Colorado voters will soon decide whether we should be the first state to implement a “single-payer” system, or universal health care for residents.  Keep an eye out for Initiative 20, the “State Health Care System”, which was certified recently as having obtained enough signatures to reach the 2016 ballot.

What this would mean to Colorado citizens:

• Single-payer system through ColoradoCare; bills paid by them and not private insurance companies
• Coverage would extend to anyone who earns income and lives in Colorado
• People who qualify for existing federal health programs such as Medicaid and Worker’s Compensation would continue, but the administration would fall under ColoradoCare
• Colorado residents would choose their own medical providers
• 10% payroll tax–employers would pay 6.67% and employees would pay 3.33%.  Self-employed people would pay 10% of their net income.

The idea of a single-payer system for health care has been a hot topic for several years, and continues to be a heated debate.  Proponents, such as Ivan Miller, the Director of ColoradoCare and head of the Colorado Foundation for Universal Health Care, contend that this type of system would extend coverage for $5 billion less than they pay now, by reducing administrative costs associated with private insurance and the pharmaceutical industry.  Opponents of the bill, such as Byron McCurdy, Board President of the Colorado State Association of Health Underwriters, goes so far as to say that “A single-payer system would destroy our industry.”  Nearly one-fifth of Colorado jobs are in the health care industry, and the belief is that physicians and hospitals would be very difficult to recruit, and the idea of a better health care system would be shattered from the start.  Critics of this bill also warn that it is a massive expansion of government that would double the size of the Colorado budget, and it’s possible even that won’t be sufficient to fund the care we’ve come to expect.

If the ColoradoCare bill is passed by voters in 2016, Colorado would become the first state in the country to implement a universal health care system.  However, Colorado is not the first state to have attempted this measure.  In 2011, the Vermont state government passed a law that established Green Mountain Care, the first single-payer system where residents would have received universal health care coverage, with the expectation that overall health care spending would be reduced.  Through 2014, Green Mountain was working on laying out the provisions and responsibilities of the bill, and trying to reconcile the $2 billion in extra spending that would have been necessary to fund the single-payer system.  Ultimately in December 2014, the universal health care plan in Vermont was abandoned, citing tax requirements on citizens and small businesses.

Stay tuned to see if the same situation occurs in the 2016 Colorado vote.

In 2013, the Legislature passed a law that allocated federal grants to support Connect for Health Colorado - Colorado’s state insurance exchange. Beginning in 2015, Colorado will be self-sustaining through a Special Assessment Fee which is applied to all health plans in Colorado, including group insurance and partially self-funded arrangements, for employers of all sizes. 

Here are a few details you need to know:

• The 2015 assessment is currently $1.25 per member / per month
• In 2016, it will be $1.80 per member / per month
• Calendar year 2016 is the last year this assessment is available under current statute

How your health insurance company will collect this fee depends on which carrier you have.  In general, carriers will include the fee as an additional line item on the bill, rather than building it into your premium, unless noted otherwise.

• Anthem – Line item for all groups
• Aetna – Currently planning to charge only groups 100+; process to be determined
• Cigna – Line item for all groups
• Humana – Since they are in the process of being acquired by Aetna, they’ll follow Aetna’s process in 2016
• Kaiser –  Will begin charging in 2016 but process to be determined
• Rocky Mountain Health Plans – Line item for all groups
• United Healthcare – Line item for all groups

For more information about this fee, please go to www.connectforhealthco.com.

The definition of a “Small Group” in Colorado for insurance purposes has long been considered to be a group employing 50 or less individuals.  The Affordable Care Act originally redefined a Small Group as a group with 100 or less individuals, and also proposed implementing a new rating mechanism for all small groups in 2016.  

The new age-banded rating structure requires that rates be determined upon each member’s exact age.  This has many companies, primarily those in the 51-100 space, struggling to prepare for new administrative complexities that they are not used to since they have always been composite-rated.  

On October 7, 2015, the federal Protecting Affordable Coverage for Employees (PACE) Act was enacted into law after much debate and lobbying in Congress. This bill re-set the definition of a small group under the ACA back to 2-50, and allows the states to extend the small employer definition up to 100 employees if they choose. 

Colorado and a few other states (CA, MD, NY, VA and VT) have already passed legislation to expand the small employer definition up to 100 employees for 2016. The PACE Act may have some of these states re-evaluating the guidance and whether it is worth the time and money to change the small group definition.  As it stands today, we do not expect the state of Colorado to change their current position, which defines Colorado Small Group as a group of under 100 employees.  Much work has already been done at the carrier level to accommodate the new definition, and it may be too late in the year for them to change their stance.

As having a different rate for every employee can be very challenging, we have two key suggestions.  First, if you are becoming subject to age-banded rates for the first time, we highly recommend using an online enrollment tool if you don’t already.  This enables you to load all the rates in advance once, so that each new employee comes on and the system has already priced out what the rates will be depending on their exact situation.

Secondly, small groups subject to the new rating structure can still create composite rates for their employees if they so choose.  The benefit is to be able to communicate the same rate to all employees regardless of age, based on their tier of coverage.  We can help you estimate what adequate composite rates would be for your group.  

These estimated composite rates are used only for establishing your employer/employee contributions and will not affect what you see on your insurance company bill.  Thus, it’s important that groups choosing this route be aware that they are taking a risk of not collecting enough premium to balance out at the end of the year should enrollment fluctuate from what was anticipated when the composite rate estimates were established.   Companies using composite rates would want to revisit them each year with the changes in enrollment over the last 12 months. Groups with high employee turnover or contract employees may not want to use composite rates because of this uncertainty.

Finally, consider a partially self funded plan, which enables you to keep your composite rates indefinitely.  Read more here.

This continues to be a hot topic and we’ll monitor the news for additional guidance in Colorado!This email address is being protected from spambots. You need JavaScript enabled to view it. or give us a call with any questions.

Employers were warned in 2014 that the ACA came with a new medical billing and coding system. As of October 1st, the United States implemented the tenth revision to the ICD (International Classification for Diseases) codes in an effort to more thoroughly define diseases and injuries. 

This change will allow key industry stakeholders to better track and manage diseases and patterns, measure the quality of care, evaluate patient outcomes, ensure patient safety, manage population health, detect fraud / abuse and track detailed data on injuries and accidents to compare global pandemics—all of which support the shift toward value-based healthcare.

 However, the coding system comes with other changes that are not so exciting.  Doctors and other medical professionals will now have to learn the 140,000 new codes which have been added to describe treatments provided on billing statements as well as private insurance claims. This is a huge leap from the 17,000 codes that previously existed before October 1.

 This complex conversion could lead to disruptions across the medical field. Providers may see overall delays in claims processing, and some individuals may have insurance claims that are denied for services that were provided, but not properly coded. 

The Health Information and Management Systems Society (HIMSS) published an article earlier in the year stating coding errors can reach a staggering 19.7% out of total claims submitted. The Centers for Medicare and Medicaid Services (CMS) published a counter article in July 2015, indicating the ICD-10 testing results displayed a 98% success rate and they would not expect ICD-10 to impact patients unfavorably. Another hurdle facing a clinic or a provider is that medical billing and coding is a highly demanded profession and this transition of codes would make it more competitive and thus more costly than before.

If you or your employees are experiencing escalated claims issues, please reach out to your account manager at Fall River - This email address is being protected from spambots. You need JavaScript enabled to view it.

Large employers who offer an opt-out provision, where the employee “opts out” of the company’s benefits plan in exchange for cash or an increase in the employee’s salary, need to be aware of the impact this could potentially have when determining “affordability” under the employer mandate. 

In 2015, the employer mandate is in effect for large employers (defined as those with 100 or more full-time or full-time equivalent (FTE) employees), who must provide “minimum essential coverage (MEC)” to at least 70% of their full-time employees or potentially pay an assessment if they do not offer coverage, or if they offer coverage that isn’t “affordable”. 

Starting January 1, 2016, employers with 50 to 99 full-time employees or FTEs will be required to comply with the mandate as well.  

Although no guidance has been released with regard to an opt-out provision under the employer mandate, it has been suggested that it will most likely mimic the individual mandate’s calculation of affordability.

What are the IRS Guidelines for the Individual Mandate? 

An employee can be eligible for a tax credit on the individual exchange if their employer coverage is unaffordable, which is defined as the employee’s contribution towards coverage exceeding 9.5% of their income.  The amount they have to contribute to employer coverage also impacts whether they are subject to the individual mandate.  

An employee’s contribution is reduced by the amount the employer contributes, as long as the employee cannot elect to receive the employer contribution as a taxable benefit (such as cash). Therefore, employer opt-out contributions that can be taken as cash must be counted as employee contributions for affordability purposes under the individual mandate.

Potential impact of the affordability requirements under the Employer Mandate

An example:

• An employer requires a $90 per month per employee contribution towards the cost of the plan.
• This amount would almost certainly meet the affordability test for all employees. 
• In addition, the employer offers all employees a $100 per month opt-out credit.
• Based on how they interpret opt-out credits for the individual mandate, it appears the IRS may interpret the employee contribution to be $190 ($90 plus the $100 that the employee must forego to elect the coverage). 

Now, many of the employer’s lowest wage employees could fail the 9.5% affordability test, potentially subjecting the employer to a $3,000 affordability penalty for any of those employees who choose subsidized coverage on the exchange rather than the employer’s plan. Whether or not the coverage is affordable is communicated on each employee’s 1095 form starting in 2016.

Employers offering an opt-out provision should carefully review their benefits plan, and potentially check with legal counsel, to determine if the current arrangement violates the affordability requirements under the employer mandate. We also recommend outsourcing the preparation of your 1095 forms, to alleviate the time and compliance hassles associated with them. 

If you’d like to discuss the potential impact of your opt-out provision, just give us a call or This email address is being protected from spambots. You need JavaScript enabled to view it..  

There are so many laws driving your practices regarding HR and Benefits, that it's getting tougher and tougher to keep track of them all. Yet with the threat of significant fines and even jail time for violations, you’ve got to stay on top of the most important ones.

Join us for a high energy and entertaining pick-me-up to the end of your day as we review the most common mistakes that land an HR person in trouble, especially regarding your employee benefits.  We'll cover what you thought you knew, but might be surprised about, on the following topics:

• ERISA – it’s not just for retirement plans, as the DOL is auditing more and more health plans.  We’ll cover some classic retirement plan blunders, but also what you need to do on your health plan – and why so many employers are out of compliance!
• HIPAA Discrimination Rules and how to keep your wellness program legal based on all the latest guidance (click here for more topics and to register)
• The ADA as it impacts wellness and workers comp and wellness programs;
• COBRA goofs you might just have made at one time or another; and 
• Tricky situations under disability leave and the FMLA.

Towards the end we'll have time for sharing best practices among peers, and networking, accompanied by some adult refreshments. Who knew Happy Hour could be so fun AND educational??  This program is free for Mile High SHRM members, and very affordable for others.  Register here.

We often talk to small and mid-sized employers about the advantages of a Partially Self Funded plan, which most large employers already use.  These include the avoidance of most premium tax, more control over plan design, and access to data that you can use to lower future renewals.

But two forces are coming together to bring more focus on partial self funding.  First, for groups under 50 employees, the end of transition relief that had allowed some smaller plans to avoid the new community rating rules means the four impacts below are hitting those groups this fall. Second, for groups with 51-99 employees, all four of these factors go into effect with your first renewal in 2016:

• Limited Age Rating: Rates for younger groups may go up once they switch to the new rating. Insurance companies today typically charge 5 to 7 times as much for the oldest enrollees compared to the youngest. Under the ACA, they’re limited to 3 times as much.  This is good news for groups with an older population, but if most of your employees are younger than age 40, this may result in higher rates at the point you switch to a community-rated plan (this Fall for many groups under 50)
• No Industry Rating: Employers who are in industries generally considered to be healthy get lower rates today to reflect this. Since January of 2014, the ACA no longer allows industry rating for groups under 50, and it’s disallowed in 2016 for groups 51-99, so many smaller plans who may see a bump at their next renewal when they move to an ACA-compliant plan
• No Rating for Health Status: Groups under 50 employees in Colorado haven’t been rated by health status in a number of years, but small groups in most other states were. Discounts for healthy groups went away in all states for groups under 50 in 2014, and they disappear for all groups up to 100 employees in 2016
• Age-Rating:  Most employers with 10 or more employees are accustomed to composite rates, where there is a single set of 4 tier rates for all employees.  This structure changes on ACA-compliant small group plans to having a different rate for every single age, as well as separate rates for each dependent.  This requires much more administration work, especially if you don’t have an online enrollment system, which we would highly recommend

Small groups under 50 employees who had used transition relief to put off joining an ACA-compliant plan will have some planning to do to avoid potential unpleasant surprises at their next renewal.  Similarly, groups between 50 and 100 employees will face a major rating change, and partially self funding can be a great way to avoid those changes permanently.  There is some talk of a delay of this rating change for groups of 51-99, but until we see something more concrete we’re encouraging groups to prepare as if it were going into effect on schedule in 2016.

If you are an employer with a relatively healthy population, you may wish to strongly consider a partially self funded plan with your next renewal.  We are helping some of our clients evaluate this strategy now so they can plan ahead of their anniversary date. Kristen will also be giving a number of seminars on partial self funding this year at the Mountain States Benefit Update Conference and also the CO-SHRM conference in Keystone. 

Please This email address is being protected from spambots. You need JavaScript enabled to view it. or give us a call at (303) 369-3200 if you would like some tips on how to approach this important decision.

Since the implementation of the Affordable Care Act, experts have attempted to analyze the cost effects on American employers.  While broad generalizations cannot be made since results can vary by state and industry type, the largest differentiator seems to be group size.   Larger employers may tell you that the cost impacts have not hurt their businesses, however small employers report a drastically different perspective.  In summary:

• Small employers (50 employees or less) are already feeling the cost impact of the ACA
• Mid-size employers (50-99 employees) will most likely not see the impact until 2016, when the mandate begins requiring employers to provide coverage or pay a tax penalty for each uninsured employee beyond the first 30.   Many of these employers are already complying with many provisions of the mandate and may not see much of a cost impact.
• Large employers (99 employees or more) have seen very little effects since most are already in compliance.  The cost impact associated with the ACA is a small fraction of what they pay overall for employer-sponsored health insurance.

Although those large groups may not have yet seen a large cost impact, provisions such as the Cadillac tax in 2018 on the most generous health plans may cause some employers to re-evaluate their plans. If they haven’t felt the cost impact like smaller groups have, they most likely did experience some transitional headaches accompanying the need to change their benefit structure to be in compliance with the ACA.

To read more about why large groups are not feeling the pain associated with the costs of the Affordable Care Act, click on the following link: 

http://www.insurancejournal.com/news/national/2015/02/19/358049.htm

Small employers are exempt from the mandate, and could potentially drop group coverage without a financial penalty.  However, they also know that having a benefit package helps to attract and retain good employees.  They may find themselves weighing the need to attract a good workforce with the increasing costs of health insurance and the impact on their budget.

According to a 2014 survey conducted by Morgan Stanley, small groups in many states reported that their premiums increased substantially.  In Colorado, renewal premiums spiked by an average of 29% and many employers opted to “grandmother” their plans in order to delay the financial impact of the transition to ACA-compliant plans.

What makes this transition especially difficult for small employers that already have a tighter budget than larger companies, is that they could be faced with the difficult choice of dropping group coverage altogether or passing some of the cost increases to employees in the form of higher out-of-pocket costs or higher employee premium responsibility.   A subset of small employers, particularly in certain industries, is going as far as  reducing employee hours to limit their eligibility on the group plans.  A survey by the Society of Human Resources Management found that 1 in 5 small businesses are reducing workers’ hours to less than 30 hours per week, making them ineligible to participate in the group plan, but possibly eligible for subsidized coverage through the individual Exchanges. 

To read more about the effects of the ACA on small businesses, click on the following link:

www.ncpa.org/pub/st356

As the effects of the ACA continue to evolve in the coming years, Fall River is positioned to help our clients navigate each step of the way.  If you have any questions about the impact of the ACA on your business, This email address is being protected from spambots. You need JavaScript enabled to view it.!

While most employers are busy figuring out the Affordable Care Act (ACA) Employer Mandate and the 2015 ACA reporting requirements, there’s an important tax coming down the road in 2018 to plan for now.

The “Cadillac Tax” is a 40% excise tax applied to any plan whose premiums exceed certain thresholds in 2018.  (Add click here to read more link)  The intention of this section of the ACA is that extremely rich healthcare plans contribute to unnecessary utilization, and thus are being discouraged.  The premium limits are $10,200 for single coverage and $27,500 for family coverage, which sound like enormous amounts.  

But, if you take your monthly premiums this year, and project them 3 years down the road, you’d be shocked at how close you may already be to facing this huge excise tax.  If your premiums today exceed about $640 single or $1,725 family, your plan is already on pace to being a Cadillac plan (assuming 10% healthcare trend).

If you’re in the danger zone, please give us a call at (303) 369-3200 or This email address is being protected from spambots. You need JavaScript enabled to view it. to get some ideas of how to head off this damaging excise tax before it arrives!

Are your health plans compliant with the Affordable Care Act (ACA)?  If you are a small employer that has put off making the switch and have kept your non-compliant plans under “transition relief,” also known as “Grandmothering,” this grace period has come to an end and your next renewal will be onto an ACA compliant plan.

The Colorado Division of Insurance (DOI) announced on March 13th, 2015 that Individual and Small Group plans not considered to be ACA-compliant will not be allowed to continue into 2016.  Insurance companies will no longer offer non-compliant plans during your 2015 renewal, and you’ll need to choose new plans that are ACA-compliant.  The only exception is if you have grandfathered plans and are not yet subject to this provision of the Affordable Care Act.

Fall River will be reaching out to all of our small group clients with Grandmothered plans to help them convert to ACA-compliant plans by the end of 2015. 

More History.  In March 2014, President Obama announced the transition relief provision that allowed the states to choose whether to allow the continuation of non-compliant plans for two more years.  In May of 2014, Colorado chose to allow non-compliant plans in late 2014, into 2015, to allow individuals and small groups more time to prepare for the transition.  At the time the Insurance Commissioner, Marguerite Salazar, felt that employers, carriers, and consumers would benefit from having additional time to prepare for the new ACA plan requirements.  However this year she stated that in her opinion all involved have had time to get ready and that it was time to implement the ACA-compliant plans. The recent decision does impact a few hundred thousand people in Colorado that are in either insured under Individual or Small Group plans that are not yet ACA-compliant.  

What happens next?  Insurance carriers will notify the individuals and small employers covered under non-compliant plans of their discontinuation in 2015.  The notice of termination should be provided at least 90 days before the termination of the plan.  Companies will be provided with information about alternate ACA-compliant plans for consideration upon renewal.  For Individuals losing their non-compliant plan, the loss of their existing coverage is considered a qualifying event to take advantage of the special enrollment period to select new coverage on the Exchange or directly through the carrier.

Small Business Renewal Dates.  Many small companies (2-50 employees) moved their renewal date to the very end of the year to delay the impact of the ACA-compliant plans as long as possible.  However, so many renewals are now in the last quarter of the year that it’s hard to get the carriers’ attention.  If your business ideally does not want to have a renewal date in November or December, you may wish to consider moving your renewal date in 2015 or 2016, if your carrier allows it.  We can help you evaluate whether this would be the right strategy for us – just This email address is being protected from spambots. You need JavaScript enabled to view it. or give us a call!