Friday, January 27, 2012
Health Cost Reporting for 2012
By: Tommy Eden, Attorney
As the battle lines on ObamaCare are set with oral arguments before the United States Supreme Court on March 26, 27 & 28, 2012, now is the time for employers to begin identifying the health benefits that will be subject to a new W-2 reporting requirement effective January, 2013. After the Supreme Court’s dueling smoke clears, employers will be able to better understand their compliance obligations. These are just a small sampling of the new compliance obligations kicking in for employers:
Aggregate Benefit Cost Reporting. Under a provision of the Patient Protection and Affordable Care Act (PPACA), many employers will soon be required to report on Form W-2 the costs of providing benefits such as major medical coverage and integrated vision plan coverage. While certain benefits can be excluded, the reported amount should reflect the aggregate cost of all reportable benefits the employee received under all the group health plans they participated in during all or part of the 2012 plan year.
Grandfathered Group Health Plans. Watch that you do not make plan changes that may take you out of grandfathered status, which can cost an employer dearly. Insured and self-funded/self-insured group health plans that existed before March 23, 2010, the day that PPACA became law, are grandfathered plans. Plans that existed before March 23, 2010, lose their status as grandfathered plans if employers or health insurance issuers made changes or revisions to group health plans on or after March 23, 2010. This includes:
• change from insured plans to self-funded/self-insured plans or from self-funded/self-insured plans to insured plans;
• eliminate all or substantially all plan benefits to diagnose or treat particular health conditions;
• increase coinsurance levels;
• increase cost-sharing requirements, deductibles, out-of-pocket limits, or co-pays above certain thresholds;
• decrease employer contributions toward plan coverage costs by more than 5% below employer contributions that were in effect on March 23, 2010; or
• impose new annual or lifetime limits on the dollar value of plan benefits.
Culturally and Linguistically Appropriate Notices. Employers and health insurance issuers must provide notice of benefit determination, notice of adverse benefit determination and notice of final internal adverse benefit determination to plan participants in English and, in certain situations, must include a one-sentence statement in a non-English language offering to provide notices in the non-English language.
Common Sense Counsel: With employers’ penalties for failure to offer minimum essential coverage of $2,000, W-2 cost reporting, grandfathered plans at risk, linguistically appropriate notices and a multitude of new compliance regulations coming down monthly, you need to locate now a trusted advisor to guide you through the murky compliance waters of PPACA.
Tommy Eden is a Lee County native, an attorney with the local office of Capell & Howard, P.C., a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at email@example.com or 334-501-1540.