HR That Works Blog

The DOL has released Interim Final Rule on Coverage of Preventive Services 

Regulation: http://www.ofr.gov/OFRUpload/OFRData/2010-17242_PI.pdf
Fact Sheet: http://www.healthcare.gov/law/about/provisions/services/background.html
Recommended Preventive Services: http://www.healthcare.gov/center/regulations/prevention/recommendations.html

The health care reform law, now generally referred to as the Affordable Care Act, established a program to provide claims reimbursement to group health plans providing coverage to early retirees. If your group health plan does not offer coverage to retirees, the program does not apply to you.

The Early Retiree Reinsurance Program provides $5 billion in temporary funding for the Secretary of Health and Human Services (HHS) to reimburse group health plans for claims paid to provide benefits to early retirees, their spouses or surviving spouses, and dependents. Generally, group health plans are eligible for an 80% reimbursement of claims paid between $15,000 and $90,000. The program began on June 1, 2010, and only claims paid for medical expenses incurred after June 1, 2010 will qualify for the reimbursement. The program is scheduled to expire in 2014, once the health benefit exchanges are open for business.

To file a request for reimbursement, employers and group health plans must submit an application for reimbursement to HHS. Over the weekend, the Secretary of HHS released her first “draft” of the Early Retiree Reinsurance Program application. You can get a copy of it here:

www.hhs.gov/ociio/Documents/application.pdf

HHS expects to make a “final” application available later this month after it has the administrative infrastructure in place to handle the claims submission process. 

Over the weekend, HHS also released a fact sheet and other information about the program on the HHS website. The fact sheet can be found among the Early Retiree Reinsurance Program details here:

www.hhs.gov/ociio/regulations/#early_retiree

We’ll be sure to let you know as soon as the “final” program application form is available. Please contact your LMV attorney if you have questions about the Early Retiree Reinsurance Program or any other facet of the Affordable Care Act at (205) 326.3002.

Article courtesy of Worklaw Network firm Lehr, Middlebrooks & Vreeland, P.C. (www.lehrmiddlebrooks.com).

Here are the rules for employers in black and white, excerpted from the Act.

Sec. 311: Health Coverage Participation Requirements

An employer meets the requirements of this section if such employer does all of the following:

• Offer Of Coverage—The employer offers each employee individual and family coverage under a qualified health benefits plan (or under a current employment-based health plan (within the meaning of section 102(b))) in accordance with section 312.
  
• Contribution Towards Coverage—If an employee accepts such offer of coverage, the employer makes timely contributions towards such coverage in accordance with section 312.
  
• Contribution In Lieu Of Coverage—Beginning with Y2, if an employee declines such offer but otherwise obtains coverage in an Exchange participating health benefits plan (other than by reason of being covered by family coverage as a spouse or dependent of the primary insured), the employer shall make a timely contribution to the Health Insurance Exchange with respect to each such employee in accordance with section 313.
  

Sec. 312: Employer Responsibility to Contribute Towards Employee and Dependent Coverage

• In General—An employer meets the requirements of this section with respect to an employee if the following requirements are met:
  
  • Offering Of Coverage—The employer offers the coverage described in section 311 either through an Exchange-participating health benefits plan or other than through such a plan.
    
  • Employer Required Contribution—The employer timely pays to the issuer of such coverage an amount not less than the employer required contribution specified in subsection (b) for such coverage.
    
  • Provision Of Information—The employer provides the Health Choices Commissioner, the Secretary of Labor, the Secretary of Health and Human Services, and the Secretary of the Treasury, as applicable, with such information as the Commissioner may require to ascertain compliance with the requirements of this section.
    
  • Autoenrollment Of Employees—The employer provides for autoenrollment of the employee in accordance with subsection (c).
    

     

• Reduction Of Employee Premiums Through Minimum Employer Contribution—
  

1. Full-Time Employees—The minimum employer contribution described in this subsection for coverage of a full-time employee (and, if any, the employee’s spouse and qualifying children (as defined in section 152(c) of the Internal Revenue Code of 1986) under a qualified health benefits plan (or current employment-based health plan) is equal to:
   
   1. in case of individual coverage, not less than 72.5 percent of the applicable premium (as defined in section 4980B(f)(4) of such Code, subject to paragraph (2)) of the lowest cost plan offered by the employer that is a qualified health benefits plan (or is such current employment-based health plan); and
      
   2. in the case of family coverage which includes coverage of such spouse and children, not less 65 percent of such applicable premium of such lowest cost plan.
      
2. Applicable Premium For Exchange Coverage.—In this subtitle, the amount of the applicable premium of the lowest cost plan with respect to coverage of an employee under an Exchange-participating health benefits plan is the reference premium amount under section 243(c) for individual coverage (or, if elected, family coverage) for the premium rating area in which the individual or family resides.
   
3. Minimum Employer Contribution For Employees Other Than Full-Time Employees.—In the case of coverage for an employee who is not a full-time employee, the amount of the minimum employer contribution under this subsection shall be a proportion (as determined in accordance with rules of the Health Choices Commissioner, the Secretary of Labor, the Secretary of Health and Human Services, and the Secretary of the Treasury, as applicable) of the minimum employer contribution under this subsection with respect to a full-time employee that reflects the proportion of:
   
   1. the average weekly hours of employment of the employee by the employer, to
      
   2. the minimum weekly hours specified by the Commissioner for an employee to be a full-time employee.
      
4. Salary Reductions Not Treated As Employer Contributions—For purposes of this section, any contribution on behalf of an employee with respect to which there is a corresponding reduction in the compensation of the employee shall not be treated as an amount paid by the employer.
   

    

• Automatic Enrollment For Employer Sponsored Health Benefits—
  

1. In General—The requirement of this subsection with respect to an employer and an employee is that the employer automatically enroll such employee into the employment-based health benefits plan for individual coverage under the plan option with the lowest applicable employee premium.
   
2. Opt-Out—In no case may an employer automatically enroll an employee in a plan under paragraph (1) if such employee makes an affirmative election to opt out of such plan or to elect coverage under an employment-based health benefits plan offered by such employer. An employer shall provide an employee with a 30-day period to make such an affirmative election before the employer may automatically enroll the employee in such a plan.
   
3. Notice Requirements—
   
   1. In General—Each employer described in paragraph (1) who automatically enrolls an employee into a plan as described in such paragraph shall provide the employees, within a reasonable period before the beginning of each plan year (or, in the case of new employees, within a reasonable period before the end of the enrollment period for such a new employee), written notice of the employees’ rights and obligations relating to the automatic enrollment requirement under such paragraph. Such notice must be comprehensive and understood by the average employee to whom the automatic enrollment requirement applies.
      
   2. Inclusion Of Specific Information—The written notice under subparagraph (A) must explain an employee’s right to opt out of being automatically enrolled in a plan and in the case that more than one level of benefits or employee premium level is offered by the employer involved, the notice must explain which level of benefits and employee premium level the employee will be automatically enrolled in the absence of an affirmative election by the employee.
      

Sec. 313. Employer Contributions In Lieu Of Coverage

• In General—A contribution is made in accordance with this section with respect to an employee if such contribution is equal to an amount equal to 8 percent of the average wages paid by the employer during the period of enrollment (determined by taking into account all employees of the employer and in such manner as the Commissioner provides, including rules providing for the appropriate aggregation of related employers). Any such contribution—
  

1. shall be paid to the Health Choices Commissioner for deposit into the Health Insurance Exchange Trust Fund, and
   
2. shall not be applied against the premium of the employee under the Exchange-participating health benefits plan in which the employee is enrolled.
   

    

• Special Rules For Small Employers—
  

1. In General—In the case of any employer who is a small employer for any calendar year, subsection (a) shall be applied by substituting the applicable percentage determined in accordance with the following table for “8 percent”:
   

1. Small Employer—For purposes of this subsection, the term “small employer” means any employer for any calendar year if the annual payroll of such employer for the preceding calendar year does not exceed $400,000.
   
2. Annual Payroll—For purposes of this paragraph, the term “annual payroll” means, with respect to any employer for any calendar year, the aggregate wages paid by the employer during such calendar year.
   
3. Aggregation Rules—Related employers and predecessors shall be treated as a single employer for purposes of this subsection.