Health Care Reform
What Changes On 9-23-2010????
This:
Summary of Coverage Requirement (2010)
Beginning with the first plan year on or after September 23, 2010, health plans must provide a new Summary of Coverage to all employees. There are very specific criteria for this new summary – it must be no more than four pages in length, can be no smaller than 12pt font, and must be written in a “culturally linguistically appropriate manner.” The summary must be distributed to employees at the time of enrollment in either a paper or electronic form, and a notice of material changes must be provided to employees at least 60 days prior to the effective date. While this requirement is effective beginning this year, required regulations have not been issued yet, and the government has 12 months to identify all of the criteria for the new Summary of Coverage.
Value of Coverage Reporting (2011)
Beginning in January of 2012, employers will be required to calculate and report the value of their employer-sponsored coverage on their employees’ W-2 forms. This rule is generally effective for coverage offered beginning January 1, 2011 and includes the value of major medical coverage, executive physicals, HSA contributions, on-site medical clinics (only if they provide more than minimum care), Employee Assistance Programs, Medicare supplemental policies, and employer contributions to health care FSAs. Interestingly, health FSA salary reductions are not included in this report, even though they will be included in the “Cadillac tax” calculation beginning in 2018.
TIP: In calculating the value of benefits, both the employer and employee cost portions must be included. To make this easy, employers can use their COBRA rate calculations with little modification – simply remove the 2% administrative surcharge from the COBRA premium to determine the overall value to report to the IRS.
Exchange Related Reporting (2013)
Starting in 2013, employers must provide a new notice to employees at the time of hiring and to all of their existing employees no later than March 1, 2013. This notice will inform employees about the new health insurance exchange that will be available
January 1, 2014, tell them how to qualify for a premium subsidy through the exchange, and warn them that they will lose the employer’s contribution for health coverage if they enroll in a plan through the exchange and do not qualify for a “free choice voucher.”
Play or Pay Reporting (2014)
Beginning in 2014, “applicable large employers” will be required to provide a report to the Secretary of Treasury and to each full-time employee by January 31st of each year.
This report must identify the employer, include the number of full-time employees for each month during the year, and provide a certification as to whether the employer offers minimum essential coverage as defined by the statute to its full-time employees. If the employer does provide minimum essential coverage, the report must also include the length of any waiting period, the months of the year that coverage was offered, the monthly premium for the lowest cost option in each enrollment category, and the employer’s share of total allowable costs of benefits. Here’s where it gets tricky: if the employee contribution exceeds 8% of any employee’s applicable household income, the report must also include the option for which the employer pays the largest portion of the premium along with the portion paid.
- No Pre-Existing Condition Exclusions for Anyone Under Age 19
- No Arbitrary Rescissions of Insurance Coverage
- No Lifetime Dollar Limits on Coverage
- Restricted Annual Dollar Limits on Coverage
- Broader Doctor Choice
- No Higher Out-of-Network Cost-Share for Emergency Department Services
These are labeled as interim final rules (IFRs), which means final rules may differ. All provisions are effective on the first plan anniversary on or after 9/23/2010
No Pre-Existing Condition Exclusions for Anyone Under Age 19
Plans are prohibited from denying coverage to anyone under the age of 19 based on a pre-existing condition. This ban includes both benefit limitations and coverage denials. These policies apply to all individual market and group health insurance plans. The requirement will be extended to all ages starting in 2014. Grandfathered individual plans are exempt from this requirement.
No Arbitrary Rescissions of Insurance Coverage
Insurers and plans will be prohibited from rescinding coverage – for individuals or groups of people – except in cases involving fraud or an intentional misrepresentation of material facts.
No Lifetime Dollar Limits on Coverage
Insurers and employers are prohibited from imposing lifetime dollar limits in all health plans and insurance policies issued or renewed on or after September 23, 2010.
Restricted Annual Dollar Limits on Coverage
The rules will phase out the use of annual dollar limits on “essential health benefits” over the next three years until 2014 when the Affordable Care Act bans them for most plans. The limits can only apply to essential health benefits; however, the rule does not provide any further detail on the definition of “essential health benefits” beyond that provided in the law.
- Plans issued or renewed beginning September 23, 2010, will be allowed to set annual limits no lower than $750,000
- Beginning September 23, 2011, minimum limit will be raised to $1.25 million
- Beginning September 23, 2012, minimum limit will be raised to $2 million
- Beginning January 1, 2014, all annual dollar limits on coverage of essential health benefits will be prohibited
Other Upcoming Reporting Requirements:
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