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Health Care Reform

This is the Health Care Reform category of the Broad REach Benefits blog. At Broad Reach Benefits, we focus on employers that have between 30 and 500 benefit eligible employees. We’re employee benefit specialists, not a big box brokerage firm or payroll company with a sales force peddling policies.

Transition Policy for Canceled Health Plans is Extended by White House

The Obama Administration announced on March 5, 2014 a two-year extension to the transition policy for individual and small group health plans that do not comply with the ACA’s market reforms.

Background:

The Affordable Care Act (ACA) includes key reforms that create new coverage standards for health insurance policies, beginning in 2014. For example, effective for 2014 plan years, the ACA imposes modified community rating standards and requires individual and small group policies to cover a comprehensive set of benefits.

Millions of Americans received notices in late 2013 informing them that their health insurance plans were being canceled because they did not comply with the ACA’s reforms. President Obama was criticized that these cancellations went against his assurances that if consumers had a plan that they liked, they could keep it. …

By |March 10th, 2014|Compliance, Employee Benefits, Health Care Reform, Legislation, Medical|Comments Off on Transition Policy for Canceled Health Plans is Extended by White House
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Hours of Service Rules Clarified by the IRS for Pay or Play Penalties

Large employers under the Affordable Care Act (ACA) are required to offer affordable, minimum value health coverage to their full-time employees or pay a penalty. This penalty is known as the shared responsibility or pay or play penalty.

On Feb. 12, 2014, the IRS published final regulations on the ACA’s employer shared responsibility rules. The final regulations clarify the definition of “hours of service” for purposes of the pay or play rules.

Definition of Hours of Service

In general, an “hour of service” means:

  • Each hour for which an employee is paid, or entitled to payment, for the performance of duties for the employer; and
  • Each hour for which an employee is paid, or entitled to payment by the employer for a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.

Under the final regulations, all periods of paid leave must be taken into account; there is no limit on the hours of service that must be credited. Also, all hours of service performed for all entities treated as a single employer under the Code’s controlled group and affiliated service group rules must be taken into account.

However, if compensation for hours of service is foreign source income, those hours of service should not be included in an employee’s hours of service. …

By |February 28th, 2014|Compliance, Employee Benefits, Health Care Reform, Legislation|Comments Off on Hours of Service Rules Clarified by the IRS for Pay or Play Penalties
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CMS Report: Most Small Employers will be Hit with Medical Rate Hikes Next Year

Are you are a small group employer with a health plan and haven’t punted your employees over to the ACA exchanges?  Get ready. Chances are, you and your employers will be paying higher premiums soon.

That’s the conclusion from a new report from the Office of the Actuary, Centers for Medicare and Medicaid Services. That’s the federal government’s chief number cruncher responsible for predicting the effects of the Affordable Care Act.

At issue: the adjusted community rating that insurance companies use to calculate premiums for small groups.

Until this year, most employers benefited from rules that allowed insurance companies to charge less for insurance plans benefiting younger and healthier groups. The Affordable Care Act, however, significantly restricts the flexibility of insurers to pass the savings of a younger and healthier risk pool back to the customer. …

By |February 27th, 2014|Employee Benefits, Health Care Reform, Medical|Comments Off on CMS Report: Most Small Employers will be Hit with Medical Rate Hikes Next Year
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Narrow Networks: Can you Really Keep your Doctor?

“…you can keep your doctor, period.”  By now we are all tired of hearing that clip played over and over.  But, it was one of the key selling points of the Affordable Care Act that was promised.   As we all now know, not so fast.

Millions of Americans who have or will be signing up for medical coverage via the online exchanges established by the ACA are due for a nasty surprise: Most of the plans available via the exchanges come with significant network restrictions, and in many case will not provide in-network coverage to the most sought-after hospitals, clinics and physicians in their markets.

The issue: In order to control costs, the Affordable Care Act relies a great deal on the managed care model employed by health maintenance organizations (HMOs) preferred provider organizations (PPOs). Here’s how it works:

Managed care organizations try to get as many subscribers as possible within a certain market, such as a city, state or zip code. They then approach the medical care providers in the community and use their large subscriber base as a bargaining chip. They offer the medical care provider or institution the prospect of a significant flow of referrals. In exchange, they ask hospitals and clinicians to take a much lower reimbursement rate.

The arrangement is known in health care circles as the “narrow network” concept. The smaller the network, the more value the stream of referrals has to those providers included in the network. Expanding the network to too many care providers also dilutes the value of the stream of providers. …

By |January 16th, 2014|Employee Benefits, Health Care Reform, Medical|Comments Off on Narrow Networks: Can you Really Keep your Doctor?
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Reduction of Hours Strategy Carries Some Risks

In order to minimize their exposure to the Employer Shared Responsibility mandate,  some employers are contemplating reducing employees to below 30 hours a week to reclassify them as part-time.  While avoiding ACA penalties, this strategy may cause other headaches for employers.

According to ERISA §510 (29 USC §1140) the anti-interference section states:

“It shall be unlawful for any person to discharge, fine, suspend, expel, discipline or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan … or for the purpose of interfering with the attainment of any right to which such participant may become entitled under the plan … “

An argument can be made that systematically reducing hours for a significant portion of the workforce to avoid the ACA is an unlawful ERISA interference.  Having said that, employers sometimes do reduce hours for business-related reasons and that would not appear to be objectionable under ERISA.

It is important to have a detailed analysis laying out all of the options available before making significant changes to a companies benefits and/or workforce.  This is critical especially in the current environment where the rules are being amended on an ongoing basis.

http://www.law.cornell.edu/uscode/text/29/1140

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By |December 3rd, 2013|Employee Benefits, Health Care Reform, Medical|Comments Off on Reduction of Hours Strategy Carries Some Risks
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Federally-Facilitated SHOP Exchanges Online Enrollment Delayed by HHS

Beginning with the 2014 plan year, individuals and small employers will be able to purchase health insurance through online competitive marketplaces, or Exchanges. Each state’s Exchange includes a Small Business Health Options Program (SHOP) component that small employers can use to provide health insurance options for their employees.

The Department of Health and Human Services (HHS) is operating a federally-facilitated Exchange (FFE or FF-SHOP) in each state that does not establish its own Exchange.

On Nov. 27, 2013, HHS announced that online enrollment in the FF-SHOP Exchanges would not be available until November 2014. Employers that wish to enroll their employees in SHOP coverage for 2014 will do so through “direct enrollment” with an agent, broker or insurer offering a certified SHOP plan.

The direct enrollment process applies in states with FF-SHOPs only. States that operate their own SHOP Exchanges will still be permitted to offer online enrollment.

HHS also released a set of Frequently Asked Questions (FAQs) on how the FF-SHOP Exchange would function until November 2014. …

By |December 2nd, 2013|Employee Benefits, Health Care Reform, Legislation|Comments Off on Federally-Facilitated SHOP Exchanges Online Enrollment Delayed by HHS
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Transition Policy for Canceled Health Plans Announced By White House

The Affordable Care Act (ACA) includes key reforms that create new coverage standards for health insurance policies, beginning in 2014. For example, effective for 2014 plan years, the ACA imposes new modified community rating standards and requires individual and small group policies to cover a comprehensive set of benefits.

Over the last few months, millions of Americans have received notices informing them that that their health insurance plans are being canceled because they do not comply with the ACA’s reforms. President Obama has received criticism that these cancelations go against his assurances that if consumers have a plan that they like, they can keep it. Both Republican and Democrat members of Congress have been advocating changes to the ACA to resolve the cancelation issue.

Responding to pressure from consumers and Congress, on Nov. 14, 2013, President Obama announced a new transition policy for 2014. Under the new policy, individuals and small businesses whose coverage has been canceled (or would be canceled) because it does not meet the ACA’s standards may be able to re-enroll or stay on their coverage for an additional year.

However, this one-year reprieve may not be available to all consumers. Because the insurance market is primarily regulated at the state level, state governors or insurance commissioners will have to allow for the transition relief. Also, health insurance issuers are not required to follow the transition relief and renew plans, and have expressed concern that the change could disrupt the new risk pool under the federal and state Health Insurance Marketplaces. …

By |November 14th, 2013|Employee Benefits, Health Care Reform, Legislation|Comments Off on Transition Policy for Canceled Health Plans Announced By White House
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Working with an Employee Benefits Specialist Instead of a Navigator has Multiple Benefits. Is anyone surprised?

Millions of people will be purchasing health insurance through marketplaces, which are part of the Affordable Care Act provision. In doing this, some consumers face problems with program access due to site failures on the Internet. One option most people forget about or are not being told about is the opportunity to purchase coverage through an employee benefits broker or agent. These professionals can provide enrollment assistance, valuable advice,  answer your questions and provide post purchase support.

There are also navigators, which are not the same as professional employee benefit brokers and agents. Navigators are paid by the government, and they are not able to provide as much assistance as a broker or agent could. These navigators have not accrued years of employee benefits, HR and compliance experience and are prohibited by law to make recommendations or give advice about policies.  In the majority of states, navigators do not have to be licensed, and they do not have to comply with the same continuing education requirements that professional employee benefits brokers are required by law to meet. In addition to this, navigators are not required to keep the professional liability coverage that brokers and agents must have in place. …

By |November 14th, 2013|Employee Benefits, Health Care Reform|Comments Off on Working with an Employee Benefits Specialist Instead of a Navigator has Multiple Benefits. Is anyone surprised?
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Private Exchanges will Transform the Health Insurance Landscape

About 30 million people – or one in every five Americans – will use a health insurance exchange by 2017  under the Patient Protection and Affordable Care Act (PPACA) or Obamacare. This is according to a research by global management consulting, technology services and outsourcing firm Accenture, which forecasts that such phenomenon will radically transform the country’s health insurance landscape.

More overwhelming than the number of individuals projected to use health insurance exchanges to cater to their medical and wellness needs, however, is the apparent lack of awareness and preparedness of many Americans. The study shows that the lack of awareness applies to all demographics and to both public and private exchange concepts, as shown by its survey of 20,000 consumers.

…

By |September 26th, 2013|Employee Benefits, Health Care Reform, Medical, Private Health Care Exchange|Comments Off on Private Exchanges will Transform the Health Insurance Landscape
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No Employer Penalites for Failing to Provide Exchange Notice

Effective October 1, 2013 The Affordable Care Act (ACA) requires employers to provide all new hires and current employees with a written notice about the ACA’s health insurance exchanges (Exchanges).

On Sept. 11, 2013, the Department of Labor (DOL) issued a frequently asked question (FAQ) on the penalties for failing to provide an Exchange Notice. In this FAQ, the DOL stated that there is no fine or penalty under the ACA for failing to provide the notice. …

By |September 13th, 2013|Compliance, Health Care Reform|Comments Off on No Employer Penalites for Failing to Provide Exchange Notice
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