Worried about the ACA repeal process? Check out this informative article from HR Morning about the status of the ACA’s repeal by Christian Schappel,
President Trump, along with other Republican lawmakers, have promised to “repeal and replace” the Affordable Care Act (ACA). But it hasn’t happened yet. Here’s why, as well as a timeline for what’s to come.
In his “Contract with the American Voter,” Donald Trump promised to repeal Obamacare within his first 100 days in office. But the reality is he can’t do it on his own. He needs votes to get it repealed outright — and he doesn’t have enough of them.
Broad legislation that would repeal the ACA would require 60 votes in the Senate, and the GOP doesn’t control enough seats to make that a reality — or avoid a filibuster by the Democrats.
Still, that hasn’t stopped Trump from declaring war on the healthcare reform law. In one of his first acts as president, Trump issued an executive order that directs federal agencies to waive some of the requirements of the law that could impose a burden on individuals and certain businesses.
It was a clear sign from Trump that his administration plans to attack the ACA by any means necessary.
Congressional Republicans are now preparing to dismantle portions of the ACA using a process known as reconciliation. It will allow the GOP to vote on budgetary pieces of the health law, without giving the Democrats a chance to filibuster.
The problem for Republicans is reconciliation limits the extent to which they can reshape the law.
Parts of the law it appears they can roll back through reconciliation:
The Republicans believe that through reconciliation they can knock the legs out from under the ACA and begin to implement their own health reforms.
Some of the things members of the GOP have indicated they want to do:
Two popular ACA provisions Republicans said they plan to keep in health plans:
When it comes to a timeline for when the GOP hopes to initiate reforms, things are a little murky. The problem is, due to the reconciliation process — and complaints from insurers about what the requirement to provide coverage to those with pre-existing conditions will do to risk pools and pricing — things aren’t as cut and dried as employers would like them to be.
But here’s what we know:
Bottom line: Employers are likely looking at a long legislative process, and an even longer implementation period.
While Congress mulls larger-scale changes to the ACA, a few bills have been introduced for lawmakers to chew on.
The following could chip away at certain elements of reform:
See the original article Here.
Schappel C. (2017 February 10). Where exactly are we in the ACA repeal process? [Web blog post]. Retrieved from address http://www.hrmorning.com/where-are-we-aca-obamacare-repeal-trump/
Due to the most recent changes President Obama made to the ACA before leaving office, ACA repeal is looking more and more like a possibility. Take a look at this great article from Employee Benefits Advisors to see how the changes will affect the ACA repeal process by Craig Hasday
President Trump is delivering on what many had viewed as an unrealistic campaign promise: The repeal of Obamacare is right on track. In finalizing the budget, the GOP can now line out any ACA items with a fiscal impact, thanks to an executive order issued by Trump on his first day in office. By lining out the individual and employer penalty and eliminating some of the ACA taxes – voila – the ACA is gone.
The market reforms will stay, however (no pre-existing conditions, guaranteed issue coverage and dependents covered to age 26). But there is an enormous “if.” If the insurance carriers stay in the market.
One of the reasons the ACA is not working is the adverse selection issue. Insurance carriers must take all comers, and since the individual penalty for not obtaining coverage is full of loopholes, and not large enough to dissuade the young and healthy from rolling the dice, the risk pool has performed horrifically. That should be no surprise – I have been writing about it for years; a few examples here, here, here and here.
But if the individual penalty is repealed, it is going to get even worse. The healthy are going to leave and the risk pools will be left with a lot of expensive sick people who love the idea of guaranteed coverage, premiums and unlimited maximums.
The problem with QSEHRAs
The prior Congress and former President Obama didn’t help matters with the passage of the 21st Century Cures Act, which was signed into law in December 2016. This law allows small employers who don’t offer a group health plan to create a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). Employers can provide money to employees on a tax-free basis to pay for individual health insurance policies and to reimburse employees for certain medical expenses. This is going to make the small group pools worse and, my guess is, increase adverse selection even more.
Given the losses incurred to date and the additional selection being imposed on the healthcare system, the big question is will the health insurance carriers stay in the marketplace? If mainstream carriers refuse to offer policies – BOOM – the system implodes.
To quote the best show on Broadway, “Hamilton,” I would love “to be in the room where it happens.” This is going to be interesting to watch.
Hasday C. (2017 February 06). How Obama’s last healthcare legislation is further hurting the ACA’s chances of survival [Web blog post]. Retrieved from address http://www.employeebenefitadviser.com/opinion/how-obamas-last-healthcare-legislation-is-further-hurting-the-acas-chances-of-survival
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:
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.
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
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 released three new advisors in February:
UBA updated existing guidance:
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:
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:
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.
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:
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:
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:
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/
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.
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
Stay up-to-date with the most recent ACA regulations thanks to our partners United Benefits Advisors (UBA),
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.
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).
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.
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.
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.
Delany M. (2017 January 24). Solving the prescription puzzle [Web blog post]. Retrieved from address http://blog.ubabenefits.com/solving-the-prescription-puzzle
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.
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/
Make sure you stay up to date on January’s compliances thanks to our partners United Benefits Advisors (UBA),
January was a significant month in the employee benefits world because the new U.S. administration issued an Executive Order announcing its intent to repeal the Patient Protection and Affordable Care Act (ACA). However, January was a relatively inactive month for new laws and administrative rulemaking because the new administration placed a freeze on rulemaking until presidential nominations of agency heads are confirmed.
The Department of Health and Human Services (HHS) released the 2017 poverty guidelines. The Department of Labor (DOL) released its inflation-adjusted civil monetary penalty amounts and an FAQ regarding the contraceptive services objection accommodation. The DOL, HHS, and the Treasury Department released FAQs about family HRA integration with a non-HRA group health plan. The IRS released its 2017 version of the Employer’s Tax Guide to Fringe Benefits and a memo on fixed indemnity health plan benefits tax treatment.
President Trump Signs Executive Order
On January 20, 2017, President Trump signed Executive Order: Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal.
The Executive Order directs the Department of Health and Human Services’ Secretary and the heads of all other executive departments and agencies with authority or responsibility under the Patient Protection and Affordable Care Act (ACA) to exercise all authority and discretion to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose a fiscal burden on any state, or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.
The Executive Order indicates that the Administrative Procedure Act and its rulemaking process still apply to regulatory revisions. Because confirmation proceedings are not concluded for the heads of the Departments of Health and Human Services, Labor, or the Treasury, the agencies are in a rule promulgation freeze until presidential nominations are confirmed.
HHS Releases 2017 Federal Poverty Guidelines
The 2017 poverty guidelines (also referred to as the FPL) were released by the Department of Health and Human Services (HHS). For a family/household of 1 in the contiguous United States, the FPL is $12,060. In Alaska, the FPL is $15,060 and in Hawaii the FPL is $13,860. Applicable large employers that wish to use the FPL affordability safe harbor under the employer shared responsibility/play or pay rules should ensure that their lowest employee-only premium is equal to or less than $97.38 a month, which is 9.69 percent of the FPL.
DOL Releases Inflation-Adjusted Federal Civil Penalty Amounts
On January 18, 2017, the Department of Labor issued the Federal Civil Penalties Inflation Adjustment Act Annual Adjustments for 2017 which is its first annual adjustment of federal civil monetary penalties. Here are some of the adjustments:
The adjustments are effective for penalties assessed after January 13, 2017, for violations occurring after November 2, 2015.
DOL Releases FAQ Regarding Contraceptive Services Objection Accommodation
As part of implementing the Patient Protection and Affordable Care Act (ACA), the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments) issued regulations to require coverage or women’s preventive services, which essentially includes all FDA-approved contraceptives, sterilization procedures, and patient education and counseling for women with reproductive capacity, as prescribed by the health care provider (collectively, contraceptive services).
The regulations exempt group health plans of “religious employers” (specifically defined in the law) from the requirement to provide contraceptive coverage. Later, amended regulations provide an accommodation for eligible organizations – which are not eligible for the religious employer exemption – that object on religious grounds to providing coverage for contraceptive services. Because of litigation, the Departments extended the accommodation to closely held for-profit entities.
Under the accommodation, an eligible organization that objects to providing contraceptive coverage for religious reasons may either:
Most recently, in 2016, the U.S. Supreme Court considered claims by several employers that, even with the accommodation provided in the regulations, the contraceptive coverage requirement violates the Religious Freedom Restoration Act (RFRA). The Court heard oral arguments and ultimately remanded the case (and parallel RFRA cases) to the lower courts to give the parties “an opportunity to arrive at an approach going forward that accommodates [the objecting employers’] religious exercise while at the same time ensuring that women covered by [the employers’] health plans ‘receive full and equal health coverage, including contraceptive coverage.’”
To address the Court’s statement, the Departments published their request for information (RFI) regarding the Court’s statement and received more than 54,000 public comments. Based on the comments submitted, the Departments released FAQs About Affordable Care Act Implementation Part 36 to indicate that they not making changes to the accommodation for the following reasons:
Agencies Release FAQs About Family HRA Integration with Non-HRA Group Health Plan
The Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments) released FAQs About Affordable Care Implementation Part 37 to address health reimbursement arrangement (HRA) integration with group health plans.
The Departments indicate that, for purposes of determining whether a family HRA is “integrated” with a non-HRA group health plan, an employer may rely on an employee’s reasonable representation that the employee and other individuals covered by the family HRA are also covered by another qualifying non-HRA group health plan.
Also, a family HRA is permitted to be integrated with a combination of coverage under other qualifying non-HRA group health plans if all individuals who are covered under the family HRA are also covered under other qualifying non-HRA group health plan coverage.
For example, a family HRA covering an employee, spouse, and one dependent child may be integrated with the combination of (1) the employee’s self-only coverage under the non-HRA group health plan of the employee’s employer, and (2) the spouse and dependent child’s coverage under the non-HRA group health plan of the spouse’s employer, if both non-HRA group health plans are qualifying nonHRA group health plans.
IRS Releases 2017 Version of the Employer’s Tax Guide to Fringe Benefits
The IRS released its 2017 Version of Publication 15-B which provides information on the employment tax treatment of various fringe benefits. Fringe benefits are taxable unless an exclusion applies. The publication lists the qualified benefits that a cafeteria plan may include and examples of benefits that a cafeteria plan is not permitted to include. It also provides the 2017 dollar limits for various benefits.
IRS Issues Memo on Fixed-Indemnity Health Plan Benefits Tax Treatment
On January 20, 2017, the IRS released a Memorandum on the tax treatment of benefits paid by fixedindemnity health plans that addresses: (1) whether payments to an employee under an employerprovided fixed-indemnity health plan are excludible from the employee’s income under Internal Revenue Code §105, and (2) whether payments to an employee under an employer-provided fixedindemnity health plan are excludible from the employee’s income under Internal Revenue Code §105 if the payments are made by salary reduction through a §125 cafeteria plan.
Some examples of fixed indemnity health plans are AFLAC or similar coverage, or cancer insurance policies.
Generally, the Internal Revenue Code imposes taxes on wages paid with respect to employment. For federal income tax withholding, the Internal Revenue Code generally requires every employer who pays wages to deduct and withhold taxes on those wages.
The IRS concluded that an employer may not exclude payments under an employer-provided fixedindemnity health plan from an employee’s gross income if the coverage’s value was excluded from the employee’s gross income and wages. Further, an employer may not exclude payments under an employer-provided fixed-indemnity health plan if the plan’s premiums were made by salary reduction through a §125 cafeteria plan.
In the context of an employer-provided fixed-indemnity health plan, when the employer’s payment for coverage by the fixed-indemnity plan is excluded from the employee’s gross income, then the payments by the plan are not excluded from the employee’s gross income
In contrast, when the premiums are paid with after-tax dollars, the payments by the plan are excluded from the employee’s gross income.
To download the full compliance recap click Here.