Health Care Reform and the Affordable Care Act

Patient Protection and Affordable Care Act

What is the Patient Protection and Affordable Care Act?

The Patient Protection and Affordable Care Act (commonly referred to as “health care reform” or the “Affordable Care Act”) requires most legal U.S. residents to obtain health insurance by this year and it provides government subsidies to help lower-income individuals do so through state or federal health insurance marketplaces.

Some of the changes brought about by this new law took effect in 2010 and most of the law’s effects were effective January 1, 2014. Marketplaces opened on October 1, 2013 and can be accessed by visiting www.healthcare.gov. Open enrollment on the marketplaces ends on March 31, 2014.

As the government issues further guidance on health care reform, MMBB will keep you informed of its potential impact.

For information on the Affordable Care Act, click the “Resources” tab above.

NOTICE: This document is for general information purposes only. While we have attempted to provide current and accurate information, this information is provided “as is” and MMBB makes no representation or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind.

The following is a list of organizations and government websites which provide detailed information on the Affordable Care Act (ACA).

  1. Healthcare.gov (www.healthcare.gov): Provides information on what changes have already taken place and what is happening in each state. The site offer comprehensive information including a map of the US and plans for each state and information specific to individuals and businesses.
  2. Marketplace.cms.gov (www.https://marketplace.cms.gov/outreach-and-education/marketplace-application-checklist.pdf): When you apply for or renew your coverage in the Health Insurance Marketplace, this link provides a helpful checklist.
  3. Kaiser Family Foundation (www.kff.org): The Foundation provides resources on implementation and the impact of the Affordable Care Act including a summary and interactive timeline detailing the many provisions in the Act and a flowchart and short analysis that explains how the individual mandate will work. Watch The YouToons Get Ready for Obamacare, a video about preparing for the Affordable Care Act, published by The Henry J. Kaiser Family Foundation.
  4. White House (www.whitehouse.gov/healthreform/timeline): The Affordable Care Act – Implementation Timeline highlights implementation of the ACA starting in 2010 and continuing through 2015.
  5. Medicaid (www.medicaid.gov/AffordableCareAct/Provisions/Eligibility.html): The link provides information on the provisions of the Affordable Care Act related to Medicaid and the Children’s Health Insurance Program (CHIP), including the new eligibility rules.
  6. Robert Wood Johnson Foundation (www.rwjf.org/en/topics/rwjf-topic-areas/health-policy.html): Information for families and individuals about the ACA and what to expect.
  7. National Conference of State Legislation (www.ncsl.org/issues-research/health.aspx): This site offers information on the ACA and legalities.

FAQs for Plan termination, Cigna and Express Scripts

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Cigna – Plan Termination FAQs

CLAIMS SUBMISSION AND APPEALS

How long can claims be submitted to Cigna after PremierHealth terminates?

Claims for in-network providers must be submitted within 90 days of the date of service. Claims for out-of-network providers must be submitted within 180 days of the date of service.

Can members file appeals after the PremierHealth plan terminates?

Yes, provided the claim was incurred while the plan was effective. If the claim was incurred while the plan was effective, members would have 180 days to file an appeal after the last adverse decision. This means that if the last adverse decision for a claim was on December 1, 2014, a member would have until May 31, 2015 to file an appeal for this claim.

CARE IN PROCESS

What happens if a member is in the middle of a hospital stay when PremierHealth terminates?

Any claims with a Date of Service up to and including 12/31/2014 will be covered under the current PremierHealth plan. Any claims with Date of Service 1/1/2015 and after will not be covered under the current plan.

ACCESS TO ACCOUNT INFORMATION/CLAIMS HISTORY

Can members access the myCigna.com website after the PremierHealth plan termination?

Yes, members can access the myCigna.com website after plan termination for a period of 24 months. During this time, members will have access to claim, benefit and account balance information. Members will be able to access the myCigna.com website using their current user name and password.

How long will claim history be stored on the myCigna.com website?

Claim history will be stored for 24 months post PremierHealth termination on the myCigna.com website.

After PremierHealth terminates, can members continue to call the current customer service phone number regarding claims that were incurred prior to the termination date? How long will members have access to this customer service phone number? Will they have to use their old ID card number or will there be other ways for them to identify themselves to the customer service representative?

Yes, the 1-800-Cigna24 customer service line will be available for 24 months post termination. Members will be able to use their current Cigna ID numbers or social security numbers as identification when contacting Cigna customer service during this time.

PRE-TERMINATION CONSIDERATIONS

What should members do to prepare for plan termination?

Members should inform their health care providers of the date that they will no longer be covered by PremierHealth and provide information to their providers on their new medical coverage, if applicable.

Express Scripts (ESI) – Plan Termination FAQs

MAIL ORDER CLAIMS, INCLUDING WORRY-FREE REFILLS

ESI currently offers a Worry-Free Fills program that automatically delivers refills to members when their medication supply is due to run out and contacts members’ doctors for a new prescription when no refills are remaining. What will happen to prescriptions that have been set up with Worry Free Fills after PremierHealth terminates?

Once PremierHealth terminates, prescriptions set up with Worry Free Fills will not automatically ship, nor will ESI contact members’ doctors requesting a new prescription.

Will ESI fill all eligible mail order prescriptions received on or before 12/31/2014?

Yes, all eligible mail order prescriptions received on or before 12/31/2014 will be filled.

Would ESI fill a prescription that is postmarked a few days or a week before 12/31/2014, but ESI does not receive it until 1/1/2015?

No, the prescription will be returned to the patient.

Will members be able to fill mail order prescriptions that have open refills on them after 12/31/2014?

No, members will not be able to fill open refills on prescriptions.

RETAIL PHARMACY

Will members’ local pharmacies continue to fill scripts for them after 12/31/14 if there is a refill on file?

Pharmacies can fill the prescription, but PremierHealth will not cover the script and members will need to pay the full undiscounted price if they do not have new Rx coverage under a different plan. If members have new coverage under a different plan, they should provide that information to the pharmacist.

BILLING, APPEALS AND CLAIMS SUBMISSION

ESI currently bills members for prescriptions that are less than $100 (i.e., members do not have to pay up front). Will this continue through 12/31/2014?

ESI will continue to bill patients for prescriptions that cost $100 or less through September. Ninety days prior to the plan’s termination (October 1, 2014), ESI will bill for prescriptions that are $50 or less. Thirty days prior to the termination (December 1, 2014), the patient will have to pay for the medication prior to Express Scripts releasing the prescription.

Can members file appeals after PremierHealth terminates?

Yes, provided the claim was incurred while the plan was effective.

If a member purchases a drug out of network, can the member submit the claim?

No. Out-of-network purchases are not covered under the PremierHealth plan.

ACCESS TO ESI/ACCOUNT INFORMATION/CLAIMS HISTORY

Can members log in to their www.express-scripts.com account after PremierHealth is terminated?

Once PremierHealth terminates, members can log into their account provided they were registered users prior to termination. Members can view their information online post termination for up to 27 months. If a member is not registered prior to termination, a member will not be able to newly register on www.express-scripts.com after plan termination. Unregistered members will not have access to online information post termination. They will, however, be able to call customer service or send a written inquiry.

Can members request a prescription history after PremierHealth terminates?

Yes, a prescription history can be requested by calling customer service. Prescription history for the most recent 18 months will be available.

Can members continue to call an ESI pharmacist after 1/1/2015 with questions on a prescription the member purchased before PremierHealth was terminated?

Yes, members can call the 800 number that currently appears on their identification card to speak to a pharmacist about a prescription that was filled prior to PremierHealth’s termination. This phone number will be available for 6 months following plan termination. Additionally, members will be able to use their current member identification numbers post termination to access an ESI pharmacist.

PRE-TERMINATION CONSIDERATIONS

What should members do to prepare for plan termination?

Members should inform their health care providers of the date that they will no longer be covered by PremierHealth and provide information to their providers on their new pharmacy coverage, if applicable. Members should also speak to their providers to obtain new prescriptions for their current mail order medications and retail medications that will need to be refilled.

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FAQs for Clergy and Non-Clergy Members

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Is my employer required to offer health insurance?

Your employer is not required to offer a health coverage plan. However, we encourage all employers to provide this option to employees as part of a comprehensive benefits package. Please see the employer FAQ for more information.

Will employers that don’t provide health insurance have to pay a penalty?

Beginning in January 2015, employers with 50 or more employees are subject to pay a penalty. Previously, the effective date was January 1, 2014.

Will everyone have to buy health insurance and what happens if they don’t?

The Affordable Care Act (ACA) requires most citizens and legal residents to have qualifying health coverage or pay a tax penalty. However, there are some exemptions. Please visit healthcare.gov to learn more.

How will people with pre-existing conditions be protected?

Beginning in 2014, all health insurance carriers must accept and offer coverage to all who apply, no matter what their pre-existing condition is. They may also not charge more for pre-existing conditions.

How do I learn more about what is available in my state?

Visit healthcare.gov for more resources to learn about how to “shop” for coverage. Coverage is based out of the state in which you have residency.

How do I access my state’s information on www.healthcare.gov?

You can access information on your state at the bottom of the healthcare.gov home page. Click on “What is the Marketplace in my state.” Then click on your state in the pull-down menu.

I don’t have access to the internet, how can I get my questions answered?

Service representatives are available through a toll-free number. Call the Health Insurance Marketplace at 1.800.318.2596. The call center is open 24 hours a day/7 days a week. {If your question cannot be answered, it is sent to their Advanced Resolution Center.} The telephone center is operated by The Center for Medicare and Medicaid Services.

How can I find out more?

For a larger list of resources, please see the “Resources” tab at the top of this page.

What health plans are available through the Marketplace?

There are four levels of plan offered —Bronze, Silver, Gold, and Platinum. Benefits vary under each plan. Each plan specifies the overall amount of cost sharing they require.

What is the difference between Bronze, Silver, Gold and Platinum plans?

All health plans offered through the Marketplace must cover essential health benefits, limit the amount of cost sharing (such as deductibles and co-pays) for covered benefits, and meet all other consumer protections required under the Affordable Care Act. Each plan specifies the overall amount of cost sharing they require. In the marketplace, Bronze plans will have the highest deductibles and other cost sharing, but the lowest premiums. Silver plans will require somewhat lower cost sharing. Gold plans will have even lower cost sharing. Platinum plans will have the lowest deductibles, co-pays and other cost sharing. In general, plans with lower cost sharing will have higher premiums, and vice versa.

Can I enroll in the marketplace mid-year?

Yes, you can enroll or change from one marketplace plan to another if certain triggering events occur. Please see healthcare.gov for a list of the triggering events. The special enrollment periods are generally 60 days from the date of the triggering event. Generally, if you enroll by the 15th of a month, coverage will be effective as of the first day of the following month. If you enroll between the 16th day and last day of any month, coverage in the marketplace plan must be effective no later than the first day of the second following month.

Are Flexible Spending Account (FSA) plans permitted in the marketplaces?

FSA plans will be permitted if your employer continues to provide health insurance, including purchasing health insurance through the marketplace’s Small Business Health Options Program (SHOP). If you purchase insurance through the individual exchange, then an employer-sponsored FSA will not be available.

Is there any financial assistance on the marketplaces available to make health insurance more affordable?

Yes, there are subsidies to lower premiums (premium tax credits) and cost-sharing assistance to certain individuals.

Is housing allowance used to determine household income when defining eligibility for subsidies?

No, housing allowance is not used to determine household income when defining eligibility for subsidies.

Who is eligible for marketplace premium tax credits?

Premium tax credit will be available to individuals who purchase coverage in the marketplace and who have income between 100% and 400% of the federal poverty level.

In addition, to be eligible for the premium tax credits, individuals must not be eligible for public coverage—including Medicaid, the Children’s Health Insurance Program, Medicare, or military coverage—and must not have access to health insurance through an employer. (There is an exception in cases when the employer plan is unaffordable because the employee share of the premium exceeds 9.5% of the employee’s income or in cases where the employer plan doesn’t provide a minimum level of coverage).

How do the premium tax credits work?

Premium tax credits reduce your premium for most marketplace plans. The amount of the tax credit you may receive depends on your income and the cost of marketplace health plans in your area. The marketplace will determine the expected contribution you are required to pay toward the premium for a mid-range (Silver) benchmark plan. The expected contribution will increase on a sliding scale based on your 2014 income. The difference between the premium for the benchmark plan and your expected contribution equals the amount of your tax credit. (You do not have to pay more than the actual premium for the plan.) The marketplace will tell you what that dollar amount is. You can use that amount to help pay the premium for any Bronze, Silver, Gold, or Platinum plan offered in the marketplace. The credit cannot be used to pay for a catastrophic or stand-alone dental plans.

When can I claim any premium tax credits?

Premium tax credits may be claimed at the end of the year, or you can apply for an advanced premium tax credit based on your estimated income for the upcoming year. If you elect to receive an advanced credit, the government will pay 1/12 of the credit directly to your insurance company each month and the insurer will bill you for the rest of the premium.

What is cost sharing?

Cost sharing refers to health plan deductibles, co-pays and co-insurance. For most covered services, you will have to pay (or share) some of the cost, until you reach the annual out of pocket limit on cost sharing. The exception is for preventive health services, which health plans must cover entirely.

Is assistance available in the marketplace for cost sharing?

Yes. If your income is between 100% and 250% of the federal poverty level, you can also qualify for cost sharing reductions. These will reduce the deductibles, copays, and other cost sharing that would otherwise apply to covered services.

The cost sharing reductions will be available through modified versions of Silver plans that are offered on the Marketplace. These plans will have lower deductibles, copays, coinsurance and out-of-pocket limits compared to regular Silver plans.

What about Medicaid and Medicare? Do they still exist?

Yes, Medicaid and Medicare still exist. Please see the “Resources” tab at the top of this page for a list of resources with more information about the Affordable Care Act and Medicaid and Medicare eligibility and coverage.

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FAQs for Employers

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Are employers required to offer health insurance?

Employers are not required to offer a health coverage plan. Beginning in January 2015, employers with 50 or more full-time equivalent employees who do not offer coverage or meet certain standards may be subject to a penalty.

We are encouraging all employers to offer health insurance to their employees. Different options can be found through the marketplace. Small businesses, including churches with fewer than 25 employees, may also be eligible for a tax credit if coverage is purchased through a state marketplace.

Please remember that if you do not choose to offer health insurance to your employees, we recommend that you use the dollars that would typically go to employee health coverage in a different way such as putting it into a TDA account. After all, this is still part of an employee’s compensation.

Will everyone have to buy health insurance and what happens if they don’t?

The Affordable Care Act (ACA) requires most citizens and legal residents to have qualifying health coverage or pay a tax penalty. However, there are some exemptions. Please visit www.healthcare.gov to learn more.

How will people with pre-existing conditions be protected?

Beginning in 2014, all health insurance carriers must accept and offer coverage to all who apply, no matter what their pre-existing condition is. They may also not charge more for pre-existing conditions.

How do I learn more about what is available in my state?

Visit www.healthcare.gov for more resources to learn about how to “shop” for coverage. Coverage is based out of the state in which you have residency.

How do I access my state’s information on www.healthcare.gov?

You can access information on your state by clicking on “Small Businesses” at the top of the page, then click on “For Employers.” Select your state from the pull-down menu.

I don’t have access to the internet, how can I get my questions answered?

Service representatives are available through a toll-free number. Call the Health Insurance Marketplace at 1.800.318.2596. The call center is open 24 hours a day/7 days a week. {If your question cannot be answered, it is sent to their Advanced Resolution Center.} The telephone center is operated by The Center for Medicare and Medicaid Services. You can also call the Small Business Health Options Program (SHOP) call center at 1.800.706.7893, Monday – Friday, from 9 a.m. to 7 p.m.

What is the Small Business Health Options Program (SHOP)?

SHOP is a program where small businesses, including churches, with 50 or fewer employees can obtain health insurance coverage for their employees on the marketplace. On the marketplace, you can compare price, coverage, and quality of plans in a way that’s easy to understand.

Can employers enroll in SHOP mid-year?

Yes. You are permitted to enroll in SHOP at any time during the year. For the federal marketplace SHOP plans, if enrollment is completed by the 15th of a month, coverage is effective for employees by the 1st day of the following month. (State marketplaces may have different rules.)

If I enroll in a SHOP plan and my employees contribute to their health insurance program, is the contribution on a pre-tax basis?

Yes it is.

If an employee obtains individual health insurance coverage from the marketplace, can I pay the premiums directly to the insurance company for the coverage?

Employers may not pay premiums directly to the insurance company to purchase individual health insurance for an employee.

Can an employer provide financial assistance to employees obtaining individual health insurance coverage in the public or private marketplace?

Recent regulatory guidance prohibits employers to specifically reimburse employees for the cost of obtaining individual health insurance coverage purchased on the public or private marketplace, whether or not such payment is taxable to the employee.

How may an employer still offer financial assistance to employees to obtain individual health insurance coverage in the public or private marketplace?

An employer may offer financial assistance to its employees by increasing the employee’s taxable compensation, provided that the compensation is neither conditioned on the employee’s purchase or maintenance of individual health insurance coverage, nor specifically designated for use in purchasing such individual health insurance coverage.

What impact did the ACA’s market reform have on Health Reimbursement Accounts (HRAs), Health Flexible Spending Accounts (FSAs) and employer reimbursement plans?

Effective with plan years beginning on or after January 1, 2014, HRAs, Health FSAs and employer payment plans will be subject to the ACA’s market reforms including the requirement that a group health plan may not establish any annual dollar limit on essential health benefits and the requirement that non-grandfathered group health plans provide certain preventive services without any cost-sharing requirements. For any violations of these market reforms, employers must report and pay excise taxes of $100 per day the arrangement is non-compliant per each affected individual. Please see the Summary of Federal Guidance on HRAs, Health FSAs and Other Employer Funding Arrangements under the Affordable Care Act at mmbb.org/healthcarereform for further details.

What is the transition relief from the penalties for violations of the market reforms for small employers maintaining employer payment plans?

In IRS Notice 2015-17, an excise tax will not be imposed for a violation of the ACA market reform provisions for the period of January 1 through June 30, 2015 for employer payment plans that paid or reimbursed employees for individual health policy premiums for 2014.

Are Health Flexible Spending Account (FSA) plans permitted in the marketplaces?

Health FSA plans will be permitted if an employer offers compliant group health plan coverage and the annual benefits available under the Health FSA to any participant is appropriately limited. Any violations can result in the penalty stated above. If employees purchase health insurance through the individual marketplace, then an employer-sponsored FSA will not be available. Please see the Summary of Federal Guidance on HRAs, Health FSAs and Other Employer Funding Arrangements under the Affordable Care Act at mmbb.org/healthcarereform for further details.

Did the ACA eliminate Health Savings Accounts (HSAs)?

No. However, there were some changes to HSAs due to the ACA. The penalty for funds withdrawn for non-medical purposes increased to 20% plus income tax. A prescription is required from a physician for reimbursement of over-the-counter drugs.

Is there any financial assistance available for employers to make health insurance more affordable?

Yes. The Small Business Healthcare Tax Credit may be available.

What is the Small Business Healthcare Tax Credit?

It is a tax credit for eligible small employers, including churches, that was established as an incentive for small employers to provide health insurance coverage to their employees. Beginning in 2014, the credit is available only for coverage obtained through the health insurance marketplaces and an employer may only use the tax credit for two years after 2014. The tax credit may cover as much as 35% of the employer contribution toward premium cost for employers who have low-to-moderate-wage workers.

What about Medicaid and Medicare? Do they still exist?

Yes, Medicaid and Medicare still exist. Please go to the “Resources” tab at the top of this page for a list of resources with more information about the Affordable Care Act and Medicaid and Medicare eligibility and coverage.

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Summary of Federal Guidance on HRAs, Health FSAs and Other Employer Funding Arrangement

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The Internal Revenue Service, Departments of Labor and Health and Human Services issued guidance clarifying how certain provisions of the Affordable Care Act (ACA) applies to health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs), employer payment plans and employee assistance programs (EAPs). The guidance is effective for plan years beginning on or after January 1, 2014.

HRAs, Health FSAs and employer reimbursement plans are in general considered group health plans under the ACA and are subject to the ACA’s market reforms (provisions that reform the health insurance market). The market reforms do not apply to a group health plan if the group health plan has fewer than two participants who are current employees (a “retiree-only plan”). In addition, if the group health plan provides only “excepted benefits” such as accident-only coverage, disability income, limited dental and vision benefits, it is exempt from complying with the market reforms.

The two market reforms listed below are addressed in the Guidance:

  • The requirement that a group health plan may not establish any annual dollar limit on the dollar amount of benefits for any individual
  • The requirement that non-grandfathered group health plans provide certain preventive services without any cost-sharing requirements for such services.
    Violations of any of these market reforms can result in the imposition of excise taxes of $100 per day per each affected individual on the employer that maintains a non-compliant health funding arrangement.

For plan years on or after January 1, 2014, key provisions of the new Guidance include:

  • Employers cannot offer a stand-alone HRA. Employers can only offer HRAs that are integrated with a group health plan that otherwise satisfies the market reforms. Specific rules must be met for the integration of HRA benefits with group health plan coverage.
  • For health FSA’s, employers will violate the market reforms unless the employer also offers compliant group health plan coverage that is not limited to the provision of excepted benefits, and the maximum annual FSA benefits payable to any employee do not exceed two times the employee’s contribution (or, if greater, do not exceed $500 plus the employee’s contribution).
  • Employers will not be able to reimburse employee premiums for individual health insurance on a tax-free basis without violating the market reform rules.
  • EAPs will generally still be permitted, provided that the EAP does not provide significant medical care or treatment benefits.

Further information on these key provisions is provided below.

HRAs

Generally, except for an HRA that qualifies as a retiree-only plan or offers only excepted benefits, an HRA will violate the market reforms unless it is integrated with a group health plan that otherwise satisfies the market reforms. Under the Guidance, an HRA may not be integrated with individual health insurance coverage, such as individual coverage on the marketplace, even if such individual coverage meets the market reforms.

Health FSAs

Health FSAs provided under a Code section 125 cafeteria plan are subject to a separate dollar limit on the annual amount of employee salary reduction contributions to an employee’s health FSA.

Employer Payment Plans

An employer payment plan that qualifies as a retiree only plan is exempt from the market reforms. If an employer establishes a payroll practice of forwarding after-tax employee wages to a health insurance company at the employee’s direction and without any substantial employer involvement in this process (e.g., no employer contributions; employer simply collects and remits premiums through payroll reduction), such a payroll practice will not create a group health plan, and the market reforms will not apply. In addition, an employer will not create an employer payment plan and will not violate the market reforms if it establishes an arrangement that allows employees to choose between receiving cash or an after-tax amount that is applied toward health coverage.

EAPs

Until further guidance is issued, employers may use a reasonable, good faith interpretation of whether an EAP provides significant medical care or treatment benefits.

To access the Guidance, please click on the link below.

Technical Release No. 2013-03 – Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements

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NOTICE: This document is for general information purposes only. While we have attempted to provide current and accurate information, this information is provided “as is” and MMBB Financial Services makes no representation or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind.

Qualified Small Employer Health Reimbursement Arrangement

The 21st Century Cures Act (“Act”), a health bill, was signed into law on December 13, 2016, with an effective date of January 1, 2017. One of the provisions of the Act (Title 18) created a new arrangement that small employers may use to help their employees pay for eligible medical expenses and health insurance premiums – “a qualified small employer health reimbursement arrangement” (“QSEHRA”). Previously, the Affordable Care Act (ACA) did not allow employers to offer health reimbursement arrangements for payment of individual insurance premiums.

To be an eligible employer that may offer a QSEHRA, the employer must be a small employer (less than 50 full-time employees or equivalents) and may not offer a group health plan to any of its employees.

To establish a QSEHRA, the following requirements must be met:

  • The QSEHRA must be funded only by the eligible employer. Employees are not able to contribute to a QSEHRA through salary reduction or otherwise.
  • The QSEHRA must be offered to all employees, with certain exceptions. The employer may exclude the following categories of employees from QSEHRA eligibility:
    o Employees under age 25
    o Employees with less than 90 days of service
    o Part-time employees
    o Seasonal employees
    o Employees covered under a collective bargaining agreement that does not provide for coverage under the QSEHRA
    o Non-resident aliens with no income from sources within the U.S.
  • The same terms must be offered to all eligible employees. The amount of benefits may vary depending on the price of health insurance in the relevant individual market based on age and family size.
  • Proof of coverage or expense (including premiums for individual health coverage) must be provided by the employee before receiving reimbursement of eligible medical care expenses, as defined in Section 213(d) of the Internal Revenue Code.
  • The maximum annual benefit is $4,950 for single employee coverage and $10,000 for family coverage for 2017. This amount is subject to an annual adjustment for inflation. Employees who are covered by a QSEHRA for only part of a year are subject to a prorated cap.

  • Health Plan Requirement for Employees:
    Employees must purchase a health plan that has minimum essential coverage (MEC), as stated by the ACA. If an individual purchases health coverage without MEC, then they may be subject to penalties under the individual mandate of the ACA and reimbursements from the QSEHRA may be included in their gross income.
  • Impact on Premium Tax Credits in the Marketplace Created by the ACA:
    Employees who obtain health insurance through the marketplace must report the amount in the QSEHRA to the marketplace. The premium tax credit will be reduced by the amount in the QSEHRA benefit. If the QSEHRA is considered affordable coverage, it may disqualify the employee from any premium tax credit.
  • Notice Requirements:
    Employers must provide an annual written notice to employees no later than 90 days before the beginning of the year or the start of a new employees’ eligibility. If an employer offered a QSEHRA in 2017, a transition provision in the Act allowed employers to provide a notice no later than March 13, 2017 (90 days after the date of enactment of the Act). If a Notice is not provided, the employer may be subject to a penalty of $50 per employee per failure with a maximum penalty of $2,500.

The Notice must include the following information:

  • The amount of the QSEHRA benefit
  • A statement informing employees to notify the marketplace of the amount of the QSEHRA benefit if they apply for advance payment of a premium tax credit subsidy
  • A statement of the consequences of not getting MEC, which may result in taxes and the inclusion of reimbursements in their gross income.

  • The IRS has suspended the deadline for compliance with the Notice requirements until further guidance is issued.
  • Reporting:
    The employer must report the amount of the QSEHRA benefit on employees’ W-2 forms.
  • COBRA:
    QSEHRAs are not subject to federal continuation coverage requirements. However, state coverage continuation requirements may apply to the QSEHRA.

As QSEHRAs are subject to many new requirements, employers should consult with legal counsel when considering establishing a QSEHRA.

Notice: This information is provided for informational purposes only. It is not intended as a substitute for legal, accounting, or other professional advice. If such services are required, the services of a competent professional should be sought. The information is general in nature and does not address any specific situation. Each circumstance should be evaluated on its own merit.

Healthcare Reimbursements

As background, prior guidance led many employers with employer payment plans to believe they could pay health care premiums for their employees and avoid penalties under the Affordable Care Act (ACA) if they made the reimbursement on an after-tax (vs pre-tax) basis. Employer payment plans are arrangements that provide cash reimbursement for the purchase of an individual market policy or pays the premium directly. These arrangements are treated as group health plans and fail to comply with certain market reforms under the Affordable Care Act.

In November of 2014, FAQs were posted on the Department of Labor’s website; one of which stated that taxing health insurance premium reimbursements did not, by itself eliminate the penalty. Many employers found themselves facing potentially significant ACA penalties for 2014 and even part of 2015. The IRS issued Notice 2015-17 (www.irs.gov/irb/2015-14_IRB/ar07.html ) which provided relief from this penalty for small employers (employers with less than 50 employees) for 2014 and for the period of January 1 through June 30, 2015.

What can churches do to avoid the excise tax penalty after June 30?

• Churches who want to make a group health plan available to their employees can go to www.healthcare.gov to complete an application to obtain a health insurance plan through the Small Business Health Options Program (SHOP) or go to a private insurer.

• Increase compensation to assist in the payment of health care premiums and there would not be an ACA violation, as long as the increased payments are not conditioned on the purchase of health care coverage. The increased compensation would be taxable income.

• A one-participant health plan exception is available. An employer payment plan with less than two participants who are current employees may be eligible to offer premium payment or reimbursement for individual health insurance coverage on a pre-tax basis without violating the ACA market reforms. Eligibility depends on the employer’s specific situation.

• Sponsor a Health Reimbursement Account (HRA) if offered with a qualified group healthcare plan that meets the ACA’s integration requirements.

Notice: This information is provided for informational purposes only. It is not intended as a substitute for legal, accounting, or other professional advice. If such services are required, the services of a competent professional should be sought. The information is general in nature and does not address any specific situation. Each circumstance should be evaluated on its own merit.

Supreme Court Decision in King v. Burwell (Availability of subsidies on the federal marketplaces)

June 29th, 2015 8:32 am

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On Thursday, June 25th the Supreme Court upheld the availability of subsidies for the purchase of health insurance coverage on the Affordable Care Act’s federally-facilitated marketplaces (exchanges). Subsidies will remain available for individuals enrolled through the federal marketplace.

As background, the Supreme Court decided to hear a case (King v. Burwell, 14-114) in 2014 that challenged the availability of subsidies for the purchase of health insurance coverage on the Affordable Care Act’s (ACA) federally-facilitated marketplaces (exchanges). Currently IRS regulations allow health insurance tax credits under the ACA for consumers in all states. The challengers based their argument on the language of the ACA, which states that subsidies will be offered through a health care exchange “established by the state.” Sixteen states have built such marketplaces, with the rest relying on the federal marketplaces.

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U.S. Supreme Court to Hear Case Challenging Subsidies Offered through the Affordable Care Act

March 2nd, 2015 12:52 pm

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The Supreme Court has decided to hear a case (King v. Burwell, 14-114) that challenges the availability of subsidies for the purchase of health insurance coverage on the Affordable Care Act’s (ACA) federally-facilitated marketplaces (exchanges). Currently IRS regulations allow health insurance tax credits under the ACA for consumers in all states.

This case is one of four cases that have been filed charging that subsidies can only be offered in the health care marketplaces run by states. The challengers based their argument on the language of the ACA, which states that subsidies will be offered through a health care exchange “established by the state.” Sixteen states have built such marketplaces, with the rest relying on the federal marketplaces.

Oral arguments will be heard on Wednesday, March 4, with a decision expected in late June or early July.

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Affordable Care Act: Notice of Coverage Options

September 1st, 2013 2:51 pm

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Beginning January 1, 2014, individuals and employees of small businesses (including churches) will have access to insurance coverage through the Affordable Care Act’s (ACA) Health Insurance Marketplaces (also known as Exchanges). Open enrollment for the Marketplaces begins October 1, 2013. The ACA requires that employers provide a written notice to all employees regarding the Marketplace. The notice must be provided to all current employees by October 1, 2013. Those beginning employment on or after October 1, 2013, must receive the notice within 14 days of their first day of employment. It must be provided to all employees regardless of plan enrollment status, part-time or full-time status, or their eligibility to participate in your plan. Employers are not required to provide a separate notice to dependents.

Two model notices called Notice to Employees of Coverage Options (Notice) have been provided by the Department of Labor (DOL). One Notice is for employers who do not offer a health plan (two pages); and one is for employers who offer a health plan to some or all employees (three pages). Employers can use one of these models “as is,” customize the model, or create their own notice, as long as the notices contain required content as outlined in the Technical Release No. 2013-02 on the DOL’s website. Either of the Notices can be copied for you to use. It should be hand-delivered or mailed via first class mail.

The Notice for employers who offer a health plan also has basic information about health care coverage including a question regarding the minimum value standard and plan affordability. Please note that if you are enrolled in the PremierHealth plan, the MVS is met.

For additional information on the Notices, we encourage you to review the Technical Release No. 2013-02. If you have any questions, please reach out to our senior benefits specialists at 800.986.6222 or service@mmbb.org.

You can download the notices at the following websites:



  • www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf
  • www.dol.gov/ebsa/pdf/FLSAwithplans.pdf

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Re-election Reaffirms Affordable Care Act (ACA)

November 15th, 2012 10:33 am

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The 2012 presidential election has come to a close and the re-election of President Obama paves the way for the continued implementation and enforcement of the Affordable Care Act (ACA).

As government officials and regulatory agencies continue to interpret and set guidelines and regulations on the law, MMBB will update you on how these provisions may affect you as well as your church or organization. For PremierHealth members, MMBB will continue to comply with the applicable provisions of the ACA and study the implications.

For more details about the ACA, visit www.healthcare.gov.

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Health Care Reform, the Supreme Court decision

July 10th, 2012 10:16 am

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In its recent decision on the health care reform legislation, known as the Affordable Care Act (ACA), the Supreme Court ruled the individual mandate portion of the ACA to be constitutional. As a result, the healthcare reform law, which takes effect in phases over a period of years, will continue to move forward.

The Court’s ruling on the expansion of Medicaid limited the requirement that states must expand eligibility for their Medicaid programs.

As the government issues further guidance on healthcare reform—including the individual mandate and health insurance exchanges—MMBB will keep you informed of its potential impact.

Because MMBB has worked to stay in compliance with the ACA, PremierHealth participants will experience no immediate effect on their coverage. All rates and coverage for the current plan year will remain unchanged. Sections of the health care overhaul that are already part of the MMBB PremierHealth program include restrictions against lifetime coverage limits and the extension of benefits coverage to dependents up to age 26. MMBB will continue to carry out all applicable provisions of the ACA and help you understand your options and responsibilities under the law.

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Patient Protection and Affordable Care Act

June 6th, 2011 2:58 pm

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The Patient Protection and Affordable Care Act (commonly referred to as “health care reform” or the “Affordable Care Act”) was signed into law by the President on March 23, 2010. This important legislation will change the delivery and financing of health care over time—and will ultimately result in numerous changes to every American’s health coverage.

The Affordable Care Act requires most legal U.S. residents to obtain health insurance by 2014 and it will provide government subsidies to help lower-income individuals do so through state health insurance exchanges that will be created.

Some of the changes brought about by this new law took effect in 2010 and most of the law’s effects will be felt by 2014.

In its recent decision on the ACA, the Supreme Court ruled the individual mandate portion of the ACA to be constitutional. As a result, the healthcare reform law, which takes effect in phases over a period of years, will continue to move forward.

The Court’s ruling on the expansion of Medicaid limited the requirement that states must expand eligibility for their Medicaid programs.

As the government issues further guidance on healthcare reform—including the individual mandate and health insurance exchanges—MMBB will keep you informed of its potential impact.

MAJOR PROVISIONS OF THE AFFORDABLE CARE ACT THAT WENT INTO EFFECT JANUARY 1, 2011

The following changes became effective on January 1, 2011:

  • Restricted annual and no lifetime dollar limits with respect to “essential health benefits”
  • Limitation on cancellation of coverage of plan participants (rescission)
  • No pre-existing condition limitations for enrollees under 19 years old
  • Coverage for adult dependent children up to age 26
  • No cost sharing for certain medical preventive care services

Restricted Annual and no Lifetime Dollar Limits on “Essential Health Benefits”

Lifetime dollar limits on essential health benefits (defined below) are prohibited. In addition, annual limits on spending for “essential health benefits” will only be allowed through December 31, 2013. Beginning January 1, 2014, annual limits on essential health benefits will be prohibited.

The ban on lifetime and annual limits applies only to “essential health benefits.” The Secretary of Health and Human Services will define “essential health benefits,” but we expect these services are likely to be considered “essential health benefits”:

  • Durable Medical Equipment
  • Emergency Services
  • External Prosthetic Devices
  • Home Health Care
  • Hospice
  • Mental Health and Substance Abuse
  • Organ Transplant
  • Ostomy Supplies
  • Outpatient Rehabilitation
  • Pharmacy Benefits (Standard Drug List)
  • Preventive Services

Limitation on Cancellation of Coverage (Rescission)

Coverage cannot be cancelled for any reason, unless it is found that you have committed fraud or misrepresentation in obtaining this coverage.

Removal of Pre-Existing Condition Limitations for Enrollees Under 19 Years Old

Plans cannot deny coverage or limit eligibility for individuals under the age of 19 based upon a pre-existing condition of any kind.

Coverage for Adult Dependent Children

As of January 1, 2011, coverage must be provided to adult dependent children, up to age 26.

Important information for you to know

  • Dependent coverage does not extend to your adult child’s spouse or your grandchildren (or any child of an adult child dependent).
  • Future enrollment materials may ask the health plan status of any adult children you may have for government reporting purposes.

No Cost Sharing for Certain Medical Preventive Care Services

Certain medical preventive services that have strong scientific evidence of their health benefits must be covered at 100% (no co-payments, coinsurance or deductible). Generally, the following services may be included:

  • Evidence-based preventive services (from the current recommendations of the United States Preventive Services)
    • Breast cancer and cervical cancer screenings
    • Colon cancer screenings
    • Screening for iron deficiency anemia during pregnancy
    • Screenings for diabetes, high cholesterol and high blood pressure
  • Routine vaccinations
  • Prevention for children
    • Regular pediatrician visits
    • Vision and hearing screening
    • Developmental assessments
    • Immunizations
    • Screening and counseling to address obesity
  • Certain preventive care measures for women

MAJOR PROVISIONS OF THE ACT THAT GO INTO EFFECT IN 2014

Additional provisions of the Affordable Care Act that will become effective on January 1, 2014 include the following:

Health plans will be banned from imposing:

  • An enrollment waiting period that exceeds 90 days
  • Any pre-existing condition exclusions on covered individuals of any age
  • Annual dollar limits on essential benefits

Automatic Enrollment (for employers with more than 200 employees)

Employers will be required to automatically enroll new full-time employees in their health plan, and the opportunity to opt out if they furnish evidence of health care coverage from another source (such as their spouse’s employer) must be provided.

Individual Mandate

U.S. citizens and legal residents will be required by the government to maintain “minimum essential coverage.” This is called the “Individual Mandate” and failure to maintain coverage for the entire year will result in a penalty or tax to the individual.

Definition of Minimum Essential Coverage

Minimum essential coverage includes:

  • Eligible employer-sponsored coverage
  • Individual health plans
  • Grandfathered health plans
  • Medicare Part A
  • Medicaid
  • CHIP (Children’s Health Insurance Program)
  • TRICARE (Government program for active troops, military retirees and their families)
  • VA
  • Other coverage as may be designated by the Department of Health and Human Services

Exceptions to the “individual mandate” will include:

  • Native Americans
  • Individuals who qualify for a religious exemption (religious groups opposed to accepting insurance benefits that pay for medical care)
  • Individuals not lawfully present in the United States
  • Incarcerated individuals
  • Those who cannot afford coverage (required contributions toward coverage exceed 8% of house-hold income)
  • Taxpayers with income under 100% of the poverty level
  • Those who have received a hardship waiver
  • Those who were not covered for a period of less than three months during the year

NOTICE: This document is for general information purposes only. While we have attempted to provide current and accurate information, this information is provided “as is” and MMBB makes no representation or warranties regarding its accuracy or completeness. The information provided should not be construed as legal or tax advice or as a recommendation of any kind.

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