Patient Protection and Affordable Care Act (PPACA) Basics

The Patient Protection and Affordable Care Act (PPACA) was passed by Congress and then signed into law by President Obama on March 23, 2010. It was amended via the budget reconciliation process several days later and President Obama signed the Health Care and Education Reconciliation Act of 2010 on March 30, 2010. Together, these two measures comprise what is known as the federal health reform law. On June 28, 2012 the U.S. Supreme Court rendered a final decision to uphold the health care law, and then on July 24, 2012 the Congressional Budget Office released a revised estimate as to what health reform will cost the federal government over the next 10 years.

• The official text of the Patient Protection and Affordable Care Act
  
• The official text of the Health Care and Education Reconciliation Act of 2010
  
• The full combined text of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 combined into one document. It is not official but has been provided for your convenience.
  
• The official opinion of the U.S. Supreme Court in NFIB v. Sebelius, which upholds the Patient Protection and Affordable Care Act but limits federal authority with regard to the Medicaid expansion provisions in the law.
  
• The Congressional Budget Office’s Cost Estimates for the Insurance Coverage Provisions of the Patient Protection and Affordable Care Act Updated for the Recent Supreme Court Decision.
  

The Obama Administration has develop a number of official websites that provide access to information, regulations, guidance and more on the provisions of the health reform law.

• The vast majority of health reform resources are containted here.
  
• The White House Office of Health Reform also is a comprehensive source of information.
  
• Most of the insurance market reform provisions of the new law fall under the jurisdiction of the Department of Health and Human Services’ Center for Consumer Information and Insurance Oversight.
  

The Department of Labor also has jurisdiction over many PPACA provisions. The Department’s overview page contains a wealth of information, and their Frequently Asked Questions pages give detailed answers to very specific PPACA implementation scenarios.

The Department of Labor's Employee Benefits Security Administration updated its Affordable Care Act webpage with Affordable Care Act Implementation FAQs Part XV addressing annual limit waiver expiration date based on a change to a plan or policy year, provider non-discrimination, coverage for individuals participating in approved clinical trials and transparency reporting.

The Internal Revenue Service has a site dedicated to the tax-related provisions of the health reform law. In addition, they have a separate site with news releases, multimedia and legal guidance.

A slide deck suitable for explaining the current state of PPACA implementation efforts to employer groups.

PPACA Resources for Clients

The health reform law is extraordinarily complicated and all of its provisions become effective at various times. To help you break the insurance coverage provisions and their implementation dates down in a manageable way for your clients we’ve. A detailed timeline of federal health care reform law provisions that will Impact Individual and Employer Health Insurance Consumers. A condensed version of the timeline suitable for distribution to consumers and employer clients. Download and print copies here or you can purchase printed copies via NAHU’s online store.

Compliance Information About Specific PPACA Provisions

Preventive Care Services

All group and individual plans that do not have grandfathered status, including self-funded plans, have to cover specific preventive care services with no cost-sharing in plan years beginning on or after September 23, 2010. Additional specific women’s preventive services must be provided without cost-sharing in plan years beginning after August 1, 2012. This provision in the law applies to most employers unless the employer qualifies for specific religious exemptions.

• Coverage of Preventive Services: Fact Sheet
  
• Women's Preventive Care Fact Sheet with Links to Other HHS Guidance and the Final Regulation
  
• Information About Women's Preventative Care Services and Religious Institutions
  

Grandfathered Health Plans

Individual and group health plans that existed on or before March 23, 2010 had the option to choose grandfathered status once health reform was enacted. However, individuals and employer group plans that elected to keep their current policy on a grandfathered basis can only do so if they maintain essentially the same benefits and follow strict rules that limit increases to employee cost-sharing or out-of-pocket costs. An amendment to the grandfathered plan rules issued in November 2010 allows all group health plans to switch insurance companies and shop for the same coverage at a lower cost and maintain their grandfathered status, so long as the structure of the coverage doesn’t violate one of the other rules for maintaining grandfathered status. Once a plan loses its grandfathered status, it is subject to all of the law’s market reforms when they take effect.

• Grandfatered Plan Regulations
  
• Amendment to the Grandfathered Plan Regulations
  
• Fact Sheet on Grandfathered Plans from the Department of Health and Human Services
  
• Fact Sheet on the Amendment to the Grandfathered Plan Rules
  
• How PPACA Provisions Apply to Grandfathered Plans Summary Chart
  
• Model Notice for Grandfathered Employer Plans

Extension of Coverage for Adult Children

All group and individual plans, including self-funded plans and grandfathered plans, in plan years beginning on or after September 23, 2010, have to cover dependent “children” to age 26 .

• Regulations Governing Extended Coverage for Children up to Age 26
  
• Fact Sheet from the Department of Labor on the Law's Dependent to Age 26 Provisions
  
• FAQs from the Department of Labor on the Law's Dependent to Age 26 Provisions
  
• IRS Guidance on the Applicability of the "Employer Exclusion" to Benefits for Adult Dependents
  
• Model Notice for Empolyers To Offer Coverage to Adult Dependents

MLR Rebate Compliance

All individual, small group and large group health plans were subject to medical loss ratio (MLR) requirements beginning on January 1, 2011. Individual and small group insurers must ensure that 80% of their premium revenue is directed towards medical claims and large group insurers must adhere to an 85% MLR. Self-funded plans are exempt from this requirement. Any plan that does not meet these requirements beginning in 2011 must issue a rebate to consumers by August of the following plan year.

• Medical Loss Ratio Rebate Checks - A NAHU Overview for Advising Employer Group Clients
  
• A Case Study from NAHU on Rebate Distribution to Employer Group Plan Participants
  
• HHS Report on MLR Rebates by Market and State
  
• Answers to frequently asked questions about the tax treatment of MLR rebates from the Internal Revenue Service
  
• The HHS interim final rule on the MLR which addresses rebate distribution for non-ERISA plans
  
• Guidance from HHS to insurers on the MLR rebate notices that must be sent to beneficiaries (includes link to template rebate notice)
  
• Guidance from HHS on MLR reporting and rebate requirements
  
• HHS Technical Guidance on the MLR Requirements
  
• MLR Interim Final Rule
  
• Guidance on Rebates for Group Health Plans Paid Pursuant to the Medical Loss Ratio Requirements of the Public Health Service Act
  

Pre-Existing Condition Insurance Plan (PCIP)

The health reform law’s temporary high-risk pool program for people who cannot obtain individual health insurance coverage due to preexisting conditions is known as the Preexisting Condition Insurance plan (PCIP) program. Twenty-seven states have elected to create and manage their own programs through December 31, 2013 and 23 states elected the federal-fallback option operated by the federal Department of Health and Human Services (HHS). This program currently serves individuals who have been uninsured for at least six months and do not have access to any other source of employer or public program coverage. Employers are prohibited from sending individuals to these high-risk pools, with associated fines.

• PCIP Program Website
  
• PCIP Program Governing Regulations
  
• Facts from the Department of Health and Human Services About PCIP

Summary of Plan Benefits and Coverage

Beginning with plan years and open enrollment periods that start on or after September 23, 2012, all group plans and group and individual health insurers (including self-funded plans) will have to provide a summary of benefits and a coverage explanation that meets specified criteria to all enrollees when they apply for coverage, when they enroll or reenroll in coverage, when the policy is delivered and when any material modification is made to the terms of their coverage outside of the coverage renewal period. The summary and explanation are commonly referred to as a SBC, and will require substantially more information than current summary plan descriptions.

• NAHU Webinar: New Guidance on Summary Plan Benefits and Other Recent Regulations
• NAHU Webinar: New Guidance on Summary Plan Benefits and Other Recent Regulations Part II
• Final Regulations on the Summary of Plan Benefits and Coverage Requirements
• Summary of Benefits and Coverage and Uniform Glossary -- Templates, Instructions, and Related Materials; and Guidance for Compliance
• Corrected Summary of Benefits and Coverage (SBC) Template
• Corrected Sample Completed SBC
• Summary of Benefits and Coverage (SBC) Template
• Sample Completed SBC
• Instructions for Completing the SBC - Group Health Plan Coverage
• Instructions for Completing the SBC - Individual Health Insurance Coverage
• Guide for Coverage Examples Calculations - Maternity Scenario
  
• Standard Format (XLSX - 91 KB)
  
• Accessible Format (PDF - 98 KB)
  
• Guide for Coverage Examples Calculations - Diabetes Scenerio
  
• Standard Format (Corrected May 11, 2012) (XLSX - 56 KB)
  
• Accessible Format (Corrected May 11, 2012) (PDF - 343 KB)
  
• Narrative for Maternity Scenerio (PDF - 11 KB)
• Narrative for Diabetes Scenerio (PDF - 11 KB)
• Checklist for Coverage Calculator (PDF - 43 KB)
• Coverage Examples Calculator Instructions (PDF - 274 KB)
• Coverage Examples Calculator Logic (PDF - 91 KB)
• Coverage Examples Calculator
  

W-2 Reporting

The health reform law established that eventually all employers must include on Forms W-2 the aggregate cost of employer-sponsored health benefits, for informational purposes only. The provision was originally supposed to apply to benefits provided during taxable years after December 31, 2010. However, enforcement of this provision was delayed for one year and made optional for the 2010 tax year (reported in 2011). The IRS has also specified that for smaller employers (those filing fewer than 250 W-2 forms) this requirement remains optional through at least 2012 (i.e., for 2012 Forms W-2 that generally would be furnished to employees in January 2013). Optional treatment for smaller employers will remain in effect until further guidance is issued, which has not occurred yet.

• Overview of W-2 Reporting of Employer-Provided Health Coverage - January 2013
• NAHU Webinar on New Form W-2 Reporting - February 2, 2012
• IRS Overview of the Form W-2 Reporting of Employer Sponsored Health Insurance
• Employer-Provided Health Coverage Informational Reporting Requirements: FAQs from the Internal Revenue Services
• Chart on Form W-2 Informational Reporting of the Cost of Employer-Sponsored Group Health Plan Coverage
• Interim Relief with Respect to Form W-2 Reporting of the Cost of Coverage of Group Health Insurance
  
• IRS YouTube Video, W-2 Health Insurance Reporting
  
• IRS Webinar, Reporting of Employer Health Care Coverage on Form W-2

FSAs

FSA contributions for medical expenses will be limited to $2500 per year, with the cap annually indexed for inflation.

• IRS Notice 2012-40 provides that the $2,500 limit on employee pre-tax health FSA contributions applies on a plan year basis and is effective for plan years beginning after December 31, 2012.
  

For more information, please contact Jessica Waltman or Farren Baer.