Simply put, a full-time employee is considered to be anyone working more than 30 hours per week, but sometimes it’s not that simple to determine which employees are hitting that requirement on a regular basis. That’s where the “look back period” comes in.

What’s in a name? Did you know the government now refers to the public Exchange as the Health Insurance Marketplace?

The Department of Labor (DOL) issued Technical Release 2013-02 on May 8th which provides the Model Notice to Employees of Coverage Options related to the Health Insurance Marketplace (referred to in the statute as the Exchange) as well as a revision to the COBRA Model Notice of Election to include information about the coverage options, in addition to COBRA, that may be available through a Health Insurance Marketplace.

Finally, it seems, the Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services (HHS) are ready to weigh in on the role of brokers in the Exchanges. The 12-page document issued on May 1 even goes so far as to say that “agents and brokers will play a critical role in helping qualified employers and employees enroll in coverage through the Small Business Health Options Programs (SHOPs).” That role in the SHOP, as well as all other Exchanges, and their compensation methods are outlined here.

The inflation adjusted limits for qualified HDHPs and contributions into an HSA that were announced for calendar year 2014 will affect health plan designs and communication to employees regarding their HSAs.

New SBC needed for 2014 to reflect key Health Care Reform provisions.

Today’s posting is from guest contributor Peter Antonie.

Under Health Care Reform, with the availability of Exchange plan coverage in 2014, is an employer still obligated to offer COBRA? The answer is, yes. Nothing in Health Care Reform changes or eliminates an employer’s obligation to offer COBRA and apply COBRA rights and responsibilities to qualified beneficiaries (QBs).

Specifically, the Department of Labor answered this question by stating that Health Care Reform did not eliminate COBRA, change the qualifying events for which COBRA is offered or change the duration of COBRA continuation coverage.

So, maybe the question really is, since individuals will be eligible for Exchange plan coverage, why are they offered COBRA for an employer’s plan when that group coverage is lost?

First, and foremost, COBRA applies to all of the group health plans (e.g., medical, dental, vision, etc.) that the QB was covered by the day before the loss of coverage. The QB may want to elect COBRA coverage...

Today’s blog is from guest contributor Peter Antonie. The Affordable Care Act (ACA), aka Health Care Reform, provides for a new fee applicable to group health plans, including certain health reimbursement arrangements (HRAs) and some Health Care FSAs. The Patient-Centered Outcomes Research (PCOR) fee is payable for specific a period of time. When applicable to the HRA or Health Care FSA, this fee is paid by the employer that sponsors the applicable HRA or Health Care FSA. The total PCOR fee paid is a function of the number of covered lives under the HRA or Health Care FSA. Regulatory guidance allows the HRA or non-Excepted Health Care FSA to count only the covered employees as the covered lives.

PCOR Fee

The purpose of this fee is to fund research by a nonprofit institute into the effectiveness, efficiency and quality of care. The intent is that the research done by the Patient-Centered Outcomes Research Institute will lead to lower costs in delivering health care and lower premiums for health...

Today’s blog is from guest contributor Peter Antonie.

Many of the provisions in Health Care Reform are targeted at non-grandfathered, non-excepted health plans. As these plans renew, on or after January 1, 2014, several provisions go into effect that will impact the scope and breadth of what coverage those plans provide.  These provisions are of special interest to employers in the “small employer group market,” which basically means employers with no more than 50 employees.

Recent guidance from the Departments of Health and Human Services, Treasury and Labor makes it clear that these small employer plans will need to provide coverage for essential health benefits (EHBs) and that the out-of-pocket cost (OOP) to a participant for these EHBs cannot exceed the threshold amounts that apply to a high deductible health plan (HDHP). Currently, the HDHP maximum OOP is $6,250 for single coverage and $12,500 for any coverage other than single plan, subject to adjustment for 2014 and later years.

In...

Health care reform (or the Affordable Care Act) attempts to benefit consumers by making health insurance more affordable, transparent, and accountable.  To further these goals, the U.S. Department of Labor (DOL) recently announced an interim final rule that provides protection to employees against retaliation by an employer for reporting alleged violations of Title I of the Act or for receiving a tax-credit or cost-sharing reduction as a result of participating in a health insurance exchange.  Title I includes a range of insurance company accountability requirements, such as the prohibition of lifetime limits on coverage or exclusions due to pre-existing conditions. 

An employer may violate the Act if the employee’s protected activity was a contributing factor in the employer’s decisions to take unfavorable employment action against the employee.  Unfavorable actions include: firing or laying off, blacklisting, demoting, denying overtime or promotion, disciplining, denying benefits, failure to hire...

This week, the U.S. Department of Health and Human Services (HHS) issued a final rule under health care reform that outlines health insurance issuer standards related to the coverage of essential health benefits (EHB) and the determination of actuarial value (AV).  The final rule generally reflects the proposed rule issued by HHS last November. 

Essential Health Benefits

The intent of the rule is to ensure that non-grandfathered health insurance plans in the individual and small group markets are consistent in that they cover benefits and services in 10 separate categories, also known as “essential health benefits.”  Under the statute, EHB must include items and services within at least the following 10 categories as well as meeting limitations on cost-sharing and the actuarial value requirements.

1.      Ambulatory patient services

2.      Emergency services

3.      Hospitalization

4.      Maternity and newborn care

5.      Mental health and substance...

Recently, the Departments of Labor, Health and Human Services (HHS) and the Treasury issued Frequently Asked Questions (FAQs) regarding implementation of certain provisions of health care reform, including the applicability of the no annual or lifetime limit provisions to HRAs and the use of HRAs to purchase individual policies. 

Under health care reform, plans and issuers of group health plans may not impose annual or lifetime limits on the dollar value of essential health benefits.  Essentially, an HRA, a group health plan, imposes an annual limit because it reimburses medical expenses (See Internal Revenue Code section 213(d)) only up to a certain dollar amount.  The preamble to the interim final regulations implementing the relevant section of health care reform clarified that an HRA that is integrated with other coverage as part of a group health plan would not violate the no annual or lifetime limit provisions because the other coverage that the HRA is so integrated with satisfies the no annual...

Guest Blogger: Peter Antonie The Employee Benefits Security Administration (EBSA) recently announced that the required notice that employers were to provide by March 1, 2013 to their employees regarding the coverage options available through the health care exchanges has been delayed until the necessary regulations and guidance are issued, probably by late summer or early fall 2013. EBSA is considering drafting model language that employers could download and use to notify their employees and new hires of:

1.      The existence of a state-based health insurance exchange and how the employee can contact the exchange to request assistance;

2.      A statement that, if the employer’s group plan share or allowed cost of benefits is less than 60% of such costs, the employee may be eligible for a premium tax credit if they purchase a plan through a state exchange; and

3.       Advice that, upon purchase of a plan through an exchange, the employee may lose any employer contribution to an offered...

On January 12, 2013, the House of Representatives passed the American Taxpayer Relief Act (ATRA) of 2012. This so-called “Fiscal Cliff” legislation is intended to avert the negative economic effects resulting from the Budget Control Act of 2011.

With the passage of this fiscal cliff legislation, Congress also addresses a few outstanding issues affecting employee benefits.

With President Barack Obama re-elected and the status quo maintained in the legislative branch (a Republican majority in the House and a Democratic majority in the Senate), implementation of the Patient Protection and Affordable Care Act (PPACA) will likely proceed as previously scheduled. There are still many unanswered questions and many vaguely defined timelines, but in the coming year, employers can expect a steady stream of guidance and clarification from the tri-agency task force (the Department of Labor, the IRS and the Department of Health and Human Services).

On November 20, 2012, in an early Thanksgiving treat of sorts, the agencies issued a flood of proposed rules related to implementation of the Affordable Care Act. 

The proposed rules covered everything from key insurance market reforms (i.e., guaranteed availability and renewability of coverage, permissible rating factors for premiums, risk pool restrictions, and catastrophic coverage plans) to essential health benefits, actuarial value and accreditation standards, and expansion of employment-based wellness programs. 

The proposed rules will appear in the Federal Register on November 26, 2012. The insurance market reform and essential health benefit proposed rules will have a 30-day comment period and the wellness proposed rule will have a 60-day comment period. 

Look for more posts in the coming weeks regarding these proposed rules.  

Happy Election Day!           

No matter where the results lie, expect a flood of regulations regarding health care reform to be released following the election, possibly as early as Wednesday.  The Department of Health and Humans Services has been quietly working on regulations, but has refrained from releasing them for the past couple of months in an attempt to avoid any controversy before the election. 

If Obama wins, then states have to face a Nov. 16 deadline to inform the Obama administration whether they will implement a health insurance exchange on their own, work with the federal government on a partnership exchange, or let the federal government operate the exchange exclusively.  The Obama administration will continue implementation work on health care reform for the next several years, but will likely work to put as many remaining pieces of the law into place as soon as possible. 

If Romney wins, expect the Obama administration to issue a flood of regulations fast. ...

Now that the Supreme Court has decided the fate of the Affordable Care Act (aka health care reform), how does health care reform affect Health Savings Accounts (HSAs)?

HSA Basics

An HSA is a tax favored medical savings account that can be contributed to by, or on behalf of eligible individuals who are covered by certain high deductible health plans (HDHPs).  The account may reimburse certain medical expenses of eligible individuals, their spouses and tax dependents.  Because the individual owns their HSA and the account is not tied to an employer or to employment status, the account is transferrable and amounts will not be forfeited. 

Eligible individuals must meet several criteria.  For any month that an individual contributes to an HSA, the individual: cannot be another individual’s tax dependent, cannot be enrolled in Medicare, must have current coverage under an HDHP and cannot be covered by any other health plan that provides coverage for a benefit prior to satisfying the...

Now that the Supreme Court has put their stamp of approval on the Affordable Care Act (ACA), what does this mean for employers and plan sponsors?  Employers and plans sponsors should work diligently to continue implementing ACA’s compliance requirements and should be prepared for a large amount of regulatory guidance coming forth from the agencies.  What follows is by no means an exhaustive list.

Quick review on what stays:

Plans must provide dependent coverage up to age 26; Non-grandfathered plans must provide preventative care without cost-sharing; No reimbursement from HRAs or Health Care FSAs for OTC items without a prescription; Plans cannot rescind coverage retroactively, except on account of fraud; and Enhanced internal and external claims appeal requirements. Requirements coming in 2012 and 2013 include:

Plans must provide a Summary of Benefits and Coverage upon application, enrollment, and re-enrollment in the plan (for open enrollment periods starting...

In a landmark ruling, The Supreme Court announced this morning (Thursday, June 28), that the entire Affordable Care Act is upheld. The legislation is deemed constitutional in its entirety. This means that all of the provisions of PPACA (Obama Care) - including the controversial individual mandate - will go forward as written.

In a historic 5-4 decision that will affect all Americans, the Supreme Court upheld the Affordable Care Act (ACA) as constitutional, with a narrow reading of the Medicaid issue.  So, how did the Court come out on the issues and what was its reasoning for the majority opinion?

Anti-Injunction Act

The issue here is whether the Anti-Injunction Act (AIA) prevents the Court from deciding the case until 2014, when the individual mandate goes into effect and the tax is actually collected.  The AIA prohibits litigants from bringing tax disputes to court until a tax applies and the individual pays it.   

The Court looked to Congress’s intent in labeling the payment a “penalty” and not a “tax” for AIA purposes, but noted that a mere label will not control whether the payment is actually a tax under the Constitution for purposes of deciding the individual mandate issue.  Thus, the Court found that the AIA does not bar the Court from deciding the rest of the case.   Interestingly, the Court...

The wait is over!  The Supreme Court has issued its decision on the Affordable Care Act.  Chief Justice Roberts has joined the left of the Court in finding that the individual mandate is constitutional, by a vote of 5-4.  Thus, the rest of the Affordable Care Act survives as well - with a narrow reading of the Medicaid issue.  More details to come once I read through the opinion.  

After what’s felt like a very long time of “what-ifs”, the Supreme Court is expected to issue its decision on the Affordable Care Act (ACA) by the end of this month.  Some have called the decision the most significant case regarding federal power in a century.  Let’s review a few of the possible outcomes:

1.      Uphold ACA 2.      Strike down the individual mandate, but find it severable from the rest of ACA, ACA stands 3.      Strike down the individual mandate, find it non-severable from the rest of ACA, ACA struck down 4.      Decision deferred Uphold ACA

If ACA stands in its entirety, expect a mad rush at the state and federal level to begin, or continue implementation in time for 2014 when the insurance reforms are effective (though some states may gamble with the Presidential election right around the corner and Mr. Romney’s promise to repeal the law if elected).  States will be accountable for a greater share of Medicaid funding in the future, so other programs...

Late Wednesday afternoon, May 30, the IRS released new guidance regarding the $2,500 limit for health FSA salary reductions in the form of IRS Notice 2012-40. There were several key changes, including a clear determination that “taxable year” refers to the plan’s “plan year.” Therefore, the rule will not affect any plans beginning prior to January 1, 2013, and fiscal plan years will not be impacted until the first plan year beginning on or after January 1, 2013.

The Departments of Labor, Health and Human Services, and Treasury – the departments responsible for implementing certain health care reform requirements – have released guidance on several key health care reform provisions effective in 2014.  The guidance – in the form of FAQs from employers and other stakeholders – covers automatic enrollment, employer shared responsibility, and the 90-day limitation on waiting periods and outlines rulemaking approaches under consideration by the departments and invites public comments.

Below find a brief overview of each health care reform provision covered by the FAQs and the key takeaways. 

·        Automatic Enrollment – Employers with more than 200 full-time employees and those subject to the Fair Labor Standards Act are required to automatically enroll new full-time employees in one of the employer’s health benefit plans (with adequate notice and the opportunity to opt out) and to continue the enrollment of current employees.  The FAQs indicate that regulations...

Last week, the IRS released updated FAQs regarding reporting of employer provided health coverage on Form W-2. The updated FAQs incorporate guidance set forth in Notice 2012-9. Generally, employers filing more than 250 Forms W-2 must report the value of employer provided health coverage starting in calendar year 2012 (on Forms W-2 furnished to employees in 2013).

Find the FAQs here: http://www.irs.gov/newsroom/article/0,,id=237894,00.html

The FAQs include a link to a helpful chart that breaks down which types of coverage employers need to report on Form W-2.

Find the chart here: http://www.irs.gov/newsroom/article/0,,id=254321,00.html

It’s been a busy week!

The Departments of Labor and Health and Human Services, along with Treasury/IRS, released a final rule on the health care reform requirement that group health plans provide a summary of benefits and coverage (SBC) to consumers.

Originally slated for March 23, 2012, the final rule requires plans with plan years that start September 23, 2012 or later to supply SBCs in their next open enrollment. Other changes from the proposed rule include:

· allowing the SBC to be incorporated into the Summary Plan Description (SPD) if the SBC information is intact and prominently displayed at the beginning of the SPD;

· permitting reasonable attempts to comply with the 4 page, double-sided, page limit;

· reducing the number of coverage examples from three to two (normal delivery childbirth and Type 2 diabetes);

· recognizing that if a plan’s terms cannot be reasonable described using the template, the plan or insurer’s best efforts to comply with the template is permissible;

...

Recently, the Department of Health and Human Services (HHS) issued a statement indicating that nonprofit employers who, based on religious beliefs, do not currently provide first dollar contraceptive coverage in their health insurance plan, have until August 1, 2013 to comply with the rule. Some expected that such employers would be completely exempt from the rule because churches and other houses of worship are exempt. Since the statement was released, all sides have weighed in and tensions surrounding the issue are escalating.

In August of 2011, HHS issued an interim final rule, stemming from Health Care Reform, requiring most health insurance plans to cover preventative services for women, including FDA-approved contraceptives like the birth control pill and morning-after pill, without charging a co-pay, co-insurance or a deductible, effective August 1, 2012. In order to be exempt from the rule concerning contraceptives, an organization must serve primarily persons who share its religious tenets. After...

Recently the Department of Health and Human Services (HHS) issued interim final rules adopting HIPAA transaction standards for health care electronic fund transfers (EFT) and electronic remittance advice (ERA).

Background

The interim final regulations implement parts of the Affordable Care Act – health care reform – which requires the adoption of standards to support and facilitate health care EFT transactions.

Health plans send health providers EFT payments separately from ERA because the information is sent in different electronic formats, through different networks and with different data for different business uses. The ERA contains information regarding the adjustments that the health plan has negotiated with the provider – rarely does a health plan pay the provider the exact amount that the provider bills. In turn, the providers use the ERAs to post payments, but cannot automatically link the postings to the EFT. Providers end up spending a significant amount of time manually reconciling...

In recent blog posts, our guest contributor, Peter Antonie, summarized IRS guidance on Form W-2 reporting requirements and I’ve covered the $2,500 Health Care FSA limit. I’d like to send readers on over to our News Center for some excellent coverage of W-2 Reporting and the $2,500 limit.

Some quick comments on the $2,500 limit. We’ve received several questions regarding how the $2,500 Health Care FSA limit) applies to plan years that cross into 2013. Employers with plan years beginning at any point between February 1, 2012 and December 1, 2012 who plan to set a Health Care FSA limit above $2,500, should ensure that employees understand the implications of their elections.

Example: Company QRS offers a Health Care FSA with an upcoming plan year of February 1, 2012 – January 31, 2013. Company QRS does not set a maximum salary reduction contribution limit for the Health Care FSA. Edward is expecting some pretty high medical expenses for the upcoming plan year, so he elects $12,000 for his Health Care FSA ($12,000 / 26 pay periods = $461.53 per pay period in salary reductions). Come February 1, 2013 Edward decides to elect the maximum of $2,500 for his Health Care FSA ($2,500 / 26 pay periods = $96.15 per pay period in salary reductions). This will result in salary reduction contributions of $3,230.66 for taxable year 2013 (2 pay periods * $461.53 + 24 pay periods * $96.15 = $3230.66). Edward will need to be taxed on the $730.66 that exceeds the limit.

...

2011 certainly kept us busy with health care reform taking up the bulk of our efforts. As we kickoff 2012, I thought I would highlight some of the upcoming issues affecting the benefits world.

Supreme Court & Health Care Reform – The Supreme Court will hear challenges to health care reform just as the presidential election swings into high gear. Expect oral arguments in March 2012 and a possible decision in June. W-2 Reporting – Beginning with tax year 2012, employers who file more than 250 Form W-2s must report the aggregate cost of applicable employer-sponsored health coverage on W-2s provided to employees (using Box 12 and code DD). Employers who file less than 250 Form W-2s get a pass until the IRS issues further guidance. See IRS Notice 2012-9 (http://www.irs.gov/pub/irs-drop/n-12-09.pdf). $2,500 Limit on Health Care FSA Salary Reductions – Although the limit is effective beginning in tax year 2013, non-calendar year Health...

Beginning in 2014, health care exchanges are expected - indeed, mandated – to play a key role in the implementation of reform legislation. Exchanges are intended to serve and address consumers who don’t have employer-sponsored coverage or cannot afford employer-sponsored coverage. The basic concept of the exchange is to facilitate the interaction between insurance companies and consumers, using a common platform for comparison of qualified health plans.

 

On Friday, President Obama announced that his Administration will implement a policy that seeks to accommodate religious liberty while protecting the health of women. Under the new policy, women will still have access to free preventive care that includes contraceptive services – no matter where she works. And as previously announced, churches and houses of worship will be exempt from the requirement to refer or provide coverage for contraception. But if a woman’s employer is a charity, hospital or other religious organization that has a religious objection to providing contraceptive services as part of its health plan, her insurance company – and not the hospital or charity – will be required to reach out and offer her contraceptive care free of charge. This policy has earned praise from a wide range of individuals and organizations, including many organizations that will be directly affected by this policy.

In an effort to help consumers make more informed health insurance decisions, the Obama administration released new rules requiring insurers to provide clear, consistent and comparable summary information about their health plan benefits and coverage. Insurers must communicate what each health plan will cover, what limitations or conditions will apply, and what each service will cost, all in standardized and straightforward language.

 A new report from Highlands, a leader in employer health care compliance and benefits management, finds that less than half of U.S. employees are ready to comply with healthcare reform provisions that call for the distribution of standardized Summaries of Benefits and Coverage (SBCs).

In a controversial, but not completely unexpected decision, the Obama administration announced this past week that health insurance plans, excluding specific categories of “religious employers,” must cover contraceptives for women free of charge. In August, the administration had made it known that it intended to require coverage of contraceptives for women, as recommended by an expert panel of the National Academy of Sciences, but the White House decided to reconsider the issue after hearing protests from the Catholic Church and prominent Republicans.

The U.S. Supreme Court is preparing to make historical rulings regarding the constitutionality of the Affordable Care Act’s “individual mandate” or “minimum coverage” provision. Even if the “mandate” is deemed unconstitutional, there will be plenty of debate as to whether it can be severed from the rest of the legislation. They will be hearing testimony in March and will likely give their ruling in June or July.

On December 16, 2011, the Department of Health and Human Services (HHS) released a bulletin outlining its intended approach to rulemaking to define “essential health benefits” (EHB). 

Background

Effective for plan years beginning on or after January 1, 2014, health care reform requires that certain health plans ensure that coverage includes an EHB package, which means the plan must provide EHB, limit cost-sharing, and provide either 60%, 70%, 80%, or 90% of the full actuarial value of benefits provided under the plan (known as “metal levels of coverage”).

The health plans that must provide EHB coverage include non-grandfathered plans in the individual and small group markets, Medicaid, and Basic Health Programs.  Self-insured group health plans, plans in the large group market, and grandfathered health plans are not required to cover EHB. 

The Secretary of HHS has been tasked with the role of defining EHB, subject to certain requirements and limitations spelled out in health care...

On December 5, 2011, the U.S. Department of Labor’s (DOL) Employee Benefits Security Administration announced two proposed rules under health care reform that greatly strengthen DOL’s oversight and enforcement authority for MEWAs.    

Background

In general, a multiple employer welfare arrangement (MEWA) is an employee welfare benefit plan, or any other arrangement which provides health coverage to the employees of two or more unrelated employers who are not parties to a bona fide collective bargaining agreement.  MEWAs are attractive to small employers who seek access to the low cost health coverage available to large employers.    

Although there are legitimate MEWAs operating in the marketplace, too often MEWAs have become a vehicle for criminals to defraud consumers and employers.  MEWAs take advantage of gaps in the law to avoid State insurance regulations (such as the requirement to maintain sufficient funding and adequate reserves to pay claims). 

Here’s how it works: employers...

On December 2, 2011, the Department of Health and Human Services (HHS) released the final medical loss ratio (MLR) rule.  Under the final rule, broker commissions remain administrative expenses in the MLR calculation. 

Background

In an effort to ensure that consumers receive more value from insurers for their premium dollars, health care reform requires insurers to spend 80% (individual and small group markets) or 85% (large group markets) of premium dollars on medical care and health care quality improvement in 2011.  Effective 2012, if insurers do not spend the threshold amount on patient care, as opposed to administrative expenses, then they must provide rebates to consumers.

In December of 2010, HHS issued implementing regulations of the rule, which became known as the medical loss ratio.  HHS requested comments and now that comment period has closed, HHS has issued a final rule. 

Final Rule

The gist of the original rule as described above has not changed.  Changes in the final rule mostly focus on technical issues in the way insurers calculate and report their MLR and the process for distributing rebates. 

...

The Supreme Court has agreed to review several challenges to health care reform, most likely in March, with a decision in June.   While the fact that the court has agreed to hear the case is not surprising, the time allotted to oral arguments highlights the significance of the case and the complexity of the issues involved – five and a half hours instead of the usual one. 

The court will focus on the following issues:

Individual Mandate - Whether Congress has the Constitutional power to require that Americans obtain health insurance by 2014 or pay a tax penalty; At issue is whether the commerce clause of the Constitution allows Congress to essentially force all Americans to buy an expensive product for the rest of their lives.  Severability  - Whether the rest of the health care reform law survives if the individual mandate is found to be unconstitutional, i.e., whether the individual mandate can be “severed” from the rest of the law; Anti-Injunction Act...

You may have heard that health care reform imposes a $2,500 limit on annual salary reduction contributions to Health Care FSAs, effective for taxable years beginning after December 31, 2012.  The $2,500 limit is indexed for inflation for taxable years starting with 2014.  As we await more guidance from the IRS, we’d like to discuss a few issues related to the limit and offer some examples to help you in the interim. 

 

Are Employer Contributions included in the limit?

Possibly.  Employer contributions to Health Care FSAs will not factor into the limit unless it is a contribution that can also be received as additional compensation (i.e., cash) that the employee allocates to the Health Care FSA.  This makes sense because the limit really focuses on employee salary reduction contributions to the Health Care FSA. 

 

Example: Company DEF contributes $500 to each employee’s Health Care FSA.  The contribution cannot be cashed out or used for any other purpose.  Jim may still elect...

In August, the Eleventh Circuit Court of Appeals rejected the individual mandate provision of the Obama administration’s health care reform law, that everyone must purchase insurance or be covered by an employer’s group health plan, as a “wholly novel and potentially unbounded assertion of congressional authority,” but upheld the rest of the law.  The Eleventh Circuit was one of three federal courts of appeal that have issued decisions on the law so far – all reaching different conclusions.  Many watched and waited to see the Obama administration’s strategy unfold.  Would the Justice Department seek a review of the decision by the full Eleventh Circuit (a condensed three-judge panel issued the first decision) or go straight to the Supreme Court? 

Although the Supreme Court petition was not due until November, last week the Justice Department filed their petition formally appealing the Eleventh Circuit decision.  The Obama administration asked the Court to uphold the individual mandate along with the rest...

The Patient Protection and Affordable Care Act (PPACA) contains Medical Loss Ratio (MLR) provisions that require insurance companies to spend at least 80% of revenue on health care for small employers and 85% of revenue for large employers.  If the insurance company fails to meet these new standards, the new provision will require the insurance companies to provide a rebate beginning in 2012.

The loss ratio formula in PPACA differs from the way MLRs have traditionally been defined. Traditionally, the MLR is calculated by dividing an insurer's medical care claims by premiums. Under PPACA’s MLR formula, the numerator includes the insurer’s expenses for activities that improve health care quality such as education, counseling, care coordination, and wellness assessments in addition to medical claims. Additionally, the denominator of the MLR subtracts from insurer’s premiums all federal and state taxes, licensing and regulatory fees.

The HSA Council of the American Bankers Insurance Association in a...

Beginning March 12, 2012, health care reform requires group health plans to provide a four-page summary of benefits and coverage (SBC) and access to a separate glossary with uniform definitions of specific medical and coverage-related terms to all eligible individuals.  The goal of the SBC is to provide consumers with access to information in plain English to help them understand the coverage they have or the differences in the coverage and benefits by health plans when they are shopping for a new plan.  In the August 22, 2011 Federal Register, the Internal Revenue Service, Department of Labor, and Department of Health and Human Services (the agencies responsible for implementing many of health care reform’s requirements) issued long-anticipated proposed regulations that detail the requirements of the SBC.  The guidance also includes templates of proposed formats.

The 34-page proposed regulations clarified that the statutory reference to a four-page summary actually means four double-sided pages in at least...

As the third party administrator of Health Reimbursement Arrangements (HRAs), we have closely followed the implementation of various provisions of the Patient Protection and Affordable Care Act (PPACA), better known as Health Care Reform, and how those provisions might impact the plans we offer.

One of the provisions is a prohibition on a health plan imposing an annual cap on the reimbursement of essential health benefits.  This no-annual limit provision went into effect September 23, 2010 and health plans that were in effect on that date and have an annual cap were provided the opportunity to apply for a waiver from the provision. Waivers must be filed no later than September 22, 2011. The waiver would allow the cap to remain in effect until the plan removes the limit, but no later than January 1, 2014.

By their very nature, virtually all HRAs have an annual limit that applies to reimbursement of expenses, which is the maximum funding of the account available to the covered employee, and family if any.

...

Recently, a 2-to-1 majority of the Eleventh Circuit Court of Appeals, in Atlanta, found that the individual mandate provision of the Obama administration’s health care law is unconstitutional.  The provision, known as the “individual mandate,” would require Americans to purchase health insurance or pay a tax penalty beginning in 2014.  The decision was a victory for the 26 Republican attorneys general and governors who challenged the law on behalf of their states. 

The case essentially turns on whether the Commerce Clause of the Constitution – which allows Congress the broad power to regulate commerce – is so broad as to allow Congress to force individuals to purchase a product or pay a penalty.  The Obama administration had argued that, by making a choice not to purchase insurance, such individuals usually end up passing on the cost of their inevitable health care needs to hospitals, insured individuals and governmental agencies – actions that Congress can legislate under its broad authority to regulate...