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GROUP HEALTH PLAN REGULATIONS AND REPORTING

 REQUIREMENTS QUESTIONNAIRE

It seems there are a dizzying array of Federal laws and reporting requirements that apply to employer group health plans, depending upon the size of the employer or the size of the group health plan.

COBRA, FMLA or Family Medical Leave, Mental Health Parity, Section 111 Medicare as Secondary Payer - just to name a few - all have potential impact on employer group health plans, but of course, the determining employee threshold number, or timeframe for calculating that threshold, or even the definition of an employee is not consistent between them all making it extremely challenging to determine just exactly what applies to your group health!

Coming up with the average number of employees in your organization during the preceding calendar year is a good starting point in this exercise.

SAMPLE AVERAGE EMPLOYEE COUNT

The example below may help illustrate:

The average must include all individuals who are employed by your organization whether full-time, part-time, or temporary/seasonal.  These are all individuals set to be issued a W-2 from your organization and regardless of whether they are participants in your group health plan.

QUESTIONNAIRE:

If your organization is considered a "single employer" under the IRS Code, provide the combined total of employees for all businesses that are included in the "single employer group" and respond to the following questions:

1.  Average number employed between January 1 and December 31 of the prior calendar year:  ____________
2.  Did your organization employ at least two individuals as of the first day of your current health plan year?

                Yes  ____________                       No  ________________

3.  Did/does your organization employ 20 or more individuals for each working day of 20 or more calendar weeks in the current calendar year or the preceding calendar year?

                Yes  ____________                       No  ________________

4.  Has your organization had an average of 50 or more individuals employed during the preceding calendar year?

                Yes  ____________                       No  ________________

5.  Has your organization employed 100 or more individuals on 50% or more of your regular business days during the preceding calendar year?

                Yes  ____________                       No  ________________

Using the Sample Average Employee Count example of the organization above with an average of 30 employees, the following regulations would generally apply:

COBRA                                                                                                  WHCRA

HIPAA                                                                                                   GINA

Certain Section 111 MSP Reporting                                                         Michelle's Law

Newborn's Act

MHPA or FMLA would not apply in this case, as the employee threshold limit for both regulations is 50+ individuals.

Disability (other than ESRD) Reporting for Section 111 MSP Reporting has an employee threshold limit of 100+ individuals.

Please note:  governmental or church plans are not subject to Title I of ERISA and may or may not have all the same reporting requirements as other group health plans.

Also, plans that are comprised of only "excepted benefits" may or may not have all the same reporting requirements as other group health plans.

For further information and to use the Department of Labor's interactive health plan compliance website tool, go to http://www.dol.gov/elaws/ebsa/health/employer.

MEDICARE AS SECONDARY PAYER (MSP) TIPS

The table below may help in determining your group health plan's Section 111 MSP Reporting Requirements.  Note that CMS considers Health Reimbursement Account (HRA) plans to be "group health plans" for these MSP reporting purposes.  For full details on Section 111 MSP Reporting, go to http://www.cms.gov/Medicare/Coordination-of-Benefits/MandatoryInsRep.

• If the employee or dependent is 65+ and the employer has less than 20 employees (considered a small employer), then Medicare is Primary, paying 1^st, prior to the group health plan(s).

• If the employee or dependent is 65+ and the employer has between 20 & 99 employees (considered a medium-sized employer), then Medicare is Secondary, paying 2^nd, after the group health plan(s).

• If the employee or dependent is 65+ and the employer has 100+ employees (considered a large employer), then Medicare is Secondary, paying 2^nd, after the group health plan(s).

• If the employee or dependent is disabled (other than with ESRD) and the employer has less than 20 employees (considered a small employer), then Medicare is Primary, paying 1^st, prior to the group health plan(s).

• If the employee or dependent is disabled (other than with ESRD) and the employer has between 20 & 99 employees (considered a medium-sized employer), then Medicare is Primary, paying 1^st, prior to the group health plan(s).

• If the employee or dependent is disabled (other than with ESRD) and the employer has 100+ employees (considered a large employer), then Medicare is Secondary, paying 2^nd, after the group health plan(s).

• In all cases of End-Stage Renal Disease (ESRD), regardless of employer size, Medicare is Secondary, paying 2^nd, after the group health plan(s).

The information contained in this article is not intended to be legal, accounting or other professional advice.  We assume no liability in connection with its use, nor are these comments directed to specific situations.

DIRTY HARRY WANTS TO KNOW DO YOU FEEL LUCKY?

Clint Eastwood in the original Dirty Harry movie asks the robber the now infamous question - "Do I feel lucky?  Well do 'ya?"

It's a question that we at Innovative Employee Benefits think any employer who is contemplating self-administering their Health Reimbursement Arrangement or HRA plan should ask of themselves.

So, " Do you feel lucky?"   Because we believe that's what its going to take luck to successfully pull off a self administered HRA.

You might think that you can save some bucks if you don't have to pay someone else to administer your HRA plan (and now days, who doesn't want to come up with ways to save money?)

But administration of an HRA plan is much more complicated that just writing checks to participants for the balance between what the regular group insurance plan pays and the provider billing.  There are any number of complexities that can trip you up.

Speaking of wanting to save money, the federal government and Medicare are interested in doing just that which is why HRA plans, along with other group health plans, are now required to submit their plan eligibility electronically each quarter to the Centers for Medicare and Medicaid Services (CMS). 

By self-administering the HRA plan, an employer becomes the group insurance plan administrator, and as such, is required to register with CMS as a Section 111 Registered Reporting Entity (RRE) and begin submitting electronic eligibility files, which will certainly involve your IT Department creating a transmission program based upon the file specifications that can be found in the 250 page CMS Section 111 User Guide. 

The coordination of coverage rules for Medicare and group health insurance is not a "one-size fits all" where Medicare is always the primary payer or always the secondary payer.  Which is correct depends upon a number of factors employer size, the different reasons for Medicare entitlement and its easy to make mistakes in the determination.

Medicare is particularly interested in making sure that overpayments in this area are not made as this is an effective way to save the government money without having to mandate additional taxes.  Non-compliance in this area can be very expensive fines of up to $1000 per day. 

And, as if that wasn't enough, in addition to the Section 111 pitfalls above, add the regulatory environment of HIPAA!

Self-administering a group insurance plan will bring a higher level of HIPAA Privacy and Security scrutiny because, by becoming the claims payer, you will now be dealing directly with Protected Health Information (PHI and e-PHI) which will need to be treated and secured in the manner mandated by the HIPAA & HITECH regulations.  Just this past fall, a new layer of HIPAA Security, was mandated, dealing specifically with the issue of electronic PHI (e-PHI), whether housed on servers, laptops, flash drives, mobile devices, copier/scanners, etc. and ad infinitum - all the places that our technological world now potentially has this information.  Certain HIPAA security breaches, are now required, in addition to having to be reported to the affected parties, must be reported to the media as well as Health & Human Services.

The specifics for HIPAA Privacy and Security compliance are certainly beyond the scope of this communication, but suffice it to say that non-compliance in this area can result in significant fines ranging from $100 to $50,000 for each violation, and $25,000 to $1,500,000 for similar violations in the same year. 

And we've not even begun to talk about the issues revolving around COBRA, Non-Discrimination Testing, and plan document drafting and the administration an HRA plan!

Its easy to see that it would take only a few days worth of non-compliance fines to wipe out any "savings" that you might be hoping to gain.  So, before you "pull the trigger" and take on the administration of your HRA plan, think again, and contact us here at Innovative Employee Benefits.

Coming up with sound workable solutions for our clients is what we strive for and the purpose of our collaborative client, broker, administrator relationship.