Kilpatrick

Carrier News

Aetna to Discontinue PPO Plans in TX Small Group Aug 2016

Effective Aug 1, 2016, Aetna will discontinue offering PPO-based plans in the Texas small group, community rated market. Aetna will offer only EPO and HMO plans to new groups and renewing ACA-compliant groups. The change will eliminate all plans with out-of-network access from their small group portfolio.

  • No plan options available to out-of-state employees. Employees must live or work in Texas. Out-of-state employees are not eligible for coverage.
  • Employees who enroll in an Elect Choice EPO plan can cover out-of-state dependents living in most regions of the country.
  • Existing groups with plans being discontinued will be offered comparable EPO plans for Texas employees.
  • Beware. Existing groups with out-of-state employees will receive a renewal offer. However, the offer will exclude the out-of-state employees from the rate and premium calculations. Beware.
  • Beware. Aetna’s quoting system will generate quotes for groups with out-of-state employees, but they will exclude those employees from the rate and premium calculations. The exclusion of out-of-state employees is denoted (subtly) in various places (see the screenshots in this grid for those references).
  • This change only applies to small groups with metallic plans (new business and existing). It does not apply to small groups with transitional relief plans, self-funded groups, or large groups.
  • Update 6/7/2016: It appears that Aetna will maintain this strategy in 2017 according to their rate filings. No plans with out-of-network access in 2017.

Aetna is not a viable option for ACA-compliant small groups that employ out-of-state employees. Those employees will not be eligible to participate. Aetna will offer coverage to these groups even though certain employees will not be eligible. Employers and brokers must pay attention to this issue.

What can employers do about affected out-of-state employees? Not much through the Aetna group policy…

  1. Employers cannot pay/reimburse employees for individual health policy premiums. It is illegal. Read our article about Employer Payment Plans.
  2. In most instances, an employer cannot purchase a separate group policy for affected employees due to legal restrictions (group domicile laws) and underwriting rules (requirement that all full time are eligible, prohibited carve-out definitions, etc).
  3. It is illegal to create a business for the purpose of obtaining insurance. There must be bona fide business reasons.
  4. Employers offering coverage under a Section 125 cafeteria plan may violate its discrimination rules depending on the scope of the exclusion.

The majority of plans offered within Aetna’s 2016 portfolio prior to August were PPO-based plans.

Type Network Scope Network Name Jan-Jul 2016 Aug-Dec 2016
EPO Broad
Narrow
Elect Choice POS
Savings Plus EPO
Aetna Whole Health EPO
AWH & Elect Choice EPO
9
9
9
3
9
9
9
3
HMO Broad
Narrow
Health Network Only OA
Aetna Whole Health HMO
2
2
2
2
PPO Broad
Narrow
Managed Choice POS OA
Savings Plus OAMC
Aetna Whole Health OAMC
21
9
9
-
-
-
Indemnity Indemnity 1 -
TOTAL 74 34

Other Changes:

  • Small groups renewing on/after Aug 1, 2016 cannot change their future renewal date.
  • Small groups rates will only be available for quoting 90 days prior to the effective date. Prior to this change, small group rates were available six months in advance of the effective date.
  • Aetna will not honor quotes for an Aug 1, 2016 or later effective date that were generated prior to May 2016.
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