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Question of the Month

What Nondiscrimination Tests Apply to Cafeteria Plans, Health FSAs, and DCAPs?


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INSURANCE SPOTLIGHT

May 19, 2016

Carrier News

 
Premera Updates
New Process For Outpatient Rehabilitation Services Begins July 1  
Effective July 1, 2016, Premera will introduce a new process for outpatient rehabilitation services that is designed to help members get the most from their coverage by ensuring treatments are right for their condition, effective, and medically necessary.
  
Premera will be partnering with eviCore healthcare for this new process because of their expertise in helping members reduce or eliminate ineffective use of benefits. Limiting unnecessary services helps control costs for everyone, and it helps set expectations for employers that costs for rehabilitation services will be managed wisely.  Read more

Premera Market Changes for 2017
You might have heard about the plans Premera Blue Cross announced for 2017 to continue moderating rising costs, increasing efficiency and maintaining competitive rates for members and employer groups.  Most of the changes will happen in the individual market, but the plans Premera will offer for small groups will also see some changes in 2017.

Premera will continue to offer group plans statewide and with coverage and access to providers that stretches outside of Washington. Although Premera will be reducing its individual market reach in 2017 by exiting some Washington counties, that change does not impact group plans.

nurses.jpg Premera's network changes for 2017, however, will affect many markets. Premera Heritage Signature and Heritage Prime networks will continue to provide members with access to quality, local care, but portions of the Swedish, Providence and CHI Franciscan Health systems will leave Premera's network in January 2017. Some will remain in network due to their locations, where members have few or no other in-network options for care. Please note-the Heritage Plus network is not affected by these changes.

If you'd like more details, we can provide you with a list of hospitals and medical facilities in these systems that will remain in network for your employees. Your employees also will be able to find providers who are within network beginning Jan. 1, 2017, by using Premera's online "Find a Doctor" tool. Here are some frequently asked questions about the changes.

 
 

Federal & State News

Final Rule on Nondiscrimination in Health Programs and Activities
On May 13, the Department of Health and Human Services Young adults (HHS), and specifically the Office of Civil Rights (OCR), issued a final rule on nondiscrimination in health programs and activities under Section 1557 of the Affordable Care Act (ACA). This section of the ACA serves protected classes of individuals whose health coverage may not be denied, cancelled, limited or refused on the basis of race, color, national origin, sex, age, or disability. The final rule clarifies existing nondiscrimination requirements, and sets new implementation standards for Section 1557.

This rule is effective July 18, 2016. However, health plans that require changes in benefits design are required to comply on the first day of the plan or policy year beginning on or after January 1, 2017.

The broad application of this final rule will affect the federal and state Marketplaces, all health care providers and health insurance issuers and employers that receive federal financial assistance. Financial assistance from HHS includes Medicare Part A, student health plans, advanced premium tax credits and many other programs. Full Article

HHS has established a web page with links to their press release, fact sheets, sample notices and FAQs

Information About the Comparative Effectiveness Research Fee in 2016
PCORI The Comparative Effectiveness Research Fee (CERF), also known as the Patient-Centered Outcomes Research Institute (PCORI) Fee, is one of several fees introduced to help fund the Patient Protection and Affordable Care Act (PPACA). Funds collected from this fee will be used to conduct research to determine the effectiveness of alternative treatments.

CERF Overview
This fee applies to both insured and self-funded medical plans. It is based on average covered lives (employees plus dependents).
  • Most carriers will pay the fee for insured plans, and it is built into premiums.
    • For the purpose of CERF requirements, insured plans also include guaranteed cost, shared returns, and minimum premium plans.
  • Self-funded plans must calculate and pay their own fee.
    • For the purpose of CERF requirements, self-funded plans also include level funding and graded preferred plans.
Please note, most carriers will pay the fee for insured plans with Health Reimbursement Accounts (HRAs) and certain Flexible Spending Accounts (FSAs) relative to the underlying medical plan only, but these clients will be responsible for paying the fee for their respective HRA or FSA funds. For HRAs and FSAs, the plan sponsor can treat each plan as covering a single covered life.

2016 CERF Payment Details
As a reminder, the fee is based on the average covered lives for the applicable 12-month policy or plan year, and is paid using IRS form 720 by July 31 each year for the plan year that ended in the preceding calendar year. It's important to remember that employers must use their ERISA plan year to calculate their fee per covered life and payment due date if their ERISA plan year and renewal date is different. The following chart outlines the applicable plans that need to pay in 2016 and the amount based on their ERISA plan year start dates.

Plan Year Start Date
Fee Per Avg Covered Life
Feb. 1, 2014-Oct. 1, 2014
$2.08
Nov. 1, 2014-Jan. 1, 2015
$2.17
You can also find more information about CERF on Cigna's Informed on Reform's Fees & Taxes page.

Health & Wellness
Consumer Reports Reveals the Best Sunscreens to Buy Now
beach_stuff.jpg Memorial Day weekend is almost here, and before you start packing your beach bag, you might want to invest in a new sunscreen. Consumer Reports recently tested and rated more than 60 sun tan lotions, sprays and sticks with a 30 or higher SPF and found that 28 of them didn't meet the SPF claim on their label. Click here for Full Article and best sunscreens for this summer.
If you have any questions about the articles contained in this newsletter, please give us a call or e-mail us: