Transition Date – 7/1/2012 Effective Dates

 We are improving our New Business mid-month effective date process to enhance the member experience and simplify plan administration. We will transition to this process for new HNE groups that are enrolling with an effective date in July 2012. 

 When is the renewal date for mid month effective dates?

The renewal date is the 1^st of the quoted month of the following year.

• Example:  7/15/2012 effective date would be quoted with rates as of 7/1/2012 and the Renewal date would be 7/1/2013 of the following year.

Will this change the way deductibles accrue?

Yes. Under the current process, additional weeks of coverage beyond one year could cause additional deductible expenses for the member. With the new solution, the deductible would begin on the enrollment date of the effective month and renew on last date of the prior month of the following year.   (Example, for a 7/15/2012 effective date, the deductible would begin on 7/15/2012 and run through 6/30/2013.  The new deductible period would begin 7/1/2013).

How will this affect plans with HSAs and/or HRAs?

• HSA:  When the effective date of the group or subscriber is other than the first of the month, the HSA can only be set up with an effective date of the 1^st of the following month.  HNE’s mid-month effective date solution will not affect the current HSA Process.
• HRA:  The group establishes the criteria for setting up the HRA.  HRA has the flexibility to have more or less than a year of funds availability.   
• Groups should be educated to clearly state the start and end date of their policy year on the HEQ Application.   

How does this enhance the member experience?

• The mid-month effective date solution makes deductible accrual easier to understand.
• The process is less confusing because medical claims no longer span two deductible periods.