Health Reform Checklist

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The following Health Reform Checklist is intended to guide you through the general compliance requirements of
t he Affordable Care Act (ACA) as you prepare now for 2015 and beyond.
In general, these items apply to all employers.

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Health Reform Checklist

  1. 1. The following Health Reform Checklist is intended to guide you through the general compliance requirements of the Affordable Care Act (ACA) as you prepare now for 2015 and beyond. In general, these items apply to all employers. Items marked with a ‘+’ only apply to employers with 50 or more Plan Design and Notice Requirements 1. Grandfathered Health Plans  Grandfathered Plans are exempt from certain market provisions of ACA. Review the triggers that would cause your plan to lose grandfathered status now and into 2015 to determine whether your plan still meets or will meet guidelines.  Make sure the Notice of your plan’s intent to remain grandfathered is included in all plan materials. 2. Annual Limits on Essential Health Benefits  Ensure your plan and plan documents have no annual limits for essential health benefits (EHBs) for plan years beginning on or after January 1, 2014. 8. 60-Day Advanced Notice of Benefit Changes 3. Review Waiting Periods for Health Plan Coverage  Review all waiting periods for enrollment to ensure they do not exceed 90 days (applicable to all health plans renewing or after January 1, 2014). Certain restrictions can apply, such as orientation period, 1200 hour require- ment or the lookback requirement.  Consider the impact on non-discrimination testing if you have different waiting periods for specific classes of employees. 4. Eliminate Pre-Existing Conditions Language  Ensure that any pre-existing conditions clauses have been removed from all health plans for 2014 plan years going forward. 6. Amend FSA Plan Documents  Consider whether to amend your FSA plan such that the- annual indexed account limit ($2,500 for 2014) will auto- matically adjust in conjunction with any IRS cost of living adjustment (you must track and modify your open enroll- ment materials).  If elections are mistakenly made that are over the $2,500 limit, the IRS has allowed for the additional funds to be included on the employee’s W-2 as taxable income for the year in which the plan ends.  Are an employee and spouse both enrolled in their employers’ health FSAs? If so, both may elect up to the $2,500 maximum. 7. Summary of Benefits and Coverage (SBC)  Ensure that all eligible new hires are provided SBC upon- initial enrollment into the health plan.  Ensure that SBCs are provided during open enrollment or at least 30 days before renewal of coverage. ® HealthReformChecklist Health Reform Checklist, Page 1 © Copyright 2014– CBIZ, Inc. NYSE listed: CBZ. All rights reserved.  Provide written notice of any material modification of plan terms or coverage that affects SBC content not reflected in the most recently provided SBC, and that occurs other than in connection with a renewal or reissuance of coverage. This notice must be provided to plan participants no later than 60 days prior to the effective date of the change. 9. Notice Of Public Marketplaces (Exchanges)  Ensure that notices are provided within 14 days of date of hire. This notice must be provided to all employees, without regard to whether they are eligible for coverage under the health plan. 10. Cost Sharing and Out-Of-Pocket Limits  For plan years beginning in 2014, the ACA imposes cost-share restrictions on essential health benefits provided by non- grandfathered group health plans. For 2014, the annual out-of-pocket limits applicable to both insured and self -funded plans offered through and outside the Marketplace are $6,350 for single coverage and $12,700 for coverage for more than one. In 2015, the out-of-pocket limits HHS has proposed will be $6,600 for self-only coverage and $13,200 for family coverage. 5. Wellness Program Incentives  For 2014 and beyond, there is an Increased limit in contingent (outcome-based or activity-based) incentives/ disincentives permitted in wellness programs from 20 to 30%; or up to 50% for tobacco-free programs.
  2. 2. Fees, Filings and Reporting for 2014 and Beyond 11. Patient-Centered Outcomes Research (PCOR) Fee  PCOR fees are paid once a year in connection with IRS Form 720, Quarterly Federal Excise Tax Return. Amount of fee: $1 per covered life for plan years ending after 9/30/12 and before 10/1/13. $2 per covered life (indexed) for plan years ending after 9/30/13 and before 10/1/14.  For insured plans, Form 720 is due by July 31st following the close of the policy year from the insurer, who includes the fee in premiums.  For self-funded plans, Form 720 is due by July 31st of the calendar year following the plan year end. 12. Transitional Reinsurance Fee  There is an annual fee beginning in 2014 through 2016, for all fully-insured and self-funded health plans.  Annual fee beginning in 2014 through 2016, imposed on all-sized fully-insured and self-funded group health plans. Fee based on covered lives, payable by the insurer for fully- insured plans or plan sponsor for self-funded plans. For 2014, the contribution rate is $5.25 per covered life per month, or approximately $63, annually. For 2015, the fee to be collected is $44 per covered life.  15. Health Insurance Provider Fees (Imposed on Insurers)  An annual fee imposed on “covered entities” such as insurers covering U.S. health risks. Assessed fees are apportioned among all applicable insurers, based on a ratio of net premiums for insuring U.S. risks during the preceding calendar year as compared to the aggregate net premiums for that same year. The Fee is assessed when net premiums covering US risks exceed $25 million for the previous year. Covered entities include state-licensed health insurance companies, federal or state-licensed HMOs, entities providing health insurance under Medicare Advantage, Medicare Part D, Medicaid, and self-funded multiple employer welfare arrangements (MEWA).While employers are not subject to this fee, insurers may pass some of the cost on to policy-holders. 16. Federal Marketplace User Fees (Applies to Individual and Small Group Market Only)  In states where a state-based marketplace has not been established (currently 26 states), a federal marketplace is available to individuals and small businesses. Where this is the case, regulations impose a monthly user fee of 3.5% of premium spread across all qualified health plans offered in the state by that insurer to help fund the federal marketplace. A state Marketplace may assess a fee as well. This fee is paid by the insurer. 13. Filings for ERISA Plans  Unless an exception applies, certain group health plans subject to ERISA are required to file a Form 5500 Annual Report filing, due the last day of the 7th month following the end of the plan year. A Summary Annual Report (SAR) for ERISA plans is due on the last day of the 9th month after the plan year ends to participants.  Multiple Employer Welfare Arrangements (MEWAs) are subject Form 5500 filings, and to an annual M-1 reporting requirement which is due March 1. Health Reform Checklist, Page 2 © Copyright 2014 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved.  17. Certification of Compliance with Electronic Transaction Requirements (Self-Funded Plans Only) ACA modifies certain aspects of HIPAA electronic transaction rules to require a controlling health plan (CHP) and any sub- health plan (SHP) to obtain a unique health plan identifier (HPID) through CMS Enterprise Portal. The CHP or SHP must certify that it is in compliance with certain standards for electronic transactions and operating procedures for purposes of processing: 1) eligibility for health plan transactions; 2) health care claim status transactions; and 3) health care electronic funds transfers (EFT) and remittance advice transactions. The CHP or SHP should work with its TPA to ensure compliance with these processes. Obtaining HPID:     Large health plans (annual receipts $5M+) must obtain HPID by 11/5/2014 Small plans (annual receipts <$5M) must obtain HPID by 11/5/2015 All plans must use HPID by 11/7/2016 CHP with HPID obtained prior to 1/1/15 must certify compliance by 12/31/15 CHP with HPID as of 1/1/15 must certify compliance by 1/1/16     CHP Certification Schedule: 14. MLR Rebate (Imposed on Insurers and Payable to Policyholders and Subscribers)  Large group insured plans (over 100 employees) must spend at least 85% of premiums paid on medical claims. Small groups (100 or fewer employees) and individual markets must spend at least 80% on medical claims. If not, a rebate is owed to the policyholder and subscriber, based on pre-established pools. Policyholders and subscribers must be notified by September 30, 2014 (for 2013 reporting year and all subsequent years). . 18. Report Health Plan Aggregate Cost on W-2  All employers filing 250 or more W-2 forms must report the cost of health coverage (both employer and employee cost) in Box 12 of the W-2, using Code DD. Employers issuing less than 250 W-2 forms are exempt until further guidance is issued. Reporting and paying the fee: Submit annual enrollment count (based on first 9 months of year) to HHS by November 15th of each year on form available via www.pay.gov. Reporting form will auto-calculate contribution amounts and allow payments to be made. Contributions paid in two installments: 1st install- ment due within 30 days of invoice reflects actual reinsurance contribution (plus HHS’s administrative costs); 2nd installment will be invoiced in 4th quarter following the year of submission and reflects amounts allocated to U.S. Treasury.
  3. 3. Shared Responsibility Employer Preparation 19. Determine Whether You Are a Large Employer - Do you have 50 or more full-time equivalent employees (FTEEs)? Note, the IRC Section 414 control group rules apply for purposes of determining employer size.  Add your full-time employees and part-time employees (add part-time together, then divide by 120, then divide by number of months used) to determine this.  Use special rules for counting seasonal workers. May use any consecutive 6-month period in 2014 for determining Large Employer status. 20. Large Employers (100 or more FTEEs), or  Employers with between 50 and 99 FTEEs: Shared Res- ponsibility rules do not apply until plan years beginning on or after January 1, 2016, if employee size and plan design is maintained as of 2/09/14. Workforce size and hours worked must be maintained Employer may not change plan year after 2/09/14 Employers with 100 or more FTEEs: Shared Responsibility rules apply for plan years on or after January 1, 2015  21. Large Employers – Review Health Plan to Ensure Affordability and Minimum Value Standards  Ensure that the employee’s contribution to premium does not exceed 9.5% of household income (affordability standard).  Choose one of these three methods of calculating:  Form W-2 method;  Rate of Pay method; or  Federal Poverty Level (FPL) standard  Does coverage meet at least 60% of the total allowed costs of benefits expected to be incurred under the plan (minimum value standard)?  Minimum value calculator supplied by HHS  Safe harbor plan design  Actuary determination 23. Large Employers – How is a Penalty Triggered? A non-deductible excise tax is assessed on large employers who do not provide minimum essential coverage (MEC), or adequate or affordable coverage to their full-time employees. Two types of potential penalties:  No Coverage Excise Tax Penalty [IRC Section 4980H(a)]: If employer fails to offer MEC to minimum of 95% (70% for 2015) of its full-time employees (employees plus dependents beginning 2015) for any calendar month and employs at least one credit employee*, the excise tax penalty calculated monthly as: Number of FTEs - 30 [-80 for 2015] X $166.67** (= $2000/yr**).  Inadequate or unaffordable Excise Tax Penalty [IRC Section 4980H(b)]: If an employer offers health coverage to at least 95% (70% for 2015) of its full-time employees and employs at least one credit employee*, and coverage fails to meet minimum value standard or is unaffordable, then monthly excise tax penalty is the lesser of: Number of credit employees multiplied by $250** (= $3000/yr**), or Number of FTEs - 30 (-80 for 2015) X $166.67** (= $2000/yr**). - *A credit employee is one who works at least 30 hours per week and who is eligible for a premium tax credit or cost sharing assistance for buying insurance through a marketplace. **These penalties are indexed beginning in 2015. ACA Provisions Beyond 2014/2015 24. Employers With 200 or More Employees Must Provide Automatic Enrollment in Health Plans  Awaiting further guidance on this provision. 25. Non-Discrimination Rules for Insured Plans  Awaiting further guidance, but assume these will be similar to the Section 105 self-insured rules. 26. Cadillac Tax – Excise Tax on Rich Health Plans  A 40% non-deductible excise tax will be imposed on the value of high cost employer sponsored health coverage – awaiting further guidance on this provision. Applies to employers with 50 or more full-time equivalent employees as defined by the law. Health Reform Checklist, Page 3 © Copyright 2014 – CBIZ, Inc. NYSE listed: CBZ. All rights reserved. Employers (50-99 FTEEs) - What Rules Apply by Employer Size in 2015?  To maintain its level of benefits, the employer must continue its contribution toward single coverage (the employer contribution must be maintained to at least 95% of its level as of 2/09/14). +    + + 22. Large Employers – Who Must Be Offered Coverage to Avoid Excise Tax in 2015?   Offer coverage to all employees scheduled to work 30 or more hours per week or 130 hours per month by the first day of the 4th month of hire (however, the waiting period requirements of the ACA must be satisfied) to avoid the risk of excise tax. Choose the monthly measurement method or the look back method. If look back method is chosen, then:  The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-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 any changes in laws or other factors that could affect the information contained herein. + + Establish a look back measurement/stability period to review ongoing variable/seasonal employees in 2014. Establish an initial look back measurement/stability period for newly hired variable employees (those who may be seasonal, or hired to work less than 30 hours per week, or individuals for whom hours worked is not known at the time of hire). This period may be between 3 and 12 months. Establish a look back measurement/stability period to review ongoing variable/seasonal employees in 2014.  

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