http:\/\/statehealthfacts.kff.org\/comparemaptable.jsp?ind=962&cat=17<\/a><\/i>.<\/p>\nSummary of Other ACA Provisions To Be Aware of
\nin 2013 <\/b><\/p>\n
The two topics
\nabove have generated the most interest, but there are a number of provisions on
\nthe horizon that also should be on your radar, summarized briefly below. Be
\nsure to work with your broker or advisor to make sure your health benefits
\nprogram stays compliant as these provisions go into effect.<\/span><\/p>\nUniform Summary of Benefits and Coverage and Notices of Material
\nModification<\/font> <\/b><\/p>\n
\n- Applicable to:<\/font><\/b> All non-grandfathered and grandfathered
\nhealth plans<\/p>\n- Effective:<\/font><\/b>For plan years and open enrollment periods
\nbeginning on or after September 23, 2012<\/p>\n- Details:<\/font><\/b> Employers must provide a Summary of Benefits and
\nCoverage to all plan participants and employees who are eligible to
\nparticipate. The summary must be written in easily understood language and is
\nlimited to four double-sided pages. Any mid-year changes to the information
\ncontained in the summary must be provided to participants 60 days in advance. <\/p>\n<\/UL><\/p>\n
- Reporting Health Coverage Costs on Form W-2<\/font><\/b><\/p>\n
\n- Applicable to:<\/font><\/b> Employers that file at least 250 W-2 Forms
\nmust comply with this reporting requirement for 2012. The requirement is
\noptional for small employers (those filing fewer than 250 W-2 Form) for at
\nleast the 2012 tax year and will remain optional until further guidance is
\nissued. <\/p>\n- Effective:<\/font><\/b> For 2012 W-2s to be issued by
\nJanuary 31, 2013<\/p>\n- Details:<\/font><\/b> ACA requires employers to disclose the value of
\nthe health coverage provided by the employer to each employee on the employee’s
\nannual Form W-2, regardless of who pays the premium for that coverage.
\nEmployers should take steps to ensure that payroll providers are prepared for
\nthe new reporting requirement.<\/p>\n<\/UL><\/p>\n
- Limiting Health Flexible Savings Account (FSA) Contributions<\/font><\/b><\/p>\n
\n- Applicable to:<\/font><\/b> Health FSAs (generally part
\nof a Section 125 plan)<\/p>\n- Effective:<\/font><\/b> For plan years beginning after
\nDecember 31, 2012<\/p>\n- Details:<\/font><\/B> ACA limits the amount of pre-tax salary reduction
\ncontributions to health FSAs to $2,500 per year. <\/p>\n<\/UL><\/p>\n
- Additional Preventive Care Services for Women<\/font><\/b><\/p>\n
\n- Applicable to:<\/font><\/b> Non-grandfathered plans only<\/p>\n
- Effective:<\/font><\/b> Plan years beginning on or after
\nAugust 1, 2012<\/p>\n- Details:<\/font><\/b> Beginning in 2010, non-grandfathered group health
\nplans and health insurance issuers offering group or individual
\nnon-grandfathered health insurance coverage were required to provide coverage
\nfor preventive care services without cost-sharing requirements. Effective for
\nplan years beginning on or after August 1, 2012, the required preventive care
\nservices include specific services for women, including contraceptives;
\ncontraceptive counseling; breastfeeding support, supplies, and counseling; and
\nscreening for domestic violence.<\/p>\n<\/UL><\/p>\n
- Employee Notice of Exchanges<\/font><\/b><\/p>\n
\n- Applicable to:<\/font><\/b> Generally all employers<\/p>\n
- Effective:<\/font><\/b> Required by March 1, 2013<\/p>\n
- Details:<\/font><\/b> Employers must provide a notice to employees
\nregarding the availability of the health care reform insurance Exchanges. The
\nnotices will explain some of the benefits and consequences to employees if they
\nchoose to purchase through the state Exchange instead of electing coverage
\nunder an employer-sponsored plan. HHS has indicated that it plans on issuing
\nmodel Exchange notices in the future for employers to use.<\/p>\n<\/UL><\/p>\n
- Additional Medicare Tax for High Wage Workers<\/font><\/b><\/p>\n
\n- Applicable to:<\/font><\/b> All employers<\/p>\n
- Effective:<\/font><\/b> January 1, 2013<\/p>\n
- Details:<\/font><\/b>Employers are required to withhold an additional
\n0.9-percent Medicare tax on an employee’s compensation in excess of $200,000. The
\nadditional tax does not have an employer matching requirement.<\/p>\n<\/UL><\/p>\n
- Comparative Effectiveness Research (CER) Fees<\/font><\/b><\/p>\n
\n- Applicable to:<\/font><\/b> All plan sponsors (insurers will pay this
\nfor fully insured plans)<\/p>\n- Effective:<\/font><\/b> First payment is due by July 31, 2013<\/p>\n
- Details:<\/font><\/strong><\/span><\/b> Issuers and sponsors of self-insured health
\nplans must pay CER fees to fund health care research. The CER fees will be
\neffective for the 2012 through 2018 plan years. For plan years ending before
\nOctober 1, 2013 (that is, 2012 for calendar year plans), the research fee is $1
\nmultiplied by the average number of lives covered under the plan. The fee goes
\nup to $2 for plan years ending on or after October 1, 2013 and before October
\n1, 2014, and will be indexed for future years.<\/span><\/p>\n<\/UL><\/p>\n
- Certification of Compliance to HHS<\/font><\/b><\/p>\n
\n- Applicable to:<\/font><\/b> All plan sponsors<\/p>\n
- Effective:<\/font><\/b> By December 31, 2013<\/p>\n
- Details:<\/font><\/b> Group health plans must file a certification
\nstatement with HHS certifying that their data and information systems for the
\nplan are in compliance with Health Insurance Portability and Accountability Act
\nstandards; and operating rules for health plan eligibility, electronic funds
\ntransfer, health claim status, health care payments, and remittance advice
\ntransactions. HHS intends to issue more guidance on this requirement in the
\nfuture.<\/p>\n<\/UL><\/p>\n
<\/UL><\/p>\n
Major Provisions Take Effect in 2014<\/b><\/p>\n
Several other important, additional health
\ninsurance reform measures will be implemented beginning in 2014 in addition to
\nthe individual and employer mandates, and the health insurance Exchanges
\ndiscussed above. <\/p>\n
\n- Guaranteed Issue and Renewability.<\/font><\/b> Health insurance issuers
\noffering health insurance coverage in the individual or group market in a state
\nmust accept every employer and individual that applies for coverage in the
\nstate and must renew or continue to enforce the coverage at the option of the
\nplan sponsor or the individual.<\/p>\n- Pre-existing Condition Exclusions.<\/font><\/b> Effective January 1,
\n2014, group health plans and health insurance issuers may not impose
\npre-existing condition exclusions on any covered individual, regardless of the
\nindividual’s age.<\/span> <\/p>\n- Insurance Premium Restrictions.<\/font><\/b>Health insurance issuers in the
\nindividual and small group markets will not be permitted to charge higher rates
\ndue to heath status, gender, or other factors. Premiums may vary based only on
\nage (no more than 3:1), geography, family size, and tobacco use. The rating
\nlimitations will not apply to health insurance issuers that offer coverage in
\nthe large group market unless the state elects to offer large group coverage
\nthrough the state Exchange (beginning on or after 2017). Also, these
\nrestrictions do not apply to grandfathered coverage.<\/p>\n- Nondiscrimination Based on Health Status.<\/font><\/b> Group health plans and
\nhealth insurance issuers offering group or individual health insurance coverage
\n(except grandfathered plans) may not establish rules for eligibility or
\ncontinued eligibility based on health status-related factors.<\/span><\/p>\n- Nondiscrimination in Health Care.<\/font><\/b> Group health plans and health insurance issuers
\noffering group or individual insurance coverage may not discriminate against any
\nprovider operating within their scope of practice. However, this provision does
\nnot require a plan to contract with any willing provider or prevent tiered
\nnetworks. It also does not apply to grandfathered plans. Plans and issuers also
\nmay not discriminate against individuals based on whether they receive
\nsubsidies or cooperate in a Fair Labor Standards Act investigation.<\/span><\/p>\n- Annual Limits.<\/font><\/b>Restricted annual limits will be permitted until
\n2014. However, in 2014, the plans and issuers may not impose annual limits on
\nthe coverage of essential health benefits.<\/p>\n- Excessive Waiting Periods.<\/font><\/b> Group health plans and health
\ninsurance issuers offering group or individual health insurance coverage will
\nnot be able to require a waiting period of more than 90 days.<\/p>\n- Coverage for Clinical Trial Participants.<\/font><\/b> Non-grandfathered group
\nhealth plans and insurance policies will not be able to terminate coverage
\nbecause an individual chooses to participate in a clinical trial for cancer or
\nother life-threatening diseases, or deny coverage for routine care that they
\nwould otherwise provide just because an individual is enrolled in such a
\nclinical trial.<\/p>\n- Comprehensive Benefits Coverage.<\/font><\/b>Health insurance issuers that
\noffer health insurance coverage in the individual or small group market will be
\nrequired to provide the essential benefits package required of plans sold in
\nthe health insurance Exchanges. This requirement does not apply to
\ngrandfathered plans.<\/p>\n- Limits on Cost-Sharing.<\/font><\/b> Non-grandfathered group health plans will
\nbe subject to limits on cost-sharing or out-of-pocket costs. Out-of-pocket
\nexpenses may not exceed the amount applicable to coverage related to Health
\nSavings Accounts, and deductibles may not exceed $2,000 (single coverage) or
\n$4,000 (family coverage). These amounts are indexed for subsequent years.
\nProposed guidance on this requirement indicates that the limits will apply to
\nplans and issuers in the small group market only and not self-funded plans or
\nplans in the large group market.<\/p>\n- New Incentive Standards for Wellness Plans.<\/font><\/b> Wellness programs can
\nincrease incentives provided for meeting health factor standards from 20 to 30
\npercent of the total cost of the applicable coverage. <\/p>\n- Transitional Reinsurance Payments.<\/font><\/b> Insurance and third-party
\nadministrators will be required to pay, on an annual basis, a fee to support
\nthe transitional reinsurance program. This program is designed to stabilize
\npremiums for coverage in the individual health insurance market. The fees will
\nbe distributed to insurers selling coverage in the Exchanges to offset the cost
\nof covering individuals with high claims. HHS has proposed annual fees equal to
\n$63 per covered individual\/year.<\/p>\n<\/UL><\/p>\n
Closing Thoughts<\/b><\/p>\n
Needless to say,
\nthe schematic drawing of health care reform confounds nearly everyone. Even
\nmore challenging, it continues to change and will grow more complex as each
\nstate begins to implement its own rules and processes of Health Insurance
\nExchanges. This article only touches on a small part of the ACA puzzle. A great
\ndeal of health care reform will address Medicaid, Medicare, and other
\nhealth-related components that do not immediately impact the business
\ncommunity. Other parts, specifically those that address how to measure employee
\nservice, exceed the scope of this discussion.<\/span><\/p>\nAt this point, many of the
\nprovisions lack integration. Grandfathering provisions do not impact the pay or
\nplay penalties. The nondiscrimination language scheduled to go into effect in
\n2014 does not address an individual’s eligibility for credits or subsidies.<\/p>\n
What should you do? For
\nstarters, employers should begin by gathering information. Do you know which of
\nyour employees meet the definition of full-time employees? Does your waiting
\nperiod need to be reduced to fewer than 90 days?<\/p>\n
Next, employers should assess
\npotential costs to their organization. Will your business costs change if you
\nbegin offering coverage to those who work 30 hours or more? Does your
\ncontribution requirement of employees exceed 9.5 percent of your employees’
\nwages?<\/p>\n
Finally, employers should
\nconsider their relationship with their employees. How will health care reform
\nimpact your ability to attract and retain a quality workforce? Arguably, this
\nmight be the most important consideration of all. At the end of the day,
\nbehaviors drive outcomes. What do you want your outcome to be? How important
\nare your people in making that happen? If your people are critical to your
\nfuture successes, health care reform may not be all that complex after all.<\/p>\n
SIDEBAR<\/span><\/b><\/p>\nSix Employer Penalty Scenarios Beginning in 2014<\/span><\/b><\/p>\n
\n- Scenario
\nA<\/font><\/strong>—<\/span>Employer does not meet the definition of
\nlarge employer. No penalty would be assessed.<\/span><\/p>\n- Scenario
\nB<\/font><\/strong>—<\/span>Large employer offers coverage deemed to
\nbe both affordable and sufficient, qualifying them for the employer safe
\nharbor. No penalty would be assessed.<\/span><\/p>\n- Scenario
\nC<\/font><\/strong>—<\/span>Large employer does not offer coverage,
\nbut no full-time employees receive credits for Exchange coverage. No penalty
\nwould be assessed. <\/span><\/p>\n- Scenario
\nD<\/font><\/strong>—<\/span>Large employer does not offer coverage and
\none or more full-time employees receive credits for Exchange coverage. The
\nannual penalty calculation is the number of full-time employees (50, in this
\ncase) minus 30, multiplied by $2,000. In this example, the penalty would not
\nvary if only one employee or all 50 employees received the credit. The
\nemployer’s annual penalty in 2014 would be (50-30) x $2,000, or $40,000.<\/span><\/p>\n- Scenario
\nE<\/font><\/strong>—<\/span>Large employer offers coverage and no
\nfull-time employees receive credits for Exchange coverage. No penalty would be
\nassessed. <\/span><\/p>\n- Scenario
\nF<\/font><\/strong>—<\/span>Large employer offers coverage, but one or
\nmore full-time employees receive credits for Exchange coverage. The number of
\nfull-time employees receiving the credit is used in the penalty calculation for
\nan employer that offers coverage. The annual penalty is the lesser of:<\/span><\/p>\n
\n- The number of full-time employees minus
\n30, multiplied by $2,000 = $40,000 for the employer with 50 full-time
\nemployees; or<\/span><\/p>\n - The number of full-time employees who
\nreceive credits for Exchange coverage multiplied by $3,000.<\/span><\/p>\n<\/UL>
\n<\/OL><\/p>\n
Although penalties are assessed on a
\nmonthly basis (with the dollar amounts above divided by 12), this example uses
\nannual amounts, assuming the number of affected employees is the same
\nthroughout the year. If the employer with 50 full-time employees had 10
\nfull-time employees who received premium credits, then the potential annual
\npenalty on the employer for those individuals would be $30,000. Because this is
\nless than the overall limitation for this employer of $40,000, the employer
\npenalty would be $30,000. <\/a>However, if the employer with
\n50 full-time employees had 30 full-time employees who received premium credits,
\nthen the potential annual penalty on the employer for those individuals would
\nbe $90,000. Because $90,000 exceeds the employer’s overall limitation of
\n$40,000, the employer penalty would be limited to $40,000.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"Recently, I decided to tackle some long overdue home improvement projects, including modernizing a number of lighting and electrical fixtures. Clearly, I am in the insurance industry for a reason. As I tried to decipher various electrical schematics, I thought to myself, this must be what health care reform looks like to everyone else. That<\/p>\n","protected":false},"author":[],"featured_media":0,"template":"","categories":[24,21,297,27],"class_list":["post-6908","articles","type-articles","status-publish","hentry","category-contracting","category-business-managment","category-basic-understanding","category-distribution"],"acf":[],"yoast_head":"\n
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Clearly, I am in the insurance industry for a reason. As I tried to decipher various electrical schematics, I thought to myself, this must be what health care reform looks like to everyone else. 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