by Phil Larson

One day can mean a month in various contexts of federal health reform including the employer fair share requirements, the individual mandate, and required reporting.   

For purposes of the employer fair share requirements (4980H), failure to offer coverage for any day can mean failure to offer coverage for that month.  

Alternatively, if an employee terminates employment mid-month, and would have been offered coverage for the entire month had they not terminated, coverage is deemed to apply the whole calendar month.  

Both of these rules may eventually factor into specific penalty calculations for employer fair share or 4980H.​

Also, for purposes of the individual mandate, coverage for one day in the month means coverage for the entire month for purposes of 5000A.  See 78 FR 7314.  This lessons the chance that someone may be subject to the individual mandate penalty in months where they had partial coverage.

Lastly, for purposes of 6055 and 6056 Reporting, the proposed regulations require coverage reporting by month.  

​If you need help understanding these rules, please contact Kinney & Larson.

by Phil Larson

The Affordable Care Act will require plans to allow adult dependents to stay on their parents plan for longer duration--until age 26.  Tied to this requirement, the federal tax code was changed to allow pre-tax coverage for these individuals during this time.  

While both of these rules apply to high deductible health plans (commonly called HDHPs), neither of these rules apply to Health Savings Accounts (HSAs).  Since these accounts can run along side the HDHP plan, this creates two different eligibility rules for participants.  For example, the adult child may get tax free medical under the major medical plan (HDHP), but they may not be eligible for tax free reimbursements under the account (HSA).  Non-qualified reimbursements from an HSA are also subject to higher tax penalties under the Affordable Care Act and may be subject to state taxation.    

If you need help understanding these rules or other HSA rules, please contact Kinney & Larson. 

by Phil Larson

We have all heard a lot of informaiton about the employer fair share requirement and some information on the 90 day waiting period rules.  

What we have not heard much about is the automatic enrollment rules and non-discrimination rules under the Affordable Care Act (ACA).  The automatic enrollment rules will default participants into coverage unless they elect out of coverage.  The non-discrimination rules which are meant to be for insured plans, may also have some implications for self-insured plans.  Both of these are delayed until further guidance.  

Careful consideration of plan eligibility rules should keep a watchful eye on these two future rules.  If your organization makes big changes now, those changes may have bigger implications when these rules become effective. UPDATE: On November 2015, the Bipartisan Budget Act of 2015 (H.R. 1314) repealed the automatic enrollment rule under the ACA.  Specifically, the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.) is amended by repealing section 18A (as added by section 1511 of the Patient Protection and Affordable Care Act (Public Law 111–148)).

by Phil Larson

Under the Affordable Care Act, two main provisions come to mind when you think about "when" you offer coverage.  The first is the Employer Fair Share Requirement, the second is the prohibition on waiting period eligiibility rules beyond 90 days.

The 90 day rule is very broad, applying to all eligible individuals under the plan.  It is not limited to full-time participants.  However, these rules do not limit other conditions on eligibility, like obtainign a required certification.  These rules are about eligibility limits involving the passage of time but do not apply to excepted benefits.  

The 90 day rule is a strict 90 days, providing coverage the first of the month after 90 days is not allowed.  Also, providing coverage after three months is not allowed as some months total may be beyond 90 days.  

​[UPDATE:  In June 2014, IRS, DOL and HHS final regulations were passed on the 90 days rule and proposed regulations were passed on the use of "employment based orientation periods."  The rules allow an orientation period imposed as a condition for eligibility under a health plan and state it will be consistent with the 90-day waiting period limitation if the following conditions are met:

• the orientation period does not exceed one month.  One month is determined by adding one calendar month and subtracting one calendar day, measured from the employee’s start date; and
• the 90-day waiting period begins on the first day after the orientation period

The rules also state that compliance with these rules does NOT mean compliance with the employer mandate provisions under 4980H.]  

The 90 day rules are also subject to tighter timeframes under state law.  California recently passed an insurance requirement preventing waiting periods over 60 days.  This means if a plan wants to start coverage on the first of the month, they may need to provide coverage close to 30 days. [Please note, after this blog post, California repealed it's law so that it now matches the federal rules on waiting period limits for employers.  This passed on August 15th, 2014 under Senate Bill 1034.] 

If you need help understanding these rules, please contact Kinney & Larson. 

by Phil Larson

While the Affordable Care Act did not directly regulate COBRA, this does not mean there will be no changes to COBRA communications as a result of federal health reform.

In fact, the Department of Labor published new recommended langauge to use for COBRA election materials which better explains an individuals right to COBRA in light of some new ACA provisions like Marketplaces or Exchanges, tax credits, pre-existing conditions, special enrollment rules, etc.   

If you need help updating these documents or COBRA generally, please contact Kinney & Larson. ​

by Phil Larson

The new SBC rules are not something to underestimate.  In fact, these documents were voted as on of the most popular features under the Affordable Care Act.  

A central theme of these is a uniform method of communicating what the plan pays for and does not pay for.  Do not get these confused with the ERISA summary of plan descriptions (SPDs) or plan documents that often provide more details on the plan.  

Unlike other plan descriptions, the SBCs include strict requirements regarding formating and also include strict requirements on who to send these to and when.  Unlike other medical plan communications, individuals must receive these before they enroll.  Electronic distribution is only allowed when other federal ERISA standards are met.  

If you need help drafting these documents or understanding the rules for distributing them, please contact Kinney & Larson.   

by Phil Larson

​You might know that the term affordability can mean different things under the Affordable Care Act (ACA).  The definition can actually change based on which part of the law is applied, when it is applied and which party is involved.

For example, ACA has a new large employer fair share requirement (delayed until 2015).  This will penalize employers who either do not offer coverage to full time employees or who provide coverage that is "unaffordable" or does not comply with certain minimum coverage thresholds.  To be able to prove affordability, Large Employers will have different safe harbors to choose from including W2 wages, rate of pay, and federal poverty line rules.    

ACA also has an individual mandate requirement that will provide a tax penalty for some individuals who do not choose to elect health coverage for themselves or applicable family members.  This rule has a special exception if their coverage is unaffordable determined by a different analysis. 

Last but not least, the ACA will provide subsidies to certain individuals to encourage them to elect coverage.  These subsidies go away if the person or family member was offered affordable coverage and this determination may change based on income later reavaluated at tax time.   

​In short, there are three different rules each with its own definition(s) of affordability.  Also, the individual mandate and the subsidy evaluation can change between the employee and their family.  What is affordable for one (i.e. the employee), may or may not be affordable for another (i.e. the family members).  

This essentially means there are 5 distinct definitions of affordability.

To add to the confusion, there appears to be at least three different definitions of modified adjusted gross income (MAGI) in the ACA.  One definition is used for the new Medicare tax on investment income (26 USC 1411), one for premium subsidy eligibility (26 USC 36B) and one for the individual mandate (26 USC 5000A). 
   
If you need help understanding these terms or others under the ACA, please contact Kinney & Larson LLP. 

by Phil Larson

Liability for HIPAA violations is taking many forms.  

The Massachusetts attorney general settled a case involving an out of business medical billing company and the entities it was doing business for.  The settlement was with Goldthwait Associates and four of its clients - Milford Pathology Associates, Milton Pathology Associates Pioneer Valley Pathology Associates, and Kevin Dole, M.D., former president of Chestnut Pathology Services.  These entities did not have BAAs in place, some of the entities were doing business together for 25 years.    

It was discovered that Goldthwait did not dispose of personal information in a proper manner by placing this data in a business trash bin open to other businesses in the building.  

The complaint alleges that the pathology groups also violated HIPAA regulations by failing to have appropriate safeguards in place to protect the personal information they provided to business associate Goldthwait Associates. The complaint also alleged these entities violated state data security regulations by not taking reasonable steps to select and retain a service provider that would maintain appropriate security measures to protect such confidential information.

A quote from the AG' office highlights this point:

"Personal health information must be safeguarded as it passes from patients to doctors to medical billers and other third-party contractors." 

If you need help understanding these rules, please contact Kinney & Larson. 

This is where we will be sharing some thoughts on topics that matter to what we do.  This is not legal advice but if you find something interesting, let us know.