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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.
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.
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
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.
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
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.
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”.
HealthCare Reform at a Glance
August 13, 2012 | Bonnie Jones, MTAS Human Resource Consultant
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)
What’s In Store for Group Health Plans?
Employers offering group benefits will continue to be able to provide coverage through employer sponsored benefit plans. The market changes will impact rates, but it is too early to forecast the full financial impact on group rates based on HCR. Some analysts say small employers will save, while bigger employers may see increases in rates.
49 Employees or Less
Cities with less than 50 employees will be treated as a small business under the act and must notify workers of their health care options under state health exchanges. Employers with less than 50 full-time equivalent (FTE) are exempt from the employer coverage requirements and applicable penalties under HCR.
50 Employees or More
The largest impact will be on cities and towns with more than 50 applicable employees. Cities with 50 or more employees must provide affordable and minimum credible health coverage to employees by 2014 or face financial penalties.
If a city with 50 or more FTE employees does not provide the minimum required coverage and an employee obtains coverage in the Exchange or if the city offers coverage but has employees that obtain coverage through the Exchange, the city would be required to pay a penalty (determined monthly; 1/12 of $3,000 x number of full-time employees who receive insurance in the Exchange or 1/12 of $2,000 x the total number of full-time employees, less the first 30 full-time employees (whichever is the lesser amount).
200 Employees or More
Auto enrollment options are required. The employer must auto-enroll new full-time employees. Opt out notices are required.
Cities are not required to provide health insurance to seasonal or temporary employees. However, seasonal or temporary employees may be used in the calculation of determining health care reform participation requirements (i.e., 50 FTE threshold). Part-time workers are exempt, except when determining the total number of employees for health insurance. Penalties are based on the number of full-time employees – not FTEs.
The court ruled that the Medicaid Expansion was constitutional, but further stated the federal government could hold only a portion of the Medicaid matching funds if they did not agree to expand Medicaid eligibility.
W-2 Reporting Requirements
Reporting new 2012 numbers will start in 2013. Employers will need to add a new number (value of benefits) to employees W-2 statements. It would be advisable to discuss this change with employees prior to the new W-2 change going into effect.
In summary, HCR is here and will stay in one form or fashion. While changes are likely, the concept of health insurance reform as an expansion of coverage appears to be here for the long term.
Some additional information
- 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
As a whole, health care reform remains much the way it was prior to this decision. The primary change as a result of the Supreme Court decision surrounds Medicaid.
We are awaiting clarification and guidance on much of what is contained in the Patient Protection Affordable Care Act (PPACA). In the meantime, your city should be continuing to implement the changes as required by health care reform.
Here are some helpful links on the recent Supreme Court decision and Health Care Reform:
Look for the next blog update for more information on how this will affect cities under 50 employees.
HealthCare Reform is Deemed Constitutional by the Supreme Court
June 28, 2012 | Bonnie Jones, MTAS Human Resource Consultant
The long awaited decision has arrived. The Supreme Court upheld the majority of the Health Care Law as constitutional.
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/
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:
A Community Forum: Health Insurance Exchanges in Tennessee
November 1, 2011 | Bonnie Jones, MTAS Human Resource Consultant
Please consider attending this community health care forum scheduled for Knoxville regarding Health care reform. This will give us a better idea what our health care system (insurance) will look like in the coming years for Tennessee. It is open to the public.
For more information click here.
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:
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:
Health Care Reform Continues to be Challenged in Court
August 16, 2011 | Bonnie Jones, MTAS Human Resource Consultant
- 11th Circuit rules against Individual Mandate
As the courts continue to hear cases on health care reform the efforts have begun to intensify surrounding finding options to the 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
The Third Circuit is the second federal court of appeals to rule on the PPACA. In June 2011, the Sixth Circuit ruled that the PPACA’s individual mandate are constitutional, holding that the individual mandate is “a valid exercise of legislative power by Congress under the Commerce Clause.”
For more information on this ruling click here
Preventative Care Under Health Care Reform is Here!
August 8, 2011 | Bonnie Jones, MTAS Human Resource Consultant
Non-grandfathered plans that operate on a calendar year will see changes effective January 2013, as the information below demonstrates.
View the Health Resources and Services Administration (HRSA) Supported Women's Preventative Services table here.
These guidelines are effective August 1, 2011. Accordingly, non-grandfathered plans and issuers are required to provide coverage without cost sharing consistent with these guidelines in the first plan year (in the individual market, policy year) that begins on or after August 1, 2012.
For more about this, see:
Health Care Consumer Guide Ready to Order
July 15, 2011 | Bonnie Jones, MTAS Human Resource Consultant
The new 2011 Health Care Consumer Guide is here!
This is a free guide that is available to cities (employers) at no charge. The guides are intended to help educate your workforce on health care issues such as quality and disease prevention.
Each year the consumer guide has a different theme-- last year's theme was Stop and think how smoking affects you. While the themes vary, you will find the same valuable general quality information (patient safety) in each edition, such as hospital specialties in Tennessee and quality ratings. It is important that all employees and consumers have access to information about medical mistakes and quality health care, and this guide aims to do that. The 2011 edition will focus on disease prevention with special emphasis on specific screening tips for men and women. The guide will be available in early fall, courtesy of Health Care 21.
Please take advantage of this free and valuable resource. It includes hospital quality ratings in Johnson City, Nashville, Knoxville, and Memphis.
As always, this is a free resource that is perfect for use at employee health fairs, mailings, open enrollment meetings or desk drops.
Again this year, the Guide will also be available on our MTAS website in PDF format. If you would like to receive this version as well as hard copy, please let Bonnie Jones know by July 26, 2011.
IRS issues limits for HDHPs and HSAs on May 16, 2011
June 13, 2011 | Bonnie Jones, MTAS Human Resource Consultant
There are some changes to HDHPs and HSAs that have to be addressed in your 2012 plan documentation. On May 16, the IRS issued Rev. Proc. 2011-32 that sets the following limits for HDHPs and HSAs for 2012:
- Maximum Annual Contribution to HSAs: $3,100 for single, $6,250 for family
- Minimum HDHP Deductible (no change): $1,200 for single, $2,400 for family
- Maximum HDHP Out-of-Pocket Expense: $6,050 for single, $12,100 for family
To read more about this see:
Employers still confused about health care reform
June 7, 2011 | Bonnie Jones, MTAS Human Resource Consultant
PPACA was made law in March 2010, and includes individual and employer penalties. Many of these rules have not been implemented or clarified because congress is still working on the details and writing the language.
This is especially frustrating for employers, who have already started making changes to their health and benefit plans, and who want to better understand these penalties.
In beyondhealthcarereform.com , (a great benefits blog) they say this:
“In a Twin Cities Business article on health insurance benefits for employees, Maureen Maly indicates that an outright repeal is unlikely, but that some type of change should be anticipated. “Employers need to march on with compliance,” Maly said, “but I also think they need to keep what’s going on judicially and legislatively on their radar.”
View full blog article here.
View Twin Cities Business article here.
Health Care Reform Class: Franklin Q & A
May 25, 2011 | Bonnie Jones, MTAS Human Resource Consultant
As promised, here are the questions from the health care reform class in Franklin, TN.
1. We currently have a waiting period before we cover pre-existing conditions. Will this be affected by health care reform?
My answer: Yes. By 2014 you will no longer be able to impose waiting periods on all employees, but as of 9/23/10 (or your next renewal) you should waive this requirement for children under 19.
Pre-existing Condition Waiting Periods
A "pre-existing condition" is a health condition where treatment was recommended or received in the six months before a person applies for new health insurance coverage. Although most states do not allow insurers to deny coverage to those with pre-existing conditions, it is currently permissible for insurers to impose pre-existing condition waiting periods. Pre-existing condition waiting periods ensure that people do not wait until they have a health condition or are sick before they purchase health insurance coverage (just as you cannot wait to buy home insurance until your house is burning). Such waiting periods cause insured people to wait up to twelve months after buying a health insurance policy to have coverage for the specific condition that is pre-existing, although they will have coverage in place for all other conditions. There are protections in place that limit what may be considered a pre-existing condition. Protections also exist that reduce waiting periods when people with pre-existing conditions switch their health insurance. Under federal health care reform, it is likely you will need to eliminate these waiting periods for children in 2010 and for adults by no later than 2014.
2. Is Obama getting a kick back from insurance companies? Why not reform the insurance companies? I am working just to cover my family’s health care insurance.
No. I have no knowledge of Obama financially benefiting from health care reform. Here are a few articles that I came across that you might be interested in.
"10 Health Care Reform Myths"
"What the Health Care Debate Is Really All About"
"Health Care Reform 2011" (Washington Post)
Some would say that health care reform addresses the very heart of your question. It allows for those who may be normally uninsurable to obtain insurance and preventive care rather than be part of the 50M Americans without coverage options. Others say it is a disaster just waiting to overburden small businesses and seniors. I try to look at all angles of the debate, and it appears there are some really good things in the health care bill, but it also appears that there are some unpopular mandates as well. I implore you to do your own research on how the health care reform bills are expected to affect you and your family/ employer and keep an open mind, as it is still evolving.
3. What is the program you talked about that works with the state plan?
I believe I was referring to Cover Tennessee. Visit site here. New enrollment is currently on hold.
4. How many hours per year for seasonal be considered a FTE?
Remember, you do count part time employees if they work a minimum of 30 hours a week/120 days per year, but they only are counted to determine if you are a small or large employer under the penalty section of the legislation.
The key is whether your city is a “large employer” which are employers defined as those who employ an average of at least 50 full-time employees on business days during the preceding calendar year. And as expected, it’s complicated. The 50-employee threshold is based on the employer’s average number of employees on business days during the preceding calendar year. Both full-time and part-time employees are considered in determining whether the employer has 50 or more employees; however, the number of part-time employees to be counted is determined by dividing the aggregate number of hours of service for those part-time employees for each month by 120.
5. In the case of a divorced couple, which parent covers the 25 year old eligible dependent?
This should be the same as it is now for eligible dependents of divorced couples, meaning you would follow a traditional means to determine primary insurer (eligibility guidelines, the “birthday rule, court judgments etc). The only new thing, is that you will have to have a new enrollment period to cover those who may have been put on COBRA, or deemed ineligible due to age or student/marital status.
6. More information on 1099 processing- does this apply to all vendors and services?
This was repealed. This is no longer part of health care reform.
The measure, initially included as a funding measure for the health care bill, does away with the requirement for companies to report to the IRS transactions valued at more than $600. While the provision has had few backers in either party, debate over its repeal had dragged on for months.
7. What if an employee does not want to add their dependent (to age 26) to their plan. Are they forced to offer coverage to the dependent? What if the employee is now required to bear additional costs?
The parents are not required to by health care reform. There is no requirement on the parent to include their adult children as dependents if they do not wish to do so.
HealthPartners Dependent Summary
Some employer plans are set up as two tier coverage, meaning there is a cost for Individual and a cost for family coverage. In these cases, the employees that are paying the "family rate" may not see an immediate change in their contribution; however if many new dependents are added and claims costs increase, this will undoubtedly affect premiums the following renewal. Those who are on individual plans that add a dependent, will go from the individual premium amount to the family premium amount which is usually a substantial change in deductions.
8. Who will pay for my dependent coverage?
Short answer- the parent pays the bill via payroll deduction. The employee can then work out an arrangement with the adult dependent on premium sharing, but this is not regulated.
Under employer plans, the employee typically pays a share of the premium and the employer pays the rest. Therefore, the bill will probably still go to your parents (for you and your parents to divide how you see fit). Parents on a family plan may see their premiums go up slightly to pay for your new coverage, but costs will increase for adding a young adult the same way that they would for adding a dependent who is under 18. In employer-based coverage, that cost will be split among all employees. The added premium for a young adult on family coverage will generally be cheaper than purchasing a plan on the individual market. For example, it was recently reported that a New Jersey premium for a young adult dependent on a Blue Cross Blue Shield plan was 60.8 percent of the premium for an individual without family coverage.
Dependent Coverage FAQ's (Young Invincibles)
9. Does the 2,500 cap on contribution to FSAs also apply to FSAs?
No. The effects on health care reform for HSAs are different.
Individuals with Health Savings Accounts (HSAs) will not be greatly affected by the recent enactment of the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Tax Credits Reconciliation Act of 2010. Following are the main changes to HSAs:
- 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.
Some of the new law's provisions will have an impact on High Deductible Health Plans (HDHP) sold in the future. As the regulations are further defined, we will continue to provide updates on how they will affect you and your Health Savings Account. To learn more about the provisions in these two Acts look here.
10. Do small group wellness program grants apply to municipalities as well?
On appearance my answer is yes. I will do a little more digging to be sure (Tim Welles of BCS consulting has sent an inquiry to HHS on this). (Do note the small business tax credit does not apply to govt. entities).
Beginning in 2011, the Patient Protection and Affordable Care Act will make available $200 million in grants for small business wellness programs.
Additionally, employers can offer higher incentives to employees who participate in group-sponsored wellness programs beginning in 2014.
The wellness grants are available to small businesses with fewer than 100 employees who work 25 hours or more per week. They will be available over five years to businesses that did not have a wellness program in place when the law went into effect on March 23, 2010.
To qualify, wellness programs must be available to all employees and include the following:
- 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.
Employers will apply for the grants directly with the federal government.
Starting Jan. 1, 2014, employers can offer discounts of up to 30 percent to employees who participate in employer-sponsored wellness programs, an increase from the current 20 percent. (This reward could increase to 50 percent at the discretion of the secretaries of the departments of Health and Human Services, Labor or Treasury.)
If a wellness program ties rewards to health status goals, such as reaching a certain body mass index (BMI), blood pressure or cholesterol level, certain conditions must be met:
- 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
The reform law will also create a 10-state pilot project by July 1, 2014 to allow participating states to use similar rewards for involvement in wellness programs in the individual market.
It is difficult at this time to say whether Michigan will seek to qualify for the project. States will be deemed eligible if it is determined that participation will not result in any decrease in coverage and will not increase costs to the federal government when providing premium tax credits.
If determined to be effective, the demonstration project will expand to additional states beginning
July 1, 2017.
Employer Wellness Grants (Michigan)
In closing I would like to thank Tim Welles, of BCS consulting for providing technical expertise on-site in Farragut and on the back end.
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