Taking Action on Healthcare

BWD Magazine, Winter 2012-13

What business needs to know - and what you need to do - regarding upcoming changes to healthcare

At over 900 pages long - not quite War and Peace, but easily surpassing Moby Dick - there's little wonder why the Patient Protection and Affordable Healthcare Act stirs as much confusion as it does: that's a lot of information to parse.

Regardless, there are Act-imposed changes coming to the fore in 2013... so it's a good idea to understand the steps you'll need to take to ensure compliance with the law come January 1.

1. Provide the summary

Health insurance issuers and group health plans are required to provide employees a summary of a health plan's benefits and coverage; this "Summary of Benefits and Coverage" (SBC) must be made available on the first day of open enrollment.

The same SBC form will be used by all insurance companies and group health plans to make comparisons easier for your employees to understand. Also included: "coverage examples" that allow employees to see what the plan would generally cover in two common medical situations. A glossary of terms should also be made available.

For more information: http://www.healthcare.gov/law/features/rights/sbc/

2. Promote the limit

A $2,500 limit on flexible spending accounts begins in 2013; you are responsible for distributing material that describes this new limit to eligible employees.

Prior to this legislation, there was essentially no limit on the amount of money an employee could contribute to a flexible spending account; it was up to the plan sponsor to prescribe a contribution limit. This amount will be increased annually via a cost of living adjustment. Note that the regulations relate to medical expenses paid with a flexible spending account and do not provide any added limits relative to Dependent Care expense reimbursements under a flexible spending account arrangement.

For more information: http://www.irs.gov/pub/irs-pdf/p502.pdf

3. Track the costs

Tracking and recording health care coverage costs in 2012 is necessary to prepare for the new reporting requirement for group health plan coverage costs that will apply to Forms W-2 ("Wage and Tax Statement") issued in January of 2013. If you provide fewer than 250 Forms W-2 for 2012, you do not need to worry about this requirement.

Both the amount paid by you, the employer, and the amount paid by the employee should be recorded so as to offer the employee as complete a picture as possible about the total cost of the benefit. The amount will be entered in "Box 12" of the form and identified by the code "DD," "Cost of employer-sponsored health coverage."

For more information: http://www.irs.gov/newsroom/article/0,,id=257101,00.html

4. Coordinate the fees

Coordinate with applicable insurers/administrators to make sure that fees related to Patient-Centered Outcomes Research are paid in a timely fashion in 2013. These fees will be used to conduct research to help involved parties make informed health care decisions. For the first year, the PCOR fee is $1 multiplied by the average number of covered individuals. For years two to seven, the fee increases to $2 multiplied by the average number of covered participants.

For more information: http://www.pcori.org/

Published in Healthcare

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