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Section 125 Plans Allow Additional Mid-Year Changes

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.

New Preventive Care Services Schedule Now Available

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.

COBRA – Good News for Employers trying to Manage Loss Ratios

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.

Fraud? – HDHP 50% Prompt-Pay Discount

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.

W2 vs 1099 Worker – ACA Regulations make it Important to Get It Right

July 16th we blogged IRC 60566/6056 “will prove to be the most cumbersome and costly part of Obamacare.” We wrote: “Employers with part-time, seasonal and variable hour workers (someone working for a company with different job functions/classifications, thus hours under two different pay codes) will particularly have difficulties and will need a managed solution. This makes it more important than ever to properly class workers under either W2 or 1099.

Answer YES to the following and it indicates the worker is an Employee (W2).

  1. Does the business provide instructions to the worker about when, where and how too\ perform the work?
  2. Does the business provide training to the worker?
  3. Are the services provided by the worker integrated into the business’ operations?
  4. Must the services be rendered personally by the worker?
  5. Does the business hire, supervise and pay assistants to the worker?
  6. Is there a continuing relationship between the business and the worker?
  7. Does the business set the work hours and schedule?
  8. Does the worker devote substantially full time to the work of the business?
  9. Is the work performed on the business’ premises?
  10. Is the worker required to perform the services in an order or sequence set by the business?
  11. Is the worker required to submit oral or written reports to the business?
  12. Is the worker paid by the hour, week or month?
  13. Does the business have the right to discharge the worker at will?
  14. Can the worker terminate the relationship with the business at any they wish without incurring liability to the business?
  15. Does the business pay the traveling expenses of the worker?

If the answer is YES for the following questions, it indicates the worker is an independent contractor (1099)>

  1. Does the worker furnish significant tools, materials and equipment?
  2. Does the worker have a significant investment in the facilities?
  3. Can the worker realize a profit or loss as a result of his or her services?
  4. Does the worker provide services for more than one firm at a time?
  5. Does the worker make their services available to the general public?

What Makes a Great EAP?

Most employers now believe Employee Assistance Programs (EAP) are important elements in their total compensation and benefits offerings.  They know the equation:  by helping employees identify and solve personal concerns, EAPs create the opportunity for employees to focus and perform at their highest levels.  The return for employers is proven time and again by staff who are more engaged and work harder to achieve organizational goals.

However, selecting an Employee Assistance Program (EAP) can be a complicated process.  EAP service delivery models vary greatly as do the depth, quality and comprehensiveness of clinical, management consultation and training services offered.  EAP “parent organizations” are also disparate; health plans, life insurance companies, workers compensation and even payroll services now offer EAPs, although usually with limited benefits.  While some large employers choose to offer in-house EAPs, most organizations contract with external providers and offer a broad range of professional and confidential EAP services, from brief assessment and referral models to comprehensive early intervention, counseling, crisis management, education and wellness programming.

Below are some questions to consider when choosing an EAP:

  • Does the EAP provide easy access with 24-hour response?
  • Are employees and family members able to participate in confidential, professional, thorough assessments and face-to-face counseling services with skilled, licensed clinicians?
  • If specialized or ongoing care is indicated, do employees receive well-matched referrals to treatment or community resources?
  • Does the EAP offer expert Drug Free Workplace Programs such as DOT/ SAP assessments, management support and mandated supervisory referrals ?
  • Is there significant follow-up to assure employee satisfaction, compliance and best outcomes?
  • Is the EAP skilled assisting leadership prevent workplace violence and responsive when there is a need for crisis intervention, de-escalation or post-traumatic event management?
  • If a crisis occurs at the workplace, are professional and unlimited crisis intervention services provided?
  • Does the EAP offer FREE and targeted promotion to heighten EAP awareness and utilization, including outreach to engage employees with the most severe problems (many with devastating and costly substance abuse and mental health issues)?
  • Are unlimited EAP promotional materials and employee orientations included?
  • Are on-site services such as employee education, management training, mediation and organizational development core elements of the EAP offering?
  • Is the EAP “all-inclusive”?  A high quality EAP should be comprehensive and not charge extra for management referrals, strong utilization rates, crisis debriefings, EAP orientation or supervisory training programs; these items should be included in the quoted rate.

Selecting an EAP begins, first, with understanding your organizational needs and how an EAP can help you meet them.  Be aware of choosing an EAP that is “free” or “embedded” in another benefit product. This may seem like an economic option, but may not be the best value or quality for your organization or employees. A great EAP should be highly promoted, well utilized by employees and families, and the “go to” resource for employers who want results.

This article was contributed by Melissa Fabrikant, LCSW, CIRS – Director of Project Management from Managed Care Concepts EAP www.theemployeeassistanceprogram.com.

Shocking News: The Government Did Not Plan Well!

Employee Benefit Advisors believes the following is important information. It supports EBA’s belief that Healthcare is best served by the private sector. Imagine the total number of policies and comprehensive coverage if either a) the government had given one billion dollars away for insurance premiums, or b) allocated one billion dollars in claims for the uninsured. As for Medicare, we are headed for trouble. (Or, the unthinkable, reduce a debt.)

Health Reform Weekly – A weekly compilation from Aetna of health care-related developments in Washington, D.C. and state legislatures across the country. Week of August 4, 2014

A new General Accounting Office (GAO) report released last week found that the government did not plan well and did not properly oversee the launch of the new federal health exchange in October. The report went on to warn that the problem-plagued federal website still faces risks for the next open enrollment period unless oversight is increased and continuing back-end issues are resolved. The original contractor for the site has been replaced because of the flawed rollout, but some key federal marketplace capabilities remain unavailable. Congressional auditors noted that Healthcare.gov costs are now running close to $1 billion.

In other news, the Medicare and Social Security Board of Trustees has issued its 2014 annual report on the financial health of the Medicare program, projecting that the Medicare Hospital Insurance Trust Fund will exhaust its reserves in 2030, four years later than projected last year. The trustees project “slight surpluses in 2015 through 2022, with a return to deficits thereafter until the fund becomes depleted in 2030.” This improvement is attributed primarily to factors that include lower-than-expected spending in 2013 for most hospital service categories.

7 Advantages of Partially Self-Funded Health Plans

Obamacare allows no rate consideration for health conditions on fully-insured small group plans. Rates are the same whether a group is very healthy or very sick. Healthier groups must subsidize the cost for sicker groups. Since groups are not underwritten, the business owner usually has no way of knowing if the cost includes a subsidy for sicker groups.

Self-insured small group health plans are allowed to underwrite and set rates for each group based on the health of the group. By going through this underwriting process, a small business owner can see the price based on the health of the employees. Once the rates for a self-insured plan are determined, the business owner can make a decision of what is best.

Very few plans a totally self-funded, so when EBA refers to the self-funded it important to realize these plans are partially self-funded.

  1. Lower Costs – Savings may result from underwriting, fewer mandates, greater flexibility in plan design, tax savings, and a refund of claims funds. The savings can be significant.
  2. Tax Savings – Self-funded plans save on state insurance taxes and ACA taxes. State insurance tax is paid only on the stop loss insurance portion of the cost. This is typically less than one half the total plan cost and results in a typical savings of one half or more of the state premium tax.
  3. Money Back from Claims Fund – In years that claims are less than funded for, the money left over in the claims fund belongs to the employer.
  4. Monthly Claims Report – The employer receives monthly claims reports showing where dollars are being spent. This information can be used by the employer and advisor to design a plan that works best for the specific business.
  5. Not Subject to State Mandates – Carriers selling fully insured plans must spend large amounts of resources just to comply with the different state mandates. With a self-funded plan, the employer selects benefits that work best for the employees.
  6. Underwriting Based for Type of Business, Age, Sex, Health and Lifestyle – With a fully-funded plan, the healthier and younger groups must subsidize the cost for older and less health groups. The underwriting process used for self-funded plans allows you to be charged the correct amount for your group, rather than being included in a community rated traditional plan. This can result in significant savings.
  7. More Latitude in Plan Design – With self-funded plan an employer is allowed to select the benefit that works best for that specific business. Deductibles, co-insurance, co-pays, prescription benefits and other options allow for a custom design.

Healthcare Bluebook brings Price Transparency

Healthcare Bluebook provides transparency to consumers to compare healthcare costs and quality. Employers can provide a valuable tool to employees that will enable them to shop for the most affordable high quality care.

How does Healthcare Bluebook work?

  • Employees search for services using common language
  • Employees learn the price range they can expect to pay how much they can save by making cost effective choices
  • Prices are based on your local area network rates
  • Employees can compare specific providers on both cost and quality

Why do employers need a transparency solution?

  • In-network prices for healthcare services vary by 300% to 500%
  • Employees don’t know that prices vary within their network or how to find lower cost quality providers
  • Employers and employees can cut healthcare costs if they have the right information, tools and incentives

Healthcare Bluebook can be paired with both self-funded and fully insured plans. Although it supports traditional plan designs, EBA believes it is a super-value-added support for consumer driven high deductible plans. Healthcare Bluebook says employers have been decreasing total medical spend by 4% to 12%.

Humpty Dumpty Had a Great Fall

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.

HiRes

 

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

 

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