Tag: Essential Health Benefits (EHBs)

Offering Health Insurance to Same-Sex Spouses

Under the Affordable Care Act, health insurance issuers in the individual and group markets are generally required to guarantee insurance coverage to every employer and individual that applies. Beginning in 2015, this guarantee will extend to same-sex spouses.

On March 14, 2014, the Department of Health & Human Services (HHS) announced that insurance companies offering non-grandfathered health insurance plans can no longer refuse to offer health insurance coverage to same-sex spouses. In taking this position, the HHS relied on federal regulations prohibiting health insurance issuers from employing marketing practices or benefit designs that discriminate on the basis of, among other things, an individual’s sexual orientation.

According to HHS, an issuer is considered to employ discriminatory marketing practices or benefit designs if the issuer:

  • Offers health insurance coverage to a spouse in an opposite-sex marriage; and
  • Does not offer the same coverage to a spouse in a same-sex marriage that was validly consummated in a jurisdiction where the law authorizes same-sex marriages.

Importantly, the prohibition against discriminating against same-sex spouses applies regardless of the jurisdiction in which the insurance policy is offered, sold, issued, renewed, in effect, or operated, and regardless of where the policyholder resides. This means that insurance companies must offer coverage to legally married same-sex spouses even if they live in a state that does not allow same-sex marriages.

HHS noted that its position regarding coverage for same-sex spouses does not require a group health plan to provide coverage that is inconsistent with the terms of eligibility for coverage under the plan, or that otherwise interferes with the ability of a plan sponsor to define a dependent spouse for purposes of eligibility for coverage under the plan. It only prohibits an issuer from refusing to offer the option to cover same-sex spouses on the same terms and conditions as opposite sex-spouses.

According to HHS, it is only clarifying the current regulations’ prohibition against discrimination based on sexual orientation in a manner that is consistent with the policy of ensuring that all individuals have access to health coverage. However, since “some issuers may not have understood the prohibition,” HHS is not requiring immediate compliance. Rather, health insurance issuers must implement changes for plans or policies years beginning on or after January 1, 2015.

Though fewer than half the states allow same-sex marriages, employers in every state need to be aware of health insurance requirements for same-sex spouses. Beginning in 2015, the focus will need to be on the legality of the marriage rather than the gender of the spouses.

Recent developments with the Affordable Care Act suggest that change rather than stability should be expected. At Setnor Byer Insurance & Risk, we are committed to guiding you through the changes coming in 2014 and beyond. Check back with us periodically for future informational updates about the Affordable Care Act.

If you have specific questions about the Act or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

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Affordable Care Act’s Employer Mandate Delayed Until 2015

Shortly before the July 4th holiday, the U.S. Department of the Treasury announced that enforcement of the Employer Shared Responsibility requirement under the Affordable Care Act (Act) will be delayed until 2015. The employer mandate, which generally requires employers with at least 50 full-time or full-time equivalent employees to offer health care benefits or pay a penalty, was scheduled to go into effect on January 1, 2014.

Through a dialogue with businesses about the Act’s employer and insurer reporting requirements, the administration learned of concerns about the complexity of the requirements and the need for more time to implement them effectively. As a result, the administration decided to delay the Act’s mandatory employer and insurer reporting requirements.

According to the announcement, this delay is designed to:

  • Provide the administration more time to consider ways to simplify the new reporting requirements consistent with the law.
  • Provide more time to adapt health coverage and reporting systems while employers are moving toward making health coverage affordable and accessible for their employees.

The administration recognized that delaying the Act’s mandatory employer and insurer reporting requirements will make it impractical to determine which employers owe shared responsibility payments for 2014. As a result, the administration decided to also delay enforcement of the employer mandate, stating that “these payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015.”

The Treasury says it will be publishing formal guidance regarding the delayed enforcement soon and that proposed rules will be published this summer. Once these rules have been issued, the administration says it will work with employers, insurers and other reporting entities to strongly encourage them to voluntarily implement this information reporting in 2014, in preparation for the full application of the provisions in 2015.

So what should employers be doing now? The Employer Shared Responsibility provision is still the law, it just isn’t being enforced. Not surprisingly, talking heads are making predictions and debating whether it’s really speeding if nobody can pull you over. Unfortunately, the manner in which employer’s will be affected by the delay will not be known until additional guidance is issued.

At Setnor Byer Insurance & Risk, we are committed to guiding you through the changing health care reform landscape. Check back with us periodically for future informational updates about the Affordable Care Act. If you have specific questions about the Act or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

If you’d like to subscribe to our weekly newsletters please click here.

Health Benefits and Value under the Affordable Care Act

The Department of Health and Human Services (HHS) released final rules pursuant to the Affordable Care Act (Act) that are designed to help consumers shop for and compare health insurance options in the individual and small group markets. According to the HHS, these final rules will promote consistency among health plans, protect consumers by ensuring that plans cover a core package of health benefits and limit out of pocket expenses.

To make it easier for consumers to make apples-to-apples comparisons among health insurance plans, the final rules create uniform standards of coverage and value.

Essential Health Benefits

The Act provides that health plans offered in the individual and small group markets, including those available through Health Insurance Marketplaces (Exchange), must offer a core package of items and services known as Essential Health Benefits or EHBs, which must be equal in scope to those benefits offered by a typical employer plan. Under the Act, EHBs must provide:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Maternity and newborn care
  • Mental health and substance use services, including behavioral health treatment
  • Prescription drugs
  • Rehabilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care

To protect consumers against discrimination the final rules also:

  • Prohibit discriminatory benefit designs
  • Include special standards and options for coverage not typically covered by individual and small group policies
  • Include standards for prescription drug coverage

Actuarial Value

The final rules outline actuarial values of individual and small group plans to help consumers distinguish and compare plans offering different levels of coverage. Actuarial Value, or AV, is calculated as the percentage of total average costs covered by a plan. For example, if a plan has an AV of 70%, a consumer could expect to pay an average of 30% of the costs.

Beginning in 2014, non-grandfathered health plans in the individual and small group markets must meet certain AVs, which have been assigned the following “metal levels”:

  • A platinum health plan has an AV of 90%.
  • A gold health plan has an AV of 8%.
  • A silver health plan has an AV of 70%.
  • A bronze health plan has an AV of 60%.

To give health plans some flexibility, a plan can meet a particular metal level if its AV is within 2% of the standard. For example, a silver plan may have an AV between 68% and 72%. The final rules also provide flexibility, if necessary, for issuers in the small group market regarding annual deductible limits to achieve a particular metal level.

To streamline and standardize the calculation of AV for health insurance issuers, HHS is providing a publicly available AV Calculator. In 2014, this calculator will use a national standard population, but in 2015, HHS will accept state-specific data sets for the standard population if states choose to submit alternate data for the calculator.

According to HHS, these final rules will give consumers a consistent way to compare and enroll in health coverage in the individual and small group markets, while giving states and insurers more flexibility and freedom to implement the Act. Time will tell if these final rules will achieve their desired purpose.

At Setnor Byer Insurance & Risk, we are committed to guiding you through Health Care Reform. Check back with us periodically for informational updates about the Affordable Care Act. If you have specific questions about the Act or if you are ready to take action and would like to see how Setnor Byer Insurance & Risk can help, contact us.

If you’d like to subscribe to our weekly newsletters please click here.