by Medcon Benefit Systems Group, Inc.

Live Well, Work Well – Back to School Edition

As summer winds down and the kids head back to school, we all make adjustments as we transition back to our “normal” routines. If you’re like most parents, you are probably just as stressed as your child about the start of a new school year, and we want to provide some practical ways to make the transition as smooth as possible for your family.

  • Re-establish routines – By setting a regular bedtime and mealtime for your children, you prepare them for the structured schedule they will need to follow at school. Begin the routine a few weeks in advance, so they are wide awake for breakfast on the first day of school.
  • Freeze a few dinners – Keep a couple of meals in your freezer for the first few weeks of school. This way you won’t have to stress about cooking and will have more time to spend with your kids.
  • Create a homework space – Designate and clear a special area where your children will be able to do their homework in peace. During the weeks leading up to school, consider offering crafts or projects they can do area to help them get used to working there.
  • Attend parent-teacher night – Take the time to visit with your children’s teachers so you know what to expect in the coming year.
  • Be enthusiastic – The best thing you can do for your children is to be excited about the new school year. When you are confident, your children will be confident, too.

While preparing your children for the first day of school can really help their transition, it is only part of the equation. Especially during the first few weeks, set aside time each night to talk about how your children are feeling about school and positively reinforce the experiences they’ve had—this will help your children adjust to their new grade.

As usual, as the kids head back to school, we also notice unwelcome germs coming home with them. Whether your children catch something from a friend at school, or you find yourself surrounded by co-workers with a cold, we have a few remendies for you and your loved ones. The best news – all of them can be found in your pantry, saving you money and time visiting the pharmacy. **As always, use your judgment when deciding whether or not to seek professional medical help.

Honey: A spoonful of this wonder-ingredient will not only help to ease a sore throat, but applying it directly to a minor burn and covering with a bandage can serve as an antibiotic and speed healing times.

Oatmeal: Not just a nutritious breakfast, oatmeal can be used to soothe a rash or irritated skin. Create a poultice by putting cooked, cooled oatmeal in a cotton cloth and applying to the affected area, or steep uncooked oatmeal in a warm bath to treat the entire body.

Toothpaste: The next time you or a loved one is stung by a bee, consider reaching for a tube of toothpaste. Just a dab of toothpaste on a bee sting can quickly relieve the irritation.

Baking soda: This versatile ingredient soothes sunburn when added to a lukewarm bath, relieves the itching from insect bites when added to a cool bath, and can relieve an upset stomach when half a teaspoon of it is dissolved in a glass of water.

Olive oil: This common cooking ingredient can soothe an earache for most adults. Put two to four drops of warm oil in your ear to lessen the pain until you can contact a medical professional.

Ginger: For hundreds of years, ginger has been used to combat nausea and upset stomachs. Simply steep a 1-inch slice of this root in hot water and drink to ease a bellyache.

As we head into fall, MedCon will be keeping you up to date on everything health-care related, so be sure to continue stopping by our blog. Please reach out to us should you have any questions.

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by Medcon Benefit Systems Group, Inc.

How Employers Should Handle MLR Rebates

The Affordable Care Act (ACA) requires health insurance issuers to spend a minimum percentage of their premium dollars on medical care and health care quality improvement. This percentage, or medical loss ratio (MLR), is 85 percent for issuers in the large group market and 80 percent for issuers in the small and individual group markets. Issuers that do not meet the applicable MLR standard must provide rebates to consumers.

The MLR requirements, which are enforced by the Department of Health and Human Services (HHS), became effective for issuers in 2011. Rebates must be paid by August 1 following the end of the MLR reporting year. Thus, issuers are required to pay rebates by Aug. 1, 2012, based on their 2011 MLRs.

In a report on 2011 MLR data, HHS noted that the vast majority of individuals are insured by issuers that met or exceeded the applicable MLR standard. However, for 2011, issuers in the large and small group markets are still expected to return $386 million and $321 million, respectively, in rebates.

Employers with insured group health plans may receive rebates this summer based on their issuer’s 2011 MLR data. Issuers were required to submit their 2011 MLR reports to HHS by June 1, 2012, so they may already know whether they will be issuing rebates by Aug. 1, 2012. Employers that expect to receive rebates should become familiar with the MLR rebate rules and should decide how they will administer the rebates. For assistance with rebates, please contact your MedCon Benefit Systems, Inc. representative.

MLR rebates

An issuer that does not meet its MLR standard must provide a rebate to the policyholder, which is typically the employer that sponsors the plan in the group health plan context. For current enrollees, issuers may provide rebates in the form of a lump-sum payment or a premium credit (that is, a reduction in the amount of premium owed).

Also, to avoid having to pay a rebate, an issuer may institute a “premium holiday” during an MLR reporting year if it finds that its MLR is lower than the required percentage. According to HHS, an issuer may use a premium holiday only if it is permissible under state law. Also, any issuers using premium holidays must meet certain other requirements, such as providing the holiday in a nondiscriminatory manner and refunding premium overpayments.

How an employer should handle any MLR rebate it receives from an issuer depends on the type of group health plan (an ERISA plan, a non-federal governmental group health plan or a non-ERISA, non-governmental plan) and whether the rebate is considered a plan asset.

ERISA Plans

Most, but not all, group health plans are governed by ERISA. Employers with ERISA plans should not assume that they can simply retain an MLR rebate. The Department of Labor (DOL) issued Technical Release 2011-4 to explain how ERISA’s fiduciary duty and plan asset rules apply to MLR rebates. Any rebate amount that qualifies as a plan asset under ERISA must be used for the exclusive benefit of the plan’s participants and beneficiaries.

Is the Rebate a Plan Asset?

According to Technical Release 2011-4, in the absence of specific plan or policy language addressing these types of distributions, whether the rebate will constitute a plan asset depends, in part, on the identity of the policyholder and on the source of premium payments.

  • If the plan or its trust is the policyholder, the policy is an asset of the plan and the entire rebate must be treated as a plan asset.
  • If the employer is the policyholder, as is most often the case, the portion of the rebate that must be treated as a plan asset depends on who paid the insurance premiums. For example:
    • If the premiums were paid entirely out of trust assets, the entire rebate amount is a plan asset;
      • If the employer paid 100 percent of the premiums, the rebate is not a plan asset and the employer can retain the entire rebate amount;
  • If participants paid 100 percent of the premiums, the entire rebate amount is a plan asset; and
    • If the premiums were paid partly by the employer and partly by the participants, the percentage of the rebate equal to the percentage of the cost paid by participants is a plan asset.

How Should the Rebate be Used?

Once an employer determines that all or a portion of an MLR rebate is a plan asset, it must decide how to use the rebate for the exclusive benefit of the plan’s participants and beneficiaries. DOL Technical Release 2011-04 identifies the following methods for applying the rebates:

  • The rebate can be distributed to participants under a reasonable, fair and objective allocation method. If the employer finds that the cost of distributing shares of a rebate to former participants approximates the amount of the proceeds, the fiduciary may decide to limit rebates to current participants.
  • If distributing payments to participants is not cost-effective because the amounts are small or would give rise to tax consequences to the participants, the employer may utilize the rebate for other permissible plan purposes, such as applying the rebate toward future participant premium payments or toward benefit enhancements.

If a plan provides benefits under multiple policies, the employer must be careful to allocate the rebate for a particular policy only to the participants who were covered by that policy. According to the DOL, using a rebate generated by one plan to benefit another plan’s participants would be a breach of fiduciary duty.

Is There a Time Limit for Using Rebates?

To the extent a rebate qualifies as a plan asset, ERISA would generally require the amount to be held in trust. However, most group health plans receiving rebates do not maintain trusts because their premiums are paid from the employer’s general assets (including employee payroll deductions). In Technical Release 2011-4, the DOL provides relief from the trust requirement for premium rebates that are used within three months of their receipt.

In addition, directing an issuer to apply the rebate toward future participant premium payments or toward benefit enhancements adopted by the plan sponsor would avoid the need for a trust and, in some circumstances, may be consistent with the employer’s fiduciary duties. Employers that decide to take this approach should coordinate with their insurance issuers to establish the process for handling rebates.

Non-federal Governmental Plans

Group health plans maintained by non-federal government employers (for example, state and local governments) are not governed by ERISA’s fiduciary standards. HHS’ interim final regulations on the MLR rules address how rebates for these plans should be handled.

Under these regulations, employers must use the portion of the rebate attributable to the amount of premium paid by employees for the benefit of its employees covered under the policy. This portion of the rebate must be applied to reduce employees’ premiums or must be provided to these employees as a cash refund. Under either option, the rebate may be applied to employees enrolled during the year in which the rebate is paid, rather than during the MLR reporting year.

Non-ERISA, Non-governmental Plans

HHS has also addressed rebates for non-governmental group health plans that are not subject to ERISA, such as church plans. Under HHS final regulations, an issuer may make a rebate payment to the policyholder (typically, the employer sponsoring the plan) if it receives the policyholder’s written assurance that the rebate will be used for the benefit of current subscribers using one of the options described above for non-federal governmental plans. Without this written assurance, issuers must pay the rebate directly to employees covered under the policy during the MLR reporting year.

Tax Treatment of Rebates

On April 19, 2012, the Internal Revenue Service (IRS) issued a set of frequently asked questions (FAQs) addressing the tax treatment of MLR rebates. In general, the rebates’ tax consequences depend on whether employees paid their premiums on an after-tax or a pre-tax basis.

After-tax Premium Payments

If premiums were paid by employees on an after-tax basis, the rebate will generally not be taxable income to employees and will not be subject to employment taxes. This tax treatment applies if the rebate is paid in cash or if it is applied to reduce current year premiums. However, if an employee deducted the premium payments on his or her prior year taxes, the rebate is taxable to the extent the employee received a tax benefit from the deduction.

Pre-tax Premium Payments

If premiums were paid by employees on a pre-tax basis under a cafeteria plan, the rebate will generally be taxable income to employees in the current year and will be subject to employment taxes. This is the case whether the rebate is paid in cash or is applied to reduce current year premiums. A premium reduction in the current year will reduce the amount that an employee can contribute on a pre-tax basis. Thus, there is a corresponding increase in the employee’s taxable salary that is also wages subject to employment taxes.

Additional Guidance

A copy of DOL Technical Release 2011-4 is available at: www.dol.gov/ebsa/newsroom/tr11-04.html.

A copy of the IRS’ FAQS is available at: www.irs.gov/newsroom/article/0,,id=256167,00.html.

More MLR guidance is available from HHS at: http://cciio.cms.gov/programs/marketreforms/mlr/index.html.

by Medcon Benefit Systems Group, Inc.

Self-Funded Plans Under Health Care Reform

The Affordable Care Act (ACA) includes numerous reforms affecting the health coverage that employers provide to their employees. Many of these reforms apply to all group health plans, regardless of their method of funding. Plans that have grandfathered status under ACA, however, are not required to comply with select health care reform requirements. In addition, self-insured plans are exempt from certain ACA requirements. This MedCon Benefit Systems, Inc. Legislative Brief summarizes how the health care reform law applies to self-insured plans.
REFORMS THAT APPLY TO SELF-INSURED PLANS

As noted above, many of ACA’s reforms affect all group health plans, regardless of whether they are fully insured or self-insured. For example, among many other reforms, self-insured and fully insured plans must comply with the following ACA provisions:

  • Dependent coverage for adult children up to age 26;
  • Coverage of preventive health services without cost-sharing (grandfathered plans are exempt);
  • No rescissions of coverage, except in the case of fraud or intentional misrepresentation of material fact;
  • No lifetime limits on essential health benefits and annual limits are restricted until 2014 (in 2014, all annual limits are prohibited); and
  • Improved internal claims and appeals process and minimum requirements for external review (grandfathered plans are exempt).

In addition, both self-insured and fully insured plans are subject to ACA’s requirement to provide participants and beneficiaries with the uniform summary of benefits and coverage. Sponsors of self-insured and fully insured plans alike must also comply with ACA’s requirement to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2.

REFORMS THAT DO NOT APPLY TO SELF-INSURED PLANS

Essential Health Benefits Package
Beginning in 2014, non-grandfathered insurance plans in the individual and small group markets must offer a comprehensive package of items and services, known as essential health benefits. This requirement applies to plans offered inside and outside of the state insurance exchanges (Exchanges). ACA identified in broad terms 10 benefit categories that must be included as essential health benefits. Within these broad categories, the individual states have flexibility to select their own benchmarks for defining essential health benefits.

Self-insured group health plans, health insurance coverage offered in the large group market and grandfathered plans are not required to cover essential health benefits.

Medical Loss Ratio Rules

The medical loss ratio (MLR) rules became effective on Jan. 1, 2011. These rules require health insurance issuers to spend 80 to 85 percent of their premium dollars on medical care and health care quality improvement, rather than administrative costs. Issuers that do not meet these requirements must provide rebates to consumers beginning in 2012. The MLR rules do not apply to self-insured plans.

Small Employer Tax Credit

Beginning with 2010 tax years, ACA created a tax credit for eligible small employers that provide health care coverage to their employees. In order to be eligible for the health care tax credit, an employer must:

  • Have fewer than 25 full-time equivalent employees (FTEs);
  • Pay average annual wages of less than $50,000 per FTE; and
  • Pay at least half of employee health insurance premiums (based on single coverage).

For tax years 2010 through 2013, the maximum health care tax credit is 35 percent of premiums for small business employers and 25 percent of premiums for small tax-exempt employers. An enhanced version of the credit will be effective in 2014.

The tax credit is only available for the purchase of health insurance coverage, and so it does not apply to self-insured coverage.

Review of Premium Increases

ACA required the Department of Health and Human Services (HHS) to establish a process for the annual review of unreasonable increases in premiums for health insurance coverage. HHS’s process provides that effective Sept. 1, 2011, issuers seeking rate increases of 10 percent or more for nongrandfathered plans in the individual and small group markets must publicly disclose the proposed increases, along with justification for the increases. Starting Sept. 1, 2012, the 10 percent threshold will be replaced with a state specific threshold to reflect insurance and health care cost trends particular to that state. The increases will be reviewed by either state or federal experts to determine whether they are unreasonable. This review process for rate increases applies to issuers in the small group and individual markets. However, it does not apply to grandfathered health plan coverage or to excepted benefits (for example, liability insurance, workers’ compensation insurance, limited scope dental or vision benefits, long-term care or nursing home benefits and hospital indemnity insurance). It also does not apply to self-insured plans.

Annual Insurance Fee

ACA’s revenue raising provisions require certain health insurance providers to pay an annual fee beginning in 2014. Issuers with net premiums in a calendar year of $25 million or less are exempt from the fee. Employers that self insure their employees’ health coverage are also exempt from the fee.

Methods to Allocate Insurance Risk

ACA includes reforms related to the allocation of insurance risk through reinsurance, risk corridors and risk adjustment. The purpose of these reforms, which become effective in 2014, is to protect against risk selection and market uncertainty as insurance changes and the Exchanges are implemented.

Self-insured plans are not subject to some of these provisions, such as the risk adjustment charges that states may impose on non-grandfathered plans in the individual and small group market. However, under ACA, each state must establish a transitional reinsurance program to help stabilize premiums for coverage in the individual market during the first three years of Exchange operation (2014-2016). Administrators of self-insured plans will be required to contribute to this program.

Insurance Market Reforms

Effective for 2014, health insurance issuers must comply with a new set of market reforms. Market reforms that are inapplicable to self-insured arrangements include:

  • Guaranteed Issue and Renewability – Health insurance issuers offering coverage in the individual or group market in a state must accept every employer and individual in the state that applies for coverage and must renew or continue to enforce the coverage at the option of the plan sponsor or the individual.
  • Insurance Premium Restrictions – Health insurance issuers will not be permitted to charge higher rates due to heath status, gender or other factors. Premiums will be able to vary based only on age (no more than 3:1), geography, family size and tobacco use.

Should you have questions about self-funded plans, health care reform, or any employee benefits, please feel free to contact the professionals at MedCon.

by Medcon Benefit Systems Group, Inc.

Health Care Reform Supreme Court Ruling – What It Means For Employers

On June 28, 2012, after much anticipation and speculation, the U.S. Supreme Court essentially upheld the entire Affordable Care Act (ACA) as constitutional. The main issue in the case was whether Congress had the authority under the U.S. Constitution to enact ACA’s individual mandate. Beginning in 2014, the individual mandate requires most individuals to obtain health care coverage or pay a penalty.

Because the Court upheld ACA, employers must continue to comply with ACA’s reforms.

  • ACA changes that have already been implemented will remain in effect, such as the requirement to cover adult children until age 26 and the requirement for non-grandfathered plans to cover certain preventive care services without cost-sharing.
  • ACA’s provisions that are not currently in effect will continue to be implemented as planned. For example, effective for 2013 plan years, participants’ pre-tax contributions to health flexible spending accounts (FSAs) will be limited to $2,500 per year.

While it is possible that changes will be made to ACA through future legislation or court rulings, ACA is the health care reform law currently in effect. Thus, employers should continue to prepare for ACA changes that become effective in 2012 and 2013. Employers should also keep in mind the ACA reforms that will take place in 2014.

ACA REFORMS – 2012 AND 2013

Annual Limits

Beginning Jan. 1, 2014, group health plans will no longer be able to impose annual limits on essential health benefits. However, until then, certain minimum annual limits are permitted. Unless a plan received a waiver of the annual limit requirements, its annual limits on essential health benefits should be set at least as high as the following amounts for each applicable plan year:

  • $750,000 for plan years beginning on or after Sept. 23, 2010, but before Sept. 23, 2011;
  • $1.25 million for plan years beginning on or after Sept. 23, 2011, but before Sept. 23, 2012; and
  • $2 million for plan years beginning on or after Sept. 23, 2012, but before Jan. 1, 2014.

Form W-2 Reporting Requirements

Beginning with the 2012 tax year, employers that are required to issue 250 or more W-2 Forms must report the aggregate cost of employer-sponsored group health coverage on employees’ W-2 Forms. The cost must be reported beginning with the 2012 W-2 Forms, which are due in January 2013. This requirement is optional for smaller employers for the 2012 tax year and until further guidance is issued. This reporting is for informational purposes only; it does not affect the taxability of benefits.

Women’s Preventive Care Services

Effective for plan years starting on or after Aug. 1, 2012, non-grandfathered plans must cover specific preventive health services for women without cost-sharing, such as deductibles, copayments and coinsurance. These services include well-woman visits, breastfeeding support, domestic violence screening, STD screening and contraceptives.

Exceptions to the contraceptive coverage requirement apply to religious employers.

Medical Loss Ratio Rebates

Fully insured plans may receive rebates in August 2012 if they qualify for a rebate from their health insurance issuers due to the medical loss ratio (MLR) rules. The MLR rules require insurance companies to spend a certain percentage of premium dollars on medical care and health care quality improvement, rather than administrative costs. Employers may receive rebates from issuers in the form of a premium credit, lump-sum payment or premium holiday, if permissible under state law. Any portion of a rebate that is a plan asset must be used for the exclusive benefit of the plan’s participants and beneficiaries. This may include, for example, reducing participants’ premium payments.

Summary of Benefits and Coverage

Plans and insurance issuers must provide a summary of benefits and coverage (SBC) to participants and beneficiaries. The SBC is intended to be a concise document – no more than four double-sided pages – providing simple and consistent information about health plan benefits and coverage in plain language. A template for the SBC is available, along with instructions and examples for completing the template and a uniform glossary of terms.

Plans and issuers must start providing the SBC as follows:

  • Issuers must provide the SBC to health plans effective Sept. 23, 2012.
  • Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period beginning with the first day of the first open enrollment period that begins on or after Sept. 23, 2012. Thus, many plans will need to include the SBC in their open enrollment packages for 2013.
  • For participants who enroll in coverage other than through an open enrollment period (for example, newly eligible individuals and special enrollees), plans and issuers must provide the SBC beginning on the first day of the first plan year that begins on or after Sept. 23, 2012.

If either the plan or issuer provides the SBC to a participant or beneficiary in accordance with the timing and content requirements, both will have satisfied their SBC obligations. Thus, a fully-insured plan will satisfy the requirement to provide an SBC to an individual if the issuer provides a timely and complete SBC to the individual.

In addition, once the SBC requirement becomes effective, plans and issuers must provide 60 days’ advance notice of any material modifications to the plan that are not related to renewals of coverage. Notice can be provided in an updated SBC or a separate summary of material modifications.

CER Fees

Self-funded plans and health insurance issuers must pay comparative effectiveness research fees, or CER fees, to help fund ACA’s new Patient-Centered Outcomes Research Institute. The CER fees apply for plan years ending on or after Oct. 1, 2012. The CER fees do not apply for plan years ending on or after Oct. 1, 2019. For calendar year plans, the research fees will be effective for the 2012 through 2018 plan years.

For plan years ending before Oct. 1, 2013 (that is, 2012 for calendar year plans), the CER fee is $1 multiplied by the average number of lives covered under the plan. The CER fee will increase to $2 for the next plan year. For plan years ending on or after Oct. 1, 2014, the CER fee amount will be indexed for inflation.

Sponsors of self-funded plans and issuers must report and pay their CER fees by July 31 of each year for the plan year that ended during the preceding calendar year. The first possible due date for reporting and paying CER fees is July 31, 2013.

FSA $2,500 Contribution Limit

Effective for plan years beginning on or after Jan. 1, 2013, an employee’s salary reduction contributions to a health FSA offered under a cafeteria plan are limited to $2,500. The $2,500 limit will be indexed for cost-of-living adjustments for 2014 and later years.

Elimination of Retiree Drug Subsidy Deduction

Employers that receive the Medicare Part D retiree drug subsidy have been able to take a tax deduction for their prescription drug costs, including costs attributable to the subsidy. Also, these employers do not have to pay tax on the drug subsidy amount. Effective for 2013, the deduction for the retiree drug subsidy will be eliminated.

Additional Medicare Tax Withholding

Effective Jan. 1, 2013, an additional 0.9 percent Medicare tax will apply to high-income individuals. Employers are required to withhold the additional Medicare tax on an employee’s wages in excess of $200,000 ($250,000 for married couples filing jointly).

Health Insurance Exchanges – Notice of Availability

Employers must provide all new hires and current employees with a written notice about ACA’s health insurance Exchanges and the consequences if an employee decides to forgo employer-sponsored coverage and purchase a qualified health plan through an Exchange. This notice requirement generally becomes effective as of March 1, 2013. The Department of Health and Human Services (HHS) has indicated that it intends to issue model Exchange notices.

More agency guidance is also expected on this notice requirement.

ACA REFORMS – 2014

Additional ACA coverage mandates and reforms become effective in 2014. For example, effective for plan years beginning on or after Jan. 1, 2014, group health plans and issuers may not:

  • Impose pre-existing condition exclusions on any covered individual, regardless of the individual’s age;
  • Have a waiting period for coverage that exceeds 90 days; or
  • Apply any annual limits on essential health benefits.

In addition, effective in 2014, ACA’s state-based insurance Exchanges are scheduled to be operational. Also in 2014, the individual mandate will become effective, as will ACA’s “pay or play” penalties for employers. Under the pay or play rules, certain employers with at least 50 full-time equivalent employees will face penalties if one or more of their full-time employees obtains a premium credit through an Exchange. An individual may be eligible for a premium credit either because the employer does not offer health care coverage or the employer offers coverage that is either not “affordable” or does not provide “minimum value.”

FUTURE OF HEALTH CARE REFORM

Although ACA survived a major hurdle when the Supreme Court upheld it, changes may be made to the health care reform law in the future by the courts or by Congress. Legal challenges to ACA’s validity are likely to continue. For instance, Catholic-affiliated institutions have already filed lawsuits challenging ACA’s contraceptive coverage requirement on the basis that it violates their religious freedoms. Also, Republican lawmakers are continuing with their efforts to eliminate or modify some of ACA’s controversial provisions. However, major legislative changes to ACA will likely require a significant shift in power in the legislative and executive branches of government and, thus, will depend on the outcome of the November 2012 elections.

MedCon Benefit Systems, Inc. will continue to monitor the status of the health care reform law, and will provide updated information as it becomes available.

by Medcon Benefit Systems Group, Inc.

Legislative Brief: HSA Limits Will Increase for 2013

The Internal Revenue Service (IRS) issued Revenue Procedure 2012-26, which increases limits for health savings accounts (HSAs) effective for calendar year 2013. The following HSA limits will increase for 2013.

  • Annual contribution limits for single and family coverage;
  • Maximum out-of-pocket expense limits for coverage under a high deductible health plan (HDHP); and
  • Minimum deductibles for HDHPs.

HSA Contribution Limits

For 2013, the annual HSA contribution limit for an individual with self-only coverage under an HDHP is $3,250 (up from $3,100 for 2012).

For 2013, the annual HSA contribution limit for an individual with family coverage under an HDHP is $6,450 (up from $6,250 for 2012).

HDHP Out-of-Pocket Expense Limits

The maximum out-of-pocket expense (deductibles, co-payments and other amounts, but not premiums) limit for self-only HDHP coverage for 2013 is $6,250, which is up from $6,050 for 2012.

For family HDHP coverage, the maximum out-of-pocket expense limit for 2013 is $12,500, which is up from $12,100 for 2012.

HDHP Deductible Limits

For 2013, the deductibles under an HDHP must be at least $1,250 for self-only coverage (up from $1,200 for 2011 and 2012) and $2,500 for family coverage (up from $2,400 for 2011 and 2012).

**This MedCon Benefit Systems, Inc. Legislative Brief is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2012 Zywave, Inc. All rights reserved.

by Medcon Benefit Systems Group, Inc.

Health Care Reform in the Supreme Court

Last week, the Supreme Court began hearings regarding the constitutionality of the PPACA. Unum U.S. Senior Vice President and General Counsel Chris Collins released a summary of the major issues to be reviewed by the Court regarding the PPACA.

Likely the most discussed issue thus far has been the constitutionality of the individual mandate, followed by the question of whether or not the PPACA would continue to stand if the individual mandate is deemed unconstitutional. The Court will also need to determine if the case can be decided before 2014 when the “tax penalty” goes into effect.

For the full summary from Chris Collins of Unum, please click here to view. Keep checking back as we follow the Supreme Court activity regarding Health Care Reform.

by Medcon Benefit Systems Group, Inc.

Let Us Reflect

Last week marked the two year anniversary of Health Care Reform, and this week begins with the Supreme Court starting to hear arguments over the law’s constitutionality. I think it is a good time to reflect back on what has happened as reform enters into its third year.

With the exception of young people, who has benefited by having coverage extended to age 26 under their parents’ coverage? More Americans lack coverage today than four years ago. The percentage of uninsured rose to 17.1% this year, the highest rate since 2008.

The Class Act, the part designed to provide long-term care insurance, has unfortunately been dismissed, thrown out, given up on.

“If you like what you have, you can keep it.” If you like your employer-sponsored coverage you can keep it. Unfortunately, according to a Gallup poll, the number of folks getting their coverage from their employer is decreasing. This number reached a record low in 2011, with only 44.6% getting health insurance from employers.

This week marks an unprecedented case. One that will impact most everyone in some way. The Supreme Court has several options, from upholding the law to striking it down in its entirety. It could also avoid the law’s constitutionality at all, if it finds the lawsuits challenging the law are premature.

Whatever happens – MedCon will be watching and keeping up with all updates. Please keep checking back to stay informed.

by Medcon Benefit Systems Group, Inc.

FMLA Part III: Notice and Certification

Eligible employees using FMLA leave must provide a 30-day advance notice to take FMLA leave when the need is foreseeable, otherwise notice is to be provided as soon as practicable. An adequate amount of information must be provided in order for the employer to determine whether the FMLA applies to the leave request. If the employee is applying for FMLA leave for the first time, the employee is not required to assert FMLA rights or even mention the FMLA. If the employee has previously been provided FMLA-protected leave, the employee must specify the qualifying reason or need for FMLA leave.

As an employer, you have some important responsibilities in order to remain compliant and avoid costly fees. A notice approved by the Secretary of Labor explaining rights and responsibilities under FMLA must be posted and included in the employee handbook or written guidance concerning employee benefits. The FMLA poster provided by the Department of Labor here is available for use by employers.

Once the employee requests FMLA leave or it is determined the leave is for FMLA purpose, the employer is responsible for notifying the employee of the rights and responsibilities under the FMLA and explain that the leave will be designated and counted as FMLA leave. Optional forms WH-381 and WH-382 are also provided on the Department of Labor website for employer use.

Employers can require certification from a health care provider when FMLA leave is requested, as well as a certification that they are fit to resume work upon their return. The Department of Labor has also provided forms WH-380E and WH-380F for employer use regarding certification.

As always, along with our sister company, ERA, we welcome the opportunity to assist you with any of your compliance needs. Please do not hesitate to contact us to find out how we can be of valuable service to you.

*This article is intended to provide general guidance and should not be considered legal advice.

by Medcon Benefit Systems Group, Inc.

FMLA Part II: Leave Entitlement

According to the United States Department of Labor, employees who are eligible under FMLA may take up to 12 work weeks of unpaid leave during a 12 month period due to one or more of the following reasons:

  • For the birth and care of a newborn child of the employee
  • For the placement with the employee of a son or daughter for adoption or foster care
  • To care for a spouse, son, daughter or parent with a serious health condition
  • To take medical leave when the employee is unable to work because of a serious health condition
  • For qualifying exigencies arising out of the fact that the employee’s spouse, son, daughter or parent is on active duty or call to active duty status as a member of the National Guard or Reserves in support of a contingency operation

A serious health condition is defined as an illness, injury, impairment or physical or mental condition that involves inpatient care or continuing treatment by a health care provider for a condition that prevents the employee or the qualified family member from performing the functions of their job. Employees can also take leave in blocks on a “reduced leave schedule” when medically necessary with reasonable efforts to schedule the leave so as not to disrupt the employer’s operations. Additionally, during FMLA leave, the employer must maintain the employee’s health coverage under any group health plan on the same terms as if the employee had continued to work. When the employee returns to work, they are to be restored their original job, or to an equivalent job with equivalent pay, benefits and other terms and conditions of employment.

To view the full code of federal regulations regarding the FMLA, please click here.

The final post in the series will discuss appropriate notice and certification under FMLA.

*This article is intended to provide general guidance and should not be considered legal advice.

by Medcon Benefit Systems Group, Inc.

FMLA Part I: Who Is Eligible?

During our many years of service to our clients, the regulation that brings the most questions is the Family Medical Leave Act (FMLA). In a concentrated effort to answer questions and bring clarity to the Act, we are going to divide the FMLA information into three distinct parts and actually give you links to appropriate forms directly from the Department of Labor website.

The FMLA allows employees to take up to 12 work weeks, consecutive or intermittent, depending on the circumstances, unpaid, job-protected leave in a 12-month period for specified family and medical reasons. Employees are eligible if they:

  • Work for a covered employer
  • Have worked for the employer for a total of 12 months
  • Have worked at least 1,250 hours over the previous 12 months
  • Work in the United States where at least 50 employees are employed by the employer within 75 miles.

There are a few exceptions related to military service. If an employee had a break in service during the 12 month employment requirement or 1,250 hour requirement due to fulfillment of the employee’s National Guard or Reserve military service obligation, the time performing the military services counts in determining whether the employee has been employed for at least 12 months or 1,250 hours. Additionally, there are military family leave entitlements, including military caregiver leave and qualifying exigency leave. Military caregiver leave allows eligible employees up to to 26 weeks (in a single 12 month period) unpaid leave to care for a service member with a serious illness or injury that is the employee’s spouse, son, daughter, parent or next of kin. To find out more details on military caregiver leave and what is classified as a “qualifying exigency,” click here to be directed to the Department of Labor website.

Our next post in the series will discuss leave entitlement.

*This article is intended to provide general guidance and should not be considered legal advice.