Health Care Reform

Latest Alerts and Information on Health Care Reform

Market Stabilization Final Rule Issued


On April 14, 2017, the Department of Health and Human Services issued a market stabilization final rule under the ACA. The final rule includes new reforms intended to help lower premiums, stabilize the individual and small group health insurance markets and increase choices for the 2018 plan year. Specifically, the rule includes a variety of policy and operational changes to existing standards to stabilize the Exchanges, including changes to the annual open enrollment period and special enrollment periods.

Key Points

  • The market stabilization final rule includes new reforms intended to stabilize the individual and small group health insurance markets for the 2018 plan year.
  • The rule makes changes to existing standards that aim to stabilize the Exchanges.
  • The rule does not directly impact large group market plans.
  • The changes made under the final rule are effective for the 2018 plan year.

If you have additional questions regarding this compliance alert, please reach out to our consulting team at:

Suspension of DOL’s new Overtime Rules

Employee time sheetsJust before the Thanksgiving holiday, a Federal Judge in Texas granted a preliminary injunction, suspending the implementation of the new overtime rules for now.  The implications of this ruling are in favor of the employer as no immediate action is required today.  Looking ahead, employers should plan to examine the “why, how & when” to spend time and money on compliance initiatives.

How did this happen?  In this case, several States and the US Chamber of Commerce filed suit, claiming that the DOL regulators’ actions went beyond the scope of the overtime legislation enacted by Congress.  A Federal Court judge granted the injunction to suspend implementation until the case is decided on the merits.  Typically Courts only grant a preliminary injunction when they feel that the case will succeed on the merits. The Department of Labor is a party to the case.  This means that any further decisions, such as whether to pursue the case or whether to appeal a decision, rests on a Department that is about to have a new Secretary of Labor and possibly a new set of policies.

What next?  Even our crystal ball is murky on this issue.  There is a new Administration, a pro-business Republican Congress, and at some point, a full panel of Supreme Court Justices; these branches may play a part in the next step, but it will start with the incoming administration.  On the one hand, President-elect Trump ran on a platform of regulatory relief, particularly for small businesses, which would suggest that he will allow the new regulations to lapse.   On the other hand, people in the affected salary range: $23,000 – $48,000, are a significant constituency for Trump, and he may choose to follow through.  Our prediction is that nothing will be settled until an Administration is in place and has conquered more pressing and sweeping issues.  For now, we will keep you updated when necessary and allow plenty of lead time to develop proper strategies for compliance.

Ann Duke, Esquire
Creative Benefits Inc.


While most transition relief for ACA compliance has expired, the IRS has granted employers additional time to file 1095-Cs and 1094-Cs.  As you recall, the IRS extended deadlines last year for the 2015 filings, but the 2016 filing dates are different.

 The extended dates are:

  • 1095-Cs provided to employees – March 2, 2017
  • 1094-C information reporting to the IRS (with attached 1095Cs) – February 28, 2017
  • 1094-C e-filing for large employers – March 31, 2017

CBI will provide you with an update on all of the changes in ACA reporting that you need to know, but we wanted you to know about these important deadline changes immediately. 

Ann Duke, Esq.
General Counsel with Creative Benefits, Inc.

The Presidential Election and the Affordable Care Act

Presidential Election 2016Interesting times…. The Affordable Care Act (“ACA”) and its volumes of regulations have been the law of the land since 2010.

Implementation was sometimes messy (the exchange websites), confusing (1095-C coding), and unreliable (late December extensions of filing deadlines). However, it is the law, and employers have spent billions of dollars to comply. While our clients continue to suffer sticker shock during each renewal period, they have made significant investments in compliance, and they worry about new costly disruptions.

Republicans’ message since 2010 has been “repeal and replace.” On November 8, they were given the chance to do just that.

The question is what does “repeal and replace” look like and how would it affect employers. The lead player is certainly President-elect Trump who provides broad outlines for reform. Speaker Ryan is likely the power broker for reform: he has already passed several House bills addressing reform measures. Additionally, he has published a comprehensive legislative blueprint “A Better Way.”

While we may expect broad policy changes over time, the most likely immediate changes may be those that all the players agree on:

  •  Allow health insurers to sell insurance across state lines. This would increase insurers’ risk pools and would open competition on price and product. This can only benefit employers, many of whom are stuck with limited options in price, products and services;
  • Expand HSA participation. This may provide employers an additional-cost shifting solution and can enhance a popular additional benefit;
  • Block grant of Medicaid money to the individual States. This will not have a direct impact on employers, but it should result in efficiency over time and lower the associated burdens on the taxpayers;
  • Allow individuals to deduct health care premiums. This levels the playing field between employers and individuals and should lead to increased competition in the market between group and individual coverage. This will break the cycle of employee reliance on employer-sponsored health care coverage;
  • Eliminate certain mandated coverages, particularly the mandated coverage of reproductive health services. The elimination of this or any mandated coverage will lower the cost of coverage.
  • Remove restrictions on introduction of cheaper drugs into the marketplace. This will open the market to more generic drugs, putting pricing pressure on prescription drug plans.  This should provide significant savings to employers and insurers.

While any change is disruptive, most of “replace and repeal” looks toward less Government regulation resulting in fewer reporting requirements, fewer mandates, and more choice of coverage. All of this is geared towards reducing costs, which helps businesses. Now the devil is in the details and in the new political leadership in our Nation’s Capital.

Ann Duke, Esquire
General Counsel
Creative Benefits Inc.

Health Care Reform Update

Below is a link to Creative Benefits’ September Health Care Reform Update, a periodic publication about various health care reform topics. This edition focuses on upcoming election and the impact each candidate will have the health care reform landscape, including Donald Trump, Hillary Clinton and Speaker of the House, Paul Ryan.

September Health Care Reform Update

3 Benefit Strategies That May Help to Control Health Insurance Costs

Insurance Plans Many Options Health Care Choices DoorsMost employers have two overall goals when shopping for benefits. First, they want an appropriate level of coverage to protect employees. Second, they need coverage that they and their employees can afford.

When healthcare costs are continually rising, achieving this balance is no easy feat.

In response to marketplace demands, insurers have introduced benefit options expressly designed to contain costs while also providing quality care. The concept behind these products is that they limit choices and/or shift costs. Limiting choices injects an element of control for insurers, and control creates economies that insurers can pass along to subscribers.

The three cost-controlling options we’ll look at in this blog are Tiered Plans, Pharmacy Benefit Managers (PBMs) and Spousal surcharges/charging dependents more.

A tiered plan divides medical facilities and/or providers into bands with differing out-of-pocket expenses. When care is needed, patients are encouraged to use a facility or provider that offers the deepest discount and highest quality care for a specific procedure or service. For example, in many networks, these facilities exist for cataract, knee, kidney, and spine surgery. When a patient chooses one of these facilities, they pay the least and get the highest ranked quality care. If a patient opts to use another facility in-network, they will have a higher out-of-pocket expense, but no balance billing. A patient going out of network will pay the most and may be balance billed — usually a high amount.

A pharmacy benefit manager (PBM) is a third-party administrator that manages prescription drug programs. What happens is that companies do a carve out, meaning they separate the pharmacy benefits administration from the company that’s administering the medical coverage. The PBM handles the formulary, negotiates with drug manufacturers for rate reductions, contracts with pharmacies, and pays prescription drug claims. Assigning responsibility for prescription drug benefits to an outside provider reduces costs, because administration is streamlined and larger networks have more clout to negotiate for lower prescription drug rates.

Spousal surcharges and dependent charges also help reduce costs. A spousal surcharge means that if a spouse has access to coverage through their own employer, a company may impose a surcharge to underwrite the cost of the spouse’s additional premium.  Another tactic is to charge for dependents. Companies using age-banded plans can reduce costs by charging older dependent children more if they are over 18 or 21.

We all know how important it is to choose the right benefit plan. There are real consequences, human and financial, when the wrong decision is made. That’s why Creative Benefits takes our role in the process so seriously. Experience, knowledge, and exceptional attention to detail means we design health benefits packages that hit the sweet spot, optimizing benefits and controlling costs.

Call now to discuss how we can help you find your delicate balance.

About the author: Macee Keelan is Vice President of Creative Benefits, Inc. She has been with the company for more than 13 years and specializes in employee benefits.

3 Tips for Filing Appeals to Marketplace Letters

Depositphotos_62885515_s-2015These past few weeks, we’ve been getting phone calls from clients who are receiving Marketplace letters. These are letters from the government that notify employers that they have not complied with the Employer Mandate. Typical violations are that the health insurance coverage offered to an employee was unaffordable, fell short of minimum standards, or the employer did not offer health insurance coverage to an employee who qualifies for it.

The Marketplace letter warns the employer that they may be assessed a financial penalty and this makes  sense if an employer has run afoul of the rules. However, our specialists at Creative Benefits find that frequently, many Marketplace letters are incorrect. Often, once we have reviewed a case, we find proof a company has complied fully with the Employer Mandate. The company has offered affordable coverage meeting minimum standards or has not offered coverage — correctly —because an employee was a part-time worker and therefore, not eligible for coverage.

It is very frustrating for employers to be told they are wrong when they have actually done everything correctly. Some employers feel that, since they did everything right, they don’t need to respond to the Marketplace letter. We understand. No one likes doing tasks that seem superfluous. But the law is very clear. Anyone who receives a Marketplace notice must respond, whether or not the notice is correct is irrelevant.

What employers should do in these cases is file an appeal. The appeal needs to show that the employer offered coverage to an eligible employee and it was affordable coverage and adequate coverage, or show that they did not offer coverage to the employee because the employee was ineligible. The only way to avoid a penalty is to prove that the employer acted correctly. Here are a few tips to ease the process.

1. Get an appeal form.

Appeal forms are available online at

2. Fill out the form, providing as much detail as possible.

Section 3 of the form asks for a description of the health insurance offer, and what reasoning was used to support or justify the offer. Do not just enter a written description of your defense. Support it with data. This means attaching payroll records or attaching Form 1095. Remember, the more data you send in the appeal, the less of a chance there is that someone will come back later asking more questions.  Doing this up front may save future headaches.

3. Hold on to absolutely everything submitted in the appeal.

The Marketplace and the IRS are separate and it’s not totally clear yet how solid the links are between the two departments. For this reason, we recommend holding on to absolutely everything submitted in the appeal. It may be necessary to repeat this submission to the IRS at a later date. If that happens, the process will be much easier if you have the material on hand.

We know it seems unfair to have to take this additional step, especially when an employer is in the right, but at this moment, this is the official directive and this is how Creative Benefits recommends handling the situation.

For more help with Marketplace forms, contact Creative Benefits at (866) 306-0200. We can talk you through the process of filling out the Marketplace Appeal forms, or help with any other aspect of your ACA compliance or benefits administration issues.

About the author: Macee Keelan is Vice President of Creative Benefits, Inc. She has been with the company for more than 13 years and specializes in employee benefits.





Health Care Reform Update

Below is a link to Creative Benefits’ Summer Health Care Reform Update, a periodic publication about various health care reform topics. This edition focuses on important dates to note as we move through the summer into the fall. There is also a reminder to not let PCORI fees sneak up on you as well as an update on the Cadillac Tax, which is still looming in the future.

Summer Health Care Reform Update

PCORI Fees Take a Bite From the Bottom Line

Big sum of money dollarsUnder the Affordable Care Act, medical plans are required to pay a fee to the Patient-Centered Outcomes Research Institute (PCORI). This non-profit organization evaluates various aspects of medical treatments and patient outcomes. Whether this research improves patient well being is one thing; that PCORI fees impact plan sponsors’ bottom lines is quite another.

PCORI fees were initially imposed in 2012 and will continue until 2019 with the 2015 payment due on July 31, 2016. The fee is based on “covered lives.” In 2015, the fee is $2.08 per covered life. Bear in mind the number of  “covered lives” is higher than the number of employees, because a “covered life” includes every person covered by a plan, including employees and dependents and any former employees and dependents covered under COBRA.

If your company is fully insured, you don’t pay the fee directly. The carrier issuing your medical benefits pays the PCORI fee. However, employers who provide certain HRAs may be subject to the additional tax as well. Stand-alone health reimbursement accounts (HRAs) are considered self-funded plans, and employers who offer this type of HRA must pay PCORI fees. Generally speaking, these are HRAs that are not integrated with major medical coverage. The regulations are tricky, so it’s important to review the plan with your advisor to see if there are associated fees.

Employers who are self-funded are also subject to both the PCORI fees and reinsurance fees. These employers have been paying the fees since 2012, but for employers now considering self-funding, these costs must be factored into the calculation. Creative Benefits is often contacted by employers that are fully insured but considering a switch to self-funding. These are frequently mid-level employers frustrated by rising medical insurance costs that want to control their expenses while still protecting their employees.

It is important to review this step with your advisor, both to insure compliance and to calculate costs accurately. Employers must have an accurate picture of the real costs. For example, a “catch” with these fees is that they may not be included as plan costs but rather as a business expenses. This distinction has tax and compliance implications.

Before making big decisions like whether or not to self-fund health coverage, it is critical to reach out to our consultants at Creative Benefits who look at situations like this every day. We help employers balance responsibilities to their workforce with their bottom line and to transition successfully. As always, feel free to contact us at (866) 306-0200 for help calculating or filing PCORI fees or with questions about any aspect of your benefits plan.

About the author: Ann Duke, Esq. is General Counsel with Creative Benefits, Inc. She provides consultative services to employers and their employees. She has an extensive background as both outside and in-house counsel in guiding companies through the understanding and implementation of complex regulatory system requirements.  Ann currently concentrates on employment-related compliance, including ACA, ERISA, and Federal and State workplace requirements.

Health Care Reform Update

Below is a link to Creative Benefits’ May Health Care Reform Update, a periodic publication about various health care reform topics. This edition focuses on everything you need to know about 1094-C Transmittal Forms and e-Filing. There is a detailed how-to guide on filling out and submitting these forms to the right places. Also in this issue is an article about the Look-Back Measurement Period as well as an update on the Cadillac Tax, which is still looming in the future.

May Health Care Reform Update

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Human Resources Manager
Electrical Inspection Industry