New PPACA Requirement for employers effective Oct 1st

A new Patient Protection and Affordable Care Act (PPACA) requirement will be in effect for employers beginning October 1, 2013. In order to comply, employers must provide written notice informing the employee about health care coverage options at the time of the employee’s hire. Additionally, employees hired prior to October 1, 2013, must be provided the written notice or before October 1, 2013. The PPACA requires that employers must provide the notice to each employee, regardless of full- or part-time status or whether or not the employee has previously elected to participate in the company health care coverage options. The notice may be delivered electronically or via first-class mail and must include the following: 1. Information about the existence of state or federal benefits exchanges (Exchanges/Marketplaces) 2. Explanation that if the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent, the employee may be eligible for a federal premium tax credit if the employee elects to purchase a qualified health plan through an Exchange/Marketplace. 3. A statement informing the employee that if he or she purchases a qualified health plan through an Exchange/Marketplace, he or she may lose the employer contribution to any health benefits plans offered by the employer. The statement must also inform the employee that all or a portion of such contribution may be excludable from income for federal income tax purposes. The notice must be written so that the average employee can understand its contents. The Department of labor (DOL) provided two model notices as part of Technical Release 2013-02, dated May 8, 2013; one for employers that provide health care benefits and the other for employers that do not. Employers may modify the model language so long as the modified notice satisfies the content requirements previously described.

Limit on Consumer Costs delayed in Health Care Law

New York Times WASHINGTON - In another setback for President Obama's health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care. The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014. The grace period has been outlined on the Labor Department's Web site since February, but was obscured in a maze of legal and bureaucratic language that went largely unnoticed. When asked in recent days about the language - which appeared as an answer to one of 137 "frequently asked questions about Affordable Care Act implementation" - department officials confirmed the policy. The discovery is likely to fuel continuing Republican efforts this fall to discredit the president's health care law. Under the policy, many group health plans will be able to maintain separate out-of-pocket limits for benefits in 2014. As a result, a consumer may be required to pay $6,350 for doctors' services and hospital care, and an additional $6,350 for prescription drugs under a plan administered by a pharmacy benefit manager. Some consumers may have to pay even more, as some group health plans will not be required to impose any limit on a patient's out-of-pocket costs for drugs next year. If a drug plan does not currently have a limit on out-of-pocket costs, it will not have to impose one for 2014, federal officials said Monday. The health law, signed more than three years ago by Mr. Obama, clearly established a single overall limit on out-of-pocket costs for each individual or family. But federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs. In many cases, the companies have separate computer systems that cannot communicate with one another. A senior administration official, speaking on condition of anonymity to discuss internal deliberations, said: "We knew this was an important issue. We had to balance the interests of consumers with the concerns of health plan sponsors and carriers, which told us that their computer systems were not set up to aggregate all of a person's out-of-pocket costs. They asked for more time to comply." Health plans are free to set out-of-pocket limits lower than the levels allowed by the administration. But many employers and health plans sought the grace period, saying they needed time to upgrade their computer systems. "Benefit managers using different computer systems often cannot keep track of all the out-of-pocket costs incurred by a particular individual," said Kathryn Wilber, a lawyer at the American Benefits Council, which represents many Fortune 500 companies that provide coverage to employees. Last month the White House announced a one-year delay in enforcement of another major provision of the law, which requires larger employers to offer health coverage to full-time employees. Valerie Jarrett, Mr. Obama's senior adviser, said that the delay of the employer mandate showed "we are listening" to businesses, which had complained about the complexity of federal reporting requirements. Although the two delays are unrelated, together they underscore the difficulties the Obama administration is facing as it rolls out the health care law. Advocates for people with chronic illnesses said they were dismayed by the policy decision on out-of-pocket costs. "The government's unexpected interpretation of the law will disproportionately harm people with complex chronic conditions and disabilities," said Myrl Weinberg, the chief executive of the National Health Council, which speaks for more than 50 groups representing patients. For people with serious illnesses like cancer and multiple sclerosis, Ms. Weinberg said, out-of-pocket costs can total tens of thousands of dollars a year. Despite the delay, consumers in 2014 will still have many new protections. They cannot be denied health insurance or charged higher premiums because of pre-existing conditions, and many will qualify for subsidies intended to lower their costs. In promoting his health care plan in 2009, Mr. Obama cited the limit on out-of-pocket costs as one of its chief virtues. "We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick," Mr. Obama told a joint session of Congress in September 2009. Advocates for patients said the promise of the law was being deferred. "We have wonderful new drugs, the biologics, to treat rheumatoid arthritis, but they are extremely expensive," said Dr. Patience H. White, a vice president of the Arthritis Foundation. "In the past, patients had to live in constant pain, often became disabled and had to leave their jobs. The new drugs can make a huge difference, and we were hoping that the cap on out-of-pocket costs would make them affordable. But now many patients will have to wait another year." The American Cancer Society shares the concern and noted that some new cancer drugs cost $100,000 a year or more. "If a prescription drug plan does not currently have a limit, then it will not have to have one in 2014," said Molly Daniels, deputy president of the lobbying arm of the American Cancer Society. "Patients who require expensive drugs could continue to have enormous financial exposure, despite the clear intent of the law to limit a patient's total out-of-pocket exposure." Federal officials said they were offering transition relief to certain health plans in 2014. But, they said, by 2015, health plans must comply with the law and must have an overall limit on out-of-pocket costs for medical, drug and other benefits combined. Theodore M. Thompson, a vice president of the National Multiple Sclerosis Society, said: "The promise of out-of-pocket limits was one of the main reasons we supported health care reform. So we are disappointed that some plans will be allowed to have multiple out-of-pocket limits in 2014." The law also requires coverage of dental care for children, but these benefits can be offered in a separate health plan with its own limit on out-of-pocket costs. Federal rules say that a free-standing dental plan must have "a reasonable annual limitation on cost-sharing." In states where the new health insurance marketplace will be run by the federal government, the limit on out-of-pocket costs for pediatric dental benefits can be no more than $700 for coverage of one child and $1,400 for a plan covering two or more children in the same family.

Health Reform-W2 and 2013

Many have asked what rules will apply for reporting health coverage on Form W-2 for 2013. So far, the IRS has not released any guidance for 2013. This relates to the Form W-2 provided to employees by end of January 2014. But, what will apply? According to questions and answers released by the IRS, the transition relief provided by the IRS in Notice 2012-9 for 2012 will continue to apply unless IRS publishes guidance giving at least six months of advance notice of any change to this relief. For 2013, this time period has just passed and it looks like the rules for 2012 will continue to apply for 2013.

OH Dept of Insur-41% increase coming

Press Release STATE OF OHIO DEPARTMENT OF INSURANCE COMMUNICATIONS OFFICE 8/1/2013 Health Insurance Premiums to Increase 41 Percent Due to Affordable Care Act Premiums for Federal Exchange Show Higher Costs for Ohio Consumers and Small Businesses Page Content COLUMBUS — The Ohio Department of Insurance announced today that individual consumers buying health insurance on the federal government's health insurance exchange for Ohio will pay an average of 41 percent more than they did in 2013. In addition, ODI confirmed previously-released preliminary calculations that insurance companies’ costs to provide individual health coverage will increase by 83 percent. “Ohio has traditionally had a more competitive health insurance market than other states with a wider range of prices and choices – from simple, high deductible coverage to comprehensive, full service plans,” Lieutenant Governor Mary Taylor said. “That level of diversity is essentially outlawed under Obamacare so Ohio's rates and premiums are going up significantly, and going up more than in other states where prices were already high.” Premiums Increase 41 Percent: The Department utilized a National Association of Insurance Commissioners (NAIC) report of premiums reported by Ohio companies at the end of 2012 to compare premiums. Individual exchange plan premiums are expected to increase on average by 41 percent in 2014 compared to 2013, while exchange plans for Ohio's small businesses will increase on average by 18 percent. For individual health insurance plans, a total of 12 companies offering 200 different plans have been approved by the Department for the exchange. Open enrollment for the exchange will begin on October 1, 2013. For small group health insurance plans, 6 companies offering 184 plans have been approved to sell on the exchange. Based on premiums for the current individual market, plans in Ohio today cost on average $236.29 per month compared to $332.58 in 2014. For the small group market, today’s premiums average is $341.03 per month compared to $401.99 in 2014. An example of the difference between premium and the cost to provide coverage is that premiums do not include cost sharing paid by the consumer, whereas cost includes both the cost to the company to provide the coverage and the cost sharing paid by the consumer. Insurance Companies’ Costs to Insure Increase 83 Percent: Estimates from a Society of Actuaries study released in 2013 showed Ohio’s current average cost to provide individual health insurance coverage is $223. Based on the rate filings approved by the Department, the average cost to provide coverage for individuals purchasing health insurance on the exchange in 2014 is $409 representing an increase of 83 percent when compared to the Society of Actuaries study. During the two month review process, the Department requested changes to submissions that in some cases resulted in rate adjustments. Ohio law requires all companies selling products in Ohio, including on the exchange, to justify rate submissions and any rate changes for 2014 by using sound actuarial judgment. The intense review process the Department conducted (as it does with all insurance products sold in Ohio) is to protect consumers from rates that are too high and to protect against company insolvency in which rates are too low and companies are unable to pay a consumer’s claim. Ohio is one of many states to recently release final exchange rate numbers and each state’s experience is different. Ohio’s rates are going up while some other states are seeing rates remain stable or even decrease as the ACA drives rates across the country closer together. For states where prices were already much higher and that had more coverage mandates, rates are not increasing as much. In Ohio, where rates have been among the most competitive in the country, rates are increasing significantly as consumers are faced with fewer options and a higher level of required coverage. "These kinds of significant costs increases are bad for job creation and why the governor and I continue to call for the repeal and replacement of this flawed law with reforms that improve access by lowering costs.” Taylor said. “Ohio said 'no' to running the federal government's health care exchange in our state and 'no' to federal takeovers of both our health insurance regulations and our Medicaid eligibility process. As the problems with this law continue to appear even the federal government has begun to balk, with its recent announcement to delay the employer mandate for a year. Hopefully it's just the beginning of more such news and an eventual total rethinking of this law." In 2010 the ACA, which includes sweeping changes to America’s health insurance system, became law. It includes the creation of health care exchanges in which individuals and small business owners in every state can purchase subsidized coverage. According to the federal government, initial open enrollment on the exchange is set to begin October 1, 2013 with coverage becoming effective January 1, 2014.