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The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) allows qualified beneficiaries who lose health benefits due to a qualifying event to continue group health benefits. The COBRA payment process is subject to various rules in terms of grace periods, notification, premium payment methods, and treatment of insignificant shortfalls.

Grace Periods

The initial premium payment is due 45 days after the qualified beneficiary elects COBRA. Premium payments must be made on time; otherwise, a plan may terminate COBRA coverage. Generally, subsequent premium payments are due on the first day of the month. However, under the COBRA grace period rules, premiums will still be considered timely if made within 30 days after the due date. The statutory grace period is a minimum 30-day period, but plans may allow qualified beneficiaries a longer grace period.

A COBRA premium payment is made when it is sent to the plan. Thus, if the qualified beneficiary mails a check, then the payment is made on the date the check was mailed. The plan administrators should look at the postmark date on the envelope to determine whether the payment was made on time. Qualified beneficiaries may use certified mail as evidence that the payment was made on time.

The 30-day grace period applies to subsequent premium payments and not to the initial premium payment. After the initial payment is made, the first 30-day grace period runs from the payment due date and not from the last day of the 45-day initial payment period.

If a COBRA payment has not been paid on its due date and a follow-up billing statement is sent with a new due date, then the plan risks establishing a new 30-day grace period that would begin from the new due date.

Notification

The plan administrator must notify the qualified beneficiary of the COBRA premium payment obligations in terms of how much to pay and when payments are due; however, the plan does not have to renotify the qualified beneficiary to make timely payments. Even though plans are not required to send billing statements each month, many plans send reminder statements to the qualified beneficiaries.

While the only requirement for plan administrators is to send an election notice detailing the plan’s premium deadlines, there are three circumstances under which written notices about COBRA premiums are necessary. First, if the COBRA premium changes, the plan administrator must notify the qualified beneficiary of the change. Second, if the qualified beneficiary made an insignificant shortfall premium payment, the plan administrator must provide notice of the insignificant shortfall unless the plan administrator chooses to ignore it. Last, if a plan administrator terminates a qualified beneficiary’s COBRA coverage for nonpayment or late payment, the plan administrator must provide a termination notice to the qualified beneficiary.

The plan administrator is not required to inform the qualified beneficiary when the premium payment is late. Thus, if a plan administrator does not receive a premium payment by the end of the grace period, then COBRA coverage may be terminated. The plan administrator is not required to send a notice of termination in that case because the COBRA coverage was not in effect. On the other hand, if the qualified beneficiary makes the initial COBRA premium payment and coverage is lost for failure to pay within the 30-day grace period, then the plan administrator must provide a notice of termination due to early termination of COBRA coverage.

Originally published by www.ubabenefits.com

While the health care affordability crisis has become so significant, questions still linger—will private exchanges become a viable solution for employers and payers, and will they will continue to grow? Back in 2015, Accenture estimated that 40 million people would be enrolled in private exchange programs by 2018; the way we see this model’s growth today doesn’t speak to that. So, what is preventing them from taking off as they were initially predicted? We rounded up a few reasons why the private exchange model’s growth may be delayed, or coming to a halt.

They Are Not Easy to Deploy

There is a reason why customized benefits technology was the talk of the town over the last two years; it takes very little work up-front to customize your onboarding process. Alternatively, private exchange programs don’t hold the same reputation. The online platform selection, build, and test alone can get you three to six months into the weeds. Underwriting, which includes an analysis of the population’s demographics, family content, claims history, industry, and geographic location, will need to take place before obtaining plan pricing if you are a company of a certain size. Moreover, employee education can make up a significant time cost, as a lack of understanding and too many options can lead to an inevitable resistance to changing health plans. Using a broker, or an advisor, for this transition will prove a valuable asset should you choose to go this route.

A Lack of Education and a Relative Unfamiliarity Revolves Around Private Exchanges

Employers would rather spend their time running their businesses than understanding the distinctions between defined contribution and defined benefits models, let alone the true value proposition of private exchanges. With the ever-changing political landscape, employers are met with an additional challenge and are understandably concerned about the tax and legal implications of making these potential changes. They also worry that, because private exchanges are so new, they haven’t undergone proper testing to determine their ability to succeed, and early adoption of this model has yet to secure a favorable cost-benefit analysis that would encourage employers to convert to this new program.

They May Not Be Addressing All Key Employer and Payer Concerns

We see four key concerns stemming from employers and payers:

  • Maintaining competitive benefits: Exceptional benefits have become a popular way for employers to differentiate themselves in recruiting and retaining top talent. What’s the irony? More options to choose from across providers and plans means employees lose access to group rates and can ultimately pay more, making certain benefits less. As millennials make up more of today’s workforce and continue to redefine the value they put behind benefits, many employers fear they’ll lose their competitive advantage with private exchanges when looking to recruit and retain new team members.
  • Inexperienced private exchange administrators: Because many organizations have limited experience with private exchanges, they need an expert who can provide expertise and customer support for both them and their employees. Some administrators may not be up to snuff with what their employees need and expect.
  • Margin compression: In the eyes of informed payers, multi-carrier exchanges not only commoditize health coverage, but perpetuate a concern that they could lead to higher fees. Furthermore, payers may have to go as far as pitching in for an individual brokerage commission on what was formerly a group sale.
  • Disintermediation: Private exchanges essentially remove payer influence over employers. Bargaining power shifts from payers to employers and transfers a majority of the financial burden from these decisions back onto the payer.

It Potentially Serves as Only a Temporary Solution to Rising Health Care Costs

Although private exchanges help employers limit what they pay for health benefits, they have yet to be linked to controlling health care costs. Some experts argue that the increased bargaining power of employers forces insurers to be more competitive with their pricing, but there is a reduced incentive for employers to ask for those lower prices when providing multiple plans to payers. Instead, payers are left with the decision to educate themselves on the value of each plan. With premiums for family coverage continuing to rise year-over-year—faster than inflation, according to Forbes back in 2015—it seems private exchanges may only be a band-aid to an increasingly worrisome health care landscape.

Thus, at the end of it all, change is hard. Shifting payers’, employers’, and ultimately the market’s perspective on the projected long-term success of private exchanges will be difficult. But, if the market is essentially rejecting the model, shouldn’t we be paying attention?

By Paul Rooney
Originally Posted By www.ubabenefits.com

Our Firm is making a big push to provide compliance assessments for our clients and using them as a marketing tool with prospects. Since the U.S. Department of Labor (DOL) began its Health Benefits Security Project in October 2012, there has been increased scrutiny. While none of our clients have been audited yet, we expect it is only a matter of time and we want to make sure they are prepared.

We knew most fully-insured groups did not have a Summary Plan Description (SPD) for their health and welfare plans, but we have been surprised by some of the other things that were missing. Here are the top five compliance surprises we found.

  1. COBRA Initial Notice. The initial notice is a core piece of compliance with the Consolidated Omnibus Budget and Reconciliation Act (COBRA) and we have been very surprised by how many clients are not distributing this notice. Our clients using a third-party administrator (TPA), or self-administering COBRA, are doing a good job of sending out the required letters after qualifying events. However, we have found that many clients are not distributing the required COBRA initial notice to new enrollees. The DOL has recently updated the COBRA model notices with expiration dates of December 31, 2019. We are trying to get our clients to update their notices and, if they haven’t consistently distributed the initial notice to all participants, to send it out to everyone now and document how it was sent and to whom.
  2. Prescription Drug Plan Reporting to CMS. To comply with the Medicare Prescription Drug Improvement and Modernization Act, passed in 2003, employer groups offering prescription benefits to Medicare-eligible individuals need to take two actions each year. The first is an annual report on the Centers for Medicare & Medicaid Services (CMS) website regarding whether the prescription drug plan offered by the group is creditable or non-creditable. The second is distributing a notice annually to Medicare-eligible plan members prior to the October 15 beginning of Medicare open enrollment, disclosing whether the prescription coverage is creditable or non-creditable. We have found that the vast majority (but not 100 percent) of our clients are complying with the second requirement by annually distributing notices to employees. Many clients are not complying with the first requirement and do not go to the CMS website annually to update their information. The annual notice on the CMS website must be made within:
  • 60 days after the beginning of the plan year,
  • 30 days after the termination of the prescription drug plan, or
  • 30 days after any change in the creditability status of the prescription drug plan.
  1. ACA Notice of Exchange Rights. The Patient Protection and Affordable Care Act (ACA) required that, starting in September 2013, all employers subject to the Fair Labor Standards Act (FLSA) distribute written notices to all employees regarding the state exchanges, eligibility for coverage through the employer, and whether the coverage was qualifying coverage. This notice was to be given to all employees at that time and to all new hires within 14 days of their date of hire. We have found many groups have not included this notice in the information they routinely give to new hires. The DOL has acknowledged that there are no penalties for not distributing the notice, but since it is so easy to comply, why take the chance in case of an audit?
  2. USERRA Notices. The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects the job rights of individuals who voluntarily or involuntarily leave employment for military service or service in the National Disaster Medical System. USERRA also prohibits employers from discriminating against past and present members of the uniformed services. Employers are required to provide a notice of the rights, benefits and obligations under USERRA. Many employers meet the obligation by posting the DOL’s “Your Rights Under USERRA” poster, or including text in their employee handbook. However, even though USERRA has been around since 1994, we are finding many employers are not providing this information.
  3. Section 79. Internal Revenue Code Section 79 provides regulations for the taxation of employer-provided life insurance. This code has been around since 1964, and while there have been some changes, the basics have been in place for many years. Despite the length of time it has been in place, we have found a number of groups that are not calculating the imputed income. In essence, if an employer provides more than $50,000 in life insurance, then the employee should be paying tax on the excess coverage based on the IRS’s age rated table 2-2. With many employers outsourcing their payroll or using software programs for payroll, calculating the imputed income usually only takes a couple of mouse clicks. However, we have been surprised by how many employers are not complying with this part of the Internal Revenue Code, and are therefore putting their employees’ beneficiaries at risk.

There have been other surprises through this process, but these are a few of the more striking examples. The feedback we received from our compliance assessments has been overwhelmingly positive. Groups don’t always like to change their processes, but they do appreciate knowing what needs to be done.

Audit-proof your company with UBA’s latest white paper: Don’t Roll the Dice on Department of Labor Audits. This free resource offers valuable information about how to prepare for an audit, the best way to acclimate staff to the audit process, and the most important elements of complying with requests.

By Bob Bentley, Manager
Originally published by www.ubabenefits.com

Last fall I had the pleasure of hosting a UBA WisdomWorkplace webinar called “Success in Voluntary through Strategic Benefits Communication.” I discussed recent Sun Life survey data regarding employee engagement and understanding of the value of voluntary benefits.

In the world of voluntary insurance carriers, success in voluntary benefits can be measured in various ways. A key metric is employee participation. For carriers, this is important because the greater the employee participation in a voluntary product, the better the spread of risk, which leads to appropriate margins and sustainable pricing.

But in the world of HR, this has not been a key metric. While good participation can reflect employee acceptance (and low participation might raise the question about whether the product is worth the time it takes to administer payroll deductions and facilitate billing), employee engagement has become more important.

This concept of knowing what you’re participating in makes me think about a good friend of mine who, a few years ago, reached out to me in a panic. He works for a large corporation with employees spread across the country. His employer was dropping all medical plan PPO options for the coming year and switching to a high- and higher-deductible option. He was sent an e-mail that provided few details but explained the action was due to high health care costs. There was no indication that more information was forthcoming, and the communication as a whole was insufficient because he couldn’t find answers to the questions he needed, the most important being, “what does this mean to me and my family?” I explained recent trends and how a high-deductible health plan (HDHP) with a health savings account (HSA) could be advantageous to him, but as we all know, not everyone is knowledgeable about their benefits or has friends in the business to explain their options.

When employees aren’t engaged in good benefits decision making, they can misunderstand or underuse their plans. Our recent survey showed that while employees are becoming more aware of changes in their medical plans, 54 percent still don’t know their out-of-pocket maximum, and 33 percent don’t know their deductible.

Employees are, however, concerned about their financial risks, and most do not have emergency savings or a cash flow to handle unexpected medical expenses. Moreover, research from the Federal Reserve shows that some people actually choose to forgo needed medical care simply because they cannot afford it.1

While these data point out employee challenges, our research does provide some encouraging feedback that shows how we might be able to help employees become knowledgeable about their benefits choices.

For example, though employees understand the benefits gap, 62 percent of those surveyed say they need additional coverage. We also learned that 70 percent were not familiar with the term “voluntary benefits,” but once they understood what voluntary products are, 63 percent agreed that these benefits are helpful in filling the gaps in health care coverage, even if they have to pay for these benefits themselves.

The real kicker is that 87 percent say more customized benefits choices that fit their specific lifestyles would help them make the right health plan choices.

This is where strategic benefits communication can play a vital role. In addition to ensuring that employees really understand the value of all of their benefits, including true total compensation, a well-planned communication effort engages employees by empowering them with information so they are confident in their open enrollment decisions.

How will you know whether you have been a successful communicator? In subsequent posts, we will talk about gathering employee feedback.

Over the next few months, this blog series will examine the ways HR benefits professionals can achieve success—not just in offering voluntary products to employees, but more important, in their overall benefits communications.

By Kevin D. Seeker
Originally published by www.ubabenefits.com

Determining how an employer develops the most effective formulary, while protecting the financial stability of the plan, is certainly the challenge of this decade. Prescription management used to mean monitoring that the right people are taking medications to control their disease while creating strategies to move them from brand name to generic medications. With the dawn of specialty medications, formulary management has become a game of maximizing the pass-through of rebates, creating the best prior authorization strategies and tiering of benefits to create some barrier to more expensive medications, all without becoming too disruptive. As benefits managers know, that is a difficult challenge. The latest UBA Health Plan Survey revealed that 53.6 percent of plans offer four tiers or more, a 21.5 percent increase from last year and nearly a 55.5 percent increase in just two years. Thus, making “tiering” a top strategy to control drug costs. There are many additional opportunities to improve and help control the pharmacy investment, but focusing on the key components of formulary management and working on solutions that decrease the demands for medications are critical to successful plan management.

When developing a formulary, Brenda Motheral, RPh, MBA, Ph.D., CEO of Archimedes, suggests that chasing rebates is not a strategy to optimize your investment. Some of the highest rebates may be from medications that add no better therapeutic value than an inexpensive medication that does not offer a rebate, but net cost is much lower than the brand or specialty medication being offered. Best formulary management will mean that specific medications that do not offer a significant therapeutic value are removed from the formulary, or are covered at a “referenced price” so the member pays the cost difference. Formulary management will need to focus on where the drug is filled and which medications are available.

When setting up parameters on where a drug is to be filled, the decision needs to be made if a plan will promote mail order. Mail order, if used and monitored appropriately, makes it more convenient for a patient to receive their regularly used medications and may provide savings. In fact, the UBA Health Plan Survey finds that more than one-third (36.3 percent) of prescription drug plans provide a 90-day supply at a cost of two times retail copays. But if mail order programs are not monitored, people can continue to receive medications that are no longer required and never used, adding to medical spend waste. Furthermore, in our analysis, we are finding that not all medications are less expensive through mail order, as shown in Figure 1 below. Therefore, examining the cost differential is critical in a decision to promote, or not promote, mail order.

Figure 1

Drug Name Rx Category Mail Order Retail
Zytiga® Malignancies $8,749 $6,027
Sumatriptan Succinate Migrane / Neurologic $575 $308
Ranexa® Cardiovascular $259 $413

 

Another formulary consideration is in monitoring the increase in same drug pricing. The stories surrounding the price increases of EpiPens® has been well-documented, but how well do you understand the impact of price increases on your plan? Monitoring price increases, as shown in Figure 2, may help an employer turn to their pharmacy benefit manager (PBM) to ask for help in controlling these price increases, or help in decisions related to formulary inclusion.

Figure 2

Drug Name Rx Category Plan Paid per
30-day Supply
(SPLY)
Plan Paid per
30-day Supply
Cialis® Genito-Urinary / Acute Minor $287 $442
AndroGel® Endocrine / Chronic Meidcal $471 $523
Viagra® Genito-Urinary / Acute Minor $615 $978

 

Formulary management solutions can become a cat-and-mouse game. The ultimate approach to manage the total spending on medications is by managing the growing demand. There has been significant press related to the opioid overutilization in the U.S., as illustrated in the article “Prescription Addiction.” But that issue is much broader in our society and relates to taking a pill as a quick solution to solve our medical problems. In March 2016, the Department of Health and Human Services (HHS) stated that 30 percent of the growth in spending related to medications was due to an increase in prescriptions per person. Certainly, medications should be used when there are no alternatives to control disease or pain. However, turning to medications as a first option for chronic condition control for issues like hypertension, blood sugar control, cholesterol control versus improving diet and exercise, etc., is just a band-aid solution that, in most cases, does not resolve the root issue. Yet, because this is sold as a quick fix, we see an increase in the number of individuals on medications. In 2012, 34 percent of plan members engaged in Vital Incite were taking four or more (active ingredients) medications, and that has grown to more than 45 percent in 2016. The data also illustrates that in 2012 more than 42 percent of members were not on any medications, but that group size has shrunk to only 27 percent. No formulary can impact this issue.

Active Ingredient Use, All Clients, All Members 21 Years and Older

This increased use could be considered an improvement in care if their disease were more controlled. Appropriate and medically-impactful utilization would mean that a person is working toward improving diet and exercise and is taking the least expensive, yet effective, medication to control his or her disease.

Considering that diabetes medication options have really expanded, an employer would hope that the more expensive medication is providing the best control of disease. But, taking the medication alone will not control the disease and, at times, the progression of the medication cost can be related to progression of the disease due to a lack of disease management. For instance, a diabetic may have progressed from taking metphormin (marketed under the tradename Glucophage® among others), which costs approximately $27 per month, to metphormin ER (Glucophage® XR), which allows a person to take only one pill a day, so it may provide increased compliance, but costs $274 per month. Now, the option of taking Glumetza® is offered, which can be reimbursed at up to $3,620 per month, and is said to provide more stable results. But, if we examine the A1c control values from Vital Incite, do we find the reduction in A1c values as evidence that this additional investment in medication options is providing better control? Figure 3 provides an example of A1c control by prescription status. The goal would be that those on medications will become controlled. But, in our data, we are not seeing a significant improvement in persons with HgA1c levels above 7 percent. Control is achieved from diet, exercise, and appropriate medications. There are theories that people on these more expensive medications are using that as an approach to help them maintain their unhealthy behaviors. Therefore, taking medications alone does not appear to provide an effective solution and, in fact, providing chronic condition medications for free, without requiring any other effort, may not be the best investment for an employer.

Figure 3

HgA1c Level In Treatment Untreated Discontinued
Treatment
Possibly
Untreated
< 5.7 6 1 2 3
5.7 to 6.4 21 2 1 11
6.5 to 7.0 17 7
> 7.0 53 4 5

 

In conclusion, determining which issues are having the most impact on an employer group will allow benefits managers to determine the company’s priorities. This is not an easy task, but with pharmacy spend increasing at a national average of 7.3 percent annually and becoming a higher percentage of the overall medical spend, new strategies need to be considered. Focusing on the key components that balance formulary management with the correct approach to manage the demand on medications can influence total pharmacy spend.

Originally published by www.ubabenefits.com

 

Employer-paid life insurance can be an important part of protecting your family in the event that you die prematurely. Companies offer the program on top of other benefits, such as health insurance. The coverage is generally term insurance, meaning there is no investment or cash-value component. If you pass on unexpectedly, depriving your family not only of your presence but also your income, your dependents will be glad you signed up for your workplace’s life insurance benefit.

Basics

Employer-paid term life insurance comes as an option through some employee benefits packages. It works, in a sense, like group health insurance: Rather than buying a separate policy for each employee, the employer buys a single policy that covers all workers who participate, according to Insurance.com. Thus, the employer pays one premium, not a separate premium for each employee. You may be responsible for a part of the premium, too. Typically, the death benefit is one or two times your yearly salary, according to the American Institute of Certified Public Accountants.

Advantages

Life insurance acquired through your employer is likely to be cheaper than what you can buy on the open market, since your employer is likely to cover at least part of the premiums, according to Insurance.com. Additionally, you do not have to undergo individual underwriting, which means you can get coverage even if you have a serious health condition, like heart disease, that would, according to Insure.com, get you denied or make you have to pay high premiums if you were buying on the open market.

Warning

Depending exclusively on employer-paid life insurance to protect your family has some disadvantages, according to Insurance.com. The main one is that if you leave your job, you stand a high chance of losing your insurance. Depending on your age and health status at that time, according to Insurance.com, you may or may not be able to get new insurance at a reasonable rate. For that reason, it is best to carry employer group insurance only as a supplement to other coverage. Another drawback to such coverage is that the amount of insurance available to you is likely to be limited, though some plans allow you to get more coverage for an additional fee.

Considerations

Some employer-paid life insurance plans, according to the American Institute of Certified Public Accountants’ 360 Degrees of Financial Literacy website, can follow you even when you leave your job. But most employees decide against doing this for the reason that the “conversion premiums” tend to be higher than prices for comparable individual policies. Typically, according to the site, “only those who are otherwise uninsurable take advantage of this conversion option.”

Taxes

The Internal Revenue Service taxes life insurance that has a value above $50,000. It uses a formula that takes into account your age and the amount of your death benefit to determine the taxable value per month.

Originally published by www.livestrong.com

Recently, the U.S. Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively the Departments) issued final regulations regarding the definition of short-term, limited-duration insurance, standards for travel insurance and supplemental health insurance coverage to be considered excepted benefits, and an amendment relating to the prohibition on lifetime and annual dollar limits.

Effective Date and Applicability Date

These final regulations are effective on December 30, 2016. These final regulations apply beginning on the first day of the first plan or policy year beginning on or after January 1, 2017.

Short-Term, Limited-Duration Insurance

Short-term, limited-duration insurance is a type of health insurance coverage designed to fill temporary gaps in coverage when an individual is transitioning from one plan or coverage to another plan or coverage. Although short-term, limited-duration insurance is not an excepted benefit, it is exempt from Public Health Service Act (PHS Act) requirements because it is not individual health insurance coverage. The PHS Act provides that the term ‘‘individual health insurance coverage’’ means health insurance coverage offered to individuals in the individual market, but does not include short-term, limited-duration insurance.

On June 10, 2016, the Departments proposed regulations to address the issue of short-term, limited-duration insurance being sold as a type of primary coverage.

The Departments have finalized the proposed regulations without change. The final regulations define short-term, limited-duration insurance so that the coverage must be less than three months in duration, including any period for which the policy may be renewed. The permitted coverage period takes into account extensions made by the policyholder ‘‘with or without the issuer’s consent.’’ A notice must be prominently displayed in the contract and in any application materials provided in connection with enrollment in such coverage with the following language:

THIS IS NOT QUALIFYING HEALTH COVERAGE (‘‘MINIMUM ESSENTIAL COVERAGE’’) THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON’T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT WITH YOUR TAXES.

The revised definition of short-term, limited-duration insurance applies for policy years beginning on or after January 1, 2017.

Because state regulators may have approved short-term, limited-duration insurance products for sale in 2017 that met the definition in effect prior to January 1, 2017, HHS will not take enforcement action against an issuer with respect to the issuer’s sale of a short-term, limited-duration insurance product before April 1, 2017, on the ground that the coverage period is three months or more, provided that the coverage ends on or before December 31, 2017, and otherwise complies with the definition of short-term, limited-duration insurance in effect under the regulations. States may also elect not to take enforcement actions against issuers with respect to such coverage sold before April 1, 2017.

For information on final regulations regarding excepted benefits, specifically similar supplemental coverage and travel insurance—as well as information on the definition of essential health benefits for purposes of the prohibition on lifetime and annual limits, view UBA’s ACA Advisor, “Regulations Regarding Short-Term Limited-Duration Insurance, Excepted Benefits, and Lifetime/Annual Limits.”

Originally published by www.ubabenefits.com

Recently, the Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively, the Departments) issued FAQs About Affordable Care Act Implementation Part 34 and Mental Health and Substance Use Disorder Parity Implementation.

The Departments’ FAQs cover two primary topics: tobacco cessation coverage and mental health / substance use disorder parity.

Tobacco Cessation Coverage

The Departments seek public comment by January 3, 2017, on tobacco cessation coverage. The Departments intend to clarify the items and services that must be provided without cost sharing to comply with the United States Preventive Services Task Force’s updated tobacco cessation interventions recommendation applicable to plan years or policy years beginning on or after September 22, 2016.

Mental Health / Substance Use Disorder Parity

Generally, the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) requires that the financial requirements and treatment limitations imposed on mental health and substance use disorder (MH/SUD) benefits cannot be more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits.

A financial requirement (such as a copayment or coinsurance) or quantitative treatment limitation (such as a day or visit limit) is considered to apply to substantially all medical/surgical benefits in a classification if it applies to at least two-thirds of all medical/surgical benefits in the classification.

If it does not apply to at least two-thirds of medical/surgical benefits, it cannot be applied to MH/SUD benefits in that classification.

If it does apply to at least two-thirds of medical/surgical benefits, the level (such as 80 percent or 70 percent coinsurance) of the quantitative limit that may be applied to MH/SUD benefits in a classification may not be more restrictive than the predominant level that applies to medical/surgical benefits (defined as the level that applies to more than one-half of medical/surgical benefits subject to the limitation in the classification).

In performing these calculations, the determination of the portion of medical/surgical benefits subject to the quantitative limit is based on the dollar amount of all plan payments for medical/surgical benefits in the classification expected to be paid under the plan for the plan year. The MHPAEA regulations provide that “any reasonable method” may be used to determine the dollar amount of all plan payments for the substantially all and predominant analyses.

MHPAEA’s provisions and its regulations expressly provide that a plan or issuer must disclose the criteria for medical necessity determinations with respect to MH/SUD benefits to any current or potential participant, beneficiary, or contracting provider upon request and the reason for any denial of reimbursement or payment for services with respect to MH/SUD benefits to the participant or beneficiary.

However, the Departments recognize that additional information regarding medical/surgical benefits is necessary to perform the required MHPAEA analyses. According to the FAQs, the Department have continued to receive questions regarding disclosures related to the processes, strategies, evidentiary standards, and other factors used to apply a nonquantitative treatment limitation (NQTL) with respect to medical/surgical benefits and MH/SUD benefits under a plan. Also, the Departments have received requests to explore ways to encourage uniformity among state reviews of issuers’ compliance with the NQTL standards, including the use of model forms to report NQTL information.

To address these issues, the Departments seek public comment by January 3, 2017, on potential model forms that could be used by participants and their representatives to request information on various NQTLs. The Departments also seek public comment on the disclosure process for MH/SUD benefits and on steps that could improve state market conduct examinations or federal oversight of compliance by plans and issuers, or both.

 

By Danielle Capilla, Originally published by United Benefit Advisors – Read More

One thing rings true when it comes to the Affordable Care Act (ACA): “expect the unexpected.” I know this sounds cliché, but it was my best attempt to describe the experience HR professionals encounter as they attempt to comply with this somewhat murky piece of legislation. Last year on December 28, we were alerted a month from the approaching deadline that the forms and filing requirements had moved two and three months out to address challenges. This was a fairly drastic move within a month of a significant compliance deadline.

As a leading provider of ACA solutions to hundreds of employers, we are finding this concern about uncertainty spills into the 2016 tax season. To provide some useful guidance, I thought it would be helpful to share with you a roll-up of common questions and key issues we are receiving from our clients over the past several months:

  1. Will the ACA be delayed again in 2016? We do not see the filing requirements delayed again in 2016. The delay for 2015 was a one-time delay, and the IRS has signaled this to be the case on their conference calls.
  2. What changes do we need to be concerned with in the 1094-C and 1095-C forms? Overall, the changes to these forms are minor in 2016. The 2015 Qualifying Offer, a form of transition relief, was eliminated from the 1094 form. The biggest changes are with two contingent offer of coverage codes 1J and 1K. The idea behind these new offer codes is that employer coverage is contingent upon not having coverage available elsewhere. If this better describes how you offer coverage, you may want to consider selecting these codes over the traditional 1A or 1E.
  3. Will it be easier to work with name/TIN mismatches flagged through the corrections process? In the first year it was difficult to work with IRS requested corrections because you often could not identify which covered individual generated the error (we didn’t know if it was the employee, a dependent, or both). Several IRS conference calls have signaled they will be providing more detail on the corrections this year. If your ACA solution communicates with the IRS Affordable Care Act Information Returns (AIR) system, you will likely be able to display the detail of this error message and act on it. A side-note: remaining corrections from 2015 do not have a specific due date, but should be addressed as soon as possible.
  4. Why do we still have transition relief in 2016? The expectations for many is that transition relief was simply a 2015 phenomenon. While non-calendar year and 2015 Qualifying Offer Transition Relief have been eliminated, 4980H Transition Relief has remained into 2016 for “non-calendar” plans that meet certain criteria. This means that employers who might be facing shared responsibility penalties in 2016 can still take advantage of one of the two types of relief: 1) if you average 50 to 99 FTEs you are shielded for the 2015 non-calendar year plan for the months that spill into 2016 (e.g., a July 1 plan will be shielded for the first six months of 2016), or 2) the same applies for 100+ clients in terms of being able to leverage the 70 percent offer requirement.
  5. Will it be easier this year? This is a general question that depends on the solution you use. Overall, we believe the answer is a resounding “YES!” With our solution, a large number of clients are able to take advantage of an automated renewal process that transitions setup from 2015 and trends existing employees from December 31, 2015, into 2016. Vendors have learned how to make this process easier for their customers after all the pain they experienced in 2015. Everything from data collection, filing and corrections process should be more automated this year.

Originally published by www.ubabenefits.com

 

Did you know studies convey that 20% of the population, or 1 in every 5 adults suffer from some sort of mental health condition? Mental health has become a substantially concerning issue in America’s workplace, and therefore a top priority in employee wellness. Mental health conditions such as depression, anxiety, and bipolar disorder cause workers to perform less efficiently on a daily basis, which in turn creates negative effects on both the employees and employers.

Unaddressed mental health problems can leave employees unhappy and less efficient at work, as well as having financial consequences for employers. Studies conducted show that mental health conditions left without treatment cost employers nationwide a total of $80- $100 billion per year. In addition, employers have a duty to ensure physical and mental safety for their workers. In the past, companies have typically encouraged employees to see therapists and potentially receive medication. These treatments can be very effective. According to a recent study by the Partnership for Workplace Mental Health, 86% of those employees that were treated saw improvements in their daily work.

However, these therapy and medication can also be very time consuming and costly. In order to achieve a more efficient and cost effective solution, companies have found creative outlets to provide daily treatment. Enter the mental health app. Human Resources in general is becoming a more app-friendly department. The IAB-commissioned Harris Poll shows mobile phone users spend 88% of their time in applications and appreciate having apps that streamline services on their phones. There are countless apps for companies to choose from, but Mobylize and MoodNotes are two of the most innovative options.

Mobylize

Mobilyze is an employee-focused mobile application that tracks location, movement, sleeping patterns, and phone calls. It then compiles the data to analyze the user’s different moods and sends them messages as well as giving feedback on their responses to try and improve their symptoms. The app is user-specific which helps generate results faster and more accurately, and offers a more convenient and cost-effective option for companies trying to improve their employees’ well-being.

MoodNotes

Other apps, like MoodNotes, provide a more interactive user experience. Like Mobilyze, the app tracks different patterns that may be associated with mental health problems, but also focuses on creating a personal relationship with the user. MoodNotes encourages the user to answer more challenging questions about how they feel and why they may be feeling that way. As a result, the user is forced to think about possible suppressed problems and the reasons behind them. The app’s goal is to act like a mental health coach or friend, and strives to get users back to their healthy, happy selves.

These are only two examples of popular mental health apps that companies are starting to use. The companies that choose to implement these types of apps are continuing to see positive results. The market for mental health apps is growing, providing employees with many options to address specific issues and allowing room to find the best fit. As businesses focus on more ways to implement technology, mobile apps may be a solution to lowering the costs of mental health care, as well as looking out for the well-being of employees and fostering a well-functioning, healthy business environment.

 

By Nicole Federico