On May 31, the U.S. Department of Health and Human Services (HHS) issued a final rule delaying the implementation of a significant portion of the Federal Small Business Health Options Program (SHOP) Exchanges. The SHOP Exchanges, established in the Patient Protection and Affordable Care Act (PPACA), are intended to allow small businesses employees access to several health insurance plans. BenefitMall provided information on the SHOP delay in April in a legislative alert.
The federal government, through adoption of the Patient Protection and Affordable Care Act (PPACA), will require all employers employing 50 or more full-time equivalent employees to offer health benefits or pay a significant tax/penalty early next year. The penalty under this requirement also referred to as the “Employer Shared Responsibility” or “Play or Pay” mandate, can be significant for large employers that fail to comply.
Recent reports, and the fact that the federal Pre-Existing Condition Insurance Plan (PCIP) program stopped accepting new enrollees in February, indicate PCIP is encountering serious funding problems, a situation that could put more financial strain on states and threaten the availability of insurance premium subsidies for uninsured individuals with pre-existing conditions. The U.S. Health and Human Services Department (HHS) is now asking states to bear the burden of the cost overruns, but if the states are unwilling to pick up the expenses, cuts to benefits for high-risk individuals are likely to follow.
On May 29, federal regulators released the final rule outlining the guidelines for how employers may use incentives for employee wellness programs pursuant to the Patient Protection and Affordable Care Act (PPACA). The rule, which applies to group health benefit plans starting in 2014, was largely unchanged from the proposed interim final version which detailed the financial incentives and penalties available to employers.
An April 23 joint Internal Revenue Service (IRS) and Treasury Department hearing exemplified the split between labor and industry over how strictly the Employer Mandate (sometimes called the Shared Responsibility for Employers) provision of the Patient Protection and Affordable Care Act (PPACA) should be applied. A wide variety of stakeholders from the insurance brokerage, organized labor, education, legal and private industry communities testified before officials from the IRS and the Department of the Treasury on the controversial issue.
On May 1, the Center for Consumer Information and Insurance Oversight (CCIIO) released new guidance on the role of “agents, brokers, and web-brokers” in Health Insurance Marketplaces/Exchanges. CCIIO describes how they foresee Brokers operating:
“Agents and brokers, including web-brokers, are among those who will play a role in educating consumers about Marketplaces and insurance affordability programs, and in helping consumers receive eligibility determinations, compare plans, and enroll in coverage. In particular, CMS anticipates that Brokers will play a critical role in helping qualified employers and employees enroll in coverage through the Small Business Health Options Programs (SHOPs)”
Recent Congressional Action Evidences Intent to Amend Large Employer Definition and Hourly Requirements under PPACA
In recent weeks, Congress has demonstrated an intent to change certain definitions and thresholds under the Patient Protection and Affordable Care Act (PPACA). On March 22, 2013, Senator Susan Collins (R-ME) submitted Amendment 144, which would change the definition of a large employer and remove the 30 hour requirement to be considered a full-time employee under PPACA. The legislative amendment would apply to the Senate Fiscal Year 2014 Budget Resolution (S. CON. RES.
Under the Patient Protection and Affordable Care Act (PPACA), wellness is one element of health care reform that is taking center stage.
Generally, health plans may not discriminate based on a health factor against individual participants with regards to eligibility, benefits, or premiums (health factors include health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, and disability). However, an exception to this rule allows for premium discounts, rebates, or modifications to otherwise applicable cost sharing in return for adherence to certain programs of health promotion and disease prevention, otherwise known as wellness programs.
The Patient Protection and Affordable Care Act (PPACA) requires large employers – those with 50 or more full-time employees and full-time equivalents – to offer their employees the opportunity to enroll in coverage that is both affordable and provides minimum value. While determining whether an employer is subject to this employer mandate is complicated in its own right, this determination can get even more complex when several employers are commonly owned.
Bundling Multiple Employers
PPACA’s Impact on Insurance Premiums: Actuarial Study Predicts 32% Increase in Costs Over Next Five Years
A new report by the Independent Society of Actuaries predicts that individual market health insurers could experience as much as a 32% increase on average in health care costs from 2014 through 2017 due to changes brought on by the Patient Protection and Affordable Care Act (PPACA). This would result in higher premiums as the increased costs are passed on to those who purchase health insurance in the individual markets.
The report refers to an “average” increase in costs, but the actual increase in “per member per month” (pmpm) claims expenses will vary from state to state.