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Defined Contribution Health Plans
Under a defined contribution health plan, an employer gives its employees a fixed contribution to purchase health insurance coverage. Employees use that money to buy or help pay for a health insurance plan they select for themselves. The concept of a defined contribution employee benefit is not new; most employees are familiar with the defined contribution approach through their retirement benefits. However, recently there has been an increased interest in the defined contribution approach to health benefits. The heightened interest in defined contribution health plans is mainly due to the increasing costs of health coverage and changes made by the
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Model COBRA Election Notice Updated for ACA Changes
Many provisions of the Affordable Care Act (ACA) that become effective beginning in 2014 are designed to expand access to affordable health coverage. Beginning Jan. 1, 2014, individuals and employees of small businesses will have access to health coverage through ACA’s health insurance exchanges (Exchanges). According to the Department of Labor (DOL), the Exchanges will create competitive health insurance marketplaces where consumers can go to find and compare private health insurance options. On May 8, 2013, the DOL issued Technical Release 2013-02. This Technical Release provides an updated model election notice for group health plans for purposes of the continuation
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Small Business Health Options Program (SHOP) and Multi-state Plans
Beginning in 2014, the Affordable Care Act (ACA) requires online competitive marketplaces, or Exchanges, to be available in each state for individuals and small businesses to purchase health insurance coverage. The first open enrollment period for plans offered through ACA’s Exchanges will begin on Oct. 1, 2013, for coverage starting Jan. 1, 2014. Both state-operated Exchanges and the federally facilitated Exchange (FF Exchange) must include a Small Business Health Options Program (SHOP) component for small businesses to purchase health insurance coverage for their employees. According to the Department of Health and Human Services (HHS), SHOPs will allow small employers to
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DOL Issues Model Exchange Notice and Sets Compliance Deadline
Beginning Jan. 1, 2014, individuals and employees of small businesses will have access to insurance coverage through the Affordable Care Act’s (ACA) health insurance exchanges (Exchanges). Open enrollment under the Exchanges will begin on Oct. 1, 2013. ACA requires employers to provide all new hires and current employees with a written notice about ACA’s Exchanges. This requirement is found in Section 18B of the Fair Labor Standards Act (FLSA). On May 8, 2013, the Department of Labor (DOL) released Technical Release 2013-02 to provide temporary guidance on the Exchange notice requirement. This temporary guidance will remain in effect until the
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Proposed Rule Released on Minimum Value and Affordability
On May 3, 2013, the Internal Revenue Service (IRS) released a proposed rule on the minimum value and affordability rules under the Affordable Care Act (ACA). In this proposed rule, the IRS provides guidance on determining whether health coverage under an employer-sponsored plan is affordable and provides minimum value for purposes of determining the employer “pay or play” penalties. In particular, the proposed regulation: Explains how to calculate minimum value (MV); Outlines special rules for determining how health reimbursement arrangements (HRAs), health savings accounts (HSAs) and wellness program incentives are counted in determining MV and affordability; and Provides new safe
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Opt-Out Election for Self-Funded, Non-Federal Governmental Plans
Sponsors of self-funded, non-federal governmental plans may opt out of complying with certain benefit mandates, such as the parity requirements for mental health and substance use disorder benefits. The health care reform law narrowed the scope of the opt-out election for these plans. To address the health care reform change, the Department of Health and Human Services (HHS) provided procedures and model election materials for sponsors of self-funded, non-federal governmental plans to use to opt out of certain federal benefit mandates. This The Horton Group, Inc. Legislative Brief provides a brief overview of the opt-out election available to sponsors of
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Year Two Template for Summary of Benefits and Coverage
The health care reform law requires health plans and health insurance issuers to provide participants and beneficiaries with a summary of benefits and coverage (SBC). This document contains the final template for the SBC for use in the second year of applicability that was provided by the Departments of Health and Human Services, Labor and Treasury on April 23, 2013. Related Posts:Additional FAQs Released on Summary of Benefits and CoverageHealthCare Reform: Timeline
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FAQs on Annual Limits, Nondiscrimination, Clinical Trials & Transparency Reporting
The Departments of Labor, Health and Human Services (HHS) and the Treasury (Departments) have issued multiple sets of Frequently Asked Questions (FAQs) to help with the implementation of the Affordable Care Act, or ACA. On April 29, 2013, the Departments issued a set of FAQs (Part XV) to address the following ACA topics: Annual limit waiver expiration date based on a change to a plan or policy year; Provider nondiscrimination; Coverage for individuals participating in approved clinical trials; and Transparency reporting. This Legislative Brief contains the Departments’ ACA FAQs – Part XV. Annual Limit Waiver Expiration Date based on a
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Role of Agents, Brokers and Web-brokers in Exchanges
The Affordable Care Act (ACA) calls for the creation of state-based competitive marketplaces, known as Affordable Health Insurance Exchanges (Exchanges), for individuals and small businesses to purchase private health insurance. ACA requires the Exchanges to become operational in 2014, with enrollment beginning Oct. 1, 2013. Agents and brokers, including web-brokers, will play a role in educating consumers about Exchanges and insurance affordability programs and in helping consumers receive eligibility determinations, compare plans and enroll in coverage. In particular, agents and brokers will play a critical role in helping qualified employers and employees enroll in coverage through the Small Business Health
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ACA Mandates – Different Measures of Affordability
Several key reforms under the Affordable Care Act (ACA) measure the affordability of employer-sponsored health coverage. Effective for 2014, the affordability of an employer’s health plan may be assessed in the following three contexts: The shared responsibility penalty for large employers; The premium tax credit for low-income individuals to purchase health coverage through an ACA Exchange; and The tax penalty imposed on individuals who fail to obtain health insurance coverage, or the individual mandate. Although all of these ACA mandates involve an affordability determination, the test for affordability varies for each provision. This Legislative Brief summarizes the different measures of
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