With President Biden now officially sworn in, many business owners are wondering what the Biden Administration will mean for the COVID-19 response and health care in general.
In this post, we’ll discuss some specific anticipated impacts of Biden’s presidency on the country’s health care system:
COVID-19 Response and Impact on Health Care
ACA, Medicare, and Medicaid
Drug Pricing
Billing and Pricing Transparency
COVID-19 Response and Impact on Health Care
Biden has indicated that he plans to increase the federal government’s role in the pandemic. He plans to lead a response focused on increased access to treatment, testing, and personal protective equipment (PPE). If necessary, he may implement mandates and mitigation strategies.
Most of the solutions that Biden has proposed to control the pandemic fall under one of the following categories:
Increase testing
Address PPE shortages
Distribute vaccines and treatments
Establish additional protections for high-risk and older Americans
Work with local authorities on public health measures
Offer federal relief
As the Biden administration takes over the domestic COVID-19 response, it hopes to improve the relationship with the World Health Organization (WHO). Biden believes this relationship was damaged by the Trump administration.
Biden has already built a COVID-19 response team and his team has begun movement on vaccine and mask initiatives. Potential federal mandates may face opposition. Conversely, increased federal aid and initiatives from the federal government to increase testing, treatment, and PPE access will be met with broader support.
ACA, Medicare, and Medicaid
President Biden hopes to address and expand health care access. Most of his agenda either fits into or supplements an expansion of the ACA, which is understandable since the ACA was one of Obama’s signature accomplishments while Biden was Vice President.
Due to potential congressional gridlock as a result of a divided congress, employers should expect to see roadblocks on Biden’s mission to expand the ACA, Medicare and Medicaid. However, it’s still worth taking a closer look at some of Biden’s health care priorities:
ACA
If the ACA is struck down by the challenges it is facing in the U.S. Supreme Court, the Biden administration would be expected to work toward a replacement. If the ACA is upheld by the courts, the Biden administration is expected to move forward with expanding the ACA. An expansion would include offering a public option and enhancing Medicaid and Medicare.
Public Option
Another Biden proposal is to offer a public option to compete with private markets. The public option would sit on Marketplace exchanges alongside private plans and be available to the public—even if employers offer coverage. President Biden’s ultimate goal with such a public option would be to create lower prices through price negotiation.
With the addition of a public option, small businesses might not need to offer coverage. However, private insurers would certainly be challenged by having to compete against a federally subsidized alternative.
Medicare
Biden has made it clear that he intends to lower the Medicare eligibility age from 65 to 60. If successful, it could increase participation in the Medicare program by 20 million people.
Medicaid
President Biden will seek an expansion of Medicaid, aiming to provide access to almost 5 million additional individuals. States that have already expanded Medicaid (which several have done in recent years) would have the choice of moving the expansion population to the public health care option as described in the previous ACA section, provided they continue to pay the cost of covering those individuals.
Ultimately, Biden hopes to ensure that people making below a certain percentage of the federal poverty level are covered. Biden would also try to create a program to facilitate automatic Medicaid enrollment for eligible participants.
Tax Credits
Biden hopes to expand tax credit eligibility for families who enroll in health coverage through the Marketplace. The current requirements to receive tax subsidies include a household income no higher than 400% of the federal poverty level. Biden would hope to achieve his plan by eliminating the current 400% income cap on eligibility, which would offer more families access to these tax credits.
Biden also hopes to lower the income cap that a family puts toward health care premiums from 9.86% to 8.5%. If a family has employer coverage but can get a better deal with the 8.5% cap on their premiums, they would be eligible under Biden’s plan to switch to a health care plan on the Marketplace.
Drug Pricing
Drug costs have been increasing for consumers in recent years, and President Biden hopes to reverse that trend. Some specific strategies that Biden has proposed are as follows:
Medicare drug pricing negotiation—Biden supports a requirement for drug corporations to negotiate with Medicare over drug prices. Biden wants this negotiated rate to be accessible for private plans. Federal programs would likely be the driving power behind these negotiations.
Drug price increase limits and new drug monitoring—Although this will clearly face opposition, Biden hopes to limit the ability of drug companies to increase prices. If successful in this effort, Biden would establish a board to oversee prices and recommend reasonable prices for new drugs.
Drug Importation —By using the U.S. Department of Health and Human Services to put controls in place to ensure safety, Biden would like to import drugs from foreign markets to increase supply and therefore reduce costs.
Both sides of the political aisle seem to understand the need to reduce drug costs, so it is possible that Biden will have support from Republicans with these efforts. However, we can expect that Biden’s prescription drug proposals will face strong opposition in Congress and from the private sector.
Billing and Pricing Transparency
The final health care related issue that we’ll briefly discuss in this post is billing and pricing transparency. Surprise billing occurs when a consumer receives care that is unknowingly not covered under their health care plan. A common example is when a patient goes to an in-network hospital but doesn’t realize that a specialist at that hospital is not part of their health plan. Biden’s strategy to combat surprise billing is to prohibit health care providers from charging patients out-of-network rates when the patient has zero control over which provider they see.
Such an initiative may have bipartisan support, as efforts to limit surprise billing were also part of the Trump campaign. Both sides of the political aisle want to see increased transparency in health care pricing and billing.
Key Takeaways
Business leaders will want to pay special attention to what unfolds in the health care world as President Biden now holds office. Fortunately, Biden has left some clues as to what we might expect from his new efforts:
Biden has a vision to increase health care access through programs such as Medicare, Medicaid, ACA, and a public health care option.
Biden seeks to reduce prescription drug costs.
Biden supports efforts to make billing and pricing more transparent.
Each new calendar year brings significant changes in the form of laws and regulations affecting employee benefits and general HR compliance. And this year, with the ongoing COVID-pandemic, employers are facing more unprecedented challenges that ever before. In this post, we’ll cover some of the main employee benefits issues that you’ll need to be aware of as we head into 2021.
Specifically, we’ll cover:
Furloughs
COVID Testing
Uncertainty of Healthcare Under New Presidential Administration
Deferred Renewals
Employees Going Remote and/or Relocating
Second COVID Wave and Corresponding Government Response
Cares Act COVID Benefit
1. Furloughs
In the early days of the COVID-19 pandemic, many state governments passed legislation to relax the eligibility requirements for furloughed employees to retain their benefits. Many of these regulatory actions were temporary and will expire as of January 1st, 2021.
Business owners should review the legislation that was passed in their states to determine if this circumstance will apply to them and any of their employees who remain furloughed. It’s also key to remain vigilant for any new legislation that may pass in the coming month around the topic of furloughs.
2. COVID Testing
The Families First Coronavirus Response Act (FFCRA), which was signed into law by President Trump on March 18, 2020 to respond to the pandemic, ensures that, “COVID-19 testing is free to anyone in the U.S., including the uninsured.” However, this provision will expire on December 31, 2020. This means that COVID testing will no longer be free, unless the Federal Government passes further legislation to extend free testing.
Consult directly with your healthcare provider to determine what their plans are for covering COVID testing as of January 1st, if any.
3. Uncertainty of Healthcare Under New Presidential Administration
Healthcare is always a topic of heated debate, especially during election years like 2020. This has caused many employers to ask themselves: what will healthcare look like under the Biden/Harris administration?
Biden plans to build off the ACA’s framework and expand a public health option similar to Medicare. This public option would directly compete with private insurance providers and would be available to anyone, regardless of whether their employer offers qualified-health plans. Additionally, regarding Medicare, Biden has proposed lowering the eligibility age to 60 from 65.
If Biden is successful in either of these healthcare initiatives, it would certainly flip healthcare as we currently know it upside down. Employers must remain tuned-into ongoing legislative conversations as the Biden administration begins their transition into the White House.
4. Deferred Renewals
Many benefits carriers handed out rate passes or premium holidays in light of the pandemic, regardless of loss ratios. Will these actions ultimately lead to significant renewals in 2021 for their clients? If your carrier granted you a rate pass or premium holiday, be sure you take that into consideration as you prepare to make decisions about renewing coverage with that provider.
5. Employees Going Remote and/or Relocating
Perhaps the most significant long-term impact of the COVID-19 pandemic is that many employees will become permanent work-from-home employees. This will give many people more flexibility with their living arrangements, and some will likely choose to relocate now that they can work from anywhere. This will undoubtably be a trend in 2021.
Employers should reevaluate benefit offerings to allow for these remote employees to have proper coverage wherever they may be. As a business leader, it’s crucial you work hand-in-hand with your benefits broker during this time to ensure you are addressing the healthcare needs of a newly remote workforce.
6. Second COVID Wave and Corresponding Government Response
Recent news about the positive preliminary results of potential coronavirus vaccines has provided a light at the end of the tunnel. However, cases are still surging in most states around the country. It is clear that we are in a second, more powerful wave of infections. However, the Federal Government has yet to pass any significant legislation to follow up the FFCRA or CARES ACT that were passed in March. With the election behind us, keep a close eye on the government to see what relief bills may be passed in the coming weeks and months.
Additionally, employers should be on the watch for any “stay-at-home” restrictions that are put in place, by either the federal government or by local state or city governments.
Whatever legislation ends up passing, if any, pay special attention to what it implies for “non-essential” businesses that need to have employees in-person. If extreme “stay-at-home” restrictions are put back in place, how will employees meet hourly requirements to maintain benefits?
If you haven’t already, you should be developing contingency plans to deal with varying levels of government restriction so that you know how to address these potential issues with your employees.
7. CARES Act COVID Benefit
As briefly mentioned in the previous section, the Federal Government passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March. Under the CARES Act, the government helps reimburse employees who are out of work due to COVID so the employer is not paying out of their employer Short Term Disability policy.
The question remains, will the CARES Act benefit continue throughout 2021 or will employers bear the financial brunt? Many employers are hopeful the federal government will take steps over the next few weeks to clarify what the future of the CARES Act will be.
Key Takeaways
From an HR and employee benefits perspective, we’ll enter the year 2021 with much uncertainty about how the COVID-19 pandemic will continue to affect the workplace. However, there are a few areas that employers will want to keep an eye on in the coming weeks and months so that they’ll have a better idea of what they’ll face in 2021:
Furloughs – Will regulatory actions that help furloughed employees retain their benefits continue into 2021?
COVID Testing – Will testing for COVID-19 still be free after December 31st, 2020?
Uncertainty of Healthcare Under New Presidential Administration – What will happen to the healthcare industry and Medicare under the incoming Biden Administration?
Deferred Renewals – Will benefits carriers see significant renewals increases in 2021 due to benefits holidays or rate passes that were handed out in 2020?
Employees Going Remote and/or Relocating – How must employers adjust their benefits plans to address the needs of a remote workforce?
Second COVID Wave and Corresponding Government Response – How significant will this second wave of COVID infections become, and what will be the response of federal, state, and local governments?
Cares Act COVID Benefit – Will the Federal Government extend the CARES ACT (or pass any follow-up legislation)?
Has choosing a healthcare plan become too complicated? According to research conducted by Medical Xpress, when given the option between two employer-sponsored healthcare plans, nearly 25% of employees chose the option that was less financially beneficial to them – despite the fact that both plans offered the same non-cost benefits.
Medical Xpress wanted to determine just how difficult it was for employees to make the most beneficial decision when presented with just two options. Both options were the exact same in every way except for cost, with one of the two healthcare plans having higher premiums and lower out-of-pocket expenses (i.e. deductibles, co-payments). According to the research, the plan with lower premiums and higher out-of-pocket expenses was more financially beneficial to 97% of the 2,300 employees in the study.
Despite this fact, 23% of the employees chose the plan with higher premiums – a mistake that would cost them more than $2,000 a year on average.
Why It Matters
For nearly 180 million Americans, employer-sponsored healthcare is a necessity to help with the expenses of medical care. In 2020, the average insured worker is spending over $5,500 in premiums and more than 8% of their total spending goes to healthcare expenses.
Typically, employees are given an option of at least two healthcare plans. The decision of which healthcare plan will be most beneficial to the employee is determined by two factors: 1.) The expected amount of care they will need for the upcoming year, and 2.) The amount of risk they are willing to take on. In most cases, if an employee expects they will need less care, it makes sense for them to choose the option with a lower monthly premium and higher out-of-pocket costs. Nonetheless, evidence shows that when employees have too many options, they routinely make poor health insurance decisions.
That said, based on the study conducted by Medical Xpress, while choice overload might play a role in poor decision making, it is not the primary reason employees are having such a difficult time making the best benefits decisions.
Healthcare practitioners and policymakers have been trying to help employees make better benefits decisions for quite some time now, yet with little progress. For example, using algorithms to provide individuals with a “smart default” plan that fits their needs best. Despite these efforts, the issue still exists. The truth is, helping employees make better benefits decisions is a difficult challenge.
While it will not eliminate all health benefit decision-making errors, simplifying the choices would help. Additionally, providing more search and analysis tools to employees would also make it easier for employees to make a better informed decision.
What You Can Do to Help Your Employees
There are many ways you can help your employees make better benefits decisions. Here are a few of the things you can do for your employees to help reduce this issue within your organization:
Plan Design – To encourage your employees to become responsible healthcare consumers and take control over their healthcare costs, you should work with your benefits broker to develop effective plan designs that give employees more control and more choice in their benefits selection.
Employee Engagement – Employees need to be aware of their role as consumers and engage with their healthcare decisions. Your employee engagement efforts should centered around crafting a healthcare approach that addresses employee concerns and needs. Once you have created a healthcare environment that is conducive to employee engagement, you should work directly with your employees to get them to take control of their healthcare decisions.
Employee Education – You should provide your employees with the resources they need to truly understand their options and best provide for their health while reducing healthcare expenses for themselves and you as an employer. In addition to utilizing external resources to give your employees access to education, you should maintain consistent communication with your employees about their healthcare options, the tools available to them, and any changes to their benefits. The right employee benefits broker will take a hands-on approach to employee benefits education, working directly with your team to help them select the best plan for their needs.
Empowering Employees – Once you have given your employees the insurance options that maximize their role as consumers and the engagement and education that makes them informed consumers, it’s time to provide them with the tools they need to become empowered consumers. There are more options than ever to manage healthcare and reduce expenses such as telehealth, pharmacy savings cards, and various benefits enrollment platforms. If you need help in deciding which of these tools are best for your business, your broker can advise on how to harness the power of modern benefits technology.
Millennials make up a significant portion of today’s workforce. Understanding millennial personalities, lifestyles, and well-being is key for many employers to successfully continue the operations of their organizations, especially in the wake of the COVID-19 pandemic.
A recent report published by the Blue Cross Blue Shield Association highlights several concerning health trends among millennials that employers will want to be acutely aware of. The issues associated with these trends could be exacerbated by the COVID-19 pandemic, which adds to the importance of understanding and preparing for the bumpy road of millennial health that lies ahead.
In this post, we’ll provide an overview of two of these key trends:
Rates of behavior health conditions among millennials are increasing.
Millennials with behavioral health conditions are more likely to have a chronic physical condition.
We’ll also briefly talk about what actions employers can take to address these trends in their workforce.
Rates of Behavior Health Conditions Among Millennials Are Increasing
Unfortunately, behavioral health conditions have been rising among millennials. The list below highlights some of the most pertinent conditions and their corresponding increases over the past five years:
ADHD – 39% increase
Tobacco Use Disorder – 10 % increase
Major Depression – 43% increase
Substance Use Disorder – 17% increase
Alcohol Use Disorder – 5% increase
Psychotic Disorders – 26% increase
This data was gathered before the COVID-19 pandemic. As you can imagine, rates of many of these behavioral health conditions are likely to increase even more due to this pandemic. In the report, 92% of millennials said that COVID-19 has had a negative impact on their mental health overall.
Also noted within the research are more statistics that show the frightening effects the pandemic has already had on millennials, “Because of the pandemic, almost 60% of millennials have canceled a health-related appointment or procedure. In addition, isolation, stress and economic insecurity attributed to the pandemic have had a major impact on millennials. Almost 10% have lost their job due to the pandemic, 25% have seen a reduction in their work hours, and 23% have had to access savings to pay for their day to day needs.”
Millennials With Behavioral Health Conditions Are More Likely to Have a Chronic Physical Condition
An extension of the issue described in the previous section is that millennials with behavioral health conditions are more likely to have a chronic physical condition. Specifically, millennials with behavioral health conditions are:
1.9 times more likely to experience hypertension
1.7 times more likely to develop high cholesterol
1.9 times more likely to have Crohn’s Disease/Ulcerative Colitis
2.1 times more likely to have Type II Diabetes
2.7 times more likely to have Coronary Artery Disease
Given that nearly one-third of millennials have behavioral health conditions (and rising), employers should anticipate an increased need to address the above physical conditions in the future.
Millennials seem to be aware of these trends as well. When surveyed, 54% of millennials perceive their mental health as good or excellent, compared to 64% of baby boomers. Further, 80% of millennials believe their mental health has an impact on their physical health, compared to 62% of baby boomers. This shows that many millennials are aware of the mental health issues facing their generation as well as the potential physical health issues that follow.
What Can Employers Do?
Many employers will feel discouraged after reading this post. Millennials will face behavioral and physical health challenges in the future, and employers like you want to do your best to help them.
One of the best strategies that is recommended by Launchways is to work with a trusted and experienced benefits broker. Consider the following ways a benefits broker can help you address the trends discussed in this article:
Guide you as you negotiate with your health service providers to make sure adequate mental and behavioral health services are available for your employees.
Perform an audit of the demographics of your workforce to determine more specifically how it will be affected by these millennial health trends.
Implement strategies to incentivize employees to not skip their routine preventative medical services.
Key Takeaways
The topic of this article is very concerning, especially for employers with workforces that are Millennial-dominant.
Key takeaways from this article include:
Rates of behavioral health conditions have been rising over the last five years.
Individuals with behavioral health conditions are much more likely to experience chronic physical conditions.
The COVID-19 pandemic has already had negative effects on the health of Millennials, and unfortunately there will almost certainly be more negative effects moving forward.
Employers should consider working with a trusted benefits broker, like Launchways, to implement strategies to care for the mental and physical health of their Millennial employees.
Since the outbreak of COVID-19, the benefits landscape has seen changes on a fundamental level. Both employers and employees have recognized the need for plans that cover the health and well-being of individuals and their families in new ways. Because of this, employee benefits are playing a larger role in retaining employees and attracting new talent for employers.
While unemployment rates across the nation have spiked, retaining and attracting new talent continues to be a challenge for several growing businesses. In a study conducted by The National Federation of Independent Business (NFIB), sourcing qualified talent is ranked as one of the biggest issues facing scaling businesses – second only to the cost of health insurance.
As these growing businesses prepare for the uncertain times ahead, identifying new ways to connect with their employees and creating benefits plans that align with their priorities will be a key factor in their success.
Meeting the Needs of Employees
Because of COVID-19, employees are starting to see the importance of benefits that may have ranked lower on their priority list in a pre-COVID era. For example, employees now look at benefits such as income protection resources as a necessity.
In a study conducted by LIMRA, research showed that roughly 25% of employers claimed that life insurance and short-term disability have become more important than ever before. In addition, roughly 40% of employers claimed that critical illness and hospital indemnity coverage is far more important now than in a pre-COVID era.
The employee benefits that, in the past, might have placed a potential employer higher on a job seeker’s list may be different than they once were. For businesses that offer their employees no benefits at all, sourcing and retaining quality talent is becoming a much bigger challenge. As stated above, the NFIB study shows that many growing businesses are struggling because of this. While they might need to expand their workforce, they feel their company is too small or the cost of health insurance is too high for them to offer potential employees the coverage they are seeking from an employer.
At the same time, certain supplemental benefit offerings are now and continue to become more relevant. For example, mental health benefits are increasing in demand as stress, anxiety, and depression are on the rise due to the effects of social isolation. Employees are now seeking benefits from their employers that look out for both their mental and physical well-being. In a study conducted by the National Alliance of Health Purchaser Coalitions, research showed that, because of COVID-19, 53% of employers are now offering their employees special emotional and mental health programs. In addition, 32% of employers have added to their mental health and well-being offerings for their employees.
Personal finances are, in most cases, the leading cause of added stress felt by employees. This is prompting more interest in financial wellness benefits from employers. As a result, there has been a focus from employers on helping their team navigate the challenges created by finances both individually and for their families, providing them with resources to help them understand and better manage their finances.
The Role of Financial Stress in Benefits
Financial uncertainty is having a large impact on the bottom line for growing businesses, forcing them to make tough calls that will ultimately change the landscape of employee benefits. Benefits such as health insurance are fundamental to the offerings of an employer. In fact, research shows more than a 25% increase in benefits offered since March. However, for businesses that have been impacted by COVID-19 more significantly, this could likely mean higher premiums for employees or adjustments to other benefit offerings.
For example, it’s possible that we will see a shift to more voluntary benefits. However, this doesn’t come without warning. In a study conducted by LIMRA, research shows that the interest in 100% employee-paid products is only 35% for life insurance and 39% for critical illness coverage. Additionally, many reported that they weren’t sure they would even enroll.
Putting together a first-rate benefits package for employees is nothing short of a balancing act. Many things have to be considered such as the needs of employees, which benefits to offer, and the budget you have to work with. That said, the businesses that are investing in getting it right are not just helping their employees, they are setting themselves up to be an employer of choice in the future.
Looking to the Future
Overhauling the entirety of your benefits offerings is a daunting task. Growing businesses should focus on listening to the needs of their people, and let communication be the guiding principle in developing a benefits package that works for them. The conversation doesn’t have to include the details of specific benefits but should allow for a dialog to better understand the concerns that employees have. This kind of communication will help to uncover the core needs employees have, and how they might have changed amidst COVID-19. As employee priorities shift, so should the decisions of the employer concerning benefits. If you are able to listen to your team and create a plan that works for them, you will be able to retain the people you have and attract the talent you need to be successful.
As a business leader you work hard to take care of your employees. When it comes to employee health benefits, it’s important that you stay on top of ever-changing compliance requirements. Failing to do so can be detrimental to your business. Whether you are a growing startup, an established small business, or a scaling medium-sized corporation, in order to stay compliant, you need a systematic approach.
While these regulations are essential for assuring the fair treatment of employees, they can also be dense and intimidating if you have no prior experience navigating them. That’s why we’ve created this resource guide, to offer you a comprehensive look at employee benefits and the compliance requirements that come with them. With this resource, you can feel confident that you are taking care of your employee’s healthcare needs and while fulfilling your business’ legal obligations.
Employee Retirement Income Security Act (ERISA)
The Employee Retirement Income Security Act (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.
ERISA – General Guidelines
ERISA imposes a variety of compliance obligations on the sponsors and administrators of group health plans. For example, it establishes strict fiduciary duty standards for individuals that operate and manage employee benefit plans and requires that plans create and follow claims and appeals procedures. ERISA applies to employee welfare benefit plans, including group health plans, unless specifically exempted such as Church and government plans. There are no exceptions for small employers.
ERISA requires plan administrators to provide the following notices/disclosures:
SPD – Plan administrator must automatically provide an SPD to participants within 90 days of becoming covered by the plan. An updated SPD must be provided at least every five years if changes have been made to the information contained in the SPD. Otherwise, an updated SPD must be provided at least every 10 years.
Summary of Material Modifications (SMM) – Plan administrator must provide an SMM automatically to participants within 210 days after the end of the plan year in which the change was adopted. If benefits or services are materially reduced, participants generally must be provided with the SMM within 60 days from adoption.
Plan Documents – The plan administrator must provide copies of plan documents no later than 30 days after a written request.
ERISA – Form 5500 Requirements
Form 5500 is used to ensure that employee benefit plans are operated and managed according to ERISA’s requirements. The filing requirements vary according to the type of ERISA plan. Unless an extension applies, Form 5500 must be filed by the last day of the seventh month following the end of the plan year (that is, July 31 of the following year for calendar year plans.
The Form 5500 requirement applies to plan administrators of ERISA plans unless an exception applies. Small health plans (those with fewer than 100 participants) that are fully-insured, unfunded, or a combination of fully-insured and unfunded, are exempt from the Form 5500 filing requirement.
Affordable Care Act (ACA)
The Affordable Care Act (ACA) is a federal law that provides numerous rights and protections that make health coverage fairer and easier to understand, along with subsidies to make it more affordable.
ACA – General Guidelines
The ACA makes many changes to health coverage requirements, such as extending coverage for young adults up to age 26, prohibiting rescissions of health coverage (except in cases of fraud or intentional misrepresentation), eliminating pre-existing condition exclusions, prohibiting lifetime and annual dollar limits on essential health benefits, and requiring coverage for preventive care without cost-sharing. These health coverage reforms have staggered effective dates, with many key provisions taking effect for plan years beginning on or after Jan. 1, 2014.
The ACA applies to health plans and health insurance issuers, with narrow exceptions for certain types of plans (for example, retiree medical plans) and there are no exceptions for small employers.
ACA requires plan administrators to provide the following notices/disclosures:
Statement of Grandfathered Status – Plan administrator or issuer was required to provide the first statement before the first plan year beginning on or after Sept. 23, 2010. The statement must continue to be provided on a periodic basis with participant materials describing plan benefits. This requirement only applies to grandfathered plans.
Notice of Rescission – Plan administrator or issuer must provide a notice of rescission to affected participants at least 30 days before the rescission occurs.
Notice of Patient Protections and Selection of Providers – Plan administrator or issuer must provide a notice of patient protections/selection of providers whenever the summary plan description (SPD) or similar description of benefits is provided to a participant. These provisions relate to the choice of a health care professional and benefits for emergency services. The first notice should have been provided no later than the first day of the plan year beginning on or after Sept. 23, 2010. This requirement does not apply to grandfathered plans.
Uniform Summary of Benefits and Coverage – Plan administrator or issuer must provide the uniform summary of benefits and coverage (SBC) to participants and beneficiaries at certain times, including upon application for coverage and at renewal. Plan administrators and issuers must also provide a 60-day advance notice of material changes to the summary that take place mid-plan year. Plans and issuers were required to begin providing the SBC to participants and beneficiaries who enroll or re-enroll in plan coverage during an open enrollment period beginning with the first open enrollment period that started on or after Sept. 23, 2012. For participants and beneficiaries who enroll in plan coverage other than through an open enrollment period, the SBC requirement became effective for the first plan year that started on or after Sept. 23, 2012.
ACA – Employer Penalties and Related Reporting
Applicable large employers (those with at least 50 full-time employees, including equivalents) that do not offer health coverage will be subject to a penalty if any of their full-time employees receives a subsidy toward a health plan offered through an Exchange. The monthly penalty will be equal to the number of full-time employees (minus 30), multiplied by 1/12 of $2,000 for any applicable month. Applicable large employers that do offer coverage may be subject to penalties if the coverage is not “affordable” or does not provide “minimum value” and at least one full-time employee obtains a subsidy under an Exchange. The monthly penalty for each full-time employee who receives an Exchange credit will be 1/12 of $3,000 for any applicable month. However, the total penalty for an employer would be limited to the total number of full-time employees (minus 30), multiplied by 1/12 of $2,000 for any applicable month. A special transition rule applies to the penalty calculation for 2015 that allows employers with 100 or more full-time employees (including equivalents) to subtract 80 employees (rather than 30) from their full-time employee count.
The ACA imposes penalties on employers with at least 50 full-time (and full-time equivalent) employees if they do not offer health coverage to their employees or if they offer health coverage to their employees that is not “affordable” or does not provide “minimum value” and certain other requirements are met. Employers that are subject to the employer penalty rules are called “applicable large employers” (or ALEs).
General Notices
HIPAA Privacy and Security
The HIPAA Privacy Rule governs the use and disclosure of an individual’s Protected Health Information (PHI). The HIPAA Security Rule creates standards with respect to the protection of electronic PHI.
The HIPAA Privacy and Security Rules require the following notices/disclosures:
Notice of Privacy Practices – Plans and issuers must provide a Notice of Privacy Practices when a participant enrolls, upon request and within 60 days of a material revision. At least once every three years, participants must be notified about the notice’s availability.
Notice of Breach of Unsecured PHI – Covered entities and their business associates must provide notification following a breach of unsecured PHI without unreasonable delay and in no case later than 60 days following.
CHIPRA
States may offer eligible low-income children and their families a premium assistance subsidy to help pay for employer-sponsored coverage. If an employer’s group health plan covers residents in a state that provides a premium subsidy, the employer must send an annual notice about the available assistance to all employees residing in the state.
CHIPRA requires the following notices/disclosures:
Annual Employer CHIP Notice – A model notice is available from the DOL
Medicare Part D
Employer-sponsored health plans offering prescription drug coverage to individuals who are eligible for coverage under Medicare Part D must comply with requirements on disclosure of creditable coverage and coordination of benefits
Medicare Part D requires the following notices/disclosures:
Disclosure Notices for Creditable or Non-Creditable Coverage – A disclosure notice must be provided to Medicare Part D eligible individuals who are covered by, or apply for, prescription drug coverage under the employer’s health plan. The purpose of the notice is to disclose the status (creditable or non-creditable) of the group health plan’s prescription drug coverage. It must be provided at certain times, including before the Medicare Part D Annual Coordinated Election Period (October 15 through December 7 of each year).
Disclosure to CMS – On an annual basis (within 60 days after the beginning of the plan year) and upon any change that affects the plan’s creditable coverage status, employers must disclose to the Centers for Medicare and Medicaid Services (CMS) whether the plan’s coverage is creditable.
Michelle’s Law
Michelle’s law ensures that dependent students who take a medically necessary leave of absence do not lose health insurance coverage. (Note: The health care reform law expanded coverage requirements for dependents by requiring plans to provide coverage up to age 26, regardless of student status.)
Plan administrators and issuers must include a Notice of Michelle’s Law with any notice regarding a requirement for certification of student status.
NMHPA
Under the Newborns’ and Mothers’ Health Protection Act (NMHPA), group health plans may not restrict mothers’ and newborns’ benefits for hospital stays to less than 48 hours following a vaginal delivery and 96 hours following a delivery by cesarean section.
The plan’s SPD must include a statement describing the NMHPA’s protections for mothers and newborns.
WHCRA
The Women’s Health and Cancer Rights Act (WHCRA) requires health plans that provide medical and surgical benefits for a mastectomy to also cover: (1) all stages of reconstruction of the breast on which a mastectomy has been performed; (2) surgery and reconstruction of the other breast to produce a symmetrical appearance; and (3) prostheses and physical complications of mastectomy, including lymphedemas.
Plans must provide a notice describing rights under WHCRA upon enrollment and on an annual basis after enrollment.
Your Benefits Compliance Checklist:
ERISA – General Guidelines
ERISA – Form 5500 Requirements
ACA – General Guidelines
ACA – Employer Penalties and Related Reporting
HIPAA Privacy and Security
CHIPRA
Medicare Part D
Michelle’s Law
Newborns’ and Mothers’ Health Protection Act (NMHPA)
Women’s Health and Cancer Rights Act (WHCRA)
Conclusion
There’s a lot to know when it comes to employee benefits compliance. At Launchways, we understand and are here to help as your benefits experts. We have the expertise to ensure that your benefits compliance needs are taken care of, so you can have the peace of mind your business is always in compliance. No matter the size of your business, if you offer your employees any form of health insurance benefits, you must feel confident that you are compliant in your offerings. Talk to a Launchways team member today about our benefits administration solution.
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Get The Complete Benefits Compliance Overview!
This guide includes:
How to determine your plan year
Full calendar-style checklist of every compliance deadline your business must meet
In-depth details on how to fulfill each compliance requirement
