ACA Split Court Decision/Subsidy Eligibility

 

On July 22, 2014, two separate U.S. appellate courts issued contrasting rulings pertaining to a key aspect of the Affordable Care Act (ACA).  The issue at hand is language contained in the 2,700 page law addressing eligibility for subsidies (or tax credits) for those unable to afford the premiums for INDIVIDUAL health insurance.  Specifically, the cases hinge of just four words - "...established by the state", or in its entirety - "[ACA] subsidies shall be available to persons who purchase health insurance in an exchange established by the state". 

Since the overwhelming majority of states opted to defer to a federal or hybrid federal/state exchange (36) the language presented a significant problem.  In effect, the language meant that only eligible individuals residing in one of the 14 states that opted to establish a state based exchange would be eligible for subsidies. The following graphic indicates (in white) those states that actually formed STATE based exchanges:

 To access the complete article, click - https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

PCORI/CERF Requirement...Year 2

A little over a year ago, I posted a blog addressing the Affordable Care Act's (ACA) - Patient Centered Outcomes Research Institute (PCORI) fee requirement, also referred to as the Comparative Effectiveness Research Fee (CERF).  Click here to access this post - http://sstevenshealthcare.blogspot.com/2013/06/to-pcori-feeor-not-to-fee-that-is.html
Last year, affected plans were required to remit a fee equal to $1 per plan participant.  This year, affected plans owe $2 per plan participant, based on their plan date.  Since last year's PCORI/CERF related post addressed the "who" and "what" of this particular ACA requirement; this post will address the "how", as in how to calculate the average number of affected lives, and then calculate and remit the applicable fee.

Plans that are fully insured (as opposed to partially or fully self funded) generally do not have to worry about calculating or remitting the fee.  Insurance companies are taking care of this ACA compliance task.  Employers that have fully insured plans who are curious about the direct cost impact of this fee on their premium can calculate their cost using any one of four prescribed methods:

1. Actual Count
2. Snapshot
3. Member Months
4. State Form

If interested, click here for the specific details on each of these approved PCORI/CERF counting methods - http://www.irs.gov/uac/Newsroom/Patient-Centered-Outcomes-Research-Institute-Fee

IMPORTANT
Health insurance plans that are partially or fully self funded (including HRAs and some FSAs) generally must calculate and remit their PCORI/CERF fee themselves.  Since the fee is remitted on IRS form 720, a self funded plan's administrator is not able to take care of this requirement on the client's behalf.  Here are the approved alternative methods of calculating the appropriate PCORI/CERF fee for self funded plans:

1. Actual Count Method: Add the total number of covered lives (members, not employees) for each day of the plan year and divide that total by the total number of days in the plan year.
2. Snapshot Method: Add the total number of covered lives (members, not employees) on a particular date during the first, second, and third month of each quarter, and divide that total by three.  For example, using January 1, April 1, and July 1 as the calculation dates, assuming there were 150, 155, and 159 covered lives on each respective date, the calculation would be 150 + 155 + 159 = 464/3 = 155 x $2 = $310.
3. Form 5500 Method: (Note, from my experience, this is the simplest and lowest cost result method of the three.) Add the number of covered employees (sometimes referred to as participants or subscribers) at the beginning of the year, as indicated on IRS form 5500, to the number of covered employees at the end of the plan year.  For example, if there were 100 employees on January 1, and 150 employees on December 31, the calculation would be 100 + 150 = 250 x $2 = $500.

To access the IRS' final regulations addressing PCORI/CERF, click here - http://www.gpo.gov/fdsys/pkg/FR-2012-12-06/pdf/2012-29325.pdf

Remember, this fee is due and filed with the second quarter IRS form 720, no later than July 31st of the calendar year immediately following the last day of the policy year or plan year to which the fee applies.  For the majority of affected plans which start/renew on January 1, 2013 through December 31, 2013, the fee is due by July 31, 2014.

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ACA's Future

Here are a few questions often posed pertaining to the Affordable Care Act (ACA): 

1. "What does the future of health care/health insurance look like, once the ACA is fully implemented"?
2. "Will the ACA result in significantly fewer or more uninsured individuals"?
3.  "After four years, what do we know about the affect of the ACA on premiums"?

This week's post offers my overall response, and associated concerns, related to these three, and perhaps other questions...

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Supreme Court Ruling/Contraception Coverage

This week (June 30, 2014) the Supreme Court ruled in favor of plaintiffs - Hobby Lobby, Mardel, and Conestoga Wood Specialties - in their respective challenges to the Affordable Care Act's (ACA) contraception mandate.  The basis for their cases was simple in nature, but sweeping in scope, as there are over 90 similar cases currently pending in courts around the country.  The court's decision was quickly followed by a tremendous amount of media coverage, some of which is patently false and misleading.  Here's an overview of what we know at this point...

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

HIPAA - Forgotten But Not Gone

With so much emphasis being placed on Affordable Care Act (ACA) compliance these days, some folks have gradually (and frighteningly) forgotten about the ACA's "older brother" - the Health Insurance Portability and Accountability Act (HIPAA).  Several ACA provisions supersede or expand upon HIPAA provisions that went into effect on and after January 1, 1997 (e.g., preexisting condition limitations, guaranteed issue/renewability, certificates of creditable coverage, etc.).  However, the ACA did virtually nothing to change the privacy and security aspects of HIPAA, which are not only still in effect, but carry stiff fines and penalties for non-compliance.

HIPAA created a new acronym - PHI - which stands for protected health information.  And among the many requirements created by HIPAA, perhaps none are more important than those addressing the request, disclosure and use of PHI by "covered entities" and "business associates".  HIPAA privacy rules also create rights for individuals to access, review, and amend their PHI.  Readers are likely familiar with the seemingly constant flow of HIPAA disclosure notices.  I want to provide a considerable amount of caution in this week's post, relative to HIPAA and PHI:

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

ACA Transition Relief - Employer Mandate

In February of this year (2014), I provided an overview of the IRS' final regulations pertaining to the Affordable Care Act's (ACA) employer mandate.
Since this is such a confusing provision of the ACA, to say nothing of the fact that there have been not one, but two separate delays of this provision, I decided to recap some of the more pertinent aspects of the final regulations and associated transitional relief.

To access the complete article and related links, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

Prescription Drugs - Health Care's Low Hanging Fruit

There is an often overused metaphor equating things easily obtained with "low hanging fruit".  And in the world of health care and consumer driven health care (CDH), there is perhaps NO lower hanging fruit to be had than prescription drugs.  I would further submit that few if any other product category in our entire economy has the sheer number of FREE...DISCOUNTED...REDUCED...SAMPLE offers connected to it, by a variety of constituencies including - manufacturers, distributors, insurers and employers - than do prescription drugs.  But do the very people these offers of "low hanging fruit" are directed toward understand the "what", "why", or even "where" associated with them?

To access the complete article, click - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx