Small businesses don’t understand health reform requirements
Source: benefitspro.com
By: Kathryn Mayer
Most small businesses either incorrectly believe or aren’t sure whether they must provide health insurance to employees in 2014, according to a recent survey of small business owners by eHealth.
Beginning in 2014, the Patient Protection and Affordable Care Act requires businesses with the equivalent of 50 or more full-time employees to provide health insurance coverage for their workers. Businesses with fewer than 50 employees are exempt from this requirement, although employees may be required to purchase their own coverage.
The eHealthInsurance survey was conducted in August and received responses from 439 small businesses.
Based on their size (fewer than 50 employees), only two of the businesses surveyed would be required by the PPACA to offer health insurance coverage to employees in 2014. But one-third incorrectly believed that they were required to buy insurance for employees in 2014, while 35 percent weren’t sure. Nearly 70 percent either incorrectly believed or were not sure whether they would be required to pay a tax for not providing health insurance in 2014. Only 31 percent of respondents correctly said that the reform law does not require them to pay a tax if they don’t offer insurance.
Another main part of health reform—health insurance exchanges—isn’t factoring into employers’ strategies. Most small business owners (78 percent) said they weren’t familiar with health insurance exchanges and how they could impact their business. Exchanges, which are slated to come online by 2014, would make subsidized health insurance available to individuals who don’t have access to health insurance through an employer.
The eHealth poll is yet another survey reporting similar findings: Health reform is confusing both employees and their employers.
Though the Supreme Court upheld the PPACA in June, many employers continued their wait-and-see approach until after the presidential election. Republican Mitt Romney had promised that he would work on repeal of the law if elected.
The survey also found that nearly a third of small businesses (29 percent) said they would consider dropping coverage for their employees in 2014. The majority, at 68 percent, said they don’t have plans to do so, while 3 percent said they planned to stop offering coverage.
The survey also addressed their willingness to adopt new cost-cutting strategies.
To reduce costs, more than half (51 percent) said they would increase employees’ share of premiums. Nearly 40 percent would consider increasing employees’ deductibles. Nearly half of the employers surveyed (44 percent) felt it would be fair to impose penalties on employees who don't participate in wellness programs.
Most small businesses don’t offer health coverage
Source: www.benefitspro.com
By Kathryn Mayer
A new study finds only 49 percent of workers in small businesses with fewer than 50 employees were offered and eligible for health insurance through their employer in 2010, down from 58 percent in 2003.
Larger firms are much more likely to provide health benefits. About 90 percent of workers in firms with 100 or more employees were offered and eligible for health insurance in both 2003 and 2010, according to the report from the Commonwealth Fund.
Low-wage workers in small businesses were the least likely to be offered and eligible for coverage: Just one-third of workers making less than $15 an hour in small firms were both offered and eligible to enroll in their employer’s health plan, compared to 70 percent of small firm workers making over $15 an hour.
Report coauthor and Commonwealth Fund Vice President Sara Collins says the report “highlights a nearly decade-long trend of declining health insurance coverage and rising costs for workers in small businesses, particularly those who make less than $15 an hour.”
“As a result, many people who work for small businesses can’t afford the health care they need or have medical bills they are unable to pay,” she says.
About half small business employees (45 percent) reported trouble paying medical bills in 2010, and 46 percent reported that they skipped needed medical care because of cost, the report says. That’s about ten percent higher than those workers working in larger firms.
Small business workers were also more likely to be dissatisfied with their health insurance, with 29 percent rating it fair or poor, compared to 16 percent of those at larger businesses. They also don’t have as much choice when it comes to health plan options.
But Commonwealth researchers say health reform should help address and solve some of these problems by offering premium tax credits to certain small businesses and by granting subsidies to many uninsured workers toward their purchase of health insurance beginning in 2014.
“The Affordable Care Act should mitigate this trend by improving the affordability and comprehensiveness of health insurance both for small-business owners who want to offer health benefits and for workers in small businesses who can't get coverage through their jobs.”
The Commonwealth Fund is a nonpartisan research foundation that supports PPACA. Though they argue the law will help small businesses, opponents say the law will burden small businesses while raising taxes.
What Does the Election Mean for Employers and PPACA
Maintenance of the status quo in Washington, D.C. (the re-election of Barack Obama, with a Republican majority in the House of Representatives and a Democratic majority in the Senate) means that implementation of the Patient Protection and Affordable Care Act (PPACA) will move forward largely as the law was passed in 2010.
The law left the task of working out many of the details to the regulatory agencies (the Department of Labor, the IRS and the Department of Health and Human Services), and with many questions remaining unanswered, employers can expect that an enormous number of regulations and other types of guidance will be issued between now and the end of 2013.
Of greatest interest to many employers is the employer shared-responsibility ("play or pay") requirement. As of Jan. 1, 2014, employers who have 50 or more full-time or full-time equivalent employees must offer "minimum essential" (basic) medical coverage for their full-time (30 or more hours per week) employees or pay a penalty of $2,000 per full-time employee, excluding the first 30 employees. Employers who offer some coverage but whose coverage is either not "affordable" or fails to provide "minimum value" must pay a penalty of $3,000 for each employee who receives a premium tax credit. (Coverage is not "affordable" if the employee's cost of single coverage is more than 9.5 percent of income. Coverage does not provide minimum value if it is expected to pay less than 60 percent of anticipated claims. Regulations are still needed to provide details on how the penalty will be determined and collected for employers who do not provide health coverage to their full-time employees, what exactly is the "minimum value" coverage that must be provided to avoid the penalties, and when dependent coverage is "affordable.")
The health insurance exchanges are also scheduled to begin operation in January 2014. (While PPACA is a federal law, the health insurance exchanges were designed to be operated by the states.) A number of states have delayed work on the exchanges pending the outcome of this election, while a few have affirmatively decided not to create a state exchange. If a state is unable or chooses not to create an exchange, the federal government will run the exchange on the state's behalf.
According to the Kaiser Family Foundation, as of Sept. 27, 2012, the following have established exchanges: California, Colorado, Connecticut, District of Columbia, Hawaii, Kentucky, Maryland, Massachusetts, Nevada, New York, Oregon, Rhode Island, Utah, Vermont, Washington and West Virginia. Arkansas, Delaware and Illinois were planning for a partnership exchange with the federal government. Alaska, Florida, Louisiana, Maine, New Hampshire, South Carolina and South Dakota have stated that they will not create an exchange (meaning the federal government will run the exchange on the state's behalf). The remaining states are studying their options but could well end up with a federally run exchange at least for 2014 as the deadline to submit the state's plan for implementing an exchange is next week (Nov. 16).
It remains to be seen whether the federal government will be able implement so many exchanges on behalf of the states by the 2014 target date. It also remains to be seen whether a change of governor, insurance commissioner or control of a state legislature or political realities, will change a state's stance on the exchanges. Because employees may choose to obtain coverage through the exchange even if they have access to coverage through their employer and because the exchanges likely will request information from employers when determining eligibility for premium tax credits, all employers will want to have an understanding of the status of their state's exchange.
In addition to deciding whether to "play" (provide health coverage) or "pay" (the penalties), employers (including those with fewer than 50 employees) have a number of compliance obligations between now and 2014, including:
- Expanding first-dollar preventive care to include a number of women's services, including contraception, unless the plan is grandfathered
- Distributing medical loss ratio rebates if any were received from the insurer
- Issuance of summaries of benefits and coverage (SBCs) to all enrollees
- Reducing the maximum employee contribution to $2,500, if the employer sponsors a health flexible spending account (FSA), beginning with the 2013 plan year
- Withholding an extra 0.9 percent FICA on those earning more than $200,000 beginning in 2013
- Providing information on the cost of coverage on each employee's 2012 W-2 if the employer issued 250 or more W-2s in 2011
- Providing a notice about the upcoming exchanges to all eligible employees in March 2013
- Calculating and paying the Patient Centered Outcomes Fee in July 2013 if the plan is self-funded (insurers are responsible for calculating and paying the fee for insured plans but will likely pass the cost on)
- Working with the exchanges to identify those employees eligible for premium tax credits
- Removing annual limits on essential health benefits and pre-existing condition limitations for all individuals, beginning with the 2014 plan year
- Limiting eligibility waiting periods to 90 days, beginning with the 2014 plan year
- Reporting to the IRS on coverage offered and available (the first reports are actually due in 2015 based on 2014 benefits)
If you have questions or would like additional information about your options and obligations under PPACA, please contact us.
Obama Wins Re-election: Health Care Reform Law Here to Stay
After hard-fought campaigns by both candidates, President Barack Obama has been re-elected for a second term in office. Obama’s victory in the election, along with last summer’s Supreme Court decision upholding the health care reform law, cements the Democratic Party’s dedication to the legislation.
While opponents of the law have called for its repeal, health care reform’s supporters consider the legislation to be the major achievement of Obama’s first term. Obama’s re-election, along with continued Democratic control of the Senate, means that implementation of the law will now continue without additional roadblocks.
WHAT DO EMPLOYERS HAVE TO DO NEXT?
With the landscape of employer-provided health care potentially changing over the next few years, employers should consider their future plans related to their role in employee health care. They may have to make some big decisions about whether to continue providing coverage to their employees. The “pay or play” penalties provide some incentive for employers to continue coverage, since they will be at risk for significant penalties if they do not. However, employers may decide that paying the penalty is more cost-effective than continuing to pay the ever-increasing costs of health care for employees and their families.
On the other hand, uncertainty among employees about the quality and cost of individual health coverage continues to make employer-provided health coverage an attractive recruiting and retention tool. Because of these advantages, most employers plan to continue offering coverage for now. The additional uncertainty for employers, with compliance obligations hinging on court decisions and the political process, has made many companies hesitant to make any large-scale changes.
Whatever their future decisions may be, employers that will continue to sponsor group health plans for the near future must prepare for upcoming deadlines. Significant health care reform provisions with looming effective dates include:
Summary of Benefits and Coverage
Health plans and issuers must provide an SBC to participants and beneficiaries that includes information about health plan benefits and coverage in plain language. The deadline for providing the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period is the first open enrollment period that begins on or after Sept. 23, 2012. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) effective for plan years beginning on or after Sept. 23, 2012.
60-Days’ Notice of Plan Changes
A health plan or issuer must provide 60 days’ advance notice of any material modifications to the plan that are not related to renewals of coverage. Notice can be provided in an updated SBC or a separate summary of material modifications. This 60-day notice requirement becomes effective when the SBC requirement goes into effect for a health plan.
$2,500 Limit on Health FSA Contributions
The health care law will limit the amount of salary reduction contributions to health flexible spending accounts to $2,500 per year for plan years beginning on or after Jan. 1, 2013.
W-2 Reporting
Beginning with the 2012 tax year, employers that are required to issue 250 or more W-2 Forms must report the aggregate cost of employer-sponsored group health coverage on employees’ W-2 Forms. The cost must be reported beginning with the 2012 W-2 Forms, which are issued in January 2013.
Preventive Care for Women
Effective for plan years beginning on or after Aug. 1, 2012, non- grandfathered health plans must cover specific preventive care services for women without cost-sharing requirements. Calendar year plans must comply effective Jan. 1, 2013.
Employee Notice of Exchanges
Effective March 1, 2013, employers must provide a notice to employees regarding the availability of the health care reform insurance exchanges. HHS has indicated that it plans on issuing model exchange notices in the future for employers to use.
Additional Medicare Tax for High-wage Workers
In 2013, health care reform increases the hospital insurance tax rate by 0.9 percentage points on wages over $200,000 for an individual ($250,000 for married couples filing jointly). Employers will have to withhold additional amounts once employees earn over $200,000 in a year.
WHAT GUIDANCE WILL WE SEE?
Regulations on a number of issues remain outstanding. The regulatory agencies responsible for implementation and enforcement of the health care reform law—the Departments of Labor, Treasury and Health and Human Services— began issuing additional guidance once the Supreme Court upheld the law. Additional guidance is expected now that the election is over.
Issues that will likely be addressed in future guidance include:
Employer Pay or Play Mandate
The agencies are expected to, and have indicated that they will, issue more guidance for employers to help them determine how to comply with the shared responsibility provisions of the law.
Automatic Enrollment
The Department of Labor is required to issue regulations implementing the rule requiring large employers that offer health coverage to automatically enroll new employees in the health plan (and re-enroll current participants).
Nondiscrimination Rules for Fully-insured Plans
Under health care reform, non-grandfathered fully- insured plans will not be able to discriminate in favor of highly-compensated employees with respect to their health benefits. The IRS delayed the effective date of this rule for additional regulations, which have yet to be issued.
State governments may also take further steps to establish the health insurance exchanges required by the health care reform law. The federal government will step in and set up exchanges for states that fail to establish their own exchanges. Many states have delayed implementation and will need to accelerate their efforts if they want to run their own exchanges.
CHALLENGES FOR IMPLEMENTATION
As we get closer to full implementation of the health care reform law, questions linger about whether the framework is in place for all pieces to be operational by their deadlines. Insufficient staffing of the responsible agencies is one potential issue, along with employer and state government hesitation or inability to implement certain parts of the law. Compliance efforts are likely to pick up now that the election is over.
Most small businesses don’t offer health coverage
Source: www.benefitspro.com
By Kathryn Mayer
A new study finds only 49 percent of workers in small businesses with fewer than 50 employees were offered and eligible for health insurance through their employer in 2010, down from 58 percent in 2003.
Larger firms are much more likely to provide health benefits. About 90 percent of workers in firms with 100 or more employees were offered and eligible for health insurance in both 2003 and 2010, according to the report from the Commonwealth Fund.
Low-wage workers in small businesses were the least likely to be offered and eligible for coverage: Just one-third of workers making less than $15 an hour in small firms were both offered and eligible to enroll in their employer’s health plan, compared to 70 percent of small firm workers making over $15 an hour.
Report coauthor and Commonwealth Fund Vice President Sara Collins says the report “highlights a nearly decade-long trend of declining health insurance coverage and rising costs for workers in small businesses, particularly those who make less than $15 an hour.”
“As a result, many people who work for small businesses can’t afford the health care they need or have medical bills they are unable to pay,” she says.
About half small business employees (45 percent) reported trouble paying medical bills in 2010, and 46 percent reported that they skipped needed medical care because of cost, the report says. That’s about ten percent higher than those workers working in larger firms.
Small business workers were also more likely to be dissatisfied with their health insurance, with 29 percent rating it fair or poor, compared to 16 percent of those at larger businesses. They also don’t have as much choice when it comes to health plan options.
But Commonwealth researchers say health reform should help address and solve some of these problems by offering premium tax credits to certain small businesses and by granting subsidies to many uninsured workers toward their purchase of health insurance beginning in 2014.
“The Affordable Care Act should mitigate this trend by improving the affordability and comprehensiveness of health insurance both for small-business owners who want to offer health benefits and for workers in small businesses who can't get coverage through their jobs.”
The Commonwealth Fund is a nonpartisan research foundation that supports PPACA. Though they argue the law will help small businesses, opponents say the law will burden small businesses while raising taxes.
Small business owners have poor grasp of health reform
Source: https://eba.benefitnews.com
By Health Data Management
A survey by online health benefits seller eHealthInsurance of 439 small business clients finds most do not understand applicable provisions of the Affordable Care Act.
The act requires employers with 50 or more full-time employees to provide coverage. Only two of the surveyed clients were large enough to fall under the requirement, yet 34% believed they had to provide coverage, and another 35% didn’t know. Thirty-one percent correctly knew that they were not required to pay a tax if they did not offer insurance because of the size of their business.
More than three-quarters of surveyed small businesses were not familiar with reform-mandated insurance exchanges, designed to be one-stop shopping sites for health benefits for employees and those who don’t have work-related benefits.
Sixty-eight percent of surveyed employers have no plans to drop coverage for employees in 2014, 29% would consider dropping coverage and 3% expect to drop it.
More than three-quarters of respondents are not doing long-term planning on how health reform, including insurance exchanges, may affect their business. In addition, 51% would consider increasing employees’ share of premium costs and 39% would consider increasing the deductible. More results are available here.
Countdown to Healthcare
Source: https://www.benefitspro.com
By Mark Roberts
America is just a few short days away from the election of a new presidential term, and the stakes have never been higher.
On one side is the juggernaut of the Federal government headed up by the incumbent Barack Obama, and on the other side is the locomotive traveling at breakneck speed toward the final depot, with engineer former Massachusetts Gov. Mitt Romney at the throttle. On Tuesday, Nov. 6, the nation will have either a new face in the White House come next January, or the same one inhabiting 1600 Pennsylvania Avenue for the last four years will just go back to the office for another term.
On the block is health care and either the demise or further propagation of the Patient Protection and Affordable Care Act. Both candidates have strong views about this landmark legislation, and both the Democrats and the Republicans have their own reasons why they love it or hate it. The PPACA has no middle ground, and it is fast becoming more entrenched into the fabric of the economy, both businesses and consumers, states and federal government agencies, and the health care environment. And health care is the focal point of much of the political landscape in this election year.
According to LifeHealthPro, health insurance channel editor Allison Bell reports that “the two candidates engage in platform-to-platform combat over the future of commercial insurance, Medicare and Medicaid.”
There are 6 key differences on health care between the two:
1. Commercial health insurance system change. President Obama says PPACA already is improving health care access for millions of Americans and “ending insurance abuses” by letting young adults stay on their parents’ coverage up till age 26; forbidding health insurers from imposing lifetime benefits caps; limiting insurers’ ability to impose annual benefits caps; requiring insurers to pay for checkups, vaccinations and other preventive care without imposing out-of-pocket costs on the patients; and requiring that plans that spend more than a certain percentage of revenue on administrative costs send their customers rebates.
Gov. Romney says he would return responsibility for regulating local insurance markets and providing care for the poor, the uninsured and the chronically ill to the states, and his administration would limit moves to apply federal standards and requirements to private insurers, he says. The Republican candidate says he would encourage use of health insurance exchanges, and that he would promote the use of high-risk pools, reinsurance and risk adjustment mechanisms to help people with chronic health problems who cannot qualify to buy conventional health insurance. Also, he would work to “prevent discrimination against individuals with pre-existing conditions who maintain continuous coverage” and “facilitate [health information technology] interoperability.”
2. Women’s health and abortion. The Obama team has worked to link the fate of PPACA to the fate of PPACA provisions that require most health plans to include benefits for contraceptive services in the package of basic preventive services that must be covered without imposing out-of-pocket costs on the patients; many insurance plans are beginning to fully cover birth control without co-pays or deductibles as part of women’s preventive care.
The Romney campaign website does not mention abortion or birth control in its discussion of health issues. The Republican Party, in its platform, says the following about federal health care policy and abortion: “Through Obamacare, the current administration has promoted the notion of abortion as healthcare. We, however, affirm the dignity of women by protecting the sanctity of human life.”
3. Medicare. The PPACA, according to the Obama campaign, already has made important changes in Medicare, such as requiring basic Medicare to impose a package of basic preventive services without imposing out-of-pocket costs on the patients, and reducing the size of the Medicare Part D prescription drug plan “doughnut hole” — the gap between the point at which routine prescription coverage ends and catastrophic coverage begins.
Governor Romney wants to modernize entitlement programs and guarantee their vitality for future generations.
“Instead of paying providers directly for medical services, the government’s role will be to help future seniors pay for an insurance option that provides coverage at least as good as today’s Medicare, and to offer traditional Medicare as one of the insurance options that seniors can choose,” he says. “With insurers competing against each other to provide the best value to customers, efficiency and quality will improve and costs will decline. Seniors will be allowed to keep the savings from less expensive options or choose to pay more for costlier plans.” Medicare would stay the same for retirees and near retirees. Younger workers would get a fixed amount that they could use to buy either traditional Medicare coverage or private plan coverage, and they would have to make up the difference out of their own pockets if they wanted to buy more expensive coverage.
4. Medicaid. President Obama says of Medicaid—the program for poor people and for eligible nursing home patients—mainly that he believes Romney would cut federal Medicaid funding.
Governor Romney says he would replace the current Medicaid funding formula with a “block grant” program that would provide each state with a set amount of cash that it could use as it wished. He says he would “limit federal standards and requirements” for Medicaid as well as for private insurance.
5. Tort reform. President Obama says nothing in his comments aimed at voters about “tort reform”—the idea of controlling health care costs by reducing what doctors and other providers spend to protect themselves against lawsuits.
Romney says he would promote free health insurance markets by capping non-economic damages in medical malpractice lawsuits.
6. Health accounts. The president says nothing on his campaign website about health savings accounts or health reimbursement arrangements on his websites.
Candidate Romney states he would “unshackle HSAs by allowing funds to be used for insurance premiums.” Although he has vowed to streamline the tax code, he also mentioned he would “end tax discrimination against the individual purchase of insurance” and encourage independent entities to rate health plans. Plus, he also has talked about wanting to let health insurance companies sell coverage across state lines.
Regardless of the discussion over health care between now and the election, one thing is for sure. There is going to be a winner and a loser. The debate over Obamacare can ramp up the rhetoric about how good or bad the PPACA is, and the electorate certainly gets energized when it is up for discussion.
Who is telling the truth? We’ll see come Nov. 6. Now, here is your obligation—exercise your inalienable right to vote. If you don’t and you find yourself on the losing side the next day, don’t blame the politicians.
What is the real cost of free women’s health care?
By Marli D. Riggs
https://ebn.benefitnews.com
Although eight new prevention-related health care services for women included in the Patient Protection and Affordable Care Act are now available at no cost to female patients, many are left wondering about the real price tag.
Tanya Boyd, owner of Sunnyvale, Texas-based Tanya Boyd & Associates, believes the Department of Health and Human Services and the Obama administration should not tout the word “free” when talking about health care coverage. “It is completely misleading,” she says.
Free is more of a fallacy and should be replaced with the more appropriate word “covered,” when talking about health care services covered for women, adds Reid Rasmussen, owner of McKinney, Texas-based Benefit Brainstorm. “While many call these ‘free’ services, there is still a cost that’s being shared by Americans who are buying insurance,” he says.
As of Aug.1, the new rules in the health care law requiring coverage of these services take effect at most health insurance plans’ next renewal date.
The services are expected to cover 47 million women, and the total number of prevention-related health care services for women climbs to 22, rising from 14 that became effective in September 2010, according to the federal government. The eight new prevention-related services are based on recommendations from the Institute of Medicine, which polled independent physicians, nurses, scientists and other experts, as well as evidence-based research, to develop its recommendations.
Non-grandfathered group health plans offering group or individual health insurance coverage must provide coverage for preventive care without any cost-sharing requirements such as copayments, coinsurance or deductibles, as long as services are administered by physicians and other health care professionals who participate in the plan’s network.
Group health plans and issuers that have maintained grandfathered status are not required to cover these preventive services. In addition, certain nonprofit religious organizations, such as churches and schools, are also not required to cover these services.
Boyd claims that the services were already readily available to women who needed and wanted them. “Many women who put health care at the top of their priority list have always had the services done, whether they paid a copay, found a clinic that provided services for free, or paid 100% out of their pocket,” Boyd says. “Now insurance companies are forced to pay for these services, which will be reflected in the premiums we all pay.”
Putting it bluntly, Boyd says: “All of this ‘free’ stuff is going to be very expensive.”