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Roadblocks to Reform: The Influence of HIPAA and HITECH on the Affordable Care Act

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By Craig B. Garner
Adjunct Professor of Law
Pepperdine University School of Law

 

April 2013 – When it comes to health care, our nation has reached a crossroads. President Obama’s fledgling Affordable Care Act is a multifaceted, aggressive program designed to overhaul the delivery of health care by effectively restructuring its foundations from the inside out.  In doing so, it seeks to reduce the number of uninsured patients who have for so long been a burden to a struggling health care system that must provide medical care as a service while also turning a profit as a business. But such a far-reaching plan has little chance of success if it is forced to evolve while fettered with the restrictions placed upon providers by certain grandfathered programs, most notably the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health Act (HITECH). As a result, we as a nation must now consider whether the ACA’s fundamental mission or patient privacy should rule the day.

 

Entering its fourth year, the ACA has sharply divided the nation. Detractors paint the program as a misguided crusade of sorts, while supporters welcome what they consider a long overdue attempt to provide care to the millions of uninsured Americans that have for decades taxed the country’s emergency departments and strained such government programs as Medicare and Medicaid. The combination of escalating health care costs and the continuous burden placed upon the system by forcing hospitals to swallow the price tag for treating America’s uninsured have in a sense given reform the justification to wage war on the cost based health care plans of yesterday, in favor of a more sweeping plan that bases reimbursement on performance and seeks to provide coverage for all. Enacting such a dramatic long-term plan at a time when America’s health care system finds itself in such a precarious state has effectively elevated the subject to a matter of national security and, as a result, any meaningful response to address this crisis must comport with the actions of a nation in times of war.

As in any war, tactical decisions must be made about where and when to strike, and certain basic individual liberties may come into question as focus shifts to the priorities of the country as a whole. History provides plenty of examples from which society can gauge the purported need to temporarily rescind fundamental rights as a means to protect the sovereign nation. Ocean vessels were outright seized during the Civil War, Cuban ports were obstructed during the Spanish-American War, American citizens of Japanese ancestry were subject to detention and relocation during the Second World War, and more recently, the passage of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the “Patriot Act”) issued what some consider to be questionable changes to the Constitution, sacrificing individual privacy in the name of public safety. While the casualties from reform’s war on behalf of health care bear no resemblance to recent conventional campaigns, it is not too soon for the United States to take drastic measures as a means to resolve the conflicts found at the heart of her slowly evolving new health care program.

 

When considered from this vantage point, the fundamental premise entrenched within HIPAA and HITECH represents an overwhelming restriction of the ability of health care reform to succeed, as the combined programs prevent the ACA from developing into maturity. Although HIPAA’s early provisions in many ways mirror the spirit of the ACA by protecting health insurance coverage for workers who lose their jobs, its evolution and partnership with HITECH have established national standards for the delivery and sharing of patient health information, the violations of which often lead to Draconian stipulations. The result has been a massive, often crippling price tag for providers, who must adopt new systems and work practices in order to comply or risk incurring civil money penalties ranging from hundreds to millions of dollars.

 

The most recent HIPAA and HITECH privacy regulations released in January 2013 and affecting almost 700,000 health care entities weigh in at a modest 138 pages. And yet, the costs involved are substantial, and whether or not justification exists must be viewed in the context of a nation struggling to save an industry. Breach notifications may run as much as $14.5 million (in 2011), not including an estimated initial expense of $3.9 million to set up toll-free notification lines. This is but a fraction of the estimated cost to business associates, which could be as high as $150 million once security rule compliance documentation and business associate addendums are included. To notify patients of privacy practices, providers, health insurers and third party administrators may be forced to spend as much as $56 million.

 

While the above numbers estimate the price tag for the implementation of these new regulations, the burden on industry participants is beyond calculation. The law requires nearly every health care related electronic device to employ encryption algorithms, from a home facsimile or copy machine to all institutional servers. Laptops and other portable devices must default to unreadable ciphertext, a protocol far beyond the ordinary login password, for all intents and purposes marking the end to casual virtual communication. This is compounded by the cost each hospital must pay out of pocket to implement and transition to a new electronic system capable of meeting these new demands, while sequestration compromises the return of these funds.

 

Separate from the new privacy regulations are the Medicare and Medicaid Programs Electronic Health Record Incentives, stage two of three. The 196-page final rule specifies hospital stage two criteria to qualify for electronic health record incentive payments. Physicians have another set of regulations with which to comply before receiving incentive payments from the Federal Government and, while incentive payments can be as much as $44,000, the future penalty for not participating in the Medicare incentive program can be as high as 3% of all Medicare payments, starting in 2017.

 

Whether necessary or not, there has been a fundamental shift in the overall expectation of privacy since September 11, 2001. Perhaps it is time for the Federal Government to create a similar paradigm in health care. While the need to protect patient privacy remains extremely important, the ways in which compliance is enforced do nothing short of crippling the power of providers as they focus on their primary goals of ministering to today’s patients while keeping their doors open to serve the patients of tomorrow. In the modern age of reform, the provision of medical care must be administered with a view toward the future, lest the providers themselves become extinct. To successfully do so in the current health care climate calls for a sacrifice of equal measure.

 

Craig Garner is an attorney and health care consultant, specializing in modern American health care and the ways in which it should be managed in its current climate of reform.

Medicaid Expansion Looms Large in the Minds of State Legislators

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By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
Senior Lobbyist

 

March 2013 – The Patient Protection and Affordable Care Act (ACA) has been the elephant in the room, consuming all of the air, attention, and to some extent fear, amongst Michigan legislators for the last 12 months. Thousands of hours have been dedicated to reviewing, evaluating and determining how, or IF the state would implement the myriad of provisions included in the Act. The debate continues to rage within the halls of the Capitol as Michigan legislators contend with the latest controversial provision of the ACA: expanding Medicaid eligibility.

 

Although most of the ACA was upheld by the Supreme Court last June, expanding Medicaid eligibility from the current 40 percent of the federal poverty limit to 133 percent was a provision ruled unconstitutional by the Supreme Court. Despite that ruling, Governor Rick Snyder included the expansion in his Fiscal Year 2013-2014 budget presented in February, and ever since, Michigan legislators, particularly Republicans, have been left questioning how to tackle the political conundrum.  

 

The ACA requires increased “shared responsibility” payments to help provide health care costs to those who do not have health insurance. If adopted, the expansion could provide health insurance to an estimated 400,000 additional Michiganders. At the crux of the issue: dollars and cents. The federal government has promised to cover 100 percent of the expense of the expansion for the first three years (if passed, the change would become effective January 1, 2014). However, by 2020, Michigan would be responsible for funding 10 percent of the costs, which has some legislators cautioning warning ahead.  Despite the eventual expense to the state, Governor Snyder believes the state would accrue significant savings by reducing expenditures in state programs currently providing services to this uninsured segment of society. Half of those accrued early savings would be dedicated to a fund that would help defray the costs of the expansion in the later years. The Administration believes the fund would cover expenses until Fiscal Year 2034-35, thus defraying costs for 20 years. As such, the Governor purports the investment is well worth a little legislative indigestion over a politically unpopular federal mandate.

 

The legislature has yet to act on the expansion and with increasing opposition from conservative and Tea Party interests, the proposal pits the Republican administration against Republican majorities in both the State House and Senate. It’s a political hot potato that has many political observers, small businesses and health advocates anxiously awaiting a decision in the latest controversy surrounding the ACA.

On the Exchange or Off the Exchange, That is the Question

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By Bonnie Bochniak
Vice President, Government Relations
MBPA/MFBA

 

March 2013 – With the October 1, 2013 date of open enrollment approaching for individuals wanting to participate on the federal healthcare exchange, many people are feverishly scanning the draft enrollment process to get a feel for what lies ahead.

At first blush, the process for a family of three is a 15-page application. The outline of the online version has 21 steps, with some having additional questions. After submitting your application, the plan then is sent through three major federal agencies, including the IRS, who examines your paperwork, double checking your identity, income and citizenship. The analysis of your application is supposed to happen in real time, if you apply online.

The initial application process is step one, as this lets you and the federal government know if you qualify for any financial assistance.  Since the PPACA is means-tested, lower income individuals will qualify for the most financial support when paying premiums. If you or your spouse had a change in financial status that the federal government isn’t aware of, that might qualify you or disqualify you for financial assistance, additional paperwork would have to be submitted and additional questions answered.

After the financial portion is complete, then the individual, family or business, moves onto choosing which health plan suits them best. Choosing a health plan will require additional steps, and a general knowledge of insurance terminology. The federal government states that this process should take individuals on average 30-45 minutes to complete, with the ability to walk away from their computer to gather needed materials, and save their place on the program.

The unanswered question still remains, will individuals be able to navigate on the web portal themselves, or out of frustration will they opt out and go back to the private market. The general feedback is that this application and choosing one’s own healthcare will be more complex and take more time to fill out than the estimated 30-45 minute timeframe. This then beckons to question the necessity for the insurance agent’s role both on and off the exchange to help navigate individuals towards the right plans for them, their families and/or their business.

From what we have seen thus far, the role of the insurance agent will be needed now more than ever before, to help guide an individual, a family or a business both on and off the exchange. As we move closer to the January 1, 2014 deadline, more details will become available, and we will share those with you.  As always, please contact our government relations team at bbochniak@michbusiness.org or by phone at 586-393-8800.

MBPA Supports Federal Funding

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By Bonnie Bochniak
Vice President, Government Relations MBPA/MFBA

 

February 2013 – The Michigan Business and Professional Association is asking the support of both the State House and Senate in appropriating the $30 million in federal grant funding available to lay the groundwork for establishing a health insurance marketplace for our state-federal partnership plan. The Association sent this letter to all legislators, as we feel our state resources should not be utilized in order to lay the groundwork for the federal health care plan. If there is federal funding to help defer that cost, we support accepting it.

 

Letter:

 

The Michigan Business and Professional Association representing over 20,000 small businesses statewide, ask for your support in appropriating the $30 million in federal grant funding available to lay the groundwork for establishing a health insurance market place for our state-federal partnership plan.

 

Our association did not support the formation of PPACA, and lobbied strongly against it. Despite our actions and the final outcome, it is the law of the land. We are moving forward to help our members, the business community, prepare for their future and give them the tools they need.

 

We believe that Michigan should be granted as much decision making power allowable by the federal health care law, which would be to establish a state-based exchange here in Michigan. Although, that is not the path our state has chosen, we still need to appropriate the $30 million in grant funding that has recently become available to begin our operations as a state-federal partnership, to comply with federal law.

 

We all understand that the $30 million in federal grant monies in no way ties our state to any permanent health care decisions; it merely gives us much needed revenue to begin technical compliance, while saving our general fund dollars. We understand the political ramifications in supporting this grant, but ask you to look beyond that and do what is best for Michigan. The time to act is now. This is the last remaining option we have for Michigan to maintain some control over decisions made in regards to our health care. Please support and pass the supplemental, providing us with the $30 million in federal funding our state desperately needs.

 

As always, please contact our Government Relations team with any questions. By phone: 888-277-6464 or by email: bbochniak@michbusiness.org. We value your feedback

Per Person Fee in PPACA Regulations

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By Bonnie Bochniak
Vice President, Government Relations
MBPA/MFBA

January 2013 – Inside our nation’s new federal healthcare law, a $63-per-person annual fee will be charged to all health insurance plans beginning next year that will aid in financing the new law’s risk-adjustment mechanism.  The new law’s reinsurance provisions are an effort to lessen the cost of pre-existing conditions and the new community rating requirements that will impact all individual and small group health insurance markets in 2014. The question remains, who will be responsible for paying the fee?

The regulation states that all health insurance plans that cover up to 190 million Americans are subject to the fee.  So essentially, the fee will be assessed on all health plans, and it is possible that this cost might be passed onto the consumer.  The cost might be further passed onto each employee, in larger companies, as their liability will be much greater.

Revenue:
In 2014 the $63 per-person fee is estimated to bring in $12 billion dollars and decreasing each year, the fee will total $8 billion in 2015 and $5 billion in 2016. As the legislation reads today, the fee will decrease, and ultimately be phased out in 2017, unless extended by Congress.  Five billion dollars of the total collected amount will go towards offsetting the cost of early retirees on employer-sponsored insurance plans.

Where will this money go:
The revenue from the fee will be placed into a fund managed by the Health and Human Services Department (HHS).  It will be utilized to lessen the burden placed on the insurance companies from the initial unpredictable costs of covering uninsured citizens with medical conditions.  As under the law, by 2014, all insurers must accept all those that apply, regardless of their health and/or risk.

What’s next:
MBPA will keep you up to date as we receive more information on this regulation and many others that will impact your business and clients.  As always, please contact our government relations team for any questions.  By email at bbochniak@michbusiness.org or by phone: 586-393-8800.
 

SB 1359; Health Insurance Claims Tax Round 2?

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By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
Senior Lobbyist

December 2012 – After a long, expensive and exhausting election season, the legislature finally returns to Lansing for the final weeks of the 96th legislature. In what is expected to be an exceptionally busy and aggressive agenda, members of the Michigan State House and Senate are expected to tackle a number of significant public policy decisions before all bills introduced in the 2011-2012 legislative cycle “die” and must be re-introduced in 2013 for consideration.

Senate Bill 1359 remains among the myriad of bills awaiting potential deliberation. The content of the legislation may be familiar to some — the bill proposes to amend the ‘Health Insurance Claims Assessment Act’ which became law in 2011, but did not take effect until January of 2012. The current legislation assesses a 1.0% tax on the “paid claims” of insurance carriers, third party administrators and self-insured entities that pay health insurance claims on health services provided in Michigan to Michigan residents. The “claims tax” was introduced as a means of preserving Medicaid dollars. The tax was intended to raise roughly $400 million annually and would help Michigan leverage or “draw down” additional federal Medicaid matching dollars. Over the last 10 months, however, the tax has not been generating the amount of revenue the state needs to adequately meet expectations regarding Medicaid funding — hence, the introduction of SB 1359.

The bill would allow the Department of Treasury the authority to increase or decrease the rate of the tax to meet the “base need.” The base need in 2012 is $400 million as stated previously, but for 2013 and each year thereafter, the base need would be calculated by the immediately preceding year’s base need adjusted by the medical inflation rate. The bill effectively allows the department to raise the rate, as appropriate, if revenues are not meeting “need.” The original legislation also established a mechanism for a proportional credit against the carrier or third party administrator’s assessment (in the immediately preceding year) if the revenue collected exceeded $400 million. This provision is no longer included in SB 1359.  

The Michigan Business and Professional Association and the Michigan Food and Beverage Association have joined a coalition of business interests across the state to oppose SB 1359. The Associations will continue to apprise members of developments regarding this important piece of legislation.

 

Post Election Report

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By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
Senior Lobbyist

November 2012 – As the dust continues to settle after last week’s election, a clearer picture begins to unfold, as pundits, political insiders and average Michiganders continue to recover from an election cycle that included unprecedented levels of spending, a barrage of media and print activity, and a number of incumbent upsets in the State House.

As expected, Presidential turnout impacted races further down the ticket and as a result, a number of House GOP members will not be returning to Lansing in January.  What is interesting, however, is that the large turnout for the President’s party did not transfer into success for those supporting some of the ballot proposals, most notably Proposals 2 and 4.

The Presidential Election

Despite a limping economy, a significantly divisive health policy agenda, and unprecedented levels of national debt, President Barack Obama will be inaugurated the 44th President of the United States. President Obama easily won Michigan with a nine point spread over “native son” Mitt Romney.  His Michigan win was rather anti-climatic as the state was called surprisingly early after the polls closed.  

Michigan Supreme Court

No major surprises for the state’s highest court as incumbent Justices Stephen Markman and Brian Zahra will be donning their robes again next year. Perhaps the most intriguing nugget of news surrounding the race was the fact that Democratic U of M Law Professor and now Justice-elect, Bridget McCormack, actually received 6,200 more votes than incumbent Justice Markman.  Nonetheless, the Supreme Court remains under Republican control, 4-3.

Michigan House of Representatives

The State House races undisputedly provided some of the most stress-inducing and exciting moments of the night, as a strong Democratic turnout had Republicans worried well into the early hours of Wednesday morning. With a number of races neck and neck and a handful of GOP incumbents losing hotly contested races, at one point Democrats looked poised to potentially take back the House. Less than 5,000 votes prevented the Democrats from seizing control of the chamber.  Although the GOP ultimately maintained the majority, five incumbent Representatives lost their races. The GOP secured 59 seats with the Democrats now at 51.

Ballot Proposals

Much has been said and hundreds of millions of dollars have been spent on this year’s ballot questions.  The general theme sounded by Michigan voters was that the State’s Constitution is not something to be tampered with lightly.  Voters overwhelmingly rejected the five proposed Constitutional Amendments while also rejecting the enactment of Public Act 4 of 2011 – the Emergency Financial Manager Referendum.  Below are the results of the six ballot questions:

Proposal 1: Emergency Manager Referendum YES – 48% NO – 52%
Proposal 2: Collective Bargaining Amendment  YES – 42% NO – 58%
Proposal 3: Renewable Energy 25/25 Standard YES – 37% NO – 63%
Proposal 4: Home Health Care Unionization YES – 43% NO – 57%
Proposal 5: 2/3 Supermajority on Taxes YES – 31% NO – 69%
Proposal 6: Detroit Bridge Public Vote YES – 40% NO – 60%

Conclusions

While many conclusions will be drawn over the ensuing weeks, one underlying electoral truism held firm this election: Michigan voters have a long history of being unpredictable and producing wild swings, specifically in the Michigan House, at the ballot from cycle to cycle.  It was also clear the state’s voters are very protective of their constitution.  What final conclusion can be drawn from all of this?  The campaign for 2012 is officially closed and the campaign for 2014 has officially opened!  
 

The Impact of the Affordable Care Act on Workplace Wellness Programs

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By Evie Zois Sweeney
Muchmore Harrington Smalley & Associates
Senior Lobbyist

November 2012 – The Affordable Care Act (ACA) is a massive, complicated and what feels like all-encompassing piece of legislation that continues to confound most Americans. Academics, bureaucrats and small business owners all continue to analyze the implications of the bill while determining how best to adapt to the changes.  One central theme of the ACA that many small business owners are reviewing is the various provisions that encourage employers to develop preventive care and wellness programs for their employees.

Wellness programs may include gym memberships, smoking cessation programs, nutrition and diet counseling, diabetes prevention strategies and more. The initiatives are intended to encourage employees to adopt healthier lifestyle choices. Employers have a lot at stake; the Centers for Disease Control and Prevention have estimated that productivity losses related to personal and family health problems cost U.S. employers an estimated $1,685 per employee per year. It’s a staggering figure if considered cumulatively — $225.8 billion annually.

So, how does the ACA propose to help the plight of the small business owner — $200 million over the course of five years to start. The ACA includes a section that provides grants for small businesses that, as of enactment of the act, were not offering comprehensive workplace wellness programs. The ACA defines “eligible employer” as an employer with less than 100 employees who work 25 hours or more per week. The act also specifies that wellness programs should be grounded in evidence-based research and best practices and should include the following components:

A)    Health awareness initiatives, including health education, preventive screenings, and health risk assessments;

B)    Efforts to maximize employee engagement including mechanisms to encourage employee participation;

C)    Initiatives to change unhealthy behaviors and lifestyle choices; efforts could include counseling, online programs and self-help materials;

D)    Supportive environment efforts including workplace policies to encourage healthy lifestyles, healthy eating, increased physical activity and improved mental health.

 The ACA also increases the incentives that may be made available to wellness program participants. Currently, employers are allowed to provide a financial reward of up to 20 percent of the costs of coverage for employees who participate in wellness programs and satisfy a standard related to health status. After January 1, 2014, employers will be allowed to discount 30 percent of the cost of individual or family health care premiums. That amount could rise to as high as 50 percent if the Secretaries of Health and Human Services, Labor and Treasury approve of the change.

As with all things surrounding the ACA, remaining apprised of changes or the issuance of new policy guidelines is important. The scope of the act and the potential implications on your business warrants close monitoring.

Governor Snyder’s Plan to Modernize Michigan’s Health Insurance Market

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By Bonnie Bochniak
Vice President, Government Relations
MBPA/MFBA

November 2012 – The Michigan Business and Professional Association (MBPA,) along with the Michigan Food and Beverage Association (MFBA), want to keep you informed on all health care updates in our state.  We pride ourselves in communicating on a daily basis with legislators, legislative staff, department directors, and other key stakeholders.  One of our critical undertakings for the past few years has been the Federal Health Care Law, and getting to know this law inside and out, and getting to know how it will impact you.

Recently, there has been action set forth by Governor Snyder that would modernize Michigan’s health insurance market, keeping in check with the new federal health care law, which includes making Blue Cross Blue Shield of Michigan (BCBSM) a nonprofit mutual insurance company.  This proposal (Senate bills 1293, 1294), written into legislative form by Senator Joe Hune, was presented to the State Senate and just passed its chambers with approval in late October.  The Governor’s proposal now heads to the State House for further deliberation and possible action in its chambers before this year’s end.

This legislation takes the shape of the Governor’s proposal and will help to level the playing field, which would in turn encourage competition among insurers, promote efficiency and cost reduction, and offer affordable and accessible health care coverage.  Whether or not the health insurance exchange is run by Michigan or the Federal Government, each state must have a regulatory system that facilitates a competitive and efficient marketplace.

Highlights of this legislation (proposal) include:

-BCBSM would contribute approximately $1.5 billion over 18 years to form a nonprofit fund to improve the health of Michigan and improve access to health care (fund would be governed by stakeholders and experts).

-Blue Cross would have to pay state and local taxes (they currently do not).

-All health insurers would be regulated under the Michigan Insurance Code and be subjected to same rules and regulations (currently they are not).

-18 other states have already legislated Blues mutual restructuring.

-Governor Snyder will be conducting a review of this transition to ensure that the value of BCBSM’s contribution aligns with what should be contributed through its nonprofit mission.

The proposal will continue to undergo further examination by legislators and key stakeholders, with additional public hearings in the future for comment.  If you have any questions about this proposal and/or future hearing dates, please contact our legislative team by phone: (586) 393-8800 or by email at: BBochniak@michbusiness.org.

We will continue to keep you informed on this issue as it moves through the legislative process.
 

What’s Next? The Impact of the Supreme Court Decision on Employers

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By Larry Grudzien, J.D.

September 2012 – The following is a review of the recent Supreme Court Decision on Patient Protection and Affordable Care Act (the Act) and outlines what steps an employer must take in 2012 and 2013 to comply.

The Supreme Court Decision
On June 28, 2012, the Supreme Court, in a 5-4 decision, ruled that payments required of individuals who do not maintain minimum health coverage under the “individual mandate” was not a penalty, but was a tax and allowed under the Congress’s power to tax under Article 1 of the Constitution. By determining that the mandate was a tax, the Supreme Court found the mandate was constitutional, but rejected the government’s arguments that the individual mandate was allowed under Constitution’s Commerce Clause or the Necessary and Proper Clause.

Chief Justice Roberts indicated in the majority opinion that since the mandate requires individuals to purchase health insurance or make a shared responsibility payment, it does not regulate existing commercial activity, but instead complies individuals to become active in commerce by purchasing a product. He reasoned that Congress is not permitted to regulate such inactivity, but only commercial activity. If Congress could regulate inactivity, it would justify a mandatory purchase to solve any problem.

In finding that the Necessary and Proper Clause of the Constitution did not apply, Chief Justice Roberts argued that the law must be the exercise of authority under a granted power and there was no power granted here. Even if the individual mandate was necessary, it was not proper.

In another part of the decision, the Supreme Court held that the Act’s Medicaid eligibility expansion provisions were unconstitutional because the government cannot coerce states to expand Medicaid by threatening to withhold existing federal Medicaid funds. As a result of this decision, even non-participating states must still receive existing Medicaid funding. The Supreme Court also decided that the unconstitutional part of the Medicaid provisions could be severed and remedied, leaving the remainder of the statute fully operable.

The Next Steps Employers Must Take to Comply
To comply with the Act in 2012 and 2013, an employer must:

1)    Prepare to receive and properly distribute or apply any Medical Loss Ratio Rebate associated with 2011 insured health coverage.

2)    Determine whether it must comply with the new Form W-2’s reporting requirement for 2012, distributed in January 2013 and, if so, obtain health coverage information (This applies if the employer filed 250 or more Form W-2s for 2011).

3)    Finalize Summary of Benefits and Coverage material for inclusion in the 2013 Open Enrollment package for all enrollees.

4)    Complete updates to its Summary Plan Descriptions and plan documents to provide for 2011 and 2012 changes.

5)    Prepare for the inclusion of the $2,500 cap on salary deferral contributions in its health care flexible spending account for the 2013 plan year.

6)    Determine if it is subject to the “PCOR fees,” paid by July 31, 2013 for 2012.

7)    Notify its employees of the availability of health insurance exchanges by March 2013.

8)    Prepare for 0.9% Medicare payroll tax increase on high income individuals for the 2013 tax year.

Larry Grudzien is an attorney practicing exclusively in the field of employee benefits. He has experience in dealing with qualified plans, health and welfare, fringe benefits and executive compensation areas. He has more than 35 years of experience in employee benefit law and is an adjunct  faculty member of John Marshall Law School’s LL.M. program in employee benefits and at the Valparaiso University School of Law, where he teaches a number of courses.

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