aca: compliant or complacent? - beere&purves · 2016-07-18 · to a dol audit summary, 775 new...
TRANSCRIPT
ACA: Compliant or Complacent?
Keynote Presenter
Dr. Kristin L. Kahle • CEO and Founder of NavigateHCR • Nationally recognized leader in Health Care
Reform • Certified Health Care Reform Specialist
(CHRS) • Dissertation on Health Care Reform • National speaker and educator • Benefits strategist and broker with 20+ years
of experience • Awarded: 2014 Most Influential Women in
Benefit Advising
Dr. Kristin Kahle
Navigatehcr.com
@EasyHCR
Ball of Confusion
Common Misnomers
We’re OK… our carrier
handles everything
for us
Our carrier
provides us with our SPD
We’re not concerned… What are the chances
of an audit?
I’m a small
employer, I don’t have to worry about fines or
penalties
Common Concerns
It’s information
overload…
I can’t get my
arms around all of this regulation
stuff…
I have a
business to run; I can’t make this a
priority!
You send us great information, but who has time to
read it?
What worries me is,
we don’t know what we don’t know…
Compliance Consequences • DOL Audits are
happening at a record pace and will continue
• Wide range of potential penalties for various notices and various timeframes
• Impacts groups of all sizes
Acronym Alert
DOL – Department of Labor
“How am I supposed to think about consequences before
they happen?”
Compliance Penalty Categories • Healthcare reform • COBRA • ERISA • FMLA • Taxation • Medicare/TRICARE • HIPAA Privacy • HIPAA Portability • Cafeteria Plans • Nondiscrimination • Other Federal Mandates
Many employers are under the misconception that the “pay or play”
penalties for large employers are the only penalties to fear
Types of Penalties Company Fines Personal Fines
Legal Action Even Prison
Compliance
ACA Compliance Solutions
NavigateHCR • Compliance Communication
– Employer Express – Push notices to employer – Employee Express – Push notices direct to employees – SPD/Wrap
• Exposure Analysis- Several Tests (including but not limited to)
– Look Back Analysis – Full-Time Equivalents Calculations
• Measurement Analysis and Reporting – Tracker – Monthly variable hour tracking – Tracker- IRS Reporting (6055 and 6056)
• ACA Consulting Services • ACA Hotline- 1095 Questions
Today’s Challenge • Mind numbing complexity of the ACA • Potentially harsh tax penalties • Financial consequences for noncompliance • Continual avalanche of new regulations All of these have created unprecedented new challenges for businesses and brokers! IRS Inspector General calls the ACA “the largest set of tax law changes the IRS has had to implement in more than 20 years.
Topics to be covered • Individual Mandate • Exchange- Premium Subsidy • Employer Shared Responsibility • Compliance Considerations/Notices • DOL Audits • Compliance Notices • Reporting
Individual Mandate • 2014 All US Citizens age 18 or older must
maintain minimum essential coverage or pay a TAX
• Minimum Essential Coverage – All “group health plans” – Policies issued in the individual market (inside
or outside the exchange) – Penalty ranges $95- $12,000 IRS determination
Exchange • Metallic level of coverage • Rating Requirements • Special/annual enrollment • Individuals may qualify for premium subsidy
– Household income between 100% and 400% FPL
– Not “eligible” for MEC with employer that is both affordable and provides minimum value OR
– Not enrolled in employer sponsored MEC
4980H- Pay or Play • Applicable Large Employers (ALE) 2015 • 50-99 (Mid) Employers 2016 (AME) • Reporting needs to occur for both groups • 2 methods for identifying employees for full
time – Look Back (12 or 6 consecutive months) – Monthly Measurement
4980H • “Offer” of coverage
– Opportunity to enroll or decline each year • Affordability
– W2 (Annual determination) – Rate of Pay – Federal Poverty Level Limits – Exchange is based on household income
• Reporting- 6056/6055
Hammer Penalties • Sledgehammer Penalty
– Offering of coverage – 70% of full time employees and dependent
children – ONE employee receives subsidy – $2,000 penalty or ($167) per month reduced by
80 employees – The reason that employees receives subsidy is
not relevant
Hammer Penalties • Tackhammer Penalty
– Offering of coverage – Does not offer affordable, minimum value
coverage – 70% of full time employees and dependent
children – Employee receives subsidy – $3,000 penalty or ($250)X the number of full
time employees receiving a subsidy in the exchange that month
Other considerations • If you want your ALE’s to AVOID 4980H
– (A): then must also include coverage for dependent children
– (B): Affordable and provide minimum value For all employers, if it doesn’t provide minimum value OR is not affordable then, YOU MUST OFER THEM THE OPPORTUNITY TO DECLINE COVERAGE.
Compliance Considerations • Key health insurance reforms • Provider non discrimination • Annual/lifetime dollar limits • Out of pocket maximums • Federal compliance considerations • COBRA • ERISA reporting, disclosure and reporting
rules
DOL Audit Triggers A DOL audit can be triggered for a variety of reasons.
In most cases, the DOL investigator will not disclose to an employer why its health plan was selected for audit.
Common triggers for a DOL audit include: • Participant complaints to the DOL about potential ERISA violations
− In 2013, according to a DOL audit summary, 775 new investigations were opened as a result of participant complaints
• Answers on the plan’s Form 5500 • The DOL’s national enforcement priorities or projects, which target the DOL’s
resources on certain issues − For example, the DOL’s Health Benefits Security Project focuses on making sure
health plans and health insurance issuers comply with the ACA’s mandates
DOL Audit Triggers • A DOL audit can be triggered for a variety of reasons. In most cases, the DOL
investigator will not disclose to an employer why its health plan was selected for audit. However, there are some common audit triggers that an employer should keep in mind.
Common triggers for a DOL audit include: • Participant complaints to the DOL about potential ERISA violations. In 2013, according
to a DOL audit summary, 775 new investigations were opened as a result of participant complaints.
• Answers on the plan’s Form 5500. For example, if a plan’s Form 5500 is incomplete, or
if inconsistent information is reported from year to year, the DOL may investigate the issue further.
• The DOL’s national enforcement priorities or projects, which target the DOL’s resources on certain issues. For example, the DOL’s Health Benefits Security Project focuses on making sure health plans and health insurance issuers comply with the ACA’s mandates.
15 Items: DOL Letter: 2014 . NavigateHCR Employer Other Vendor/NHCR
Genetic Information Nondiscrimination Act (GINA)
Contracts for claims and administration services
Plan Document
Certificate of Creditable coverage Contracts with Insurance Companies SPD (Summary Plan Description)
HIPAA COBRA
ERISA
Preexisting Conditions
Newborns’ Act Notice
FMLA
QMSCO
Mental Health Parity and Addiction Equity Act
COBRA
WHCRA
Grandfathered status
Healthcare and Education Reconciliation Act
Preparing for 2015
Employers Need a Compliance Strategy
• Arduous task which is difficult to implement without the help of outside resources
• Risk of being audited for non-compliance is increasing as regulations regarding healthcare become more stringent
• Partnering with the right compliance provider is necessary so that you can provide appropriate solutions
Employer Notices By Size 1-49
SPD SMM and Summary Material Reduction in Covered Services
Plan Documents Health Insurance Exchange Notice
SBC Notice of Modification
Disclosure of Grandfather Status Notice of Patient Protections
Patient-Centered Outcomes Research (PCORI) Notice of Special Enrollment Rights
Wellness Program Disclosure Notice of Privacy Practices
WHCRA Mental Health
CHIP Michelle’s Law
Newborns and Mothers Protections Medicare Part D
20-49 General Notice of COBRA
Notice of COBRA QE COBRA election notice
Notice of Unavailability of COBRA Notice of Underpayment of COBRA
Notice of Early Termination of COBRA Coverage
Employer Notices By Size 50+
SPD SMM and Summary Material Reduction in Covered Services
Plan Documents Health Insurance Exchange Notice
SBC Notice of Modification
Disclosure of Grandfather Status Notice of Patient Protections
Patient-Centered Outcomes Research (PCORI) Notice of Special Enrollment Rights
Wellness Program Disclosure Notice of Privacy Practices
WHCRA Mental Health
CHIP Michelle’s Law
Newborns and Mothers Protections Medicare Part D
50+ General Notice of COBRA
Notice of COBRA QE COBRA Election notice
Notice of Unavailability of COBRA Notice of Underpayment of COBRA
Notice of Early Termination of COBRA Coverage
50+ FMLA Notice
Notice of FMLA Eligibility Rights FMLA Designation Notice
100+ Form 5500
SAR
Example: Notices
New Hire/Upon Eligibility Notices
Notice Potential Penalties
Employer Chip Notice Up to $100 per day per failure
HIPAA Notice of Special Enrollment Rights $100 per failure up to $25,000
FMLA General Notice Employers may be liable for compensation or benefits lost, actual monetary losses, or other equitable relief
Medicare Part D Creditable/Non-creditable Disclosure Notice
No monetary penalties as of yet, but employer may lose eligibility in Retiree Drug Subsidy program
Exchange Notice No specific penalty, but possibility of civil action
Summary of Benefits and Coverage (SBC) Penalty of up to $1,000 per failure; may also target excise tax of $100 per day under the IRC
Example: Notices
Notices Upon Enrollment
Notice Potential Penalties
Summary of Benefits and Coverage (SBC) Up to $110 per day; up to 10 years in prison and a $100,000 fine for individuals or a $500,000 fine for companies
Summary of Material Modification (SMM) Up to $110 per day; up to 10 years in prison and a $100,000 fine for individuals or a $500,000 fine for companies
Initial COBRA Notice $110 per day under ERISA; must self report with IRS using Form 8928 and civil penalty of $100 per day would be assessed
Example: Notices
Ongoing/Annual Notices
Notice Potential Penalties Medicare Part D Creditable/Non-creditable Disclosure Notice
No monetary penalties as of yet
Summary Annual Report (5500) No specific civil penalties but possible criminal penalties up to 10 years in prison and $100,000 fine
Employer Chip Notice Up to $100 per day per failure
Notice of Availability of Reasonable Alternative Standard for Wellness Program
Violation of HIPAA discrimination rules could lead to employer having to repay surcharge amounts
Summary of Benefits and Coverage (SBC) Penalty of up to $1,000 per failure
Women’s Health and Cancer Rights Act Annual Notice
Legal action may be brought by the participant; $110 per day penalty under ERISA
FMLA Eligibility Notice, FMLA Rights and Responsibility Notice, FMLA Designation Notice
Employers may be liable for compensation or benefits lost, actual monetary losses, or other equitable relief
Coverage Termination Notices
Notice Potential Penalties
COBRA Election Notice Legal action by the participant (may be liable for medical costs incurred); ERISA $110 per day penalty; must self-report on Form 8928 and pay $100 per day civil penalty
FMLA Notice of Nonpayment of Premium Employers may be liable for compensation or benefits lost, actual monetary losses, or other equitable relief
Notice of Rescission of Coverage Must self-report violation on Form 8928 and $100 per day penalty
Be the ACA Coach for your Groups •Be the “go to” person for ACA questions-NavigateHCR can be your resource for ACA compliance. The more you know, the more your prospects and clients will trust you. •Become a trusted advisor-With our monthly reporting feature, you will know exactly where your clients stand, and be able to determine if action is needed. •Minimize Your Groups’ Exposure -An employer has little control over whether they will be audited by the DOL. However, it is imperative that they reduce the likelihood by remaining in compliance with the laws, and establishing a record keeping system for maintaining all important benefit related documents. •Offer them a solution-We are cost effective, easy to implement and reliable.
navigateHCR Compliance Solutions
Products Offered by navigateHCR • EmployER Express • EmployEE Express • SPD • Plan Document • Transition Relief Testing • Look Back Analysis/Measurement • Full-Time Equivalent Calculations • Tracker - Monthly • Tracker – IRS Reporting Quarterly • ACA Hotline • ACA Consulting Services
Compliance Communications
Exposure Analytics
Functional Data
ACA Concierge Services
EmployER Express and EmployEE Express
Notices and Requirements All employers, regardless of employee count, are required to provide
employees with notices regarding their rights as they relate to benefits throughout the year.
Some states are requiring employers to provide proof that notices are delivered to employees throughout the year.
Examples of these include:
ERISA- 7 Parts of ERISA Part 1: Reporting and
Disclosure Part 4: Fiduciary
Responsibilities Part 5: Administration and
Enforcement Part 6: COBRA Part 7: Group Health
Requirements
Mandated Coverage QMCSO Dependents Mental Health Financial Accounting
Standards Board (FASB) Requirement
Statement 106 Statement 112 Statement 158
Other Federal Laws Medicare Part D etc. 8 others Employment Law Affecting
Group Health Plans 7 items Key State Regulations
EmployERExpress
Notice Delivery Email Monthly notices are
delivered directly to employer email inbox
Employer is responsible for delivering to employees
EmployEE Express
Notice Delivery Email • Notices are delivered
directly to employee email inboxes from HCRToolbox
• Simple “click thru” process to show email receipt begins by clicking the link at the bottom of the email
EmployER and EmployEE Express
Verification Record 1. Once employees click the
link in the email they are taken to a verification screen
2. Employees are asked to “confirm” receipt of listed notices
– There are no logins or passwords to remember
– New links are generated monthly
SPD
What is an SPD? • Summary Plan Description • SPD is the basic ERISA disclosure document • Different then a plan document
− Goes hand-in-hand with certificate booklets and evidence of coverage • Must be written to be understood by the “average plan participant” • Must be a complete and accurate summary of the plan
− Including benefits − Rights and obligations under the plan − Timing Requirement
• Automatically given within 90 days of being covered by a group health plan • Within 30 days of request • Every 5 years
Testing: Exposure Analysis
Look Back Analysis Analysis using 12 months Analysis using 6 consecutive months Start of Tracker FTE Calculation included Affordability Calculation included Shows with our ACA Alerts • Color Coded Report
− Red - Employees working 130+ hours − Yellow - Employees 129 -120 hours − Green - Enrolled on benefits − Blue - Ineligible
Tracker
Look Back Example
Tracker: Monthly
Tracking Variable Hour Employees • Tracker gives the following data monthly
− Name − Description − Monthly Period Hours − Average Hours − Rate Type − Pay Rate − Affordability
• ACA Alerts − Red - Employees working 130+ hours “STOP” − Yellow - Employees 129-120 hours “CAUTION” − Green - Enrolled on benefits “GO” − Blue - Ineligible “ON ICE”
Tracker : Monthly
Dashboard
Tracker Reporting 6055 and 6056 • Data gathered quarterly for IRS filings • Need data by the following dates
− January- March: April 30 − April - June: July 15 − July - September: October 15 − October - December: January 5
• Description: IRS DRAFT! • Signature ready for companies • Payroll agnostic
− In Excel format
Tracker Reporting 6055 and 6056
ACA Compliance Solutions
NavigateHCR Summary • EmployER Express
– Pushes all notices to employer for distribution to employees
• EmployEE Express – Pushes all notices direct to employees and verifies
receipt – Monthly reports sent to employer (notices
sent/verification of notices) • SPD/Wrap
– Create and maintain proper SPDs (to accompany certificates of coverage)
– Can send SPD to employees through Employee Express • Tracker – Monthly variable hour tracking • Tracker Reporting - 6055 and 6056 • ACA Hotline • ACA Consulting
NavigateHCR will support its clients in the
event of a DOL audit
Things to Remember Although the Affordable Care Act (ACA) brings complexity and changes to your business and your client’s, you can add value with the right tools.
•Become an advisor and educator to your groups - the more you teach them about managing compliance issues related to reform, the better. •Help your clients by offering them a cost effective solution to the delivery and tracking of the required notices. •Mitigate your groups’ exposure to an audit - an employer has little control over whether they will be audited by the Department of Labor, but with our unique record keeping system, they will have proof that they followed the requirements of the law.
Contact Us Our NavigateHCR team is ready to assist:
Email: [email protected] P: 855-742-7427 X201
Or visit us online at http://navigatehcr.com/products/
@EasyHCR Navigatehcr.com