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The IRS announced two new situations in which a participant may revoke his or her cafeteria plan election in order to purchase coverage through a marketplace (Exchange) established under the ACA.  These provisions do not apply to FSAs.  Change is permitted provided:

Employee Enrolls in Marketplace Coverage

1. The employee is eligible for a special enrollment period during the Marketplace’s annual open enrollment period; and
2. The employee enrolls in Marketplace coverage, effective immediately following the last day of the employer’s coverage.

Reduction in Hours of Service

1. The employee changes from full-time status to part-time status (i.e., reasonably expected to average less than 30 hours per week), even if the reduction in hours does not result in the employee ceasing to be eligible under the group health plan; and
2. The employee enrolls in another plan that provides MEC, effective no later than the first day of the second month following the month the original coverage is terminated.

Cafeteria plans must be amended to provide for the new permitted election changes in accordance with the guidance under Notice 2014-55.

Interim Final Rules related to the coverage of preventive services under the Patient Protection and Affordable Care Act (PPACA) were recently published. A complete list of required preventive services is available from the U.S. Department of Health and Human Services. The following is a partial listing of preventive services required to be covered under Health Care Reform.

For Adults
Blood pressure screening
Cholesterol screening for adults of certain ages or at higher risk
Colon cancer screening for adults over 50
Immunization vaccines (doses, recommended ages, and recommended populations vary)
Obesity and tobacco use screening
Type 2 diabetes screening for adults with high blood pressure

For Children
Autism screening for children at certain ages
Blood pressure screening
Alcohol and drug use assessment for adolescents
Developmental screening for children under age 3
Immunization vaccines from birth to age 18 (doses, recommended ages, and recommended populations vary)
Lead screening for children at risk of exposure
Obesity screening and counseling

Note:
The requirements to cover recommended preventive services without cost-sharing do not apply to grandfathered plans.
Coverage of preventive services does not disqualify High Deductible Health Plans HSA qualifying status.

Employee’s eligible for Cobra can opt for “Marketplace coverage” instead of COBRA.

Employees and their families eligible for, but not enrolled in, COBRA continuation insurance are able to enroll in Marketplace coverage outside of the normal open enrollment period, in most cases. It’s very possible employees eligible for COBRA continuation coverage could save on their monthly health insurance premiums by purchasing health insurance through the Marketplace. (Most employers offer a two or three plan choices with one carrier while the Marketplace makes all options, insurance carriers and plan designs, available that are offered in the Exchange.)

Updates to model notices informing employees of their eligibility to continue health-care coverage through the Consolidated Omnibus Budget Reconciliation Act are now available. The updates make it clear to workers that if they are eligible for COBRA continuation coverage when leaving a job, they may choose to instead purchase coverage through the Health Insurance Marketplace.

Employees and their families who are eligible for employer-sponsored coverage generally must be informed of their right to COBRA continuation coverage at the start of employment. They must also be informed of their right to purchase COBRA coverage when separating from a job. The proposed changes to the model notices would offer information on more affordable options available through the Marketplace, where workers and families may be eligible for financial assistance that would not otherwise be available for COBRA continuation coverage.

Scenario: Employee has a HDHP and goes to Hospital. Hospital offer to discount the employee’s deductible by 50%. (i.e. Employee owes only half of the deductible, $3,000 debt is now $1,500.) The plan pays the full amount due above the deductible.

Has fraud been committed (knowingly or not)?

It is fraud because there’s a 3rd party involved – the insurance carrier or self-funded medical program. are providing an HDHP contract which pays “after the deductible has been met” – pursuant to the IRS rules to establish HSAs, etc. The representation is to them – that the deductible has been met – when it has not been met – a lie to gain profit (in this case the payment of the balance from their coverage). 

If a participant pays their “50%” out of their HSA / HRA account – then the insurance may end up getting a feed that illustrated the participants hadn’t met their deductible – even if the hospital is billing as if they had.  It is not uncommon for an HSA administrator to process first and pass along their EOBs to the insurance to match up with the provider bills.  In those cases, it would be a problem – because the insurance isn’t going to pay the hospital anything without knowing the full deductible had been satisfied.

The DOJ has not prosecuted this type of fraud in many years, but it seems rife for a state DOI to get involved.

Thanks to my CEBS’ colleagues. The above example and discussion came from our online link discussion.

Employee Benefit Advisors blogged Oct 9, 2013 about court cases that have been falling under the radar. EBA said “These cases could dismantle health care reform as we know it.”  –  Yesterday the decision came down the “Court bars PPACA aid for federal exchange shoppers.” The decision has already been appealed, however, the way PPACA is written makes it very clear that the subsidy is available only to people who bought plans on state-run exchanges. Only 14 states have opted to set up their own marketplaces.

A conflicting ruling was also issued on an almost identical case by the 4th Circuit Court of Appeals in VA. To complicate things further, there are two other cases still pending before other circuit courts. These conflicting rulings mean that the issue will almost certainly be appealed to the U.S. Supreme Court later this year. If and when heard by the Supreme Court, expect a final decision regarding the availability of subsidies in federally facilitated marketplaces no sooner than June 2015.

Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall;
All the King’s horses, and all the King’s men
Cannot put Humpty Dumpty together again.

…so apropos