Transcript Data Breaches & Electronic Banking Fraud:

An Employer’s Obligations and
Opportunities Under the
Affordable Care Act
By: Nicole Radziewicz, Esq.
Allen Warshaw, Esq.
Renee Martin, Esq.
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INTRODUCTION
 Overview of ACA topics, including:
 Employer Mandate
 Individual Mandate
 SHOP Marketplace
 Medicaid Expansion
 Grandfathered Plans
 Can you keep your insurance
 Contraceptive Mandate
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EMPLOYER MANDATE
 POSTPONED UNTIL 2015
 Employers should be in the process of determining:
 (1) Whether they are “large employers” subject to the mandate;
 (2) If so, the number of full-time workers within their employment
that are eligible for coverage;
 (3) Measurement periods for ongoing and variable hour
employees;
 (4) Whether the health plan provides “minimum” and “affordable”
coverage;
 (5) Potential monetary penalties for non-compliance, and
 (6) Whether required notices and written policies are in place
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EMPLOYER MANDATE
 Large Employers Subject to the Mandate
 “Large employers “are those “who employed an average of at least 50
full-time employees on business days during the preceding calendar
year.”
 Under the ACA, a “full-time employee” is one that, “with respect to
any month, is employed on average at least 30 hours of service per
week” (or one hundred thirty hours (130) per month).
 Part-time and seasonal employees are taken into consideration under
the full-time equivalent (“FTE”) method.
 An employer determines the number of full-time equivalents
(FTEs) by dividing the total number of hours worked by part-time
and seasonal employees each month by one hundred twenty
(120) - the result being the number of equivalents.
 Note, seasonal employees are considered to an extent
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EMPLOYER MANDATE
 The “large employer” determination is
measured on a controlled group basis
 Employees of a controlled group of
corporations, partnerships or
proprietorships under common
control, affiliated services group or
others as prescribed by Treasury.
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EMPLOYER MANDATE
 Large employers must offer health coverage that is “affordable”
and of “minimum value” to substantially all (95%) of their “fulltime employees,” and their dependents, to avoid monetary
penalties.
 Dependents are the employee’s children under the age of
26.
 Dependents DO NOT include spouses
 Questions surrounding affordability of dependent care
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EMPLOYER MANDATE
 Employers do not have to offer health
insurance coverage to part-time or
seasonal employees, including former
full-time employees who are now parttime.
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EMPLOYER MANDATE
 Employees that are reasonably expected to be employed
30 hours or more per week on average (and who are not
seasonal employees) must be offered health insurance
within their first ninety (90) days of employment.
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EMPLOYER MANDATE
 IRS has provided for the implementation of measurement and stability periods
 Used to keep track of the status of ongoing employees
 Used to determine the status of new variable hour or seasonal employees
if employers are unsure whether they will be working 30 hours per week
on average.
 Should have written policies in place regarding the use of measurement
and stability periods. Specific rules regarding their implementation
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EMPLOYER MANDATE
 Measurement periods may range between 3 and 12 months. Subsequent
stability periods may range between 6 and 12 months.
 You may have an administrative period of ninety (90) days in between the
measurement and stability periods but the initial measurement period and the
administrative period combined cannot extend beyond the last day of the first
calendar month beginning on or after the employee’s one year anniversary
(up to 13 mos.)
 Measurement and stability periods must uniformly apply to all employees.
Distinctions are only allowed with regard to:
 Salaried and hourly employees
 Employees located in different states
 Employees working at different business entities
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EMPLOYER MANDATE
 If it is difficult to determine hours worked by salaried employees, one of three
methods set forth by the IRS may be used:
 Actual hours worked from payroll records
 Days-worked equivalency of 8 hours per day
 Weeks worked equivalency of 40 hours per week
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EMPLOYER MANDATE
 Employer- sponsored plans must be of “minimum
value” and must be “affordable”
 A plan is of “minimum value” if it covers at least
60 percent of the total allowed cost of benefits that
are expected to be incurred under the plan.
 Not required to provide essential health benefits but
MV will be determined in comparison to standard
pop. claims data based on:
 Hospital/ER Services
 Physician/mid-level practitioner care
 Pharmacy benefits
 Lab/imaging services
 Use minimum value calculator released by HHS or
get a certification from a member of the American
Academy of Actuaries to ensure of MV
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EMPLOYER MANDATE
 A plan is considered “affordable” if the employee's required
contribution for his or her own coverage does not exceed
9.5 percent of the employee's household income for the
taxable year.
 Does not take into account the affordability of dependent coverage
 Affordability can be determined by looking at the employee’s wages
reported in Box 1 on the Form W-2.
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EMPLOYER MANDATE
 Other Large Group Plan Standards:
 No lifetime or annual limits on benefits that are considered
essential health benefits
 Plans must allow adult children under age 26 to enroll on a
parent’s plan
 Plans must offer preventative services without cost-sharing
 No discrimination based upon pre-existing conditions and no
discrimination against similarly situated individuals
 However, rewards for participation in wellness programs are permissible.
 Patient-Centered Outcomes Research Institute Fee imposed
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EMPLOYER MANDATE
 PENALTIES:
 For offering no insurance: the annual penalty is equal to $2,000
multiplied by the number of full-time employees minus 30 (the
penalty is waived for the first 30 full-time employees).
 To illustrate, an employer with fifty full-time employees that fails to offer
coverage will be subject to an annual penalty of $40,000 reflecting the
$2000 fine x (50 employees – 30 employees).
 For offering inadequate insurance: annual fine of $3,000 per
each employee that receives a tax credit through an exchange
 Less draconian than the fine for failing to offer coverage
 For example, if four employees receive tax credits through an exchange,
the employer will be subject to a fine of $12,000 representing the $3,000
fine x 4 employees
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EMPLOYER MANDATE
 Notice/Reporting Requirements:
 2012- Employer W-2 reporting for cost of health care coverage
 By 10/1/13 provide notice regarding availability of the health insurance
exchange
 9/12- Summary of Benefits and Coverage
 Beginning in 2015, large employers must report to IRS:
 Length of waiting period
 Months for which coverage was available
 Monthly premium for lowest-cost option under the plan
 Large employer’s share of total allowed cost of benefits
 Name/address/TIN of each FTE who was covered
 Must also provide statements to individuals of name and address of
person required to submit the return
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INDIVIDUAL MANDATE
individual mandate, requires “applicable
individual[s]” to maintain “minimum essential” health
insurance coverage, or face a mandatory “shared
responsibility payment”
 The
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INDIVIDUAL MANDATE
 Persons not subject to penalty, include:
 (i) persons with religious exemptions;
 (ii) members of health sharing ministries;
 (iii) individuals not lawfully present (not in the country);
 (iv) incarcerated individuals
 (v) persons who do not meet the income threshold for filing income tax
returns;
 (vi) members of Indian tribes;
 (vii) persons who have breaks in coverage for no longer than three
continuous months;
 (viii) persons qualifying for a hardship exemption
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INDIVIDUAL MANDATE
 Must have “minimum essential coverage”
 Either employer-sponsored coverage, private insurance; or governmentsponsored insurance.
 Exchanges:
 Government-operated health insurance marketplaces offering qualified
health insurance plans by competing companies.
 Pennsylvania’s exchange is being operated by the federal government
 Use of healthcare exchange in Massachusetts helped result in 97% coverage
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INDIVIDUAL MANDATE
 Individual and small group plans must include ten essential health
benefits:
 Ambulatory patient services;
 Emergency services;
 Hospitalization;
 Maternity and newborn care;
 Mental health and substance use disorder services, including behavioral
health treatment;
 Prescription drugs;
 Rehabilitative and habilitative services and devices;
 Laboratory services;
 Preventive and wellness services and chronic disease management; and
 Pediatric services, including oral and vision care.
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INDIVIDUAL MANDATE
 Benefit Plan Tiers
 Bronze: actuarial value of 60% of plan costs
 Silver: actuarial value of 70% of plan costs
 Gold: actuarial value of 80% of plan costs
 Platinum: actuarial value of 90% of plan
costs
 Catastrophic: available for individuals up to
age 30. Coverage levels set at HSA current
law
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INDIVIDUAL MANDATE
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INDIVIDUAL MANDATE
 Advance Premium Tax Credit
 Those making up to 400% of the poverty level ($46,000 for
individuals/$94.200 for families) will be eligible for subsidies
in the form of advance premium tax credits (“APTC”)
 Not eligible if have an offer of affordable coverage
through employer or if eligible for government insurance
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INDIVIDUAL MANDATE
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INDIVIDUAL MANDATE
 Advance Premium Tax Credit
 Three ways it can be applied:
 In its entirety, evenly across all monthly payments
 In part towards monthly payments, with the balance being
refunded as part of tax return
 None of the credit is applied toward monthly payments, and it is
refunded in its entirety as part of tax return
 Changes in life such as marriage/divorce, births/deaths,
change of jobs will affect eligibility.
 Can immediately update information through exchange account
 If information isn’t updated, may have to pay-in difference or
will receive a refund
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INDIVIDUAL MANDATE
 PENALTIES
 Greater of: $695 per individual
(up to $2085 per family) OR
2.5% of household income
 Phased-in:
 2014: $95.00 or 1% of
household income (higher of
two)
 2015: $325 or 2% of
household income (higher of
two)
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SMALL BUSINESS HEALTH OPTIONS PROGRAM
 The
Small Business Health Options Program
(“SHOP”) Marketplace is open to employers with 50
or fewer full-time-equivalent employees (FTEs).
Beginning in 2016, 100 or fewer FTEs.
 Updated: the day before Thanksgiving the administration announced
a one year delay of the online SHOP exchange. Small businesses
must go through agents or brokers, or directly through health
insurance companies, to sign up for plans and to receive tax credits, if
qualified.
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SMALL BUSINESS HEALTH OPTIONS PROGRAM
 According to HHS, advantages of SHOP include:
 Controlling the coverage you offer and how much you pay
toward employee premiums.
 Obtaining ability to compare health plans online on an apples-
to-apples basis, which helps you make a decision that's right
for your business.
 Possibly qualifying for a small business health care tax
credit worth up to 50% of your premium costs. You can still
deduct from your taxes the rest of your premium costs not
covered by the tax credit. Beginning 2014 the tax credit is
available only for plans purchased through SHOP.
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SMALL BUSINESS HEALTH OPTIONS PROGRAM
 You may qualify for employer health care tax credits if you have
fewer than 25 full-time equivalent employees making an average
of about $50,000 a year or less.
 To qualify for the Small Business Health Care Tax Credit, you must
pay at least 50% of your full-time employees' premium costs.
 You don’t need to offer coverage to your part-time employees or to
dependents.
 Starting in 2014, the tax credit is worth up to 50% of your contribution
toward employees' premium costs (up to 35% for tax-exempt
employers).
 Sliding scale. The tax credit is highest for companies with fewer
than 10 employees who are paid an average of $25,000 or less.
The smaller the business, the bigger the credit.
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SMALL BUSINESS HEALTH OPTIONS PROGRAM
 The SHOP Marketplace provides 4 plan
categories based on how your employees
and the plan expect to share the costs for
health care:
 Bronze – covers 60% of the total
average costs of care
 Silver – covers 70% of the total
average costs of care
 Gold – covers 80% of the total
average costs of care
 Platinum – covers 90% of the total
average costs of care
 Ten essential health benefits are minimum
requirements for all plans in the
Marketplace. Plans may offer additional
coverage.
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SMALL BUSINESS HEALTH OPTIONS PROGRAM
 ENROLLING IN SHOP
 To start coverage on January 1, 2014, you must select a plan to offer your
employees and your employees must enroll in the plan by December 15,
2013. You submit your employees’ applications along with your completed
employer application.
 You can apply for coverage any time after that. To get coverage, you must
submit your completed application along with your employees’
applications by the 15th of any month for coverage to take effect on the
1st of the following month.
 For example, if you enroll by April 15th, coverage will begin May 1st. If you
enroll between April 16th and April 30th, coverage will begin June 1st.
 You will be able to use a licensed agent or broker to provide help or handle
your SHOP business. You won’t pay more if you use a SHOP agent or
broker.
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SMALL BUSINESS HEALTH OPTIONS PROGRAM
 How to sign up for a Marketplace account:
 Visit HealthCare.gov/marketplace/shop/ and click on the
“Apply Now” link. Click on the link to “Set up a Marketplace
account online” and follow 3 steps:
 1. Provide some basic information like your name, address,
and email address
 2. Choose a user name and password
 3. Create security questions for added protection
 You’ll get an email confirming account creation. The email
will explain how to access your Marketplace account and go
to the application. Before starting the SHOP application,
you’ll be asked to complete an identity proofing section.
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MEDICAID EXPANSION
 The current Medicaid program generally offers federal
funding to States to assist pregnant women, children,
needy families, the blind, the elderly, and the disabled in
obtaining medical care. 42 U.S.C. § 1396d(a).
 The Affordable Care Act provides for the expansion of the
Medicaid program to increase the number of individuals
the States may cover.
 Federal government will cover the full cost of newly
eligible Medicaid beneficiaries for the first 3 years and not
less than 90% of the cost in years thereafter
 Individuals earning up to 133% of the FPL (138%
using the current formula)
 $15,800 for individuals, $32,400 families
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MEDICAID EXPANSION
 States have the choice of whether or not to expand
Medicaid per Nat'l Fed'n of Indep. Bus. v. Sebelius, 132
S. Ct. 2566, 2595 (2012).
 Pennsylvania is considering an alternative expansion
program
 Affects approximately 520,000 low-income
Pennsylvanians
 Follows Arkansas’ approach
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MEDICAID EXPANSION
 The “Healthy Pennsylvania Plan”
 Qualified individuals use Medicaid funds to purchase private
insurance through the exchange
 Cost-sharing requirements for current adult Medicaid recipients ─
accomplished through instituting a monthly premium on a sliding
scale up to $25 for an individual and $35 for families
 Work
search requirement for all unemployed working-age
Medicaid beneficiaries, with limited exceptions, connecting them to
jobs and job training as needed through Pennsylvania’s
JobGatewaySM
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MEDICAID EXPANSION
 The “Healthy Pennsylvania Plan”
 As of now NO PLAN – only Concepts
 Need federal approval of a waiver
 State needs to file a waiver application before process begins
 It appears the Healthy Pennsylvania Plan contemplates a waiver
similar to that CMS approved for Arkansas
 But no work search requirement in Arkansas
 AND the devil is in the details and there are not yet any details
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GRANDFATHERED PLANS
 What is a “grandfathered plan.”
 A health plan may qualify as a grandfathered plan if it existed as of March
23, 2010, the date on which the Act was enacted, and has served, at least
one individual since that date. It may have lost that status if it changed the
terms of its coverage in significant ways after that date. And, it will lose
that status if makes such changes in the future.
 The changes which would affect the grandfathered status include:
 Cannot Significantly Cut or Reduce Benefits. For example, terminating
coverage for people with diabetes, cystic fibrosis or HIV/AIDS.
 Cannot Raise Co-Insurance Charges. This is the fixed percentage of a
charge (for example, 20% of a hospital bill).
 Cannot Significantly Raise Deductibles..
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Grandfathered Plans
 Cannot Significantly Raise Co-Payment Charges.
 Cannot Significantly Raise Deductibles.
 Cannot Significantly Lower Employer Contributions.
 Cannot Add or Tighten an Annual Limit on What the Insurer Pays.
 Cannot force consumers to switch to another grandfathered plan that,
compared to the current plan, has less benefits or higher cost sharing as a
means of avoiding new consumer protections.
 Cannot be bought by or merge with another plan simply to avoid complying
with the law.
 CAN Change Insurance Companies provided the plan does not make any
of the above six changes to its cost or benefits structure.
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GRANDFATHERED PLANS
 What new requirements apply to grandfathered health plans?
 A grandfathered health plan must comply with following
requirements
 No lifetime limits on coverage for all plans.
 No rescissions of coverage when people get sick and have
previously made an unintentional mistake on their application.
 Extension of parents’ coverage to young adults under 26 years old
 Disclose to consumers every time it distributes materials whether
the plan believes that it is a grandfathered plan The plan must also
provide contact information for enrollees to have their questions
and complaints addressed
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GRANDFATHERED PLANS
 What requirements do not apply to grandfathered
health plans?
 Coverage of recommended prevention services with no cost
sharing.
 Patient protections such as guaranteed access to OB-GYNs and
pediatricians
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Can you keep your insurance?
 The Problem
 The President Said that “if you like your plan you will
be able to keep it.”
 Turned out not to be accurate
 PPACA requires all insurance policies plans provide
a certain minimum level of benefits
 Many existing policies do not provide the required
benefits
 Insurance companies were required to cancel those
policies
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Can you keep your insurance?
 Under the Current Law – you can only keep your
existing policy
 if it is part of grandfathered plan
 If it meets minimum benefit requirements
 Many plans – mostly individual policies -- do not meet the
minimum benefit requirement
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Can you keep your insurance?
 The solution
 Three alternatives on the table as of
November 15
 President Obama – allow everyone to keep their existing
policy for one or two years
 House Republicans – allow everyone to keep their policies
indefinitely and allow everyone to buy whatever kind of
policy they want even if the policy does not meet the Act’s
minimum requirements
 Senate Democrats – allow everyone to keep their existing
policy indefinitely
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Can you keep your insurance?
 NONE OF THE ABOVE
 Obama has declared that insurance companies may renew non-compliant
policies for a year IF state insurance regulatory agency permits such
renenwals
 Many states have refused to permit such renewals
 Pennsylvania is permitting them
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Can you keep your insurance?
STAY TUNED
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CONTRACEPTION MANDATE
 The preventative health provisions of the PPACA, require that
all employers, with the exception of religious employers, must
provide insurance that covers contraception and contraception
counselling, without cost-sharing.
 Effective August 1, 2013, a religious employer is defined as
an employer that is organized and operates as a non-profit
entity and is referred to in section 6033(a)(3)(A)(i) or (iii) of
the Internal Revenue Code.
 The full range of FDA-approved prescription contraceptive
methods are included.
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Contraception Mandate
 The final rules also lay out the accommodation for other non-profit religious
organizations - such as non-profit religious hospitals and institutions of higher
education - that object to contraceptive coverage. Under the accommodation
these organizations will not have to contract, arrange, pay for or refer
contraceptive coverage to which they object on religious grounds, but such
coverage is separately provided to women enrolled in their health plans at no
cost.
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Contraception Mandate
 With respect to an insured health plan, including a student health plan, the
non-profit religious organization provides notice to its insurer that it objects to
contraception coverage. The insurer then notifies enrollees in the health plan
that it is providing them separate no-cost payments for contraceptive services
for as long as they remain enrolled in the health plan.
 Similarly, with respect to self-insured health plans, the non-profit religious
organization provides notice to its third party administrator that objects to
contraception coverage. The third party administrator then notifies enrollees in
the health plans that it is providing or arranging separate no-cost payments
for contraceptive services for them for as long as they remain enrolled in the
health plan.
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CONTRACEPTION MANDATE
 Many for profit corporations and their owners rejected this
accommodation
 At least seventy lawsuits have been filed, with six Circuit Court
splitting 4-2 on the issue of whether the mandate, even as modified,
violates the rights of corporations or their owners setting the stage for
a Supreme Court intervention:
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Contraception Mandate
 Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114 (10th Cir. 2013)
 Conestoga Wood Specialties Corp. v. Sec'y of U.S. Dep't of Health &
Human Servs., 724 F.3d 377 (3d Cir. 2013)
 Autocam Corp. v. Sebelius, 2013 WL 5182544 (6th Cir. Sept. 17, 2013)
 Korte v. Sebelius, No. 3:12-CV-01072-MJR (7th Cir. Nov. 8, 2013)
 Gilardi, et al v. HHS, No. 1:13-cv-00104 (D.C. Cir. Nov. 1, 2013)
 O’Brien v. HHS (8th Cir. November 27, 2013)
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CONTRACEPTION MANDATE
 Cases involve the Religious Freedom Restoration Act (“RFRA”)
 Under the RFRA, “[g]overnment shall not substantially burden a
person's exercise of religion even if the burden results from a rule of
general applicability [unless the burden] (1) is in furtherance of a
compelling governmental interest; and (2) is the least restrictive
means of furthering that compelling governmental interest.”
Conestoga Wood Specialties Corp. v. Sec'y of U.S. Dep't of Health &
Human Servs., 724 F.3d 377, 388 (3d Cir. 2013).
 Cases seek injunction against the contraception mandate
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CONTRACEPTION MANDATE
 Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1133 (10th Cir.
2013)
 Two companies operating according to Christian principles brought suit
 Argued contraception mandate violated their sincerely held religious
beliefs
 Tenth Circuit held that privately held, for-profit secular corporations were
“persons,” within the meaning of the RFRA
 The Tenth Circuit went on to hold that, under RFRA, the plaintiffs
established a likelihood of success that their rights under this statute are
substantially burdened by the contraceptive-coverage requirement
 A substantial burden on their religious beliefs was established by requiring
them to compromise their religious beliefs or face substantial tax
penalties.
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CONTRACEPTION MANDATE
 Hobby Lobby Stores, Inc. v. Sebelius, 723 F.3d 1114, 1140 (10th Cir. 2013)
 Burden emanated from what plaintiffs described as “a sincere religious
objection to providing coverage for Plan B and Ella since they believe
those drugs could prevent a human embryo ... from implanting in the wall
of the uterus, causing the death of the embryo.”
 They alleged a “sincere religious objection to providing coverage for
certain contraceptive [IUDs] since they believe those devices could
prevent a human embryo from implanting in the wall of the uterus, causing
the death of the embryo.”
 Further, objected to “participating in, providing access to, paying for,
training others to engage in, or otherwise supporting” the devices and
drugs that yield these effects.
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CONTRACEPTION MANDATE
 Conestoga Wood Specialties Corp. v. Sec'y of U.S. Dep't of Health & Human
Servs., 724 F.3d 377, 388 (3d Cir. 2013).
 Plaintiffs were Conestoga Wood Specialities Corp. (a for-profit company
operated according to religious principles), and its 100% shareholders, the
Mennonite Hahn family
 Held that for-profit company that created secular product and had no
formal ties to church or other religious group did not fall within definition of
“religious organization” with First Amendment right to free exercise of
religion.
 Held that a secular, for-profit corporation could not “exercise religion”
within the meaning of Religious Freedom Restoration Act (RFRA). Thus,
plaintiff Conestoga Wood did not have a claim under the RFRA.
.
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CONTRACEPTION MANDATE
 Conestoga Wood Specialties Corp. v. Sec'y of U.S. Dep't of
Health & Human Servs., 724 F.3d 377, 388 (3d Cir. 2013).
 Thirdly the Court held that, in regard to the individual
plaintiffs (the Hahn’s), the mandate did not “substantially
burden” their religious exercise, in part, because “free
exercise protections are not absolute, and that, while
religious beliefs are to be accommodated, there is a point at
which accommodations would ‘radically restrict the
operating latitude of the legislature.”
.
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CONTRACEPTION MANDATE
 Conestoga Wood Specialties Corp. v. Sec'y of U.S. Dep't of
Health & Human Servs., 724 F.3d 377, 388 (3d Cir. 2013).
 Here, the burden was too “indirect” because:
 (i) they are a for-profit company who voluntarily engaged in
business knowing that doing so subjects them to a certain level of
regulation, and
 (ii) their employees’ potential use of an abortifacient drug
(emergency contraceptive) was too attenuated to constitute a
substantial burden on their religious beliefs because “they remain
free to make their own independent decisions about their use or
non-use of different forms of contraception, as that clearly remains
a personal matter.”
.
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CONTRACEPTION MANDATE
 Autocam Corp. v. Sebelius, 12-2673, 2013 WL 5182544 (6th
Cir. Sept. 17, 2013)
 Plaintiffs were for-profit, secular corporations engaged in high-
volume manufacturing for the automotive and medical industries
and controlling shareholders. Controlling shareholders members of
the Kennedy family, all of whom are practicing Roman Catholics.
 Held, shareholders did not have standing to assert religious claims
on behalf of the corporation.
 Court stated: “We are without authority to ignore the choice the
Kennedys made to create a separate legal entity to operate
their business.”
 Held that Autocam is not a “person” capable of “religious exercise”
as intended by RFRA
.
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CONTRACEPTION MANDATE
 Autocam Corp. v. Sebelius, 12-2673, 2013 WL 5182544 (6th
Cir. Sept. 17, 2013)
 Sixth Circuit stated “we need not ‘draw the conclusion that,
just because courts have recognized the free exercise rights
of churches and other religious entities, it necessarily follows
that for-profit, secular corporations can exercise religion.’”
.
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CONTRACEPTION MANDATE
 Korte v. Sebelius, No. 3:12-CV-01072-MJR (7th Cir. Nov. 8,
2013)
 Plaintiffs are two Catholic families and their closely held
corporations—one a construction company in Illinois and the other
a manufacturing firm in Indiana. The businesses are secular and
for profit.
 The Court held that both the companies and their owners were
protected by the Religious Freedom Restoration Act. RFRA
protects “persons,” but does not define the word. The Dictionary
Act, which supplies rules of construction, defines the term to
include corporations, the court said.
 Thus, the health care law violated their rights under the Religious
Freedom Restoration Act.
 First to issue preliminary injunction
.
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CONTRACEPTION MANDATE
 Gilardi, et al v. HHS, No. 1:13-cv-00104 (D.C. Cir. Nov. 1,
2013)
 Somewhat splits the baby- entity’s rights not violated but individual
owner’s religious freedom rights are by the mandate.
 Two brothers sued on behalf of the two corporations, and on their
own behalf, contending that the mandate forces them and their
firms to choose between their faith by denying the required
coverage in their health plans, or paying penalties of $14 million
for disobeying the mandate.
 The 2-1 majority found that Freshway, as a secular
organization, cannot exercise religion under the Religious Freedom
Restoration Act (RFRA) and therefore lacks standing to challenge the
mandate. But a different majority of judges found that the Gilardis as
individuals could bring a claim under the RFRA.
.
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CONTRACEPTION MANDATE
 Gilardi, et al v. HHS, No. 1:13-cv-00104 (D.C. Cir. Nov. 1,
2013)
 “The burden on religious exercise does not occur at the point of
contraception purchase; instead, it occurs when a company’s owners fill
the basket of goods and services that constitute a health care plan,” wrote
Brown. “In other words, the Gilardi‘s are burdened when they are
pressured to choose between violating their religious beliefs in managing
their selected plan or paying onerous penalties.
 The Court found by a 2-1 majority that the brothers were likely to prevail
.
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CONTRACEPTION MANDATE
 Eden Foods, Inc. v. Sebelius, Sixth Circuit Docket No. No. 13-
1677
 Plaintiff, Michael Potter—founder, chairperson, president, and
shareholder of Eden Foods—is a Roman Catholic who challenged
the mandate on the grounds it violates his “deeply held religious
beliefs.”
 Held, a secular, for-profit company is not a person that can
exercise religion under the Religious Freedom Restoration Act.
.
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Contraception Mandate
O’Brien v. HHS (8th Cir. November 27, 2013)
 Plaintiffs -- Frank O’Brien and his company, O’Brien Industrial Holdings
LLC of St. Louis,
 O’Brien, a devout Catholic, claimed the requirement that workplace health
plans cover birth control infringes on his religious beliefs.
 District Court rejected his claim, holding that that requiring indirect
financial support of a practice, from which plaintiff himself abstains
according to his religious principles, does not constitute a substantial
burden on plaintiff’s religious exercise
 Eighth Circuit, by a 2-1 vote, disagreed and entered an injunction without
issuing an opinion explaining its decision
.
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Contraception Mandate
 Overall, Sixth and Third Circuits have held that the contraception mandate
applies to for-profit secular businesses, while the D.C. and Seventh have held
that the mandate may impose a substantial burden on a for-profit company’s
sincerely held religious beliefs. The Tenth, on the other hand, has held that
while corporations cannot make a claim under the RFRA, the mandate likely
imposes a substantial burden on the owner of a for-profit company’s sincerely
held religious beliefs. Finally, the Eighth has apparently held that the owners
and/or the corporation have rights under the RFRA which are violated by the
contraception mandate – absent an opinion we do not know which.
.
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Other Legal Issues
 Does the ACA permit subsidies in the Federal Exchanges
 If the ACA is a tax law, should it have originated in the House rather than the
Senate
.
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HIPAA Under the Affordable Care Act
By: Renee H. Martin, JD, RN, MSN
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HIPAA Basics
Who is covered under HIPAA?
.
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Covered Entity
 Health plans
 Health care clearinghouses – public/private entity that process or facilitates
processing of standard electronic transactions
 Health care providers who transmit any protected health information in
electronic form in connection with financial and administrative transactions
.
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Health Plans – broad definition – includes any
individual or group plan that provides or pays
for medical care
 Includes
 Health insurance issuers
 Medicare, Medicaid, Tricare
 Most employee health benefit plans –
Group Health Plans and Self-Insured Plans
 Excludes
 Employer
 Accident, Disability, Life Insurance, Workers Compensation Insurers
.
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 So, HIPAA not applicable to employers – employers are not Covered
Entities, but HIPAA has an impact on employers who act as health plan
sponsors
 The ERISA/self-funded plan is covered
.
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HIPAA Basics
What is covered?
.
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HIPAA Basics
Protected Health Information (PHI)
 Health information including demographics that:
 Is created or received by a health care provider or
health plan
 Relates to the past, present or future physical or
mental health or condition; the provision of health
care; or the past, present or future payment for the
provisions of health care to an individual
• Identifies the individual or allows creation of a
reasonable basis to believe the information
identifies an individual
.
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Application to Employer Sponsored Plans
 HIPAA as it relates to employers –
 Employers must ensure that PHI is not used for employment-related
decisions
 How it affects employer-sponsored plans will depend upon level of
employer’s involvement in administering medical benefits to its current
and former employees and their dependents
.
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Application to Employer Sponsored Plans
 HIPAA recognizes that the employer as plan
sponsor and the “plan” are not self-operating
and that employers frequently are involved in
plan administration
 Therefore HIPAA does not prohibit employers
from obtaining access to PHI – instead sets PHI access boundaries
.
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Application to Employer Sponsored Plans
Insured with TPA vs. Self-Insured
 Insured with TPA
 To the extent that employer’s plan provides benefits
through an insurer or HMO, employer can substantially
rely on insurer or HMO to comply with HIPAA’s
administrative requirements provided:
• Employer does not create or receive PHI other than Summary Health
Information and enrollment information
.
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Application to Employer Sponsored Plans
Fully Self-Insured
 Fully Self-Insured
 Employer may review PHI for purposes of claim appeals,
claim audits and other administrative purposes provided
that:
• The Plan amends plans documents to incorporate HIPAA’s
required provisions
• Amendments essentially must incorporate many of HIPAA’s
administrative and security requirements (Notice of Privacy Practices, Privacy
Officer, HIPAA privacy and security policies, individual rights)
.
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Fully Self-Insured ACA Changes
Comply with Genetic Information Nondiscrimination Act of 2008
(GINA)
 Review existing vendor relationships with respect to group health plans:
 To identify any business associates not having existing business
associate agreement and to put such agreements in place as soon as
possible but no later than September 23, 2013; and
 To make any revisions necessary to existing business associate
agreements by September 23, 2014, or as part of any earlier non-HIPAArelated amendment (for example, breach notification, subcontractor
requirements, compliance with the security regulations, and optional
provisions allocating compliance responsibilities and/or providing for
indemnification).
 Amend (or, if necessary, adopt) written breach notification procedures.
 Update and redistribute the Notice of Privacy Practices regarding new or
revised individual rights and changes in policies and procedures.
.
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Fully Self-Insured ACA Changes
 Prepare or revise documentation for new or revised individual privacy rights
 To implement new access rights to an electronic copy of “personal health
information” (PHI);
 For authorization to use or disclose PHI for marketing purposes;
 For restrictions of disclosures of health services paid for “out of pocket”;
 For requests to transmit PHI to third persons; and
 For disclosures of PHI to family members of a deceased patient.
 Comply with Genetic Information Nondiscrimination Act of 2008
(GINA)
.
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Fully Self-Insured ACA Changes
 Update privacy, security, and breach notification policies and procedures
(GINA, types of information used for fund-raising without authorization,
protection of PHI of deceased individuals for at least 50 years, disclosures of
immunization records to schools.)
 Train workers with access to PHI on all applicable changes.
.
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OVERVIEW
SHARED SAVINGS PROGRAM
&
ACOs
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Shared Savings Program
 PPACA established a “Shared Savings Program”:
 Promotes accountability for Medicare beneficiaries
 Coordinates items/services under Medicare Parts A & B
 Encourages investment in infrastructure and re-designed care processes
for high quality and efficient service delivery
 Incent higher value care
 Providers work together to manage and coordinate care for Medicare fee-forservices beneficiaries through “Accountable Care Organizations”
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Definitions
 An accountable care organization (ACO) is a
legal entity recognized and authorized under
applicable State law, as identified by a
Taxpayer Identification Number (TIN), and is
formed by one or more ACO participants
 ACO Participant is an individual or group of
ACO providers/suppliers identified by a TIN
and alone or together with one or more other
ACO participants comprises an ACO and is on
the list of ACO participants
(Continued)
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ACO Participants?
1.
ACO professionals (M.D., D.O., P.A., N.P., C.N.S.) in a group
practice arrangement
2.
Network of individual practices of ACO professionals
3.
Partnership or joint venture arrangement between hospitals and
ACO Professionals
4.
Hospital (Acute care) employing ACO professionals
5.
CAHs
6.
RHCs
7.
FQHCs
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Eligibility of ACO
 Legal entity formed under state/federal tribal law
 Receive and distribute shared savings
 Repay shared losses
 Establish, report and ensure provider compliance with quality performance
standards
 Perform other ACO functions (including shared governance)
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Required Processes
 Promote evidence-based medicine
 Promote Patient Engagement
 Patient experience of care survey
 Beneficiary representation
 Process for evaluating health needs of ACO population including a plan to
address diversity
 Internally report on quality and cost metrics
 Coordinate care among providers/suppliers
 Develop an individualized care program
 Coordinate care through an episode of care
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Payment Models
 All providers continue to receive fee-for-service payments
 Shared savings model
 CMS establishes a per capita Part A and Part B FFS benchmark
expenditures for ACO based on 3-month claims run out
 Using claims data, CMS computes per capita expenditures for the year –
adjusted for changes in severity growth and health status
 Separate calculation for ESRD, disabled, dual vs. non-dual eligibles
 PQRI Payments to ACO
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Eligibility for Shared Savings
 Meet all contractual requirements of ACO Agreement with CMS
 Meet the quality performance standards
 Realize savings compared to the Expenditure Benchmark that meet or
exceed the Minimum Savings Rate
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Quality Performance Measures
 Grouped into 4 domains:
 Patient/caregiver experience
 Care coordination/patient safety
 Preventative health
 At risk population/frail elderly health
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Data Sharing
 ACO needs data to be accountable for care
 CMS will share aggregate reports at the request of the ACO provided ACO
complies with privacy/security of PHI pursuant to a Data Use Agreement
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QUESTIONS?
.
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