The Labor, Health and Human Services and Treasury departments have released a new set of frequently asked questions on rules stemming from the Patient Protection and Affordable Care Act (PPACA). According to Spencer Fane Britt & Browne LLP, the guidance clarifies a number of points:
Automatic enrollments: Previous rules required some employers to automatically enroll their employees into health benefit plans by 2014. Now, however, employers will not need to do so until final rules are issued.
“Shared responsibility”: The law calls for employers with 50 or more full-time employees to provide minimum coverage to their full-time workforce. The guidance now allows employers to create a “look-back/stability period safe harbor” when determining whether an employee qualifies as “full-time.”
Waiting periods: PPACA requires plans on or after Jan. 1, 2014, to have a waiting period no longer than 90 days. The new guidance clarifies that this applies only to eligible employees, meaning that other eligibility conditions (for instance, full-time vs. part-time) will still apply.
The Department of Health and Human Services (HHS) has issued a set of proposed notices that insurance carriers may use to remain compliant with the new medical loss ratio (MLR) rules under the health care reform law. The MLR rules require insurance companies spend between 80 percent and 85 percent of premium revenue on reimbursement for medical services or activities that improve health care quality. If they fail to do so, the companies must provide refunds to enrollees, payable by Aug. 1 annually starting this year.
However, Spencer Fane notes that employers who receive rebates should be careful what they do with the money. If a plan is subject to ERISA, the refunds may be considered plan assets. Under that situation, the funds would have to be used “solely for the benefit of plan participants and beneficiaries,” according to the law firm.