TRICARE, Flex Elect and You
The rules have changed a bit. Under the "Affordable Care Act (ACA / ObamaCare) there is a change in the Flex Elect program.
The State of California’s FlexElect program offers two types of employee benefits:
- Pre-tax reimbursement accounts for out-of-pocket medical and dependent care expenses, and
- Cash Options in lieu of your state-sponsored health and/or dental benefits.
When it comes to the Cash Option, many of our members who are retired military, and now work for the State, have chosen to keep their TRICARE and receive the cash out for their CalPERS medical coverage.
Qualifying Group Health Coverage
Effective immediately, only employees who attest that they have other qualifying group health coverage are eligible to enroll in the state’s FlexElect or CoBen Cash Option programs and receive cash in lieu of state-sponsored health coverage. Employees are not required to show proof of coverage.
Qualifying group health coverage includes health coverage that provides minimum value and is maintained by an employer or employee organization. All state California Public Employees’ Retirement System (CalPERS) health plans currently meet the law’s minimum value standards.
Employees enrolled in individual coverage, such as Tricare, Medicare, Medi-Cal, and Covered California, are not eligible to receive cash in lieu of other health coverage, even if the coverage provides minimum value.
In these cases your CalPERS is your Primary coverage, with TRICARE considered Supplemental Coverage, and acts like a secondary insurance. In essence, you can not enroll in two government sponsored health plans, and opt out of one to receive cash back.
FlexElect and CoBen Cash Option Enrollment Forms
The California Department of Human Resources (CalHR) has updated the FlexElect and CoBen Cash Option enrollment forms (STD. 701C and STD. 702) to include the employee’s attestation of other qualifying group health coverage. The updated enrollment forms are available on CalHR’s website at: http://www.calhr.ca.gov/Pages/forms.aspx
The Federal Government
Under the ACA, the Internal Revenue Service has recently prohibited employers from offering cash to employees who elect to opt out of employer-sponsored health coverage and enroll in “individual” health coverage.
Refer to “Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Healthcare Arrangements” available at: http://www.irs.gov/pub/irs-drop/n-13-54.pdf
FOR FURTHER INFORMATION:
The Departments have coordinated on the guidance and other information contained in this notice. The guidance in this notice is being issued in substantially identical form by DOL, and guidance is being issued by HHS to reflect that HHS concurs in the application of the laws under its jurisdiction as set forth in this notice. Questions concerning the information contained in this notice may be directed to the IRS at 202-927-9639, the DOL’s Office of Health Plan Standards and Compliance Assistance at 202-693-8335, or HHS at 410-786-1565. Additional information for employers regarding the Affordable Care Act is available at www.healthcare.gov, www.dol.gov/ebsa/healthreform, and at www.business.usa.gov.