2013 June/July Health & Employee Benefits

Good things come to those who wait... right?

The following are just a few of the issues that need to be addressed before the October open enrollment of the State and Federal Exchanges.

Back in April, HHS released the long awaited proposed rule outlining standards for the navigator program in health insurance exchanges and, as usual, NAHU submitted a comment letter. Earlier this week we received word that the final navigator rule is at the Office of Management and Budget, which is every rule’s last stop before being issued and published in the Federal Registrar.

The proposed rule clarified who may be navigators, outlines navigator duties and proposes conflict of interest and privacy and training standards.

The proposed rule does not apply to traditional agents and brokers, who can choose to still continue to help individual and small-group health insurance consumers, including with exchange purchases under separate rules.  Alternatively, the proposed rule does provide a path for agents and brokers to serve as navigators; however, that path would require a significant change in most agents’ business model, as a producer who opted to become a navigator could not receive any commission or other compensation from a health insurance issuer or stop-loss insurer.

The regulation does not in any way limit state-based action to regulate navigators, either in states with a state-based, federally facilitated or partnership exchange. In fact, the proposed rule repeatedly references the fact that individual navigators and navigator organizations must comply with state laws.

In the submitted comment letter, NAHU asked for clarification about the role of navigators, what kinds of information they may present to the public and whether or not states may require navigator and assister entities to have some type of liability coverage. Additionally, we stressed the importance that navigators and assisters be legally accountable for their actions in order to provide health insurance consumers with adequate protection and that conflict of interest standards need to be broadened. The proposed rules also created tremendous potential for fraud when it comes to the exchanges. In our comment letter, we asked that HHS disclose how it plans to deal with the issue, including any plans to provide assistance and relief to potentially defraud consumers.

PCORI Fee Compliance Update

Many brokers are preparing their employer clients with self-funded health plans for the first reporting of their collection of the Patient Centered Outcomes Research Institute (PCORI) Fee required to fund federal comparative effectiveness programs under the health reform law. The first annual payment of this excise tax is due on July 31, 2013 and it is to be reported on IRS Form 720. It’s important to note that Form 720 is really designed for quarterly payments of certain excise taxes, but the PCORI fee is only to be paid by self-funded health plans once, during the second quarter filing period. For sponsors of self-insured health plans, the IRS recently posted an updated Form 720 and accompanying instructions on its website.  Building on that, this week the IRS Chief Counsel announced that the PCORI fee is an “ordinary and necessary business expense paid or incurred in carrying on a trade or business” and as result is tax-deductible, in a May 31 memorandum that was published on June 7.

GOP Looking To Cut Off Funding For IRS Ahead Of ACA Implementation.

It was  reported that Congressional Republicans are getting “a timely excuse” to crimp funding for the IRS due to “mounting scandals,” just as it prepares to play a critical role in the implementation of the Affordable Care Act. “Unable to repeal the law, some Republicans hope to starve it by refusing to fund its implementation,” and the IRS is due for “a significant budget increase” that President Obama requested for the agency to be able to fund subsidies for health insurance exchanges. The IRS is in the crosshairs over targeting of conservative groups and “lavish” spending.

Senator Orrin Hatch (R-UT) argued in an op-ed that if the Internal Revenue Service was unable to handle the burden of 1,700 applications for tax exemption, it is sure to be unable to handle the seven million premium subsidies it will be responsible for under the Affordable Care Act. Hatch said such refundable tax credits have been difficult for the IRS to administer in the past, and predicted many cases of fraud and error are likely to occur.

ACA May Be Prompting Employers To Cut Hours, Workers.

The Washington Times  reports that a “growing number of economic indicators” show that the Affordable Care Act is “prompting employers to hire more part-time and temporary workers to escape paying benefits under a mandate that goes into effect next year.” Moreover, lower-income workers will be “hardest hit by the move toward cutting work hours and increasing temporary hiring.”      

WSJ Panel Considers Whether ACA Will Lead Employers To Cut Insurance. The Wall Street Journal  (6/17, Thurm, Subscription Publication) assembled a panel of experts to assess whether the Affordable Care Act will reduce the number of employers who offer health insurance across the country. The panel consisted of Kevin Kuhlman, a manager of legislative affairs at the National Federation of Independent Business; Christine Eibner, an economist at RAND Corp; and David Marini, managing director, strategic advisory services, at Automatic Data Processing Inc. One overall conclusion the three reach is that many of the outcomes of the law are thus far anything but certain.

Sandra Powers-Booth

Health & Employee Benefits Chair