| Selected Employer Provisions in New Health-Care Reform Law |
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 Employer Responsibility
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No employer mandate to provide health insurance but employers who employ 50 or more full time employees (defined as 30 or more hours of service per week) and the employer must also include in that number part-time employees (which is determined by dividing the aggregate number of hours of service of employees who are not full-time employees for the month by 120) and don’t offer health insurance must pay a fine if one of their employees receives a subsidy for coverage in the Exchange. (HRA, Sec.1003)
Levies an excise tax of 40 percent on insurance companies and plan administrators for any health coverage plan (stand alone dental and vision plans not included) with an annual premium that is exceeds $10,200/individuals and $27,500/families. For retirees (55+) and for plans that cover employees in “high risk professions” the tax applies to threshold amount of $11,850 for single coverage and $30,950 for family coverage. (HRA, Sec. 1401)
Beginning in 2011, employers are required to disclose the value of each employee’s health insurance coverage on the annual Form W-2. (PPA, Sec. 9002)
Employers would be required to provide a voucher worth the same amount as the largest premium contribution the employer makes to a health plan. To qualify for the voucher, employees must be eligible for coverage under an employer plan, whose required premium contribution is between 8 and 9.8% of their income, and their total household income does not exceed 400% of the federal poverty level. The voucher would be used by the employee to purchase health insurance in an exchange in lieu of the employer sponsored plan. The amount of the voucher would not be taxable and the employee would be able to retain any excess amount. (PPA, Sec. 10108)
Employers with more than 200 full-time employees and that offers employees enrollment in 1 or more health benefits plans required to automatically enroll new full-time employees in one of the plans offered (subject to any waiting period authorized by law). Any automatic enrollment program must include “adequate notice and the opportunity for an employee to opt out of any coverage the individual or employee were automatically enrolled in.” (PPA, Sec. 1511) |
| Wellness |
Requires the CDC to study and evaluate best employer-based wellness practices and provide an educational campaign and technical assistance to promote the benefits of worksite health promotion to employers. (PPA, Sec. 4303)
Any recommendations, data, or assessments carried out under this part shall not be used to mandate requirements for workplace wellness programs.(PPA, Sec. 4303)
Permits employers to establish premium discounts or rebates, or modify co-pays or deductibles up to 30% to encourage participation in health promotion or disease prevention program. The Secretary would have authority to issue regulations to allow financial incentives up to 50%. (PPA, Sec. 2705)
Establishes a 5-year, $200,000,000 grant program to help small employers (less than 100 employees) who do not have wellness programs already in place provide comprehensive wellness programs to their employees. (PPA, Sec. 10408) |
| Health Insurance Exchange |
Creates separate exchanges for the small group and individual markets to faciliate the purchasing of insurance on the open market.
Employees of non-small business employers may participate in the Exchange IF:
- The employer did not provide minimum, essential coverage OR
- The employer provided such coverage but it was deemed unaffordable. (PPA. Sec. 1311)
Exchange eligible employers choose a level of coverage (bronze, silver, gold, platinum - see "Mandated Benefits" for definitions) and employees can choose any plan offered in that level of coverage in the Exchange. (PPA, Sec 1312)
The term ‘‘qualified employer’’ means a small employer that elects to make all full-time employees of such employer eligible for 1 or more qualified health plans offered in the small group market through an Exchange that offers qualified health plans. (PPA, Sec 1312)
Beginning in 2017, each State may allow issuers of health insurance coverage in the large group market (employers over 100 employees) in the State to offer qualified health plans in such market through an Exchange. (PPA, Sec 1312)
All legal U.S. residents may obtain insurance coverage through the health insurance exchanges. People with employer coverage are not eligible for an income-based tax credit for coverage obtained in an exchange unless their share of the premium for the employer plan would exceed 9.8% of income or if the employer plan has an actuarial value of less than 60%. (PPA, Sec. 1401) |
Mandated Benefits |
Creates four benefit categories: Bronze (60% actuarial value), Silver (70% actuarial value), Gold (80% actuarial value), and Platinum (90% actuarial value). (PPA, Sec 1312)
Includes a "young invincible plan" for people 30 and younger that only includes catastrophic coverage in the individual market. (PPA, Sec. 1302)
The Secretary of Health and Human Services shall ensure that the scope of the essential health benefits is equal to the scope of benefits provided under a typical employer plan, as determined by the Secretary. The Secretary of Labor shall conduct a survey of employer-sponsored coverage to determine the benefits typically covered by employers, including multiemployer plans, and provide a report on such survey. (PPA, Sec. 1302)
In the case of a health plan offered in the small group market, the deductible under the plan shall not exceed— $2,000 in the case of a plan covering a single individual; and $4,000 in the case of any other plan. (PPA, Sec. 1302)
No lifetime limits or overall annual dollar limits on benefits. (PPA, Sec. 1302) In 2014, group health plans must prohibit pre‐existing condition exclusions, restrict annual limits beginning six months after enactment, and prohibit them starting in 2014. (HRA, Sec. 2301)
All existing health insurance plans must starting 6 months after enactment of the bill, prohibit lifetime limits, prohibit rescissions, limitations on excessive waiting periods, and a requirement to provide coverage for non‐dependent children up to age 26. (HRA, Sec. 2301)
For coverage of non‐dependent children prior to 2014, the requirement on group health plans is limited to those adult children without an employer offer of coverage. (HRA, Sec. 2301) |
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WorldatWork News/Resources
Issue Summary : Interim Guidance on Informational Reporting to Employees of the Cost of Their Group Health Insurance Coverage -
The Patient Protection and Affordable Care Act requires employers to report the aggregate cost of employer-sponsored health insurance on an employee’s Form W-2. The IRS has specified that this reporting is for informational purposes only and does not cause excludable employer-provided health-care coverage to become taxable. Previous IRS guidance (Notice 2010-69) specified that employers were not required to report the cost on W-2s issued for 2011.
Issue Summary: Reasonable Break Time for Nursing Mothers Request for Information - At the time of the issuance of the RFI, the Department of Labor specified that it did not plan to issue regulations implementing this provision because of the wide variety of factors that would impact the number and length of breaks needed and the manner in which an employer would comply with the provision. Until final guidance is issued, the DOL’s enforcement will be based on the statutory language and the guidance provided in the Wage and Hour Division’s Fact Sheet #73 and the associated FAQs. Employers are also encouraged to use the information in the RFI when establishing policies for nursing mothers.
Issue Summary: Interim Final Rule on Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 under the Patient Protection and Affordable Care Act - A summary of the interim final rules regarding the extension of dependent coverage to adult children up to age 26.
Issue Summary: Interim Final Rule on Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan under the Patient Protection and Affordable Care Act - A summary of the interim final rules regarding the a plan's status as a grandfathered health plan.
Selected Employer Provisions in the PPA and HRA - This in-depth chart explains selected employer provisions in the Patient Protection and Affordable Care Act and the Health and Education Reconciliation Act of 2010.
Health-Care Reform Implementation Timeline - Where we've broken down selected employer provisions by their effective dates so practitioners can see which provisions are active in 2010 through 2018.
Regulatory and White House News/Resources
Treasury, Labor, & HHS Release Summary of Benefits and Coverage Guidance - The Departments of Labor, Treasury, and Health and Human Services have released guidance on how to construct a 4-page Summary of Benefits and Coverage ("SBC"). However, the guidance is not complete as it does request comments on several gaps related to employer-sponsored group health plans. The SBCs are scheduled to be available to health plan consumers in 2012. According to the health-care reform law, all health plans and issuers will provide a SBC, along with a uniform glossary of terms, to shoppers and enrollees upon request and before they buy coverage. In addition, health plans and issuers must also provide notice at least 60 days before any significant modification is made in the plan or coverage during the plan or policy year. An offical fact sheet is available here, and the proposed template for the SBC can be found here.
Notice of Proposed Rulemaking Published Regarding Summaries of Coverage - The Departments of Labor, Treasury, and Health and Human Services published a notice of proposed rulemaking regarding how employers communicate and explain their health care plans next year under the Patient Protection and Affordable Care Act. The proposal would require employers to provide employees with an “easy-to-understand” summary of benefits and coverage and, upon request, a glossary of commonly used health care coverage terms, such as deductible and copayment, in addition to a cost breakdown for three common medical procedures: giving birth, treating breast cancer, and treating diabetes.
HRAs Exempted from Annual Limits Requirements - The Center for Consumer Information and Insurance Oversight (CCIIO) has received questions as to whether the restriction on annual limits applies to Health Reimbursement Arrangements (“HRAs”). The purpose of supplemental guidance, published August 19, is to exempt as a class HRAs that are subject to section 2711 of the PHS Act from having to apply individually for waivers or waiver extensions from the restrictions on annual limits applicable to plan years beginning before January 1, 2014. An HRA that is exempt from applying for an annual limit waiver still must comply with the record retention and Annual Notice requirements to participants and subscribers set forth in the supplemental guidance issued on June 17, 2011.
Amendment to Internal Claims and
Appeals and External Review Processes Interim Final Rule Issued - The IRS, Employee Benefits Security Administration, and the Department of Health and Human Services have issued an amendment to the July 2010 interim final rules on internal claims and
appeals and external review processes. The amendment addresses concerns that were raised around many of the provisions including the time frame for responding to urgent claims, the inclusion of diagnostic codes and descriptions in notices of internal claims and appeals determinations, the scope of claims eligible for external review, and the minimum number of independent review organizations. The Employee Benefits Security Administration has released an updated technical guidance document, with links to updated model notices.
IRS Issues Request for Comment on "Pay or Play Provisions" - Starting in 2014, employers who employ 50 or more full time employees and don’t offer health insurance are subject to a fine if one of their employees receives a subsidy for coverage in the Exchange. The IRS, in an effort to develop guidance around this provision well in advance of the effective date, is seeking public comment on how to implement this provision in a way that "is workable and administrable for employers." Topics the IRS is looking for comment on include how to calculate who is a full time employee; how to determine whether an employer is an applicable large employer; general definitions of employer, employee, and hours of service; and any additional comments
IRS Issues Further Guidance on W-2 Reporting Rule - Starting in tax year 2011, the Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan. To give employers more time to update their payroll systems, Notice 2010-69, 2010-69 issued last fall, made this requirement optional for all employers in 2011. Notice 2011-28 provided further relief for smaller employers filing fewer than 250 W-2 forms by making the reporting requirement optional for them at least for 2012 and continuing this optional treatment for smaller employers until further guidance is issued. Notice 2011-28 also includes information on how to report, what coverage to include and how to determine the cost of the coverage. Most governmental entities are subject to this requirement.
IRS Delays Implementation of W-2 Reporting Rule - The IRS announced in mid-October that it was delaying the implementation of the rule requiring employers to report the value of employer sponsored health-care on employees' W-2s until after 2011.The Treasury Department and the IRS determined that this delay is needed to provide employers with additional time to make any necessary changes
to their payroll systems or procedures in preparation for compliance with the reporting
requirement. In addition, the IRS and Treasury released a draft W-2 form that includes the value of employer sponsored health-care.
Health and Human Services Department Releases Guidance on Applying for an Annual Limits Waiver - In regulations on the Patient Protection and Affordable Care Act's provision restricting annual limits forplan or policy years beginning on or after September 23, 2010 and prior to January 1, 2014, the Department of Health and Human Services was given the power to waive these restrictions if "compliance with the interim final regulations would result in a significant decrease in access to benefits or a significant increase in premiums." Guidance was released on September 3, 2010 that outlines the scope and process for applying for such a waiver.
Department of HHS Issues Preventative Care Guidelines for Women - The Department of Health and Human Services and Health Resources and Services Administration issued guidelines for group health plans and health insurance issuers on preventive services that must be offered to women at no additional cost. These services include:
- well-woman visits;
- screening for gestational diabetes;
- human papillomavirus (HPV) DNA testing for women 30 years and older;
- sexually-transmitted infection counseling;
- human immunodeficiency virus (HIV) screening and counseling;
- FDA-approved contraception methods and contraceptive counseling;
- breastfeeding support, supplies, and counseling; and
- domestic violence screening and counseling.
All non-grandfathered health plans (both insured and self-insured plans) will need to include these services without cost sharing for plan years beginning on or after August 1, 2012.
An additional interim final rule was released alongside these guidelines to give religious organizations the choice of buying or sponsoring group health insurance that does not cover contraception, if that is inconsistent with their tenets. This proposal is modeled on the most common exemption available in the 28 states that already require insurance companies to cover contraception.
Department of Labor Released Amendment to Grandfathered Plans IFR - The DOL has issued an amendment to the regulations on what constitutes a grandfathered plan that would allow group plans to change insurance providers without losing grandfathered status as long as the change of providers didn't trigger another change in benefits that would cause the plan to lose grandfathered status.
Department of Labor Issues Updated FAQs on Current Regulations - The DOL has issued a series of Frequently Asked Questions on various aspects of health care reform implementation from dependent care to grandfathered plans to the appeals processes. The series can be found:
Departments of Treasury, Labor, and Health and Human Services Issue Interim Final Rules on Internal Claims and Appeals and External Review Processes - Effective September 21, 2010, these interim final rules apply to implementing the requirements regarding internal claims and appeals and external review processes for group health plans and health insurance coverage in the group and individual markets under the Patient Protection and Affordable Care Act.
Departments of Treasury, Labor, and Health and Human Services Issue Interim Final Rules on Preexisting Condition Exclusions, Lifetime and Annual Limits, Rescissions, and Patient Protections - Effective August 27, 2010, these interim final rules apply to implementing the rules for group health plans and health insurance coverage in the group and individual markets under provisions of the Patient Protection and Affordable Care Act regarding preexisting condition exclusions, lifetime and annual dollar limits on benefits, rescissions, and patient protections.
Departments of Treasury, Labor, and Health and Human Services Issue Interim Final Rules on Grandfathered Plans - On June 17, the three agencies with jurisdiction for implementing the new health care reform law issued interim final regulations relating to how employer sponsored plans can retain their grandfathered status and, thus, remain exempt from certain provisions of the new law. The agencies are accepting comments through August 16, 2010 and the rules went into effect June 14.
Departments of Treasury, Labor, and Health and Human Services Issue Interim Final Rules on Dependent Coverage - On May 14, a coalition of three agencies released interim final rules on the implementation of the requirement that health insurance plans must offer dependent coverage through age 26. The agencies are accepting comments on these rules thrugh August 11, 2010 and they go into effect July 12, 2010.
Department of Health and Human Services Issues Interim Final Rule on Early Retiree Reinsurance Program - Beginning June 1, companies can begin applying for the early retiree reinsurance program offered through the new health-care reform law. According to an HHS fact sheet, the amount of this reimbursement to the employer plan is up to 80% of claims costs for health benefits between $15,000 and $90,000. Claims incurred between the start of the plan year (often January 1) and June 1st are credited towards toward the $15,000 threshold for reimbursement. However, only medical expenses incurred after June 1, 2010 are eligible for reimbursement under this program.
Department of Health and Human Services Accepting Applications for Early Retiree Reinsurance Program - Beginning June 29, companies can submit applications to the HHS Department for funding through the early retiree reinsurance program. Applications are accepted on a first come, first serve basis. If you have any questions about the program or the application process, HHS has a helpful list of Frequently Asked Questions and application dos and don'ts.
WorldatWork Advocacy
Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act - WorldatWork's comment letter to the Employee Benefits Security Administration regarding the interim final rules on a plan's status as a grandfathered health plan.
Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 under the Patient Protection and Affordable Care Act - WorldatWork's comment letter to the Employee Benefits Security Administration regarding the interim final rules on the extension of dependent care to adult children up to age 26.
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