Understanding The HHS Rules For Essential Health Benefits
Health and Human Services (HHS) ruled to establish the future of insurance issuer standards and health insurance exchanges for actuarial value and essential health benefits under the Patient Protection and Affordable Care Act (PPACA). The final rule creates a plan for when federal facilitated exchanges should accredit qualified health plans. When the PPACA goes into full effect, insurance plans that were not grandfathered into the small and individual market must provide coverage of services or benefits in 10 categories. They must also show the scope of benefits a typical employer plan covers. Qualified health plans are designed to provide benefits that cover essential health benefits, meet minimum value requirements and include cost-sharing limits.
Essential Health Benefits
Every state is allowed to have a single EHB benchmark plan. This is the plan that defines the standards for health benefits every Qualified Health Plan (QHP) must follow. One of these four options must be selected:
- A state employee health plan, which comprises the three largest and most available enrollment-based state plans.
- A small group plan, which is the largest enrollment-based plan in any of the three largest of the small group options.
- The plan featuring the largest non-Medicaid insured commercial plan with enrollment through an HMO.
- Any of the nation’s three largest Federal Employees Health Benefits Program choices offering aggregate enrollment.
When states do not decide on a plan, the default benchmark plan is what will be used. If the plan does not offer all of the required coverage in the 10 necessary categories, it must have supplemental provisions using the rule’s outlines. Multi-state plans must adhere to the benchmark standards set forth by the U.S. OPM.
Actuarial Value
The PPACA allows four levels of health plans through exchanges. Each one of these levels or tiers is defined by an actuarial value, which is a percentage of the total allowed benefits costs paid by the health plan. For example, a silver plan would have an actuarial value of 70 percent while a gold plan’s percentage would be 80. Values may vary by a positive or negative two percent. These levels were set in place to help potential enrollees and participants compare their options. To count toward the actuarial value calculation, amounts made available under HRAs and employer contributions to HSAs may only be used for cost sharing. In addition to this, the issuer must be made aware when the plan is purchased. Issues of integrating other types of HRAs will be addressed and amended when necessary.
Minimum Value
If the percentage of all allowed costs of benefits offered by an employer-sponsored plan equals less than 60 percent, the plan is said to provide minimum value. To determine their values, employers can use the minimum value calculator offered by the IRS and HHS. This calculator is similar to their actuarial value calculator. However, it is based on claims data that shows regular employer-sponsored plans.
Yearly Limits And Deductible Limitations
The HHS requires all group health plans to meet the annual cost-sharing limitation. However, only issuers and plans in the small group market must comply with the deductible limits. When the PPACA goes into effect, the limit for self coverage is set at $2,000. For those with insurance beyond self coverage, the limit is $4,000. Small group health coverage may exceed deductible limits if it is not able to reach a certain tier.
Cost Sharing
For annual out-of-pocket limits, the HHS says that self-insured plans and non-grandfathered group plans must meet the annual limit for the maximums defined in the ACA’s in §1302(c)(1). However, the Employee Benefits Security Administration (EBSA) guidance says that plans may have multiple service providers for administration purposes. If a plan’s annual out-of-pocket maximum limits meet the following, it may be considered satisfied:
The plan includes out-of-pocket maximum coverage that is not completely reliant on major medical coverage.
The plan meets all of the requirements for major medical coverage.
In relation to a specific time frame, the new rule says that exchanges in the future must create a uniform period for a QHP issuer that is not accredited but must gain accreditation. For answers to questions about these issues, discuss concerns with an agent.
At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.
Spring Cleaning Safety
Ah, springtime. That glorious time of year when you suddenly realize the lawn needs mowing, the garden needs weeding and the house could use a fresh coat of paint. But with many families’ budgets a little tighter this year, buying new spring-cleaning tools isn’t always possible.
Using last season’s tools is a good idea, provided they’re in good condition and can be used safely. The last thing you want to do is take a trip to the emergency room. Yet that’s exactly where more than 350,000 people end up every year, thanks to injuries from improperly used ladders, lawn mowers and power garden tools. So before you get too ambitious, take a few precautions to help keep your family safer.
- If you’re reusing last season’s lawn and garden power tools, inspect them for frayed power cords and cracked or broken casings. If the item is damaged, have it repaired by a qualified technician or replace it.
- Never carry a power tool by the cord or yank a power cord from a receptacle. When disconnecting the cord, always grasp the plug, not the wire. Keep cords away from heat, oil and sharp edges.
- When pulling out the lawn mower for the first time this year, refresh your memory by reading the owner’s manual. Be sure you know how to stop the machine in case of an emergency.
- If you have a gasoline-powered mower, store the gas in a UL Classified safety can.
- Always start your mower outdoors. Never operate it where carbon monoxide can collect, such as in a closed garage, storage shed or basement.
- Don’t operate an electric or gas-powered lawn mower on wet grass.
- When you’re through with power tools and garden appliances, store them away from water sources to avoid electric shock. Never use them in the rain.
- Whether your ladder is brand new or it has seen a few spring cleanings, read the instructions and warning labels before using it. They’ll help you choose the right ladder for the job and describe ladder weight and height limits.
- Remember the 4-to-1 rule. For every four feet of ladder height, the bottom of the ladder should be one foot away from the wall or object it is leaning against.
- Use a fiberglass ladder if you’re working near electricity or overhead power lines.
- If you purchase new tools this spring, look for the UL Mark, which means representative samples of the product have been tested against stringent safety standards for fire, electric shock and other safety hazards.
Concerned about your personal insurance coverage? At Cleary, our experienced Personal Lines department will work with you to evaluate your insurance needs, identify exposures, and create a customized insurance portfolio. Give us a call today at 617-723-0700.
DOL Finalizes Executive Order and Summarizes SCA Audits
DOL Finalizes Executive Order # 13495
Executive order # 13495 pertaining to “ Nondisplacement of Qualified Workers” was finalized on January 18, 2013. The ruling ensures qualified workers on a Federal Service Contract who would otherwise lose their jobs as a result of the completion or expiration of a contract will be given the right of first refusal for employment, with the successor contractor. Generally, a successor contractor may not hire any new employees under the contract until the right of first refusal has been provided. This order applies to a successor for the performance of the same or similar services at the same location.
This order defines service contracts or contract to mean any contract or subcontract for services entered into by the Federal Government or its contractors that is covered by the McNamara-O’Hara Service contract Act.
You can review FAR 52.222-17 for more comprehensive details about this new executive order. Also, look at Fact Sheet # 67A: Nondisplacement of Qualified Workers on www.dol.gov that provides a more detailed explanation about the order and whom to contact if you have more questions.
DOL Audit Statistics for FY 2012
In Fiscal Year 2012, the Wage and Hour Division (WHD) in Washington DC collected more than $32 million dollars in back wages for underpaid Davis Bacon workers as the result of more than 50 project investigations. The Branch’s work exceeded the overall strategic plans call for an increase in enforcement of the Service Contract Act.
The coordination of this goal resulted in resolving 858 SCA cases and collecting $44,888,935 in back wages for approximately 15.6 million service employees. Of the 858 cases, 634 were found in violation under SCA. In addition there were 19 SCA debarments processed in FY 2012.
Having knowledgeable personnel capable of handling a DOL audit can protect you from wage settlements and possible debarment. For more information contact MARAL, LLC (acorvigno@marallc.com) and set up a one-day SCA/DBA training seminar for your employees.
At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe-benefit obligations and provides your employees with valuable benefits.