Author: InsurancePro

Here are some updates on Health Care Reform and how it can affect you or your business.   Remember, you can also visit http://www.healthcare.gov/ to get information.

Unions/collectively bargained plans

Whether fully insured or self-insured, unions must implement the same provisions as other gr andfathered plans for plan years beginning on or after September 23, 2010. However, fully insured plans get some special treatment in the interim final gr andfathering rules. The following allowances are given to collectively bargained agreements (for the life of the agreement) that were ratified before March 23, 2010:

· The plans may change carriers and remain gr andfathered.

· The plans may make benefit plan changes (such as plan design) or change employer/employee organization contribution amounts and remain gr andfathered.

· The interim final rules on gr andfathering are silent as to whether gr andfathered health insurance coverage is exempt from the anti-abuse rules.

When the last of the collectively bargained agreements expires, the special allowances end as well. From that point on, the gr andfathered status of fully insured plans will be determined as it is for any other health plan.

Self-funded plans that are kept as collectively bargained agreements are treated like any other plan. For self-funded plans, whether or not they are kept as collectively bargained agreements, a change in third-party administrators will not result in the loss of gr andfathered status.

If a group customer requests that we implement health care reform changes earlier or later than its renewal date because its ERISA plan year differs from the renewal date, we will honor the request.

60-day notice of plan changes

Another health care reform law provision requires plans to create a uniform summary of benefits. And any material modifications to the terms of the plan must be communicated to members 60 days before those changes go into effect. Based on our review, we believe that the 60-day notice provision will not go into effect right away; however, it must be implemented before March 23, 2012 (two years after the law was enacted). The U.S. Department of Health and Human Services will be giving us more guidance on this provision. When it does, we will let you know.

No discrimination based on compensation

Benefits cannot be based on wages

The health care reform law notes that, effective September 23, 2010, plans may not discriminate in favor of highly compensated employees. This means that group health plans cannot base eligibility or the level of benefits on an employee’s wage. The group can offer different levels of benefits as long as they comply with ERISA and are not tied to the amount an employee makes. The legislation defines a highly compensated employee is someone who is:

· One of the five highest paid officers.

· A shareholder who owns more than 10% in value of the employer’s stock.

· Among the highest paid 25% of all employees (exceptions apply).

Waiting periods

We do not believe we will need to change our approach to allowing groups to offer different waiting periods to different employee levels. The health care reform law "nondiscrimination by compensation" provision is specific to the benefit offerings of a medical plan and not the waiting periods established by a company.

Gr andfathered vs. non-gr andfathered plans

No matter how a plan is structured, in order for it to be a gr andfathered plan, it must have been in effect when the health care reform law was passed on March 23, 2010, and no changes are made to the benefits or the benefit plan. For non-gr andfathered plans, the plan sponsor of a group health plan (other than a self-insured plan) may not set up rules about health insurance coverage eligibility (including continued eligibility) for any full-time employees based on the total hourly or annual salary of the employees. Nor can the sponsor set up rules that in any way favor employees who receive more compensation.

Offering benefits only to currently eligible employees

A group can retain gr andfathering status by continuing to offer benefits only to currently eligible employees (instead of all employees), as long as the benefits are not tied to how much those employees make. In addition, the health care reform law notes that the plan sponsor of a group health plan (other than a self-insured plan) may not set up rules about health insurance coverage eligibility (including continued eligibility) for any full-time employees based on the total hourly or annual salary of the employees. Nor can the sponsor set up rules that in any way favor employees who receive more compensation.

Executive physicals

Because this health care reform law provision is specific to plans and not to benefits, executive physicals ( and similar benefits) are not affected.

Getting to the bottom of your health care costs

Did you know: Health care fraud and abuse accounts for 3% of health care spending?

The National Health Care Anti-fraud Association estimates conservatively that 3% of all health care spending, or $68 billion, is lost to health care fraud each year – that’s more than $180 million per day.

This content is provided solely for informational purposes: it is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.  We’re just passing along information we are getting in hopes of assisting you in navigating the new rules and regulations as they come.