Upload
summit-professional-networks
View
111
Download
0
Embed Size (px)
DESCRIPTION
Citation preview
Surviving Reform Roger Abramson, General Counsel
AmeriFlex Business Solutions
April 29, 2013
HCR: One Stubborn Three-Year Old
2011: When HCR Could Barely Walk
• Happy Birthday, Health Care Reform” (BSE, Opryland Hotel, April 2011)
• The Two-Factor Theory: – Does the provision expand coverage?
– Has the provision gone into effect?
2011: When HCR Could Barely Walk
2012: The Terrible Twos
• January - May: Republican Presidential Primaries – Mitt Romney wins
• June: Supreme Court Ruling – “Individual Mandate” upheld
– Only Medicaid mandates affected
• November: President Obama re-elected
• 11/6/12 at 11:17 EST: Skynet becomes self-aware; starts developing and issuing regulations
2013: Where We Are Now
• ACA now as much a part of the benefits legal landscape as ERISA, COBRA, HIPAA, etc.
• Congress out of the picture until at least 2015
• Playing field has shifted to the agencies
• The Five Stages of Grief = Completed! – Right?
2013: Where We Are Now
Understanding Administrative Law
• Executive Branch: Where the action is now
• Not just “enforcement,” but “administration”
• President holds all of the cards
• Health care reform law gives agencies wide latitude
Understanding Administrative Law
• Administrative Procedure Act (1946) – Codified the Washington we know and love today
– Borne out of the Great Depression/WWII/FDR Era
– Essentially put into place an entirely new lawmaking process
– Understanding this is key to understanding the next phase of health care reform implementation
Understanding Administrative Law
• The Rulemaking Process – Proposed Rule
– Public Comment
– Final Rule
– Judicial Review?
• Was Congress’ intent clear?
• If not, is agency’s statutory construction permissible?
• Courts tend to grant wide latitude
Administrative Law & the ACA
• The ACA’s Three-Agency Circus – Internal Revenue Service
– Department of Labor
– Department of Health and Human Resources
• Internet HQ: http://www.dol.gov/ebsa/healthreform/
Administrative Law & the ACA
• Sometimes It’s Pretty Straightforward – Insurance Market Reforms
– Essential Benefits
– Affordability
– Actuarial Value
– Exchanges & “Play-or-Pay” (more to come)
Administrative Law & the ACA
• Sometimes…It’s Not: HRAs Anyone? – HRAs: The HCR Wedding Crasher
– Not “HCR,” but “HIR” Who Invited HRAs?
– HRAs = “Group Health Plans”
– But they are not insurance
– Legislative afterthought
– Agencies have struggled to deal with them
The HRA/HCR Conundrum
• Annual limits – Annual limits prohibited for group health plans
– The great “waiver” controversy of 2010
– 2011 – “Pre-existing” HRAs grandfathered in
– 2014 – Window closing
– Stand-alone HRAs now at risk
• Retiree plans OK
• Vision/dental plans OK
The HRA/HCR Conundrum
• HRAs & the Summary of Benefits and Coverage (SBC) – Applies to “group health plans”
– So applies to HRAs
– Started doing those for clients in fall 2012
The HRA/HCR Conundrum
• HRAs & PCOR Fees – Patient-Centered Outcomes Institute
– Usually a “per-participant” fee paid by insurers
– HRA application
• Stand-alones: Pay
• Integrated with insurance plan: Pay on top of insurance PCOR fee
• Integrated with self-insured plan: One combined fee
The HRA/HCR Conundrum
• HRAs & “Valuable” Coverage – Yes, if “integrated”
• Calculations to come
– Stand-alones may be left out in cold
– What about “cost-sharing”?
• Small groups cannot use HRAs to lower deductible to required $2,000/$4,000 threshold
• “Administrative concerns”
The HRA/HCR Conundrum
• HRAs & the “Cadillac Tax” – Down the road
– Likely determined by the answers to above questions
• Or whatever direction the wind is blowing then
Exchanges, Playing, Paying & All That Stuff
• The “Play-or-Pay” Penalty – Intended Purpose: Shared responsibility
– Two ways to lose
• Not offering minimum essential health care coverage for all FT EEs
• Insufficient benefits
– Not offering “affordable” coverage (premium exceeds 9.5% of EE’s household income)
– Not offering “minimum value” (at least 60%)
– Penalty is due if any FT EE purchases health insurance through an Exchange using a premium tax credit or cost-sharing reduction
Exchanges, Playing, Paying & All That Stuff
• The “Play-or-Pay” Penalty – Applies to “applicable large employers”
– Average 50 FT EEs during previous calendar year
• Generally, FT= at least 30 hours a week
• Count FTEs for part-time EEs
– BUT: PT EEs do not count for purpose of the penalty
– Watch out for controlled groups
– Complicated calculations for ERs on “the line”
Exchanges, Playing, Paying & All That Stuff
• The “Play-or-Pay” Penalty – Offering employer-sponsored health coverage to FT EEs is the trigger
– BUT: Assessing “FT EE” a little different here
• Part-timers do not count
• Real-time, not retrospective
– The “fortunetelling” problem
– IRS has developed safe harbors for both new and regular EEs
» Summary: “Standard periods” and “measurement periods”
Exchanges, Playing, Paying & All That Stuff
• The “Play-or-Pay” Penalty – The “No-Plan” Penalty
• No plan with “minimum essential coverage” offered to FT EEs + subsidized FT EE enrollment in a QHP = Penalty
– NOTE: Both factors must apply
• Penalty = Applicable payment amount ($166.67 in 2014) x # of FT EEs (minus a 30-EE allowance)
Exchanges, Playing, Paying & All That Stuff
• The “Play-or-Pay” Penalty – The “Inadequate-Plan” Penalty
• Plan failing minimum value or affordability requirement with “minimum essential coverage” offered to FT EEs + subsidized FT EE enrollment in a QHP = Penalty
– NOTE: Both factors must apply
• “Minimum Value” – three options
– Calculator
– Safe harbor checklist
– Actuarial certification
Exchanges, Playing, Paying & All That Stuff
• The “Play-or-Pay” Penalty – The “Inadequate-Plan” Penalty
• “Affordability”
– Statute = “household income”
– IRS safe harbor = EE’s W-2 alone OK to use
» EE portion of the self-only premium for the ER’s lowest-cost “minimum value” coverage cannot exceed 9.5% of the EE’s wages
• Penalty = $250 (1/12 of $3,000) X # of FT EEs getting subsidized QHP
– No “30 EE” reduction
– Capped Cannot be higher than “no-plan” penalty
Exchanges, Playing, Paying & All That Stuff
• The “Play-or-Pay” Penalty – How Would the Employer Know?
• Exchange sends notice to employer
• IDs EE and explains ERs penalty
• ER can appeal
• Details still being worked out
• Expect changes as we go along
• Privacy?
Congratulations: You are the New HR Director at Holiday Corp
• Holiday Fun & Family Resort (“HFFR”) – Principal business: Family resort in NE US
– Main operating season: May 1 – August 31
• Seasonal EEs work during this time
• Mostly college students
– Off-season: September 1 – April 30
Congratulations: You are the New HR Director at Holiday Corp
• Stats – 250 total employees
– 60 year-round employees
• 20 corporate employees – 10 “FT” working at least 35 hours/wk
– 10 “PT” working at least 25 hours/wk
• 40 resort employees – 25 “FT” working at least 35 hours/wk
– 15 “PT” working at least 20 hours/wk
– 175 seasonal employees
• 90 “FT” working at least 35 hours/wk
• 85 variable but no more than 25 hours/wk
The Rubber Meets the Road (Issues)
• “Applicable large employer” – Predecessor/successor employers
– “Business day”
– Full-time & Full-time Equivalents
– Seasonal employees
– New employers
The Rubber Meets the Road (Issues)
• “Full-Time Employee” – Exclude PT EEs this time
– Not retrospective this time
• Except that it is
– What is an “hour of service”?
• Up to agencies to define
• Hourlies v. Salaried – Actual? Days? Weeks?
– “Anti-abuse” rule
• “Oddballs” (e.g., airline pilots, adjunct profs)
The Rubber Meets the Road (Issues)
• “Full-Time Employee” – The IRS Safe Harbor (aka “Lets Just Ignore What the Statute Says”)
• The Measurement Period, etc.
• New v. Ongoing EEs
• Transition Rule for 2013
• “Variable-Hour” EEs
• Seasonal EEs
The Rubber Meets the Road (Issues)
• The “No-Plan” Penalty – The 5/5 “Margin-of-Error” allowance
– “Offer of coverage”
– Employees and “Dependents”
• Who’s missing?
– “Minimum essential coverage”
The Rubber Meets the Road (Issues)
• The “Inadequate-Plan” Penalty – Minimum Value Test (at least 60%)
• Calculator
• Safe Harbor
• Actuarial
– Affordability Test (9.5% of HH income)
• “Form W-2”
• “Rate of Pay”
• Poverty Line
– Role of HRA/HSA contributions?
The Rubber Meets the Road (Issues)
• Penalty Assessment – Exchange sends notice to employer
– IDs EE and explains ER’s penalty
– ER can appeal/detailed process
– Expect changes as we go along
– Privacy?
The Rubber Meets the Road (Issues)
• Transition Rules – Fiscal Year Plan Years/Cafeteria Plan Years
– Initial Measurement Period for 2013/4
– Coverage for Dependents
– Variable-Hour Employee Definition
Keeping It Real
• Good Advice = Providing a Reality Check
• Better to “play” or “pay”? – False choice?
• The Taxation Factor – Bonus-up?
• The HR Factor
• The PR Factor
Keeping It Real
• “Wait-and-see” approach most likely – “Diehards” excepted
– Let the pioneers go ahead
• “29 hours” may be the new “39 hours” – Legislative movement to lower?
• Agencies & exchanges adjusting on the fly – Remember: Expanding or preserving coverage is the key
Questions?