COBRA and the ACA: Compatible or Irreconcilable?

Several key provisions of the Affordable Care Act (ACA) have now been delayed. When the ACA has fully achieved lift off, what will become of COBRA?

 

The simple answer is that COBRA will continue to fly, until and unless another law permanently grounds it. Here are some observations around the interplay between the ACA and COBRA:

• The ACA likes COBRA. Parts of the ACA looked to COBRA concepts as the gold standard for calculations. Case in point is W-2 reporting of health care coverage in IRS Notice 2012-09. More recently, the DOL thought COBRA was important enough to update the Model Election Notice when it released the Exchange Notice. Click here for our article.
• The DOL likes COBRA. Look at this DOL FAQ, which states that the ACA “did not eliminate COBRA or change the COBRA rules.” making it clear that COBRA is not going away. And take a gander at this lengthy 25-year proclamation by the DOL from 2011.
• COBRA fills some ACA gaps. Granted, the Health Insurance Marketplace will provide COBRA qualified beneficiaries with some alternatives for medical coverage. In some cases, the alternatives may be cheaper, but that is not certain. Also, understand that stand-alone dental, vision, prescription drugs are not required to be offered in the marketplace. Neither are flexible benefits like HRAs and Health FSAs. COBRA offers these benefits to the extent that they are employer-sponsored coverage.
• To some extent, the marketplace likes COBRA. To some extent, the Marketplace coordinates with COBRA. For example, take your most common reason for termination of COBRA: premium non-payment. If a qualified beneficiary loses coverage because of non-payment, this person is not entitled to a special enrollment period for Marketplace coverage and must wait until the annual enrollment period. Another thing to consider is when the Marketplace opens in 2014, small employers can obtain Marketplace coverage through the Small Business Health Options Program (SHOP). This coverage would be subject to COBRA because it is employer-sponsored coverage.

 

This is COBRA’s current status: a valid law. The ACA did not change COBRA, as the DOL has pointed out.

 

COBRA and the ACA: Compatible or Irreconcilable? | Infinisource Newsroom

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.”

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

IRS Releases Proposed Regulations on the Employer Mandate

On December 28, 2012, the IRS issued 144 pages of proposed regulations addressing the employer “shared responsibility” mandate (aka Play or Pay mandate) in the Affordable Care Act. In addition, the IRS issued a FAQ summarizing major points of the regulations. Some of the highlights include: