Major Unions Join the Chorus Seeking Changes to the Affordable Care Act

By Edwin S. Hopson

According to the Wall Street Journal, three major unions, Teamsters, UFCW and UNITE-HERE, have written a letter to Senate Majority, Leader Harry Reid, and Democratic Leader in the House, Nancy Pelosi, complaining:

“Since the ACA was enacted, we have been bringing our deep concerns to the Administration, seeking reasonable regulatory interpretations to the statute that would help prevent the destruction of non-profit health plans. As you both know first-hand, our persuasive arguments have been disregarded and met with a stone wall by the White House and the pertinent agencies. This is especially stinging because other stakeholders have repeatedly received successful interpretations for their respective grievances. Most disconcerting of course is last week’s huge accommodation for the employer community—extending the statutorily mandated ‘December 31, 2013’ deadline for the employer mandate and penalties.”

More, specifically, they complain that the ACA creates an incentive for employers to keep employee work hours below 30 per week in order to avoid any obligation to provide health care coverage.  Next, they point out that under Taft-Hartley plans such as many of their members have, they will not be eligible for all the benefits that other employees will receive who are covered under lesser plans.  Finally, employees covered by so-called Cadillac plans will be taxed to pay for subsidies other employees receive, according to the letter.

Whether this approach will produce results remains to be seen.

See: http://blogs.wsj.com/corporate-intelligence/2013/07/12/union-letter-obamacare-will-destroy-the-very-health-and-wellbeing-of-workers/

Employers Get Ready! NEW Notice Requirement under the Affordable Care Act

By Sherry P. Porter

Overview of the New Notice Requirement

Most employers will have a new notification requirement beginning October 1, 2013.  Under the Patient Protection and Affordable Care Act (ACA), new health insurance options will be available under the health care exchanges or marketplaces as of January 1, 2014.  Employers are required to provide notices to their employees about these new health insurance options by October 1, 2013 which corresponds with the date open enrollment begins on the marketplaces for health insurance coverage beginning January 1, 2014.

The ACA added a new provision under the Fair Labor Standards Act (FLSA) that requires an employer to notify all of its employees about the new health insurance options available through the marketplace.  This requirement applies to all employers who are subject to the FLSA.  This generally applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce with at least $500,000 in annual dollar volume of business or if the employer is one of a list of certain employers such as hospitals, schools, government agencies and others.  To see if you are subject to the FLSA, you can visit their internet compliance tool:  http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp

Assuming you are subject to the FLSA, you will need to comply with the notification requirement by October 1, 2013.  All full time and part time employees must receive the notice.  Employers must provide the notice even if they do not provide health insurance for their employees.  Employers do not have to provide the notice to dependents, former employees or other individuals who may be covered under their health plan, such as retirees.  The marketplaces open on October 1, 2013 which is driving this deadline.  Under the ACA, nearly all Americans will be required to have health insurance coverage by January 1, 2014 or risk a penalty assessment.

Notice Contents

The notices must contain certain information about the marketplace.  The notice must (1) inform the employee of the existence of the marketplace and include a description of the services provided and contact information, (2) inform the employee that if the employer plan does not provide a minimum value, then the employee may be eligible for premium tax credits under the ACA if s/he purchases insurance through the marketplace, and (3) inform the employee that if s/he purchases insurance through the marketplace, s/he may lose any employer contribution toward such coverage and that all or a part of the employer’s contribution may be excluded from their income.

The Department of Labor recently issued two model notices that an employer may use to meet this notification requirement – one for employers that offer a  health plan for its employees and one for employers that do not offer a health plan for its employees.  However, these model notices are not the type that an employer can just print out and send to its employees.  The forms will require the employer to have a real handle on its health insurance plan and how it meshes with the requirements under the ACA in order to fulfill the notification requirement.  Employers may use the model notices or create their own notices so long as they contain the required information.

Giving Notice

If an employer does not sponsor a health plan for its employees, there is a sample form that may be used.  Generally, if the employer is not a “large” employer (it has less than 50 full time equivalent employees), then it is not subject to potential ACA penalties for not offering health insurance coverage to its full time employees.  Many small employers do not offer health insurance for a myriad of reasons.  The employer that does not provide health insurance to its employees will need to provide the required information along with its contact information and distribute it to all employees by October 1.  This information will be needed by employees who seek to obtain insurance through the marketplace.

For employers that sponsor health plans for employees, the form is a little more complicated.  The basic information is the same but the employer must add information about the health plan it sponsors.  Employers will have to provide information about its health plan and whether or not the coverage meets the affordability and minimum value standards mandated by the ACA.  Employers must be analyzing this now to be able to complete the required notification.  If an employer has not determined the status of its plan under the ACA and how it will comply or not comply, then it cannot properly complete the form. 

The model notices direct employees to a website (www.healthcare.gov) for more information about the marketplace. While this should relieve the employer from explaining the notice to employees, employers are still going to be inundated with questions as the individual insurance mandate and marketplaces go into effect.  You will need to be ready to handle these questions.  Many employers will take advantage of this opportunity to educate their employees about the upcoming mandates under the ACA, the impact on employer provided health insurance and understanding the how the ACA impacts the employer as well as the employee. 

For existing employees, the notice must be provided by October 1, 2013. Beginning October 1, 2013, the notice must be given to each new hire.  For 2014, new hires must receive the notice within 14 days of their start date.  The notice must be provided free of charge, can be sent by first class mail and must be provided in writing that can be understood by the average employee.  An employer may also send the notice electronically so long as all of the Department of Labor’s electronic disclosure rules are met.

 Revised COBRA Notice

For many years, employers have been providing COBRA notices to employees and dependents who experience a qualifying event under COBRA to allow them to continue health care coverage at their own expense.  Now, all COBRA notices will need to be revised to include information about the marketplace.  The DOL has updated its existing COBRA notice on its website.  From October 1, 2013, all COBRA notices must contain the new information about the marketplace.  The new language may be confusing to employees so employers are going to have to be ready for questions.

 What Should Employers Do Now?

All employers should be developing their own communication plan about the new health insurance requirements to avoid confusion by employees and to keep employees informed.  The notices provided by the DOL contain terms that are going to be confusing to employees and will likely prompt even more questions.  Many employers are taking this opportunity to educate their employees about the ACA and the impact it has on employer provided health insurance.  Employers will need to look at their own work force to determine what is best for all involved.  Employers may wish to modify the DOL’s forms to best suit their work force and may very well end up with different forms for different groups of employees.  An employer can only comply with the notice requirements if it has a good understanding of its health plan’s compliance under the ACA – so don’t delay!

“Affordable Care Act” Update

By Mark C. Blackwell

Group health plans that are in place as of March 23, 2010 are “grandfathered” and many of the new health plan mandates applicable to new plans either do not apply, or do not apply until future years.  However, a number of new rules apply effective the first plan year that starts after Sept. 23, 2010, even if the group plan is grandfathered.  The primary rules that apply to grandfathered plans on January 1, 2011 (for calendar year plans) include:

 Extension of Dependent Coverage.  If the plan covers dependents, coverage for adult children is extended until age 26 (i.e., through age 25), unless the child is eligible to enroll in another eligible employer-sponsored health plan (until 2014).

 Prohibition on Lifetime Limits.  Applies to all group health plans.  An individual whose coverage ended due to a lifetime limit is eligible to reenroll when the new rule takes effect.

 Prohibition on Annual Limits.  Applies to all group health plans, subject to (i) a transition rule and (ii) possible “waiver”  where the transitional rule “would result in a significant decrease in access to benefits” or “would significantly increase premiums.”  The “transition rule” permits an annual limit no lower than $750,000 for 2011 plan year; $1.25 million for 2012 plan year; and $2 million for 2013 plan year.  The “waiver” is available by application to HHS and must be made no later than 30 days before the start of the plan year.  It is primarily available to so-called “limited benefit” plans or “mini med” plans that are made available to part-time employees, seasonal workers, etc.

 Pre-existing Condition Exclusion (under age 19).  Applies to enrollees under age 19; applies to all covered individuals effective 2014.

 Prohibition on Rescissions.  Coverage cannot be rescinded after enrollment, except for fraud or intentional misrepresentation of a material fact.

New Health Care Bill Includes Whistleblower Protection

By Kim Koratsky

Ongoing review of the Patient Protection and Affordable Care Act (“PPACA”) is much like a long hike through an unfamiliar forest; each time we go around a turn, we find something that we have not seen before.  Included in its many provisions, the PPACA contains whistleblower protection for persons who report abuses or fraudulent conduct in the delivery of health care.

The PPACA whistleblower provisions amend the Fair Labor Standards Act (FLSA).  The amendment provides protection to employees who report fraud waste and other violations under Title I of the PPACA, which applies to “conventional” medical care settings (i.e., hospitals, clinics and physician offices), and other violations in individual and group health plans covered by Title I of the PPACA.   The amendment does not, apparently, extend to violations of Titles II through X of the PPACA.  Thus, unprotected employees would include those working in administration of Medicare and Children’s Health Insurance Program (CHIP) expansion, Medicaid, Medicare and CHIP program integrity, nursing home care for the elderly, innovative treatment and therapies, payments and reimbursements, prescription drugs and preventative care, house-call visits, expansion and increasing training for the health care workforce, and grants for expansion of health care to under-served populations.  Protected activity under the PPACA provisions includes situations where an employee:

New Healthcare Legislation Contains Some Provisions Having Immediate Effect

By Edwin S. Hopson

The Patient Protection and Affordable Care Act just passed by Congress and signed into law by President Obama has changes that take effect in the near term (typically 6 months after passage).  These include:

–small business tax credits of up to 35% of premiums;

–the elimination of co-pays for preventive services for non-grandfathered plans effective January 1, 2011;

–the prohibition of  medical plans dropping persons when they become ill;

–prevention of  medical plans denying coverage to children with pre-existing conditions;

— restriction of  NEW plans putting restrictions on coverage (in 2014 all such restrictions would be prohibited for all plans);

–the elimination of  lifetime caps on essential benefits coverage for all plans;

–as to NEW plans, protection of patients’ choice of doctors by allowing plan members to pick any participating primary care provider, prohibiting insurers from requiring prior authorization before a woman sees an ob-gyn, and ensuring access to emergency care;

–requirement that insurers permit children to stay on family policies until age 26 in most circumstances;

–prohibition for NEW fully insured group health plans from establishing any eligibility rules for health care coverage that have the effect of discriminating in favor of higher wage employees; and

–establishment of standards for insurance overhead and requires public disclosure to ensure that enrollees get value for their premium dollars, including a requirement that plans in the individual and small group markets spend 80% of premium dollars (and 85% for plans in large group markets) on clinical services and quality activities, effective January 1, 2011 and applicable to all plans, including grandfathered plans, with the exception of self-insured plans.

There are other provisions not directly impacting employers that also take effect in the near term.  See http://dpc.senate.gov/healthreformbill/healthbill64.pdf.

Health Care Reform Law Contains Provision Allowing Time To Express Breast Milk

By Mitzi D. Wyrick

The recently enacted Patient Protection and Affordable Care Act, better known as the federal Health Care Reform law, contains a surprise for many employers.  Employers must provide “a place, other than a bathroom, that is shielded from view and free from intrusion from co-workers and the public, which may be used by an employee to express breast milk.” Only companies with less than 50 employees can claim it’s an undue hardship. In addition, in an amendment to the Fair Labor Standards Act, employers will have to provide nursing mothers with “reasonable break time” (which has not yet been defined) to express breast milk for up to one year after the birth of their child.  Many states (Tennessee for example) also have laws that entitle nursing mothers to time to express breast milk.