know about the new legislation:
Information about the coverage will be included in student certification notices mailed to members beginning in April. To find out more:
The Affordable Care Act(ACA) requires most U.S. citizens to have health coverage that meets a government standard — known as minimum essential coverage — or be subject to a potential tax penalty.
This requirement is sometimes called the individual mandate. However, the revised U.S. tax code reduced the penalty to zero.
Employers, insurers, and government agencies are still required by the ACA to annually report to the IRS the minimum essential coverage they provide for all enrolled individuals. They are also required to provide reports to subscribers using IRS Form 1095.
Starting in January, health plan subscribers will get one or more 1095 tax forms for the previous tax year, depending on their plan.
The forms apply to everyone with health coverage, except those who purchased a catastrophic plan through a health insurance marketplace such as Covered California. The form they’ll receive depends on the type of health plan they have:
Type of plan |
Form |
|---|---|
Individual and family through a marketplace |
1095-A |
Individual and family direct from carrier |
1095-B |
Small group (50 or fewer employees) |
1095-B |
Fully insured large group (more than 50 employees) |
1095-B and 1095-C |
Self-funded large group (more than 50 employees) |
1095-C |
Starting on January 1, 2020, California residents must have qualifying health coverage for themselves, their spouses or domestic partners, and their dependents for each month.
Unless they qualify for an exemption, California residents could face a financial penalty of $695 or more when they file their 2020 state income tax returns, starting in 2021. The penalty for a dependent child is half of what it would be for an adult.
This law does not change Kaiser Permanente's Large Group special open enrollment guidelines.
When your clients’ employees fill out their tax returns, they should report any federal financial assistance they received toward health coverage. Additional tax forms will determine if the taxpayer receives a credit or owes payment. Subscribers will need to file Form 8962 to claim the premium tax credit or if advance payments were made to Kaiser Permanente.
Subscribers may have to pay a tax penalty if they:
Subscribers may receive corrected forms, so it’s important to use the most current forms to ensure accuracy of information. Also note that not filing a return could affect a subscriber’s eligibility for federal assistance.
Review our annual reporting requirements for the ACA fact sheet and minimum essential coverage Q&A overview for more information or see below for more details on each form.
• For employees in large group plans who were eligible for benefits at least one month during the tax year.
• Mailed by the end of March by the employer or plan sponsor.
• Employers who self-fund must also report which employees and dependents are covered.
• 1095-C identifies:
o Employee and employer
o Months during the year the employee was offered group coverage
o Cost of the cheapest monthly premium the employee could have paid under the plan
o Months of coverage in which the employee and/or dependents were enrolled in a self-funded plan
• If subscribers had benefits-eligible jobs with more than one employer during the same tax year, they’ll get a separate 1095-C from each employer.
• If subscribers weren’t eligible for benefits but averaged 30 or more hours per week in at least one calendar month during the tax year, they should get a 1095-C.
• Subscribers and dependents covered through a self-funded plan will need to fill out Part 3 of 1095-C to show months of coverage.
• Subscribers in fully insured large group coverage will get both 1095-C from their employer and 1095-B from Kaiser Permanente:
o 1095-C tells subscribers the months of the previous year they were offered coverage by their employer
o 1095-B tells subscribers the months of the previous year they had coverage in a fully insured plan issued by Kaiser Permanente (including Kaiser Permanente Insurance Company)
• Subscribers in self-funded large group coverage will only get a 1095-C, sent from their employer.
• Those who waived coverage will get a 1095-C from their employer showing they were offered coverage.
This information was accurate at the time of posting. However, from time to time, new details become available after our release date. For the most current information, contact your sales executive.
* The new laws apply to all commercial plans. Medicare and special programs such as Medi-Cal will not be affected.
† The traditional HMO plan and the in-network portion of the Point-of-Service (POS) plan are underwritten by Kaiser Foundation Health Plan, Inc. (KFHP). Kaiser Permanente Insurance Company (KPIC) underwrites the PPO and Indemnity tiers of the POS plan. KPIC is a subsidiary of KFHP.
‡ Kaiser Permanente cannot give legal or financial advice. To find out more about claiming the subsidy as an offset against payroll taxes, contact the Internal Revenue Service.
