Employer Bulletin

State Agencies
Vol. 17, State H
November 17, 2000

Employee Reimbursement (ERA) Administrative Fee Decrease; Health Insurance Portability and Accountability Act (HIPPA) Update

Program Administrative Fees for Employee Reimbursement Accounts (ERA) Decrease in 2001

The administrative fee for the 2001 Employee Reimbursement Accounts (ERA) Program will decrease from $.60 to $0.48 per month for each health contract that has an employer-paid share reported to the Department of Employee Trust Funds (ETF). This change is effective with the health summary report due December 20, 2000 for January 2001 coverage.

Agencies should report the total fee (number of contracts x $0.48) via the State Health Insurance Summary (ET-1608) form. Even if an agency has no employees enrolled in the medical expense or dependent care reimbursement portions of the ERA program, the agency is still responsible for its share of ERA administrative costs. For most state agencies, employer FICA savings due to pre-tax funding of premiums, which remain in agency fringe benefit lines, will more than offset ERA fees.

For more information about this fee structure, contact Marcia Blumer at (608) 266-2640 or marcia.blumer@etf.state.wi.us. If you have questions about reporting and transmitting the fee with the State Health Insurance Summary (ET-1608) form, contact Ron Diehl, Division of Employer Services at (608) 266-2737 or ron.diehl@etf.state.wi.us.

Health Insurance Portability and Accountability Act (HIPAA) Special Enrollment for Health Insurance

Employees must enroll for health insurance during a designated enrollment period. Enrollment options include submitting an application for enrollment within 30 days of the date of hire if the employee elects to pay the entire premium before employer contributions begin. If the employee does not elect to enroll during the first 30 days, the application must be received prior to the date employer contribution begins. There are no interim effective dates. If the employee misses both of these designated enrollment periods, the employee is limited to the Standard Plan. By virtue of enrolling in the Standard Plan, the employee will have a 180-day waiting period for all pre-existing medical conditions except pregnancy.

Under certain situations HIPAA allows an employee to enroll during the period in-between the two enrollment periods without being restricted to the Standard Plan with a 180-day waiting period for pre-existing conditions. HIPAA allows a special enrollment when an employee or dependent is eligible but not enrolled and there is a marriage or birth, adoption or placement for adoption, if coverage is elected within 30 days of the event. Coverage is effective on the date of birth, adoption, placement for adoption, or on the first of the month following the request for enrollment following a marriage.

EXAMPLE:

An employee with no previous WRS service begins WRS-eligible employment. The employee does not elect health insurance coverage within the first 30 days of employment. The employee's spouse has a baby prior to the date the employer contribution begins. HIPAA allows a special enrollment when an employee or dependent is eligible but not enrolled and there is a birth, if coverage is elected within 30 days of the date of birth. Coverage is effective on the date of birth. The employee can elect family coverage by submitting an application within 30 days of the birth.

HIPAA also provides for a special enrollment period when other coverage is lost. A person meeting the requirements for this special enrollment period would not be denied solely because it occurred during the interim period (i.e., beyond the first 30 days of employment and before the date employer contributions begin). The enrollment period begins on the date other group health insurance coverage terminates due to loss of eligibility (e.g., termination of employment, divorce, etc., but not voluntary cancellation of coverage) or the employer's premium contribution ends. An application and other information documenting the employee's loss of coverage or loss of employer's premium contribution must be submitted within 30 days of the date the other coverage or employer's premium contribution ended. Coverage will be effective on the date the other coverage or the employer's premium contribution ends.

For more information about HIPAA, including when an employee or dependent is eligible but not enrolled, contact ETF's Employer Communication Center at (608) 264-7900.