W53_Radakovich_Emplo..

Report
Employers and The
Affordable Care Act – Why
Are We Still Confused?
Presented by: Katherine L.
Radakovich, MBA, SPHR
Chief Human Resources Officer
Chartiers Center
Welcome
• Presenter introduction
• Show respect for differing ideas,
thoughts, and questions
• Silence electronic devices
• Time for Q & A will be provided at
the end of the presentation
• This is not a substitution for legal
advice
Katherine L. Radakovich, MBA,
SPHR
2
Seminar Objectives
• Using the information provided
today, participants and Employers
will be able to:
– Recognize and understand key
components of the ACA
– Differentiate and analyze
compliance requirements
– Confidently create an action plan to
comply with the ACA and be ready
for a DOL audit
Katherine L. Radakovich, MBA,
SPHR
3
How do you feel about
compliance and the ACA?
Katherine L. Radakovich, MBA,
SPHR
4
PPACA
• PPACA –Patient Protection and
Affordable Care Act - ACA
• One of the most significant laws
affecting the workplace in recent
history
• Time to reshape benefit packages
• Communication is key
• Compliance delays
• Interpretation and guidance
changes on a daily basis
Katherine L. Radakovich, MBA,
SPHR
5
Recent Top 5 Employer
Concerns
• May 2015 Fisher and Phillips LLP
released 5 current employer
concerns:
•
•
•
•
•
The employer mandate
The individual mandate
Wellness programs
Reporting requirements
Automatic enrollment and
nondiscrimination regulations
Katherine L. Radakovich, MBA,
SPHR
6
Understand what is (and
is not) delayed
• Employer Mandate
– 2015 – large employers (with 100+
employees) are required to offer
ACA compliant (affordable) health
care coverage to 70% of their
employees. 95% in 2016 (1/1/15)
– Employers with 50-99 – delayed
requirement until 2016 (1/1/16)
– Also known as “shared
responsibility” or “play or pay”
Katherine L. Radakovich, MBA,
SPHR
7
Understand what is (and
is not) delayed
• 2014 – Requirements (not delayed)
– Eliminating pre-existing conditions
exclusions
– Imposing the 90 day waiting period
– Eliminating annual dollar limits on
essential health benefits
– Include coverage for clinical trials
– Eliminating maximums on annual
deductions and limiting out of pocket
costs
– Eliminating the ability of
grandfathered plans to exclude adult
children who have access to other
employer coverage
Katherine L. Radakovich, MBA,
SPHR
8
2014-2015 Requirements
• Individual Coverage Mandate
– Individuals are required to obtain
health coverage or pay a penalty
– Supreme Court rules it is
constitutional
• Health Insurance Exchanges
– States establish insurance
exchanges that sell qualified health
plans to individuals and small
business – or participate in the
Federal Exchange
Katherine L. Radakovich, MBA,
SPHR
9
2014-2015 Requirements
• No Pre-existing Condition Limits
– Elimination of ALL pre-existing
condition exclusions
• Dependent Coverage Expansion
– Grandfathered plans may no longer
deny coverage to dependent
children even if they are eligible for
other employer coverage
– Spouses are not considered
dependents
Katherine L. Radakovich, MBA,
SPHR
10
2014-2015 Requirements
• Limited Waiting Periods
– Group health plan waiting periods may
not exceed 90 days
– Coverage must begin on the 91st day of
employment
– June 2014 – Final Rule - Orientation
period can last 1 month before
beginning the 90 day waiting period
– This rule applies to plan years starting
January 1, 2015.
– Final rule defines the 1 month
orientation period beginning the first
of of employment and ends the same
day in the following month. Coverage
must start by the first day of the fourth
month.
Katherine L. Radakovich, MBA,
SPHR
11
2014-2015 Requirements
• Wellness Programs
– Employers can offer employees
incentives up to 30 % (may increase
to 50%) of the cost of coverage for
participation in wellness programs
– HIPAA Wellness Program Rule
issued
Katherine L. Radakovich, MBA,
SPHR
12
2014-2015 Requirements
• Automatic Enrollment
– Employers with more than 200 full
time employees are required to
auto-enroll employees in the health
plan
– Delayed until regulations are issued
• Employer Shared Responsibility
– Employers with 100 + employees
may face a penalty if the group
health plan does not provide
affordable, minimum essential
coverage to at least 70% of full time
employees.
Katherine L. Radakovich, MBA,
SPHR
13
2014-2015 Requirements
• Provision applies if:
– The employer does not offer
minimum essential coverage to all
full-time employees and their
dependents
– The employer offers minimal
essential coverage that is not
considered affordable or does not
provide minimum value
Katherine L. Radakovich, MBA,
SPHR
14
2014-2015 Requirements
• Additional reporting requirements
– Employers are required to file
annual reports with the IRS (and
provide annual statements to
employees)
– Must contain specific plan
information, and certification of
minimum essential coverage
– Reports due to employees by
January 31st of the following the
year the report is submitted to the
IRS
Katherine L. Radakovich, MBA,
SPHR
15
Are you ready for a DOL
audit?
• Affordable coverage
– What is considered affordable coverage
under the employer mandate?
• Employee’s contribution to self only benefits
cannot exceed 9.5% of the employees
household income
• Employers have no practical way of knowing
what an employee’s “household income is”
• Employees can shop on the exchange if the
employer does not provide affordable or
minimum coverage
• Employees may qualify for federal tax credits
• In 2015 large employers will face fines of
$2000 per employee, for failure to provide
compliant coverage AND employees qualify for
tax credits (2016 Mid-size employers must
comply)
• Small employers (50 or less employees) are
not required to provide health care coverage
Katherine L. Radakovich, MBA,
SPHR
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Who is eligible for tax
credits?
• An employee qualifies for tax credits
when:
– Singles who make less than $46,000
– Family of 4 who earns less than $94,000
– Employers may pay fines up to $2,000 per
employee over the first 30 employees
– Employers may pay fines up to $3000 per
each employee that actually receives tax
credits
• If an employee seeks coverage on the
exchange AND the employer offers
compliant coverage the employee will
not receive tax credits and the employer
will not be assessed a penalty
Katherine L. Radakovich, MBA,
SPHR
17
Safe Harbor Methods
• To be compliant with affordable
coverage – utilize safe harbor
methods:
– Employees required premium co-share for
the lowest cost, self-only coverage that
provides minimum value not being
greater than 9.5% of the employee’s W-2
taxable income
– Taxable calculation currently excludes:
• Employee’s contribution to health savings account
• Employer 401(k) plans, or other nontaxable Section 125
plans (cafeteria plans)
– Cost of Dependent coverage
• Not calculated in the affordable coverage percentage
Katherine L. Radakovich, MBA,
SPHR
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Safe Harbor Methods
– Coverage is minimum value if
• The plan covers 60% of an employee’s
medical expenses. (Actuarial value)
– Minimum value is provided prior to
Wellness program participation
• Minimum value calculation may be
calculated assuming that every
employee satisfies the terms of the
program relating to prevention or
reduction of tobacco use.
Katherine L. Radakovich, MBA,
SPHR
19
Full Time Employees
• Under the Employer Mandate:
– Coverage must be provided to
employees who work an average of
30 or more hours per week
– The measurement period to meet
the 70% coverage and then 95%
coverage levels can be 3 -12 months
– Stability period cannot be shorter
than 6 months
Katherine L. Radakovich, MBA,
SPHR
20
Qualifying for “fewer than
100 employees”
• Employers must certify
– Employer must average 50 full time
employees – includes part time employees’
whose combined hours equal full time
employee equivalents
– Feb 2014 – through the end of December
2014 – the employer cannot reduce its
workforce or hours of service to meet the
condition of having fewer than 100
employees
– Must maintain and/or not reduce the health
coverage offered as of February 2014 until the
last day of the 2015 plan year
– Employers are not penalized for employees
who receive Medicaid coverage
– Mandate delay adds to the penalty confusion
Katherine L. Radakovich, MBA,
SPHR
21
Who is a Full Time Employee or a
Full Time Employee Equivalent?
• FTE = 30 hours/week average (130
hours/month)
• Hours include ANY PAID LEAVE
• Reasonable counting method
– Month to Month
• Penalty determined on a monthly basis
• 3 month breather if coverage is offered
the 1st day of the 4th month
– Measurement and Stability Period
– May use different methods or
measurement periods for different
classes
• Hourly v. Salary, Union v. Non-Union,
different states NOT variable hour v. non
variable hour
Katherine L. Radakovich, MBA,
SPHR
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Who is a Full Time Employee or
a Full Time Employee
Equivalent?
• Break in service/Leave of Absence
Rules
– Must treat rehired employees as
new employees
• If period of no service was 13 weeks or
more
– Under rule of parity
• Treat as continuing employee as same
status for that stability period
• For employees returning after special
unpaid leave (FMLA, Jury) – exclude
special unpaid leave or credit hours at
average weekly rate
Katherine L. Radakovich, MBA,
SPHR
23
Health Care Strategy
Planning
• Keep in mind the following when
making decisions about employee
health plans:
– The actual cost of play or pay
– The effect of changing the composition
of the workforce – reducing employee
hours, hiring part time, etc.
– How to treat retirees – do you offer
retiree coverage?
– Understand future cost savings of
wellness plans
– Eliminate coverage for part time
employees
– No longer offer to cover employee
spouses
Katherine L. Radakovich, MBA,
SPHR
24
Planning for Federal
Reporting Requirements in
2015
• New regulatory reporting in 2015
– Evaluate the processes you are
using to track an employee’s key
information:
• Address
• Social Security Number
• Number of individuals covered any
given time on the health plan
• Dates employee was covered during a
calendar
• This information will be required for
reporting
Katherine L. Radakovich, MBA,
SPHR
25
Planning for Federal
Reporting Requirements in
2015
• IRS Reporting
– Internal Revenue Code (Title 26)
• Information gathering begins in 2015
• First reports filed in 2016
–
–
–
–
6055 and 6056
Information gathering begins in 2015
Draft form available as of 8/28/14
Watch for further communication – final
rulings
– Completed by anyone who provides
minimum essential health coverage
– Section 6056 reporting applies only to
large employers
– Currently the IRS is evaluating reporting
methods
Katherine L. Radakovich, MBA,
SPHR
26
Planning for Federal
Reporting Requirements in
2015
• Who will be responsible for
reporting requirements?
– HR’s new role
• HR will keep employees informed on
employer health coverage and about
the exchanges
Katherine L. Radakovich, MBA,
SPHR
27
Self Compliance Tool
Affordable Care Act
Provisions
• Be ready for an audit
– Use the self compliance tool
– Does not cover all aspects of the
law
– http://www.dol.gov/ebsa/healthref
orm/ - most up to date guidance
– Compliance aid is continually
updated as changes are made
Katherine L. Radakovich, MBA,
SPHR
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Self Compliance tool will help
you determine the following:
• Determine Grandfather Status and what that
means for you, the employer
• Determine compliance with Dependent
coverage of children to Age 26
• Determining compliance to Rescission
Provisions
– A cancellation or discontinuance of coverage that
has a retroactive effect; treats a policy as void
from start date (do not pay premiums)
Katherine L. Radakovich, MBA,
SPHR
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Self Compliance tool will
help you determine the
following:
• Compliance with Lifetime Limits
and restrictions on annual limits
• Compliance with Pre-existing
condition exclusion for individuals
• Compliance provision of
supplying the Summary of
Benefits and Coverage to
employees and Uniform Glossary
• Compliance with the Patient
Protection Provisions
– Employee has the right to designate
primary care provider of choice
covered in the plan
Katherine L. Radakovich, MBA,
SPHR
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Self Compliance tool will
help you determine the
following:
• Compliance in the coverage of
preventive services
– Plan must provide preventive services
without cost sharing
• Compliance in the internal claims
and appeals process and external
review
– Health insurers offering group health
plans must offer effective internal
claims and appeal process
– Must comply with State or Federal
external review process
– Ensure your group health plan offers
this provision
Katherine L. Radakovich, MBA,
SPHR
31
Self Compliance tool will
help you determine the
following:
• Self Compliance tool provides
questions to help employers
review its group health plan and
ensure compliance with ACA
Employer provisions
Katherine L. Radakovich, MBA,
SPHR
32
Cost Controlling Steps while
complying with the ACA
Employer Provisions
• Provide Consumer (employee)
engagement tools
– Teach employees to be better
health care consumers
– Choose a plan that offers cost
transparency tools for employees to
make smart provider choices
Katherine L. Radakovich, MBA,
SPHR
33
Cost Controlling Steps while
complying with the ACA
Employer Provisions
• Consumer Directed Plans
– Implement or expand a CDP
– Assists in the elimination of high
cost plans
• Wellness Programs
– Offer wellness incentives
– Cannot violate the HIPAA
Nondiscrimination Rules
• Spousal Coverage
– Eliminate or limit spousal coverage
– Spousal surcharges
Katherine L. Radakovich, MBA,
SPHR
34
Cost Controlling Steps while
complying with the ACA
Employer Provisions
• New delivery models
– Encourage employees to use highperformance networks –
accountable healthcare
organizations, designated centers of
excellence
• Specialty pharmacy benefits
– Specialty drugs can make up 30% of
a plans costs
– Require step therapy – trying lessexpensive medication to manage
condition first
Katherine L. Radakovich, MBA,
SPHR
35
Sharing the cost
• 2015 Employee Contributions
– Move to a private exchange
• Gives employee’s the choice of
provider
• Mixed views on whether it will save
employers money
– Large organizations will make
employees responsible for at least
20% of coverage costs.
– “Skinny” plans do not meet ACA
affordability or minimum value test
• Low value plan
Katherine L. Radakovich, MBA,
SPHR
36
Do not ignore the ACA
• In summary – to-dos
– Determine if you are in compliance
• Self audit tool
– Determine if you are a “large”
employer
• Subject to play or pay
– Determine your 2015 plan design
– Determine which employees will be
eligible for open enrollment
– Determine whether or not your
organization will be subject to the
“auto-enroll” requirement (pending
ruling status)
Katherine L. Radakovich, MBA,
SPHR
37
Summary
• Use the ACA as a catalyst to
strategize employee benefits for
recruiting and retention purposes
• ACA is constantly evolving
– Assign an expert in your
organization to monitor the ACA
• Its time to get ready for
2015/2016 Reporting
Requirements
Katherine L. Radakovich, MBA,
SPHR
38

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