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Friday, May 30, 2014

Those penalties can be stiff if you become a target of the IRS

The Internal Revenue Service has threatened employers with Affordable Care Act penalties of $36,500 per employee, per year, nondeductible. Makes those $2,000 and $3,000 penalties look like small potatoes, right?


The targets of this particular Q&A are employers who maintain “non-integrated” “employer payment plans.” These are new terms, which include reimbursement plans such as health reimbursement arrangements (HRAs, excluding retiree-only and excepted benefits HRAs). Those should generally have been eliminated by Jan. 1, 2014, or amended to be integrated with group health coverage.
The federal agencies dropped this bomb on employers on the cusp of open enrollment season last year, and many employers had to scramble into compliance. You could have done the math on the $100 per day excise tax. But the IRS puts this $36,500 figure into a Q&A for a reason: it wants to scare you. And employers need to know that a non-integrated employer payment plan is just one of many potential triggers of these potentially devastating excise taxes.


When I first blogged about health care plan self-audit, self-correction, and self-reporting compliance issues on Form 8928, no one seemed too interested. It’s time to get interested.


Caresani, a partner Porter Wright Morris & Arthur’s Cleveland/Akron, Ohio area, focuses her practice on employee benefits, ERISA and executive compensation. As editor of the firm’s employee benefits blog — Employee Benefits Law Report — and the ERISA preemption chapter of ERISA, A Comprehensive Guide (published by CCH), Caresani consistently reviews recent cases, legislation, regulations, and other employee benefits law developments and helps our clients understand how these changes may impact their organizations.

Thursday, May 22, 2014

IRS Highlights Stiff Penalty for Reimbursing Individual Premiums

IRS Highlights Stiff Penalty for Reimbursing Individual Premiums

Exchange Rx may cost more than employer sponsored plans.

Silver plans offered through the exchanges may require patients to pay more than twice as much out of pocket for prescription medicines as they would under a typical employer plan, offering employers a prime opportunity to use health care benefits as retention and recruitment tools for their employees.
Silver plans — the second highest coverage tier on the Affordable Care Act’s public health insurance exchanges — impose 130% higher cost sharing for prescription medicine, along with a combined deductible, than typical employer-sponsored plans, according to a new report by the Seattle, Wash.-based Milliman Inc., a consulting company. The Milliman report also notes that silver plans are nearly four times more likely to have a single combined deductible for medical and pharmacy benefits (46% of the time) compared to typical employer-sponsored plans (12%).
See related story: Access to Rx drugs challenged by the exchanges
Employees with chronic conditions requiring the use of medications could be motivated to seek out employers offering high quality health care coverage rather than those that have opted to send their employees to the exchanges, says Brenda Gagnon, a pharmacy-focused benefit adviser and president and CEO of the health care consulting firm B.M Gagnon Associates.
“Employers have started recognizing that offering great health care coverage has become an attraction tool for high quality talent and retention for current employees,” she says. “This movement started in mid-year 2013 and will pick up speed faster this year.”
She adds: “Advisers that don’t take this knowledge and bring it into their business practice will be left behind.”
“Americans participating in the exchanges were promised coverage comparable to employer plans and yet the reality is that many new plans are failing to provide an appropriate level of access to quality, affordable health care,” says John Castellani, president and CEO of Pharmaceutical Research and Manufacturers of America (PhRMA), the Washington, D.C.-based trade association that commissioned the report.
“Patients face hurdles in accessing the medicines they need to manage their conditions, which is particularly problematic for Americans trying to control their chronic diseases,” he adds.
According to Milliman’s analysis, the typical deductible for silver plans is $2,000.
Previous studies have found that higher out of pocket costs reduce patients’ likelihood of taking prescription medicines to manage chronic conditions. The result is an increase in hospitalizations and higher health care costs overall, a common reason employers often exclude pharmacy benefits from deductible requirements — in the long-term it saves the employer money on increased medical costs.
Programs that encourage better adherence to medication management for chronic conditions have also been found to reduce emergency department visits, hospitalizations and other preventable, costly care, the Milliman report adds.
According to a 2012 Health Affairs study, improved medication adherence for patients with diabetes has the potential to save $8.3 billion each year.
The Milliman report analyzed the differences between common health care benefit designs offered to individuals through the exchanges and typical employer-sponsored plans. The report looked at silver plans because they were the most popular in the enrollment period that ended March 31 of this year.

Friday, May 16, 2014

COBRA SEP in CA?




Posted: 16 May 2014 06:21 AM PDT
**Question**: Is the COBRA SEP adopted by CA the same as the feds? **Answer**: No. The COBRA SEP in CA extends from May 15 to July 15 (SEP in fed exchanges ends July 1st)So people **currently enrolled** in COBRA coverage have until July 15 to apply for coverage through Covered California or off-exchange in a ACA compliant plan.

Tuesday, May 06, 2014

Uninsuree rate at five year low while ACA remains unpopular




 
Obamacare reduced the percentage of U.S. adults without health insurance to its lowest point since 2008 even as the law remains unpopular with the public, separate surveys showed.
READ MORE »

ACA effects on employers still to come



 
All of the delays related to the Affordable Care may be seen a sign of the law's failure, but one employment law expert said Monday employers can view the delays as a good thing – an extra year or more to figure out what to do.
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Monday, May 05, 2014

Feds: Employers must notify laid-off employees of exchange option



Laid-off employees are eligible to continue participating in employer-sponsored health plans after they are laid off, but employers must now also inform employees that they can enroll in a plan through an Affordable Care Act exchange, under recent guidance from the departments of Labor and Health and Human Services. The Wall Street Journal (tiered subscription model) (5/2)