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Effective: March 1, 2008 |
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15.05.20ar2 - Employer-Subsidized Insurance (ESI) (Archive) |
Archived: September 1, 2009 |
Employer-Subsidized Insurance (ESI) is one of several insurance barriers to receiving MinnesotaCare coverage.
Note: Health care coverage available through self-employment, farm self-employment or as an independent contractor is not ESI.
See MinnesotaCare Insurance Barriers for more information on how having current or past access to ESI affects MinnesotaCare eligibility.
Special Enrollment Period and ESI.
Employer-Subsidized Insurance (ESI) is coverage offered to employees for which an employer or union pays at least 50% of the cost of coverage for the employee and at least 50% of the cost of coverage for the spouse and dependents.
Example:
Janet is employed by the Acme Company which offers its employees health insurance. Acme pays $150 per month for Janet’s insurance and she pays a $50 per month premium for the insurance.
Action:
Janet’s health insurance is considered ESI. The total cost of the insurance is $200 ($150 employer paid + $50 employee paid). Acme is paying over half of the cost of the insurance.
Example:
Drake is employed by the Widget Company, which offers health insurance for employees and their dependents. Widget pays $100 per month for Drake’s 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:
Drake’s health insurance is considered ESI for himself. The total cost for his coverage is $125 ($100 employer paid + $25 employee paid). Widget pays over half the cost.
The dependent 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 contributes a specific amount for the employee and a set amount for dependent coverage regardless of the number of dependents.
l Some employers contribute only toward the cost of employee coverage.
l They may not offer dependent coverage or may offer it at full cost to the employee.
Employers who offer health insurance usually allow workers to sign up for the health insurance when they are first hired. Employers may allow employees to sign up for health insurance during open enrollment or may offer a special enrollment.
For more information on how to determine if coverage through an employer is ESI see:
l Determining ESI – Cash Benefits.
Verify access to ESI under any of the following conditions:
l Applicants or enrollees indicate on the application or renewal form that they, their spouse or parent meet any of the following:
n Have access to health insurance through a current employer.
n Have turned down or dropped health insurance from a current employer.
n Work for an employer that stopped offering health insurance in the last 18 months.
l ESI information provided is inconsistent with documentation or information on file.
l Applicants or enrollees, their spouses or parents meet all of the following at application, renewal or when they report an employment change:
n Are age 21 and over.
n Are employed more than 20 hours per week at any one employer.
n Have not previously provided verification regarding access to ESI for the reported employer. Once verification is provided, do not re-verify as long as the person remains with the same employer.
Exception: Require verification of ESI if an employed person’s hours of employment through a previously reported employer increase from at or below 20 hours per week to over 20 hours per week, even if verification was submitted previously.
Require verification for people who meet all of the criteria above, even if they failed to answer the employer health insurance questions or responded ”no” to these questions on the application form.
Example:
Dani submits an application for health care to the county agency on or after February 1, 2008. She is determined ineligible for Medical Assistance (MA) and General Assistance Medical Care (GAMC). Dani is over age 21 and works 30 hours per week at a bakery.
Action:
Require Dani to verify that she does not have access to ESI through her employer to meet MinnesotaCare verification requirements.
Example:
Marquis is an adult without children enrolled in MinnesotaCare. At his last renewal in November, Marquis worked on-call about 12 hours per week and reported that he did not have access to ESI through his employer. Marquis calls in March to report that his hours have increased to 36 hours per week.
Action:
Require Marquis to verify whether he has access to ESI, since he has not previously submitted verification for this employer and he now works more than 20 hours per week.
Do not require verification of ESI for employed people who meet one of more of the following:
l Are under age 21.
l Are employed 20 hours per week or less per job.
l Have previously verified access to ESI for the listed employer.
l Are college students with school-related employment such as work study or internship.
l Are spouses or parents of applicants or enrollees under age 21 in households with incomes at or below 150% FPG if only the household members under age 21 are requesting or receiving coverage.
n Do not request verification of access to ESI if the application or renewal form reports income less than or equal to 150% FPG. If verified income is later shown to exceed 150% FPG, request verification of whether the spouse or parent(s) age 21 and over has access to ESI for the dependents under age 21 if the spouse or parent(s) works at least 20 hours per week for one employer and has not submitted verification previously.
n Request verification of access to ESI for a parent or spouse age 21 and over who works at least 20 hours per week for one employer and has not previously submitted verification if the parent or spouse later requests to be added to coverage.
Example:
Julia, age 19, and Loren, age 22, are a married couple who apply for MinnesotaCare. Both are employed 40 hours per week and their income is above 150% FPG. They answered ’No’ to all the insurance questions on the application.
Action:
Do not require verification of access to ESI through Julia’s employer, since she is under age 21. Require verification of access to ESI through Loren’s employer.
Example:
Joe and Beth apply for MinnesotaCare for their son, Josh. The application form indicates that their income is below 150% FPG. Both Joe and Beth are employed more than 20 hours per week, and they have health insurance through Joe’s current employer. No income verification is submitted with the application, so Josh’s eligibility is pended for that information. When the verification is received, the household income is actually above 150% FPG.
Action:
Require verification of access to ESI for both parents’ employers, since Josh is not exempt from ESI requirements.
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. He is working more than 20 hours per week at the new job.
Action:
Require verification of access to ESI for Aidan’s new employer, to be returned within 30 days. If verification is not received within 30 days, cancel Aidan’s MinnesotaCare coverage with 10-day advance notice.
Acceptable verification of ESI includes:
l A Request for Verification of Employer Insurance (DHS-3348). The client must sign the form and request the employer to complete 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 question to the DHS Health Care Policy Center if the employer refuses to provide ESI verification.
l Documents from an employer which provide insurance 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 insurance information or confirmation from the employer.
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 ”no” to the employer-offered health insurance question on the application. Jack is over age 21 and is employed 40 hours per week. 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.
Some employers 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 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. If they refused the ESI during the past 18 months they are ineligible for MinnesotaCare.
Example:
Tim’s employer offers ESI to Tim, his wife Nancy, and their two children. The family has income under 150% FPG. They can sign up for the insurance 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 150% FPG.
Example:
Janice’s employer offers her health insurance 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.
Special Enrollment Period and ESI
Many group health plans offer a special enrollment period. During a special enrollment period an employee 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 since have 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 150% 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.