Shirazi Notice – March 2013

 open book


Legislative Alerts

SB 13-011: Authorizing Civil Unions in Colorado

Health Care Reform

HHS Releases Draft Application for Individuals & Families as part of the Online Exchange Enrollment Process: Many Express Concerns about Complexity

HHS Issues New Rules on the Implementation of Health Insurance Reform

Choice for Colorado Employers

Carrier Updates The New Site for Members to Manage Their Health and Health Care Expenses

Wellness in the Workplace

Want some super-savings? Avoid super-sizing.

Anthem Employer Wellness Webinars



SB 13-011: Authorizing Civil Unions in Colorado

On Thursday, March 21, 2013, Governor Hickenlooper signed SB 13-011 – Concerning Authorization of Civil Unions. The bill creates the “Colorado Civil Union Act” (Act) to authorize any two unmarried adults, regardless of gender, to enter into a civil union. The bill grants rights to same-sex couples that are similar to those protections married couples enjoy under the law. The bill takes effect May 1, 2013, and will impact many areas of the law.

For insurance policies issued, delivered or renewed on or after January 1, 2014, the Colorado Civil Union Act will allow parties to a civil union to cover their partner as a dependent in life insurance, health insurance and other insurance policies that provide coverage relating to joint ownership of property.



HHS Releases Draft Application for Individuals & Families as part of the Online Exchange Enrollment Process: Many Express Concerns about Complexity

Last week, the U.S. Department of Health and Human Services (HHS) released the draft paper application, and corresponding online version, to receive benefits through a state health benefits Exchange.

The application, available here, has been criticized by many industry insiders who were hoping for a simple, straight forward application that would ease the burden of the individual mandate on consumers. Others are more supportive, stating that “this is the government’s first stab at simplifying a notoriously complicated process.”

The draft application is 15 pages, accompanied by a 60 page description. The online version has been compared to TurboTax, and was released along with two explanatory videos detailing the process for a family, and for a single individual.

The complexity of the application clearly highlights the need for Brokers to have greater involvement in the application process. While the law may provide access to information, the ability to understand it will be missing. Brokers could easily fill this role, and utilize their knowledge and ability to communicate healthcare requirements to the public to ease the application and selection process.

Download a copy of the draft application here.


HHS Issues New Rules on the Implementation of Health Insurance Reform

Earlier this month, the U.S. Department of Health and Human Services (HHS) released new proposed, final rules on a host of issues relating to the implementation of the Patient Protection and Affordable Care Act (PPACA). Many of these reforms will be implemented on January 1, 2014. The rule will be effective on April 30, 2013.

The rule, published on March 11, 2013, provides detail to a wide range of reforms under PPACA, covering additional explanations or updates to:

  • Federal Exchange user fees;
  • A number of insurance risk issues;
  • The federally-facilitated Small Business Health Option (SHOP) program; and
  • The medical loss ratio (MLR) program

Federal Exchange User Fees
PPACA authorizes a federal Exchange to charge a fee to participating issuers to provide funding to support its operations. The rule implements these user fees for qualified health plans (QHP) participating in a federal health benefits Exchange. The rule also outlines HHS’s approach to calculating the fee. For the calendar year 2014, the user fee assessed to QHPs being offered through federal Exchanges will be 3.5% of the premium charged by the QHP.

Insurance Risk Updates
The rule also provides greater detail for the implementation of the permanent risk adjustment methodology, the transitional reinsurance program, and the temporary risk corridors program. These programs are intended to help stabilize premiums for the individual and small employer group markets and protect against the effects of adverse selection.

A primary goal of the reinsurance program is to mitigate insurance risk in the individual market by subsidizing the costs of more expensive enrollees. The risk corridors program will protect against uncertainty in rate setting for qualified health plans by limiting the extent of issuers’ financial losses and gains. The risk adjustment program will provide increased revenues to health insurance carriers that attract high-risk populations, including populations with chronic conditions, and remove the incentive for issuers to avoid higher-risk enrollees. Under the risk adjustment process, funds will be transferred from health insurance carriers with lower-risk enrollees to carriers with higher-risk enrollees.

MLR Updates
The rule also amends prior medical loss ratio (MLR) rules to require health insurance carriers to include premium stabilization amounts in the MLR and the rebate check calculations. The rule proposes to account for all premium stabilization amounts in a way that would not have a net impact on the adjusted earned premium used in calculating the MLR denominator and rebates. The rule amends prior rules to include all premium stabilization amounts as adjustments to incurred claims in calculating the MLR numerator. This final rule amends the MLR calculation formula to read:

MLR = [(i + q s + n r)/{(p + s n + r) t f (s n + r)}] + c

i = incurred claims
q = expenditures on quality improving activities
p = earned premiums
t = federal and state taxes and assessments
f = licensing and regulatory fees, including transitional reinsurance contributions
s = issuer’s transitional reinsurance receipts
n = issuer’s risk corridors and risk adjustment related payments
r = issuer’s risk corridors and risk adjustment related receipts
c = credibility adjustment, if any

Other sections of the rule provide clarification on the proposed process for advance payments of the premium tax credit and certain cost-sharing reductions.

SHOP Standards
The rule establishes operational standards for the SHOP, which will allow small employers to offer employees a greater variety of QHPs through a state or federal Exchange. This final rule establishes standards and processes for implementing SHOP Exchanges, including:

  • Standards for the definitions and counting methods used to determine whether an employer is a small or large employer and whether an employee is a full-time employee;
  • A methodology for employers to make a QHP available to employees in the federally-facilitated SHOP (FF–SHOP);
  • The minimum participation default rate in the FF–SHOP;
  • QHP standards linking federally-facilitated Exchange and FF–SHOP participation;
  • Standards ensuring broker commissions in FF–SHOP that are the same as those in the outside market;
  • Standards authorizing state and federal Exchanges and SHOPs to selectively list only brokers registered with the respective state or federal Exchange or SHOP.

The rule also details several other key elements to help a SHOP navigate through a variety of additional federal and state requirements. Finally, the rule provides transitional relief in some cases where existing state laws may conflict with new federal mandates.


Choice for Colorado Employers

Over the past few days we’ve seen reports that the federal government will not provide health plan choices to small businesses though the federal exchange that opens this fall. The federal exchange, known as the Health Insurance Marketplace, will serve the residents of over 30 states – not including Colorado.

Colorado is moving forward with choice. We will be introducing an enhanced employer/employee choice model to our SHOP marketplace customers when we open on October 1st 2013. As decided by our Board of Directors, Colorado is implementing the technology and operational support necessary to offer small employers more health plan choices than exist in the market today. Starting in October, employers with 2-50 full-time employees will come to our marketplace, set their budget and decide what types of plans they wish to offer to their employees. Employers may elect to offer their employees a multi-carrier/multi-plan menu of health plan options. Coverage will take effect as early as 1/1/2014.

The Colorado Health Benefit Exchange will become Connect for Health Colorado this spring to better serve Coloradans. As Connect for Health Colorado, we will launch a new health insurance marketplace and support network in October that will allow individuals, families and small employers to compare and purchase health plans from companies including the major providers in the state in a convenient way. We will provide high quality customer assistance by phone and in person, as well as access to new financial assistance to reduce costs.


CARRIER UPDATES: The New Site for Members to Manage Their Health and Health Care Expenses

Cigna members will soon be moving from to As their new site for managing their health and health care expenses, is designed to be easier to use and navigate – because that makes it easier for our customers to get healthy, stay healthy and be more productive.

Download this guide to see all the materials available to communicate this website move to Cigna members. For more information, contact your Account Manager.



Want Some Super-Savings? Avoid Super-Sizing.

Watching food portions can be hard. But it’s worth the effort. Overeating and under-exercising can lead to obesity. And obesity doesn’t just affect your overall health. It can really sock it to your wallet too. Researchers found that the average cost to up-size a “value” meal is about 67 cents. That 67 cents buys you about 400 extra calories and an extra 36 grams of body fat for one meal. Unfortunately, it can also cost you as much as $7.00 in extra health care and other living expenses. Multiply that times the number of times you super-size a meal at a restaurant or at home, and the costs really keep adding up.


Anthem Employer Wellness Webinars

Anthem offers free employer wellness webinars that cover a wide variety of topics to boost your worksite wellness program.

The next webinar, on Wednesday, April 24th at noon MT, is on “How to Inspire Weight Loss at Work.” Future topics include “No-Cost and Low-Cost Wellness Tools,” “Using Incentives to Change Behaviors,” “How Can You Inspire Employees to Quit Smoking,” and “What Can You Do When Employees Get Sick?”

Register online here.