PPACA: Are You in Compliance?

The best news we have heard in a long time is that Treasury plans to revamp, simplify, and suspend some reporting requirement of employers and insurers for 2014. And since employer responsibility payments can only be assessed based on some of the reporting, Play or Pay payments won’t be collected for 2014. The following remain on the compliance checklist.


What: Summary of Benefits Coverage (SBC) When: Now

Summaries required for each health plan option as part of open enrollment and for distribution to newly hired or newly eligible employees. There is a penalty up to $1,000 per individual for willful failure to comply. Your enrollment material or SPD do not take the place of the SBC. Distribution may be made electronically if the enrollment is conducted electronically. For the most recent model language: Click Here


What: Form 720 Quarterly Federal Excise Tax Return (reporting of PCOR fees) When: By 7/31/2013 for plan years ending 12/31/2012

Applies to applicable self-funded plans; insurers report and pay fees for fully insured plans. The fee is calculated by using the applicable dollar amount in effect for the plan year multiplied by the average number of lives covered under the policy. For a detailed discussion of the fees, how to calculate average number of lives, and which self-funded plans are “applicable” plans see article entitled “First PCOR Fees due July, 2013” in the October 2012 edition of this newsletter.


What: Notice all employees about your State Exchange (Marketplace) When: By October 1st annually; and within 14 days of new hire start date

This requirement applies to any employer that is subject to the Fair Labor Standards Act (FLSA); this will include most employers. Not sure if it applies to you? DOL has a calculator on their website to help you determine your status. DOL model language is available at the following links:Model Notice for employers who offer a health plan to some or all employees | en español Model Notice for employers who do not offer a health plan | en español COBRA Model Election Notice | en español | See companion article. For additional information see FBMC Benefits Alert 2013-02; call the HCTC Customer Contact Center at 1-866-628-HCTC or visit the HCTC website.


What: Expanded W-2 Reporting When: By January 31st annually

Most employers must report the aggregate cost of applicable employer sponsored coverage on an employee’s Form W-2, Box 12, Code DD. (Does not apply to employers with fewer than 250 W-2s issued for the prior calendar year.)


What: Reinsurance fees When: Assessed for calendar years 2014 - 2016

Employers with self-funded medical plans will pay the fee directly; insurers of fully insured plans will pay on behalf of the plans. There is no exemption based on group size. HHS estimates the fee will be $5.25 per month per covered life; however the final cost will not be determined until 2014.


What: Quality of Care Reporting When: Pending Guidance

Insurers and employers with self-funded non-grandfathered plans must submit an annual report to HHS and to enrollees during each annual enrollment that addresses plan or coverage benefits and provider “reimbursement structures” that may affect the quality of care. The reporting requirements are to be developed in consultation with health care quality experts, care providers, care recipients, insurers, and employers). We are still waiting on guidance from HHS.


What: Tracking employee hours When: 2015 for the 2014 plan year

Although reporting has been delayed, there is no word from Treasury on whether they are revamping these rules.Any applicable employer wanting to use the IRS safe harbors (large employer or employer with self-funded plan) should be tracking employee hours to identify full-time employees. Large employers are defined as an employer who employed on average 50 or more full-time employees during the prior year. Beginning with the 2015 plan year you must begin reporting certain health plan information to the IRS and to your employees. For additional information and links to agency guidance, see article entitled “30 Hours/Week is considered Full-Time Employment?” in the October 2012 edition of this newsletter.


What: Transparency in Coverage Reporting When: 2014
Insurers and employers with self-funded non-grandfathered plansmust prepare Transparency in Coverage Disclosures that are intended to help employees understand how reliably the plan reimburses claims for covered services, whether the provider network is adequate to assure access to covered services, and other practical information. Information must be provided in plain language that the intended audience, including individuals with limited English proficiency, can readily understand and use. The law requires plans to disclose information, and for exchanges and the federal Department of Health and Human Services (HHS) to then make publicly-available accurate and timely disclosure of this information. The disclosure will include the following categories ofinformation:
    • Claims payment policies and practices,
    • Periodic financial disclosures,
    • Data on enrollment,
    • Data on disenrollment,
    • Data on the number of claims that are denied,
    • Data on rating practices,
    • Information on cost-sharing and payments with respect to out-of-network coverage,
    • Information on enrollee and participant rights, and
    • Other information as deemed appropriate by the Secretary
What: Begin considering and planning your 2015 health plan design When: 2014

Does it include essential health benefits? What type of plan will be needed to assure it will be deemed affordable and will provide minimum value? Will any pay adjustments be needed in your entry level salaries? It will generally be considered affordable if the cost of the coverage to an employee of your lowest cost option plan would not exceed 9.5% of the wages you pay the employee that year, as reported in Box 1 of Form W-2. It will be considered of minimum value if deductibles, coinsurance, copayments and other out-of-pocket amounts the employee pays are no more than 40% of the actuarial value of benefits under the plan. See Quarterly Review April 2013 Your Health Plan: Is it Affordable? Does it Provide Minimum value?


Quick links to CMS Actuarial Value Calculator and Minimum Value Calculator: Click Here. For a printable PDF version of this checklist: Click Here.


This article is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that neither the authors nor FBMC are rendering legal, accounting, or other professional advice and assume no liability in connection with its use. No portion of this article may be reprinted or used without written permission from FBMC. Copyright 2013, FBMC.

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