Here We Go Again! Benefits Legal Compliance Update

Transcription

1 Here We Go Again! Benefits Legal Compliance Update Sally Wineman, JD Area Vice President, Compliance Counsel

2 What s going on? 2

3 Midterm Elections 3

4 Recent Developments Repealed! Individual mandate penalties reduce to $0 beginning in 2019 What hasn t changed Employer mandate Forms 1094-C and 1095-C reporting Keep an eye on State individual mandates 4

5 Employer Shared Responsibility Do you have at least 50 FT and FTE employees? Is coverage affordable? No penalty applies! YES Is coverage offered to 95% of all full-time employees? YES Does plan have minimum value? YES YES NO NO NO NO No penalty applies! If at least one FT employee receives premium assistance: 2018: $2,320 (total # of FTs 30) 2019: $2,500 (total # of FTs 30) Lesser of: 2018: $3,480 for each FT receiving tax credit; OR $2,320 x (# of FTs 30) 2019: $3,750 for each FT receiving tax credit; OR $2,500 x (# of FTs 30) 5

6 Affordability Increase in Percentage 9.86% for 2019 Up from 9.56% for 2018 Affordability may be impacted by: HRA contributions Flex credits Rate of Pay Safe Harbor Example: Impact of Affordability Increase Affordability Percentage 9.56% 9.86% Employee Contribution $200 $200 Salary Where Employee Contribution is Affordable $25, $24, Opt-out bonus 6

7 Employer Mandate Enforcement IRS has begun assessing potential employer mandate penalties for: A penalty: failure to offer coverage to enough full-time employees B penalty: failure to offer MV and affordable coverage to certain employees 2015 Enforcement 30,000 penalties notices issued $4.4 billion: Total penalties assessed so far Still more to come 7

8 Employer Mandate Enforcement If you receive a letter from the IRS Evaluate the accuracy of the IRS s proposed employer mandate penalties Review Letter 226J and other materials provided by the IRS Gather 2015 Forms 1094-C and 1095-C filed with the IRS Compare ESRP Summary Table to Form 1094-C Compare Form 14765, Employee PTC Listing to Forms 1095-C Use Form 14764, ESRP Response to respond 8

9 It s All Connected Group Health Plans Government Plans Providers Individual Market 9

10 The Marketplace Open Enrollment Coming! November 1 December 15,

11 Cost Sharing Subsidies Cost-sharing subsidies eliminated Government provided subsidies to insurance companies To cover costs (deductibles, copays) for individuals with incomes under 250% FPL $10 billion in 2018 Silver loading allowed Class-action lawsuit certified 11

12 Executive Orders Promoting Healthcare Choice and Competition across the United States (Executive Order 13813) Executive Order Signed October 12, 2017 Days to Release Status Association Health Plans Short-Term Limited Duration Health Insurance HRA Funds for Individual Policies 60 days Final regulations released June 19, days Final regulations released August 1, days No public activity 12

13 Association Health Plans Final rules released New regulations create an additional mechanism for groups or associations to sponsor a single plan Challenges Association health plans are MEWAs Heavily regulated by states Most requirements for group health plans apply Impact to individual and small group markets 13

14 Evaluating Potential AHPs Consider the following issues when evaluating AHPs Are the benefits available through the AHP lesser than the plan currently offers? If so, they should timely communicate the reduction in benefits to employees. Does the AHP provide minimum value? If not, have they evaluated the amount of potential employer mandate penalties (if applicable)? Which safe harbor is the AHP relying on? Does the AHP comply with the state laws in all of the states where it is operating? Does the AHP have adequate reserves? Is the AHP required to pay claims before it pays administrative fees? If not, in what order are claims required to be paid? How will the employer know if claims are not being timely paid? Has the AHP filed Forms 5500 and M-1? What are the procedures for leaving the AHP? 14

15 Short Term Health Plans Final rules released Consumers can purchase short-term, limited-duration policies Less than 12 months (previously limited to 3 months) May be renewed for up to 36 months total States still permitted to regulate policies 15

16 Reporting Individualized Statement Form 1095-C Transmittal Report Form 1094-C Each Employee Statement Forms 1095-C TO FULL-TIME EMPLOYEES TO IRS January 31, 2019 Feb. 28, 2019 (April 1, 2019 if e-file) Feb. 28, 2019 (April 1, 2019 if e-file) 16

17 2019 Limits Out-of-Pocket (OOP) Maximum (single/family) $7,350 / $14,700 $7,900 / $15,800 FSA Maximum $2,650 Pending Qualified HSA HDHP Minimum deductible $1,350 / $2,700 $1,350 / $2,700 Maximum OOP $6,650 / $13,300 $6,750 / $13,500 Maximum HSA contribution $3,450 / $6,900¹ $3,500 / $7,000 Catch-up HSA contribution $1,000 $1,000 ¹ Reinstated the HSA family maximum contribution to $6,900 for 2018 Transit Mass transit/van pooling $260 per month* Pending Parking $260 per month* Pending * No tax deduction for employers, but employee can use pre-tax income Bicycle commuter $0 $0 17

18 Taxes & Fees Cadillac Tax delayed to 2022! Health insurer tax suspended for 2019! PCORI fee nearly done! 18

19 Mental Health Parity Updated Guidelines Proposed FAQs and other proposed guidance regarding non-quantitative treatment limitations and disclosure requirements Address several benefit plan situations that may (or may not) violate MHPAEA, including: Experimental treatment exclusions Prescription drug dosage limitations Exclusions for a particular condition or disorder Step therapy Provider reimbursement rates Network adequacy Treatment setting limitations Network directories 19

20 HIPAA Enforcement As of December 31, ,297 HIPAA complaints received by HHS 25,637 cases investigated and resolved $75,229,182 in penalties imposed by HHS Recent Settlements $4.3 Million: Stolen laptop, lost thumb drives, failure to encrypt devices despite risk analysis showing high risk $2.5 Million: Stolen laptop, insufficient risk analysis, inadequate risk management processes, and policies and procedures were in draft form $31,000: No business associate agreement $400,000: Failure to timely conduct risk analysis $5.5 Million: Failed to implement procedures to terminate former employees access to PHI 20

21 HIPAA Enforcement Tips to avoid penalties Conduct (or update) a risk analysis Implement required safeguards Prepare for ransomware attacks Ensure paper records are protected and disposed in a secure way Obtain and strengthen Business Associate Agreements Conduct prompt investigations Timely report breaches Keep good records Develop protocols for terminated employees Train and retrain HIPAA workforce members 21

22 Wellness EEOC Final Wellness Regulations Allow incentive up to 30% of premium for wellness programs 30% is arbitrary and capricious try again! Plan new proposed rules in 2018, but not effective until 2021 Not timely enough 30% rule vacated as of Jan 1, 2019 New proposed rules coming soon? 22

23 Washington Washington Paid Family and Medical Leave Premium payments commence in Benefits available in 2020 Maximum weekly benefit is $1,000 Eligible for leave after working 820 hours in first four of the last five completed calendar quarters Leave runs concurrently with any FMLA leave Health benefits continued only as required by FMLA Funded with premiums paid by employers and employees Employers with 50 or fewer employees are exempt from paying the employer share, but may voluntarily elect to do so Indian Tribes and self-employed individuals may opt-in to the program Employers may opt-out if have voluntary plan that meets certain standards Leave not to exceed 12 weeks (may be extended to 18 months) 23

24 Washington State-provided School Employee Benefits (SEHB 2242) Establishes a School Employees Benefits Board to procure health care and other benefits for school district employees All school districts in WA must participate beginning January 1,

25 Stay Focused Plans should be well-organized to avoid potential problems. Take methodical approach to dealing with government requirements and requests Be cautious when changing wellness programs or mental health benefits Conduct analysis and training for compliance with HIPAA Keep copies of important documents in one place Update eligibility provisions to reflect ACA classifications Be alert to guidance upcoming for new requirements (WPFML) Vote! Election is November 6 th. 25

26 Questions? ajghealthcarereform.com 26

27 Thank you! Questions? Morgan Donnelly, MBA Client Consultant Nancy Kokenge Area Vice President, Client Consultant