Monday, September 22, 2014

IRS releases notice 2014-55

The IRS recently issued notice 2014-55

This notice expands the application of the permitted change rules for health coverage under a § 125 cafeteria plan (cafeteria plan). In particular, this notice addresses two specific situations in which a cafeteria plan participant may wish to revoke, during a period of coverage (commonly a plan year), the employee’s election for employer-sponsored health coverage under the cafeteria plan in order to purchase a Qualified Health Plan through a competitive marketplace established under § 1311 of the Patient Protection and Affordable Care Act, commonly referred to as an Exchange or a Health Insurance Marketplace (Marketplace). The first situation involves a participating employee whose hours of service are reduced so that the employee is expected to average less than 30 hours of service per week but for whom the reduction does not affect the eligibility for coverage under the employer’s group health plan. (This may occur, for example, under certain employer plan designs intended to avoid any potential assessable payment under § 4980H of the Internal Revenue Code.) The second situation involves an employee participating in an employer’s group health plan who would like to cease coverage under the group health plan and purchase coverage through a Marketplace without that resulting either in a period of duplicate coverage under the employer’s group health plan and the coverage purchased through a Marketplace or in a period of no coverage.

This notice permits a cafeteria plan to allow an employee to revoke his or her election under the cafeteria plan for coverage under the employer’s group health plan (other than a flexible spending arrangement (FSA)) during a period of coverage in each of those situations provided specified conditions are met. The Treasury Department and the IRS intend to modify the regulations under § 125 consistent with the provisions of this notice, but taxpayers may rely on this notice immediately.

To access the full notice click here.

Thursday, September 18, 2014

Understanding the Health Plan Identifier Requirement

By now, most of us have heard about the HPID and if you’ve tried to ascertain if or how it applies to you or your client, you’ve come up with more questions than answers. 

Why an HPID?
In 2012 the Affordable Care Act required the adoption of a standard Unique Health Plan Identifier (HPID) to be used in covered HIPAA standard transactions.  There are currently many different health plan number combinations in regards to length, number and letter combination which can make identification a frustrating process.  The HPID ten-digit number will be a standardized number to identify a health plan.  HHS foresees a publicly accessible searchable database where these numbers can be looked up for billing information, eligibility, and other high level information. 1 

Part of the complexity with this rule includes an intentional ambiguity on the part of HHS.  The goal is for controlling health plans and subhealth plans to obtain an HPID in a way that best fits their business model. 2

Who needs an HPID and when?

Large Health Plans (receipts of $5M or greater) need to obtain their HPID by November 5th, 2014.
Small Health Plans (receipts of less than $5M) need to obtain their HPID by November 5th, 2015.
Full implementation for using HPID in standard transactions is November 7th, 2016.3
The carriers for most Fully Insured health plans have or are releasing information about their plans to apply for an HPID.  Self-funded health plans need to apply for their own HPID if they meet the definition of a Controlling Health Plan as defined below. 4 

Am I a Controlling Health Plan (CHP) or a Subhealth Plan (SHP)?

Controlling Health Plan (CHP): a health plan that—
1. Controls its own business activities, actions, or policies; or
2. Is controlled by an entity that is not a health plan; and if it has a subhealth plan, exercises sufficient control over the subhealth plan(s) to direct its/their business activities, actions, or policies.
If either or both of those statements apply to you, you meet the requirements of a Controlling Health Plan.

Subhealth Plan (SHP): a health plan whose business activities, actions, or policies are directed by a controlling health plan. 5
Subhealth Plans are not required to apply for their own HPID.  Their CHP may apply for an HPID for their SHP or require the SHP to apply for their own HPID. 

Commonly Asked Questions:

Q. I got my HPID number.  Now what?
A. The HPID will be used in HIPAA standard transactions so that health plans can be identified.

Q. The HPID Application asks for a Payor ID or NAIC number and I don’t have either?  What should I put in the field and will it cause issues with my application?
A. If you do not have a Payor ID or NAIC number, CMS has advised that an applicant fill in “not applicable” in the field.  It should not cause issues with your application.  If an issue does arise, contact the HIOS Help Desk at 1-877-343-6507 or email at
insuranceoversight@hhs.gov.

Q. How long should the application take for me to complete?
A. There are 4 steps to the application and you will have to wait to receive approval after each step which can take up to 24 hours at this time. 

Q. Under the User Roles section of the application, am I a Submitter or an Authorizing Official?
A. There are 2 applicable HPOES user roles in regards to completing your HPID application.  You can only select to be one role at a time and both roles need to be filled by an applicable party.  If you register as a Submitter, you can enter the Authorizing Official’s information on a later screen.
Submitter User: A representative of a health plan or other entity that submits an application.
Authorizing Official User: A company executive that has the authority to approve applications, including CEOs and CFOs.


 

Sources:

1 Federal Register Vol. 77 No. 172; 45 CFR Part 162 II.2.C
2
NCVHS Meeting Notes from 9/20/12
3
Federal Register Vol. 77 No. 172; 45 CFR Part 162 Chart 1
4
Federal Register Vol. 77 No. 172; 45 CFR Part 162 II.2.A.
5 Federal Register Vol. 77 No. 172; 45 CFR Part 162 II. A.

Friday, September 12, 2014

Virginia Governor Abandons Plan for Large Medicaid Expansion

Virginia Gov. Terry McAuliffe announced this week a plan to expand medicaid to around 25,000 uninsured Virginians.  This is a much smaller group than the 400,000 he had previous hoped to offer coverage.

For the Washington Post Article click here.

Tuesday, July 29, 2014

IRS Releases Draft Forms for Employer Reporting of Health Coverage


The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code (Code) Sections 6055 and 6056. Under these new reporting rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees.

On July 24, 2014, the Internal Revenue Service (IRS) released draft versions of the following forms that employers will use to report under Sections 6055 and 6056:





To view the Scott Healthcare Reform Bulletin click here.

Tuesday, July 22, 2014

Well that was Fast...Another Court Rules Federal Exchange Subsidies Can Stand

Below is a link to an article from LifeHealthPro.com outlining the details of a seperate ruling today from another circut court of appeals that upheld the ability for the states using federal exchanges to receive subsidies. This one seems destined for the supreme court.

Click here for the article...

D.C. Appeals Court: Residents in States with Federal Exchanges Ineligible for Subsides

From Business Insurance

Joe Carlson, Modern Healthcare

D.C. appeals court strikes down ACA insurance subsidies for federal exchanges

July 22, 2014 - 10:06am
A federal appeals court has ruled the Obama administration cannot subsidize insurance premiums for nearly 7 million Americans, dealing a serious blow to the Patient Protection and Affordable Care Act.
The ruling sets up an almost-certain appeal to the U.S. Supreme Court.

Two judges with the D.C. Circuit Court of Appeals in Washington ruled Tuesday that the text of the reform law clearly forbids income-tax subsidies to go to low- and middle-income Americans who use one of the 34 federally run insurance exchanges. The tax subsidies have been flowing since the beginning of the year, based on a 2012 interpretation of the law by the IRS.

The actual text of the law says the sliding-scale tax credits are only available for coverage purchased “though an exchange established by the state,” which only 16 states did. IRS officials had claimed the imprecise wording of the law contradicted Congress' overall intent to expand insurance coverage as widely as possible. But that argument did not win the day Tuesday.

“Because we conclude that the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges 'established by the State,' we reverse the district court and vacate the IRS's regulation,” the two-member majority wrote.

The ruling was the second dose of bad news for the Democrat-passed reform law this summer. Last month, the Supreme Court dealt a major symbolic blow to the law by ruling in Burwell v. Hobby Lobby Stores that the administration could not force the owners of closely held corporations to defy religious objections and cover contraceptives in their employees' insurance plans. The ruling prompted new legislation to ensure contraceptives are covered without cost for millions of women, but the future of that proposal is far from certain.

Tuesday’s ruling poses a much greater financial threat to the law's internal function, but the decision was not altogether surprising.

During oral arguments in March, the judges seemed to be split along the partisan lines that eventually became the 2-1 vote on Tuesday, with Republican-appointed Judges Thomas Griffith and A. Raymond Randolph voting for the plaintiffs and Democrat-appointed Judge Harry Edwards siding with Obama's IRS.

Judge Edwards filed a dissent saying that that the opinion required a reading of the law that would “crumble” the reform law's overall structure, which shows it was not Congress' intent to have the law interpreted narrowly.

“Reading the ACA as a whole, it is clear that the statute does not unambiguously provide that individuals who purchase insurance from an Exchange created by HHS on behalf of a State are ineligible to receive a tax credit. The majority opinion evinces a painstaking effort — covering many pages — attempting to show that there is no ambiguity in the ACA. The result, I think, is to prove just the opposite.”

The ruling does not automatically doom the subsidies. It's virtually certain that the administration will appeal Tuesday's ruling, either to a full panel of the D.C. Circuit Court or directly to the Supreme Court. Legal experts say the earliest the high court would rule is in the matter as soon as spring 2015 — setting up a period of national uncertainty, since the final word on the subsidies' legality would likely come after the re-enrollment period for next year.

Economists have estimated that a ruling like Tuesday's, in favor of the plaintiffs in Halbig v. Burwell, would eventually cause 6.5 million people nationally to forgo insurance purchased with now-illegal tax credits.

Nearly 7 million people used the exchanges to buy coverage in 2014, and more than 80% of them qualified for a tax credit that averaged about $2,900 per enrollee. Most of them are likely to forgo the coverage rather than pay the full price themselves, legal experts on both sides of the issue say. That would set up a situation where only people with immediate plans to use the insurance — that is, the sick or chronically ill — would be likely to find a way to pay for it. Skewing insurers' risk pools would most likely cause prices to rise, perhaps dramatically.

The ruling could also destabilize non-group insurance markets outside the exchanges.
That's because the reform law required insurance companies to put individuals in the same risk pools for coverage, regardless of whether they use an exchange or not. In other words, the grouping of disproportionately sick individuals in the exchanges could cause non-group premiums to rise outside the exchanges as well, because individuals in each state are in the same risk pool.

The Halbig case is not the only such lawsuit based on the legal theory that the reform law was only supposed to offer subsidies through federal exchanges.

The Competitive Enterprise Institute, which coordinated Halbig v. Burwell, also has a case called King v. Burwell awaiting a decision before judges of the 4th U.S. Circuit Court of Appeals in Richmond, Virginia. In addition, federal lawsuits filed by state officials, Pruitt v. Sebelius in Oklahoma and Indiana v. IRS, are pending in U.S. District Courts in Oklahoma City and Indianapolis.

Traditionally, the Supreme Court waits for two circuit courts to issue split rulings on the same question before taking up a case, though the court is free to accept cases involving urgent national questions if it chooses.

Joe Carlson writes for Modern Healthcare, a sister publication of Business Insurance.

Monday, June 9, 2014

Most employers to keep health benefits for workers but may drop spouses: Survey

 
Posted On: Jun. 09, 2014 2:58 PM CST

Jerry Geisel


Most employers will continue to offer health care coverage to their employees, but some will eliminate coverage for employees' spouses, according to a survey released Monday.

Just 6% of employers surveyed by Willis Group Holdings P.L.C survey say they will not comply with a Patient Protection and Affordable Care Act mandate that requires employers with at least 50 employees to offer coverage to their full-time employees or be hit with a stiff financial penalty. Sixty-two percent said they will comply with the mandate, and 32% said they were undecided.That requirement goes into effect in 2015 for larger employers and in 2016 for smaller firms.“The results of the survey underscore that organizations recognize the value of offering competitive medical benefits to employees and, despite concerns over health care reform, appear poised to continue to offer employer-sponsored health plans as part of a total rewards package,” said Jay Kirschbaum, St. Louis-based practice leader of the Willis human capital practice's national legal and research group, in a statement.On the other hand, 12% of employers already have added a special surcharge or eliminated coverage to employees' spouses if the spouse is eligible for coverage from his or her own employers, while 3% plan to take such action between 2015 and 2018, and 20% will likely do so but haven't set a date yet.The motivation behind such action is financial. Employers can reap significant financial savings when employees' spouses are not covered or are required to pay premium surcharges when they are eligible for coverage through their own employers but don't take it.For example, the average premium in 2013 for employee-only coverage was $5,884, according to the Kaiser Family Foundation in Washington. Adding a spouse easily will double that premium, experts say.

Other findings

The health care reform law also gives employers a further incentive to pare their health plan enrollment numbers.In 2014, employers have to pay a $63 reinsurance fee that is imposed for every health care plan participant, while a $44 per participant fee will be assessed in 2016. The amount of the fee in 2017 — the last year such fees will be imposed — has not been set yet by federal regulators. Revenue generated by the transitional reinsurance program fee will be used to partially reimburse insurers for covering high-cost individuals through health exchanges.The survey also found that just 37% of respondents have calculated the cost of the reform law on their health care plans.That relatively low percentage “demonstrates that for many organizations, determining an accurate assessment of these figures is still a challenge,” the survey said.,Among respondents that have calculated the cost impact, 54% said the law would boost costs between 0% and 5%, while 22% put the increase in the 5% to 10% range.The survey is based on the responses of 1,033 employers, including 36% with between 100 and 499 employees and 26% with less than 100 employees.