The Patient Protection and Affordable Care Act (PPACA), also referred to as health care reform, introduced several new laws and regulations that impact businesses of all sizes. The following health care reform checklist outlines 10 key PPACA compliance issues employers may need to complete in 2013.
Whether a business needs to complete each item depends on the type of employee health benefits offered, and business size. For example, if a business offers an employer-sponsored group health insurance plan, the requirements are different than if the business offers a stand-alone Health Reimbursement Arrangement (HRA).
1. Grandfathered Plan Status
A grandfathered health insurance plan is defined as being in existence when health care reform was enacted on March 23, 2010. If you make certain changes to your plan, your plan is no longer grandfathered.
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If you have a grandfathered plan: Does it qualify to maintain grandfathered status?
- If you have changed to a non-grandfathered plan, confirm it meets PPACA requirements for 2013.
See: What is a Grandfathered Health Insurance Plan?
2. Annual Limits
PPACA prohibits health insurance plans from imposing annual or lifetime limits on essential health benefits (EHB). For plans beginning 9/23/12 - 1/1/14, the annual limits cannot be less than $2 million. Starting in 2014, annual limits are prohibited.
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If you offer a group plan: Confirm the plan's annual limits are in compliance with 2013 amounts, and prepare for 2014 when annual limits are prohibited. See: ACA Annual and Lifetime Limits Requirements.
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If you offer a stand-alone HRA: Confirm the HRA plan design meets the definition of one of the five HRAs excluded from annual limit requirements. See: Annual and Lifetime Limits for HRAs.
3. Summary of Benefits & Coverage (SBC)
The Summary of Benefits and Coverage (SBC) is a required, easy-to-understand summary of the benefit. Generally speaking, your insurer, HRA provider, or third-party administrator will provide the SBC. Provide the SBC to eligible participants at least thirty (30) days before plan year begins.
4. Decide Your “Play or Pay” Strategy for 2014
Starting January 1, 2014, PPACA requires all applicable large employers (50+ FTE employees) to either provide qualified, affordable health insurance or pay a penalty based on full-time employees.
If you have over 50 FTE employees, conduct a cost analysis to decide if you will play, pay, or play differently:
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Play: Offer a qualified, affordable group health insurance plan.
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Pay: Choose to not offer a group health insurance plan, and pay applicable penalties.
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Play Differently: Choose to not offer a group health insurance plan, pay penalties, and offer a defined contribution health plan.
IMPORTANT: Employers with less than 50 FTE employees are not subject to this requirement. For employers with less than 50 FTE, the "play differently" allows a business to offer a cost-effective health benefit, and take advantage of the individual premium tax subsidies.
5. W-2 Reporting Requirements
Beginning with the 2012 tax year, employers with 250 or more W-2 Form Employees must report the aggregate cost of employer-sponsored group health coverage on employees’ W-2 Forms. Determine if this requirement applies to you. W-2 reporting for smaller employers, and for stand-alone HRAs, is optional until further guidance is issued.
6. Sixty (60) Day Notice of Plan Changes
A health plan or issuer must provide 60 days advance notice of any mid-year “material modifications” to the plan. Notice can be provided in an updated SBC or a separate summary of material modifications.
7. Notice of Coverage Options through the Marketplaces
Employers must provide written notice to all current employees (regardless of full-time/part-time status) about coverage options through the Marketplaces by October 1, 2013. The Department of Labor has provided two templates employers can use: one for employers offering a group health plan, and one for employers not offering a group health plan.
For details on the notice see: Employer ACA Marketplace Notice Requirements.
8. CER Plan Fees
PPACA created the Patient-Centered Outcomes Research Institute (PCORI) to help patients, clinicians, payers, and the public make informed health decisions by advancing comparative effectiveness research. The Institute’s research is to be funded, in part, by fees paid by health insurance issuers and sponsors of self-insured health plans. These fees are called comparative effectiveness research fees or CER plan fees.
Self-funded plans and health insurance issuers (including stand-alone HRAs) must pay a $1 per covered life fee for comparative effectiveness research. Fees are effective for plan years ending on or after Oct. 1, 2012. Fees increase to $2 the next year and will be indexed for inflation after that. Full payment of the research fees will be due by July 31 of each year. It will generally cover plan years that end during the preceding calendar year.
9. Flexible Spending Account (FSA) New Annual Limits
New limits of $2,500 for health care FSAs apply to plan years beginning on or after January 1, 2013. Note: The limit does not apply to non-health care FSAs, such as dependent care FSAs.
10. Women’s Preventive Care Mandate
Effective for plan years beginning on or after August 1, 2012, non-grandfathered health plans must cover specific preventive care services for women without cost-sharing requirements. See this list of preventive care services covered under PPACA.
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If you have a non-grandfathered group plan: Confirm that your plan covers specified preventive care services for women without cost sharing.
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If you have a stand-alone HRA: While there has not been final rule on how this regulation affects HRAs, we recommend you do not limit this expense in any way.
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