Source: United Benefit Advisors
The federal government in the past few weeks has kept up the fast pace of pumping out benefits-related guidance — a trend that started at the end of 2012 — with a set of final and proposed regulations for the health care reform law, a final HIPAA rule and a compromise on the Obama administration’s coverage requirement for contraceptives.
HIPAA: The Department of Health and Human Services (HHS) released its HIPAA omnibus final rule in late January. The final rule establishes new rights for individuals to access their health information, calls for updates to business associate contracts, beefs up privacy protections for patients and gives the government more power to enforce the law, according to a HealthLeaders Media article.
Employers should expect tougher policing of HIPAA-related infractions by federal agencies, experts say.
“The ‘good old days’ of voluntary compliance and ‘slaps on the wrist’ seem to be a thing of the past,” Brad M. Rostolsky, a partner with Reed Smith, LLP, told HealthLeaders Media. “As a result, it’s important that regulated businesses, from the top down, are seen to have buy-in to HIPAA compliance efforts.”
Contraception Compromise: HHS has tweaked its requirement that religious nonprofit organizations provide their female members coverage for birth control, according to a PPACA Advisor release from United Benefit Advisors (UBA). Instead, insurance companies, after being notified of the employer’s objection to the coverage, would be required to provide coverage at no cost to workers through separate policies. If the employer is self-insured, it can use a third party to set up a separate health policy that would provide coverage for contraceptives. The costs for this action may be be offset by the fees that insurers will pay to participate in the government-run health care exchanges, slated to go online in 2014.
Affordability: The IRS finalized a rule that clarified that the health coverage “affordability” requirement (that an employee’s premium contribution not exceed 9.5 percent of household income) under the Patient Protection and Affordable Care Act (PPACA) will be based on self-only coverage, according to a Business Insurance online report. Employers with plans that fail that test face a $3,000 penalty for each full-time employee who is not offered affordable coverage and instead receives a premium subsidy from the government to purchase insurance in a health care exchange. The proposed regulation left open the possibility that the affordability test might have applied to family coverage, but the IRS removed that scenario with its final rule.
HRAs: A new set of frequently asked questions posted by federal agencies limits the use of health reimbursement arrangements (HRAs) in the coming government-run health insurance exchanges, an online report by the Society for Human Resource Management (SHRM) notes. The FAQs state that an HRA that is not integrated with a group health plan but instead functions as a “stand-alone” benefit falls under the PPACA provision that limits the annual amount an individual is required to spend on health care coverage. The report points out that this restriction means funds from stand-alone HRAs can’t be used to buy individual coverage through the online exchanges, slated to open in 2014.
Timothy Jost, a professor at Washington and Lee University School of Law, told SHRM that many employers were hoping to offer employees “a fixed-dollar contribution” through an HRA. Such a move “would permit the employee to take advantage of the tax subsidies currently available through HRA coverage but get the employer out of the health insurance business.” For many employers, this now will not be possible.
Minimum Coverage: A proposed PPACA rule clarifies what types of services would be considered “minimal essential coverage,” UBA reports. Services such as on-site clinics, limited-scope dental and vision, long-term care, disability income and accident-only income would not qualify as employer-sponsored minimal essential coverage. More details can be found in the Federal Register: https://www.gpo.gov/fdsys/pkg/FR-2013-02-01/pdf/2013-02141.pdf
Exchange Notice Delay: Employers who were concerned about a fast-approaching deadline to distribute notices on the exchanges can relax for a few more months. The Department of Labor (DOL) has pushed the date (originally March 1) to late summer or early fall. The DOL is preparing model language for the notice, and a final date will be announced later, the agency said.