Health Insurance Marketplace Notice and OMB Expiration Date

Stay in the know with the most recent ACA rules and regulations thanks to our partners at United Benefits Advisors (UBA),

Under the Patient Protection and Affordable Care Act (ACA), an applicable employer must provide a written notice about the Health Insurance Marketplace to each employee. The Department of Labor (DOL) provides a model notice for employers that offer a health plan and a model notice for employers that do not offer a health plan.

Can I continue to use the model notice if the OMB approval number has expired?

At the top right of each model notice, there is a Form Approved area that indicates the form’s OMB approval number and expiration date. Often, as the expiration date approaches, employers will ask whether they can continue to use the model notice after the OMB approval number expires and whether the DOL has indicated when it will update its form.

Employers can continue to use the model notice if the OMB approval number has expired. The DOL doesn’t usually give advanced notice when it will update its forms.

What is the OMB expiration date?

As clarification, the OMB expiration date applies to the OMB approval, not the form. This means that the expiration date does not apply to the form itself, just the Office of Management and Budget (OMB) approval of the form for data collection purposes. A form can still be used if the OMB approval number has expired; however, under the Privacy Act, the expiration of the OMB approval number can limit the information the government can require an individual to provide if the form is intended to collect information.

Also, sometimes an agency has secured an updated OMB approval, but simply hasn’t revised a form to reflect the updated OMB approval.

Even if an OMB approval number has expired, the failure of a form to display a currently valid OMB number does not invalidate the underlying regulation or law

Practically speaking, even if the DOL Model Notice’s OMB form approval date expires, the ACA still requires employers covered by the Fair Labor Standards Act to inform their employees of the following aspects of the Health Insurance Marketplace:

  • Information about the Health Insurance Marketplace.
  • That, depending on their income and what coverage may be offered by the employer, employees may be able to get lower cost private insurance in the Marketplace.
  • That, if they buy insurance through the Marketplace, employees may lose the employer contribution (if any) to their health benefits.

To download the full compliance alert click Here.


Qualifying Small Employer Health Reimbursement Arrangements FAQ

Stay up-to-date with the most recent ACA rules and regulations thanks to our partners at United Benefits Advisors (UBA),

On December 13, 2016, President Obama signed the 21st Century Cures Act (Cures Act) into law. The Cures Act provides a method for certain small employers to reimburse individual health coverage premiums up to a dollar limit through HRAs called “Qualified Small Employer Health Reimbursement Arrangements” (QSE HRAs). This provision will go into effect on January 1, 2017.

Unless an employer meets all the requirements for offering a QSE HRA, previous IRS guidance prohibiting the reimbursement of individual premiums directly or indirectly, after- or pre-tax, through an HRA, a Section 125 plan, a Section 105 plan, or any other mechanism, remains in full effect. Reimbursing individual premiums in a non-compliant manner will subject an employer to a Patient Protection and Affordable Care Act (ACA) penalty of $100 a day per individual it reimburses, with the potential for other penalties based on the mechanism of the non-compliant reimbursement.

Which employers may offer a QSE HRA?

  • Employers with fewer than 50 full-time and full-time equivalent employees (under ACA counting rules) that do not offer a group health plan.

Which employers may not offer a QSE HRA?

  • Employers with 50 or more full-time and full-time equivalent employees (under ACA counting rules).
  • Employers of any size that offer a group health plan

Which employees may participate?

  • Employers must offer the QSE HRA to all similarly situated employees.
  • It is acceptable to provide different reimbursement amounts to different employees within the reimbursement limits, as long as the variance is due to variant prices in the insurance policies in which the individual employees are enrolled.
  • It is not acceptable to provide different reimbursement amounts to employees based on employee classifications, seniority, job performance, wellness program incentives, or any other type of incentive/reward program.

What, if any, nondiscrimination rules apply?

  • Internal Revenue Code (IRC) Section 105 nondiscrimination rules apply, so employers must ensure that a QSE HRA does not discriminate in favor of highly compensated or key employees. This test must be satisfied every plan year.
  • It is best practice to run the test prior to the beginning of the plan year, several months before the end of the plan year, and at the close of the plan year.

What benefits can a QSE HRA pay for or reimburse?

  • Any documented healthcare expenses as defined by Section 213(d) of the IRC. Unlike traditional HRAs, a QSE HRA may reimburse individual premiums.

A QSE HRA can reimburse employees for premium costs for individual plans. Can a QSE HRA reimburse employees for premium costs for enrollment in a spouse’s or parent’s group health plan?

  • That is unclear at this time. Employers considering this should consult with their attorney. Risk averse employers should prohibit this.

A QSE HRA can reimburse employees for premium costs for individual plans. Are there requirements on where the policy is purchased?

  • No. Employees can be reimbursed for individual coverage that they purchase from a broker, or for coverage that they purchase in the Marketplace or on the Exchange.

How are expenses reimbursed?

  • The employee submits substantiated expenses to the claims administrator.

Are there limits on reimbursable expenses?

  • Yes. In 2017, the reimbursement may not exceed $4,950 annually for single coverage, and $10,000 annually for family coverage.
  • The amount is prorated by month for individuals who are not covered by the arrangement for the entire year.
  • The 2017 monthly limit for single coverage reimbursement is $412.
  • The 2017 monthly limit for family coverage reimbursement is $833.
  • The limits will be updated annually.

Will a QSE HRA impact an employee’s subsidy eligibility in the Marketplace?

  • Yes, if the QSE HRA offers affordable coverage, then an individual will not be subsidy eligible.
  • Potentially, if the QSE HRA offers unaffordable coverage. In that case, an individual’s subsidy eligibility would be reduced by the dollar amount provided for the month through the QSE HRA

How are QSE HRAs funded?

  • A QSE HRA can only be funded by an employer. Employees cannot contribute to QSE HRAs on a pre- or post-tax basis. Employers should avoid plan designs that provide incentive/reward money to employees through a QSE HRA that is not provided to all similarly situated employees on a uniform basis, or requires employees to meet additional requirements to “earn” the money.

How is affordability calculated for a QSE HRA?

  • Affordability will be determined by calculating the “net cost of coverage” to the employee.
  • Net cost of coverage is the amount an employee would pay for self-only coverage under the lowest cost silver plan offered in the Marketplace minus the reimbursement from the QSE HRA.
  • If the net cost of coverage is less than 9.69 percent of household income, coverage is affordable. If it is more costly, the coverage is unaffordable.

If an employee with a QSE HRA receives a subsidy, is the employer at risk for penalties?

  • No, because employers with fewer than 50 full-time and fulltime equivalent employees are not obligated to provide coverage under the ACA

Are QSE HRAs subject to COBRA?

  • No.

Are QSE HRAs subject to ERISA?

  • A QSE HRA is excluded from the ERISA Title I, Part 7 group health plan definition. The rest of ERISA may apply to QSE HRAs, although this issue remains undetermined by an administrative agency or court.

Do employers have any notice requirements if they offer a QSE HRA?

  • Yes. QSE HRA benefits have an annual notice requirement. Written notice must be provided to all eligible employees no later than 90 days prior to the beginning of the benefit year.
  • On February 27, 2017, the IRS issued Notice 2017-20 that delays the initial written notice deadline. The Treasury and IRS intend to issue guidance to provide eligible employers with additional time to furnish the initial required written notice to eligible employees; the extended deadline will be no earlier than 90 days following issuance of future guidance. Further, no penalties will be imposed for failure to provide the initial written notice before the extended deadline.

What information must be contained in the written notice?

  • The dollar figure the individual is eligible to receive through the QSE HRA.
  • A statement that the eligible employee should provide information about the QSE HRA to the Marketplace or Exchange if the employee has applied for an advance premium tax credit.
  • A statement that employees who are not covered by minimum essential coverage (MEC) for any month may be subject to penalty.

Does an employer that offers a QSE HRA have reporting requirements?

  • Yes. Employers sponsoring QSE HRAs are subject to ACA related reporting with Form 1095-B and 1094-B as the sponsor of MEC.
  • Employers sponsoring QSE HRAs must report money provided through a QSE HRA on an employee’s W-2 under the aggregate cost of employer-sponsored coverage.
  • It is unclear if the existing safe harbor on reporting the aggregate cost of employer-sponsored coverage for employers with fewer than 250 W-2s would apply, as arguably many of the small employers eligible to offer QSE HRAs would have fewer than 250 W-2s

To download the full compliance alert click Here.


Implications of the 21st Century Cures Act

Great article from our partner, United Benefit Advisors (UBA) about the impact of the 21st Century Cures Act by Danielle Capilla,

On December 13, 2016, former President Obama signed the 21st Century Cures Act into law. The Cures Act has numerous components, but employers should be aware of the impact the Act will have on the Mental Health Parity and Addiction Equity Act, as well as provisions that will impact how small employers can use health reimbursement arrangements (HRAs). There will also be new guidance for permitted uses and disclosures of protected health information (PHI) under the Health Insurance Portability and Accountability Act (HIPAA). We review the implications with HRAs below; for a discussion of all the implications, view UBA’s Compliance Advisor, “21st Century Cares Act”.

The Cures Act provides a method for certain small employers to reimburse individual health coverage premiums up to a dollar limit through HRAs called “Qualified Small Employer Health Reimbursement Arrangements” (QSE HRAs). This provision will go into effect on January 1, 2017.

Previously, the Internal Revenue Service (IRS) issued Notice 2015-17 addressing employer payment or reimbursement of individual premiums in light of the requirements of the Patient Protection and Affordable Care Act (ACA). For many years, employers had been permitted to reimburse premiums paid for individual coverage on a tax-favored basis, and many smaller employers adopted this type of an arrangement instead of sponsoring a group health plan. However, these “employer payment plans” are often unable to meet all of the ACA requirements that took effect in 2014, and in a series of Notices and frequently asked questions (FAQs) the IRS made it clear that an employer may not either directly pay premiums for individual policies or reimburse employees for individual premiums on either an after-tax or pre-tax basis. This was the case whether payment or reimbursement is done through an HRA, a Section 125 plan, a Section 105 plan, or another mechanism.

The Cures Act now allows employers with less than 50 full-time employees (under ACA counting methods) who do not offer group health plans to use QSE HRAs that are fully employer funded to reimburse employees for the purchase of individual health care, so long as the reimbursement does not exceed $4,950 annually for single coverage, and $10,000 annually for family coverage. The amount is prorated by month for individuals who are not covered by the arrangement for the entire year. Practically speaking, the monthly limit for single coverage reimbursement is $412, and the monthly limit for family coverage reimbursement is $833. The limits will be updated annually.

Impact on Subsidy Eligibility. For any month an individual is covered by a QSE HRA/individual policy arrangement, their subsidy eligibility would be reduced by the dollar amount provided for the month through the QSE HRA if the QSE HRA provides “unaffordable” coverage under ACA standards. If the QSE HRA provides affordable coverage, individuals would lose subsidy eligibility entirely. Caution should be taken to fully education employees on this impact.

COBRA and ERISA Implications. QSE HRAs are not subject to COBRA or ERISA.

Annual Notice Requirement. The new QSE HRA benefit has an annual notice requirement for employers who wish to implement it. Written notice must be provided to eligible employees no later than 90 days prior to the beginning of the benefit year that contains the following:

  • The dollar figure the individual is eligible to receive through the QSE HRA
  • A statement that the eligible employee should provide information about the QSE HRA to the Marketplace or Exchange if they have applied for an advance premium tax credit
  • A statement that employees who are not covered by minimum essential coverage (MEC) for any month may be subject to penalty

Recordkeeping, IRS Reporting. Because QSE HRAs can only provide reimbursement for documented healthcare expense, employers with QSE HRAs should have a method in place to obtain and retain receipts or confirmation for the premiums that are paid with the account. Employers sponsoring QSE HRAs would be subject to ACA related reporting with Form 1095-B as the sponsor of MEC. Money provided through a QSE HRA must be reported on an employee’s W-2 under the aggregate cost of employer-sponsored coverage. It is unclear if the existing safe harbor on reporting the aggregate cost of employer-sponsored coverage for employers with fewer than 250 W-2s would apply, as arguably many of the small employers eligible to offer QSE HRAs would have fewer than 250 W-2s.

Individual Premium Reimbursement, Generally. Outside of the exception for small employers using QSE HRAs for reimbursement of individual premiums, all of the prior prohibitions from IRS Notice 2015-17 remain. There is no method for an employer with 50 or more full time employees to reimburse individual premiums, or for small employers with a group health plan to reimburse individual premiums. There is no mechanism for employers of any size to allow employees to use pre-tax dollars to purchase individual premiums. Reimbursing individual premiums in a non-compliant manner will subject an employer to a penalty of $100 a day per individual they provide reimbursement to, with the potential for other penalties based on the mechanism of the non-compliant reimbursement.

See the original article Here.

Source:

Capilla D. (2017 February 01). Implications of the 21st century cures act [Web blog post]. Retrieved from address http://blog.ubabenefits.com/implications-of-the-21st-century-cures-act


Compliance Recap February 2017

Stay up-to-date with the most recent ACA regulations thanks to our partners at United Benefits Advisor (UBA)

February had relatively little activity in the employee benefits world because a new Secretary of the Department of Health and Humans (HHS) was recently confirmed and HHS started its rulemaking under the new administration.

On February 10, 2017, the U.S. Senate confirmed Rep. Tom Price as the new Secretary of HHS, who has a budget of more than $1 trillion, the largest budget of any Cabinet secretary. HHS administers the Patient Protection and Affordable Care Act (ACA), Medicare, and Medicaid, and oversees other programs and agencies.

The Centers for Medicare & Medicaid Services (CMS) extended its transitional policy for nongrandfathered coverage in the small group and individual health insurance markets. The Internal Revenue Service (IRS) delayed the deadline for small employers to provide its initial written notices to employees regarding Qualified Small Employer Health Reimbursement Arrangements (QSE HRAs). CMS proposed a rule on ACA market stabilization.

HHS issued its Annual Civil Monetary Penalties Inflation Adjustment to reflect required inflation-related increases to the civil monetary penalties in its regulations. The IRS released a letter that discusses retroactive Medicare coverage’s effect on HSA contributions. Also, the IRS announced that it will not automatically reject individual tax returns when the taxpayer failed to indicate continuous coverage, failed to claim an exemption from the individual mandate, or failed to pay the penalty.

UBA Updates

UBA released three new advisors in February:

  •  CMS’ Proposed Rule on ACA Market Stabilization
  • Medicare Part D: Creditable Coverage Disclosures
  • Health Insurance Marketplace Notice and OMB Expiration Date

UBA updated existing guidance:

  •  Qualified Small Employer Health Reimbursement Arrangements FAQ

CMS Allows States to Extend Life of “Grandmothered” or Transitional Health Insurance Policies

On February 23, 2017, the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) released its Insurance Standards Bulletin Series, in which it re-extended its transitional policy for non-grandfathered coverage in the small group and individual health insurance markets.

States may permit issuers that have renewed policies under the transitional policy continually since 2014 to renew such coverage for a policy year starting on or before October 1, 2018; however, any policies renewed under this transitional policy must not extend past December 31, 2018.

If permitted by applicable state authorities, health insurance issuers may choose to continue certain coverage that would otherwise be cancelled, and affected individuals and small businesses may choose to re-enroll in such coverage.

As background, CMS’ transitional policy was first announced in November 14, 2013; CMS had most recently extended the transitional policy on February 29, 2016, for an additional year for policy years beginning on or before October 1, 2017, provided that all policies end by December 31, 2017.

Policies subject to the transitional relief are not considered to be out of compliance with the ACA’s single risk pool requirement or the following Public Health Service Act (PHS Act) provisions:

  • Section 2701 – relating to fair health insurance premiums
  • Section 2702 – relating to guaranteed availability of coverage
  • Section 2703 – relating to guaranteed renewability of coverage
  • Section 2704 – relating to the prohibition of pre-existing condition exclusions or other discrimination based on health status, with respect to adults, except with respect to group coverage
  • Section 2705 – relating to the prohibition of discrimination against individual participants and beneficiaries based on health status, except with respect to group coverage
  • Section 2706 – relating to non-discrimination in health care
  • Section 2707 – relating to comprehensive health insurance coverage
  • Section 2709 – relating to coverage for individuals participating in approved clinical trials

However, issuers can choose to adopt some of or all these provisions in their renewed policies.

IRS Delays Initial Notice Requirements for QSE HRAs

Under the 21st Century Cures Act, small employers that want to reimburse individual health coverage premiums through HRAs called “Qualified Small Employer Health Reimbursement Arrangements” (QSE HRAs) must provide annual written notice to all eligible employees no later than 90 days before the beginning of the benefit year.

On February 27, 2017, the Internal Revenue Service (IRS) issued Notice 2017-20 that delays the initial written notice deadline. The Department of the Treasury and the IRS intend to issue guidance to provide employers with additional time to furnish the initial notice to employees; the extended deadline will be no earlier than 90 days following the issuance of future guidance. Further, no penalties will be imposed for failure to provide the initial notice before the extended deadline.

CMS’ Proposed Rule on ACA Market Stabilization

On February 17, 2017, the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to stabilize the health insurance market and address risks to the individual and small group markets. CMS proposes changes to guaranteed availability of coverage, network adequacy, essential community providers, open enrollment periods, special enrollment periods, continuous coverage, and standards for the Exchanges.

The proposed changes primarily affect the individual market. However, to the extent that employers have fully-insured plans, some of the proposed changes will affect those employers’ plans because the changes affect standards that apply to issuers.

Public comments are due by March 7, 2017.

HHS Civil Monetary Penalties Increase

On February 3, 2017, the Department of Health and Human Services (HHS) issued its Annual Civil Monetary Penalties Inflation Adjustment to reflect required inflation-related increases to the civil monetary penalties in its regulations. Here are some of the adjustments:

  • Medical Loss Ratio report and rebating: The maximum penalty increases to $111 per day, per individual affected by the violation.
  • Summary of Benefits and Coverage: For failure to provide, the maximum penalty increases to $1,105 per failure.
  • HIPAA: The penalty range increases to a minimum penalty of $112 up to a maximum of $55,910 per violation, and the maximum penalty for all violations of an identical requirement in a calendar year increases to $1,677,299.

Most adjustments are effective for penalties assessed after February 3, 2017, for violations occurring after November 2, 2015. The HIPAA penalty adjustments are effective for penalties assessed after February 3, 2017, for violations occurring on or after February 18, 2009.

IRS Letter Regarding the Retroactive Medicare Coverage Effect on HSA Contributions

The Internal Revenue Service (IRS) recently released a letter regarding retroactive Medicare coverage and health savings account (HSA) contributions.

As background, Medicare Part A coverage begins the month an individual turns age 65, provided the individual files an application for Medicare Part A (or for Social Security or Railroad Retirement Board benefits) within six months of the month in which the individual turns age 65. If the individual files an application more than six months after turning age 65, Medicare Part A coverage will be retroactive for six months.

Individuals who delayed applying for Medicare and were later covered by Medicare retroactively to the month they turned 65 (or six months, if later) cannot make contributions to the HSA for the period of retroactive coverage. There are no exceptions to this rule.

However, if they contributed to an HSA during the months that were retroactively covered by Medicare and, as a result, had contributions in excess of the annual limitation, they may withdraw the excess contributions (and any net income attributable to the excess contribution) from the HSA.

They can make the withdrawal without penalty if they do so by the due date for the return (with extensions). Further, an individual generally may withdraw amounts from an HSA after reaching Medicare eligibility age without penalty. (However, the individual must include both types of withdrawals in income for federal tax purposes to the extent the amounts were previously excluded from taxable income.)

If an excess contribution is not withdrawn by the due date of the federal tax return for the taxable year, it is subject to an excise tax under the Internal Revenue Code. This tax is intended to recapture the benefits of any tax-free earning on the excess contribution.

Individual Mandate – IRS Will Not Reject Silent Returns

For 2016 returns, the Internal Revenue Service (IRS) intended to reject electronically filed “silent returns,” when the taxpayer failed to indicate continuous coverage on Line 61, failed to file a Form 8965 to claim an exemption from the individual mandate, or failed to pay the penalty.

On February 15, 2017, the IRS issued a statement that it would change course and process silent returns. This means that returns without a completed Line 61 will not be systemically rejected by the IRS at the time of filing. The IRS determined that allowing returns to be accepted for processing – when a taxpayer doesn’t indicate health insurance coverage status – is consistent with the January 20, 2017, Executive Order directing federal agencies to exercise authority and discretion to reduce potential burden under the ACA.

Per the IRS, the ACA’s provisions are still in force until changed by Congress; further, taxpayers remain required to follow the law and pay what they may owe. The IRS indicates that if it has questions about a return, it will follow up with correspondence and questions to taxpayers at a future date, after the filing process is complete.

Please be aware that this change in IRS policy for individual filers does not affect employer reporting.

To download the full compliance click Here.


9 questions employees have about ACA – and how to answer them

Have your employees been asking more questions about the ACA? Check out this great article from HR Morning about some of the question your employees might ask and how to answer them by Christian Schappel.

Even under the Trump administration, the Affordable Care Act (ACA) is still a real, enforceable law. You already know this. But do all of your employees? 

Chances are, once employees start getting their ACA-mandated 1095 forms from you in the next few weeks, some of them are going to have questions — à la: What is this? I thought Trump did away with Obamacare.

Here are some of the questions employees are asking — and are bound to ask — along with how HR can answer them:

1. Didn’t Trump repeal Obamacare?

No. While he has promised to “repeal and replace” the ACA, all he has done so far is sign an executive order that directs federal agencies to grant certain exemptions from the law, as well as waive any requirements that they’re able to by law.

Surely, the executive order will eventually weaken some parts of the ACA — and maybe even lead to some repeals — but nothing concrete has happened yet. As a result, employers still have to comply with the “play or pay” mandates, and individuals still have to carry health insurance or risk penalties.

2. Didn’t Republicans in Congress start repealing the law?

No. Republicans in Congress don’t have the votes they need to repeal the ACA outright. They can’t avoid a Democratic filibuster.

As a result, what they have done is state their intention to attack the law through a process known as reconciliation. It’ll allow Republicans to vote on budgetary pieces of the law — like the individual mandate (which is imposed with a tax) and healthcare subsidies — without giving the Democrats a chance to filibuster.

The problem for Republicans, though, is that reconciliation limits how they can reshape (or repeal) Obamacare.

3. Then when will Obamacare be repealed?

All you can tell employees right now is that it hasn’t happened, and there is no clear answer on when (or even if) it will happen in its entirety.

However, Republicans recently made two things clear at its recent annual retreat in Philadelphia:

  • They plans to use the reconciliation process to “repeal and replace” parts of the law.
  • The GOP will bring a final reconciliation package to the floor of the House of Representatives by late February or early March.

Chances are, we’ll find out more once Trump’s cabinet picks — specifically his pick to lead the Department of Health and Human Services — have been confirmed.

4. If I have a pre-existing condition, will I have trouble finding a health plan?

President Trump, as well as Republicans in Congress, have stated their intentions to attempt to keep two popular requirements of the ACA in place:

  • The need for insurance companies to offer coverage to individuals with pre-existing conditions.
  • The ability for children to be able to stay on their parents’ health plans until age 26.

Form 1095 questions

5. What is this form?

Form 1095 is a little like Form W-2: The employer or insurer sends one copy to the Internal Revenue Service (IRS) and one copy to the employee. It describes whether the person obtained the minimum required level of health insurance under the ACA in 2016.

It also informs the IRS, and the employee, if the person was eligible for a premium tax credit in 2016.

6. If Obamacare is going to be repealed, do I still need this form?

Yes. The reason is because the ACA was in effect for all of 2016, and this form is for reporting information that reflects what happened in 2016.

7. What do I have to do with it?

In most cases, no action will be necessary. When filing taxes for 2016, individuals will be asked if they obtained minimum insurance coverage. This form will help individuals answer that question.

8. Do I have to wait to receive the form to file my taxes?

Again, in most cases, the answer is no. Only those who received insurance via an exchange or the “marketplace” will have to wait for their 1095 to file their taxes.

If a person received insurance through an employer, that person doesn’t have to wait for Form 1095 to file his or her taxes, assuming the person already knows whether or not they had minimum coverage throughout the year. In that case, the person can just keep the form for their records.

If a person’s unsure whether he or she had minimum coverage for the entire year, that person can wait for the form to file their taxes or ask their employer whether he or she had minimum coverage.

9. How will I receive the form(s)?

Individuals may receive their form(s) in one of three ways:

  • mail
  • hand delivery, or
  • electronically (if they have consented to receive it electronically).

See the original article Here.

Source:

Schappel C. (2017 February 1). 9 questions employees have about ACA- and how to answer them [Web blog post]. Retrieved from address http://www.hrmorning.com/employee-questions-aca-obamacare-repeal-answers/


What Trump’s ACA executive order means for employers

Great article from our partner, United Benefit Advisors (UBA) by Nick Otto

President Donald Trump wasted no time in fulfilling one promise he made time and again on his campaign trail in undoing the Affordable Care Act on day one in office.

On Friday, Trump issued an executive order directing members of his administration to take steps that will facilitate the repeal and replacement of the ACA, but experts note employers should continue with business as usual until solid formalities come out.

From an employer’s perspective, “every regulation they need to comply with, they still need to until they hear differently,” says Steve Wojcik, vice president of public policy at the National Business Group on Health.

What Trump’s order did was send a signal to everyone that his administration is prioritizing to repeal major parts of the ACA and to replace it with something else.

“In terms of specifics, nothing changes now, and it makes it clear that some changes may take longer than others because of the regulatory process to revise existing regulations,” Wojcik notes.

This specific order reiterates that it is administration policy to seek the repeal and replacement of the ACA and directs relevant agencies like Health and Human Services, Treasury and Labor, to utilize their authorities under the act “to minimize the unwarranted economic and regulatory burdens of the Act, and prepare to afford the States more flexibility and control to create a more free and open healthcare market,” according to the order.

But the different agencies will have to follow the law that requires notice and commenting periods before any final regulation is put in place, adds Chatrane Birbal, a government relations senior advisor with the Society for Human Resource Management.

“Trump’s administration is drawing a line in the sand,” she says. “While Congress is working on making its changes on a legislative front, Trump wants to move forward with the regulatory side.”

The most immediate focus will be whether the IRS acts to delay the employer reporting requirements under the employer shared responsibility provisions of the law, points out Joy Napier-Joyce, principal and leader of the employee benefits group at labor & employment law firm Jackson Lewis P.C.

“Employer reporting is key to assessing employer penalties under the employer mandate, [but it] represents a significant burden to employers and the deadlines are fast approaching,” she says. Similarly, Napier-Joyce says, “we have not seen enforcement of employer penalties under the employer mandate to date.”

Especially given Trump’s announcement Monday of a hiring freeze for federal workers and the known shortage of resources at the IRS, employers will be eager to glean hints as to any non-enforcement stances, she says. Much of the requirements under the employer mandate have been formalized through statute and regulation, so in order to effectively and completely reverse course, formal processes will need to be followed, which will in turn take time.

“For now, employers should stay the course, but stay tuned as we await how and when the agencies, particularly the IRS, choose to exercise discretion,” Napier-Joyce adds.

One issue Birbal advises keeping an eye on is that the executive order calls for greater flexibility to states.

“This could be a concern for employers because it doesn’t recognize ERISA preemption,” she notes. “It has provided employers and employees with a workable regulatory framework for benefits, offering uniform set of benefits to employees throughout out the U.S.”

“We believe the flexibility and certainty of the ERISA framework already in place has been a success to the employers sponsored system and we hope that’ll be maintained,” she adds.

Another area to note, says NBGH’s Wojcik, is how providers could be impacted by the order.

“There are a lot of punitive delivery reform regulations that are in various stages of completion or haven’t been issued,” he says. “To the extent that that affects hospitals and physicians, it could be an area where you see a lot of impact besides issues like the individual mandates and excise tax.”

As for policies that were still in the works, “if something hasn’t come out yet, it’s likely that it won’t come out ever based on executive order,” Wojcik notes.

See the original article Here.

Source:

Otto N. (2017 January 23). What trump’s ACA executive order means for employers [Web blog post]. Retrieved from address http://www.benefitnews.com/news/what-trumps-aca-executive-order-means-for-employers?feed=00000152-18a4-d58e-ad5a-99fc032b0000


CMS’ Proposed Rule on ACA Market Stabilization

Stay up-to-date with the most recent ACA regulations thanks to our partners United Benefits Advisors (UBA),

On February 17, 2017, the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to stabilize the health insurance market and address risks to the individual and small group markets. CMS proposes changes to guaranteed availability of coverage, network adequacy, essential community providers, open enrollment periods, special enrollment periods, continuous coverage, and standards for the Exchanges.

The proposed changes primarily affect the individual market. However, to the extent that employers have fully-insured plans, some of the proposed changes will affect those employers’ plans because the changes affect standards that apply to issuers.

Guaranteed Availability of Coverage

The guaranteed availability provisions require health insurance issuers offering non-grandfathered coverage in the individual or group market to offer coverage to and accept every individual and employer that applies for such coverage unless an exception applies. Individuals and employers must usually pay the first month’s premium to activate coverage.

CMS previously interpreted the guaranteed availability provisions so that a consumer would be allowed to purchase coverage under a different product without having to pay past due premiums. Further, if an individual tried to renew coverage in the same product with the same issuer, then the issuer could apply the enrollee’s upcoming premium payments to prior non-payments.

Under the proposed rule, CMS modifies its interpretation of the guaranteed availability provisions so that an issuer may refuse to activate new coverage because of premium payment failure. This means that an issuer can require a policyholder whose coverage was terminated for premium non-payment in the individual or group market to pay all past due premiums owed to the issuer for coverage enrolled in the prior 12 months for that policyholder to resume coverage from that issuer. The issuer is required to apply its premium payment policy uniformly to all employers or individuals regardless of health status and consistent with non-discrimination requirements.

Network Adequacy

Under the Patient Protection and Affordable Care Act (ACA), health and dental plan issuers must meet minimum network adequacy criteria to be certified as qualified health plans (QHPs). The criteria require a QHP issuer to maintain a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance abuse services, to assure that all services will be accessible without unreasonable delay.

The Department of Health and Human Services (HHS) proposes to rely on state reviews for network adequacy in states where a federally-facilitated exchange is operating. For states that do not have the authority and means to conduct sufficient network adequacy reviews, HHS would rely on an issuer’s accreditation (commercial or Medicaid) from an HHS-recognized accrediting entity.

Essential Community Providers

Essential community providers (ECPs) include providers that serve predominantly low-income and medically underserved individuals; issuers must meet requirements for ECPs’ inclusion in QHP provider networks.

HHS proposes to lower the minimum percentage of network participating practitioners; an issuer will satisfy the regulatory standard if the issuer contracts with at least 20 percent of available ECPs in each plan’s service area to participate in the plan’s provider network.

Under current guidance, issuers may only identify providers in their network who are included on a list of available ECPs maintained by HHS. HHS proposes to allow issuers to identify ECPs through a write-in process to build up the HHS ECP list.

Annual Open Enrollment Periods

Currently, annual Exchange open enrollment begins on November 1, 2017, and ends on January 31, 2018, for plan year 2018. CMS proposes to shorten the open enrollment period to begin on November 1, 2017, and end on December 15, 2017.

Special Enrollment Periods

Starting in June 2017, CMS proposes to require pre-enrollment eligibility verification for all special enrollment periods of new consumers who seek QHP coverage through the federally-facilitated exchanges and state-based exchanges on the federal platform (Exchanges).

The proposed special enrollment period changes apply to the individual market only, not to special enrollment periods under the Small Business Health Options Program (SHOP).

Continuous Coverage

HHS seeks public comment on individual market policies to promote continuous health coverage enrollment and to discourage individuals from waiting to enroll in coverage until they become ill.

HHS provides examples of potential policies. One example is to require prior coverage evidence and require a longer look-back period for special enrollment period eligibility. Another example is to allow individuals who cannot provide prior coverage evidence during a look-back period, to be covered under a special enrollment period, but to impose either at least a 90-day waiting period before activating enrollment or a late enrollment penalty.

HHS is also interested in public comment on whether the individual market needs policies such as waiting periods or maintaining continuous, creditable coverage to avoid pre-existing condition exclusions that were requirements imposed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

Health Insurance Issuer Standards under the ACA, Including Standards Related to Exchanges

Under the ACA, issuers of non-grandfathered individual and small group health insurance plans, including qualified health plans, must ensure that the plans adhere to certain levels of coverage.

A plan’s coverage level, or actuarial value (AV), is determined based on its coverage of the essential health benefits (EHBs) for a standard population. The ACA requires a bronze plan to have an AV of 60 percent, a silver plan to have an AV of 70 percent, a gold plan to have an AV of 80 percent, and a platinum plan to have an AV of 90 percent. The HHS Secretary issues regulations on the calculation of AV and its application to coverage levels; the ACA authorizes the Secretary to develop guidelines to provide for a de minimis variation in the actuarial valuations used in determining the level of coverage of a plan to account for differences in actuarial estimates.

CMS proposes to amend the definition of de minimis to a variation of -4/+2 percentage points, rather than +/- 2 percentage points for all non-grandfathered individual and small group market plans that are required to comply with AV. To implement the amended AV de minimis range, CMS would update its 2018 AV Calculator accordingly.

Conclusion

Per HHS, the proposed rule aims to ensure market stability and issuer participation in the Exchanges for the 2018 benefit year as issuers develop their proposed plan benefit structures and premiums for 2018.

With a nod to President Trump’s Executive Order to minimize the economic burden of the ACA pending its repeal, the proposed rule states that it aims to reduce the fiscal and regulatory burden on individuals, families, health insurers, patients, recipients of health care services, and purchasers of health insurance. Further, the proposed rule seeks to lower insurance rates and ensure a competitive market by preventing and curbing potential abuses associated with special enrollment periods and gaming by individuals taking advantage of current regulations on grace periods and termination of coverage due to premium nonpayment.

The proposed rule includes HHS’ assessment of the benefits, costs, and transfers associated with its proposed regulatory action. Based on its impact estimates, HHS anticipates that the rule will reduce issuers’ regulatory burden, reduce the impact of consumer adverse selection, stabilize premiums in the individual insurance market, and provide consumers with more affordable health insurance coverage.

To download the original recap click Here.


Solving the Prescription Puzzle

Great article from our partner, United Benefit Advisors (UBA) by Mary Delaney

Determining how an employer develops the most effective formulary, while protecting the financial stability of the plan, is certainly the challenge of this decade. Prescription management used to mean monitoring that the right people are taking medications to control their disease while creating strategies to move them from brand name to generic medications. With the dawn of specialty medications, formulary management has become a game of maximizing the pass-through of rebates, creating the best prior authorization strategies and tiering of benefits to create some barrier to more expensive medications, all without becoming too disruptive. As benefits managers know, that is a difficult challenge. The latest UBA Health Plan Survey revealed that 53.6 percent of plans offer four tiers or more, a 21.5 percent increase from last year and nearly a 55.5 percent increase in just two years. Thus, making “tiering” a top strategy to control drug costs. There are many additional opportunities to improve and help control the pharmacy investment, but focusing on the key components of formulary management and working on solutions that decrease the demands for medications are critical to successful plan management.

When developing a formulary, Brenda Motheral, RPh, MBA, Ph.D., CEO of Archimedes, suggests that chasing rebates is not a strategy to optimize your investment. Some of the highest rebates may be from medications that add no better therapeutic value than an inexpensive medication that does not offer a rebate, but net cost is much lower than the brand or specialty medication being offered. Best formulary management will mean that specific medications that do not offer a significant therapeutic value are removed from the formulary, or are covered at a “referenced price” so the member pays the cost difference. Formulary management will need to focus on where the drug is filled and which medications are available.

When setting up parameters on where a drug is to be filled, the decision needs to be made if a plan will promote mail order. Mail order, if used and monitored appropriately, makes it more convenient for a patient to receive their regularly used medications and may provide savings. In fact, the UBA Health Plan Survey finds that more than one-third (36.3 percent) of prescription drug plans provide a 90-day supply at a cost of two times retail copays. But if mail order programs are not monitored, people can continue to receive medications that are no longer required and never used, adding to medical spend waste. Furthermore, in our analysis, we are finding that not all medications are less expensive through mail order, as shown in Figure 1 below. Therefore, examining the cost differential is critical in a decision to promote, or not promote, mail order.

To see the full original article and charts click Here.

Source:

Delany M. (2017 January 24). Solving the prescription puzzle [Web blog post]. Retrieved from address http://blog.ubabenefits.com/solving-the-prescription-puzzle


Best and Worst States for Group Health Care Costs

Great article from our partner, United Benefit Advisors (UBA) about which states are the best/worst for group health care by Matt Weimer.

Also make sure to register for our upcoming UBA webinar on Tuesday, February 21 at 2:00 p.m. ET. The topic will be a case study on why communication matters in employee benefits. To register for the webinar click Here.

Employer-sponsored health insurance is greatly affected by geographic region, industry, and employer size. While some cost trends have been fairly consistent since the Patient Protection and Affordable Care Act (ACA) was put in place, UBA finds several surprises in its latest Health Plan Survey. Based on responses from more than 11,000 employers, UBA recently announced the top five best and worst states for group health care monthly premiums.

The top five best (least expensive) states are:

1) Hawaii

2) Idaho

3) Utah

4) Arkansas

5) Mississippi

Hawaii, a perennial low-cost leader, actually experienced a nearly seven percent decrease in its single coverage in 2016. New Mexico, a state that was a low-cost winner in 2015, saw a 22 percent increase in monthly premiums for singles and nearly a 30 percent increase in monthly family premiums, dropping it from the “best” list.

The top five worst (most expensive) states are:

1) Alaska

2) Wyoming

3) New York

4) Vermont

5) New Jersey

The UBA Health Plan Survey also enables state ranking based on the average annual cost per employee. The average annual cost per employee looks at all tiers of a plan and places an average cost on that plan based on a weighted average metric. While the resulting rankings are slightly different, they also show some interesting findings.

The 2016 average annual health plan cost per employee for all plan types is $9,727, which is a slight decrease form the average cost of $9,736 in 2015. When you start to look at the average annual cost by region and by state, there is not much change among the top from last year. The Northeast region continues to have the highest average annual cost even with the continued shift to consumer-driven health plans (CDHP). In 2016, enrollment in CDHPs in the Northeast was 34.9 percent, surpassing those enrolled in preferred provider organization (PPO) plans at 33 percent. Even with the continued shift to CDHPs, the average annual costs were $12,202 for New York, which remained the second-highest cost state, followed by $12,064 for New Jersey, and rounding out the top five, Massachusetts and Vermont flip-flopped from 2015 with Massachusetts at $11,956 and Vermont at $11,762.

As was the case in 2015, Alaska continues to lead all states in average health plan costs, topping New York by more than $1,000 per employee, with an average cost of $13,251. While year-over-year the average cost for Alaska only increased 3.35 percent, the gap increased to 36.2 percent above the national average of $9,727.

Keeping close to the national average increase, the top five states all saw a year-over-year increase of less than 4.5 percent. Unfortunately, even at a modest increase, the one thing that the top five have in common is that they all are more than 20 percent above the national average for health plan costs per employee.

See the original article Here.

Source:

Weimer M. (2017 February 15). Best and worst states for group health care costs [Web blog post]. Retrieved from address http://blog.ubabenefits.com/best-and-worst-states-for-group-health-care-costs


Large Employer Health Plans Could Also See Some Impacts From Obamacare Overhaul

Obamacare repeal could have a huge impact on employer healthcare plans. According to this article from Kaiser Health News large employers might feel some of the Obamacare overhauls ripple effect by Michelle Andrews

If you think that because you get health insurance through your job at a big company, you won’t be affected if Republicans overhaul Obamacare, think again.  Several of the law’s provisions apply to plans offered by large employers too (with some exceptions for plans that were in place before the law passed in March 2010).

It’s not yet clear how President-elect Donald Trump and the congressional Republicans plan to revamp the federal health law. They have not agreed on a plan, and they do not have enough votes in the Senate to fully repeal the current statute. So they are planning to use a budgeting rule to disassemble part of the law, and that will limit what they can change. But they also may seek revisions in important regulations and guidance that have determined how the law is implemented.

Nonetheless, as the tensions grow in Washington over the future of the health law, it is important to understand some of its effects on large-group plans.

No Copays For Preventive Services

The health insurance offered by big companies is typically pretty comprehensive, the better to attract and keep good employees. But Obamacare broadened some coverage requirements. Under the law, insurers and employers have to cover many preventive services without charging people anything for them. The services that are required with no out-of-pocket payments include dozens of screenings and tests, including mammograms and colonoscopies, that are recommended by the U.S. Preventive Services Task Force; routine immunizations endorsed by the federal Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices; and a range of services that are recommended specifically for children and for women by the federal Health Resources and Services Administration.

The change that affects the most people on an ongoing basis is likely the requirement that plans cover without cost sharing all methods of contraception approved by the Food and Drug Administration. (There are limited exceptions for religious employers.)

“In terms of sustained costs, birth control is probably the biggest,” said Caroline Pearson, a senior vice president at Avalere Health.

No Annual Or Lifetime Limits On Coverage

Even the most generous plans often had lifetime maximum coverage limits of a few million dollars before the health law passed, and some plans also imposed annual coverage limits. The health law eliminated those dollar coverage limits.

Annual Cap On Out-Of-Pocket Payments For Covered Services

The health law set limits on how much people can be required to pay in deductibles, copayments or coinsurance every year for covered care they receive from providers in their network. In 2017, the limit is $7,150 for individuals and $14,300 for families.

“Many employers often had an out-of-pocket limit anyway, but this guarantees protection for people with high needs,” said JoAnn Volk, a research professor at Georgetown University’s Center on Health Insurance Reforms, who has written on this issue.

Adult Kids’ Coverage Expanded

The law allowed workers to keep their children on their plans until they reach age 26, even if they’re married, financially independent and live in another state. Republicans have said they may keep this popular provision in place if they dismantle the law.

Guaranteed External Appeal Rights

Consumers who disagree with a health plan’s decision to deny benefits or payment for services can appeal the decision to an independent review panel.

The provision applies to all new health plans, including those offered by self-funded companies that pay their workers’ claims directly and who were previously exempt from appeals requirements.

No Waiting Periods To Join A Plan 

Employers used to be able to make new employees wait indefinitely before they were eligible for coverage under the company plan. No more. Now the waiting time for coverage can be no more than 90 days.

No Waiting Periods For Coverage Of Pre-Existing Conditions 

Prior to the ACA, employers could delay covering workers’ chronic and other health conditions for up to a year after they became eligible for a plan. Under the ACA, that’s no longer allowed. As a practical matter, though, coverage of pre-existing conditions was rarely an issue in large-group plans, say some health insurance experts.

“It was difficult administratively, and the law of large numbers” meant that one individual’s health care costs didn’t generally have a noticeable impact on the group, said Karen Pollitz, a senior fellow at the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

Repeal could reopen the door to that prohibited practice, however.

Standardized Plan Descriptions

The law requires all plans to provide a “summary of benefits and coverage” in a standard format that allows consumers to understand their coverage and make apples-to-apples plan comparisons. 

Basic Coverage Standards For Large-Group Plans

The health law isn’t as prescriptive with large-group plans about the specific benefits that have to be offered. They aren’t required to cover the 10 essential health benefits that individual and small-group plans have to include, for example. But the law does require that big companies offer plans that meet a “minimum-value” standard paying at least 60 percent of the cost of covered services, on average. Those that don’t could face a fine.

Initially, the online calculator that the federal Department of Health and Human Services provided to help large employers gauge compliance with the minimum value standard gave the green light to plans that didn’t cover hospitalization services or more than a few doctor visits a year. Now plans must provide at least that coverage to meet federal standards.

The result: Large employers generally no longer offer so-called “mini-med” policies with very skimpy benefits.

If the health law is repealed, that could change. In some industries with lower-wage workers and smaller profit margins, “they might begin to offer them again, and employees might demand it” to help make the premiums more affordable, said Steve Wojcik, vice president of public policy at the National Business Group on Health, a membership organization representing large employers.

Although the law strengthened coverage for people in large-group plans in several ways, consumer advocates have complained about shortcomings. It aimed to ensure that coverage is affordable by requiring that individuals be responsible for paying no more than 9.69 percent of their household income for individual employer coverage, for example.

If their insurance costs more than that, workers can shop for coverage on the marketplaces set up by the health law and be eligible for premium tax credits — if their income is less than 400 percent of the federal poverty level (about $47,000). But the standard does not take into consideration any additional costs for family coverage.

Consumer advocates also point to the wellness regulations as a problematic area of the law. The health law increased the financial incentives that employers can offer workers for participating in workplace wellness programs to 30 percent of the cost of individual coverage, up from 20 percent.

Such incentives can effectively coerce people into participating and sharing private medical information, critics charge, and unfairly penalize sick people.

“It potentially allows [plans] to discriminate against people with medical conditions, which the ACA is supposed to eliminate,” said Linda Blumberg, a senior fellow at the Urban Institute’s Health Policy Center.

See the original article Here.

Source:

Andrews M. (2017 January 17). Large employer health plans could also see some impacts from obamacare overhaul [Web blog post]. Retrieved from address http://khn.org/news/large-employer-health-plans-could-also-see-some-impacts-from-obamacare-overhaul/