Confined Spaces in Construction Final Rule has been
HEALTH CARE BENEFITS ALERT
By Paul Routh
of Dunlevey, Mahan & Furry
There have been
three major changes
with respect to fully insured group health plans in
Ohio. The first two modifications are legislative
changes that bring Ohio in line
with the Federal rules and the final one is a change in
the Ohio Department of Insurance's position on spousal
coverage. The Federal government also issued some
transitional relief for small employers. You need
to know about these changes and ensure your plan is in
Ohio Now Permitting Spousal "Carve Outs" To Save
A spousal "carve out," as opposed to
a "spousal surcharge," is when the employer precludes
the employee’s spouse from enrolling in the group health
plan if the spouse is eligible for another group health
plan (i.e. a group health plan sponsored by the spouse’s
employer). A spousal surcharge, on the other hand,
is when the employer simply charges the employee more to
cover his or her spouse if the spouse has access to
another group health plan. For example, the
employer may tell the employee it will cost the employee
$ 100 per month to cover his or her spouse but, if the
spouse has access to another group health plan, it will
cost the employee $ 175 per month to cover his or her
The Ohio Department of Insurance
precluded insurance companies from offering a group
health plan that had a spousal carve out.
Therefore, employers sponsoring a fully insured health
plan could not implement a spousal carve out; their only
option was to impose a spousal surcharge. The Ohio
Department of Insurance has changed its position and is
allowing insurance companies the option of offering
fully insured health plans with a spousal carve out.
So, you should contact your insurance company if you
want to implement a spousal carve.
Note, you cannot
simply adopt an internal policy imposing the spousal
carve out. You have to have the insurance company
implement that provision. The Ohio Department of
Insurance is allowing insurance companies to offer these
types of policies but it is up to each carrier whether
or not they want to offer these types of products.
Again, spouses that lose coverage due to a spousal carve
out will not be eligible for COBRA coverage because
there is no qualifying event
Under all three changes, individuals
will lose health coverage. Even though they may
not be eligible for COBRA coverage, they (and their
spouses and dependents) will have the opportunity to
enroll in their employer’s group health plan.
Federal law allows individuals to enroll in their
employer’s group health plan mid-year, assuming they are
otherwise eligible to participate in that plan, whenever
there is a “special enrollment period.” As a
general proposition, a loss of eligibility in a group
health plan for almost any reason creates a special
enrollment period. So individuals who lose their
health coverage because of these three changes will
probably have the right to enroll in another group
health plan immediately upon losing their coverage and
they will not have to wait until the next open
Employer's Payment for Individual Health Policies Ending
The Federal government has issued a
number of rulings saying employers cannot pay for or
reimburse employees for individual health policies.
That is, employers cannot, directly or indirectly, pay
for the employee’s individual premiums on either a
pre-tax or post-tax basis. Employers that violate
this rule are subject to a $ 36,500 per year per
The Federal government just issued
transitional relief that allows small employers (i.e.
those with less than 50 full time and full time
equivalent employees) to pay or reimburse employees’
premiums for individual health policies until June 30,
2015. Note, this relief is only for small
employers and only until June 30, 2015.
So, larger employers
are currently subject to the $ 36,500 annual per
employee penalty and starting July 1, 2015, small
employers will become subject to the penalty.
"Eligible Employee" For Mandatory Coverage Increased To
30 Hours Per Week
Ohio requires small employers
sponsoring fully insured health plans to offer coverage
to “eligible employees.” Eligible employee is
defined as an employee that works, on average, at least
25 hours per week. The hour requirement in this
definition is going to change to 30 hours per week.
This change, which is effective for plan years beginning
on or after January 1, 2016, brings Ohio law into line
with the Federal statute. That is, health care
reform defines a full time employee as one that works at
least 30 hours per week.
Note that this change applies to
small employers in Ohio. A small employer is
defined as an employer that had between 2 and 50
employees during the previous calendar year. As a
side point, once the change kicks in, employees that
worked more than 25 hours or more but less than 30 hours
will lose their health coverage. However, they
(and their family members) will not be entitled to COBRA
coverage because there is no qualifying event.
Remember there has to be an enumerated event that causes
the loss of coverage for COBRA to apply. In this
case, there is no qualifying event which means there is
no COBRA coverage!!!!
Definition of Dependent Child Changed To Age 2
Ohio law currently requires employers
sponsoring fully insured health plans to offer coverage
to unmarried children up to age 28 if the child lives in
Ohio or is a full time student who is not eligible for
another group health plan, Medicare or Medicaid.
For plan years beginning on or after January 1, 2016,
the age is lowered from 28 to 26. This brings the
Ohio rules in line with Federal law. This change
applies to all size employers sponsoring fully insured
health plans in Ohio.
The COBRA rules with respect to this
change are less clear. Those rules say you have to
offer COBRA coverage when a dependent loses dependency
status under the terms of the plan. The COBRA
rules contemplate a child attaining a certain age and
losing coverage rather than a plan amendment that
results in a number of children becoming ineligible for
coverage. Therefore, you need to contact your
insurance carrier to determine if you should offer COBRA
coverage to those dependents that lose health coverage
as a result of the change.
Paul Routh is a
Director at Dunlevey, Mahan & Furry and heads the
Benefit Group. Visit their website at
www.dmfdayton.com. DM&F sponsors the Legal Services
Plan available to all members. Contact Bob
Dunlevey at (937) 223-6003.