By Bonnie Bochniak
Vice President, Govt. Relations
MBPA/MFBA
April 29, 2014 – New legislation signed by President Obama eliminates the Affordable Care Act’s (ACA) annual limitation on deductibles for non-grandfathered plans in the small group market, effective retroactively to 2010. Those limits were set at $2,000 for self-only coverage and $4,000 for other than self-only coverage for plan years beginning in 2014; however, certain small group plans were allowed to exceed the limits if necessary to reach a given level of coverage, or metal tier.
The annual limitation on out-of-pocket expenses for non-grandfathered group plans was not eliminated and remains in effect. Annual out-of-pocket expenses (including coinsurance and copayments, but not premiums) for a plan year beginning in 2014 may not exceed $6,350 for self-only coverage or $12,700 for other than self-only coverage. For 2015, these limits increase to $6,600 and $13,200, respectively.
Note: Certain small businesses may be allowed to renew existing group coverage that does not comply with the annual limits on out-of-pocket expenses through policy years beginning on or before October 1, 2016. Not all states and insurers will permit coverage to renew. Businesses that are eligible to continue existing coverage will receive a notice from their insurance companies for each policy year.
Stay tuned to MBPA for up to date information on the ACA. As a helpful tool, you may download our app and receive an alert as soon as changes occur.
As always, please contact our government relations team for any questions at bbochniak@michbusiness.org or by phone 586-393-8800.
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April 29, 2014 – The Office of the National Coordinator for Health Information Technology (ONC) recognizes that conducting a risk assessment can be a challenging task. That’s why ONC, in collaboration with the HHS Office for Civil Rights (OCR) and the HHS Office of the General Counsel (OGC), developed a downloadable SRA Tool to help guide covered entities through the process.
This tool is not required by the HIPAA Security Rule, but is meant to assist providers and professionals as they perform a risk assessment.
The SRA Tool is a self-contained, operating system (OS) independent application that can be run on various environments including Windows OS’s for desktop and laptop computers and Apple’s iOS for iPad only. The iOS SRA Tool application for iPad, available at no cost, can be downloaded from Apple’s App StoreWeb Site Disclaimers.
The SRA Tool takes a covered entity through each HIPAA requirement by presenting a question about the organization’s activities. Its “yes” or “no” answer will show the covered entity if it needs to take corrective action for that particular item. There are a total of 156 questions.
Resources are included with each question to help the covered entity:
• Understand the context of the question
• Consider the potential impacts to its PHI if the requirement is not met
• See the actual safeguard language of the HIPAA Security Rule
The covered entity can document its answers, comments, and risk remediation plans directly into the SRA Tool. The tool serves as your local repository for the information and does not send your data anywhere else.
Completing a risk assessment requires a time investment. At any time during the risk assessment process, the covered entity can pause to view its current results.
The results are available in a color-coded graphic view (Windows version only) or in printable PDF and Excel formats.
For details on how to use the tool, download the SRA Tool User Guide
April 29, 2014 – Blue Cross Blue Shield of Michigan and Blue Care Network are moving forward with offering ACA-compliant plans in the small group market and will not be extending legacy plans.
Small Group Market
Throughout 2014, Blue Cross will continue to work with small groups to move them into ACA- compliant products on their renewal date. We will not offer small groups an option to retain their 2013 plans beyond their renewal date in 2014.
We are deferring our decision on extending the legacy plans for the 50-99 market for 2016 until later this year.
The decision to continue the transition to ACA-compliant plans for small groups was based on several factors:
1. The framework and timing of the extension would not allow all group customers to extend their plan options, which we feel would not be a fair approach to our customer base.
Roughly 50 percent of our small group customers already have transitioned into ACA compliant plans, and these customers wouldn’t have the option to return to their pre-ACA plans.
2. Keeping legacy plans as options would increase rates in a time where customers are more cost-conscious than ever.
As an example, one negative by-product would be additional rate increases on ACA and legacy plans of 3% to 5% above what the rate adjustments would otherwise be.
3. Continuing legacy plans adds additional complexity to our business.
Extending legacy plans would essentially create two small group markets (non-ACA products and ACA products) and would significantly compromise the stability of the risk pool.
Significant servicing complexity and cost would be added if we extended legacy plans.
4. Extending legacy plans isn’t an effective solution for our customers to manage their ongoing costs.
The ACA transition option does not allow any changes to benefit plans. This therefore greatly limits the flexibility for groups looking to modify benefits each year to manage rate increases.
5. With the new law just enacted that removes the $2,000 deductible limit, the small group product portfolio will now include higher deductible plans. This will alleviate one key concern of previous ACA limitations for many customers.
Groups with 50-99 Employees
Currently, the ACA defines a small group as having one to 50 full-time equivalent employees while in 2016, the definition changes to one to 100.
Blue Cross will continue to assess whether to allow the extension to employers with 50-99 employees in 2016. We anticipate making that announcement later this year.
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April 29, 2014 – Generally speaking, the employer-shared responsibility provisions under the Patient Protection and Affordable Care Act (“PPACA”) take effect on January 1, 2015. However, the recently released final regulations provide for much anticipated transition relief for group health plans maintained on a non-calendar year basis. Essentially the final regulations continue the transition relief that was set forth in the proposed regulations and allow for employers meeting strict criteria to avoid potential employer-shared responsibility penalties until the start of their plan year beginning in 2015, as opposed to having to comply on January 1, 2015.
Employers maintaining non-calendar year group health plans will be eligible for the non-calendar year plan transition relief if:
1. The Employer maintained the non-calendar year plan on December 27, 2012; and
2. Since December 27, 2012, the employer has not changed the plan year to begin on a later date.
If eligible for the transition relief, employers will not be subject to applicable employer-shared responsibility penalties until the first day of the plan year beginning after January 1, 2015 with respect to the following groups of full-time employees:
1. Employees who no later than the first day of the plan year beginning after January 1, 2015 are offered “affordable” and “minimum value” coverage (as those terms are defined pursuant to PPACA) in accordance with plan eligibility terms in effect on February 9, 2014 (the date of the final regulations) and would not have been eligible for any calendar year plan maintained by the employer (or member of the employer’s controlled group, if applicable) as of February 9, 2014; and
2. All other employees who are offered coverage no later than the first day of the plan year beginning after January 1, 2015 regardless of the eligibility terms of the plan on February 9, 2014, as long as the following three (3) conditions are met:
a. A “sufficient percentage” (see below) of employees were either offered or provided coverage under the non-calendar year plan prior to February 9, 2014;
b. The coverage offered as of the first day of the plan year after January 1, 2015 is “affordable” and provides “minimum value”; and
c. The employees would not have been eligible for coverage under any calendar year plan maintained by the employer (or member of the employer’s controlled group, if applicable) as of February 9, 2014.
For these purposes, the final regulations define “sufficient percentage” of employees as being:
1. As of any date during the 12 months ending on February 9, 2014, at least 25% of the employer’s total employees (full-time and part-time) or at least one-third of the employer’s full-time employees are covered under the non-calendar year plan; or
2. At least one-third of its total employees (full-time and part-time) or at least 50% of the employer’s full-time employees were offered coverage under the non-calendar year plan during the most recent open enrollment period ending before February 9, 2014.
Eligibility for this transition relief requires compliance with the complex rules set forth above. Therefore, it is important for employers who maintain a non-calendar year plan to work closely with their benefits consultants and legal advisors to determine whether they are eligible for this transition relief.
*This article is not intended to give legal advice. It is comprised of general information. Employers facing specific issues should seek the assistance of legal counsel.
Kristi R. Gauthier is a senior attorney in Clark Hill’s Birmingham office and concentrates her practice in Employee Benefits Law. Kristi has represented clients in a wide variety of employee benefits issues involving health and welfare benefits, as well as retirement plans. Kristi is admitted to practice in the State of Michigan, the U.S. District Court for the Eastern District of Michigan, and the U.S. Sixth Circuit Court of Appeals. She also is active in the legal community with memberships in the American Bar Association, the State Bar of Michigan, and the Oakland County Bar Association where she is a member of the Employee Benefits Committee. Kristi also serves as a member of the Clark Hill Diversity and Inclusion Committee. Kristi has lectured on various employee benefits issues, including ERISA compliance, healthcare reform, COBRA, section 125 plans, 403(b) plans and IRS plan correction programs. Kristi is also a co-author of the ABA publication ERISA Survey of Federal Circuits. Kristi was named a “Rising Star” by Michigan Super Lawyers in 2011.
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The Best and Brightest Sustainable Companies is searching for organizations that exhibit leadership and innovation in their green and sustainability approach. The program recognizes the best-in-class and companies from across all industries are encouraged to participate. Participating organizations will receive feedback and analysis on their sustainability strategy and resulting impact on their financial bottom line which improves the lives of their employees, the local community and global environments.
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This is the time of the year when most companies begin to plan their business, sales and marketing strategies for the coming year and beyond. It’s not uncommon for leadership to use the turn of the year to devise new service models, revise pricing plans, or launch fresh marketing schemes.
This work is generally done within the confines of the board room, with department leadership coming together to inform senior leadership about the state of the company and to brainstorm new ideas to move the company forward. Which leaves out a valuable — perhaps the most valuable — input: that of the market you’re looking to influence.
“What if we charged X for Y, but then included an up-charge for Z?”
“What if instead of being in the product business, we introduced a service-based model and monthly fee?”
“How can we convert this type of customer into the type of customer that actually makes us more money?”
While well-intentioned, this type of brainstorming begins and ends with the service or product provider’s interests in mind, and not the customer’s. As a result, what follows all too often is dismay and despair a year later (when it’s time to start the planning anew) in discovering the program didn’t go as planned. The up-charge never happened. The service model never connected. Our customer conversion plan actually repelled existing customers, rather than attracting new ones.
Now what?
Getting Into the Hearts and Minds of the Consumer
So how is a company supposed to know what the market actually wants, rather than simply guessing at what senior leadership hopes is the next big thing?
Answer: You ask them.
It sounds simple, intuitive and obvious, but very few companies take this seemingly natural first step before doing their year-end planning.
Perhaps they think it’s too time-intensive, and there’s no time to waste. (Funny, though, that — absent this approach — a whole year might go by before they understand whether their planning worked to begin with.)
Perhaps they think it will be too expensive. To which, a logical response might be, “How expensive is the trial-and-error approach?”
Perhaps others are afraid of what they might hear if they research the market’s drivers and de-motivators, or what the market really thinks about their product or service, or that the market prefers either the competition, nothing at all, or something no one has thought of yet.
No matter the inhibitions, it should be painfully clear that a company doing future forecasting and planning would want to know all of this stuff before they put their next plan into motion.
Taking some time to step back and respond to actionable intelligence actually (and naturally) saves time. Listening and responding directly to customer feedback intrinsically saves money. And, as for being afraid to hear what the market actually wants, wouldn’t you want to have that information before your competitor does?
But, of course, I’m open to other opinions. What do you think are some valid reasons for not working hard to understand your target market before planning your company’s next big thing?
Tom Nixon serves as Chief Marketing Alchemist for Alchemy, a Troy, Michigan-based brand strategy firm helping companies identify and maximize market engagement strategies. He can be reached at: tnixon@alchemygp.com.
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New legislation signed by President Obama eliminates the Affordable Care Act’s annual limitation on deductibles for non-grandfathered plans in the small group market, effective retroactively to 2010. Those limits were set at $2,000 for self-only coverage and $4,000 for other than self-only coverage for plan years beginning in 2014; however, certain small group plans were allowed to exceed the limits if necessary to reach a given level of coverage, or metal tier.
The annual limitation on out-of-pocket expenses for non-grandfathered group plans was not eliminated and remains in effect. Annual out-of-pocket expenses (including coinsurance and copayments, but not premiums) for a plan year beginning in 2014 may not exceed $6,350 for self-only coverage or $12,700 for other than self-only coverage. For 2015, these limits increase to $6,600 and $13,200, respectively.
• Note: Certain small businesses may be allowed to renew existing group coverage that does not comply with the annual limits on out-of-pocket expenses through policy years beginning on or before October 1, 2016. Not all states and insurers will permit coverage to renew. Businesses that are eligible to continue existing coverage will receive a notice from their insurance companies for each policy year.
The Healthy Michigan Plan, also referred to as “Medicaid Expansion” kicks off its open enrollment this April 1st, 2014, allowing those eligible to submit applications, as originally prescribed as part of the federal Affordable Care Act (ACA).
This past September 2013 Governor Snyder signed into law a bill creating the Healthy Michigan Plan, which had a start date of early spring 2014, expanding healthcare to an estimated 320,000 Michiganders, eventually providing care to as many as 470,000 residents that meet the criteria, which is highlighted below. The new plan is funded by the federal government through 2017 with the federal government’s share gradually declining to 90 percent, thus placing the remaining funding liability on the state to make up the difference after that point.
The State of Michigan’s Department of Community Health (DCH), who administers Medicaid, is advising individuals to visit their website(see link below) for more information on the new plan and that open enrollment through the Federal Marketplace for Healthcare Coverage is closing on March 31st, 2014. DCH states if individuals are uncertain if they are eligible for the Healthy Michigan Plan and have not yet enrolled for any healthcare coverage, to please apply through the Marketplace at Healthcare.gov before the March 31st, 2014 deadline.
Eligibility for the Healthy Michigan Plan is established through the Modified Adjusted Gross Income (MAGI) methodology, managed through the Department of Human Services. All criteria for the MAGI eligibility must be met to be qualified for the Healthy Michigan Plan.
The Healthy Michigan plan provides healthcare to those who:
• Are age 19-64 years
• Have income at or below 133% of the federal poverty level under the Modified Adjusted Gross Income methodology
• Do not qualify for or are not enrolled in Medicare
• Do not qualify for or are not enrolled in other Medicaid programs
• Are not pregnant at the time of application
• Are residents of the State of Michigan
Per the federal ACA requirement, individuals eligible for services under the Healthy Michigan Plan must have access to the following 10 Essential Health Benefits:
• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder treatment services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care
The Healthy Michigan Plan will cover other medically necessary services as appropriate.
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New legislation signed by President Obama eliminates the Affordable Care Act’s annual limitation on deductibles for non-grandfathered plans in the small group market, effective retroactively to 2010. Those limits were set at $2,000 for self-only coverage and $4,000 for other than self-only coverage for plan years beginning in 2014; however, certain small group plans were allowed to exceed the limits if necessary to reach a given level of coverage, or metal tier.
The annual limitation on out-of-pocket expenses for non-grandfathered group plans was not eliminated and remains in effect. Annual out-of-pocket expenses (including coinsurance and co-payments, but not premiums) for a plan year beginning in 2014 may not exceed $6,350 for self-only coverage or $12,700 for other than self-only coverage. For 2015, these limits increase to $6,600 and $13,200, respectively.
Note: Certain small businesses may be allowed to renew existing group coverage that does not comply with the annual limits on out-of-pocket expenses through policy years beginning on or before October 1, 2016. Not all states and insurers will permit coverage to renew. Businesses that are eligible to continue existing coverage will receive a notice from their insurance companies for each policy year.
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