Archive for April, 2011

April 2011: Health Reform Update

Posted on: April 25th, 2011 by Benefit Services Group

Health Reform Update: Free Choice Voucher Provision Repealed

The employee free choice voucher provision that was found in Section 10108 of the Patient Protection and Affordable Care Act was repealed in the “Department of Defense and Full-Year Continuing Appropriations Act, 2011,” HR 1473, which was signed by President Obama on April 15, 2011. This represents a major change in the employer provisions of health care reform.

The provision would have taken effect in 2014. “Offering employers” would have been required to provide certain “qualified employees” a voucher to be used in state exchanges when purchasing health coverage. For definitions of these terms, please see below. The amount of the voucher would have been determined by whichever health plan offered by the employer resulted in the largest employer premium contribution. If the exchange coverage cost less than the voucher amount provided by the employer, the employee would have kept the excess contribution. Any excess amounts would have been tax-deductible for employers but taxable to the employee.

Employers would not have been penalized under the employer mandate (effective in 2014 and also known as the pay or play penalty) for any employee who was provided with a voucher. It is important to note that the employer mandate, requiring employers to pay a penalty for not offering coverage or offering coverage deemed to be unaffordable, was not repealed as part of HR 1473.

Definitions:

Offering employer is any employer that offers minimum essential coverage to its employees through an “eligible employer-sponsored plan,” including grandfathered plans, and pays any portion of the costs of the plan.

Qualified employee is an employee who does not participate in a health plan offered by the offering employer, whose household income for the tax year is not greater than 400 percent of the poverty line for a family of the size involved, and whose required contribution for minimum essential coverage through an eligible employer-sponsored plan:

1. Exceeds 8 percent (indexed) of the employee’s household income for the tax year ending within the plan year; and

2. Does not exceed 9.8 percent (indexed) of the employee’s household income for the tax year.

Additional Resources: 

HR 1473

White House Signed Legislation

April 18, 2011: Compliance Update

Posted on: April 18th, 2011 by Benefit Services Group

DOL Releases Another Set of PPACA FAQs

In what has become a regular occurrence, the Department of Labor (DOL) has released yet another set of Frequently Asked Questions (FAQs) relating to PPACA. This set of questions makes up Part VI, and provides even further additional insight into the Departments of Health and Human Services, Labor, and the Treasury, with the goal of helping people to understand PPACA.

With a total of six questions, Part VI of the FAQs is relatively short, but includes several important clarifications. For example, Q/A-1 provides five examples of what would constitute a “bona fide employment-based reason” for employees enrolled in a benefit package that is being eliminated to be transferred into another benefit package. This clarification is important for employers who wish to retain grandfathered status but are eliminating a benefit package and are concerned about the anti-abuse rule contained in the law. Q/A-4 and Q/A-5 are similar to each other, but make the distinction concerning when a plan will actually lose its grandfathered status if an amendment is effective at the beginning or in the middle of the plan year. Finally, there are other FAQs concerning the movement of prescription drugs from one tier to another, the interaction of value-based design and the no cost-sharing preventive care services requirement, and plans that use formulas for determining an employer’s contribution rate.

Click here to view the FAQs

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April 5, 2011: Compliance Update

Posted on: April 5th, 2011 by Benefit Services Group

EEOC Issues Regulations Implementing ADA Amendments Act

The Equal Employment Opportunity Commission (EEOC) issued finalized regulations implementing the changes made by the ADA Amendments Act (ADAAA), which went into effect on Jan. 1, 2009. The regulations are intended to simplify the determination of whether an individual has a “disability” for purposes of protection under the ADA. The regulations keep the ADA’s definition of the term “disability” as a physical or mental impairment that substantially limits one or more major life activities, a record or past history of such an impairment, or being regarded as having a disability.

One of the most notable changes is that the final regulations no longer state that certain impairments will consistently be considered disabilities. However, the regulations do still list a number of impairments that usually will be considered disabilities as defined by the ADA, including epilepsy, diabetes, cancer, HIV infection and bipolar disorder.

Importantly, the regulations also adopt “rules of construction” to use when determining whether an individual has a disability. For example, according to the EEOC, the principles provide that an impairment need not prevent or severely or significantly restrict performance of a major life activity to be considered a disability. Additionally, whether an impairment is a disability should be construed broadly, to the maximum extent allowable under the law. The principles also provide that, with one exception (ordinary eyeglasses or contact lenses), “mitigating measures,” such as medication and assistive devices like hearing aids, must not be considered when determining whether someone has a disability. Additionally, impairments that are episodic (such as epilepsy) or in remission (such as cancer) are disabilities if they would be substantially limiting when active.

Among other changes, the regulations also clarify that the term “major life activities” includes “major bodily functions,” such as functions of the immune system, normal cell growth and brain, neurological and endocrine functions. The regulations also make it easier for individuals to establish coverage under the “regarded as” part of the definition of “disability.”

These final regulations become effective on May 24, 2011.

EEOC Final ADAAA Regulations

EEOC Fact Sheet on Final Regulations

EEOC Press Release

EEOC FAQ

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