ACA: Compliant or Complacent?

Keynote Presenter

Dr. Kristin L. Kahle • CEO and Founder of NavigateHCR • Nationally recognized leader in Health Care

Reform • Certified Health Care Reform Specialist

(CHRS) • Dissertation on Health Care Reform • National speaker and educator • Benefits strategist and broker with 20+ years

of experience • Awarded: 2014 Most Influential Women in

Benefit Advising

Dr. Kristin Kahle

Navigatehcr.com

@EasyHCR

Ball of Confusion

Common Misnomers

We’re OK… our carrier

handles everything

for us

Our carrier

provides us with our SPD

We’re not concerned… What are the chances

of an audit?

I’m a small

employer, I don’t have to worry about fines or

penalties

Common Concerns

It’s information

overload…

I can’t get my

arms around all of this regulation

stuff…

I have a

business to run; I can’t make this a

priority!

You send us great information, but who has time to

read it?

What worries me is,

we don’t know what we don’t know…

Compliance Consequences • DOL Audits are

happening at a record pace and will continue

• Wide range of potential penalties for various notices and various timeframes

• Impacts groups of all sizes

Acronym Alert

DOL – Department of Labor

“How am I supposed to think about consequences before

they happen?”

Compliance Penalty Categories • Healthcare reform • COBRA • ERISA • FMLA • Taxation • Medicare/TRICARE • HIPAA Privacy • HIPAA Portability • Cafeteria Plans • Nondiscrimination • Other Federal Mandates

Many employers are under the misconception that the “pay or play”

penalties for large employers are the only penalties to fear

Types of Penalties Company Fines Personal Fines

Legal Action Even Prison

Compliance

ACA Compliance Solutions

NavigateHCR • Compliance Communication

– Employer Express – Push notices to employer – Employee Express – Push notices direct to employees – SPD/Wrap

• Exposure Analysis- Several Tests (including but not limited to)

– Look Back Analysis – Full-Time Equivalents Calculations

• Measurement Analysis and Reporting – Tracker – Monthly variable hour tracking – Tracker- IRS Reporting (6055 and 6056)

• ACA Consulting Services • ACA Hotline- 1095 Questions

Today’s Challenge • Mind numbing complexity of the ACA • Potentially harsh tax penalties • Financial consequences for noncompliance • Continual avalanche of new regulations All of these have created unprecedented new challenges for businesses and brokers! IRS Inspector General calls the ACA “the largest set of tax law changes the IRS has had to implement in more than 20 years.

Topics to be covered • Individual Mandate • Exchange- Premium Subsidy • Employer Shared Responsibility • Compliance Considerations/Notices • DOL Audits • Compliance Notices • Reporting

Individual Mandate • 2014 All US Citizens age 18 or older must

maintain minimum essential coverage or pay a TAX

• Minimum Essential Coverage – All “group health plans” – Policies issued in the individual market (inside

or outside the exchange) – Penalty ranges $95- $12,000 IRS determination

Exchange • Metallic level of coverage • Rating Requirements • Special/annual enrollment • Individuals may qualify for premium subsidy

– Household income between 100% and 400% FPL

– Not “eligible” for MEC with employer that is both affordable and provides minimum value OR

– Not enrolled in employer sponsored MEC

4980H- Pay or Play • Applicable Large Employers (ALE) 2015 • 50-99 (Mid) Employers 2016 (AME) • Reporting needs to occur for both groups • 2 methods for identifying employees for full

time – Look Back (12 or 6 consecutive months) – Monthly Measurement

4980H • “Offer” of coverage

– Opportunity to enroll or decline each year • Affordability

– W2 (Annual determination) – Rate of Pay – Federal Poverty Level Limits – Exchange is based on household income

• Reporting- 6056/6055

Hammer Penalties • Sledgehammer Penalty

– Offering of coverage – 70% of full time employees and dependent

children – ONE employee receives subsidy – $2,000 penalty or ($167) per month reduced by

80 employees – The reason that employees receives subsidy is

not relevant

Hammer Penalties • Tackhammer Penalty

– Offering of coverage – Does not offer affordable, minimum value

coverage – 70% of full time employees and dependent

children – Employee receives subsidy – $3,000 penalty or ($250)X the number of full

time employees receiving a subsidy in the exchange that month

Other considerations • If you want your ALE’s to AVOID 4980H

– (A): then must also include coverage for dependent children

– (B): Affordable and provide minimum value For all employers, if it doesn’t provide minimum value OR is not affordable then, YOU MUST OFER THEM THE OPPORTUNITY TO DECLINE COVERAGE.

Compliance Considerations • Key health insurance reforms • Provider non discrimination • Annual/lifetime dollar limits • Out of pocket maximums • Federal compliance considerations • COBRA • ERISA reporting, disclosure and reporting

rules

DOL Audit Triggers A DOL audit can be triggered for a variety of reasons.

In most cases, the DOL investigator will not disclose to an employer why its health plan was selected for audit.

Common triggers for a DOL audit include: • Participant complaints to the DOL about potential ERISA violations

− In 2013, according to a DOL audit summary, 775 new investigations were opened as a result of participant complaints

• Answers on the plan’s Form 5500 • The DOL’s national enforcement priorities or projects, which target the DOL’s

resources on certain issues − For example, the DOL’s Health Benefits Security Project focuses on making sure

health plans and health insurance issuers comply with the ACA’s mandates

DOL Audit Triggers • A DOL audit can be triggered for a variety of reasons. In most cases, the DOL

investigator will not disclose to an employer why its health plan was selected for audit. However, there are some common audit triggers that an employer should keep in mind.

Common triggers for a DOL audit include: • Participant complaints to the DOL about potential ERISA violations. In 2013, according

to a DOL audit summary, 775 new investigations were opened as a result of participant complaints.

• Answers on the plan’s Form 5500. For example, if a plan’s Form 5500 is incomplete, or

if inconsistent information is reported from year to year, the DOL may investigate the issue further.

• The DOL’s national enforcement priorities or projects, which target the DOL’s resources on certain issues. For example, the DOL’s Health Benefits Security Project focuses on making sure health plans and health insurance issuers comply with the ACA’s mandates.

15 Items: DOL Letter: 2014 . NavigateHCR Employer Other Vendor/NHCR

Genetic Information Nondiscrimination Act (GINA)

Contracts for claims and administration services

Plan Document

Certificate of Creditable coverage Contracts with Insurance Companies SPD (Summary Plan Description)

HIPAA COBRA

ERISA

Preexisting Conditions

Newborns’ Act Notice

FMLA

QMSCO

Mental Health Parity and Addiction Equity Act

COBRA

WHCRA

Grandfathered status

Healthcare and Education Reconciliation Act

Preparing for 2015

Employers Need a Compliance Strategy

• Arduous task which is difficult to implement without the help of outside resources

• Risk of being audited for non-compliance is increasing as regulations regarding healthcare become more stringent

• Partnering with the right compliance provider is necessary so that you can provide appropriate solutions

Employer Notices By Size 1-49

SPD SMM and Summary Material Reduction in Covered Services

Plan Documents Health Insurance Exchange Notice

SBC Notice of Modification

Disclosure of Grandfather Status Notice of Patient Protections

Patient-Centered Outcomes Research (PCORI) Notice of Special Enrollment Rights

Wellness Program Disclosure Notice of Privacy Practices

WHCRA Mental Health

CHIP Michelle’s Law

Newborns and Mothers Protections Medicare Part D

20-49 General Notice of COBRA

Notice of COBRA QE COBRA election notice

Notice of Unavailability of COBRA Notice of Underpayment of COBRA

Notice of Early Termination of COBRA Coverage

Employer Notices By Size 50+

SPD SMM and Summary Material Reduction in Covered Services

Plan Documents Health Insurance Exchange Notice

SBC Notice of Modification

Disclosure of Grandfather Status Notice of Patient Protections

Patient-Centered Outcomes Research (PCORI) Notice of Special Enrollment Rights

Wellness Program Disclosure Notice of Privacy Practices

WHCRA Mental Health

CHIP Michelle’s Law

Newborns and Mothers Protections Medicare Part D

50+ General Notice of COBRA

Notice of COBRA QE COBRA Election notice

Notice of Unavailability of COBRA Notice of Underpayment of COBRA

Notice of Early Termination of COBRA Coverage

50+ FMLA Notice

Notice of FMLA Eligibility Rights FMLA Designation Notice

100+ Form 5500

SAR

Example: Notices

New Hire/Upon Eligibility Notices

Notice Potential Penalties

Employer Chip Notice Up to $100 per day per failure

HIPAA Notice of Special Enrollment Rights $100 per failure up to $25,000

FMLA General Notice Employers may be liable for compensation or benefits lost, actual monetary losses, or other equitable relief

Medicare Part D Creditable/Non-creditable Disclosure Notice

No monetary penalties as of yet, but employer may lose eligibility in Retiree Drug Subsidy program

Exchange Notice No specific penalty, but possibility of civil action

Summary of Benefits and Coverage (SBC) Penalty of up to $1,000 per failure; may also target excise tax of $100 per day under the IRC

Example: Notices

Notices Upon Enrollment

Notice Potential Penalties

Summary of Benefits and Coverage (SBC) Up to $110 per day; up to 10 years in prison and a $100,000 fine for individuals or a $500,000 fine for companies

Summary of Material Modification (SMM) Up to $110 per day; up to 10 years in prison and a $100,000 fine for individuals or a $500,000 fine for companies

Initial COBRA Notice $110 per day under ERISA; must self report with IRS using Form 8928 and civil penalty of $100 per day would be assessed

Example: Notices

Ongoing/Annual Notices

Notice Potential Penalties Medicare Part D Creditable/Non-creditable Disclosure Notice

No monetary penalties as of yet

Summary Annual Report (5500) No specific civil penalties but possible criminal penalties up to 10 years in prison and $100,000 fine

Employer Chip Notice Up to $100 per day per failure

Notice of Availability of Reasonable Alternative Standard for Wellness Program

Violation of HIPAA discrimination rules could lead to employer having to repay surcharge amounts

Summary of Benefits and Coverage (SBC) Penalty of up to $1,000 per failure

Women’s Health and Cancer Rights Act Annual Notice

Legal action may be brought by the participant; $110 per day penalty under ERISA

FMLA Eligibility Notice, FMLA Rights and Responsibility Notice, FMLA Designation Notice

Employers may be liable for compensation or benefits lost, actual monetary losses, or other equitable relief

Coverage Termination Notices

Notice Potential Penalties

COBRA Election Notice Legal action by the participant (may be liable for medical costs incurred); ERISA $110 per day penalty; must self-report on Form 8928 and pay $100 per day civil penalty

FMLA Notice of Nonpayment of Premium Employers may be liable for compensation or benefits lost, actual monetary losses, or other equitable relief

Notice of Rescission of Coverage Must self-report violation on Form 8928 and $100 per day penalty

Be the ACA Coach for your Groups •Be the “go to” person for ACA questions-NavigateHCR can be your resource for ACA compliance. The more you know, the more your prospects and clients will trust you. •Become a trusted advisor-With our monthly reporting feature, you will know exactly where your clients stand, and be able to determine if action is needed. •Minimize Your Groups’ Exposure -An employer has little control over whether they will be audited by the DOL. However, it is imperative that they reduce the likelihood by remaining in compliance with the laws, and establishing a record keeping system for maintaining all important benefit related documents. •Offer them a solution-We are cost effective, easy to implement and reliable.

navigateHCR Compliance Solutions

Products Offered by navigateHCR • EmployER Express • EmployEE Express • SPD • Plan Document • Transition Relief Testing • Look Back Analysis/Measurement • Full-Time Equivalent Calculations • Tracker - Monthly • Tracker – IRS Reporting Quarterly • ACA Hotline • ACA Consulting Services

Compliance Communications

Exposure Analytics

Functional Data

ACA Concierge Services

EmployER Express and EmployEE Express

Notices and Requirements All employers, regardless of employee count, are required to provide

employees with notices regarding their rights as they relate to benefits throughout the year.

Some states are requiring employers to provide proof that notices are delivered to employees throughout the year.

Examples of these include:

ERISA- 7 Parts of ERISA Part 1: Reporting and

Disclosure Part 4: Fiduciary

Responsibilities Part 5: Administration and

Enforcement Part 6: COBRA Part 7: Group Health

Requirements

Mandated Coverage QMCSO Dependents Mental Health Financial Accounting

Standards Board (FASB) Requirement

Statement 106 Statement 112 Statement 158

Other Federal Laws Medicare Part D etc. 8 others Employment Law Affecting

Group Health Plans 7 items Key State Regulations

EmployERExpress

Notice Delivery Email Monthly notices are

delivered directly to employer email inbox

Employer is responsible for delivering to employees

EmployEE Express

Notice Delivery Email • Notices are delivered

directly to employee email inboxes from HCRToolbox

• Simple “click thru” process to show email receipt begins by clicking the link at the bottom of the email

EmployER and EmployEE Express

Verification Record 1. Once employees click the

link in the email they are taken to a verification screen

2. Employees are asked to “confirm” receipt of listed notices

– There are no logins or passwords to remember

– New links are generated monthly

SPD

What is an SPD? • Summary Plan Description • SPD is the basic ERISA disclosure document • Different then a plan document

− Goes hand-in-hand with certificate booklets and evidence of coverage • Must be written to be understood by the “average plan participant” • Must be a complete and accurate summary of the plan

− Including benefits − Rights and obligations under the plan − Timing Requirement

• Automatically given within 90 days of being covered by a group health plan • Within 30 days of request • Every 5 years

Testing: Exposure Analysis

Look Back Analysis Analysis using 12 months Analysis using 6 consecutive months Start of Tracker FTE Calculation included Affordability Calculation included Shows with our ACA Alerts • Color Coded Report

− Red - Employees working 130+ hours − Yellow - Employees 129 -120 hours − Green - Enrolled on benefits − Blue - Ineligible

Tracker

Look Back Example

Tracker: Monthly

Tracking Variable Hour Employees • Tracker gives the following data monthly

− Name − Description − Monthly Period Hours − Average Hours − Rate Type − Pay Rate − Affordability

• ACA Alerts − Red - Employees working 130+ hours “STOP” − Yellow - Employees 129-120 hours “CAUTION” − Green - Enrolled on benefits “GO” − Blue - Ineligible “ON ICE”

Tracker : Monthly

Dashboard

Tracker Reporting 6055 and 6056 • Data gathered quarterly for IRS filings • Need data by the following dates

− January- March: April 30 − April - June: July 15 − July - September: October 15 − October - December: January 5

• Description: IRS DRAFT! • Signature ready for companies • Payroll agnostic

− In Excel format

Tracker Reporting 6055 and 6056

ACA Compliance Solutions

NavigateHCR Summary • EmployER Express

– Pushes all notices to employer for distribution to employees

• EmployEE Express – Pushes all notices direct to employees and verifies

receipt – Monthly reports sent to employer (notices

sent/verification of notices) • SPD/Wrap

– Create and maintain proper SPDs (to accompany certificates of coverage)

– Can send SPD to employees through Employee Express • Tracker – Monthly variable hour tracking • Tracker Reporting - 6055 and 6056 • ACA Hotline • ACA Consulting

NavigateHCR will support its clients in the

event of a DOL audit

Things to Remember Although the Affordable Care Act (ACA) brings complexity and changes to your business and your client’s, you can add value with the right tools.

•Become an advisor and educator to your groups - the more you teach them about managing compliance issues related to reform, the better. •Help your clients by offering them a cost effective solution to the delivery and tracking of the required notices. •Mitigate your groups’ exposure to an audit - an employer has little control over whether they will be audited by the Department of Labor, but with our unique record keeping system, they will have proof that they followed the requirements of the law.

Contact Us Our NavigateHCR team is ready to assist:

Email: kristin@navigatehcr.com P: 855-742-7427 X201

Or visit us online at http://navigatehcr.com/products/

@EasyHCR Navigatehcr.com