Last months PPACA Challenge quiz showed that — unlike type O negative blood — there is nothing universal about benefits practitioners understanding or interpretation of the Patient Protection and Affordable Care Act.
After testing readers on their PPACA knowledge, this month, we provide the answers, along with some commentary from industry experts. So read on to find out if you have healthy hemoglobin when it comes to health care reform, or are in need of a transfusion to relieve PPACA confusion.
In all her years of advising employers on their health care benefits, consultant Chantel Sheaks has never seen a law go into effect as quickly as the Patient Protection and Affordable Care Act. There was a huge scramble for compliance, says Sheaks, who works for Buck Consultants and primarily advises large employers. For employers -- whether or not they opposed the legislation once it becomes law, they want to be compliant. But it was just so overwhelming. And the law, as written was just incredibly vague. Even though we got guidance, it was a scramble.
And while, compared to 2010, Sheaks says 2011 has not been as much of a scramble, several lingering questions remain.
Employers today are still concerned, as they ve always been, about the costs of health care and the fact that PPACA didn't do anything to bend the long-term cost curve, says Sam Fleet, president of AmWINS Group Benefits. The one thing we know is there s a lot of uncertainty. Employers are feeling that.
Fleet and Sheaks, along with Helen Darling, president of the National Business Group on Health, and Stan Schroeder, a partner in the law firm The Lowenbaum Partnership, talked with EBN about how employers are faring with the legislation today and provided some general commentary on the questions in our PPACA quiz.
1. The Cadillac Plan tax, which will impose an excise tax on the value of excess coverage, under PPACA takes effect in:
Answer: D. While there might not be many employers out there that cover 100% of all benefits anymore, or those that have very small deductibles, Sheaks says this PPACA provision can still affect employers without generous plans. Some plans, because of the industry they re in sciences, engineering, nursing have an aging workforce, she says. It s not that they have particularly rich benefits, it s that they have higher claims because of their [workforce s] make up. One of the biggest concerns I m seeing with employers is that they re afraid this legislation does not understand that you can have a high-cost program without having high benefits.
2. True or false: PPACA s rules regarding wellness programs do not apply to grandfathered plans.
3. Fully insured plans must include an essential health benefits package. Which of these is not an essential health benefit under the law?
A) Emergency services
B) Maternity and newborn care
C) Chiropractic services
D) Rehab services
Answer: C. The Department of Health and Human Services definition of essential benefits is so wide you could drive a truck through it, says Sheaks. And since lifetime and annual dollar limits are not allowed for essential benefits under the law, some employers have amended their plans, or are thinking of amending their plans, to limit the number of visits per therapy. We are still desperately waiting for guidance in that area, she says.
4. PPACA increased non-taxable adoption assistance to $13,170. This provision expires when?
5. Under PPACA, employers must provide reasonable break time to allow nursing mothers to express milk for a child up to the age of one. True or false: This break time is unpaid.
6. Health plans begun on or after Sept. 23, 2010 must have an internal and external claims appeal process, unless grandfathered. An employer s internal appeals process must follow which body s appeals process?
A) The Department of Health and Human Services
B) The Department of Labor
C) The Federal Trade Commission
D) State law process
Answer: B. If you re a private employer, you already have to have a detailed claims appeal procedure in your plan. ERISA mandates that, says Schroeder. Where you didn t see claims and appeals processes, necessarily, was in governmental plans and in religious organization plans. So it may be more of a shock for those groups. But if you re grandfathered, you can ignore that.
7. Health plans that offer dependent coverage are required to cover dependents up to what age?
8. Which of the following statements is not true?
A) Lifetime limits are allowed on nonessential benefits.
B) Lifetime limits on benefits are not allowed under the PPACA.
C) Some lower lifetime limits may violate the ADA.
D) State laws may prohibit certain lifetime benefits.
Answer: B. Lifetime limits on essential benefits are not allowed but stand-alone dental plans and vision plans can continue to have lifetime limits.
9. Under PPACA, a non-grandfathered group plan may:
A) Require a referral for OB-GYN care
B) Allow a pediatrician to be a designated primary care provider
C) Require higher cost-sharing amounts for out-of-network emergency care
D) All of the above
10. Starting with plans beginning Jan. 1, 2014, no one can be excluded from coverage for a pre-existing condition. Until then, though, when may a health plan exclude a dependent with a pre-existing condition?
A) At any time
B) When the dependent is older than age 26
C) When the dependent is older than age 19
D) When the dependent has been refused coverage in the past
Answer: C. One of the sound bytes used to promote this legislation was 'we re getting rid of pre-existing conditions so you won t have people being denied coverage because they ve had cancer or diabetes, says Schroeder. That s baloney. Until 2014, you can be denied enrollment unless you are a child. There are state programs that have been made more affordable that will take you but they still have a six-month waiting period. But according to Sheaks you still can t exclude dependents completely because HIPAA is still in place. Under employer-sponsored group health plans you can t exclude someone from coverage because of a pre-existing condition but you can not cover the pre-existing condition for up to 12 months.
11. True or false: The law s requirements on preventive care do not apply to grandfathered plans.
12. Who is eligible for the PPACA s small employer tax credit?
A) Employers with fewer than 25 full-time equivalent employees
B) Employers with fewer than 50 full-time equivalent employees
C) Employers with fewer than 100 full-time equivalent employees
13. Who is required to automatically enroll all new employees in a health plan?
A) All employers
B) Employers with more than 100 full-time employees
C) Employers with more than 200 full-time employees
D) Employers with more than 1,000 full-time employees
14. When must an employer provide an opt-out notice to employees?
A) When the employee declines health care benefits during open enrollment
B) When the employee changes from one plan to another
C) When dependents are no longer eligible for coverage
D) When the company automatically enrolls employees in its health plan
Answer: D. Young people who are in good health aren t necessarily going to be interested in getting health insurance. They never have been, says Schroeder. So the idea of auto-enrollment for a lot of young folks, that may be a problem for them. We ll have to see.
15. An employer may establish a cafeteria plan under PPACA if:
A) The company currently employs 100 or fewer employees.
B) The company employed 100 or fewer employees in the preceding year.
C) The company employed 100 or fewer employees for either of the two preceding years.
D) The company employed 100 or fewer employees on average over the past five years.
Answer: C. There s no mandate that you have to have a flexible health care spending account or a dependent flexible spending account but there is a mandate that certain employers will have to offer a pre-tax premium deduction program, says Schroeder. And that s going to be primarily to facilitate employee enrollment in the exchanges.
16. The Class Act provision of the PPACA deals with:
A) Network vs. non-network coverage
B) Best-in-class provider identification
C) Long-term care insurance
D) State exchanges
Answer: C. Sheaks believes the federal government is between a rock and a hard place with this provision. I think the agencies realize it s unsound, actuarially speaking, she notes. How do you give guidance on something that s actuarially unsound? I think the [HHS] Secretary is struggling with how much authority she has to make it sound to get more people involved. Most employers I ve talked to say they re not even going to go near that.
17. Which provision of the PPACA does not take effect this year (2011)?
A) The Uniform Explanation of Coverage provision
B) Class Act provision
C) The W-2 Reporting provision
D) The Qualified Medical Expenses provision
Answer: A. While the provision is intended to make sure groups of employees who ve never had good explanations of their benefits have access to something that s understandable, Schroeder believes this is regulation run amok. It does not eliminate the requirement under ERISA that private employers have a summary plan description. It will be duplicative for all private employers who are governed by ERISA.
18. Who is eligible to receive federal grant money for a workplace wellness program?
A) Any employer
B) Companies with fewer than 500 employees
C) Companies that had no workplace wellness program prior to enactment of PPACA
D) Companies that can document prior success with workplace wellness initiatives
19. The majority of future changes required by PPACA will take place in:
20. Beginning Jan. 1, 2013, annual employee contributions to FSAs will be:
A) Capped at $2,000
B) Capped at $2,500
C) Capped at $3,500
D) Tied to the Consumer Price Index
Answer: B. The irony is that at a time when they re trying to give more to everybody, they re actually taking away the FSA from the ones who really need it, says Darling. For fundamentally healthy people, you d have a hard time hitting the $2,500 [limit]. But for some families with autistic children, for example they ll put every penny they can in the FSA because they ll need that money.
21. The requirement that there be no annual limits in health plans except for per beneficiary annual limits on specific covered, non-essential benefits takes effect in:
22. True or false: For plans beginning Jan. 1, 2014, PPACA requires that limits on the annual out-of-pocket maximum imposed by group health plans be the same as those imposed on HSA-compatible HDHPs.
23. Employers with plans beginning Jan. 1, 2014 must offer affordable coverage to employees working how many hours per week?
24. True or false: The PPACA states that insurers must accept every employer that applies for coverage in the state where the insurer writes policies for health coverage. However, an insurer is not required to continue such coverage if the plan becomes unaffordable.
Answer: False. There is no mandate in this law that anybody has to offer any health plan, says Schroeder. If you have over 50 full time employees then you have a decision to make. Either don t offer a plan, in which case, you will have to pay $2,000 per full time employee if you have at least one employee who is eligible for subsidized coverage through an exchange. If you choose to offer a health plan, then you must offer 'affordable coverage the coverage has to cover at least 60% of the full cost of essential benefits and the premium can t exceed 9.5% of an employee s family income.
25. Effective for plans starting Jan. 1, 2014, waiting periods for coverage may be no longer than:
A) 30 days
B) 60 days
C) 90 days
D) 120 days
Answer: C. I have one very large employer who brings [employees] in on the first day of the third month following [being hired], which can in some cases be 92 or 93 days. That will be an issue for them, says Schroeder. But for more employers than not, this should not be an issue.
26. True or false: Under the current law, large employers will not be allowed to offer insurance through state health exchanges.
Answer: False. States may allow large employers to offer health coverage through an exchange in 2017. While regulatory guidance on the exchanges was issued in July, Fleet questions their economic viability. Where are the states going to get the money to run them? Where are the feds going to get the money to fund them? he asks. I keep going back to this whole deficit discussion and the fact that we have a $63 trillion deficit. That s $550,000 for every household in this country when the average asset base of that household is $90,000. It s unsustainable. I just don t know where the money s going to come from.
27. True or false: States will be free to limit which employers are allowed to purchase insurance though state health insurance exchanges.
28. Which of the following would not cause a non-collectively bargained health plan to lose grandfathered status under the PPACA?
A) Change in insurance carriers
B) Change in the scope of benefits
C) Increase in cost-sharing
D) Change in third-party administrator
29. The PPACA s Claims Review Rules do not apply to:
A) Health plans that are grandfathered plans
B) Plans with less than two current employees participating in the plan on the first day of the plan year (e.g., stand-alone retiree-only plans)
C) Non-health plans, such as disability and retirement plans
D) All of the above
30. PPACA will require an excise tax on so-called Cadillac Plans. Who is responsible for calculating this tax?
D) Third-party administrators
We hope you enjoyed the PPACA Challenge and use both the quiz and results analysis to fuel discussion among your staffs and with your benefits adviser. Send comments to EBN Editor-in-Chief Kelley M. Butler at firstname.lastname@example.org. A.D.
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