In the confusing landscape of health insurance regulations post ACA implementation, numerous health insurance companies have sent out renewal letters to members with errors. Blue Cross, Blue Shield, Health Net and even Covered California have had to send follow-up letters to correct erroneous information. Unfortunately, this incorrect correspondence only leads to more confusion surrounding the benefits and renewal of individual and family plans for 2015.
Blue Shield confusion with grandfathers
Blue Shield sent out renewal notices to non-grandfathered plans with information intended for members in grandfathered plans. Grandfathered plans are generally individual and family plans purchased before the full implementation of the ACA. Even though the grandfathered plans now include many required ACA benefits, they don’t follow all the same rules as the new plans purchased in California. The erroneous information in the renewal letters impacts consumers in On and Off exchange plans in either PPO or EPO plan types.
New ACA plans have better consumer protection
The stated Blue Shield premium and tax credit are correct in the renewal letters. The following parts of the letter are incorrect. From a Blue Shield producer alert –
- The IFP non-grandfathered plan renewal packet included a notice entitled “Your Health Insurance Choices Are Different. You May Qualify for Free or Low-Cost Health Insurance.” This notice should not have been included in the mailing to non-grandfathered members.
- The notice states that the health insurance the member has “is not required to follow many of the new laws.” This is incorrect as to non-grandfathered plan members, and these members do have health insurance that provides benefits required of new plans under the Affordable Care Act (ACA) and related to California law.
- The notice states that Blue Shield “may be allowed to increase your rates based on your health status while new plans and policies cannot.” This is incorrect as non-grandfathered plan rates cannot be based on health status.
- If a member would like to view their contracts to confirm this information, they can visit blueshieldca.com/RenewalCenter and scroll towards the bottom and click on the “Get your policy documents” link.
- Impacted members will soon receive a notice containing the correct information.
Anthem abortions and income amounts
Anthem Blue Cross had a mischaracterization of on-exchange health plans for the abortion benefit.
- On Exchange Correction Letter- For On Exchange members on Multi-State Plans, a benefit was stated incorrectly on the 2015 On Exchange Plan benefit comparison chart in their enrollment kit. The chart stated that “Abortions will no longer be limited to Therapeutic Abortion.” The On Exchange Multi-State Plans are required to keep this limitation. This means the correct statement, which we will communicate to these members, is as follows: “Abortions will be limited to Therapeutic Abortion.”
Both on and off exchange California members received incorrect income information for Medi-Cal eligibility. The incorrect income ranges used the Federal Poverty Level (FPL). In California, an individual or family can qualify for Medi-Cal with household incomes up to 138% of the FPL.
- On and Off Exchange Correction Letter- The premium tax credit or subsidy eligibility requirements for plans purchased through Covered California were listed as “To qualify you must have a modified adjusted gross income of $11,670 to $46,680 or $23,850 to $95,400 for a family of four.” These amounts are not correct. The correct income requirements are as follows: “To qualify you must have a modified adjusted gross income of $16,105 to $46,680 or $32,913 to $95,400 for a family of four.”
Covered California overlooked plan closures
Earlier in October, Covered California sent out renewal notices indicating the consumers in Contra Costa Health Plans and Health Net PPO plans would be automatically renewed. As both plans are being effectively terminated for on-exchange enrollment, members in those plans must actively select a new health plan for 2015.
Don’t believe everything you read
The take away lesson from all these corrections is if you don’t understand a statement in a renewal letter or if it sound contrary to what you have been told, call the carrier and get clarification. Your question might reveal another error in the information being sent out about to members. If nothing else, this flurry of correction letters should keep the paper mills in business for another year.