New ACA Proposed Rules

Posted December 17, 2014 Company News

HHS released a proposed rule on November 26th to address several Affordable Care Act (ACA) provisions, which for many plan sponsors will have limited effect on the cost and administration of their health benefits:

Transitional Reinsurance Fee Process for Self-Funded Plan Sponsors

  1. Exemption for certain expatriate health plans. Self-insured group health plans limited to participants residing outside their home country for at least 6 months of the plan year will be exempt from the reinsurance contributions for benefit years beginning in 2015.
  2. Amendment to requirement for plan sponsors maintaining multiple group health plans to report the average covered lives calculated, the counting method adopted and the names of the multiple plans that are being treated as a single plan by the plan sponsor. While it is expected that this information will still be part of the registration and payment process, there will no longer be a requirement to report this information through the reinsurance contribution submission process. Plan sponsors should retain the information in case it is requested in the future as part of a compliance assessment.
  3. Clarified approach to counting covered lives when a plan was established, terminated or changed funding mechanisms in the middle of a quarter. Contributing entities will be able to accurately capture the amount of time during the quarter for which major medical coverage was provided to enrollees, while not being required to pay more than once with respect to the same covered life.

Exchange Marketplace for Consumers

  1. Annual Exchange open enrollment period to begin October 1st and extend through December 15th for benefit years beginning on or after 2016.

Defining Habilitative Coverage

  1. Amendment to establish a uniform definition of habilitative services that can be used by States and issuers so to minimize variability in benefits and the lack of coverage in certain plans. Comments have been accepted on whether to use the current definition or the new proposed definition: “health care services that help a person keep, learn, or improve skills and functioning for daily living. Examples include therapy for a child who is not walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology and other services for people with disabilities in a variety of inpatient and/or outpatient settings.”

Cost Sharing Limits

  1. New language requiring non-calendar year plans to apply annual limitations specific to the calendar year during which the plan is in effect. The new requirements clarify non-calendar year plans are not permitted to reset the plan’s annual limitation on cost-sharing at the end of the calendar year, when the end of the calendar year is not the end of the plan year. This is to ensure enrollees are only required to accumulate cost-sharing applicable to one annual limit per plan year.
  2. Clarity addressing the annual limitation on cost-sharing. The self-only coverage cost sharing limitation is to apply to all individuals enrolled in health coverage regardless of whether they are covered by a plan that is other than self-only (i.e. covering more than one family participant).
  3. 2016 cost sharing limitations of $6,850 for single-only and $13,700 for all other tiers.

Distribution of Medical Loss Ratio (MLR) Rebates

  1. Amended MLR regulations to provide that premium and rebate calculations should not be reduced by Federal and State employment taxes.
  2. A rule to ensure group policyholders do not withhold rebates issued for non-ERISA coverage for a period longer than 3 months.

Please note that the information contained in this document is designed to provide authoritative and accurate information, in regard to the subject matter covered. However, it is not provided as legal or tax advice and no representation is made as to the sufficiency for your specific company’s needs. This document should be reviewed by your legal counsel or tax consultant before use.

Additionally, the messages and content within the Pittsburgh Health Care Reform group do not reflect the advisory services of Henderson Brothers, Inc.