Information

Managing Health Insurance

By NYC Hospitality Alliance & Howard Goldstein, LUTCF

How to handle your employee benefit program during the mandated shutdown for restaurants and nightlife establishments

The NYC Hospitality Alliance has received many questions on how to handle your employee benefit program during the mandated shutdown for restaurants and nightlife establishments. The following outlines the options you may have:
  • You may elect to terminate coverage for your employees in March during this shutdown. A few considerations if you take this option:
    • As most insurance companies bill in whole months, a termination today or at the end of this month will still be billed for the entire month. 
  • You can request that your employees contribute to their benefits cost share for the remaining pay periods of the month on their last check. You can also request your employees to pay your company directly for their share of the benefits cost for the days in the month they do not receive a paycheck.
  • You may also elect to maintain your employees' coverage for an additional period of time. We are aware of some employers waiving or delaying the employees cost share contributions during this period. If you prefer your employees pay for their cost share during the shutdown period, clearly communicate the amounts due and payment methods in writing. If you will be maintaining coverage for any/all of your employees, you should also communicate if you will be waiving the employee cost share or "doubling up" once operations resume.
  • If coverage is terminated for any or all your employees, usual COBRA notification rules still apply. 
  • As medical insurance is the priority, you may consider terminating your dental and any other ancillary benefits you may offer. We are asking the major carriers to allow medical and dental plans to be suspended with no coverage or premium and resumed when the shutdown is over. This will avoid having to apply for new coverage once operations resume. We are still waiting for guidance on this issue. If possible, retain at least one person on each benefit plan to keep it open. If this is impossible the coverage can be re-written when needed. 
  • If coverage is terminated your employees can also obtain coverage from the State Exchange (Obamacare). Some may be eligible for subsidy and can purchase low cost coverage based on their expected annual income. Take note that if you are a "large employer" (>50 Ft and FTE employees) your employees are not eligible for subsidy when they resume work. Medicare coverage is not subject to this rule.
  • If your employees have access to other coverage from a spouse, parent, or the exchange, they will need to provide proof of loss from your insurer to enroll into another plan. We suggest that your employees contact the insurance company directly to obtain the proof of loss. 
  • If you terminate coverage for part of your staff in March, the April billing will still include all who were enrolled in March. Normally the credits for those terminated employees would appear on a following invoice and full payment is expected to maintain coverage. We suggest that upon receipt of the bill you or your agent contact the insurance company and ask for manual adjustment, paying only for those currently insured. Most insurance companies rarely allow this, we are asking for a temporary change to this policy. 
  • For any period you wish to have coverage, the usual premium payment rules still apply. Payments must be received by the insurance company by the end of the grace period. The grace period is 30 days from the invoice due date. 
Looking forward to the resumption of operations:
  • If you have terminated coverage for all or part of your staff, ask your agent about your plans rehire provision. This will allow you to bring your employees back into your benefit plan without triggering the new hire waiting period.
  • If your plan will renew and would normally have open enrollment during the shutdown, ask your agent about a special open enrollment period so you can offer coverage to your team during when back to full operations. 
 
We will update you as we receive information from the insurance companies on what relief, if any, they will provide. If we can provide any additional assistance, please contact us at Benefits@thenycalliance.org. 

This memo was generously prepared by Howard Goldstein, LUTCF


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