Employer-Subsidized Insurance (ESI)

Employer-Subsidized Insurance (ESI) is one of several health care coverage barriers to receiving MinnesotaCare coverage.

See MinnesotaCare Other Health Care Coverage Barriers for more information on how having current or past access to ESI affects MinnesotaCare eligibility.

What is ESI?

When to Verify Access to ESI.

How to Verify Access to ESI.

Open Enrollment and ESI.

Special Enrollment Period and ESI.

Special Enrollment When MA is Terminated.

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What is ESI?

Employer-Subsidized Insurance (ESI) is health care coverage offered to employees for which an employer or union pays at least 50% of the total cost of coverage for the employee or at least 50% of the cost of coverage for the spouse and dependents.

Do not consider health care coverage available through self-employment, farm self-employment or as an independent contractor to be ESI.  Also, do not consider health care coverage available to an adult age 21 and over, through a parent's employer plan, to be ESI.

Example:

Janet is employed by the Acme Company which offers its employees health care coverage. Acme pays $150 per month for Janet’s health care coverage and she pays a  monthly premium of $50.

Action:

Janet’s health care coverage is considered ESI. The total cost of the coverage is $200 ($150 employer paid + $50 employee paid). Acme is paying more than half of the cost of the health care coverage.

Example:

Drake is employed by the Widget Company, which offers health care coverage for employees and their dependents. Widget pays $100 per month for Drake’s health care coverage, plus an additional $150 per month to cover his dependents. Drake pays $25 per month for himself plus an additional $200 per month to cover his dependents.  

Action:

The health care coverage is considered ESI for Drake. The total cost for his coverage is $125 ($100 employer paid + $25 employee paid). Widget pays more than half the cost.

The dependent health care coverage is not considered ESI. The total cost for the dependents is $350 ($150 employer paid + $200 employee paid). Widget pays less than half the cost for Drake’s dependents.

In many cases the employer or union contributes a specific amount for the employee and a set amount for dependent coverage regardless of the number of dependents.

l  Some employers or unions contribute only toward the cost of employee coverage.

l  Employers may not offer dependent health care coverage or may offer it at full cost to the employee.

Employers or unions who offer health care coverage usually allow employees to sign up for the coverage when they are first hired. Employers or unions may allow employees to sign up for health care coverage during open enrollment or may offer a special enrollment.

For more information on how to determine if health care coverage through an employer or union is ESI see:

l  Determining ESI.

l  Determining ESI - Cash Benefits.

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When to Verify Access to ESI

Verify access to ESI under any of the following conditions:

l  An applicant or enrollee reports any of the following in a written or verbal statement, or indicates on an application or renewal that the applicant or enrollee, or a spouse or parent:

n  Has access to health care coverage through a current employer or union.

n  Has turned down or dropped health care coverage from a current employer or union.

n  Works for an employer or union that stopped offering health care coverage in the last 18 months.

Exception:  Do not verify potential access to insurance through a parent’s employer or union plan for applicants and enrollees ages 21 and over.

l  ESI information provided is inconsistent with documentation or information on file.

Example:

Mark, age 42, and his son, Tim, age 20, are currently enrolled in MinnesotaCare. Mark reports he just started a new job.  His new income is 215% FPG for a household of two and his employer offers insurance.  Mark states he would rather stay on MinnesotaCare than enroll in his employer's insurance.

Action:

Request verification of access to ESI from Mark. Allow Mark 30 days to return the needed verification.  Update the new income to the amount reported over the phone.  Mark is not required to verify income changes between renewals, but must verify access to ESI for himself and Tim because he reports that he can get insurance through his new employer.

Example:

Julia, age 19, and Loren, age 22, are a married couple who apply for MinnesotaCare. Both are employed 40 hours per week. They answered "No" to all the health care coverage questions on the application.

Action:

Do not require verification of access to ESI from either Julia or Loren. Neither applicant reported current access to health care coverage, that they refused access to health care coverage, or that either employer stopped offering health care coverage in the past 18 months. Complete the MinnesotaCare eligibility determination without requesting verification of access to ESI.

Example:

Aidan is enrolled in MinnesotaCare as a parent over age 21. His wife and children are enrolled in MA. He submitted verification of ESI with his family’s last renewal in October. In February, Aidan reports he has changed jobs and that his new employer offers insurance.

Action:

Require verification of access to ESI for Aidan’s new employer, to be returned within 30 days. Cancel Aidan’s MinnesotaCare coverage with 10-day advance notice if verification is not received within 30 days.

How to Verify Access to ESI

Acceptable verification of access to ESI includes:

l  An Employer Insurance Information Form (DHS-3348). The client must sign the form and either request the employer or union to complete it or send it to the worker to contact the employer.

Note:  Do not contact the employer or union without written consent from the applicant or enrollee to verify access to ESI. Submit a HealthQuest if the employer refuses to provide ESI verification.

l  Documents from an employer or union which provide health care coverage information including:

n  Open enrollment materials.

n  Employee handbooks.

n  New employee orientation papers.

n  Union contracts.

l  A written statement from the employer or union.

l  Verbal health care coverage information or confirmation from the employer or union.

Pend eligibility (P30 or C48) if the client does not provide the requested insurance information.

l  Request ESI verification.

l  Document all actions and requests for verification in case notes.

l  Clients have 30 days to provide verification of access to ESI.

l  Eligibility will automatically be denied or closed by MMIS in 60 days for applicants or at the end of the renewal period for enrollees renewing coverage.

Example:

Jack applies for MinnesotaCare for himself and his family on April 3. Jack answers ”yes” to the employer-offered health insurance question on the application. His wife is self-employed. They did not submit income verification with the application.

Action:

Jack must verify access to ESI. Pend eligibility for Jack and his family. The application is incomplete because they did not provide income and insurance verifications.

Jack faxes copies of his pay stubs and tax forms as income verification. He does not provide his insurance documentation.

Action:

Continue the pending status for ESI. MMIS will automatically deny the application in 60 days.

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Open Enrollment and ESI

Some employers or unions offer a time each year when employees and dependents can join the employer's health benefit plan. This time is referred to as open enrollment.

Note:  Not all employers or unions offer an open enrollment period.

l  Consider applicants and enrollees who have access to ESI during an employer’s open enrollment period to have current access to ESI.

l  Applicants and enrollees who had access to ESI during an employer’s open enrollment period and refused to accept the ESI at that time have had access to ESI in the past. They are ineligible for MinnesotaCare if they refused the ESI during the past 18 months.

Example:

Tim’s employer offers ESI to Tim, his wife Nancy, and their two children. The family has income under 200% FPG. They can sign up for the health care coverage annually in April but have chosen not to sign up. They apply for MinnesotaCare in July, two months after Tim’s open enrollment period ended.

Action:

Tim and Nancy are ineligible for MinnesotaCare because a current employer offered ESI within the past 18 months. The children are eligible for MinnesotaCare because, although they had access to ESI, they have income under 200% FPG.

Example:

Janice’s employer offers her health care coverage when she is first hired. Janice declines the coverage. Janice’s employer does not offer open enrollment. Janice applies for MinnesotaCare.

Action:

Janice is ineligible for MinnesotaCare for 18 months from the day her employer offered her ESI.

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Special Enrollment Period and ESI

Many group health plans offer a special enrollment period. During a special enrollment period an employee or union worker has an opportunity to enroll in a group health plan without having to wait for an open enrollment period.

A special enrollment period may be available if an employee:

l  Declined coverage under the plan because they had alternative coverage but has since lost that alternative coverage. The loss of coverage cannot be due to a failure to pay premiums on a timely basis or termination for cause (such as making a fraudulent claim).

l  Has new dependents through marriage, birth or adoption.

Special enrollment may be available to people who declined ESI when it was first offered because they had MinnesotaCare and whose MinnesotaCare coverage later ends.

Example:

Gary and his family are enrolled in MinnesotaCare. They have income over 200% FPG.

The MinnesotaCare worker discovers at the annual renewal in July that Gary had an opportunity to enroll the entire family in ESI at the time of his employer’s annual open enrollment six months earlier. Gary chose not to accept the coverage because he had MinnesotaCare.

Action:

Close MinnesotaCare for the first month for which you can give 10-day notice. Advise Gary to ask his employer if he can enroll in ESI without waiting for the next open enrollment period since he has lost his MinnesotaCare coverage.

The family remains ineligible for MinnesotaCare for 18 months from the date Gary could have enrolled in the ESI. The 18-month period starts over if Gary again has an opportunity to enroll in the ESI and refuses.

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Special Enrollment When Medical Assistance (MA) Coverage is Terminated

The Children’s Health Insurance Reauthorization Act (CHIPRA) of 2009 provides employees and their dependents with a special enrollment period in group health plan coverage without having to wait for an open enrollment period if all of the following conditions are met:

l  The employee or dependent loses eligibility under MA.    

l  The employee or dependent meets the eligibility requirements of the group health plan.

l  The employee requests coverage under the group health plan within 60 days after losing eligibility for MA.

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