2017 health plan compliance priorities 20170824 · 2017 health plan compliance priorities ©2017...

8/24/2017

©2017 Gallagher Benefit Services, Inc.©2017 Gallagher Benefit Services, Inc.

2017 HEALTH PLAN COMPLIANCE PRIORITIES

©2017 Gallagher Benefit Services, Inc.

HEALTH PLAN COMPLIANCE IN 2017

AGENDA

0201 03ONGOING ACA COMPLIANCE ISSUES

GROUP HEALTH PLAN COMPLIANCEBusiness as Usual… For Now

04ACTION STEPS

Mike Beck, CEBSArea VP, Health & Welfare

Consulting

Ben Garner, JDCompliance Advisor

8/24/2017


SENATE VOTES DOWN THREE

REPEAL & REPLACE PROPOSALS

JULY 25‐28, 2017

NOW WHAT…?

BETTER CARE RECONCILIATION

ACT(Discussion draft)

JUNE 22, 2017

Draft bill released by Senate Republicans

Much discussion and maneuvering for votes ensued…



JUNE 22, 2017





JUNE 22, 2017



RECENT DEVELOPMENTSFutureOfHealthcare


EXECUTIVE ORDER BY PRESIDENT

TRUMP

JANUARY 20, 2017

Communicates intent to repeal the ACA

Directs federal agencies to exercise authority to delay implementation and grant exemptions

to the ACA


TRUMP

JANUARY 20, 2017



to the ACA


TRUMP

JANUARY 20, 2017



to the ACA

BUDGET RESOLUTION

PASSED IN HOUSE AND SENATE

JANUARY 13, 2017

Lays the ground work for partial repeal through budget reconciliation

AMERICAN HEALTH CARE

ACT

MAY 4, 2017

Reconciliation bill to repeal and replace parts of the ACA

Passes House 217‐213


NOW WHAT?

Next steps for Congress

2017 LEGAL DEVELOPMENTS

Bipartisan attempts to

continue repeal & replace

Moving on – to tax reform

Continued Republican efforts, probably using the

budget reconciliation process

8/24/2017


POSSIBLE REGULATORY CHANGES TO THE ACA

2017 LEGAL DEVELOPMENTS

Request for Information on Reducing Regulatory Burden

June 8 CMS issues an RFI to gather recommendations focused on creating a more flexible, streamlined approach to the individual and small group markets

Multiple organizations have responded with a variety of suggestions (American Benefits Council, U.S. Chamber of Commerce)

ACA § 1332 State Innovation Waivers

March 13 HHS Secretary Price sent a letter to state governors

May 11 HHS issued a checklist to assist states with their waiver applications

July 11 Alaska received reinsurance waiver (Hawaii = approved; Minnesota = pending)


SO WHAT REMAINS OF THE ACA?

“I heard that even if Congress won’t repeal the ACA that President Trump will get rid of the mandates and taxes anyway.

IS THIS TRUE?”

“No, the provisions of the Affordable Care Act are still the law of the land until Congress Acts. In fact, the IRS, which is responsible for collecting the

penalties for noncompliance, has recently made that clear in

several Information Letters issued at the end of June.”

8/24/2017


CONTINUING ACA OBLIGATIONS


Most of the repeal and replace bills do not attempt to get rid of the ACA’s most popular provisions. Many of these cannot be repealed through the budget reconciliation process.

ACA PROVISIONS REMAININGACAHighlights

Dependent coverage to age 26

Prohibition on annual and lifetime limits

Maximum out of pocket cost limitations

Coverage of preventive care without cost‐sharing

Prohibition against pre‐existing condition exclusions

8/24/2017


EMPLOYER SHARED RESPONSIBILITY

CONTINUED ACA COMPLIANCE

BASICS

ALEs must offer MEC that is affordableand provides minimum value to 95% of more of their full‐time employees and dependents

PENALTIES

Headcount/ “Sledgehammer” (4980H(a))

Per employee/ “Icepick” (4980H(b))

KEY TAKEAWAYS

No changes yet to the Employer Mandate

No enforcement yet, but may come see

Important: document offers of coverage!

4980H(a) 4980H(b) Affordable

2015 $2,080 $3,120 9.56%

2016 $2,160 $3,240 9.66%

2017 $2,260 $3,390 9.69%

2018 $2,330 $3,500 9.56%


FORM 1094 / 1095 REPORTING


BASICS

Reporting MEC

Reporting offer of coverage

PENALTIES

Failure to file: $260 per form

WHY HIGHLIGHT THIS?

Filing with IRS likely due:

• Feb. 28 (paper)

• Mar. 31 (electronic)

Distribute to employees by:

• Jan. 31 (unless extended)

IRS enforcement likely on its way…!

8/24/2017


IRS ENFORCEMENT MOVING FORWARD


Since January, IRS contacting identified non‐filers for tax year 2015

IRS Letter 5699 states:

“A review of our records shows you may have been an . . . ALE in 2015 and therefore required to file certain information returns for 2015. We have not received those returns . . . .”

“ . . . [F]ailure to comply may result in the assessment of a penalty [for not filing an information return] . . . .”

Response required within 30 days

IRS has indicated that it could take 18 months from the filing deadline before potential liability letters are issued, so we may start to seeing these in December 2017 for the 2015 reporting year

Expecting guidance from IRS on how employers will pay

INFORMATION REQUEST LETTERS (LETTER 5699)

EMPLOYER SHARED RESPONSIBILITY LIABILITY LETTERS


REPORTING OBLIGATIONS, NOTICES, AND TAXES


REP

ORTING& NOTICES

Summary of Benefits and Coverage

Marketplace Notice

Offer of MEC

Offer of Coverage (1094/1095 reporting)

W‐2 reporting

MLR rebates

FEES & TAX PROVISIONS

Transitional reinsurance fee (expired 2016)

PCORI fee (until 2019)

Return of the “HIT” (2018)

“Cadillac” tax (returning 2020)

Additional Medicare tax

8/24/2017


RETURN OF THE HEALTH INSURANCE TAX


Paid by insurance carriers and self‐insured MEWAsApportioned among insurers on basis of market share (overall premium base)

Plan years beginning after DECEMBER 31, 2013Medical, dental and vision plans

HIT DOES NOT APPLY to self‐insured plans (and associated stop loss) or governmental entities that are health coverage providers (ex. Medicaid)


“CADILLAC” TAX = THE ZOMBIE TAX?


Multiple delays but currently expected in 2020

40% non‐deductible excise tax on high‐cost employer provided health coverage beginning in 2018

Tax assessed on applicable amount of employer‐sponsored coverage over certain thresholds

Estimated thresholds (subject to adjustment factors)

$10,200 per year for employee‐only coverage

$27,500 per year for other coverage (i.e., family coverage)

8/24/2017


IF NOT ENFORCED, WILL EMPLOYERS CHANGE THEIR BEHAVIOR?

The National Business Group on Health, shows companies continue to try to control costs while backing away from shrinking or dropping health benefits. NBGH is a coalition of large employers.

The heightened need for strong benefits and compensation packages is a resonating theme throughout the 2017 Arthur J. Gallagher & Co. Benefits Strategy & Benchmarking Survey, which collected data from 4,226 organizations across the U.S.

Labor market is tight...Recent surveys reflect employers’ thoughts:


WHILE WE WAIT FOR SOMETHING TO HAPPEN, THERE IS STILL…

Nondiscrimination

PPACA Cafeteria Plans

WHCRAERISA

HIPAA

Men

tal Health

Life Insuran

ce

Welln

ess

Med

icare

Newborns

FMLA

QMCSOADEA Short‐Term Disability

COBRATransportation Benefit

ADAConsumer‐ Driven PlansLife Insurance

8/24/2017


OTHER COMPLIANCE PRIORITIES


HIPAAPrivacyandSecurity

BASICS

PRIVACY RULE

Protection of PHI

SECURITY RULE

Protection of ePHI

WHY HIGHLIGHT THIS?

OCR’s AUDIT PROGRAM: Phase II

(Enforcement continues to be a focus!)

COMPLIANCE FAILURES INCREASED BREACH VULNERABILITY

PENALTIES

$100–$50,000 per violation

Criminal Penalties up to $250,000 + PRISON

8/24/2017


WELLNESS PROGRAMS


BASICS

HIPAA

Requirements to meet a health standard

ADA

Physical exams and disability‐related inquiries

GINA

Requesting or requiring genetic information about an employee’s family member

WHY HIGHLIGHT THIS?

Interaction with HIPAA rules

Incentive limitations

Confidentiality/privacy, security

PENALTIES

HIPAA—$100/day per person affected

ADA—Provide reasonable accommodations; compensatory or even punitive damages


MENTAL HEALTH PARITY AND ADDICTION EQUITY ACT

BASICS

Parity in financial requirements/treatment limitations for mental health or substance use disorder vs. medical/surgical

Increased requirements from MHPA

WHY HIGHLIGHT THIS?

Final regulations effective 2014‐2015

Mental Health Parity Task Force

21st Century Cures Act

PENALTIES

Participant/DOL lawsuits (including damages)

HHS Penalties and IRS Excise Taxes

up to $100/day per person affected

8/24/2017


TELEMEDICINE


BASICS

Medical care through internet or phone/video

Typically replaces or functions as physician office visit

WHY HIGHLIGHT THIS?

Rapid increase in popularity

ERISA, COBRA, HIPAA concerns

HSA eligibility can be affected

Deductibles and OOP maximums

PENALTIES

Vary with underlying regulatory scheme


ERISA


BASICS

Substantive provisions

Plan document

Fiduciary responsibilities

Reporting and disclosure rules

WHY HIGHLIGHT THIS?

Plan foundation

PPACA

New requirements

Form 5500: Potential elimination of small plan exemption

PENALTIES

Failure to file Form 5500—up to $2,063/day

DISCLOSURE—civil penalties up to $147/day

LITIGATION—by individuals and DOL

CRIMINAL PENALTIES

8/24/2017


ACTION ITEMS


WHAT TO DO NOW

ACTION ITEMS

LEARN

REVIEW AND UPDATE

DOCUMENT

PAY ATTENTION

NOTIFY

8/24/2017

QA


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QUESTIONS?

The intent of this presentation is to provide you with general information regardingthe status of, and/or potential concerns related to, your current employee benefitsenvironment. It should not be construed as, nor is it intended to provide, legaladvice. Laws may be complex and subject to change. This information is based oncurrent interpretation of the law and is not guaranteed. Questions regarding specificissues should be addressed by legal counsel who specializes in this practice area.

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