Two States Pass Individual Mandate Legislation

After last year’s GOP tax bill zeroed out the penalties for the ACA’s individual mandate provision beginning in 2019, two states – New Jersey and Vermont – passed legislation to institute individual mandates of their own. They become the second and third states to do so after Massachusetts, which has had an individual mandate in place since 2006.

New Jersey’s law, the New Jersey Health Insurance Market Preservation Act, will take effect in 2019. Its penalties are structured similarly to the ACA’s mandate, and the penalties will be used to fund a reinsurance program that will help offset costs for the highest claimants. (A bill establishing the reinsurance program was also signed into law.) The state took early action to pass a mandate in order to stabilize individual market premiums  to preserve the gains it had realized under the ACA’s mandate, including a historically low uninsured rate.

Vermont’s bill doesn’t go as far as New Jersey’s, instead establishing a framework for an individual mandate to take effect in 2020 and requiring formation of a working group to make recommendations to the legislature in 2019.

Several other states considered similar legislation in 2018, but in the end, only New Jersey and Vermont moved forward. However, other states may adopt similar legislation in future years, once the market has had some time to react to the “repeal” at the federal level. This will be something to keep an eye on. Although the existence or non-existence of the individual mandate doesn’t directly affect employers’ requirements under the ACA, having a mandate in place may mean higher levels of enrollment in both group coverage and subsidized individual marketplace coverage. The former may affect employers’ benefit offerings, and the latter may affect an employer’s potential for being assigned penalties if it doesn’t comply with the employer mandate.

An Act to Amend Title 19 of the Delaware Code Relating to Employment Practices

A poll from 2017 revealed that 31% of people in the United States have been sexually harassed in the workplace.  Further, a comprehensive study of workplace harassment in the United States released by the United States Equal Employment Opportunity Commission concluded that between 25% and 85% of women reported having experienced sexual harassment in the workplace.  The State of Delaware has pending legislation with purpose of combating sexual harassment in the workplace as well as making employers responsible for the sexual harassment of an employee.

Under this bill, employers with 50 or more employees in Delaware will be required to provide sexual harassment training to all employees and supervisory employees, every 2 years. This bill takes effect on January 1, 2019.

Lyons HCM is able to provide Respectful Workplace training to help employers comply with this requirement.  Contact us at LyonsHCM@Lyonsinsurance.com for more information.

For full details, click here.

 

IRS Employer Mandate Letters

Last week, the Internal Revenue Service (IRS) unveiled a new webpage focused on helping applicable large employers (ALEs) understand the Letter 227 series, which some employers may receive in connection with IRS's employer mandate enforcement efforts.

Given that the IRS is now actively assessing penalties on ALEs that may not have met the terms of the Patient Protection and Affordable Care Act's (ACA) employer shared responsibility provisions (employer mandate) in 2015, it is vital for businesses to understand IRS communications on the matter and to be prepared to respond.

Read full article here.

New Jersey Takes Steps to Sure-Up Individual Mandate

On Wednesday, May 30, New Jersey Governor Phil Murphy signed into law NJ A3380 (18R) which will preserve the individual mandate penalties for New Jersey residents. The law is scheduled to take effect on January 1, 2019.

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act of 2017.  Included in the Act was a provision reducing penalty liability to $0 for the Affordable Care Act's individual mandate beginning in 2019. Fearing that the zeroing of the individual mandate's penalty liability would cause high rates of adverse selection (i.e. healthy people forgoing purchasing insurance) in New Jersey's individual market, New Jersey lawmakers took steps aimed at keeping healthier people in the market.

It is likely that other states will consider taking similar measures leading into the 2019 individual market open enrollment season.

To read more about NJ A3380 (18R), please click here.

Case Law: Arbitration Agreements

The Supreme Court of the United States issued its decision in Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP v. Morris, No. 16-300; and NLRB v. Murphy Oil USA, Inc., No. 16-307 (May 21, 2018), which clearly establishes that arbitration agreements providing for individualized proceedings, and waiving the right to participate in class or collective actions, are lawful and enforceable.

Wilmington Blue Rocks Ticket Winners

This past fall, Lyons Companies participated in a few college career fairs.  Students who submitted their resume to Lyonsinsurance.com were entered to win 4 tickets to a Blue Rocks baseball game during the 2018 season.

Our first winner has been announced. Congratulations to Casey S.  Casey is a Junior Business Administration major from Temple University.  Enjoy the game, Casey!

Lyons Companies is always looking for ways to expand our team.  Please check Lyonsinsurance.com to look for open career and internship opportunities. 

Mental Health Parity – Agency Guidance and Tools Recently Issued

The agencies (the DOL, IRS, and HHS) recently released additional proposed FAQs, a revised form for individuals requesting information about treatment limitations from employer-sponsored plans, and a self-check tool in accordance with a directive set forth in the 21st Century Cures Act (passed in late 2016), which tasked the agencies to make further progress in clarifying and enforcing compliance with the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). The MHPAEA requires group health plans offering both medical/surgical benefits and mental health (MA) or substance use disorder (SUD) benefits to provide MH and SUD benefits at least equal to (“in parity” with) the medical/surgical benefits provided. More detailed summary information about such requirements may be found in our issue brief dated back in December of 2013.

A fact sheet with recent enforcement activity indicated that out of the 187 investigations the DOL closed in 2017, 92 were cited for noncompliance with MHPAEA. It is likely that we will continue to see focus on enforcement of MHPAEA in 2018. Although often the insurance carriers or TPAs will assist in making sure that plan offerings are in compliance with MHPAEA, it is worthwhile for brokers and employers to be aware of these requirements in regard to any covered MH or SUD benefits.

The proposed FAQs focused on the use of non-quantitative treatment limitations (NQTLs) for MH and SUD benefits and disclosure requirements under MHPAEA. See further details below.

Clarification on Application of NQTLs

When implementing a NQTL for MH or SUD benefits, the proposed FAQs clarify that any processes, strategies, evidentiary standards, and other factors considered by the plan be comparable to and applied no more stringently than those used in applying the NQTL to medical/surgical benefits. The proposed FAQs indicate that the following plan practices, while allowed, are considered NQTLs and must be comparable to and not applied more stringently to MH and SUD benefits than to medical surgical benefits:

  • Medical management standards limiting or excluding benefits based on whether a treatment is experimental or investigative, or based on medical necessity, medical appropriateness, or other factors (specific examples include coverage of applied behavioral analysis (ABA), which is used to treat autism, and dosage limits for prescription drugs)
  • Refusing to pay for a higher-cost therapy until it is shown that a lower-cost therapy is not effective (commonly known as “step therapy protocols” or “fail-first policies”)
  • Imposing standards for admitting a provider to participate in a network (including the plan’s reimbursement rates for providers)
  • Considering factors such as distance standards and waiting times for participants and beneficiaries for appointments for services to measure network adequacy
  • Plan or coverage restrictions based on facility type (specific example addresses residential facilities for eating disorders, which is considered a mental health condition)

While treatment limitations imposed on MH and SUD benefits cannot be more restrictive than treatment limitations that apply to medical/surgical benefits, a plan is allowed to completely exclude benefits for a particular condition or disorder without violating MHPAEA so long as coverage is not required otherwise (e.g., as an essential health benefit under the state benchmark plan for small, fully insured plans).

Clarification of Disclosure Requirements

The proposed FAQs also clarify that if an ERISA-covered plan utilizes a network, its SPD must provide a general description of the provider network, and, more importantly, that the list of providers in that SPD must be up-to-date, accurate, and complete (using reasonable efforts). The list may be provided as a separate document that accompanies the plan’s SPD if it is furnished automatically and without charge and if the SPD contains a statement to that effect.

Any provisions governing the use of network providers, the composition of the provider network, and whether any coverage is provided for out-of-network services may be provided electronically (e.g., via hyperlink or URL address), so long as DOL electronic distribution safe harbor requirements are met. Also keep in mind that a Summary of Benefits and Coverage (SBC) must include an Internet address (or other contact information) for obtaining a list of in-network network providers.

Links to the the FAQs, revised form, and self-check tool are provided below.

NJ just passed “The most sweeping equal pay legislation in America.”

NJ just passed “The most sweeping equal pay legislation in America.”

The Allen Act, here's a snapshot:  It's not just a gender-equity law. Rather, subject to narrow exceptions, the Allen Act requires equal pay among all protected classes performing substantially-similar work The statute of limitations is six years and the Allen Act has very strong anti-retaliation language The Allen Act mandates triple damages for violations Employers finding pay disparities cannot lower the pay of the higher-compensated worker. 

Read the Philadelphia Business Journal's full article here.

Another Change in 2018 HSA Contribution Limits

This week, the IRS released Rev. Proc. 2018-27 modifying (again) the HSA contribution limits for family coverage for 2018, returning the contribution limit to $6,900.

In May 2017, the IRS released Revenue Procedure 2017-37, which set forth the 2018 inflation adjusted amounts for HSA contributions ($3,450 for self-only, and $6,900 for other than self-only). However, in accordance with the Tax Cuts and Jobs Act passed late in 2017, Rev. Proc. 2018-18 set forth a variety of changes to tax rates and inflation-adjusted thresholds, including a different methodology for determining adjustments to limits for things such as contributions to health flexible spending accounts (FSAs) and health savings accounts (HSAs) using a "chained CPI". This resulted in the HSA contribution limits for family coverage being reduced by $50 (to $6,850) for 2018. Following this change, after receiving feedback from many several stakeholders, the IRS made the decision to return the amount to $6,900 for 2018.

Below are the updated dollar amounts for 2018 HSA contributions. The 2018 requirements for a qualifying high deductible health plan (HDHP), the minimum deductibles and maximum out-of-pockets, are unchanged.  

2018 HSA Annual Contribution Limits

  • Self-only (single) HDHP coverage = $3,450 ($3,400 in 2017)
  • Other than self-only (family) HDHP coverage = $6,900 ($6,750 in 2017), previously set at $6,850 for 2018

Read the full alert here.