Health Care Reform Compliance Workshop: Your Questions Answered

Transcription

1 Health Care Reform Compliance Workshop: Your Questions Answered Amy Gordon Susan Nash McDermott Will & Emery HR Specialist & Business Management Daily April 27,

2 Plan Design Issues Grandfathered Plans All plans in effect as of the date of enactment Permits individuals to maintain their current coverage Allows later enrollment of family members and new hires

3 Plan Design Issues Benefit design changes - All plans Effective 1st plan year following Sept 23, 2010 Essential health benefits Defined by HHS No lifetime limits Restricted annual limits Dependent Children Coverage to age 26 Unless eligible for another ER-sponsored plan No preexisting condition exclusions for children under 19

4 Plan Design Issues Benefit design changes - All plans Effective 1st plan year following Sept 23, 2010 Rescission of Coverage Prohibited Except for intentional misrepresentation or fraud Violations of coverage mandates are subject to penalty $100/day for each affected participant from date of failure to date of correction Unintentional failures capped at lesser of $500,000 or 10% of health plan costs

5 Plan Design Issues Benefit Design changes - All plans Effective 2014 Plan cannot have waiting periods that exceed 90 days No pre-existing condition exclusions for any participant No annual limits Automatic enrollment For employers with more than 200 FTEs Notice and opportunity to opt out Regulations to be issued, target 2014

6 Plan Design Issues Benefit design changes - Non-grandfathered plans Effective first plan year following Sept 23, 2010 Dependent children Coverage to age 26 Regardless of other coverage Preventive care with no cost-sharing Non-discrimination rules apply to fully-insured plans (105(h))

7 Plan Design Issues Benefit design changes - Non-grandfathered plans Effective first plan year following Sept 23, 2010 Internal and external claim and appeal process similar to ERISA Emergency services without prior authorization Participant may designate primary care provider Pre-authorization not permitted for pediatrics and OB-GYN

8 Plan Design Issues Benefit design changes - Non-grandfathered plans Effective 2014 No eligibility discrimination HIPAA wellness incentive cap increased from 20% to 30% Secretary discretion to increase to 50% No discrimination as to health care providers

9 Plan Design Issues Benefit design changes - Non-grandfathered plans Effective 2014 Annual cost-sharing may not exceed: $5,000 (single) $10,000 (family) (indexed) Annual deductible may not exceed: $2,000 (single) $4,000 (family)

10 Pay or Play Applies to all plans with 50 or more FTEs Free-rider non-deductible excise tax For no coverage Penalty if: One FTE obtains a tax credit Cost sharing assistance is $2,000 per FTE in excess of 30 employees For providing unaffordable coverage Penalty of $3,000 per FTE who receives a federal subsidy Capped at $2,000 per FTE in excess of 30 employees Free Choice Vouchers

11 Tax Issues HSAs/FSAs Increases excise tax on nonqualified withdrawals from HSAs from 10% to 20% (2011) Cap on Health FSAs to $2,500 (indexed) (2013) Elimination of ability to submit reimbursement for OTC drugs to HRAs, HSAs and FSAs (unless prescribed by a physician) (2011)

12 Tax Issues New Taxes/Fees Per participant fee to fund comparative effectiveness research ( ) Addition to employee HI tax for high-wage earners 3.8% Medicare tax on unearned income Cadillac Plan Tax (2018)

13 Tax Issues Miscellaneous Non-taxable coverage of adult dependent children (2010) Employer-provided adoption assistance limit increases (2010) and is extended through December 31, 2011 Temporary subsidy for retiree health benefits (2010 to 2015, if earlier when appropriation is exhausted) Medicare Part D Subsidy no longer deductible effective 2013

14 Reporting and Disclosure Requirements W-2 reporting of aggregate value of employer provided health care (2011 W-2) Uniform Explanation of Coverage in addition to SPD (March, 2012) Notice of material modifications sixty days before effective date (2012)

15 Reporting and Disclosure Requirements Notice to employees of availability of Exchanges (March, 2013) Health care reporting to IRS and to covered individuals (2014) Transparency requirements

16 Question & Answer Session Have a question for the speaker? Press Star and then 1 on your phone to enter the queue. If, during the Q&A, your question has been answered, or you wish to remove yourself form the queue, press Star and then 1. The moderator will open your line when it is your turn to speak. For more information regarding Business Management Daily s newsletters, forums, webinars and Special Reports, visit: We d love your feedback regarding the conference and other topics you d like to hear about! Contact Heather Rice at: hrice@businessmanagementdaily.com. Thank you for participating!

17 Health Care Reform Compliance Workshop: Your Questions Answered Amy Gordon Susan Nash McDermott Will & Emery HR Specialist & Business Management Daily April 27,