- Complex Case Management
- Inpatient Management
- Outpatient Management
- Telehealth Services
- Nurse Health Coaching
- Maternity Management
- Behavioral Health
As widely reported over the weekend, within a few hours of his swearing in, President Donald Trump signed his first Executive Order, calling on federal agencies to take immediate steps to curtail aspects of the Affordable Care Act and signaling the new administration’s plans to repeal and replace the Act altogether.
What does the Order say?
The Order itself has little if any tangible impact on the law. The Order states the administration’s official policy of pursuing a complete repeal and replacement of the ACA. It directs the heads of all federal agencies to take steps within their authority to remove or minimize any provision of the ACA that carries fiscal or regulatory burden. As the primary agencies charged with implementing the ACA, that action will likely come from the Department of Health and Human Services, the Department of Labor, and the IRS. The order also directs these agencies to afford greater flexibility to the States in areas impacted by the law. Finally, the order directs federal agencies to take steps to encourage and enable an interstate market for health coverage.
What does the Order mean for employers?
For now, the Order has no real impact on employers, except to signal that federal agencies will be acting quickly to relax various components of the ACA that impact employers, group health plans, and their members. The Senate has yet to confirm those President Trump has nominated to lead the agencies affected by the Order. Once those agency heads are confirmed, we expect to see regulations issued as prescribed by the Order and will be watching closely. Of course, both the Trump administration and members of both houses are said to be working on legislation to repeal and/or replace the ACA. Both the House and the Senate have laid the groundwork for streamlined procedures for repeal of the Act. They face more of an uphill battle to pass legislation to replace the ACA, as a 60-vote majority will be required in the Senate to pass replacement legislation. We will provide updates as details of those efforts become public. Until such legislation passes or further regulations are released, employers should bear in mind that the ACA remains in full force and effect.
By Michael Berwanger, JD, Director, Quality Management & Compliance
The Internal Revenue Service recently announced the tax year 2017 annual inflation adjustments for more than 50 tax provisions.
Notably, for the first time in two years and consistent with industry expectations, the IRS has increased the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health Flexible Spending Accounts (FSA) from $2,550 to $2,600.
The Revenue Procedure 2016-55 provides details about these annual adjustments. The tax year 2017 adjustments generally are used on tax returns filed in 2018.
For guidance on FSAs, please review the IRS Frequently Asked Questions page.
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Does open enrollment for your Human Resources department seem like “Nightmare on Employment Street?” Our first post listed five practical tips to streamline the open enrollment period for annual benefits. Check out these five additional best practices to chase the confusion away:
1. Make sure you provide all of the data requested by your claims administrator.
Inaccurate or incomplete data can result in time-consuming, frustrating mistakes. Remember to enter information exactly as provided in previous enrollments. Unique and accurate identifying information must be entered for each dependent.
2. Collect waiver forms from your employees.
For ACA reporting and Department of Labor requirements, you as the employer need to keep proof of waived coverage on file. Here is a Compliance Assistance Guide from the U. S. Department of Labor that offers more information. MedCost provides our clients with a generic form as part of our benefits’ services, if clients do not have one.
3. If you submit updated enrollment data on paper forms or by spreadsheet, information on new hires, changes, and terminations is all that is needed.
It may seem counterintuitive, but full enrollment data is not required and can actually slow down the input process for your claims administrator.
Note: This does not apply to clients that electronically submit enrollment data via 834 transaction.
4. When open enrollment is over, it’s over—no extensions.
Stick with the open enrollment deadline you set. Announce the deadline and remind employees of it several times during the open enrollment period. It is then the employees’ responsibility to complete the required enrollment process by the deadline. Remember, open enrollment is a finite time period, not an ongoing process.
5. Once you’ve collected enrollment data, submit it all at one time.
Submitting information piecemeal or in multiple spreadsheets that have to be merged or compared to previous submissions only increases the chance for errors. Avoid confusion with one complete submission of enrollment data.
It’s that time of the year that presents headaches for HR professionals and admin staff—open enrollment. But your company’s benefits administration doesn’t have to resemble a Halloween Fright Night. Here are five best practices to streamline your employees’ enrollment period and leave you with a basket of sweet candy:
1. Create a realistic schedule for open enrollment by beginning with the end in mind.
Your open enrollment period should end no later than 30 days prior to the end of your plan year or renewal date. Once you determine the ending date of open enrollment, back up from there to schedule open enrollment meetings, print forms or materials, distribute or mail open enrollment packets, etc.
2. Collect all required information for each plan participant (employee or dependent).
This may include information for each plan participant such as:
- Last Name, First Name and Middle Initial (exactly as provided in previous enrollments)
- Social Security Number (unique and accurate identifying information for each dependent)
- Date of Birth (unique and accurate identifying information for each dependent)
- Hire Date (if an employee)
- Coverage Effective Date
- Product Coverage (Medical, Dental, Flex)
- Date of Termination, if applicable, and Reason for Term
(especially needed for COBRA)
- E-mail address (useful to promote programs and services available through benefits plan)
3. Remind employees that “good data in equals good data out.”
Stress the importance of completing all fields on any enrollment or waiver forms. It’s in every plan participant’s best interest to review and verify new and existing data during open enrollment since it directly affects coverage for the upcoming plan year. Decisions regarding participants’ eligibility and coverage under the health plan—as well as that of their dependents—are made based on the information provided during open enrollment.
4. Educate employees about the “not-so-flexible” guidelines of flexible spending accounts (FSAs), if available through your plan.
In addition to the advantages of flexible spending accounts, make sure your employees also know about the guidelines for FSAs. The most important thing for employees to remember is that FSAs are “use it or lose it” accounts. Contributions made to an FSA during a calendar year can be used only for eligible expenses incurred during the same year—unless your plan provides for either a grace period or a carryover. If your plan doesn’t provide for a carryover, employees need to be aware that any money remaining in an FSA account after the claim filing period at the end of the year (and after the grace period, if applicable) is forfeited in accordance with IRS regulations.
5. If your employees have flex debit cards, remind them to save all receipts for purchases made with the card.
Since a flex debit card deducts payment for an eligible health care expense directly from an FSA account, employees may think that saving health care receipts is unnecessary. Some claims for reimbursement, however, may require substantiation. Encourage employees to save all receipts for flex debit card purchases in case they receive a substantiation request or their tax return is audited by the IRS. Employees should hold on to their cards even if the allocated FSA total amount has already been used.
Our next blog will contain five more tips to plan and prepare for open enrollment like a pro. Subscribe to our blog to receive it automatically!*
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By Michael Berwanger, JD, Director, Quality Management & Compliance
As background, this program was established to fund a reinsurance pool to help stabilize premiums in the insurance markets created under the Affordable Care Act (ACA).
The program is being funded by three annual assessments on employer-sponsored health plans. The assessments are for average covered lives in 2014, 2015 and 2016 calendar years.
This year, enrollment data must be submitted by November 15, 2016, and payment must be submitted no later than January 17, 2017.
The 2016 Reinsurance Contribution Rate is $27.00 per covered life.
Online Submission Process
The Centers for Medicare and Medicaid Services (CMS) has implemented a streamlined process for the collection of reinsurance contributions. A contributing entity, or a Third Party Administrator (TPA) on its behalf, can complete all required steps for the reinsurance contributions process online (using the government portal, pay.gov), including registration, submission of annual enrollment count, and remittance of contributions.
A form is available for the contributing entity (or its TPA) to provide basic company and contact information and the annual enrollment count for the applicable year. The form will automatically calculate the contribution amounts, and entities will be required to submit payment information and schedule a payment date for remittance of the contributions.
CMS will not send an invoice to contributing entities. All required action will be completed online at pay.gov.
Options for Payment
There are two options for how a contributing entity can make a payment: (1) a one-time lump sum payment, or (2) a full contribution in two payments. (See chart below.)
Contribution Payment Options for the 2016 Benefit Year
Source: Centers for Medicare and Medicaid Services
CMS will permit contributing entities to submit each year’s contribution in two separate payments – one larger payment of $21.60 per covered life at the start of the year, and a smaller payment of $5.40 per covered life at the end of the year.
However, when submitting enrollment data, dates must immediately be scheduled for payment of the fees, whether there will be one payment prior to January 17, 2017, or two payments with the later in November 2017.
If You Are Self-funded for a Portion of the Reporting Period
For a plan that has moved from a fully insured plan to a self-funded plan during the first nine months of the 2016 calendar year, both plans will be responsible for paying a portion of the fee, using one of the permitted calculation methods.
Since fully-insured plans are not permitted to use the Snapshot Factor Method of calculation, either the Actual Count Method or the Snapshot Method of calculation must be used.
This site provides technical assistance and training related to the Marketplace and Premium Stabilization program (which includes the Transitional Reinsurance Program). Webinars are offered that provide entities with information on program and operational guidance, along with live demos of the enrollment count and contributions submission process.
This is the site where the contributing entity, or TPA, will create a profile, and submit the enrollment data and contributions for the Transitional Reinsurance Program.
This website is hosted by the Centers for Medicare and Medicaid to provide information about the Transitional Reinsurance Program.
For more information, consult your broker, legal advisor or cms.gov.
This blog post should not be considered as legal advice.
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One-Fourth of Employers Now Offering CDHPs to Avoid Tax
Employers continue to take action to avoid the looming excise or “Cadillac” tax on more expensive health insurance for their employees. This Affordable Care Act tax of 40% annually is currently set to take effect in 2020, but it is already having a major impact.
A 2015 Mercer study found that total health benefits cost averaged $11,635 per employee.[i] This average amount exceeds the Cadillac tax’s threshold of $10,200 for individuals, and would trigger the 40% tax on benefits above the threshold. And small employers are seeing higher increases in medical, dental and other health benefits than large employers.
Employers Turn to
For the first time, 25% of covered employees are now enrolled in Consumer-Driven Health Plans (CDHP). Large employers of 20,000 or more employees have added CDHPs the fastest (73%). A projected 34% of employers with 50+ employees will be subject to the excise tax in 2020 if they make no changes to their current health plans.
High-Deductible Health Plans (HDHP) are a type of Consumer-Driven Health Plans. Employers are saving an average of 18% with an HSA-eligible HDHP instead of a traditional Preferred Provider Organization (PPO) plan.[ii]
One key reason that employees are researching medical costs in advance for services such as maternity care, joint replacements and Emergency Room visits. A 2015 Consumer Health Insights’ survey showed that 22% always talked to others about costs or searched websites for information.[iii]
Employees who have a telemedicine option in their health plans can choose a more appropriate level of care for certain respiratory infections, fevers and nausea (see “Treatment Alternatives to the Emergency Room”). Choosing the right level of care reduces time away from work, boosting productivity. And employees save unnecessary dollars from their own pockets.
Some employers offer pricing transparency tools such as HealtheReports™ which compares costs for a complete procedure. Employees can review local facilities that offer mammograms, colonoscopies, X-rays and other services. HealtheReports also lists comments from members about their recommendations for health care organizations.
A New Era in Health Care
CDHP plans require a shift in thinking about medical spending. In traditional plans, employees are used to handing over their insurance card and paying a small copay.
It can come as a jolt to employees to realize that CDHP coverage begins with paying expenses up to a higher deductible before insurance kicks in. For this reason, employers must proactively educate employees when introducing CDHP options.
Our next blog will detail key steps for employers to take in providing tools for smart decision-making. Employers who can manage staff expectations with a balanced understanding of the changing health care industry will build a productive partnership with your team.
[i] “With the Excise Tax in Their Sights, Employers Hold Health Benefits Cost Growth to 3.8% in 2015,” Mercer Global, November 19, 2015, http://www.mercer.com/newsroom/national-survey-of-employer-sponsored-health-plans-2015.html (accessed August 8, 2016)
[iii] “Debunking Common Myths about Healthcare Consumerism,” McKinsey & Company, December 2015, http://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/debunking-common-myths-about-healthcare-consumerism (accessed August 11, 2016)
Big employers expect health costs to continue rising by about 6 percent in 2017, a moderate increase compared with historical trends that nevertheless far outpaces growth in the economy, two new surveys show.
These cost increases, while stable, are both unsustainable and unacceptable,” said Brian Marcotte, CEO of the National Business Group on Health (NBGH), a coalition of very large employers that got responses from 133 companies.
Employers are changing tactics to address the trend, slowing the shift to worker cost sharing and instead offering video or telephone links to doctors, scrutinizing specialty-drug costs and steering patients to hospitals with records of lower costs and better results.
Most large-company employees should expect a 5 percent increase in their premiums next year and, in contrast to previous years, “minimal changes” to plan designs, NBGH said.
(Kaiser Health News, Jay Hancock, August 9, 2016)