Health Care ReformCountdown:202 Days until 2014Tom DalyManaging PartnerBenefit Administration Group(504) 708-5382
About Benefit Administration Group• Established as Hartwig Moss Benefits in 2001. Acquired in 2010 andrebranded as Benefit Administration Group.• 75 employer clients and over 7,000 individual and employee clients.• Team of experience insurance carrier, medical provider, human resourcesand employee benefits technology professionals.• President-Elect of local chapter of the Society for Human ResourceManagement (SHRM) - www.hrmaneworleans.org• World’s largest association devoted to human resource management• 250,000 members in 125 countries• 375+ local human resource professionalswww.bagllc.com
Agenda• Implementation Update – Where Are We Now?• What is Coming in 2014?• 90-Day Limitation on Waiting Periods• Annual Limitations on Out-of-Pocket Cost Sharing• Availability of Health Insurance Exchanges/Marketplaces• Coverage of Essential Health Benefits• Dependent Coverage to Age 26 for Grandfathered Plans• Employer Shared Responsibility ("Pay or Play")• Expanded Medicaid and CHIP?• Guaranteed Availability of Coverage and Limits on Variations in Premiums• Individual Mandate• No Annual Limits or Preexisting Condition Exclusions• Premium Subsidies• Small Business Tax Credit?• Wellness Programs• Group Hug?• Questions?
Memory Lane• Tax Credits for Some Small Businesses: 2010-2013?• Preventive Coverage• Grandfathering?• Extended Child Coverage• Annual and Lifetime Caps Eliminated• Appeals Process• Break Time Requirement for Nursing Mothers• Grants for Small Businesses to Provide Comprehensive Workplace WellnessPrograms?• Simple Cafeteria Plans?• Medicare Part D• Medical Loss Ratio• Summary of Benefits and Coverage• Reporting Costs of Employer-Provided Health Coverage on Forms W-2• Medical Loss Ratio (MLR) Rebates• Expanded Coverage of Preventive Services for Women• Comparative Effectiveness Research Fees• Community Living Assistance Services and Supports?
Where Are We Now?Medicare Tax Increase for High EarnersFor taxable years beginning after December 31, 2012, individuals will be liablefor an Additional Medicare Tax (at the rate of 0.9%) if the individuals wages,other compensation, or self-employment income, together with that of his orher spouse if filing a joint return, exceed the threshold amount for theindividuals filing status. The IRS has released Questions and Answers related tothe increase. Proposed rules have also been issued regarding implementation ofthe Additional Medicare Tax. Taxpayers may rely on the proposed rules for taxperiods beginning before the date that final regulations are published in theFederal Register.An employer is required to withhold the Additional Medicare Tax on wages orcompensation it pays to an employee in excess of $200,000 in a calendar year.There is no "employer match" for the Additional Medicare Tax (unlike theregular Medicare tax) and there is no requirement that an employer notify itsemployees when it begins withholding the Additional Medicare Tax.
Where Are We Now?Health FSA Contribution LimitsEffective for plan years beginning on or after January 1, 2013, the amountof salary reduction contributions to a health flexible spending account(FSA) is limited to $2,500 annually, adjusted for inflation. An amendmentto a written cafeteria plan reflecting this change may be adopted at anytime through the end of calendar year 2014.The $2,500 limit does not apply to contributions or amounts available forreimbursement under other types of FSAs, health savings accounts (HSAs),or health reimbursement arrangements (HRAs), or to salary reductioncontributions to cafeteria plans used to pay an employees share of healthcoverage premiums.
Where Are We Now?Employer-Provided Notice Regarding Health InsuranceExchanges/MarketplacesSpecial Update: Not later than October 1, 2013, employers are required toprovide each current employee a written notice with information about aHealth Insurance Exchange. Employers must provide the notice to each newemployee at the time of hiring beginning October 1, 2013. Model languagethat employers may use to satisfy the notice requirement is available fromthe DOL.
What Is Coming in 2014?90-Day Limitation on Waiting PeriodsIn plan years beginning on or after January 1, 2014, a group health plan orgroup health insurance issuer may not apply any waiting period thatexceeds 90 days.A waiting period is the period of time that must pass before coverage foran employee or dependent who is otherwise eligible to enroll under theterms of a group health plan can become effective.
What Is Coming in 2014?Annual Limitations on Out-of-Pocket Cost SharingBeginning in 2014, non-grandfathered group health plans must ensure thatcost-sharing under the plan does not exceed certain limitations, includinglimits on both out-of-pocket maximums and deductibles:The annual limitation on out-of-pocket expenses is tied to the enrollee out-of-pocket limit for high deductible health plans in connection with healthsavings accounts (HSAs).The annual limitation on deductibles for plans in the small group marketmay not exceed $2,000 (for self-only coverage) or $4,000 (for non-self-onlycoverage), for plan years beginning in calendar year 2014.Contributions to flexible spending arrangements (FSAs) are not taken intoaccount when determining the deductible maximum.
What Is Coming in 2014?Availability of Health Insurance Exchanges/MarketplacesExchanges are expected to begin operating in 2014 as an option forindividuals to buy private health insurance. Exchanges will also operate asmall business health options program (SHOP) as an option for qualifiedsmall employers to purchase employee health coverage. Businesses withup to 100 employees will be eligible to participate in SHOPs, althoughstates may limit participation to businesses with up to 50 employees until2016.Key Employer Choice Feature of SHOP Exchanges Delayed Until 2015A final rule delays the requirement for SHOPs to provide employers theoption of offering employees a choice of any qualified health plan (QHP) ata single level of coverage selected by the employer, until plan yearsbeginning on or after January 1, 2015.
What Is Coming in 2014?Coverage of Essential Health BenefitsNon-grandfathered plans offered in the small group market (both inside andoutside of exchanges) must cover a core package of items and servicesknown as "essential health benefits" beginning in 2014. Final rules have beenissued which outline issuer standards related to coverage of these essentialhealth benefits.Dependent Coverage to Age 26 for Grandfathered PlansThe temporary exception for grandfathered plans from the requirement thatdependents be covered to age 26 no longer applies for plan years beginningon or after January 1, 2014. As a result, both grandfathered and non-grandfathered group health plans that cover dependents must makecoverage available until a child reaches age 26, regardless of other coverageoptions.
What Is Coming in 2014?Employer Shared Responsibility ("Pay or Play")Beginning in 2014, employers with 50 or more full-time equivalent employeesmay be required to make an annual shared responsibility payment if any full-time employee is certified to receive a premium tax credit or cost-sharingreduction payment.If an employer does not offer its full-time employees (and their dependents)the opportunity to enroll in minimum essential coverage under an eligibleemployer-sponsored plan, the penalty amount is $2,000 for each full-timeemployee (excluding the first 30 full-time employees).If an employer offers the opportunity to enroll in minimum essential coveragethat is either unaffordable relative to an employees household income or doesnot provide minimum value, the penalty is the lesser of $3,000 for each full-time employee receiving a tax credit or cost-sharing reduction, or $2,000 foreach full-time employee (excluding the first 30 full-time employees as above).
What Is Coming in 2014?Employer Shared Responsibility ("Pay or Play") - ContinuedNote: Proposed rules have been issued which provide that an employer who is subject tothe requirements would generally be treated as offering coverage to its full-timeemployees for a calendar month if, for that month, it offers coverage to at least 95% of itsfull-time employees (and their dependents, i.e., children under 26 years of age). Toprovide employers sufficient time to expand their health plans to add dependentcoverage, transition relief is available for plan years that begin in 2014. Specifically, anemployer that takes steps toward satisfying the requirement to offer coverage todependents of full-time employees during its plan year that begins in 2014 will not beliable for a penalty solely based on the failure to offer coverage to such dependents forthat plan year.Coverage is unaffordable for an employee if the required contribution for self-onlycoverage exceeds 9.5% of household income for the taxable year. (At least through theend of 2014, employers may rely on a safe harbor if the coverage offered isaffordable based on an employees Form W-2 wages.) An eligible employer-sponsoredplan generally provides minimum value if the plan pays for at least 60% of covered healthcare expenses.
What Is Coming in 2014?Expanded Medicaid and CHIP?By 2014, states would be required to extend Medicaid coverage to allindividuals under 65 who have incomes up to 133% of the federal poverty level.The law would also fund the Childrens Health Insurance Program through 2015,and require states to maintain the current eligibility levels for children in theMedicaid and CHIP programs.Special Update: The U.S. Supreme Court has ruled that the portion of the lawwhich threatens states existing Medicaid funding for failure to comply with therequirements related to expanding the scope of Medicaid coverage isunconstitutional.Louisiana is one of 20 states who has decided not to move forward withMedicaid expansion.
What Is Coming in 2014?Guaranteed Availability of Coverage and Limits on Variations in PremiumsFor plan years beginning on or after January 1, 2014, issuers offering non-grandfathered group plans must accept every employer that applies forcoverage, with certain exceptions.Issuers that offer coverage in the small group market must limit any variationin premiums with regard to a particular plan or coverage to age and tobaccouse (within limits), family size, and geography. Final rules have been issuedto implement these requirements.Individual MandateStarting in 2014, the law will require most U.S. citizens and legal residents toobtain health insurance. Increasing levels of penalties will be assessed oncertain individuals who do not obtain coverage.
What Is Coming in 2014?No Annual Limits or Preexisting Condition ExclusionsAll annual dollar limits on coverage of "essential health benefits" are prohibited for grouphealth plans issued or renewed beginning January 1, 2014.Also effective for plan years beginning on or after January 1, 2014, group health plans arenot permitted to exclude individuals from coverage or limit or deny benefits on the basisof preexisting medical conditions. (The prohibition on exclusions of children under 19years of age on the basis of pre-existing conditions began 6 months from the date the lawwas enacted.)Premium SubsidiesIn 2014, the law will provide tax credits to individuals and families with incomes aboveMedicaid eligibility and below 400% of the Federal Poverty Level to buy coverage throughstate-based Exchanges. These individuals and families would be entitled to the credits ifthey are not eligible for or offered other "acceptable coverage."The IRS has issued final regulations relating to the tax credit.
What Is Coming in 2014?Small Business Tax CreditFor up to two years starting in 2014, eligible small businesses (generally those with fewerthan 25 full-time equivalent employees with average annual wages below $50,000) thatbuy health coverage through a SHOP and pay at least half of the premium cost foremployees may receive a tax credit of up to 50% of the contribution.Wellness ProgramsWellness programs that require an individual to satisfy a standard based on a health factorin order to obtain a reward must comply with specific nondiscrimination rules underHIPAA (the Health Insurance Portability and Accountability Act). For plan years beginningon or after January 1, 2014, the maximum permissible reward that may be offered forsuch programs is increased from 20% to 30% of the cost of coverage (final rules furtherraise the maximum from 20% to 50% for wellness programs designed to prevent orreduce tobacco use).