A recent survey by the Society for Human Resource Management about social media in the workplace revealed the following:

• 68 percent of organizations use social media for external communications, marketing or recruiting.
• The departments most likely to use social media on their company’s behalf were HR, marketing and public relations.
• The most popular social websites for external communications were Facebook®, LinkedIn® and Twitter™.
• 73 percent of respondents said their organizations do not offer social media training for employees who use social media for business use.

If your company has not yet joined the social media movement, consider looking into its many benefits for business. And whether you’re a social media beginner or veteran, be sure your company protects itself with comprehensive social media policies and employee training.

• Ensure all your HIPAA-related policies and procedures are updated and compliant. Also think about other documentation an auditor may request, so that you can prepare it now.
• If you haven’t already, identify all vendors that handle protected health information and negotiate business associate agreements with each.
• Covered entities are required to periodically conduct a formal risk analysis. If you haven’t done one in the past year, do one now and document the entire process in case of an audit.
• Covered entities are also required to formally evaluate their program to ensure HIPAA compliance and compliance with recent changes such

as the HITECH Act. If you haven’t done this type of evaluation, do so now, document the process, and make changes to your policies and procedures as necessary.

• Make sure your employees are properly trained on HIPAA-related requirements and practices.
• An auditor will ask which individuals in your company can speak to each aspect of HIPAA implementation. Identify these subject matter experts and ensure they are properly trained.
• Explain the importance of timeliness to whoever may receive the initial audit communications—deadlines are generally short.
• You may also consider consulting with an attorney to ensure your company is complying with all HIPAA provisions and not at risk of crippling fines for noncompliance.

The Patient Protection and Affordable Care Act (PPACA or Affordable Care Act) will require non-grandfathered health insurance plans in the individual and small group markets to cover a comprehensive set of items and services, known as the essential health benefits (EHB) package. This coverage requirement will become effective in 2014.

PPACA broadly identified 10 benefit categories to be included as EHB. PPACA also directed the Department of Health and Human Services (HHS) to provide more specific guidance on the items and services that make up the EHB package.

On Dec. 16, 2011, HHS released an informational bulletin (Bulletin) that described the approach it intends to take in future rulemaking to outline EHB. This approach defers to the individual states by giving them flexibility to select their own benchmarks for defining EHB. In connection with the Bulletin, HHS also released FAQs to provide more guidance on HHS’s intended approach for specifying EHB.

This GSM Insurors Legislative Brief contains HHS’s FAQs regarding defining EHB that are relevant to group health plans.

Frequently Asked Questions on Essential Health Benefits Bulletin

1. Under the approach described in the Bulletin, would the Secretary permit the State to adopt different benchmark plans for its individual and small group markets?

A: No. A State would select only one of the benchmark options as the applicable EHB benchmark plan across its individual and small group markets both inside and outside of the Exchange. HHS believes that selecting one benchmark for these markets in a State would result in a more consistent and consumer-oriented set of options that would also serve to minimize administrative complexity. HHS seeks to provide flexibility to issuers by permitting actuarially equivalent substitution of benefits within the ten categories of benefits required by the Affordable Care Act.

2. When a State chooses an EHB benchmark plan, would the benefits be frozen in time, or as the benchmark plan updates benefits each year, would the benchmark plan reflect these updates?

A: As indicated in the Bulletin, we intend to propose a process for updating EHB in future rulemaking. Under the intended approach, the specific set of benchmark benefits selected in 2012 would apply for plan years 2014 and 2015. For 2014 and 2015, the EHB benchmark plan selection would take place in the third quarter of 2012. A consistent set of benefits across these two years would limit market disruption during this transition period. As indicated in the Bulletin, HHS intends to revisit this approach for plan years starting in 2016.

3. Would States be required to defray the cost of any State-mandated benefit?

A: The Affordable Care Act requires States to defray the costs of State-mandated benefits in qualified health plans (QHPs) that are in excess of the EHB. If a State were to choose a benchmark plan that does not include all State-mandated benefits, the Affordable Care Act would require the State to defray the cost of those mandated benefits in excess of EHB as defined by the selected benchmark.

States have several benchmark options from which to choose, including the largest small group market plan in the State, which is the default benchmark plan for each State. Generally, insured plans sold in the small group market must comply with State mandates to cover benefits. Thus, if a small group market benchmark plan was selected, these mandated benefits would be part of the State-selected EHB. However, if there are State mandates that do not apply to the small group market, such as mandates that apply only to the individual market or to HMOs, the State would need to defray the costs of those mandates if the mandated benefits were not covered by the selected benchmark.

As indicated in the Bulletin, the treatment of State benefit mandates is intended as a two-year transitional policy that HHS intends to revisit for plan years starting in 2016.

4. Could a State add State-mandated benefits to the State-selected EHB benchmark plan today without having to defray the costs of those mandated benefits?

A: No. We intend to clarify that under the proposed approach any State-mandated benefits enacted after Dec. 31, 2011 could not be part of EHB for 2014 or 2015, unless already included within the benchmark plan regardless of the mandate. Note that any State-mandated benefits enacted by Dec. 31, 2011 would be part of EHB if applicable to the State-selected EHB benchmark plan. As mentioned above, HHS intends to revisit this approach for plan years starting in 2016.

5. How must a State supplement a benchmark plan if it is missing coverage in one or more of the ten statutory categories?

A: We intend to propose that if a benchmark plan is missing coverage in one or more of the ten statutory categories, the State must supplement the benchmark by reference to another benchmark plan that includes coverage of services in the missing category, as described in the Bulletin. For example, if a benchmark plan covers newborn care but not maternity services, the State must supplement the benchmark to ensure coverage for maternity services. The default benchmark plan would be supplemented by looking first to the second largest small group market benchmark plan, then to the third, and then, if neither of those alternative small group market benchmark plans offers benefits in a missing category, to the FEHBP benchmark plan with the highest enrollment.

Our research found that three categories of benefits – pediatric oral services, pediatric vision services, and habilitative services – are not included in many health insurance plans. Thus, the Bulletin describes special rules to ensure meaningful benefits in those categories:

As a transitional approach for habilitative services, the Bulletin discusses two alternative options that we are considering proposing:

• A plan would be required to offer the same services for habilitative needs as it offers for rehabilitative needs and offer them at parity.
• A plan would decide which habilitative services to cover and report the coverage to HHS. HHS would evaluate and further define habilitative services in the future. Under either approach, a plan would be required to offer at least some habilitative benefit.

For pediatric oral care, we are considering proposing that the State would supplement the benchmark plan with benefits from either:

• The Federal Employees Dental and Vision Insurance Program (FEDVIP) dental plan with the largest national enrollment; or
• The State’s separate Children’s Health Insurance Program (CHIP).

For pediatric vision care, we are considering proposing that the State would supplement the benchmark plan with the benefits covered in the FEDVIP vision plan with the highest enrollment.

6. One of the currently intended benchmark plans is the largest plan by enrollment in any of the three largest products in the small group market. What is the difference between a plan and a product?

A: For the purpose of administering the health plan finder on HealthCare.gov, HHS has defined “health insurance product” (product) as a package of benefits an issuer offers that is reported to State regulators in an insurance filing. Generally, this filing describes a set of benefits and often a provider network, but does not describe the manner in which benefits may be tailored, such as through the addition of riders. For purposes of identifying the benchmark plan, we identify the plan as the benefits covered by the product excluding all riders. HHS intends to propose that if benefits in a statutory category are offered only through the purchase of riders in a benchmark plan, that required EHB category would need to be supplemented by reference to another benchmark as described in question 5.

7. What is the minimum set of benefits a plan must offer in a statutory category to be considered to offer coverage within the category consistent with the benchmark plan?

A: Under the approach described in the Bulletin, a plan could substitute coverage of services within each of the ten statutory categories, so long as substitutions were actuarially equivalent, based on standards set forth in CHIP regulations at 42 CFR 457.431, and provided that substitutions would not violate other statutory provisions. For example, a plan could offer coverage consistent with a benchmark plan offering up to 20 covered physical therapy visits and 10 covered occupational therapy visits by replacing them with up to 10 covered physical therapy visits and up to 20 covered occupational therapy visits, assuming actuarial equivalence and the other criteria are met. The benchmark plan would provide States and issuers with a frame of reference for the EHB categories.

8. Can scope and duration limitations be included in the EHB?

A: Yes. Under the intended approach, a plan must be substantially equal to the benchmark plan, in both the scope of benefits offered and any limitations on those benefits such as visit limits. However, any scope and duration limitations in a plan would be subject to review pursuant to statutory prohibitions on discrimination in benefit design. In addition, the Public Health Service Act (PHS Act) section 2711, as added by the Affordable Care Act, prohibits imposing annual and lifetime dollar limits on EHB. Note that for annual dollar limits, the prohibition generally applies in full starting in 2014, with certain restricted annual limits permitted until that time. The prohibition on annual dollar limits does not apply to grandfathered individual market policies.

9. State-mandated benefits sometimes have dollar limits. How does the intended EHB policy interact with the annual and lifetime dollar limit provisions of the Affordable Care Act?

A: PHS Act section 2711, as added by the Affordable Care Act, does not permit annual or lifetime dollar limits on EHB. Therefore, if a benefit, including a State-mandated benefit, included within a State-selected EHB benchmark plan was to have a dollar limit, that benefit would be incorporated into the EHB definition without the dollar limit.

However, based on the Bulletin describing our intended approach, plans would be permitted to make actuarially equivalent substitutions within statutory categories. Therefore, plans would be permitted to impose non-dollar limits, consistent with other guidance, that are at least actuarially equivalent to the annual dollar limits.

10. How would the intended EHB policy affect self-insured group health plans, grandfathered group health plans, and the large group market health plans? How would employers sponsoring such plans determine which benefits are EHB when they offer coverage to employees residing in more than one State?

A: Under the Affordable Care Act, self-insured group health plans, large group market health plans, and grandfathered health plans are not required to offer EHB. However, the prohibition in PHS Act section 2711 on imposing annual and lifetime dollar limits on EHB does apply to self-insured group health plans, large group market health plans, and grandfathered group market health plans. These plans are permitted to impose non-dollar limits, consistent with other guidance, on EHB as long as they comply with other applicable statutory provisions. In addition, these plans can continue to impose annual and lifetime dollar limits on benefits that do not fall within the definition of EHB.

To determine which benefits are EHB for purposes of complying with PHS Act section 2711, the Departments of Labor, Treasury, and HHS will consider a self-insured group health plan, a large group market health plan, or a grandfathered group health plan to have used a permissible definition of EHB under section 1302(b) of the Affordable Care Act if the definition is one that is authorized by the Secretary of HHS (including any available benchmark option, supplemented as needed to ensure coverage of all ten statutory categories). Furthermore, the Departments intend to use their enforcement discretion and work with those plans that make a good faith effort to apply an authorized definition of EHB to ensure there are no annual or lifetime dollar limits on EHB.

11. In the case of a non-grandfathered insured small group market plan that offers coverage to employees residing in more than one State, which State-selected EHB benchmark plan would apply?

A: Generally, the current practice in the group health insurance market is for the health insurance policy to be issued where the employer’s primary place of business is located. As such, the employer’s health insurance policy must conform to the benefits required in the employer’s State, given that the employer is the policyholder. Nothing in the Bulletin or our proposed approach seeks to change this current practice. Therefore, the applicable EHB benchmark for the State in which the insurance policy is issued would determine the EHB for all participants, regardless of the employee’s State of residence. Health insurance coverage not required to offer EHB, including grandfathered health plans and large group market coverage, would comply with the applicable annual and lifetime limits rule, as described in the answer to the previous question.

12. How do the requirements regarding coverage of certain preventive health services under section 2713 of the PHS Act interact with the intended EHB policy?

A: The preventive services described in section 2713 of the PHS Act, as added by section 1001 of the Affordable Care Act, will be a part of EHB.

13. Under the intended EHB approach, would the parity requirements in MHPAEA be required in EHB?

A: Yes. Consistent with Congressional intent, we intend to propose that the parity requirements apply in the context of EHB.

14. Could a State legislature require that issuers offer a unique set of “EHB” the way Medicaid and CHIP benchmarks have options for Secretary-approved benefits, or benchmark equivalent benefits, if the State benefits are actuarially equivalent to one of the choices that HHS defines to be EHB?

A: No. Under the approach we intend to propose, States would be required to adhere to the guidelines for selecting a benchmark plan outlined in the Bulletin. Otherwise, EHB in that State would be defined by the default benchmark plan.

15. Would States need to identify the benchmark options themselves?

A: HHS plans to report the top three FEHBP benchmark plans to States based on information from the Office of Personal Management. HHS also plans to provide States with a list of the top three small group market products in each State based on data from HealthCare.gov from the first quarter of the 2012 calendar year. We intend to continue working with States to reconcile discrepancies in small group market product enrollment data. If a State chooses to consider State employee plans and/or the largest commercial HMO benchmark plans, the State would be required to identify benchmark options for those benchmark plans, as is done today in Medicaid and CHIP.

16. When would States be required to select a benchmark plan?

A: As noted in the Bulletin, we intend to propose that States must select an EHB benchmark plan in the third quarter two years prior to the coverage year, based on enrollment from the first quarter of that year. Thus, HHS anticipates that selection of the benchmark plan for 2014 and 2015 would need to take place in the third quarter of 2012 in order to provide each State’s EHB package, which includes the benchmark plan, any State-supplemented benefits to ensure coverage in all statutory categories, and any adjustments to include coverage for applicable State mandates enacted before Dec. 31, 2011. This schedule would ensure plans have time to determine benefit offerings before QHP applications are due. Separate guidance on the selection of Medicaid benchmark plans is forthcoming.

17. How would a State officially designate and communicate its choice of benchmark plan and the corresponding benefits to HHS?

A: HHS is currently evaluating options for collecting a State’s benchmark plan selection and benefit information. A State’s EHB package would include the benefits offered in the benchmark plan, any supplemental benefits required to ensure coverage within all ten statutory categories of benefits, and any adjustments to include coverage for applicable State mandates enacted before Dec. 31, 2011. HHS anticipates that submissions will be collected from States in a standardized format that includes the name of the benchmark plan along with benefit information and, if necessary, the benefits used to ensure coverage within a missing statutory category.

18. How can my State find benefit information with respect to the default benchmark plan?

A: As indicated in the Bulletin, we intend to propose that the default benchmark plan in each State would be the largest small group market product in the State’s small group market. HHS anticipates that it will identify and provide benefit information with respect to State-specific default benchmark plans in the Fall of 2012.

19. By empowering the State to select an EHB benchmark plan, does HHS intend that the State executive branch (i.e., State Insurance Department) or the legislative branch must make the selection?

A: Each State would be permitted to select a benchmark plan from the options provided by HHS by whatever process and through whatever State entity is appropriate under State law. In general, we expect that the State executive branch would have the authority to select the benchmark plan. It is also possible that, in some States, legislation would be necessary for benchmark plan selection. It is important to note that, regardless of the entity making these State selections, it is the State Medicaid Agency that will be held responsible for the implementation of EHB through the Medicaid benchmark coverage option.

Source: Department of Health and Human Services

Health care reform imposes a $2,500 annual limit on salary reduction contributions to health flexible spending arrangements (FSAs) offered under cafeteria plans. The limit applies to both grandfathered and non-grandfathered health FSAs. This new limit is effective for taxable years beginning after Dec. 31, 2012. Beginning with the 2014 tax year, the $2,500 limit will be indexed for inflation.

TAXABLE YEAR VS. CALENDAR YEAR

The health FSA limit applies on a taxable year basis and is not tied to the plan year. The applicable taxable year is the taxable year of the employee, not the employer. In general, an employee’s taxable year will be the calendar year. Therefore, an employer sponsoring a calendar-year health FSA can set the limit at $2,500 (or less if it chooses) beginning with the 2013 plan year, which starts Jan. 1, 2013.

However, if the employer’s health FSA operates on a non-calendar-year basis, administration of the limit is more complicated. Specifically, if the health FSA plan year begins between Feb. 1, 2012, and Dec. 1, 2012, an employee may inadvertently exceed the $2,500 limit for a calendar year if he or she also elects the $2,500 maximum amount for the 2013 plan year.

If the employer allows a limit over $2,500 for the 2012 plan year that is not the calendar year, it should monitor compliance with the limit on a calendar-year basis. This will help ensure that an employee’s salary reductions do not exceed $2,500 threshold and that the health FSA remains a qualified benefit. It can also prevent unintended tax consequences for the employee. Alternatively, the employer may want to set the limit at $2,500 or less for the 2012 tax year right away to simplify administration of plan years that span more than one taxable year.

PER PARTICIPANT LIMIT

The health FSA limit applies on a per participant basis. Each participant may elect only up to $2,500 in salary reductions, regardless of whether or not he or she also has family members who benefit from the funds in that FSA.

However, each family member who is eligible to participate in his or her own health FSA will have separate limits. For example, a husband and wife who have their own health FSAs can both make salary reductions up to $2,500 per taxable year (subject to any lower employer limits). Also, the health care reform law indicates that if an individual has health FSAs through two or more unrelated employers, he or she can make salary reductions up to $2,500 under each employer’s health FSA.

EMPLOYER CONTRIBUTIONS

Under the health care reform statute, the $2,500 limit applies to health FSA salary reduction contributions, not to other employer contributions. This means that non-elective employer contributions to a health FSA that cannot be cashed out are likely not taken into account for purposes of the limit. However, the IRS may view cashable employer contributions as equivalent to salary reductions.

Arvak Insurance Group will continue to inform you of developments related to this and other health care reform issues. If you have any further questions, feel free to contact us via e-mail or phone at 361.855.2500.

It is characterized by the breakdown of cartilage in the part of the joint that cushions the ends of bones. When cartilage breaks down, bones rub together causing pain and loss of movement. Osteoarthritis most often affects middle-aged and older adults. It can range from very mild to very severe, and most often occurs in the hands and weight-bearing joints such as the knees, hips, feet and back.

What Causes Osteoarthritis?

• Age: Your risk of developing arthritis increases as you age.
• Gender: In general, arthritis occurs more frequently in women than in men.
• Obesity: Obesity increases your chances of getting osteoarthritis, particularly for women, where a link has been found connecting obesity and the development of arthritis of the knee. However, with diet and exercise you can help reduce your weight and minimize the stress on weight-bearing joints such as the knees.
• Work factors: Repetitive injuries and physical traumas at work can contribute to the development of arthritis.

Symptoms of Osteoarthritis

Osteoarthritis usually develops slowly. In its early stage, joints may ache after physical work or exercise. However, about a third of those actually report pain or other symptoms. For those that do experience symptoms, the most common warning signs include:

• Steady or intermittent pain in a joint.
• Stiffness that tends to follow periods of inactivity, such as sleeping or sitting.
• Swelling or tenderness in one or more joints.
• Crunching feeling or the sound of bones rubbing together when the joint is used.

Treating Osteoarthritis

Generally, osteoarthritis is treated by focusing on decreasing pain and improving joint movement and may include the following:

• Exercise to keep joints flexible and improve muscle strength.
• Medications to control pain. Acetaminophen is used for mild pain while steroid injections in the joints can relieve more severe pain.
• Heat and cold therapy for temporary pain relief.
• Joint protection to prevent strain or stress on painful joints.
• Surgery, to relieve chronic pain in damaged joints.
• Weight control to prevent extra stress on weight-bearing joints.

As a result of these physiological changes, older adults are more susceptible to various cardiovascular diseases. In spite of this, there are many things people can do to live long after their hearts have exhibited the signs of age.

Hypertension

High blood pressure is an extremely common condition, especially in the elderly. This disease is linked to stroke, kidney disease, heart attack and heart failure. Those whose blood pressure measures above 160/90 mm Hg, should seek treatment including:

• Diet modification
• Moderate exercise
• Giving up smoking
• Weight loss
• Medication

Coronary Heart Disease

Half of all heart attack victims are over 65, and women are most at risk for a heart attack after menopause.

Treatment varies for heart attack sufferers depending on physical limitations, history of heart disease and other factors. However, some form of medication is traditionally prescribed.

Heart Valve Disorders

There are several common heart valve disorders present in older adults, the most common being aortic valve disease. Valve disorders cause heart failure, chest pain and fainting in most patients as valves thicken and stiffen. Many patients are treated successfully through a valve replacement surgery.

Rhythm Disorders

People of any age but predominantly older adults may experience problems with rhythm abnormalities. They may experience slow or missed beats, dizziness and fainting. However, at times, sufferers may not experience an indication of any rhythmic problem at all. Doctors often prescribe pace makers to resolve this problem.

Overall, lifestyle changes make a large difference in the prevention of cardiovascular disease. To minimize your risks, follow a regular exercise regime, eat a low-fat diet and do not smoke. Also, visit your doctor on a regular basis to check your heart health.

Make the Right Health Benefit Decisions When You Get Married

The Health Insurance Portability and Accountability Act (HIPAA) offers special enrollment rights for employees and spouses that allow them to enroll in a group health plan upon marriage, and provides protections for individuals who have preexisting conditions or might suffer discrimination on the basis of health status when they switch plans.

ERISA Disclosure Provisions provide individuals with rights to important information concerning benefits under their own or spouse’s group health plan.

Protect Your Rights When You Have or Adopt a Baby

HIPAA prohibits preexisting condition exclusions from being applied to pregnancy, regardless of whether the mother had previous health coverage. In addition, HIPAA does not permit preexisting condition exclusions to be applied to newborns and adopted children who enroll within 30 days of birth or adoption.

HIPAA also offers special enrollment rights for employees, spouses and new dependents allowing them to enroll in a group health plan upon birth, adoption or placement for adoption.

ERISA Claims Procedures help ensure timely and fair review of maternity and other claims under group health plans. The Newborns’ and Mothers’ Health Protection Act includes important new protections for mothers and their newborn children with regard to the lengths of hospital stays following the birth of a child.

Keep Health Coverage After a Job Change

HIPAA protects individuals who have preexisting conditions, helping them keep coverage for those conditions or get coverage for them in no more than 12 or 18 months through limits on the length of preexisting condition exclusions. HIPAA also helps individuals who might suffer discrimination in health coverage on the basis of health status when they change jobs.

COBRA generally requires that most group health plans of employers with at least 20 employees offer employees and their dependents the opportunity to continue their health plan coverage for limited periods of time when the employee loses his or her job or has a reduction in hours that would result in a loss of coverage.

Make Sure Your Loved Ones Have Good Health Care

ERISA permits a parent to obtain a court order to provide coverage for children under the noncustodial parent’s health plan (called a qualified medical child support order).

ERISA Disclosure Provisions help to ensure that individuals covered by group health plans receive clear information about their rights, benefits and obligations under the plan, including information about COBRA continuation coverage, access to urgent or specialized care, and composition of physician and other provider networks.

HIPAA includes protections for newborns and adopted children with preexisting conditions. Specifically, HIPAA does not permit a preexisting condition exclusion to be applied to a newborn or adopted child who enrolls within 30 days of birth or adoption.

ERISA Claims Procedures help ensure timely and fair review of plan denials of claims.

Keep Coverage When a Marriage Ends

HIPAA offers special enrollment rights, generally allowing employees and dependents who were covered under a spouse’s plan to obtain coverage under the employee’s plan upon divorce or legal separation, if they are otherwise eligible.

COBRA generally requires that group health plans of employers with at least 20 employees offer spouses and dependent children the opportunity to continue their health care coverage for limited periods of time in the event of the spouse’s legal separation or divorce from the employee covered by the plan.

Secure the Right Care in Your Later Years

HIPAA offers protections for individuals who have preexisting conditions, helping them to keep coverage for those conditions or get coverage in no more than 12 or 18 months through limits on preexisting condition exclusions.

HIPAA includes protections to help ensure individuals are not excluded from coverage under their group health plan or charged a higher premium based on health status.

COBRA generally requires that group health plans of employers with at least 20 employees offer employees and their dependents the opportunity to continue their health plan coverage for limited periods of time when the employee loses his or her job due to retirement.

ERISA Claims Procedures help ensure fair and timely appeals process for covered individuals.

ERISA Disclosure Provisions require that group health plan disclosure material furnished to plan participants and beneficiaries must contain information about specialists in the plan network and the plan’s rules for accessing specialty care.

ERISA Disclosure Provisions also require that plan disclosure material must describe the ability of the employer to reduce plan benefits or terminate the plan.

Source: Department of Labor

Under the Patient Protection and Affordable Care Act (PPACA), annual limits for health plans are being eliminated. Annual limits on essential health benefits will be prohibited in 2014, but “restricted annual limits” are permitted for plan years beginning before Jan. 1, 2014.

The Department of Health and Human Services (HHS) implemented a waiver program for plans that would experience a significant decrease in access to benefits or a significant increase in premiums due to the restricted annual limits requirements. The annual limit waivers may apply until plan years beginning on or after Jan. 1, 2014, when all annual limits on essential health benefits will be prohibited.

HHS is no longer accepting annual limit waiver applications. The annual limit waiver program closed to applications on Sept. 22, 2011. Plans that did not receive a waiver must fully comply with PPACA’s restricted annual limits on essential health benefits. Plan that received a waiver must provide a notice informing current and eligible participants that the plan does not meet the minimum annual limits and has received a waiver of the requirement.

This GSM Insurors Legislative Brief summarizes the notice requirement for recipients of annual limit waivers and contains HHS’s updated model notice.

PROVIDING THE NOTICE

According to HHS, communicating the information required in the notice is necessary in order for consumers to understand the value and quality of the coverage they have, and to ensure that they do not have expectations that PPACA’s annual limits apply to their policies.

Each recipient of an annual limit waiver must distribute an annual notice to participants. The annual notice must be provided to participants as part of plan or policy materials that describe the terms of coverage (for example, summary plan descriptions) for each plan year for which the waiver applies.

When HHS announced the close of the annual limit waiver application process, it also released an updated model notice that group health plans and insurance issuers must use to meet the notice requirement. Waiver recipients must obtain written permission from HHS to use different notice language to satisfy the annual notice requirement.

Plans that received a waiver for a plan year beginning before Sept. 23, 2011 and already distributed the annual notice will need to distribute the updated annual notice beginning with the plan year starting on or after Sept. 23, 2011.

MODEL NOTICE

The following model language, which must be prominently displayed in clear, conspicuous 14 point bold type on the front of the materials, must be used to satisfy the notice requirement:

The Affordable Care Act prohibits health plans from applying dollar limits below a specific amount on coverage for certain benefits. This year, if a plan applies a dollar limit on the coverage it provides for certain benefits in a year, that limit must be at least [$750,000/$1.25 million/$2 million, as applicable].

This regulation now goes to the Federal Office of Management and Budget (OMB) for review and approval.

If approved, the regulation will place more burdens on employers regarding older workers and the Age Discrimination in Employment Act. The regulation would make it more difficult for employers to justify that a practice is based on a reasonable factor other than age, potentially putting them at risk for more lawsuits.

The EEOC will release more details if the regulation is approved by OMB.

Employers want to win back employee morale, but it may not be in the budget to reverse these recent trends. Some employers are instead turning to unique benefits and perks to appeal to current and prospective employees.

Many of the following options cost the company little or nothing, but are perceived as valuable by employees:

• Voluntary benefits (including unusual options like pet insurance)
• Group-buying discounts—on items like computers, gym memberships and cell phone plans—often cost the company nothing but offer cost savings to employees

• Free tickets to theme parks or other entertainment venues
• At-work chair massages
• Online stress-relief or exercise how-to videos
• Adoption assistance
• Concierge services
• Offer free or subsidized soda, coffee and/or snacks during the workday
• Additional PTO or personal days, such as an extra bonus day or two
• Paid hours for volunteer work each year
• Flexible scheduling options
• Telecommuting options

These may not all appeal to every employee, but offering a variety of perks and benefits can help satisfy a diverse employee population.