What employers need to know ppaca 9 26-12

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  • 1. Requirements and Applicability
  • 2. Apply to Apply to Apply to Apply to Apply to Apply to Large Small Very Small Additional Fully Self- Grand- Requirement Effective Date Employers Employers Employers Guidance Action Needed Comments Penalties Insured Funded fathered (>100 (50 - 100 (<50 Needed Plans Plans Plans employees) employees) employees) If receive rebate, must share prorata with Precise method participants; if no of determining rebate received, each Failure toMinimum for first year of participants distributeMedical Loss rebate only, share of rebate appropriately 7/12/2012 Yes Yes Yes Yes No Yes NoRatio (MLR) include notice is not may be aRebates with first plan prescribed; prohibited materials (e.g. must use transaction open enrollment "reasonable" materials) approach provided after 7/1/12 Insurer will provide for insured First open coverage andSummary of enrollment Prepare SBC and TPA likely will $1,000/ failureBenefits or plan year Yes Yes Yes Yes Yes Yes No distribute by due help with self- to provideCoverage after date funded, but 9/23/2012 plan sponsor ultimately responsible UpdateMaximum enrollment This is a longer Plan disqualifi-Health FSA First day of materials, verify time to amend cation (allContribution of 2013 plan Yes Yes Yes Yes Yes Yes No administration is than is usually benefits become$2,500 year updated, amend given taxable)(indexed) plan by 12/31/2014
  • 3. Apply to Apply to Apply to Apply to Apply to Apply to Large Small Very Small Additional Fully Self- Grand- Requirement Effective Date Employers Employers Employers Guidance Action Needed Comments Penalties Insured Funded fathered (>100 (50 - 100 (<50 Needed Plans Plans Plans employees) employees) employees) Ensure W-2 system has Report totalW-2 Reporting Yes, if needed data on valueof Value of issued 1/31/2013 No No Yes Yes Yes No value of GHP (employer + Likely $50/ W-2Group Health >250 W- coverage and can employeeBenefit 2s in 2011 correctly populate contributions) Box 12 Employee owes an additional 0.9% Medicare withholding if Update pay filing marriedAdditional FICA withholding to with combinedwithholding on collect additional wages Likely 20% ofemployees 1/1/2013 Yes Yes Yes Yes Yes Yes Yes 0.9% FICA for >$250,000 or amount under-share of wages employees filing single withheld> $200,000 earning > with wages > $200,000 $200,000. Employer responsibility limited as described Only affects employers receiving subsidy forLoss of First day of Consider subsidy providing Rx toDeductibility for 2013 tax Yes Yes Yes Yes Yes Yes No taxable income for retirees;Part D subsidy year 2013 and later change also likely impacts financial reporting
  • 4. Apply to Apply to Apply to Very Small Apply to Apply to Apply to Large Small Additional Employers Fully Self- Grand- Requirement Effective Date Employers Employers Guidance Action Needed Comments Penalties (<50 Insured Funded fathered (>100 (50 - 100 Needed employees Plans Plans Plans employees) employees) ) Exchange Create and send contact detailsNotice of notices re are not 3/1/2013 Yes Yes Yes Yes Yes Yes YesExchanges availability of available yet; exchanges model notices are expected Fee increases to $2/covered life for following year, then $2 (indexed)/ covered life; fee applies to Calculate fee plan/ policy ($1/covered life)Patient 7/31/2013 years ending and pay on IRSCentered for plan after Form 720 if self-Outcomes/ years 9/30/2012 Yes Yes Yes Yes Yes Yes Yes funded; insurerComparative ending through calculates andEffectiveness 10/1/12 - plan/policy pays for insuredFee Due 12/31/12 years ending plans but likely on or before will pass fee along 9/30/2019; fee is due by 7/31 of the calendar following the plan year; applies to retiree only plans Yes (unlessOpen state has If eligible, decideenrollment chosen a whether to 10/1/2013 No Yes Yes No Yes Yesbegins for 50- participate inexchanges employee exchange/SHOP threshold
  • 5. Apply to Apply to Apply to Very Small Apply to Apply to Apply to Large Small Additional Employers Fully Self- Grand- Requirement Effective Date Employers Employers Guidance Action Needed Comments Penalties (<50 Insured Funded fathered (>100 (50 - 100 Needed employees Plans Plans Plans employees) employees) ) Guidance wasReport to HHS due prior toand participants Report as required HHS will TBD Yes Yes Yes Yes Yes No Yes 3/23/12, buton quality of once rules set determine none has beencare issued yet $100/ discrimin- TBD for ated-against Determine insured employee if No if whether meet plans; insured; loss ofNondiscrimin- insured, discrimination existing tax preferenceation Yes Yes Yes Yes Yes yes if Yes requirements and requiremen for undulyrequirements self- make needed t for self- benefited highly funded adjustments if do funded compensated not plans individual if self- funded Auto-enroll employees who do Unclear if will not affirmatively use sameAutomatic 2014 or Yes (if > enroll in or decline definition of No No Yes Yes Yes Yesenrollment later 200 EEs) coverage, most employee as likely in lowest will for "play or cost plan, once pay" rules are set
  • 6. Apply to Apply to Apply to Very Small Apply to Apply to Apply to Large Small Additional Employers Fully Self- Grand- Requirement Effective Date Employers Employers Guidance Action Needed Comments Penalties (<50 Insured Funded fathered (>100 (50 - 100 Needed employees Plans Plans Plans employees) employees) ) If no coverage is Employer to offered, penalty pay a penalty is # of FT EEs - for each FT 30 EEs x (30+ $166.67/ mo; if hours/week) EE coverage is Begin to consider who is not offered but itsEmployer whether to play or offered unaffordable orshared pay (i.e., offer coverage that 1/1/2014 Yes Yes No Yes Yes Yes Yes below minimumresponsibility compliant meets essential,("play or pay") coverage or pay minimum penalty is the penalty) essential (60%) $250/mo. for level & is each FT EE who affordable gets a premium (<9.5% of credit or cost household share through income) an exchange Not Yes (unless available If eligible, begin to Exchanges/ state until at consider whether SHOP will restricts toExchanges/ least to provide provide online 1/1/2014 employers Yes Yes No Yes YesSHOP 2017; coverage inside or resource to with 50 or state by outside of elect health fewer state exchange/SHOP coverage lives) decisionElimination of Determine ifAnnual Dollar First day of current plan Up to $100/Limits on 2014 plan Yes Yes Yes Yes Yes Yes Yes design complies; if affectedEssential year not, revise participant/ dayBenefits plan/policyElimination of Determine ifPre-Ex Limits for First day of current plan Up to $100/adults (as well 2014 plan Yes Yes Yes Yes Yes Yes No design complies; if affectedas children year not, revise participant/ dayunder age 19) plan/policy
  • 7. Apply to Apply to Apply to Very Small Apply to Apply to Apply to Large Small Additional Employers Fully Self- Grand- Requirement Effective Date Employers Employers Guidance Action Needed Comments Penalties (<50 Insured Funded fathered (>100 (50 - 100 Needed employees Plans Plans Plans employees) employees) ) Agencies have not yet determined if Determine if first of monthWaiting period First day of Up to $100/ current eligibility after 90 days iscannot exceed 2014 plan Yes Yes Yes Yes Yes Yes Yes affected rules comply; if permissible,90 days year participant/ day not, revise how to address those who move between PT and FT, etc. Determine ifNo Minimal First day of current plan Up to $100/discrimination change from 2014 plan Yes Yes Yes Yes Yes No Yes design complies; if affectedbased on health current HIPAA year not, revise participant/ daystatus rules plan/policy Maximum deductible of Determine if $2,000 forLimits on cost- First day of current plan Up to $100/ single andsharing and 2014 plan Yes Yes Yes Yes Yes No Yes design complies; if affected $4,000 family;deductibles year not, revise participant/ day maximum OOP plan/policy based on HDHP limits Determine ifMandated First day of current plan Up to $100/coverage of 2014 plan Yes Yes Yes Yes Yes No Yes design complies; if affectedclinical trials year not, revise participant/ day plan/policy
  • 8. Apply to Apply to Apply to Very Small Apply to Apply to Apply to Large Small Additional Employers Fully Self- Grand- Requirement Effective Date Employers Employers Guidance Action Needed Comments Penalties (<50 Insured Funded fathered (>100 (50 - 100 Needed employees Plans Plans Plans employees) employees) ) Agencies have authority to increase If have permissible HIPAA/PPACA- reward to 50% compliant of cost of First day ofWellness wellness program, coverage; 2014 plan Yes Yes Yes Yes Yes N/A Yes N/AIncentives may increase compliance year incentive to 30% with of cost of single HIPAA/PPACA coverage does not guarantee compliance with ADA These are the 10 listed Only for Only for Only for Yes If this applies, categories of First day of lifetime lifetimeEssential health lifetime & (varies determine if benefits; this is 2014 plan Yes Yes & annual & annual Yesbenefits applies annual by group offered coverage not the same year maximu maximu max. size) is adequate as "minimum ms ms essential benefits" Begins with coverageReport to IRS provided on orand participants after 1/1/14; Report as required Likely $50/on minimum 1/31/2015 Yes Yes Yes Yes Yes Yes Yes insurers likely once rules set employeeessential to becoverage responsible for reporting for insured plans
  • 9. Apply to Apply to Apply to Very Small Apply to Apply to Apply to Large Small Additional Employers Fully Self- Grand- Requirement Effective Date Employers Employers Guidance Action Needed Comments Penalties (<50 Insured Funded fathered (>100 (50 - 100 Needed employees Plans Plans Plans employees) employees) ) Begins with coverage provided on or after 1/1/14;Report to IRS IRS hasand participants Report as required requestedon coverage 1/31/2015 Yes Yes No Yes Yes Yes Yes once rules set comments onoffered by large combiningemployers minimum essential and large employer reporting Employer pays excise tax if total cost of medical benefits (EE and ER Determine if contributions current design combined) 40% non-Excise tax on falls below exceeds 1/1/2018 Yes Yes Yes Yes Yes Yes Yes deductiblehigh cost plans threshold; if not, $10,200 excise tax consider design (single) or changes $27,500 (family) [indexed]for medical, HRA and Section 125 (pre-tax & health FSA)
  • 10. ALREADY IN EFFECT Apply to Apply to Apply to Very Small Apply to Apply to Apply to Large Small Additional Employers Fully Self- Grand- Requirement Effective Date Employers Employers Guidance Action Needed Comments Penalties (<50 Insured Funded fathered (>100 (50 - 100 Needed employees Plans Plans Plans employees) employees) ) In 2014, grandfathered plans must Verify plan/SPD coverCover First day of has been dependent Up to $100/dependent to 2011 plan Yes Yes Yes Yes Yes Partly No amended and even if affectedage 26 year administration is dependent has participant/ day correct employer- provided coverage available Verify plan/SPDElimination of First day of has been Up to $100/Lifetime Dollar 2011 plan Yes Yes Yes Yes Yes Yes No amended and affectedLimit year administration is participant/ day correctRestriction on Verify plan/SPDAnnual Dollar First day of has been Up to $100/Limits on 2011 plan Yes Yes Yes Yes Yes Yes No amended and affectedEssential year administration is participant/ dayBenefits correct Verify plan/SPDElimination of First day of has been Up to $100/Pre-Ex Limits for 2011 plan Yes Yes Yes Yes Yes Yes No amended and affectedchildren under year administration is participant/ dayage 19 correct Generally may not terminate First day of Verify ineligible Up to $100/Limits on 2011 plan Yes Yes Yes Yes Yes Yes No administration is covered affectedRescissions year correct persons retro participant/ day to ineligibility date
  • 11. Apply to Apply to Apply to Very Small Apply to Apply to Apply to Large Small Additional Employers Fully Self- Grand- Requirement Effective Date Employers Employers Guidance Action Needed Comments Penalties (<50 Insured Funded fathered (>100 (50 - 100 Needed employees Plans Plans Plans employees) employees) ) HHS may Verify plan/SPD periodically Up to $100/First dollar First day of has been revise definition affectedcoverage for 2011 plan Yes Yes Yes Yes Yes No No amended and of preventive participant/Preventive Care year administration is care, such as they day correct have done with womens care Verify plan/SPD Up to $100/ First day of has beenEnhanced affected 2011 plan Yes Yes Yes Yes Yes No Yes amended andAppeals Rules participant/ year administration is day correctNo Verify plan/SPDreimbursement First day of has been Applies to FSAs,of OTC drugs 2011 plan Yes Yes Yes N/A N/A Yes No amended and HRAs and HSAsw/o a year administration isprescription correct Verify plan/SPD has been Up to $100/ First day of amended,Primary care affected 2011 plan Yes Yes Yes Yes Yes No No participantsphysician choice participant/ year advised and day administration is correct Verify plan/SPD has been Up to $100/OON First day of amended, affectedemergency care 2011 plan Yes Yes Yes Yes Yes No No participants participant/coverage year advised and day administration is correct
  • 12. Apply to Apply to Apply to Very Small Apply to Apply to Apply to Large Small Additional Employers Fully Self- Grand- Requirement Effective Date Employers Employers Guidance Action Needed Comments Penalties (<50 Insured Funded fathered (>100 (50 - 100 Needed employees Plans Plans Plans employees) employees) )Notes: ControlledUnder PPACA, group rulescutoff for a generally "Fully“small apply insured"employer" may when de- includesbe 50 or 100, termining HMOsdepending on employerprovision size This chart reflects UBAs understanding of the available guidance as of the date shown and is subject to change. It is provided as general information and should not be considered legal or tax advice. Damon H. Lee, Vice President Horizon Agency, Inc. 6500 City West Parkway Eden Prairie, MN 55344 damon@horizonagency.com 952-914-7187