201308 spba exchange notice program - amazon s3 · 28.08.2013 · 8/28/2013 3 exchange notice...

8/28/2013

1

Section 18B Exchange Notice & Other New ACA Notice Requirements

Cynthia Marcotte Stamer, Esq.Fellow, American College of Employee Benefits Counsel

Board Certified In Labor & Employment Law

Cynthia Marcotte Stamer, P.C.

3948 Legacy Drive, #106, Box 397, Plano, Texas 75023

Telephone (469) 767.8872

[email protected]

www.CynthiaStamer.com

©2013 Cynthia Marcotte Stamer. All rights reserved.

About Cynthia Marcotte Stamer, Esq.Cynthia Marcotte Stamer is nationally known for her nearly 25 years of work, publications and presentations on employee benefit, health

care and human resources matters.

A Fellow in the American College of Employee Benefits Counsel, Vice Chair of the American Bar Association (ABA) TIPS Employee Benefits Committee, Immediate Past Chair and the current Welfare Committee Co-Chair of the ABA RPTE Employee Benefit & Other CompensationGroup, a Council Member of the ABA Joint Committee on Employee Benefits, Past Chair of the ABA Health Law Section Managed Care &Insurance Section and Board Certified in Labor and Employment Law, Ms. Stamer is known and valued for her ability to draw upon her expansive knowledge of the complex tapestry of federal and state judicial precedent and statutory, regulatory, contracting, other laws and industry operations to help payers, plan sponsors and other employee benefit and insurance industry clients manage risk and achieve objectives.

Ms. Stamer continuously advises and represents health and other employee benefit plans, their fiduciaries, insurers, sponsors, administrators and other vendors about the design, documentation, administration and defense of employee benefit and insurance programs, ethics, compliance and management processes and tools for administering these and other processes, and ERISA and other employee benefit, insurance, tax, licensing, privacy and data security, human resources, contracting, technology, risk management and other legal compliance and operational concerns. She designs and writes insured and self-insured health, 24-hour and other occupational injury benefit and risk management, disability management, corporate health and wellness, disease management, utilization, audit, patient empowerment, deferred compensation and pension and other employee benefit, insurance and retirement programs. Her work includes leading edge development and use of 24-hour coverage and other occupational injury, ex-pat and other medical tourism products, min-med and other limited benefit plans, fraternal benefit and association plans, hi-deductible health plans and deductible reimbursement programs.

Ms. Stamer also designs and advises clients about fiduciary process and risk management, claims and appeals administration. She counsels and defends clients about regulatory compliance; defends clients in ERISA, contract, and other disputes by private plaintiffs, as well as litigation, audits, licensing board and other enforcement actions by state insurance departments, the Department of Labor, the Internal Revenue Service, the Office of Civil Rights, the Centers for Medicare & Medicaid Services, the Department of Justice, State Attorneys General and other federal and state regulators. She also has extensive experience counseling third party administrators, insurers, self-insured employee benefit plans and their sponsors, medical bill audit, utilization management, cafeteria plan administrators and sponsors, reinsurers, fiduciary liability and other E&0 carriers, consulting firms, brokers, and others about product design and defense; licensure; contract review, drafting, interpretation and enforcement; corporate and broker ethics, regulatory compliance and risk management programs; managed care contracting and compliance; electronic and paper claims and appeals administration under ERISA, clean claims and prompt pay, workers’ compensation, and other laws; coordination of benefits with Medicare, Medicaid, CHIP, TRICARE, and other third party liability sources; subrogation and assignment; federal and state health care, insurance, tax, labor, licensing and other matters. The author of “Claim’s Processing Under the New World Order" "The Health Care Eligibility Toolkit,” and “A Plan Sponsor’s HIPAA Privacy & Compliance Toolkit,” and many other implementation processes and aids, she regularly advises, develops processes and procedures, and conducts training for insurers, plan fiduciaries and administrators, third party administrators and other service providers, employers, their professional associations and others.

A popular lecturer and widely published author of thousands of publications on health, disability, and other employee benefits, insurance, health care and human resources matters. Ms. Stamer publishes the HR & Benefits Update. Her insights on health care, health insurance, human resources and related matters appear in the Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Managed Healthcare, Health Leaders, and a many other national and local publications. To register to receive the HR & Benefit Update, arrange for training or for additional information about Ms. Stamer, her experience, involvements, see www.CynthiaStamer.com or contact Ms. Stamer as follows: Cynthia Marcotte Stamer, P.C., 3948 LegacyDrive, Suite 106, Box 397, Plano, Texas 75023, Telephone: (469) 767-8872 e-mail to [email protected].

©2013 Cynthia Marcotte Stamer. All Rights Reserved.©2013 Cynthia Marcotte Stamer. All Rights Reserved.

Page 2

THE FINE PRINT

This presentation and any materials and/or comments are training and educational in nature only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. No comment or statement in this presentation or the accompanying materials is to be construed as an admission. The presenter reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and this presentation provides an overview, this program and its materials also may not be fully updated to reflect the current state of law in any particular jurisdiction or circumstance as of the time of the presentation. Furthermore, the rapidly evolving rules also makes it highly likely that subsequent developments may impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Parties participating in the presentation or accessing of these materials are solely responsible for and are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance.

Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.*

©2013 Cynthia Marcotte Stamer. All Rights Reserved.

©2013 Cynthia Marcotte Stamer. All Rights Reserved.

Page 3

8/28/2013

2

Impending Deadlines For New ACA-Required Notifications

• Exchange Notice

• SBC Mandate

• 60-Day Advance Notice of Material Changes Requirement

• Fiduciary Duty4© 2013

Exchange Notice Due Beginning October 1

• Practically pressures employers by October 1, 2013 to finalize and implement 2014 Health Plan design, plan documents, contracts & communications

• Notice requirements assume that employer already has finalized the plan design

• No more last minute decisions in final 60 days of plan year

5©2013 Cynthia Marcotte Stamer, PC

FLSA Section 18BExchange Notice Due By October 1

• Originally required by March 1, 2013

• DOL extended deadline to October 1, 2013


8/28/2013

3

Exchange Notice Requirement

All Fair Labor Standards Act (FLSA)-covered employers generally must deliver a notice (Exchange Notice) to employees about the new option beginning January 1, 2014 to get health care coverage through a health care exchange (now rebranded by the Obama Administration as a “Marketplace”)(Marketplace) created by ACA that meets the requirements of new FLSA Section 18B, enacted by Section 1512 of ACA.



• Employers must provide a notice of coverage options to each employee

• Notice required regardless of plan enrollment status (if applicable) or of part-time or full-time status

• Separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees not required

• Temporary Guidance contemplates that COBRA beneficiaries receive notice



Applies to all employers subject to the FLSA including:

• Employers employing <1 one or more employees engaged in, or produce goods for, interstate commerce.

• For most firms, a test of not less than $500,000 in annual dollar volume of business applies.

• FLSA also specifically covers: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies.

• Employers questioning if FLSA applies seek the assistance of legal counsel experienced with the FLSA


8/28/2013

4


Delivery Deadline

• Beginning October 1, 2013 to new employee at hiring

For 2014, the Department will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date.

• No later than October 1, 2013 to employees who are current employees before October 1, 2013



Timing and Delivery of Notice

• Employers may deliver the Exchange Notice by:

• First-class mail or

• Electronically if the electronic notification requirements of the Department of Labor’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) met



Required Content – ACA Statute

Section 18B only expressly requires the Exchange Notice three required elements:

• Inform employees of coverage options, including information about the existence of the new Marketplace as well as contact information and description of the services provided by a Marketplace

• Inform the employee that the employee may be eligible for a premium tax credit under section 36B of the Code if the employee purchases a qualified health plan through the Marketplace; and

• Include a statement informing the employee that if the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.


8/28/2013

5


Required Content Interim DOL Guidance

Must inform employees:

• Of the existence of the Marketplace (referred to in the statute as the Exchange) including a description of the services provided by the Marketplace, and the manner in which the employee may contact the Marketplace to request assistance

• Employee may be eligible for a premium tax credit or subsidy under Section 36B of the Internal Revenue Code (the Code) if the employee purchases a qualified health plan through the Marketplace and the employer does not offer coverage to the employee under a group health plan that is considered to provide “Minimum Value” for purposes of ACA; and

• If the employee purchases a qualified health plan through the Marketplace, the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer and that all or a portion of such contribution may be excludable from income for Federal income tax purposes.



Model Exchange Notices

• Find at http://www.dol.gov/ebsa/healthreform/index.html

• Three notices:

• Notice for employers who do not offer a Health Plan

• Notice for employers who offer a health plan to some or all employees

• Notice to notify COBRA qualified beneficiaries

• Model notice use optional, not required if notice provided meets content requirements - Technical Release No. 2013-02

• Not panacea


FLSA Section 18BExchange Notice Due By October 1Minimum Value Determinations Require Adequate Time

Plan provides “Minimum Value” if the ratio of the share of total costs paid by the Health Plan relative to the total costs of covered services is no less than 60% of the anticipated covered medical spending for covered benefits paid by a group health plan for a standard population, computed in accordance with the plan’s cost-sharing, and divided by the total anticipated allowed charges for covered benefits provided to a standard population is no less than 60%


8/28/2013

6

ACA Model Exchange Notice-No Coverage

©2013 Cynthia Marcotte Stamer. All rights reserved.Page 16

ACA Model Exchange NoticePART A


PART A: General InformationWhen key parts of the health care law take effect in

2014, there will be a new way to buy health insurance: the Health Insurance Marketplace. To

assist you as you evaluate options for you and your family, this notice provides some basic information

about the new Marketplace.



What is the Health Insurance Marketplace?The Marketplace is designed to help you find health

insurance that meets your needs and fits your budget. The Marketplace offers "one-stop shopping"

to find and compare private health insurance options. You may also be eligible for a new kind of tax credit that lowers your monthly premium right

away. Open enrollment for health insurance coverage through the Marketplace begins in October

2013 for coverage starting as early as January 1, 2014.

8/28/2013

7



Can I Save Money on my Health Insurance Premiums in the Marketplace?

You may qualify to save money and lower your monthly premium, but only if your employer does not offer

coverage, or offers coverage that doesn't meet certain standards. The savings on your premium that you're eligible for depends on your household income.



Does Employer Health Coverage Affect Eligibility for Premium Savings through the Marketplace?

Yes. If you have an offer of health coverage from your employer that meets certain standards, you will

not be eligible for a tax credit through the Marketplace and may wish to enroll in your

employer's health plan. However, you may be eligible for a tax credit that lowers your monthly premium, or a reduction in certain cost-sharing if

your employer does not offer coverage to you at all or does not offer coverage that meets certain

standards. If the cost of a plan from your employer that would cover you (and not any other members of

your family) is more than 9.5% of your household income for the year, or if the coverage your

employer provides does not meet the "minimum value" standard set by the Affordable Care Act, you

may be eligible for a tax credit.1



Note: If you purchase a health plan through the Marketplace instead of accepting health coverage offered by your employer, then you may lose the employer contribution (if any) to the employer-

offered coverage. Also, this employer contribution -as well as your employee contribution to employer-offered coverage- is often excluded from income for

Federal and State income tax purposes. Your payments for coverage through the Marketplace are

made on an after-tax basis.

8/28/2013

8



How Can I Get More Information?

The Marketplace can help you evaluate your coverage options, including your eligibility for coverage through the Marketplace and its cost.

Please visit HealthCare.gov for more information, including an online application for health insurance

coverage and contact information for a Health Insurance Marketplace in your area.

ACA Model Exchange NoticeCoverage Offered-Part B


Employer NameEmployer Address

Employer EINEmployer Contact PersonEmployer Contact PhoneEmployer Contact E-Mail



Here is some basic information about healthcoverage offered by this employer:• As your employer, we offer a health planto:

• All employees.• Some Employees. Eligible

employees are:___________________________________________________

8/28/2013

9



With respect todependents:• We do offer

coverage. Eligible dependents are:___________________________

• We do not offer coverage.



_____ If checked,this coverage meetsthe minimum valuestandard, and the costof this coverage toyou is intended tobe affordable, basedon employee wages.



** Even if your employer intends yourcoverage to be affordable, you may stillbe eligible for a premiumdiscount through the Marketplace. TheMarketplace will use your householdincome, along with other factors,to determine whether you may beeligible for a premium discount. If, forexample, your wages vary fromweek to week (perhaps you are an hourlyemployee or you work on a commissionbasis), if you are newlyemployed mid-year, or if you have otherincome losses, you may still qualify for apremium discount.

8/28/2013

10



If you decide to shop for coverage in theMarketplace, HealthCare.gov will guideyou through the process. Here's theemployer information you'll enter whenyou visit HealthCare.gov to find out ifyou can get a tax credit to lower yourmonthly premiums.



The information below corresponds tothe Marketplace Employer Coverage Tool.Completing this section is optional foremployers, but will help ensureemployees understand their coveragechoices.



Is the employee currently eligible forcoverage offered by this employer, or willthe employee be eligible in the next 3months?___Yes (Continue)

___ No (STOP and return this form toemployee)

8/28/2013

11



13a. If the employee is not eligible today,including as a result of a waiting orprobationary period, when is theemployee eligible for coverage?(mm/dd/yyyy) (Continue)



14. Does the employer offer a healthplan that meets the minimum valuestandard*?___Yes (Go to question 15)___No (STOP and return form toemployee)



For the lowest-cost plan that meets theminimum value standard* offered only tothe employee (don't include familyplans): If the employer has wellnessprograms, provide the premium that theemployee would pay if he/ she receivedthe maximum discount for any tobaccocessation programs, and didn't receiveany other discounts based onwellness programs.

• An employer-sponsored health plan meets the"minimum value standard" if the plan's share ofthe total allowed benefit costs covered bythe plan is no less than 60 percent of such costs(Section 36B(c)(2)(C)(ii) of the Internal RevenueCode of 1986)

8/28/2013

12



15.a. How much would the employee haveto pay in premiums for this plan? $b. How often?___Weekly___Every 2 weeks___Twice a month___Monthly___Quarterly___Yearly



15.…If the plan year will end soon and youknow that the health plans offered willchange, go to question 16. If you don'tknow, STOP and return form toemployee.



16. What change will the employer makefor the new plan year?___Employer won't offer health coverage___Employer will start offering healthcoverage to employees or change thepremium for the lowest-cost planavailable only to the employee thatmeets the minimum value standard.*(Premium should reflect the discount forwellness programs. See question 15.)

8/28/2013

13



16.a. How much will the employee have topay in premiums for that plan? $_____b. How often?___Weekly___Every 2 weeks___Twice a month___Monthly___Quarterly___Yearly



16.Date of change (mm/dd/yyyy):______



8/28/2013

14

ACA Model Exchange Notice-COBRA


ACA Model Exchange Notice-COBRA

“There may be other coverage options for you and your family. When key parts of the health care law take effect, you’ll be able to buy coverage through the Health Insurance Marketplace. In the Marketplace, you could be eligible for a new kind of tax credit that lowers your monthly premiums right away, and you can see what your premium, deductibles, and out-of-pocket costs will be before you make a decision to enroll. Being eligible for COBRA does not limit your eligibility for coverage for a tax credit through the Marketplace. Additionally, you may qualify for a special enrollment opportunity for another group health plan for which you are eligible (such as a spouse’s plan), even if the plan generally does not accept late enrollees, if you request enrollment within 30 days. “



Plan provides “Minimum Value” if the ratio of the share of total costs paid by the Health Plan relative to the total costs of covered services is no less than 60% of the anticipated covered medical spending for covered benefits paid by a group health plan for a standard population, computed in accordance with the plan’s cost-sharing, and divided by the total anticipated allowed charges for covered benefits provided to a standard population is no less than 60%


8/28/2013

15


Actuarial certification required to determine if its Health Plan provides Minimum Value unless the employer proves Health Plan proves 60% test either by:

� Actuarial certification;

� If qualifies, Minimum Value Calculator

� A safe harbor design approved by HHS, Treasury and DOL



Expect actuarial certification needed to determine if the Health Plan provides Minimum Value determination if the Health Plan is taking advantage of temporary relief from the cost sharing limitations of ACA for 2014 announced by the Obama Administration in February and reconfirmed in July



Minimum Value Determinations “2014 Relief”

• For 2014, Health Plans may apply a separate ACA-compliant out-of-pocket maximum to prescription drug benefits from the ACA-compliant out-of-pocket maximum applied to all other benefits subject to ACA’s cost sharing restrictions.

• As Minimum Value Calculator cannot take into account this option, employer plan planning to use separate out-of-pocket maximum for prescription drug coverage versus other plan benefits should be prepared to get an actuarial certification of whether the plan provides Minimum Value.


8/28/2013

16

ACA Summary of Benefits & Coverage (SBC)

Health Plans and health insurance issuers must provide SBC and a “Uniform Glossary” that “accurately describes the benefits and coverage under the applicable plan or coverage” in a way that meets the format, content and other detailed SBC standards set for ACA as implemented by the Departments regulatory guidance.


ACA Summary of Benefits & Coverage (SBC)

Health Plans and health insurance issuers must provide SBC and a “Uniform Glossary” that “accurately describes the benefits and coverage under the applicable plan or coverage” in a way that meets the format, content and other detailed SBC standards set for ACA as implemented by the Departments regulatory guidance by first day of offer of any coverage and following any material change


ACA Summary of Benefits & Coverage (SBC)Required Content & Form

• Must use required template for providing the SBC and accompanying glossary

• Except for adding Minimum Value to required disclosures, required content or form of the 2013 SBC Template until their April 23, 2013 release of FAQs About ACA Implementation (Part XIV). See e.g. FAQs About ACA Implementation Part IX and Part X.


8/28/2013

17

ACA Summary of Benefits & Coverage (SBC)Required Content & Form

2014 SBC Must Include MEC and Minimum Value Disclosures In SBC

FAQ Part XIV Requires MEC and Minimum Value Disclosures In SBC

• The 2014 SBC Template requires health plans to disclose same information required in 2013 template plus if plan provides minimum essential coverage (MEC).

Does this Coverage Provide Minimum Essential Coverage?

ACA requires most people to have health care coverage that qualifies as “minimum essential coverage.” This plan or policy [does/does not] provide minimum essential coverage.

Does this Coverage Meet the Minimum Value Standard?

In order for certain types of health coverage (for example, individually purchased insurance or job-based coverage) to qualify as minimum essential coverage, the plan must pay, on average, at least 60 percent of allowed charges for covered services. This is called the “minimum value standard.” This health coverage [does/does not] meet the minimum value standard for the benefits it provides.”


ACA Summary of Benefits & Coverage (SBC)When Required

Summary of Benefits and Coverage and Uniform Glossary Final Regulation requires Health Plans give SBC as of 1st day of 1st open enrollment period beginning on or after September 23, 2012:

• Before 1st offer of coverage under the Plan

• Following certain material changes to the Plan. For Health Plans providing group health plan coverage

• To covered persons enrolling or re-enrolling in an open enrollment period (including late enrollees and re-enrollees) as the first day of the first open enrollment period that begins on or after September 23, 2012; and

• For individuals enrolling in coverage other than through an open enrollment period (including individuals who are newly eligible for coverage and special enrollees) as the first day of the first plan year that begins on or after September 23, 2012. See FAQs About ACA Implementation (Part VIII).


ACA Summary of Benefits & Coverage (SBC)When Required

• If change Health Plan terms or designs after distributing a SBC must send an updated SBC

• Finalize Health Plan terms before the enrollment period begins to avoid the need to and expense of sending updated SBCs as a result of a later change in Health Plan terms.


8/28/2013

18

ACA 60-Day Advance Notice of Material Changes Requirement

60-Day Advance Notice of Material Changes Requirement

• Group health plans and their plan administrators also must ensure that participants and beneficiaries are given at least 60 days prior notice before the effective date of any “material reduction in covered services or benefits.”

• Group health plan issuers or sponsors that willfully (intentionally) fail to provide the notice of material modification can face a fine of up to $1,000 for each failure. Each covered individual equates to a separate offense for purposes of these penalties.


Questions, Resources & Thank You


Office of Civil Rights

http://www.hhs.gov/ocr/privacy/index.html

Health & Human Services Health Care Reform Generally

http://www.healthcare.gov/

Health Care Reform Regulations At Healthcare.gov

http://www.healthcare.gov/law/resources/regulations/index.html

201308 spba exchange notice program - amazon s3 · 28.08.2013 · 8/28/2013 3 exchange notice...

Documents