Past Issues
-October 2006Contact us:
Ed Bates
952.944.5044
Mary Bates
952.942.8355
Jereme Bates
952.944.2919
Did you know?
COBRA legislation has changed again, requiring employers to provide a letter for all new hires, explaining their COBRA options upon termination. For more information, please read COBRA... Recent Changes, or contact us at your convenience.
Quarterly Quote
You can complain because roses have thorns, or you can rejoice that thorns have roses.
- Ziggy
Written by Ed Bates
Even though we are having a slow start to our winter season here in beautiful Minnesota, that does not slow our thoughts in recapping 2004 and planning for 2005.
2004 was an exceptional year for our firm. W e saw greater interest in saving insurance dollars than at any other time in our 16-year history. Health care costs continued to increase with corresponding increases in renewal premiums. We did, however, sense a slowing of renewal increases toward the end of the year suggesting that 2005 might be a little gentler on us all.
Commercially, the economy and investments, two major components in commercial insurance pricing, improved over 2003 and 2004, but not at a rate that returned premiums to pre September 11th levels. We do expect, however, that 2005 will offer more options at slightly better pricing, assuming the economy stays on it’s current course.
We also completed the marketing side of our website this year and invite those interested to review it at, www.bates-inc.com. If all goes well, we hope to complete our client side in 2005. That will bring resources and convenience to our current clients. It will also include links to the HMOs and insurance companies in order to obtain forms, information, provider networks and more. Our company is committed to using and providing the technology that is available to us all in the 21st century.
It is hard to believe that our family business will soon be forced to consider expansion of our offices and additional staffing. Whatever happens due to our growth, we will never lose that founding commitment to personalized attention. We specialize in catering to the needs of the smaller employer and we pledge to work hard to be a resource for them that will contribute to their insurance programs.
At this very special time of the year, we do want to take a moment and thank you for your business and wish you all health and happiness in the coming year. Mary, Jereme and I, look forward to serving you in 2005.
Written by Mary Bates
Last May, the Department of Labor issued new regulations regarding notice requirements for healthcare continuation under COBRA. The new rules are designed to give guidance to the employer/plan administrator and for the employees to better understand their COBRA rights. I think you understand that you do have a responsibility to provide your ex-beneficiary (covered employee/dependents) a notice of the “Right to Elect Continuation of Coverage”, when there is a qualifying event. Some of you also may be sending out “initial” COBRA notices to new employees on your plan, explaining now that you (employee/dependents) have benefits, you will be entitled to the “Right to Elect Continuation of Coverage” if certain qualifying events should occur. This is the piece that must be instituted for all groups renewing on or after December 1, 2004. Basically, COBRA notification must be given at the beginning as well as the end. This will also put responsibility on the qualified beneficiary to notify you (plan administrator) of an event, in a timely manner. Additional regulations from DOL require the plan administrator establish “reasonable procedures” to be followed by qualified beneficiaries in notifying the employer of a qualifying event. You are at liberty to establish your own time frame for notification, and it must be in writing. This should be outlined in your “summary plan document”, if you have one, or included with the initial COBRA notification. Another new requirement is if the plan administrator receives notice of a qualifying event but determines that the qualified beneficiary is not entitled to continuation of coverage (e.g., employee terminated for gross misconduct), the plan administrator must send out a notice (in writing) explaining this determination, within 14 days of receiving notice of the event. Finally, under the new rules, the plan administr tor will now be required to notify qualified beneficiaries when their COBRA coverage will terminate. This could be due to nonpayment of premium, end of the 18 months, or becoming eligible under another plan.
I’m sure some of you have already incorporated these procedures, but now it is official. It’s logical to keep everyone informed, and once a routine is established, it will result in a more efficient program. I would suggest for those of you who have had a plan in place for some time, and never sent out an initial COBRA notice (many are in this boat), it may be a good payroll stuffer for the new year. We have a form that you could use on your company stationery, for this purpose. This can be found and downloaded from our web site at www.bates-inc.com, under "what's new” on our homepage. We also have sample forms you could use, again on your company stationery, when a COBRA event occurs and you need to send out notification.
Please call me if you have any questions or concerns, and above all, don’t panic! As long as you’re making an effort to comply, you’re doing your job. It’s hard to keep up with all the federal and state regulations and to sift through the ones of importance, but these 4 new rules do warrant your attention. We are available to help you implement these into your benefits program if you need our assistance.
Have a wonderful holiday season and best wishes for a great new year!
What You Can Expect to Hear More Of
Written by Jereme Bates
Consumer-directed health plans are a topic I suspect we will all hear more about in 2005. What is a consumer-directed health plan? They are more tradition ally known as HSAs or Health Savings Accounts and HRAs or Health Reimbursement Arrangements. Without getting into specific plan details, as there are too many plan designs to talk specifics, HSAs and HRAs are high deductible plans, ranging form $1000 per individual, upward to $10,000 per family in out of pocket expenses. The demands of these high deductibles are made easier on employees by setting up an employee owned savings account, (HSA) or coming to an employer/employee agreement on how claims are paid past a certain point (HRA). The idea is lowering the actual health insurance premiums by going to a high deductible plan and then putting the money saved to work for employees and employers alike. What will be different about this year versus years past? Awareness! You may have heard the issue brought to national attention in this year’s presidential debates. You may have been solicited by other insurance agencies, telling you that these plans are the new best thing. Fact is, these are the plans of the future, but we strongly encourage employers to go cautiously and do their homework. It is crucial that employers and employees truly understand what is involved in a plan design change like this. It is important to know what the positives and negatives of each type of plan design are, and how they might affect your group. So as you hear more on the subject of consumer-directed health plans, (HSA/HRA) remember to talk to one of us at Bates & Associates, as there are a lot of things to consider. Best wishes in the coming year.