Health Care Reform /2017 Strategic Analysis

Transcription

1 Health Care Reform /2017 Strategic Analysis Employers sponsoring health can expect to see no slow-down in Affordable Care Act (ACA) rules, clarifications, and requirements. Understanding these changes, their applicability to your business and benefits offering, and complying with these requirements requires analysis. A solid strategic analysis will include a review of all employer laws and responsibilities, including ACA, ERISA, and HIPAA. Consider the following: Business Characteristic Compliance Concern Work with Advisor to... Average more than 50 full-time and full-time equivalent employees in the preceding calendar year Penalties may result for failure to offer affordable, minimum value coverage to full-time employees and their dependents Document the ACA applicable large employer (ALE) calculation for 2015 to determine employer responsibilities for 2016 Purchase, start, create affiliation, or partner in new businesses/companies Applicability may require the aggregation of employees and required coverage offer Understand benefit plan transitions, ACA responsibilities, potential aggregation and timing, and other compliance requirements Have or gain a significant number of variable hour employees Inability to produce accurate records will result in significant administration and potential for penalties Develop appropriate eligibility program, its corresponding recordkeeping and communications Applicable large employer (ALE) or employer with a self-funded plan Obligation to provide new annual reports Establish and document procedures and process to gather information for reporting Employer sponsoring one or more benefit Lack of plan documents create potential for employer liability Finalize plan documents, making sure to incorporate any new employee classifications Annual compliance requirements under ACA, ERISA, and HIPAA Failure to comply with employer responsibilities may result in fines, taxes, penalties, and increased administrative costs Conduct a compliance check-up to itemize all obligations and set compliance schedule

2 Health Care Reform Looking ahead to 2017 As employers and individuals work to comply with the new rules, it is important to identify the actions to be completed in the current year and also to look ahead to the next year. Understanding future requirements and how they impact the current benefits program are crucial elements to the development of your 2017 strategic plan. Here is what s on the horizon for ACA Provision Applicability Work with Advisor to Employer shared responsibility (mandate) Annual re-determination of applicable large employer (ALE) status Determine and document applicability of employer shared responsibility based on 2016 calendar year calculation Review plan offerings and determine affordable contribution levels Market reform rules governing plan type, rating and marketplace rules Modification of limits for outof-pocket, FSA, and HSA ; states will decide whether to open marketplace to groups with more than 100 employees Review new limits and compare to current plan offering; explore benefits of the exchange marketplace is a viable option Nondiscrimination (release date of rules unknown) All fully-insured and self-funded nongrandfathered Review plan(s) to ensure that the offer and operation of the plan does not favor the highly compensated Employer reporting and employee statements Employers with self-funded or who are considered applicable large employers for the 2016 calendar year Review recordkeeping and documentation requirements, explore alternative options, and develop plan for reporting to the IRS and producing/distributing employee statements in 2017

3 Annual out-ofpocket limits Maximum for 2016 plan = $6,850 for individual and $13,700 for family Out-of-pocket limit must include all copays and deductibles Each individual maximum cannot exceed the out-ofpocket amount for self-only coverage All self-funded Fully-insured small group Large group Excludes grandfathered January 1, 2016 No separate maximum for Rx copays even if plan has separate pharmacy service ACA Health Plan Reporting Reporting of plan information and participant information IRS Forms 1094-B & 1095-B for insurance carriers and small employers (non-ale) with selffunded Employers who are ALEs may use IRS Forms 1094-C and 1095-C Insurance providers, government agencies, multiemployer, and employers that are not applicable large employers (ALEs) and who sponsor self-insured Due to IRS on or before: Paper filing May 31, 2016 Electronic filing - June 30, 2016 ACA Health Plan Reporting Reporting of employer sponsor information, employer offer of coverage, and compliance with employer mandate, i.e. minimum value and affordability ACA applicable large employers (ALEs) Due to IRS on or before: Paper filing May 31, 2016 IRS Forms 1094-C and 1095-C Electronic filing - June 30, 2016 ACA Employee Statements Statement confirming offer of coverage, type of coverage, months coverage was offered, and enrollment status IRS Forms 1095-B and 1095-C Must be sent to all Due to IRS on or before March 31, 2016 ACA Measurement of Plan Affordability (Employer Mandate) Plan affordability is calculated as the percentage of premium the employee pays for the employee-only rate as compared to their compensation, i.e. W2, rate of pay, and Federal Poverty Level (FPL) Applicable large employers offering health to employees 9.5% for 2014 plan 9.56% for 2015 plan 9.66% for 2016 plan

4 Cafeteria Plan Elections May allow cafeteria plan election changes for employees who(se): o Hours are reduced to less than 30 o Desire to enroll or actually enroll in other minimum essential coverage (MEC) o Are eligible for Marketplace coverage during annual open enrollment or a special enrollment period Reduction in hours applies even if there is no loss of coverage New MEC plan coverage must be effective no later than the 1st of the second month following revocation Marketplace coverage must be effective no later than the 1st day after the group plan terminates Plan documents must be amended prior to December 31, 2016 Flexible Spending Accounts New cap is $2,550 for 2016 Resolve any FSA overpayments Review carryover provisions with offer of HSA plan Must amend cafeteria plan Not eligible for HSA if carryover FSA in play unless opt-out or limited purpose Plan amendment and overpayments by 12/31/15 Beginning January 1, 2016 Grandfathered plan status Provide annual notice to all employees if plan is, or ceases to be grandfathered Employers with grandfathered At open enrollment Health Plan Identifier Must apply through CMS for unique plan identifier for conducting standardized transactions All self-insured Delayed until further notice Individual Premium Reimbursement Employers cannot reimburse employees for the premium cost of individual insurance coverage Prohibition on all pre-tax and post-tax reimbursements January 1, 2014 Marketplace notification Indicates existence of Marketplace, eligibility for subsidies and contact information All group health, Must provide to all new hires within 14 days of hire date Patient Centered Outcomes/ Comparative Effectiveness Fees (PCORI) Fee per each covered life for plan ending: o 1/1/15-9/30/15 = $2.08 o 10/1/15-12/31/15 =$2.17 o Report on IRS Form 720 Insurers and plan sponsors of self-insured Play ending on or after 10/1/12 and before 10/1/19 Due by July 31, 2016

5 Summary of Benefits and Coverage (SBC) Provide at first day of open enrollment, on first day of plan year (if no open enrollment) or at time of application All group health, Enrollment or plan on or after September 23, 2012 Summary Plan Description (SPD) Update SPD with any new plan changes and provide to each participant (beneficiaries on request) All employers with ERISA Within 120 days of plan effective date Transitional Reinsurance Fees Fees collected for fee (payable in 2016) = $44 per plan member Applies to health insurance issuers and self-funded plan administrators 1st installment of $33.00 or full $44 due 1/15/16 2nd installment of $11.00 due November 2016 Waiting Periods Maximum waiting period of 90 calendar days Can have bona fide orientation period of one month prior to start of 90-day waiting period All group health, January 1, 2014 W-2 reporting Report aggregate cost of employer-sponsored group health benefits (employer + employee contributions) Employers filing 250 or more W-2s in the preceding year First applicability Due January 31, 2016 for Form W-2s issued for the 2015 tax year