The Affordable Care Act mandates that a fee be assessed on health insurance issuers and plan sponsors of self-insured health plans to fund the Patient-Centered Outcomes Research Institute. The IRS recently proposed rules implementing the new fees. Under the proposed rules, employers sponsoring self-insured health plans, including HRAs, are subject to the fees. This is the case even if the HRA is integrated with a fully-insured plan. In this scenario, both the health insurance issuer and employer would be assessed a fee. Health FSAs qualifying as excepted benefits, stand-alone dental and vision plans, employee assistance programs, wellness programs and health savings accounts are excluded and not subject to the new fee. For plan years ending on or after October 1, 2012, the fee is $1.00 multiplied by the average number of covered lives (including dependents). The fee is increased to $2.00 for plan years ending on or after October 1, 2013 and may be further increased thereafter based on an increase in the projected per capita amount of national health expenditures. The “average number of covered lives” can be determined in one of three ways: (i) the number of lives covered for each day of the plan year divided by the number of days in the plan year; (ii) the total lives covered on one day in each quarter divided by the sum of the number of dates on which a count was made; or (iii) using the plan sponsor’s Form 5500 participant counts. Employers who sponsor self-insured plans, such as HRAs, are required to report and pay the fee once per year on Form 720, the Quarterly Federal Excise Tax Return. The Form must be filed by July 31 of each year for the plan year ending in the preceding calendar year. A copy of the proposed regulations can be obtained at http://www.gpo.gov/fdsys/pkg/FR-2012-04-17/html/2012-9173.htm
Last week HHS, DOL and Treasury issued an advanced notice of proposed rule-making seeking public comments on how best to accommodate the objections raised by religious organizations to mandated contraceptive coverage. HHS has been under scrutiny since it released interim final rules last August including FDA-approved contraceptives in the definition of preventative care that must be covered at 100% by non-grandfathered health plans. While the interim final rule contained a religious exemption it exempts only those non-profit religious organizations who primarily serve and employ individuals who share their religious tenets. Many religious-affiliated organizations, such as Catholic hospitals, universities, and charities, do not qualify for the exemption. After much public outcry, HHS announced in February that it would delay by one year the effective date of mandated contraceptive coverage for non-grandfathered plans sponsored by non-profit organizations with religious objections while it worked on a resolution to this issue. The agencies are now seeking comments on what this resolution should look like. Comments will be accepted through June 19, 2012. A copy of the notice, including how to submit public comments, can be accessed at http://www.gpo.gov/fdsys/pkg/FR-2012-03-21/pdf/2012-6689.pdf
Today the Department of Labor added several new FAQs to its website regarding the implementation of the Summary of Benefits & Coverage requirements. The FAQs can be accessed at http://www.dol.gov/ebsa/faqs/faq-aca8.html Employers sponsoring group health plans must start complying with the requirements on the first day of their plan’s first open enrollment period on or after September 23, 2012.
Today CMS awarded seven loans under the Consumer Oriented & Operated Plan (“CO-OP”) Program. The CO-OP Program provides low-interest federal loans to qualifying non-profit cooperatives to establish health insurance for cooperative members. One of the loans was made to Midwest Members Health, a cooperative sponsored by the Iowa Institute, who applied to offer insurance within Iowa and Nebraska. More information on the awards is available at http://www.healthcare.gov/news/factsheets/2012/02/coops02212012a.html
On Tuesday, the final Summary of Benefits and Coverage rules were posted in the Federal Register. Employers sponsoring group health plans will have to comply with these rules starting with their first open enrollment period on or after September 23, 2012. A summary of the final rules is available on the Davis Brown website.
Today the Department of Labor released final regulations implementing the Affordable Care Act’s summary of benefits and coverage (“SBC”) requirement. The rules require employers sponsoring group health plans to distribute an SBC to employees and participants in certain situations, such as at open enrollment. The rules were originally supposed to be effective on March 23, 2012; however, the final rules delay the effective date. The new effective date is (i) the first day of the plan’s open enrollment period on or after September 23, 2012 for disclosures required to be provided to re-enrollees or late enrollees; and (ii) the first day of the plan year that begins on or after September 23, 2012 for individuals newly eligible for coverage (such as new hires or special enrollees). For example, a calendar year plan with an open enrollment period beginning November 15 would need to begin complying with the new regulations on November 15, 2012 for re-enrollees and late enrollees and January 1, 2013 for newly eligible individuals.
We will provide a detailed summary of the new rules in the coming days. A copy of the rules and additional DOL guidance can be accessed at http://www.dol.gov/ebsa/
Last August HHS revised the definition of preventative care that non-grandfathered plans must cover without cost-sharing to include all FDA approved forms of birth control. The new definition is effective for plan years that begin on or after August 1, 2012. The rule contained a very limited exemption for “religious employers”, such as churches, but did not include an exemption for non-profit entities affiliated with religious organizations, such as Catholic hospitals.
On Friday HHS announced that it was giving non-profit employers who currently do not cover birth control because of religious objections an additional year to comply with the new definition of preventative care services. Therefore, non-grandfathered group health plans sponsored by non-profit employers affiliated with religious organizations who currently do not cover birth control because of religious beliefs will not have to cover birth control at 100% until their first plan year on or after August 1, 2013.
A copy of HHS’ press release can be accessed at http://www.hhs.gov/news/press/2012pres/01/20120120a.html
Today HHS released an informational bulletin outlining how it intends to define “essential health benefits” for purposes of the Affordable Care Act. The definition is important as beginning in 2014 all health plans offered in the individual and small-group market must cover the essential health benefits package. The bulletin announces that HHS will allow each State to define its own “essential health benefits package” based on a “benchmark” chosen by the State. A State may choose from one of the following 4 benchmarks:
- One of the three largest small group plans in the state by enrollment;
- One of the three largest state employee health plans by enrollment;
- One of the three largest federal employee health plan options by enrollment;
- The largest HMO plan offered in the state’s commercial market by enrollment.
The benefits and services included in the benchmark chosen by the State will be the State’s “essential health benefits package.” States with benefit mandates that exceed essential health benefits will be responsible for defraying the costs associated with these mandates. A copy of the HHS bulletin is available at http://www.healthcare.gov/news/factsheets/2011/12/essential-health-benefits12162011a.html
The HHS bulletin is not a rule and HHS will still need to proceed with the rule-making process at some time in the future.
CMS announced today that based on the amount of program funds remaining, the Early Retiree Reinsurance Program will stop accepting claims starting with claims incurred on or after January 1, 2012. Until further notice, CMS will continue to accept claims incurred on or before December 31, 2011, including those paid by the Plan after December 31, 2011. However, any claim list that is submitted to ERRP containing claims incurred by early retirees on or after January 1, 2012 will be rejected in its entirety, even if it includes claims incurred on or before December 31, 2011.
The Early Retiree Reinsurance Program is a program that reimburses employer-sponsored group health plans for qualifying claims paid on behalf of early retirees. The Program was created by the Affordable Care Act and was appropriated $5 billion in federal funding.
Today CMS released final rules for the CO-OP (Consumer Operated & Oriented Plans) Program created by the Affordable Care Act. The Program provides federal loans to private organizations seeking to establish new health insurers through consumer-operated cooperatives. The rules adopt standards for CO-OPs and for qualifying for federal assistance to establish a CO-OP. The final rules can be accessed at http://www.ofr.gov/OFRUpload/OFRData/2011-31864_PI.pdf.