Monday, October 30, 2017
On October 27, 2017, the Department of Health and Human
Services (HHS) issued proposals which reflect the current administrator’s
desire to improve access to plans on the Exchange, increase competition, and
reduce some of the premium increases affected by the ACA provisions.
Posted by SDF Associates at 11:50 AM
Wednesday, March 15, 2017
On Monday, the GOP introduced the highly anticipated American Health Care Act (AHCA). Instead of completely dismantling former President Barack Obama’s landmark legislation, the AHCA repealed former’s mandates and funding sources (i.e. taxes), and focuses on expanding health insurance options for those that felt that their choices were limited.
Below is a summary of the central ideas of the AHCA. While positioned as a “Repeal and Replace” effort, the proposed law does leave certain aspects of the Affordable Care Act untouched. We capture the summary in each area below under the headings Repealed, Replaced, and Remains.
Say goodbye to the mandates
- Repealed: Individuals will no longer be required to buy an insurance policy, and employers (with over 50 full-time equivalent employees) are no longer mandated to offer affordable coverage, that meets minimum value.
- Replaced: “Continuous Coverage” is required to receive standard market premiums. Individuals who forego health insurance for greater than 63 days can be charged up to a 30% increase to their premiums for a period of up to 12 months.
- Remains: Nothing remains of these major components to the ACA - providing significant relief to employers in their tracking and administration of the Section 4980H requirements.
Product enhancements, market stabilization, and consumer coverage protections.
- Repealed: Small Group and Individual market products will sunset the actuarial-value defined “metal tiers”, effective December 31, 2019. This would mark the end of the Bronze, Silver, Gold, and Platinum plan design designations.
- Replaced: Age rated premium caps for individual and small group premiums will be increased from 3:1 to 5:1. A $100 billion fund will be created and dispersed over a decade to help states stabilize insurance markets, maintain preventative services, and pay for those in high-risk pools.
- Remains: Essential Health Benefits, as defined in the ACA, remain mandatory for all individual and small group plans. Caps on deductibles and out of pocket limits also were left intact. Pre-existing conditions still have to be covered by insurers. Dependents can still remain on their parents’ policy until the age of 26. Caps and guidance on insurer premium rating factors - such geographic boundaries (community rating areas), age band structures, and tobacco use permitted adjustments, have not been changed.
Nearly all taxes from the ACA will be repealed.
- Repealed: 14 out of the 21 taxes that the ACA introduced will be walked back. PCORI and Reinsurance Fees. Net Investment Income Tax. Medical Device Excise Tax. Additional Medicare Tax. Branded Prescription Drug Manufacturers and Importers Tax. Health Insurance Providers Tax. Indoor Tanning Services Tax.
- Replaced: No new taxes were introduced. Households will also now be able to deduct medical expenses over 7.5% of their income (back to the levels in place prior to the 10% introduced by ACA).
- Remains: The ACA’s high-cost plan tax (HCPT), known to many as the “Cadillac Tax,” is a 40% tax on employer plans which exceed $10,200 in premiums (a year) for individuals and $27,500 for families. Many groups and lobbies were against this tax, and it has become a common punching bag from both sides of the aisle. It was scheduled to take effect in 2020. Despite aggressive lobbying efforts from industry organizations in the last 60-90 days, the AHCA did not remove this tax. Rather, it extended the effective date to January 1, 2025.
Favorable Treatment to Account Based Health Plans
- Repealed: The annual FSA contribution limit of $2,500 is removed.
- Replaced: HSA early distribution penalty tax will be lowered from 20% to 10% (pre-ACA rate). Furthermore, the maximum contribution limit for HSAs will be increased to match the deductible and out-of-pocket limits. This means that the basic limit to contribute tax-free will be $6,550 / year for individuals and $13,100 for families. Spouses will now be allowed to contribute catch-up contributions to HSAs. Over-the-counter medications can also be purchased pre-tax with HSA dollars.
- Remains: There was little in the ACA to support and strengthen Account Based Health Plans (ABHP). The GOP has taken the opportunity with the AHCA to promote and strengthen these options - a welcome advantage for employers offering these plan structures.
Reporting and Administration
- Repealed: Reconciliation rules limit the ability of Congress to repeal current reporting requirements. The proposed regulations call for the Secretary of the Treasury to “phase out” old reporting, as new reporting takes effect.
- Replaced: Eligibility for employer sponsored insurance will remain a determining factor in tax credit eligibility. Therefore, it is possible the IRS will still require forms 1094/1095 - though with modifications to the form and format. However, according to the Ways And Means Chairman Rep. Kevin Brady (R-Texas) they are calling for a “simplified reporting of an offer of coverage on the W-2 by employers.” This is not a legislative mandate - rather, instructions to relevant Department heads.
- Remains: At this point, the requirement for plan sponsors and issuers to furnish a Summary of Benefits and Coverage (SBC) appears to remains in place.
Posted by SDF Associates at 7:01 AM
Tuesday, December 29, 2015
Yesterday, the IRS announced it will delay the deadlines of the 1094 and 1095 form submissions.
· The deadline to provide employees with 1095-C Forms has been extended to March 31, 2016.
· The deadline to file paper 1094-C and 1095-C forms with the IRS has been extended to May 31, 2016.
· The deadline to e-File electronic 1094-C and 1095-C forms has been extended to June 30, 2016.
Because of the delay, no other extensions will be granted to employers. Within the notice of delay, the IRS requests that employers submit the forms to employees as soon as they are ready, and advised employees that they do not need to provide the forms with their 2015 tax filing as proof of coverage. Employees who received premium subsidies from the exchange may need to amend their returns once they receive the form.
Please contact us with any questions.
For more details, reference the official notice from the IRS.
Posted by SDF Associates at 10:04 AM
Friday, December 18, 2015
Lobbyists in Congress have succeeded in raising concern regarding the uniform application of the Cadillac Tax throughout the nation. As a result, a recent law introduces several significant changes to the "Cadillac Tax" section of the Affordable Care Act.
Here are the highlights:
· The effective date of the Cadillac Tax has been delayed until January 1, 2020
· Any excise tax levied will now be fully tax deductible for employers
· The government will fund an official study by the comptroller on appropriate age and gender premium adjustments in consultation with the National Association of Insurance Commissioners (NAIC)
Posted by SDF Associates at 7:49 AM
Wednesday, November 11, 2015
Update from 4D Pharmacy Below:
As you may be aware of the unfortunate announcement that The Great Atlantic & Pacific Tea Company A&P, which are owners of the Live Better Mail Order facility where your members receive their prescriptions through mail order, has filed for bankruptcy and will be closing their doors 11/14/2015. This was very sad news to us all and we have worked diligently to make the transition to the new mail order pharmacy, Magellan RX Mail as smooth as possible for your members. All members utilizing mail order have had a personal letter mailed to them with clear instructions of what they need to do including the dedicated 4D/Magellan RX Mail phone number where customer service representatives will assist your members in a smooth transition. We are monitoring this on a daily basis as this is our highest priority and have the resources in place to be able address any issues very quickly.
Members will be required to obtain new prescriptions for either mail order or specialty as part of this transition and will need to follow the below instructions:
· Mail the prescription to Magellan Rx Home, PO Box 620968, Orlando FL 32862. (We are including mail order forms and instructions in our member communication.)
· Have the physician either E-prescribe MagellanRx Home Delivery, Orlando, FL 32812 or Fax to 1.888.282.1349.
· For prompt delivery, members will need to provide payment information and registration by completing the order form or by calling 1.800.424.1771.
· E-prescribe MagellanRx Specialty, Orlando, FL 32812 or Fax to 1.866.364.2673. Make sure the form includes member contact inofrmation. Fax prescriptions may only be sent by a doctor’s office and must include patient informaiton and diagnosis for timely processing. If a prior authorization is required, your doctor may need to take extra steps to submit your prescription.
· Magellan Rx Specialty will call the member to get important information and schedule the first delivery
· The prescription will arrive when and where the member has requested.
Please feel free to contact us at Friedman Associates for the updated forms or with any questions.
Posted by SDF Associates at 8:32 AM
Thursday, September 24, 2015
Transitional Reinsurance Fee
The Transitional Reinsurance Fee is assessed annually, and paid by all health plans, whether insured or self-funded. The fee for 2015 plan years is $44 per covered person, and is due by January 15, 2016. Plans have an option to pay the fee in installments, with the first installment of $33 due by January 15, 2016, and the balance payable by November 15, 2016. This fee is paid through accessing ‘ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form’ on pay.gov. Look out for our reminder email with membership counts in mid-November.
Feel free to contact your Account Administrator with any questions.
Posted by SDF Associates at 10:48 AM
Monday, September 22, 2014
In anticipation of the large-employer reporting requirements outlined in Code 6056 of the Healthcare Reform law, the IRS published draft forms. The reports are intended to confirm an employer’s compliance with the Employer Mandate, enforce the Individual Mandate, and confirm employees’ and family members’ eligibility for subsidies related to health insurance premiums on plans purchased on an Exchange.
Initial reporting is required in January 2016. We’ve attached copies of the forms, Form, 1094-C , which will be submitted to the IRS, and Form 1095-C, which will be distributed to each employee, for informational purposes. At this point, the forms are in draft form, and may change somewhat. It is important to note that the reports will require information not previously collected from employees, such as their spouse and dependent social security numbers. We highly recommend that our clients use the ensuing months to develop methods of collecting and maintaining the necessary data, and transferring the information to the applicable format.
Posted by SDF Associates at 11:55 AM
Tuesday, July 22, 2014
In response to client inquiries regarding HPID identifiers, our attorneys have compiled a list of frequently asked questions. Please feel free to contact your account representative at Friedman Associates to discuss your issues or questions.
Who is considered a CHP?
Are most self insured plans CHP's?
A self-funded health plan could be a CHP if the self-funded health plan controls its own policies and is not controlled by another health plan or the self-funded health plan is controlled by an entity that is not a health plan (such as the employer sponsor). Self-funded health plans that are controlling health plans will need to obtain an HPID in accordance with the compliance dates described below. It is our understanding that most self-funded health plans will need to obtain an HPID. Please see the remainder of this memorandum for a more detailed explanation of health plan identifiers.
On September 5, 2012, the Department of Health and Human Services (HHS) and its Center for Medicare & Medicaid Services (CMS) released a final rule regarding HIPAA Administrative Simplification. Included in this rule is a mandate that all health plans and other entities (such as third party administrators) will obtain an identification number to be used in electronic health care transactions. These identifiers will be used in HIPAA standard transactions where health plans and other entities need to be identified. HIPAA standard transactions include medical and dental claims and encounter information, payment remittance advice, claim status requests and responses, eligibility and benefit inquiries and responses, enrollment and disenrollment, referrals and authorizations, and premium payments. For example, these identifiers will be needed in electronic data interchanges (EDI). An EDI is used to send claims electronically between the entity that processes claims, the clearinghouse, and the health care provider.
The cumulative set of rules that HHS and CMS are producing will include additional topics including electronic funds transfers (EFTs), ICD-10, and further administrative simplification rules creating standards for claims attachments, operating rules for claims attachments, and requirements for health plans to certify compliance with the HIPAA standards and operating rules.
HHS determined the need for health plan identifiers (HPIDs) and potentially the need for other entity identifiers (OEIDs) to streamline health care administrative transactions and make the existing standards more efficient. The rule is intended to make it easier for health care providers to determine participant eligibility and obtain status information on claims that have been submitted. As there is currently no standard for health plans identification numbers, each health plan and third party administrator creates their own identifiers for electronic transactions. These identifiers differ in length and format and create issues for health care providers with the routing of transactions, rejections of transactions, and difficulty in determining eligibility.
Who Must Obtain an Identifier:
HIPPA defines the term health plan in 45 CFR 160.103 which includes self-funded health plans. A controlling health plan (CHP) is required to obtain an HPID. A controlling health plan is defined in 45 CFR 162.103:
Controlling health plan (CHP) means a health plan that—
(1) Controls its own business activities, actions, or policies; or
(2) (i) Is controlled by an entity that is not a health plan; and
(ii) If it has a subhealth plan(s) (as defined in this section), exercises sufficient control over the subhealth plan(s) to direct its/their business activities, actions, or policies.
A subhealth plan (SHP) is a health plan whose business activities, actions, or policies are directed by a controlling health plan.
A self-funded health plan that is a CHP will need to obtain an HPID. Fully insured health plans will not need to obtain HPIDs as the insurance carrier will be required to obtain an HPID.
A subhealth Plan (SHP) is nto required to obtain an HPID, but may obtain an HPID at teh direction of its CHP or on its own. CHP's may obtain HPIDS for its SHPs.
Third party administrators and other entities (such as repricers) that perform certain health plan functions will have the option of obtaining an OEIDs as they are not health plans and are not eligible to obtain an HPID. Health plan clients of third party administrators may require the third party administrator to obtain an OEID for plan administration purposes. It is possible that OEIDS may be mandated in the future.
Required and Permitted Uses:
A covered entity is required to use an HPID when it identifies a health plan in a standard transaction (standard transactions are described in the Background section above). Business associates of the covered entities will be required to use the HPIDs to identify the health plans in standard transactions.
HPIDs may also be used in the following manners (but it is not required):
1. In internal files;
2. On an enrollee’s health plan identification card;
3. As a cross-reference in health care fraud and abuse files and other program integrity files;
4. In patient medical records to help identify health care benefit packages;
5. In electronic health records to identify the health plan;
6. In federal and state health insurance exchanges to identify health plans; and
7. For public health date reporting purposes.
Health plans, with the exception of small health plans, must obtain an HPID by November 5, 2014. Small health plans are defined as those whose annual receipts total $5 million or less. Small health plans must obtain an HPID by November 5, 2015. Health care providers and clearinghouses must be able to implement the use of HPIDs in standard transactions by November 7, 2016.
CMS’s website offers a multitude of resources including presentations, videos, and a HPID user manual that can offer additional guidance on HPIDs, OEIDs, including a step-by-step process to obtain an HPID and OEID. The application process takes place through the CMS Health Plan and Other Entity Enumeration System (HPOES). New users must register themselves and their organization prior to gaining access to the HPOES. After registration, the organization would then apply for an HPID (See http://www.cms.gov/Regulations-and- Guidance/HIPAA-Administrative-Simplification/Affordable-Care-Act/Health-Plan-Identifier.html).
In 2010, HHS started the process of standardizing and simplifying the way health care providers, health plans, and other entities assisting health plans transmit electronic information. A series of rules has been issued by HHS over the last several years to guide the process. One of the rules contains the creation of HPIDs and OEIDs. Health plans and other entities that participate in health care transactions may need to obtain a standardized identifier that will be used to streamline HIPAA standard transactions as described in this memorandum.
Act/Downloads/HPOESTrainingSlides02132013.pdf http://www.alston.com/Files/Publication/bca4c652-a76e-46d4-a05d- c7920110cfca/Presentation/PublicationAttachment/c83e2933-f907-4d25-88ad-c9f78eb362d9/HHS-Adopts- Final-Rule-Adopting-HIPAA-Standard-Health-Plan-Identifier-and-One-Year-Delay-of-ICD-10.pdf http://www.gpo.gov/fdsys/pkg/FR-2012-09-05/pdf/2012-21238.pdf
Disclaimer: This opinion is based on the facts as presented and re-stated above, and our research. It is a consulting opinion only, and does not purport to offer legal advice or fiduciary guidance as to the denial or acceptance of claims. This opinion is based upon our interpretation of the relevant materials and may not conform to official interpretations of statutes, regulations, contracts, or other materials. Ultimately the Plan Administrator has the discretionary authority to interpret the terms of the Plan Document and accept or deny claims for benefits.
Posted by SDF Associates at 9:42 AM