Final Rule on Nondiscrimination in Health Programs and Activities
From the Department of Health and Human Services.
Final rule prohibits discrimination based on race, color, national origin, sex, age or disability; enhances language assistance for individuals with limited English proficiency; and protects individuals with disabilities.
The Department of Health and Human Services (HHS) issued a final rule to advance health equity and reduce health care disparities. Under the rule, individuals are protected from discrimination in health care on the basis of race, color, national origin, age, disability and sex, including discrimination based on pregnancy, gender identity and sex stereotyping. In addition to implementing Section 1557’s prohibition on sex discrimination, the final rule also enhances language assistance for people with limited English proficiency and helps to ensure effective communication for individuals with disabilities. The protections in the final rule and Section 1557 regarding individuals’ rights and the responsibilities of many health insurers, hospitals, and health plans administered by or receiving federal funds from HHS build on existing federal civil rights laws to advance protections for underserved, underinsured, and often excluded populations.
The Nondiscrimination in Health Programs and Activities final rule implements Section 1557 of the Affordable Care Act, which is the first federal civil rights law to broadly prohibit discrimination on the basis of sex in federally funded health programs. Previously, civil rights laws enforced by HHS’s Office for Civil Rights (OCR) broadly barred discrimination based only on race, color, national origin, disability, or age.
“A central goal of the Affordable Care Act is to help all Americans access quality, affordable health care. Today’s announcement is a key step toward realizing equity within our health care system and reaffirms this Administration's commitment to giving every American access to the health care they deserve," said HHS Secretary Sylvia M. Burwell.
The final rule helps consumers who are seeking to understand their rights and clarifies the responsibilities of health care providers and insurers that receive federal funds. The final rule also addresses the responsibilities of issuers that offer plans in the Health Insurance Marketplaces. Among other things, the final rule prohibits marketing practices or benefit designs that discriminate on the basis of race, color, national origin, sex, age, or disability. The final rule also prohibits discriminatory practices by health care providers, such as hospitals that accept Medicare or doctors who participate in the Medicaid program.
The final rule prohibits sex discrimination in health care including by:
- Requiring that women must be treated equally with men in the health care they receive. Other provisions of the ACA bar certain types of sex discrimination in insurance, for example by prohibiting women from being charged more than men for coverage. Under Section 1557, women are protected from discrimination not only in the health coverage they obtain but in the health services they seek from providers.
- Prohibiting denial of health care or health coverage based on an individual’s sex, including discrimination based on pregnancy, gender identity, and sex stereotyping.
It also includes important protections for individuals with disabilities and enhances language assistance for people with limited English proficiency including by:
- Requiring covered entities to make electronic information and newly constructed or altered facilities accessible to individuals with disabilities and to provide appropriate auxiliary aids and services for individuals with disabilities.
- Requiring covered entities to take reasonable steps to provide meaningful access to individuals with limited English proficiency. Covered entities are also encouraged to develop language access plans.
While the final rule does not resolve whether discrimination on the basis of an individual’s sexual orientation status alone is a form of sex discrimination under Section 1557, the rule makes clear that OCR will evaluate complaints that allege sex discrimination related to an individual’s sexual orientation to determine if they involve the sorts of stereotyping that can be addressed under 1557. HHS supports prohibiting sexual orientation discrimination as a matter of policy and will continue to monitor legal developments on this issue.
The final rule states that where application of any requirement of the rule would violate applicable Federal statutes protecting religious freedom and conscience, that application will not be required.
For more information about Section 1557, including factsheets on key provisions and frequently asked questions, visit https://www.hhs.gov/civil-rights/for-individuals/section-1557.
To learn more about non-discrimination and health information privacy laws, your civil rights, and privacy rights in health care and human service settings, and to find information on how to file a complaint, visit us at www.hhs.gov/ocr.
Employers' Greatest Fears: PPACA & Compliance
Original post benefitspro.com
The last few years have put employers in the position of becoming compliance officers. The Department of Labor, Health and Human Services, and the Internal Revenue Service have actively been pursuing small- and mid-size businesses about various issues, from PPACA reporting to wage and hour miscalculations.
It is becoming a full-time job for manager HR representatives to keep up with the requirements of a compliant business.
The average employer cannot tell you what the affordability test is compared to the value test, but they know that it is now a requirement. Most important is the employer's concern for their employees to have the best health insurance available for the least expensive price. The employees are now looking for jobs that will provide them with health insurance in order to not be penalized at tax filing time. Employers are trying to understand what exactly they should be providing under health care reform in order to not pay additional fines for doing it incorrectly.
IRS fines are increasing in 2016 for employees to either $695 or 2.5 percent of adjusted family income per uninsured adult, whichever is greater. Employers will have to pay $2,160 per employee (after the first 30) if not providing health insurance or for an incorrect plan, and $3,240 for each employee getting a subsidy through the marketplace. Penalties for not filing certain documents in time, such as form 5500 or form 1094C, can add up to $1,100 per late day.
Insurance agents are becoming consultants in a very different world than we first began. Employers are asking accounting and legal questions which are requiring research and partnerships with other professionals.
Employers want to know the difference now in using a professional employer organization (PEO) versus outsourcing their HR and payroll departments. If the employer decides to do it themselves, questions they ask are:
- How long do I keep the necessary paperwork?
- Should I use the qualifying offer method or the 98 percent offer method?
- Which Safe Harbor would be best for my situation?
Insurance consultants will be the ones answering these questions with their employers as well as reviewing the documents and procedures.
Education and wisdom are the most important values for an insurance consultant’s job security. Just about the time you learn it, it will change.
How Agents Can Help Comply with PPACA
Original post benefitspro.com
“You can help your employer clients comply with the Patient Protection and Affordable Care Act [PPACA] by becoming their trusted advisors,” Julie L. Hulsey, CLU, LUTCF, president and CEO, Zynia Business Solutions, Amarillo, Texas, told her audience in her presentation, “Employers’ Greatest Fears: PPACA and Compliance.”
As of Jan. 1, 2016, Hulsey reminded the audience, employers of 50 or more full-time equivalent (FTE) employees are required to provide health insurance to at least 95% of their employees or face a penalty. One key issue for employers is that many federal government entities are auditing small businesses with little to no coordination, for example:
1. Department of Labor, including the Wage and Hour Division, the Equal Employment Opportunity Commission and the Occupational Safety and Health Administration
2. Internal Revenue Service
3. Office for Civil Rights
4. Immigration Customs Enforcement
5. Department of Transportation
“Smaller employers, those with less than 50 employees, or 50 to 100 employees, don’t have an HR department or even an HR professional on staff,” Hulsey observed. One way agents and brokers can demonstrate their value is by providing clients with charts showing affordable coverage employee wage calculations for a 40-hour work week and for a 30-hour work week, she explained, showing the charts she had created for her clients.
Penalties 101 for agents and brokers
Hulsey reminded the audience that for 2016 the employer shared responsibility penalty of $2,000 is now $2,160, and the $3,000 penalty is now $3,240. If an employer is considering paying the penalty instead of offering insurance, you can point out that the penalty is not a tax deductible business expense but health insurance premiums are, which may affect the employer’s decision.
“Penalties will be calculated on a monthly basis so if you are out of compliance for just one month, you will only be penalized for that month,” Hulsey pointed out. “Therefore, become compliant as soon as possible to avoid accumulating more monthly penalties.”
If an employer offers a “minimum essential coverage” plan that meets the “affordable” and “minimum value” tests to an employee who declines it, no employer penalty will be owed for that employee. “Tell the employer to keep a copy of the signed waiver of coverage form, and get a signed waiver every year!” Hulsey said.
It’s important to let our clients know what the Department of Labor and the Department of Justice are targeting, Hulsey said. Quoting from a recent presentation by the DOL and DOJ that she attended, Hulsey said that the DOL’s FY 2013 Strategic Plan has a goal to generate $1,172,108,000 in enforcement results through 4,330 reporting compliance reviews. They indicated their enforcement program will use a series of approaches (including national/regional priorities, civil/criminal litigation, and sample Investigation Programs) to achieve this goal. The current strategic plan is under review and that enforcement goal is likely to increase.
Hulsey acknowledged that agents and brokers are losing commissions but you can take some action to limit those losses “Connect with professionals like TPAs and payroll vendors to offer some of those third party services,” she suggested. “Also, be sure you understand your clients’ needs so you can answer their questions.” Employers need answers about PPACA and compliance, and they’ll be calling you or their attorneys. “It’s better if they call you,” she said.
Many Employees Still Unaware of Free Preventive Care Benefits
Original post benefitspro.com
Even employees covered by an employer-sponsored health plan remain confused about the benefits that are free of charge to them under health care reform law. But employers say that they often don’t have the resources or effective communications tools to fully explain these benefits to the workforce.
This finding emerged from a small sample study by the Midwest Business Group on Health, which surveyed 53 workplaces, more than half of which had 5,000 or more employees in their plans.
The survey indicated that progress is being made: 62 percent said they were aware of all the free services, which include vaccinations, maternity and pregnancy related services, pediatric services and others. But another 36 percent admitted they weren’t aware of the full spectrum of these free benefits. (Just 2 percent pleaded complete ignorance of the benefits.)
The survey said that larger employers that often use participation incentives to increase benefits usage had higher rates of preventive service use compared to small- to mid-sized employers, with larger ones reporting about 60 percent participation and small-to-mid-sized around 50 percent. Overall, 53 percent said they offer such incentives.
“In addition,” the report said, “outside of the flu vaccination, survey respondents indicated they are not promoting important adult vaccinations, and for those that do, employee use is low.”
Digging deeper into the benefits available to workers, the study found that 58 percent of respondents offered vaccines only to those covered and their dependents. A small number — 42 percent — included retirees in the coverage.
The flu vaccine was far and away the most prevalent benefit for employers with onsite or near-site clinics, offered by 70 percent. Vaccinations for hepatitis B were the second most common, at 41 percent, with hepatitis A found in 39 percent of plans. Vaccinations for diseases such as HPV, shingles, pneumonia, measles and others were in the 27 percent to 37 percent range. Nearly half of plans (43 percent) covered all vaccinations costs.
Increasingly, larger employers, and even some with fewer employees, are turning to onsite service centers to encourage greater use of free preventive benefits. Nearly half reported having an onsite clinic, 21 percent said they use a near-site clinic, and 7 percent reported using a mobile van.
While overall, employers felt their benefits communications strategies were working fairly well, a major area where they are not finding success is in encouraging employees to choose a specific location to receive vaccines. This indicates that the employer-led national effort to attempt to steer workers to centers of excellence, or at least of cost efficiency, is not yet working well.
The MBGH has created a preventive benefits “toolkit” designed to help employers spread the word about free benefits and increase participation in them.
“Employers are the primary purchasers of health care for employees and families, so it’s important that these benefits are effectively understood and appropriately used,” said Larry Boress, MBGH president and CEO. “Otherwise, consumer engagement levels suffer, resulting in millions of benefit dollars being wasted each year. Many employers don’t know where to start or how to effectively communicate available preventive care benefits to their covered population. That’s why we’re launching an employer toolkit to help employers do a more effective job.”
Counting Employees Doesn't Always Add Up
Original post benefitspro.com
Employee counts are used to determine what laws, rules, fees and penalties apply to a health plan and/or the employer sponsor. But the methods for counting employees are as varied as the laws that affect them. This creates confusion and frustration among employers and can significantly hinder their compliance efforts. To make sense out of all this, we have put together a synopsis of 12 counting methods that employers must utilize to properly administer their health plans. Read on to find out how to stay compliant as you move forward.
Employers with at least 15 employees
Law or compliance requirement applied:
Title VII of the Civil Rights Act, as amended by the Pregnancy Discrimination Act (PDA): Employers may not consider a person's race, color, sex (including sexual orientation), national origin, religion, or pregnancy in determining eligibility for, amount of, or charges for employee benefits. Denying coverage for a condition or treatment that disproportionately affects members of a protected group is also considered a violation of Title VII.
Americans with Disabilities Act (ADA): An employer may not deny an individual with a disability equal access to insurance, or require such an individual to have terms and conditions of insurance different than those of employees without disabilities. The ADA also applies to wellness and disease management programs.
Who to count: Employees working 20 or more calendar weeks in the current or preceding calendar year.
How to count: Count each full-time and part-time employee as one.
Consequences of noncompliance: The EEOC may bring an action in court, and individuals may file private lawsuits to correct violations and obtain appropriate legal or equitable relief (including attorney’s fees and other costs).
Employers with at least 20 employees
Law or compliance requriement applied:
Genetic Information Nondisclosure Act (GINA): Group health plans may not discriminate against individuals based on genetic information and may not use this information in underwriting or determining premiums or contributions. It also restricts questions that can be asked on a Health Risk Assessment (HRA) if an incentive is offered for its completion.
Age Discrimination in Employment Act (ADEA): Benefits provided to older workers (40 years and older) must be the same as those provided to younger workers in all respects, including payment options, types of benefits and amount of benefits (although certain exceptions may apply).
Who to count: Employees working 20 or more calendar weeks in the current or preceding calendar year.
How to count: Count each full-time and part-time employee as one.
Consequences of noncompliance: The DOL may assess special penalties and the EEOC may bring an action in court against a plan sponsor for violations. Individuals may file private lawsuits to correct violations and obtain appropriate legal or equitable relief (including attorney’s fees and other costs).
Employers with at least 20 employees
Law or compliance requriement applied:
COBRA: COBRA provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates.
Who to count: Employees (in all commonly-owned businesses) on more than 50 percent of the typical business days in the previous calendar year.
How to count: Count each full-time employee as one. Each part-time employee counts as a fraction, with the numerator equal to the number of hours worked by that employee and the denominator equal to the number of hours that must be worked on a typical business day in order to be considered full-time.
Consequences of noncompliance: COBRA compliance failures can result in excise taxes and statutory penalties. Qualified beneficiaries may also file private lawsuits to correct violations and obtain appropriate legal or equitable relief (including attorney’s fees and other costs).
Employers with 20 or more employees
Law or compliance requriement applied:
Medicare Secondary Payer (MSP) rules based on age: A group health plan is the primary payer and Medicare is the secondary payer for individuals age 65 or over if their group health coverage is by virtue of the individual's (or his/her spouse’s) current employment status.
Who to count: Employees on each working day in at least 20 weeks in either the current or the preceding calendar year. The 20-employee test must be run at the time the individual receives the services for which Medicare benefits are claimed.
How to count: Count each full-time and part-time employee as one.
Consequences of noncompliance: Medicare can collect any incorrect claim payments directly from the employer, regardless of whether the employer's plan is fully insured or self-insured.
Employers with at least 50 employees
Law or compliance requriement applied:
Family and Medical Leave Act (FMLA): FMLA requires employers that sponsor group health plans to provide group health plan benefits to employees on an FMLA leave. Please note that public agencies and public and private schools are covered regardless of the number of employees.
Who to count: Employees working 20 or more weeks in the current or preceding calendar year within a 75 mile radius of the applicable work location.
How to count: Count each full-time and part-time employee as one.
Consequences of noncompliance: The EEOC may bring an action in court and individuals may file private lawsuits to correct violations and obtain appropriate legal or equitable relief (including attorney’s fees and other costs).
Applicable Large Employers (ALEs)
Law or compliance requriement applied:
Shared responsibility provisions of the Affordable Care Act (ACA): ALEs must offer minimum essential coverage that is “affordable” and that provides “minimum value” to their full-time employees, must report to the IRS information about the health care coverage, if any, they offered to full-time employees, and must provide a statement to employees.
Who to count: Full-time employees and full-time equivalent (FTE) employees in each month of the preceding year. Divide this number by 12, and if the result is 50 or greater, the employer is an ALE for the current year.
How to count: Count full-time (30 or more hours per week determined on a monthly basis) and FTE employees as one. Aggregate part-time hours (no more than 120 hours per employee) and divide by 120 to determine FTEs. Special counting rules apply with respect to special situations, such as teachers, seasonal workers, etc.
Consequences of noncompliance: ALEs are subject to a penalty if one or more full-time employees are certified to the employer as having received an applicable premium tax credit or cost-sharing reduction, and either: 1) the employer fails to offer to its full-time employees (and their dependents) minimum essential coverage; or, 2) the employer's coverage is deemed to be unaffordable or does not provide minimum value (as defined by the ACA). Failure to file a return with the IRS or furnish a statement to employees can result in penalties up to $250 per return/statement, with a maximum penalty of $3 million.
Law or compliance requriement applied:
Mental Health Parity and Addiction Equity Act (MHPAEA):Group health plans that provide mental health coverage must provide parity between medical/surgical benefits and mental health/substance use disorder benefits.
Who to count: Employees on business days during the preceding calendar year.
How to count: Count each full-time and part-time employee as one.
Consequences of noncompliance: Individuals and the DOL may use ERISA's civil enforcement provisions to file lawsuits to enforce the MHPAEA's requirements. In addition, noncompliance with the MHPAEA can trigger an IRS excise tax.
Employers with 100 or more employees
Law or compliance requirement applied:
Medicare Secondary Payer (MSP) rules based on disability:A group health plan is the primary payer, and Medicare is the secondary payer for individuals under age 65 entitled to Medicare on the basis of a disability, if their group health coverage is by virtue of the individual's (or his/her spouse’s) current employment status.
Who to count: Employees on at least 50 percent of regular business days during the previous calendar year.
How to count: Count each full-time and part-time employee as one.
Consequences of noncompliance: Medicare can collect any incorrect claim payments directly from the employer, regardless of whether the employer's plan is fully insured or self-insured.
Welfare plans that cover at least 100 employees
Law or compliance requirement applied:
Form 5500: Employee benefit plans must file the Form 5500 reporting and disclosure document on an annual basis with the Department of Labor (DOL). Please note that the Form 5500 requirement applies to ERISA plans only.
Who to count: Employees enrolled in the plan at the beginning of the plan year.
How to count: Count each full-time and part-time employee as one.
Consequences of noncompliance: The penalty for failing to file a Form 5500 is $1,100 per day, which is cumulative from the filing deadline. Lesser penalties may be assessed for incomplete or otherwise deficient Form 5500s.
Employers that filed 250 or more W-2s
Law or compliance requirement applied:
Reporting the cost of health benefits on W-2: The Affordable Care Act (ACA) requires employers to report the total cost of employer-provided health coverage on Form W-2.
What to count: W-2s filed with the IRS in the preceding calendar year.
How to count: W-2s for full-time and part-time employees count as one.
Consequences of noncompliance: Penalties for compliance failures range from $30 to $250 per form.
All self-insured medical plans
Law or compliance requirement applied:
Transitional reinsurance program fee: The ACA requires self-insured group health plans to make contributions to help stabilize premiums for coverage in the individual market during the years 2014 through 2016.
Who to count: Covered lives, which includes both employee and dependent lives.
How to count: The fee is calculated based on the average number of covered lives, which can be determined using one of the following four methods:
- Actual Count: Add the total number of lives covered for each day of the first nine months of the calendar year and divide that total by the number of days in the first nine months.
- Snapshot Count: Add the total number of lives covered on any date during the same corresponding month in each of the first three quarters of the calendar year, and divide that total by the number of dates on which a count was made.
- Snapshot Factor: Use the Snapshot Count method, except the number of lives covered on a given date is calculated by adding the number of participants with self-only coverage to the product of the number of participants with coverage other than self-only coverage and a factor of 2.35. This method can be used to estimate the number of total lives included in coverage that is not self-only coverage.
- Form 5500 Method: The number of participants as of the beginning and end of the plan year as reported on Form 5500 for the last applicable time period.
Consequences of noncompliance: As with any amount owed to the federal government, an unpaid/underpaid Reinsurance Program Fee will be subject to federal debt collection rules.
All self-insured medical plans
Law or compliance requirement applied:
Patient-Centered Outcomes Research Institute (PCORI) fee:The PCORI fee supports the Patient-Centered Outcomes Research Trust Fund and will be imposed for each policy year ending on or after October 1, 2012 and before October 1, 2019.
Who to count: Covered lives, which includes both employee and dependent lives.
How to count: The fee is calculated based on the average number of covered lives, which can be determined using one of the following three methods:
- Actual Count Method: Add the total lives covered for each day of the plan year and divide that total by the total number of days in the plan year.
- Snapshot Method: Add the total number of lives covered on one date during the first, second or third month of each quarter, and divide that total by the number of dates on which a count was made.
- Form 5500 Method: The number of participants as of the beginning and end of the plan year as reported on Form 5500 for the last applicable time period.
Consequences of noncompliance: As with any amount owed to the federal government, an unpaid/underpaid PCORI Fee will be subject to federal debt collection rules.
2017 HSA Limits Released
Original post benefitspro.com
Change is not the order of the day for health savings account (HSA) limits in 2017.
The Internal Revenue Service (IRS) issued its new guidelines for contributions and out-of-pocket expenses for HSAs that are tied to a high-deductible plan this week.
Maximum OOPs for individual and family accounts won’t budge next year, and contributions will remain intact for family plans. Individual contributions increased slightly.
Here’s the run-down of the details:
- Out-of-pocket maximums are unchanged at $6,550 for individuals and $13,100 for families;
- Maximum contributions for family plans remain the same at $6,750;
- Individual contributions can increase from $3,350 to $3,400.
High deductible plans in 2017 will be those that have an annual deductible of least $1,300 for self-only coverage and $2,600 for family coverage.
HSAs are open to all men and women enrolled in a high-deductible health insurance program (exceeding $1,300 for individuals and $2,600 for family) aside from those policyholders currently covered by Medicare or listed as a dependent.
For both 2015 and 2016, IRS regulations mandating the potential contributions on plans covering families (a minimum of two people) held successive increases of $100. Individual restrictions, meanwhile, were bumped up by $50 in 2015, but remained stable the following year.
The annual fluctuations of HSA contribution levels are based directly upon federal cost of living adjustments. They will be applied for the calendar year of 2017.
A full account of the new guidelines may be read under Revenue Procedure 2016-28.
Compliance Alert: New Affordable Care Act FAQs Released
Original post jdsupra.com
The U.S. Department of Labor, the Department of Health and Human Services, and the Department of the Treasury (collectively, the “Departments”) have jointly issued a new set of answers to frequently asked questions about the Affordable Care Act (the “ACA”). Below are some highlights from the FAQs.
Rescissions of Coverage
The FAQs provides some specific guidance regarding rescissions of coverage that is of interest for K-12 schools and higher education institutions. Under the ACA, a plan generally cannot retroactively cancel coverage (referred to as a “rescission” of coverage) unless the participant commits fraud or makes an intentional misrepresentation of material fact prohibited by the terms of the plan. The FAQs answer a very specific question about rescissions, which may have broader application. The question raised by the FAQs is whether a school can retroactively cancel coverage for a teacher who was employed on a 10-month contract from August 1 to May 31 and gave notice of resignation on July 31. The plan attempted to terminate coverage retroactively to May 31. According to the FAQs, such a rescission violates the ACA’s restrictions.
Preventive Care Mandate
Under the ACA, non-grandfathered group health plans must cover certain preventive services without imposing any cost-sharing requirements. In the new FAQs, the Departments issued the following guidance regarding preventive services:
- Any required preparation for a preventive screening colonoscopy is an integral part of the procedure and must be covered without cost-sharing.
- Plans and issuers that use reasonable medical management techniques for specific methods of contraception can develop a standard exception form and instructions for providers to use in prescribing a particular service or FDA-approved item based on medical necessity. The Medicare Part D Coverage Determination Request Form can be used as a model in developing a standard exception form.
Additionally, the FAQs clarify that if a non-grandfathered plan pays a fixed amount (a “reference price”) for a particular procedure, the plan must either (1) ensure that participants have adequate access to quality providers that accept the reference price as payment in full or (2) count an individual’s out-of-pocket expenses for providers who do not accept the reference price toward the individual’s maximum out-of-pocket limit.
Out-of-Network Emergency Services Coverage
The ACA also prohibitsnon-grandfathered group health plans from imposing cost-sharing on out-of-network emergency services in an amount that is greater than that imposed for in-network emergency services. The statute does not specify whether “balance billing” is included in the definition of cost-sharing. “Balance billing” is the practice of providers billing a patient for the difference between the provider’s billed charges and the amount collected from the plan plus the amount collected from the patient in the form of a copay or coinsurance. To avoid circumvention of the ACA requirements, the Departments previously issued regulations requiring a plan or issuer to pay a reasonable amount before the patient becomes responsible for balance billing. Under this regulation, the plan or issuer must provide benefits at least equal to the greatest of: (1) the median amount negotiated with in-network providers for the emergency service; (2) the amount for the emergency service calculated using the same method the plan generally uses to determine payments for out-of-network services; or (3) the amount that would be paid under Medicare for the emergency service (collectively, the “Minimum Payment Standards”). The FAQs now make clear that plans that are subject to the Employee Retirement Income Security Act must disclose the documentation and data they use to calculate the Minimum Payment Standards (1) upon request by a participant (or authorized representative) or (2) if relevant to an appeal of an adverse benefit determination.
Mental Health Parity
Lastly, the Mental Health Parity and Addiction Equity Act (“MHPAEA”) and underlying regulations generally prohibit group health plans from imposing more restrictions on financial requirements and treatment limitations provided for mental health/substance abuse disorder services than the “predominant” financial requirements and treatment limitations that apply to “substantially all” medical/surgical services. “Substantially all” for this purpose is a requirement or limitations that apply to at least 2/3 of all medical/surgical benefits in a classification. If a limitation meets the substantially all requirement, then the “predominant” level that may apply to the mental health/substance abuse disorder benefits is the one that applies to more than half of the medical/surgical benefits within the classification. In the FAQs, the Departments clarify that when calculating the “substantially all” and “predominant” tests, a plan or issuer may not base its analysis on an issuer’s entire book of business for the year. Group health plan-specific data must be used where available. If not available, data from plans with similar structures and demographics can be used.
The FAQs also clarify that under MHPAEA, criteria for medical necessity determinations must be made available to any current or potential enrollee in a group health plan, not just active participants.
This is the 31st set of FAQs issued by the Departments on the ACA, which reflects the complexity of implementing the ACA’s many requirements.
How Employers Should Respond to Increased DOL Audits
Original post benefitnews.com
The Department of Labor says it will be stepping up enforcement efforts and employer audits, which should prompt brokers, who formerly worried little about such regulatory efforts, to prepare to serve as a trusted adviser to clients concerned about such efforts, says Julie Hulsey, president and CEO of Amarillo, Texas-based Zynia Business Solutions.
Speaking at an industry conference in Hollywood, Fla. last week, Hulsey said employers are feeling pressured by the weight of increased DOL and health care reform regulations and brokers need to stay up to date on regulations, including those related to the Affordable Care Act and ERISA.
The ACA reporting requirements have brought increased scrutiny of employer-sponsored health care plans and the government is largely expected to respond to anomalies or red flags with an employer audit. But industry experts agree the government won’t limit its inquiries to ACA-related information only, and employers should be prepared for full-blown audits of health care plans.
Quoting from a DOL presentation in Austin, Texas, Hulsey says the Department said, “leniency is over; the EBSA has staffed up and is focusing its resources on health and welfare plan ERISA compliance.”
Additionally, in her small Texas town alone, she says she’s heard that the DOL has added 10-12 auditors, who are conducting random audits of employers, mostly on the smaller employee size.
Increased compliance needs can be a strain for small employers, some of which may not even have a designated Human Resources department or manager.
When a DOL audit is announced, an employer’s first phone call will be their broker or an attorney.
Among the topics that brokers should be aware,
- Variable Employee Testing: Based on employee classifications, an employer can group employees into different groups, such as part-time and seasonal.
- HR 3236-The Transportation and Veteran Health care Choice Improvement Act of 2016: This Act regulates that employees covered by Tricare can be excluded from counting employee numbers.
- Cadillac Tax: Although delayed until 2020, it is important to start planning now.
- Waivers: If employers offer a minimum-essential coverage plan that meets affordable and minimum value test and an employee declines coverage, it is important the employer have a signed waiver. “That waiver is gold,” Hulsey said.
- Individual Mandate: The period will run from Nov. 1, 2016 to Jan. 31, 2016.
- Special Enrollment Period: Presenting a sales opportunity to brokers, these enrollment periods take affect when an employee experiences any change that affects income or household size, such as becoming pregnant. Other special enrollments include marriage/divorce, changing place of residence and having a change in disability.
The DOL has the authority to audit for compliance with several laws, including the ACA, HIPAA and the Mental Health Parity and Addiction Equity Act. They also have the authority to audit for minimum loss ratio rebates and PECORI fees.
The Cadillac Tax: Myths & Facts
Original post benefitspro.com
Americans love a good story. From fairy tales to hair-raising films that leave us cowering in our seats, we enjoy when our hearts pound in anticipation. Sometimes, though, we keep ourselves up at night by creating myths about things that shouldn't be worrisome at all. One example: The Affordable Care Act's 40 percent excise tax on high-cost health care plans, commonly referred to as the Cadillac Tax.
Although we are several years away from its implementation, brokers are wondering what these health care changes will mean for their business. The Cadillac Tax is confusing and prompts questions from employers and benefits professionals — especially about when to make changes to benefits plans and whether voluntary insurance is affected.
Let's take some time to distinguish between the myths and facts so when you communicate with your clients about their plans this year — and in years to come — you have the facts to ensure you’re providing clients with accurate information to make effective business decisions regarding benefit offerings.
Myth: Employers should make benefit changes now to avoid the Cadillac tax.
Fact: The Cadillac tax has been delayed until 2020.
- As part of the Congressional spending bill signed into law in late December 2015, the Cadillac Tax is delayed until 2020.
- Considering implementation of the tax is several years away and regulations will evolve, employers can wait before considering changes to their policies.
Myth: All voluntary benefits are included in the tax.
Fact: Generally, voluntary insurance products do not count toward the Cadillac Tax calculation.
- Only two types of voluntary coverage — specified disease and hospital indemnity — are subject to the calculation of the tax, but only if they’re paid for with pretax dollars, such as through a cafeteria plan, or with excludable employer contributions. Otherwise, they are not subject to the calculation of the tax.
- Voluntary insurance products are defined as HIPAA-excepted benefits.
Myth: Employers should switch their pretax voluntary insurance products to after-tax versions.
Fact: Only employers with benefits plans considered “high cost” need to consider after-tax strategies.
- Employers and their workers receive tax advantages for retaining pretax voluntary products.
- Only two types of voluntary coverage — specified disease and hospital indemnity — are included in tax calculations, and only then if they’re paid with pretax dollars or the employer pays any portion of the premium. Other voluntary insurance benefits won't trigger the Cadillac Tax, regardless of whether they’re offered before or after tax.
Myth: Employers or workers will be responsible for paying the Cadillac Tax when it goes into effect.
Fact: In most cases, the insurance provider will be responsible for paying the tax.
- Most small businesses are fully insured, meaning the insurance provider sets the premium and pays the claims. When that's the case, the insurer, not the employer, is responsible for paying the Cadillac Tax when it goes into effect in 2020.
- If an employer is self-insured, meaning the employer sets the premiums and pays the claims, or the coverage offered is a health savings account (HSA) or an Archer medical savings account (MSA), the employer or the plan administrator will be responsible for paying the tax.
The bottom line is that myths and rumors have made the Cadillac Tax seem more confusing than it already is. It isn't even expected to take effect for another four years, so it shouldn't prompt your clients to exclude voluntary insurance from their benefits options. After all, the security voluntary coverage provides can help ensure your clients and their employees sleep well instead of worrying about medical costs that are continuing to rise.
How to Prepare for a HIPAA Audit
Original post benefitnews.com
The Department of Health and Human Services’ Office of Civil Rights has announced it will be launching phase two of the Health Insurance Portability and Accountability Act audit program. Advisers can help clients prepare by updating policies and procedures, among other steps.
HIPAA provides the ability to transfer and continue health insurance coverage for millions of American workers and their families when they change or lose their jobs, reduces healthcare fraud and abuse, mandates industry-wide standards for healthcare information on electronic billing and other processes; and requires the protection and confidential handling of protected health information.
HIPAA established national standards for the privacy and security of protected health information and the Health Information Technology for Economic and Clinical Health Act (HITECH). This established breach notification requirements to provide greater transparency for individuals whose information may be at risk.
HITECH requires OCR to conduct periodic audits of covered entity and business associate compliance with the HIPAA privacy, security and breach notification rules. OCR began its initial audit in 2011 and 2012 to assess the controls and processes implemented by 115 covered entities to comply with HIPAA.
Phase two of the audit will focus on any covered entity and business associate. OCR will identify pools of covered entities and business associates representing a wide range of healthcare providers, health plans and healthcare clearing houses.
Roy Bossen, partner at Hinshaw & Culbertson LLP, says the law firm he works for is considered a business associate because the firm deals with cases under medical malpractice.
“When we defend a hospital or a doctor, we have access to Protected Health Information (PHI),” Bossen says. “There is requirement in HIPAA for what a business associate must do to protect [PHI] as well.”
Bossen says there is not a specific penalty for not passing the audit; however an entity or business associate could face possible fines for failure of the audit.
“The next phase of the audit will be called a compliance review,” he says. “[Entities and business associates] will require a more in-depth review of what their policies and procedures are, and that could theoretically lead to fines and penalties.”
Bossen stresses that it is important for employers to determine whether they are a covered entity or business associate or if the audit even applies to an employer’s business. An employer that operates their own plan would be considered a covered entity.
Advisers and brokers can assist their clients by making sure employer’s policies and procedures are up to date while also making sure the employer’s practices match-up with the up to date policies and procedures.
“It is not uncommon in any field to have a great policy manual that’s in a nice binder on a shelf or an email document that gets sent out, but nobody practices the organization of what their policies and procedures stipulate,” Bossen says.
The HIPAA phase two audit program will begin the next couple months and should a covered entity or business associate be contacted for a desk audit or onsite audit.
Both audits can take up to 10 days to be reviewed and the auditor will have entity’s final report within 30 business days.