HIPAA Notice of Privacy Practices

This notice for self-insured health plans, including cafeteria plan health FSAs,  needs to be updated and distributed by September 23, 2013, to comply with the omnibus HIPAA regulations issued in January.  The regulations added the following items to the content requirements for a health plan’s Notice:

· Uses and Disclosures Requiring Authorization. The Notice must include a statement that most uses and disclosures of psychotherapy notes, uses and disclosures of protected health information (PHI) for marketing purposes, and disclosures that constitute a sale of PHI can be made only with an individual’s authorization.

· Genetic Information. If the health plan intends to use or disclose PHI for underwriting purposes, the Notice must state that the health plan is prohibited from using or disclosing genetic information for those purposes.

· Breach Notification. The Notice must state that an individual has a right to be notified when a “breach” (as defined in the regulations) of his or her unsecured PHI has occurred.

No Time to Rest

While the Employer Mandate or the Play or Pay provisions of the Affordable Care Act (ACA) have been delayed until 2015, many other provisions of the ACA will still become effective in 2014 and employers can use the additional year to tune up their game plan for the implementation of the Employer Mandate.  Here are some provisions to focus on and be prepared for:

Individual MandateGenerally, all US citizens will be required to have health insurance or pay a penalty beginning January 1, 2014.  The penalty for 2014 is the greater of a flat dollar penalty of $95 per adult/$47.50 per child, up to $285 for a family, or 1% of income.  Many employees are under the misconception that their employer and/or the government will be providing free health insurance and they are unaware of the individual shared responsibility.  Employers may want to address this misconception when delivering the Marketplace Notices discussed below.

 Marketplace Notices must be sent by October 1, 2013- Employers, regardless of size and subject to the Fair Labor Standards Act (“FLSA”) must send all current employees a notice by October 1, 2013 letting them know that they can get coverage through the Marketplace. This notice must be provided to new employees within 14 days of their hire date. COBRA election notices must be modified to inform COBRA qualified beneficiaries of coverage options available through the Marketplace and about other ACA changes. The Department of Labor has issued model Marketplace Notices and updated COBRA model election notices.

Summary of Benefits and Coverage (SBC)- The model SBC has been updated by adding two questions: 1) Does this coverage provide “Minimum Essential Coverage”? (Most employer sponsored plans will answer “yes” which tells a plan participant that he or she has coverage that satisfies the Individual Mandate.) and 2) Does this coverage meet the “Minimum Value Standard”? (Participants and eligible family members that have coverage that meets the Minimum Value Standard and is affordable are not eligible for subsidized coverage bought through the Marketplace.) Other ERISA health plans also need a SBC, such as, a EAP or HRA.

 Other Effective Group Health Reforms for 2014-

  • Community rating used in determining premiums for individuals and small groups- Insurers may vary their premiums based only on age, geography, family size and tobacco use. In addition, insurers may not charge the oldest insureds more than three times what they charge the youngest insureds and may not charge tobacco users more than 50% more than what they charge non tobacco users. This could result in the premiums for older or less healthy individuals/groups going down and premiums for younger, healthier individuals/groups going up when the policy is renewed in 2014. For this reason, some insurers are allowing employers to renew early (e.g., December 1, 2013) to delay the higher premiums.
  • Eligible employees must be brought into the plan within 90 days of hire, based upon the plan’s eligibility provisions.  The failure to follow this requirement can result in a penalty of $100/day/individual.
  • All pre-existing condition exclusions (regardless of age) are eliminated.
  • Annual limits on essential health benefits are eliminated. As a result, “mini-med” plans often offered to part-time or lower paid workers and stand-alone Health Reimbursement Accounts (HRAs) will not be allowed. Retiree only HRAs will still be permitted.
  • For non-grandfathered group health plans:

o The annual deductible for insured small group health plans cannot be more than $2,000 for individuals and $4,000 for families.

o The out-of-pocket maximum for essential health benefits (including major medical, pharmacy, and mental health/substance use disorder benefits) cannot be more than $6,350 for individuals and $12,700 for families. (Based on agency guidance provided in February, plans that use different providers for major medical and pharmacy benefits can continue to impose separate out-of-pocket maximums for each benefit for another year if certain conditions are met.)

o Certain benefits must be provided to individuals who participate in clinical trials.

What should employers be doing now?

  • Continue to plan for how the health plan will meet the new Play or Pay rules in 2015.
  • Prepare HR personnel to respond to questions about the new Marketplace and to confirm employee data and coverage if requested by the Marketplace to help determine an employee’s eligibility for premium subsidies.
  • Decide on a method to determine if variable hour employees are full-time and therefore subject to the Play or Pay rules. An employer can use a measurement period of up to 12 months to see if a variable hour employee will average 30 or more hours per week. For example, the measurement period for current employees could begin October 15, 2013 and end October 14, 2014 so that variable hour employees who are determined to be full-time can be enrolled during the fall open enrollment and begin participating in the plan on January 1, 2015. That means employers with variable hour employees may need to start tracking hours in just a couple of months.
  • Make sure the plan documents and summary plan descriptions are updated to reflect the required changes.



Relief from Employer Mandate Penalties Until 2015

As you’ve probably heard in the news, blog, or other media, the Obama Administration has delayed the large employer mandate penalties until 2015.  What does this mean for the other intertwined provisions?  We are waiting for guidance (which is scheduled to come out next week), but it appears that they still stand.  With that in mind, whatever steps employers have been taking towards compliance, they should continue on.  More below:

In an informal July 2nd blog post, a Treasury official announced that the Obama Administration intends to delay the following crucial employer mandate components until 2015:

The employer reporting requirements that the IRS will use to facilitate the employer mandate penalty payments (under Internal Revenue Code Sections 6055 and 6056), and

The employer mandate penalties (under Code Section 4980H).
Notably, it appears this transition relief does not extend to other provisions of the Affordable Care Act effective in 2014, including the 90 day limit on waiting periods, the exchanges (including the premium tax credits available to qualifying individuals), or the individual mandate.

Details Promised Next Week

The announcement (later confirmed by a senior advisor to the President) indicated the IRS  will issue guidance within the next week providing additional details on the transition relief.  The vague announcement leaves many unanswered questions, as detailed below.  Specifically, nothing in the guidance indicated that the actual employer mandate (i.e., the requirement to offer coverage) will be delayed.  But perhaps a delay in the penalty effectively results in a delay in the requirement to offer coverage.

Unanswered Questions

The Administration’s announcement comes in the wake of several public announcements by employers (large and small) who intended to reduce employee hours and freeze hiring to avoid the costs associated with offering health coverage (or paying a penalty).   The announcement indicates that during the 2014 transition period, employers are encouraged to maintain or expand health coverage.  Presumably, the Administration hopes to stem this trend by delaying the penalty, but it leaves many unanswered questions.

Will the IRS still require employers to take reasonable steps toward complying in 2014 to avoid penalties, or will employers get a free one-year pass?  If employers are not required to offer qualifying coverage, will it cause employees to flood the exchanges?

Will this transition relief further extend, through 2015 (or later), the previous transition relief granted:
For employers contributing to multiemployer plans?
From the dependent coverage requirement?
For employers with off-calendar year plan years?
For employers to treat full-time, temporary employees as variable hour employees if it cannot be determined that they will be employed at least 30 hours per week over the initial measurement period?

How will the IRS determine which individuals have employer-sponsored coverage?  (This information is necessary to determine (1) eligibility for tax credits on the exchanges, and (2) liability under the individual mandate.)

Will employers still be required to report whether they offer “minimum essential coverage” and “minimum value” coverage on the SBCs issued for the 2014 plan year?

Will the Department of Labor revise the model exchange notice to remove the information section regarding employer-provided coverage?

The SHOP Marketplace

The initial open enrollment period for the Small Business Health Options Program (SHOP) is several months away (October 1, 2013). But if you’re a small business owner, there’s no time like the present to start preparing for it.  Below is a checklist of seven things that a small business owner can do now to get ready for the health insurance marketplace and possible participation in a SHOP:

Get organized. You’ll want to have basic information about how your businesses are organized and a list of employees you plan to cover and your tax ID number.  Don’t forget to include those employed through a staffing agency.

Set your budget. Think about how much money you’re able to spend for group coverage. You’ll also need to consider how much your employees can spend for their coverage.

Make sure you understand how insurance works. For example, you’ll want to understand the difference between premiums and out-of-pocket costs, like deductibles and copayments. You’ll want to compare these details to help determine which plans are right for you and your employees.

Learn about different types of health insurance. Through the Marketplace, you’ll be able to choose a level of coverage that gives you and your employees the right balance of cost and benefits.

Start thinking about when to begin coverage. You’ll need to choose a month to start coverage. Consider what timing would work best for you and your employees.

Make a list of questions you have before it’s time to choose which health plans you’ll offer. Consider the budget established in step 2 and balance it with what’s most important for your company and your employees.

Look for help. Postlethwaite & Netterville is a group of professionals with a wide range of experience in accounting and audit, tax, technology, and business consulting. With 9 locations and 500 employees, we are a regional firm whose qualifications have been nationally recognized.Our professionals are dedicated to providing expert advice on how to keep your business compliant with the health care reform. Service is not a point in time for us — it’s a method of practice.

Learn more about SHOP in this presentation

Health Care Reform Forum: New Orleans

Thank you for your interest in the information presented during the New Orleans Health Care Reform Seminar, sponsored by BancorpSouth Insurance Services/Wright & Percy, Postlethwaite & Netterville, and Taylor Porter. The information presented in the seminar can be accessed by clicking the links below.

Have Questions? Contact Us!

Affordable Health Care Act Seminar

Are you a small or large business owner?
Interested in understanding the regulations and impact of the PPACA (Patient Protection and Affordable Care Act)?

Plan to attend the 2 hour learning session with facilitators, followed by the lunch presentation featuring keynote speaker Michael Bertaut, Health Care Economist for Blue Cross Blue Shield of Louisiana.

Register Here

Notice to Inform Employees of the Insurance Marketplace

Yesterday, the DOL issued several model notices required to be given by any employer subject to the FSLA.  One of the notices must be provided to all employees by October 1, 2013 and all new hires on the date of hire thereafter. For 2014, a notice provided within 14 days from the date of hire will be deemed to have been provided on the start date.  There is a notice for those employers that offer coverage and those that don’t offer coverage.  For those employers that do offer coverage, the notice addresses the issues of affordability and minimum value and thus, the employee’s access to subsidies.

In addition, the DOL revised the COBRA notice to include marketplace language.  Employers subject to mini-COBRA may also want to add the marketplace language.

The Department of Labor’s Employee Benefits Security Administration updated its Affordable Care Act web page with the following information on the notice to employees of coverage options: