3½ BIG Employee Benefit Changes in 2015 – Thanks to the Affordable Care Act
The Affordable Care Act (ACA) continues to inflict a great many changes on the employee benefit and health insurance landscape. With 2015 in full swing, we at benefEx are here to update you on some of the more notable changes that may very well impact your company. For your convenience, our “BIG 3 ½” are summarized below:
- ERISA Compliance Crackdown:
You’d be forgiven for believing that the ERISA acronym stands for “Every Ridiculous Idea Since Adam!” In actuality, the Employee Retirement Income Security Act – since its initial passage in 1974 – has provided an ever-expanding excuse for the federal government to micromanage the design, reporting, and communication employers must comply with for the benefit programs they choose to offer their employees. So what’s new for this year? In a word: ENFORCEMENT! Specifically, we’ve been seeing a steady increase in DOL / EBSA audits of employers (some with as few as 2 employees!) – and these start with the demand for a Summary Plan Description (i.e., “SPD”).
Many employers mistakenly believe SPD’s are required only for their pension or 401(k); however, the “letter of the law” calls for ALL health and welfare programs (such as Medical, Dental, Vision, and Disability plans) sponsored by ANY sized employer to distribute valid / current SPD’s to its plan participants, with fines for failure to comply are fixed at $110 per employee, per benefit, per day!
And don’t assume your insurance company provides these for you (they generally don’t), or that the health care reform mandated Summary of Benefits & Coverage (SBC) covers your assets (it generally won’t). The best part? Employees (those that might best be described as “disgruntled”) get a piece of the action (in the form of part or all of the fine described above) for turning you in to the Department of Labor (DOL) and their Employee Benefits Security Administration (EBSA). Are we having fun yet?
- HIPAA Compliance Crackdown:
Next up on the federal government’s compliance hit parade relates to an issue known as HIPAA, which passed in 1996 as the “Health Insurance Portability and Accountability Act.” HIPAA was innocuously positioned as a way to prevent health care fraud and abuse, to “simplify” administration, and to bring some much-needed reform to medical liability. Sounds like a great idea, doesn’t it? In practice, it’s a monstrosity of byzantine rules intended to protect patient privacy. So what’s considered private? Great question! How about the diagnostic code on an explanation of benefits (EOB) for your 18 year old high school senior who’s a dependent on your plan? Did you know that inadvertently releasing a covered participant’s address can be considered a HIPAA breach? Oh – and naturally – there’s a convenient fine structure for that, too!
HIPAA impacts “covered entities” (CE), and – if you’re reading this – chances are both YOU and your staff are subjected to HIPAA’s compliance requirements. Had we mentioned the convenient fine structure? Just wanted to be certain…
- Employer Mandate:
The Employer Mandate currently refers to employers with at least 50 full-time equivalent employees (currently defined as those who work 30 hours or more per week). We use the term “currently” (twice!) above because the ACA’s definitions and provisions have been moving targets since its initial passage –frequently changing with a single stroke of a teleprompter or a Department of Health and Human Services (HHS) administrative memorandum. There HAS been one constant target since its passage. Oh, that target would be YOU…
Still with us? Great. An employer now must offer coverage to full-time employees, too. So far, so good (see also: no penalties yet). BUT, if you’re not offering the right kind of coverage (guess who decides what’s considered the right kind of coverage?), with the right mix of covered services (guess who decides what’s considered the right mix of covered services is?), and – importantly – at a sufficiently affordable price to the employee (we’re piling on, but – for the sake of consistency – guess who decides what’s considered an affordable price?)…
It’s not quite as lyrical as Mick and the Stones might’ve preferred (see also: Ain’t I rough enough / tough enough / rich enough / in love enough?), though the ACA certainly creates no shortage of beasts and burden in its own inimitable way!
So why not just ignore the whole thing? You guessed it! There’s a conveniently designed schedule of penalties, this time ranging from $2,000 to $3,000 per employee per year. Maybe they won’t catch you. Maybe my hair will grow back, too.
Feeling completely and utterly confused? Well, you can either join the club – or contact us. At benefEx, our expertise in these areas means you don’t have to give up your day job and study employee benefit compliance. That said (and in the interest of full disclosure), neither we nor the Food and Drug Administration (FDA) are prepared to make ANY guarantees about your hair’s regrowth.
Oh and as for the .5 that we’re missing.
3½) The Entire ACA Mess May Collapse in June
Arguments are being heard right now (well, maybe not this very minute – but you know what we mean) before the Supreme Court of the United States (SCOTUS Docket No. 14-114; King v. Burwell) that may effectively doom this entire failed experiment in federal overreach. We’re not attorneys (so sue us!), though the ACA was designed to encourage States to establish their own exchanges. How? By providing premium subsidies (see also: dangling carrots) to residents of states that DID establish their own health care exchanges. The problem? Thirty four (thirty four!) states refused to create their own exchanges, and two additional states that DID create their own exchanges have seen those exchanges subsequently fail.
Our view is that the ACA’s language was NOT ambiguous on the matter of premium subsidies, and – when the nice folks with the lifetime tenure in black robes have heard the arguments and read the text – they’ll have no choice but to discontinue the disbursement of premium subsidies to residents of those 36 states whose residents are now going through the federal exchange for their coverage.
Who among us doesn’t fondly recall having congress admonished by its then Speaker that they’d need to pass the bill in order to find out what was in it? Well, it’s been passed, we’ve found out what’s in it. And those premium subsidies simply were NOT in it, no matter how much supporters of the ACA wish they had been. So – no premium subsidy, no employer mandate, no individual mandate for residents of 36 of these 50 United States… Dominoes, anyone?
Again, item 3½ is just our opinion (false modesty aside, it’s well informed and we’ve READ the plain text of the law), and – until and unless SCOTUS sees the error of this legislative folly – we’ve got no choice but to comply with the ACA as it’s currently being administered / interpreted. As for the FIRST 3 items on our list, well – as Casey Stengel used to say – “You could look it up!”
Please know that NONE of the information we provide is intended to frighten you; rather, it’s intended to make you more aware of the ongoing changes to the employee benefit and health insurance landscape for 2015. Again, contact benefEx at (973) 740-2500 for help or with any questions. We’ve got your back…