Category Archives: Health Care Reform

Final birth control rule issued for faith groups

Kathryn Mayer, LifeHealthPro

The Obama administration issued final rules Friday for the birth control mandate under the Patient Protection and Affordable Care Act, an area of the massive health overhaul that generated some of the greatest opposition.

The mandate — effective Aug. 1, 2012 — requires most employers to cover a range of birth-control methods in their health plans without charging a co-pay or a deductible.

Religious groups have strongly opposed the rule, and dozens of lawsuits against the federal government followed. Meanwhile, the administration — as well as women’s rights advocates — continued to praise the contraception mandate, saying it gives women control over their health care.

Health and Human Services Secretary Kathleen Sebelius said Friday the final rules “strike the appropriate balance” between respecting those religious considerations and increasing access to important preventive services for women.

“The health care law guarantees millions of women access to recommended preventive services at no cost,” Sebelius said in a statement.

“Today’s announcement reinforces our commitment to respect the concerns of houses of worship and other nonprofit religious organizations that object to contraceptive coverage, while helping to ensure that women get the care they need, regardless of where they work.”

The final rules finalize the proposed simpler definition of “religious employer” for purposes of the exemption from the contraceptive coverage requirement in response to concerns raised by some religious organizations.

These employers, primarily churches, may exclude contraceptive coverage from their health plans for their employees and their dependents.

Women at nonprofit, religious-based organizations — such as at certain hospitals and universities — will have the ability to receive contraception through separate health policies at no cost.

The approach taken in the final rules is similar but simpler than that taken in the proposed rules, and addresses many stakeholder concerns, HHS said.

Announced early last year, the original mandate required most employers, including religious-affiliated organizations, to cover a range of birth control methods.

That triggered a fast and intense pushback from Catholics and other religious groups that oppose birth control, and called the mandate an attack on their religious freedom.

In February, the administration proposed a work-around for religious nonprofits that object to providing health insurance that covers birth control, attempting to create a barrier between religious groups and contraception coverage, through insurers or a third party.

But groups such as the U.S. Conference of Catholic Bishops continued to oppose the regulations.

Proponents of the mandate argue that the requirement is a “win” for women, and will help reduce unplanned pregancies and abortions.

“The magic combination of responsible public and private policies and responsible behavior on the part of men and women can make all the difference in helping reduce unplanned pregnancy and improving the education and employment prospects of women and their families,” Sarah Brown, CEO of The National Campaign to Prevent Teen and Unplanned Pregnancy, said last year.

The Catholic Church has yet to respond to the final rules.


DOMA Is Dead: What That Means for Your Business

BY | 20 hours ago|

Many business owners may need to adjust their employee benefits packages and tax liabilities now that legally married gay couples will be eligible for federal benefits.

The U.S. Supreme Court’s landmark decision to overturn the 1996 Defense of Marriage Act this week has been celebrated by many as a social-justice victory. DOMA defines marriage as only existing between a man and a woman. By striking it down in a 5-4 decision, the Court cleared the way for same-sex couples, in the 12 states and Washington, D.C., where those marriages are recognized, to receive federal marriage benefits.

The ruling will require that many business owners make changes to their office administration. “Anytime the Supreme Court or Congress makes major changes to a law, there is a lot of work that happens behind the scenes to ensure the changes are understood and implemented correctly,” says Martin Mucci, president and chief executive of payroll and human-resource outsourcing company Paychex, in a statement.

While necessary changes will depend on the state your business is in, here are a few areas that may require updates, according to Rochester, N.Y.-based Paychex.

  1. Health insurance plans: The cost of an employee’s health-insurance coverage can be deducted from their income before taxes. With the DOMA ruling, employees will now be able to deduct the cost of their same-sex spouse’s health-insurance costs, just like opposite-sex spouses can.
  2. Flexible spending: Flexible spending accounts allow employees to set money aside for certain costs, such as commuting, qualifying prescriptions and childcare expenses. Same-sex spouses will now be eligible to set aside pre-tax money into these accounts, which helps reduce the employee’s tax bills, says Mike Trabold, the director of compliance for Paychex.
  3. Tax liability: As a business owner, many of your tax liabilities are calculated based on the taxable income of your employees. If the total taxable income of your employees decreases because they are able to deduct the cost of their same-sex partner’s health insurance and flexible spending plans, the business’s tax bill will also decrease.
  4. Employee time off: The Family Medical Leave Act protects an employee’s job for up to 12 weeks of unpaid leave to take care of immediate family, such as a spouse. The DOMA ruling could increase the amount of time off taken by employees.

The specifics of how the Internal Revenue Service plans to handle same-sex tax benefits remain uncertain, says Trabold. For example, how will same-sex couples who live in a state that does not recognize same-sex marriage be treated come tax time? Will same-sex couples and businesses that employ them be able to go back and file amended tax returns? What about someone who works in a state that recognizes same-sex marriage but lives in a state that does not?

“We are expecting a tremendous amount of clarifying regulation and other types of guidance coming out from both the federal agencies, like the IRS, and the states,” says Trabold. “There is likely going to be a lot of questions, probably a lot of lawsuits.”


Health Care Reform notes from the Atlanta Conference

I have just returned from the National Association of Health Underwriters annual conference in Atlanta.  As you can imagine, there was a lot of discussion and education on the topic of Health Care Reform, and many of the exhibitors were focused on the same topic.  I thought I would report to my clients on the more interesting tidbits of the 4 day trip.


Best lines from the presentations:

“This is chess, not checkers”

“An exchange is someplace you go to find out your choices, learn about the plans, compare costs, get advice and sign up for coverage.  We used to call those people “brokers.””

“The south has two seasons – Hot and Humid” (remember we were in Hotlanta)

“To those people who still think the law is going away – the toothpaste is out of the tube, and it is smeared all over the counter”

“The south has four seasons – shrimp, crab, crawfish and oysters”


As you can imagine, this was the area of largest concern.   Remember this applies to businesses with over 50 Full Time Equivalent Employees.  Some interesting items:

–        If you do not offer insurance, but no one qualifies for a subsidy, the $2000 tax cannot be triggered.  The tax is not triggered by part time employees, or dependents.

–        The law requires employee, and employee with child coverage, but not spouse or family coverage

–        When the employee gets a subsidy, the IRS will send the money to the insurance carrier, who in turn will lower your bill

–        The Affordability rule – the employee pays no more than 9.5% of their W2 income – is based on the lowest offered plan that meets the “Minimum Essential Benefit” rules – essentially the “Bronze” level plan.  If you offer other, richer plans, they are not involved in the computation

Here is a BIG concern:

Remember that the term “affordable” is now a legislated definition of 9.5% of income.  However, employees probably don’t think your plan is “affordable” unless it is free.  If an employee checks the box on the exchange application that says “my employer coverage is not affordable” they will automatically get the subsidy, even if you are meeting the 9.5% rule and they don’t qualify for the subsidy! The big questions are, therefore, how long will it take  (a) for you to get notified, (b) respond to the error, (c) get it reversed (the subsidy triggered a tax bill to your company!) (d) how long will it take to get the money back from the insurance company, and (e) will this trigger a special enrollment period – can you get your employee back on your plan off-cycle?



In the calculation to determine if you are over 50 “Full Time Equivalent” (FTE) employees, and hence subject to the Play or Pay tax, Part Timers are counted.  You add up the total hours (lets say 10 PT employees, X 25 hours/week = 250 hours per week X 4 = 1000 hours per month).  Now divide that by 120 (1000/120 = 8.33) and that is your number of FTE’s that get added to your full time employees.  You drop the decimal, so you have 8 FTE’s.  If you had 43 Full Time employees, for the law you now have 51 (43+8) employees, and are subject to the Play or Pay rules.

If you are a new business and not in existence for more than a year, this determination will be based on what you expect your employee count to be.

Yes, I know there are 4.33 weeks in a month, and that would make more sense.  Apparently the government is not aware of that.



A very popular method to work around the Play or Pay rules is moving your employees to a PEO – Professional Employer Organization.  This moves them off your payroll and insurance and onto the PEO’s books, and moves all the Human Resource functions as well.  A PEO typically charges between 3-15% of gross payroll.  (Yes, I have these available.)

The concern here currently is the definition being used by ObamaCare – which says they don’t counted as your employees only if they get their management and direction from the PEO or temp agency.   There is work in Congress to get this changed.  Note that the Supreme Court decided that the PEO is the employer of record in a previous case, but that new law trumps past decisions.



Do you own any interest in another business?  Under the affiliated control group rules, this may bring them into your employee counts.  The Attorney used this example:  you own a pizza parlor, and you helped out your son with his pizza parlor, and your daughter with her burger joint.  You own some of all three restaurants.  Each restaurant has 25 employees.  Under the Control Group rules, this makes all three restaurants subject to the Play or Pay rules.

How would that work?  Well if you are not offering insurance at any of the restaurants, the three businesses would owe a total of $90,000 to the government.  How did I get that?  You have 75 employees total, and the first 30 do not count;  so 45 employees X $2000 = $90,000.  Each Restaurant would owe their prorated share.


Final ACA wellness rules issued

Employee Benefit Advisor

By Amy Gordon and Jamie Weyeneth
May 31, 2013

On May 29, the U.S. Departments of the Treasury, Labor (DOL) and Health and Human Services issued final regulations amending the 2006 HIPAA nondiscrimination wellness regulationsto implement the employer wellness program provisions of the Affordable Care Act.  The final rules retain the two categories of wellness programs – “participatory wellness programs” and “health-contingent wellness programs.” The final rules do not deviate extensively from the proposed regulations issued in November 2012, although the content has been reorganized to more clearly set forth the requirements for each type of wellness program. The participatory wellness program rules are basically unchanged from the current 2006 regulations – participatory wellness programs comply with the HIPAA nondiscrimination requirements as long as the participant does not have to satisfy any additional standards and participation in the program is made available to all similarly situated individuals, regardless of health status. However, the final rules update and expand on the requirements for health-contingent wellness programs, which condition a reward on a participant’s satisfaction of a standard related to a health factor.

Under the final rules, there are two types of health-contingent wellness programs – “activity-only” programs and “outcome-based” programs. An activity-based wellness program provides a reward if an individual performs or completes an activity related to a health factor, but it does not require the individual to satisfy any specific health outcome. Examples include walking or exercise progams in which a reward is provided just for participation, or rewards for taking a health risk assessment without requiring any further action. An outcome-based wellness program requires an individual to either attain or maintain a specific health outcome – for example, not smoking or achieving certain results in biometric screenings – in order to obtain a reward.

All health-contingent wellness programs must meet five requirements:

1.  Eligible individuals must be given an opportunity to qualify for the reward at least once per year.

2.  Generally, the reward may not exceed 30% of the total cost of employee-only coverage (including both the employee and employer portion of the cost of coverage). If dependents are permitted to participate, the reward can be calculated on the basis of 30% of the cost of coverage in which the employee and any dependents are enrolled. In the case of a program designed to reduce or prevent tobacco use, the maximum reward amount is 50% of the total cost of coverage. The reward limit is cumulative for all health-contingent wellness programs.

3.  The program must be reasonably designed to promote health or prevent disease.

4.  For an activity-based wellness program, the full reward must be available to all similarly situated individuals by offering a reasonable alternative standard for obtaining a reward if it is either unreasonably difficult due to a medical condition to satisfy or medically inadvisable to attempt to satsify the otherwise applicable standard. A wellness program can require verification from a physician that an individual’s health factor makes it unreasonably difficult or medically inadvisable to attempt to satisfy the regular standard.

For an outcome-based wellness program, the full reward must be available to anyone who does not meet the standard based on the initial measurement, test, or screening.  The alternative standard cannot be a requirement to meet a different level of the same standard without additional time to comply – for example, if the initial standard is to achieve a body mass index of less than 30, the reasonable alternative standard cannot be to achieve a BMI of less than 31 on that same date, but it might be reasonable to require the individual to reduce his or her BMI by a smaller amount over the course of a year or other realistic period of time.  If the individual’s physician joins in the individual’s request for an alternative standard, the physician can be involved in setting (and adjusting) a second alternative standard, consistent with medical appropriateness.

An alternative standard is not reasonable under either type of program unless the time commitment required to satisfy the standard is reasonable.  If the alternative standard requires completion of an educational or diet program, the employer must assist the individual in finding the program, and the individual cannot be required to pay for the cost of the program.  The alternative standard must accommodate the recommendations of an individual’s personal physician as to medical approriateness.

5.  The availability of a reasonable alternative standard to qualify for the reward must be disclosed in all materials describing the terms of the wellness program. For an outcome-based wellness program, a similar statement must be included in a notice that the individual did not satisfy the initial outcome-based standard.  Sample language is provide in the final rule.

The final rules apply to both grandfathered and non-grandfathered group health plans in both the insured and self-insured markets and are effective for plan years beginning on or after January 1, 2014.  Plan sponsors and issuers should review their current wellness programs and health plan communications in light of these final rules.

Used with permission by McDermott Will & Emery LLP.


Ohio Insurance Regulators Warn of 80% increase in premiums under Obamacare

Word from Ohio from several sources are that “rate shock” is just around the corner.  Ohio is using a study by the Society of Actuaries and “estimates the cost to cover healthcare insurance will rise an average of 88 percent” for individual insurance policies.

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Reeve Conover is a Registered Representative. Securities offered through Cambridge Investment Research, Inc., a Broker/dealer member FINRA/SPIC. Cambridge and Conover Consulting are not affiliated. Licensed in SC, NC, NY, CT, NJ, and CA. - SIPC - Brokercheck