Health Reform Changes On The Back Burner, Focus Now Shifts to Compliance

Health Reform Changes On The Back Burner, Focus Now Shifts to Compliance

Congress is in recess until September 5th and our federal legislators are shifting efforts to repeal and replace the Patient Protection and Affordable Care Act (ACA) to a back burner in favor of other efforts, such as comprehensive tax reform.  While individual opinions about Congress’s inability to move forward on ACA reform may vary, for employee benefit plan sponsors, the lack of imminent changes to the ACA provides a degree of certainty and clarity to 2018 benefit year planning.

Employers now know that, for at least 2018, current health plan requirements and health insurance programs remain in place unchanged, and they must continue their ACA compliance efforts.  Given this reality, here are five major compliance obligations that employers should keep in mind this fall.

  1. Preparing for 2017 health information reporting. The Internal Revenue Service (IRS) just released draft versions of Forms 1094-B, 1094-C, 1095-B and 1095-C for employers and health insurance coverage issuers to use when reporting offers of employer-based health insurance and health coverage enrollment status for the 2017 tax year. The draft instructions for these forms should follow in the next few weeks.  It does not appear that the IRS under the Trump Administration will change the reporting process much, since the 2017 draft forms are very similar to the ones used in the past.  Employers subject to the reporting requirements should ensure that they have a reporting solution in place for this fall and be readying the data they will need to provide notices to employees and report to the IRS in the winter of 2018.  Once the IRS publishes this year’s reporting form instructions, Kistler Tiffany Benefits will host a webinar to help you prepare.
  2. Providing employees with Medicare Part D creditable coverage notices by October 15, 2017. All employer plans that offer prescription drug benefits must send all active employees and retirees on the plan a notice specifying if the coverage they provide is “creditable coverage” by October 15, 2017. “Creditable” means that the drug benefit is expected to cover, on average, as much as the standard Medicare Part D prescription drug plan.  The federal Centers for Medicare and Medicaid Services (CMS) has model notices available for employers to use, and Kistler Tiffany Benefits will work with you to determine if your plan is creditable, and help you prepare a notice suited to your plan and distribute it appropriately.
  3. Ensuring that your plan is fully compliant with mental health and substance abuse parity requirements. Given the rising incidence of mental health and substance abuse disorders, presently the Department of Labor is focused on ensuring that all Americans covered by the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008  (MHPAEA) receive its full level of protections, including through plan enforcement action.  MHPAEA applies to almost all large group plans of 50 or more employees.  Employer plan sponsors have parity compliance liability and can be subject to penalties if the coverage they offer doesn’t meet MHPAEA standards.  This liability exists even if an employer offers fully-insured coverage or if a self-funded plan coverage is fully administered by a third party.  Kistler Tiffany Benefits can help you review your plan offerings to make sure they meet the MHPAEA standard.
  4. Using the new Summary of Benefits and Coverage and Uniform Glossary template. Last year, federal regulators approved a new summary of benefits and coverage (SBC) template and a new uniform glossary of health coverage terms for consumers.  All health plans and employers must start using the updated SBC template and new glossary beginning on the first day of their first open enrollment period that begins on or after April 1, 2017.  The fine for willful noncompliance can be up to $1000 per violation, so employers need to make sure the SBCs and glossaries that they provide to plan participants are accurate! Kistler Tiffany Benefits will review the SBCs and glossary you are using with your employees now, to make sure that you are distributing the right version of these forms beginning with your coverage renewal for 2018.
  5. Keeping in mind the looming excise tax on high-cost health benefits (Cadillac Tax). A 40% excise tax on all group health insurance coverage valued above an annually adjusted dollar threshold is scheduled to go into effect on January 1, 2020.  The IRS will use the amounts of $10,200 for individual coverage and $27,500 for family coverage as a basis for building the first year’s cost thresholds, but that amount may be adjusted for higher cost individuals and industries based on rules that still need to be finalized. The tax rules will apply to businesses of all sizes and even companies that offer lower cost health coverage will be affected because they will have to calculate, aggregate and report tax thresholds and plan values on an employee-by-employee basis. The ACA’s excise tax was already delayed one time (from 2018 to 2020), and Kistler Tiffany Benefits is working with many other groups to convince Congress to repeal it, or at least delay it further.  However, until that happens, we will be strategizing with you about its potential impact and implementation in two years.

Kistler Tiffany Benefit will consult with you this fall on all of these compliance priorities.  Information and specific instructions about all of these requirements will be provided via webinars and written materials, and of course our consultants will be reaching out to you directly to make sure your plan is in the best possible shape for open enrollment and the 2018 plan year ahead.   If any requirements change, or if the federal government makes new compliance tools, resources or guidance available, we will make sure that you are informed immediately.  If you have any concerns or questions in the meantime, do not hesitate to reach out to your Kistler Tiffany Benefits consultant.

By Jessica Waltman, Special Contributor

Jessica Waltman is a health reform strategist, with more than 20 years of experience in health insurance markets and health policy. She is the former Senior Vice President, Government Affairs, for the National Association of Health Underwriters.