HMSA Group Leader G U I D E

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1 HMSA Group Leader G U I D E

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3 Table of Contents Introduction....2 HMSA s Health Plans....3 Dental, Prescription Drugs, and Vision HMSA Senior Plans....5 HMSA Individual Plans....6 Group Sponsored Benefits and Services Benefit Services of Hawaii/USAble Life....7 HMSA Well-Being Connection....8 Group Services....9 Important Health Care Laws Eligibility General Procedures Enrollment General Information When Can Your Employees and Their Dependents Enroll How to Enroll Your Employees and Dependents How to Add New Employees How to Add New Dependents Cancellations How to Cancel Your Employees How to Cancel Your Dependents Billing How to Read Your Bill How to Pay Your Bill General Information Terms and Definitions....37

4 Aloha! Mahalo for choosing HMSA! As a group leader, you are an important link between your employer group and HMSA. Our Group Leader Guide is a valuable tool to help you administer your program. It outlines the policies and procedures you ll need for enrolling and maintaining members of your group. MY HMSA ACCOUNT REPRESENTATIVE is: Phone: ACCOUNT MANAGEMENT & SALES: Oahu Groups with 20 or more employees...contact your account representative Groups with less than 20 employees Individual Plans (eligibility, enrollment, and brochures) Neighbor Islands (toll-free)...1 (800) Fax Hilo Office Kona Office Kauai Office Maui Office CUSTOMER SERVICE Plan benefits and claim inquiries Oahu Group and Individual Plans Federal, State, and County Plans Medicare and HMSA Coverage (including Senior Plan members) Dental Plans (including Dental Network) HMO Plans Hilo Office Kona Office Kauai Office Maui Office MEMBERSHIP SERVICE Group Billing Information Oahu... Contact your Billing Reconciliation Representative Neighbor Islands (toll-free)... 1 (800) Individual Plan Billing & Other Information Group Member Eligibility & Other Information HMSA Mailing Address: HAWAI I MEDICAL SERVICE ASSOCIATION 6-AMS P.O. BOX 860 HONOLULU, HI For more information about HMSA, visit hmsa.com. 2

5 HMSA s Health Plans HMSA offers a variety of comprehensive health plans designed to meet the changing needs of our members. Choice Medical: HMSA s Choice Medical is an innovative health plan package developed specifically to help keep your employees healthy and reduce your costs. This unique package combines the Preferred Provider Plan, CompMED, and Health Plan Hawaii Plus to give your employees unparalleled choice in health care coverage. All of these outstanding plans feature extensive provider networks, away from home coverage, preventive care, and all of the high standards in service you ve come to expect from HMSA. Preferred Provider Plan: HMSA members have the freedom to choose their own physicians. When members use participating providers, most services are covered at 90 percent of the eligible charge. This free-choice plan gives members access to the largest network of health care providers in the state. It also offers members access to over 750,000 Blue Cross and Blue Shield providers nationwide. This plan includes a managed-care program to ensure your employees receive the maximum plan benefits when using HMSA participating providers. CompMED: A lower-priced plan for employers with comprehensive benefits for employees. Plan benefits include coverage for physician office visits, inpatient and outpatient facility services, and other provider services. Like the Preferred Provider Plan, this free-choice plan gives members access to the largest network of health care providers in the state. It also offers members access to over 750,000 Blue Cross and Blue Shield providers nationwide. Health Plan Hawaii Plus: An enhanced version of our popular health maintenance organization, Health Plan Hawaii. Members pay only a low copayment for each health center visit. This means less out-of-pocket expenses and easier budgeting. This plan requires the employee to select a primary care provider for coordinated care. Health Plan Hawaii Plus emphasizes preventive care, such as physical exams, well-baby visits, standard immunizations, and prenatal care. Small Group Plus: HMSA s comprehensive plan for groups with one to 19 employees. This plan gives members access to benefits for medical, drug, vision, dental, and group term life insurance. Small Group Plus is offered with our Choice Medical and Choice Dental programs. This allows the member to choose a plan based on their own personal health care needs and finances. Small Group Preferred: HMSA s comprehensive plan for groups with two to 50 employees. This plan gives members access to benefits for medical, drug, vision, dental, employee term life insurance, dependent term life, accidental death and dismemberment (AD&D), and Long- Term Disability. Small Group Preferred is offered with our Small Group Plus, Choice Medical, and Choice Dental programs. This allows the member to choose a plan based on their own personal health care needs and finances. Riders: In addition to basic medical plan options, HMSA also offers extra protection with a dental plan, prescription drug, and vision programs. Minimum subscriber count is required for riders. Retiree Plans: HMSA offers a selection of health and drug plans for retirees. Employer groups can sponsor a plan for their retirees or retirees may qualify for individual coverage on their own. Among the selection is HMSA s Medicare Advantage Prescription Drug plan, designed especially for people in Hawaii with Medicare who want coverage beyond what Medicare provides. Retirement can bring up many questions about health insurance. Please contact your account representative and ask about HMSA s free Pre-Retirement Health Care Planning Seminars. Individual Plans: For employees leaving your company who are not eligible for COBRA coverage, we offer several individual health plan options. Please refer to page 6 in this guide or call HMSA s Account Management & Sales Individual Plans at on Oahu or 1 (800) toll-free on the Neighbor Islands. Affordable Care Act (ACA). Small businesses with up to 50 full-time employees can choose new ACA plans that include health benefits required by health care reform. Premiums for these plans are based on the age of employees; health plans for older employees may cost more than plans for younger employees. Small businesses with an equivalent of up to 25 full-time employees with average wages of less than $50,000 may qualify for a tax credit when they buy ACA plans on the Hawai i Health Connector, the state s online health insurance marketplace. 3

6 Dental, Prescription Drugs, and Vision Choice Dental Plan The following provisions are applicable when enrolling in HMSA s Choice Dental Plan: A group must maintain a minimum of two subscribers to be eligible, with the exception of Small Group Plus. If a group offers the dental plan, all eligible employees must be enrolled in this plan. Members enrolled in the dental plan must enroll in the single coverage if they have the single basic medical plan or family dental coverage if they have the family basic coverage. Enrollment for medical and dental coverage must be done at the same time. Employer groups that voluntarily terminate their dental plan will not be permitted to re-enroll until 12 months after the cancellation date. Members have a choice of the following: Participating Provider Program: This program allows members to receive services from any licensed dentist. Members may choose from over 700 participating dentists and will receive the maximum benefits from this option. Dental Network Program: Each member can choose a dental center to receive all of their services close to work, home, or school. Offices are conveniently located on Oahu, Kauai, Hawaii Island, and Maui. HMSA has contracted with these dentists to provide members with personal, quality service with an emphasis on preventive care. They offer the most modern facilities and treatment methods for members ultimate comfort. Drug/Vision Riders The following provisions are applicable when enrolling in HMSA s drug/vision rider: A group must maintain a minimum of five subscribers to be eligible, with the exception of Small Group Plus and Small Group Preferred. If a group offers the drug/vision rider, all eligible employees enrolling in the medical plan must also enroll in the rider. Members must take the same level of coverage in the rider that they have in the medical plan. For example, an employee may enroll in single medical/ single rider coverage, but may not enroll in single medical/family rider coverage. Members must enroll in the drug/vision rider at the same time they enroll in the medical plan. Groups that voluntarily cancel their drug/vision rider may not re-enroll until 12 months after their cancellation date. Riders Only A group may allow an employee to enroll in rider coverage only when the rider is accompanied by the medical or dental plans. This situation may occur when an employee has an additional medical plan through a spouse. If an employer offers medical and dental coverage, the employee may enroll themselves and their eligible dependents under the dental coverage. If the employer offers medical, dental and drug/vision coverage, the employee may enroll under the dental and drug/vision coverage. The employee must enroll in all riders available in the group. Drug/vision rideronly coverage is not allowed. Riders-only coverage is subject to the same administrative guidelines as regular coverage, such as open enrollment, dependent eligibility, and contribution requirements. 4

7 HMSA Senior Plans Akamai Advantage HMSA offers health plan and prescription drug options, with a Medicare contract that is designed especially for people in Hawaii with Medicare Part A and B who want benefits beyond what Medicare provides. Groups may sponsor the health plan and prescription drug coverage as a retiree plan. Individuals may also qualify for coverage on their own. Here are some reasons why people in Hawaii choose HMSA: Established reputation. A trusted, reputable name for health care in Hawaii. Experience. A local company serving Hawaii since More than 48 years of Medicare experience. Easily accessible customer relations. Speak to local, friendly, and knowledgeable customer relations representatives who are eager to help you in person or on the phone. Financial strength. Your health plan is protected by HMSA s solid financial foundation. About 93 cents of every dollar we receive goes to pay for your care. HMSA has one of the lowest administrative expenses for health plans in the nation. Our focus is on you. Part of Hawaii s communities. Generations of Hawaii families put their trust in us. Akamai Advantage offers: Affordable plans. Premiums as low as $0. Comprehensive benefits. Medical, drug, and vision benefits, as well as dental discounts. Choice of doctors. Choose from more than 2,700 participating physicians statewide. Prescription drugs. Medications are available at neighborhood pharmacies and conveniently through the mail. Drug discounts in the Coverage Gap. All drug plans feature discounts in the Coverage Gap ranging from 28 percent to 52.5 percent on generic and brand-name drugs to save you money during this period. Financial protection. There s a limit on how much you pay every year for medical services. Predictable costs. Set charges for most health care services, including doctor visits, to help you manage your health care budget. Special HMSA member discounts. Save money on many health and wellness products and services, including dental and vision. Notification of Creditable Coverage for HMSA Employer-Sponsored Prescription Drug Plans HMSA tests all group-sponsored prescription drug plans every year to ensure they meet or exceed the requirements necessary to be considered creditable coverage under the Medicare Modernization Act (MMA). Creditable coverage means that an employer s drug plan benefits are at least equal to Medicare Part D. Employers offering a group-sponsored drug plan to Medicare-eligible individuals are required under the Medicare Modernization Act (MMA) to provide a notice to all of the Medicare-eligible individuals. A model letter from the Centers for Medicare & Medicaid Services (CMS) is available on hmsa.com. Employers must provide the creditability of coverage notice to their Medicare-eligible individuals: Once a year before the Medicare annual election period (October 15 - December 7). Within the 12 months before an individual s initial enrollment period for Medicare. Before the start date for a Medicare-eligible individual beginning participation in the employer-sponsored group drug plan. When the plan s prescription drug benefit ends or is no longer creditable. Upon a beneficiary s request. If you have questions regarding creditable coverage and the requirement notifications, please contact your HMSA Account Management & Sales representative or visit hmsa.com. HMSA offers complimentary Pre-Retirement Health Care Planning Seminars. HMSA s Pre-Retirement Health Care Planning Seminars are a valuable resource to help you and your employees as each individual navigates through health care planning prior to retirement. Generally, each seminar takes about an hour and covers Medicare basics and HMSA plan choices (for eligible retirees who have Medicare Part A and Part B). Whether your group sponsors an HMSA retiree health plan or elects to endorse an HMSA Senior Plan for your retirees to fund on an individual basis, if you have 10 or more interested attendees, we will come to your place of business to host a seminar. For more information, please call your account representative. 5

8 HMSA Individual Plans Employees leaving your company may be eligible for COBRA. However, members who are ineligible for COBRA or choose not to enroll in COBRA, may apply for an HMSA Individual Plan. Conversion Membership. Members must apply within 60 days of their HMSA group plan cancellation date. However, if they apply within 31 days of their group cancellation than they will not have a break in coverage. Affordable Care Act (ACA). People who buy health insurance on their own can buy an ACA individual PPO or HMO plan that includes health benefits required by health care reform. This includes part-time employees and your employees spouse or children. Premiums for these plans are based on age; the older you are, the more your premiums will be. People who buy health insurance on the Hawai i Health Connector, the state s online health insurance marketplace, could qualify for a subsidy depending on their income. Student Plan 19: A PPO medical plan for students attending an accredited college or university on a full-time basis. Applicants must be age 19 through 24. Once students graduate or reach the maximum age of 25, they must disenroll from this plan. Student Plan 19 also provides access to medical care to students attending school outside the state of Hawaii. This plan is specially priced for students (single plan) and features medical, surgical, hospital coverage, and a $15,000 group term life insurance policy. Waiting periods for maternity benefits help to keep monthly dues affordable. Children s Plan: An HMO medical plan that provides limited basic health care benefits needed to help keep children age 31 days through 18 years in good health. The HMSA Children s Plan covers certain preventive services, immunizations, doctor visits, diagnostic tests, emergency care, and mental health benefits. This plan also provides some prescription drugs and preventive dental care benefits. Dental Plans HMSA dental plans pay for a variety of dental services with regular screenings and cleanings. We help pay for basic services, such as cavity fillings and spacers, and for major care such as dentures, crowns, or bridges. Our plans include: Dental Plus. For seniors 65 years and older. PPO Dental. PPO members have the freedom to choose their own dentist from one of the largest network of providers in the state. HMO Dental. Our HMO dental plan has the most value for members who want great care for the least amount of money. Services must be provided by Hawaii Family Dental Centers. Children s dental benefits. You can enroll in an Affordable Care Act health plan that includes children s dental benefits as required by health care reform: Preventive services such as oral exams, teeth cleaning, and X-rays at no copayment. Basic services such as fillings, extraction, and root canals. Members pay 30 percent of the cost. Major services such as crowns and dentures. Members pay 50 percent of the cost. Where to buy an HMSA Individual Plan. People who don t have health insurance, including part-time employees or your employees spouse and children, have various ways to buy an HMSA individual plan: On the phone. Call us at on Oahu or 1 (800) toll-free on the Neighbor Islands. Online. Visit hmsa.com and go to Health Plans and Individuals and Family. In person. Go to an HMSA center or Neighbor Island office. (Locations and hours of operation on hmsa.com.) People can also buy an ACA plan on the Hawai i Health Connector, the state s online health insurance marketplace. Depending on their income, they could receive financial help for health insurance when they buy it on the Hawai i Health Connector. 6

9 Group-Sponsored Benefits and Services Benefit Services of Hawaii/USAble Life Group Term Life and Accidental Death and Dismemberment: HMSA has made arrangements through Benefit Services of Hawaii, Inc., to offer life insurance benefits at competitive rates. We offer Group Term Life and Accidental Death and Dismemberment plans designed for Hawaii businesses. Voluntary Group Term Life Insurance, Dependent Life, and Supplemental Life programs may be included for your employees to purchase at their own expense. Temporary Disability Insurance (TDI) [Long-Term Disability Insurance (LTD)]: Our TDI plan can help you meet the requirements of the state law while reducing your administrative burden of dealing with several carriers for all your insurance needs. LTD provides protection for one s most valuable assets the ability to earn their paycheck. It helps employees maintain their standard of living while disabled. Worksite Benefits: These voluntary benefits are made available to provide added peace of mind for your employees in the event of an unexpected crisis in their lives. These plans do not require employer contributions and many of the premiums can be payroll deducted on a pretax basis. In most cases, the benefits are paid directly to the insured regardless of any other coverage they may already have, and those benefits may be used to cover out-of-pocket expenses such as copayments, and living and travel expenses. Accident Plan: Accidents may happen at anytime, at work or at home, and are the leading cause of death and injuries among people from birth to age 44. Unlike a standard AD&D plan, Accident Plan provides comprehensive benefits that pay for services such as hospital confinement, burns, surgery for tendon/ligament repair, emergency room, 7 and ambulance. In addition, it pays for a routine physical exam after each anniversary of the policy effective date. CancerCare: Because there are many non-medical expenses associated with the diagnosis and treatment of cancer, many people need supplemental coverage. CancerCare plans include benefits such as hospital stay, surgery, chemotherapy, and transportation. CriticalCare (Critical Illness): This benefit offers lump-sum payments paid directly to the policyholder or beneficiary upon first positive diagnosis of a covered critical illness. Critical illnesses include cancer, heart attack, stroke, end-stage renal failure, major organ transplant, quadriplegia, coronary artery bypass surgery, balloon angioplasty, stent or laser relief obstruction surgery, and carcinoma in situ. Hospital Confinement Plan: The Hospital Plan provides coverage from the first day of a hospital stay as a result of an accident or sickness. Benefits include coronary care/intensive care, accidental death and dismemberment, surgical procedures, and ambulance. Voluntary Long-Term Disability: If an employee becomes disabled due to an accident or illness, TDI will be exhausted in six months. Voluntary Long-Term Disability provides extended coverage if the employee is unable to return to work for a period of time. Voluntary Life and Accidental Death & Dismemberment (AD&D): Employees may select a term life insurance for themselves and their spouse at competitive group rates on a convenient payroll deduction basis. There are also options available for their children. Voluntary AD&D provides 24-hour coverage for accidental loss of limbs, sight, speech, or hearing. TASC (Total Administrative Services Corporation) The Flexible Spending Plan allows your employees to use pretax income to pay for eligible health plan dues, dependent care expenses, and out-of-pocket medical expenses not covered by the health plan. Employees will save 25 percent to 35 percent on taxes while employers will save about 8 percent in matching FICA/Medicare taxes.

10 Group-Sponsored Benefits and Services (continued) HMSA Well-Being Connection Your employees are the most important part of your business. Healthy employees can lead to a more productive workplace and can help contain your health care costs. That s why we continually look at new ways that will help your employees achieve their health goals and reduce their risk of chronic diseases. HMSA Well-Being Connection is a comprehensive, integrated approach to health and well-being. Well-Being Connection will help your employees evaluate their current health, set health goals, and achieve those goals through support, online tools, and coaching: Well-Being Connect. This convenient, powerful website offers your employees a variety of tools and resources to improve and maintain their health and well-being. Employees can track their progress in personal focus areas like managing stress, exercising, weight loss, and calorie intake. Well-Being Connect is available on My Account on hmsa.com. We encourage your employees to share their Well-Being Report and goals from Well-Being Connect with their primary care provider (PCP). The Healthways Well-Being Assessment. This easy, interactive assessment asks simple questions about your employees health, lab results, physical and emotional well-being, work environment, health behaviors, and more. It then analyzes health risks and suggests areas to work on. Metrics are based on the Gallup-Healthways Well-Being Index. Well-Being Plan. The plan, created through Well-Being Connect, recommends steps to improve behaviors based on each employee s Well-Being Assessment. It s a tailored action plan that changes with the employee s progress and includes tools to help them reach their goals. Trackers and Resources. Your employees can stay on track with their Well-Being Plan with these personalized tools: Recipe Centers. Meal plans. Articles and videos. Trackers for exercise, medication, weight, and healthy eating. Well-Being Connection Workshops. Health and wellness education are key to a healthy lifestyle. Your employees can take a variety of workshops at no charge: Disease Awareness: Review common, life-altering conditions such as heart disease, high-blood pressure, diabetes, osteoporosis, and cancer. General Health: Increase your well-being in these workshops that focus on virus treatment and prevention, the importance of quality sleep, positive attitude, and goal-setting. Healthy Aging: Discover ways to keep your body and mind functioning at high levels in these engaging sessions. Injury Prevention & Safety: Practice healthy posture, proper lifting techniques, and back stretches in this interactive workshop. Learn about the contributing factors for recurring back pain and reduce your risk. Nutrition: Explore our relationship with food, how to make smart choices on the go, review dietary guidelines, and choose healthier local foods. Physical Activity & Exercise: Tackle a handson approach in these interactive workshops that focus on cardiovascular exercise, strength training, outdoor fitness, and family-based activities. Stress Management: Relaxing and finding the calm in life are important for your home and work environment. Learn and practice techniques that will help you lower your stress levels. Weight Awareness: Gain an understanding of calories, lifestyle behaviors, and societal influences in relationship with weight management in this interactive workshop. Workshops are held at various HMSA Centers and community locations statewide for members ages 18 and older. To enroll, call HMSA Well-Being Connection at 1 (855) toll-free. Find more information on hmsa.com. Healthways Well-Being Assessment is a trademark of Healthways, Inc. All rights reserved. 8

11 Group Services HMSA offers many services to enhance your member experience. COBRA ASSIST Companies with 20 or more employees are required to offer continued health care coverage to employees and their covered dependents under the Consolidated Omnibus Budget Reconciliation Act (COBRA). HMSA offers an administrative service to help you meet your mandated responsibilities. This service is offered to you at no additional charge by assisting you with monthly billings, collection, tracking, bookkeeping, claims processing, and customer service. For more information, contact your account representative. Qualified Medical Child Support Orders All companies are required to honor Qualified Medical Child Support Orders by providing group health plan benefits to children whose parents are divorced or separated. HMSA will assist you by providing samples of the administrative procedures that companies must follow. HMSA will also handle claims processing and customer servicing for these dependents. Sample Administrative Procedures for Qualified Medical Child Support Orders Required Employer Action The Omnibus Budget Reconciliation Act of 1993 (OBRA 93) amended ERISA by adding Section 609. The Act requires all employers to honor Qualified Medical Child Support Orders (QMCSO) by providing group health plan benefits for children whose parents are divorced or separated. All employers must honor QMCSOs received on or after August 10, Upon receipt of a medical child support order: 1) First Written Notification Send written notification within 10 days to: The employee affected by the court order. Any custodial parent/legal guardian and/or dependent mentioned in the court order. This written notification must: Acknowledge receipt of the court order. Mention employer s procedure for determining if the order is a qualified one. Qualified Guidelines - A qualified order must: State the name and current addresses of the employee and each dependent mentioned in the order. Provide, create, or recognize the right, or assigns to each dependent covered under the order the right to enroll in the employee s group health plan. Describe the health plan, including the type of coverage to be provided. Specify the period to which the order applies. State each health plan affected by the order. Restrictions of a Qualified Medical Child Support Order: Cannot require the employee s group health plan coverage to provide any type or form of benefit or any option that is not otherwise provided to the employee, except as otherwise required by the law. 2) Second Written Notification Send written notification within 10 days of the first notification to: The employee affected by the court order. Any custodial parent/legal guardian and/or dependent mentioned in the court order. This written notification must: State whether the order has been determined to be a qualified medical child support order. Employer Action to Add Dependents If the medical child support order is determined to be qualified, the employer must: Acknowledge in writing that the dependent is eligible to receive the same group health plan coverage as the employee. Verify in writing who will receive (custodial parent, legal guardian, etc.) any communications for the dependent s health plan coverage. This includes: Receipt of health plan brochure. Separate Summary Plan Description(s). Direction of payment or reimbursements for covered out-of-pocket medical expenses paid by the dependent or custodial parent/legal guardian. 9

12 Group-Sponsored Benefits and Services (continued) Enroll each dependent under the employee s group health plan using HMSA s Membership Report form. Attach with the enrollment form copies of the letters to the dependents and a copy of the Qualified Medical Child Support Order. Treat the dependent as an employee for purposes of any reporting and disclosure requirements under ERISA. HMSA s Responsibilities When the enrollment forms, copies of the letters to the dependents, and a copy of the QMCSO are received, HMSA will: Enroll the dependent under the employee s group health plan. Mail benefit checks to the dependents or designated parent or guardian. Answer inquiries from the dependents or designated guardians. 10

13 Important Health Care Laws An HMSA COBRA administrative service is available to help your company meet your COBRA responsibilities. Please note that HMSA doesn t issue mandated COBRA notices to your employees. For more information, please contact your account representative or the U.S. Department of Labor Employee Benefits Security Administration at (626) The following is intended to summarize key health care laws affecting employers. For more detailed information, please contact the appropriate office listed. COBRA: The Consolidated Omnibus Budget Reconciliation Act was signed into law on April 7, This provision applies to employer groups who had 20 or more employees for at least 50 percent of the previous calendar year. Employees are counted on a full-time equivalent basis, which means that part-time employees are counted as a fraction of a full-time employee based on the number of hours worked. Employers must offer continued group health plan benefits, which may be at the employee s expense. Coverage must be made available for 18 months to employees who have a reduction in work hours, voluntarily leave employment, are laid off because of economic conditions, or are discharged other than for gross misconduct. To receive 29 months of COBRA coverage, the qualified beneficiary must be deemed disabled by SSA within the first 60 days of COBRA coverage. The qualified beneficiary can be charged up to 150 percent of the cost of coverage during the 11 month disability extension. The total maximum period of 29 months of COBRA coverage, includes the 18 months of COBRA coverage period and the 11-month extension. Coverage must also be offered to the employee s covered dependents. Extended coverage of 36 months must be made available to covered dependents who are spouses of deceased employees, legally separated or divorced spouses of current employees, Medicare-ineligible dependents of employees entitled to Medicare, and children of current employees who lose coverage because of their age. ERISA: The Employee Retirement Income Security Act of 1974 as amended requires all employers who have 100 or more employees to file an annual plan report with the U.S. Department of Labor and to provide to participants a summary of the annual report. This annual summary is in addition to the formal summary plan description (SPD) each participant receives after becoming a participant. All ERISA plans, regardless of size, must prepare and distribute an SPD to participants. For more information, call the U.S. Department of Labor at (626) Hawaii Prepaid Health Care Act: This state law requires employers to offer health care benefits to their employees who work a minimum of four consecutive weeks at 20 or more hours a week. For an A status plan, the employer must pay at least half of the premiums for the employee and the employee is responsible for the balance. The employee s portion, however, can t exceed 1.5 percent of their gross monthly wage. For a B status plan, the employer s contribution toward the family premiums must equal the required single rate contribution plus half the difference between the single rate and family rate. The employer also has the option of paying more or all of the health plan premiums. If the employee chooses to waive medical coverage, the employee must complete and submit an HC-5 waiver form to the employer. The employer must then file the document with the Hawaii Department of Labor and Industrial Relations. This exemption is binding for one year and must be renewed every December 31. If an employee is hospitalized or otherwise prevented by sickness from working, the employer shall enable the employee to continue the employee s coverage by contributing to the premiums the amounts paid by the employer toward such premiums before the employee s sickness for the period that the employee is hospitalized or prevented by sickness from working. This obligation shall not exceed three months after the month during which the employee became hospitalized or disabled from working, or the period for which the employer has undertaken the payment of the employee s regular wage in such case, whichever is longer. For more information, call the Hawaii Department of Labor and Industrial Relations at on Oahu. 11

14 Important Health Care Laws (continued) HIPAA: The Health Insurance Portability and Accountability Act of 1996 (HIPAA). The HIPAA Privacy Rule set boundaries for the appropriate uses and disclosures of protected health information. It also requires health care providers, plans, and clearinghouses to have policies and procedures in place to protect the privacy of member information. HIPAA limits HMSA from disclosing protected health information to an employer or plan administrator if the HIPAA privacy regulations or HMSA s privacy policies don t expressly permit the disclosure. In such cases, we ll require the authorization of the enrollee who is the subject of that information before we disclose the information. HIPAA was also designed to help employees maintain access to health coverage as they change employers or when they leave their employer and seek an individual health plan. Key provisions include requirements to apply an individual s prior health coverage under a group health plan toward meeting pre-existing exclusion periods under another group or an individual health plan. HIPAA states that employees who enroll in a new group plan within 63 days of their prior coverage will receive credit for prior plan coverage. Prior creditable coverage includes coverage under their previous employer s group plan, an individual plan, and continuing coverage under government programs such as Medicare, Medicaid, QUEST, and TRICARE. The law also limits exclusion periods for pre-existing conditions in group plans by applying or crediting previous periods of health plan coverage toward those exclusion periods. It also limits pre-existing condition exclusion periods to a maximum of 12 months for certain individuals (18 months for late enrollees). Under the new federal law, it s the employer s responsibility to provide certificates of coverage for all former employees who have been canceled from the group plan after June 1, But the law also states employers can contract with an issuer to provide the certificates for them. As a service to employer groups, HMSA has elected to perform this service. The certificate will be important to those employees exiting the group health plan who will join a health plan that imposes exclusion periods for pre-existing conditions. This could be an individual plan or a group health plan in another state. If a former employee seeks coverage under an individual plan, HIPAA eligibility will affect their access to coverage. To be considered eligible under HIPAA, an individual must: 1. Have had 18 months of continuous creditable coverage with their most recent coverage by a group health plan; 2. Be ineligible for group coverage, Medicare, Medicaid, QUEST, or other health insurance; and 3. Be ineligible for COBRA or have accepted and exhausted COBRA coverage. Refer to your legal counsel for more information. If you need information about individual plan options, please contact your account representative or your local HMSA office. Qualified Medical Child Support Order (QMCSO): The Omnibus Budget Reconciliation Act of 1993 (OBRA 93) added Section 609 to ERISA. The act requires all employers to honor Qualified Medical Child Support Orders by providing group health plan benefits for children whose parents are divorced or separated. All employers must honor QMCSOs received on or after August 10, HMSA will help employers meet their requirements for QMCSOs. For more information, refer to the section on Sample Administrative Procedures for QMCSOs in this guide or contact the U.S. Department of Labor at (626) TEFRA: The Tax Equity & Fiscal Responsibility Act of 1982 requires employers of 20 or more employees to offer working employees and their spouses the same health coverage as employees under 65 if either the employee or spouse is 65 or older and eligible for Medicare. The group plan becomes primary and will pay benefits first, before Medicare pays. Refer to your legal counsel for more information. USERRA: The Uniformed Services Employment and Reemployment Rights Act, signed into law on October 13, 1994, requires employers to offer up to 24 months of continuation coverage to employees who take military leave and their dependents. If the health plan coverage would terminate because of an absence due to uniformed service, the employee and their dependents may elect to continue the health plan coverage for up to 24 months after the absence begins or the period of services, whichever is shorter. The law is very similar to COBRA except for two important differences. First, it applies to all employers; COBRA generally exempts employers that have fewer than 20 employees. Second, if the military leave is longer than 30 days, employers can charge up to 102 percent of the premiums. If the leave is 30 days or less, employers can only charge up to the active employee s share of the premiums. On return from service, health insurance coverage must be reinstated without any waiting periods or exclusions for pre-existing conditions, other than waiting periods or exclusions that would have applied had there been no absence for uniformed service. 12

15 Domestic Partnership: HMSA will offer domestic partnership and reciprocal beneficiary coverage if requested by an employer group. The request must be submitted to HMSA and approved by your account representative. The following documents must be submitted by the employer to the account representative for domestic partnership coverage: 1. A copy of the group s domestic partnership benefit policy, which must include: a) Definition of domestic partners. b) Benefits, both health and non-health, for which domestic partners and their dependents are eligible. c) A requirement that the employee provide evidence showing financial interdependency and joint residency. 2. A copy of the group s enrollment and termination guidelines for domestic partners. 3. A letter of confirmation from the employer stating that all health plan carriers will provide coverage for domestic partners. Domestic partners are not qualified beneficiaries under COBRA and, therefore, are not eligible for COBRA coverage. When they are terminated from group coverage, they are eligible to enroll in individual conversion plans. Reciprocal Beneficiary: The following documents must be submitted by the employer to your HMSA account representative for reciprocal beneficiary coverage: 1. A copy of the group s reciprocal beneficiary benefit policy, which must include: a) Definition of reciprocal beneficiary. b) Benefits, both health and non-health, for which reciprocal beneficiaries and their dependents are eligible. 2. A copy of the group s enrollment and termination guidelines for reciprocal beneficiaries, which, in accordance with Hawaii Revised Statutes 572C, must include: a) A requirement that a valid Certificate of Reciprocal Beneficiary Relationship be issued by the Department of Health before enrollment. b) A requirement that the dependent will no longer be eligible for coverage upon the issuance of a Certificate of Termination of Reciprocal Beneficiary Relationship by the Department of Health. c) A requirement that the dependent will no longer be eligible for coverage upon the issuance of a marriage license to either party to the reciprocal beneficiary relationship. 3. A letter of confirmation from the employer stating that all health plan carriers will provide coverage for reciprocal beneficiaries. Reciprocal beneficiaries are not qualified beneficiaries under COBRA and, therefore, they are not eligible for COBRA coverage. When they are terminated from group coverage, they are eligible to enroll in individual conversion plans. Civil Union: The Hawaii law relating to civil unions, Act 1 of the 2011 Legislature (Act), became effective January 1, The Act provides that a person who meets the requirements of a civil union partner as set forth in the Act has all the same rights, benefits, protections, and responsibilities as are granted to a married spouse. HMSA will add as a dependent anyone who the employer identifies as an eligible civil union partner, provided the employer follows all other HMSA requirements of enrollment for that person. Employers must make their own determination as to whether dependents have met the requirements of the Act and should be enrolled. For more information, please visit hmsa.com. 13

16 Eligibility General Procedures This section will give you basic eligibility guidelines for HMSA s medical plans, dental plans, drug/vision riders, and supplemental medical benefit riders. General Eligibility for HMSA Group Medical and Dental Plans Membership is limited to owners (other than sole proprietors) and eligible active employees of your organization. Partners, officers, or directors of corporations are considered employees if they are directly involved and participate in the day-to-day operation of the business. Owners, partners, officers, and directors must receive a salary from the company to qualify for coverage under their group plan. Employees may enroll their spouse and eligible dependents (see Terms and Definitions for eligible employees and dependents). Employees who wish to enroll in an HMSA group health plan may do so upon their initial eligibility. Transfers from one HMSA plan to another are allowed only during the annual open enrollment period (see Terms and Definitions). Employees who choose to end their group health plan membership outside of an open enrollment period will be eligible to re-enroll at the next annual open enrollment period. HMSA reserves the right to audit the group at its discretion for compliance with group and membership eligibility and enrollment requirements. This includes proof of dependent relationships. Under circumstances of fraudulent enrollment, cancellation will be immediate and any premiums paid for an ineligible employee will be returned by HMSA. Any benefits paid out by HMSA for ineligible employees in excess of premiums collected will become the group s liability. Guidelines When Administering a Variety of Medical and Dental Plans HMSA has developed guidelines to help protect employers from rising health care costs. Many employers are providing their employees with health care options, such as a choice of medical plans and riders. The objective is to maintain a balanced membership basis in the community that encourages stability in plan costs. HMSA s guidelines serve to support the community and defend HMSA from situations where plan costs could unnecessarily rise due to adverse selection. More than one HMSA medical plan: HMSA has a range of medical plans to meet employer needs, such as our preferred provider organization, CompMED, and health maintenance organization plans. Employers may offer more than one medical plan to provide their employees with a choice of coverage, as long as the plans are sufficiently different in plan type. An employer may not offer the A status and B status preferred provider plans side by side. However, an employer may offer the Preferred Provider Plan, CompMED, and HMO plans as these plan types provide a contrasting range of benefits that offer your employees variety in coverage types. Additionally, when offering these health care plans, the package benefits should be relatively equitable. For example, an employer should offer riders with both medical plan choices and contribute to both plans equally. This prevents employees from selecting a plan based solely upon benefit value or cost. Presently, plan choices that are balanced in benefits and employee contribution allow employees to select the plan that best meets their needs. Other non-hmsa medical and dental plans: HMSA will not offer this contract in conjunction with another non-hmsa free choice or Preferred Provider Organization medical or dental plan option. At such time a non-hmsa plan is added to the group plan options, the HMSA medical or dental plan will be canceled immediately. 14

17 Dependent Maximum Age Limit: There are some conditions where continued coverage is available for dependents who would otherwise be ineligible due to maximum age limit of the plan. A disabled dependent may be eligible for continuous coverage if they meet all of the specified criteria defining a child with special needs (see Terms and Definitions). Canceled dependents may not continue their health coverage under the employer group plan unless the employer group is affected by COBRA (see Health Care Laws). They may, however, be eligible for conversion coverage to an HMSA Individual Plan. For more details, please contact your account representative. Members Age 65: HMSA members who reach the age of 65 will be sent a letter concerning their Medicare status. If they are no longer eligible for a group plan, they may apply for an HMSA senior plan if they have Medicare Parts A and B or Part B only. Members should apply at least 60 days prior to the cancellation of their group plan to ensure continuous coverage. Actively employed individuals age 65 or older who are eligible for Medicare will have benefits paid by their group plan coverage first, then by Medicare, if the group has 20 or more employees (see Health Care Laws TEFRA). Persons Not Eligible for Group Coverage HMSA group plans are designed to assist employers in complying with the requirements of the Hawaii Prepaid Health Care Act. The law mandates employers to provide health care coverage for active employees who receive compensation from their employer. The employer is also responsible for deductions such as FICA and state and federal taxes. If an employer has members enrolled under their group plan who do not meet HMSA s guidelines defining an eligible employee, those individuals must be cancelled from the HMSA group health plan (such as listing an individual on the group plan that has less than the minimum number of work hours required, or listing an out-of-state individual on the group plan who is not actually working for the group). HMSA will work with the employer to determine suitable alternate coverage options for that individual. Retirees: In most cases, retirees are not eligible for coverage under an employer group health plan since they are not considered actively employed. HMSA has individual and senior plans that retirees may enroll in for medical coverage. However, on an exception basis, HMSA may allow the continuation of group plan coverage to all retirees of the group. See your account representative for more information. Independent Contractors: Independent contractors are not considered employees of a group and are not eligible for enrollment under the group health plan. HMSA has plans for sole proprietors and selfemployed individuals that are available for independent contractors working in the state of Hawaii on a full-time basis. In special situations, HMSA may evaluate requests from groups to cover all independent contractors in an equitable manner under the group health plan. Please contact your account representative for more information. Non-Employed Family Members: Relatives who are not employed by the company are not eligible for group health plan enrollment except for legal spouses or eligible children. Family members who are employees may be enrolled provided their employee benefits are administered in the same manner as non-family employees. 15

18 Enrollment General Information HMSA offers group-sponsored prepaid medical plans. Monthly dues must be paid on or before the first of the month for that month s coverage. If the group becomes 30 days delinquent in payment, it will be canceled. When Can Your Employees and Their Dependents Enroll? When HMSA receives an enrollment form, membership will be effective on the first of the month following the receipt of the required enrollment forms. Example: HMSA receives an enrollment form on July 20, so the effective date of coverage for this employee would be the first of the following month or August 1. If a person does not enroll when they first become eligible, your company will be liable for any claims incurred during the period of non-coverage. HMSA will not accept retroactive enrollment unless there was an unusual and justifiable cause for late enrollment. Initial Enrollment Period is when new employees can enroll for the first of the month following their hire date or the first of the month following completion of four consecutive weeks of employment, working 20 or more hours a week. Employees must also add eligible dependents at this time. Example: An employee is hired on June 11. That employee can be enrolled the first of the following month or July 1. However, should the company require the employee to work four consecutive weeks at 20 hours or more a week, the employee would become eligible on July 11, and the effective date of coverage for this employee would be the first of the following month or August 1. Open Enrollment Period is when your employees and their eligible dependents who did not join HMSA when they were first eligible may enroll. During this period, members may also change their medical and dental plans. New Eligible Dependents such as newborn children, newly married spouses, and adopted children, must be added to the HMSA plan within 31 days of the qualifying event. A qualifying event would be the birth date, marriage date, adoption date, or date a minor child is placed for adoption and the member has assumed a legal obligation for total or partial support. For eligible newborns, HMSA will enroll the baby effective from the date of birth. For other dependents, coverage becomes effective the first of the month following the date of the qualifying event, provided HMSA receives notice within the appropriate time frame. Change of Employment Status: For example, an employee changes from part time to full time. On the HMSA Membership Report form, you would provide an explanation in the Action Request column such as part time to full time on (date), and list the effective date for this coverage to begin. Loss of Coverage Under Spouse s Group- Sponsored Plan occurs when your employee is covered under their spouse s group plan and that spouse loses coverage. Your employee and their dependents are then eligible for coverage under your group plan. Submit an enrollment form and Membership Report form; in the Action Requested column, include an explanation such as spouse lost coverage due to termination on (mm/dd/yy), and provide an effective date for this coverage to begin. 16