Workers Compensation – Out of State Issues

Do your employees travel to states other than where your business is domiciled? Do your employees perform work in other states? Understanding how Workers Compensation laws respond to interstate operations is important to ensure that you are in compliance with state employment laws.

Workers Compensation insurance is regulated at the state level. Benefit schedules for claims, interpretation of laws, rates and requirements will vary from state to state. Considerations for establishing where an employee is domiciled include: Where the employee lives? Where the employee primarily works? In what state was the employee hired?

Extraterritorial coverage issues arise when employees travel and work in a state that is not listed on the Workers Compensation policy. In general, domestic short term business trips to other states should not present a coverage problem. However, a number of states, such as NY and NH, are requiring that they be listed on the Workers Compensation policy even if the work only lasts a few days. Noncompliance with these requirements could open you up to a possible fine.

ND, WA, OH, and WY are “monopolistic” states.  Workers Compensation coverage for employees located in one these four states is only available through the respective state agency.  For example, a Workers Compensation policy would have to be purchased directly through www.ohioBWC.com for an Ohio based employee.

International travel presents additional complications for Workers Compensation. It is likely that your carrier will not have the resources to respond to an employee injured in a foreign location. Traditional Workers Compensation may not apply if the employee was injured during the trip but not engaged in employment related activities. International insurance policies are available to provide 24 hour protection for workers traveling on an overseas business trip.

Understanding how state laws impact your Workers Compensation coverage is important for compliance issues as well as ensuring that your employees are protected. We encourage you to discuss with us any questions you may have regarding your inter-state operations.

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.

Client Spotlight: Road To College

Spring is right around the corner. For high school seniors, a lot will take place over the next few months. Between academics, sports, social activities like prom, and graduation looming, you have to make sure to stay on track with your college planning. Our client, Road To College™ , can help!

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Understanding The HHS Rules For Essential Health Benefits

Health and Human Services (HHS) ruled to establish the future of insurance issuer standards and health insurance exchanges for actuarial value and essential health benefits under the Patient Protection and Affordable Care Act (PPACA). The final rule creates a plan for when federal facilitated exchanges should accredit qualified health plans. When the PPACA goes into full effect, insurance plans that were not grandfathered into the small and individual market must provide coverage of services or benefits in 10 categories. They must also show the scope of benefits a typical employer plan covers. Qualified health plans are designed to provide benefits that cover essential health benefits, meet minimum value requirements and include cost-sharing limits.

Essential Health Benefits

Every state is allowed to have a single EHB benchmark plan. This is the plan that defines the standards for health benefits every Qualified Health Plan (QHP) must follow. One of these four options must be selected:

  • A state employee health plan, which comprises the three largest and most available enrollment-based state plans.
  • A small group plan, which is the largest enrollment-based plan in any of the three largest of the small group options.
  • The plan featuring the largest non-Medicaid insured commercial plan with enrollment through an HMO.
  • Any of the nation’s three largest Federal Employees Health Benefits Program choices offering aggregate enrollment.

When states do not decide on a plan, the default benchmark plan is what will be used. If the plan does not offer all of the required coverage in the 10 necessary categories, it must have supplemental provisions using the rule’s outlines. Multi-state plans must adhere to the benchmark standards set forth by the U.S. OPM.

Actuarial Value

The PPACA allows four levels of health plans through exchanges. Each one of these levels or tiers is defined by an actuarial value, which is a percentage of the total allowed benefits costs paid by the health plan. For example, a silver plan would have an actuarial value of 70 percent while a gold plan’s percentage would be 80. Values may vary by a positive or negative two percent. These levels were set in place to help potential enrollees and participants compare their options. To count toward the actuarial value calculation, amounts made available under HRAs and employer contributions to HSAs may only be used for cost sharing. In addition to this, the issuer must be made aware when the plan is purchased. Issues of integrating other types of HRAs will be addressed and amended when necessary.

Minimum Value

If the percentage of all allowed costs of benefits offered by an employer-sponsored plan equals less than 60 percent, the plan is said to provide minimum value. To determine their values, employers can use the minimum value calculator offered by the IRS and HHS. This calculator is similar to their actuarial value calculator. However, it is based on claims data that shows regular employer-sponsored plans.

Yearly Limits And Deductible Limitations

The HHS requires all group health plans to meet the annual cost-sharing limitation. However, only issuers and plans in the small group market must comply with the deductible limits. When the PPACA goes into effect, the limit for self coverage is set at $2,000. For those with insurance beyond self coverage, the limit is $4,000. Small group health coverage may exceed deductible limits if it is not able to reach a certain tier.

Cost Sharing

For annual out-of-pocket limits, the HHS says that self-insured plans and non-grandfathered group plans must meet the annual limit for the maximums defined in the ACA’s in §1302(c)(1). However, the Employee Benefits Security Administration (EBSA) guidance says that plans may have multiple service providers for administration purposes. If a plan’s annual out-of-pocket maximum limits meet the following, it may be considered satisfied:

The plan includes out-of-pocket maximum coverage that is not completely reliant on major medical coverage.

The plan meets all of the requirements for major medical coverage.

In relation to a specific time frame, the new rule says that exchanges in the future must create a uniform period for a QHP issuer that is not accredited but must gain accreditation. For answers to questions about these issues, discuss concerns with an agent.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.

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