In preparation of 2020 open enrollment, Employers should review their plan documents to confirm that they include these required changes. Learn how our Agency is helping businesses thrive in today’s economy. Please contact us at info@medicalsolutionscorp.com or (855)667-4621.
On June 13, 2019, the Departments of Labor, Health & Human Services and Treasury released final rules concerning Health Reimbursement Arrangements (HRAs). The 497-page rule includes the creation of two new types of HRAs, the “Individual Coverage HRA” and the “Excepted Benefit HRA.”
The final rule also created the “Excepted Benefit HRA” which, starting in January of 2020, will permit employers to finance additional medical care. Employees can use the HRA without having to be enrolled in the group’s traditional health plan.
Employers who want to offer the “Individual Coverage HRA” for January 1, 2020, can do so but employees will need to enroll in an individual plan during the 2019 open enrollment period (November 1, 2019 – December 15, 2019).
If you have any questions or would like additional information, please contact us at 855-667-4621 or info@medicalsolutionscorp.com.
To download this entire document as a PDF, click here: Open Enrollment Checklist 2019
In preparation of open enrollment, group health plan sponsors should be aware of the legal changes affecting the design and administration of their plans for plan years beginning on or after Jan. 1, 2019. Employers should review their plan documents to confirm that they include these required changes.
Health plan sponsors should also confirm that their open enrollment materials contain certain required participant notices, when applicable—for example, the summary of benefits and coverage (SBC). There are also some participant notices that must be provided annually or upon initial enrollment. To minimize costs and streamline administration, employers should consider including these notices in their open enrollment materials.
Below is an Employer 2019 Open Enrollment Checklist including some administrative items to prepare for in 2019.
Effective for plan years beginning on or after Jan. 1, 2014, non-grandfathered health plans are subject to limits on cost sharing for essential health benefits (EHB). The ACA’s out-of-pocket maximum applies to all non-grandfathered group health plans, including self-insured health plans and insured plans.
The annual limit on total enrollee cost sharing for EHB for plan years beginning on or after Jan. 1, 2019, is $7,900 for self-only coverage and $15,800 for family coverage.
Also, the ACA’s self-only out-of-pocket maximum applies to all individuals, regardless of whether they have self-only or family coverage under a non-grandfathered plan. This means that non-grandfathered health plans are required to embed an individual out-of-pocket maximum in the plan’s family coverage when the family out-of-pocket maximum exceeds the ACA’s out-of-pocket maximum for self-only coverage.
The ACA requires non-grandfathered health plans to cover certain preventive health services without imposing cost-sharing requirements (that is, deductibles, copayments or coinsurance) for the services. Health plans are required to adjust their first-dollar coverage of preventive care services based on the latest preventive care recommendations. If you have a non-grandfathered plan, you should confirm that your plan covers the latest recommended preventive care services without imposing any cost sharing.
More information on the recommended preventive care services is available through the U.S. Preventive Services Task Force and www.HealthCare.gov.
The ACA imposes a dollar limit on employees’ salary reduction contributions to a health FSA offered under a cafeteria plan. An employer may impose its own dollar limit on employees’ salary reduction contributions to a health FSA, as long as the employer’s limit does not exceed the ACA’s maximum limit in effect for the plan year.
The ACA’s limit on employees’ pre-tax health FSA contributions first became effective for plan years beginning on or after Jan. 1, 2013. The ACA set the health FSA contribution limit at $2,500. For years after 2013, the dollar limit is indexed for cost-of-living adjustments. The health FSA limit has been increased to $2,700 for 2019 plan years.
If you offer an HDHP to your employees that is compatible with an HSA, you should confirm that the HDHP’s minimum deductible and out-of-pocket maximum comply with the 2019 limits. The IRS limits for HSA contributions and HDHP cost sharing will all increase for 2019. The HSA contribution limits will increase effective Jan. 1, 2019, while the HDHP limits will increase effective for plan years beginning on or after Jan. 1, 2019.
The following table contains the HDHP and HSA limits for 2019:
Under the ACA’s employer penalty rules, applicable large employers (ALEs) that do not offer health coverage to their full-time employees (and dependent children) that is affordable and provides minimum value will be subject to penalties if any full-time employee receives a government subsidy for health coverage through an Exchange.
To qualify as an ALE, an employer must employ, on average, at least 50 full-time employees, including full-time equivalent employees (FTEs), on business days during the preceding calendar year. All employers that employ at least 50 full-time employees, including FTEs, are subject to the ACA’s pay or play rules.
All full-time employees must be offered affordable minimum value coverage. A full-time employee is an employee who was employed on average at least 30 hours of service per week. The final regulations generally treat 130 hours of service in a calendar month as the monthly equivalent of 30 hours of service per week. The IRS has provided two methods for determining full-time employee status—the monthly measurement method and the look-back measurement method.
An ALE may be liable for a penalty under the pay or play rules if it does not offer coverage to “substantially all” full-time employees (and dependents) and any one of its full-time employees receives a premium tax credit or cost-sharing reduction for coverage purchased through an Exchange. Employees who are offered health coverage that is affordable and provides minimum value are generally not eligible for these Exchange subsidies.
The ACA requires ALEs to report information to the IRS and to employees regarding the employer- sponsored health coverage on Form 1095-C. The IRS will use the information that ALEs report to verify employer-sponsored coverage and to administer the employer shared responsibility provisions (Code Section 6056).
In addition, the ACA requires every health insurance issuer, sponsor of a self-insured health plan, government agency that administers government-sponsored health insurance programs and any other entity that provides minimum essential coverage (MEC) to file an annual return with the IRS and individuals reporting information for each individual who is provided with this coverage (Code Section 6055).
Sponsors of self-funded plans and health insurance issuers of fully insured plans are required to pay a fee each year, by July 31st, to fund comparative effectiveness research. Fees will increase to $2.39 per covered life in 2019 and are next due July 31, 2019.
Healthcare Reform requires employers to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2. This reporting requirement was originally effective for the 2011 tax year. However, the IRS later made reporting optional for 2011 for all employers.
The IRS further delayed the reporting requirement for small employers (those that file fewer than 250 Forms W-2) by making it optional for these employers until further guidance is issued. For the larger employers, the reporting requirement was mandatory for the 2012 Forms W-2 and continues.
The ACA requires health plans and health insurance issuers to provide an SBC to applicants and enrollees to help them understand their coverage and make coverage decisions. Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including those who are newly eligible for coverage and special enrollees).
The SBC template and related materials are available from the Department of Labor (DOL).
If you have a grandfathered plan, make sure to include information about the plan’s grandfathered status in plan materials describing the coverage under the plan, such as SPDs and open enrollment materials. Model language is available from the DOL.
Under the ACA, non-grandfathered group health plans and issuers that require designation of a participating primary care provider must permit each participant, beneficiary and enrollee to designate any available participating primary care provider (including a pediatrician for children). Also, plans and issuers that provide obstetrical/gynecological care and require a designation of a participating primary care provider may not require preauthorization or referral for obstetrical/gynecological care.
If a non-grandfathered plan requires participants to designate a participating primary care provider, the plan or issuer must provide a notice of these patient protections whenever the SPD or similar description of benefits is provided to a participant. If your plan is subject to this notice requirement, you should confirm that it is included in the plan’s open enrollment materials. Model language is available from the DOL.
Group health plan sponsors should consider including the following enrollment and annual notices with the plan’s open enrollment materials.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to employers with 20 or more employees that sponsor group health plans. Plan administrators must provide an initial COBRA notice to new participants and certain dependents within 90 days after plan coverage begins. The initial COBRA notice may be incorporated into the plan’s SPD. A model initial COBRA notice is available from the DOL.
At or prior to the time of enrollment, a group health plan must provide each eligible employee with a notice of his or her special enrollment rights under HIPAA. This notice may be included in the plan’s SPD. Model language for this disclosure is available on the DOL’s website.
Group health plans covering residents in a state that provides a premium subsidy to low-income children and their families to help pay for employer-sponsored coverage must send an annual notice about the available assistance to all employees residing in that state. The DOL has provided a model notice.
Plans and issuers must provide notice of participants’ rights to mastectomy-related benefits under the Women’s Health and Cancer Rights Act (WHCRA) at the time of enrollment and on an annual basis. Model language for this disclosure is available on the DOL’s website.
Plan administrators must include a statement within the Summary Plan Description (SPD) timeframe describing requirements relating to any hospital length of stay in connection with childbirth for a mother or newborn child under the Newborns’ and Mothers’ Health Protections Act. Model language for this disclosure is available on the DOL’s website.
Group health plan sponsors must provide a notice of creditable or non-creditable prescription drug coverage to Medicare Part D eligible individuals who are covered by, or who apply for, prescription drug coverage under the health plan. This creditable coverage notice alerts the individuals as to whether or not their prescription drug coverage is at least as good as the Medicare Part D coverage. The notice generally must be provided at various times, including when an individual enrolls in the plan and each year before Oct. 15th (when the Medicare annual open enrollment period begins). Model notices are available on the Centers for Medicare and Medicaid Services’ website.
The HIPAA Privacy Rule requires covered entities (including group health plans and issuers) to provide a Notice of Privacy Practices (or Privacy Notice) to each individual who is the subject of protected health information (PHI). Health plans are required to send the Privacy Notice at certain times, including to new enrollees at the time of enrollment. Also, at least once every three years, health plans must either redistribute the Privacy Notice or notify participants that the Privacy Notice is available and explain how to obtain a copy.
Self-insured health plans are required to maintain and provide their own Privacy Notices. Special rules, however, apply for fully insured plans. Under these rules, the health insurance issuer, and not the health plan itself, is primarily responsible for the Privacy Notice.
Model Privacy Notices are available through the Department of Health and Human Services
Plan administrators must provide an SPD to new participants within 90 days after plan coverage begins. Any changes that are made to the plan should be reflected in an updated SPD booklet or described to participants through a summary of material modifications (SMM).
Also, an updated SPD must be furnished every five years if changes are made to SPD information or the plan is amended. Otherwise, a new SPD must be provided every 10 years.
Plan administrators that are required to file a Form 5500 (> 100 participants in plan) must provide participants with a narrative summary of the information in the Form 5500, called a summary annual report (SAR). The plan administrator generally must provide the SAR within nine months of the close of the plan year. If an extension of time to file the Form 5500 is obtained, the plan administrator must furnish the SAR within two months after the close of the extension period.
Group health plans that include wellness programs may be required to provide certain notices regarding the program’s design. As a general rule, these notices should be provided when the wellness program is communicated to employees and before employees provide any health-related information or undergo medical examinations.
A Texas federal judge ruled late Friday that the health coverage of some 20 million Americans in limbo by ruling Obamacare as unconstitutional. The entire Affordable Care Act must be scrapped because Congress repealed the individual mandate penalty for failing to obtain insurance coverage last December as part of the Tax Cuts and Jobs Act.
1) There is no change to the law. A statement from White House that pending the appeal process, the law remains in place. ACA reporting requirements remain and penalties are unchanged.
2) Texas ruling expected to be overturned. The ruling will be appealed, ultimately to the Supreme Court if it gets that far and may take years to appeal. The Supreme Court has consistently upheld the constitutionality of the ACA twice in previous court challenges, and experts (including those who are both for and against the law) widely expect the Court to do the same in this case.
3) ACA is actually becoming more embraced overall. More states are choosing to expand Medicaid, some are creating their own individual mandates, and employer mandate penalties are being enforced by the IRS. Any change to the law that would take away affordable healthcare coverage from those who currently receive it could be a major political challenge for the governing party.
For ALE (applicable large employers) who are preparing for 2018 Forms 1095 and 1094 reporting, the Texas ruling has no immediate impact. The Employer Mandate is in full effect and the IRS continues to assess potential penalties for non-compliance. We’ll keep our current clients informed of any changes of substance.
If you would like to know more about MMS Corp and Health Care Reform for your company, contact us today.
Health and Human Services had released earlier this year the final version of its 2018 Individual Marketplace Guidance. Under the Affordable Care Act (ACA) this is issued annually. While the guidance is mostly related to the individual marketplace it does, however, include several items relevant to employers and group health plans.
Example:
Nov 2017 – How to Select a Broker on NYS of Health marketplace. 
Nov 2017- 2018 Individual Marketplace Guidance.
Nov 2017- Indiviudal Enrollement on Oscar or UnitedHealthcare Essential Plan.
Nov 2017 – Emnployer Reporting 2017 Updated 1094 & 1095 Now Available
Your decision on which will depend on your Household Income and the number of people in your household applying for coverage. In the chart below, if your HOUSEHOLD income (include all members or your tax household regardless of if they are applying for coverage or not) is below the limit shown based on the number in your household applying for coverage, then it is better for you to apply via your state marketplace such as the NY State of Health.
| # of Household Members Applying for Coverage | Maximum Household Income for Subsidy |
| 1 | $48,240 |
| 2 | $64,960 |
| 3 | $81,680 |
| 4 | $98,400 |
| Each Add’l. Household Member | $16,720 |
MEDICAID EXPANSION: For those with incomes less than 200% of the Federal Poverty level you should also enroll via NYSOH as you might qualify for the United Healthcare Essential Plan.
Alternatively, If you earn too much to qualify for a subsidy we will enroll you OFF EXCHANGE. The application forms can be found using the Oscar link above. Download the FULL ENROLLMENT KIT and complete the necessary forms to send to us for processing.
2018 NY State of Health Open Enrollment Runs from 11/1/17 – 1/31/18. Special enrollment period runs throughout the rest of the year for qualifying events.
The annual out of pocket limits for plan years beginning on or after January 1, 2018 are $7,350 for individual coverage and $14,700 for family coverage. These cost sharing limits apply to in-network essential health benefits offered under non-grandfathered health plans, both fully and self-insured. Annual deductibles, in-network co-insurance and other types of in-network cost sharing accumulate toward the out-of-pocket limit, including prescription drug copayments. Not included are premium payments, out-of-network cost sharing and spending on non-essential health benefits.
Beginning in 2017, the Marketplace will notify an employer as soon as possible when one of its employee’s first enrolls in subsidized Marketplace coverage. Since some employers may be liable for a penalty under the ACA’s employer mandate when an employee qualifies for a subsidized Marketplace coverage, this change to a more proactive notification process will hopefully provide employers with the opportunity to work with CMS in cases where an improper subsidy has been provided.
Open Enrollment in the Health Insurance Marketplace, Healthcare.gov, for 2018 will take place from November 1, 2017 through January 31, 2018.
Beginning in 2017, small employers electing coverage in the SHOP Exchange will have the option of “vertical choice,” offering plans across all metal levels (platinum, gold, silver and bronze) from one insurer. States who opt out of the vertical choice option will continue to offer employers the choice of selecting health plans that are available at one single metal level of coverage.
Health and Human Services had released earlier this year the final version of its 2018 Notice of Benefit and Payment Parameters. Under the Affordable Care Act (ACA) this is issued annually. While the guidance is mostly relate dot the individual marketplace itt does, however, include several items relevant to employers and group health plans, specifically:
Your decision on which will depend on your Household Income and the number of people in your household applying for coverage. In the chart below, if your HOUSEHOLD income (include all members or your tax household regardless of if they are applying for coverage or not) is below the limit shown based on the number in your household applying for coverage, then it is better for you to apply via your state marketplace such as the NY State of Health.
| # of Household Members Applying for Coverage | Maximum Household Income for Subsidy |
| 1 | $48,240 |
| 2 | $64,960 |
| 3 | $81,680 |
| 4 | $98,400 |
| Each Add’l. Household Member | $16,720 |
MEDICAID EXPANSION: For those with incomes less than 200% of the Federal Poverty level you should also enroll via NYSOH as you might qualify for the United Healthcare Essential Plan.
To enroll via NYSOH and have us as your broker use this link for instructions
Alternatively, If you earn too much to qualify for a subsidy we will enroll you OFF EXCHANGE. The application forms can be found using the Oscar link above. Download the FULL ENROLLMENT KIT and complete the necessary forms to send to us for processing.
2018 NY State of Health Open Enrollment Runs from 11/1/17 – 1/31/18. Special enrollment period runs throughout the rest of the year for qualifying events.
The annual out of pocket limits for plan years beginning on or after January 1, 2018 are $7,350 for individual coverage and $14,700 for family coverage. These cost sharing limits apply to in-network essential health benefits offered under non-grandfathered health plans, both fully and self-insured. Annual deductibles, in-network co-insurance and other types of in-network cost sharing accumulate toward the out-of-pocket limit, including prescription drug copayments. Not included are premium payments, out-of-network cost sharing and spending on non-essential health benefits.
Beginning in 2017, the Marketplace will notify an employer as soon as possible when one of its employee’s first enrolls in subsidized Marketplace coverage. Since some employers may be liable for a penalty under the ACA’s employer mandate when an employee qualifies for a subsidized Marketplace coverage, this change to a more proactive notification process will hopefully provide employers with the opportunity to work with CMS in cases where an improper subsidy has been provided.
Open Enrollment in the Health Insurance Marketplace, Healthcare.gov, for 2018 will take place from November 1, 2017 through January 31, 2018.
Beginning in 2017, small employers electing coverage in the SHOP Exchange will have the option of “vertical choice,” offering plans across all metal levels (platinum, gold, silver and bronze) from one insurer. States who opt out of the vertical choice option will continue to offer employers the choice of selecting health plans that are available at one single metal level of coverage.
Health Insurance GlossaryOn occasion, there are questions about what a specific word or term means in the context of health
insurance. This glossary is intended to serve as a tool to assist you in understanding some of the
most common terms.
A
Affordable Care Act (ACA): The comprehensive health care reform law enacted in March 2010.
Affordable Coverage: An employer-sponsored health plan covering only the employee, the cost of which
does not exceed a set annual percentage of the employee’s household income. Click here for more
information.
Allowed Amount: The maximum amount a plan will pay for a covered health care service. If a provider
charges more than the plan’s allowed amount, the plan participant may have to pay the difference through
a process called balance billing.
Annual Limit: A cap on the benefits an insurance company will pay in a year while a plan participant is
enrolled in a particular health insurance plan. Annual limits are sometimes placed on particular services such
as prescriptions or hospitalizations, on the dollar amount of covered services, or on the number of visits that
will be covered for a particular service. After an annual limit is reached, the plan participant must pay all
associated health care costs for the rest of the year.
B
Balance Billing: When a provider bills a patient for the difference between the provider’s charge and the
patient’s insurance plan’s allowed amount. For example, if the provider’s charge is $100 and the patient’s
insurance plan’s allowed amount is $70, the provider might bill the patient for the remaining $30.
Brand-Name Drug: A drug sold by a drug company under a specific name or trademark and that is
protected by a patent. Brand-name drugs may be available by prescription or over the counter.
C
CHIP (Children’s Health Insurance Program): Insurance program that provides low-cost health coverage to
children in families that earn too much money to qualify for Medicaid, but not enough money to buy private
insurance.
Claim: A request for payment of a benefit by a plan participant or his or her health care provider to the
insurer for items or services the participant believes are covered by the plan.
COBRA (Consolidated Omnibus Budget Reconciliation Act): A federal law that may allow a plan participant
or his or her dependents to temporarily keep their existing health coverage after certain qualifying events
(such as the participant’s employment ending or losing coverage as a dependent of a covered
employee). Click here for more information.
Coinsurance: The percentage of costs of a covered health care service the participant pays after having
paid his or her deductible.
Co-op Plan: A health plan offered by a non-profit organization in which the same people who own the
company are insured by the company.
Copay (also known as copayment): A fixed amount the participant pays for a covered health care service
after having paid his or her deductible.
Coverage:See Health Insurance
Cost Sharing: The share of costs covered by insurance that a plan participant pays out of his or her own
pocket. Cost sharing generally includes deductibles, coinsurance, and copays, but does not include
premiums.
D
Deductible: The amount a plan participant pays for covered health care services before his or her insurance
plan starts to pay.
Dental Coverage: Benefits that help pay for the cost of visits to a dentist.
Dependent: A child or other individual for whom a parent, relative, or other person may claim a personal
exemption that reduces their tax obligation.
Diagnostic Test: Test to figure out what the plan participant’s health problem is. For example, an x-ray can be
a diagnostic test to diagnose a broken bone.
Disability: A limit in a range of major life activities. This includes activities like seeing, hearing, and walking, and
tasks such as thinking and working.
Drug List: See Formulary.
E
Emergency Medical Condition: An illness, injury, symptom (including severe pain), or condition severe enough
that a reasonable person would seek medical attention right away.
Emergency Medical Transportation: Ambulance services for an emergency medical condition.
Emergency Services: Services to check for or treat an emergency medical condition.
Employer Mandate: Provision of the Affordable Care Act that requires certain employers with at least 50 full-
time employees (including full-time equivalents) to offer health insurance coverage to their full-time
employees (and their dependents) that meets certain affordability and minimum value standards, or pay a
penalty tax. The employer mandate is often referred to as “pay or play.” Click here for more information.
Employer Shared Responsibility Provision: See Employer Mandate.
Essential Health Benefits: A set of 10 categories of services health insurance plans must cover under
the Affordable Care Act. These include doctors’ services, inpatient and outpatient hospital care, prescription
drug coverage, pregnancy and childbirth, mental health services, and more. Click here for more information.
Exchange: See Health Insurance Marketplace.
Excluded Services: Health care services that a plan does not pay for or cover.
F
Flexible Spending Arrangement (FSA): See Health Flexible Spending Arrangement.
Formulary: A list of prescription drugs covered by a prescription drug plan or another insurance plan offering
prescription drug benefits. A formulary is also often called a drug list.
Fully Insured Plan: A health plan purchased by an employer from an insurance company.
G
Generic Drug: A drug that has the same active-ingredient formula as a brand-name drug.
Grandfathered Health Plan: A group health plan that was created—or an individual health insurance
policy that was purchased—on or before March 23, 2010. Grandfathered health plans are exempted from
many changes required under the Affordable Care Act. Plans or policies may lose their “grandfathered”
status if they make certain significant changes that reduce benefits or increase costs to consumers. A health
plan must disclose in its plan materials whether it considers itself to be a grandfathered plan and must also
provide consumers with contact information for questions or complaints.
Group Health Plan: In general, a health plan offered by an employer or employee organization that provides
health coverage to employees and their families.
H
Health Care Provider: An individual or facility that provides health care services. Examples include a doctor,
nurse, chiropractor, physician assistant, hospital, surgical center, skilled nursing facility, and rehabilitation center.
Health Flexible Spending Arrangement (Health FSA): An arrangement an individual establishes through his or
her employer to pay for out-of-pocket medical expenses with tax-free dollars. These expenses include
insurance copays and deductibles, and qualified prescription drugs, insulin, and medical devices.
Contributions to an FSA are subject to an annual limit that is adjusted for inflation each year. These
arrangements are also referred to as Health Flexible Spending Accounts.
Health Insurance: A contract that requires a health insurance company to pay some or all of a plan
participant’s health care costs in exchange for a premium.
Health Insurance Marketplace: A service that helps people shop for and enroll in health insurance. The
federal government operates the Marketplace, available at HealthCare.gov, for most states. Some states run
their own Health Insurance Marketplaces.
Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care
from doctors who work for or contract with the HMO. There are generally two main types of HMOs:
Health Reimbursement Arrangement (HRA): Employer-funded group health plans from which employees are
reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year. Unused amounts
may be rolled over to be used in subsequent years. Also referred to as a Health Reimbursement Account.
Health Savings Account (HSA): A type of savings account that allows an individual to set aside money on a
pre-tax basis to pay for qualified medical expenses, if he or she has a high deductible health plan. HSA
contributions are subject to an annual limit that is adjusted for inflation each year.
High Deductible Health Plan (HDHP): A plan with a higher deductible than a traditional insurance plan. To be
considered an HDHP, the plan must meet minimum deductible and maximum out-of-pocket limit
requirements, which are annually adjusted for inflation.
High-Risk Pool Plan: A state-subsidized health plan that provides coverage for individuals with expensive pre-
existing health care conditions.
Home Health Care: Health care services and supplies an individual receives in his or her home under doctor’s
orders. Services may be provided by nurses, therapists, social workers, or other licensed health care providers.
Hospice Services: Services to provide comfort and support for persons in the last stages of a terminal illness.
Hospitalization: Care in a hospital that requires admission as an inpatient and usually requires an overnight stay.
I
Individual Health Insurance Policy: Insurance policy for an individual who is not covered under an employer-
sponsored plan.
Individual Mandate: Provision of the Affordable Care Act that requires every individual to have minimum
essential coverage for each month, qualify for an exemption, or make a penalty payment when filing his or
her federal income tax return.
Individual Shared Responsibility Provision: See Individual Mandate.
In-Network: Health care providers (e.g., specialists, hospitals, laboratories) that have accepted contracted
rates with the insurer in order to participate in the insurer’s network. The insured person typically pays a lower
price for using services within the network.
Inpatient Care: Health care that an individual receives when formally admitted as a patient to a health care
facility, like a hospital or skilled nursing facility.
Internal Limit: Limitation that applies to individual categories of care—for example, a $250-per-
procedure deductible for inpatient surgery.
L
Lifetime Limit: A cap on the total lifetime benefits a plan participant may receive from his or her insurance
company. After a lifetime limit is reached, the insurance plan will no longer pay for covered services.
M
Mail-Order Drugs: Drugs that can be ordered through the mail.
Marketplace: See Health Insurance Marketplace.
Medicaid: A joint state and federal insurance program that provides free or low-cost health coverage to
some low-income people, families, children, pregnant women, the elderly, and people with disabilities.
Medical Care: Services rendered by a hospital or qualified medical care provider.
Medical Loss Ratio (MLR): A basic financial measurement used in the Affordable Care Act to encourage
health plans to provide value to enrollees. If an insurer uses 80 cents out of every premium dollar to pay its
customers’ medical claims and activities that improve the quality of care, the company has a medical loss
ratio of 80%. A medical loss ratio of 80% indicates that the insurer is using the remaining 20 cents of each
premium dollar to pay overhead expenses, such as marketing, profits, salaries, administrative costs, and
agent commissions. The Affordable Care Act sets minimum medical loss ratios for different markets, as do
some state laws.
Medicare: A federal health insurance program for people aged 65 and older, certain younger people with
disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a
transplant, sometimes called ESRD). Medicare consists of four parts:
Minimum Essential Coverage (MEC): Any insurance plan that meets the Affordable Care Act requirement for
having health coverage (sometimes called qualifying health coverage). Individuals without minimum
essential coverage may be subject to the individual mandate penalty.
Minimum Value: A standard of minimum coverage that applies to employer-sponsored health plans. Click
here for more information.
N
Network: The facilities, providers, and suppliers a health insurer or plan has contracted with to provide health
care services.
O
Obamacare: See Affordable Care Act.
Open-Access HMO: A type of HMO that allows enrollees to receive services from an out-of-network provider
at a higher cost than the enrollee would pay at an in-network provider. The additional costs may be in the
form of higher deductibles, copays, or coinsurance.
Open Enrollment Period: The yearly period when people can enroll in a health insurance plan.
Out-of-Network: Services received outside an insurer’s network. These services typically carry a higher cost to
the insured person.
Out-of-Pocket Costs: Expenses for medical care that are not reimbursed by insurance. Out-of-pocket costs
include deductibles, coinsurance, and copays for covered services, plus all costs for services that are not
covered.
Out-of-Pocket Limit: The most a plan participant can be required to pay for covered services in a plan year.
The out-of-pocket limit does not include monthly premium amounts or spending for services the plan does not
cover. An out-of-pocket limit is also often called an “out-of-pocket maximum.”
Out-of-Pocket Maximum: See Out-of-Pocket Limit.
Outpatient Care: Care received where a doctor has not written an order to admit the individual to a hospital
as an inpatient (in these cases, an individual is an outpatient even if he or she spends the night in the hospital,
but typically it does not require an overnight hospital stay).
P
“Pay or Play”: See Employer Mandate.
Physician Services: Health care services a licensed medical physician provides or coordinates.
Plan Year: A 12-month period of benefits coverage under a group health plan. This 12-month period need not
align with the calendar year.
Preauthorization: A decision by a health plan that a health care service or product is medically necessary. A
health plan may require preauthorization for certain services before they are provided (except in an
emergency), though preauthorization is not a promise by a health plan to cover the cost.
Pre-Existing Condition: A health problem an individual had before the date that his or her new health
coverage starts.
Pre-Existing Condition Exclusion Period: The period during which an insurance policy will not pay for care
relating to a pre-existing condition.
Preferred Provider Organization (PPO): A type of health plan that contracts with medical providers, such as
hospitals and doctors, to create a network of participating providers. Under a PPO, a plan participant pays
less in out-of-pocket costs if he or she uses providers that belong to the PPO’s network.
Premium: The amount a plan participant pays for his or her health insurance every month.
Premium Tax Credit: A tax credit an individual can use to lower his or her premium when he or she enrolls in a
plan through the Health Insurance Marketplace. The Premium Tax Credit is based on the income estimate
and household information the individual provides on his or her Health Insurance Marketplace application.
Prescription Drugs: Drugs and medications that, by law, require a prescription.
Prescription Drug Coverage: A health plan that helps pay for prescription drugs and medications.
Preventive Services: Routine health care that includes screenings, check-ups, and patient counseling to
prevent health problems.
Primary Care: Health services that cover a range of prevention, wellness, and treatment programs for
common illnesses.
Primary Care Provider: A physician, nurse practitioner, clinical nurse specialist, or physician assistant who
provides, coordinates, or helps an individual access a range of primary care services.
Q
Qualified Health Plan: An insurance plan that is certified by the Health Insurance Marketplace,
provides essential health benefits, follows established limits on cost sharing (like deductibles, copays, and out-
of-pocket limits), and meets other requirements under the Affordable Care Act. All qualified health plans
meet the minimum essential coverage requirement.
R
Referral: A written order from a primary care provider directing a patient to see a specialist or receive certain
health care services. Under many health plans, a plan participant must obtain a referral before he or she can
receive health care services from anyone except his or her primary care provider.
Rehabilitation Services: Health care services that help an individual keep, get back, or improve skills and
functioning for daily living that have been lost or impaired because he or she was sick, hurt, or disabled. These
services may include physical and occupational therapy, speech therapy, and psychiatric rehabilitation
services in a variety of inpatient and outpatient settings.
Rescission: The retroactive cancellation of a health insurance policy. Insurance companies will sometimes
retroactively cancel an entire individual health insurance policy if an individual made a mistake on his or her
application for the policy that amounts to fraud or an intentional misrepresentation of material fact.
S
Screening: A type of preventive service that includes tests or exams to detect the presence of a health issue,
usually performed when an individual has no symptoms, signs, or prevailing medical history of a disease or
condition.
Self-Insured Plan: Type of plan, usually present in larger companies, where the employer itself collects
premiums from enrollees and takes on the responsibility of paying employees’ and dependents’ medical
claims. These employers often contract with a third-party administrator for services such as enrollment, claims
processing, and provider networks.
Skilled Nursing Care: Services from licensed nurses in an individual’s home or in a nursing home.
Special Enrollment Period (SEP): A time outside the yearly Open Enrollment Period when an individual can sign
up for health insurance. An individual typically qualifies for a Special Enrollment Period as a result of certain
life events, such as losing other health coverage, moving, getting married, having a baby, or adopting a
child. By law, employer-sponsored plans must provide a special enrollment period of at least 30 days.
Specialist: A health care provider focusing on a specific area of medicine or group of patients to diagnose,
manage, prevent, or treat certain types of symptoms and conditions.
Summary of Benefits and Coverage (SBC): An easy-to-read summary that allows an individual to make
apples-to-apples comparisons of costs and coverage between health plans. An individual most commonly
receives an SBC when he or she shops for coverage or renews or changes coverage.
T
Traditional HMO: A type of HMO that provides no benefits for services obtained outside of a network.
TRICARE: A health care program for active-duty and retired uniformed service members and their families.
U
Urgent Care: Care for an illness, injury, or condition serious enough that a reasonable person would seek care
right away, but not so severe that it requires emergency room care.
Usual, Customary, and Reasonable Charge (UCR): The amount paid for a medical service in a geographic
area based on what providers in the area usually charge for the same or similar medical service. The UCR
amount is sometimes used to determine the allowed amount.
V
Vision Coverage: A health benefit that at least partially covers vision care, such as eye exams and glasses.
W
Waiting Period: The time that must pass before coverage can become effective for an employee or
dependent who is otherwise eligible for coverage under an employer-sponsored health plan.
Well-Baby/Well-Child Care: Routine doctor visits for comprehensive preventive health services that occur
when a child is 2 years of age or younger, and annual visits until a child reaches age 21. Services include
physical exams and measurements, vision and hearing screenings, and oral health risk assessments.
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The much ballyhooed Senate Republican health reform overhaul – the “Better Care Reconciliation Act of 2017” – was released today after weeks of intrigue.
The politics of the legislation are unclear, as GOP leaders have virtually no margin for error in a vote that Majority Leader Mitch McConnell intends to push by the end of next week. They may lose only two votes, assuming Vice President Mike Pence will cast the deciding party-line vote.
The Council is extremely pleased to note that the legislation leaves the employer/employee “exclusion” from taxation on group health benefits untouched.
Taxing employee premiums is a major threat during this process as Congress looks to increase revenue for the measure.
We’re also gratified that the “Cadillac Tax” on high cost health plans would continue to be delayed until 2025.
The House-passed American Health Care Act also included a provision that would delay implementation of the tax until 2025 (from the current law which would implement the tax in 2018). We will continue our efforts to see a complete elimination of the Cadillac Tax.
Top Level PoliticsConsidering the fact that preservation of the employer-provided group health insurance marketplace has been the top priority of The Council’s for years, we are relieved and grateful at these provisions.The fight going forward is going to be over the reoriented subsidies and Medicaid. There is nothing explicit that allows states to waive out of anything new but the general waiver requirements process has been expanded.The significant problems in the individual and exchange marketplaces, and corresponding cuts to the federal safety net of Medicaid, will have consequences for years to come on the entirety of the health care ecosystem – as evidenced by the growing political movements on the left in support of single-payer health coverage.As we continue to digest the political and practical consequences of this legislation, we will be issuing a summaryof key provisions of the legislation as prepared by our legal team at Steptoe & Johnson, later this afternoon.
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Breaking: House Passes Obamacare Repeal & Replace
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employees [including full-time equivalent employees] must offer affordable, minimum value coverage to their full-time employees, or pay a penalty tax) are zeroed out. However, the Form 1094 & 1095 reporting requirements are unchanged by the bill.
Affordable Care Act (ACA) |
American Health Care Act (AHCA) |
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Mandates |
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Assistance |
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Medicaid |
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Premium Age Differences |
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Health Savings Account Limits |
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“Cadillac” Tax |
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Other Taxes |
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Essential Health Benefits |
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The following chart summarizes the changes made to the AHCA by the MacArthur amendment.
| Insurance Market Provisions |
The MacArthur amendment:
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| Limited Waiver Option | States may obtain waivers from certain federal standards, in the interest of lowering premiums and expanding the number of enrollees. States could seek waivers from:
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| Limited Waiver Requirements | States must explain how the waiver will benefit the insurance market in their state, such as reducing average premiums, increasing enrollment, stabilizing premiums for individuals with pre-existing conditions, or increasing the choice of health plans.,Applications are automatically approved within 60 days unless denied by HHS. |
As always, please contact us info@medicalsolutiosncorp.com for a compliance review of your benefits offering. Click here to read the American Health Care Act in its entirety.