Health Care Reform Comparative Effectiveness Fee Impact for Self-funded Employers with California Network Plans
Your Network plan is one-of-a-kind in the industry. It offers you the financial and cash-flow advantages of a self-funded plan, plus access to a network with health care professionals that are reimbursed on a capitated basis.
Under California law, only a licensed Health Maintenance Organization (HMO) can offer a capitated provider network. As a result, the in-network coverage for the California residents under a Network product is provided through a group service agreement of a licensed HMO, Cigna HealthCare of California.
Given this unique contractual arrangement, we want to help you understand how the Comparative Effectiveness Research Fee (CERF) applies to your Network plan.
Network: The Network product provides only in-network benefits through a group service agreement of an HMO, Cigna HealthCare of California, Inc.
One CERF payment is due.
Cigna HealthCare of California (CHC/CA) is required to pay the CERF. We will charge for the Fee separately from your current administration fee (periodic charges) and claims.
You will not need to do anything for your insured/network medical plan to be compliant. We will file the 720 Tax Form for you.
Network Point-of-Service: The Network Point-of-Service product provides in-network coverage through a group service agreement of a licensed HMO, Cigna HealthCare of California, Inc., and out-of-network coverage that is self-funded by you.
Two CERF payments are due.
CHC/CA is required to pay the CERF. We will charge for the fee separately from your current administration fee (periodic charges) and claims.
You are required to make a second payment for the out-of-network benefit by including this membership when you submit your separate contribution for your self-funded plans.
Network plans covering individuals outside of California:
You are responsible for paying the CERF on the self-funded Network plans covered lives outside of California.
The regulation prohibits Cigna from calculating or facilitating this payment on your behalf. However, at no additional cost, Cigna will support your compliance by providing access to a report summarizing your covered lives impacted by these Maximum Premium plans.
Payment Responsibility for the CERF
|Type of Plan||Responsible for Payment|
|CA Network Point-of-Service (POS)||Both CHC/CA and Employer|
|Network plans (including POS) outside of California||Employer|
Please contact your Cigna representative for additional details.