In this edition of Expert's Corner, Joan Fusco addresses some of the most common questions she hears from our producers.

If you have a question for Joan, send it to her at joanfusco@savoyassociates.com.

Question:  I have a NJ-based client who is a large employer with both union and non-union employees.  Sixty employees are members of the union-eligible segment who receive benefits through a collective bargaining unit (and are thereby covered under the welfare fund plan).  The remaining thirty-five employees are non-union and in need of a health plan.  How does state qualify them?  For health insurance purposes, are they subject to Small Group Reform; i.e. can they purchase a NJ Small Employer Plan because the eligible population is under fifty-one employees?  Or, are these thirty-five employees still considered to be a large group?

Answer: They are subject to small group reform.  The employees whose benefits are collectively bargained for do not count towards the total eligible population.

Question:  I received a phone call from an ex employee of a 51+ large group who is on Cobra as of 5/18/07.  His birthday is 8/15/1942 and is eligible for Medicare this month.  The Third Party Administrator of Cobra for this group told him he is no longer eligible for Cobra.  How do I advise him?

Answer:  The COBRA administrator is correct.  If the employee is Medicare eligible when the COBRA event occurs, s/he must be offered COBRA continuation.  If the person on COBRA becomes Medicare eligible, the employer may terminate the coverage.  You should advise the client to shop for a Med Supp or Medicare Advantage with prescription coverage.

Question: How do I know if the NJ Continuing Education courses I take are considered to be ethics or not?

Answer:  Schools apply for what designation they want their courses approved for, but the NJDoBI makes the final determination.  For our school, Savoy Associates Insurance Education Services, I put the word ‘ethics’ with the number of credits on each producer’s certificate of completion.  If you think a particular course may have included ethics/fraud content, you must contact the schools directly and ask them if the course was indeed designated for ethics credits.  Unfortunately, Pearson VUE does not track this for producers.

Question:  With regard to HSAs, if an employee starts with an HSA in June and makes the maximum contribution for 2007, does he have to stay on the plan for at least 12 months from June, or 12 months from December of that year?  I read in a summary that "the person must remain eligible for 12 months, beginning with the last month of the year in which the individual became eligible."  Can you clarify?

Answer:  If a person on an HSA plan makes the maximum contribution, s/he must remain eligible to contribute to the HSA for the ensuing 12 months.  So, if someone contributes $5650 June 2007, they must remain eligible to contribute to an HSA plan until May 2008.  To be eligible to contribute means that they are covered under a High Deductible Health Plan (HDHP), are not enrolled in Medicare, and are not covered under someone else as a dependent.

Question:  Is a group a valid group if they have one employee on NJ continuation on their employer sponsored plan, and two employees waiving due to other coverage with a spouse?

Answer:  As long as the group satisfies the participation requirement in aggregate, one person alone may be covered by a health carrier.  I’ve attached the NJ Small Group Bulletin 05-01 which addresses this in the Q&A on NJ Continuation.  See page three, midway down.  Keep in mind that the spousal coverage must be group coverage in order to be a waiver which counts towards participation.

Question:  Can you explain the benefit coverage in NJ for Biologically Based Mental Illness versus Non-Biologically Based conditions?

Answer:  Biologically Based Mental Illnesses (BBMI) must be treated the same as any other illness under a NJ Individual or group fully insured contract.  These are diagnoses such as bi-polar manic depression, schizophrenia, autism, and pervasive developmental disorder.  All mental health conditions must be submitted to the insurance carrier's mental health provider for pre-approval whether they are accessing a network or non network provider.  When a mental health condition is not considered BBMI, (and this is determined by the carrier), it is limited to 30 inpatient days plus 20 outpatient visits.  With prior carrier approval, the member can swap inpatient days 2 for 1 to obtain additional outpatient visits.

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