Employers who sponsor group health plans that cover any prescription drugs generally must disclose whether the plan provides creditable or noncreditable prescription drug coverage to CMS within 60 days of the start of a new plan year. Because 2012 is a leap year, the deadline for calendar year plans is February 29.

Filing is done electronically using the CMS web site. Instructions also are available there. Read more.

New Proposal for Religious Employers and Contraceptive Coverage
Last Friday, the President announced a compromise on the contraceptive coverage requirement for religious employers. Under this compromise, religious employers like schools and hospitals may choose whether or not to cover contraception, consistent with their religious beliefs. If a religious employer decides not to provide this coverage, contraceptive coverage would be provided by the insurance company directly, free of charge, without involving the employer. We will continue to monitor this as the back and forth continues. Read more.

Technical Guidance on Automatic Enrollment, Employer Shared Responsibility and Health Plan Waiting Periods
Last Thursday, the Department of Labor (DOL) issued Technical Release 2012-01, which provides guidance in the form of frequently-asked questions (FAQs) on some of the health care reform provisions that become effective in 2014. These provisions relate to automatic plan enrollment for large employers, the employer penalty (or shared responsibility) rules and the 90-day limitation on health plan waiting periods. Read more.

Change in Coverage for Elective Abortions in Kansas Effective Early 2012
As of July 1, 2011, a new Kansas law (HB 2075) became effective prohibiting any health insurance plan, contract or policy from providing elective abortion coverage, except by optional rider with additional premium. Read more.

IN CASE YOU MISSED IT:

PowerMail: Blue KC Bill Correction

PowerMail: Final Guidance on Summary of Benefits & Coverage

PowerMail: HHS Unveils Final Design For Insurance Labels

PowerMail: Coventry & UHC ink deals with Stormont-Vail HealthCare

Abortion is defined as “the use or prescription of any instrument, medicine, drug or any other substance or device to terminate the pregnancy of a woman known to be pregnant with an intention other than to increase the probability of a live birth, to preserve the life or health of the child after live birth, or to remove a dead unborn child who died as the result of natural causes in utero, accidental trauma or a criminal assault on the pregnant woman or her unborn child and which causes the premature termination of the pregnancy.” Elective abortion is defined as “an abortion for any reason other than to prevent the death of the mother upon whom the abortion is performed; provided, that an abortion may not be deemed one to prevent the death of the mother based on a claim or diagnosis that she will engage in conduct which will result in her death.”

UHC Changes for Fully Insured 100+ and Public Sector Customers

To comply with the Kansas law (HB 2075) and to uniformly administer UnitedHealthcare’s fully insured medical employee benefit plans in Kansas, UnitedHealthcare will be removing coverage for elective abortions according to state law for all customers effective Feb. 1, 2012. Please note that this change applies to large 100+ employee groups (commercial as well as public sector).

To inform customers, a letter will be mailed to affected groups on Jan. 31, 2012.

UHC Changes in Legal Standard for Kansas Small Business Customers

To comply with the Kansas law (HB 2075) and to uniformly administer UnitedHealthcare’s fully insured medical employee benefit plans in Kansas, we will be removing coverage for elective abortions according to state law for all customers effective Feb. 1, 2012.

To inform customers, a letter will be mailed to affected small business groups on
Jan. 31, 2012.

For more information, please contact your UnitedHealthcare representative.

Churches, other houses of worship and similar organizations are exempt from covering contraception on the basis of their religious objections. However, this exemption does not cover other church-affiliated institutions, such as schools, charities, hospitals and universities.

On Feb. 10, 2012, President Obama announced a proposal to address objections of non-exempt religious organizations. Under this proposal, the organization may choose whether or not to cover contraceptives. The insurance company providing coverage would be required to cover contraception if the religious organization chooses not to.

Background

The health care reform law requires non-grandfathered health plans to cover preventive health services without imposing cost-sharing requirements, effective for plan years beginning on or after Sept. 23, 2010. In August 2011, the Department of Health and Human Services (HHS) issued additional preventive care guidelines for women, including contraceptives, effective for plan years beginning on or after Aug. 1, 2012.

On Aug. 3, 2011, HHS issued an amendment to the women’s preventive care guidelines to allow certain non-profit religious employers offering health coverage to decide whether or not to cover contraceptive services, consistent with their beliefs. A non-profit religious employer, for this purpose, is an employer that has the inculcation of religious values as its purpose, primarily employs persons who share its religious beliefs and primarily serves persons who share its religious beliefs. This exemption covers churches and similar organizations.

On Jan. 20, 2012, HHS announced a one-year delay to the contraceptive coverage requirement for non-profit employers that do not qualify for the exemption and do not provide contraceptive coverage to employees based on religious beliefs. Church and religious leaders objected, arguing that the coverage requirement violates their organizations’ religious freedoms and that the delay is not an adequate solution. According to the White House, the President’s proposal is an attempt to balance religious liberty with the health of women.

WHITE HOUSE PROPOSAL

There will continue to be a one-year transition period for non-exempt religious organizations. During the transition period, a new regulation will be drafted. Under the new regulation, religious organizations, such as schools, charities, hospitals and universities, will not have to provide contraceptive coverage, refer their employees to organizations that provide contraception or subsidize the cost of contraception.

However, under the new regulation, female employees of these entities will receive free preventive care that includes contraceptive services. Specifically, contraception coverage will be offered to women by their employers’ insurance companies directly, free of charge, with no role for religious employers that oppose contraception.

Additional details of the policy will need to be finalized, such as how it applies to self-funded health plans. Also, the new policy does not affect existing state insurance requirements concerning contraception coverage.

Employers who sponsor group health plans that cover any prescription drugs generally must disclose whether the plan provides creditable or noncreditable prescription drug coverage to CMS within 60 days of the start of a new plan year. Because 2012 is a leap year, the deadline for calendar year plans is February 29.

Filing is done electronically using the CMS web site. Instructions also are available there.

This filing requirement applies to health plans that cover anyone who is eligible for the Medicare Part D prescription drug program, whether as an active employee, spouse, dependent or retiree. There are limited exemptions for plans that contract with a Medicare Part D plan or directly with Medicare to become a Part D plan. No disclosures are required for health flexible spending accounts (FSAs) or health savings accounts (HSAs); but disclosures are required for Health Reimbursement Arrangements (HRAs) if the HRA reimburses prescription drug expenses.

Note that this disclosure is in addition to the Notice of Creditable (or Noncreditable) Coverage that you provide annually to Medicare-eligible participants. Remember also that if, after filing this disclosure, you terminate prescription drug coverage or change from creditable to noncreditable coverage (or vice versa), you must file a new electronic disclosure within 30 days (and also provide an updated notice to participants in your plan).

If you have any questions about the creditable coverage disclosure to CMS or about Medicare Part D generally, please contact your Power Group representative.

The Internal Revenue Service has released updated guidance for employers on W-2 reporting of aggregate coverage costs under group health plans, which will soon be required by the Patient Protection and Affordable Care Act. Issued in Q&A format, Notice 2012-9 makes changes to earlier guidance and provides additional information on issues such as the cost of coverage under employee assistance programs and health reimbursement arrangements. The guidance generally is applicable beginning with Forms W-2 for calendar year 2012—that is, the forms that employers must give employees by the end of January 2013, IRS noted. (More.)

New 2013 FSA Limit Requires Plan Amendments in 2012

Health care reform legislation imposed a new, $2,500 limit on annual contributions to health care flexible spending accounts (FSAs). This limit applies to all FSA plans in taxable years beginning after Dec. 31, 2012 — even plans grandfathered under other provisions of health care reform. (More.)

FMLA Forms: Expiration Date Saga

The US Department of Labor (DOL) has submitted the Family and Medical Leave Act (FMLA) forms for renewal by the Office of Management and Budget (OMB). The most recent versions originally expired on December 31, 2011. On Saturday January 14, the DOL quietly changed the expiration date on the FMLA forms to January 31, 2012; however, this appears to be the only change at this time. As always, employers should use the most recent versions of the forms; however, be reminded that the DOL forms that expire on January 31 do not address the Genetic Information Nondiscrimination Act (GINA) safe harbor notice employers can provide when seeking medical information from employees or employees’ medical providers.

According to law [5 CFR 1320.10(e)(2)], employers may continue to use the form while its renewal is pending at OMB.

Affordable Care Act holding insurers accountable for premium hikes

Health insurance premium increases in five states have been deemed “unreasonable” by the U.S. Department of Health and Human Services, HHS Secretary Kathleen Sebelius announced today. After independent expert review, HHS determined that Trustmark Life Insurance Company has proposed unreasonable health insurance premium increases in Alabama, Arizona, Pennsylvania, Virginia, and Wyoming. The excessive rate hikes would affect nearly 10,000 residents across these states. (More.)

New Report: States Moving Forward to Implement Health Reform’s Affordable Insurance Exchanges

Twenty-eight states are on their way toward establishing a key component of health care reform — Affordable Insurance Exchanges — according to a report issued today by the White House. Affordable Insurance Exchanges are state-based, one-stop marketplaces where consumers can choose a private qualified health insurance plan that fits their health needs. The report outlines some of the steps the Administration has taken to ensure all Americans have access to an Exchange beginning in 2014. (More.)

1/13/12

The Patient Protection and Affordable Care Act (PPACA) imposed a new $2,500 limit on the contribution or election amount for health care Flexible Spending Accounts (FSA). The new requirement applies to all FSA plans whose taxable years begin after Dec. 31, 2012 — even plans grandfathered under other provisions of health care reform.

The “taxable year” refers to the employee’s taxable year –and in most cases this stipulation means a calendar year. Thus, a calendar year limitation of $2,500 in salary reductions for the health care FSA will become effective Jan. 1, 2013.

Changes to Plan Documents
Plans that currently allow a health care FSA election of more than $2,500, must amend plan documents before Jan. 1, 2013, and change employee communications. Non-calendar plans that amend their plans as of Jan. 1, 2013, mid-plan year, may face some unique challenges or situations due to the changes required.

Be Proactive
To simplify administration of this change, sponsors of non-calendar year plans may want to adopt the new limit as of the first day of the plan year rather than waiting until Jan. 1, 2013. For example, if the current plan year begins May 1 and ends April 30, the plan sponsor may:

Communicate the change to employees.

• Amend their plan documents to implement the new $2,500 maximum election
• Initiate the changes to the contribution effective May 1, 2012, rather than wait until the mid-plan year in Jan. 1, 2013

The Internal Revenue Service Jan. 3 issued Notice 2012-9, which amends interim guidance for employers on reporting the cost of their group health insurance to employees on Forms W-2 beginning with the 2012 tax year.

Like the initial guidance (Notice 2011-28), these latest modifications are in question-and-answer format (62 BTM 108, 4/5/11). The changes come in response to solicited comments on the reporting requirement under Internal Revenue Code Section 6051(a)(14) as imposed by the Patient Protection and Affordable Care Act, the agency said.

The new Q& As address issues such as cost of coverage under an employee assistance program and under a health reimbursement arrangement, and the application of the exception for fixed indemnity insurance offered by an employer on an after-tax basis.

The guidance is “generally applicable” beginning with 2012 Forms W-2, Wage and Tax Statement—that is for forms that employers generally must file by the end of January 2013—IRS said. Employers required to file fewer than 250 Forms W-2 for the 2011 tax year will not be subject to the reporting requirement for 2012 Forms W-2, the agency said.

Notice 2012-9 is scheduled to appear in Internal Revenue Bulletin 2012-4, to be published Jan. 23.

The Patient Protection and Affordable Care Act (PPACA) established the Early Retiree Reinsurance Program (ERRP). The ERRP is a temporary program that provides reimbursement to eligible employers (and employment-based plans) for part of the cost of providing health care coverage to early retirees and their families. Early retirees are those who are age 55 and older, but not yet eligible for Medicare.

The ERRP was created to encourage health plan sponsors to make coverage available for early retirees and their families, who often face difficulties finding affordable health coverage in the individual market. Under the program, plan sponsors can receive reimbursements of 80 percent of high cost claims between $15,000 and $90,000.

The ERRP became effective in June 2010. It received $5 billion in funding. The ERRP was designed to expire on Jan. 1, 2014, or earlier if the program’s funds were depleted. On Dec. 9, 2011, the Department of Health and Human Services (HHS) announced that the ERRP will end early because its funding is almost exhausted.

This Power Group Companies Legislative Brief summarizes the end of the ERRP for claims incurred after Dec. 31, 2011.

Winter Wellness

Is getting more active your New Year’s resolution or are you trying to shed those pesky holiday pounds? Winter is ripe with outdoor activities that offer a good workout. Plus, you can burn more calories exercising in winter because your body has to work hard to keep itself warm.

Flex your muscles. Snow creates plenty of opportunity for burning calories. When the fluffy stuff falls, ditch the snow blower, and shovel your driveway and sidewalk by hand. Offer to help a neighbor or family member to maximize the workout. Download Live Well, Work Well — January 2012.

In Case You Missed It

8 ways employees can use their Flexible Spending Accounts before 2012. Read the 12/7/2011 PowerMail.

Holiday Schedule

Power Group’s Overland Park office will be closing at 3pm on Friday, 12/23. Our office will be closed on Friday, 12/30, and Monday, 1/2. We will have a reduced staff on 12/23 and 12/26.

Holiday Misc.

We all have our holiday favorites, but what about the other end of the spectrum? The movie ticket website Fandango polled customers to come up with the ultimate holiday flop, and now has a list of the top 10 worst Christmas movies ever made.

1. SANTA CLAUS CONQUERS THE MARTIANS 23%
2. SILENT NIGHT, DEADLY NIGHT  16%
3. JINGLE ALL THE WAY 10%
4. JACK FROST  9%
5. SANTA WITH MUSCLES  5%
6. ERNEST SAVES CHRISTMAS  5%
7. HOME ALONE 3  4%
8. DECK THE HALLS  4%
9. SURVIVING CHRISTMAS  3%
10. CHRISTMAS WITH THE KRANKS  3%

Have a safe and healthy holiday season!

The ERRP was created to encourage health plan sponsors to make coverage available for early retirees and their families, who often face difficulties finding affordable health coverage in the individual market. Under the program, plan sponsors can receive reimbursements of 80 percent of high cost claims between $15,000 and $90,000.

The ERRP became effective in June 2010. It received $5 billion in funding. The ERRP was designed to expire on Jan. 1, 2014, or earlier if the program’s funds were depleted. On Dec. 9, 2011, the Department of Health and Human Services (HHS) announced that the ERRP will end early because its funding is almost exhausted.

This Power Group Companies Legislative Brief summarizes the end of the ERRP for claims incurred after Dec. 31, 2011.

Flex your muscles. Snow creates plenty of opportunity for burning calories. When the fluffy stuff falls, ditch the snow blower, and shovel your driveway and sidewalk by hand. Offer to help a neighbor or family member to maximize the workout. Download Live Well, Work Well — January 2012.