M.F. Irvine 2013 Health Care Reform Seminar Highlights

M.F. Irvine Corporate Solutions is pleased to share highlights from our Health Care Reform Seminar. To play the videos click on the below links.

Health Care Reform Overview

Michael Devine - M.F. Irvine Corporate Solutions

Business Litigation Considerations of PPACA

Keith R. McMurdy - Fox Rothschild LLP

Tax Changes Associated with Health Care Reform

Kevin Ryan, CPA - Citrin Cooperman

Carrier Perspective: Global Market Changes

R. Scott Post - Independence Blue Cross

Pay or Play - Overview of Key Points

Mary Andersen, CEBS, ERPA - M.F. Irvine Corporate Solutions

Questions & Answers

Paul Miller, CEBS - M.F. Irvine Corporate Solutions

Stay tuned for more information regarding Health Care Reform and our next seminar scheduled for September. 

April 2013 Newsletter

Click below for MFI Team Updates, New Technology Changing Auto Insurance Industry, Teledoc, Compliance Corner, Guardian Nurses, M.F. Irvine’s Privacy Policy and Affordable Care Act Updates.

April Newsletter

Health and Human Services Plans to Delay Part of Small Employer Exchanges

Numerous news articles in national publications have headlines suggesting that the Obama Administration has delayed the Small Business Health Options Program (SHOP) exchange for 2014.   

In March, HHS announced a proposal to delay the employee-choice portion of the small business insurance Exchanges by one year. The delay is intended to provide the SHOP Exchanges with additional time to prepare for this model, which would permit employers to offer employees a choice between Exchange plans. States could still choose to incorporate this feature in their Exchanges in 2014.   

To clarify, the Obama Administration, through its Department of Health and Human Services (HHS), has not announced a delay of the SHOP exchange, but has proposed delaying certain features of the SHOP exchange - specifically the “employee choice” option. Under this option employers select a level of coverage - such as the gold level - and employees choose any Qualified Health Plan (QHP) from any issuer at that level.

Instead, for 2014 only, HHS is proposing that the SHOP exchange provide for an employer choice option only. This means an employer can select only one QHP from an issuer to offer its employees. This delay only applies to the Federally Facilitated Exchange (FFE) and FFE Partnership exchanges (which includes Pennsylvania, West Virginia and Delaware). State-based exchanges can still choose to offer the “employee choice” option in their SHOP exchanges.

If you have any questions, please contact your M.F. Irvine Representative.

Administration Sets New Rule On Essential Health Benefits

The Obama administration has released the final rule on essential health benefits, which sets the parameters for the types of benefits that must be offered by insurers starting in 2014.

The Obama administration today finalized a key Affordable Care Act rule on essential health benefits. Insurers must cover 10 broad categories of care, including emergency services, maternity care, hospital and doctors’ services, mental health and substance abuse care and prescription drugs.

Essential benefit requirements apply mainly to individual and small group plans sold within and outside the new online, state-based exchanges scheduled to launch in 2014. They also apply to plans provided to those newly eligible for Medicaid coverage. These requirements do not apply to self-insured health plans, which is how most large companies cover their employees. More specifics about Essential Health Benefits will follow at a future date.

The HHS rule can be found here 

 

If you have any questions, please contact your M.F. Irvine Representative.

Source: Kaiser Health News’ Daily Report

Employer Requirement Regarding Notification of Exchanges Postponed

The Department of Labor has announced that the employer requirement to inform its employees of the existence of Exchanges including a description of the services provided by the Exchanges will not take effect March 1, 2013.

In a recently released FAQ document the DOL sited a need to further coordinate its education efforts regarding Exchanges with those of HHS and the IRS, as well as its commitment to providing employers with sufficient time to comply with the requirement and getting pertinent information to employees at a meaningful time as its reasons for delaying this requirement.

The DOL expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.

If you have any questions, please contact your M.F. Irvine Representative.

December 2012 Newsletter

Click below for MFI Team Updates, Hurricane Sandy Personal Risk Management Success Story, Govenor Corbett’s Decision on Exchange, PPACA Retroactive Termination Policies and M.F. Irvine’s Holiday Card.

December Newsletter

October 2012 Newsletter

Click below for MFI Team Updates, Group Captives - A New Trend for Group Health Insurance, Medicare Part D Notification Requirements, 2012 International Foundation Wellness Survey and ERISA Compliance Corner.

October Newsletter

Health Care Reform Update Summary of Benefits and Coverage

Summary of Benefits & Coverage Guidance (SBC)

The deadline is approaching for “summary of benefits and coverage” (SBC) distribution to health plan participants and beneficiaries. The summary must accurately describe the benefits and coverage under the applicable plan and the requirement is in addition to ERISA’s SPD and SMM requirements. 

The SBC will be provided by the insurance carrier for fully insured plans.  For self-insured plans the Plan Administrator will be legally responsible for providing the SBC.

 

When Must the SBC Be Distributed?

Beginning with the first open enrollment period beginning on or after September 23, 2012 for participants and beneficiaries enrolling or re-enrolling through open enrollment. For individuals enrolling other than through open enrollment (newly eligible individuals or special enrollees), the requirement applies beginning on the first day of the first plan year that begins on or after September 23, 2012. For calendar-year plans, this means that SBCs will first be required during open enrollment in 2012 for the 2013 plan year.

The SBC requirement applies to so-called “grandfathered” health plans under Health Care Reform. It is not one of the requirements from which those existing group health plans and health coverage were excused.

What Methods of Distribution?

The SBC may be provided in paper form or electronically to participants and beneficiaries covered by the plan. 

For participants and beneficiaries who are eligible but not enrolled, the SBC may be provided electronically as long as the person intended to receive the SBC has access to a computer as part of their work duties. A paper form is provided free of charge upon request.  For these participants and beneficiaries only, the SBC may be provided via Internet posting if the individuals are notified in paper form (such as a postcard) or via email that the documents are available on the Internet.

Which Plans Are Required to Provide the SBC?

The SBC requirement applies to group health plans both insured and self-funded but not to certain “excepted benefits”. Other requirements do apply, please refer to the SBC guidelines for more details.

For more details concerning the specifics of the regulation click here Summary of Benefits and Coverage.

At the time of your renewal your M.F. Irvine Representative will coordinate the delivery of your SBC. If you have any questions, please contact your M.F. Irvine Representative.

Source: U.S. Department of Health & Human Services, www.hhs.gov; Thomson Reuters/EBIA

Health Care Reform Medical Loss Ratio Rebate FAQs for Employers

“My insurance company just sent me a rebate. What should we do with it?” The rebates received in 2012 are for Medical Loss Ratio (MLR) plan year 2011. This FAQ provides helpful information to employers to assist with the distribution.

How do I determine which employees should share in the rebate?  

• Employer needs to decide either to distribute to:
• All employees participating in the plan the year the MLR rebates are paid (e.g. 2012) regardless of whether the employee participated in the MLR year (e.g. 2011); OR 
• Only to employees participating in the plan both in the year employees paid the premiums being rebated (e.g. 2011) and the year the MLR rebates are paid (e.g. 2012).

Does the rebate need to be distributed to former plan participants? (e.g. terminated employees)  

• If the cost of distributing shares of a rebate to former participants who were in the plan year 2011 is costly and unreasonable, it may be properly allocated to current participants based upon a reasonable, fair and objective allocation method. Therefore, tracking down former participants to provide rebates is not necessarily required. The IRS has not yet issued the tax treatment of rebates for former employees participating in an employer’s plan including COBRA beneficiaries.

How must rebates be distributed to employees if they contributed toward the cost of the plan? 

• Rebates can be distributed in one of the following ways:
• Reducing the employees’ portion of premium contributions for the upcoming year for those who participate in the 2012 Plan Year or; those who participate in both 2011 and 2012 Plan Years
• Providing a cash rebate to the participants; 
• Applying the rebate toward future participant premium contributions; or 
• Using the rebate to provide enhanced plan benefits for the participants. 

* Regardless of the chosen method it is important for the employer to maintain clear documentation of the logic used for calculating and distributing the rebate.

What portion of the rebates can the policyholder/employer keep and what portion must the plan distribute to each enrollee under ERISA? 

• Non-contributory plans (Employer/Policyholder contributed 100% of the premium in 2011) The employer can keep the entire rebate. 

• The participants and the employer each paid a fixed percentage of the cost (premium) Employer distributes to each enrollee amounts proportionate to the amount of premium each paid. So, if the employer paid 80% of the premium they would keep 80% of the rebate. The employees would be entitled to the 20%, which would be equivalent to their 20% contribution. 

What will be the tax consequences for those who receive the rebates via cash or premium reduction?

• It would depend on whether employees made pre-tax or after-tax contributions. 

• For Employee Pre-Tax Payments: The rebate payment would be taxable income and subject to employment taxes to those employees who made pre-tax contributions regardless of whether the rebate was paid by cash or a reduction in premium contribution.  

• For Employee After-Tax Premium Payments: Generally, when employees pay group health plan premiums with after-tax contributions, MLR rebates would not be taxable regardless of whether the rebate was paid in the form of cash or premium contribution reduction. Also, it is not subject to federal employment taxes. 

By when should the rebate be distributed to plan participants? 

• In order to avoid the requirement of setting up a trust, the plan must distribute to the participants within three months of receipt by the policyholder. (Note: The rebate amounts paid to the participants are considered plan assets.)

If distributing payments to any participants is not cost-effective (e.g. payments to participants are of small amounts, or would give rise to tax consequences to participants or the plan), does the policyholder need to pay the rebates to the participants? 

• No. The rebate amounts may be used for other permissible plan purposes, such as applying the rebate toward future participant premium payments or toward plan benefit enhancements. Keep in mind that rebates are not guaranteed from year to year. It depends on how Insurance Companies spend their premium income on health care claims and quality improvement efforts in 2012 and the coming plan years. 

Our plan changed carriers in the middle of 2011. Will I receive 2 rebates? 

• Rebates are based on 2011 premium. If there are any rebates, the plan will receive prorated rebate amounts from the former carrier and/or new carrier, as applicable. 

Does the rebate need to be distributed to COBRA participants as well? 

• There is no clear guidance from the agencies regarding COBRA participants as of the date this document is being released. 

Do I, as a policyholder, need to distribute any notice to our participants? 

• It is not required under the regulations. Employers may want to give their employees a “heads up” when it is determined that a rebate will be forthcoming. 

How are rebates determined by the carrier? 

• Rebates are calculated based on the experience of an insurance company in a segment (Individual, smallgroup, and large group) in a state where each plan is sitused. Also, rebates are determined according to the prior year’s MLR. (E.g. Rebates issued in August 2012 will be based on the 2011 MLR reporting year.) 

All carriers’ MLR rates can be viewed at: Healthcare.gov http://companyprofiles.healthcare.gov/

Helpful Resources 

• The Department of Labor (DOL)’s Employee Benefits Security Administration. 1-866-444-3272 DOL. Technical Guidance 2011-04.http://www.dol.gov/ebsa/newsroom/tr11-04.html

• IRS. Medical Loss Ratio (MLR) FAQs.http://www.irs.gov/newsroom/article/0,,id=256167,00.html

• HHS. Final Rule. December 7, 2011.http://www.gpo.gov/fdsys/pkg/FR-2011-12-07/pdf/2011-31289.pdf

• HealthCare.gov. MLRhttp://www.healthcare.gov/news/factsheets/2010/11/medical-loss-ratio.html

If you have any questions, please contact your M.F. Irvine Representative.

Sources: www.irs.gov, www.healthcare.gov 

Health Care Reform $2,500 FSA Health Care Limit

The IRS issued  Notice 2012-40 regarding the $2,500 flexible spending account (FSA) limit enacted by Health Care Reform.

Bottom Line:

• The limit applies to plan years beginning after December 31, 2012

• Plans may adopt amendments at any time through the end of 2014

• For plans with a grace period, amounts carried over will not apply to the $2,500 limit

• Relief may be available for reasonable errors in applying the $2,500 limit

The Notice

The $2,500 limit applies to salary reduction contributions and not to non-elective contributions (e.g., employer provided flex-credits) unless the employee may elect to receive the flex-credits as cash or a taxable benefit.

The $2,500 limit does not apply to:

• Salary reduction contributions that are used to pay the employee’s share of the health coverage contributions,
• Health Savings Account contributions,
• Health Reimbursement Account contributions or
• Dependent care spending account contributions.

The limit is applied on an employee basis; therefore, if an employee and spouse are each eligible as employees, the $2,500 limit applies separately to each employee.

However, the $2,500 limit is applied on a controlled group basis; if an employee works for more than one employer in the controlled group, the employee’s maximum salary deferral is $2,500 in total.

The Notice cautions that a plan year can only be changed for valid business reasons; changing the plan year to postpone application of the rule is not a valid business reason.

What should Plan Sponsor’s do?

• It depends on the Supreme Court’s decision regarding health care reform.

• If your open enrollment material must go to print before the Supreme Court decision regarding health care reform make sure your 2013 open enrollment material explains the new limit and how it will apply to your plan.

• Review your plan document to determine if an amendment is necessary.  

If you have any questions, please contact your M.F. Irvine Representative.

Source: IRS Notice 2012-40

June 2012 Newsletter

Click below for MFI Team Updates, Directors and Officers Liability Insurance, International travel with GeoBlue, and Essentials of Employee Benefits seminar.

June Newsletter

Breaking News Supreme Court Upholds Health Care Reform

The United States Supreme Court announced this morning its decisions on the four interrelated issues that made up the constitutional challenge to President Barack Obama’s Patient Protection and Affordable Care Act.

The court has decided the individual mandate is a tax and thereby constitutional, and that the Medicaid expansion is also legal, although its provisions were limited. The entire measure stands as is except that the federal government’s power to terminate states’ Medicaid funds has been reduced. For purposes of implementation, virtually all of the law and all resulting regulations and deadlines proceed as scheduled. 

Gearing Up For Deadlines

The high court’s decision comes a year and a half before January 2014, when some of the most significant changes called for in the law take effect. Those include the launch of new state-based marketplaces where consumers will shop for coverage, the fining of employers with 50 or more workers who fail to provide affordable coverage and the expansion of Medicaid.

Impact Of Medicaid Ruling

State politics, meanwhile, will come into play on the ruling on the Medicaid expansion. The ruling gives states the option not to expand eligibility without losing funding for their existing program. They would, however, lose billions in additional federal funding that would have covered newly eligible residents up to 133 percent of the federal poverty level, or about $30,000 for a family of four. Today, about 60 million people are enrolled in the program.

The basic import here is that all litigation is done and that the law proceeds. Access the full text of the decision here: Supreme Court Upholds Health Care Reform. For a comprehensive overview of the Affordable Care Act, visit  WhiteHouse.gov/HealthReform.

As always, M.F. Irvine will keep you updated on the continuing obligations of Health Care Reform. If you have any questions, please contact your M.F. Irvine Representative.

Sources: www.supremecourt.gov, www.whitehouse.gov, www.healthreform.kff.org, & National Association of Health Underwriters 

Health Care Reform Comparative Effectiveness Research Fee

The Affordable Care Act imposes fees on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans, generally referred to as the Comparative Effectiveness Research Fees.  The IRS issued proposed regulations regarding the fee.  The insurance company is responsible for the fee in the case of an insured group health plan.  The Plan sponsor is responsible for the fee in the case of a self-insured group health plan.  Self-insured plans include retiree only plans, HRAs and certain health care FSAs. The fee is effective for each policy/plan year ending on or after October 1, 2012 and before October 1, 2019.  Form 720 - Quarterly Federal Excise Tax Return will be used to pay the fee but it is to be filed annually and is due by July 31 of the calendar year immediately following the last day of the policy/plan year. The first filing for most plans will be July 31, 2013. The fee The fee is $1 times average number of lives covered under the policy/plan for policy/plan years ending before October 1, 2013. The fee is $2 times average number of lives covered under the policy/plan for policy/plan years ending before October 1, 2019. For policy/plan years ending on or after October 1, 2014 the fee is increased based on the increases in the projected per capita amount of National Health Expenditures. The proposed regulations provide guidance regarding counting the number of lives. Plans not subject to the fee: An EAP, disease management program or wellness program that does not provide significant benefits in the nature of medical care or treatment. An HRA if it is integrated with another applicable self-insured plan that provides major medical coverage provided the self-insured plan and the HRA are maintained by the same plan sponsor. Excepted benefits e.g., stand alone vision and dental, certain health care FSAs Stop loss coverage. HRAs and FSAs If plan is insured and is integrated with an HRA, the insurance company is responsible for the fee for the insured plan and the plan sponsor is responsible for the fee for the HRA. A health care FSA that doesn’t satisfy the excepted benefit rules (most plans do) is considered a self-insured plan subject to the fee and is treated as an integrated HRA. What should Plan sponsors do now? Identify your plans that are subject to the fee. Determine which counting method you will use. Add the fee to your budgeting process if you haven’t already done so. If you are a member of a controlled group, check the plan document to ensure that one plan sponsor is designated or else each member of the controlled group will be subject to the fee. Add another item to your compliance calendar. If you have any questions, please contact your M.F. Irvine Representative. Source: www.gpo.gov

March 2012 Newsletter

Click below for MFI Team Updates, Financial Education Series for Employees, Employee Wellness Survey, and Department of Labor auditing Health & Welfare plans.

March Newsletter

Health Care Reform: Summary of Benefits and Coverage

Summary of Benefits & Coverage Guidance (SBC)

Health care reform has expanded ERISA’s disclosure requirement by requiring that “summary of benefits and coverage” (SBC) be provided to health plan participants and beneficiaries. The summary must accurately describe the benefits and coverage under the applicable plan and the requirement is in addition to ERISA’s SPD and SMM requirements. 

Generally we believe that the SBC will be provided by the insurance carrier for fully insured plans.  For self-insured plans the Plan Administrator will be legally responsible for providing the SBC.

 

When Must the SBC Be Distributed?

Beginning with the first open enrollment period beginning on or after September 23, 2012 for participants and beneficiaries enrolling or re-enrolling through open enrollment. For individuals enrolling other than through open enrollment (newly eligible individuals or special enrollees), the requirement applies beginning on the first day of the first plan year that begins on or after September 23, 2012. For calendar-year plans, this means that SBCs will first be required during open enrollment in 2012 for the 2013 plan year.

The SBC requirement applies to so-called “grandfathered” health plans under Health Care Reform. It is not one of the requirements from which those existing group health plans and health coverage were excused.

What Methods of Distribution?

The SBC may be provided in paper form or electronically to participants and beneficiaries covered by the plan. 

For participants and beneficiaries who are eligible but not enrolled, the SBC may be provided electronically if the format is readilly accessible and a paper form is provided free of charge upon request.  For these participants and beneficiaries only, the SBC may be provided via Internet posting if the individuals are notified in paper form (such as a postcard) or via email that the documents are available on the Internet.

Which Plans Are Required to Provide the SBC?

The SBC requirement applies to group health plans both insured and self-funded but not to certain “excepted benefits”. Other requirements do apply, please refer to the SBC guidelines for more details.

For more details concerning the specifics of the regulation click here Summary of Benefits and Coverage.

If you have any questions, please contact your M.F. Irvine Representative.

Source: U.S. Department of Health & Human Services, www.hhs.gov; Thomson Reuters/EBIA