Workplace Wellness: Protecting Employees’ Rights

Health screenings often reveal sensitive, personal information about your employees, so it is important that you keep your employees’ information confidential. When employees reveal personal information for health screenings, they trust you to not use this information to increase their copays, make them vulnerable to additional expenses, or cause them any embarrassment or attention from other employees. In addition, health assessments must remain in compliance with federal laws such as HIPAA, GINA and the ADA.

To protect your employees’ rights while executing your workplace wellness program, consider the following recommendations:

• Do not share employees’ personal or health-related information with anyone. This may inadvertently cause them to receive impartial treatment in the workplace. Plus, you are legally obligated to protect sensitive employee information.
• Keep health screening information separate from your employees’ employment records, as this information must not affect hiring, firing and promotion decisions.
• When reporting on wellness data, provide an aggregate summary of the health conditions affecting your entire employee body; do not single anyone out.
• Make participation in wellness programs a voluntary activity. Though you can offer incentives to encourage employees to participate, it is illegal to require employees to engage in wellness activities or to provide health-related information.
• Provide a confidentiality agreement to employees with the health promotion materials.
• Protecting your employees’ personal information is the law. Take these steps to ensure that your employees’ personal information is kept confidential.

For more information, please contact Elizabeth Long, Senior Benefits Consultant, Champion Risk & Insurance Services, L.P., 858-369-7923 Direct / 619-733-4176 Cell or via email: elong@championrisk.net

Health Care Reform: What Does it Mean for You?

Health care reform affects each American differently based on many different factors. Changes are unique to your situation. How health care reform legislation affects you varies greatly depending on your age, who you work for and many other factors. So what does it mean for you? Below is a list of how health care reform affects a number of common categories.

Elderly
The elderly now receive free preventive services under Medicare, annual wellness visits and personalized prevention plan services. Once those with Medicare prescription drug coverage enter the “doughnut hole” coverage gap, they will be entitled to 50 percent off certain brand-name medications.. Medicare beneficiaries earning $85,000 or more will pay higher Part B premiums until 2019. Those with Medicare Advantage plans may lose some benefits or experience an increase in copayments.

Employees of a Large Company
Employers with 50 or more employees will be required to provide coverage or pay a penalty starting in 2014. Existing coverage packages will be grandfathered in, but new plans have to meet minimum requirements. Caps on out-of-pocket spending are intended to keep costs down.

Low-Income Employees
Even without children or a disability, those among the lowest-income workers will be eligible for Medicaid as of 2014. Those who earn less than 400 percent of the federal poverty level (about $88,000 for a family of four) will be eligible for subsidies to help buy coverage. The expansion of funding for community health centers, designed to offer free and reduced-cost care, will also provide relief.

Children with Pre-existing Conditions
Group health plans and health insurance issuers may not impose exclusions on coverage for children with pre-existing condition. Provision applies to all employer plans and new plans in the individual market.

Adults with Pre-existing Conditions
Starting 2014, adults with pre-existing conditions will be able to obtain individual coverage through an insurance exchange and pay the same rate as other participants in same age group. Insurers cannot place annual or lifetime limits on coverage, nor can they deny coverage or charge higher premiums due to a pre-existing condition.

Unemployed and Uninsured
Most individuals who are unemployed and uninsured likely qualify for Medicaid under the coverage expansion that began in 2010. The expansion of funding for community health centers, designed to offer free and reduced-cost care, will also provide relief. Certain uninsured individuals with pre-existing conditions can obtain coverage through the temporary high-risk pool as well.

Small Business Owners
Organizations with 25 or fewer workers may be eligible for a tax credit to help provide coverage for employees. Those with 50 or more employees must provide benefits or incur a penalty starting in 2014. Small-business owners will be able to buy insurance for employees through insurance marketplaces by 2017.

Young Adults
Children may stay on their parents’ policies until age 26. Those who buy coverage on their own or through the exchanges can obtain cheaper catastrophic coverage. Individuals who obtain traditional benefits packages will pay less than those who are older than age 26. Starting 2014, individuals age 26 or younger must obtain coverage unless qualified for an exemption.

If you are a business owner and have questions about what actions you should take or what your responsibilities will be under the new law, please don't hesitate to call Elizabeth Long, Senior Benefits Consultant at 858-369-7923 or email her at elong@championrisk.net. 

Changes to Health Accounts

The health care reform law, which consists of the Affordable Care Act (ACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA), makes some significant changes to health flexible spending accounts (health FSAs), health reimbursement arrangements (HRAs) and health savings accounts (HSAs). These include:

• Reimbursement permitted for medicine or a drug only with a prescription (except for insulin).
• Contributions to health FSAs limited to $2,500 per year, subject to cost-of-living increases. 
• Increased tax on withdrawals from HSAs and Archer MSAs not used for medical expenses. 

This Champion Risk & Insurance Services, L.P. Legislative Brief describes the new rules related to these accounts and when the changes take effect. Please read below for more information and contact Champion Risk & Insurance Services, L.P. with any questions. 

LIMITS ON REIMBURSEMENT
OF OVER-THE-COUNTER MEDICATIONS

The health care reform law has revised the definition of “qualified medical expenses” for purposes of reimbursement from health FSAs and HRAs, and distributions from Archer medical savings accounts (Archer MSAs) and HSAs. The new definition is consistent with the definition used for the itemized tax deduction. 

Under the new definition, qualified medical expenses include amounts paid for medicines or drugs only if the medicine or drug is a prescribed drug (determined without regard to whether the drug is available without a prescription) or is insulin. 

This means that health FSAs and HRAs may not reimburse the cost of over-the-counter medications that do not have a prescription. Also, distributions from Archer MSAs and HSAs used to pay for over-the-counter medications without a prescription will be taxable and subject to penalties. However, amounts paid for over-the-counter medicine with a prescription still qualify as medical expenses. 

The limits on over-the-counter medications for health FSAs and HRAs are effective for expenses incurred with respect to taxable years beginning after Dec. 31, 2010. For HSAs and Archer MSAs, the limits are effective for amounts paid with respect to taxable years beginning after Dec. 31, 2010.

LIMITS ON HEALTH FSA CONTRIBUTIONS

Many employers choose to limit the amount that employees may contribute to a health FSA each year, but there is no federal limit on contributions. However, beginning in 2013, a health FSA offered through a cafeteria plan will have to limit the amount of salary reduction contributions that employees can make. Effective for plan years beginning after Dec. 31, 2012, employees may not elect to contribute more than $2,500 per year to a health FSA. This amount will increase in future years to reflect cost-of-living increases. 

INCREASED TAX ON WITHDRAWALS
FROM HSAS AND ARCHER MSAS

Participants in HSAs and Archer MSAs may withdraw funds from those accounts either to pay for qualified medical expenses or to use for other purposes. However, only withdrawals used to pay for qualified medical expenses are tax-free. If the funds are used for other purposes, the withdrawal becomes taxable and subject to penalties.  

The health care reform law increases the additional tax on HSA distributions prior to age 65 that are not used for qualified medical expenses from 10 to 20 percent. The additional tax for Archer MSA distributions not used for qualified medical expenses increases from 15 to 20 percent. The increased taxes apply to distributions from these accounts made after Dec. 31, 2010. 

LEGISLATIVE REFERENCES

For more information on these topics, see the following sections of the health care reform legislation:

• Limits on Reimbursement of Over-the-Counter Medications: PPACA §9003
• Limits on Health FSA Contributions: PPACA §9005, §10902; HCERA §1403
• Increased Tax on Withdrawals from HSAs and Archer MSAs: PPACA §9004

For more information, please contact Elizabeth Long, Senior Benefits Consultant, Champion Risk & Insurance Services, L.P., 858-369-7923 Direct / 619-733-4176 Cell or via email: elong@championrisk.net

Pay or Play Penalty – Dependent Coverage Requirements

If you don't offer health coverage to
your employees' dependents, you may
be subject to penalties, also referred

to as a "shared responsibility payment."

Beginning in 2015, the Affordable Care Act (ACA) imposes “pay or play” requirements on large employers. Under these “pay or play” requirements, large employers that do not offer health coverage to their full-time employees and their dependents, or that offer coverage that is either unaffordable or does not provide minimum value, may be subject to a penalty. This penalty is also referred to as a “shared responsibility payment.”

On Jan. 2, 2013, the Internal Revenue Service (IRS) published proposed rules that provide further guidance on the employer shared responsibility provisions, including the requirement to cover dependents. These proposed rules:

• Clarify the term “dependent” for purposes of the coverage requirement; and 

• Provide transition relief for plan years that begin in 2015.

The regulations are not final. However, employers may rely on the proposed regulations until final regulations or other applicable guidance is issued.

Who qualifies as a dependent?

The proposed regulations clarify that, starting in 2015, an applicable large employer must offer health coverage to both its full-time employees and their dependents to avoid the shared responsibility payment. The term “dependent” is defined as an employee’s child who is under 26 years of age. An employee’s child includes a natural son or daughter, adopted child, stepchild and foster child. 

For these purposes, “dependent” does not include any other individual, including the employee’s spouse. This means that employers are not required to offer coverage to an employee’s spouse under the employer shared responsibility provisions, and will not be liable for any penalty due to failure to offer coverage to an employee’s spouse.

Despite the dependent coverage requirement, an employer’s liability for the shared responsibility payment is triggered only by a full-time employee receiving a premium tax credit, regardless of whether any dependents are eligible for, or receive, a premium tax credit.

Transition Relief

The IRS recognizes that a number of employers currently offer employee-only coverage, and that expanding their health plans to include dependent coverage will require substantial revisions to their plans. Therefore, the proposed regulations provide transition relief with respect to dependent coverage for plan years that begin in 2015.

Any employer that does not offer coverage to dependents during the 2015 plan year will not be liable for a penalty for that plan year as long as it takes steps toward offering dependent coverage during the year.

Source: Internal Revenue Service

For more information, please contact Elizabeth Long, Senior Benefits Consultant, Champion Risk & Insurance Services, L.P., 858-369-7923 Direct / 619-733-4176 Cell or via email: elong@championrisk.net