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Healthcare Reform – Next Steps for 2014
Tuesday, December 10, 2013
2:00 pm – 3:00 pm EST
2
Joe DiBella
Executive Vice President of the Health & Welfare Practice
Conner Strong & Buckelew
Phyllis Saraceni
Senior Vice President, Compliance & Audit Practice Leader
Conner Strong & Buckelew / AIM
Today’s Speakers
3
Conner Strong & Buckelew’s sixteenth installment in ongoing series
of webinars on key issues dealing with national healthcare reform
Session will focus on 2014 healthcare reform next steps
Special emphasis on action required to decide if adjustments or
plan amendments are needed for 2014 changes
Welcome and Agenda
4
March 23, 2010: Patient Protection and Affordable Care Act (PPACA) signed into law
June 28, 2012: US Supreme Court upholds constitutionality of law
November 6, 2012: President Obama re-elected along with divided Congress
July 2013: Employer mandate delay announced, until PY beginning in 2015
October 1, 2013: Exchange enrollment begins (website problems)
October 28, 2013: Six week extension announced, until 3/31/2014, for Americans to sign up
for coverage and avoid new individual mandate tax penalties
November 14, 2013: Transition period announced for individual/small group policies allowing
insurers to renew cancelled policies
January 1, 2014: Exchange coverage takes effect
March 31, 2014: Date Americans must have coverage to avoid individual mandate tax
January 1, 2015: Employer mandate begins
Major PPACA Milestones
5
Marketplace website rollout began 10/1/13
Continued concerns about viability of Marketplace
- website “glitches” / 20-30% of federal website still to be built
- some part of website still “under-construction” including systems to transfer data
to insurers and make payments to them (administration looking to finish by
1/15/14)
- enrollment / signups / security concerns / hacking incidents
Miscalculated subsidies will need to be paid back (even though insurer received
subsidy amount)
Narrow networks – doctor/hospital of choice may not be available
Policy cancellations
Even supporters predicting chaos in 2014 as people start coming on / using benefits
(less choice, higher costs/deductibles, increased potential for fraud, more
bureaucratic headaches, more disincentives for providers to enter/stay in medical
profession)
Exchange/PPACA Implementation
Continues
6
Law still facing significant resistance three plus years after passage
Republicans and now some Democrats calling for repeal / delay / changes
Law will be litigated for years - more than 65 current lawsuits targeting key
provisions, such as:
- contraceptive mandate (religious objectors) - case recently accepted by
US Supreme Court for review next year
- by its terms, law makes subsidies available only to people who buy
insurance through state-run exchanges, and not to those in federal
exchange (if successful would abolish subsidies in much of country and
make employer mandate unenforceable)
Challenges Ahead
7
Delays more commonplace as key 2014 deadlines approach
- Delay of Marketplace verification of consumers’ health insurance (employer
coverage) status and incomes (both essential for successful function of
exchange system)
- Sign up date extended to 12/23/13 to get coverage effective 1/1/14 (gives
insurers only 8 days to confirm information and start care)
- Six week extension granted – people have until 3/31/14 to sign up and still be
in compliance with mandate that all Americans carry health coverage in 2014
- Transition period announced for individual/small group policy renewal (for
policies cancelled for 2014 market reforms)
- Although originally scheduled to go into effect in 2014, employer mandate (pay
or play) and related IRS information reporting rules now delayed to 2015 (with
first information reports due in early 2016)
• employer community pushing for future rulemaking to allow for use of
Form W-2 as option for employers to satisfy pay or play reporting
obligations
Delays to Key Deadlines
8
Do you think PPACA exchanges will be delayed in 2014?
Unlikely.
HHS secretary, Kathleen Sebelius, and others in Obama administration have
repeatedly said delaying exchanges would create too many logistical
problems for government and insurers, as well as for states where exchanges
are working (like California and Connecticut).
But……continued delays in various provisions are very likely.
Participant Question
9
Will some people be without insurance on January 1?
Absolutely.
There was never an expectation that every American would have insurance
on 1/1/14.
initial enrollment period was always set to run through 3/31/14
most young adults will make their decisions closer to 3/31/14 deadline
even before implementation problems, CBO projected that 7M people
would enroll in exchange plans in 2014 and 44M would remain uninsured
for most, government fine for not having insurance much cheaper than
buying coverage
Participant Question
10
What is the current regulation under the FTE calculation?
Mandate for businesses to decide whether they’ll provide health care or pay
employer mandated (pay or play) fine now delayed until 2015
- companies should be looking at FT/PT data throughout 2014 to get
more information on which to base decision
- keep informed - don’t be complacent about “pay or play” decisions
Any decisions on how part time adjunct faculty hours of work
will be defined?
- Existing rules still applicable (for now)
- More guidance (and possible changes to rules) expected
Participant Question
11
Effective for PYs beginning in 2015:
Employers with 50+ FTEs have to offer benefits to 95% of FTEs and
dependents that meet coverage and cost levels or pay penalty
Does not require employers to offer health insurance, but if they don’t
they’ll pay tax:
> If NO COVERAGE offered, penalty = $2,000/FTE minus first 30 FTEs
> If SUBSTANDARD COVERAGE OFFERED, penalty = lesser of:
» $3,000/FTE on exchange plan receiving credits/subsidies, or
» $2,000/FTE minus first 30 FTEs
Employer Mandate - Review
12
Whether paying or playing, large employers (50+ FTEs) must decide which employees are
working on average 30 hrs or more/wk for 2015 (previously effective in 2014)
Reprieve from employer mandate may be short-lived - unless additional guidance
issued, 1/1/14 starts clock for determining which employees will be considered FT and
PT. As of 1/1/15, must be prepared to:
- Identify/count FTEs (30 or more hours/week)
- Identify/count PTEs (less than 30 hours/week - not subject to penalty)
- Identify variable hour and seasonal employees (can measure them over look-
back/measurement period to determine if FT)
complex measurement/administrative/stability period “safe harbors” - for
summary of look-back measurement periods, see CSB 4/4/13 Webinar
“Preparing for the Full-Time Employee Determination” – link to recording and
presentation available on CSB Resource Center webpage
if no transition rules provided going into 2015, must start counting hours in
2013/2014
FTE Determination - Review
13
If paying, must be prepared to justify determinations about
number of FTEs (used to determine penalty amount)
If playing, be prepared to justify determinations about
number of FTEs and demonstrate FTEs are eligible for
minimum essential coverage (and be prepared to justify plan
affordability and minimum value standard)
FTE Determination - Review
14
What is the impact on mid-sized companies?
All employers with health plans are required to comply with PPACA’s market
reforms, and all employers with more than 50 FTEs are required to identify and
report number of FTEs and analyze their plans for purposes of pay or play penalty
rules to decide whether they’ll provide qualified health care or pay employer
mandated (pay or play) fine.
How will it affect my health care coverage?
Each of us as individuals must be enrolled in qualified health plan for 2014 or pay
individual mandate tax.
Employer provided coverage will continue to provide higher-quality,
comprehensive, cost-effective, efficiently administered benefits.
Covered employees will continue to recognize value these plans represent.
Employer plans will continue to remain very appealing.
Participant Question
15
Regarding the measurement period: If a company chooses a 3
month or 6 month period, does the company have to do a
measurement every 3 months or every 6 months? I have been
told different things including that the company can do a 3 month
measurement once a year?
Measurement periods must run consecutively, so if you have 3 month
measurement period you will need to run four measurement periods in single
year.
How are leaves, including FMLA, NJFLA or military leaves
calculated into the measurement of an employee's average hours
worked per week?
Special (detailed) 26 week break period, rule of parity, and educational
organization rules apply when counting hours – refer to our 4/4/13 Webinar or
contact your CSB consultant for more information.
Participant Question
16
I understand some provisions, but I need a greater understanding
of how it's going to affect a large employer that's currently in a
unionized environment?
Employer is subject to pay or play mandate - not union/Taft
Hartley/multiemployer plan.
Employer (not plan) is also responsible for identifying which employees are FT
(based on hours of service for employer).
Employer must also file annual returns with IRS reporting terms/conditions of
health coverage provided to FTEs.
There are variety of complexities for union plans under PPACA and
additional guidance is expected on how pay or play rules should apply to
employers participating in multiemployer plans.
Participant Question
17
For employers under a CBA, can a large employer force their
employees to obtain healthcare under Obamacare rather than
under the CBA's multiemployer healthcare funds?
Over time, employers can renegotiate terms of CBA, but no employer can
“force” an employee to obtain exchange coverage. And in any event:
many fundamental unknowns about cost of coverage and operation of
exchanges should be taken into account when assessing their suitability
as vehicle to provide health benefits
exchanges were not designed to replace group coverage and do not
make economic or practical sense for vast majority of current
multiemployer participants
Participant Question
18
Nondiscrimination requirements and limitations on insured plans -
delayed
Insured plan rules (similar to existing self-insured plan rules)
Effective date postponed until IRS publishes notice, which has not yet
been issued
Grandfathered plans exempt
Auto enrollment – delayed
Employers with 200+ employees must automatically enroll new FTEs in
health plan
Must give affected employees notice and opt out option
Effective date postponed until IRS publishes notice, which has not yet
been issued
Other Major Provisions - Still Delayed
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Some employers plan to trim benefits, eligibility, spousal benefits (coverage
must be offered to employees and their dependents, but not spouses)
Other employers planning to utilize private exchanges
Not clear if agencies will release guidance on use of private exchanges
Some employers planning not only to cut their costs, but costs to employees as
well
Exploring dual-plan approach - offer health care plan that meets
requirements of PPACA, as well as stripped down plan that does not meet
all requirements, but generally is cheaper to employee
Other employers planning to trim employees to get under 50-employee large
employer threshold, or create new PT positions to replace FT positions to
reduce number of employees to whom health care will be provided.
Watch for risks of potential employee challenges (careful planning and
communication needed)
Employer Reactions Mixed
Immediate Concerns for 2014
21
FSA $500 carryover
Non-calendar year midyear election changes
Reinsurance fee
Cost-sharing / OOP limitations
EHBs and benchmark plans
Updates to SBCs
Same sex marriage rules
Actions required for HRAs
90 day waiting period rules
2014 – Immediate Issues
22
Plan sponsors of health FSAs consider new carryover feature
New IRS guidance modified “use-or-lose” rule for health FSAs - allows optional
adoption of $500 (or less) carryover for Health FSA (not DCAP)
- Health FSAs subject to “use-or-lose” rule - meaning funds left unused at
end of year are forfeited.
- One exception, under special grace period rule - plans can to allow
employees to use amounts remaining from previous year to pay expenses
incurred for certain qualified benefits during period of up to 2-1/2 months
immediately following end of PY.
- Employee’s salary reduction contributions can be no more than
$2,500/PY.
At plan sponsor’s option, employees participating in health FSAs will be
allowed to use up to $500 of unused health FSA amounts in next year, instead
of forfeiting unused amounts.
Health FSA Carryover
23
Effective immediately, health FSA sponsor can do one of following as matter of
plan design:
- maintain traditional health FSA with no carryover or grace period feature,
- adopt/continue grace period feature, or
- adopt carryover feature.
No action needed for employer that chooses either (1) to continue traditional health
FSA with no carryover or grace period feature, or (2) to continue grace period
feature.
If carryover, consider administrative (plan design) issues
- required FSA participation in next PY?
- require minimum salary reduction election in next PY?
- Minimum carryover amount (example – only carryover amounts $10 and over)
Carryover - Plan Design Choices
24
Pros
Increased participation of employees (FICA savings)
Helps with wasteful end-of-year spending
Cons
Loss of forfeitures (for employer)
Some additional administration
Requires cancellation of grace period
Some HSA complications for employers that offer HDHPs with HSA -
need to assess how grace period/carryover feature affect individual's
eligibility to make and receive HSA contributions. IRS guidance did not
address this issue
Carryover – Pros/Cons
25
Grace Period
Applies to entire account balance
Participants who planned for large expenditures during grace period won’t
lose contributions
Ex: participant with year-end balance greater than $500 benefits from grace period
feature that contains no cap but has shorter duration for incurring and submitting
claims, while participants with year-end balances of $500 or less may benefit from
carryover feature having longer duration to submit and incur claims.
Carryover
Duration not limited
Reduces risk for participants with favorable health experience and low
claims
Carryover – Grace Period vs Carryover
26
Considerations and next steps for employer adopting carryover feature:
If plan sponsor adopts carryover, it cannot also provide grace period.
Determine amount of carryover; same carryover limit must apply to all participants. Can be up
to $500 of unused health FSA funds (can choose lower amount).
Inform participants of carryover provision
Consider how this will impact administrative fees
Consider that employee-paid forfeitures through "use-or-lose" rule often balance out loses from
employer advance reimbursement
- Could be effective for 2013
> Must announce before end of 2013 PY
> Must amend plan before end of 2014 PY (e.g., 2013 calendar year plan can allow
carryover of unused 2013 health FSA funds into 2014 as long as adopts
amendment by 12/31/14)
> If grace period, must amend plan before 2013 PY- end to eliminate grace period
Next Steps to Adopt Carryover
27
Can still have run-out period following PY during which participants
can submit (and be reimbursed for) expenses from prior PY
Amount carried over determined after all expenses have been
reimbursed for that PY after end of plan's run-out period
$2,500 limit still applies
Can have up to $3,000 available in FSA to reimburse health
expenses, plus amounts plan sponsor contributes (if any)
Example:
> Participant has $500 of carryover and elects $2,500 salary
reduction, plan must make full $3,000 available for
reimbursements at beginning of PY.
Run-Out and Plan Limit Apply
28
Example:
Calendar PY and annual run-out period from 1/1 to 3/31. Participants can elect
$2,500 for year and plan is timely amended to provide for $500 carryover. No grace
period and no non-elective employer flex credits.
In 11/13, Pat elects $2,500 for 2014. By 12/31/13, Pat’s unused amount from
2013 PY is $800.
On 2/1/14, Pat reimbursed $350 for expenses incurred in 2013 PY, leaving
carryover on 3/31/14 (end of run-out period) of $450 ($800 - $350) of unused
health FSA amounts from 2013.
$450 amount is not forfeited; but instead is carried over to 2014 and available to
pay claims incurred in that year so that $2,950 (that is, $2,500 + $450) is
available to pay claims incurred in 2014.
Pat reimbursed $2,700 during July 2014, and does not submit any other claims
during 2014. Pat has $250 as unused amount from 2014 to carryover (depending
upon whether Pat submits claims during 2014 run-out period in early 2015).
Carryover Example
29
Employer with non-calendar year plans starting in 2013 should
consider allowing employees to make certain midyear cafeteria
plan elections
Non-calendar year cafeteria plans can offer special midyear election
opportunity.
- enables employees to enroll in public exchange coverage
effective 1/1/14, and obtain exchange subsidies, if eligible.
- provides way to accommodate public exchange coverage options
and individual-mandate rules taking effect 1/1/14.
Midyear election changes in
non-calendar year plans
30
Midyear election changes for accident/health coverage permitted in either or both of
these circumstances:
Prospectively revoke or change existing salary-reduction election during PY that
began in 2013, regardless of any change-in-status event.
- Ex: Pat enrolled in employer coverage under non-calendar year cafeteria plan that begins
7/1/13 and ends 6/30/14. During 6/13 OE period, Pat elected coverage effective 7/1/13.
Pat can obtain less expensive plan on exchange if he is eligible for exchange subsidies.
If his employer decides to allow special midyear election change, Pat can revoke his
cafeteria plan election and enroll in subsidized exchange coverage.
An employee who did not make salary-reduction election before start of PY that
began in 2013 can make prospective election for accident/health coverage at any
time during non-calendar year cafeteria plan that began in 2013.
- Ex: Pat is eligible for employer coverage under non-calendar year cafeteria plan that
begins 7/1/13 and ends 6/30/14, but he did not enroll during 6/13 OE. Pat will pay
individual mandate tax if he does not have health coverage in 2014. If his employer
provides for special midyear elections, Pat can make salary-reduction election and enroll
in health coverage for remainder of PY ending 6/30/14.
Midyear election changes in
non-calendar year plans
31
Change optional for employers and applies only to cafeteria plan elections for accident/health
coverage in 2013-2014 non-calendar PY.
Implementing change. Must amend cafeteria plan document for change.
May apply change retroactively to first day of 2013 PY, as long as amendment is made by
12/31/14.
Inform employees in writing about this special midyear election opportunity.
Consult cafeteria plan administrators about how to implement change.
Special elections to enroll in employer coverage may be unnecessary. Under another special
transition rule recently announced - no individual-mandate penalty will be assessed through PY
ending in 2014 on eligible individuals who failed to enroll in employer-sponsored, non-calendar
year plan
Relief appears designed to protect individuals whose employers choose not to allow midyear
cafeteria plan elections by employees who failed to enroll before start of PY.
Relief eliminates major reason for sponsors to allow new special midyear elections to enroll in
employer coverage.
Considerations for Employers
32
What are the employer responsibilities on self insured plans?
Most of PPACA’s rules apply to insured plans and self-insured plans,
although for many requirements insured plan carrier is responsible.
Self-insured plan sponsors have obligation to address many and varied
plan design and fee issues.
CSB Updates and guidance identifies rules applicable to self insured plan
sponsors.
Participant Question
33
Understand new reinsurance fees
All plans will be assessed fee to fund reinsurance program designed to
stabilize individual insurance market
2014 rate $5.25/covered life/month, equivalent to $63/covered life for year
fee set at $44/yr for 2015 (will set rate for 2016 at later date)
affects sponsors of both insured and self-funded health plans for calendar
years 2014, 2015 and 2016
health insurers make contribution for insured coverage
TPAs responsible for making contributions on behalf of self-insured
health plans (plan entity liable for payment)
self-insured, self-administered plan, without TPA, makes payment
directly
Reinsurance Fee
34
Newly announced special exclusion for self-insured, self-administered plans
(without TPA) for 2015 and 2016 years – most plans will be unable to qualify
for exclusion from fee
Paid on calendar year (rather than PY) basis
Plan enrollment counts due to HHS by 11/15/14
HHS sends bill by 12/15/14
New schedule for collection of fee (due in two phases each year)
First installment due at beginning of following calendar year (i.e., in
early 2015 for 2014 fee)
Second due at end of following calendar year (i.e., in late 2015 for
2014).
Reinsurance Fee
35
Review plans to confirm compliance with the cost-sharing requirements
For PYs beginning on or after 1/1/14, all non-grandfathered group health plans’
annual cost-sharing out-of-pocket (OOP) maximum for all benefits (e.g., medical and
prescription drugs combined) cannot exceed limits:
$6,350 for self-only coverage; and
$12,700 for all other coverage.
Applies to medical expenses related to essential health benefits (EHBs).
Special rule for 2014 PY if plan uses multiple vendors - overall limit delayed until 2015
for plan using independent managers to handle pharmacy (or other) benefits.
Definition of Cost-Sharing.
Cost-sharing includes deductibles, coinsurance; co-payments; and similar charges.
Cost-sharing does not include:
- Premiums;
- Cost-sharing for out-of-network benefits, if plan uses network; or
- Spending for non-covered services.
OOP Limits
36
With a 12/1 renewal date, inclusion of OOP (cost sharing) limits will not
affect us until 12/1/14 plan year, correct?
Correct.
PPACA market reforms generally effective for PYs beginning on or after
1/1/14.
Under PPACA, employer must identify group health PY to ensure timely
compliance with healthcare reform requirements.
PY is generally 12-month filing year for Form 5500 purposes - so for ERISA
plan, if plan’s renewal is December but filing year is January, then likely have
to start complying as of 1/1/14. But if plan filing year is December, then
effective date should be December.
For plan not required to file Form 5500, such as state/local plan or fully
insured plan with <100 participants, PY generally is policy/renewal year,
presuming plan is administered based on that policy/renewal year.
Participant Question
37
I would like to confirm whether a self-insured plan (non HDHP) that
has no annual or lifetime limits must select a benchmark state for
OOP limits?
Confirmed.
A self-insured plan must choose benchmark plan if it is covering essential
health benefits (EHBs).
SI plans are not required to cover EHBs, but to extent they do cover EHBs,
must comply with OOP limits, must have no lifetime dollar limits on EHBs, and
must have no annual dollar limits on these EHBs by PYs beginning on or after
1/1/14.
Participant Question
38
Review plans' design, select a benchmark plan to be used in defining EHBs,
and confirm that no limits are imposed on such EHBs
Effective for PYs beginning on or after 1/1/14, group health plans may not
establish any annual dollar limits on essential health benefits ("EHBs").
- In classifying which benefits are EHB, self-funded and large fully-insured
group health plans may refer to any state's designated "benchmark" plan.
- Self-insured plan that covers EHBs does not have to formally declare which
state they will model their EHBs after. But they do have to examine HHS-
authorized state or federal EHB definitions and determine which works best
for them.
- Consider state with lenient benefit schedule, such as Alaska.
EHBs and Benchmark Plans
39
Update SBCs for new language
For PYs beginning on or after 1/1/14 and before 1/1/15, SBCs must include language
about whether plan provides minimum essential coverage and whether plan meets
PPACA minimum value requirements.
Plans have 2 options for complying : (1) using new SBC template, which includes
required language, or (2) using prior SBC template and adding cover letter or similar
disclosure with following language:
Does this Coverage Provide Minimum Essential Coverage?
The Affordable Care Act requires most people to have health care coverage that qualifies as
“minimum essential coverage.” This plan or policy [does/does not] provide minimum
essential coverage.
Does this Coverage Meet the Minimum Value Standard?
The Affordable Care Act establishes a minimum value standard of benefits of a health plan.
The minimum value standard is 60% (actuarial value). This health coverage [does/does
not] meet the minimum value standard for the benefits it provides.
Updates to SBCs
40
Understand US Supreme Court decision and subsequent guidance issued
on same-sex-spouse status
Employers should consider eligibility policies for same-sex spouses and their
children under their welfare programs.
no requirement under federal DOMA ruling or subsequent guidance that
employer must cover domestic partnerships, civil unions, or same sex married
partners
however state law may mandate certain rights for partners which may impact
fully insured plans and require insurance contract to provide certain benefits to
partners
self funded plans are not required to follow state law and can decide to provide
coverage or not provide coverage
Modifications to Eligibility Rules for
Same Sex Partners
41
Determine how to treat same-sex spouses for purposes of health and
welfare benefits, and modify employee communications, SPDs, and
handbooks accordingly
must allow employees to pay for health insurance for their same-sex spouse on
pre-tax basis if employer offers hearth coverage
consider other employee benefits offered to employees and spouses, such as life
insurance, disability, and employee assistance programs, and prepare policies to
include or exclude same-sex spouses
same-sex spouses may now be reimbursed for qualified medical expenses using
FSAs, HRAs, and HSAs
same-sex spouses may be entitled to HIPAA special enrollment rights and must
be treated like other spouses with respect to COBRA
no new obligations with respect to domestic partnerships and civil unions - but be
prepared to answer questions regarding what rights both same-sex and
opposite-sex couples have as domestic partners
Modifications to Eligibility Rules for
Same Sex Partners
42
Review plan designs and confirm not offering any non-retiree-only, stand-
alone health reimbursement arrangements ("HRAs")
Effective for PYs beginning on or after 1/1/14, group health plans may not establish
any annual dollar limits on EHBs.
IRS clarified that because employer-provided HRAs constitute group health plans,
and necessarily include dollar limits on benefits, they will violate these rules if they
are offered on "stand-alone" basis -- i.e., if they are not "integrated" with another
group health plan -- unless they are otherwise exempt from rules (for example, as
retiree-only HRA)
Example:
HRA under which employer makes specified dollar amount available for active
employees to pay individual health insurance premiums -- so-called "defined
contribution health plan" approach -- would likely violate these provisions
Actions Required for HRA Plans
43
Regarding the requirement that recipients of HRA benefits be
covered by insurance, is Medicare sufficient to allow HRA
participation?
No.
An HRA must be linked to other group health plan coverage in order to continue
to offer benefits in 2014. Medicare is not considered other group health
coverage.
Only exception to Rule is retiree-only plan because these plans are not subject
to PPACA’s group health plan mandates.
More HRA rules:
HRA participants are ineligible for public exchange subsidies
Active-employee HRAs must be integrated and allow opt-outs
Retiree HRAs must be ‘retiree only’ and may permit opt-outs
Participant Question
44
Review plan terms closely to make sure they comply with 90 day waiting period
rule
“Waiting period” = time between when employee first meets eligibility requirements to
be covered by health insurance and when they can actually enroll.
Many employers currently use "three month" or "first of month following 90 days"
waiting period
For PYs beginning on or after 1/1/14, group health plans may not impose waiting
periods of more than 90 days before coverage becomes effective
Applies to FT and PT employees
Applies to any group health plan subject to PPACA (grandfathered, insured, self
insured, under 50 ees)
“Excepted benefits” (e.g., certain dental/vision plans) not subject to limit
All calendar days count towards 90 day period
90 Day Waiting Period
45
Applies to employees in waiting period as of 1/1/14.
• Ex: group health plan coverage for any employee hired before
1/1/14 cannot begin later than 3/31/14 — 90 days after 12/31/13
Special rule allows for eligibility rules not based on lapse of time ( e.g.,
completion of license or certification requirements)
• Can’t be designed to avoid compliance with 90-day waiting period
limitation
Cumulative hours eligibility requirements and special buy-in rules are
permitted
• Departments soliciting additional comments on application of
proposed rules to multiemployer plans and whether additional
examples/provisions needed
90 Day Waiting Period
46
I’m interested in recommended employee manual policy changes.
All sponsors should be addressing changes to communication materials.
Many PPACA market reforms and rules require changes to plan design and
also changes to SPDs, handbooks, employee manuals and plan
administration to remain compliant.
See Conner Strong & Buckelew Resource Center webpage for summaries
of various requirements and suggested next steps for communications and
plan design changes – also link to various past recordings and
presentations
Participant Question
47
Consider whether to amend wellness programs to provide for increased
incentive, and whether to make any changes to comply with updated rules
Wellness program incentives increased
- effective for PYs beginning on or after 1/1/14
- maximum incentive increased from 20% to 30% of total cost of coverage (with
permissible increase to 50% in connection with programs that aim to reduce
tobacco use)
- participation-only wellness programs continue to have no maximum incentive
limit
Complicated rules also clarified distinctions between, and requirements for,
participation-only and health-contingent wellness programs.
Wellness Programs
Preparing for 2014
49
Know requirements and deadlines
Prepare and distribute
- exchange notices
- other required employee communications (SMMs, SPDs, SBCs)
Review/revise plan terms for 2014 compliance
- 2014 mandates
- current plans that may no longer be permitted
Amend plan documents, SPDs, OE/new hire materials
- reflect changes to waiting periods, eligibility, plan design, and wellness
incentives
Remove any pre-existing condition limitations
Determine when first PCOR (research) fee due and how to facilitate payment
2014 Checklist
50
Understand reinsurance fee application and payment schedule
Revise programs for same sex marriage issues as needed
Decide whether to “play” or “pay”
- if playing, consider affordability and minimum value standards
- consider alternatives such as captives and private exchanges
Consider FTE workforce effective 1/1/15
- for pay or play reporting and penalty assessment
- when and how to start counting hours
Start planning for Cadillac tax in 2018
- for entities with high cost plans, plan design and labor contract
negotiation strategies need to be put in place to protect from this
potentially exorbitant tax
2014 Checklist
Resources
52
Agency Resources
Agency Healthcare Reform Sites:
Health and Human Services (HHS):
http://healthcare.gov/
Department of Labor (DOL):
http://www.dol.gov/ebsa/healthreform/
Internal Revenue Service (IRS):
http://www.irs.gov/newsroom/article/0,,id=220809,00.html?portlet=6
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Help from Conner Strong & Buckelew
Conner Strong & Buckelew
Healthcare Reform website page at:
http://www.connerstrong.com/healthcare_reform
» News updates
» Online library of client updates and alerts
» Summary of major provisions
» Detailed Year-by-Year timeline of changes
» Outline of all aspects of law
Check back for updates, news and analysis, and
updated tools to help you navigate this complex
process
Call Conner Strong & Buckelew at 877-861-3220
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Other Resources from
Conner Strong & Buckelew
Periodic Webinars
- Web-based presentations on health
care legislation, regulations and
innovative ideas
Email Alerts and Updates
- High level, quickly produced articles
about emerging issues intended to
alert clients to legislative and
regulatory developments
- Historic library available on line
Perspectives
- Thought pieces intended to identify
trends and issues, helping clients
anticipate challenges
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