The IRS and Treasury have also provided several other clarifications.  The Agencies have confirmed that Minimum Essential Coverage excludes any coverage that consists solely of excepted benefits, such as most health FSAs, stand-alone dental or vision plans, and certain fixed indemnity plans.  The Agencies have also solicited comments on how to treat employer contributions provided through Section 125 Cafeteria Plans that employees may not elect to receive as a taxable benefit for affordability purposes.  The comments and resolution to this issue will be important for those employers providing flex credits through Section 125 Cafeteria Plans that employees are not allowed to cash out.  The NPRM also confirms that the only wellness incentives that are presumed to be earned for affordability purposes are those related to tobacco.  All other incentives earned through a wellness program, whether for participation or for meeting another health standard such as BMI, are disregarded in determining affordability.

Finally, the Agencies clarified that individual mandate penalties are assessed on a monthly basis.  The penalty for each month will be 1/12 of a flat dollar amount ($95 in 2014) or a percentage (1% of household income in 2014).  A public hearing will be held on May 21, 2014.  For a copy of these proposed regulations, click here.

The post IRS Publishes New Proposed Regulations on the Individual Mandate and Minimum Essential Coverage appeared first on Healthcare Reform Digest.

For more information on this extension, see this article from the Washington Post.  Our original post is below.

Today, December 23, 2013, is the deadline to enroll in health insurance coverage available through the health insurance Marketplaces, also known as Exchanges, that will be effective on January 1, 2014.  Open enrollment for Marketplace coverage will continue until March 31, 2014.  However, today is the last day to enroll for coverage that is effective on January 1, 2014.  Individuals will have until January 10, 2014 to make the first premium payments for these policies.

Policies purchased after December 23, 2013 and before January 15, 2014 will be effective on February 1, unless an earlier effective date is requested and can be accommodated by the carrier.

Visit www.healthcare.gov to enroll and for more information on eligibility for premium tax credits and cost-sharing subsidies for lower income individuals.

The post Want health insurance coverage effective January 1, 2014? Today is the deadline to enroll! appeared first on Healthcare Reform Digest.

• Total number of enrollees selecting coverage in both state (14 states and DC) and federal (36 states) exchanges:  106, 185
• Total completed applications submitted from 10/1/2013 to 11/2/2013:  846, 184  (to cover an estimated 1,508,883 individuals)
• Total number of enrollees selecting coverage in state-based exchanges:  79, 391
• Total number of enrollees selecting coverage in federally-facilitated exchanges:  26, 794
• Individuals determined or assessed to be eligible for Medicaid or CHIP:  396,261
• Individuals determined to be eligible for a plan through an exchange: 1,081,592
• Individuals determined to be eligible for financial assistance: 326,130
• Number of individuals who have selected a plan from the exchange in North Carolina: 1,662

For more details on the data, click here for the official report from HHS.  Do you think these numbers will improve?  How close will enrollment be to the Congressional Budget Office target by year end?

The post HHS Publishes Official Data on Health Insurance Exchange Enrollment appeared first on Healthcare Reform Digest.

This action by the Agencies is in direct response to a soliciation for public comments regarding changes to the “use it or lose it” rule in IRS Notice 2012-40 and some legislative activity to consider possible changes to the rule that would make contributions to a health FSA more palatable after implementation of the $2,500 cap.  In a rather surprising move, the Agencies also provided that the $500 carryover will not impact the ability of an individual to contribute the full salary reduction amount of $2,500 for the next plan year.  However, there is one caveat.  While the Agencies have not changed the ability of an employer to utilize the allowed grace period for use of health FSA funds, this new guidance does clarifiy that an employer may use the grace period or the carryover, but not both.  Employers that currently utilize the permitted grace period should consider whether to continue using the grace period or to utilize the new carryover feature, and to amend their Section 125 cafeteria plan documents accordingly.  Employers may also specify an amount lower than $500 that employees may carryover if this new provision is utilized.

Employers may be able to take advantage of this new carryover feature during 2013 for the 2014 plan year.  For more information about the carryover, see the Treasury Press Release and IRS Notice 2013-71.  The associated fact sheet may be accessed through the press release.

The post IRS to Allow Limited Carry Over in Healthcare Flexible Spending Arrangements appeared first on Healthcare Reform Digest.

• Aged, blind or disabled;
• Infants, children and families;
• Long-term care; and
• Medicare recipients.

*Click here for the N.C. Medicaid Eligibility Chart

So what is the result?  Childless, low income adults will be impacted the most.  Individuals with household incomes between 100% and 400% of the Federal Poverty Level may be eligible for premium tax credits or cost-sharing subsidies for coverage purchased through a health insurance Marketplace if they do not have access to other minimum essential coverage.  Currently, 100% of the Federal Poverty Level for 2013 is $11,490.  A childless adult making less than $11,490 will not qualify for Medicaid because they do not meet the Medicaid eligibility requirements, at least in North Carolina.  And, because the adult’s income is less than 100% of the Federal Poverty Level, they also will not qualify for premium tax credits or cost-sharing subsidies.  An adult in this situation would be left with limited options: (1) going without coverage; (2) paying the full premium for a health plan through the Marketplace; or (3) enrolling in employer-sponsored coverage, if employed and eligible for the employer’s benefits.  Although these options are not very appealing, the U.S. Department of Health and Human Services (HHS) has made an accomodation.  In a final rule published on June 26, 2013, HHS provided an exemption from the individual mandate tax penalty for individuals ineligible for Medicaid solely because a state declined to expand Medicaid under PPACA.

Some of the states that have not expanded Medicaid may do so at a later date. Until then, this coverage gap could only be remedied by legislative action.

The post Low Income Adults Fall Into PPACA’s “Coverage Gap” appeared first on Healthcare Reform Digest.

• How premiums will be calculated in the FF-SHOPs;
• How premium rates for small employers with employees in multiple states will be calculated;
• Whether a small employer’s premium rate may be changed during the employer’s plan year (for example, if the employer moves its headquarters to another state during the plan year);
• Whether composite (or average) premiums may be used in the FF-SHOPs;
• How employers may contribute to employee and dependent premiums in an FF-SHOP;
• Whether employers purchasing coverage through the FF-SHOP may vary premium contribution amounts to different employee classifications (i.e. part-time vs. full time, hourly vs. salary);
• How employees will be allowed to contribute to their premiums in an FF-SHOP;
• What happens if an employer’s estimate of the number of employees who will participate (elect coverage) is different from actual participation, and the associated impact on premiums; and
• Examples of contribution calculations.

Small employers with 50 or fewer employees are currently eligible to purchase group health insurance coverage through a SHOP Exchange.  However, online enrollment for the FF-SHOPs will not be available until November 1, 2013. For more information, see our prior post on the delay of online enrollment.

The post CMS Publishes New FAQ for Federally-Facilitated SHOP Exchange for Small Businesses appeared first on Healthcare Reform Digest.

SHOP Exchanges will provide a new avenue for small businesses to purchase group health insurance for employees.  Despite this delay of the online enrollment function, small businesses will still be able to apply for coverage through a SHOP Exchange on October 1, but will be required to mail or fax their SHOP enrollment information to the SHOP.  This delay impacts the SHOP Exchanges in the 34 states that have chosen not to operate their own state-based SHOP Exchange.  Some states that elected to operate their own small business health insurance exchanges, including Maryland and Washington, have delayed access to their state-based small business health insurance exchanges.

For more information about the SHOP online enrollment delay, the Washington Post, CNN, New York Times (subscription required), and Wall Street Journal (subscription required) report.

The post SHOP Exchange Online Enrollment Delayed appeared first on Healthcare Reform Digest.

The proposed rules, in additional to providing more detail about the health insurance tax credit for small employers, also provide some transition relief for those small employers that have non-calendar year plans that do not begin on the same date as their taxable year.  A small employer (25 or fewer full time equivalent employees for purposes of the health insurance tax credit) will be treated as offering coverage for the entire 2014 tax year for purposes of eligibility for and calculation of the health insurance tax credit if the small employer:

• Offers coverage that begins on a date other than the first day of its tax year; and
• Offers coverage during the period before the first day of the plan year beginning in 2014 that would have qualified the employer for the credit under the rules that applied before January 1, 2014; and
• Begins offering coverage through a SHOP Exchange as of the first day of its plan year that begins in 2014.

This flexibility will help those small employers who might have otherwise qualified for the Small Business Health Insurance Tax Credit but either would have missed out on it for a portion of the year or faced the administrative challenges of terminating an existing group health plan early in order to purchase coverage through the SHOP.

The IRS has requested comments on these proposed rules.  Comments and any requests for a public hearing must be submitted within 90 days after the Notice of Proposed Rulemaking is published in the Federal Register, which should occur next week.

The post IRS Issues Proposed Regulations on Small Business Health Insurance Tax Credit appeared first on Healthcare Reform Digest.

These reports have created some confusion among both the employer and consumer communities.  The “delay” arises out of one of many FAQs jointly issued by the U.S. Department of Labor (DOL), IRS, and U.S. Department of Health and Human Services back in February of 2013.  This particular set of FAQs addresses limitations on cost-sharing under healthcare reform.  The FAQ clarifies that the deductible limits of $2,000 only apply to employers in the small group market.  Specifically, non-grandfathered group health plans and qualified group health plans in the small group market must implement the $2,000 deductible limit for the first plan year beginning on or after January 1, 2014.  However, the DOL will allow qualified health plans in the small group market to exceed the $2,000 deductible limit if the plan cannot reasonably achieve a given actuarial value without increasing the deductible.  For example, a qualified group health plan in the small group market may have to increase the deductible to $4,00o or $5,000 to meet the minimum 60% “Bronze” metal level.

The second part of the out-of-pocket cost regulations contained in PPACA relates to a plan’s out-of-pocket limits.  The DOL clarified that the out-of-pocket maximums provided in Section 1302(c)(1) of PPACA apply to all non-grandfathered employer group health plans under PHSA Section 2707(b), regardless of the employer’s size.  For 2014, these out-of-pocket maximums are set at $6,350 for individuals and $12,700 for families.  The “delay” recent news articles reference is an acknowledgment by the DOL that many “plans may utilize multiple service providers to help administer benefits (such as one third-party administrator for major medical coverage, a separate pharmacy benefit manager, and a separate managed behavioral health organization).”  Different service providers may impose different out-of-pocket maximums for the benefits provided under each separate policy.  Coordinating the accrual of amounts toward these out-of-pocket maximums between separate insurers comes with additional communication challenges.  Recognizing this additional compliance challenge, the Departments will consider the out-of-pocket maximum requirement to be met if each individual separate policy complies.  This transitional relief is only available for the first plan year beginning on or after January 1, 2014.

Many employers use the same insurance carrier for their medical and pharmacy benefits, for example.  As a result, for most employer group health plans, these requirements will continue as-is and will be implemented for the first plan year beginning on or after January 1, 2014.  Employees are not likley to feel much of a change if the employer already has separate component benefits in place.  If the employer has certain benefits with the same provider, the employees will benefit from these out-of-pocket maximums in 2014 as initially provided in the regulations.  Employees of small employers and individuals purchasing coverage through the Marketplaces may see increased costs intially as Marketplace plans may have deductibles higher than $2,000.

The post Wait, Another Delay?? The Truth About Out of Pocket Costs in 2014 appeared first on Healthcare Reform Digest.

Under the Patient Protection and Affordable Care Act, small employers are those employers with 50 or fewer full time equivalent employees.  This number will increase to 100 full time equivalent employees in 2016.  In 2014, small employers may use the SHOP to purchase a group health plan for their employees and to qualify for the Small Business Health Insurance Tax Credit.  For more information on this tax credit for small employers, please see our prior post.  Although the SHOP was intended to provide great flexibility for employees of small employers to choose from a variety of plans offered through the SHOP Exchange, this year small employers may only choose one plan that will be available to their employees.  Employees will be able to choose from a variety of plan options in later years.  Only Blue Cross Blue Shield of North Carolina will offer plans through the North Carolina SHOP Exchange.

Click here to reach the Health Insurance Marketplace’s alert regarding SHOP and Small Business questions.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

The post Want Answers to your Small Business Health Insurance Exchange Questions? Call Now! appeared first on Healthcare Reform Digest.