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Entering the Final Stretch - Preparing for New Affordable Care Act Obligations


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Entering the Final Stretch - Preparing for New Affordable Care Act Obligations

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Entering the Final Stretch - Preparing for New Affordable Care Act Obligations

  1. 1. 27th Annual Paramedic Systems of Wisconsin Conference September 17, 2014 Green Bay, Wisconsin 1
  2. 2. Entering the Final Stretch Preparing for New Affordable Care Act Obligations & Opportunities
  3. 3. Presenters Thomas Shorter, Godfrey & Kahn, S.C. Health Care & Employment (608) 284-2239 Todd Cleary, Godfrey & Kahn, S.C. Employee Benefits & Health Care (414) 287-9433 3
  4. 4. Overview • Review how the ACA will affect Emergency Medical Organizations as employers. • Review how to prepare and position as an employer for continued implementation of the ACA. 4
  5. 5. Overview • Review how the ACA will affect Emergency Medical Organizations as providers. • Review the changing “players” in the health care arena after ACA and how to position for success. 5
  6. 6. ACA Emergency Medical Service as Employer 6
  7. 7. I. Introduction • “Pay or play” rules will go into effect in 2015 for many employers • Application to any specific employer hinges on employer’s workforce in 2014 • Other important Affordable Care Act rules/changes/opportunities looming • Consequently, it is vital that employers understand the issues now and prepare accordingly 7
  8. 8. II. Pay or Play Rules A. Applicable Large Employers • Rules apply only to “applicable large employers” • 50 or more FTEs on average for preceding year • Exemption available during 2015 for employers with between 50 and 99 FTEs • To qualify for exemption, employer needs to certify that it generally maintained workforce, hours of service, and coverage during 2014 • Full-time employee generally is one who regularly works 30 or more hours per week 8
  9. 9. II. Pay or Play Rules A. Applicable Large Employers (cont.) • Controlled group and affiliated service group member employees must be included • Controlled group and affiliated service group rules are extremely complicated, and consequences could be dire if applicable employees are not counted • Foreign service not considered 9
  10. 10. II. Pay or Play Rules B. First Level Penalty • Applies if: i. An applicable large employer does not offer “minimum essential coverage” to at least 70% (95%, after 2015) of its full-time employees and their dependent children; and ii. A full-time employee receives governmental assistance for coverage under a health insurance exchange 10
  11. 11. II. Pay or Play Rules B. First Level Penalty (cont.) • Subsidies generally available to individuals with household income between 100% and 400% of federal poverty limit • Use “measurement periods” and “stability periods” to ease administration • Calculated on a monthly basis • Penalty is $166.67 x total number of employer’s full-time employees in excess of 80 (30, after 2015) • Controlled group and affiliated service group members considered separately • Penalty is not deductible (health insurance premiums generally are deductible) 11
  12. 12. II. Pay or Play Rules C. Second Level Penalty • Can apply even if employer offers minimum essential coverage • Applies if (i) applicable large employer offers coverage to full-time employees that is “unaffordable” or does not provide “minimum value”, and (ii) a full-time employee receives governmental assistance for coverage under a health insurance exchange 12
  13. 13. II. Pay or Play Rules C. Second Level Penalty • Calculated on a monthly basis • Penalty is $250 times the number of the employer’s full-time employees who receive governmental assistance for coverage under a health insurance exchange • Not deductible (health insurance premiums generally are deductible) 13
  14. 14. II. Pay or Play Rules D. Federal Exchange Subsidy • Statute says subsidies are only available as to exchanges “established by the State” • Only 14 states set up exchanges; other 36 use Federal exchange • Recent split in Federal circuit courts over whether subsidies are available under Federal exchange • Limit of subsidies to State exchange could have dramatic effect on ACA 14
  15. 15. II. Pay or Play Rules E. Critical Points for Employers • Review and understand the law • Rules to determine whether an employer is an “applicable large employer” are complicated • Structure of employer’s 2014 (and 2015) workforce is critical • Rules should be considered when determining timing of transactions and changes in workforce • Decision not to play shouldn’t be taken lightly 15
  16. 16. III. Annual Employer Reporting A. Section 6055 Reporting (IRS and Individuals) • Applies to any employer providing major medical plan coverage regardless of size • Assists enforcement of individual mandate • Obligation is on insurer for insured plans. For self-funded plans, each entity that participates must report. A controlled group member can report on behalf of other group members. • Use Form 1095-B if not an applicable large employer but plan is self-funded 16
  17. 17. III. Annual Employer Reporting B. Section 6056 Reporting (IRS and Individuals) • Applies only to entities that are (or are part of) applicable large employers. A controlled group member can file reports on behalf of other controlled group members. • Determines compliance with pay or play rules and availability of subsidies under exchange • Combined Section 6055 and 6056 reporting by applicable large employers on single form (IRS Form 1095-C) 17
  18. 18. III. Annual Employer Reporting C. Effective Date and Deadline • Early 2016 (to report coverage for 2015) • Although reporting is voluntary for 2014 coverage, employers should do so to work out kinks • Individual statements due by January 31 • IRS reporting due by February 28 (March 31, if filed electronically) 18
  19. 19. IV. Contraceptive Coverage A. Hobby Lobby Issue • Under ACA, non-grandfathered plans are required to provide first dollar coverage for preventive care (including contraception) • Accommodation was set up by HHS in 2013 for certain non-profits • U.S. Supreme Court held this mandate substantially burdens exercise of religion as to for-profit closely held corporations whose owners object for religious reasons 19
  20. 20. IV. Contraceptive Coverage B. Application • HHS expanded accommodation to for-profit closely held entities with religious objections to contraception coverage • Guidance expected on meaning of “closely held” • Accommodation can be obtained by (1) filing Form 700 with insurer or third-party administrator or (2) notifying Secretary of HHS • Mid-year dropping of coverage can create participant notice requirements 20
  21. 21. V. 90-Day Waiting Period A. Rule • No plan may impose a waiting period that exceeds 90 days • 90 days does not equal three months • Substantive eligibility conditions are permitted A. Orientation Period • One-month “orientation period” is permissible because it is treated as substantive eligibility condition • Must be “reasonable” and a “bona fide employment orientation period” • Maximum 90-day waiting period must begin on day orientation period ends 21
  22. 22. V. 90-Day Waiting Period C. What Does Orientation Period Mean? • True evaluation of whether employment situation is satisfactory for both parties • Seems to leave some flexibility • However, employees should undertake evaluation of employer during this period C. Interaction with Pay or Play Rules • Compliance with waiting period rule does not guarantee avoidance of pay or play penalty 22
  23. 23. VI. Small Business Tax Credit A. Eligible Employer • Fewer than 25 full-time employee equivalents • Pays average annual wages below $50,000 • Contributes 50% or more toward employees’ self-only health plan coverage • Purchases coverage through exchange 23
  24. 24. VI. Small Business Tax Credit B. Credit • Up to 50% of premium contribution (35%, for non-profits) • Credit is on sliding scale based on employer size and average pay • Available for any two consecutive tax years • Claimed on IRS Form 8941 24 12061431_1
  25. 25. VII. Wellness Programs A. Participant-based vs. health contingent-based programs B. Health contingent-based program changes • Maximum reward/penalty has increased to 30% of cost of coverage (20% maximum before 2014) • Maximum has increased to 50% of cost of coverage when wellness program includes tobacco prevention (non-tobacco piece can’t exceed 30%) • For some programs, (i) “reasonable alternative” must be provided regardless of reason for not satisfying standard, and (ii) physician verification may not be required • If reasonable alternative includes educational component (e.g., tobacco cessation program), employer must pay for it • Time commitment for satisfaction of reasonable alternative must be reasonable • Changes to required language in notice of reasonable alternative 25
  26. 26. ACA Emergency Medical Service as Provider 26
  27. 27. I. Fraud Enforcement • ACA Fraud Initiatives - More money to prevent and fight fraud • $350 million over 10 years - Better Screening and Compliance • Pre-enrollment Screening • Moratorium on New Providers - (e.g., Houston & Philadelphia) • Compliance Plans - OIG Compliance Plan Guidance from 2003 27
  28. 28. I. Fraud Enforcement • ACA Fraud Initiatives - New Penalties • Expanded Office of Inspector General authority • 60 Day Overpayment Rule • May 12, 2014 Proposed Rules - Failure to provide records-$15,000 per day - False statements in enrollment-$50,000 - 60 day overpayment rule-$10,000 per claim per day - False statement - $50,000 per false statement. 28
  29. 29. I. Fraud Enforcement OIG Work Plan for 2014 •Examine Medicare claims data to assess the extent of questionable transports billings. •Review transports that may not have occurred or were medically unnecessary transports, notably for dialysis. •Review whether Medicare payments for ambulance services satisfied Medicare requirements. 29
  30. 30. II. Essential Health Benefits • All non-grandfathered health insurance coverage in individual and small group markets must cover essential health benefits. • Emergency transport is included as an essential health benefit. 30
  31. 31. II. Essential Health Benefits • Non-emergency transport is not an essential benefit (e.g., trip to the morgue). • Prudent layperson standard - serious enough that person with average knowledge of health and medicine can reasonably assume that immediate medical attention is absolutely necessary. 31
  32. 32. III. Accountable Care Organizations • National and State Trend Started with ACA - Medicare ACOs • $372 Million in Savings to date for Medicare - Commercial ACOs • Partnership of providers - Hospitals - Insurers - Physicians - Emergency Medical Transport 32
  33. 33. III. Accountable Care Organizations • Commercial ACO negotiates rates and determines quality measures. • Closer working relationships among providers to ensure appropriate point of care – most appropriate facility usage, outpatient and post-acute care. 33
  34. 34. III. Accountable Care Organizations • How does EMS improve quality of care, avoid admissions and readmissions as part of ACO? - Make home visits the first day of discharge - Verify medication and post-discharge compliance - Link physicians to consultation via telemedicine video equipment • Strategy – be part of the conversation! • What ACO is in your market? 34
  35. 35. IV. Health Insurance Exchanges • Increase in insured individuals - More individuals covered by insurance may result in fewer no pay or uninsured transports - Emergency medical transport is essential benefit - 165,000 Wisconsin residents signed up (7/16/14) • Some things never change…. - Copays, Deductibles & Coinsurance • Collection still an issue - Failure to pay premiums • Insurers required to pay for 30 days 35
  36. 36. Thank You! • 9/27/14 – First Responders Appreciation Day • Thanks for all you do! 36