The document discusses new guidance from the Department of Health and Human Services (HHS) on the transitional reinsurance program established under the Affordable Care Act. The guidance provides details on the amounts that will be contributed to and reimbursed from the program for 2014-2016. Contribution amounts will fund $12 billion in 2014, $8 billion in 2015, and $5 billion in 2016. The contribution per enrollee is estimated to be $63 per year. Insurers will receive reimbursements of 80% of individual claims between $60,000-$250,000. Health plans and insurers will generally have to make contributions, with some exceptions like health flexible spending accounts and employee assistance programs.
The document summarizes regulations issued by HHS regarding the transitional reinsurance program established by the Affordable Care Act. The reinsurance program requires health insurers and self-insured group health plans to make contributions in order to help stabilize premiums for individual market policies from 2014-2016. Contribution amounts are based on a national per capita rate, and the total contributions collected will be $12 billion in 2014, $8 billion in 2015, and $5 billion in 2016. Certain limited benefit plans and government-sponsored plans are exempt from making reinsurance contributions.
Health care reform_timeline_chart_1-28-13Eric Stern
The timeline summarizes important dates in the implementation of the Affordable Care Act between 2010 and 2018. Key provisions include:
- 2010-2011: Dependent coverage must be offered until age 26 and pre-existing conditions can be covered through high-risk pools.
- 2011-2013: Medical loss ratio and electronic transactions rules apply, health care exchanges are established.
- 2014: Most individuals must have coverage or pay a penalty and health insurance market reforms take effect.
- 2015-2018: Additional taxes and fees are imposed on health plans, and remaining ACA provisions are implemented.
Alert - Health Care Reform Bill - IRS Issues Final Regulations for Comparativ...Annette Wright, GBA, GBDS
This document summarizes IRS regulations regarding fees to fund the Patient-Centered Outcomes Research Institute (PCORI). Key points include:
- The fee applies to self-insured health plans from 2012-2019 to fund PCORI research on treatment effectiveness.
- The fee amount is based on average number of covered lives, starting at $1 then $2 per life. Insurers pay for fully-insured plans, sponsors for self-insured plans.
- Exceptions include expatriate plans, certain FSAs/HRAs, EAPs, and plans covering mainly excepted benefits. Government and military plans are also exempt.
Legislative Update Patient Protections And Affordable Care Act Timeline 4 1...ForestFinancialGroup
Forest Financial Group provides a legislative update on the timeline for implementation of the Patient Protection and Affordable Care Act. Key provisions beginning in 2010 include a temporary reinsurance program for early retirees, establishing high-risk pools, and requiring dependent coverage until age 26. Starting in 2014, major reforms take effect such as prohibiting pre-existing condition exclusions, establishing health insurance exchanges, and expanding Medicaid eligibility. An excise tax on high-cost health plans begins in 2018.
This document defines various key terms related to health insurance:
1. It describes an actuary as an insurance professional responsible for determining premiums based on claims paid versus premiums collected to ensure profits.
2. It provides brief definitions for terms like admitting privilege, affordable care act, agent, beneficiary, benefit, brand name drug, broker, carrier, case management, certificate of insurance, claim, and COBRA.
3. It explains concepts such as coinsurance, copayment, credit for prior coverage, deductible, denial of claim, dependent, effective date, exclusion, explanation of benefits, fee for service, generic drug, group health insurance, and guaranteed issue.
The document provides an overview of the financial impact of the Affordable Care Act. It discusses key findings including how employers will want to manage differences in insurance plan values and how supplemental benefits will grow in importance. It also summarizes effects on businesses, including a potential shift of premium costs between employers, employees, insurers and the public sector. Insurers will be required to spend a certain percentage of premiums on medical care and quality improvement activities.
The document is a chapter from a textbook on health and life insurance. It covers various types of health insurance including group policies, individual policies, and exchanges. It also discusses types of coverage such as basic, major medical, dental and vision. For private plans it addresses unmanaged care, health savings accounts, and managed care options like HMOs, PPOs, and POS. The document also summarizes disability and life insurance, including definitions of term and permanent life policies.
The document summarizes regulations issued by HHS regarding the transitional reinsurance program established by the Affordable Care Act. The reinsurance program requires health insurers and self-insured group health plans to make contributions in order to help stabilize premiums for individual market policies from 2014-2016. Contribution amounts are based on a national per capita rate, and the total contributions collected will be $12 billion in 2014, $8 billion in 2015, and $5 billion in 2016. Certain limited benefit plans and government-sponsored plans are exempt from making reinsurance contributions.
Health care reform_timeline_chart_1-28-13Eric Stern
The timeline summarizes important dates in the implementation of the Affordable Care Act between 2010 and 2018. Key provisions include:
- 2010-2011: Dependent coverage must be offered until age 26 and pre-existing conditions can be covered through high-risk pools.
- 2011-2013: Medical loss ratio and electronic transactions rules apply, health care exchanges are established.
- 2014: Most individuals must have coverage or pay a penalty and health insurance market reforms take effect.
- 2015-2018: Additional taxes and fees are imposed on health plans, and remaining ACA provisions are implemented.
Alert - Health Care Reform Bill - IRS Issues Final Regulations for Comparativ...Annette Wright, GBA, GBDS
This document summarizes IRS regulations regarding fees to fund the Patient-Centered Outcomes Research Institute (PCORI). Key points include:
- The fee applies to self-insured health plans from 2012-2019 to fund PCORI research on treatment effectiveness.
- The fee amount is based on average number of covered lives, starting at $1 then $2 per life. Insurers pay for fully-insured plans, sponsors for self-insured plans.
- Exceptions include expatriate plans, certain FSAs/HRAs, EAPs, and plans covering mainly excepted benefits. Government and military plans are also exempt.
Legislative Update Patient Protections And Affordable Care Act Timeline 4 1...ForestFinancialGroup
Forest Financial Group provides a legislative update on the timeline for implementation of the Patient Protection and Affordable Care Act. Key provisions beginning in 2010 include a temporary reinsurance program for early retirees, establishing high-risk pools, and requiring dependent coverage until age 26. Starting in 2014, major reforms take effect such as prohibiting pre-existing condition exclusions, establishing health insurance exchanges, and expanding Medicaid eligibility. An excise tax on high-cost health plans begins in 2018.
This document defines various key terms related to health insurance:
1. It describes an actuary as an insurance professional responsible for determining premiums based on claims paid versus premiums collected to ensure profits.
2. It provides brief definitions for terms like admitting privilege, affordable care act, agent, beneficiary, benefit, brand name drug, broker, carrier, case management, certificate of insurance, claim, and COBRA.
3. It explains concepts such as coinsurance, copayment, credit for prior coverage, deductible, denial of claim, dependent, effective date, exclusion, explanation of benefits, fee for service, generic drug, group health insurance, and guaranteed issue.
The document provides an overview of the financial impact of the Affordable Care Act. It discusses key findings including how employers will want to manage differences in insurance plan values and how supplemental benefits will grow in importance. It also summarizes effects on businesses, including a potential shift of premium costs between employers, employees, insurers and the public sector. Insurers will be required to spend a certain percentage of premiums on medical care and quality improvement activities.
The document is a chapter from a textbook on health and life insurance. It covers various types of health insurance including group policies, individual policies, and exchanges. It also discusses types of coverage such as basic, major medical, dental and vision. For private plans it addresses unmanaged care, health savings accounts, and managed care options like HMOs, PPOs, and POS. The document also summarizes disability and life insurance, including definitions of term and permanent life policies.
This document provides a timeline and overview of key provisions in the Patient Protection and Affordable Care Act (ACA). It outlines the legislative timeline from when the House and Senate passed versions of health care reform in 2009-2010 to when President Obama signed the bill into law. It then summarizes major ACA provisions being implemented from 2010 through 2018 and beyond, including requirements for insurance plans, the establishment of health insurance exchanges, Medicaid expansion, and individual/employer mandates. The document concludes by discussing how the ACA is paid for through various new taxes and fees and its projected impact on the private health insurance marketplace.
The document summarizes key provisions of the 2010 health care reform legislation that affect employers, including requirements regarding lifetime and annual limits on coverage, dependent coverage for children up to age 26, uniform explanations of coverage, reporting on quality of care, and appeals processes. The reforms impose new regulations on employer-provided health plans with respect to benefits and administration.
The document discusses the Supreme Court ruling on the Affordable Care Act and its implications. It summarizes that the individual mandate was found to be permissible as a tax. It also limits the federal government's ability to take away state Medicaid funds. Employers must now prepare for new reporting and plan requirements related to health care reform.
The document discusses challenges facing employers who provide post-retirement pharmaceutical benefits and alternatives to address these challenges. It describes the Retiree Drug Subsidy program and its limitations. A key alternative presented is an Employee Group Waiver Plan (EGWP), where an employer contracts with a Part D plan sponsor to provide a Medicare Part D prescription drug plan and receive subsidies directly from Medicare. An EGWP can provide increased subsidies compared to the Retiree Drug Subsidy and outsources administration. The document provides an example comparing the financial impact of these options for an employer with 57,000 Medicare-eligible retirees.
The Departments of Labor, Health and Human Services, and the Treasury issued a FAQ clarifying when supplemental coverage qualifies as an excepted benefit. According to the FAQ, only supplemental group health coverage that does not include essential health benefits may qualify. The Departments intend to propose regulations stating that supplemental coverage filling gaps in primary coverage categories will only qualify if the benefits are not essential health benefits in that state. Pending rulemaking, the Departments will not enforce against supplemental coverage of non-essential health benefits that complies with existing guidance.
How Does Obamacare Impact Your Business Planning?Tilson
The Supreme Court has upheld the PPACA and its implementation is full steam ahead. Now is the time to begin preparing for the impact on your business and your employees. Many have forgotten the complexity, decisions, and regulatory requirements of this legislation. As we all know, the devil is in the details.
The Terrorism Risk Insurance Act (TRIA) tries to prevent double payments of policyholder and claimant losses under multiple federal disaster relief programs. When Treasury implemented TRIA’s double payment rules more than 15 years ago it assumed future disaster relief programs would look a lot like those previously rolled out for hurricanes, floods and earthquakes.
COVID-19 has shaken that assumption.
Senate "Free-Rider" Provision fails to hold large employers accountableufcwinternational
A new report, "Health Care Reform and Walmart: What the Senate Health Care Reform Bill Means to the Country’s Largest Employer," outlines how that the Senate Health Care Bill, as written, fails to hold Walmart responsible for the health care costs of its 1.4 million employees.
This document defines various terms related to health insurance and disability insurance. It provides definitions for terms like HMO, experience rating, fraud, guaranteed renewable, exclusion rider, express authority, fully insured, hazard, disability income insurance, elimination period, presumptive disability benefit, noncancelable renewal provision, nonscheduled plan, offer, own occupation, nondisabling injury, notice of claims provision, partial disability, open-panel HMO, Medicare parts A, B, D, misstatement of age or sex provision, multiple employer trust, morbidity, National Association of Insurance Commissioners, Medical Information Bureau, major medical expense policy, Lloyd's of London, legal purpose, managed care organization, long-term care, limited policies, ins
This white paper discusses accounting standards for post-retirement healthcare benefits and how recent healthcare reforms impact employer obligations. It explains that the Patient Protection and Affordable Care Act eliminated tax deductions for the Retiree Drug Subsidy, increasing employer costs. As a result, employers must now record the present value of future tax liabilities as a current expense. The paper analyzes options for employers to reduce costs, such as terminating retiree drug plans, and risks of litigation and reputation damage from doing so. It also outlines accounting rules requiring employers to disclose impacts of the new laws on benefit obligations.
Health Reform Bulletin 125 | Updated Employer Shared Responsibility Guidance,...CBIZ, Inc.
The latest HRB has been released. Get updates on the following: 1) Updated Employer Shared Responsibility Guidance; 2) ACA Implementation Guidance; 3) Gender Identity Discrimination: Preliminary Injunction Issued; 4) Final Rules - Premium Tax Credit; and 5) 2018 Benefit and Payment Parameters.
The NAIC & Center for Insurance Policy and Research have placed a special call for policy position briefs exploring the “potential development of a federal program to provide pandemic related business interruption coverage.”
The Centers for Better Insurance has submitted the attached short policy brief proposing the Payroll Risk Insurance Act.
- Employers who receive the Retiree Drug Subsidy (RDS) will lose the tax deduction for retiree drug expenses starting in 2013 due to healthcare reform regulations. This will significantly increase costs for companies with retiree prescription drug coverage.
- Self-funded Employer Group Waiver Plans (EGWPs) are emerging as an alternative to the RDS. EGWPs allow employers to contract with a prescription drug plan sponsor to provide retiree drug benefits while passing on government subsidies to reduce costs.
- EGWPs offer employers benefits like reducing costs, satisfying existing retiree benefit commitments, increasing efficiency, reducing administrative burden, and improving cash flow compared to the RDS. Employers should
This document is a form for verifying treatment by an attending physician or other healthcare provider under New York's no-fault motor vehicle insurance law. The multi-page form requires information about the patient, diagnosis, treatment details, charges, and contains options for authorizing direct payment to the provider or assigning benefits to the provider. It collects essential details needed by the insurer to process no-fault insurance claims related to motor vehicle accidents.
The document summarizes provisions of the American Recovery and Reinvestment Act of 2009 regarding subsidies for COBRA health insurance premiums. It provides details on eligibility requirements, the amount of subsidies, how subsidies are administered and reimbursed, notification requirements, and income limits for receiving subsidies. The key points are that the Act provides subsidies of 65% of COBRA premiums for involuntarily terminated workers for up to 9 months, subsidies are claimed as a tax credit by employers/plans, and certain income thresholds apply for subsidy eligibility.
The document defines health insurance as a contract between an insurance provider and an individual or organization that covers medical expenses. Key aspects of health insurance include premium payments, deductibles, copays, coverage limits, and what medical costs are covered. Rates are calculated based on personal health history and risks. Premiums can increase if claims are high or an individual's health status changes. Missed payments can cause a policy to lapse or be cancelled. The document also outlines some common types of health insurance plans and tax benefits.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows individuals to continue their group health plan coverage in certain situations. Specifically, COBRA requires group health plans to offer continuation coverage to covered employees and dependents when coverage would otherwise be lost due to certain specific events...
This document summarizes a presentation about self-insurance under the Affordable Care Act. The presentation discusses what self-insurance is, the impact of the ACA on self-insured plans, advantages and disadvantages of self-insurance, and updates about ACA requirements. It provides an overview of stop loss insurance, cost-sharing limits, reinsurance fees, employer penalties, and reporting requirements under the ACA. The presentation aims to educate companies on health care reform and compliance obligations for self-insured plans.
The document provides instructions for using the Optimal Resume Builder software, including how to create and name a new resume, add and edit resume sections, format the header and style the document, and use tools like section examples, action verbs, and resume samples. It also describes features for reviewing and sharing the completed resume, as well as information on the company that produces the Optimal Resume Builder software.
Presentazione Futurology 10-40-100 GBEthernet tratta dal seminario internazionale Helping you to build a better networks conclusosi lo scorso luglio a LISBONA Portogallo
The document summarizes information about the transitional reinsurance fee that employers with self-insured health plans must pay, including:
1) The fee is $44 per covered individual for 2015 and must be paid in full by January 15, 2016 or in two installments of $33 by January 15, 2016 and $11 by November 15, 2016.
2) Employers must submit enrollment counts using the pay.gov website by November 16, 2015.
3) The Centers for Medicare and Medicaid Services will hold information sessions by phone and email through November 16th to assist employers with submitting enrollment counts and fees.
This document provides a timeline and overview of key provisions in the Patient Protection and Affordable Care Act (ACA). It outlines the legislative timeline from when the House and Senate passed versions of health care reform in 2009-2010 to when President Obama signed the bill into law. It then summarizes major ACA provisions being implemented from 2010 through 2018 and beyond, including requirements for insurance plans, the establishment of health insurance exchanges, Medicaid expansion, and individual/employer mandates. The document concludes by discussing how the ACA is paid for through various new taxes and fees and its projected impact on the private health insurance marketplace.
The document summarizes key provisions of the 2010 health care reform legislation that affect employers, including requirements regarding lifetime and annual limits on coverage, dependent coverage for children up to age 26, uniform explanations of coverage, reporting on quality of care, and appeals processes. The reforms impose new regulations on employer-provided health plans with respect to benefits and administration.
The document discusses the Supreme Court ruling on the Affordable Care Act and its implications. It summarizes that the individual mandate was found to be permissible as a tax. It also limits the federal government's ability to take away state Medicaid funds. Employers must now prepare for new reporting and plan requirements related to health care reform.
The document discusses challenges facing employers who provide post-retirement pharmaceutical benefits and alternatives to address these challenges. It describes the Retiree Drug Subsidy program and its limitations. A key alternative presented is an Employee Group Waiver Plan (EGWP), where an employer contracts with a Part D plan sponsor to provide a Medicare Part D prescription drug plan and receive subsidies directly from Medicare. An EGWP can provide increased subsidies compared to the Retiree Drug Subsidy and outsources administration. The document provides an example comparing the financial impact of these options for an employer with 57,000 Medicare-eligible retirees.
The Departments of Labor, Health and Human Services, and the Treasury issued a FAQ clarifying when supplemental coverage qualifies as an excepted benefit. According to the FAQ, only supplemental group health coverage that does not include essential health benefits may qualify. The Departments intend to propose regulations stating that supplemental coverage filling gaps in primary coverage categories will only qualify if the benefits are not essential health benefits in that state. Pending rulemaking, the Departments will not enforce against supplemental coverage of non-essential health benefits that complies with existing guidance.
How Does Obamacare Impact Your Business Planning?Tilson
The Supreme Court has upheld the PPACA and its implementation is full steam ahead. Now is the time to begin preparing for the impact on your business and your employees. Many have forgotten the complexity, decisions, and regulatory requirements of this legislation. As we all know, the devil is in the details.
The Terrorism Risk Insurance Act (TRIA) tries to prevent double payments of policyholder and claimant losses under multiple federal disaster relief programs. When Treasury implemented TRIA’s double payment rules more than 15 years ago it assumed future disaster relief programs would look a lot like those previously rolled out for hurricanes, floods and earthquakes.
COVID-19 has shaken that assumption.
Senate "Free-Rider" Provision fails to hold large employers accountableufcwinternational
A new report, "Health Care Reform and Walmart: What the Senate Health Care Reform Bill Means to the Country’s Largest Employer," outlines how that the Senate Health Care Bill, as written, fails to hold Walmart responsible for the health care costs of its 1.4 million employees.
This document defines various terms related to health insurance and disability insurance. It provides definitions for terms like HMO, experience rating, fraud, guaranteed renewable, exclusion rider, express authority, fully insured, hazard, disability income insurance, elimination period, presumptive disability benefit, noncancelable renewal provision, nonscheduled plan, offer, own occupation, nondisabling injury, notice of claims provision, partial disability, open-panel HMO, Medicare parts A, B, D, misstatement of age or sex provision, multiple employer trust, morbidity, National Association of Insurance Commissioners, Medical Information Bureau, major medical expense policy, Lloyd's of London, legal purpose, managed care organization, long-term care, limited policies, ins
This white paper discusses accounting standards for post-retirement healthcare benefits and how recent healthcare reforms impact employer obligations. It explains that the Patient Protection and Affordable Care Act eliminated tax deductions for the Retiree Drug Subsidy, increasing employer costs. As a result, employers must now record the present value of future tax liabilities as a current expense. The paper analyzes options for employers to reduce costs, such as terminating retiree drug plans, and risks of litigation and reputation damage from doing so. It also outlines accounting rules requiring employers to disclose impacts of the new laws on benefit obligations.
Health Reform Bulletin 125 | Updated Employer Shared Responsibility Guidance,...CBIZ, Inc.
The latest HRB has been released. Get updates on the following: 1) Updated Employer Shared Responsibility Guidance; 2) ACA Implementation Guidance; 3) Gender Identity Discrimination: Preliminary Injunction Issued; 4) Final Rules - Premium Tax Credit; and 5) 2018 Benefit and Payment Parameters.
The NAIC & Center for Insurance Policy and Research have placed a special call for policy position briefs exploring the “potential development of a federal program to provide pandemic related business interruption coverage.”
The Centers for Better Insurance has submitted the attached short policy brief proposing the Payroll Risk Insurance Act.
- Employers who receive the Retiree Drug Subsidy (RDS) will lose the tax deduction for retiree drug expenses starting in 2013 due to healthcare reform regulations. This will significantly increase costs for companies with retiree prescription drug coverage.
- Self-funded Employer Group Waiver Plans (EGWPs) are emerging as an alternative to the RDS. EGWPs allow employers to contract with a prescription drug plan sponsor to provide retiree drug benefits while passing on government subsidies to reduce costs.
- EGWPs offer employers benefits like reducing costs, satisfying existing retiree benefit commitments, increasing efficiency, reducing administrative burden, and improving cash flow compared to the RDS. Employers should
This document is a form for verifying treatment by an attending physician or other healthcare provider under New York's no-fault motor vehicle insurance law. The multi-page form requires information about the patient, diagnosis, treatment details, charges, and contains options for authorizing direct payment to the provider or assigning benefits to the provider. It collects essential details needed by the insurer to process no-fault insurance claims related to motor vehicle accidents.
The document summarizes provisions of the American Recovery and Reinvestment Act of 2009 regarding subsidies for COBRA health insurance premiums. It provides details on eligibility requirements, the amount of subsidies, how subsidies are administered and reimbursed, notification requirements, and income limits for receiving subsidies. The key points are that the Act provides subsidies of 65% of COBRA premiums for involuntarily terminated workers for up to 9 months, subsidies are claimed as a tax credit by employers/plans, and certain income thresholds apply for subsidy eligibility.
The document defines health insurance as a contract between an insurance provider and an individual or organization that covers medical expenses. Key aspects of health insurance include premium payments, deductibles, copays, coverage limits, and what medical costs are covered. Rates are calculated based on personal health history and risks. Premiums can increase if claims are high or an individual's health status changes. Missed payments can cause a policy to lapse or be cancelled. The document also outlines some common types of health insurance plans and tax benefits.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows individuals to continue their group health plan coverage in certain situations. Specifically, COBRA requires group health plans to offer continuation coverage to covered employees and dependents when coverage would otherwise be lost due to certain specific events...
This document summarizes a presentation about self-insurance under the Affordable Care Act. The presentation discusses what self-insurance is, the impact of the ACA on self-insured plans, advantages and disadvantages of self-insurance, and updates about ACA requirements. It provides an overview of stop loss insurance, cost-sharing limits, reinsurance fees, employer penalties, and reporting requirements under the ACA. The presentation aims to educate companies on health care reform and compliance obligations for self-insured plans.
The document provides instructions for using the Optimal Resume Builder software, including how to create and name a new resume, add and edit resume sections, format the header and style the document, and use tools like section examples, action verbs, and resume samples. It also describes features for reviewing and sharing the completed resume, as well as information on the company that produces the Optimal Resume Builder software.
Presentazione Futurology 10-40-100 GBEthernet tratta dal seminario internazionale Helping you to build a better networks conclusosi lo scorso luglio a LISBONA Portogallo
The document summarizes information about the transitional reinsurance fee that employers with self-insured health plans must pay, including:
1) The fee is $44 per covered individual for 2015 and must be paid in full by January 15, 2016 or in two installments of $33 by January 15, 2016 and $11 by November 15, 2016.
2) Employers must submit enrollment counts using the pay.gov website by November 16, 2015.
3) The Centers for Medicare and Medicaid Services will hold information sessions by phone and email through November 16th to assist employers with submitting enrollment counts and fees.
The document discusses geosocial networking applications like Foursquare and Gowalla. It explains that these apps allow users to check-in at locations and interact with friends. While Foursquare currently has more users, both platforms reward user engagement through badges, discounts and other incentives. The presentation outlines how businesses can leverage these apps through special promotions, custom branding and tracking customer locations.
News flash january 3, 2013 – president signs bill extending tax policies of c...Annette Wright, GBA, GBDS
The document summarizes key provisions of the American Taxpayer Relief Act of 2012 (ATRA) signed into law by the President on January 2, 2013. ATRA made permanent the Bush-era tax cuts for individuals earning less than $400,000 annually and couples earning less than $450,000 while allowing rates to rise for higher incomes. It also altered capital gains and dividend taxes and estate taxes. The Act extended tax exclusions for employer-provided education assistance up to $5,250 and adoption benefits including tax credits up to $10,000. It also extended the parity between employer-provided mass transit and parking benefits. However, it did not extend the temporary payroll tax holiday that had been in place.
News Flash November 4 2014 - IRS Issues Warning to Group Health Plans Not Cov...Annette Wright, GBA, GBDS
The IRS issued a notice warning that health plans not covering hospitalization or physician services do not provide minimum value as defined by the ACA. It advised employers currently offering such plans to exercise caution and announced plans to propose regulations stating such plans do not qualify. The notice provided guidance for employers with plans established before November 4, 2014, allowing them to continue such plans for the current plan year, but warned others not to adopt new non-qualifying plans for 2015. It also outlined disclosure requirements for employers regarding premium assistance eligibility.
This document summarizes the results of a survey of over 1,200 employers about the effects and costs of the Affordable Care Act (ACA). Key findings include:
- Over half of employers have not determined the actual costs of complying with the ACA, though many are concerned about rising costs. Of those who have calculated costs, 61% saw increased costs, with 17% seeing over a 5% increase.
- Most employers intend to "play" and offer coverage under the ACA's employer mandate rather than pay penalties, but have flexibility in how they do so.
- Employers expect other employers will address rising costs through measures like cost-shifting to employees and wellness programs rather than dropping
SUPREME COURT RULES ON SAME-SEX MARRIAGE AND DOMA: STILL WAITING FOR GUIDANCEAnnette Wright, GBA, GBDS
The Supreme Court ruled that section 3 of the Defense of Marriage Act (DOMA) was unconstitutional. This ruling affects over 1,000 federal laws related to benefits like health insurance, taxes, and retirement plans. However, it did not provide clear guidance on key issues employers face in complying, such as which same-sex marriages are recognized, whether civil unions count, and if benefits must be extended retroactively. The document advises employers to wait for further guidance from federal agencies on these open questions before making changes to their benefit plans and eligibility.
Companies are increasingly implementing innovative wellness programs to improve employee health and reduce costs. This document discusses several cutting-edge trends in corporate wellness, including wellness coaching, using technology like health apps and social media, incorporating physical activity into the workday through walking meetings or treadmill desks, redesigning workspaces, and offering incentive programs. These innovations can help create a culture of wellness and engage employees.
The IRS has issued guidance on implementing the $2,500 limit on employees' pre-tax contributions to health flexible spending accounts (FSAs) as required by the 2010 health care reform law. Key points include: the limit applies on a plan year basis for cafeteria plans beginning after 2012; employers have until 2014 to amend plans to reflect the limit but must administer plans in accordance with it starting in 2013; and relief is provided for excess contributions due to reasonable mistakes.
The survey report summarizes the results of the 2014 Willis Health and Productivity Survey. Some key findings:
- 68% of organizations have wellness programs, with 61% identifying employees' health habits as the top challenge to controlling costs.
- 54% are implementing high-deductible health plans and 64% are providing tools for employees to be better healthcare consumers.
- 49% of organizations with wellness programs reported reduced medical costs or health risks.
- Most organizations recognize the link between employee health and productivity but few measure absenteeism, FMLA, or presenteeism.
The IRS issued a notice confirming its delay of the employer pay-or-play excise tax until 2014 and provided additional clarification. With the delay, employers have time to focus on other Affordable Care Act compliance issues that were previously secondary to pay-or-play, such as updated HIPAA privacy policies and notices of exchange availability. Employers can also expect inquiries from employees and health insurance exchanges regarding their coverage to determine exchange subsidy eligibility. Willis will continue monitoring all provisions affecting employers and provide updates.
News Flash November 15, 2013—Temporary Exemption from 2014 PPACA Requirements...Annette Wright, GBA, GBDS
The Department of Health and Human Services announced a transitional policy allowing health insurers to continue individual and small group market plans that do not comply with 2014 PPACA requirements between January 1, 2014 and October 1, 2014. This will allow people to maintain their 2013 benefits and avoid cancellations due to noncompliance. Insurers can choose to renew non-grandfathered plans without meeting requirements for fair premiums, guaranteed availability and renewability, pre-existing conditions, essential health benefits, and more. Insurers must notify affected individuals and small businesses of changes, PPACA requirements that will not apply, Exchange options, and their rights. This provides temporary relief from cancellations and exemptions from certain PPACA rules until October 1
The document summarizes the human capital services offered by Willis to help organizations manage human resources challenges. Willis provides consulting services to help with challenges like employee communications, compliance, engagement, and health care costs. They develop strategies for benefits programs, provide plan administration support, and give access to subject matter experts in areas like health care management, legal issues, and HR. Willis also offers various online tools and resources for compliance, communications, and reporting.
The document discusses new IRS requirements for reporting the cost of employer-sponsored health coverage on employee W-2 forms beginning in 2012. It provides guidance on calculating the reportable cost and which types of coverage must and need not be included. Reporting is required for employers filing 250 or more W-2s and will apply to most types of employer-sponsored health plans. Failure to comply can result in penalties of up to $1,500,000. Employers have flexibility in determining costs and should rely on payroll systems and IRS notices for guidance.
This document provides a recipe for a peanut butter and jelly sandwich, including a list of ingredients and instructions for assembly. It suggests using crunchy peanut butter, homemade strawberry jam, and white bread. The instructions explain how to open the jars, spread the fillings on the bread, and enjoy the sandwich with a glass of milk. Survey results are presented showing that strawberry jam is most people's preferred filling to pair with peanut butter. Occasions for eating peanut butter and jelly sandwiches include school lunches, birthday parties, picnics, and late night snacks.
News Flash December 18, 2013—IRS Provides Guidance on Same-Sex Spouse Cafete...Annette Wright, GBA, GBDS
The IRS issued guidance allowing cafeteria plans and health accounts to recognize same-sex spouses in 2013 based on the Supreme Court's Windsor decision. Employees with same-sex spouses can now make mid-year election changes to include spousal coverage. Contribution limits for HSAs and FSAs were adjusted to consider same-sex couples as married. The PBGC also announced it will recognize same-sex marriages in administering pension benefits.
The document provides guidance for employers on determining full-time employee status under the Affordable Care Act. It outlines safe harbors that allow employers to use look-back measurement periods to determine full-time status. For ongoing employees, employers can use a standard measurement period of 3-12 months followed by a stability period where coverage must be provided based on the measurement. For new variable hour or seasonal employees, an initial measurement period of 3-12 months can be used, followed by a stability period. The guidance aims to provide employers flexibility and certainty in their determinations of full-time status.
Chile has a population of over 16 million people, with 85% living in urban areas like the capital of Santiago. It has a strong economy based on industries like mining and fishing. Geographically, Chile is a long, narrow country located on the western edge of South America between the Andes mountains and the Pacific Ocean. Culturally, Chilean society is based around extended families, Catholicism plays a strong role, and traditional foods include dishes like cazuela soup and arroz con pollo. The government prioritizes education, healthcare, and affordable housing for its citizens.
The document provides a timeline summary of key provisions from the 2010 Affordable Care Act (ACA) health reform law to be implemented between 2010-2018. Some key points include: expanded dependent coverage until age 26 starting in 2010; prohibiting pre-existing condition exclusions for children under 19 in 2010; establishing state health insurance exchanges by 2014; requiring individuals to have health insurance or pay a penalty starting in 2014; and increasing the Medicare Part D subsidy starting in 2011 to completely close the coverage gap by 2020.
The document discusses how certain proposed legislation and regulations will impact different types of health plans. It notes that while small group and individual plans will be subject to new deductible and out-of-pocket limit caps in 2014, self-insured group plans and large group plans are proposed to be exempt from these requirements. Grandfathered group health plans would also be exempt. Additionally, it states that under proposed regulations, self-insured group health plans would be responsible for paying proposed reinsurance fees of $63 per covered life each year, though third parties could administer the payments.
Health Reform Alert - Implementation Guidance FAQsCBIZ, Inc.
The ACA’s governing agencies (Labor, HHS and IRS) have issued their 18th set of implementation FAQs, further defining certain aspects of the Affordable Care Act, as well as how the law coordinates with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Following are highlights of this guidance.
Learn more at www.cbiz.com
News Flash: September 16, 2013 – Federal Regulators Have Been Busy; Two New D...Annette Wright, GBA, GBDS
Federal regulators issued two new developments related to health care reform: 1) A model notice of HIPAA privacy practices with versions for health plans and providers to use; and 2) New guidance on applying health care reform to HRAs, health FSAs, and other arrangements. The new guidance indicates stand-alone HRAs are no longer viable unless integrated with group health coverage by meeting restrictive conditions. It also addresses health FSAs, EAPs, and employer-paid premium arrangements. The guidance is intended to coordinate previous rules and fill gaps, clarifying that tax-favored employer health coverage must comply with reform laws.
The Gardner Group's eighth newsletter provides updates on self-funded employee health benefits and data analytics. Self-funding allows employers to avoid premium taxes and state-mandated benefits, saving thousands per year. While it presents financial risk, purchasing stop-loss insurance mitigates exposure to catastrophic claims. Data analytics helps self-funded employers streamline inefficiencies, identify at-risk members, and lower costs through wellness programs. The newsletter also discusses consumer-directed health plans that function as a form of modified self-insurance, saving employers money versus traditional insurance.
This document discusses the implications of the Mental Health Parity and Addiction Equity Act of 2008 for employer-provided health plans. It addresses whether moving mental health benefits to an employee assistance program (EAP) would avoid the Act's requirements and analyzes different types of excepted benefits that are not subject to the Act. The document also outlines potential cost exemptions and opt-out provisions for certain self-funded government plans.
Health Reform Bulletin 120 | Proposed Reliant Regulations.CBIZ, Inc.
The latest HRB provides insight into the following: Proposed Regulations: Expatriate Health Plans, Excepted Benefit Plans, Essential Health Benefits relating to Lifetime and Annual Limits, and Individual Shared Responsibility Requirements; IRS Releases Draft 2016 Forms 1094/1095.
The document discusses new guidance from the Department of Labor regarding medical loss ratio rebates paid by insurers to employers sponsoring ERISA group health plans. The guidance states that rebates may be considered plan assets, requiring employers to comply with ERISA fiduciary rules in handling the funds. It provides details on how rebates should be allocated based on plan terms and between employers and participants. The guidance also covers requirements for non-ERISA plans and terminated plans.
- Employers must consider new options for offering health insurance under the Affordable Care Act, including offering a plan, not offering but paying penalties, or sending employees to the insurance exchanges.
- For small employers, tax credits may help offset plan costs but expire after two years. Larger employers not offering a qualified plan may pay fines of $2000 per employee if any employees receive subsidies.
- Plans offered must meet requirements like essential benefits to exempt employees from penalties, but some employees may still qualify for exchange subsidies. Costs of offering a plan versus penalties must be weighed.
- Self-insuring allows employers more flexibility but comes with new reporting rules. Sending employees to exchanges is another option starting in
- Medical billing companies handle the process of submitting claims to insurance companies and getting paid for physicians' services, as the process is lengthy, complicated, and involves many rules and regulations.
- There are three main parties in medical billing - the physician, the insurance company, and the patient. Medical billing companies work to maximize collections for physicians while complying with insurance company rules and not penalizing patients.
- The main functions of medical billing companies are to process patient information and file claims with private insurance companies and government programs like Medicare and Medicaid in order to get healthcare providers paid on time.
2016 Presentation to the Benefits Committee of the TSA Texas Sign Association on the concept of self-insured group medical stop loss captive for employee health insurance.
The document discusses health insurance and the Malaysian government's plans to privatize healthcare facilities and treatment. This will likely lead to increasing medical fees. Currently, only those who can afford it or have company sponsorship access private healthcare. The government is considering a compulsory national health insurance plan like the UK to address issues of collecting premiums from different groups and ensuring access. However, questions remain about whether health insurance would encourage equitable access to healthcare services or lead to a more polarized system favoring the affluent. The government aims for a restructured national health insurance scheme to attract healthcare workers to rural and underserved areas.
ACA Healthcare legislation and attempts at increasing regulation of self-funding and stop loss coverage are driving more employers toward stop loss captives.
Health Reform Bulletin 116 | Year-End Wrap Up Dec. 29, 2015CBIZ, Inc.
The document summarizes new laws and guidance affecting the Affordable Care Act. Key points include:
- New laws delay several ACA taxes, including the "Cadillac tax" until 2020 and pause insurer fees and medical device taxes.
- IRS guidance provides details on employer shared responsibility rules, including affordability calculations and penalty amounts.
- Deadlines for reporting health coverage on Forms 1095-B and 1095-C were extended to March 31, 2016 for furnishing to individuals and May 31, 2016 for filing with the IRS.
Health Reform Bulletin 116 Year End Wrap Up 12-29-15Daniel Michels
The most recent CBIZ Health Reform Bulletin: Year-End Wrap Up (HRB 116). This issue includes specific information and guidance on:
1. Late breaking development, IRS delays new Affordable Care Act's (ACA) reporting and disclosure obligations!
2. On December 18, 2015 Consolidate Appropriations Act, 2016, and the Protecting Americans from Tax Hikes (PATH) Act of 2015 (H. R. 2029; now Public Law No. 114-113) were signed by the President, and amend several provisions of the Affordable Care Act.
3. The IRS Issued guidance relating to ACA implementation
4. Year-End Reminders
Actuarial Review on Post-Retirement Medical Plans-2014.Antony Okungu
This document provides guidelines for conducting an actuarial review of a post-retirement medical plan in Kenya. It outlines key factors to consider, such as plan membership details, covered benefits, assumptions used, and methodology. The actuary is responsible for estimating future medical costs, which requires analyzing claims experience, adjusting for factors like medical trend, and making assumptions about mortality, withdrawal rates, and retirement patterns. Sensitivity testing is also recommended to illustrate the impact of changes to assumptions. The review will help advise on accrued liabilities and costs of providing post-retirement medical benefits.
The document discusses rising healthcare costs in the US and a new study projecting that healthcare spending will increase substantially over the next decade. It also summarizes strategies that large employers are implementing to better manage costs, such as health improvement programs, engagement of employees, accountability measures, and use of technology. Finally, it provides legislative updates on expanded preventive care coverage for women and subsidies available through the Affordable Care Act.
The IRS issued Notice 2015-16 seeking comments on key issues related to the upcoming "Cadillac tax" on high-cost employer health plans. The notice focuses on defining "applicable coverage", determining the cost of coverage, and applying the annual dollar limits. The IRS specifically requests input on topics like the treatment of health reimbursement arrangements, on-site medical clinics, and how dollar limits should apply when employees have multiple types of coverage. Comments are requested by May 15 to help guide future rulemaking around calculating and assessing the 40% excise tax.
Consumer-Centric Technology in Benefits AdministrationCraig Burma
This document discusses defined contribution (DC) health benefit plans, also known as "DC health plans". It examines the key features of DC health plans, including how employer contributions are determined and issues around employee choice and plan design innovations. The advantages and disadvantages of DC health plans for employers and employees are also assessed. While interest in DC health plans is growing due to rising healthcare costs and complexity, significant challenges around implementation remain. Widespread adoption of full DC health plans may depend on factors like unemployment levels and further healthcare cost increases.
Similar to Alert health care reform bill - hhs issues additional guidance on transitional reinsurance program (20)
This document summarizes key Social Security, Medicare, and retirement plan limits for 2017 and 2018. For Social Security, the wage base and maximum annual benefit increased slightly, as did annual retirement earnings limits. For Medicare, premiums and deductibles increased modestly. For retirement plans, the compensation limit and contribution limits increased, with the defined benefit plan limit rising to $220,000. Health savings account contribution and deductible/out-of-pocket expense limits also increased for individual and family coverage.
The document introduces The HR Trove, an online store providing HR products and expertise. The store offers around 100 basic products to start with areas like benefits, compensation, and employee development. Sample products include HR software, videos, surveys, guides, templates and reports covering topics such as benefits for different generations, compensation benchmarking, and employment policies. The HR Trove aims to be a one-stop shop matching the breadth of HR solutions and trusted expertise that clients expect from Willis Towers Watson.
The document is a survey report from Willis that summarizes the results of their 2015 Benefits Benchmarking Survey. Some key findings include:
- PPO/POS plans are offered by 87% of employers and are the most prevalent plan type. HSA-eligible CDHPs are the second most offered at 47%.
- On average, employers offer 3 or fewer medical plan options. The majority (85%) of employers offer 3 plans or fewer.
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The IRS issued a second notice regarding guidance on the Cadillac tax, set to take effect in 2018. The notice addresses issues such as who is liable for the tax, employer aggregation rules, determining the cost of coverage, and adjusting the dollar limits based on employee age and gender. The IRS is considering designating Form 720 as the method for paying the excise tax on a particular quarter of the calendar year. Comments on the notices are due by October 1, 2015, after which the IRS intends to issue proposed regulations.
The IRS released interim guidance on how certain provisions of the Affordable Care Act apply to expatriate health plans under the Expatriate Health Coverage Clarification Act of 2014. The guidance provides additional time for expatriate plans to modify their plans to meet exemption requirements under the new law. It also clarifies that the Patient-Centered Outcomes Research Institute fee does not apply to plans that cover qualified expatriates as defined by the act. The interim guidance applies to policies issued or renewed on or after July 1, 2015 and plan years starting on or after that date.
The Patient-Centered Outcomes Research Institute (PCORI) was created by the Affordable Care Act to promote research that compares the effectiveness of medical treatments. PCORI is funded by an annual fee paid by health insurers and sponsors of self-insured health plans. Plan sponsors must calculate the average number of lives covered and pay the PCORI fee of $2 per life for plan years ending before October 1, 2014 or $2.08 per life after on Form 720 by July 31 of the year following the plan year. Responsibility for paying the fee lies with the health insurer for fully insured plans and the plan sponsor for self-insured plans.
The IRS has released draft guidance on electronic filing of Affordable Care Act reporting forms for 2014 and beyond. The guidance outlines the two-step process that issuers and transmitters must follow to register with the IRS e-Services system and obtain a Transmitter Control Code to file ACA Information Returns electronically using the Affordable Care Act Information Returns system. Only XML file formats are accepted, with a 100MB limit per transmission. Employers with 250 or more employees should begin preparing now to file electronically by the first quarter 2016 deadline.
- The document discusses communications that some employers have received from the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) regarding Transitional Reinsurance Fee (TRF) payments for 2014. These communications were inadvertently sent to some employers even when the insurance company had submitted the payment.
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- The guidance aims to help CMS reconcile records by confirming whether TRF payments were made for covered employers and collecting additional information from insured employers where
The EEOC published proposed rules on how Title I of the ADA applies to employer wellness programs that are part of group health plans. The proposed rules provide guidance to employers on how wellness programs can comply with ADA and HIPAA provisions. For a wellness program to be considered voluntary under the proposed rules, employees cannot be required to participate, cannot be denied health coverage or benefits for non-participation, and employers cannot retaliate against employees. Employers must also provide a notice to employees about what medical information is collected and how it is used and kept private.
The document discusses IRS Notice 2015-16 regarding guidance on the excise tax on high-cost employer-sponsored health plans, also known as the "Cadillac tax". The Notice seeks comments on key issues related to implementing the tax. Willis is participating in an industry group response and provides a template letter for plan sponsors to submit their own comments to the IRS by May 15, 2015. The letter template is available on Willis' website.
The document summarizes a recent FAQ from the Department of Labor regarding the implementation of health care reform law. The FAQ provides an update on when final rules for the summary of benefits and coverage (SBC) and uniform glossary will be issued. According to the FAQ, final rules are intended to apply for plan years beginning on or after January 1, 2016, and the new SBC template and documents will be finalized by January 2016 and apply for plan years beginning on or after January 1, 2017. The proposed regulations would amend previous SBC regulations and templates to make them more user-friendly.
The document discusses the current status of the Patient Protection and Affordable Care Act (PPACA) five years after its enactment. It covers three key areas: regulatory guidance, legal challenges, and legislative efforts to amend or repeal the law. Regarding regulatory guidance, employers are waiting for rules on provisions like the excise tax on high-cost plans and nondiscrimination requirements for insured plans. There have been several legal challenges to PPACA, with the Supreme Court upholding the individual mandate but limiting expansion of Medicaid. Congress has unsuccessfully attempted to fully repeal PPACA but has considered some amendments. Overall, PPACA continues to significantly impact employers as they comply with its provisions.
The Supreme Court heard oral arguments in King v. Burwell, a case that will determine whether the Affordable Care Act allows tax subsidies for health insurance purchased through federal exchanges. A ruling for the plaintiffs could significantly impact employer penalties under the employer mandate by limiting penalties only to employees who receive subsidies through state exchanges, rather than federal exchanges used by many states. Employers should continue their compliance efforts and await the Supreme Court's ruling in late June before making any changes.
The Department of Labor, Internal Revenue Service, and Equal Employment Opportunity Commission have released their semiannual regulatory agendas outlining new regulations for the coming year. In a change, most of the anticipated new rules do not focus on implementing provisions of the Affordable Care Act as they have for the past five years. The agendas include only a few exceptions and are otherwise modest in terms of new health plan regulations. This may provide an opportunity for employers to review their compliance efforts over the past five years and prepare for potential increased agency audits by documenting their actions. The summaries highlight some areas where new guidance is being developed, including updates to COBRA and preventive services notices, clarification of wellness programs under the ADA
The IRS released final forms and instructions for health care reform reporting in 2014 and 2015. Forms 1095-B and 1094-B are used by health insurers to report minimum essential coverage to individuals and the IRS. Forms 1095-C and 1094-C are used by applicable large employers to report offers of health coverage to employees and the IRS to determine employer shared responsibility penalties. While reporting is voluntary for 2014, it will be mandatory beginning in 2016. The final forms and related Q&As are now available on the IRS website.
News Flash January 27 2015 - Settled Law Changing _ Retiree Medical Benefits...Annette Wright, GBA, GBDS
The following article describes a new employee benefits development (Supreme Court decision could make it easier for employers to reduce union retiree health benefits).
News Flash January 27 2015 - Settled Law Changing _ Retiree Medical Benefits...
Alert health care reform bill - hhs issues additional guidance on transitional reinsurance program
1. HUMAN CAPITAL PRACTICE
ALERT:
HEALTH CARE REFORM BILL
January 2013 www.willis.com
HHS ISSUES ADDITIONAL GUIDANCE
ON TRANSITIONAL REINSURANCE
PROGRAM
Section 1341 of the Patient Protection and Affordable Care Act (PPACA) requires that standards
be implemented enabling states to establish and maintain a transitional reinsurance program.
The purpose of the program is to help stabilize premiums for coverage in the individual health
insurance market.
PPACA provides for three risk-spreading mechanisms to mitigate the potential impact of adverse
selection and to stabilize premiums: a risk corridor, a risk adjustment program and the
transitional reinsurance program. Only the reinsurance program is discussed in this Alert, as it is
the program of particular interest to plan sponsors of group health plans.
On March 23, 2012 the Department of Health and Human Services (HHS), issued a final
regulation implementing the premium stabilization rules. However, those regulations did not
provide the most important information for employers that sponsor group health plans: the
amount that will have to be paid. The Willis Alert addressing those earlier regulations can be
found here.
On December 7, 2012 HHS published proposed regulations that expand and revise some of the
prior guidance, such as addressing the reinsurance amount and other structural changes to the
program to provide uniformity from state to state. The proposed regulations can be found here.
BACKGROUND
Starting in 2014, due to insurance reform under PPACA, health coverage will be available to
anyone, regardless of health status, either in the individual market or through the small group
market. This unfettered availability may result in adverse selection (i.e., the tendency for high-risk
individuals to buy health insurance and low-risk individuals to defer purchase of health insurance)
which in turn would result in fewer healthy enrollees. Such adverse selection may ultimately cause
premiums to increase in any market, but especially in the individual and small group markets.
In order to stabilize these increasing premiums, especially in the first three years (2014-2016) of
operation of state insurance exchanges, PPACA provides for the implementation of a transitional
reinsurance program. Reinsurance is basically buying protection against the possibility that
some rare set of circumstances (such as high claim cost) might produce losses that an insurer is
unable to fund on its own. Thus, the reinsurance program under PPACA is designed to reduce the
uncertainty of insurance risks in the individual market by making payments for high-cost claims.
According to the HHS guidance, the “reinsurance program is designed to protect against
2. insurers’ potential perceived need to raise premiums due to the implementation of the 2014
market reform rules, specifically guaranteed availability.”
The reinsurance program will be funded with payments to an “applicable reinsurance
entity” from health insurance issuers and certain plan administrators on behalf of group
health plans. Although the regulations provide for states to establish a reinsurance program,
even if not establishing a health insurance exchange, states are not required to establish
such a program. If a state chooses not to establish a reinsurance program, then HHS will
establish it for the state. The program is scheduled to run for a three-year period beginning
January 1, 2014.
AMOUNT OF RESINSURANCE CONTRIBUTIONS AND
REIMBURSEMENTS
In order to fund the transitional reinsurance program, PPACA provides for aggregate
contributions in the amount of $12 billion for plan years beginning in 2014, $8 billion for
plan years beginning in 2015 and $5 billion for plan years beginning in 2016. The
contributions consist of three components: a basic contribution rate, a contribution to the
U.S. Treasury, and an amount to cover administrative costs. It is noted in the guidance that
the $5 billion payable to the Treasury is the same amount appropriated for the Early Retiree
Reinsurance Program (ERRP). Reinsurance contributions are calculated by adding the basic
contribution rate, the U.S Treasury contribution and administrative costs and then dividing
by the estimated number of enrollees in plans that must make reinsurance contributions.
National Per Capita = Basic contribution rate + U.S. Treasury contribution +
Contribution Rate Administrative cost
Estimate of enrollees in plans subject to contributions
HHS determines the national per capita contribution rate for a benefit year (defined to be a
calendar year). Based on the required 2014 amounts, HHS has estimated the per capita
amount as $5.25 a month, or $63 a year. The per capita contribution will be applied to all
“reinsurance contribution enrollees” who are defined as individuals covered by a plan for
which reinsurance contributions must be made pursuant to the final regulations. Since the
regulations reference individuals covered by a plan, this means that “reinsurance
contribution enrollees” are employees, spouses and dependents, and the fee will be
applicable to all of these.
HHS is responsible for allocating reinsurance payments to appropriate insurance issuers in
a state. In 2014, insurers will receive a reimbursement of 80% of the individual claims that
exceed an attachment point of $60,000 up to a national reinsurance cap of $250,000. For
example, for an individual claim of $100,000, the insurer will receive 80% of $40,000 or
$32,000 ($100,000 - $60,000 attachment point = $40,000 X 80%).
Additionally, the proposed regulations provide that a state may elect to collect additional
reinsurance contributions for administrative expenses or reinsurance payments. However,
due to the federal preemption of state laws that relate to an ERISA-covered plan, a state
cannot collect an additional reinsurance contribution from an ERISA self-insured plan.
2 Willis North America • 1/13
3. AFFECTED PLANS AND EXCEPTIONS n Health flexible spending accounts (FSAs)
that meet the definition of an excepted
benefit
Health insurance issuers and third-party administrators (TPAs) on
n Employee assistance programs, disease
behalf of group health plans, referred to as “contributing entities,” are
management or wellness program as long
generally required to make contributions to the transitional
as the program does not provide for
reinsurance program. The guidance clarifies that the ultimate
major medical coverage
liability for the reinsurance fee rests with the self-insured plan, but
n Stop-loss coverage
that a TPA can remit the fee on behalf of the plan. Presumably,
n Health savings accounts (HSAs)
insurance issuers will pass the fee directly on to the plan sponsor of
(although reinsurance contributions are
the group health plan by way of premiums. Thus, the plan sponsor
required for the high deductible health
(generally the employer) should be prepared to fund this
plan)
contribution, regardless of being fully insured or self-insured.
n Health reimbursement arrangements
Furthermore, a self-insured plan that is self-administered is expected
(HRAs) integrated with a group health
to make the reinsurance payments directly. Neither the statute nor
plan (although reinsurance contributions
the regulations provide exceptions for governmental or church plans
are required for the group health plan)
that are self-insured.
n Tribal coverage offered to tribal
members, their spouses and dependents,
PPACA provides that contribution amounts for the reinsurance
in their capacity as tribal members and
program are to reflect an insurer’s “commercial book of business for
not in their capacity as current or former
all major medical products.” Thus, the statute is being interpreted to
employees of the tribe or their
require reinsurance contributions only for “major medical coverage”
dependents, as this would not be a
which the proposed regulations define as “health coverage which may
commercial book of business
be subject to reasonable enrolled cost sharing, for a broad range of
services and treatments including diagnostic and preventive services,
Although there is not a per se exemption for
as well as medical and surgical conditions provided in various settings,
retiree plans, the proposed regulations clarify
including inpatient, outpatient, and emergency room settings.” The
that when an individual has both Medicare
proposed regulations provide that the following types of plans and
and employer-provided coverage, the group
coverage would be excluded from reinsurance contributions.
health plan will only be considered major
medical coverage when the group health plan
n Medicare, Medicaid, CHIP or state high-risk pools, because they
is primary to Medicare. So for example, a
are not part of an insurer’s commercial book of business;
working 68-year-old covered under the
likewise, Medicare Part C or Part D programs are part of a
employer’s group health plan and enrolled in
“governmental book of business” and excluded from the
Medicare (with the group health plan as
reinsurance contribution
primary) would be counted for purpose of the
n Coverage that is not issued on a form filed and approved by a
reinsurance contribution. A 68-year-old
state insurance department (expatriate coverage may fall within
retiree who is enrolled in the group health
this category)
plan (with Medicare as primary) would not be
n Coverage only for a specified disease or illness and hospital
counted for the reinsurance contribution.
indemnity or other fixed indemnity insurance
This is the same application that would be
n Stand-alone dental or vision plans
used for a group health plan covering pre-
n Liability insurance, including general liability and automobile
Medicare retirees, disabled employees where
n Workers’ compensation
Medicare is not primary and COBRA
n Credit-only insurance
beneficiaries.
n Long-term care
3 Willis North America • 1/13
4. CALCULATING REINSURANCE CONTRIBUTIONS
The reinsurance contribution is applicable for a group health plan based on the average
number of lives (employees and dependents) covered under the plan. Although the
contribution is required for insurers and the administrators of self-insured plans, this Alert
is only addressing the calculation method for a self-insured plan, as insurers are responsible
for the contribution for a fully insured plan. The guidance provides a number of methods for
calculating the average number of lives for a self-insured group health plan. To be
consistent, a plan sponsor must use the same method for the duration of a calendar year;
however, a different method may be used from one calendar year to the next. These methods
are similar to those provided for determining the Patient Centered Outcomes Research
Institute (PCORI) fee (also referred to in previous communications as the Comparative
Effectiveness Research fee). Contributions can be calculated using a different method for
the reinsurance fee than for the PCORI fee. Note again that the PCORI fee is based on a plan
year, while the reinsurance contribution is based on a benefit year, defined by HHS as a
calendar year.
At the same time HHS issued the proposed regulations, the Internal Revenue Service (IRS)
issued a Transitional Reinsurance Program FAQ, which provides that health insurance
issuers and a sponsor of a self-insured group health plan may treat the reinsurance program
contributions as ordinary and necessary expenses paid or incurred in carrying on a trade or
business, subject to any applicable disallowances. Furthermore, a footnote contained in the
preamble to the new proposed regulations states, “[t]he Department of Labor has reviewed
this proposed rule and has advised that paying required reinsurance contributions would
constitute a permissible expense of the plan for purposes of Title I of [ERISA] because the
payment is required by the plan under the Affordable Care Act as interpreted in this
proposed rule.” Accordingly, it appears that plan sponsors may elect to reimburse the cost of
the annual fee from the respective plan, as permitted by ERISA and DOL regulations and
guidance issued thereunder. If electing to reimburse this cost from the plan, plan sponsors
should ensure that the plan document properly reflects this provision.
ACTUAL COUNT METHOD
The average number of lives covered under the plan for the plan year can be determined by
adding the total number of lives covered for each day of the first nine months of the calendar
year and dividing that total by the number of days in those nine months.
EXAMPLE: Employer is the plan sponsor of a self-insured health plan. Employer
determines the sum of the lives covered for each day of the first nine months in the
applicable calendar year as 2,463,750. The average number of lives covered under the
plan will be determined by dividing 2,463,750 by 273 days (the number of days in the
first nine months of a normal calendar year, i.e., not considering a leap year): 9,024.
SNAPSHOT FACTOR METHOD
Add the totals of lives covered on any date (or more dates if an equal number of dates are
used for each quarter) during the same corresponding month in each quarter and divide
that total by the number of dates on which a count was made. The number of lives covered
on a date is calculated by adding the number of participants with self-only coverage on the
date to the product of the number of participants with coverage other than self-only
4 Willis North America • 1/13
5. coverage multiplied by 2,35. This counting method is only used over Procedures for counting covered lives for
the first three quarters of the calendar year. The date or dates for each group health plans with a self-insured
quarter generally must be the same, except that the date used for the coverage option and an insured coverage
second and third quarters must fall within the same week of the option.
quarter as the corresponding date used for the first quarter.
When determining the number of covered
EXAMPLE: Employer has a self-insured health plan providing lives for reinsurance contributions for a
coverage for employee, employee plus one and family. Employer group health plan that has insured and
designates the first day of each quarter for determining covered self-insured options, the plan must use either
lives. On January 1 there is employee-only coverage for 600 the Actual Count Method or the Snapshot
participants, and 800 for other than employee-only coverage. Factor Method.
On April 1 there is employee-only coverage for 608 lives and 800
for other than employee-only coverage. On July 1 the plan
provides employee-only coverage for 610 lives and for other
MULTIPLE PLANS
than employee-only coverage 809 lives. The average number of
For the purpose of the reinsurance
lives covered under the plan for the plan year is 2,493. [((600 +
contribution, a plan sponsor has multiple
(2.35 X 800) + ((608 + (2.35 x 800) + ((610 + (2.35 x 809) + ((610 +
plans when it maintains two or more group
2.35 x 809)) divided by three]
health plans (or a group health plan with both
insured and self-insured components) that
FORM 5500 METHOD collectively provide major medical coverage
for the same covered lives. These types of
The average number of lives is determined on the basis of multiple plans are aggregated and treated as a
information in the ERISA Form 5500 filings for the last applicable single self-insured group health plan when
plan year. The guidelines provide that a self-insured group health calculating any reinsurance contribution
plan may rely upon such data, even though the data may reflect amount. This aggregation prevents double
enrollment in a previous benefit year. Plans providing self-only counting of lives across multiple plans.
coverage calculate the number of lives by adding the number of Form
5500 at the beginning and end of the plan year, divided by two. For There are two exceptions to this aggregation
plans providing coverage to employees and dependents, the number rule provided in the proposed regulations.
of lives is the sum of the number of participants of Form 5500 at the
Aggregation is not required with respect to a
beginning and end of the plan year.
group health plan that only provides:
EXAMPLE: Employer has a self-insured health plan with a plan n Coverage for excepted benefits, such as
year of August 1, 2012 through July 31, 2013 offering employee- stand-alone dental or stand-alone vision
only coverage. On Form 5500 the employer reports 4,000 OR
participants on the first day of the plan year and 4,200 n Prescription drug coverage
participants on the last day of the plan year. The plan sponsor
determines the average number of lives covered by adding
4,000 and 4, 200 (8,200) divided by two (4,100). PLAN SPONSOR – PLAN
DOCUMENT
EXAMPLE: Employer has a self-insured health plan with a plan
year of August 1, 2012 through July 31, 2013 offering employee, Because the plan sponsor is responsible for
employee plus one and family coverage. On Form 5500 the payment of the contribution, it is important
employer reports 4,000 participants on the first day of the plan to know how “plan sponsor” is defined. The
year and 4,200 participants on the last day of the plan year. proposed regulations define “plan sponsor”
The plan sponsor determines the average number of lives as the employer in the case of a single
covered by adding 4,000 and 4,200 (8,200). employer, the employee organization, the
5 Willis North America • 1/13
6. board of trustees for a multiemployer plan, the committee for a multiple employer welfare
arrangement (MEWA), the cooperative or association for rural elective cooperatives and the
trustee for a plan maintained by a voluntary employees’ beneficiary association (VEBA).
Generally, when a self-insured plan covers employees of more than one related employer,
they are deemed to be under common control of one employer and one plan sponsor.
However, the proposed regulations for the reinsurance contribution do not contain rules
that would treat related entities as a single employer. Thus, in this situation, the regulations
provide that the plan sponsor (and entity responsible for the contribution) will be the
person identified in the terms of the plan document that governs the plan. In addition to
being named in the plan document as the plan sponsor, the entity must also consent to the
designation by no later than the date by which the count of covered lives for that benefit year
(calendar year) is required to be provided.
If a plan sponsor is not designated in the terms of the plan document then the plan sponsor
is each employer which has employees covered under the plan. Thus, each employer would
be responsible for making any applicable reinsurance contribution for the employees it has
covered under the plan. This provision again emphasizes the importance of an employer
ensuring its plan is established and governed by a plan document (and that such document
properly designates the plan sponsor).
REMITTING REINSURANCE CONTRIBUTIONS
In order to simplify the collection of the reinsurance contributions for insurers and self-
insured group health plans, HHS will be the only collecting entity and will collect
contributions on an annual basis for all states. Initially it was proposed that the states would
establish their own collections on a quarterly basis. (However, if a state decides to operate its
own reinsurance program, then this would be a separate fee and would not be collected by
HHS.) The guideline for paying payments will be as follows:
n By November 15 of each benefit year (2014, 2015, and 2016) the contributing entity
submits to HHS an enrollment count of the average number of covered lives subject to
the reinsurance contribution.
n HHS will notify the contributing entity within 15 days of submission of the annual
enrollment count or by December 15, whichever is later, of the reinsurance contribution
amount to be paid.
n Contributions by the contributing entity are required to be remitted within 30 days
after HHS’ notification of contributions.
CONCLUSION
The transitional reinsurance program is to assist in stabilizing premiums for the individual
and small group market in 2014. It is likely to result in additional costs for employer-plan
sponsors. Plan sponsors of both fully and self- insured plans need to begin to consider the
additional costs the plan may incur. Also, plan sponsors of self-insured plans will need to
work with their TPAs to determine how they intend to administer the contribution.
6 Willis North America • 1/13
7. KEY CONTACTS
U.S. HUMAN CAPITAL PRACTICE OFFICE LOCATIONS
NEW ENGLAND ATLANTIC Mobile, AL Pittsburgh, PA Irvine, CA
251 544 0212 412 645 8506 949 885 1200
Auburn, ME Baltimore, MD
207 783 2211 410 584 7528 Orlando, FL Schaumburg, IL Las Vegas, NV
407 562 2493 847 517 3469 602 787 6235
Bangor, ME Knoxville, TN 602 787 6078
207 942 4671 865 588 8101 Raleigh, NC SOUTH
704 344 4856 CENTRAL Los Angeles, CA
Boston, MA Memphis, TN 213 607 6300
617 437 6900 901 248 3103 Savannah, GA Amarillo, TX
912 239 9047 806 376 4761 Phoenix, AZ
Burlington, VT Metro DC 602 787 6235
802 264 9536 301 581 4262 Tallahassee, FL Austin, TX 602 787 6078
850 385 3636 512 651 1660
Hartford, CT Nashville, TN Portland, OR
860 756 7365 615 872 3716 Tampa, FL Dallas, TX 503 274 6224
813 490 6808 972 715 2194
Manchester, NH Norfolk, VA 813 289 7996 972 715 6272 Rancho/Irvine, CA
603 627 9583 757 628 2303 562 435 2259
Vero Beach, FL Denver, CO
Portland, ME Reston, VA 772 469 2842 303 765 1564 San Diego, CA
207 553 2131 703 435 7078 303 773 1373 858 678 2000
MIDWEST 858 678 2132
Shelton, CT Richmond, VA Houston, TX
203 924 2994 804 527 2343 Appleton, WI 713 625 1017 San Francisco, CA
800 236 3311 713 625 1082 415 291 1567
NORTHEAST Rockville, MD
301 692 3025 Chicago, IL McAllen, TX San Jose, CA
Buffalo, NY 312 288 7700 956 682 9423 408 436 7000
716 856 1100 SOUTHEAST 312 348 7700
Mills, WY Seattle, WA
Morristown, NJ Atlanta, GA Cleveland, OH 307 266 6568 800 456 1415
973 539 1923 404 224 5000 216 861 9100
New Orleans, LA
Mt. Laurel, NJ Birmingham, AL Columbus, OH 504 581 6151 The information contained
in this publication is not
856 914 4600 205 871 3300 614 326 4722
intended to represent legal or
Oklahoma City, OK tax advice and has been
New York, NY Charlotte, NC Detroit, MI 405 232 0651 prepared solely for
212 915 8802 704 344 4856 248 539 6600 educational purposes. You
Overland Park, KS may wish to consult your
attorney or tax adviser
Norwalk, CT Gainesville, FL Grand Rapids, MI 913 339 0800
regarding issues raised in
203 523 0501 352 378 2511 616 957 2020 this publication.
San Antonio, TX
Radnor, PA Greenville, SC Milwaukee, WI 210 979 7470
610 254 7289 704 344 4856 414 203 5248
414 259 8837 Wichita, KS
Wilmington, DE Jacksonville, FL 316 263 3211
302 397 0171 904 562 5552 Minneapolis, MN
763 302 7131 WESTERN
Marietta, GA 763 302 7209
770 425 6700 Fresno, CA
Moline, IL 559 256 6212
Miami, FL 309 764 9666
305 421 6208
5 Willis North America • 12/12