New York Times by Robert Pear –

May 24, 2014:

Many employers had thought they could shift health costs to the government by sending their employees to a health insurance exchange with a tax-free contribution of cash to help pay premiums, but the Obama administration has squelched the idea in a new ruling. Such arrangements do not satisfy the health care law, the administration said, and employers may be subject to a tax penalty of $100 a day — or $36,500 a year — for each employee who goes into the individual marketplace.

The ruling this month, by the Internal Revenue Service, blocks any wholesale move by employers to dump employees into the exchanges.

Under a central provision of the health care law, larger employers are required to offer health coverage to full-time workers, or else the employers may be subject to penalties.

Many employers — some that now offer coverage and some that do not — had concluded that it would be cheaper to provide each employee with a lump sum of money to buy insurance on an exchange, instead of providing coverage directly.

But the Obama administration raised objections, contained in an authoritative question-and-answer document released by the Internal Revenue Service, in consultation with other agencies.

The health law, known as the Affordable Care Act, builds on the current system of employer-based health insurance. The administration, like many in Congress, wants employers to continue to provide coverage to workers and their families.

“I don’t think that an employer-based system is going to be, or should be, replaced anytime soon,” President Obama said recently, when asked if the law might speed the erosion of employer-sponsored insurance.

When employers provide coverage, their contributions, averaging more than $5,000 a year per employee, are not counted as taxable income to workers. But the Internal Revenue Service said employers could not meet their obligations under the health care law by simply reimbursing employees for some or all of their premium costs.

Christopher E. Condeluci, a former tax and benefits counsel to the Senate Finance Committee, said the ruling was significant because it made clear that “an employee cannot use tax-free contributions from an employer to purchase an insurance policy sold in the individual health insurance market, inside or outside an exchange.”

If an employer wants to help employees buy insurance on their own, Mr. Condeluci said, it can give them higher pay, in the form of taxable wages. But in such cases, he said, the employer and the employee would owe payroll taxes on those wages, and the change could be viewed by workers as reducing a valuable benefit.

Andrew R. Biebl, a tax partner at CliftonLarsonAllen, a large accounting firm based in Minneapolis, said the ruling could disrupt arrangements used in many industries.

“For decades,” Mr. Biebl said, “employers have been assisting employees by reimbursing them for health insurance premiums and out-of-pocket costs. The new federal ruling eliminates many of those arrangements by imposing an unusually punitive penalty.”

When an employer reimburses employees for premiums, the arrangement is known as an employer payment plan. “These employer payment plans are considered to be group health plans,” the I.R.S. said, but they do not satisfy requirements of the Affordable Care Act.

Under the law, insurers may not impose annual limits on the dollar amount of benefits for any individual, and they must provide certain preventive services, like mammograms and colon cancer screenings, without co-payments or other charges.

But the administration said employer payment plans do not meet those requirements.

Richard K. Lindquist, the president of Zane Benefits in Park City, Utah, a software company that helps employers reimburse workers for health insurance costs, said, “The I.R.S. is going out of its way to keep employers in the group insurance market and to reduce the incentives for them to drop coverage.”

The ruling came as the Obama administration rushed to provide guidance to employers and insurers deciding what types of coverage to offer in 2015.

In a new regulation, the Department of Health and Human Services said it would provide financial assistance to certain insurers that experience unexpected financial losses this year. Administration officials hope the payments will stabilize premiums and prevent rate increases generic viagra cheap that could embarrass Democrats in this year’s midterm elections.

Republicans want to block the payments, which they see as a bailout for insurance companies that supported the president’s health care law.

In a separate rule, the administration prohibits states from imposing onerous restrictions on insurance counselors, who educate consumers and help them enroll in health plans. Under the rule, states cannot establish standards that impair the counselors’ ability to help consumers or to perform other tasks required by federal law.

In January, a federal district judge in Missouri found that the state was illegally obstructing the activities of insurance counselors, including those known as navigators. The state has appealed the decision.

Fox Business by kate Rogers – April 9, 2014: The increased coverage requirements mandated under the Affordable Care Act are shifting the payment landscape for other types of insurance, including auto insurance, and worker’s compensation. Automobile, worker’s compensation and general business liability insurance costs could potentially fall under the law, according to http://clanofthecats.com/ nonprofit research organization RAND. On the other hand, medical malpractice coverage costs could tick higher. The report says there could be as much as a 5% change of costs in those three insurance policies in certain states, but adds there is “considerable uncertainty” around these estimates. Researchers examined how the ACA might operate across different liability lines and how those lines might vary across states given existing laws, population demographics and other factors. RAND reports that liability insurance companies reimburse tens of billions of dollars annually for medical care related to auto accidents, workplace injuries and more. David Auerbach, RAND policy researcher, says the impacts are small but noteworthy, and have the potential to evolve overtime. “We don’t know how this will play out and if the ACA will lead to lower costs overall,” Auerbach says. “Insurers could see their costs going down, but there free phone games no download are things that could change within specific markets.” More Americans are projected to be gain health insurance under the ACA, with 7.1 million people having selected plans on both state and federal exchanges according to President Obama’s latest enrollment announcement. This means the costs of providing auto insurance, workers compensation and homeowners insurance could fall for providers. It’s important to note, as RAND does, that cost changes may ultimately hit consumers. The study also cautions that with more people being covered under the ACA, the number of medical malpractice claims made against doctors and

providers could increase, making these costs higher. “There’s more care being provided, so naturally there’s more that can go wrong,” Auerbach says. The ACA mandated that every individual in the country have insurance by March 31, or they will face a fine of $95 a year or 1% of their annual income for failing to comply.

HHS Plans to Delay Key Aspect of SHOP Exchanges

(A key provision of forthcoming reform is the availability of employee choice within the SHOP exchanges. This option has been delayed by the 33 state exchanges which the Federal government will provide to states who do not establish their own SHOP>)

On March 11, 2013, HHS issued a proposed rule that would amend some of the standards for SHOP Exchanges. Most notably, the proposed rule creates a transition policy regarding an employee’s choice of qualified health plans (QHPs) in the SHOP. The transition policy would delay implementation of the employee choice model as a requirement for all SHOPs for one year, until 2015.

Beginning in 2014, individuals and small employers will be able to purchase health insurance through online competitive marketplaces, or Exchanges. The Affordable Care Act (ACA) requires each state that chooses to operate an acheter cialis france Exchange to also establish a Small Business Health Options Program (SHOP) Exchange. The SHOP Exchange is intended to assist eligible small employers in providing health insurance for their employees.

HHS will establish and operate a federally-facilitated Exchange (FFE) in each state that does not establish its own Exchange. The FFE will include both individual market and SHOP components.

Small employers with up to 100 employees will be eligible to participate in the Exchanges. However, until 2016, states may limit participation in the SHOP Exchanges to businesses with up to 50 employees. Beginning in 2017, states may allow businesses with more than 100 employees to participate in the Exchanges.

Functions of SHOP

On March 27, 2012, HHS issued a final rule on establishment of the Exchanges. This final rule describes the minimum functions of a SHOP. The final rule provides that a SHOP must allow employers the option to offer employees all QHPs at a level of coverage chosen by the employer—bronze, silver, gold or pla

tinum. In addition, the final rule permits SHOPs to allow a qualified employer to choose one QHP for its employees.

In a separate final rule issued in March 2013, HHS provided that the federally-facilitated SHOP (FF-SHOP) would give employers the choice of offering only a single QHP, as employers customarily do today, in addition cheap viagra canada to the choice of offering all QHPs at a single level of coverage.

In the proposed rule, HHS provides a transition

policy for 2014 plan years that is intended to provide all SHOPs (both state SHOPs and

the FF-SHOP) with additional time to prepare for the employee choice

model.

Under the transition policy, for plan years beginning on or after Jan. 1, 2014, and before Jan. 1, 2015, state SHOPs would not have to allow employers to offer their employees a choice of QHPs at a single level of coverage. However, a SHOP may decide to provide this option to employers for 2014 plan years.

In addition, for plan years beginning on or after Jan. 1, 2014, and before Jan. 1, 2015, FF-SHOPs would not allow qualified employers to offer their employees a choice of QHPs at a single level of coverage. For 2014 plan years, the FF-SHOP would assist employers in choosing a single QHP to offer their qualified employees.

According to HHS, the transition policy would increase the stability of the small group market while providing small groups with the benefits of SHOP in 2014 (for example, choice among competing QHPs and access for qualifying small employers to the small business health insurance tax credit).

The 2012 final rule also included a premium aggregation function for the SHOP that was designed to assist employers whose employees were enrolled in multiple QHPs. Because this function will not be necessary in 2014 for SHOPs that delay implementation of the employee choice model, the proposed rule would make the premium aggregation function optional for plan years beginning before Jan. 1, 2015.

Effective September 23, 2012 as outlined in the Affordable Care Act (ACA), employers that offer a group health plan MUST provide a Summary of Benefits and Coverage (SBC) to their employees. Employers must comply upon their plan renewal on or after No

vember 1, 2012.

The health insurance carrier is responsible for creating the SBC”s and making them available to the employer for distribution. Most carriers have published

them online, however some are mailing them until they establish permanent guidelines. Please feel free to contact us

for information specific to your carrier.

More informtion about SBC requirements, including penalites for non-compliance can be found by http://arbonpublishing.com/ visiting the DOL website.