News & Insights

ACA FAQ Part XXII Addresses Premium Reimbursement Arrangements

Posted on by McKeogh Administrator

The Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury released FAQ Part XXII addressing the compliance of premium reimbursement arrangements with the Affordable Care Act. Sponsors of health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) or other arrangements that reimburse health premiums should confirm that reimbursements are not being made for individual coverage premiums.

Specifically, the guidance provided in this set of three questions states that:

  • Employers cannot offer employees cash to reimburse the purchase of an individual policy.
  • Employers cannot offer employees at risk of high claims a choice between the group health plan or cash to obtain individual insurance.
  • Employers cannot cancel group policies, setup a Code section 105 reimbursement plan using brokers to help employees select individual policies and allow employees to access premium tax credits.

Final Regulations Issued on Excepted Benefits

Posted on by McKeogh Administrator

Final rules were released by the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury addressing limited scope vision and dental benefits and employee assistance programs (EAPs) as excepted benefits. These regulations should be reviewed so that plans may make any necessary changes effective for plan years beginning on or after January 1, 2015.

Background

Excepted benefits are generally excluded from the Affordable Care Act’s (ACA’s) requirements. There are four categories of excepted benefits:

  1. Benefits that are generally not health coverage (workers compensation, accidental death and dismemberment)
  2. Limited excepted benefits (some limited scope* vision or dental benefits, long-term care, home health care, health FSAs)
  3. Non-coordinated excepted benefits (coverage for a specific disease or illness, hospital indemnity insurance)
  4. Supplemental excepted benefits (Medicare Supplement plans)

*Limited scope means that benefits are limited to treatment of the eye (vision) or mouth (dental).

In December 2013, proposed rules were issued regarding excepted benefits. The rules proposed changes in the requirements affecting limited scope vision and dental coverage and recognition of both employee assistance programs and coverage that wraps around individual coverage as new forms of limited excepted benefits. The final rule is silent on wraparound coverage and makes minor modifications to the other proposals. Additional guidance on wraparound coverage is expected in the future.

Vision and Dental Benefits

The final rules clarify that limited scope vision and dental benefits are excepted benefits if they (1) are offered under a separate policy or insurance contract or (2) are not considered to be an integral part of the group health plan. These benefits are not an integral part of the group health plan if either (1) participants may decline coverage or (2) claims for the benefits are administered under a separate contract. The regulations eliminate the requirement that an additional premium be charged in order to qualify as an excepted benefit.

Employee Assistance Programs (EAPs)

The final rule also allows employee assistance programs to be recognized as excepted benefits if they:

  • Do not provide significant medical care benefits.
  • Do not coordinate their benefits with group health plan benefits.
  • Do not require employee premiums or contributions for participation.
  • Do not impose cost-sharing requirements.

Next Steps

These regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015. Plans should review the regulations and determine that benefits have been designed and are being administered appropriately to meet the definition of excepted benefits. If these requirements are not met, plans may face additional compliance under HIPAA, Mental Health Parity and the ACA as well as potential penalties for noncompliance.

PCORI Fee Announced for Year 3 of Program

Posted on by McKeogh Administrator

The Internal Revenue Service (IRS) issued Notice 2014-56 announcing the PCORI fees applicable to health plans for plan and policy years ending on or after October 1, 2014 and before October 1, 2015 is $2.08. These fees are calculated using an average number of covered lives and an annually announced applicable dollar amount. The applicable dollar amount for plan and policy years ending on or after October 1, 2012 and before October 1, 2013 was $1.00. This dollar amount was increased to $2.00 for plan and policy years ending on or after October 1, 2013 and before October 1, 2014.

For policy years and plan years ending October 1, 2015, through September 30, 2019, the adjusted applicable dollar amount will be published in future guidance in the Internal Revenue Bulletin.

Plans Must Obtain Health Plan Identifier (HPID)

Posted on by McKeogh Administrator

As part of the effort to standardize health plans’ electronic transactions, all group health plans are required to obtain a health plan identifier (HPID). The HPID is a 10-digit number assigned to health plans and will be used to identify the plan in standard transactions. Proposed regulations about the HPID were issued by HHS on April 27, 2012. Final regulations followed shortly after on September 5, 2012. Large health plans must obtain a HPID by November 5, 2014. Small health plans with less than $5 million in benefits per year have a one year extension and must obtain a HPID by November 5, 2015.

If a plan is fully insured, the insurance carrier is responsible for obtaining the HPID. If a plan is self-insured, the plan sponsor must obtain the HPID. If a plan sponsor’s health plan has both fully-insured and self-insured options, or has multiple self-insured options, the plan sponsor may obtain one HPID as the controlling health plan. Plans must apply for HPIDs at https://portal.cms.gov/wps/portal/unauthportal/home/. CMS has resources available to assist plans through the application process. For assistance in determining whether your plan is required to apply for an HPID or for assistance with the application process, please contact The McKeogh Company.   Continue reading →

IRS Releases 2015 HSA and HDHP Amounts

Posted on by McKeogh Administrator

The Internal Revenue Service (IRS) published Revenue Procedure 2014-30 outlining the annual health savings account (HSA) contribution limitation, the minimum deductible for a high-deductible health plan (HDHP) and the maximum out-of-pocket expense limits for an HDHP in 2015. For calendar year 2015, the annual contribution limitation to an HSA is $3,350 for self-only coverage and $6,650 for family coverage. The minimum deductible under an HDHP is $1,300 for self-only coverage or $2,600 for family coverage. The maximum out-of-pocket expense limit is $6,450 for self-only coverage or $12,900 for family coverage.

HHS Releases Data on Physician Medical Services Payments

Posted on by McKeogh Administrator

“As part of the Obama administration’s work to make our health care system more transparent, affordable, and accountable, Health and Human Services (HHS) Secretary Kathleen Sebelius announced the release of new, privacy-protected data on services and procedures provided to Medicare beneficiaries by physicians and other health care professionals. The new data also show payment and submitted charges, or bills, for those services and procedures by provider.”  Read more here.

Insurers Rethink Pay and Pursue Strategy

Posted on by McKeogh Administrator

“With about seven percent of all public and private health insurance claims paid incorrectly, insurers have a ways to go, beyond traditional models, if the healthcare spending crisis is to be reined in.

Private insurers historically were apt to raise premiums to cover rising healthcare inflation and, like Medicare, to “pay and chase” incorrect claims. But that may not be sustainable for much longer.

With provider upcoding and demand for healthcare services bound to continue … payment integrity is one area where insurers can start to make a large difference.”  Read more here.

Final Regulations for Basic Health Program Issued

Posted on by McKeogh Administrator

The Centers for Medicare & Medicaid Services (CMS) published final regulations on March 12, 2014 to establish the Basic Health Program (BHP) under the Affordable Care Act.  These regulations include eligibility and enrollment requirements for standard health plan coverage offered through the BHP, minimum benefits covered by such plans and federal funding available to states participating in the BHP.  These regulations are effective on January 1, 2015.  CMS also published a final methodology to determine the federal payments states may receive should they elect to participate in the BHP in 2015.

HHS Releases 2015 Benefit and Payment Parameters

Posted on by McKeogh Administrator

The Department of Health and Human Services (HHS) published on March 11, 2014 the final rule on benefit and payment parameters for 2015.  This rule includes oversight provisions related to the risk adjustment, reinsurance, and risk corridors programs as well as cost-sharing parameters and cost-sharing reductions.

In this rule, HHS finalized its provision that any self-insured group health plan that does not use a third party administrator for claims processing, adjudication, or plan enrollment for the 2015 and 2016 benefit years is excluded from making reinsurance contributions.

Cost-sharing limits for calendar year 2015 will be increased from $6,350 to $6,600 for self-only coverage. The limits for all other coverage will be increased from $12,700 to $13,200 for 2015.

These regulations are effective on May 12, 2014.