Viewing posts from: November 2013

Holiday Regulation Dump! That Pesky $63 per head fee and Much More!

Posted November 27, 2013 by PHaynes

More Proposed Regulations from HHS

While the Department of Health and Human Services (HHS) has been busy on several fronts (including fixing the healthcare.gov websites), they haven’t taken their “foot off the gas pedal” and are sending out new regulations at a solid pace.  This week they issued proposed regulations that address a variety of Patient Protection and Affordable Care Act (PPACA) benefit provisions for 2015.   While there is a 30-day comment period on these proposed regulations (so they aren’t final), it is rare that they change much by the time the final versions are released.  Here is an overview of some of the key provisions.

That Pesky $63 per head fee – Transitional Reinsurance Program or “Premium Stabilization” Fee

The Reinsurance Assessment is a fee applicable to insured and self-funded major medical plans for calendar years 2014 through 2016. It will primarily be used to help cover the cost of high-dollar claims occurring within the individual market. The 2014 fee is $63 per person, which the updated regulation proposes to collect in two installments: $52.50 in January 2015, and $10.50 late in the fourth quarter of 2015. (Reports due 11/15/2014, HHS’ bill comes 12/15/2014, bills due in installments; typically from your ASO-claims payer to HHS).  For 2015, the proposed fee is $44 per person.   See our prior guidance (and details) on this topic from Dec 13, 2012.

The updated regulation also proposes to exempt certain self-funded group health plans from paying the fee for 2015 and 2016. Specifically, self-funded group health plans that do not use a third-party administrator for claims processing would be exempt.

  • View the proposed rule, here.
  • View the CMS-Fact-Sheet, here.

Stabilizing Market Premiums for Individuals (not applicable to/for group plans)

To promote stable individual market premiums, the regulations propose modifications to the amount that the reinsurance program will pay to an insurer for a given policyholder in the individual market based on that person’s cumulative claim total over an applicable calendar year. The changes invest more of the reinsurance fee funds into the program sooner than originally planned.

2015 Marketplace Enrollment Period

The 2015 Health Insurance Marketplace open enrollment period will be held from November 15, 2014 – January 15, 2015.

Adjustments for Current Individual Policies Extended into 2014

Earlier this month, the federal government announced that states may allow individuals whose policies were in effect on October 1, 2013 to continue those policies through the end of the policy year that begins on and after January 1, 2014 even if they do not meet all PPACA requirements. In states that choose to permit insurers to extend these policies, the risk pool in the state’s Marketplace could be impacted. The regulations propose a number of state-by-state adjustments to address this impact.  Remember, the individual market makes up less than 5% of all the insured plans in effect and this is a decision left to each state’s insurance commissioner.  In the end, people that keep these non-PPACA-creditable plans will end up owing the PPACA-individual-mandate tax/penalty (if that is the only coverage they have).

States Moving from Federal to State-Run Marketplaces

States that are participating in the federal Marketplace for 2014 but want to establish a state-run Marketplace in the future will now have more time to prepare for the transition. The January 1 conditional approval deadline will be moved to June 15.

2015 Cost-Sharing Limits

The 2015 maximum annual out-of-pocket limits for all non-grandfathered plans will increase to $6,750 for individual coverage and $13,500 for family coverage. The maximum deductibles will increase to $2,150 individual and $4,300 family for insured non-grandfathered small group plans. For standalone child dental plans, the annual out-of-pocket maximum will be limited to $300 for one covered child and $400 for two or more children.

Protecting Privacy Information

Changes may be made to the eligibility and enrollment information collected by the Marketplace, but individual information will still be protected.

Patient Safety Standards

Plans offered on the Marketplace must meet certain patient safety standards. The initial standards will require that hospitals meet the Medicare Hospital Condition of Participation requirements related to quality assessment, performance improvement and discharge planning.

Meaningful Difference

To be offered on the federal Marketplace, a plan must be “meaningfully different” from all other plans offered by the same insurer in the same service area and metal level. Meaningful difference requires that a consumer would be able to identify two or more material differences between plans in factors such as cost-sharing, provider networks and covered benefits.

2015 Federal Marketplace User Fee

The user fee paid by insurers that offer plans on the federal Marketplace will be 3.5% of premiums. Adjustments will be made to reimburse third-party administrators that provide payment for contraceptive services for self-funded group plans.

IRS Issues Final Rule on PPACA’s Health Insurance Tax

The IRS, via Section 9010 of PPACA, is requiring health plans and commercial insurers to pay $8 billion in new taxes in the coming year, and more in later years, to help compensate for the new, subsidized business PPACA is supposed to send to carriers.   The “covered entities” subject to PPACA Section 9010 will have to pay a flat, per-person tax using Form 8963. The IRS says it will apply the Section 9010 “belly button tax” to most of the types of entities that asked for relief from the tax in comment letters.  The IRS says that, because of the wording in PPACA, the Section 9010 tax will apply to colleges that run their own health plans; companies that run plans for Medicaid and other government programs; any state-run high risk pools that continue to operate in 2014; dental plans; and vision plans.

The IRS says it will not make employee assistance plans pay the tax, at least for now, but may apply it to them later, if it looks as if some EAPs are providing significant health benefits.  The IRS says it is still deciding what to do about stop-loss insurance arrangements.

More IRS Notices

  • Notice 2013-76, which describes the procedures carriers and plans should follow when submitting their Form 8963 health insurance provider tax forms.
  • Revenue Ruling 2013-27, which requires carriers to include any premium revenue they use to pay the new tax in their taxable income.
  • Notice 2013-45, a set of answers to questions about the IRS decision to delay enforcing employer health benefits reporting and minimum coverage requirements for at least a year.

Small Business Health Options Program (SHOP) Plans

The proposed regulations include several new requirements related to premium payments and plan offerings that will take effect once employee choice becomes available in federal Marketplace SHOP plans.  However, the federal SHOP will not take any online enrollments until October 2014 (they delayed online enrollment for another year).

Links:

Exchanges Gear Up for 2015

Posted November 27, 2013 by ABlume

by Allison Bell, LifeHealthPro.com

The U.S. Department of Health and Human Services and state agencies are already starting to issue regulations and guidelines for the 2015 public exchange program.

Many states have had trouble getting 2014 exchange enrollment systems to work properly. Oregon, for example, has not yet completed work on its enrollment site, and Covered California has set up the small-business coverage sales section of its site just this week.

Officials at HHS and the Centers for Medicare & Medicaid Services have been trying to soften President Obama’s recent promises that the government would get the HealthCare.gov federal exchange enrollment site working properly by Nov. 30.

But CMS has started to seek comments on a draft version of an actuarial value calculator that health plans, employers and actuaries could use in PPACA-related calculations in 2015.

Meanwhile, states are developing strategies for making state-based exchanges “self-sustaining.”

PPACA provides startup and first-year funding for state-based exchanges but requires the exchanges to sustain themselves with their own revenue, or local government support or other support, starting in 2015.

HHS has proposed funding the federally run exchanges with an exchange insurer user fee equal to 3.5 percent of exchange plan premium revenue.

Your commute could be saving you money; 2014 Transit & Parking Updates

Posted November 26, 2013 by PHaynes

Editor’s Note:  Before you get “excited” and re-do printed materials with the “new” (lower 2014 mass-transit limit/higher parking limit), please keep last year’s timing in mind. Last year’s timeline:  (a) 1/4/13:  Federal stimulus package expired, dropping the transit benefit from $240 to $125.  Parking remained at $240.  (b) 1/11/13:  Transit was restored to parking’s level at $240.  (c) 1/11/13:  Both parking & transit were increased (due to cost of living adjustments) to $245.

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Use tax-free dollars to pay for your commute by bus, rail, or ferry and any parking near these commuter stations or your workplace. The 2014 Limits are $130 (transit) and $250(parking).

What is a commuter account?

A commuter account is an employer-sponsored benefit program that allows an employee to set aside pre-tax funds in separate accounts to pay for qualified mass transit and parking expenses associated with your commute to work.

Eligible expenses include:

Mass Transit

Get reimbursed for transit passes, tokens, fare cards, vouchers, or similar items entitling you to ride a mass transit vehicle to or from work. The mass transit vehicle may be publicly or privately operated and includes bus, rail, or ferry.

Van-Pooling

Van-pooling is not to be confused with carpooling. Van-pooling requires a commuter highway vehicle with a seating capacity of at least 7 adults, including the driver. At least 80 percent of the vehicle mileage must be for transporting employees between their homes and workplace, with employees occupying at least one-half of the vehicle’s seats (not including the driver’s seat).

Parking

Get reimbursed for parking expenses incurred at or near your work location or a location from which you continue your commute to work by car pool, van pool or mass transit. Out-of-pocket parking fees for parking meters, garages and lots qualify. Parking at or near your home is not an eligible expense.

Why should I enroll in a commuter account?

Mass transit has always been eco-friendly and a great way to get some work done on your commute, but there is a new reason to get excited about your commute. Participating in a commuter account puts money back in your wallet. Contributions to a commuter account are free from federal income, Social Security, and Medicare taxes and remain tax-free when it is reimbursed for eligible expenses. If you pay for mass transit, van-pooling, or parking on your commute to work, you’ll want to take advantage of the savings this plan offers.

The chart below illustrates potential savings based on a variety of contribution levels:

FSA_parking_transit_chart_2014

*For illustrative purposes only. Based on 7.65% FICA and 15% federal tax. Your tax situation may be different. Consult a tax advisor.

How much can I contribute?

Monthly limits are set by the IRS. For 2013, contributions for parking and transit passes are limited to $245 each per month ($490 in total).  The majority of plan participants are accustomed to using a fixed dollar amount for these expenses.  And, while your amount can roll-over, you can also make adjustments to your contribution, join, or terminate plan participation at any time (subject to your employer’s plan’s rules).  For 2014, the contribution for transit pass is $130 and the monthly limitation for qualified parking is $250.  See IRS Notice 2013-35 (released October 31, 2013) for additional details (page 14 of 22).

How does it work?

You authorize your employer to deduct a pre-tax amount for parking or van-pooling/transit from each paycheck, up to the IRS limits stated above. You pay for the qualified transportation with your benefits debit card or you can pay out of pocket and then file a claim for reimbursement.

Other Links:

ACA Cancellation Fix Decisions by Region

Posted November 20, 2013 by ABlume

This chart provides information by state on whether or not late renewals will be allowed within their implementation of the affordable care act and the reasoning behind these decisions. The decisions are varied, and a number have not yet committed. To read more, view the PDF from the National Association of Health Underwriters.

Comparison Chart from the Council for Affordable Health Coverage

Posted November 19, 2013 by ABlume

Individuals with existing health insurance are receiving notices from insurers that, as of January 1, 2014, their plan would be cancelled. Plans are being cancelled because they do not meet the Affordable Care Act’s (ACA) new standards, and, as such, would no longer be offered. The ACA did include a so called, “grandfather clause,” which allows people to maintain their current coverage if the plan does not substantially change. The rules surrounding this clause were so tightly written, it was nearly impossible a plan could continue on and maintain a grandfathered status. As a result, both the Administration and Congress have offered to address this problem by allowing “Americans who like the coverage they have to keep it”.

To learn more, view the PDF.

Debate Over Delaying Individual Mandate Grows Louder

Posted November 12, 2013 by ABlume

By John Commins, from HealthLeaders Media

The American Academy of Actuaries is warning that delaying the individual mandate could affect risk pools and claims in 2014 and beyond. Health plans say they cannot work without this key provision of the Patient Protection and Affordable Care Act.

Insurers and actuaries are warning that extending the enrollment period and delaying the individual mandate under the Affordable Care Act will create “potentially adverse consequences” for the law.

A letter to Congress [PDF] from the American Academy of Actuaries’ Health Practice Council noted that the individual mandate and limited open enrollment period were included in the law to bring in a broad cross-section of risks—the young and the old, the healthy and the sick—to ensure the markets are viable and premiums are stable. The group said the approved premium rates for 2014 were based on the assumption that the individual mandate and limited open enrollment period would be in effect.

“If either provision is delayed, there would be an incentive for lower-cost individuals to delay purchasing coverage. If predominantly higher-cost individuals purchase coverage, 2014 premiums may not be adequate to cover that population’s costs,” the actuaries said.

“Further, as a result, the ACA risk-corridor mechanism would more likely be triggered and the U.S. Department of Health and Human Services would have to make payments to insurers if losses due to insufficient premiums exceeded a certain threshold.”

HHS Issues HIPAA Law-Enforcement Guide and Informal Guidance on Marketing and Decedents' PHI

Posted November 6, 2013 by ABlume

From EBIA

HHS has added several new resources to its HIPAA privacy website, including the following materials addressing the use and disclosure of protected health information (PHI) in law-enforcement situations, for certain marketing purposes, and with respect to deceased individuals:

  • “Blue Card” Guide for Law Enforcement. This two-page summary briefly explains the scope of the HIPAA privacy rule and lists examples of situations in which covered entities may disclose PHI to law-enforcement officials without an individual’s written authorization. The Guide does not provide any new rules or exceptions; rather, it summarizes and illustrates existing rules. [EBIA Comment: Although the Guide may be directed at law-enforcement personnel, covered entities and business associates may find the examples helpful if they receive law-enforcement inquiries. Just remember that the Guide is only a summary; responding to actual inquiries will depend on the particular facts and may necessitate advice of counsel.]
  • Refill Reminders Exception to Marketing Rules. A new fact sheet and related FAQs provide informal guidance on how changes to HIPAA’s marketing rules under the January 2013 final regulations affect a covered entity’s use of refill reminders and similar communications to individuals about their current prescriptions. As background, an individual’s written authorization is generally required for any use or disclosure for marketing purposes; the “refill reminders exception” permits these types of communications under limited circumstances. [EBIA Comment: Although the rule and exception primarily affect pharmacies and other providers, they may be relevant to health plans that include a mail-order pharmacy administered by a business associate of the plan.]
  • Deceased Individuals. A new fact sheet (with linked FAQs) provides informal guidance on handling the health information of deceased individuals. Although the privacy rule protects this information as PHI for 50 years following death, special rules may permit disclosure during that period to relatives and others involved in the decedent’s care and to law enforcement in certain circumstances. (After 50 years, the information is no longer considered PHI.) [EBIA Comment: These materials can assist with those practical questions that employer plan sponsors, administrators, and insurers often receive from surviving family members.]

EBIA Comment: HHS continues to devote resources to HIPAA privacy and security compliance—health plans and their business associates would be wise to follow suit. Those interested will find these and other detailed materials reasonably easy to locate online, organized by topic within the HIPAA privacy tab of HHS’s website (see “Emergency Preparedness Planning and Response” and “Guidance on Significant Aspects of the Privacy Rule”). For more information, see EBIA’s HIPAA Portability, Privacy & Security manual at Sections XXVI.D (“Disclosures for Specific Public Policy-Related Purposes”) and XXVI.E.1.c (“Uses and Disclosures for Marketing Purposes Usually Require an Authorization”).

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