Global Health Care Update

Transcription

1 Global Health Care Update July/August 2013 This bimonthly Update summarizes recent legislative developments and trends related to health care and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans. Action May Be Required Canada (Quebec) The expansion of pharmacists services has been postponed until questions regarding who will pay for the services are resolved. In an effort to make certain health care services more accessible to the public, the Quebec government introduced Bill 41, An Act to Amend the Pharmacy Act. Among other things, this legislation allows pharmacists to offer services previously provided to patients by doctors only. These services, prior to this legislation, were paid by Quebec s universal health plan, the Régie de l assurance maladie du Québec (RAMQ). The government s position is that it will only pay for individuals covered by RAMQ for prescription drugs, which constitutes about 40% of Quebec residents. For the remaining 60% of the population, the new fees will be covered by the individual. For individuals with drug coverage through work, this cost may be picked up by their plan. The legislation was originally scheduled to take effect on September 3, 2013, but its effective date has been postponed until negotiators for the government and the pharmacists have time to reach an agreement satisfactory to all parties, respecting the government s capacity to pay. For employer-sponsored drug plans with employees in Quebec, this could translate into cost increases. The potential implications for plan sponsors are twofold a potential increase in drug utilization due to ease of access and the special fees charged by the pharmacists. The main cost concern focuses on the new fees. Given that rules governing RAMQ dictate that employers that offer drug programs to their employees must provide coverage at least equivalent to the basic (RAMQ) plan coverage, it appears that employer-sponsored drug programs would pick up these new costs. Employers may wish to examine potential cost-sharing solutions and other means of reducing the cost impact of these changes once the full implications of these changes are known. In terms of administration, it may take time for insurers to ensure their systems are ready to process these new claims, which are similar to dispensing fees since they are for service charges, not actual drug costs. Also, employers will need to communicate the changes to employees. Copyright 2013 Aon plc 1

2 Recent Developments U.S. Health Care Reform In the United States, the Obama Administration announced that the employer mandate under the Patient Protection and Affordable Care Act (Affordable Care Act) will be delayed until 2015, thus giving employers an extra year to comply with the law s complicated hours-tracking and related reporting rules. The Internal Revenue Service (IRS) followed up with a Notice ( ) spelling out the specifics of the delay. Under the Affordable Care Act, an employer with 50 or more full-time equivalent employees is liable for monetary penalties if the employer does not offer affordable, minimum value health care coverage to a full-time employee and that employee obtains subsidized health care coverage from a health insurance exchange. Those penalties, along with the insurance reporting requirements imposed on employers under the Affordable Care Act, will not be enforced against employers until The delay means that employers will have an additional year to offer health insurance coverage to their full-time employees before the IRS will assess penalties, known as the employer shared-responsibility payment. Employers also will have an additional year to comply with the information reporting provisions that require employers to provide information to the IRS regarding the health insurance coverage offered to their full-time employees. That information will, in part, determine whether those employees are entitled to subsidized health insurance and whether employers are liable for an employer shared-responsibility payment. Proposed rules on these reporting requirements are expected to be published later this summer. It should be noted that the transition relief does not delay the effective date for other provisions of the Affordable Care Act, such as the requirement that individuals purchase health insurance or pay a penalty. The IRS has provided transition relief from the individual mandate for employees who are eligible for an employer-sponsored group health plan that operates on a noncalendar year. The individual mandate generally requires all taxpayers to maintain minimum essential coverage beginning January 1, Under the transition relief, the IRS will allow employees and their spouses or dependents who are eligible to enroll in a noncalendar year employer-sponsored health plan to avoid individual mandate tax penalties for the months between January 1, 2014 and the month that the employer s plan year ends. The U.S. Department of Health and Human Services (HHS) and IRS issued guidance on minimum essential coverage. HHS issued final regulations on the individual shared-responsibility payments required under the Affordable Care Act to be paid on federal income tax returns by people who do not have minimum essential coverage. The final regulations address exemptions available to persons for whom obtaining coverage under a qualified health plan constitutes a hardship. The HHS has developed a list of certain circumstances that will always be treated as constituting a hardship. For example, hardship exemptions will be available to individuals for whom a marketplace projects that no offer of coverage that meets the minimum value standard will be affordable. Copyright 2013 Aon plc 2

3 Hardship exemptions also will be available on a case-by-case basis. Specific rules for receiving an exemption are explained in the final regulations. In addition, the final regulations designate types of coverage as minimum essential coverage. For example, self-insured student health coverage is designated as minimum essential coverage only for After 2014, sponsors of self-funded student health plans may apply to be recognized as minimum essential health coverage through a process outlined in the final regulations. The IRS has provided guidance on when, for purposes of the premium tax credit, an individual is eligible for minimum essential coverage under Medicaid, Medicare, the Children s Health Insurance Program, and the TRICARE government-sponsored health program. In Notice , the IRS also provides guidance on eligibility for minimum essential coverage through self-funded student health plans and state high-risk pools. The Treasury and IRS released proposed regulations on health insurance reporting requirements applicable to large employers (generally, employers with 50 or more full-time employees). Under the Affordable Care Act (Section 6056 of the Internal Revenue Code), large employers must report detailed information on employee health care coverage to the IRS. Large employers also must provide statements to employees about their coverage that will help them determine whether they can claim a premium tax credit on their tax returns. The proposed regulations specify the substantial amount of information to be reported on the extent of health insurance coverage provided to employees and would provide a general method and simplified methods for reporting. The Treasury and IRS are considering the use of codes on Form W-2 for some of the required reporting. Comments are due by November 8, The Treasury and IRS issued a second set of proposed regulations on the required reporting of minimum essential coverage under the Affordable Care Act (Section 6055 of the Internal Revenue Code). Health insurance issuers and sponsors of self-insured health plans must report information on the type and period of coverage to the IRS, including the name of each person enrolled in minimum essential coverage and the months the person was covered. They also must furnish information to employees on the coverage provided to them and their dependents. The proposed regulations would permit issuers and plan sponsors to transmit this information to employees electronically, but the recipient would have to consent to the electronic delivery. Comments are due by November 8, Americas Effective July 1, 2014, long-term disability benefits offered to federally regulated employees in Canada must be insured with an insurance company licensed in a province. Currently, employers are not required to prefund for claims. Under recent amendments to the Canada Labor Code, employers will not have the option of self-insuring long-term disability benefits. Asia India s Insurance Regulatory and Development Authority (IRDA) has revised its health insurance standardization rules. The changes, effective September 30, 2013, include the following: The definition of portability will exclude different plans provided by the same insurer; Copyright 2013 Aon plc 3

4 With regard to deductibles, insurers will not be liable for a specified amount in the case of indemnity policies and for a specified number of hours or days in the case of a hospital cash policy; Registered homeopathic practitioners will be classified as medical practitioners; The bed requirement for hospitals will be relaxed, and hospitals must be registered with local authorities as specified by the Clinical Establishments (Registration and Regulation) Act 2010; A newborn baby will include an adopted child; and Maternity expenses include those related to childbirth and to the lawful termination of pregnancy during the policy period. President Aquino signed the Republic Act of 2012 on June 19, 2013, which amends the National Health insurance Act of 1995 to expand national health care coverage to all Filipinos. Previously, government employees and private-sector employees who paid contributions to PhilHealth were covered. The government must now provide comprehensive health care services to the poor, elderly, and disabled. In Australia, the Medicare levy rate will increase from 1.5% to 2.0%, effective July 1, The increase will apply beginning with income year The revenue raised from the increase will be used to finance the DisabilityCare Australia Fund for ten years. Immigration authorities in New Zealand rejected a work visa renewal application because the individual s obesity created significant health risks. New Zealand has one of the highest obesity rates in the developed world according to the Organization for Economic Cooperation and Development (OECD), with an estimated 30% of the population overweight. Authorities claimed that the individual s weight put him at risk for diabetes, hypertension, and heart disease. They further stated that migrants must have an acceptable standard of health in order to minimize costs to the national health care system. South Korea s Occupational Health and Safety Act has been amended to cover 12 additional industries. The provisions related to special education will apply to all workplaces, regardless of their industry and size, if employees are engaged in harmful or hazardous work. Employers must provide health and safety education to employees on a regular basis, as well as when new employees are hired and when changes in prescribed work require employees to engage in harmful or hazardous work. Employers are required to conduct special health exams for night-shift employees within six months of the job assignment and every 12 months thereafter. The amended Act is effective January 1, The requirement for health exams for night-shift employees will be phased in: workplaces with 300 or more employees, January 1, 2014; workplaces with 50 or more employees, January 1, 2015; and workplaces with less than 50 employees, January 1, South Korea s Financial Services Commission announced plans to introduce a hybrid medical bill/pension savings product in The new product would allow individuals to pay premiums during their income-earning years and collect pension benefits after they turn age 65. Individuals would be permitted to make withdrawals from their accumulated balance to pay medical bills. The FSC also plans to introduce medical insurance for later life. Copyright 2013 Aon plc 4

5 Europe France s Constitutional Council ruled that the designation clause, which requires employers to choose from named health insurers, is unconstitutional. The designation clause was included in the recent Accord National Interprofessionnel (ANI) that requires all employers to provide supplementary health insurance to their employees. (These designation clauses are typically included in industry agreements and reviewed every five years. As a result, certain insurers have a dominant position in the industry. Health industry analysts indicate that the ruling will affect the estimated 250 industry agreements that include designation clauses. Middle East Turkey s draft income tax law would change the tax treatment of health expenses. Taxpayers may deduct health (and education) expenses equal to 10% of income, as long as they are incurred in the country and documented. Under the draft income tax law, these expenses would be treated as a tax credit; taxpayers would be permitted to reduce up to 15% of their declared income or the annual minimum wage, whichever is lower. * * * * For more information on the topic and countries in this newsletter, please refer to the Aon Hewitt Country Profiles eguide. You can learn more about the Country Profiles eguide here. Copyright 2013 Aon plc 5

6 About Aon Hewitt Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit Copyright 2013 Aon plc This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Aon Hewitt's preliminary analysis of publicly available information. The content of this document is made available on an as is basis, without warranty of any kind. Aon Hewitt disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Aon Hewitt reserves all rights to the content of this document. Copyright 2013 Aon plc 6