Nondiscriminatory Wellness Incentives

Federal agencies have issued final regulations for the Patient Protection and Affordable Care Act (PPACA).  Group health plans may not discriminate against individuals on the basis of health factors.  However, there is an exception to the nondiscrimination rules for wellness programs.  Wellness programs have been divided into two categories: (1) participatory wellness programs and (2) health-contingent wellness programs.

Participatory wellness programs must be set up to improve the health risk of all similarly situated individuals and not simply reward those who are already in good health.

Health contingent wellness programs must be designed to promote good health and prevent disease.  The program must not be overly burdensome, used to implicitly discriminate based on a health factor, and highly suspect in the method chosen.  The reward must allow a reasonable alternative standard, if it is unreasonably difficult because of an individual’s existing medical condition and it is medically inadvisable for an individual to attempt to satisfy the normal standard.  A plan does not need a specific reasonable alternative standard, but only the disclosure that one can be made available.

© 2013 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com

Deadline for Patient Centered Outcomes Research (PCOR) Fee

July 31st is the deadline to pay Patient Centered Outcomes Research “PCOR” fees established under the Patient Protection and Affordable Care Act (“PPACA”),   This deadline applies to all health insurance plan sponsors and health care insurers for a plan year that ends after Sept. 30, 2012 and before Jan. 1, 2013. The fee is paid with Form 720. The IRS has recently posted an updated of such form and a payment voucher on the IRS website.

The fee will be used to fund research regarding clinical effectiveness relating to patient centered outcomes. This research institute conducts research to help assist patients, clinicians, purchasers, and policy-makers in making informed health decisions.

© 2013 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com

Governor Heineman Determines that Nebraska will have a Federal Healthcare Exchange

Governor Heineman announced that he has opted to have Nebraska adopt a Federal Healthcare Exchange.  In support  of his decision, Heineman pointed out that a State Healthcare Exchange would cost Nebraskans $470 million more than a Federal Healthcare Exchange.

Health care exchanges are mandated under the Patient Protection and Affordable Care Act.   A healthcare exchange is an organization in the health insurance market that is expected to ease the complications of shopping for coverage for consumers and small businesses.  Exchanges are expected to create a more organized and competitive market.  Exchanges will offer different health insurance  plans and will be organized  in a way that shows a clear comparison of available plan options based on price, benefits and services, and quality.  For individuals, a federal healthcare exchange will create a more efficient healthcare market while also making purchasing healthcare more affordable and understandable.

© 2012 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com

 

Nebraska Will Wait to Implement Health Care Exchanges

Governor Heineman recently said Nebraska will wait to set up a health care exchange until the U.S. Supreme Court rules on whether the Patient Protection and Affordable Care Act (the “Act”) is constitutional.  The health care exchanges are intended to offer health insurance to those currently without coverage.  While Nebraska is planning a program in case the Act is ruled constitutional, Governor Heineman said it does not make sense to build a formal proposal until the Court has decided.  The Act requires states to have a health care exchange plan certified by January of 2013.

© 2011 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com

HHS Offers HIT Grants to Help States Establish Exchanges

The Department of Health and Human Services (“HHS”) has announced that five states will receive grants to design the technology needed for health insurance exchanges.

States (and coalitions of states) have the opportunity to compete for the two-year “Early Innovator” grants, which will help pay the cost of developing and implementing the information technology infrastructure for establishing the exchanges.  The models developed by the grant recipients will then be made available for other states to use to help establish their exchanges.

The grants will be awarded by February 15, 2011.  They will be given to states with ambitious but attainable proposals that have the ability to generate IT models that can serve as best practices.

HHS has not determined how much money grant recipients will receive.  Rather, HHS will look to the states to determine how much their proposals would cost.

The Patient Protection and Affordable Care Act of 2010 (“PPACA”) requires states to implement the insurance exchanges by 2014, which are envisioned as websites to compare insurance plans.

© 2010 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

 

Tax Alert: Key Provisions of New Healthcare Law

The PVW Healthcare Newsletter was mailed out to our clients this month, addressing many issues and concernes regarding the new Health Care Bill.

The electronic version can be viewed by clicking the following link:

http://www.pvwlaw.com/CM/Articles/00133334.pdf.

© 2010 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

Payments of Penalties for Being Uninsured Under the Healthcare Bill

Starting in 2014, the Patient Protection and Affordable Care Act requires most United States residents to obtain health insurance and establishes a penalty for being uninsured. Here are several important facts about the law and its requirements:

  • The penalty will be the greater of a flat dollar amount per person that rises to $695 in 2016 and is indexed by inflation thereafter (the penalty for children will be half that amount and an overall cap will apply to family payments) or a percentage of the household’s income that rises to 2.5 percent for 2016 and later years (also subject to a cap).
  • It is estimated that about 21 million nonelderly residents will be uninsured in 2016, but most will not face the penalty.
    • For instance, unauthorized immigrants are exempted from the requirement to obtain health insurance.
    • Others will be subject to the requirement but exempted from the penalty (i.e., because they will have income low enough that they do not have to file an income tax return, because they are members of Indian tribes, or because the premium they would have to pay would exceed a specified share of their income).
    • Individuals may also be granted waivers from the penalty because of hardship and may be exempted from the mandate on the basis of their religious beliefs.
  • Of those who are subject to the penalty, many will voluntarily report on their tax returns that they are uninsured and pay the required amount. Still, others will try to avoid making payments.
  • Thus, the estimates presented here take into account probable compliance rates, as well as the ability of the IRS to administer and collect the penalty.
  • In total, about 4 million people are projected to pay a penalty because they will be uninsured in 2016.  This includes uninsured dependents that have the penalty paid on their behalf.

© 2010 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

Senate Health Care Bill Overcomes Hurdle for Final Passage

Senate Democrats have obtained the needed 60th vote approving a procedural motion to move the health care reform bill toward final passage on Christmas Eve.  Vote for final passage was 60-40, completely divided on party lines.  Not one Republican in the Senate voted for the health care reform bill. 

Once the bill clears the Senate, House and Senate negotiators will begin negotiations for joining two very different House and Senate bills.  The Senate bill, which is expected to cost $871 billion over ten years, would extend coverage to 31 million uninsured Americans by expanding Medicaid, offering new insurance subsidies, and creating a national insurance marketplace.  The Senate bill would also raise the Medicare Payroll Tax for individuals making over $200,000 and couples over $250,000. Additionally, insurance companies could no longer deny insurance over pre-existing conditions or set a lifetime on benefits.  But the bill has been trimmed from its original form.  The government-run insurance option has been eliminated, along with the proposed substitute for the public option by expanding Medicare eligibility to individuals as young as 55. 

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

American Recovery and Reinvestment Act Includes COBRA Changes

The American Recovery and Reinvestment Act of 2009 (“ARRA”) provides for premium reductions and additional election opportunities for health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Eligible individuals pay only 35 percent of their COBRA premiums and the remaining 65 percent is reimbursed to the coverage provider through a tax credit. The premium reduction applies to periods of health coverage starting on or after February 17, 2009 and lasts for up to nine months.

COBRA

COBRA gives employees who lose their jobs, including their health benefits, the right to purchase group health coverage provided by the plan under certain circumstances.

If the employer continues to offer a group health plan, the employee and his or her dependants can keep their group health coverage for up to 18 months by paying group rates. The COBRA premium may be higher than what the individual was paying while employed, but in general, the cost is lower than that for private, individual health insurance coverage.

The plan administrator must notify affected employees of their right to elect COBRA. The employee and his or her dependants each have 60 days to elect the COBRA coverage, otherwise they lose all rights to COBRA benefits.

It is important to note that COBRA generally does not apply to plans sponsored by employers with less than 20 employees. However, many States (including Nebraska) have similar requirements for small plans providing benefits through an insurance company. The premium reduction is available for plans covered by these State laws.

Changes Regarding COBRA Continuation Coverage Under ARRA

Premium Reduction:  The premium reduction for COBRA continuation coverage is available to “assistance eligible individuals.”

An “assistance eligible individual” is the employee or a member of his or her family who:

·         is eligible for COBRA continuation coverage at any time between September 1, 2008 and December 31, 2009;

·         elects COBRA coverage; and

·         is eligible for COBRA as a result of the employee’s involuntary termination between September 1, 2008 and December 31, 2009.

Those who are eligible for other group health coverage (such as a spouse’s plan) or Medicare are not eligible for the premium reduction. There is no premium reduction for premiums paid for periods of coverage prior to February 17, 2009.

ARRA treats assistance eligible individuals who pay 35 percent of their COBRA premium as having paid the full amount. The premium reduction (65 percent of the full premium) is reimbursable to the employer, insurer or health plan as a credit against certain employment taxes. If the credit amount is greater than the taxes due, the Secretary of the Treasury will directly reimburse the employer, insurer or plan for the excess.

The premium reduction applies to periods of coverage starting on or after February 17, 2009. A period of coverage is a month or shorter period for which the plan charges a COBRA premium. The premium reduction starts on March 1, 2009 for plans that charge for COBRA coverage on a calendar month basis. The premium reduction for an individual ends upon eligibility for other group coverage (or Medicare), after 9 months of the reduction, or when the maximum period of COBRA coverage ends, whichever occurs first. Individuals paying reduced COBRA premiums must inform their plans if they become eligible for coverage under another group health plan or Medicare.

Special COBRA Election Opportunity:  Individuals involuntarily terminated from September 1, 2008 through February 16, 2009 who did not elect COBRA when it was first offered OR who did elect COBRA, but are no longer enrolled (for example because they were unable to continue paying the premium) have a new election opportunity. This election period starts on February 17, 2009 and ends 60 days after the plan provides the required notice. This special election period does not extend the period of COBRA continuation coverage beyond the original maximum period. COBRA coverage elected in this special election period begins with the first period of coverage beginning on or after February 17, 2009. Additionally, this special election period opportunity does not apply to coverage sponsored by employers with less than 20 employees that is subject to State law.

Notice: Plan administrators must provide notice about the premium reduction to individuals who have a COBRA qualifying event during the period from September 1, 2008 through December 31, 2009. Plan administrators may provide notices separately or along with notices they provide following a COBRA qualifying event. This notice must go to all individuals, whether they have COBRA coverage or not, who had a qualifying event from September 1, 2008 through December 31, 2009.

Individuals eligible for the special COBRA election period described above also must receive a notice informing them of this opportunity, which must be provided within 60 days following February 17, 2009.

Expedited Review of Denials of Premium Reduction: Individuals who are denied treatment as assistance eligible individuals and thus are denied eligibility for the premium reduction (whether by their plan, employer or insurer) may request an expedited review of the denial by the U.S. Department of Labor. The Department must make a determination within 15 business days of receipt of a completed request for review. The Department is currently developing a process and an official application form that will be required to be completed for appeals.

Switching Benefit Options: If an employer offers additional coverage options to active employees, the employer may (but is not required to) allow assistance eligible individuals to switch the coverage options they had when they became eligible for COBRA. To retain eligibility for the ARRA premium reduction, the different coverage must have the same or lower premiums as the individual’s original coverage. The different coverage cannot be coverage that provides only dental, vision, a health flexible spending account, or coverage for treatment that is furnished in an on-site facility maintained by the employer.

Income limits: If an individual’s modified adjusted gross income for the tax year in which the premium assistance is received exceeds $145,000 (or $290,000 for joint filers), then the amount of the premium reduction during the tax year must be repaid. For taxpayers with adjusted gross income between $125,000 and $145,000 (or $250,000 and $290,000 for joint filers), the amount of the premium reduction that must be repaid is reduced proportionately. Individuals may permanently waive the right to premium reduction but may not later obtain the premium reduction if their adjusted gross incomes end up below the limits.

Fact Sheet: COBRA Premium Reduction

U.S. Department of Labor

February 26, 2009

  © 2009 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com