Transcript HIPAA - State

Affordable Care Act
Issues and Impact
Presentation to the
State and HE Agency Benefit Coordinators
August 15, 2014
Patrice Steinhart & Melissa Wiseman
Benefits Administration, State of Tennessee
Presentation Outline
• Affordable Care Act (ACA) – broad strokes
• Practical issues facing employers and health plan
administrators
• ACA Impact
• TN Hours for Benefits
2
Stated Intent of the ACA
•
To establish a mechanism to provide for health care
coverage to uninsured individuals and families at
affordable rates
•
To provide that coverage through employer-sponsored
plans or through competitive marketplaces
•
To help ensure that pre-existing conditions would not be
a barrier to health care
•
To help ensure that the insurance coverage offered
meets established standards
3
Affordable Care Act — Compliance Timeline
2011 Plan Year
 Lifetime dollar limits on
2011
 Over-the-Counter
2012
 Distribution of Summary
2013
 Notice to Inform
2014
 Individual Mandate to
Essential Health Benefits (EHB)
Medicines Not
of Benefits and Coverage
Employees of Coverage
Purchase Insurance or Pay
prohibited
Reimbursable Under
to Participants (Ongoing)
Options in Exchange
Penalty
 Preexisting Condition
Health FSA, HRAs, or from
Exclusions Prohibited for
HSAs Without a
Children under 19
Prescription, Except
 Overly restrictive annual dollar
limits on EHB prohibited
 Extension of Adult Child
Coverage to Age 26
 Prohibition on Rescissions
 No Cost Sharing and Coverage
Insulin
 HSA Excise Tax Increase
 Public Long-Term Care
Option (CLASS Act) –No
Longer Supported by HHS
 Medicare Part D Discounts
 PCORI (Comparative
Effectiveness) Fee
 Quality of Care Report
(delayed)
 Medical Loss Ratio
 Limit of Health Care FSA
Contributions to $2,500
(Indexed)
 Addition of women’s
preventive health
rebates (insured plans
requirements to No Cost
only)
Sharing and Coverage for
 Employer Reporting of
Certain In-Network
Health Coverage on Form
Preventive Health
Services
for Certain In-Network
for Certain Drugs in
W-2 (due January 31,
Preventive Health Services
“Donut Hole”
2013)
 Elimination of Deduction
 Effective Appeals Process
for Expenses Allocable to
 Consumer/patient protections
Retiree Drug Subsidy
 Nondiscrimination
(RDS)
requirements on fully insured
plans (DELAYED)
 Certain Retiree Medical Claims
Reimbursable (ERRP)
 Retiree Drug Plan FAS Liability
Recognition
***
Applies to full time employees (e.g., 30 hours per week) and will require coverage that is affordable and satisfies
a certain actuarial value to avoid the penalty.
 State Insurance Exchanges
 Employer Responsibility to
Provide Affordable Minimum
Essential Health Coverage***
 Preexisting Conditions
Exclusions Prohibited
 Annual Dollar Limits on EHB
Prohibited
 Automatic Enrollment
(DELAYED)
 Limit of 90-Day Waiting Period
for Coverage
 Employer Reporting of Health
Insurance Information to
Government and Participants
 Increased Cap on Rewards for
Participation in Wellness
Program
 Cost-sharing limits for all
group health plans, not just
HDHPs/HSA (deductibles and
OOP maximum)
 Coverage of routine patient
Employer Responsibility noted in RED above
costs for participants in
approved clinical trials
 Transitional reinsurance
contributions
2018
 Excise Tax on
High-Cost Coverage
Plan Compliance Requirements
 Extension of adult child coverage to age 26
 Summary of Benefits & Coverage communication
 100% coverage for preventive services
 W2 reporting of the value of coverage
 Elimination of pre-ex for children
 Final appeals moved to Independent Review
Organization
• Marketplace notification
• Women’s preventive services
Plan Compliance Requirements
 Employer mandate to provide affordable minimum
essential health coverage
 Preexisting conditions exclusions prohibited
 No annual dollar limits on essential health benefits
 Limit of 90-day waiting period for coverage
 Cost-sharing limits for all group health plans (deductibles
and OOP maximum)
Employer Mandate (a.k.a. Shared Responsibility)
 Requires employers with 50 or more “full time
employees” to offer “affordable health coverage” that
provides a “minimum actuarial value” and “minimum
essential coverage” to at least 95%* of their full-time
employees and their eligible dependents, or else face a
penalty
 Who is a “full-time employee”?
 What is “affordable coverage?”
 What is “minimum actuarial value”?
 What is “minimum essential coverage”?
*70% in 2015
7
Health Care Reform Impact –
Individual Responsibility
• Individuals have a responsibility to maintain
minimal essential coverage or pay a penalty that
is generally based on taxable income
• Payable on tax return for the year in which the
penalty was incurred
• Individuals on Independent and Service
Contracts will evaluate their own employment
status to determine if they must maintain
coverage
8
Key Questions
• How will we handle PT and seasonal employees and
those who will not be considered FT under the ACA
and who could trigger a penalty?
• How will we handle PT employees who work two
positions?
• Are any of our PT or contractors considered to be
common law employees according to IRS
guidelines?
• What measurement period makes sense for our
organization?
9
ESR – Determining covered employees – special
considerations
-Seasonal employees expected to work less than 6 months per
year – not full time
-Volunteers – not full time
-Student work-study programs – not full time
-Educational employees - not part time simply because school is
closed or operating on limited schedule during summers
-Adjunct faculty – final regulations allow crediting 2.25 hours of
service in addition to each of hour of teaching or classroom time
Look-Back Measurement Safe Harbor
DETERMINING FULL-TIME EMPLOYEE STATUS
Time Periods under Proposed IRS Guidelines
Only pay 4980H penalty during stability period if required
Ongoing Employees
Standard Measurement Period
12 months
to determine if full time
Admin
Period
up to 90
days
Stability Period
12 months
Measurement & Stability
Periods repeat
New Variable Hour and Seasonal Employees
Initial Measurement Period
12 months
to determine if full time
Admin
Period
30 days
Cannot exceed 13 months for new EE
Source: Congressional Research Services (CRS) based on IRS Notice 2012-58 Determining Full-time
Employees for Purposes of Shared Responsibility for Employers Regarding Health Coverage.
Stability Period
12 months
Then use the Measurement
Period for Ongoing employees
Employer Responsibility Flow Chart
Sources: Kaiser Family Foundation, Segal
12
Employer Mandate &
Penalties delayed
 “No Coverage Penalty” (Code section 4980H(a))
 Employer does not offer Minimum Essential Coverage (“MEC”) to all eligible FTEs
and eligible dependents and at least one FTE enrolls in Exchange and receives
Federal subsidy
 Penalty equals $2,000 per year for all FTEs (minus first 30 FTEs), regardless of
whether the FTE elected employer-provided health care coverage
 Applies if less than 70% of FTEs (and their eligible dependents) are offered
coverage in 2015 (95% in future years)
OR
 “Inadequate Coverage Penalty” (Code section 4980H(b))
 Employer offers MEC to FTEs but coverage is either
 “Unaffordable,” or
 Does not provide “minimum actuarial value” (State plans exceed this threshold)
 Penalty equals $3,000 per year per each FTE who enrolls in an Exchange insurance
product and receives a Federal subsidy
 Not more than the No Coverage Penalty
 Also applies to the excluded 5% above
13
Not Just About Insurance
• Not a new employment issue - new financial risks
• State of Tennessee created a working group of financial,
insurance, human resource, and procurement staff to
• Identify risk
• Communicate this risk to relevant parties
• Develop a solution to mitigate the risk going forward
Solutions to Mitigate Risk
• Part-Time report for managers to monitor hours worked
• Decision model to hire an employee, obtain independent
contractor, or temporary employee
• Simple questionnaire for hiring managers to determine
whether to hire an employee or contractor using IRS 20
Common Law questions
• Contract language for agencies to use for RFPs
• Master contract that includes contractor relationships and
defines employer responsibilities
• http://intranet.tn.gov/dohr/hr/acquiring-hr.html
ESR – Liability for payment
-IRS will review the credits paid to individual taxpayers
-Employers will be sent notice that they may be liable for an ESR
payment
-Earliest notices would be issued in 2016
-Employers should research and dispute liability if appropriate
-Payment will be $2,000 per full time employee
Regs Require Employer Offered Coverage
• Regulations only require that employers provide information
about offers of coverage
• Decision guide mailed to all eligible members
• State will require proof that newly hired employees declined
coverage
• Using ESS is the preferred approach
• Enrollment form
Current Eligible not Enrolled
• 4,000 State employees who are eligible but not enrolled
• These employees will receive a letter in mid-September
notifying them that they are eligible for coverage and can
enroll during Open Enrollment this year.
Key Administrative Employer Requirements
 W-2 reporting
 Summary of Benefits and Coverage (SBC)
 Employer Exchange-related notices
 Reporting to IRS starting in 2015
 Automatic enrollment (not yet issued)
IRS Reporting
 Two reporting requirements; single report: Form 1095-C
 Employer-sponsored coverage provided to full-time employees
 Employer-sponsored minimum essential coverage
 Statements to employees notifying them of the
information reported to the IRS (on for before 2/1/16)
 File electronic returns to the IRS on or before 3/31/16
20
Key Questions
• How will we handle PT and seasonal employees and
those who will not be considered FT under the ACA
and who could trigger a penalty?
• How will we handle PT employees who work two
positions?
• Are any of our PT or contractors considered to be
common law employees according to IRS
guidelines?
• What measurement period makes sense for our
organization?
21
Questions?
22
TN Hours for Benefits Report
• Standard Measurement period
• Individual Measurement period