Healthcare Reform Next Steps for 2014 Tuesday, December 10, 2013 - - PowerPoint PPT Presentation

Healthcare Reform – Next Steps for 2014

Tuesday, December 10, 2013 2:00 pm – 3:00 pm EST

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Joe DiBella

• Executive Vice President of the Health & Welfare Practice
• Conner Strong & Buckelew

Phyllis Saraceni

• Senior Vice President, Compliance & Audit Practice Leader
• Conner Strong & Buckelew / AIM

Today’s Speakers

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Conner Strong & Buckelew’s sixteenth installment in ongoing series

• f webinars on key issues dealing with national healthcare reform
• Session will focus on 2014 healthcare reform next steps
• Special emphasis on action required to decide if adjustments or

plan amendments are needed for 2014 changes

Welcome and Agenda

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• March 23, 2010:

Patient Protection and Affordable Care Act (PPACA) signed into law

• June 28, 2012:

US Supreme Court upholds constitutionality of law

• November 6, 2012: President Obama re-elected along with divided Congress
• July 2013:

Employer mandate delay announced, until PY beginning in 2015

• October 1, 2013:

Exchange enrollment begins (website problems)

• October 28, 2013:

Six week extension announced, until 3/31/2014, for Americans to sign up for coverage and avoid new individual mandate tax penalties

• November 14, 2013: Transition period announced for individual/small group policies allowing

insurers to renew cancelled policies

• January 1, 2014:

Exchange coverage takes effect

• March 31, 2014:

Date Americans must have coverage to avoid individual mandate tax

• January 1, 2015:

Employer mandate begins

Major PPACA Milestones

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• Marketplace website rollout began 10/1/13
• Continued concerns about viability of Marketplace
• website “glitches” / 20-30% of federal website still to be built
• some part of website still “under-construction” including systems to transfer data

to insurers and make payments to them (administration looking to finish by 1/15/14)

• enrollment / signups / security concerns / hacking incidents
• Miscalculated subsidies will need to be paid back (even though insurer received

subsidy amount)

• Narrow networks – doctor/hospital of choice may not be available
• Policy cancellations
• Even supporters predicting chaos in 2014 as people start coming on / using benefits

(less choice, higher costs/deductibles, increased potential for fraud, more bureaucratic headaches, more disincentives for providers to enter/stay in medical profession)

Exchange/PPACA Implementation Continues

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• Law still facing significant resistance three plus years after passage
• Republicans and now some Democrats calling for repeal / delay / changes
• Law will be litigated for years - more than 65 current lawsuits targeting key

provisions, such as:

• contraceptive mandate (religious objectors) - case recently accepted by

US Supreme Court for review next year

• by its terms, law makes subsidies available only to people who buy

insurance through state-run exchanges, and not to those in federal exchange (if successful would abolish subsidies in much of country and make employer mandate unenforceable)

Challenges Ahead

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• Delays more commonplace as key 2014 deadlines approach
• Delay of Marketplace verification of consumers’ health insurance (employer

coverage) status and incomes (both essential for successful function of exchange system)

• Sign up date extended to 12/23/13 to get coverage effective 1/1/14 (gives

insurers only 8 days to confirm information and start care)

• Six week extension granted – people have until 3/31/14 to sign up and still be

in compliance with mandate that all Americans carry health coverage in 2014

• Transition period announced for individual/small group policy renewal (for

policies cancelled for 2014 market reforms)

• Although originally scheduled to go into effect in 2014, employer mandate (pay
• r play) and related IRS information reporting rules now delayed to 2015 (with

first information reports due in early 2016)

• employer community pushing for future rulemaking to allow for use of

Form W-2 as option for employers to satisfy pay or play reporting

• bligations

Delays to Key Deadlines

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Do you think PPACA exchanges will be delayed in 2014?

Unlikely. HHS secretary, Kathleen Sebelius, and others in Obama administration have repeatedly said delaying exchanges would create too many logistical problems for government and insurers, as well as for states where exchanges are working (like California and Connecticut). But……continued delays in various provisions are very likely.

Participant Question

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Will some people be without insurance on January 1?

Absolutely. There was never an expectation that every American would have insurance

• n 1/1/14.
• initial enrollment period was always set to run through 3/31/14
• most young adults will make their decisions closer to 3/31/14 deadline
• even before implementation problems, CBO projected that 7M people

would enroll in exchange plans in 2014 and 44M would remain uninsured

• for most, government fine for not having insurance much cheaper than

buying coverage

Participant Question

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What is the current regulation under the FTE calculation?

Mandate for businesses to decide whether they’ll provide health care or pay employer mandated (pay or play) fine now delayed until 2015

• companies should be looking at FT/PT data throughout 2014 to get

more information on which to base decision

• keep informed - don’t be complacent about “pay or play” decisions

Any decisions on how part time adjunct faculty hours of work will be defined?

• Existing rules still applicable (for now)
• More guidance (and possible changes to rules) expected

Participant Question

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Effective for PYs beginning in 2015:

• Employers with 50+ FTEs have to offer benefits to 95% of FTEs and

dependents that meet coverage and cost levels or pay penalty

• Does not require employers to offer health insurance, but if they don’t

they’ll pay tax:

> If NO COVERAGE offered, penalty = $2,000/FTE minus first 30 FTEs > If SUBSTANDARD COVERAGE OFFERED, penalty = lesser of:

» $3,000/FTE on exchange plan receiving credits/subsidies, or » $2,000/FTE minus first 30 FTEs

Employer Mandate - Review

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Whether paying or playing, large employers (50+ FTEs) must decide which employees are working on average 30 hrs or more/wk for 2015 (previously effective in 2014)

• Reprieve from employer mandate may be short-lived - unless additional guidance

issued, 1/1/14 starts clock for determining which employees will be considered FT and

• PT. As of 1/1/15, must be prepared to:
• Identify/count FTEs (30 or more hours/week)
• Identify/count PTEs (less than 30 hours/week - not subject to penalty)
• Identify variable hour and seasonal employees (can measure them over look-

back/measurement period to determine if FT)

• complex measurement/administrative/stability period “safe harbors” - for

summary of look-back measurement periods, see CSB 4/4/13 Webinar “Preparing for the Full-Time Employee Determination” – link to recording and presentation available on CSB Resource Center webpage

• if no transition rules provided going into 2015, must start counting hours in

2013/2014

FTE Determination - Review

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• If paying, must be prepared to justify determinations about

number of FTEs (used to determine penalty amount)

• If playing, be prepared to justify determinations about

number of FTEs and demonstrate FTEs are eligible for minimum essential coverage (and be prepared to justify plan affordability and minimum value standard)

FTE Determination - Review

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What is the impact on mid-sized companies?

All employers with health plans are required to comply with PPACA’s market reforms, and all employers with more than 50 FTEs are required to identify and report number of FTEs and analyze their plans for purposes of pay or play penalty rules to decide whether they’ll provide qualified health care or pay employer mandated (pay or play) fine.

How will it affect my health care coverage?

Each of us as individuals must be enrolled in qualified health plan for 2014 or pay individual mandate tax.

• Employer provided coverage will continue to provide higher-quality,

comprehensive, cost-effective, efficiently administered benefits.

• Covered employees will continue to recognize value these plans represent.
• Employer plans will continue to remain very appealing.

Participant Question

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Regarding the measurement period: If a company chooses a 3 month or 6 month period, does the company have to do a measurement every 3 months or every 6 months? I have been told different things including that the company can do a 3 month measurement once a year?

Measurement periods must run consecutively, so if you have 3 month measurement period you will need to run four measurement periods in single year.

How are leaves, including FMLA, NJFLA or military leaves calculated into the measurement of an employee's average hours worked per week?

Special (detailed) 26 week break period, rule of parity, and educational

• rganization rules apply when counting hours – refer to our 4/4/13 Webinar or

contact your CSB consultant for more information.

Participant Question

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I understand some provisions, but I need a greater understanding

• f how it's going to affect a large employer that's currently in a

unionized environment?

Employer is subject to pay or play mandate - not union/Taft Hartley/multiemployer plan. Employer (not plan) is also responsible for identifying which employees are FT (based on hours of service for employer). Employer must also file annual returns with IRS reporting terms/conditions of health coverage provided to FTEs.

• There are variety of complexities for union plans under PPACA and

additional guidance is expected on how pay or play rules should apply to employers participating in multiemployer plans.

Participant Question

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For employers under a CBA, can a large employer force their employees to obtain healthcare under Obamacare rather than under the CBA's multiemployer healthcare funds?

Over time, employers can renegotiate terms of CBA, but no employer can “force” an employee to obtain exchange coverage. And in any event:

• many fundamental unknowns about cost of coverage and operation of

exchanges should be taken into account when assessing their suitability as vehicle to provide health benefits

• exchanges were not designed to replace group coverage and do not

make economic or practical sense for vast majority of current multiemployer participants

Participant Question

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• Nondiscrimination requirements and limitations on insured plans -

delayed

• Insured plan rules (similar to existing self-insured plan rules)
• Effective date postponed until IRS publishes notice, which has not yet

been issued

• Grandfathered plans exempt
• Auto enrollment – delayed
• Employers with 200+ employees must automatically enroll new FTEs in

health plan

• Must give affected employees notice and opt out option
• Effective date postponed until IRS publishes notice, which has not yet

been issued

Other Major Provisions - Still Delayed

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• Some employers plan to trim benefits, eligibility, spousal benefits (coverage

must be offered to employees and their dependents, but not spouses)

• Other employers planning to utilize private exchanges
• Not clear if agencies will release guidance on use of private exchanges
• Some employers planning not only to cut their costs, but costs to employees as

well

• Exploring dual-plan approach - offer health care plan that meets

requirements of PPACA, as well as stripped down plan that does not meet all requirements, but generally is cheaper to employee

• Other employers planning to trim employees to get under 50-employee large

employer threshold, or create new PT positions to replace FT positions to reduce number of employees to whom health care will be provided.

• Watch for risks of potential employee challenges (careful planning and

communication needed)

Employer Reactions Mixed

Immediate Concerns for 2014

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• FSA $500 carryover
• Non-calendar year midyear election changes
• Reinsurance fee
• Cost-sharing / OOP limitations
• EHBs and benchmark plans
• Updates to SBCs
• Same sex marriage rules
• Actions required for HRAs
• 90 day waiting period rules

2014 – Immediate Issues

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Plan sponsors of health FSAs consider new carryover feature New IRS guidance modified “use-or-lose” rule for health FSAs - allows optional adoption of $500 (or less) carryover for Health FSA (not DCAP)

• Health FSAs subject to “use-or-lose” rule - meaning funds left unused at

end of year are forfeited.

• One exception, under special grace period rule - plans can to allow

employees to use amounts remaining from previous year to pay expenses incurred for certain qualified benefits during period of up to 2-1/2 months immediately following end of PY.

• Employee’s salary reduction contributions can be no more than

$2,500/PY.

• At plan sponsor’s option, employees participating in health FSAs will be

allowed to use up to $500 of unused health FSA amounts in next year, instead

• f forfeiting unused amounts.

Health FSA Carryover

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• Effective immediately, health FSA sponsor can do one of following as matter of

plan design:

• maintain traditional health FSA with no carryover or grace period feature,
• adopt/continue grace period feature, or
• adopt carryover feature.
• No action needed for employer that chooses either (1) to continue traditional health

FSA with no carryover or grace period feature, or (2) to continue grace period feature.

• If carryover, consider administrative (plan design) issues
• required FSA participation in next PY?
• require minimum salary reduction election in next PY?
• Minimum carryover amount (example – only carryover amounts $10 and over)

Carryover - Plan Design Choices

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Pros

• Increased participation of employees (FICA savings)
• Helps with wasteful end-of-year spending

Cons

• Loss of forfeitures (for employer)
• Some additional administration
• Requires cancellation of grace period
• Some HSA complications for employers that offer HDHPs with HSA -

need to assess how grace period/carryover feature affect individual's eligibility to make and receive HSA contributions. IRS guidance did not address this issue

Carryover – Pros/Cons

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Grace Period

• Applies to entire account balance
• Participants who planned for large expenditures during grace period won’t

lose contributions

• Ex: participant with year-end balance greater than $500 benefits from grace period

feature that contains no cap but has shorter duration for incurring and submitting claims, while participants with year-end balances of $500 or less may benefit from carryover feature having longer duration to submit and incur claims.

Carryover

• Duration not limited
• Reduces risk for participants with favorable health experience and low

claims

Carryover – Grace Period vs Carryover

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Considerations and next steps for employer adopting carryover feature:

• If plan sponsor adopts carryover, it cannot also provide grace period.
• Determine amount of carryover; same carryover limit must apply to all participants. Can be up

to $500 of unused health FSA funds (can choose lower amount).

• Inform participants of carryover provision
• Consider how this will impact administrative fees
• Consider that employee-paid forfeitures through "use-or-lose" rule often balance out loses from

employer advance reimbursement

• Could be effective for 2013

>

Must announce before end of 2013 PY

>

Must amend plan before end of 2014 PY (e.g., 2013 calendar year plan can allow carryover of unused 2013 health FSA funds into 2014 as long as adopts amendment by 12/31/14)

>

If grace period, must amend plan before 2013 PY- end to eliminate grace period

Next Steps to Adopt Carryover

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• Can still have run-out period following PY during which participants

can submit (and be reimbursed for) expenses from prior PY

• Amount carried over determined after all expenses have been

reimbursed for that PY after end of plan's run-out period

• $2,500 limit still applies
• Can have up to $3,000 available in FSA to reimburse health

expenses, plus amounts plan sponsor contributes (if any) Example:

> Participant has $500 of carryover and elects $2,500 salary

reduction, plan must make full $3,000 available for reimbursements at beginning of PY.

Run-Out and Plan Limit Apply

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Example: Calendar PY and annual run-out period from 1/1 to 3/31. Participants can elect $2,500 for year and plan is timely amended to provide for $500 carryover. No grace period and no non-elective employer flex credits.

• In 11/13, Pat elects $2,500 for 2014. By 12/31/13, Pat’s unused amount from

2013 PY is $800.

• On 2/1/14, Pat reimbursed $350 for expenses incurred in 2013 PY, leaving

carryover on 3/31/14 (end of run-out period) of $450 ($800 - $350) of unused health FSA amounts from 2013.

• $450 amount is not forfeited; but instead is carried over to 2014 and available to

pay claims incurred in that year so that $2,950 (that is, $2,500 + $450) is available to pay claims incurred in 2014.

• Pat reimbursed $2,700 during July 2014, and does not submit any other claims

during 2014. Pat has $250 as unused amount from 2014 to carryover (depending upon whether Pat submits claims during 2014 run-out period in early 2015).

Carryover Example

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 Employer with non-calendar year plans starting in 2013 should

consider allowing employees to make certain midyear cafeteria plan elections

• Non-calendar year cafeteria plans can offer special midyear election
• pportunity.
• enables employees to enroll in public exchange coverage

effective 1/1/14, and obtain exchange subsidies, if eligible.

• provides way to accommodate public exchange coverage options

and individual-mandate rules taking effect 1/1/14.

Midyear election changes in non-calendar year plans

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Midyear election changes for accident/health coverage permitted in either or both of these circumstances:

• Prospectively revoke or change existing salary-reduction election during PY that

began in 2013, regardless of any change-in-status event.

• Ex: Pat enrolled in employer coverage under non-calendar year cafeteria plan that begins

7/1/13 and ends 6/30/14. During 6/13 OE period, Pat elected coverage effective 7/1/13. Pat can obtain less expensive plan on exchange if he is eligible for exchange subsidies. If his employer decides to allow special midyear election change, Pat can revoke his cafeteria plan election and enroll in subsidized exchange coverage.

• An employee who did not make salary-reduction election before start of PY that

began in 2013 can make prospective election for accident/health coverage at any time during non-calendar year cafeteria plan that began in 2013.

• Ex: Pat is eligible for employer coverage under non-calendar year cafeteria plan that

begins 7/1/13 and ends 6/30/14, but he did not enroll during 6/13 OE. Pat will pay individual mandate tax if he does not have health coverage in 2014. If his employer provides for special midyear elections, Pat can make salary-reduction election and enroll in health coverage for remainder of PY ending 6/30/14.

Midyear election changes in non-calendar year plans

31 Change optional for employers and applies only to cafeteria plan elections for accident/health coverage in 2013-2014 non-calendar PY. Implementing change. Must amend cafeteria plan document for change.

• May apply change retroactively to first day of 2013 PY, as long as amendment is made by

12/31/14.

• Inform employees in writing about this special midyear election opportunity.
• Consult cafeteria plan administrators about how to implement change.

Special elections to enroll in employer coverage may be unnecessary. Under another special transition rule recently announced - no individual-mandate penalty will be assessed through PY ending in 2014 on eligible individuals who failed to enroll in employer-sponsored, non-calendar year plan

• Relief appears designed to protect individuals whose employers choose not to allow midyear

cafeteria plan elections by employees who failed to enroll before start of PY.

• Relief eliminates major reason for sponsors to allow new special midyear elections to enroll in

employer coverage.

Considerations for Employers

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What are the employer responsibilities on self insured plans?

Most of PPACA’s rules apply to insured plans and self-insured plans, although for many requirements insured plan carrier is responsible. Self-insured plan sponsors have obligation to address many and varied plan design and fee issues. CSB Updates and guidance identifies rules applicable to self insured plan sponsors.

Participant Question

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 Understand new reinsurance fees

All plans will be assessed fee to fund reinsurance program designed to stabilize individual insurance market

• 2014 rate $5.25/covered life/month, equivalent to $63/covered life for year
• fee set at $44/yr for 2015 (will set rate for 2016 at later date)
• affects sponsors of both insured and self-funded health plans for calendar

years 2014, 2015 and 2016

• health insurers make contribution for insured coverage
• TPAs responsible for making contributions on behalf of self-insured

health plans (plan entity liable for payment)

• self-insured, self-administered plan, without TPA, makes payment

directly

Reinsurance Fee

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Newly announced special exclusion for self-insured, self-administered plans (without TPA) for 2015 and 2016 years – most plans will be unable to qualify for exclusion from fee

• Paid on calendar year (rather than PY) basis
• Plan enrollment counts due to HHS by 11/15/14
• HHS sends bill by 12/15/14
• New schedule for collection of fee (due in two phases each year)
• First installment due at beginning of following calendar year (i.e., in

early 2015 for 2014 fee)

• Second due at end of following calendar year (i.e., in late 2015 for

2014).

Reinsurance Fee

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Review plans to confirm compliance with the cost-sharing requirements For PYs beginning on or after 1/1/14, all non-grandfathered group health plans’ annual cost-sharing out-of-pocket (OOP) maximum for all benefits (e.g., medical and prescription drugs combined) cannot exceed limits:

• $6,350 for self-only coverage; and
• $12,700 for all other coverage.

Applies to medical expenses related to essential health benefits (EHBs). Special rule for 2014 PY if plan uses multiple vendors - overall limit delayed until 2015 for plan using independent managers to handle pharmacy (or other) benefits. Definition of Cost-Sharing.

• Cost-sharing includes deductibles, coinsurance; co-payments; and similar charges.
• Cost-sharing does not include:
• Premiums;
• Cost-sharing for out-of-network benefits, if plan uses network; or
• Spending for non-covered services.

OOP Limits

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With a 12/1 renewal date, inclusion of OOP (cost sharing) limits will not affect us until 12/1/14 plan year, correct? Correct. PPACA market reforms generally effective for PYs beginning on or after 1/1/14. Under PPACA, employer must identify group health PY to ensure timely compliance with healthcare reform requirements. PY is generally 12-month filing year for Form 5500 purposes - so for ERISA plan, if plan’s renewal is December but filing year is January, then likely have to start complying as of 1/1/14. But if plan filing year is December, then effective date should be December. For plan not required to file Form 5500, such as state/local plan or fully insured plan with <100 participants, PY generally is policy/renewal year, presuming plan is administered based on that policy/renewal year.

Participant Question

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I would like to confirm whether a self-insured plan (non HDHP) that has no annual or lifetime limits must select a benchmark state for OOP limits?

Confirmed. A self-insured plan must choose benchmark plan if it is covering essential health benefits (EHBs). SI plans are not required to cover EHBs, but to extent they do cover EHBs, must comply with OOP limits, must have no lifetime dollar limits on EHBs, and must have no annual dollar limits on these EHBs by PYs beginning on or after 1/1/14.

Participant Question

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Review plans' design, select a benchmark plan to be used in defining EHBs, and confirm that no limits are imposed on such EHBs

• Effective for PYs beginning on or after 1/1/14, group health plans may not

establish any annual dollar limits on essential health benefits ("EHBs").

• In classifying which benefits are EHB, self-funded and large fully-insured

group health plans may refer to any state's designated "benchmark" plan.

• Self-insured plan that covers EHBs does not have to formally declare which

state they will model their EHBs after. But they do have to examine HHS- authorized state or federal EHB definitions and determine which works best for them.

• Consider state with lenient benefit schedule, such as Alaska.

EHBs and Benchmark Plans

39 

Update SBCs for new language For PYs beginning on or after 1/1/14 and before 1/1/15, SBCs must include language about whether plan provides minimum essential coverage and whether plan meets PPACA minimum value requirements. Plans have 2 options for complying : (1) using new SBC template, which includes required language, or (2) using prior SBC template and adding cover letter or similar disclosure with following language:

• Does this Coverage Provide Minimum Essential Coverage?

The Affordable Care Act requires most people to have health care coverage that qualifies as “minimum essential coverage.” This plan or policy [does/does not] provide minimum essential coverage.

• Does this Coverage Meet the Minimum Value Standard?

The Affordable Care Act establishes a minimum value standard of benefits of a health plan. The minimum value standard is 60% (actuarial value). This health coverage [does/does not] meet the minimum value standard for the benefits it provides.

Updates to SBCs

40 

Understand US Supreme Court decision and subsequent guidance issued

• n same-sex-spouse status

Employers should consider eligibility policies for same-sex spouses and their children under their welfare programs.

• no requirement under federal DOMA ruling or subsequent guidance that

employer must cover domestic partnerships, civil unions, or same sex married partners

• however state law may mandate certain rights for partners which may impact

fully insured plans and require insurance contract to provide certain benefits to partners

• self funded plans are not required to follow state law and can decide to provide

coverage or not provide coverage

Modifications to Eligibility Rules for Same Sex Partners

41 

Determine how to treat same-sex spouses for purposes of health and welfare benefits, and modify employee communications, SPDs, and handbooks accordingly

• must allow employees to pay for health insurance for their same-sex spouse on

pre-tax basis if employer offers hearth coverage

• consider other employee benefits offered to employees and spouses, such as life

insurance, disability, and employee assistance programs, and prepare policies to include or exclude same-sex spouses

• same-sex spouses may now be reimbursed for qualified medical expenses using

FSAs, HRAs, and HSAs

• same-sex spouses may be entitled to HIPAA special enrollment rights and must

be treated like other spouses with respect to COBRA

• no new obligations with respect to domestic partnerships and civil unions - but be

prepared to answer questions regarding what rights both same-sex and

• pposite-sex couples have as domestic partners

Modifications to Eligibility Rules for Same Sex Partners

42 

Review plan designs and confirm not offering any non-retiree-only, stand- alone health reimbursement arrangements ("HRAs") Effective for PYs beginning on or after 1/1/14, group health plans may not establish any annual dollar limits on EHBs.

• IRS clarified that because employer-provided HRAs constitute group health plans,

and necessarily include dollar limits on benefits, they will violate these rules if they are offered on "stand-alone" basis -- i.e., if they are not "integrated" with another group health plan -- unless they are otherwise exempt from rules (for example, as retiree-only HRA) Example: HRA under which employer makes specified dollar amount available for active employees to pay individual health insurance premiums -- so-called "defined contribution health plan" approach -- would likely violate these provisions

Actions Required for HRA Plans

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Regarding the requirement that recipients of HRA benefits be covered by insurance, is Medicare sufficient to allow HRA participation?

No. An HRA must be linked to other group health plan coverage in order to continue to offer benefits in 2014. Medicare is not considered other group health coverage. Only exception to Rule is retiree-only plan because these plans are not subject to PPACA’s group health plan mandates. More HRA rules:

• HRA participants are ineligible for public exchange subsidies
• Active-employee HRAs must be integrated and allow opt-outs
• Retiree HRAs must be ‘retiree only’ and may permit opt-outs

Participant Question

44  Review plan terms closely to make sure they comply with 90 day waiting period

rule

• “Waiting period” = time between when employee first meets eligibility requirements to

be covered by health insurance and when they can actually enroll.

• Many employers currently use "three month" or "first of month following 90 days"

waiting period

• For PYs beginning on or after 1/1/14, group health plans may not impose waiting

periods of more than 90 days before coverage becomes effective

• Applies to FT and PT employees
• Applies to any group health plan subject to PPACA (grandfathered, insured, self

insured, under 50 ees)

• “Excepted benefits” (e.g., certain dental/vision plans) not subject to limit
• All calendar days count towards 90 day period

90 Day Waiting Period

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• Applies to employees in waiting period as of 1/1/14.
• Ex: group health plan coverage for any employee hired before

1/1/14 cannot begin later than 3/31/14 — 90 days after 12/31/13

• Special rule allows for eligibility rules not based on lapse of time ( e.g.,

completion of license or certification requirements)

• Can’t be designed to avoid compliance with 90-day waiting period

limitation

• Cumulative hours eligibility requirements and special buy-in rules are

permitted

• Departments soliciting additional comments on application of

proposed rules to multiemployer plans and whether additional examples/provisions needed

90 Day Waiting Period

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I’m interested in recommended employee manual policy changes.

All sponsors should be addressing changes to communication materials. Many PPACA market reforms and rules require changes to plan design and also changes to SPDs, handbooks, employee manuals and plan administration to remain compliant.

• See Conner Strong & Buckelew Resource Center webpage for summaries
• f various requirements and suggested next steps for communications and

plan design changes – also link to various past recordings and presentations

Participant Question

47 

Consider whether to amend wellness programs to provide for increased incentive, and whether to make any changes to comply with updated rules

• Wellness program incentives increased
• effective for PYs beginning on or after 1/1/14
• maximum incentive increased from 20% to 30% of total cost of coverage (with

permissible increase to 50% in connection with programs that aim to reduce tobacco use)

• participation-only wellness programs continue to have no maximum incentive

limit Complicated rules also clarified distinctions between, and requirements for, participation-only and health-contingent wellness programs.

Wellness Programs

Preparing for 2014

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• Know requirements and deadlines
• Prepare and distribute
• exchange notices
• ther required employee communications (SMMs, SPDs, SBCs)
• Review/revise plan terms for 2014 compliance
• 2014 mandates
• current plans that may no longer be permitted
• Amend plan documents, SPDs, OE/new hire materials
• reflect changes to waiting periods, eligibility, plan design, and wellness

incentives

• Remove any pre-existing condition limitations
• Determine when first PCOR (research) fee due and how to facilitate payment

2014 Checklist

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• Understand reinsurance fee application and payment schedule
• Revise programs for same sex marriage issues as needed
• Decide whether to “play” or “pay”
• if playing, consider affordability and minimum value standards
• consider alternatives such as captives and private exchanges
• Consider FTE workforce effective 1/1/15
• for pay or play reporting and penalty assessment
• when and how to start counting hours
• Start planning for Cadillac tax in 2018
• for entities with high cost plans, plan design and labor contract

negotiation strategies need to be put in place to protect from this potentially exorbitant tax

2014 Checklist

Resources

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Agency Resources

Agency Healthcare Reform Sites: Health and Human Services (HHS): http://healthcare.gov/ Department of Labor (DOL): http://www.dol.gov/ebsa/healthreform/ Internal Revenue Service (IRS): http://www.irs.gov/newsroom/article/0,,id=220809,00.html?portlet=6

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Help from Conner Strong & Buckelew

Conner Strong & Buckelew Healthcare Reform website page at:

http://www.connerstrong.com/healthcare_reform

» News updates » Online library of client updates and alerts » Summary of major provisions » Detailed Year-by-Year timeline of changes » Outline of all aspects of law Check back for updates, news and analysis, and updated tools to help you navigate this complex process Call Conner Strong & Buckelew at 877-861-3220

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Other Resources from Conner Strong & Buckelew

Periodic Webinars

• Web-based presentations on health

care legislation, regulations and innovative ideas Email Alerts and Updates

• High level, quickly produced articles

about emerging issues intended to alert clients to legislative and regulatory developments

• Historic library available on line

Perspectives

• Thought pieces intended to identify

trends and issues, helping clients anticipate challenges

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