2014

Healthcare Reform | 2014

Changes

Whistleblower Protection: No discrimination against employees who receive tax credit or cost-sharing subsidy (All employers)
Essential Benefits: All annual limits on essential benefits ended; e.g. previously grandfathered must be added at this time. NO annual limits on the dollar value of benefits allowed; NO pre-existing condition limits for ANY participant or beneficiary. (All plans & insurers)
Essential Benefits Reporting: Plans required to cover minimum essential benefits and employer required to report the coverage of such benefits to the IRS and covered individuals (All plans & insurers) Waiting Periods: Eligibility waiting periods cannot exceed 90 days (All plans)
Wellness Incentives: Wellness incentives increased from 20% to 30% of the cost of employee only coverage; Secretary has discretion to increase to 50% (All plans)
Free Choice Vouchers: Employees may receive free choice voucher from employer to purchase coverage through Exchange. Eligible employees – if contribution toward coverage exceeds 8% but not more than 9.8% of household income and their household income is 400% or less of poverty level and does not participate in ER plan (Employees below certain income levels)
Deductible Limits: Deductibles cannot exceed $2000 for individual and $4000 for family, plus limit in health FSA plan (indexed annually) (ER plan in Small Group Market)
Employer Mandate: “Play or pay” (ER with more than 50 F/T employees (working 30+ hours/week))
Plan must provide minimum essential benefits, cover at least 60% of the cost of benefits; premium cost < 9.5% of income
If employer fails to “play” by providing NO coverage AND at least 1 F/T employee receives Federal premium assistance for purchasing coverage through an exchange, ER pays $2000 per F/T ee, excluding the first 30 F/T ees
If employer fails to “play” by providing inadequate coverage AND at least 1 F/T ee receives Federal premium assistance for purchasing coverage through an exchange, ER pays the lesser of $3000 per F/T ee receiving assistance OR $2000 per F/T ees, excluding the first 30 F/T ees
An employee may qualify for Federal premium assistance if income level is < 400% of Federal poverty level (currently $88,200 for family of 4)
Individual Mandate: Individuals must obtain health insurance or pay a penalty; Individuals with household income up to 400% of poverty level (in 2010, $88,200 for family of four) may be eligible for federal tax credit and cost-sharing reduction (Individuals)
New tax: Annual health insured fee based on premium volume >$25M in prior year net premiums. Exemptions for government and self-insured plans. (Insurers)
Clinical Trials: Health plans must cover routine costs for clinical trial participants (Non Grandfathered plans & insurers) Cost Sharing Amounts: Cost sharing amounts – co-pay, deductibles – capped at levels allowed for high deductible plans, indexed for inflation. Deductibles cannot exceed $2000 for individual and $4000 for family (Non Grandfathered plans & insurers)
Provider nondiscrimination: Group plans and insurers may not discriminate against any provider in regard to plan participation (Non Grandfathered plans & insurers)
CHIPRA: All states required to provide CHIPRA assistance for employer sponsored health coverage for employees and dependents who qualify for Medicaid or state health program regardless of age (States)
Insurance Exchanges: State based health insurance exchanges operational; for uninsured individuals and small employers (100 or fewer employees; states can lower the threshold to 50 employees) to purchase insurance. Bronze, silver, gold and platinum levels of coverage. (States)

Employer Checklist

Communicate insurance reform changes to employees – “pay or play” for employers with an average of 50 F/T employees (working 30+ hours/week); individual mandates, employer mandates, subsidies for certain income levels and tax penalties
Determine applicability of free rider vouchers and provide to employees if necessary
Make all required plan design changes – all annual limits on essential benefits end:
No waiting periods greater than 90 days
No pre-existing conditions for anyone
Cost sharing amounts capped at levels allowed for high deductible plans
Employers in Small Group Market, deductibles capped at $2000 individual and $4000 family plus limit in health FSA plan
Cover routine costs for clinical trial participants
No discrimination against any provider in regard to plan participation
Report coverage of minimum essential benefits to IRS and covered individuals
Consider increasing wellness incentive to 30% of coverage cost
Update all employee communications, amend SPD Wraps and Cafeteria Plan documents and distribute to employees
If insured plan, obtain updated EOCs from Insurers and distribute to employees