Viewing posts from: March 2014

HHS Proposes Rules for Exchanges and Insurers for 2015

Posted March 28, 2014 by Megan DiMartino

HHS has proposed regulations covering a variety of issues related to Exchanges and to insurance market reforms. Many of these items were anticipated in the preamble to last week’s final regulations on the 2015 Benefit and Payment Parameters. The topics covered are wide-ranging—here are some highlights:

  • SHOP Elections and Employee Choice. The rules propose to align the start dates for annual election periods through the Small Business Health Options Program (SHOP) with open enrollment periods in the individual market Exchanges for 2015, and to eliminate the 30-day minimum periods during which employers and employees may select a plan. In addition, the regulations would allow states to request that their SHOP delay the employee choice option for another year if it would result in significant adverse selection in the small group market, or if there are too few plans available to allow a meaningful choice. HHS confirmed these and other details to insurers in a 2015 Letter to Insurers, which was finalized contemporaneously with these proposed regulations.
  • Exchange Navigators and Other Assistance Personnel Standards. The proposed regulations would allow for civil penalties for Exchange Navigators and other Exchange assistance personnel of up to $100 a day for failure to comply with federal standards. And although states generally may pass laws to regulate these individuals (for instance, by imposing fingerprinting and background check requirements), new rules propose a list of requirements that states generally may not impose, including that states may not require Navigators to be agents or brokers or to refer individuals to agents and brokers, and may not prevent them from providing advice on substantive benefits or terms of coverage. In its 2015 Letter to Insurers, HHS also “strongly suggests” that agents and brokers not use “Marketplace” or “Exchange” in the names of their businesses or websites.
  • Premium Stabilization Program Modifications. In addition to proposing how to handle shortfalls arising from the sequester of certain funds that were anticipated to be available for the reinsurance program, HHS has proposed increases in the administrative cost ceiling and the profit margin floor, which could increase the amount an insurer receives from the risk corridor program for 2015.
  • Guaranteed-Renewability Guidance. Under health care reform’s guaranteed-renewability rules, insurers generally must renew coverage at the option of the policyholder, but they may modify the coverage at the time of renewal so long as, in the individual and small group markets, the modification is effective uniformly. Also, insurers in the group and individual markets may elect to discontinue a product (rather than provide guaranteed renewability) under certain circumstances. The proposed regulations provide new criteria, which would be applied in the small group and individual markets, to determine whether a “uniform modification of coverage” has occurred or, conversely, if those criteria are not satisfied, the existing product is considered to have been discontinued and a new product offered. A proposed form of notice has also been released, which insurers would be required to provide to individuals (in the individual market) and employers (in the group market) when renewing or discontinuing a product.

Private health exchange interest fueled by finance, not HR

Posted March 25, 2014 by Megan DiMartino

from Employee Benefit News

Employers across the country may be expecting to offset higher health care costs through private health exchanges and boosting wellness offerings. However, HR leaders interviewed in a new PricewaterhouseCoopers report say that the push to private exchanges is being fueled by C-suite executives and not benefits professionals.

Through a recent series of six employer roundtables held in New York, Chicago and Atlanta, PwC found that there seems to be differing opinions among HR leaders and other executives over how to address the Affordable Care Act’s implications.

“Much of the corporate interest in private exchanges is coming from leadership and finance, not HR,” says one response in the report from PwC’s Human Resources Services, a global network of 6,000 HR practitioners.

The December 2013 roundtable initiative concludes, however, that the “value proposition for private exchanges is likely to improve over time.”

The cusp of the problem for most employers is worry over the ACA’s “pay or play” penalties and the impending 2018 excise tax, commonly known as the Cadillac tax.

Additionally, wellness programs were lauded as a possible option to improve overall employee happiness and health. The roundtables discussions found that many employers were focusing “more on total employee well-being” and less on improving the health of their workforce.

“There is a big correlation between happy employees and business outcomes,” PwC states in the report.

IRS Releases Final Rules on Information Reporting for Employers

Posted March 21, 2014 by Megan DiMartino

The IRS and Department of Treasury announced on March 5 the release of final rules on two provisions: reporting health insurance coverage by large employers, and reporting minimum essential coverage by insurers and employers of self-insured plans. The guidance provides a streamlined process for reporting duplicate information required by both provisions – to both the IRS and respective employees. First reporting will not be required until 2016 but employers are encouraged to voluntarily report coverage information in 2015 for the 2014 calendar year. Doing so will allow for an increased adjustment period to the new policies.

Employers with 50 or more full-time employees must report all employees offered coverage throughout the calendar year to the IRS. Respectively, all employees named in this report must also be provided with a statement, and can simply be given a copy of the IRS form. Minimum essential coverage is also requisite in the new annual reporting structure to both the IRS and any individual named in the report as having such coverage.

The final rules call for a single, consolidated form in an effort to streamline the reported information. Employers and insurers are to complete their respective portions of the form and submit them separately. Large self-funded employers can complete both parts of the combined form for information reporting. The form can be used for reporting to both the IRS and employees.

To learn more, contact us.

Webinar: Wellness Plans in the Wake of Obamacare

Posted March 19, 2014 by Megan DiMartino

PPACA changed the landscape for many employers, exposing plans to unlimited claims. High claimants expose plan sponsors to extraordinary costs as 20% of plan claimants can drive 80% of plan costs. This metric is compelling plan sponsors to “bend their cost curve.” The DOL, Treasury and HHS has now published Final Rules under incentives for nondiscriminatory wellness programs in group health plans. Employers must understand these final rules, how they impact their plan design and employee contributions, and the administrative burdens associated with their implementation. Join AP Benefit Advisors Senior Counsel, Patrick Haynes, as he discusses this important topic and addresses these questions:

*  Are there plans that are exempt from these rules?
*  What are employees’ rights under these plans?
*  What rules apply to your company’s 10,000-steps walking initiative?
*  Prior rules vs. Final rules – what has changed?
*  How can I maximize penalties for employees refusing to participate in wellness plans?
*  How do the Final rules and PPACA’s Affordability Test work together?

Open to all HR professionals – but not brokers and agents

Date & Time: Thursday, March 27 at Noon EDT

To register:

ObamaCare's Secret Mandate Exemption

Posted March 12, 2014 by Megan DiMartino

From The Wall Street Journal

HHS quietly repeals the individual purchase rule for two more years.

ObamaCare’s implementers continue to roam the battlefield and shoot their own wounded, and the latest casualty is the core of the Affordable Care Act—the individual mandate. To wit, last week the Administration quietly excused millions of people from the requirement to purchase health insurance or else pay a tax penalty.

This latest political reconstruction has received zero media notice, and the Health and Human Services Department didn’t think the details were worth discussing in a conference call, press materials or fact sheet. Instead, the mandate suspension was buried in an unrelated rule that was meant to preserve some health plans that don’t comply with ObamaCare benefit and redistribution mandates. Our sources only noticed the change this week.

That seven-page technical bulletin includes a paragraph and footnote that casually mention that a rule in a separate December 2013 bulletin would be extended for two more years, until 2016. Lo and behold, it turns out this second rule, which was supposed to last for only a year, allows Americans whose coverage was cancelled to opt out of the mandate altogether.

In 2013, HHS decided that ObamaCare’s wave of policy terminations qualified as a “hardship” that entitled people to a special type of coverage designed for people under age 30 or a mandate exemption. HHS originally defined and reserved hardship exemptions for the truly down and out such as battered women, the evicted and bankrupts.

But amid the post-rollout political backlash, last week the agency created a new category: Now all you need to do is fill out a form attesting that your plan was cancelled and that you “believe that the plan options available in the ObamaCare Marketplace in your area are more expensive than your cancelled health insurance policy” or “you consider other available policies unaffordable.”

This lax standard—no formula or hard test beyond a person’s belief—at least ostensibly requires proof such as an insurer termination notice. But people can also qualify for hardships for the unspecified nonreason that “you experienced another hardship in obtaining health insurance,” which only requires “documentation if possible.” And yet another waiver is available to those who say they are merely unable to afford coverage, regardless of their prior insurance. In a word, these shifting legal benchmarks offer an exemption to everyone who conceivably wants one.

Keep in mind that the White House argued at the Supreme Court that the individual mandate to buy insurance was indispensable to the law’s success, and President Obama continues to say he’d veto the bipartisan bills that would delay or repeal it. So why are ObamaCare liberals silently gutting their own creation now?

The answers are the implementation fiasco and politics. HHS revealed Tuesday that only 940,000 people signed up for an ObamaCare plan in February, bringing the total to about 4.2 million, well below the original 5.7 million projection. The predicted “surge” of young beneficiaries isn’t materializing even as the end-of-March deadline approaches, and enrollment decelerated in February.

Meanwhile, a McKinsey & Company survey reports that a mere 27% of people joining the exchanges were previously uninsured through February. The survey also found that about half of people who shopped for a plan but did not enroll said premiums were too expensive, even though 80% of this group qualify for subsidies. Some substantial share of the people ObamaCare is supposed to help say it is a bad financial value. You might even call it a hardship.

HHS is also trying to pre-empt the inevitable political blowback from the nasty 2015 tax surprise of fining the uninsured for being uninsured, which could help reopen ObamaCare if voters elect a Republican Senate this November. Keeping its mandate waiver secret for now is an attempt get past November and in the meantime sign up as many people as possible for government-subsidized health care. Our sources in the insurance industry are worried the regulatory loophole sets a mandate non-enforcement precedent, and they’re probably right. The longer it is not enforced, the less likely any President will enforce it.

The larger point is that there have been so many unilateral executive waivers and delays that ObamaCare must be unrecognizable to its drafters, to the extent they ever knew what the law contained.

Popular PPACA and Benefits Blogs

Posted March 4, 2014 by Megan DiMartino

The last few months have seen continued implementation of various elements of the Affordable Care Act in addition to rulings by courts and governing bodies throughout the land. Staying abreast of these updates as well their impact on businesses is essential, and here at AP Benefit Advisors we make it our business to do so. Here are a few of our most popular and recent blogs on these topics:

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