Employers getting overwhelmed with timelines and deadlines shortly after PPACA was passed are now confused with the slowdown on the action. Why? Because timelines change as the administration realizes they keep putting the cart before the horse and extend and amend deadlines. And so it is with the ominous Summary of Benefit and Coverages requirement. You know, the one that says people can’t possibly comprehend the benefits as outlined in the current Summary Plan Description, yet need twice the information carved into a 4 page cornucopia of information they still won’t read. Originally slated for March 2012, employers who were paying attention to these threats of non-compliance are worried about fines and fees…..are they behind the curve?
Well, we are currently receiving phone calls and inquiries regarding these PPACA regulations that were to go into effect on 3-23-2012. Specifically employers are asking us for directions on the required Summary Benefits of Coverage that, if not distributed, can result in $1,000 penalties per failure. Please note the following:
ON SUMMARY BENEFITS OF COVERAGE
- Refresher: PPACA (Obama Care) requires that ALL employers distribute a very specific 4-Page Summary of Benefits (not to be confused with the current Summary Plan Description).
- The original deadline for implementation of this requirement has been delayed, in general, to the first renewal after September 23, 2012. AKA: All effective or renewal dates beginning 10-1-12.
- The Insurer is responsible for creating this Summary for each plan offered. It applies to your health benefits only. (HSA and HRA information may be included.)
- It is the responsibility of the employer to make sure this is distributed to all of the employees and their dependents. It can be in paper or electronic form. (Caution: Electronic form must abide by current ERISA rules. In short, if your employees don’t log on to a computer daily to receive employer communications, that system will not pass. )
- These rules apply to COBRA beneficiaries as well. This is where you COBRA administrator will become very important. We are confident that every COBRA administrator we have installed will provide excellent support in this area.
- A penalty of $1,000 per failure applies to the Employer.
- This applies to our Self-Funded clients as well. We will negotiate with the reinsurance carriers for that SBC.
- There are very specific rules regarding continued distribution of this 4-page SBC as new employees are hired, benefits are change mid-year and upon request of any beneficiary.
ON PREMIUM REBATES
As you know, insurers must rebate excess premiums when they exceed the new MLR (minimum loss ratio) rules. We have just received details on how employers distribute rebates to employees. We are reviewing these regulations now regarding the taxability of these to the employees as well as other details. Since the first rebates are not expected until August 2012, we will be sure to present you with guidance long before they occur. We believe the taxability will depend on the method of deduction in the first place. (After tax vs. Pre-Tax via Section 125 Cafeteria POP Plan)
NOTE: California employers currently receiving rebates from Blue Shield should not confuse these current voluntary rebates with the upcoming MLR rebates.
Ongoing Support during PPACA Implementation
Please be assured that we continue to be very current on all of the implementation details of PPACA and will continue to monitor and assist our employer clients as if PPACA will survive the pending SCOTUS decision. Our library of details is very complete and we will get information to you on a timely basis.
We appreciate all referrals to your employer group friends and associates that may benefit from our services. Frankly, I rarely run into insurance “agencies” that know or care much about this challenge. We continue to be very hands on in order to assure that OUR clients receive the most timely and proper advice as the full implementation of this law approaches. Planning over the next year is critical. We are just 19 months away from the full implementation. HHS is rolling out more and more detail every week. The sooner we can build relationships with new clients, the better we will be able to guide them through the upcoming tsunami of regulations coming at them. Please feel free to forward this to your associates.
Paula L. Wilson, RHU, REBC PAULA@PAULAWILSON.COM 951-694-1009