Background – Oklahoma Option was passed mid-year 2013 to be effective 02/01/14, but was challenged in the Oklahoma Supreme Court in September 2013.  Due to that challenge, insurance companies stopped working on plans and rates due to fear the law would be overturned.  The Supreme Court ruled on 12/16/13 that the new law would stand and would go into effect on 02/01/14 as planned.  As this was in the middle of the Holiday season, no company resumed work on their plans/rates until January.

As of 02/24/14, the Oklahoma Insurance Department has not approved any plans/rates yet for the Oklahoma Option.  There are approximately 6 insurance companies that are or will be filing plans to be approved…there is no real “uniformity” to these plans and it is thought they will vary in both benefit and price rather substantially.

MIG is currently working with 2 “reputable” companies that are filing plans/rates…Great American and Safety National; both of which currently offer TX non-subscriber coverage as well.  Both companies hope to be able to roll out their plans in late March or early April, but admit it could be May or even June depending on the OID (Ok Ins Dept).

Although they are not making the public aware of it, as of 02/24/14, the OID does not yet have their procedures in place to even “approve” the application from employers to opt out.  They do expect to be ready in conjunction with the new plans approval in late March/April/May-ish.

MIG is watching the development of the new plans very closely, and we are already appointed with the carriers who will be offering plans in OK.  We will be informing clients of the availability to move to the OK Option as soon as it’s available. 

The decision to move to the Option will be based on each individual business’ claim history, so we will need to schedule a visit or conference call at that time.  Generally the Option will initially be best suited for mid to large size employers whose claims are neither frequent nor severe (ie 3 to 10 claims per year depending on employer size with no or very few claims over $15K).

For specific questions regarding whether the Oklahoma Option may be a good fit for you please contact:

Heather McGregor heather@mig-ok.com

The Internal Revenue Service (IRS) says it will let employers with 50 to 99 full-time employees wait until Jan. 1, 2016, to comply with the Patient Protection and Affordable Care Act (PPACA) group coverage mandate.

But employers with 100 or more full-time employers will have to comply with the Internal Revenue Code Section 4980H “play or pay” provision Jan. 1, 2015.

Employers affected by the requirements in 2015 would have to offer coverage to just 70 percent of full-time workers in the first year and 95 percent in the second year, according to new final regulations that are set to appear in the Federal Register Wednesday.

Midsize employers that want to wait until 2016 to comply cannot simply downsize to fit into the 50-99 FTE category, but employers close to the 100-employee cut-off may be able to qualify for the mandate delay if they can show they reduced workforce size or hours for “bona fide business reasons.”

Under PPACA, workers are “full-time employees” and eligible for the mandated coverage if they work more than 30 hours per week.

Phasing in the penalty should help workers who work 35 hours per week but have been considered part-time workers, IRS officials say.

The regulations — Shared Responsibility for Employers Regarding Health Coverage (RIN 1545-BL33) — implement a tax law added by PPACA Section 1513.

PPACA requires that employers with at least 50 full-time employees, or full-time equivalents (FTEs), offer health coverage or else pay a penalty for every employee who qualifies for subsidized coverage from the new PPACA health insurance exchange system.

Originally, the mandate was supposed to take effect for all secular employers with 50 or more FTEs this year.

’The penalty the employer pays would be based on the number of full-time workers that the employer employs. For purposes of calculating the penalty, the employer would not have to include part-time and seasonal workers in the calculations.

Under PPACA, only workers who are not offered group health coverage are eligible to apply for exchange coverage subsidies.

Part of the new regulations deal with efforts to keep employers from using offers of low-quality “skinny plans,” or plans with an employee share of individual premiums that exceeds 9.5 percent of the worker’s income, to block a worker from applying for exchange coverage subsidies.

An employer cannot require a worker to enroll in an unaffordable plan or a plan that fails to meet federal minimum value standards, officials say in a preamble to the proposed regulations.

An employer can keep a worker from qualifying for an exchange subsidy by offering affordable coverage that provides benefits with a minimum value, but only if the employer offers the worker an “effective opportunity to accept or decline coverage.”

“An employer  may not render an employee ineligible for a premium tax credit by providing an  employee with mandatory coverage (that is, coverage which the employee is not offered an effective opportunity to decline) that does not meet [minimum value] or that may not be affordable,” officials say in the regulation preamble.

The IRS, an arm of the Treasury Department, also deals with many of the details involved with counting employees.

The hours of unpaid volunteers, unpaid interns and of students in federal work-study programs would not count toward FTE calculations, for example, but officials do want employers to include other paid student work hours in FTE calculations, and they see they will look at exclusion of interns’ hours from calculations for signs of abuse.

The IRS also talks about arrangements it will make for temporary staffing agencies.

Many commenters asked the IRS to increase the number of hours a worker must work to count as a full-time worker over 30 hours per week

The IRS believes it has no regulatory authority under PPACA to set a higher minimum number of hours, officials say.

Some benefits experts have said complicated business aggregation rules could trip up some employers that don’t realize the IRS would consider them to be related to other employers. IRS officials say employers will have to use IRS aggregation rules to determine whether they are large, but can go on a business-by-business basis when calculating actual penalty payments.

Reprint from LifeHealthPro

By John D. Doak, Oklahoma Insurance Commissioner 

In light of recent wildfires and the threat of more activity, now is a great time to review your home and auto insurance policies.

Damage caused by fire and smoke is covered under standard homeowners, renters and business insurance policies. The comprehensive portion of an auto insurance policy also covers fire and smoke damage. There is also coverage for water or other damage caused by firefighters in the course of extinguishing a fire.

To make sure you’re prepared for a wildfire or other disaster, you should ask your insurance agent or broker two important questions:

1. Do I have enough insurance to rebuild my home?
A homeowners policy needs to cover the cost of rebuilding a home at current construction costs. Unfortunately, some homeowners only buy the minimum insurance protection required by their mortgage company. Others confuse the real estate market value of their home with what it costs to rebuild it. The Insurance Information Institute suggests you consider the following while discussing coverage needs with an agent or broker:

Replacement Cost
Most policies cover replacement cost for damage to the structure. A replacement cost policy pays for the repair or replacement of damaged property with materials of similar kind and quality.

Guaranteed or Extended Replacement Cost
An extended replacement cost policy pays a certain amount above the policy limit to replace a damaged home, generally 20 percent or more. A guaranteed replacement cost policy pays whatever it costs to rebuild the home as it was before the disaster, regardless of the policy limit. These types of coverage can be useful if there is a widespread disaster that pushes up the local costs of building materials and labor.

Inflation Guard
This coverage automatically adjusts the policy limit, upon renewal, to reflect increases in construction costs. Some policies already include this coverage, but it may need to be purchased separately.

Ordinance or Law Coverage
If a homeowner is required to rebuild the home to meet new building code, this coverage pays a specific amount toward those costs.

Water Back-Up
This coverage insures the property for damage caused by the back-up of sewers or drains. Most insurers offer this coverage as an add-on to a standard policy.

Additional Living Expenses (ALE)
ALE pays for the added costs of living away from home, such as hotel rooms and restaurant meals, while the house is being repaired or rebuilt. If part of the home is rented out, ALE also replaces lost income. Many policies provide coverage for 20 percent of the amount of insurance you have on your house and may specify a time limit. Additional ALE coverage is generally available for an extra premium.

2. Do I have enough insurance to replace all of my possessions?
Most homeowners insurance policies provide coverage for your personal possessions for approximately 50 to 70 percent of the amount of insurance on the structure of the home. For example, $100,000 worth of coverage on the structure of the home would pay for $50,000 to $70,000 worth of personal items.

To determine whether that coverage is sufficient, it is important to conduct a home inventory, detailing everything you own and the estimated cost to replace these items if they are stolen or destroyed. A home inventory kit is available for free here.

Actual Cash Value vs. Replacement Cost

Possessions can be insured in two ways: either for their actual cash value or their replacement cost. Actual cash value only pays a percentage of the original cost because it is no longer worth what you originally paid for it 10, five or even two years ago. A replacement cost policy reimburses you for the full cost of replacing the item, but not up front. First, you’ll get paid for its actual cash value. Later, after you’ve purchased the new item, you’ll be paid the difference between the actual cash value and the replacement cost.

For more information, or help with other insurance questions, please contact the Oklahoma Insurance Department’s Consumer Assistance Team at 1-800-522-0071.