More Delays in PPACA notice
February 4, 2013 | Bonnie Jones, MTAS Human Resource Consultant

During the last week in January 2013, the Departments of Labor, Treasury, and Health and Human Services issued a new FAQ page addressing PPACA implementation issues, particularly the announcement of the delayed effective date for the written notice of Exchange requirements under health care reform.

http://reillybenefits.com/feds-to-delay-employer-ppaca-notice

The Patient Protection and Affordable Care Act (PPACA) requires employers to provide notice to employees about the existence of State-based insurance exchanges. The purpose of the notice is to provide employees necessary information to understand the availability of new health plan options and to help employees compare those options against costs and benefits available through the employment-based coverage. PPACA requires employers to provide this notice by March 1, 2013 or, you guessed it, face potential penalties! So what are employers to provide?

Well, we don’t quite know. To date, neither the federal government nor the state exchanges have provided guidance regarding the layout or content of the notice. As with several other areas of reform implementation the reality of delays in the regulatory process trump the stated deadlines. With no guidance employers have nothing to provide.

Fortunately, it is expected the federal government will delay the notice requirement, and employers will escape the looming deadline, at least for the time being. A new date has not yet been issued, but it is widely anticipated the feds will enforce a new deadline in the Fall, closer to the October 1, 2013 kick-off date for open enrollment in the exchanges. Employers should watch for an announcement soon.


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The Supreme Court upheld PPACA, now what?
January 16, 2013 | Bonnie Jones, MTAS Human Resource Consultant

Healthcare reform is more than 1,000 pages long, and that doesn’t include all the recent interpretations and clarifications. Now that the Supreme Court has ruled it constitutional people are trying to understand in layman terms what this means for them.

The good news is that some of health care reform has already gone into effect. Let’s take a quick glance at the changes at large:

- By 2014 every US citizen will be required to have health care. Medicaid will be expanded to include more people covered and eligible and subsidies and tax credits will be offered for those people who will find it hard to afford insurance

- Employers with more than 50 employees (yes, this means cities, towns, and counties) will be required to offer a minimum essential coverage as defined by law or face penalties per employee per year.

- Pre-existing conditions are no longer a factor in approving or denying coverage in most cases. In addition most policies will not be able to drop an individual if they become sick.

- Children can stay on parents plans up to 26 regardless of marital status, schooling status or if being claimed as a dependent on tax returns

- Insurance companies cannot put lifetime limits on policies and deny claims once a certain dollar amount has been hit in claims


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Notice Medicare Tax increase?
January 5, 2013 | Bonnie Jones, MTAS Human Resource Consultant

Taxes have gone up. I am sure you have noticed but here is the skinny on Medicare tax increases compliments of of http://lifehacker.com/5922382/how-will-the-new-health-care-law-affect-me

Smart Money breaks it down in detail, but the main impact is an increase in Medicare taxes:

Starting in 2013, an extra 0.9% Medicare tax will be charged on: (1) salary and/or SE income above $200,000 for an unmarried individual, (2) combined salary and/or SE income above $250,000 for a married joint-filing couple, and (3) salary and/or SE income above $125,000 for those who use married filing separate status. For self-employed individuals, the additional 0.9% Medicare tax hit will come in the form of a higher SE bill.
The only other major financial change insured people will see is that the new law halves the amount you can keep in your "flexible spending account." This pre-tax medical fund was to help pay for any medical procedures, and it was capped at $5,000. Now it's capped at $2,500 and purchases for non-prescription medicines are not eligible.
All of this is on top of the other changes we mentioned, of course—like being accepted regardless of pre-existing conditions, and being able to stay on your parent's insurance until age 26. Check out Healthcare.gov's timeline for a full breakdown.


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Let's better understand tax credits and poverty level (FPL)
December 20, 2013 | Bonnie Jones, MTAS Human Resource Consultant

Source: Kaiser Family Foundation July 2012 PDF below

What types of subsidies does PPACA provide to people buying health insurance?

New eligibility rules enacted under PPACA – as revised by the recent Supreme Court decision on the law – give states the option of extending coverage in Medicaid to most people with incomes under 138% of poverty. For people with somewhat higher incomes (up to 400% of poverty), PPACA provides tax credits that reduce premium costs. People with incomes up to 250% of poverty also are eligible for reduced cost sharing (e.g., coverage with lower deductibles and copayments) paid for by the federal government. The premium tax credits and cost-sharing assistance will begin in 2014.

What is the amount of the tax credit provided to people?

The amount of the tax credit that a person can receive is based on the premium for the second lowest cost silver plan in the exchange and area where the person is eligible to purchase coverage. A silver plan is a plan that provides the essential benefits and has an actuarial value of 70%. (In PPACA, a 70% actuarial value means that on average the plan pays 70% of the cost of covered benefits for a standard population of enrollees.) The amount of the tax credit varies with income such that the premium that the premium a person would have to pay for the second lowest cost silver plan would not exceed a specified percentage of their income (adjusted for family size), as follows:

Income Level Premium as a Percent of Income

Up to 133% FPL 2% of income

133-150% FPL 3 – 4% of income

150-200% FPL 4 – 6.3% of income

200-250% FPL 6.3 – 8.05% of income

250-300% FPL 8.05 – 9.5% of income

300-400% FPL 9.5% of income

Full PDF here: http://www.kff.org/healthreform/upload/7962-02.pdf


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HealthCare Reform Marches on
November 16, 2012 | Bonnie Jones, MTAS Human Resource Consultant

The Supreme Court upheld health care reform and President Obama was reelected, both important factors in the future of health care reform. The big change that is coming is in the form of exchanges. Let’s discuss health care exchanges.

Exchanges

The law’s most notable provision which creates health care exchanges takes full effect January 1, 2014. These exchanges will allow individuals and small businesses to purchase coverage through a central “clearinghouse” so to speak that will be managed by individual states and the federal government. Insurers will still be able to offer coverage outside the exchange in accordance with PPACA. Each state is in charge of running its own health insurance exchange and all plans will be approved by HHS with demonstration of operationally by Oct 2013. States may operate their exchanges similar to Medicaid, or department of insurance, or as in independent public entity, nonprofit or as any other state agency would be considered as a contracting entity. http://www.beckershospitalreview.com/racs-/-icd-9-/-icd-10/hhs-publishes-final-rule-on-ppacas-health-insurance-exchanges.html

The Congressional Budget Office (CBO) estimates that approximately 22 million people will buy coverage through the exchange by 2016. For more detailed information on the effect of exchanges and the state of exchanges today visit http://www.benefitmall.com/News-and-Events/Industry-Insights/Life-Outside-the-PPACAs-Public-Health-Insurance-Exchanges

All plans offered through exchanges will meet minimum requirements and be called qualified health plans or QHPs. This means that the plan provides essential health benefits as defined by PPACA and follows certain cost sharing rules making coverage “affordable”.

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HealthCare Reform at a Glance
August 13, 2012 | Bonnie Jones, MTAS Human Resource Consultant

The latest
June 28, 2012, the Supreme Court upheld Health Care Reform in the landmark case NFIB v. Sebelius, specifically stating that the government did have the authority to require individuals to purchase health insurance via a tax penalty (otherwise called the Individual Mandate). The court held that although the insurance mandate was not constitutional under the commerce clause, it was in fact valid under the government’s taxing powers.

A portion of Health Care Reform (HCR) has already gone into effect, and most group plans have been amended with the following:

• Dependents covered until age 26
• Higher annual limits/elimination of caps
• Free or reduced cost wellness benefits
• Creation of high risk pool (PCIP) pre- existing condition insurance plan
• Greater protection for children with pre-existing conditions
• Business tax credits
• Patient bill of rights
• Expanded rights of appeal
• Early Retirement Reinsurance Program
• Individual coverage and pricing assistance by state (healthcare.gov)

• Much of the required employee summaries may be provided electronically but must be made available in paper on an individual request basis.
• An employee is defined by the IRS – not the Affordable Care Act (ACA). The IRS uses a common law employee definition. An FTE is an employee who works an average of 30 hours per week or more. Additional clarification is expected to come later.
• Flexible Spending Account rules apply to healthcare accounts. The new limits do not apply to dependent care accounts (pre-taxed accounts for daycare expenses).
• Loss ratio rules (MLR) only apply to fully insured plans

The long awaited decision has arrived. The Supreme Court upheld the majority of the Health Care Law as constitutional.

Read more

1. The individual mandate will stay in effect (starting 2014). Most American’s will be taxed if they fail to maintain health insurance. This mandate is deemed valid under Congress’s taxing authority.

2. The Medicaid provision stays but will be limited. Medicaid will be expanded, but the states will not lose existing funding for opting out of the expansion.

The full opinion can be read here http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf

Live legal blog http://www.scotusblog.com/cover-it-live/

Summary Articles:

• Click here
• Click here

Supreme Court agrees to hear challenges to HealthCare Reform
November 15, 2011 | Bonnie Jones, MTAS Human Resource Consultant

As anticipated, the Supreme Court said it will hear a challenge to President Obama’s HealthCare Reform bills, which has been touted as a violation of the constitution by some. The justices will hear the claim by Florida and many other states that claim that the individual health care mandate is unconstitutional and violates the commerce clause.

A ruling on the constitutionality of the Patient Protection and Affordable Care Act is expected in June, following oral arguments in March, according to USA Today and several other news outlets.

For more information, see:

• CNN: Supreme Court takes up challenge to health care reform law

• Miami Herald: Supreme Court to consider health care law challenge in 2012

Health Care Reform Update from CHICAGO
October 17, 2011 | Bonnie Jones, MTAS Human Resource Consultant

Recently, I attended IPMA’s HR conference in Chicago. I sat in on a very informative session by Segal on health care reform presented by an attorney named Kathy Schwappach. Ms. Scwappach, J.D., is a Senior Health Compliance Specialist at The Segal Company.

Here are a few key points I took from this informative session. These are a result of my very messy handwritten notes- so if an error or inconsistency is found, please let me know so I can correct it.

• Is health care reform constitutional? It is likely a Supreme Court decision will be made before the next presidential election. As you know, the lower courts have been conflicted on the constitutionality of healthcare reform. Most experts believe this will be settled in our Supreme Court sooner than later. The question at hand concerns the commerce clause and whether the individual mandate violates the commerce clause. It is unlikely we will have a clear answer until the Supreme Court reviews the case.

• Current trend is showing a 5% increase in premiums

• While local government is not subject to ERISA, continually check for updates because local governments may in fact be subject to a piece of ERISA in the future via PPACA. The ERISA issue comes in with the following changes: Rules that apply to Non-Grandfathered plans such as preventive care with no cost sharing, patient protections (emergency care, OB-GYN, etc.), Internal claims and appeals, and external reviews, and nondiscrimination in favor of highly compensated employees (insured), and quality reporting. In addition, plan years beginning on or after 1/14/2014 with additional changes such as maximum OOPs, clinical trials, provider nondiscrimination, wellness incentives/ penalties, and information reporting. Healthcare reform applies to local governments under PHSA. So, while local government is not used to complying with ERISA that looks to be changing in the near future when a component of ERISA may apply.

• Remember, you can change carriers without changing Grandfathered status. In fact, there are more employers than originally thought that will keep grandfathered status. In the event that healthcare reform is overturned (in part or whole), these employers hope to make that transition easier. The expert went on to say that losing grandfathered status wouldn’t be the worst option. (Especially if healthcare reform is upheld). Key Takeaway: Compare the impact of losing grandfathered status to the limitations on flexibility in managing your plan. Grandfathered status can go on indefinitely; but highly unlikely given the number of factors that jeopardize grandfathered status. Losing grandfathered status can be very costly for employers because they have to add in items like 100% preventive coverage and other benefit features mandated by the PPACA. Many companies are saving significant dollars by saving

• 1099 and Free Choice Vouchers have been repealed

• As long as a dependent has access to another plan you can deny access to your plan until 2014.

• Public Sector employers do not have to cover temporary employees, even if they are long term. You don’t have to cover seasonal employees and may not even have to count them. However, the individual mandate would still apply to them.

• People below poverty level are still required to get coverage or they are subject to an individual mandate (penalty).

Summary of Benefits Coverage (SBC)
October 14, 2011 | Bonnie Jones, MTAS Human Resource Consultant

On August 22, 2011, the Departments of Labor, Treasury and Health and Human Services released a much anticipated template of the new uniform Summary of Benefits Coverage (SBC). Health Care Reform (Affordable Care Act) required this and once the guidelines are finalized group health plans will be required to provide this information to employees (participants of health plans). The information includes a summary of a plan’s benefits (commonly coined “SOC”) including benefit levels, exclusions, and cost sharing information (out of pocket for the employee).

Comments on the proposed rules and on the template are due no later than October 21, 2011. You are not required to use this template at this time.

For more information, see:

• Groom Law Group Benefits Brief

• Sibson Consulting Capital Checkup

Early Retirement Reinsurance Program (ERRP)
October 7, 2011 | Bonnie Jones, MTAS Human Resource Consultant

The temporary Early Retirement Reinsurance Program was a program created by the Affordable Care Act with the intention of reimbursing certain employer group plans for claims costs incurred by early retirees age 55 and not yet eligible for Medicare. The regulations prohibit employers/ plan sponsors from using the reimbursements improperly (i.e., as general revenue). Employers are also required to maintain the same level of contributions for their health plans as they did prior to receiving reimbursement via ERRP.

On July 20, 2011 CMS issued detailed guidance. For more information see:

• ERRP.gov

• Sibson Consulting Capital Checkup

Health Care Reform Continues to be Challenged in Court
August 16, 2011 | Bonnie Jones, MTAS Human Resource Consultant

• 11th Circuit rules against Individual Mandate

The 11th Circuit U.S. Court of Appeals declared the “individual mandate” unconstitutional, citing “unprecedented exercise of congressional power. The ruling which was 2-1, is the first time a democratic judge has struck down the mandate, however the rest of the statue was upheld. This August 2011 ruling appears to conflict with a different ruling in the Sixth Circuit which found the individual mandate constitutional.

This court ruling and the conflict between the circuit courts makes it even more certain that health care reform is headed to the Supreme Court. Many have called the new reform “unconstitutional”, and the courts have been split on the matter.

For more information on this ruling click here.

• 6th Circuit upholds validity of PPACA

• Employee Benefits Legal Blog

1. Maximum Annual Contribution to HSAs: $3,100 for single, $6,250 for family
2. Minimum HDHP Deductible (no change): $1,200 for single, $2,400 for family
3. Maximum HDHP Out-of-Pocket Expense: $6,050 for single, $12,100 for family

• Thompson Employee Benefits Newsbrief
• Buck Research FYI Newsletter

• A change in the definition of a "qualified medical expense" that impacts reimbursements and withdrawals under HSAs. Beginning with 2011, expenses incurred for over-the-counter (OTC) medications without a prescription will no longer be eligible for payment or reimbursement from an HSA.
• An increase in the tax penalty on HSA withdrawals that are not used for qualified medical expenses will be increased from the current 10 percent to 20 percent in 2011.

• Health awareness initiatives, such as health education, preventive screenings and
  health risk assessments
• Efforts to maximize employee engagement and encourage participation
• Initiatives to change unhealthy behaviors and lifestyle choices (such as seminars, counseling, online programs and self-help materials)
• Supportive workplace efforts, including policies to encourage healthy lifestyles, healthy eating, increased physical activity and improved mental health.

• Rewards for all goal-based wellness programs cannot exceed more than 30 percent of the cost of employee-only or family coverage through the plan.
• The wellness program must set an easily met standard for improving health status or preventing disease among participants. The program also must not be overly burdensome, cannot be used to discriminate based on health status and cannot use highly suspect methods to promote wellness.
• Eligible individuals should be able to qualify for the reward at least annually.
• The program must offer reasonable alternative standards (or a waiver) for obtaining the reward to any individual who cannot satisfy the standard for that period due to unreasonable difficulty resulting from a medical condition or medical inadvisability.
• The group health plan or health insurer can seek verification from the individual’s doctor.
• Programs do not need to establish an alternative standard until an enrollee informs the health plan that they are unable to participate due to health reasons.
• Alternative standards could include meeting a lower threshold, following a personalized physician recommendation, walking three days a week for 20 minutes, etc.
• Notification and/or details that alternative standards or a waiver exists must be disclosed in
  plan materials.