Coming ACA regulations will affect groups of all sizes
The government continues to release new information regarding the Affordable Care Act (ACA). There are a number of provisions that employers should put on their radar and regularly monitor for updates.
The following is not intended to be a full list, but is of note:
Nondiscrimination testing for fully insured plans (applies to fully insured, non-grandfathered group plans)
The Proposed Rule expanded the nondiscrimination testing, which previously only applied to self-insured group health plans, to now include fully insured group health plans, with some modifications. According to the Proposed Rule, fully insured plans are not to discriminate in favor of highly compensated employees. A plan needs to perform two tests - a "benefits test" and an "eligibility test" to determine if it is discriminatory. If a plan fails either test it is considered discriminatory and will be assessed an excise tax.
Note: Health and Human Services (HHS) has not yet released the final rule regarding nondiscrimination testing for fully insured group health plans. This rule, when issued will include a compliance date.
Insurance Provider Fee (applies to fully insured group, individual)
This provision, frequently referred to as the Annual Health Insurer Fee, applies to an annual fee paid by the insurance industry to help fund reforms under the ACA. The Internal Revenue Service (IRS) will send each applicable insurance carrier a notice of final fee calculation by Aug. 31. The fee is due by Sept. 30 of each year beginning in 2014.
Note: The exact amount of the fee that each carrier will pay has not yet been released.
Quality of Care Reporting (applies to non-grandfathered group health plans)
Group health plans and health issuers providing group and individual health insurance coverage are required to provide a yearly report to the Secretary of Health and Human Services (HHS) and plan members. The yearly report will include plan activities such as: improved health outcomes, reduced hospital readmissions, and activities that promoted health and wellness. Enrollees under the plan are to be provided a copy of the report during the open enrollment period.
Note: The Secretary of HHS will make the report available to the public on an internet site. Additional guidance on the reporting requirements has not been released.
Auto-enrollment for large groups (applies to employers with more than 200 full-time employees)
This provision applies to employer groups with more than 200 full-time employees. However, guidance has yet to be released as to how to determine full-time status. The intent is to automatically enroll new full-time employees in one of the employer's health benefits plans (subject to an applicable waiting period) and to continue enrollment for current employees in the employer's health benefits plan. Employees are to be provided an opportunity to opt out of any coverage in which they are automatically enrolled. Employers are to provide notice of automatic enrollment procedures.
Note: Compliance with this requirement has been placed on hold until further guidance is published, which is not expected until 2014.
"Cadillac" Tax (applies to high-cost employer sponsored plans)
An excise tax will be imposed on high-cost, employer-sponsored health coverage beginning with tax years after Dec. 31, 2017. The tax is 40 percent of the value of the health insurance benefits exceeding a certain threshold. The estimated threshold for 2018 is $10,200 for individual coverage and $27,500 for family coverage. Thresholds may be increased for individuals in high-risk professions and adjusted pursuant to age and gender. The applicable tax is to be paid by the issuer in the case of a fully insured plan and the plan administrator (normally the employer) in the case of self-funded plans.
Note: Further guidance is expected for the administrator of the excise tax, including the method and timing for payment.
Again, this is not a complete listing, but a reference of some ACA provisions. Wellmark is here to inform, lead, assist and support you through all the ACA changes. For more information, call your Wellmark representative, agent or broker about Wellmark coverage options that best meet the ongoing needs of you and your employees. Continue to monitor WeKnowReform.com for updates.
Wellmark is not providing any legal advice with regard to compliance with the requirements of the Affordable Care Act (ACA) or the Mental Health Parity Addiction Equity Act (MHPAEA). Regulations and guidance on specific provisions of the ACA and MHPAEA have been and will continue to be provided by the U.S. Department of Health and Human Services (HHS) and/or other agencies. The information provided reflects Wellmark's understanding of the most current information and is subject to change without further notice. Please note that plan benefits, rates, renewal rate adjustments, and rating impact calculations are subject to change and may be revised during a plan's rating period based on guidance and regulations issued by HHS or other agencies. Wellmark makes no representation as to the impact of plan changes on a plan's grandfathered status or interpretation or implementation of any other provisions of ACA. Any questions about Wellmark's approach to the ACA of MHPAEA may be referred to your Wellmark account representative. Wellmark will not determine whether coverage is discriminatory or otherwise in violation of Internal Revenue Code Section 105(h). Wellmark also will not provide any testing for compliance with Internal Revenue Code Section 105(h). Wellmark will not be held liable for any penalties or other losses resulting from any employer offering coverage in violation of section 105(h). Wellmark will not determine whether any change in an Employer Administered Funding Arrangement affects a health plan's grandfathered health plan status under ACA or otherwise complies with ACA. Wellmark will not be held liable for any penalties or other losses resulting from any Employer Administered Funding Arrangement. For purposes of this paragraph, an "Employer Administered Funding Arrangement" is an arrangement administered by an employer in which the employer contributes toward the member's share of benefit costs (such as the member's deductible, coinsurance, or copayments) in the absence of which the member would be financially responsible. An Employer Administered Funding Arrangement does not include the employer's contribution to health insurance premiums or rates.