Aftermath: Policies and Procedures following the Blue Cross Blue Shield of Massachusetts DOI Rate Settlement
As you read in our last post. Blue Cross Blue Shield of Massachusetts has settled with the Massachusetts Division of Insurance. They’ve agreed on new rates they can charge their policy holders who renewed on 4/1/10 through the present day – http://bit.ly/adztWw. If you renewed this year anytime after 4/1/10 you’ll most likely be affected by this with higher premiums moving forward.
I’ve since spoken to reps at Blue Cross to find out how this will affect our clients currently with Blue Cross with renewal dates in the affected time period. They’ve given me specific directions which I would like to share in today’s blog post.
Essentially, they’ve broken down their policies and procedures into three different groups:
- April 1 , 2010 – July 31, 2010 Renewals
- August 1, 2010 - August 31, 2010 Renewals
- September 1 – Present Day Renewals
April 1 , 2010 – July 31, 2010 Renewals
Blue Cross has made this group the first priority in communicating new medical insurance rates. They’re currently working on calculating rates for all groups with renewals in this time period and are aiming to get them out the door by Wednesday, 8/18/10. These rates will go into effect on 9/1/2010. Once a group has received their new rates, they’ll have 60 days to decide if they’d like to switch plan designs within Blue Cross. If the group decides to make a plan design switch, Blue Cross will implement the changes 30 days from the decision date.
Examples:
If you’re renewal date was anywhere between 4/1/10 and 7/31/10, you can expect to receive your new rates on 8/18/2010 which will become effective as of 9/1/2010. (Since you’re September bill will most likely have already been generated by then, a retroactive adjustment including the additional premium for September should be expected on your October bill. The September invoice should be paid as billed).
You’ll have 60 days from the date you found out (if its 8/18/10 as Blue Cross has projected you’ll have until 10/17/10 to decide if your company will make a plan design change within Blue Cross). If you decide anytime within this 60 day period to make a change, that change won’t become effective until 30 days after the request. A few scenarios:
- If the group decides to make a plan design change on the day it finds out what it’s new rates are (8/18/10 in this example) the change won’t become effective until 9/17/10 (30 days). Since the new rates for your old plan become effective on 9/1/10, the group would have to pay the higher rate for this coverage through the new effective date of 9/17/10.
- If the group chooses to wait until the last possible date to make a switch (10/17/10 in this example), that change won’t become effective until 11/16/10 resulting in your group being billed at the higher new rate for the old plan through 11/16/10.
- If the group decides to not make a change in plan design, nothing needs to be done on the carrier end. You may just want to contact your payroll vendor if you’re planning to adjust employee withholdings to maintain an agreed upon employer/employee cost share percentage.
In all cases, you’re anniversary date will remain the same and Blue Cross will not retroactively bill back past September 1, 2010 for any lost premiums during the April – July months of lower interim rates.
August 1, 2010 – August 31, 2010 Renewals
As the groups that renewed their medical insurance in April, May, June and July are scheduled to receive their premium increases relatively soon as mentioned above; groups that renew in the month of August actually won’t receive their premium increases until sometime in the first two weeks of September. These rates will go into effect on 9/1/2010 however. Once a group has received their new rates, they’ll have 60 days to decide if they’d like to switch plan designs within Blue Cross. If the group decides to make a plan design switch, Blue Cross will implement the changes 30 days from the decision date.
Examples:
If you’re renewal date was 8/1/2010, you can expect to receive your new rates sometime between 9/1/2010 – 9/14/2010. These rates will become effective as of 9/1/2010. (Since you’re September bill will have already been generated and most likely paid by then, a retroactive adjustment including the additional premium for September should be expected on your October bill. The September invoice should be paid as billed).
You’ll have 60 days from the date you found out what your new medical insurance rates are to decide if your company will make a plan design change within Blue Cross. For example, if your group finds out about its premiums on 9/14/10, you’ll have until 11/13/10 to make a plan design switch. If you decide anytime within this 60 day period to make a change, that change won’t become effective until 30 days after the request. A few scenarios:
- If the group decides to make a plan design change on the day it finds out what it’s new rates are (we’ll use 9/14/10 on this example) the change won’t become effective until 10/14/10 (30 days). Since the new rates for your old plan become effective on 9/1/10, the group would have to pay the higher rate for this coverage through the new effective date of 10/14/10.
- If the group chooses to wait until the last possible date to make a switch (11/13/10 in this example), that change won’t become effective until 12/13/10 resulting in your group being billed at the higher new rate for the old plan through 12/13/10.
- If the group decides to not make a change in plan design, nothing needs to be done on the carrier end. You may just want to contact your payroll vendor if you’re planning to adjust employee withholdings to maintain an agreed upon employer/employee cost share percentage.
In all cases, you’re anniversary date will remain the same and Blue Cross will not retroactively bill back past September 1, 2010 for any lost premiums during the April – July months of lower interim rates.
September 1, 2010 – Present Day Renewals
As of today, rates for 9/1/10 medical insurance renewals and later are updated in the system and available for viewing. You should consult your broker to find out what these updated rates are so they can help you make a decision on whether or not to switch plan designs within the carrier.
You should also consider other insurance companies at this time the same way you would during a normal renewal. Keep in mind that all carriers require that all applications, enrollment forms and payment be submitted 30 days in advance of the proposed Effective date. Since we’re already past the 30 day window for 9/1/10, it would still makes sense to look at the other carriers because their new business rates will remain the same throughout the month of September. So even if the effective date ends up being later in the month, this shouldn’t have an effect on the rates (just the Effective Date). This gives groups approximately 13 days to gather quotes, make decisions and submit paperwork before the end of the month. 13 days gets you to September 25th (generally the last possible September Effective date for most carriers).
I’m planning to post similar policies and procedures for the other major health insurers as soon as I can. If you have any questions on any of this or if you have a related question that we didn’t answer in this post, please don’t hesitate to reach out as we’re happy to be a resource for you.
Ryan P. McDermott
