Agencies Plan to Issue Final Rules for SBC Requirements

On March 31, 2015, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued Frequently Asked Questions (FAQ) announcing their intention to issue final regulations for the Affordable Care Act’s (ACA) summary of benefits and coverage (SBC) and uniform glossary requirement. These regulations will finalize the proposed regulations from Dec. 22, 2014.

The ACA requires these disclosure tools—the SBC and uniform glossary—to help consumers compare available coverage options. The requirement to provide them applies to both grandfathered and non-grandfathered plans.

Health plan issuers must provide the SBC to applicants and enrollees free of charge. The SBC is a concise document that provides simple and consistent information about health plan benefits and coverage.

The final regulations are expected to be released in the near future and will apply for plan years beginning on or after Jan. 1, 2016 (including open enrollment periods in fall of 2015 for coverage beginning on or after Jan. 1, 2016).

The updated template and related documents, including sample language and instructions, for the SBC and uniform glossary will not be issued until January 2016. The updated template will then apply for plan years beginning on or after Jan. 1, 2017. Until further guidance is issued, the previously updated template provided on the DOL’s website on April 23, 2014, continues to be authorized.

The March 31 FAQ guidance leaves a lot of uncertainty for employers in regard to their SBC documents. The changes included in the final regulations may require health plans to update their SBC documents before the new template is released.

The forthcoming final regulations may address this issue. In some cases, the Departments have provided temporary enforcement safe harbors when guidance is not issued sufficiently in advance of an effective date. However, at this time, no safe harbors or other relief has been provided on this issue.

On May 4, 2015, the Internal Revenue Service (IRS) released Revenue Procedure 2015-30 to announce the inflation-adjusted limits for health savings accounts (HSAs) for calendar year 2016.The following limits apply for 2016:

  • The HSA contribution limit is $3,350 for self-only and $6,750 for family.
  • The minimum deductible for high deductible health plans (HDHPs) is $1,300 for self-only and $2,600 for family.
  • The maximum out-of-pocket for HDHPs is $6,550 for self-only and $13,100 for family.

Plan Offerings Now Diverging by Group Size
A new trend of health plan offerings has emerged over the past few years, according to a new report from Zywave Inc. Group size appears to be a determining factor in whether employers are offering more generous health plans or working on implementing more cost-sharing strategies for health benefits.

Large organizations—with more than 500 lives—tend to offer generous health plans, likely in an effort to use their benefits packages as recruiting and retention tools in a market that is becoming increasingly fierce.

Smaller groups are cutting back on benefits and using cost-sharing efforts with employees. This trend of leaner benefits with smaller groups is likely an effort to bring down expenses associated with rising health care costs and other costs related to the ACA.

More Information
Stay tuned to for the latest news affecting your insurance needs, and stay in close contact to your professional agents and underwriters here at Morris & Reynolds Insurance. We will do our very best to guide you in the right direction, keep you informed and assist you for many years to come.

Communicating With Employees During Open Enrollment

Open enrollment can be a hectic time for both employers and employees. Between budgeting and anticipating needs, both sides can become overwhelmed when choosing a benefits package that balances cost and value. Amidst the stress of research and deadlines, communication is the critical component that will help both parties reach a satisfactory conclusion.

With that in mind, here are some helpful suggestions to use employee communication to your maximum advantage:

  1. Understand workforce benefit needs. Consider surveying your employees to gauge their satisfaction with current options and ask what they are looking for in terms of benefits. Compare this information to plan utilization trends. When combined, this data should tell you what employees value and what they don’t, while possibly identifying benefits employees want but didn’t know they had.
  2. Customize benefits and information resources to the life stages of your employees, instead of taking a one-size-fits-all approach. For instance, if you employ a large older population, feature more retiree benefits and long-term care insurance.
  3. Start talking about enrollment early. Provide plan details several weeks before the enrollment deadline. Avoid using insurance and benefits industry jargon as much as possible, and present information in easy-to-understand terms. Explain the difference between general and voluntary benefits. Provide sources for additional information, as well as contact information for employee questions. Consider featuring employee stories about the impact benefits have had on their lives.
  4. Repeat information. Conduct meetings and seminars and offer calculators, intranet education information and benefit fairs. If your organization is smaller, conduct one-on-one meetings with employees to determine exactly the type of information they need.
  5. Maintain all Summary Plan Descriptions on your website, rather than directing employees to the insurance carrier site for information.
Instructions for the forms to be used for health coverage reporting under the Affordable Care Act are now available, along with Q&As on the reporting rules, which are found in Code Section 6055 and 6056.The Instructions for Forms 1094-B and 1095-B will be useful for entities reporting minimum essential coverage under Section 6055, such as health insurance issuers and self-insured plan sponsors that are not applicable large employers (ALEs). The Instructions for Forms 1094-C and 1095-C will be used by ALEs that are reporting under Section 6056, as well as for combined reporting by ALEs with self-funded plans.The forms and instructions are draft versions only, and they should not be relied upon or used for filing. Both the forms and instructions will be finalized later this year.

New Rules on Contraception for Religious Employers
On Aug. 27, 2014, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury published two separate rules in response to the recent U.S. Supreme Court decisions regarding contraception coverage under the Affordable Care Act. The rules pertain to both nonprofit and closely held for-profit organizations.

The ACA’s contraceptive coverage mandate generally requires non-grandfathered health plans to cover certain women’s preventive health services without cost-sharing, but provides special exceptions for certain religious organizations.

The interim final rule maintains the existing accommodation for certain religious nonprofit organizations and also creates an additional pathway for eligible organizations to provide notice of their objection to covering contraceptive services.

An additional proposed rule would extend the same accommodation that is available for nonprofit religious organizations to certain closely held for-profit companies.

More Information
Contact Morris & Reynolds Insurance at 305.238.1000 or visit our website’s Employee Benefits page for more information.