By: Jeanne Hines, SPHR
Manager of Employee Benefits in HR Services
The long-awaited Supreme Court decision was handed down on June 28th. Many thought the court would overturn the Affordable Care Act (ACT) or parts of it. Instead all, except the federal government’s power to terminate states’ Medicaid funds, was upheld. In waiting for the decision and anticipating repeal, many businesses held off on preparation. Estimates are as high as 70% unprepared. If you’re one of the many businesses that waited, now is the time to find out about the changes and what you need to do to begin the process.
Up until this point, most changes for fully-insured plans were made and executed by insurance companies. One example is a plan change effective August 1st which requires plans to cover preventive care for women without cost sharing. Some of the broad coverage categories requiring coverage for all, except grandfathered plans, are well-woman routine preventive care visits for adult women, breastfeeding support and equipment, FDA approved contraception, and domestic violence screening.
One of the big questions around health care reform is who is going to pay for these changes? One way the reforms will be paid for is through the Comparative Effectiveness Fee. The Comparative Effectiveness Fee will be paid by the carrier for fully insured plans. Self insured plans are responsible for filing the fee. The first payment will be filed through IRS Form 720, the Quarterly Excise Tax Return, and will be due on July 31, 2013. From 2013 to 2018, the fee will be $2 per covered life per year. It is anticipated that the fee will cease in 2019.
An intent of the ACA was to provide a way for people to compare the coverage of multiple plans and choose the one best suited for their situation. To provide information, a document called the Summary of Benefits and Coverages, or SBC, was developed. The SBC is to be distributed by employers. It has specific guidelines on how and when the documents must be distributed, along with requirements about who is to receive it. If you are not aware of what needs to be done, please see the Health Care Reform button in WA University. In addition to the SBC, companies must provide access to a dictionary of common health insurance terms called the Uniform Glossary of Coverage.
Employers who issued more than 250 W-2s for 2011 will need to show the value of the person’s health insurance on their W-2s beginning in 2012. Smaller employers are exempt from the requirement for now, but in time, it may apply to all employers. Although this requirement will not require the payment of taxes, the IRS requires employers to report it.
Requirements will continue in 2013 and beyond. I’ll discuss more 2013 requirements in my next blog, due to be published on September 19th. In the meantime, I hope you’ve made plans to attend our Employer Symposium on September 18th in Rochester, Minnesota. We have some very knowledgeable speakers on topics all related to employee engagement, including well-being programs, employee benefits trends, and an employer panel representing banking, manufacturing, and services to the disabled. In addition, our own Jan Northam will be presenting the latest on Health Care Reform. You can also hear Jan in the webinar she’ll present just after the November elections, on November 14th. Registration is available on our webinar page. Please join us!