Health Care Reform Fails!!!!
In a dramatic late night vote, the Republican controlled Senate failed to pass health care reform. Mitch McConnell introduced three separate bills. The first was Repeal and Replace which would have repealed the Affordable Care Act aka Obamacare. The second was simply Repeal which would have completely repealed Obamacare but with a two year delayed effective date for the repeal. The third attempt was a “Skinny Repeal” which would have repealed the individual and employer mandate and a few other pieces of the law. However, all three attempts went down in flames. This means Obamacare remains the law of the land and employers should continue to comply with the law. In fact, the IRS confirmed this is the case.
Having said that, do not underestimate the impact the Trump administration can exert on the law through the regulatory process. In addition, it is doubtful Congress will give up on health care reform. The only thing that is certain is that health care will remain in the headlines.
One of the requirements under health care reform is that employees get a summary of benefits and coverage or SBCs. This requirement has been around for a while but employers should note the government has updated the four-page template.
The new template should be used for open enrollment periods beginning on or after April 1, 2017. So this means you should be using the new template for the 2018 open enrollment period.
Mid-Year HSA Contributions Changes
The statutory limits on HSA contributions are based on an annual basis. For 2017 the maximum annual HSA contributions for single coverage is $3,400 and for family coverage it is $6,750. Although the amounts are listed on an annual basis, they are calculated on a monthly basis and the IRS allows individuals to change their HSA contributions mid-year on a prospective basis.
This article explains the rules on how to calculate the maximum amount an individual can contribute to his or her HSA if that person changes from single to family coverage or vice versa. There is nothing new about these rules; they have been in effect since HSAs were first introduced under President George W. Bush.
Pet Friendly Workplaces
The reason I am including this article in the newsletter is that I have two dogs. One dog was diagnosed with diabetes early this year and we started giving him insulin. He recently went blind with cataracts and we took him to a veterinary that specializes in ophthalmology and he underwent eye surgery. This article talks about pet friendly workplaces and the advantages of allowing employees to bring pets to work.
In case you are wondering Charlie (my dog) gave me permission to talk about his health issues so there are no HIPAA concerns.
Interesting Health Care Exchange Proposal
At least as of today’s date, it seems that a wholesale repeal and replacement of the Affordable Care Act is not likely to happen in the short term. One of the biggest concerns is the collapse of the health care exchanges or marketplaces where there is little, if any, competition.
This article talks about offering Medicare and Medicare Advantage through the exchanges as a way to increase competition. I doubt that this will happen but it is an interesting concept.
Costs to surpass $14k
Large employers expect health care costs to be close to $14,000 per year per employee in 2018. These employers are planning on paying 70% of that number while charging employees the remaining 30% of the total premium costs.
Most employers blame specialty pharmacy for a lot of the price increases. Employers are adopting telemedicine, working with accountable care organizations and some are even opening health clinics as a way to combat the rising costs.
Smaller Groups are Going Self-Funded
The Affordable Care Act really changed the landscape for all employers as well as insurance carriers when it comes to offering health coverage to employees.
One trend is that smaller employers are starting to migrate over to self-funded health plans. Traditionally only larger employers with 100+ employees went self-funded. However, health care reform has encouraged carriers to develop self-funded products for small employers. This article talks about the trend and the impact this has on the fully insured market for the small employers left behind.
COBRA and Severance Packages
COBRA has been around for a long time and it is not going anyway any time soon. With all the focus on health care reform, COBRA has fallen out of the spotlight.
This article talks about offering COBRA as part of a severance package and things to consider when taking this approach.
All Self-Funded Health Plans are Not Created Equally
With health care reform more employers are adopting self-funded health plans for a variety of reasons. However, not all self-funded health plans are created equally.
When thinking about adopting a self-funded health plan it is critical to consider the provider network and discounts. This article talks about how important it is to consider those items.
Telemedicine Continues to Grow
More employers are adopting telemedicine as a way to help control costs and provide convenience to the employees. It is a lot easier and usually cheaper to simply call a physician than go to the doctor’s office.
Unfortunately the practice of medicine is on a state-by-state basis which means there are no uniform nationwide rules. This article talks about some of the issues employers offering telemedicine face.
Government Issues Draft ACA Forms
If you are an Applicable Large Employer (“ALE”) or you sponsor a self-funded health plan, then I am sure you have fond memories of the dreaded IRS Form 1094 and IRS Form 1095. The government just released the 2017 forms in draft format.
It is clear both political parties and President Trump would like to repeal both the individual and employer mandates. If that happens most predict the reporting requirements may not go away completely but they would become much simpler. Unfortunately, Congress has not been able to pass health care reform so we are stuck with the current reporting requirements. Having said that, it remains to be seen if the Trump administration actually enforces them. However, the reporting rules are the current law of the land.
COBRA Class Action Lawsuit
A previous article in this newsletter talks about COBRA and it is again worth saying – COBRA is not going away. As a practical matter, there are now alternatives to COBRA coverage and chances are most individuals will not elect COBRA. However, that does not mean employers should get sloppy when it comes to COBRA notices and procedures.
This employer got tangled up in a class action lawsuit because of vague language in the COBRA notices. As this article points out, the government now provides COBRA notice templates and employers should use the government approved documents. However, the templates should be modified to say that all notices to the employer should be in writing. That is, employers should add language to the government’s model notices requiring notices to the employer be in writing.
Refresher Course on Notices
There are various disclose requirements when sponsoring employee benefit plans. This really is just common sense. Basically, you have to tell the people about the various benefits.
This article does a nice job of listing those requirements in one place. There is nothing new here – really just a reminder of the rules.