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Are There Icebergs or Open-Waters Ahead in Your Affordable Care Act Journey?

The drama is building as employers struggle to understand their upcoming implementation responsibilities under the Affordable Care Act (ACA), and employees struggle to understand what the bottom-line financial impact will be on their individual/family budgets.  Media reports add to the confusion as they struggle to keep up with the changing implementation schedule announced by the Department of Health & Human Services.  So, let's bring some focus to what the ACA requires in the way of future implementation requirements to assist employers in developing a winning compliance strategy.

First, let's briefly review what substantive changes have been implemented since September 23, 2010 for non-grandfathered plans:

 
Changes to Health Plans
 
  1. Lifetime limits have been eliminated.
  2. Annual limits on "essential health benefits" have been restricted.
  3. Adult dependents up to age 26 are now eligible for coverage.
  4. First dollar, "full cost" coverage for preventive care services is required.
  5. Non-discrimination rules prohibit favored treatment of "highly-compensated individuals".
  6. Prior authorization restrictions are eliminated, and cost sharing for emergency room services may not be greater than in-network rates.
  7. Pre-existing exclusions for participants under age 19 is eliminated.
  8. Primary care physician selection restrictions are eliminated.
  9. Pre-tax purchase of non-prescription over-the-counter drugs eliminated.
  10. Increased penalties for non-medical withdrawals from an HSA or Archer MSA implemented.
  11. Employee flex spending account contributions are now capped at $2,500.
 

Changes to Employer Processes

  1. Grandfathered status disclosures are required in plan materials.
  2. Recission/cancellation of coverage rules implemented .
  3. New appeals process for coverage disputes implemented.
  4. Transparency disclosure rules regulating claims payment, enrollment, cost sharing, rating, and out-of-network coverage policies required.
  5. Use of simple cafeteria plans for employers under 100 implemented.
  6. Summary of Benefits and Coverage explanations required for employees.
  7. 60-day notice of material modifications to a plan required.
  8. New electronic transaction standards implemented.
  9. Form W-2 reporting of value of benefits required for the 2012 tax year.
 
Changes in Legislation and Fees
 
  1. Comparative effectiveness fee (CORI) implemented through 2019.
  2. Medicare Tax increase (0.9%) for high earners implemented.
  3. Retiree drug subsidy deductions eliminated impacting tax liabilities.
 
Second, let's look at what future changes you can expect in upcoming years, beginning in 2013, as the full impact of the Affordable Care Act requirements is felt:
 
Changes to Health Plans
 
  1. All pre-existing condition exclusions must be eliminated. (2014)
  2. Employee out-of-pocket expenses must be limited to $6,250 for single coverage, and $12,500 for family coverage. (2014)
  3. Annual limits on "essential health benefits" are eliminated. (2014)
  4. Waiting periods for coverage cannot exceed 90 days. (2014)
  5. Wellness program incentive caps increase from 20% of the total cost of coverage to 30% (50% for tobacco use prevention programs). (2014)
  6. Non-discrimination rules based on health status go into effect. (2014)
  7. Strict community rating rules go into effect for individual or small group policies (100 or fewer employees); experience rating is prohibited. (2014)
  8. Coverage is required for individuals participating in clinical trials for life-threatening diseases. 
 
Changes to Employer Processes
 
  1. Employer notification regarding the existence of state health insurance exchanges and employee eligibility requirements. (2013/2014)
  2. Employer certification of employee coverage to IRS required. (2014)
  3. Automatic enrollment of employees required for employers with 200 or more employees. (2014)
  4. Electronic records/processing systems required. (2015)
  5. Large employers with more than 100 employees  are allowed to purchase health insurance for employees through state exchanges. (2017) 
 
Changes in Legislation and Fees
 
  1. Employer mandate requires offering employees "minimum essential coverage" or payment of $2,000 penalty per employee. (2014)
  2. State-based health insurance exchanges must be in place. (2014)
  3. Health insurance premium tax for insurance carriers implemented. (2014)
  4. Transitional reinsurance fees for insured and self-insured plans required for plan years 2014-2016. (2014)
  5. "Cadillac Tax" required for high-value health insurance benefit plans exceeding $10,200 for single coverage and $27,500 for family plans. (2018)
 

As you can see, the Affordable Care Act provides an uncertain journey for employers and employees navigating the health care act waters.  The question is: can you successfully navigate the icebergs ahead to clear skies, or will you be shipwrecked on the shoals and rocks inherent in the health care reform process. Progressive Benefit Solutions has extensive experience in assisting our clients with surviving and thriving in the new Affordable Care Act environment.  If we can assist you with developing tools and strategies associated with your ACA responsibilities, please contact Rusty Bramlage at 919-602-6555 or rbramlage@probenefitsolutions.com.  You can also find valuable timeline information on the Affordable Care Act at the DHHS website located at: http://www.healthcare.gov/law/timeline/index.html

Posted April 22, 2013

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