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Substandard Health Insurance Hits Workplaces, Thanks to Bad Calculator


Health-InsuranceRemember why the Affordable Care Act (ACA) exists? One of its basic goals was to define a minimum standard for the benefits consumers receive when they sign up for health insurance. The intent is good, but it turns out there’s a problem. The online calculator that employers can use to determine if their plans meet ACA standards apparently has a glitch.

Little glitch, big implications

Self-insured employers have to prove their plans are adequate. One way to do that is to use the “minimum value” calculator on the Department of Health and Human Services website. Employers check a box beside each of the benefits they’re offering; then they plug in the amount employees have to contribute toward the cost of care. The calculator tells them whether or not their plan meets minimum standards.

Reportedly, a flaw in the calculator has told dozens of employers they’re in the clear, when in fact, the plans they’re offering lack rudimentary benefits. Thus, these employers are heading into 2015 with substandard plans, without facing any of the penalties the ACA put in place to prevent exactly that.

Who suffers? Employees. If workers want better coverage – coverage that actually meets minimum ACA requirements – they’ll have to pay for it themselves. That’s because they’re not eligible for a health care subsidy. After all, their employer is on the books as providing “adequate” coverage.

Insurance experts advise caution

While Health and Human Services is aware of the glitch, they have not yet fixed it. Still, experts urge employers to resist the urge to save a buck by gaming the system. Here are three reasons to take that advice.

1. This loophole is not here to stay. This is a temporary glitch, not an actionable opportunity. Eventually, it will be resolved. How could it not? “Employer insurance without hospital coverage ‘flies in the face of Obamacare,’ said Liz Smith, president of employee benefits for Assurance, an Illinois-based insurance brokerage” (source).

2. The consequences may catch up later. Employers who go for short-term gain at their employees’ expense may suffer for it down the road. When the glitch is resolved, will these employers face severe retroactive fines? It’s possible.

3. This is not a harmless indiscretion. While employers can save a buck in the short run, workers bear the cost of that indiscretion directly. For some employees, it’s a cost they simply can’t afford.

Stay tuned for more ACA developments! If you haven’t already done so, subscribe to our blog in the top right corner of this screen. 

Affordable Care Act Update: Will the mandate be delayed before 1/1/15?


Affordable-Care-Act-UpdateHere’s another insightful Affordable Care Act update from our friend Jason M. Cogdill, Corporate Counsel & Benefits Attorney at ProBenefits, Inc.

Will the employer mandate be delayed? I continue to estimate the probability of delay as roughly 50 percent.  Not only was the mandate not delayed after Labor Day, but the IRS re-released draft forms for the employer and insurer reporting (6055/6056 reporting) that will be part of the mandate.  That is being interpreted by some as a sign that the agencies are proceeding on schedule and that a delay may not be imminent.

If delayed, it would of course be helpful if employers knew enough ahead of 1/1/15 to adjust any planned workforce adjustments or expanded coverage.  The mid-term elections are taking place November 4.  I have two informal dates circled: October 15 and November 14.  If the mandate is not delayed by the week of 10/15, it is unlikely to be delayed prior to the elections. If not delayed prior to the elections, the next key date is November 14, the day before the 2015 Marketplace open enrollment period begins. If not delayed by 11/15, then the probability of delay likely decreases significantly.  In 2013, the delay was announced on July 2 (six months prior to planned effective date), so we are already well past that at this point and the clock is ticking. 

Without question, the best plan for 100+ employers is to prepare now to comply and let any potential delay be a backup solution.  Groups with 100 or more full-time employees, including equivalents, need to prepare to identify all 30+ hour employees and evaluate options to offer qualifying coverage at the 2015 effective date.  If any organization has not yet done the full analysis, the three initial key questions are: (1) does the mandate apply in 2015 based on the IRS formula for FT + FTE determined by any 6-month period in 2014; (2) if so, what is the specific effective date in 2015; and (3) which employees will qualify as 30+ hour employees and must be offered coverage to avoid potential penalties.

Key Developments since June

  • June 25 – Agencies issued final rules on eligibility waiting period, including confirmation of orientation period extension
  • June 30 – U.S. Supreme Court ruled in favor of privately held companies challenging contraceptive mandate
  • June 30 – IRS published final rules on small business tax credit (only available to qualifying employers purchasing coverage through FF-SHOP for 2014 and beyond)
  • July 22 – Two federal Circuit Courts of Appeal issued opinions on challenges to ACA subsidy awards in states without state exchanges (likely to go to Supreme Court in 2015)
  • July 24 – IRS issued proposed regulations on issues regarding premium tax credit
  • July 24 – IRS released draft forms for insurer and employer reporting under Code 6055 & 6056
  • July 24 – IRS set maximum amount for individual mandate penalty (percentage) at $2,448 per individual (up to $12,240 for family of 5+)
  • August 28 – IRS re-released draft forms for reporting, with updated instructions

Update on “Skinny Plans” and Alternative Options for Large Employers

A continuing hot topic is how “skinny plans” (also known as “MEC” plans to designate Minimum Essential Coverage) will or will not assist large employers with mandate compliance in 2015. The keys to remember with MEC plans are that: (1) these plans meet the low standard of Minimum Essential Coverage to help an employer avoid the A penalty (“sledgehammer”) by offering coverage to all 30+ hour employees; and (2) these plans, by themselves, do not meet the higher standard of Minimum Value (60% actuarial value or Bronze level coverage) to satisfy the terms of the B penalty (“tackhammer”).  At this point, I think that most employers that use MEC plans will use them in conjunction with a plan that provides Minimum Value, in order to avoid potential B penalties for employees who decline the MEC coverage and receive premium subsidies at the Marketplace. 

A related topic involves a new plan option that I am referring to as “skinny Bronze.”  This is a plan designed to look like Bronze major medical coverage, except without hospitalization or surgical benefits.  The promoters of these plans claim that they meet Minimum Value.  If so, then such plans would allow an employer to offer them as a single option and avoid any risk of the A or B penalty if the coverage is offered to all 30+ hour employees and affordable to 30+ hour employees consistent with the 9.5% rule. 

The primary approach for all employers is offering Minimum Value, affordable coverage to all 30+ hour employees for 2015.  If that strategy is not workable for a particular organization, then alternative strategies are available, including the above.  However, before an MEC strategy, 70% strategy, or skinny Bronze strategy is considered, an employer will need to understand fully all of the potential scenarios and risks.

Upcoming Item: Reinsurance Fees

Other than the mandate, the only upcoming ACA item for the remainder of 2014 is the new required contribution to reinsurance fee.  The reinsurance fee took effect in January and applies based on the calendar year for 2014-2016.  Many fully insured plans are already paying reinsurance fees because they were built into the 2014 premiums by the carrier (the carrier is required to calculate and submit them).  For self-funded plans, the reinsurance fees will be paid in two installments.  Employers who are subject to the fees will have to report the participant count to HHS by November 15.  HHS will then bill the employer for $52.50 per participant, theoretically by 12/15, with payment due by 1/31.  The remaining amount ($10.50 per participant) will be billed to the employer by the Treasury during 2015.  The amount of the reinsurance fee for 2014 is $5.25 per member per month ($63 annually).  The fee will decrease to $3.67 per month ($44 annual) for 2015.

CMS has been hosting a series of webinars on the calculation and submission of the reinsurance fee.  You can access copies of the slides from these presentations via the CMS webpage and REGTAP. 

Do you have comments about Affordable Care Act developments? Share with them with us below. Also, make sure to subscribe to the COBRA blog at the top right corner of this screen.

The Latest on HSAs and COBRA Administration


HSA's-and-COBRA-AdministrationConsumers are finally getting the hang of Health Savings Accounts.

That’s the word from the HSA Council of the American Bankers' Association and America’s Health Insurance Plans in their latest HSA data review. After several years of research, the data shows that nearly twice as many people opened a Health Savings Account (HSA) in 2012 as in 2010, and 52 percent of account holders spent more than 80 percent of their money for healthcare expenses. According to the investment consulting firm Devenir, there are now about 11.8 million accounts with an estimated $22.8 billion in assets as of June 2014.

These studies confirm that HSAs are doing what they were meant to do: Help consumers pay for routine healthcare expenses and save towards future medical expenses. And with the Affordable Care Act in play, more Americans are eligible for an HSA than ever before.

It’s easy to understand why HSAs are gaining in popularity among employees with high-deductible health insurance plans. Employers and employees can both contribute to accounts. Most accounts include a nominal amount of interest and many allow investing once a minimal threshold is achieved. Employees can then deduct contributions from their taxes or contribute pre-tax dollars from their paychecks. These funds can be used to pay for out-of-pocket healthcare expenses their group health insurance plans don’t cover. Any unused funds can be rolled over from one year to the next.

What happens to the HSA when COBRA comes into play?

Let’s say an employee with an HSA resigns or is terminated from her job. The money in the account at the time of termination is hers to keep. When she and her dependents become eligible for COBRA, they can take the HSA with them. She can still contribute to the HSA, keep it as long as she wants, and continue to use it to pay for qualified medical expenses, including COBRA premiums, qualified medical, dental, or vision expenses,  Medicare premiums, and long-term care premiums.

For employers, HSAs are less complex than Health Reimbursement Accounts (HRAs) from a COBRA administration perspective. Why?

Consider the scenario above, but replace the employee’s HSA with an HRA. When that employee resigns or is terminated and goes on COBRA, the employer still has to continue funding the HRA. If the next year rolls around and the employee stays on COBRA, the employer has to fund the HRA again. That means doling out money for someone who is no longer on the payroll.

But with an HSA, the employer is no longer obligated to contribute money or administer the HSA when the employee or dependents are eligible for COBRA, so it’s a simpler process.

Need more advice on COBRA administration? Subscribe to our blog in the top right corner of this screen.

Annual Enrollment Communication Strategy: Make it Personal


Open-Enrollment-CommunicationCommunicating effectively with your employees can be a challenge any time of the year. But if there’s one time your communication needs to be crystal clear and hitting the mark, it’s during annual open enrollment for healthcare benefits.

That’s especially true now that the Affordable Care Act (ACA) and the new Marketplace exchanges are fully operational. With a host of new guidelines and regulations, employers have to be better educated and informed than ever before. And with more choices, employees have more questions than ever.

Employees still need more education

According to the 2014 Aflac Workforces Report, 76 percent of American workers say they’ve made mistakes when choosing their benefits, and 42 percent say those mistakes have cost them money. Whether it’s failing to take advantage of supplemental coverage such as vision or dental, choosing the wrong level of coverage, or contributing too little to Flexible Spending Accounts, far too many workers are making benefits coverage decisions they end up regretting – often simply due to a lack of information.

How can your HR staff help your employees understand their benefits and make smart financial choices?

Make it personal.

Follow these five tips to give your benefits communications the personal touch that hits the mark with employees. 

1.  Find out what they want and need. Pay attention to the questions your employees ask during the open enrollment period. Take a survey to understand their needs, preferences, and fears. Collect all the data you can from surveys, retirement plans, and other sources of information to learn what kinds of decisions your employees are making about their benefits. This data can be invaluable for creating a more targeted communication and education strategy all year round.

2.  Communicate with them regularly. Instead of a one-time information blitz at open enrollment, why not give your employees regular information and advice all year long? As Mimi Kelly, HR Manager at Businessolver says, “There’s no such thing as too much communication.” And with modern technology, there are plenty of avenues available for reaching your employees. In fact, studies have shown that when employees get the same information multiple times through different mediums, they’re more likely to really grasp it. Send a series of informational and educational emails throughout the year, for example. When open enrollment comes around, your employees will be much better prepared to make smart decisions.

3.  Meet them where they are. Most employees today are pretty tech savvy, so take advantage of technology to reach out to them where they’re most comfortable getting information. Online enrollment, email, text messages, Twitter and other social media, conference calls, and web meetings are just some of the tech tools available to connect with your employees on a more personal level.

4.  Give them relevant “what-if” scenarios. Employees are naturally curious about what others in their circumstances do, such as how much health coverage a young single typically needs, whether a married person with a family should choose dental and vision coverage or spend the money on life insurance, etc. Giving them real-life scenarios they can visualize themselves in can help them see their own situations more clearly.

5.  Offer practical tools. Give your employees useful tools such as an online financial learning center where they can get advice, crunch their own numbers, and learn how to make better financial decisions. Work with your benefits provider to develop a customized financial education program to fit their needs.

Annual enrollment mistakes can be costly for your employees. Communicate with them regularly and personally about their benefit options and how their decisions affect their financial well-being. Don’t just be a boss – be a trusted advisor. It’s good for your employees, and good for business.

Want to receive more helpful benefits administration tips?  Subscribe to our blog in the top right corner of this page.

COBRA Administration Best Practices: How to Avoid the COBRA Collection Blues


COBRA-CollectionIf you want to hear an employer sing the blues, bring up the topic of COBRA billing and collection. It’s a task that eats up precious time, and it can be a real challenge. No employer likes to be the “bad guy” when it comes to enforcing grace periods or terminating coverage when payments are missed. Nevertheless, billing and collection are just part of the gig when it comes to administering COBRA. So if you aren’t outsourcing the task, it’s important to make the process as efficient and painless as possible.

First off, timeliness is more crucial than ever.
With the Affordable Care Act taking center stage in health care over the past few years, the rules of the game have changed and there’s a highly orchestrated interplay between the ACA and COBRA that employers and employees need to be aware of. For example, COBRA participants have the option of replacing their COBRA coverage with Marketplace coverage – but there are specific guidelines:

  • COBRA plan dropped during open enrollment: During the open enrollment period, COBRA recipients can drop their coverage and purchase a plan through the Marketplace, even if the COBRA coverage hasn’t run out. 
  • COBRA plan expiration outside open enrollment: If COBRA coverage expires outside the Marketplace open enrollment period, the participant may qualify for a special enrollment period and can enroll in a private health plan through the Marketplace. Participants may also qualify for tax credits that can lower their monthly premiums. 
  • COBRA plan dropped outside open enrollment: Any COBRA participant that voluntarily drops coverage outside the open enrollment period won’t be able to enroll in any Marketplace plan until the next open enrollment period.

Note: The next open enrollment period for 2015 coverage is November 15, 2014 through February 15, 2015.

Timely COBRA notification is imperative as well.
With the ACA coming into play, it’s even more important for employers to notify their COBRA-qualified beneficiaries quickly and help them navigate the process so they don’t stretch out their COBRA eligibility period too long. It’s crucial for them to make sure their COBRA coverage doesn’t end before their new Marketplace plan starts, or they’ll have a gap in coverage.

Finally it’s important to know the collection timelines involved with COBRA-ACA transition periods.
With COBRA administration, grace periods of 45 days for the first COBRA payment and 30 days for each subsequent payment continue to be the standard. Conversely, under the ACA, patients who buy health plans through the Marketplace have a 90-day grace period to get caught up on premium payments before coverage can be canceled.

One thing that that remains constant is the need for consistent COBRA administration best practices. Here are four to keep in mind:

  1. Create a well-documented paper trail. Provide COBRA participants with monthly invoices that clearly communicate the amount due and the end date of the 30-day grace period.
  1. Don’t accept late payments. COBRA participants need to realize there is no grace period for the grace period. They’ll have to make their premium payments by the date on the invoice to keep their benefits. 
  1. Use technology to send helpful payment reminders. It’s not mandatory, but sending regular payment reminders by email, text, letter, phone, or automated message is a great way to keep it top of mind and prod the procrastinators. 
  1. Offer more ways to pay. Make it as easy and convenient as possible for COBRA participants to pay their premiums, including through ACH and credit card payments, PayPal, and automatic recurring payments.

Of course, the best way to chase away the COBRA collection blues is to outsource your COBRA administration. With the new challenges of complying with the healthcare law, outsourcing can be a welcome relief for employers and HR professionals. To find out more, download our free report In Search of ROO (Return on Outsourcing).

Coordinating COBRA and PPACA – Communication is Key


COBRA-and-PPACACOBRA CONUNDRUMS is reprinted from the May, 2014 issue of Health Insurance Underwriter Magazine featuring our very own Robert Meyers. 

Employers and employees have made it through the first PPACA open enrollment and we all seemed to have learned a great deal. Employers continue to provide the vast majority of health care plans in the U.S. and many employees have a renewed sense of appreciation for the health care benefits they receive.

Last May, the Department of Labor (DOL) provided revised notices to help employers with the rollout of the PPACA’s first open enrollment which ended March 31, 2014. However, we all know that confusion is prevalent throughout any open enrollment period, and even more so during health care reform. So, it seems appropriate to revisit these notices one year after their release.

Technical release 2013-02 contains guidance on the Notice to Employees of Coverage Options (No. OMB 1210-0149) and the revised COBRA Model Election Notice. Both of these notifications are required of employers and are intended to make current and former employees aware of their rights to health plan coverage under PPACA and the Consolidated Omnibus Budget Reconciliation Act (COBRA). We will discuss the details of both of these notices below. The notice required for employers not providing health coverage is also available but is not part of this discussion.

  • The Notice to Employees of Coverage Options: As with most mandated notifications, the DOL requires timing and method of delivery and this notice is no different. For 2014 and beyond, employees are to be provided this notice within 14 days of their date of hire. Make sure that your clients’ HR departments are aware of this requirement and encourage them to keep a stack of these notices on hand. Notice is to be provided in writing, automatically, free of charge, and must be written in a way that can be understood by the average employee.

According to the DOL, these notices may be provided by First-Class Mail. Alternatively, they may be provided electronically (via email) if the requirements of the DOL’s electronic disclosure safe harbor are met. See 29 CFR 2520.104b-1(c). As a best practice, employers should consider providing a physical copy to new hires along with their other paperwork and emailing them a copy of the notice as well.

  • Model COBRA Continuation Coverage Election Notice: This notification was modified last May to include language for former employees and their families who experienced a COBRA qualifying event after January 1, 2014. It is essentially the same as the previous Election Notice except that it contains five separate references to the Marketplace. It is designed to introduce the Marketplace as another coverage option to former employees. The notice is also intended to help former employees gain a basic understanding of their choice between the employer-sponsored COBRA plan and coverage through the Marketplace.

The COBRA notice requirements are more defined by timing, form and content than the Coverage Options notice mentioned previously. The COBRA notice also has a penalty component which the other notice does not – employers are potentially subject to penalties of $110 per day for not providing these notices to COBRA qualified beneficiaries in a timely manner. As for the timing, the employer has 30 days to notify the administrator, who in turn has 14 days to mail the COBRA notice to each qualified beneficiary. COBRA also requires that the notice be furnished using “measures reasonably calculated to ensure actual receipt.”  A best practice is to have your COBRA administrator send the notice via U.S. Mail and maintain “proof of mailing” as part of its record-keeping responsibilities.

These notices are distinctly different and will undoubtedly be modified as the rules of PPACA continue to evolve. It will be interesting to see if the DOL, the U.S. Department of Health and Human Services and the Internal Revenue Service will collaborate to ensure that their future requirements are well-coordinated. It sure would be welcome relief to those of us in benefits administration. Stay tuned.

Are you ready for the ACA’s 2015 reporting requirements?


aca's-2015-reporting-requirementsIt’s hard to believe, but we’re less than six months away from 2015. That means employers will soon be grappling with a host of new reporting requirements under the Affordable Care Act (ACA). The IRS delayed the requirements for a year, but issued their final regulations in March of this year. Employers will now be required to gather data beginning in 2015 and submit the first set of informational returns in 2016. On July 24, 2014, the IRS issued draft forms for employers to transmit the required data.

Here are some of the highlights …

Self-insured plans
If you offer a self-insured plan, you’ll be required to submit annual returns to the IRS identifying who is covered. If you offer a fully insured group health plan, the health insurance issuer is required to submit the returns. You’ll need to make sure each employee gets a copy of the return by January 31, 2016, and that you submit all returns on Forms 1094-C and 1095-C with the IRS by February 28, 2016 (if filed on paper - March 31 if filed electronically). Some of the data you’ll need to keep track of and report includes: 

  • Employer’s name, address, employer identification number (EIN), and a contact person
  • Name and social security number (SSN) – or date of birth if SSN is not available – of each employee and each spouse or dependent of the employee who is covered
  • The months of the calendar year during which each individual was covered
  • Full-time and total employee counts by month
  • Whether the employer is part of an aggregated group at any time during the year

Large employer plans
If you’re a large employer subject to the “play or pay” requirements, you’ll be required to report annually to the IRS on any employee who was full-time for one month or more (working an average of 30 hours per week or 130 hours per month), whether that person was offered health coverage, and if so, the lowest amount the employee could pay to get coverage that meets the minimum value requirements.

Large employers have a few options when it comes to reporting. Under the general method, a return must be filed for each employee who is full-time for one month or more during the calendar year. Large employers also have two optional reporting methods: 

  • Qualifying offer method. This method eliminates the need to report month-by-month information for employees who received a "qualifying offer" for all 12 months of the year. The employer must still report identifying information for each employee, regardless of whether he or she receives a qualifying offer. For those who don’t receive such an offer for all 12 months of the year, the employer must report all the information required month by month under the general method. For 2015 only, large employers can further simplify their reporting obligations by certifying that they made a qualifying offer to at least 95 percent of their full-time employees and dependents.
  • Ninety-eight percent offer method. This method is available to large employers that certify that they offered affordable, minimum value coverage to at least 98 percent of their employees and their dependents.

It’s crunch time
Given the complexity of the new reporting requirements, the level of data required to comply, and the fact that time is running out, employers will need to work quickly to make sure the appropriate systems and processes are in place by the end of the year to capture all of the required data beginning in 2015.

For more details about the new reporting requirements, visit the IRS website. 

GAO releases report on ACA broker fee proposals


aca-updateOne of the many ongoing battles over the Patient Protection and Affordable Care Act (PPACA) involves the federal minimum medical loss ratio (MLR) standards for private insurers. Under this provision, health insurance plans in the small group market are required to spend at least 80 percent of premiums on medical costs and no more than 20 percent on administrative costs (15 percent for the large group market). If a plan fails to meet the minimum MLR standard, the insurer is required to pay rebates to enrollees and policyholders.

One of the biggest points of contention is the requirement that insurers include agent and broker compensation as part of their non-claims costs. The insurance industry is fighting to get that changed, saying it would be much easier to meet the standards if payments to the middlemen were not calculated in the MLR.

GAO studies the issue, releases report

Given the ongoing battle, the General Accounting Office (GAO) was asked to review the effects of the MLR requirements on all stakeholders including insurers, brokers, and enrollees, and how rebates would change if agent and broker payments were excluded from the MLR. They recently issued their report, and here’s a brief rundown of what they found… 

  • The insurance industry claims the current requirement is tough on their bottom line and could mean higher premiums for customers. They also warn that the requirements could cause some insurers to leave certain markets in some states, leading to instability in those markets. 
  • Agents and brokers are also hoping for a change in the requirements, concerned that if insurers are required to count agent and broker compensation as a non-claims cost in calculating their MLR, those insurers could decrease broker compensation. According to a report from the Commonwealth Fund, agents and brokers took a $300 million hit in commissions in 2012 as a direct result of the MLR provision. That could seriously cut down on the number of agents and brokers available to help consumers choose a health insurance plan. 
  • Consumer advocates prefer to keep the law as is, saying that the requirements have resulted in greater transparency in how insurance companies use premiums. They feel that the current requirements also provide an incentive for insurers to reduce their administrative costs. They also note that refunds to consumers will be significantly less if the commissions and fees insurers pay to agents and brokers aren’t included in the MLR formula. 
  • Rebates. In 2011, the first year the new requirements were in effect, almost 13 million Americans received rebates from insurers that didn’t meet the MLR, totaling about $1.1 billion. In 2012, more insurers complied with the new standard, which dropped the total rebates to $520 million. The GAO says that had the commissions and fees insurers paid to agents and brokers been excluded from the MLR formula, these amounts would have decreased by about 75 percent, reducing the average customer rebate from $58.50 to $15.21 per person.

What lies ahead?

Clearly, this battle has yet to be decided. Health experts generally agree that exempting broker commissions from the MLR formula would make it easier for insurers to meet the MLR standards, but they feel it could also mean higher premiums and smaller rebates for consumers.

Brokers and employers alike should stay tuned for further updates on PPACA and the broker fee proposals. For the latest news, subscribe to our blog in the top right corner of this screen.

Affordable Care Act Changes: 41 and Counting


This week, we are sharing a post from the Galen Institute

By our count at the Galen Institute, more than 41 significant changes already have been made to ObamaCare: at least 23 that the Obama Administration has made unilaterally, 16 that Congress has passed and the president has signed, and two by the Supreme Court.


1. Medicare Advantage patch: The administration ordered an advance draw on funds from a Medicare bonus program in order to provide extra payments to Medicare Advantage plans, in an effort to temporarily forestall cuts in benefits and therefore delay early exodus of MA plans from the program. (April 19, 2011)

2. Employee reporting: The administration, contrary to the Obamacare legislation, instituted a one-year delay of the requirement that employers must report to their employees on their W-2 forms the full cost of their employer-provided health insurance. (January 1, 2012)

3. Subsidies may flow through federal exchanges: The IRS issued a rule that allows premium assistance tax credits to be available in federal exchanges although the law only specified that they would be available “through an Exchange established by the State under Section 1311.” (May 23, 2012)

4. Delaying a low-income plan: The administration delayed implementation of the Basic Health Program until 2015. It would have provided more-affordable health coverage for certain low-income individuals not eligible for Medicaid. (February 7, 2013)

5. Closing the high-risk pool: The administration decided to halt enrollment in transitional federal high-risk pools created by the law, blocking coverage for an estimated 40,000 new applicants, citing a lack of funds. The administration had money from a fund under Secretary Sebelius’s control to extend the pools, but instead used the money to pay for advertising for Obamacare enrollment and other purposes. (February 15, 2013)

6. Doubling allowed deductibles: Because some group health plans use more than one benefits administrator, plans are allowed to apply separate patient cost-sharing limits for one year to different services, such as doctor/hospital and prescription drugs, allowing maximum out-of-pocket costs to be twice as high as the law intended. (February 20, 2013)

7. Small businesses on hold: The administration has said that the federal exchanges for small businesses will not be ready by the 2014 statutory deadline, and instead delayed until 2015 the provision of SHOP (Small-Employer Health Option Program) that requires the exchanges to offer a choice of qualified health plans. (March 11, 2013)

8. Employer-mandate delay: By an administrative action that’s contrary to statutory language in the ACA, the reporting requirements for employers were delayed by one year. (July 2, 2013)

9. Self-attestation: Because of the difficulty of verifying income after the employer-reporting requirement was delayed, the administration decided it would allow “self-attestation” of income by applicants for health insurance in the exchanges. This was later partially retracted after congressional and public outcry over the likelihood of fraud. (July 15, 2013)

10. Delaying the online SHOP exchange: The administration first delayed for a month and later for a year until November 2014 the launch of the online insurance marketplace for small businesses. The exchange was originally scheduled to launch on October 1, 2013. (September 26, 2013) (November 27, 2013)

11. Congressional opt-out: The administration decided to offer employer contributions to members of Congress and their staffs when they purchase insurance on the exchanges created by the ACA, a subsidy the law doesn’t provide. (September 30, 2013)

12. Delaying the individual mandate: The administration changed the deadline for the individual mandate, by declaring that customers who have purchased insurance by March 31, 2014 will avoid the tax penalty. Previously, they would have had to purchase a plan by mid-February. (October 23, 2013)

13. Insurance companies may offer canceled plans: The administration announced that insurance companies may reoffer plans that previous regulations forced them to cancel. (November 14, 2013)

14. Exempting unions from reinsurance fee: The administration gave unions an exemption from the reinsurance fee (one of ObamaCare’s many new taxes). To make up for this exemption, non-exempt plans will have to pay a higher fee, which will likely be passed onto consumers in the form of higher premiums and deductibles. (December 2, 2013)

15. Extending Preexisting Condition Insurance Plan: The administration extended the federal high risk pool until January 31, 2014 and again until March 15, 2014, and again until April 30, 2014 to prevent a coverage gap for the most vulnerable. The plans were scheduled to expire on December 31, but were extended because it has been impossible for some to sign up for new coverage on (December 12, 2013) (January 14, 2014) (March 14, 2014)

16. Expanding hardship waiver to those with canceled plans: The administration expanded the hardship waiver, which excludes people from the individual mandate and allows some to purchase catastrophic health insurance, to people who have had their plans canceled because of ObamaCare regulations. The administration later extended this waiver until October 1, 2016. (December 19, 2013) (March 5, 2014)

17. Equal employer coverage delayed: Tax officials will not be enforcing in 2014 the mandate requiring employers to offer equal coverage to all their employees. This provision of the law was supposed to go into effect in 2010, but IRS officials have “yet to issue regulations for employers to follow.” (January 18, 2014)

18. Employer-mandate delayed again: The administration delayed for an additional year provisions of the employer mandate, postponing enforcement of the requirement for medium-size employers until 2016 and relaxing some requirements for larger employers. Businesses with 100 or more employees must offer coverage to 70% of their full-time employees in 2015 and 95% in 2016 and beyond. (February 10, 2014)

19. Extending subsidies to non-exchange plans: The administration released a bulletin through CMS extending subsidies to individuals who purchased health insurance plans outside of the federal or state exchanges. The bulletin also requires retroactive coverage and subsidies for individuals from the date they applied on the marketplace rather than the date they actually enrolled in a plan. CRS issued a memo discussing the legality of these subsidies. (February 27, 2014)

20. Non-compliant health plans get two year extension: The administration pushed back the deadline by two years that requires health insurers to cancel plans that are not compliant with ObamaCare’s mandates. These “illegal” plans may now be offered until 2017. This extension will prevent a wave cancellation notices from going out before the 2014 midterm elections. (March 5, 2014)

21. Delaying the sign-up deadline: The administration delayed until mid-April the March 31 deadline to sign up for insurance. Applicants simply need to check a box on their application to qualify for this extended sign-up period. (March 26, 2014)

22. Canceling Medicare Advantage cuts: The administration canceled scheduled cuts to Medicare Advantage. The ACA calls for $200 billion in cuts to Medicare Advantage over 10 years. (April 7, 2014)

23. More Funds for Insurer Bailout:  The administration said it will supplement risk corridor payments to health insurance plans with “other sources of funding” if the higher risk profile of enrollees means the plans would lose money. (May 16, 2014)


24. Military benefitsCongress clarified that plans provided by TRICARE, the military’s health-insurance program, constitutes minimal essential health-care coverage as required by the ACA; its benefits and plans wouldn’t normally meet ACA requirements. (April 26, 2010)

25. VA benefitsCongress also clarified that health care provided by the Department of Veterans Affairs constitutes minimum essential health-care coverage as required by the ACA. (May 27, 2010)

26. Drug-price clarificationCongress modified the definition of average manufacturer price (AMP) to include inhalation, infusion, implanted, or injectable drugs that are not generally dispensed through a retail pharmacy. (August 10, 2010)

27. Doc-fix taxCongress modified the amount of premium tax credits that individuals would have to repay if they are over-allotted, an action designed to help offset the costs of the postponement of cuts in Medicare physician payments called for in the ACA. (December 15, 2010)

28. Extending the adoption creditCongress extended the nonrefundable adoption tax credit, which happened to be included in the ACA, through tax year 2012. (December 17, 2010)

29. TRICARE for adult childrenCongress extended TRICARE coverage to dependent adult children up to age 26 when it had previously only covered those up to the age of 21 — though beneficiaries still have to pay premiums for them. (January 7, 2011)

30. 1099 repealedCongress repealed the paperwork (“1099”) mandate that would have required businesses to report to the IRS all of their transactions with vendors totaling $600 or more in a year. (April 14, 2011)

31. No free-choice vouchersCongress repealed a program, supported by Senator Ron Wyden (D., Ore.) that would have allowed “free-choice vouchers,” that the Hill warned “could lead young, healthy workers to opt out” of their employer plans, “driving up costs for everybody else.” The same law barred additional funds for the IRS to hire new agents to enforce the health-care law. (April 15, 2011)

32. No Medicaid for well-to-do seniors: Congress saved taxpayers $13 billion by changing how the eligibility for certain programs is calculated under Obamacare. Without the change, a couple earning as much as much as $64,000 would still have been able to qualify for Medicaid. (November 21, 2011)

33. CO-OPs, IPAB, IRS defundedCongress made cuts to agencies implementing Obamacare. It trimmed $400 million off the CO-OP program, cut $305 million from the IRS to hamper its ability to enforce the law’s tax hikes and mandates, and rescinded $10 million in funding for the controversial Independent Payment Advisory Board. (December 23, 2011)

34. Slush-fund savingsCongress slashed another $11.6 billion from the Prevention and Public Health slush fund and $2.5 billion from Obamacare’s “Louisiana Purchase.” (February 22, 2012)

35. Less cash for Louisiana: One of the tricks used to get Obamacare through the Senate was the special “Louisiana Purchase” deal for the state’s Democratic senator, Mary Landrieu. Congress saved another $670 million by rescinding additional funds from this bargain. (July 6, 2012)

36. CLASS Act eliminated: Congress repealed the unsustainable CLASS (Community Living Assistance Services and Supports) program of government-subsidized long-term-care insurance, which even the Democratic chairman of the Senate Finance Committee dubbed a “Ponzi scheme of the first order.” (January 2, 2013)

37. Cutting CO-OPsCongress cut $2.2 billion from the “Consumer Operated and Oriented Plan” (CO-OP), which some saw as a stealth public option, blocking creation of government-subsidized co-op insurance programs in about half the states. Early reports showed many co-ops, which had received federal loans, had run into serious financial trouble. (January 2, 2013)

38. Trimming the Medicare trust-fund transferCongress rescinded $200 million of the $500 million scheduled to be taken from the Medicare Part A and Part B trust funds and sent to the Community-Based Care Transition Program established and funded by the ACA. (March 26, 2013)

39. Eliminating caps on deductibles for small group plans: Congress eliminated the cap on deductibles for small group plans as part of the SGR “doc fix.” This change gives small businesses the freedom to offer high deductible plans that may be paired with a Health Savings Account. (April 1, 2014)


40. Medicaid expansion made voluntary: The court ruled it had to be voluntary, rather than mandatory, for states to expand Medicaid eligibility to people with incomes up to 138 percent of the federal poverty level, by ruling that the federal government couldn’t halt funds for existing state Medicaid programs if they chose not to expand the program.

41. The individual mandate made a tax: The court determined that violating the mandate that Americans must purchase government-approved health insurance would only result in individuals’ paying a “tax,” making it, legally speaking, optional for people to comply.

This list was originally published HERE on and has been published on National Review Online. It was updated to 29 changes on December 10, 2013.

December 13, 2013 UPDATE: 30 changes (PCIP extension)
December 19, 2013 UPDATE: 31 changes (Hardship waiver)
January 14, 2014 UPDATE: 32 changes (Union reinsurance fee exemption)
January 14, 2014 UPDATE: (PCIP extended again)
January 21, 2014 UPDATE: 33 changes (Equal employer coverage delay)
February 3, 2014 UPDATE: 34 changes (Subsidies may flow through federal exchanges) (List is now ordered chronologically)
February 10, 2014 UPDATE: 35 changes (Second employer mandate delay)
March 5, 2014 UPDATE: 36 changes (Subsidies extended outside of exchanges)
March 5, 2014 UPDATE: 37 changes (Consumers can keep non-compliant plans until 2017)
March 26, 2014 UPDATE: 38 changes (Sign-up deadline delayed)
April 7, 2014 UPDATE: 39 changes (Small group deductible cap eliminated-passed by Congress and signed into law)
April 8, 2014 UPDATE: 40 changes (Cuts to Medicare Advantage in 2015 canceled)
May 22, 2014 UPDATE: 41 changes (More funds for insurer bailout)

What Happens When Your Employee’s Dependent Turns 26?


Age-26-RuleAs an employer, you face tough questions from employees every day – particularly now as you both navigate the changing landscape of health care reform. If the “age 26” question hasn’t come up yet, you’ll likely encounter it soon. To help you be prepared, we’ve prepared the hypothetical scenario below.

The hypothetical question posed by employee, John Jones:

My daughter is about to turn 26 this summer. I suspect that after her birthday, she will no longer eligible for my health insurance, but I’m not sure. I’m also not sure what her options are since the next federal Marketplace enrollment isn’t until the fall. What can you tell me?

How would you answer? 

  • Answer One: “It’s okay. Your plan continues providing dependent coverage through the end of the plan year.” 
  • The Background: This is true of some plans. Other plans terminate coverage for dependents immediately on their 26th birthday or on the last day of the month in which he or she turns 26. Take the initiative to find out how long, under the benefits package you offer, your employee’s daughter will retain coverage after turning 26.
  • Answer Two: “When your daughter turns 26 and loses dependent status, the good news is, she becomes eligible for COBRA.” 
  • The Background: There are a variety of “triggering” life events which make a person eligible for COBRA coverage – see the full list here. With COBRA, your employee’s daughter can keep the same benefits she has now for an additional 18 months. That said, she will be responsible to pay the full cost of coverage.
  • Answer Three: “Her coverage will end on her birthday, but don’t worry. This is considered a qualifying life event for Marketplace Special Enrollment.” 
  • The Background: As we mentioned earlier this year, “all of the qualifying events associated with COBRA are now also considered triggering life events under PPACA and cause special Marketplace enrollment to be available when they occur.” This means your employee’s 26-year-old can apply for her own health insurance plan through ACA special enrollment as soon as she loses her dependent status. Go here to start that process.
  • Answer Four: “Is it possible for her to get benefits through her employer?” 
  • The Background: Your employee’s daughter may be able to get health benefits through her own place of employment, if benefits are offered and she satisfies the plan eligibility requirements. Because she was covered under your plan and is now losing coverage, she qualifies for a special enrollment period under her employer’s plan.

So as you can see, there are several correct answers to your employee’s dilemma. As always, be proactive, educate your team about their options, and do your part to provide the information they need to make smart choices.

Also, don’t forget to subscribe to the COBRA blog in the top right corner of this screen.

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