Historical Health Reform Alerts
DOL Says No Penalties for Failing to Provide Exchange Notice
September 16, 2013
The Affordable Care Act requires employers to provide employees with a written notice about the ACA's health insurance exchanges beginning on Oct. 1, 2013. However, on Sept. 11, 2013, the Department of Labor issued an FAQ stating that there is no fine or penalty under the law for failing to provide the notice.
Despite the lack of penalty, the DOL also stated that employers should provide the Exchange notices to employees and reiterated the content that should be included. The FAQ also provides links to the model notices issued by the DOL earlier in the year.
Although employers will apparently not be penalized if they do not provide the notice, they should consider how they and their employees can benefit from this information. Providing the Exchange notice can help answer employee questions about the Exchanges and about employee eligibility for coverage under the employer's health plan or premium tax credits for coverage in the Exchange. Employees may look to their employers for information on their health coverage and providing this notice is one way that employers can be prepared to deal with their questions.
Administration Delays ACA's Limit on Out-of-Pocket Costs
September 12, 2013
The Affordable Care Act requires employers to provide employees with a written notice about the ACA's health insurance exchanges beginning on Oct. 1, 2013. However, on Sept. 11, 2013, the Department of Labor issued an FAQ stating that there is no fine or penalty under the law for failing to provide the notice.
Despite the lack of penalty, the DOL also stated that employers should provide the Exchange notices to employees and reiterated the content that should be included. The FAQ also provides links to the model notices issued by the DOL earlier in the year.
Although employers will apparently not be penalized if they do not provide the notice, they should consider how they and their employees can benefit from this information. Providing the Exchange notice can help answer employee questions about the Exchanges and about employee eligibility for coverage under the employer's health plan or premium tax credits for coverage in the Exchange. Employees may look to their employers for information on their health coverage and providing this notice is one way that employers can be prepared to deal with their questions.
Administration Delays ACA's Limit on Out-of-Pocket Costs
August 13, 2013
In what a front-page New York Times story describes as “another setback” for the ACA, the Administration “has delayed until 2015” the limit on out-of-pocket costs. The limit “was not supposed to exceed $6,350 for an individual and $12,700 for a family,” but Federal officials “have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all, in 2014.” The development “is likely to fuel continuing Republican efforts this fall to discredit the president’s health care law.”
Cover Oregon Modifies Exchange Roll out Amid Overload Concerns
August 13, 2013
“Cover Oregon is tweaking its rollout” of the state’s health insurance exchange in response to “concerns about overloading the system,” the Portland (OR) Business Journal reports. Starting October 1, residents “will be able to look for plans,” but “they won’t be able to enroll in coverage or tax credits for the first couple of weeks without an agent or community partner.” Cover Oregon spokeswoman Lisa Morawski stated: “Later in the month, we’ll open it up so they can do it on their own. That will give us time to identify any issues that come up.”
Waiting Period Adjustment for California Employee Benefit Plans
July 26, 2013
The State of California is set to enact a new law that will reduce the Patient Protection and Affordable Care Act’s (ACA) mandated waiting period cap of 90 days down to a maximum of 60 days. Any insured health benefit plan providing benefits to residents of California will be required to comply with this law regardless of the situs state of the plan sponsor or insurer. This new law will require employers sponsoring employee benefit plans with California residents to reduce any existing waiting period in excess of 60 days (including first of the month following 60 days) in order to be compliant.1
ACA’s requirement to limit waiting periods to a maximum of 90 days is set to take effect January 1, 2014, however for insured health plans with workers in California this new mandate supersedes that provision regardless of grandfathered status or group size.2 Exceptions to the rule exist for self insured plans, dental and vision plans provided under separate contract, and specified disease or hospital confinement indemnity policies.
1 Cal. Ins. Code Section 10198.7(c)(1). “A health benefit plan for group coverage may apply a waiting period of up to 60 days as a condition of employment if applied equally to all eligible employees and dependents and if consistent with PPACA. A waiting period shall not be based on a preexisting condition of an employee or dependent, the health status of an employee or dependent, or any other factor listed in Section 10198.9. During the waiting period, the health benefit plan is not required to provide health care services and no premium shall be charged to the policyholder or insureds.
2 Cal. Ins. Code Section 10198.8. “This article applies to all health benefit plans that provide benefits to residents of this state regardless of the situs of the contract or group master policyholder.”
For a copy of the law, visit:
Final Rule Issued on Contraceptive Coverage and Religious Employers
July 8, 2013
The Affordable Care Act (ACA) requires non-grandfathered health plans to cover certain preventive care services for women, including contraceptives, without imposing cost-sharing requirements for the services. Special rules have been created for religious employers’ health plan coverage to provide women with access to contraceptive coverage without cost-sharing while also respecting these employers’ objections to contraception.
Under these special rules, churches are exempt from covering contraception on the basis of their religious objections. Certain church-affiliated institutions (such as schools, charities, hospitals and universities) that object to contraceptive coverage are subject to an enforcement delay and accommodations approach.
On June 28, 2013, the Departments of Health and Human Services (HHS), Labor and the Treasury (Departments) issued a final rule on the contraceptive coverage exceptions that apply to religious employers.
EXEMPTION FOR CHURCHES
Group health plans of religious employers are exempt from ACA’s contraceptive coverage requirement. The final rule simplifies the definition of a “religious employer” as it relates to contraceptive coverage, effective for plan years beginning on or after January 1, 2013.
Specifically, the rule eliminates the criteria that a religious employer:
- Have the inculcation of religious values as its purpose;
- Primarily employ persons who share its religious tenets; and
- Primarily serve persons who share its religious tenets.
The simplified definition of “religious employer” for purposes of the exemption is based solely on Section 6033(a)(3)(A)(i) or (iii) of the Internal Revenue Code, which primarily includes churches and other houses of worship.
The definition was simplified to clarify that a house of worship is not excluded from the exemption because, for example, it provides charitable social services to persons of different religious faiths or employs persons of different religious faiths. According to HHS, the simplified definition does not expand the universe of employer plans that qualify for the exemption beyond that which was intended in prior guidance.
ACCOMMODATIONS FOR NONPROFIT RELIGIOUS ORGANIZATIONS
The final rule provides accommodations for nonprofit religious organizations that object to contraceptive coverage on religious grounds and do not qualify for the church exemption. The accommodations are effective for plan years beginning on or after January 1, 2014. A temporary enforcement delay applies until then.
An eligible organization is one that:
- Opposes providing coverage for some or all of any contraceptive services which are required to be covered on account of religious objections;
- Is organized and operates as a nonprofit entity;
- Holds itself out as a religious organization; and
- Self-certifies that it meets these criteria (HHS has provided a self-certification form for this purpose).
Under the accommodations, eligible organizations do not have to contract, arrange, pay or refer for any contraceptive coverage to which they object on religious grounds. However, separate payments for contraceptive services will be provided to females in the health plan by an independent third party, such as an insurance company or third-party administrator (TPA), directly and free of charge.
For insured group health plans, the religious organization must provide the self-certification to the health insurance issuer. The issuer must then provide separate payments for contraceptive services for the women in the health plan of the organization, at no cost to the women or to the organization. According to HHS, issuers will find that providing these payments is cost-neutral.
For self-insured group health plans, the religious organization must provide the self-certification to its TPA. The TPA must then provide or arrange separate payments for contraceptive services for the women in the health plan of the organization, at no cost to the women or to the organization. The costs of these payments can be offset by adjustments in federally-facilitated Exchange user fees paid by a health insurance issuer with whom the TPA has an arrangement.
TEMPORARY ENFORCEMENT DELAY
In prior guidance, HHS provided a temporary safe harbor allowing nonprofit employers that do not provide contraceptive coverage to their employees because of their religious beliefs to delay covering contraceptive services. This delay covers church-affiliated organizations that do not qualify for the church exemption, such as schools, hospitals, charities and universities. Under the terms of the safe harbor, the Departments will not take any enforcement action against employers, group health plans or group health issuers that meet the eligibility criteria for the safe harbor and that fail to cover some or all of the recommended contraceptive services without cost sharing.
The safe harbor was originally set to expire for the first plan year beginning on or after Aug. 1, 2013. However, to cover the period before the accommodations approach becomes effective, HHS extended the safe harbor to encompass plan years beginning on or after Aug. 1, 2013, and before January 1, 2014.
MORE INFORMATION
For more information on ACA’s preventive care requirements, contact your Custom Benefit Consultants, Inc. representative.
Source: Departments of Labor, Health and Human Services and the Treasury
Breaking News
July 2nd 2013
The Obama administration says it is delaying for a year a key provision in the Affordable Care Act that would require companies with more than 50 employees to provide health insurance.
The Treasury Department now says it will begin penalizing companies that don't provide insurance in 2015, instead of January 1, 2014.
We will continue to provide information as it becomes available.
Delay in Enforcement of Employer Mandate under Affordable Care Act
July 1st 2013
In a surprise announcement on Tuesday, July 2nd, the Obama administration stated that it will delay for one year the enforcement of the penalty that was set to be imposed against large employers who failed to provide adequate health coverage to their full-time employees starting in 2014. The delay is due in large part to the inability of the Internal Revenue Service to timely establish the applicable reporting requirements (also intended to be effective beginning with respect to the 2014 calendar year) that would have provided the necessary information to determine whether such penalty was applicable. This is welcome news for many employers who are currently getting prepared for their 2014 open enrollment seasons.
The announcement did not indicate that otherwise applicable mandates, such as the prohibition on annual limits and preexisting condition exclusions, or the establishment of the Exchanges would be delayed. Accordingly, employers who offer health coverage (whether insured or self-insured) will still be required to comply with applicable market reforms with respect to such coverage and provide the notice explaining the Exchanges by the applicable effective dates. Similarly, there is no indication that the delay will apply to the individual mandate, which requires that individuals obtain health coverage or face a penalty. The agencies have indicated that guidance will be issued within the next week to address this transition period through 2014.
