Gray & Troy Insurance Health Care Reform Seminar Videos Now Available

Gray & Troy Insurance Services recently presented Health Care Reform seminars for employers in San Luis Obispo, Monterey and Santa Barbara Counties.  Separate presentations were developed for small and large employers and focused on implementation of the Affordable Care Act and related California legislation to date, employer compliance and communication responsibilities in 2013 and beyond.  The presentations also addressed insurance market reform, changes to the individual, small group and large group insurance markets and the interplay with Covered California, the state’s new health insurance exchange.

Video recordings of both small group and large group presentations may be viewed on the Gray & Troy Insurance YouTube channel.  You may also download the corresponding presentation materials for the small group and large group presentations for reference.

For more information regarding employer responsibilities or other information related to Health Care Reform please contact Gray & Troy Insurance to speak with a Certified Affordable Care Act Specialist, or click on the button below and we will contact you.

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Some Small Employers May Be Able to Defer Adverse Impacts of Health Reform

With benefit changes and possible cost increases associated with the Affordable Care Act (ACA) coming in 2014, small employers may find the Early Renewal Option offered by most California health insurance carriers beneficial. Beginning in 2014, small group health insurance plans and rates from all health insurance providers will change significantly, and the impacts will be varied for affected groups and participants within those groups.

By moving their health insurance anniversary date to December 1, small groups will be able to accept December 2013 benefits and premium costs until December 2014, providing 12 months of plan and rate stability as well as allowing for additional time to evaluate coverage options as new plans are introduced. Although the Early Renewal Option may be appealing to many small employers, it will not be beneficial for all groups. Additionally, certain ACA taxes and fees will apply to health plans on January 1, 2014, regardless of a group’s health plan anniversary date.

Blue Shield of California, Anthem Blue Cross and Kaiser are currently distributing notices of the Early Renewal Option to small group policyholders, along with guidance in the form of Frequently Asked Questions (FAQs) and election forms to opt for the early renewal option. Deadlines to submit the election notices vary by carrier, from October 7th for Blue Shield of California, to November 15th for Anthem Blue Cross. Employers who decline to elect the Early Renewal Option will retain their existing anniversary date and accept new ACA compliant benefits and rate structures on their plan’s anniversary in 2014.

Gray & Troy Insurance is in the process of analyzing the Early Renewal Option for our small group clients and we will provide guidance for employers to evaluate their election opportunity within the time allowed by their respective insurance carriers. For more information regarding the Early Renewal Option or other issues related to Health Care Reform please contact Gray & Troy Insurance to speak with a Certified Affordable Care Act Specialist, or click on the button below and we will contact you.


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Guidance for Employers Receiving Medical Loss Ratio (MLR) Insurance Rebates

The Medical Loss Ratio (MLR) provision of the Affordable Care Act (ACA) took effect in 2011 and requires that health insurers spend a minimum percentage of all premiums received toward medical claims and programs that improve the quality of healthcare.  When an insurer does not meet minimum MLR requirements, they are required to rebate premiums back to policyholders.

Minimum MLR standards are set at 80% for the individual and small-group markets, and 85% for the large-group market.  MLR calculations are performed on a calendar-year basis and insurers who fail to meet minimum MLR standards must provide rebates to applicable policyholders no later than August 1st of the following year.

Insurance carriers are required under the ACA to provide one of two possible MLR notices to all policyholders stating that they are either ineligible for a rebate, or that they received a rebate, along with the rebate check.

Since 2011, guidance has been provided by the United States Department of Health and Human Services, Department of Labor, and Internal Revenue Service that addresses the distribution of MLR rebates and how rebates may be used by plan sponsors.  Group policyholders who receive an MLR rebate may use the rebate in one of several ways, depending on the extent to which employees shared in the cost of insurance premiums paid during the period for which a rebate was provided.  If an employer intends to provide a cash refund, they should act quickly, as distribution to plan participants  is required within 90 days.

In general, rebates may be used to reduce premiums for participants going forward, or they may be used as a cash refund to participants that were covered during the period that resulted in the MLR rebate, though this may result in taxable income to the participants receiving cash refunds.  Ultimately, the calculation of employer rebate to be provided to plan participants should be based on the participants’ contribution to overall premium costs during the period that is addressed by the rebate.

Both Blue Shield of California and Anthem Blue Cross have recently announced that some policyholders will receive rebates for premiums paid on policies with coverage in existence during the 2012 calendar year.  Guidance for individual and group policy holders regarding MLR rebates has recently been provided by Blue Shield of California and Anthem Blue Cross, as well as the Society for Human Resource Management (SHRM).

For more information regarding MLR rebates or other provisions of Health Care Reform please contact Gray & Troy Insurance to speak with a Certified Affordable Care Act Specialist, or to learn more simply click on the button below and we will contact you.

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Invitation to our Health Care Reform Update Seminar

Seminar Invite

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Employer “Pay or Play” Mandate Delayed- What Does It Mean?

On July 2nd, the Obama Administration announced in a Treasury Department blog post that enforcement of the large employer shared responsibility “pay or play” rules and associated reporting requirements was going to be postponed until 2015.  While the announcement was generally greeted as good news by large employers, it has also created a significant amount of confusion among the general population about the current state of Health Care Reform, who the delay applies to and what changes will actually occur in 2014.

Under the large employer pay or play rules, employers with more than 50 full-time equivalent employees are required to provide health coverage that meets minimum standards for coverage and affordability to all employees working at least 30 hours per week on a regular basis.  Applicable large employers who elect not to provide coverage, or who provide coverage that does not meet the minimum coverage or affordability standards would be subject to annual penalties of as much as $3,000 per employee, depending on how the employer’s plan falls short of the pay or play rules.

It is notable that although the law itself has not been changed, this enforcement delay to 2015 is not the first element of the Affordable Care Act to be postponed, and may not be the last.  With this in mind it is important to consider the changes we will see in 2014 and how they will be applied:

  • The individual mandate requires most Americans to maintain qualified group or individual coverage for themselves and tax-dependent children or face financial penalties
  • Insurance Exchanges or “Marketplaces” begin operation January 1 and will be administered by individual states or the federal government on a state by state basis
  • Federal premium tax credits (affordability subsidies) will apply for low to moderate income qualifying households

In addition, insurers face the following new requirements for plan years beginning on or after January 1st, 2014:

  • Elimination of all annual and lifetime maximum dollar benefit limits
  • Annual out-of-pocket limits may not exceed $6,350 for individual and $12,700 for family coverage
  • Pre-existing condition exclusions or limitations may not be applied to any insured
  • Waiting periods for group coverage eligibility may not exceed 60 days from date of hire
  • Plans offered for sale to small groups (less than 50 employees) and individuals may not apply deductibles of more than $2,000 for individual and $4,000 for family coverage
  • Small group and individual health plans will be community-rated and may not use health status to determine premiums
  • Essential benefit requirements apply to all small group and individual health plans

Other responsibilities apply to plan sponsors and are not impacted by the recent delay are:

  • Summary of Benefits and Coverage (SBC) distribution required during open enrollment and initial eligibility
  • Distribution of Notice of Exchange to all employees by October 1, 2013
  • W-2 reporting of healthcare costs for employers issuing 250 or more W-2s or more in the prior year
  • Timely distribution of carrier-provided Medical Loss Ratio (MLR) rebates to plan participants

While there have been several delays applicable to the Affordable Care Act in recent months, implementation of the law and supporting regulation remains mostly on-track.  As January 1st draws nearer, we may see additional delays  in implementation and Gray & Troy Insurance will continue to monitor developments, providing guidance that is current, relevant and useful.

On August 7th, Gray & Troy Insurance will host our next Affordable Care Act update seminar.  To RSVP please contact our office at (805)540-7010 or email us at

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Health Care Reform Update Seminar – SAVE THE DATE

Seminar Save the Date

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Essential Health Benefits Defined

The Department of Health and Human Services (HHS) recently finalized rules defining Essential Health Benefits which  must be introduced into all health plans beginning January 2014.

The final ruling expanded coverage to include rehabilitative care, mental health and substance use disorder services, pediatric vision and dental care, which was not previously offered in most plans.  These benefits must be included in plans offered both inside and outside of the exchanges.

A “metal rating” will be used to assist with the comparison of similar plans, premiums, and other costs within the exchange.  The law also places an annual limit on the amount an individual will pay, which will prevent those insured from facing high costs, associated with an injury or illness.

More plan details should be released by early summer.  Gray & Troy will continue to provide updates as they are released.  To learn more about Essential Health Benefits, contact Gray & Troy Insurances Services, Inc.

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American Tax Payer Relief Act

In 2012, the American Taxpayer Relief Act was signed, putting important changes in effect, to the estate tax and gift tax laws, for 2013. The maximum estate and gift tax rate is now 40% (5% increase from 2012), with exemptions remaining at $5 million, and an inflation adjustment of $5.25 million.

With the America Taxpayer Relief Act, a married couple may shield up to $10.5 million, from federal estate tax, and make lifetime gifts of $10.5 million, without being subjected to the federal gift tax.  In 2013, the annual gift tax exclusion is $14,000 ($10,000 increase from 2012).

The act also extends “portability”, allowing a spouse to gift their unused federal estate and gift tax exemption to the surviving spouse. California will continue to have a no inheritance tax in 2013.

For more information about the American Taxpayer Relief Act, visit The National Law Review, or contact Gray & Troy Insurance Services, Inc.

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Notice of Exchanges Extension

The requirement to provide Notice of Exchanges to Employees has been extended from March 2013, to late summer or early fall of 2013, in order to provide a smoother implementation. In a recent release from the Department of Labor (DOL), this extension will ensure that employers receive proper information and guidelines, as well as provide employers with additional time to prepare.  The timing will coincide with the open enrollment period for the Exchanges.

The notice must be provided to all current employees and new hires.  The information that must be included in the notices as stated in the Fair Labor Standards Act (FLSA) is as follows:

  •  To inform employees of the existence of their local exchange, the services provided and the contact information;
  • Purchasing insurance through the exchange, may cause the employee to lose the employer contribution of the premium; And
  • The employee may be eligible for a premium tax credit or a cost sharing reduction if the employer plan does not meet certain requirements.

With the additional guidelines that are to be provided by the DOL, they may also provide a sample Notice of Exchange.

Gray & Troy will continue to keep you informed of updates to these guidelines as they become available. If you have any questions, call us at (805) 540-7010.

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Affordable Care Act Likely to Increase Young Adult Premiums

When the Affordable Care Act (ACA) is fully implemented in 2014, one provision will significantly impact young adults, ages 21-29; age band compression.  The premise of age band compression is that young adults pay more for their premiums, allowing for older adults to pay less.   A recent Contingencies study found that premiums for the 21-29 age group could rise as much as 42%.  Those in the 30–39 age groups could see a premium increase averaging 31%.

Another provision of the ACA taking effect in 2014 is the availability of catastrophic coverage for adults under the age of 30, a plan that may become a viable affordable option.   Young adults will also be considering the individual mandate.  Starting in 2014, there will be a penalty for being without health insurance.  The penalty will be $95 per adult and $47.50 per child with a maximum of $285 per family, or, 1% of family income; whichever is greater.

There are several options to consider and understand while preparing for the ACA 2014 changes. Gray & Troy Insurance is available for assistance, to help evaluate all options, for each individual’s specific needs.  As 2014 draws near, please contact Gray & Troy Insurance at (805)540-7010 to review.

To read the complete Contingencies article and study, visit: Age Band Compression Under Health Care Reform.

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