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CBIZ Matrix & Health Reform Bulletin 40 ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts & What Are Essential Benefits?
 

CBIZ Matrix & Health Reform Bulletin 40 ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts & What Are Essential Benefits?

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CBIZ HEALTH REFORM MATRIX...

CBIZ HEALTH REFORM MATRIX
A TOOL FOR UNDERSTANDING THE IMPACT OF HEALTH CARE REFORM
Patient Protection and Affordable Care Act (Public Law 111-148, Enacted March 23, 2010) and the
Health Care and Education Reconciliation Act (Public Law 111-152, enacted March 30, 2010)

For more information, visit http://www.cbiz.com/benefits/

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CBIZ Matrix & Health Reform Bulletin 40 ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts & What Are Essential Benefits? CBIZ Matrix & Health Reform Bulletin 40 ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts & What Are Essential Benefits? Presentation Transcript

  • CBIZ HEALTH REFORM MATRIX A TOOL FOR UNDERSTANDING THE IMPACT OF HEALTH CARE REFORMPatient Protection and Affordable Care Act (Public Law 111-148, Enacted March 23, 2010) and the Health Care and Education Reconciliation Act (Public Law 111-152, enacted March 30, 2010)
  • The following health reform provisions matrix is divided into six categories:EMPLOYER/PLAN SPONSOR ISSUES ......................................................................................................................................... 2REPORTING AND DISCLOSURE ISSUES ................................................................................................................................... 15TAX ISSUES ............................................................................................................................................................................... 23INSURANCE ISSUES .................................................................................................................................................................. 31INDIVIDUAL RESPONSIBILITY ................................................................................................................................................... 41MEDICARE ISSUES .................................................................................................................................................................... 45© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 1
  • EMPLOYER/PLAN SPONSOR ISSUES ALSO SEE REPORTING AND DISCLOSURE ISSUES, TAX ISSUES & INSURANCE ISSUES© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 2
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply rules apply for determining 2010 Health Reform Bulletin to both insured and self-funded plans employer sizeTemporary Early Retiree Reinsurance Program. The Early Retiree All-sized employers Program began Early Retiree ReinsuranceReinsurance Program (ERRP) began June 1, 2010, and is designed to 6/1/10 Program (5/5/10)encourage employers to establish or maintain health coverage for their Early Retiree Subsidy – Initialearly retirees (aged 55-64), and their eligible spouses and dependents. Application Date is ApproachingThe purpose of the program is to provide reimbursement of certain (6/11/10)expenses to plan sponsors of group health plans that provide retiree Early Retiree Reinsurancecoverage. Program Application ProcessApplication Process. To be eligible to participate in the program, an Opened (6/29/10)application must be filed with HHS. HHS will only accept applications Update: Early Retiree Reinsurancesubmitted on its official application form. Program (9/1/10)Reimbursement Process Once a plan’s application has been approved Early Retiree Reimbursement(certified), the ERRP reimburses up to 80% of the cost of benefits in Program Updates (10/5/10)excess of $15k and below $90k. The reimbursement must be used tolower plan costs, or to reduce participant premiums, copayments, Grandfathered Status and ERRPdeductibles, coinsurance, or other out-of-pocket expenses. Updates (04/04/11)Notification Requirement. Certified plans must provide notice to all ACA Updates: CLASS Actplan participants, including covered family members, explaining that Suspended, Increase in ERRPthe plan has been approved to receive ERRP reimbursement, and that Cost Thresholds and Amounts,the resulting reimbursement monies may impact the participant’s and What Are Essential Benefits?coverage under the plan. (10/17/11)Application Deadline. In April 2011, HHS announced that the $5Bfunding allocated to ERRP is running out; and thus, applications mustbe submitted no later than 5:00 PM (ET) on May 5, 2011. Noapplications for ERRP will be accepted after May 5, 2011.The ERRP application, model notice, FAQs and additional information isavailable via its website: http://www.errp.gov.The Program expires January 1, 2014.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 3
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Impact Provision Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply rules apply for determining 2010 Health Reform Bulletin to both insured and self-funded plans employer sizeExtension of Dependent Coverage All-sized employers Plan years beginning Health Reform’s Coverage for Group health plans that provide dependent coverage must on or after 9/23/10 Dependent Children Explained continue to make such coverage available to an adult child up to (5/10/10) age 26. Grandfathered Health Plan For this purpose, a “dependent” includes a biological child, a step Rules (6/17/10) child, an adopted child or a foster child. Coverage must be New Model Notices Issued available without regard to the child’s marital status, or whether (7/12/10) the child can be claimed as a dependent. Older-aged dependents cannot be subject to a surcharge, premium Agencies Issue PPACA penalty, or any other plan differential, unless the differential is Clarifications (10/12/10) imposed on all dependents under the plan. An insurer is allowed to Agencies Issue Additional PPACA charge a differential for tiers of coverage (self, self + one, self + Clarifications (12/23/10) two, etc.). An older-aged dependent’s enrollment must be effective as of the first day of the first plan year beginning on or after 9/23/10.Important Notes:The extension of dependent coverage does not apply to HIPAA-exemptprograms, limited scope dental and vision plans, and stand alone retiree-onlyplans.Grandfathered Plan Exception: Older-aged dependent coverage must beavailable to an adult child up to age 26, unless he/she has access to otheremployer-provided coverage; this exception expires for plan years beginning onor after January 1, 2014.Ban on Preexisting Condition Exclusions. Group health plans, including All-sized employers Plan years beginning Patient’s Bill of Rights (6/23/10)grandfathered plans, are prohibited from imposing preexisting on or after 9/23/10condition exclusions on enrollees under 19. Plan exclusions can still beimposed; however, the imposition of a new exclusion may cause a planto lose grandfathered status. Beginning 1/1/14, preexisting conditionexclusions cannot be imposed on anyone.(N/A to HIPAA-exempt programs, limited scope dental and vision plans, andstand alone retiree-only plans.)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 4
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply rules apply for determining 2010 Health Reform Bulletin To both insured and self-funded plans employer sizeBan on Rescissions. Group health plans, including grandfathered plans, All-sized employers Plan years beginning Patient’s Bill of Rights (6/23/10)cannot rescind such plan or coverage once an enrollee is covered on or after 9/23/10 Agencies Issue PPACAunder the plan, except in the event of fraud or intentional Clarifications (10/12/10)misrepresentation of material fact. Cancellation can be retroactive forthe failure to pay premium. Plans must provide 30 days advancewritten notice to each participant who would be affected beforecoverage may be rescinded.(N/A to HIPAA-exempt programs, limited scope dental and vision plans, andstand alone retiree-only plans.)Ban on Annual and Lifetime Limits. Group health plans, including All-sized employers Plan years beginning Patient’s Bill of Rights (6/23/10)grandfathered plans, are prohibited from establishing lifetime limits on or after 9/23/10 New Model Notices Issuedand unreasonable annual limits on the dollar value of “essential (7/12/10)benefits” (to be defined by regulations) for a participant or beneficiary. Mini-Med Plan Relief fromPlans are allowed to impose limits on non-essential benefits. A change Annual Limit Restriction Offeredin annual or lifetime limits can cause a plan to lose grandfathered (9/21/10)status. Relief for Stand-Alone HealthSpecial Enrollment Period A special enrollment opportunity must be Reimbursementmade available to individuals whose coverage has dropped due to Arrangements (8/23/11)reaching the plan’s lifetime limit. The impacted individual must beallowed to enroll in any of the benefit packages offered by the Update: Mini-Med Planemployer, as long as the eligibility criteria are met. The enrollment Waivers (6/22/11)period must be for a minimum of 30 days. ACA Updates: CLASS ActMini-Med Plan Waivers. Mini-med plans in existence prior to 9/23/10 Suspended, Increase in ERRPmay apply for a waiver of the annual limits. The waivers will not be Cost Thresholds and Amounts,allowed after 1/2/14. The waiver is only granted for one plan year at a and What Are Essentialtime and plans must request a waiver for each subsequent plan year. Benefits? (10/17/11) (N/A to HIPAA-exempt programs, limited scope dental and vision plans, andstand alone retiree-only plans.)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 5
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply rules apply for determining 2010 Health Reform Bulletin to both insured and self-funded plans employer sizeCoverage for Preventive Health Services. Group health plans must All-sized employers Plan years beginning Preventive Health Servicesprovide coverage for certain maternal and preventive health services, on or after 9/23/10 (7/15/10)as well as evidence-based items or services recommended by the U.S. (N/A to grandfathered plans, Preventive Care CoveragePreventive Services Task Force, the Advisory Committee on HIPAA-exempt programs, limited Expanded to Include Women’sImmunization Practices as adopted by the Director of the CDCP and scope dental and vision plans, and stand alone retiree-only plans.) Health Services (8/3/11)guidelines supported by the HRSA, without imposing any cost sharingrequirements when the services are delivered by in-network providers.Independent Claims and Appeals, and External Review Process. All-sized employers Plan years beginning Internal Claims and Appeals,Insured and self-funded group health plans must provide for an internal (N/A to grandfathered plans) on or after 9/23/10 and External Review Processclaim and appeals process, as well as an external review process, for Note: Enforcement (7/26/10)coverage determinations and claims. delayed in certain Federal External Claims Review: aspects of these rules Interim Procedures and Model – see Delay in Claims Notices (8/30/10) and Appeals Agencies Issue PPACA Enforcement Clarifications (10/12/10) Delay in Claims and Appeals Enforcement (3/22/11) Modifications to Claims and Appeals, and External Review Processes (7/11/11)Salary-based Discrimination Rules Applicable to Insured Group Health All-sized employers Plan years beginning Salary-based DiscriminationPlans. Insured group health plans must comply with the on or after 9/23/10; Rules Applicable to Fully Insurednondiscrimination rules (IRC §105(h)) currently applicable to self- (N/A to grandfathered plans, However, IRS Notice Group Health Plans (8/24/10)funded plans. Plans cannot discriminate in favor of highly HIPAA-exempt programs, limited 2011-01 delays the Agencies Issue PPACAcompensated individuals as to eligibility and benefits. The scope dental and vision plans, and effective date of these Clarifications (10/12/10)consequence of a discriminatory insured plan is an excise tax equaling stand alone retiree-only plans.) rules; no penalties will Implementation of Salary-based$100 a day, per affected employee, with a maximum penalty of be imposed until after Discrimination Rules$500,000. implementing Delayed (12/23/10) regulations are issued.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 6
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply rules apply for determining 2010 Health Reform Bulletin to both insured and self-funded plans employer sizeChoice of Primary Care Provider. If a group health plan requires All-sized employers Plan years beginning Patients Bill of Rights (6/23/10)designation of a primary care provider (PCP), a participant must be on or after 9/23/10 New Model Notices Issuedallowed to designate a participating in-network PCP, who is available to (7/12/10)accept him/her. A pediatrician can be designated as a child’s PCP.(N/A to grandfathered plans, HIPAA-exempt programs, limited scope dentaland vision plans, and stand alone retiree-only plans.)Direct Access to OB/GYN Services. Group health plans must provide All-sized employers Plan years beginning Patients Bill of Rights (6/23/10)direct access to OB/GYN providers, without prior authorization or a on or after 9/23/10 New Model Notices Issuedreferral from the individual’s primary care physician. Plans may require (7/12/10)the OB/GYN provider to agree or adhere to the plan’s policies andprocedures relating to referrals, obtaining prior authorization, andproviding services, pursuant to a treatment plan.(N/A to grandfathered plans, HIPAA-exempt programs, limited scope dentaland vision plans, and stand alone retiree-only plans.)Access to Emergency Room Services. Group health plans that provide All-sized employers Plan years beginning Patients Bill of Rights (6/23/10)coverage for hospital emergency room services must also cover on or after 9/23/10emergency services without prior authorization, even if the emergencyservices are provided on an out-of-network basis. Plans cannot imposelimitations on coverage or greater cost sharing requirements for out-of-network emergency services than those that apply to in-networkservices.(N/A to grandfathered plans, HIPAA-exempt programs, limited scope dentaland vision plans, and stand alone retiree-only plans)60-day Advanced Notice of Material Modification of Benefits. A notice All-sized employers Effective 3/23/10, but Agencies Issue Additional PPACAof any material modification of benefits must be provided to plan plans not obligated to Clarifications (12/23/10)participants no later than 60 days prior to the effective date of the comply untilchange. implementingNote: In addition to this requirement, plans subject to ERISA, presumably, will regulations are issuedhave to continue complying with all existing ERISA disclosure requirements; by HHS/DOL/IRSthis may be clarified in future regulations. Plans exempt from ERISA aresubject to this new requirement. (N/A to HIPAA-exempt programs, limitedscope dental and vision plans, and stand alone retiree-only plans.)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 7
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2011 Health Reform Bulletin employer sizeOTC Medications Are Not Qualified Expenses. FSAs, HRAs, Archer MSAs, Individuals 1/1/11 Over-the-Counter Medicationand HSAs can no longer reimburse the cost of over-the-counter (OTC) Prohibition Clarified (9/7/10)medications, except for insulin or prescribed OTC medications. Debit Limited Relief for Debit Cardcards for FSAs and HRAs can only be used for prescribed OTC Purchases of OTCmedications, if certain conditions met. Medications (1/10/11)Medical Loss Ratio. Insurers in the individual and group markets, Plans in the large group, small 1/1/11including grandfathered plans, are required to provide an annual group and individual markets,rebate to each enrollee if the ratio of the amount of premium revenue including grandfathered plans.expended on costs related to reimbursement for clinical services and These restrictions do not applyactivities that improve health care quality versus the total amount of to self-insured plans.premium revenue is less than: 85% for insurers in the large group market 80% for insurers in the small group or individual marketsBeginning January 1, 2014 the rebate amount will be based onaverages for each of the previous 3 years for the plan.Simple Cafeteria Plans. An eligible small employer can establish a Employers with 100 or fewer Plan years beginning Simple Cafeteria Plans (9/1/10)simple cafeteria plan that includes a safe harbor from the employees on or after 1/1/11nondiscrimination requirements applicable to cafeteria plans andcertain qualified benefits. These simple cafeteria plans must meet thefollowing requirements:1. Eligible Employer. To be eligible to sponsor a simple cafeteria plan, the employer must have employed an average of 100 or fewer employees on business days during either of the 2 preceding years.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 8
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2011 Health Reform Bulletin employer sizeSimple Cafeteria Plans continued2. Minimum eligibility and participation requirements. All employees who had at least 1,000 hours of service for the preceding plan year are eligible to participate in the plan and may, subject to terms and conditions applicable to all participants, elect any benefit available under the plan.3. Contribution requirement. The employer is required, without regard to whether a qualified employee makes any salary reduction contribution, to make a contribution to provide qualified benefits under the plan, on behalf of each qualified employee.CLASS Act: Voluntary, Self-Funded Long-Term Insurance Program. HHS All-sized employers This provision has ACA Updates: CLASS Actwill establish a voluntary long term care insurance program for been suspended Suspended, Increase in ERRPpurchasing community living assistance services and supports (CLASS Cost Thresholds and Amounts,program). and What Are EssentialAn individual would be required to contribute to the program for 5 years Benefits? (10/17/11)(vesting period) before benefits (up to $50/day cash benefit) areavailable. The payments can be used to purchase non-medical servicesand support necessary to maintain community residence, including,home modifications, assistive technology, accessible transportation,homemaker services, respite care, personal assistance services, homecare aides, and nursing support.The program is financed entirely through voluntary payroll deductions.All working adults will be automatically enrolled in the program, unlessthey choose to opt-out. Employers can voluntarily choose to provideenrollment tools and process the premiums for the program.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 9
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2012 Health Reform Bulletin employer sizeUniform Summary of Plan Benefits and Coverage. Plans must provide All-sized employers 3/23/12 Proposals on Exchanges,applicants and enrollees an additional disclosure document, explaining (or, 12 months after Premium Assistance and Uniformcertain aspects of the health benefit coverage. The document must model forms issued) Benefit Summary (8/18/11)meet uniform standards, such as format, appearance, language, andcontent.Note: In addition to this requirement, plans subject to ERISA, presumably, willhave to continue complying with all existing ERISA disclosure requirements; thismay be clarified in future regulations. Plans exempt from ERISA will be subjectto this new requirement.Patient-Centered Outcomes Research Fee. Group health plans must pay Insurers of fully-insured plans Plan years beginninga fee of $2 ($1 for policy years ending during fiscal year 2013) and All-sized employers of 9/30/12multiplied by the average number of lives covered under the policy. The self-funded plansfee must be paid by insurers of fully-insured plans, and employers ofself-funded plans. The fees will be used to measure patient-centeredoutcomes. Effective Date 2013FSA Cap. The maximum amount of salary contributions to a flexible All-sized employers with FSA 1/1/13medical spending account is capped at $2,500. planRetiree Prescription Drug Coverage. An employer’s deduction for retiree All-sized employer sponsored 1/1/13prescription drug expenses is reduced by the amount of the Medicare health plans claimingPart D tax-free subsidy. Medicare Part D retiree drug subsidyAutomatic Enrollment in Health Plan. Employers who offer their Employers with 200+ full-time Notice due 3/1/13employees enrollment in one or more health benefit plans, are required employees Requirement forto automatically enroll new full-time employees in one of the plans automaticallyoffered, subject to any waiting period. enrolling is to be clarified.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 10
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Health Reform Unless otherwise noted, these provisions apply to rules apply for determining 2014 Bulletin both insured and self-funded plans employer sizeShared Responsibility for Employers regarding Health Coverage. A (tax) Employers with 50+ full- 1/1/14penalty could be imposed against employers who: time equivalent employees Fail to Offer Coverage to full-time employees; or (FTEE). Offer coverage to employees qualified for premium tax credits or A FTEE is determined by cost-sharing reductions. dividing the aggregate number of hours workedReporting Requirement. Employers subject to the penalty for by part-time employees innoncompliance are required to file an IRS return and furnish a month by 120. Theinformation statements to employees. The return and information number of FTEEs isstatement must include: reduced by 30 and part-1. Identifying information of the employer and covered employees; time employees are not2. Certification as to whether the employer offers minimum essential counted for penalty coverage; assessment purposes.3. Length of any waiting period;4. The months during the calendar year for which coverage was available;5. The monthly premium for the lowest cost option in each enrollment category;6. The employer’s share of the total costs of benefits, and7. The number of full-time employees.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 11
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2014 Health Reform Bulletin employer sizeFree Choice Vouchers. Employers who offer minimum essential All-sized employers This provision has Repeal of 1099 and Vouchercoverage to employees and pay any portion of the cost would have been repealed. (4/19/11)been required to provide free choice vouchers to certain qualifyingemployees (those exempt from the individual mandate, but do notqualify for premium subsidies).Ban on Discriminatory Premium Rates. Group health plans may only Employers with 100 or fewer Plan years beginningvary premium rates based upon: employees. on or after 1/1/14 Individual or family coverage; May be applicable to large The rating area; employer plans (100+ employees) offered through Age (rates can’t vary by more than 3 to 1); and Exchange. Tobacco use (rates can’t vary by more than 1.5 to 1).Ban on Excessive Waiting Periods. Group health plans cannot require All-sized employers Plan years beginningenrollment waiting periods in excess 90 days. on or after 1/1/14© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 12
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2014 Health Reform Bulletin employer sizeBan on Discrimination Based on Health Status. Group health plans and All-sized employers Plan years beginninginsurers are prohibited from imposing discriminatory eligibility rules on or after 1/1/14based on any of the following health status-related factors, relating tothe covered individual or his/her dependent: Health status; Medical condition (including both physical and mental illnesses); Claims experience; Receipt of health care; Medical history; Genetic information; Evidence of insurability (including conditions arising out of acts of domestic violence). Disability; or Any other health status-related factor determined discriminatory by HHS.Reward for Participation in Wellness Program. The reward under a All-sized employers Plan years beginningstandard-based wellness program can be up to 30% (currently 20%) of on or after 1/1/14the cost of coverage (this amount could increase up to 50%, if deemedappropriate by the Agencies). Wellness premium discounts will notcause loss of grandfathered status.Coverage for Individuals Participating in Approved Clinical Trials. All-sized employers Plan years beginningIndividual and group health plans cannot deny individual participation on or after 1/1/14in approved clinical trials and must cover routine costs in approvedclinical trials. Insurers are not required to cover: The investigational item, device or service; Items and services that are provided solely to satisfy data collection and analysis needs that are not used in the direct clinical management of the patient; or A service that is clearly inconsistent with widely accepted and established standards of care for a particular diagnosis.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 13
  • EMPLOYER/PLAN SPONSOR ISSUES (also see Reporting and Disclosure, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2018 Health Reform Bulletin employer sizeExcise Tax on High Cost Employer-Sponsored Health Coverage. A 40% All-sized employers 1/1/18excise tax will be imposed on the value of high cost employersponsored health coverage (“Cadillac” health plans) exceeding certainthreshold limits ($10,200/individual; $27,500/family) [indexed]. Theemployer calculates the excise tax and provides it to the insurer orthird party administrator, who then pays the tax.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 14
  • REPORTING AND DISCLOSURE ISSUES ALSO SEE EMPLOYER/PLAN SPONSOR ISSUES, TAX ISSUES & INSURANCE ISSUES© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 15
  • REPORTING AND DISCLOSURE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer sizeNotice of Special Enrollment: Extension of Dependent Coverage to Age All-sized employers Plan years beginning Health Reform’s Coverage for26. Dependents who age off a group health plan must be given a on or after 9/23/10 Dependent Children Explainedspecial enrollment opportunity of 30 days. The 30-day enrollment (5/10/10)opportunity must be provided to: Grandfathered Health Plan Dependents who were not eligible when the parent first became Rules (6/17/10) covered under the plan; New Model Notices Issued Dependents who have lost eligibility; and (7/12/10) Dependents currently on COBRA, due to loss of eligibility. Agencies Issue PPACADependent children who become newly eligible by virtue of this law Clarifications (10/12/10)must be given a special enrollment opportunity to enroll in any of the Agencies Issue Additionalbenefit packages offered by the employer. PPACA ClarificationsNotice Requirement. A written notice explaining the special enrollment (12/23/10)opportunity, and the 30-day enrollment period, must be provided nolater than the first day of the first plan year beginning on or after9/23/10. The notice must include a statement that children whosecoverage ended, or who were denied coverage (or were not eligible forcoverage), because the availability of dependent coverage of childrenended before attainment of age 26 are eligible to enroll in the plan orcoverage.The notice may be provided to an employee on behalf of theemployee’s child. In addition, the notice may be included with otherenrollment materials that a plan distributes to employees, provided thestatement is prominent. Enrollment must be effective as of the firstday of the first plan year beginning on or after 9/23/10.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 16
  • REPORTING AND DISCLOSURE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer sizeDependent Coverage (Continued)Important Notes: The extension of dependent coverage does not apply to HIPAA-exempt programs, limited scope dental and vision plans, and stand alone retiree- only plans Grandfathered Plan Exception: Older-aged dependent coverage must be available to an adult child up to age 26, unless he/she has access to other employer-provided coverage; this exception expires for plan years beginning on or after January 1, 2014.Notice of Rescission of Coverage. Individual and group health plans, All-sized employers Plan years beginning Patient’s Bill of Rightsincluding grandfathered plans, must provide 30 day-advanced written on or after 9/23/10 (6/23/10)notice of a rescission of coverage to each affected individual, prior to Agencies Issue PPACArescinding coverage. Clarifications (10/12/10)Lifetime Limit Notifications. Group health plans must provide written All-sized employers Plan years beginning Patient’s Bill of Rightsnotice to individuals when the lifetime limit on the dollar value of all on or after 9/23/10 (6/23/10)benefits is no longer applicable and that an individual, if covered, is New Model Notices Issuedonce again eligible for benefits under the plan. (7/12/10)Special Enrollment Period. For those individuals whose coverage has Mini-Med Plan Relief fromdropped due to reaching the plan’s lifetime limit, a special enrollment Annual Limit Restriction Offeredopportunity must be made available. The individual must be given (9/21/10)notice of the enrollment opportunity. The notice may be included withother enrollment materials as long as the statement is prominent. Thenotice and enrollment opportunity must be provided beginning no laterthan the first day of the first plan year beginning on or after 9/23/10and coverage must take effect no later than the first day of the firstplan year beginning on or after 9/23/10.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 17
  • REPORTING AND DISCLOSURE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer sizeNotice of Grandfathered Health Plan Status. All grandfathered health Grandfathered plans, whether No later than the first Grandfathered Health Plansplans, whether insured or self-funded, are required to provide a Notice insured or self-funded day of the first plan Rules (6/16/10)to covered individuals of the plan’s grandfathered status. The Notice year beginning on or New Model Notices Issuedmay be included in any plan materials provided to participants and after 9/23/10 (7/12/10)beneficiaries and must include the plan’s contact information for Agencies Issue PPACAquestions and complaints. Clarifications (10/12/10) Grandfathered Status & ERRP Update (04/04/11)Notice of Choice of Primary Care Provider. if a group health plan All-sized employers Plan years beginning Patients Bill of Rightsrequires designation of a primary care provider (PCP), a participant on or after 9/23/10 (6/23/10)must be allowed to designate a participating in-network PCP, who is New Model Notices Issuedavailable to accept him/her. A pediatrician can be designated as a (7/12/10)child’s PCP.(N/A to grandfathered plans, HIPAA-exempt programs, limited scope dentaland vision plans, and stand alone retiree-only plans.)Notice of Right to Direct Access to OB/GYN Services. Group health All-sized employers Plan years beginning Patients Bill of Rightsplans must provide direct access to OB/GYN providers, without prior on or after 9/23/10 (6/23/10)authorization or a referral from the individual’s primary care physician. New Model Notices IssuedPlans may require the OB/GYN provider to agree or adhere to the (7/12/10)plan’s policies and procedures relating to referrals, obtaining priorauthorization, and providing services, pursuant to a treatment plan.(N/A to grandfathered plans, HIPAA-exempt programs, limited scope dentaland vision plans, and stand alone retiree-only plans.)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 18
  • REPORTING AND DISCLOSURE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer size60-day Advanced Notice of Material Modification of Benefits. A notice All-sized employers Effective 3/23/10, but Agencies Issue Additionalof any material modification of benefits must be provided to plan plans not obligated to PPACA Clarificationsparticipants no later than 60 days prior to the effective date of the comply until (12/23/10)change. implementingNote: In addition to this requirement, plans subject to ERISA, presumably, will regulations are issuedhave to continue complying with all existing ERISA disclosure requirements; by HHS/DOL/IRSthis may be clarified in future regulations. Plans exempt from ERISA aresubject to this new requirement.N/A to HIPAA-exempt programs, limited scope dental and vision plans, andstand alone retiree-only plans.Notice of Participation in Early Retiree Reimbursement Program. Group Group health plans that are Immediately after the Early Retiree Reinsurancehealth plans participating in the ERRP and have received certification, participating in the ERRP, first reimbursement is Program (5/5/10)must provide notice to all plan participants, including covered family whether insured or self-funded received, but it may be Early Retiree Subsidy – Initialmembers, explaining that the plan has been approved to receive ERRP provided in advance Application Date is Approachingreimbursement, and that the resulting reimbursement monies may (6/11/10)impact the participant’s coverage under the plan. The notice may be Early Retiree Reinsurancehand delivered to the participant, as long as it is addressed to all Program Application Processfamily members. Employees may be provided with the notice Opened (6/29/10)electronically; however, a statement that the employee is responsiblefor providing the notice to covered family members should be included Update: Early Retireewith the notice. The ERRP model notice and additional information is Reinsurance Program (9/1/10)available via its website: http://www.errp.gov. Early Retiree Reimbursement Program Updates (10/5/10)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 19
  • REPORTING AND DISCLOSURE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer sizeIndependent Claims and Appeals, and External Review Process. As part Non-grandfathered group Plan years beginning Internal Claims and Appeals,of the requirements applicable to independent claims and appeals, health plans and plans that on or after 9/23/10 and External Review Processand external review process, the plan or insurer must provide lose grandfathered status. (7/26/10)claimants with the following document(s), in writing, to the affected These rules apply to ERISA Federal External Claims Review: Note: Enforcementindividual(s): plans and non-ERISA plans, Interim Procedures and Model delayed in certain Notice of Adverse Benefit Determination such as governmental plans Notices (8/30/10) aspects of these rules and church plans. Notice of Final Internal Adverse Benefit Determination – see Delay in Claims Agencies Issue PPACA Notice of Final External Review Decision. and Appeals Clarifications (10/12/10) Enforcement Delay in Claims and AppealsThere are specific content and timeframes for providing these notices,depending on whether the issue relates to an urgent care or life- Enforcement (3/22/11)threatening matter, or whether it relates to a non-urgent matter. In Modifications to Claims andaddition, there are specific methods of distribution of the various Appeals, and External Reviewnotices in urgent and non-urgent instances. Processes (7/11/11)In addition to these notice requirements, plans subject to ERISA mustto continue to comply with all existing ERISA claims and appealdisclosure requirements. Effective Date 2011New Form W-2 Reporting Rules. Employers are required to disclose the All-sized employers required to Beginning 2011 See “IRS Pronouncements” inaggregate cost of any employer-sponsored health insurance coverage file a Form W-2. Tax Year; however, Agencies Issue Additionalon the Form W-2, including both the employer’s and employee’s share. N/A to Self-funded plans exempt the reporting is PPACA ClarificationsPlans excluded include LTC plans; on-site medical clinics; stand-alone, from federal COBRA; government- voluntary for the (12/23/10)non-integrated dental or vision plans; contributions to HSAs, Archer sponsored plans maintained for 2011 plan year. military members and their IRS Issues Interim Guidance onMSA, HRAs, or salary reduction contributions to FSA; or multiemployer Employers issuing W-2 Reporting (3/30/11)plans. The aggregate cost can be calculated in one of several ways: families; or Federally-recognized Indian tribal government plans. fewer than 250the insurance premium method, the COBRA method, or, a modified Form W-2s perCOBRA method. year are exempt until 2013© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 20
  • REPORTING AND DISCLOSURE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2012 Health Reform Bulletin employer sizeExpanded 1099 Reporting Requirements. Businesses that pay $600 or All-sized employers This provision has Expanded 1099 Reportingmore for goods and/or services to a single payee, whether a been repealed. Requirements for 2012 and Callcorporation or otherwise, would have been required to file an for Public Comment (8/3/10)informational return reporting the payments. Repeal of 1099 and Voucher (4/19/11)Uniform Summary of Plan Benefits and Coverage. Plans must provide All-sized employers 3/23/12 (or, 12 Proposals on Exchanges,applicants and enrollees an additional disclosure document, explaining months after model Premium Assistance andcertain aspects of the health benefit coverage. The document must forms issued) Uniform Benefitmeet uniform standards, such as format, appearance, language, and Summary (8/18/11)content.Note: In addition to this requirement, plans subject to ERISA, presumably, willhave to continue complying with all existing ERISA disclosure requirements;this may be clarified in future regulations. Plans exempt from ERISA will besubject to this new requirement.Quality of Care Reporting Requirement. Plans and insurers are All-sized employers 3/23/12required to submit a quality of care report to HHS. The type ofinformation included in the report are details about coverage benefits,health care provider reimbursement structures, any improvement ofhealth outcomes, and implementation of any wellness or preventionactivities. Effective Date 2013Notice of Exchange Coverage. Employers are required to provide each All-sized employers 3/1/13employee at the time of hiring, as well as current employees, a writtennotice informing the employee of the existence of an Exchange,including a description of the services provided by such Exchange, andthe manner in which the employee may contact the Exchange torequest assistance.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 21
  • REPORTING AND DISCLOSURE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2014 Health Reform Bulletin employer sizeEmployer Health Insurance Reporting Requirement. Reports to IRS. Employers with 50+ full-time 1/1/14Employers must satisfy an IRS reporting requirement relating to its employeeshealth insurance coverage as to access, eligibility, waiting periods,costs, number of employees, and other coverage details.Reporting Requirement. Employers subject to the penalty fornoncompliance are required to file an IRS return and furnishinformation statements to employees. The return and informationstatement must include: 1. Identifying information for the employer and covered employees; 2. Certification as to whether the employer offers minimum essential coverage; 3. Length of any waiting period; 4. The months during the calendar year for which coverage was available; 5. The monthly premium for the lowest cost option in each enrollment category; 6. The employer’s share of the total costs of benefits, and 7. The number of full-time employees.Benefit Statements to Employees. The employees listed in the IRSreport, above, must be furnished a written statement relating toinformation contained in the employer’s report, applicable to theemployee.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 22
  • TAX ISSUES ALSO SEE EMPLOYER/PLAN SPONSOR ISSUES, REPORTING AND DISCLOSURE ISSUES & INSURANCE ISSUES© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 23
  • TAX ISSUES (also see Employer/Plan Sponsor Issues, Reporting and Disclosure Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer sizeSmall Business Tax Credit. Small businesses and tax-exempt Employers who employ 25 1/1/10 The Small Business Health Careemployers that provide health care coverage to their employees or fewer full-time Special credit carry Tax Credit (5/20/10)under a qualified health care arrangement are entitled to a credit for employees and pay back rules apply Additional Guidelines to thetaxable years beginning 1/1/10. To be eligible, the business must: average annual wages 1/1/11 Small Business Tax Credit1. Employ 25 or fewer full-time equivalent employees ("FTEs") for between a maximum of (12/22/10) the tax year; $25,000 (10 or fewer employees) and $50,0002. Pay average annual wages of less than $50,000 per employee; (25 or fewer employees). and Employers who employ 253. Maintain a “qualifying arrangement”, i.e., employer pays or more employees could premiums for each employee enrolled in health insurance qualify for the credit if coverage offered by the employer in an amount equal to a some of its employees uniform percentage (minimum 50%) of the premium cost of the work part-time. coverage. Credit is only available for insured plans; it is not available for self-funded plans, including employer contributions to FSAs, HRAs, HSAs, or other similar account-based plans.Eligible tax exempt employers receive a credit of 25%. After 2013,the credit increases to 50% for employers (35% for tax exempt)purchasing coverage through an insurance exchange, subject to a 2consecutive-year limit.The entire amount of premiums can be claimed as a credit byemployers with 10 or fewer employees whose annual wages are$25,000 or less.Increase of Adoption Credit. Increase of the maximum amount of Individuals 1/1/10qualified adoption expenses eligible for tax credit from $12,170 Sunset Date: 12/31/11(indexed for 2010) to $13,170 (indexed for inflation). The credit isfully refundable in year claimed.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 24
  • TAX ISSUES (also see Employer/Plan Sponsor Issues, Reporting and Disclosure Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer sizeAdult Dependent Children Coverage. The cost of employer-provided All-sized employers 3/30/10 IRS Guidance: Tax-Favoredhealth coverage of dependent children under the age of 27 (as of the Status of Dependent Coverageend of the tax year) is excluded from employee’s gross income, and is (4/28/10)not included in employment taxes. Self-employed individuals may State Tax Treatment of Older-deduct premiums paid on dependent coverage. The exclusion of aged Dependent Coveragehealth expenses from the employee’s taxable income extends to (12/16/10)reimbursements and premiums paid by employers.Economic Substance Doctrine. The economic substance judicial All-sized employers Transactions entereddoctrine has been codified. Transactions are treated as having into after 3/30/10economic substance, and therefore, respected for tax purposes, onlyif the transaction results in a meaningful change to a taxpayer’seconomic position, and the taxpayer has a substantial purpose forentering into the transaction (apart from Federal income tax effects).Significant penalties apply to transactions that fail theserequirements.Excise Tax on Indoor Tanning Services. A 10% tax is imposed on the Individuals 7/1/10cost of indoor tanning services. Effective Date 2011Increased Penalty for Nonqualified HSA or Archer MSA Distributions. Individuals 1/1/11Penalties on nonqualified HSA distributions increase from 10% to20%. The penalty for nonqualified distributions from Archer MSAsincreases from 15% to 20%.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 25
  • TAX ISSUES (also see Employer/Plan Sponsor Issues, Reporting and Disclosure Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2011 Health Reform Bulletin employer sizeNew Form W-2 Reporting Rules. Employers are required to disclose All-sized employers required to Beginning 2011 Tax See “IRS Pronouncements” inthe aggregate cost of any employer-sponsored health insurance file a Form W-2 Year; however, the Agencies Issue Additional PPACAcoverage on the Form W-2, including both the employer’s and reporting is voluntary for Clarifications (12/23/10)employee’s share. Plans excluded include LTC plans; on-site medical N/A to Self-funded plans exempt the 2011 plan year. IRS Issues Interim Guidance onclinics; stand-alone, non-integrated dental or vision plans; from federal COBRA; government- W-2 Reporting (3/30/11)contributions to HSAs, Archer MSA, HRAs, or salary reduction sponsored plans maintained for Employers issuing fewercontributions to FSA; or multiemployer plans. The aggregate cost military members and their than 250 Form W-2s per families; or Federally-recognizedcan be calculated in one of several ways: the insurance premium Indian tribal government plans. year are exempt untilmethod, the COBRA method, or, a modified COBRA method. 2013 Effective Date 2012Expanded 1099 Reporting Requirements. Businesses that pay $600 All-sized employers This provision has been Expanded 1099 Reportingor more for goods and/or services to a single payee, whether a repealed. Requirements for 2012 and Callcorporation or otherwise, will have to file an informational return for Public Comment (8/3/10)reporting the payments. Certain business purchases made with Repeal of 1099 and Vouchercredit or debit cards are exempted from the reporting requirement. (4/19/11) Effective Date 2013FSA Cap. The maximum amount of salary contributions to a flexible All-sized employer sponsored 1/1/13medical spending account is capped at $2,500. FSA plans© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 26
  • TAX ISSUES (also see Employer/Plan Sponsor Issues, Reporting and Disclosure Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2013 Health Reform Bulletin employer sizeIncreased Medicare (Hospital Insurance) Tax on High-Income Individuals with wages of 1/1/13Individuals. The Medicare portion of an individual’s FICA tax is $250,000 (married filingincreased (by 0.9%), from 1.45% to 2.35%, to the extent an jointly), $200,000 (single), orindividual’s wages exceed $250,000 for married filing jointly, $125,000 (married filing$200,000 for single taxpayers, or $125,000 for married filing separately)separately. Employer must withhold on all wages >$200,000 Employee liable regardless of employer withholding Counted for estimated tax paymentsUnearned Income Medicare Contribution. A Medicare tax is imposed Individuals with net investment 1/1/13on high income individuals, equal to 3.8% of the lesser of an income and modified AGI ofindividual’s: $250,000 (married filing “Net investment income” (capital gains, interest, dividends, jointly), $200,000 (single), or annuities, rent and gross income from passive activities); or $125,000 (married filing separately) Modified AGI in excess of $250,000 for married filing jointly, $200,000 for single taxpayers, or $125,000 for married filing separately. No employer withholding requirement Counted for estimated tax payments Net investment income excludes income from a qualified retirement plan and amounts subject to self-employment taxes.Retiree Prescription Drug Coverage. An employers deduction for All-sized employer sponsored 1/1/13retiree prescription drug expenses is reduced by the amount of the health plans claiming MedicareMedicare Part D tax-free subsidy. Part D retiree drug subsidy© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 27
  • TAX ISSUES (also see Employer/Plan Sponsor Issues, Reporting and Disclosure Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2013 Health Reform Bulletin employer sizeModification of Itemized Deduction for Medical Expenses. The Individuals 1/1/13threshold for deductibility of unreimbursed medical expenses isincreased from 7.5% to 10% of AGI. The 7.5% threshold is retainedthrough 2016 for individuals who are at least 65 years old by yearend. Effective Date 2014Shared Responsibility for Employers for Health Coverage. Covered Employers with 50+ full-time 1/1/14employers may be subject to monthly nondeductible penalties: equivalent employees (FTEE). For failure to offer minimum essential coverage (including, in an A FTEE is determined by employer-sponsored plan, employer payment of at least 60% of dividing the aggregate number the benefit costs) at an affordable rate (employee’s contribution, of hours worked by part-time including salary reduction amounts, cannot exceed 9.5% of employees in a month by 120. household income): The number of FTEEs is Monthly Penalty in 2014: (Number of full-time employees – 30) reduced by 30 and part-time x 166.67. After 2014 the amount of the penalty is indexed for employees are not counted for inflation. penalty assessment purposes. Offering minimum essential coverage at an affordable rate, but at least one full time employee is eligible for or receives a premium tax credit or cost sharing assistance for buying insurance from a State exchange plan. Monthly Penalty in 2014: Number of credit employees x $250 (subject to cap in the amount described in the first penalty, above). After 2014, the amount of the penalty is indexed for inflation.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 28
  • TAX ISSUES (also see Employer/Plan Sponsor Issues, Reporting and Disclosure Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2014 Health Reform Bulletin employer sizeFree Choice Vouchers. Employers who offer minimum essential All “qualifying employers” 1/1/14coverage to employees and pay any portion of the cost must providefree choice vouchers to certain qualifying employees (those exemptfrom the individual mandate, but do not qualify for premiumsubsidies). Qualified employees include any employee:1. Whose required contribution for minimum essential coverage is between 8 and 9.8% of household income;2. Whose household income does not exceed 400% of the FPL; and3. Who does not participate in the employer’s health plan.The amount of the voucher includes what the employer would havepaid to cover the employee in its plan. The employer pays theseamounts to the Exchange plan in which the employee is enrolled. Theentire cost of the voucher is deductible by the employer. Any excessover the cost of the premium for coverage through the Exchange ispaid to the employee as taxable compensation.Premium Assistance Tax Credit. Taxpayers with family income of Individuals with family income 1/1/14 Proposals on Exchanges,400% of the federal poverty level (FPL) or less, and whose employers at or below 400% of the Premium Assistance andfail to offer minimum essential coverage at an affordable rate (see Federal Poverty Level Uniform Benefit Summaryabove), are entitled to a tax credit for coverage purchased through a (8/18/11)State exchange. The amount of the credit is based upon premiumcost and family income, but starts at the amount by which premiumsexceed 2% of family income if the income is at or below 100% of FPL.At 400% of FPL the credit is the amount by which premiums exceed9.5% of income. The credit is refundable, payable in advance, andremitted directly to the insurer.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 29
  • TAX ISSUES (also see Employer/Plan Sponsor Issues, Reporting and Disclosure Issues & Insurance Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2018 Health Reform Bulletin employer sizeExcise Tax on High Cost Employer-Sponsored Health Coverage. A All-sized employers 1/1/1840% excise tax will be imposed on the amount paid for high costemployer-sponsored health insurance coverage exceeding certainthreshold levels ($10,200/individuals; $27,500/family)[indexed].The tax is imposed on health insurance issuers, plan administrators(for self-insured plans), or employers making contributions (HSAsand MSAs). The tax is calculated using overall cost of insurance,including premium costs and employer/employee contributions, butexcludes stand-alone dental and vision plan coverage.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 30
  • INSURANCE ISSUES (ALSO SEE EMPLOYER/PLAN SPONSOR ISSUES, TAX ISSUES & INDIVIDUAL RESPONSIBILITY)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 31
  • INSURANCE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility) Provision Impact Note: The IRC control Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans group rules apply for 2010 Health Reform Bulletin determining employer sizeExtension of Dependent Coverage Individual and Group Plans Plan years beginning Health Reform’s Coverage for Health plans that provide dependent coverage must continue to on or after 9/23/10 Dependent Children Explained make such coverage available to an adult child up to age 26. The extension of dependent (5/10/10) coverage does not apply to For this purpose, a “dependent” includes a biological child, a step Grandfathered Health Plan Rules HIPAA-exempt programs, child, an adopted child or a foster child. Coverage must be available limited scope dental and (6/17/10) without regard to the child’s marital status, or whether the child can vision plans, and stand New Model Notices Issued be claimed as a dependent. alone retiree-only plans. (7/12/10) Older-aged dependents cannot be subject to a surcharge, premium Grandfathered Plan Agencies Issue PPACA penalty, or any other plan differential, unless the differential is Exception: Older-aged Clarifications (10/12/10) imposed on all dependents under the plan. An insurer is allowed to dependent coverage must Agencies Issue Additional PPACA charge a differential for tiers of coverage (self, self + one, self + two, be available to an adult Clarifications (12/23/10) etc.). child up to age 26, unless he/she has access to other An older-aged dependent’s enrollment must be effective as of the employer-provided first day of the first plan year beginning on or after 9/23/10. coverage; this exception expires for plan years beginning on or after January 1, 2014Coverage for Preventive Health Services. Health plans must provide Individual and Group Plans Plan years beginning Preventive Health Servicescoverage for certain maternal and preventive health services, as well as (N/A to grandfathered plans, on or after 9/23/10 (7/15/10)evidence-based items or services recommended by the U.S. Preventive HIPAA-exempt programs, limited Preventive Care CoverageServices Task Force, the Advisory Committee on Immunization Practices scope dental and vision plans, Expanded to Include Women’sas adopted by the Director of the CDCP and guidelines supported by the and stand alone retiree-only Health Services (8/3/11)HRSA, without imposing any cost sharing requirements when the services plans.)are delivered by in-network providers.Choice of Primary Care Provider. If a health plan requires designation of a Individual and Group plans Plan years beginning Patients Bill of Rights (6/23/10)primary care provider (PCP), a participant must be allowed to designate a (N/A to grandfathered plans, on or after 9/23/10 New Model Notices Issuedparticipating in-network PCP, who is available to accept him/her. A HIPAA-exempt programs, limited scope dental and vision plans, (7/12/10)pediatrician can be designated as a child’s PCP. and stand alone retiree-only plans.)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 32
  • INSURANCE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility) Provision Impact Note: The IRC control Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans group rules apply for 2010 Health Reform Bulletin determining employer sizeDirect Access to OB/GYN Services. Health plans must provide direct Individual and Group plans Plan years beginning Patients Bill of Rights (6/23/10)access to OB/GYN providers, without prior authorization or a referral from (N/A to grandfathered plans, on or after 9/23/10 New Model Notices Issuedthe individual’s primary care physician. Plans may require the OB/GYN HIPAA-exempt programs, limited (7/12/10)provider to agree or adhere to the plan’s policies and procedures relating scope dental and vision plans,to referrals, obtaining prior authorization, and providing services, and stand alone retiree-onlypursuant to a treatment plan. plans.)Access to Emergency Room Services. Health plans that provide coverage Individual and Group plans Plan years beginning Patients Bill of Rights (6/23/10)for hospital emergency room services must also cover emergency (N/A to grandfathered plans, on or after 9/23/10services without prior authorization, even if the emergency services are HIPAA-exempt programs, limitedprovided on an out-of-network basis. Plans cannot impose limitations on scope dental and vision plans,coverage or greater cost sharing requirements for out-of-network and stand alone retiree-onlyemergency services than those that apply to in-network services. plans.)Ban on Annual and Lifetime Limits. Health plans, including grandfathered Individual and Group Plans Plan years beginning Patient’s Bill of Rights (6/23/10)plans, are prohibited from establishing lifetime limits and unreasonable (N/A to HIPAA-exempt on or after 9/23/10 New Model Notices Issuedannual limits on the dollar value of “essential benefits” (to be defined by programs, limited scope dental (7/12/10)regulations) for a participant or beneficiary. Plans are allowed to impose and vision plans, and standlimits on non-essential benefits. A change in annual or lifetime limits can alone retiree-only plans.) Mini-Med Plan Relief from Annualcause a plan to lose grandfathered status. Limit Restriction Offered (9/21/10)Special Enrollment Period. A special enrollment opportunity must bemade available to individuals whose coverage has dropped due to Relief for Stand-Alone Healthreaching the plan’s lifetime limit. The impacted individual must be Reimbursementallowed to enroll in any of the benefit packages offered by the employer, Arrangements (8/23/11)as long as the eligibility criteria are met. The enrollment period must be Update: Mini-Med Planfor a minimum of 30 days. Waivers (6/22/11) ACA Updates: CLASS Act Suspended, Increase in ERRP Cost Thresholds and Amounts, and What Are Essential Benefits? (10/17/11)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 33
  • INSURANCE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer sizeLifetime Limits (continued) Mini-Med Plan Waivers. Mini-med plans in existence prior to 9/23/10may apply for a waiver of the annual limits. The waivers will not beallowed after 1/2/14. The waiver is only granted for one plan year at atime and plans must request a waiver for each subsequent plan year.Ban on Rescissions. Health plans, including grandfathered group plans, Individual and Group Plans Plan years beginning on Patient’s Bill of Rightscannot rescind such plan or coverage once an enrollee is covered under (N/A to HIPAA-exempt programs, or after 9/23/10 (6/23/10)the plan, except in the event of fraud or intentional misrepresentation of limited scope dental and vision Agencies Issue PPACAmaterial fact. Cancellation can be retroactive for the failure to pay plans, and stand alone retiree-only Clarifications (10/12/10)premium. Plans must provide 30 days advance written notice to each plans)participant who would be affected before coverage may be rescinded.Ban on Preexisting Condition Exclusions. Health plans, including Individual and Group Plans Plan years beginning on Patient’s Bill of Rightsgrandfathered plans, are prohibited from imposing preexisting condition (N/A to HIPAA-exempt programs, or after 9/23/10 (6/23/10)exclusions on enrollees under 19. Plan exclusions can still be imposed; limited scope dental and visionhowever, the imposition of a new exclusion may cause a plan to lose plans, and stand alone retiree-onlygrandfathered status. plans.)Beginning 1/1/14, preexisting condition exclusions cannot be imposedon anyone.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 34
  • INSURANCE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2011 Health Reform Bulletin employer sizeMedical Loss Ratio. Insurers in the individual and group markets, Plans in the large group, small 1/1/11including grandfathered plans, are required to provide an annual rebate group and individual markets,to each enrollee if the ratio of the amount of premium revenue expended including grandfathered plans.on costs related to reimbursement for clinical services and activities that These restrictions do not applyimprove health care quality versus the total amount of premium revenue to self-insured plans.is less than: 85% for insurers in the large group market 80% for insurers in the small group or individual marketsBeginning January 1, 2014 the rebate amount will be based on averagesfor each of the previous 3 years for the plan.CLASS Act: Voluntary, Self-Funded Long-Term Insurance Program. HHS All-sized employers This provision has been ACA Updates: CLASS Actwill establish a voluntary long term care insurance program for suspended Suspended, Increase inpurchasing community living assistance services and supports (CLASS ERRP Cost Thresholds andprogram). Amounts, and What AreAn individual would be required to contribute to the program for 5 years Essential Benefits?(vesting period) before benefits (up to $50/day cash benefit) are (10/17/11)available. The payments can be used to purchase non-medical servicesand support necessary to maintain community residence, including,home modifications, assistive technology, accessible transportation,homemaker services, respite care, personal assistance services, homecare aides, and nursing support.The program is financed entirely through voluntary payroll deductions. Allworking adults will be automatically enrolled in the program, unless theychoose to opt-out. Employers can voluntarily choose to provideenrollment tools and process the premiums for the program.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 35
  • INSURANCE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2012 Health Reform Bulletin employer sizePatient-Centered Outcomes Research Fee. Insurers must pay a fee of $2 Insurers of fully-insured plans Plan years ending after($1 for policy years ending during fiscal year 2013) multiplied by the and Employers of self-funded 9/30/12average number of lives covered under the policy. The fee must be paid plans.by insurers of fully-insured plans and employers of self-funded plans. Thefees will be used to measure patient-centered outcomes. Effective Date 2014Rating Restrictions. Insurers in the individual and small group markets Insurers in the Individual Plan years beginning onmay only vary premium rates based upon: and Small Group (<100 or after 1/1/141. Individual or family coverage; lives) Markets2. The rating area; Insurers in the Large Group Market (100+ lives), if the3. Age (rates can’t vary by more than 3 to 1); and State allows Large Group4. Tobacco use (rates can’t vary by more than 1.5 to 1). coverage through theIf a State offers large group coverage through the Exchange, insurers in Exchange.the large group market are also required to comply with the rating These restrictions N/A torestrictions. self-insured plans.Coverage for Individuals Participating in Approved Clinical Trials. Individual and Group Plans Plan years beginning onIndividual and group health plans cannot deny individual participation in (N/A to HIPAA-exempt programs, or after 1/1/14approved clinical trials and must cover routine costs in approved clinical limited scope dental and visiontrials. Insurers are not required to cover: plans, and stand alone retiree-only The investigational item, device or service; plans.) Items and services that are provided solely to satisfy data collection and analysis needs that are not used in the direct clinical management of the patient; or A service that is clearly inconsistent with widely accepted and established standards of care for a particular diagnosis.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 36
  • INSURANCE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2014 Health Reform Bulletin employer sizeBan on Excessive Waiting Periods. Individual and group health plans Individual and Group Plans Plan years beginning oncannot require enrollment waiting periods in excess 90 days. (N/A to HIPAA-exempt programs, or after 1/1/14 limited scope dental and vision plans, and stand alone retiree-only plans.)Ban on Discrimination Based on Health Status. Insurers are prohibited Individual and Group Plans Plan years beginning onfrom imposing discriminatory eligibility rules based on any of the following or after 1/1/14health status-related factors, relating to the covered individual or his/herdependent: Health status; Medical condition (including both physical and mental illnesses); Claims experience; Receipt of health care; Medical history; Genetic information; Evidence of insurability (including conditions arising out of acts of domestic violence). Disability; or Any other health status-related factor determined discriminatory by HHS.Health Insurance Exchange. Health Insurance Exchanges will be Insurers in the Individual 1/1/14 for Individual Proposals on Exchanges,established by the individual states to facilitate the purchase of qualified and Small Group Markets and Small Group Plans Premium Assistance andhealth plans by individuals and assist small employers in facilitating the Uniform Benefit Summary Beginning in 2017, Largeenrollment of their employees (SHOP Exchange). A state may choose to (8/18/11) Groups may be allowed to 2017 for Large Groupcombine the Individual and HSOP Exchanges if the Exchange has participate in the Exchange Plansadequate resources.Limited Scope dental benefit plans may be offered through the Exchangeif the plan provides pediatric dental benefits.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 37
  • INSURANCE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2014 Health Reform Bulletin employer sizeHealth Insurance Exchange, (continued)Participating Insurer RequirementsPlans seeking to participate in the Exchange are required to submitjustification for any premium increases to the Exchange prior toimplementing the change and prominently post the information on theirwebsites.Plans are required to provide information in a timely manner to individualsregarding the amount of cost-sharing under the plan or coverage theindividual would be responsible for paying with respect to the furnishing ofa specific item or service by a participating provider. Plans are required tomake this information available on their websites.Plans are also required to disclose the following information in plainlanguage: 1. Claims payment policies and practices; 2. Periodic financial disclosures; 3. Data on enrollment; 4. Data on disenrollment; 5. Data on the number of claims that are denied; 6. Data on rating practices; 7. Information on cost-sharing and payments with respect to any out-of network coverage; and 8. Information on enrollee and participant rightsRating Requirements Individual Market: Insurers are required to consider all enrollees in all health plans (other than grandfathered health plans) offered in the individual market, including those who do not enroll in individual plans through the Exchange to be members of a single risk pool.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 38
  • INSURANCE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2014 Health Reform Bulletin employer sizeHealth Insurance Exchange, (continued) Small Group Market: Insurers are required to consider all enrollees in all health plans (other than grandfathered health plans) offered in the small group market, including those who do not enroll in small group plans through the Exchange to be members of a single risk pool.Beginning in 2017, individual States may allow large groups to participatein the Exchange. Insurers are not required to offer large group plansthrough the Exchange.Employer Size Defined Small Employers: Those with at least 1 but not more than 100 employees. Large Employers: Those with at least 101 employees. For plan years starting before 1/1/16, States may elect to define Small Employers as one with 1-50 employees; Large Employers as one with 51+ employees.Insurers are allowed to offer plans to qualified individuals and qualifiedemployers outside of the Exchange. Effective Date 2016Health Care Choice Compacts. Insurers are permitted to sell insurance in Individual plans 1/1/16states participating in health care choice compacts, provided the insureris licensed in each state in which it offers the plan under the compact.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 39
  • INSURANCE ISSUES (also see Employer/Plan Sponsor Issues, Tax Issues and Individual Responsibility) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2018 Health Reform Bulletin employer sizeExcise Tax on High Cost Employer-Sponsored Health Coverage. A 40% Employer sponsored group 1/1/18excise tax will be imposed on the value of high cost employer sponsored health planshealth coverage (“Cadillac” health plans) exceeding certain thresholdlimits ($10,200/individual; $27,500/family) [indexed]. The employercalculates the excise tax and provides to the insurer or third partyadministrator, who then pays the tax.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 40
  • INDIVIDUAL RESPONSIBILITY (ALSO SEE TAX ISSUES, INSURANCE ISSUES & MEDICARE ISSUES)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 41
  • INDIVIDUAL RESPONSIBILITY (also see Tax Issues, insurance Issues and Medicare Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer sizeTemporary High Risk Pool. HHS established a Pre-existing Condition Individuals 6/21/10 Pre-existing ConditionInsurance Plan (“PCIP”) to assist individuals who have been denied Insurance Plan (“PCIP”)insurance coverage due to a preexisting condition. Generally, to be (8/19/10)eligible for the pool, the individual must:1. Be a US citizen;2. Be a resident of the State that falls within the service area of a PCIP;3. Not been covered under creditable coverage (generally defined as most individual or group health plan coverage) during the 6- month period, prior to the date on which the individual is applying for PCIP coverage; and4. Have a pre-existing condition.The HHS website provides an in-depth overview of what PCIPs areavailable to individuals, including details relating to eligibility, federaland state-run programs, benefits and premium rates, and FAQs.Sunset date. The PCIP program is scheduled to sunset on January 1,2014. Effective Date 2011OTC Medications Are Not Qualified Expenses. FSAs, HRAs, Archer Individuals 1/1/11 Over-the-Counter MedicationMSAs, and HSAs can no longer reimburse the cost of over-the-counter Prohibition Clarified (9/7/10)(OTC) medications, except for insulin or prescribed OTC medications. Limited Relief for Debit CardDebit cards for FSAs and HRAs can only be used for prescribed OTC Purchases of OTCmedications, if certain conditions met. Medications (1/10/11)© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 42
  • INDIVIDUAL RESPONSIBILITY (also see Tax Issues, insurance Issues and Medicare Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2011 Health Reform Bulletin employer sizeIncreased Penalty for Nonqualified HSA or Archer MSA Distributions. Individuals 1/1/11Penalties on nonqualified HSA distributions increase from 10% to20%. The penalty for nonqualified distributions from Archer MSAsincreases from 15% to 20%. Effective Date 2013FSA Cap. The maximum amount of salary contributions to a flexible Individuals participating in an 1/1/13medical spending account is capped at $2,500. employer-sponsored FSA planIncreased Medicare (Hospital Insurance) Tax on High-Income Individuals with wages of 1/1/13Individuals. The Medicare portion of an individual’s FICA tax is $250,000 (married filingincreased (by 0.9%), from 1.45% to 2.35%, to the extent an jointly), $200,000 (single), orindividual’s wages exceed $250,000 for married filing jointly, $125,000 (married filing$200,000 for single taxpayers, or $125,000 for married filing separately)separately. Employer must withhold on all wages >$200,000 Employee liable regardless of employer withholding Counted for estimated tax paymentsUnearned Income Medicare Contribution. A Medicare tax is imposed Individuals with net investment 1/1/13on high income individuals equal to 3.8% of the lesser of an income and modified AGI ofindividual’s (1) “net investment income” (capital gains, interest, $250,000 (married filingdividends, annuities, rent and gross income from passive activities) or jointly), $200,000 (single), or(2) modified adjusted gross income in excess of $250,000 for $125,000 (married filingmarried filing jointly, $200,000 for single taxpayers, or $125,000 for separately)married filing separately. No employer withholding requirement Counted for estimated tax payments Net investment income excludes income from a qualified retirement plan and amounts subject to self-employment taxes.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 43
  • INDIVIDUAL RESPONSIBILITY (also see Tax Issues, insurance Issues and Medicare Issues) Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2013 Health Reform Bulletin employer sizeModification of Itemized Deduction for Medical Expenses. The Individuals 1/1/13threshold for deductibility of unreimbursed medical expenses isincreased from 7.5% to 10% of AGI. The 7.5% threshold is retainedthrough 2016 for individuals who are at least 65 years old by yearend. Effective Date 2014Individual Mandate. Individuals are required to maintain minimum All U.S. citizens, nationals and 1/1/14essential health coverage for themselves and their dependents. lawfully present aliens, exceptOptions for Coverage: individuals meeting certain religious or immigration Individuals with household income <133% of FPL may be eligible exemptions, and incarcerated for minimum essential coverage through Medicaid. individuals. Individuals who are between 134%-400% of FPL may be eligible Exceptions: for premium assistance or cost sharing possibilities. Members of Indian Tribes; Individuals with household income <400% of FPL would be entitled to a Free Choice Voucher, if their employer offers Individuals with short coverage with a cost of between 8% to 9.5% of the individual’s coverage gaps; household income and the individual does not participate in the Individuals suffering a employer’s plan. See Employer/Plan Sponsor chart for details hardship; about the Free Choice Voucher. Individuals with household modified AGI below the filing threshold.Exchange Subsidy. Qualified taxpayers who get health insurance Taxpayers whose income 1/1/14coverage by enrolling in a qualified health plan are eligible for a equals or exceeds 100% butrefundable tax credit. does not exceed 400% of the FPL for the size of family involved.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 44
  • MEDICARE ISSUES© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 45
  • MEDICARE ISSUES Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2010 Health Reform Bulletin employer sizeMedicare Coverage Gap Discount Program – Coverage Gap Rebate Medicare Part D Enrollees 3/23/10for 2010. Retirees who enter the coverage gap or “donut hole” willreceive a one-time $250 rebate from the Medicare Prescription DrugAccount no later than the 15th day of the third month following theend of the quarter when they enter the “donut” hole. Effective Date 2011Medicare Coverage Gap Discount Program. In order to have their Medicare Part D Enrollees 1/1/11drugs covered by Medicare Part D, pharmaceutical manufacturersmust provide a 50% discount off the negotiated price for brand namedrugs under plan formularies for beneficiaries who enter the coveragegap. Beneficiaries would be eligible for the discount if they don’tqualify for low-income subsidies, do not have employer-sponsoredcoverage, or do not pay higher, income-related Medicare premiumsunder Parts B or D. Effective Date 2013Increased Medicare (Hospital Insurance) Tax on High-Income Individuals with wages of 1/1/13Individuals. The Medicare portion of an individual’s FICA tax is $250,000 (married filingincreased (by 0.9%), from 1.45% to 2.35%, to the extent an jointly), $200,000 (single), orindividual’s wages exceed $250,000 for married filing jointly, $125,000 (married filing$200,000 for single taxpayers, or $125,000 for married filing separately)separately. Employer must withhold on all wages >$200,000 Employee liable regardless of employer withholding Counted for estimated tax payments© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 46
  • MEDICARE ISSUES Provision Impact Note: The IRC control group Effective Date Related CBIZ Unless otherwise noted, these provisions apply to both insured and self-funded plans rules apply for determining 2013 Health Reform Bulletin employer sizeUnearned Income Medicare Contribution. A Medicare tax is imposed Individuals with net investment 1/1/13on high income individuals, equal to 3.8% of the lesser of an income and modified AGI ofindividual’s: $250,000 (married filing “Net investment income” (capital gains, interest, dividends, jointly), $200,000 (single), or annuities, rent and gross income from passive activities); or $125,000 (married filing separately) Modified AGI in excess of $250,000 for married filing jointly, $200,000 for single taxpayers, or $125,000 for married filing separately. No employer withholding requirement Counted for estimated tax payments Net investment income excludes income from a qualified retirement plan and amounts subject to self-employment taxes.The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. Theinformation contained herein is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace orsubstitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is providedas-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of anychanges in laws or other factors that could affect the information contained herein. As required by U.S. Treasury rules, we inform you that, unless expressly statedotherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penaltiesthat may be imposed by the Internal Revenue Service.© Copyright 2011 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. 10/18/2011 47