U.S. relaxes health law income - Health markets to employ honor system

As reported by the Washington Post:

The Obama administration announced Friday that it would significantly scale back the health law's requirements that new insurance marketplaces verify consumers' income and health insurance status.
Instead, the federal government will rely more heavily on consumers' self-reported information until 2015, when it plans to have stronger verification systems in place.

The delay comes after a Tuesday announcement that the federal government would postpone for one year a requirement that employers with 50 or more full-time workers provide health coverage.

"I think that Health and Human Services is doing the best that it can under the circumstances," said Sara Rosenbaum, a health policy professor at George Washington University.

The verification systems are meant to determine who qualifies for new benefits under the Affordable Care Act. The law includes tax subsidies to purchase health insurance for Americans who earn less than 400 percent of the poverty line, about $45,000 for an individual.

Those earning less than 133 percent of the poverty line - about $15,000 - will qualify for Medicaid coverage in the District and 23 states that have decided to expand the program.

The federal government also needs to know who receives health insurance coverage from an employer. Consumers who receive affordable health insurance from their company under a policy that costs less than 9.5 percent of their income do not qualify for tax credits under the Affordable Care Act.

IRS Determines that the PCOR Fees are Deductible Business Expenses

On May 31, 2013, the IRS released an update memorandum that found that fees paid by issuers of certain health insurance policies and plan sponsors of certain self-insured health plans to fund the Patient-Centered Outcomes Research Trust Fund (PCOR) were ordinary and necessary business expenses, and, thus, deductible business expenses under Section 4375-77 Excise Tax on Certain Insurance Policies.

To view the complete IRS Memo:  http://www.irs.gov/pub/irs-utl/AM2013-002.pdf

Final Rules on Employment Based Wellness Programs Released

On May 23, 2013, the DOL, Treasury and HHS finalized the HIPAA Nondiscriminatory Wellness Programs Regulations that were proposed in November 2012, clarifying what will work and what will not work for 2014 and beyond.

 

The accompanying news release stated that the “final rules ensure flexibility for employers by increasing the maximum reward that may be offered under appropriately designed wellness programs.”

DOL Releases Guidance on Model Exchange Notice & Model COBRA Election Notice

The Department of Labor released Technical Release 2013-02 on May 8, 2013. It provided guidance for the Model Exchange Notice and the Model COBRA Election Notice. A copy of Technical Release 2013-02 follows:

I. Introduction

This Technical Release provides temporary guidance regarding the notice requirement under FLSA section 18B and announces the availability of the Model Notice to Employees of Coverage Options. This Technical Release also provides an updated model election notice for group health plans for purposes of the continuation coverage provisions under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to include additional information regarding health coverage alternatives offered through the Marketplace.

Departments Issue FAQ on Summary of Benefits & Coverage Changes

On Tuesday, April 23, 2013, HHS, Treasury and the DOL published Part XIV of their FAQs on the Affordable Care Act, focusing on revisions to the Summary of Benefits and Coverage (SBC).

 

The seven-question FAQs introduce two primary changes, which take effect for plan years starting on or after January 1, 2014:

• A statement indicating whether a plan provides minimum essential coverage (MEC)
• A statement answering whether the plan's share of the total allowed costs of benefits meets applicable minimum value (MV) requirements (i.e., at least 60 percent of allowed charges for covered services, also known as bronze level coverage)

Plans may provide this information by either updating their SBCs or providing it in a cover letter. The departments provided sample language in the FAQs. In addition, the SBC template has been updated as well as the sample completed SBC. The uniform glossary remains unchanged.

 

In a previous notice, the departments indicated that more wholesale changes would be likely for 2014, including revisions and additions to the coverage examples. However, these FAQs confirm that the MEC and MV statements are the only required changes. Also, much of the transition relief provided in 2013 has been extended to 2014. See Q/A-5 in the FAQs for additional details.

 

FAQs about the the Affordable Care Act Implementation Part XIV

 

Original article courtesy of Infinisource:  http://newsroom.infinisource.com/post/2013/04/25/Departments-Issue-FAQ-on-Summary-of-Benefits-Coverage-Changes.aspx

New fact sheets answer questions about Health Reimbursement Arrangements

An FAQ issued by the Department of Labor on January 24, 2013 stated that stand-alone HRAs used to buy an individual policy is not considered combined employer-sponsored coverage that follows the annual dollar limit requirement. If employees are offered an HRA and employer-sponsored coverage and turn down the employer-sponsored coverage, the stand-alone HRA will violate the law. The FAQ does allow amounts already in a stand-alone HRA before January 1, 2014 to be drawn on after that time if certain standards are met.

Anthem HRA Fact Sheet

Small Businesses Pursue Health Law ‘Loophole’

Summary: Self-insurance, once the purview of only large companies, is becoming popular with small employers, too. But it could be a threat to the Affordable Care Act, since self-insured companies are exempt from many of the health law's requirements.

Article:  Small Businesses Pursue Health Law ‘Loophole’

Most PPACA Provisions for Expatriate Plans Delayed Until 2015

On March 8, 2013, the Departments of Labor, Health and Human Services and Treasury issued a Frequently Asked Question (FAQ) announcing that compliance with most Patient Protection and Affordable Care Act (PPACA) provisions is being delayed for expatriate plans meeting this definition:

HRAs & PCORI Fees

As part of The Patient Protection and Affordable Care Act (PPACA) a new fee was introduced to be paid by health insurers and self-funded plan sponsors to fund the Patient-Centered Outcomes Research Institute (PCORI). The PCORI was established by the Act to promote the use of evidence-based medicine by disseminating comparative clinical effectiveness research findings. In mid December, the IRS released final regulations and guidance on the calculation and payment of the PCORI fees. Plans that are subject to the fee are:

Medical Loss Ratio Rebates - Final Rule Update

HHS is amending the Medical Loss Ratio program, also known as the 80 / 20 rule, to ensure that, beginning in 2014, issuers include premium stabilization amounts in medical loss ratio and rebate calculations. HHS is extending the annual medical loss ratio reporting deadline from June 1 to July 31, and the rebate disbursement deadline from August 1 to September 30 to take into account the premium stabilization programs. This change will allow issuers to accurately calculate their medical loss ratios while ensuring that consumers receive rebates as quickly as possible. HHS is also allowing tax-exempt not-for-profit issuers to deduct community benefit expenditures (subject to caps) and State premium tax from premium in calculating medical loss ratios and rebates. This change promotes a level playing field for issuers within each State.

HHS Releases Final Regulations on Essential Health Benefits Standards

On February 20, 2013, the Department of Health and Human Services (HHS) released a final rule that helps consumers shop for and compare health insurance options in the individual and small group markets by promoting consistency across plans, protecting consumers by ensuring that plans cover a core package of items that are equal in scope to benefits offered by a typical employer plan, and limiting their out of pocket expenses.

The Final Rules include details on:

• Essential Health Benefits (EHB) benchmark and default plans
• Determining Actuarial Value (AV) and Employer Mandate Minimum Value (MV)
• Preventive care
• Cost sharing requirements