State Health Plan Operations 101

Benefitfocus, the Plan’s current EES vendor, is responsible for managing the Plan’s eligibility rules, accurately transmitting and receiving enrollment with the Plan’s other service vendors and providing telephonic member enrollment. The Eligibility and Enrollment Support Center is also managed by Benefitfocus. The call center is available each state business day between 8 a.m. and 5 p.m. to assist Plan members as well as HBRs through the account management team.

Blue Cross NC, the Plan’s current TPA, provides a statewide network for members, administers the Plan’s network, provides medical management, processes claims and claim appeals, and provides customer service for claims issues. The Plan is self-funded, which means taxpayers and Plan members, not Blue Cross NC, fund the claims. 

Humana is the Plan’s current MAPDP. This is a fully insured product, which means Humana is at full risk for these claims. The claims are funded by Humana, which means the checks are written on Humana paper.

CVS is the Plan’s current PBM that processes pharmacy claims. While the PBM is also self-funded, the reimbursement model for the PBM is different because the member pays for the pharmacy claim at point of sale (at the pharmacy). The PBM pays the pharmacy, and the Plan reimburses the PBM.

iTEDIUM is the Plan’s current CABS vendor. Like the TPA, the CABS services are self-funded. Checks are written off the Plan’s bank accounts and are on Plan paper.

Next year, we’ll begin transitioning premium billing services to iTEDIUM. The group premiums will be sent to a new lockbox, managed by iTEDIUM, but the funds will be deposited into a Plan bank account. And when Aetna comes onboard two years from now in 2025 as the Plan's TPA, you may be asked to remit a wage garnishment to Aetna, but the check will be made out to the Plan and deposited in a Plan bank account. Regardless of where you may be directed to remit payment to the Plan, the funds will be deposited directly into a Plan bank account. The W-9 for these payments is always the same. The entity on the W-9 is the Plan and the address on the W-9 is the Plan’s Raleigh address.

Blue Cross NC, iTEDIUM, and soon Aetna, also issue checks from the Plan’s bank accounts. All of these checks are on Plan paper with the Treasurer’s signature. While Plan vendors are on the front lines of the Plan’s cash management, Plan staff has oversight of all these functions. All these Plan Vendors and TPAs are required to submit a litany of back-up detail and reports to support all of the transactions. Additionally, Plan staff audit the vendors on a routine basis.  

Benefitfocus manages the Plan’s eligibility and enrollment rules, transmitting and receiving enrollment with the Plan’s other vendors and some employing units as well as providing support via telephone and enrollment to Plan members. Enrollment and Eligibility rules are a combination of state and federal regulations.

Eligibility rules are more “Plan-specific” and include things like the 12-Month RIF (Reduction in Force) rules or what we call the “Forever RIF” rules. While you only have to manage the subscriber for the first 12 months of RIF, the Plan must ensure they are offered the appropriate coverage at the end of the 12-month RIF period and that their Medicare status is correct. Towards the end of the 12-month RIF period, Benefitfocus mails members a letter offering them “Forever RIF” coverage and providing enrollment instructions. Of course, it all hinges on the HBR accurately setting them up as a 12-month RIF on a timely basis as well as terminating them on a timely basis. See instructions here.

The Plan has established similar, custom procedures with Benefitfocus to support surviving dependents. The termination due to death sets off a process that includes enrolling the dependents in surviving dependent coverage and mailing them a letter with enrollment and billing instructions.

Benefitfocus mails a letter to all active members right before they turn 65. The letter includes all the information they need to know about enrolling in Medicare and/or making changes to their Plan coverage. It is a helpful resource even if the member does not intend to make any enrollment changes due to this qualifying life event.

The Plan automatically enrolls a member into the Retirement Systems group once a retirement is approved. The subscriber is mailed a letter advising them they have been enrolled and giving them the timelines for making changes. New retirees will not auto-enroll into retirement until their active termination is processed. It is not uncommon for a new retiree to miss their opportunity to enroll into a Medicare Advantage plan because of a delayed termination by the active group.

Many groups have established payroll file exchanges with Benefitfocus, which are employing-unit specific. Similarly, we have custom daily enrollment files between Benefitfocus and other Plan vendors: Blue Cross NC, iTEDIUM, CVS and Humana. Many of those also return daily files to Benefitfocus. A great deal of the Plan’s staff time every month is devoted to ensuring the data exchanges between Plan vendors is audited and reconciled. 

Employees must process a QLE within the QLE enrollment window.  All QLEs except the Medicaid QLEs have a 30-day enrollment window. Medicaid QLEs have a 60-day enrollment window. Even if the subscriber does not have the documentation, they should process the QLE within the enrollment window and try to get the documentation added before the enrollment window expires. HBRs should not approve the QLE without the documentation.

Employees must use the correct QLE “reason” when processing a change. While most QLE reasons are self-explanatory – such as Birth, Adoption, Marriage, etc. – there are two QLEs that some employees and HBRs appear to use incorrectly: “Loss of other coverage” and “Now Eligible for Other Coverage.”  These codes should only be used when an employee and/or dependent has lost or gained other “group health coverage.” Employees should not be using “now eligible for other coverage” when the QLE is related to Medicaid or Medicare eligibility. Medicaid and Medicare QLEs have different effective date and processing time guidelines.  

QLE effective dates continue to be one of the Plan’s top drivers of enrollment exceptions. While it can be confusing, there are some simple guidelines that can help. It is also important to note that the dates do not always align to prevent gaps or overlaps in coverage.  Everything is date driven and because different employers use different termination and effective date rules, it’s not perfect. 

The effective date for every QLE except Birth/Adoption/Newly eligible for Medicare is always “first of the month following the event.”  A 10/1/2022 termination means that coverage ended on 9/30/2022.  For example, the loss of other coverage date, for a 10/1/2022 termination is 9/30/2022.  If you have the correct effective date for the event, it is pretty simple to follow with the “Loss of Other Coverage” QLE:

• Member loses other coverage 9/2/2023, the effective date on the Plan is 10/1/2023
• Member loses other coverage 9/30/2023, the effective date on the Plan is 10/1/2023

When a dependent has an employment status change that results in a loss or gain of coverage under another group health benefit plan, there are two date options for the QLE event. Which option the employee chooses will drive the effective date.

For example, a spouse gets a new job. Hire date is 10/2/2023 and the date he/she gains other coverage is 11/1/2023.  Here’s how the “Now Eligible for Other Coverage” QLE could work in this scenario:

• Subscriber enters the 10/2/2023 hire date as the “Now Eligible for Other Coverage” date which results in a 10/31/2023 Plan cancellation date; or,
• Subscriber enters the 11/1/2023 benefit effective date which results in a 11/30/2023 Plan cancellation date

Depending on the QLE date, there may be a gap or an overlap of coverage. That’s just the way it works. Using the examples we’ve outlined above, we have both Gap and Overlap scenarios:

• Gap - Member loses other coverage 9/2/2023, the effective date on the Plan is 10/1/2023.
• Overlap - Subscriber enters the 11/1/2023 benefit effective date which results in a 11/30/2023 Plan cancellation date which means the subscriber is paying for the dependent coverage in November when the dependent already has coverage through the new employer.
  • In this overlap scenario, if the hire date is truly 10/2/2023, then all the subscriber needs to do is change the QLE date from 11/1/2023 to 10/2/2023 and there will be no overlap, but that does not always work.
  • If the hire date is 9/30/2023 and the benefit start date is 11/1/2023, the subscriber will have to choose between the gap or an overlap:
    • Subscriber enters a 9/30/2023 hire date as the “Now Eligible for Other Coverage” date which results in a 9/30/2023 Plan Cancellation date. If the new coverage doesn’t start until 11/1/2023, then there is a gap.
    • Subscriber enters the 11/1/2023 benefit effective date which results in a 11/30/2023 Plan cancellation date and a month of coverage overlap.

There are a variety of documents that can be used to satisfy the QLE documentation requirement, but the key to any of those documents is that the document must have an effective date.

• Health Benefit Effective Date – The two most popular forms of documentation used to confirm the Health Benefit effective date for the “Now Eligible for Other Coverage” QLE are:
  • ID Cards – Only useful if there is an Effective date on the card. An “issue date” will not suffice. Neither will an ID card without an effective date at all.
  • Confirmation Statements – Confirmation statements and even screen shots from an enrollment portal almost always have an effective date of coverage, but if for some reason they do not, it will not be an acceptable form of QLE documentation.
• Dependent employment status changes (such as a new job or moving from a part-time to full-time employee) – The two most popular forms of documentation to confirm this “Now eligible for Other Coverage” QLE are:
  • Offer Letter – An employment offer letter that includes the hire date
  • Confirmation Statements – Confirmation statements are only helpful if the statement includes the hire date. The confirmation statements generated by eBenefits do include a hire date so this document can be used as QLE document when a dependent is hired by another employing unit that is part of the Plan or another employer who may use Benefitfocus as their enrollment vendor.