Legal Alert: What Employers Need to Know About the New Transparency Rules

Proposed Transparency Rule Released

Following President Trump’s Executive Order on Improving Price and Transparency in American Healthcare, one final and one proposed rule was released by HHS and CMS that aim to increase price transparency for hospitals and insurance companies.  These rules would have an impact on employers who sponsor group health plans. Healthcare Reform

It is important for employers to remember that the Transparency in Coverage Proposed Rule is only a proposed rule and will not be finalized until after the public comment period if it all. There is also a possibility it may not become a final rule. It is anticipated that many organizations and entities will provide comments on this rule, and there is a likelihood that if finalized in the future, it could be markedly different from the proposed rule. Furthermore, for rules of this magnitude, additional guidance will be required by federal agencies to assist employers, Third-party administrators, insurance carriers, and hospitals, with the specific implementation processes and policies. Employers should look for updates on this rule but should not make decisions or changes based on these proposed rules at this time.

The final rule for hospitals is the Calendar Year (CY) 2020 Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule. This rule will require hospitals to provide, publicly on the internet, standard charges (gross charges, payer-specific negotiated charges, the amount the hospital will accept in cash from a patient, and the minimum and maximum negotiated charges) for all items and services. This rule will go into effect in 2021. The information must include common billing and/or accounting codes and descriptions of the items or services so consumers can compare standard charges between hospitals.

The rule will also require hospitals to make similar information available for 300 common shoppable services, which include services that consumers can schedule in advance such as x-rays, outpatient visits, and bundled services such as a cesarean delivery including pre- and post-delivery care.

Civil monetary penalties of $300 a day will be imposed on hospitals that do not comply.

The second rule which could impact employers and carriers is the Transparency in Coverage Proposed Rule. This rule is aimed to ensure consumers would be able to get estimates of their cost-sharing liability for health care for different providers, allowing them to both understand how costs for covered health care items and services are determined by their plan, and shop and compare costs for health care before receiving care. The rule is also intended to increase consumerism and provide opportunities for innovation in health care.

The proposed rule would require all non-grandfathered group health plans or health insurance issuer:

  • Make available to participants, beneficiaries and enrollees (or their authorized representative) personalized out-of-pocket cost information for all covered health care items and services through an internet-based self-service tool and in paper form upon request.
  • Make available to the public, including stakeholders such as consumers, researchers, employers, and third-party developers the in-network negotiated rates with their network providers and historical payments of allowed amounts to out-of-network providers through standardized, regularly updated machine-readable files.

In addition to comments on the above items, the rule seeks comments on whether group health plans and insurance issuers should be required to make available through a standards-based application programming interface the cost-sharing information referenced above that is proposed to be disclosed through the internet-based self –service tool and the machine-readable files.

The information provided by the health plan would have to include: 

•    The participant’s estimated cost-sharing liability
•    Accumulated amounts (financial responsibility already incurred w/ respect to the deductible or out of pocket limits)
•    The negotiated rate, reflected as a dollar amount
•    Out-of-network allowed amount (if requested item or service is out of network)
•    Items and services content list
•    Notice of pre-requisites of coverage
•    Disclosure notice

This information would have to be provided in the following manners: 

•    Internet-based self-service tool
•    Paper form at no fee provided via mail no later than 2 business days after it is requested by the participant, beneficiary, or enrollee, with an option to allow participants to select delivery over the phone, via email, by fax, or face to face.

The proposed rule would allow employers and health insurance carriers to contractually agree that the information will be provided by the carrier.

 


Danielle Capilla, JD
Director of Compliance, Employee Benefits
In her role as Director of Compliance, Employee Benefits, Capilla focuses on enhancing  Alera Group’s existing compliance capabilities and building new world-class solutions for Alera Group’s employee benefits clients. Her legal background helps Alera Group clients navigate the complex landscape of healthcare legislation, regulation and reform. Capilla currently serves as an adjunct professor at DePaul University College of Law and is the Federal and State Legislative Chair for the Downtown Chicago Chapter of the National Association of Health Underwriters (NAHU).

The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our employee or our clients. This is not legal advice and no client-lawyer relationship between you and Alera Group or any of its employees is or may be created by your use of this information. Rather, the content is intended as a general overview of the subject matter covered. This agency and the Alera Group are not obligated to provide updates on the information presented herein. Those reading this alert are encouraged to seek direct counsel on legal questions.

Legal Alert: IRS Releases Draft 2019 ACA Reporting Forms and Instructions

The IRS has released draft forms and instructions for the 2019 B-Series and C-Series reporting forms (Forms 1094-B, 1095-B, 1094-C and 1095-C) used by employers and coverage providers to report certain information to full-time employees and the Internal Revenue Service (IRS). ACA Reporting

As background, the Affordable Care Act (ACA) added Sections 6055 and 6056 to the Internal Revenue Code. These sections require employers, plans, and health insurance issuers to report health coverage information to the IRS and to participants annually. Section 6055 reporting requirements apply to insurers, employers that sponsor self-insured group health plans, and other entities that provide minimum essential coverage (such as multiemployer plans). Section 6056 reporting requirements apply to “applicable large employers” or “ALEs” (generally, employers with 50 or more full-time employees) and require reporting of health care coverage provided to the employer’s full-time employees.

Reporting under Sections 6055 and 6056 involves two sets of forms:  the “B-Series” (Forms 1094-B and 1095-B); and the “C-Series” (Forms 1094-C and 1095-C).  Each includes a transmittal form (Form 1094-B or 1094-C), which serves as a cover page and provides aggregate information, and an individualized form (Form 1095-B or 1095-C) for each employee for whom the employer is required to report.

The forms for calendar year 2019 are due to employees by January 31, 2020. Forms are due to the IRS by February 28, 2020 if filing by paper and by March 31, 2020 if filing electronically.  The forms that must be filed and distributed depend on whether the employer is an ALE and the type of coverage provided. Employers filing 250 or more of a particular form are required to file with the IRS electronically. The following table summarizes the responsible parties and forms applicable to the ACA’s reporting requirements.

Responsible Entity Fully Insured Plan Self-Funded Plan
Applicable Large Employer (ALE)

50 or more full-time equivalent employees on average in prior calendar year

Forms 1094-C and 1095-C

(Parts I and II of Form 1095-C)

Forms 1094-C and 1095-C

(Parts I, II, and III of Form 1095-C)

Either B-Series or C-Series Forms for covered non-employees

Non-ALE

Fewer than 50 full-time equivalent employees on average in prior calendar year

Not required to file Forms 1094-B and 1095-B
Insurance Carrier Forms 1094-B and 1095-B Not Applicable


2019 Draft Instructions

The draft forms and instructions can be found here:

The draft instructions reflect the newly increased penalty structure (generally leaving the penalty at $270 per return but increasing the penalty cap from $3.275 million to $3.339 million).

Note Regarding 2019 Form 1095-C, Line 15.  The section 4980H “affordability” safe harbor percentage threshold is adjusted to 9.86% for plan years beginning in 2019, up from 9.56%.

Employers should continue to work closely with their insurance broker and other trusted advisors when determining how their organization will address the reporting requirements. Unless extended, 1095-C and 1095-B forms for the 2019 calendar year are due to participants by January 31, 2020. Forms 1094/1095-C and 1094/1095-B are due to the IRS by February 28, 2020 if filing by paper and by March 31, 2020 if filing electronically.  Employers should endeavor to file timely, as the IRS has begun enforcing penalties against employers who have failed to file timely or file electronically when required.

 

 

About the Author.  This alert was prepared for Spring Consulting Group by Stacy Barrow.  Mr. Barrow is a nationally recognized expert on the Affordable Care Act.  His firm, Marathas Barrow Weatherhead Lent LLP, is a premier employee benefits, executive compensation and employment law firm.  He can be reached at sbarrow@marbarlaw.com.
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Spring to Present at Cayman Captive Forum

As the weather turns cold in Boston, the Spring team is looking forward to heading to the Cayman Islands in a few weeks!

It’s not just a holiday in the sun, however. Being one of the largest domiciles, Cayman is a breeding ground for captive thought leadership and Spring has been a longtime supporter of the Insurance Managers Cayman Captive ForumAssociation of Cayman (IMAC) who puts on this great event every year. In fact, Spring has been attending the annual forum for over a decade. This year, we are proud to announce that our Managing Partner, Karin Landry, will be presenting on voluntary benefits in captives on Thursday, December 5th at 3PM, during the three-day event.

Karin will be presenting alongside Larry Smith, Vice President of MedStar Health, a not-for-profit healthcare organization with over 120 entities in the Baltimore area. The session will highlight different advantages to adding voluntary benefits to your captive, and offer strategies and best practices for how to structure a program. The audience will be walked through two case studies to make the concepts come to life.

If you’re heading to Cayman, we hope you can make Karin’s session. If not, we’ll have a whole team that would love to chat with you at booth #7!

 

Legal Alert: Massachusetts Employers Must File HIRD Form by December 15

Massachusetts Employers Must File HIRD Form by December 15

As part of Massachusetts’ expanded Employer Medical Assistance Contribution (EMAC) program, employers with 6 or more employees in Massachusetts must submit a health insurance responsibility disclosure (HIRD) form annually, which collects information about employer-sponsored health insurance offerings.  Employers throughout the Commonwealth should have received email communication from the Department of Revenue (DOR) indicating that the HIRD form must be completed by December 15, 2019Massachusetts HIRD Form

The HIRD reporting requirement is administered by MassHealth and the DOR through the employer’s MassTaxConnect (MTC) account.  Employers may complete the HIRD form by logging into their MTC Withholding Tax account and selecting the “File HIRD” hyperlink under the “I Want To” section. The form will be available starting November 15 and will be used to assist MassHealth in identifying its members with access to qualifying insurance who may be eligible for the MassHealth Premium Assistance Program.  The DOR has published FAQs available here: https://www.mass.gov/info-details/health-insurance-responsibility-disclosure-hird-faqs.

Under the law, employers who knowingly falsify or fail to file the form may be subject to a penalty of $1,000 – $5,000 for each violation.

Next Steps

Employers should check with their payroll provider to determine if they will assist with the filing.  While the HIRD form may be filed by either the employer or its payroll company, it’s the employer’s responsibility to ensure that the form is timely filed.

The form is used to indicate whether the employer has offered to pay or arrange for the purchase of health insurance and information about that insurance, such as the premium cost, benefits offered, cost sharing details, eligibility criteria and other relevant information.  The HIRD form will be used to assist MassHealth in identifying its members with access to qualifying insurance who may be eligible for the MassHealth Premium Assistance Program. The Premium Assistance Program helps eligible working individuals and families pay for qualifying employer-sponsored insurance.

 

About the Authors.  This alert was prepared for Spring Consulting Group by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act.  Contact Peter Marathas or Stacy Barrow at pmarathas@marbarlaw.com or sbarrow@marbarlaw.com.

Spring’s SVP Speaking at the National Workers’ Compensation and Disability Conference

We are excited to share that our Senior Vice President, Karen English, has been invited to speak at this year’s National Workers’ Compensation and Disability Conference & Expo, which runs from November 6th-8th in Las Vegas. Karen, winner of the 2019 Power Broker award for Workers’ Compensation, is an expert in the field and will bring great value to the audience. Workers' Comp and Disability

Her session, Getting Smart Integrating Workers’ Comp, Disability and Leave Programs, runs from 2:30-3:45 PM on Wednesday, November 6th. She will be presenting alongside Kerry Daley, Absence Program Manager at Robert Half. Together they will cover the full spectrum of integrated program benefits, such as:

  • Cost reductions
  • Increased productivity
  • Greater efficiency
  • Deeper understanding of employee health
  • More consistent claims

The duo will offer best practices for integrating, and will demonstrate different approaches, implementation challenges and results through a case study. Attendees will leave with enhanced knowledge about the dangers of a program of silos, and with a plan of attack for integrating and/or maintaining their leave program.

 

Spring Wins Two of Captive Review’s 2019 Awards

We are incredibly excited to announce that the Spring team had a great night this past Monday at the CaCaptive Review Award Winner 2019ptive Review awards reception in Burlington, Vermont.

Spring took home the award for Employee Benefits Specialist of the year, and our Senior Consultant, Prabal Lakhanpal, won the Emerging Talent award for service professionals.

Our team works tirelessly day in and day out to deliver the best, research-driven and innovative service to our clients, with the goal of always producing tangible results. All of our staff is encouraged to participate in educational and industry related events and organizations so they can continue to build their skills and knowledge, and Prabal is a prime example of this development and growth. Always at the forefront of employee benefits and how they intersect with captives, we are constantly thinking outside-the-box to help clients fund competitive benefits packages that makes sense for their organization, its culture and its risk profile. This has been a particularly strong year for us, and we thank Captive Review for the recognition.

Spring to Speak in 3 Sessions at DMEC Annual Conference

As a long-time sponsor and advocate for the Disability Management Employer Coalition (DMEC), Spring is excited to continue our involvement in this year’s annual conference.

The event, which takes place from August 5-8 in Washington, D.C., will bring together around 500 professionals in HR, Benefits, Disability and Absence Management fields, and is sure to be a thought-provoking and fun few days. This year, Spring team members will be featured a few times on the conference agenda:DMEC Annual Conference

  • Launching Your Organization’s Self-Audit Checklist: Tuesday, August 6th, 3:35PM
    Senior Vice President Teri Weber will be running this short quick-dive session, which will guide audience members on effectively conducting an internal compliance audit.
  •  The RFP Process: A Deep Dive: Wednesday, August 7th, 2:30PM
    Teri Weber and Senior Vice President Karen English will be joined by clients on this panel that outlines the who, what, and the how of conducting an RFP. Best practices and case studies will be shared.
  • Got ROI?: Thursday, August 8th, 9:30AM
    In this general session, Karen, Teri and Disability Management professionals from Baystate Health Systems and Chevron will speak to how to determine if an absence management program is producing ROI. The audience will be left with a framework to overcome common challenges and learn from the success of large employers.

So, if you are heading to the DMEC Annual Conference, be sure to catch us at one (or all!) of these sessions, and say hello to our team at booth #312. We promise good conversation and fun giveaways!

Spring to Speak at VCIA 2019

Our team has long been involved with the Vermont Captive Insurance Association (VCIA), an organization that has done much to advance the captive industry in one of the country’s strongest captive domiciles. The VCIA Annual Conference is a hot event in this sphere, bringing over 800 professionals together each year in Burlington, Vermont to share their experienceCaptive Insurance and learn from each other.

This year, not only is Spring an exhibiting sponsor at VCIA, but our Managing Partner, Karin Landry, will also be leading a session, Association Health Plans & Captives: New Regulations, New Opportunities. This advanced session will feature a panel and will cover why Association Health Plans (AHPs) came to be, the shifting regulatory landscape around them, where that leaves us today, and an employer case study that ties in captives. The session will represent multiple perspectives: the consultant, the attorney, and the insurer.

The presentation will take place on Wednesday, August 7th from 10-11AM. We hope you can join, but if not, be sure to say hello to our team at booth 44 at VCIA!