FAQ's released on Deductible, Preventive and Out-of-Pocket Max

Treasury released FAQs on Cost-Sharing Limitations under the ACA

Who must comply with the $2,000 deductible limit?

For now, small groups (under 50) need to comply with the $2,000 deductible maximum. However, there is a provision that allows insurers to offer a plan with a deductible larger than $2,000 if it cannot reasonably reach a given level of coverage on the exchange. 

Who must comply with the annual out-of-pocket maximums?

All non-grandfathered group health plans must comply with this provision.  Beginning with the plan year in 2014, a plan cannot have the member's total expenses (ie. deductibles, coinsurance, co-payments) exceed the HSA limits for that year.  It only applies to in-network expenses.  The limits can change annually, for 2013 they are $6,250 for single coverage and $12,500  for a family. 2014 limits have not been announced yet.

Preventive Services

ACA requires that many preventive services be covered in-network at 100% without any cost-sharing  by the employee. This additional guidance closes a few gaps in this coverage:

• Out-of-network preventive must be covered at 100% when there aren't any network providers who can administer the service(s)
• Certain preventive over-the-counter recommended items(ie. aspirin) must be covered at 100%, but only when prescribed by a health care provider
• Colonoscopy including any polyp removal must be covered at 100% if done as a part of the preventive procedure
• Genetic testing and counseling (specifically the breast cancer susceptibility gene BRCA test) should be covered at 100%
• Preventive services for high risk individuals as determined by their health care provider covered at 100%
• All immunizations recommended by the Advisory Committee on Immunization Practices (ACIP) the plan year after the recommendation is made covered at 100%
• Clarifies that a full range of FDA-approved contraceptives must be covered at 100%, not just oral contraceptives
• Additional guidance on breastfeeding counseling 

The Rockwood Company - Insurance Brokers since 1896 - To find out more about healthcare reform and how it affects your business, please feel free to contact us at ddoe@rockwoodco.com or 312-621-2215.

Final Rules Issued on Market and Rate Review by HHS

The U.S. Department of Health and Human Services released a Final rule on February 22 that implements key provisions of ACA.

The release finalizes five provisions of ACA that are applicable to non-grandfathered health plans.  These provisions apply to groups less than 50 employees and the individual market.

• Guaranteed Renewability - Insurance companies must renew plans with very few exceptions (ie. non-payment of premium)
• Guaranteed Availability - Insurance companies must issue plans to individuals, with no consideration of existing health conditions.  However, individuals can only purchase a plan during certain times of the year which will be considered the open enrollment period.  This first year the open enrollment will be  October - February, but October - December each subsequent year.
• Premiums - Insurance companies can only vary premiums based on age, tobacco use, family size and location.  Age rating can not be greater than 3:1 and tobacco 1.5:1.  This is a monumental change from how premiums are calculated now, expect large rate increases for young and healthy individuals and employer groups.
• Risk Pool - Insurers are required to maintain a single risk pool for claims experience in the individual market and one statewide risk pool for the small group market.
• Catastrophic plans -  Individuals younger than 30 can expect large increases due to the new rating structure.  To try to keep insurance affordable for these individuals, they can satisfy the insurance requirement by purchasing a policy that will be considered catastrophic only coverage.

The Rockwood Company - Insurance Brokers since 1896 - To find out more about healthcare reform and how it affects your business, please feel free to contact us at ddoe@rockwoodco.com or 312-621-2215.

Essential Health Benefits

HHS Releases Final Regulations on Essential Health Benefits

To achieve the goal of quality coverage, the Affordable Care Act has established a set of benefit requirements for individual and small group plans.  As a result, no matter what plan you choose, you will be confident that your basic healthcare needs will be met.  These benefits we refer to as Essential Health Benefits or EHB.  Under the statute, EHB must include items and services within the following 10 categories:

1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Mental health and substance abuse, including behavioral health treatment
6. Prescription drugs
7. Rehabilitative and habilitative services and devices
8. Laboratory services
9. Preventive and wellness including chronic disease management
10. Pediatric services, including oral and vision care

In addition to these services, every plan must cover what the "typical" employer plan covers in each state referred to as the "benchmark" plan.  Each state needed to submit their benchmark plan for review. Illinois selected a Blue Cross and Blue Shield of Illinois plan as their benchmark plan because it is the most common small group plan in the state.  The plan does not cover all of the EHB's, specifically the dental and vision care for children.  The plan is supplemented by the All Kids dental and Federal Vision to make it compliant with the law.  To see what the Illinois benchmark plan covers you can review it here.  

For additional information visit Fact Sheet on Essential Health Benefits

The Rockwood Company - Insurance Brokers since 1896 - To find out more about healthcare reform and how it affects your business, please feel free to contact us at ddoe@rockwoodco.com or 312-621-2215.

Administration Confident Marketplace Will be Ready

The Obama administration assured U.S. Lawmakers that they will meet the October 1 deadline to begin open enrollment on the Insurance Exchanges (now called Marketplace).  

The exchanges were created as a part of the Affordable Care Act to provide the uninsured a place to go to compare and ultimately purchase a health plan.  If a consumer is eligible for financial assistance, they must purchase coverage through the exchange.

There has been much doubt that the exchanges will be ready in time for the open enrollment due to the complexity of the law and the fact that no details have been released on how the exchanges will actually work.

To read more go to http://www.businessweek.com/news/2013-02-14/insurance-exchanges-are-on-track-health-official-says


The Rockwood Company - Insurance Brokers since 1896 - To find out more about healthcare reform and how it affects your business, please feel free to contact us at ddoe@rockwoodco.com or 312-621-2215.

llinois gets OK for health insurance 'marketplace'

Governor Pat Quinn and U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius  announced today in a press conference that Illinois has obtained approval from the federal government to operate its health insurance marketplace jointly with the U.S. Department of Health and Human Services.

For more details http://www3.illinois.gov/PressReleases/ShowPressRelease.cfm?SubjectID=2&RecNum=10921

Calculating the size of your group for ACA penalties

Employers that are hovering around 50 employees, are you a large group (subject to penalties) or small group (penalties do not apply)?

Employers will determine each year, based on their current number of employees, whether they will be considered a large employer for the next year.  If on average, your group has more than 50 employees each month in 2013, then the shared responsibility provisions will apply to your group.

To determine if you are a large employer you need to count your employees for each calendar month in 2013.

1) How many full time employees do you have working 30 or more hours a week?

2) How many full time equivalent employees do you have?  A full time equivalent is how many full time employees your part-time employees add up to.  To determine this, add the total hours that your part time employees worked in a month and divide that by 120.
3) Add the total of steps 1 and 2 for each month of 2013, divide by 12.  If this average exceeds 50, then you may be a large employer.

For those employers that may be close to the 50 full-time employee (or equivalents) threshold and need to know what to do for 2014, special transition relief is available to help them count their employees in 2013. 

For more information see the Q & A at the IRS website regarding Employer Shared Responsibility Provisions Under ACA http://www.irs.gov/uac/Newsroom/Questions-and-Answers-on-Employer-Shared-Responsibility-Provisions-Under-the-Affordable-Care-Act

Exchanges - Re-branded to "Marketplace"

What we have known to be called insurance "exchanges" will now be referred to as a "Marketplace".  The Illinois' Partnership Marketplace is scheduled to begin accepting applications October 1, 2013 and be fully operational January 1, 2014.

2014 Penalties for Employers over 50 Employees

Penalty for Not Offering Coverage

If a large employer (> than 50 full time employees) does not offer coverage to their full-time employees employers face a penalty of :

• $2,000 X the total number of full-time employees (FTE) minus 30 - Only if at least one FTE is receiving a premium assistance tax credit

Penalty for Coverage that is Not Affordable

If a large employer has coverage but that coverage does not provide minimum value or it is unaffordable for some employees.  Coverage that is not affordable requires employees to pay more than 9.5% of their earnings toward the cost of the coverage. The penalty is:

• The lesser of $3,000 X the number of FTEs receiving premium assistance through the exchange or $2,000 X the number of FTEs, employers subtract the first 30 workers in the final calculation.

Change to Flexible Spending Accounts (FSA)

Flexible Spending Accounts (FSA) plans must be amended to allow a maximum of $2,500 a year beginning 2012.  The figure will be adjusted for inflation after 2013.

Small Group Tax Credit

An eligible employer must:

• Have less than 25 full-time (part-time are considered a portion of a full-time employee)
• Average wages of less than $50 (not including owners and family of owners)
• Employer must contribute at least 50% of the cost of single health coverage

Please contact your accountant to discuss whether your firm qualifies for the credit.  Or you can go to http://www.irs.gov/newsroom/article/0,,id=223666,00.html for more information

W-2 Reporting for groups > 250 employees

For employers filing more than 250 W-2's in 2011, you are required to report the cost of employer sponsored coverage on your employee's W-2 for 2012 (tax filing in 2013).  The amount reported does not affect tax liability, and is not taxable.

For more information please talk to your accountant or go to http://www.irs.gov/uac/Affordable-Care-Act-Tax-Provisions for additional information.

Medical Loss Ratio (MLR) Rebates

Beginning in 2011, insurance companies are required to spend a specified percentage of premium dollars on medical care and quality improvement, meeting a medical loss ratio (MLR) standard.  Companies not meeting this standard will be required to provide consumers rebates.  This began in 2012.

Employers need to have think about a procedure to handle any rebates, a portion of which needs to be refunded to the employee if the employee pays a portion of the premium. 

Not all employers will be eligible for rebates.

Notice of Exchange - Delayed

Employers are going to be required to notify their employees of the availability of the insurance exchange.  This notice was supposed to be provided in March of 2013, but it has now been delayed.  More than likely, it will be required at the end of the 3rd or beginning of the 4th quarter of 2013 to coincide with the enrollment into the exchanges which will be operational January 1, 2014.