Many physicians and physician practices have begun receiving letters from the Medical Association of the State of Alabama (“MASA”) that MASA health insurance plans will be cancelled, effective November 30, 2014.

MASA health insurance plans through Blue Cross and Blue Shield of Alabama (“Blue Cross”) have long been a popular benefit for members.  Pursuant to the Affordable Care Act (“ACA”), the Internal Revenue Service (“IRS”) published guidance last fall, effective January 1, 2014, which raised potential problems with the payment method used by many physician practices to purchase MASA health insurance plans.

The Birmingham Medical News interviewed Sirote attorney Jay Maples about this issue in a December 2013article. MASA likewise alerted its members to the issue in December 2013.  The IRS issued additional guidance in May 2014 emphasizing that certain common payment methods used for health insurance plans can triggerpenalties of $100 per person per day under the ACA “market reforms.”  Further information is availablehere.

Upon inquiry to MASA, its Executive Director, Mark Jackson noted:

“These cancellations are a direct result of Blue Cross sending MASA a notice indicating that it could not comply with certain provisions of the ACA, and therefore it could not offer MASA’s health insurance plans after this year.  Since that time, MASA embarked on a 10 month journey, employing significant internal and external resources, to study any alternatives – including self-insurance – to the terminating plans.  MASA could not self-insure and continue to offer the health insurance plan at competitive rates in this new regulatory environment. Reluctantly, MASA cannot offer any alternatives, but it will continue to offer its dental plan to its membership.”

According to the letter MASA recently sent to its members, MASA stated it has exhausted all possible options to continue offering health insurance to its members.  The letter from MASA to its members noted that Blue Cross will be sending out a notice of plan termination along with additional information outlining health plan options available from Blue Cross.  Physicians and physician practices affected by this change have only about four months to review health insurance options, decide on a plan, discuss changes with employees, and complete enrollment.  Often, insurance underwriting can take at least several weeks.  It is important to begin considering the options now for health insurance to take effect December 1, 2014