Employee Benefits Compliance, Timeline

2012–2014 Health Care Reform Timetable—Provisions Affecting Plan Sponsors

2012

  • Annual dollar limits on essential health benefits must be at least $1.25 million for plan years beginning on or after September 23, 2011 and before September 23, 2012.
  • Additional claims and appeals requirements.  Non-grandfathered plans must provide additional information in claim denials and include a statement on non-English language services if 10% of county population is literate only in that non-English language.
  • PCORI Fee (Comparative Clinical Effectiveness Fee).   Insurers and self-funded health plans must pay an annual fee of $1/enrollee for the first plan year, fees increase through 2018 plan year.  First payment is due July 31, 2013 for calendar year plans.
  • W-2 Reporting of Value of Health Coverage.  Employers who issued more than 250 W-2s in 2011 must report on 2012 W-2s (issued by 1/31/13) the value of 2012 healthcare.  In January 2012 identify the plans and costs to be reported & ensure payroll collects data.
  • Medical Loss Ratio (MLR) rebates.  Insured health plan sponsors who receive MLR rebates from carriers must allocate the “plan assets” portion of the rebate among participants; rebates should be paid by August 1, 2012.
  • Women’s preventive services, coverage with no cost-sharing.  Non-grandfathered plans and policies must provide, for plan years starting on or after August 1, 2012; and must communicate availability of such coverage to plan participants.
  • Uniform Summary of Benefits and Coverage (SBC) & Uniform Glossary. Health insurers and group health plans must provide SBCs and Uniform Glossaries to applicants and enrollees, as of the first open enrollment beginning on or after September 23, 2012.
  • Mid-year material modifications to information in SBC.  Plan must provide 60-day advance notice to participants.
  • DELAYED: Quality of care reporting.  Plans and insurers will at some point be required to report annually to HHS & provide report to enrollees at open enrollment.  HHS was to issue reporting requirements by March 2012, but this has been delayed.

2013 

  • Annual dollar limits on essential health benefits must be at least $2 million for plan years beginning on or after September 23, 2012 and before January 1, 2014.
  • Women’s preventive services, coverage with no cost-sharing.  Non-grandfathered plans and policies must provide, for plan years starting on or after August 1, 2012; and must communicate availability of such coverage to plan participants.
  • $2500 annual limit on employee pre-tax contributions to HFSAs. Does not apply to employer contributions.
  • Medicare retiree drug subsidy, change in tax treatment.  Employers who provide retiree drug coverage and receive a federal subsidy may no longer take a tax deduction for the subsidy amount they receive.
  • Notice of Health Insurance Marketplaces and federal subsidies.  Employers must provide notices to employees by October 1, 2013 (delayed from original date of March 1).  Government provided templates are at www.dol.gov/ebsa/pdf/FLSAwithplans.pdf.
  • Additional Medicare payroll tax on “high-earners”.  Employers must ensure an additional 0.9% Medicare tax (2.35%, up from 1.45%) is withheld from paychecks of employees as of the pay period the employer pays wages over $200,000.
  • Medicare tax on investment income of “high-earners.”  Employers are not responsible to withhold this new 3.8% Medicare tax, but may want to notify employees of it.
  • Itemized tax deduction threshold for health expenses (for individuals) rises from 7.5% to 10% of AGI, except that for taxpayers 65 and older it remains at 7.5% through 2016.
  • Initial open enrollment period for Health Insurance Marketplaces for 2014.  Begins October 1, 2013 (through March 31, 2014).
  • HCR Notices. Plan sponsors must continue to provide required HCR notices;  e.g., Grandfather notice, notice of participants’ right to select PCP for non-grandfathered plans.

2014

  • Individual Mandate. Requires most U.S. citizens and legal residents to have minimum essential health coverage or to pay a tax for failing to have coverage.  Tax is the greater of: $95/person/year or 1% of household income in 2014; $325/person/year or 2% of household income in 2015; $695/person/year or 2.5% of household income in 2016 (cap of $2,085/family). It increases in future years based on increased average price of health insurance in the U.S.
  • Health Insurance Marketplaces.  Virtual insurance markets in each state, can be separate or combined for the individual market, and Small Business Health Options Program (SHOP) for small group market (up to 100 employees, or states can limit to up to 50 in 2014-2015).  Federally-facilitated Marketplaces in states that have not set up state-based exchanges.
  • Employer Shared Responsibility Provisions.  “Large” employers (at least 50 employees) must “Pay or Play.” May be subject to penalties if do not offer coverage that meets affordability and minimum value requirements to at least 95% of employees (& dependents) who work at least 30 hours/week. One of two different penalty levels may apply if eligible employees buy insurance in an Exchange/Marketplace and receive a premium tax credit. *This has been delayed until 2015 (July 2, 2013 Notice from IRS and from the Whitehouse).
  • Federal subsidies for health insurance premiums and reduced cost-sharing.  Refundable and advance tax credits and cost sharing subsidies for qualifying individuals with household incomes of 100-400% of the federal poverty level (FPL).
  • Guarantee issue and renewability of insurance in the individual and small group markets and in the Marketplaces.  Insurers cannot deny coverage due to pre-existing conditions, for applicants of any age (no longer limited to under age 19).
  • Modified community rating, allows insurers to rate only on age (limited to a 3 to 1 ratio), geographic area, family tier and tobacco use (limited to 1.5 to 1 ratio) in the individual and small group market, both in and outside the Marketplaces.
  • No annual dollar limits on essential health benefits.
  • Wellness plan limits (HIPAA).  Employers may offer employees wellness rewards of up to 30% (up from 20%) of the total cost of coverage under the employer group health plan, if employees participate in wellness program and meet certain health-related standards. For tobacco cessation wellness programs, reward may be up to 50% of total cost of coverage.
  • Coverage of clinical trials.  Non-grandfathered plans must provide coverage for routine medical costs for participants in clinical trials. Plan years beginning on or after 1/1/14.
  • Nondiscrimination rules.  Will be effective some period of time after final guidance is issued, and will apply to non-grandfathered insured health plans.  Likely will be effective in 2014 or possibly 2015.
  • Small business Tax Credits of up to 50% of employer cost of providing employee health insurance, if employer purchases it through an Insurance Exchange.   Applies for small employers with no more than 25 employees and average annual wages of less than $50,000. Employer can claim the credit for up to two consecutive years.
  • Health insurance Tax on insurers and re-insurers, starts in 2014 and is fully implemented in 2018. Tax is on health insurance carrier’s net premiums.  Expected that carriers will pass on the additional costs to plan sponsors of insured and self-insured plans.  Effective 1/1/14.
  • Transitional re-insurance fee. Tax on both insured and self-insured group health plans, during 2014-2016. Purpose is to raise money to partially reimburse carriers who get more than their share of high claims individuals in non-grandfathered individual policies in the Marketplaces in 2014-2016.

2015

  • Employer Shared Responsibility Provisions.  “Large” employers (at least 50 employees) must “Pay or Play.” May be subject to penalties if do not offer coverage that meets affordability and minimum value requirements to at least 95% of employees (& dependents) who work at least 30 hours/week. One of two different penalty levels may apply if eligible employees buy insurance in an Exchange/Marketplace and receive a premium tax credit. *Originally effective in 2014, but delayed (on July 2, 2013) until 2015.
  • Auto Enrollment. Employers with more than 200 full-time employees must automatically enroll eligible employees in the employer group health plan (but the employee can opt out). Expected to become effective in 2015, but could be later. DOL said it expects to complete rule-making by 2014.

2018

  • Cadillac Tax on high-cost insurance.  A 40% excise tax will be imposed on insurers of employer-sponsored health plans if the total annual benefits cost exceeds $10,200 for individual coverage or $27,500 for family coverage.

 

2012_2014 Timetable 082213 [PDF]