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.
This email is a service to our clients and friends.  It is designed only to give general information on the developments actually covered.  It is not intended to be a comprehensive summary of recent developments in the law, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion.

Benefit Advisors Network and its members are not attorneys and are not responsible for any legal advice.  To fully understand how this or any legal or compliance information affects your unique situation, you should check with a qualified attorney.

© Copyright 2019 Benefit Advisors Network. All rights reserved.

Association Health Plans | Everything You Need to Know About AHPs

As the future of healthcare in the U.S. remains uncertain and, at times, confusing, we wanted to take a moment to share a potentially game-changing provision in a Presidential Executive Order that came late last year regarding Trade Associations and Small Businesses across the country.

Association Health Plans Executive Order

The provision relates to the expansion of Association Health Plans (AHPs) and, given that Spring is a facilitator for one of the only two State-Approved Healthcare Cooperatives in Massachusetts, we are tentatively excited to see the administration loosening regulations for AHPs and recognizing the benefits that buying together offers to small businesses and employers. By joining together to purchase coverage for their employees, these businesses can dramatically cut costs while both better serving their employees and reinvesting in their own economic growth.

Small businesses specifically benefit from the freedom to join together across state lines and, in some cases, pool their risk by forming an AHP, because it opens up the freedom to craft coverage that better suits the needs of the companies and their employees. Without this option, these smaller employers often are forced to purchase overpriced plans that are either excessive or ill-suited for their workforce, wasting resources and straining their already tight finances.

This small provision in the executive order – and the new regulations that will soon follow – may well enable small businesses much greater control over building their benefits packages, but constructing a stable long-term Association Health Plan remains complex and challenging. Spring Consulting Group has developed best-in-class solutions for AHPs and their members, and recognizes the key role benefits play in helping businesses attract and retain the best possible workers.

The Executive Order was signed in October of 2017 and then went to the Department of Labor (DOL) and the Centers for Medicare and Medicaid Services (CMS) for consideration. As of January 4th, 2018, the proposed regulations are still on the table, and we are in a comment period until March 6th.

In what ways would the proposed regulation expand the market for Association Health Plans?

  1. Association Health PlansIt would allow a reclassification for AHPs, eliminating some prerequisites that previously existed, such as the provision of mental health services. This means more groups would qualify as AHPs.
  2. It would allow individuals to buy an AHP, something which wasn’t permitted previously.
  3. It would allow small business to band together for the purpose of affordable group healthcare, whereas before an AHP could only be formed as a sort of spin-off of a group that already existed for some other reason not pertaining to health plans.
  4. It would allow AHPs to be sold across state lines.

These are the most notable ways this could be a positive change for US healthcare, and one that opens many doors that had previously been closed. Now more than ever, it is critical that the accessibility of affordable yet effective health plans increases.

More About Association Health Plans

This video below spotlights what the AHP regulation means for businesses and existing associations. We provide an overview of AHPs, the current laws that pertain to them and the ways in which this could be a game-changer for your business or association.

Find Out More

Employer Alert: Congress Delays Key ACA Taxes

Lost in much of the drama of this weekend’s government shutdown and the inclusion of the Children’s Health Insurance Program (CHIP) funding extension in the continuing resolution (CR) that finally passed, was that the CR also addressed a few of the more onerous aspects of the Affordable Care Act (ACA). Here is a quick rundown:

ACA Tax UpdateThe ACA’s Cadillac Tax implementation was pushed back even further to January 1st, 2022. You’ll recall that this 40% excise tax on higher-cost employer medical plans was originally set to go into effect in 2018 and was then moved to 2020 back in 2015. While this latest delay doesn’t kill the tax, the constant kicking of this can down the road certainly gives its opponents hope that it will never actually see the light of day.

The ACA’s Medical Device Tax has been delayed 2 years to 2020. This 2.3% tax on medical devices was included in the ACA legislation to offset some of its costly insurance subsidies, much like the Cadillac Tax.

The Health Insurance Tax (HIT) will be suspended for all of 2019. It will be collected in 2018 and then presumably again in 2020, unless another suspension or other Congressional act occurs. The HIT is essentially a health insurance excise tax which was included in the original ACA legislation and took effect this month.

What this means to employers: in the short-term, not much. Your health insurance premiums likely already reflect the 2018 HIT and the other two taxes have not taken effect yet, so their delay will not have any immediate financial impact on your company.

In the medium-term, this is a win for employers, as the HIT will go away for at least a year, resulting in temporarily lower 2019 renewals. Further, any employer with generous benefits won’t have the Cadillac Tax looming over their heads for at least four more years.

If the HIT is reinstated in 2020, fully-insured groups will see a big 2020 rate increase. Self-funding with stop-loss would avoid this unknown. It is also worth noting that these delays and suspensions, combined with the recent tax bill’s repeal of the ACA’s individual mandate, significantly reduce the ACA’s funding mechanism. We will be watching these issues closely and will be issuing further employer alerts as the ACA picture gains a bit more clarity.

Deconstructing ACA “Repeal and Replace”

The efforts to “repeal and replace” the Affordable Care Act (ACA) have occupied a good deal of recent media attention. This should not come as a surprise, since the ACA’s repeal was one of the centerpieces of Mr. Trump’s campaign, and it has also been a staple of Republican campaigns and legislation for the past eight years. The U.S. House of Representatives has voted to repeal or cripple the ACA on 60 separate occasions during that time. (For an excellent summary of these efforts, please see the November 2016 paper, prepare by Stephen Redhead, Health Policy Specialist, and Janet Kinzer, Senior Research Librarian, Congressional Research Service, entitled Legislative Actions to Repeal, Defund, or Delay the Affordable Care Act.)

aca repeal and replace

Image credit: Phil Roeder via flickr

While the mantra “repeal and replace” has become ubiquitous with reference to the ACA, for important political, budgetary and procedural reasons, these are really two different concepts, with radically different consequences. “Repeal” has a very different political calculus than “repeal and replace.”

What an ACA Repeal Really Means:

Despite their campaign promises, Republican lawmakers lack sufficient votes to repeal the ACA outright. This would require 60 votes in the Senate; Republicans have 52. So they must instead rely on a special budget strategy—referred to as “reconciliation”—that permits them to repeal those provisions of the ACA that directly impact federal spending. Created by the Congressional Budget Act of 1974, reconciliation allows for expedited consideration of certain tax, spending, and debt limit legislation. In the Senate, reconciliation bills aren’t subject to filibuster. Because any controversial bills in the Senate tend to attract a filibuster, the Senate Parliamentarian reviews the bill and decides whether it qualifies for reconciliation. Under the so-called Byrd rule, reconciliation bills can only make legislative changes that affect the federal budget. A previous ACA repeal bill was approved for budget reconciliation, which passed by the Senate in December of 2015. The bill was vetoed by President Obama, however.

The ACA is a massive law with 10 titles and hundreds of provisions. Of these, it is the insurance reforms, the individual and employer mandates, and the exchanges/marketplaces that are the most well-known. But the ACA also includes Medicare reforms, workforce provisions, FDA approval of biosimilars, and the many other provisions.

Repeal – The Reconciliation Process

Of all of the ACA’s many provisions, the following items are those that can be addressed by reconciliation in a stand-alone “repeal” measure (i.e., that can pass be a simple majority in the Senate):

  • Individual mandate penalty reduced to zero
  • Employer mandate reduced to zero
  • 40% excise tax on so-called Cadillac plans repealed (currently delayed until 2020). The excise tax may be replaced with a cap on the amount excluded from the employee’s income for employer-sponsored health plan coverage.
  • Increase the dollar limit on flexible health spending account contributions for Section 125 cafeteria plans (currently set at $2,600 for 2017)
  • Federal government subsidies for individuals to purchase exchange coverage reduced to zero (likely to be phased in over time)
  • Federal government “risk stabilization” payments to insurance companies reduced to zero (likely to be phased in over time)
  • Federal government payments to states adopting the optional Medicaid expansion reduced to zero, with Medicaid payments as block grants

A complete list of ACA provisions that are subject to repeal under the reconciliation process can be found in Table 3 of the Congressional Research Service paper cited above.

Replace – Requires 60 Votes

In contrast, the following items may not be repealed using reconciliation. This means that 60 votes will be required in the Senate to proceed:

  • Coverage mandates for insured and employer self-insured group health plans:
    • Coverage of adult children to age 26
    • Prohibitions on imposing:
      • Preexisting condition coverage exclusions
      • Waiting periods exceeding 90 days
      • Annual and lifetime dollar limits on essential health benefits
      • Reporting requirements (e.g., Summary of Benefits and Coverage)
      • Other ACA insurance mandates (the full list is set out below)
    • Additional ACA Requirements for Non-Grandfathered Plans:
      • Coverage of preventive services without cost-sharing (the regulatory interpretation of “preventive services” as including contraceptive coverage is likely to be changed eventually by new regulations under a Trump Administration)
      • Limits on employee cost-sharing
      • Independent external review of denied claims for plans not already subject to IRO under state insurance laws
    • Insurance Market Reforms
      • Small employer insurance plans required to offer coverage of all ten essential health benefits
    • The requirement to report the cost of employer-sponsored health plan coverage on Form W-2 cannot be repealed via budget reconciliation

Any attempt to repeal these provisions through normal legislative channels would be subject to a filibuster. Consequently, these provisions would remain in effect even if the ACA revenue provisions were repealed under a reconciliation measure. (A complete listing of the insurance market reforms is provided in the accompanying tables.)

Ignore – No Change

There is alternative to the handling of the ACA insurance market reforms, which are enforced through an excise tax penalty imposed on the employer. The Penalty is $100 per affected individual, per day, and it applies to any employer (regardless of the size of its workforce) that offers a group health plan that fails to comply with the ACA’s market reform requirements. Congress could reduce the excise taxes to zero. Or the the Trump Administration might adopt a non-enforcement policy regarding some certain market reform violations, but still enforce other popular market reforms (e.g., coverage of adult children up to age 26).

The “state of play”

There are currently at least five separate “repeal and replace” proposals. There are no stand-alone “repeal” proposals. Among other things, there is widespread concern that the repealing the ACA without providing a replacement would destabilize the insurance markets, and even lead to the collapse of the non-group market. The reasons for this collapse are explained in compelling fashion in a study by the Urban Institute, which claims that repeal of the ACA without replacement would devastate the non-group market “causing 7.3 million . . . people to become uninsured” as a result of three factors:

  • Eliminating premium tax credits and cost-sharing assistance would make coverage unaffordable for many of the people currently enrolled, causing them to drop coverage. Those with the fewest health problems would drop their coverage fastest
  • Eliminating the individual mandate penalty would reduce the incentive to enroll for healthy people who can afford coverage
  • Insurers would remain subject to the requirement to sell coverage that meets adequacy standards to all would-be purchasers, and they would remain subject to the prohibition against charging higher premiums or offering reduced benefits to those with health care needs

While we find the Urban Institute’s analysis compelling, Congressional Republicans are almost certainly aware of this risk, and they may be prepared to appropriate funds necessary to stabilize the insurance markets pending passage of comprehensive ACA replacement legislation.

The impact of repeal and replace on Government programs (Medicare and Medicaid)

Medicare

The ACA made some valuable, and correspondingly costly, changes to Medicare. Among other things, it expanded Medicare coverage to include certain preventive services, like mammograms or colonoscopies, without charging Part B coinsurance or deductible. In addition, the ACA phased out the prescription drug “donut hole.” Finally, the law took steps to ensure the Medicare program’s long-term solvency. All of this would be rolled back in the case of a full-blown ACA repeal. But at least one of the major replacement plans proposes to leave the ACA changes to Medicare intact. Presumably, this is a nod to popularity of the phase-out of the prescription drug donut hole.

One replacement plan (proposed by Rep. Paul Ryan) does not stop here. It instead proposes “transforming the [Medicare] benefit into a fully competitive market-based model using premium support.” Under the Ryan plan, beginning in 2024, Medicare beneficiaries would be given a choice of private plans competing alongside the traditional fee-for-service Medicare program on a newly created Medicare Exchange.

Medicaid

Medicaid is another matter entirely. The ACA vastly expanded the reach of the Medicaid program. The matter of Medicaid’s regulation post-ACA was further complicated by the Supreme Court’s ruling in 2012 that states were free to reject the ACA Medicaid expansion.

Before the ACA, Medicaid provided health care for children, pregnant mothers, the elderly, the blind, and the disabled.” The ACA expanded Medicaid’s reach to all low- income individuals. The Republican members of Congress roundly criticized this expansion, noting that the program’s expansion under the ACA accounts for more than 15 percent of all health care spending in the United States. This, they claim, is unsustainable.

The “Ryan” Plan’s approach to Medicaid is representative of the various “replace” proposals. Like the other plans, it makes radical changed to Medicaid that go well beyond mere repeal. This and the other plans offer two alternative approaches that states can elect: per capita allotment and block grants.

Per capita allotment

Under the per capita allotment approach a total federal Medicaid allotment would be available for each state to draw down on. The amount of the federal allotment would be the product of the state’s per capita allotment for the four major beneficiary categories—aged, blind and disabled, children, and adults—and the number of enrollees in each of those four categories. The per capita allotment for each category would be determined by each state’s average medical assistance and non-benefit expenditures per full-year-equivalent enrollee during the base year (2016), adjusted for inflation. The per capita allotment would be designed to grow at a rate slower than under current law.

Block Grants

Under the block grant option, a state that opts out of the per capita allotment could automatically receive a block grant of federal funds to finance their Medicaid program. States would then be free to manage eligibility and benefits generally as they see fit without the need to apply to the Department of Health and Human Services for waivers.

Individual and Group Market Reforms*

Provision Effective Date Section Title/Heading
(1) PPACA §1201§10103(e); PHSA §2704 Plan years beginning on or after September 23, 2010 Prohibition on preexisting condition exclusions for enrollees who are under 19 years of age.
(2) PPACA §1001§10101(a)HCERA §2301(a); PHSA §2711 Plan years beginning on or after September 23, 2010 Ban on annual and lifetime dollar limits on essential health benefits. Applies to group and individual insurance markets, and group health plans, including grandfathered group and individual plans. Annual or lifetime limits are permitted for items and services that are not part of the essential health benefits.
(3) PPACA §1001HCERA §2301(a); PHSA §2712 Plan years beginning on or after September 23, 2010 Rescissions permitted only for fraud or intentional misrepresentation of material fact and with prior notice to the enrollee. Applies to group and individual insurance markets, and group health plans, including grandfathered group and individual plans.
(4) PPACA §1001; PHSA §2713 Plan years beginning on or after September 23, 2010 Group and individual insurance contracts and group health plans (other than grandfathered plans) must cover the following preventive health services with no cost-sharing:
• Evidence-based items/services with a rating of “A” or “B” in the current recommendations of the U.S. Preventive Services Task Force (USPSTF).
• Immunizations recommended by the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention (CDC).
• Evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration (HRSA) for infants, children and adolescents.
• With respect to women, additional preventive care and screenings provided for in guidelines supported by HRSA.
(5) PPACA §1001HCERA §2301(a)§2301(b); PHSA §2714 Plan years beginning on or after September 23, 2010 Group health plans that provide dependent coverage must make coverage available to age 26. Grandfathered group health plans may delay to plan years commencing on and after January 1, 2014, for adult children eligible to enroll in an employer-sponsored plan.
(6) PPACA §1001§10101; PHSA §2715 Plan years beginning on or after September 23, 2010 Group health plans must provide summaries of benefits and coverage (SBC) explanation that meets standards developed by HHS.
(7) PPACA §1001§10101(d); PHSA §2716 Plan years beginning on or after September 23, 2010, but enforcement suspended (Notice 2011-1, 2011-2 I.R.B. 259) Insured group health plans (other than grandfathered plans) must satisfy benefits-related non-discrimination rules under §105(h)(2) prohibiting discrimination in favor of highly compensated individuals in terms of eligibility and benefits.
(8) PPACA §1001; PHSA §2717 Plan years beginning on or after September 23, 2010 Group and individual market policies and group health plan (other than grandfathered plans) must establish quality programs and report quality data to HHS and to enrollees during each open enrollment period. Required elements of a quality program include:
• Improve health outcomes through activities such as quality reporting, effective case management, care coordination, case management and medication and care compliance initiatives, including through the use of the medical home model.
• Implement activities to prevent hospital readmissions through a hospital discharge program that includes patient-centered education and counseling, comprehensive discharge planning and post-discharge reinforcement by an appropriate individual.
(9) PPACA §1001; PHSA §2718 Plan years beginning on or after September 23, 2010 Bringing down the cost of health care coverage: Health insurance issuers provide an annual accounting for coverage offered (including grandfathered health plans) and rebates to enrollees if medical loss ratios are not met.
(10) PPACA §1001§10101(g); PHSA §2719 Plan years beginning on or after September 23, 2010 Internal appeals/external review:
• Issuers in the group market and group health plans must have an internal claims and appeals process based on existing DOL claims and appeals procedures, updated by standards established by HHS.
• Non-group plans must have an internal claims and appeals process based on existing law, updated by standards established by HHS.External Review: Issuers in the group market and group health plans must comply with applicable state or federal external review requirements.
(11) PPACA §10101(h); PHSA §2719A Plan years beginning on or after September 23, 2010 Group health plans must provide patient protections, including more choice of health care professionals, coverage of emergency services, and access to pediatric care and obstetrical or gynecological care.

 

Health Insurance Market Reforms*

Provision Effective Date Section Title/Heading
(1) PPACA §1201; PHSA §2704 Plan years beginning on or after January 1, 2014 Prohibition on preexisting condition exclusions or other discrimination based on health status.
(2) PPACA §1201; PHSA §2701 Plan years beginning on or after January 1, 2014 Fair health insurance premiums.
(3) PPACA §1201; PHSA §2702 Plan years beginning on or after January 1, 2014 Guaranteed availability of coverage.
(4) PPACA §1201; PHSA §2703 Plan years beginning on or after January 1, 2014 Guaranteed renewability of coverage.
(5) PPACA §1201; PHSA §2705 Plan years beginning on or after January 1, 2014 Prohibiting discrimination against individual participants and beneficiaries based on health status.
(6) PPACA §1201; PHSA §2706 Plan years beginning on or after January 1, 2014 Nondiscrimination in health care.
(7) PPACA §1201; PHSA §2707 Plan years beginning on or after January 1, 2014 Comprehensive health insurance coverage.
(8) PPACA §1201HCERA §2301(a); PHSA §2708 Plan years beginning on or after January 1, 2014 Prohibition on excessive waiting periods.
(9) PPACA §10103(c); PHSA §2709 Plan years beginning on or after January 1, 2014 Prohibition on denial of participation in approved clinical trials.

Tables used with permission. © 2017 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com2017.

New Limitations on Short-Term Healthcare Policies: What You Need to Know

Short-Term Healthcare

Image credit: Michael Havens via flickr

On October 31st, the US Departments of Labor, Health and Human Services and Treasury (the Departments) issued a Final Rule pertaining to short-term healthcare policies. Here are the details:

Short-term health policies are exactly as they sound: healthcare policies, limited in duration, that are meant to function to fill a gap in coverage some individuals may face during their lives if they transition between jobs or group health plans. They are currently limited to twelve months of coverage.

What the Departments have found is there is a growing practice of individuals purchasing short-term policies (which are generally cheaper than exchange policies) and then paying the IRS penalty (short-term policies are not considered Minimum Essential Coverage), which has become a cheaper option. In some cases, individuals are even allowed to renew their short-term policy past the twelve month period, further solidifying the policy as their primary coverage.

It is speculated those opting to go this route are healthier individuals that just want to ensure they have some coverage. These healthier individuals are exactly what the Affordable Care Act needs in the exchange risk pool to balance things out. This is why there was such a concerted effort to close the door on this practice and push these individuals to the exchanges.

To combat this practice and further diversify the exchange risk pool, the Departments have issues a Final Rule, which changes the twelve month maximum for short-term policy coverage to three months. This will be effective for any policies with policy years beginning January 1, 2017. It should be noted that the limit will not be enforced on any 2017 policies, sold before April 1, 2017, in states with existing approved 12 month limits providing the policy expires in the 2017 calendar year.

The full ruling can be found here.

This change won’t cause a seismic shift in the exchange risk pool, but with some of the projected rate increases being reported for 2017 and beyond, even small steps certainly help in chipping away.

Of course, in light of last night’s election results, much of the Affordable Care Act will be under a cloud of uncertainty for the foreseeable future, so stay tuned…

Let’s Combat Rising Health Insurance Costs!

The big news in the world of politics last week was the reported increases employers are facing due, in part, due to insurer costs related to the Affordable Care Act. Media accounts have health insurance exchange open enrollment renewals pegged at an average increase of 28% with some having to pay double their current rates

We will leave it to the politicians to duke it out over the specific causes of the increase and who is to blame. As employee benefit advisors, we prefer to focus on how we can help employers get out from under these significant cost hikes, while still providing your employees with robust, cost-effective benefit packages. One solution that is generating positive results and cost savings for businesses is self-funding their health insurance.

A self-funded health insurance plan is one in which an employer retains the financial risk of covering employees’ health care costs with the option to insure against the cost of catastrophic claims. Contracting with a third-party payer, administrative services organization, or an insurance company, an employer will pay a third party to administer the benefits, pay claims and perform certain limited fiduciary functions.

There are many benefits to self-funding including plan design choice, cost transparency and cost savings. Self-funded employers have much more flexibility in their plan design than insured employers, as they are not subject to state coverage mandates. They also have insight into the actual cost of care, administrative costs and any loaded fees or additional expenses to the plan. Other benefits of moving to self-insurance include eliminating a number of taxes, fees and administrative costs incurred with a fully funded plan.

Once an employer has made the conversion to self-funding, they can achieve savings of anywhere from 5% to 15% depending on their cost structure. Self-insurance remains a powerful weapon in the war on burgeoning benefit costs. Employers who make the change can reap immediate benefits and avoid, or at least slowdown, some of the significant and inevitable cost increases on the horizon.

If your company is in the process of renewing your health insurance for 2017, or if a renewal is on the horizon, we can help. You owe it to your business and employees to talk to us about self-funding. Speak to one of our team of brokers, consultants, underwriters and actuaries for self-funding advice and a free, no-obligation quote. In the end, you may chose to go a fully funded route, but you should know your options especially in light of the projected increases.

Contact us today using the form below to discuss self-funding health insurance further.

You might also be interested in our FREE white paper on self-funding. This helpful eguide was written by our funding experts and will give you more detail about how exactly self-insurance works.

Identity Theft Coverage Now a Tax Deductible Employee Benefit

identity theft coverage

Image credit: GotCredit via flickr

With the growing threat of data breaches and hacking incidents on the rise, having identity theft protection is quickly becoming as important as home or auto coverage. Forward-thinking employers looking to attract and retain top talent have been adding identity theft protection to the benefit offerings, but to date, there has been no financial incentive to do so for the employer.

The U.S. Internal Revenue Service (IRS) recently announced in Announcement 2016-22, that identity theft protection could be offered to employees on a tax-free basis regardless of a prior data breach. In the past, the IRS has offered the tax-free perk to employers ONLY if a data breach has occurred. This latest move allows employers to move from being reactive to proactive and use identity theft coverage as an attractive perk.

Spring is a market leader in developing the most attractive and appropriate employee benefit packages for employers of all sizes. We offer an excellent Financial Protection Plus identity theft protection product for individuals and families, through a relationship with LifeLock; the leader in Identity theft protection for ID and credit fraud.

LifeLock provides a series of proactive services to protect your employees’ identity and provides a Million Dollar Protection™ Package.

For less than $10 per month, employees can purchase protection against identity theft, ID and credit fraud and more.

Services are available for individuals and families via online enrollment through secure, encrypted servers.

For more information on how you can get these critical services to offer to your employees, please contact our team today!