A majority of US employers offer some sort of wellness program designed to reduce the cost of health insurance and healthcare costs, and to improve the health and well-being of employees. However, unless care is taken, even well-intentioned wellness programs may violate federal law.
Under the Patient Protection and Affordable Care Act (the “Act”), the federal government, state governments, insurers, employers, and individuals all share responsibility to make affordable health insurance coverage widely available. The rules that apply to employers — referred to as the “employer shared responsibility” rules — build on the existing private employer-based health insurance system. The employer shared responsibility rules apply to “applicable large employers,” which include employers with 50 or more full-time and full-time equivalent employees. The vast majority of staffing firms fit this description.
For a high-level analysis of how the Act impacts staffing firms, click here to read an advisory written by my colleague, Alden Bianchi, and Ed Lenz, Senior Counsel to the American Staffing Association.
The core policy goals of the Patient Protection and Affordable Care Act—on which there is near universal consensus—are threefold: expand health care coverage; increase the quality of medical outcomes, and reduce costs. (The consensus quickly breaks down, however, when it come to the means whereby these goals might be achieved.) The first of these goals (the expansion of coverage) raises concerns about the affordability of coverage for low-income individuals.
Affordability is germane to several of the Act’s provisions- for an in-depth analysis written by my colleague, Alden Bianchi, click here.
On Tuesday, January 8, 2013, the Patrick administration proposed legislation that will repeal the Massachusetts Fair Share Law effective June 30, 2013. In effect since 2006, the Fair Share Law requires companies with Massachusetts employees to either provide compliant medical coverage to full time employees, or pay a penalty of $295 per year per employee.
Commencing in 2014, the Patient Protection and Affordable Care Act (Act) requires that health insurance coverage provided in the individual and small group markets, including coverage offered through American Health Benefit Exchanges, provide “essential health benefits.” This requirement is part of a larger regulatory scheme that includes, among other things, penalties on large employers (i.e., those with 50 or more full-time equivalent employees) that fail to offer comprehensive, affordable coverage to full-time employees. For more information on employer responsibilities under the Act, click here for a Mintz Levin advisory authored by my colleagues, Gary E. Bacher and Alden J. Bianchi.
In a much anticipated move, the IRS recently issued a set of important proposals aimed at helping employers identify their full-time employees for purposes the Affordable Care Act’s “employer shared responsibility” rules. These are the 2014 rules that require employers with 50 or more full-time equivalent employees to offer health coverage or pay money to the government. Penalties, or “assessable payments” in the parlance of the law, are based on the number of “full-time” employees. So it’s important for employers to know who these folks are. At the same time, the IRS expanded on a separate but related feature of the Act that imposes a 90-day limit on waiting periods in group health plans.
The Affordable Care Act’s requirements relating to first dollar coverage of preventive has hit something of a snag on the subject to coverage of contraceptive services on the part of religiously-affiliated entities such as colleges, universities and hospitals. Under rules previously issued by HHS, these employers are requires to provides the full range of Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling.
In a recent blog-post, which you can read here, I described a claim by opponents of the Affordable Care Act to the effect that low-income individuals living in states that fail to establish health insurance exchanges will be barred from receiving subsidized health insurance coverage commencing in 2014. The Act encourages, but does not require, states to establish insurance exchanges. In states that fail to do so, the Federal government will step in and operate a Federally-facilitated exchange. But, say the opponents, low-income subsidies are available only to residents of states that establish their own insurance exchange.
Employers are increasingly looking to consumer-driven health plans (CDHPs) in an effort to control health insurance costs. CDHPs generally combine a high-deductible health plan with a tax-advantaged account, such as health reimbursement arrangement (HRA), that enrollees can use to pay for otherwise uninsured health care expenses. Proponents claim that CDHPs can help restrain health care spending, arguing that the high deductibles and ability to carry over balances give enrollees an incentive to seek lower-cost health care services and to obtain services only when necessary. Critics worry that these plans may disproportionately attract healthier enrollees who use fewer health care services or may discourage other enrollees from obtaining necessary care.
While the political elites and the chattering classes posture for advantage in the wake of the Supreme Court's decision upholding the constitutionality of the Affordable Care Act's individual mandate and modifying the law's Medicaid expansion, employers among others are left to contemplate what to do next. There is, of course, no shortage of industry- and trade association-based conference calls, Webinars and programs offering to help employers move forward. The content will vary from program-to-program in some respects, but there are three common high-level "take aways":
In a July 7 article entitled Brawling Over HealthCare Moves to Rules on Exchanges, The New York Times reported on a brewing challenge to tax credit provisions of the Affordable Care Act that will affect both employers and individuals. According to the Times,
“At issue is whether the subsidies will be available in exchanges set up and run by the federal government in states that fail or refuse to establish their own exchanges. ... The most likely challenger ... is an employer penalized because one or more of its employees receive subsidies through a federal exchange. Employers may be subject to financial penalties if they offer no coverage or inadequate coverage and at least one of their full-time employees receives subsidies.”
