Global Health Care Update

Transcription

1 Global Health Care Update May/June 2013 This bimonthly Update summarizes recent legislative developments and trends related to health care and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans. Action May Be Required Turkey Foreign employees with a residence permit of at least one year are no longer required to enroll in the national health care system. Foreign employees may participate in the health care system voluntarily. The change was included in an omnibus law the Social Security and General Health Law effective at the end of May Recent Developments U.S. Health Care Reform The Department of Labor (DOL) issued temporary guidance (Technical Release ) on employee notification requirements that are required as part of the Affordable Care Act. As part of the health care reform law, a new Fair Labor Standards Act (FLSA) Section 18B was created that requires a notice to employees of coverage options available through the Exchanges (marketplace). The federal and state Exchanges are to become operational in 2014 and are intended to provide individuals and small businesses with the opportunity to purchase affordable, quality health insurance options. Under the guidance, employers must provide the notice to current employees no later than October 1, Employers are required to provide the notice to new employees at the time of hiring beginning October 1, For 2014, the DOL will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee s start date. Copyright 2013 Aon plc 1

2 Technical Release also announces the availability of the model notice to employees of coverage options. Additionally, the guidance provides an updated model election notice for group health plans for purposes of the continuation coverage provisions under COBRA, to include additional information regarding health coverage alternatives offered through the Exchanges. The Treasury and Internal Revenue Service (IRS) issued proposed regulations relating to the health insurance premium tax credit enacted by the Affordable Care Act. The proposed regulations affect individuals who enroll in qualified health plans through Exchanges and claim the premium tax credit, and Exchanges that make qualified health plans available to individuals and employers. The proposed regulations also provide guidance on determining whether health coverage under an eligible employer-sponsored plan provides minimum value and affect employers that offer health coverage and their employees. Comments on the proposed regulations are due by July 2, The Departments of Labor, Treasury, and Health and Human Services (the agencies) released final regulations regarding nondiscriminatory wellness programs in group health coverage, as required by the Affordable Care Act. The final regulations increase the maximum permissible reward under a health-contingent wellness program offered in connection with a group health plan (and any related health insurance coverage) from 20% to 30% of the cost of coverage. The final regulations further increase the maximum permissible reward to 50% for wellness programs designed to prevent or reduce tobacco use. Additionally, the regulations include other clarifications regarding the reasonable design of health-contingent wellness programs and the reasonable alternatives they must offer in order to avoid prohibited discrimination. Examples of health-contingent wellness programs include programs that provide a reward to those who do not use, or decrease their use of, tobacco, or programs that reward those who achieve a specified health-related goal such as a specified cholesterol level, weight, or body mass index, as well as those who fail to meet such goals but take certain other healthy actions. According to the agencies, the final regulations also continue to support participatory wellness programs, which generally are available without regard to an individual s health status. These include programs that reimburse for the cost of membership in a fitness center; provide a reward to employees for attending a monthly, no-cost health education seminar; or reward employees who complete a health risk assessment, without requiring them to take further action. The final regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, The final regulations apply to individual health insurance issuers for policy years beginning on or after January 1, The final regulations become effective on August 2, The Department of Health and Human Services Centers for Medicare and Medicaid Services released final regulations, which implement provisions of the Affordable Care Act, related to the Small Business Health Options Program (SHOP). The final regulations amend existing regulations on triggering events and special enrollment periods for qualified employees and their dependents, and implement a transitional policy regarding employees choice of qualified health plans in the SHOP. Federal and state Exchanges (marketplaces) will become operational in 2014 and are intended to provide individuals and small businesses with the opportunity to purchase affordable, quality health insurance options. As part of the Affordable Care Act, each state will have a SHOP that assists qualified employers in providing health insurance options for their employees. The final regulations become effective on July 1, Copyright 2013 Aon plc 2

3 Americas The U.S. IRS issued inflation-adjusted limits for contributions to a health savings account (HSA) for calendar year For calendar year 2014, the limit on contributions for an individual with self-only coverage under a high-deductible health plan is USD 3,300 (USD 6,550 for family coverage). A high-deductible health plan for calendar year 2014 is defined as a health plan with an annual deductible that is not less than USD 1,250 for self-only coverage (USD 2,500 for family coverage). The limit on annual out-of-pocket expenses is USD 6,350 for self-only coverage (USD 12,700 for family coverage). The limit on catch-up contributions for individuals age 55 or older is USD 1,000. Ontario s (Canada) 2013 budget includes adjustments to the Employer Health Tax (EHT). The EHT is paid by employers on their Ontario payrolls. All private-sector employers, regardless of size, are exempt from paying the EHT on up to CAD 400,000 of their Ontario payrolls each year. Groups of associated employers share the exemption. Payroll above the CAD 400,000 threshold is taxed at a rate of 1.95%. The government proposes to increase this exemption to provide greater EHT relief for small employers. Effective January 1, 2014, the exemption would increase to CAD 450,000. It would be adjusted for inflation every five years using the Ontario Consumer Price Index. At projected inflation rates, the exemption is expected to rise to CAD 500,000 in To better target the EHT exemption, beginning January 1, 2014, the exemption would be eliminated for private-sector employers (including groups of associated employers) with annual Ontario payrolls over CAD 5 million. The budget also includes past health care initiatives, notably, the introduction of income testing under the Ontario Drug Benefit program, effective August This would require high-income seniors to pay a larger share of their prescription drug costs. In Manitoba (Canada), Bill 31 The Workplace Safety and Health Amendment Act received its first reading in the legislature. The Workplace Safety and Health Act would be amended to: 1) enable a stop work order to apply to all Manitoba workplaces of an employer when similar activities at multiple workplaces involve, or are likely to involve, an imminent risk of serious physical or health injury; 2) provide for the appointment of a chief prevention officer and establish the officer s mandate; 3) strengthen provisions for a worker exercising his or her right to refuse unsafe work; 4) require a worker safety and health representative in every workplace with five or more workers, rather than ten or more; 5) require a workplace safety and health committee in seasonal workplaces, if there are at least 20 workers and the work is expected to continue for at least 90 days; 6) clarify provisions for paid training and other activities of worker safety and health representatives and committee members; and 7) expand the list of activities or contraventions for which administrative penalties may be imposed and strengthen the enforcement of those penalties. Saskatchewan (Canada) Bill 58 The Workers Compensation Act, 2012, which amends existing workers compensation legislation to improve client service, fairness, efficiency, and accountability, received Royal Assent on May 15, The legislative amendments are expected to come into effect January 1, In particular, these amendments: 1) increase the maximum wage rate to CAD 59,000 for workers injured after the legislation takes effect; 2) index the maximum wage rate for current and future claimants to ensure benefits are consistent with inflation; 3) introduce administrative penalties up to CAD 10,000 for employers that breach their obligations under the Act; 4) enable workers with less than CAD 25,000 in their annuity account to choose how they access Copyright 2013 Aon plc 3

4 those funds, either through a lump-sum payment or an annuity; and 5) ensure employers assist with an employee s Return to Work program. In New Brunswick (Canada), Bill 47 and Bill 48, amending the Workers Compensation Act, received their first reading on May 22, Bill 47 would: 1) clarify the Commission s discretion with respect to extending the time period to apply for compensation, if the Commission considers that the delay is justified; 2) provide that employers must give notice to the Commission within three days after the date a worker is diagnosed with an occupational disease; and 3) require employers to establish a procedure for workers to notify the employer of any accident that must be reported to the Commission. If passed, the amendments would be effective June 1, Under Bill 48, the written safety policy would have to be established in consultation with employees and set out the responsibilities of employees, as well as the employer. The safety policy would no longer have to be filed with the Commission, but it must continue to be available upon request. It also would require the establishment of a new written health and safety program for every employer with 20 or more employees regularly employed in New Brunswick. If passed, the amendments would be effective June 1, Employers in Argentina are reminded that they must comply with the new Labor Risks Law (Law No. 26,773), which increases the cost of workers compensation to cover changes in the premium and mandatory coverage. The changes to workers compensation include the following: The new law includes additional payments, equivalent to the total indemnity, that are used to offset any other damages not covered under the specified calculations. The additional indemnity is not applicable to in itinere events (i.e., commuting to and from the workplace); Workers compensation payments are indexed to the RIPTE (Remuneracíon Imponible Promedio de los Trabajadores Estables). The current RIPTE is 2.316; it is updated twice each year, in March and September. The index factor grows at an average rate of around 2% each month; The general indemnity principle is the sole payment under the system; Claims will be processed more quickly; Once permanent disability has been determined or the employee dies, workers compensation insurers (ART) have 15 days to provide information on the amount payable as calculated under Law No. 26,773. The beneficiary may then accept the stated payment or file suit. Unlike the former system, the beneficiary may not collect twice. In the city of Buenos Aires, the action may be filed in the civil court. Elsewhere, it may be filed in the civil or labor court, depending on the jurisdiction; All disputes between employees and insurers will be heard by a medical commission, and, if needed, by the labor court; All permanent monetary indemnities will accrue interest until the time of payment, from the date of the event for workplace-related accidents and from the date the causal relationship is determined for workplace-related illnesses; Copyright 2013 Aon plc 4

5 A new minimum amount has been established for the purpose of premium calculations, which takes into account cash and noncash elements; and A limit has been placed on insurers administrative expenses that are not related to the actual indemnity. These expenses cannot exceed 20% of income corresponding to workers compensation coverage. Asia The Australian government announced an increase in the personal income tax Medicare levy threshold. A Medicare levy of 1.5% of taxable income helps finance Medicare benefits. Effective July 1, 2013, married couples earning AUD 33,693 or less (increased by AUD 3,094 per dependent child) may submit a formal application to the Australian Taxation Office to claim an exemption from this tax. The threshold for single individuals increased from AUD 19,404 to AUD 20,542 under the Household Assistance Package. A reduced levy is payable if taxable income is within a narrow range of the low-income thresholds. In related news, the government s budget includes measures affecting the taxation of health care related expenses. The Medicare levy would increase to 2.0% as of July 1, Also, the medical expenses tax offset would be phased out from July 1, As of July 1, 2013, the offset would be available only to taxpayers who claimed the offset in the previous income year. Europe France s Competition Authority has recommended changes to draft legislation, which would require employers to provide supplementary health insurance to all employees. The new requirement was introduced in the Accord National Interprofessionnel (ANI), signed by the social partners (unions and employers associations) in January Under current industry agreements, a designation clause may exist, which requires employers to choose from the named health insurers. These designation clauses are typically reviewed every five years. As a result, certain companies have a dominant position. The Competition Authority recommended that at least two insurers be included in a designation clause and that the clause be reviewed every three years. The designated insurers would be selected after a competitive review conducted by an ad hoc body of independent individuals. As a result of the Authority s recommendations, the government removed the designation clause from the draft legislation. The legislation was subsequently passed by the parliament, and the health care provision of the ANI is under review by the Constitutional Council Employers in Russia are required to provide smoke-free working environments for their employees. Effective June 1, 2013, all public spaces in Russia, including workplaces, are required to be smoke free. According to the World Health Organization, an estimated 40% of Russians are smokers and nearly 0.3% of the population dies each year from smoking-related illnesses. Employers in Turkey are reminded that they must comply with the Law 6,331 on Occupational Health and Safety. In workplaces classified as hazardous or very hazardous and with up to 50 employees, employers must hire a workplace doctor and other medical staff by June 30, In workplaces classified as less hazardous and with Copyright 2013 Aon plc 5

6 less than 50 employees, a workplace doctor and/or other medical staff must be hired by June 30, Other workplaces were required to comply with this requirement by December 30, Law 6,331 also includes the following requirements: election or appointment of employee representatives to work on health and safety issues; provision of information on health and safety risks to employees; provision of educational training on health and safety issues; and provision of periodical medical examinations to all employees and to employees who have returned to work following a workplace accident. Middle East Under a draft federal law, employers in the UAE would be fined for failing to provide health insurance for their employees. The minimum fine would be AED 10,000 for each uncovered employees. Employers would be fined AED 30,000 for charging an employee for health insurance. A federal authority would be established to oversee health care coverage. Currently, only Abu Dhabi has a mandatory health insurance system. Qatar s Advisory Council approved a draft law establishing a universal health care system. Under the system, the government would pay the health care premium for citizens, and employers would pay the premium for expatriate employees and their families. The government would collect the health care premium for expatriates at the time they renewed their residence permits or their personal identity cards were issued. The amount of the premium is not yet known. The health care system would be rolled out in four stages first to Qatari women; second to all Qatari nationals; third to resident employees and their families; and lastly, to remaining workers. * * * * For more information on the topic and countries in this newsletter, please refer to the Aon Hewitt Country Profiles eguide. You can learn more about the Country Profiles eguide here. Copyright 2013 Aon plc 6

7 About Aon Hewitt Aon Hewitt is the global leader in human resource solutions. The company partners with organizations to solve their most complex benefits, talent, and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates, and administers a wide range of human capital, retirement, investment management, health care, compensation, and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit Copyright 2013 Aon plc This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Aon Hewitt's preliminary analysis of publicly available information. The content of this document is made available on an as is basis, without warranty of any kind. Aon Hewitt disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Aon Hewitt reserves all rights to the content of this document. Copyright 2013 Aon plc 7