PPACA Transition Update
Here is a briefing from our business partner, Emerson Reid. The federal government is encouraging states to adopt a transitional policy which would allow a health insurance carrier, at its option, to continue group coverage that would otherwise be terminated or cancelled. This would allow affected small businesses to re-enroll for that coverage for 2014. However, not all states and insurance companies will permit coverage to continue. So far, there has been no determination in Pennsylvania from the state. We’ll keep you informed as we hear of updates.
Reporting ERISA Status & Group Size to Insurance Carrier by 12/31/2013
Insurance companies must identify each of their group customers as either a small or large group and verify the ERISA status of the group as part of implementation of the medical loss ratio (MLR) provision of the Affordable Care Act. You will be asked to identify your average number of employees. For 2012 and 2013 calendar years, small group has been defined as 50 or fewer; 51 or more for large group. As of 2016, 2-100 employees will be classified as a small group. Utilizing government criteria, the ACA defines an employee as any person for whom the company issues a W-2, regardless of part time or seasonal status or whether the individual has medical coverage. Most employers are ERISA groups while church organizations and government plans are ERISA-exempt.
Oct 2013 BMC Can Sell on Exchange on Behalf of Clients
The Federally-Mandated Marketplace for individual coverage and Small Business Health Option Program (SHOP) for group coverage officially opened on October 1st for January enrollments. The earliest effective date of any coverage under the Marketplace is January 1, 2014 so there is plenty of time to see if the coverage available in the Marketplace might be a good alternative for groups.
BE ASSURED THAT BMC BENEFIT SERVICES HAS COMPLETED THE REQUIREMENTS TO SELL ON THE EXCHANGE AND ON SHOP. We’ll be monitoring the plans and cost and comparing them to the private carriers, looking out on behalf of our clients.
The Patient Protection and Affordable Care Act (PPACA) requires all employers to provide notices to current employees (and new hires) about the coming exchanges (now being called Marketplaces). As of May 2013, the Department of Labor has provided guidance indicating that employers are to provide these notices to employees by October 1, 2013. The law only applies to employers who are subject to the Fair Labor Standards Act (FLSA) which includes schools, non-profits and most privately owned, commercial businesses.
The notice should be provided to each employee, regardless of whether or not they participate (or are eligible to participate) in your group health plan. You are NOT required to provide notices to dependents, former employees or COBRA continuants.
The notice must be provided in writing in a manner such as attached to paychecks or personally handed out. You cannot, however, simply leave a stack of them in a break room because it doesn’t insure that each employee receives it. You can also distribute it electronically. The key to distribution, whether by hard copy or electronically, is to have a copy of what you distributed and be able to state how the notice was distributed, a list of the individuals and date when it was provided.
The law does not specifically address a penalty for failure to comply with the notice requirements and it is not clear if the FLSA provisions actually allow for the DOL to impose actions for violation, however, non-compliance is not a good option!
The model notice is attached. The first page is boiler plate, the second page (Part B) needs to be completed with basic information (e.g. name, address, HR contact at your office). Most employers will check the “some employees” box in response to the question of who you offer your plan to and include the wording of your definition of eligibility (e.g. 25 hours, 30 hours). The box ‘with respect to dependents’ is checked that you do offer. Eligible dependents are: spouse and children to age 26. You can also check the box that your coverage meets the minimum value standard.
The third page is optional. You are under no obligation to provide that information.
Once completed and once distributed to all current employees, it should also be included for employees hired after October 1st.
If you need assistance completing the form or have any questions, please contact us. See the attached document for additional information.
July 2013 PPACA Little-Known HRA Fee Due July 31st
This is a reminder that if you have established a Health Reimbursement Arrangement (HRA) that you utilize to fund deductibles or co-payments under your medical plan, you should check with your accountant about the Affordable Care Act mandated annual fee.
The fee (only $1 per person for plan years beginning on or after November 1, 2011 but before November 1, 2012) is for medical plans (paid by the insurance company for all fully insured plans), certain FSAs (does NOT apply to the Flexible Spending Accounts that are solely funded with employee contributions – referred to as ‘excepted benefits’) and HRAs.
The fee is nominal, however, the penalties and fines for failure to file will mount up. You must file/pay by July 31st following the end of your plan year utilizing form 720 (Quarterly Federal Excise Tax Return).
See the attached document for additional information.
PPACA Employer Mandate Delayed Until 2015 – July 2013
The employer mandate portion of PPACA has been delayed until 2015. This is the portion that would require any employer with more than 50 employees to provide coverage for all full time employees (and define ‘full time’ as 30 hours or more, the primary issue affecting many of our clients). See www.washingtonpost.com for more.
Since the effective date would have been the plan anniversary in 2014, presumably it will now be the plan anniversary in 2015, however, details have not been released as yet.
BMC Benefit Services will keep you updated on the specifics as they are received and, as always, will assist you with compliance for your specific organization.
Health Care Reform Updates – May 2013
COBRA NOTICES:
COBRA notices must be revised to incorporate new language letting beneficiaries know that there are alternatives to COBRA available through the Marketplace. If BMC sends notices on your behalf, be assured that all of our COBRA notices have been updated and are compliant.
MARKETPLACE NOTICES:
Model notices have now been released for employers to inform employees of the existence of the new Marketplace as well as contact information and a description of the Marketplace services. This will be a required distribution for new employees hired beginning October 1st. For employees who are current employees prior to October 1, 2013, employers must provide the notice no later October 1, 2013.
Model notice for employers who offer a health plan to some or all employees, available at http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
Model notice for employers who do not offer a health plan, available at http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
BMC-Sponsored Health Care Reform Seminar – May 2013
Let us help you navigate PPACA (Patient Protection and Affordable Care Act). Keep an eye out for your invitation to our Health Care Reform seminar on June 7th at the City Line Avenue Hilton in Philadelphia.
Who is Eligible for PPACA Reminder – February 2013
Remember that if you had fewer than 50 employees in 2013, you are NOT subject to the Patient Protection and Affordable Care Act (PPACA) beginning in 2014. So called “small employers” (no more than 25 full time/equivalent employees) are being given incentives by way of tax credits (including tax-exempt entities that are eligible for FICA credits). You are only subject to the employer pay or play rules IF you employed more than 50 employees in 2013 (full time and equivalent employees), but not until your plan year begins in 2014. Many companies will clearly fall into the “under 50” category and will not have to make any changes; many companies will clearly fall into the “over 50” category and many of them will already be in compliance (covering at least 95% of their full time population). Some companies will require careful calculation under the rules to know if they are subject to PPACA or not. If you have questions about how to calculate whether you are a “large” employer under the law, whether you should adjust your workforce in 2013 to better prepare for 2014, or about the small employer incentives (tax credits) for providing coverage, let us know.
Regardless of whether you, as an employer, will be subject to PPACA, your part time employees will be subject to the individual mandate that requires them to have coverage or pay a penalty. BMC has a link on our website to iDecide, a means of locating the most cost effective plan for individuals. If you have a large number of part time employees who would benefit, let us know. We can include the link on your website as well.
No Exchanges? No Problem – January 2013
Governor Tom Corbett notified Federal officials on December 12th that Pennsylvania would not establish its own insurance exchange, but would default to a federally-facilitated health insurance exchange. Prior to that the Pennsylvania Department of Insurance had taken the lead with exchange planning. They released an extensive report in November 2011 suggesting broad support for a state-run exchange. In January 2012 the Department released a draft of proposed legislation that would establish multiple private exchanges to be overseen by the Department, however, Governor Corbett’s announcement would negate moving forward with that. As a result, the Federal government will assume full responsibility for running a health insurance exchange in Pennsylvania beginning in 2014. Private health insurers such as UnitedHealthcare and Aetna have already begun implementing programs that operate in a fashion similar to exchanges. BMC Benefit Services will continue to monitor legislation and regulations as they are issued to keep you in compliance and insured with the best carrier for you and your organization!
Based upon an article in the Insurance and Financial Advisor, following the continued implementation of the Patient Protection and Affordable Care Act (PPACA) , the market for insurers and employers in 2013 appears predictable. Insurers seem prepared to weather the next two years with stability, according to their accredited research organization, Fitch Ratings. Employers will continue to work to keep benefit rates in check, but, for the short term, rate increases are being calculated with some certainty. According to health consulting firm Mercer, employers in 2012 kept increases to 4.2%, frequently implementing health management programs. Without that action, costs would have been an average of 7.4%. Increases of 5% are expected in 2013, Mercer predicts, provided that employers continue controlling cost aspects that are within their control.
Basics of the Employer Mandate & Penalties – January 2013
For your further reference, please see the attached primer: Basics of the Employer Mandate. It includes how to calculate if you are a ‘large employer’ and a compliance chart. Keep in mind that most of the Health Care Reform penalties are aimed at employers who do NOT cover their full time employees. If you’re currently a BMC Benefit Services client, even if you employ more than 50 and are subject to Health Care Reform, there’s a very good likelihood that you are already in compliance. Each and every BMC client will be carefully monitored as their 2014 plan renewal approaches for compliance and we’ll be sure to provide all the information that’s relevant to you. If you have any questions, please contact us.
Update – November 2012
The topic on everyone’s mind these days is Health Care Reform and what you will need to do to remain in compliance. A recent study conducted by Market Strategies International showed that, perhaps awaiting the Supreme Court ruling and perhaps in anticipation of the presidential election, most employers have taken no active steps to prepare.
While this may well be true, you can rest assured that BMC has been working with the major carriers that provide your health care benefits to meet the timelines for all compliance. Since its inception in 2010, we’ve been adhering to the timelines as they come due. This includes the amendment of contracts to include preventive services paid at 100%, additional preventive services, dependent coverage to age 26, and the most recent addition, distribution of Summary of Benefits and Coverage (SBCs). Several of the large carriers are already setting up their version of “exchanges”, whereby an employer can establish a defined contribution that they will make to the premium and each employee can select the level of coverage that’s right for them from a menu of between 12 and 30 plans.
While you’re busy overseeing the daily operation of your business or school, rest assured that BMC Benefit Services is going to make the appropriate recommendations to keep you in compliance with Health Care Reform!
Retroactive Terminations – November 2012
One Health Care Reform-related reminder: Under the PPACA (Patient Protection and Affordable Care Act), the insurance carriers are enforcing the retroactive termination policy: Retroactive terminations may be made for up to 30 days plus the current month. This means that a termination cannot be made for more than 60 days prior to the date of notification. Further, if your employee makes a contribution toward the premium, coverage cannot be terminated retroactively. We remind you to be diligent in the notification of terminations. The carriers have publicized that they will NOT make any exceptions so no additional premium credits will be retroactively provided. If you have any questions about Health Care Reform or any other benefit-related matter, please let us know.
Expanded Women’s Preventive Health Benefits – August 2012
Expanded women’s preventive health benefits for plans that renew on or after August 1st now include services such as prenatal visits, certain contraceptives (specific religious organizations may be exempt), screening/counseling for domestic violence, and screening for gestational diabetes.
Medical Loss Ratio Rebates – August 2012
In short, insurers are required to issue rebates by August 1st for the 2011 plan year. Under the Patient Protection and Affordable Care Act (PPACA), the insurance carriers are required to satisfy certain medical loss ratio thresholds, spending 80-85% of premium dollars on medical care and health care quality improvement. The carriers are required to make the first rebates to consumers in 2012 based upon their 2011 MLR and must be paid by August 1st of each year. Rebates are issued to employers with an accompanying letter with Federally-mandated language. Federal regulations require the insurance company to send letters to each employee alerting them that a rebate is being sent to the employer. Where employers pay premium on behalf of employees, the rebate remains with the employer. For premiums or portions of premiums paid by the employees, there are three ways for enrollees to receive rebates: by having premiums reduced, by means of a rebate check or, if premiums were paid by credit card, by a lump-sum credit to that credit card.
New Restrictions For Terminating Employees from Your Plan – March 2011
The brief background is that the Patient Protection and Affordable Care Act of 2010 (PPACA) prohibits health insurance carriers and group health plans from rescinding coverage except for cases involving fraud. You CANNOT retroactively terminate coverage if the employee paid premium (contributed to the cost). If the employee was paying premium, you can only terminate the coverage with a FUTURE termination date (e.g. end of the current month). You MAY still terminate retroactively as part of your reconciliation of eligibility if the member did not contribute toward the cost of the premium past the termination date you are requesting. The most common scenario for a retroactive termination is when an employee is no longer employed and you are, therefore, not taking premium contributions. In that case, the retro termination is still permitted. When you submit a retroactive termination, the insurance company (and BMC) will regard the request as your verification that no premium/contribution was paid by the employee/dependent for that period.
ARRA COBRA Subsidy Update – August 2010
The ARRA COBRA subsidy has expired and has not been extended. Current COBRA notices should be in the pre-ARRA format. If BMC Benefit Services sends your COBRA notices, we’ve already updated our files to the pre-ARRA notices.
Carrier Product Update – August 2010
Two of the area’s major carriers, Keystone/Independence Blue Cross and Aetna, have updated their product portfolios as of October 2010. Depending on your plan anniversary and group size, you may be able to renew “as is” if you desire or you may have to amend to a current plan offering. With Keystone, there will be fewer “mix and match” options in a move to packaged “as is” plans, including prescription and vision benefits. All of the new plans meet the new health care reform guidelines, specifically waiving co-pays for preventive services, eliminating annual or lifetime dollar maximums on coverage for essential benefits and covering adult children to age 26.
If your coverage is currently with Keystone/Independence Blue Cross or Aetna, you can expect to see a letter from them regarding the new plans; however, BMC has already had presentations from both carriers and is prepared to present all available options at your plan anniversary.
Health Care Reform Update – August 2010
The prohibition of lifetime limits on essential health benefits, prohibition of certain annual limits, extended eligibility of dependent children and prohibition of pre-existing condition exclusions are all generally effective as of the first day of the first plan year beginning on or after October 1, 2010. There are some “special relief” situations where compliance is postponed, however, for most clients who have fully insured plans with the major carriers, the carriers are amending the plans (as above) to comply, thereby assuring your compliance.
Health Care Reform Update on FSAs and HRAs – August 2010
As of plan years beginning January 1, 2011, medical FSAs may no longer reimburse drugs which are not prescribed. The drug does not have to be a prescription drug to be covered, but must be prescribed. As a result, an over the counter drug prescribed by a physician can still qualify as of 2011. Effective 2013, annual medical FSAs will be capped at $2,500 per participant. The cap is to be adjusted for inflation after 2013.
An excellent overview, Health Care Reform: What Employers Need to Know, that was prepared by the national law firm of Miller Johnson and provided to us by Brown and Brown, one of BMC Benefit Services’ business partners. Some of the information above is based on their advisory.