DOL Delays Exchange Notice, Promises HRA Guidance

On January 24, 2013, the DOL published Part XI of the FAQs about Affordable Care Act (ACA) Implementation, delaying the March 1, 2013, deadline for employers to send an Exchange Notice. 

The DOL provided two reasons for delaying the Exchange Notice. First, the notice will be coordinated with educational efforts by the IRS and HHS on the subject of minimum value. Second, a later deadline will ensure that individuals receive a notice with meaningful information. The new deadline will be in the late summer or early fall of this year. Open enrollment for the Exchange – now known as the Health Insurance Marketplace – begins on October 1, 2013.

The DOL also addressed several pending issues for Health Reimbursement Arrangements (HRAs) related to when they are considered to be integratedwith other coverage. Further guidance will be forthcoming.

Click here to continue reading.

Understanding Account-based Plans

FSA. HDHP. HRA. HSA. CDHP.

These five acronyms require only eight letters of the English alphabet, but their mixture is far from simple. How do these terms fit together? Let’s look at them one at a time.

A Health FSA is a flexible spending arrangement that is sponsored by an employer. Employees and employers can contribute to it. Major restrictions include use-or-lose, uniform coverage and a prohibition on reimbursing individual premiums. The FSA typically reimburses out-of-pocket expenses not covered by a major medical plan.

Click here to read about the rest of these plans.

IRS Provides Guidance on $2,500 FSA Limit

In late May, the IRS issued Notice 2012-40, which offers long-awaited guidance on the $2,500 limit on Health FSA salary reduction contributions. This rule is effective in 2013 under the Affordable Care Act (ACA).

Notice 2012-40 brings clarity to several gray areas related to §9005 of the ACA. This provision created §125(i) of the Internal Revenue Code. In addition, the IRS publicly indicated a willingness to change the Use-or-Lose Rule. 

Click Here for some highlights and to continue reading.

IRS Reminds Plans of Benefit Gray Areas

Every year, the IRS clarifies areas of the law in which it will not provide guidance. For 2012, Revenue Procedure 2012-03 provides a good reminder of a few gray areas for health and welfare benefits.

Specifically, the Revenue Procedure identified 79 areas in which the IRS will not issue rulings or determination letters “because of the inherently factual nature of the problems involved, or for other reasons.” Four areas are of particular interest.

First, the IRS will not define gross misconduct as it relates to COBRA. Recall that a termination of employment involving gross misconduct is not a qualifying event. In the past, courts have differed on how to define this term. This will continue. Because gross misconduct is so murky, the usual recommendation is to offer COBRA to avoid daily penalties, excise taxes and self-insuring claims.

Click Here to read the entire article.

Feds exempt HRAs from reform’s annual limit requirements

The feds just announced health reimbursement arrangements (HRAs) are exempt from the annual limit restrictions in the healthcare reform law until Jan. 1, 2014.

Back in June, the Centers for Medicare & Medicaid Services (CMS) issued guidance that required HRA plans to renew or apply for a waiver by Sept. 22, 2011 if they wanted to be relieved from complying with the reform law’s restrictions on annual dollar limits.

But the Center for Consumer Information & Insurance Oversight has just issued new guidance rendering the CMS renewal/application process unnecessary.

It says HRAs have been deemed exempt from having to comply with the annual limit restrictions through 2013, as long as they comply with existing record retention and annual participant notice requirements.

Under the Patient Protection and Affordable Care Act (PPACA), group health plans need to start phasing out annual dollar limits on health benefits provided.

The reform law says plans cannot:

• impose limits lower than $750,000 for plan years beginning on or after Sept. 10, 2010
• impose limits lower than $1,250,000 for plan years beginning on or after September 23, 2011, and
• impost limits lower than $2,000,000 for plan years beginning on or after September 23, 2012.

By Jan 1, 2014, HRAs and health plans will not be allowed to impose any spending limits.

The CCIOO’s reasoning for allowing HRAs to be exempt from the limits until 2014: Requiring mini-med HRA plans to comply with the limits would likely result in a significant increase in mini-med premiums, which would cause many employers to drop coverage and leave workers without even minimal insurance coverage.

The new guidance also says any coverage that’s “integrated” with an HRA must meet the reform law’s annual limit requirements or obtain a waiver by Sept. 22, 2011.

However, no clear guidance was given as to when/how coverage is “integrated” with an HRA.

Click here for the original article and more information.

Tip Tuesday! 4 things to say that’ll boost HRA participation

As you know, completing a health risk assessment (HRA) is one of the best first steps employees can take to start improving their health – not to mention lower your health insurance costs. But there are some common problems.

Employees are often reluctant to complete HRAs for three reasons:

• They’re unsure how completing an HRA will benefit them
• They don’t know how the info will be used, and
• They’re unsure what their employers’ motives are behind issuing the HRAs.

Employees are commonly concerned their answers will result in them paying higher insurance premiums.

Click Here to read the complete article.