Large Employer Mandate Delayed....Again

Employers with fewer than 100 workers won't have to provide health insurance until 2016 under ACA.  The administration announced a delay in a key requirement of the law.

For additional details, read the news alert here .

Under Consideration - Full-time Defined as 40 or More Hours

For purposes of applying the "shared responsibility" mandate included in ACA, the members of the House Ways and Means Committee passed H.R. 2575, the Save American Workers Act bill which defines a full-time worker as an employee working 40 hours a week amending the current definition of 30 hours a week.

If passed, this will be welcome relief to many employers who cut back hours on employees to avoid the penalty for not offering the minimum health insurance required by the PPACA.

For more information visit this news release.

Obama Announces Individuals Can Keep Their Plan

President Obama announced Thursday that Americans can keep canceled health insurance policies for a year.  "Americans whose plans have been canceled can choose to re-enroll, " the president said during a White House news conference.

The President was pressured to uphold one of his campaign promises about the Affordable Care Act (ACA) that if you like your current policy you can keep it.  As the country moves closer to the implementation of the law on January 1, 2014, many policy holders were notified by their current insurance company that their policy was being cancelled and replaced with new policies that meet the ACA guidelines.

For now this is geared for individuals purchasing insurance outside of an employer, it does not yet affect small group, employer-based coverage.

ACA Marketplace Glitches Attributed to High Volume

The online health insurance marketplace continued to experience technical problems on Wednesday, their second day in operation.

For more info visit this  Washington Post article.

Administration Announces a Delay in the Out-of-Pocket Maximum Requirement

The administration announced a delay until 2015 in one of the consumer protection requirements included in the Affordable Care Act.  The maximum out-of-pocket limits in 2014 of $6,350 for individual/$12,700 family were supposed to include all expenses including deductibles and office visit/drug copayments. Federal officials have granted a one-year grace period to some insurers allowing them to set higher limits, or no limit at all on some costs in 2014.

Many insurers and employers needed more time to comply because they use seperate companies for medical and prescription drugs, making the single out-of-pocket maximum difficult to manage.

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.

Major Component of Healthcare Reform Delayed a Year

Large Employer (50+ Full Time Employees) Requirement to Offer Health Insurance or Face a Penalty is Delayed Until 2015

For more information see the Washington Post article.

What has not changed and will still be implemented beginning January 2014:

• Exchanges/Marketplace is still scheduled to be available January 1, 2014 (Enrollment beginning October, 2013)
• Individuals are required to purchase insurance or face a penalty
• Individual's access to subsidies
• All other Affordable Care Act mandates and changes

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.

Guidance Issued on Notice to Employees about Exchanges/Marketplace

The Affordable Care Act (ACA) requires employers to provide their employees a notice letting them know that they have coverage options through the health insurance exchange (also referred to as insurance marketplace).  All employers must satisfy the notification requirement, even if they do not offer a health plan to their employees.

The model notices have been released by the department of labor.  You can view the model notices -
Employers that provide a health plan click here
Employers that do not provide a health plan click here

Employers are required to provide the notice to each new employee at the time of hire (after 10/1/13) and to existing employees before 10/1/13.

The Department of Labor COBRA election notice has also been updated to include information regarding purchasing coverage through the new insurance marketplace.  The model COBRA notice can be found here.

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.

2014 HSA Limits Announced

2014 Health Savings Account (HSA) IRS Parameters
HSA Contribution  Limits
	2013	2014
Individual	$3,250	$3,300
Family	$6,450	$6,550
Minimum Deductible for
High Deductible Health Plan (HDHP)
	2013	2014
Individual	$1,250	$1,250
Family	$2,500	$2,500
Maximum Out-of-Pocket Amounts
for High Deductible Health Plan (HDHP)
	2013	2014
Individual	$6,250	$6,350
Family	$12,500	$12,700

For more information about these limits please visit the IRS procedure 2013-25 at http://www.irs.gov/pub/irs-drop/rp-13-25.pdf

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 on Health Insurance Market and Rate Review

Health and Human Services (HHS) issued a final rule on February 22, 2013.

A summary of the key provision include:

• Single risk pool - After January 1, 2014, health insurance companies must have one individual market pool and one small group market pool in each state. States may choose to require issuer merge these pools.  This provision prevents insurers from using separate insurance pools with markets to circumvent the market reforms and charge people with greater health problems higher premiums.
• Fair health insurance premiums  - Health insurance companies may vary the premium charged to a specific individual or small group from the rate for a particular plan limited to the following factors: family size, geography, age and tobacco use.  These rules standardize how insurance companies can price products, bringing transparency and fairness to their pricing methodology.
• Family Rating: Premiums for each family will be calculated by adding the rate for each covered family member over 21 and for the oldest three covered children under age 21.  Premiums will be adjusted for age and tobacco use. The final rule recognizes for all states and markets a single age band for children 0 to 20, one-year age bands for adults 21 through 64, and a single age band for adults 64 and older. Age will be determined once a year, at the time of issue or renewal. 
• Small group rating: Companies will use a per-member rating methodology in the small group market.  States may require companies to base small group premiums on an average amount for each employee in the group, provided that the total group premium equals the premium that would be obtained through the per-member rating approach.
• Geographic rating: Rating areas to be based on counties, three-digit zip codes, or metropolitan statistical areas (MSAs).  States may establish more geographic rating areas with HHS approval.  The areas my not vary by insurance product. 
• Tobacco use: There is concern that the current 1.5:1 rating provision may leave many tobacco users without access to affordable insurance.  The final rule attempts to offset the impact of the higher rating by requiring small group plans to offer tobacco cessation wellness-program discounts to reduce the surcharge.  This does not help the individual market since cessation programs are not typical for individual insurance policies.  Tobacco use is defined as the use of any tobacco product four or more times a week on average within the last six months.   States have the flexibility to enact more consumer protective definitions or look-back periods, or even reduce/eliminate the surcharge altogether. 
• Guaranteed availability of coverage  - Insurers must accept every employer or individual who applies for coverage in the group and individual market.  Insurers may limit coverage to 1) open and special enrollment periods, 2) only to those that reside in the service area, and 3) up to the insurer's network capacity.  Small and large employers cannot be denied coverage due to failure to satisfy the minimum participation or contribution requirements.  To mitigate adverse selection risk, there will be limited open enrollment periods in the individual market.  Enrollment for "special" circumstance triggers (e.g., loss of other coverage, birth, marriage, etc.) will be 60 days for the individual market and 30 days for the group market.  Future guidance will further address strategies to limit adverse selection related to guaranteed availability. Adverse selection is covering only the unhealthy, instead of a mix of healthy/non-healthy.  Purchasing needs to be monitored, so that people will purchase coverage when they are healthy, not only when they are sick and need the coverage.
• Guaranteed renewability of coverage - The insurance company may not cancel coverage with very few exceptions.  For instance, an insurer may cancel for non-payment, an insured moving out of the service area, no longer eligible for a particular form of coverage (such as catastrophic) or the exit of the insurance company from a particular market.
• Rate review - Insurance companies are required to submit to HHS all rate increase proposals, not just those exceeding a previously set reasonable threshold. HHS will allow states to make the rate review decisions for states with an "effective rate review program." 
• Catastrophic plans - Catastrophic plans will be available to individuals who are certified by the exchange as exempt from the individual responsibility requirement because of affordability, or who are under age 30 at the beginning of the plan year.  Catastrophic plans must cover at least three primary care visits in addition to the preventive services that all plans are required to cover.
• Special plan types - The final rule exempts all student health insurance coverage from the single risk pool requirements.  Clarification was also issued that student health insurance coverage is not subject to federal rate review requirements at this time.  Future guidance will be issued on the applicability of the market reform provisions to expatriate plans.

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 me at ddoe@rockwoodco.com or 312-621-2215.

Small Group Marketplace (Exchange) Delayed!

Unable to meet the January 2014 implementation deadline, the full exchange for small businesses will not be available until 2015. 

The Affordable Care Act calls for a new insurance marketplace (formerly called an exchange) for small employers to be able to offer plans from several different insurance companies.  As it stands right now, the marketplace opening in January 2014 will be limited to a single plan offering, rather than the multiple choice option that was a key advantage and selling point to small employers.

The administration cited "operational challenges" as a reason for the delay.  One of the most important tasks of the exchange is to simplify the collection of payment of monthly premiums.  An employer through the marketplace will receive one bill for all the employees, regardless of the insurance company the employee selected. 

The administration said that the government and insurers needed "additional time to prepare for an employee choice model" of the type envisioned in the law.  Insurance companies urged the administration to delay the marketplace offering because the administration did not provide detailed guidance or final rules for the small business exchange until recently, just not in enough time to implement the complex system by January 2014.

"Experience with Massachusetts has demonstrated that employee choice models are extremely cumbersome to establish and operate, " the health insurer Aetna said in a letter to the administration in December. 

A few states running their own exchanges indicated that they will be fully operational in January 2014 (California and Connecticut), but Illinois will not be ready at that time due to being in a partnership with the federal exchange.

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.

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.