Tag Archives: employer mandate

Consumers Facing Higher Out-of-Pocket Limits Than Expected

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With all the recent discussion of out-of-pocket limits, let me start by explaining what out-of-pocket limits actually are. An out-of-pocket limit is the maximum amount of money a plan participant may spend in a health plan per year. Beyond that amount of money, a plan participant can receive care to an unlimited amount, and they will not pay a single penny for it. If care becomes too costly for any given individual, then either the employer is paying for it past a certain point, or an insurance mechanism is paying for it. Insurance mechanisms include fully insured plans or self-insured plans with what we call “aggregate reinsurance protection” or “medical stop-loss.” Essentially, insurance or reinsurance will likely be paying the bill, but increased premiums for paying more expensive bills is also highly probable.

Back in February, the Department of Labor offered transitional relief, not from the employer mandates that were delayed, but transitional relief from general PPACA rules. This relief first states that the out-of-pocket limit for next year is $6,350 for an individual and $12,700 for a family. That is the most an individual or family participating in an employer-based health plan will have to pay in a given year for coverage. The regulation then states that some employers use more than one service provider to administer their plans. Some employers, for instance, will use a third party administrator (TPA) to administer claims and to make claims-based decisions on medical treatment. Furthermore, they also will use a pharmaceutical benefits manager (PBM) to make pharmaceutical-based decisions. If you have more than one service provider who administers your plan, or separate benefits under your plan, the regulations state that you may treat those benefits separately. This conclusion means you can charge a separate out-of-pocket maximum for each. For example, if you have a health plan with a TPA and  PBM, each of them will have a $6,350 out-of-pocket maximum for individuals, and each of them will have a $12,700 out-of-pocket maximum for families. So for plan participants, instead of paying a minimum of $6,350 next year, they will be paying $12,700 minimum for the same benefits. For a family next year, instead of paying a minimum of $12,700, they will be paying $25,400 for the same benefits.

Consumers should probably be somewhat angry that this is the case. Out-of-pocket maximum rules are listed very clearly in the ACA, and it appears once again that the administration is selectively enforcing those rules. Just like the employer mandate delays, the federal government again is engaging in a selective and seemingly inaccurate enforcement of the clear provisions of PPACA. The authority for these actions is not known except by simple fiat of the federal government that they have the authority to do this. Clearly, Congress, who passed the legislation on PPACA, seem somewhat angry in the news media that such selective enforcement is occurring and continues to occur by the executive branch. Substantive actions, such as a lawsuit filed by the legislative branch against the executive branch to more faithfully and honestly enforce PPACA, is up in the air, but we do not expect such actions to take place at this time.

Ultimately, this means that people who are in the know with these types of regulations have already had this provision in place in their plans for next year. In my legal practice, for instance, my clients who are concerned about costs have these provisions in their health plans already. WellMEC™ has made this a key feature of the program for some time now, as well. This was possible because when we know about these regulations – again these came out in February – we can adjust much more quickly and provide much greater economic efficiency than a plan that is provided by someone who may be unaware of these regulations.

This is not the only example of cost-saving mechanisms that we provide in our plans. This is just a good example of one that has come to the attention of the media and is ripe for current discussion. With that, we would encourage employers to seek assistance from individuals who understand these regulations and can provide cost-efficient solutions to the employer for their plans, because again, there are numerous examples of the value and savings that employers can achieve by engaging with such individuals.



Knoxville, Tennessee (PRWEB) July 26, 2013

WellMEC, the new solution to the Affordable Care Act, is now available to employers in all fifty states.Enrollment First, Inc. and Ratliff Law Firm ERISA and tax attorneys, Eric Ratliff and Alex Renfro, together have created the exclusive solution to health care reform that eliminates compliance challenges created by the Affordable Care Act.

The Affordable Care Act continues to be in a state of flux, spawning a multitude of new rules and regulations that enterprises must comply with or face significant financial penalties. “We are excited to be able to pick up the pieces and exclusively bring the solution to the marketplace for business owners and corporations alike,” said Enrollment First Founder and President Hazen Mirts. “It’s been a long time coming, but after much evaluation and brainstorming between my team and the ERISA and tax attorneys, our solution is ready now and it eliminates the challenges of complying with the ACA now, in 2014, and beyond.”

WellMEC, officially available in July 2013, is a minimum essential coverage, self-insurance plan with reinsurance and covers all wellness and preventive services. The plan provides audit protection through automatic enrollment for new employees and includes a PPO Network. Employees can also elect to participate in WellMEC+, the minimum value plan that satisfies the unaffordable plan penalty, as well as a hospital indemnity plan.

WellMEC eliminates the challenges created by the ACA by providing employers with complete visibility and control over their health benefits while also managing the entire process for them, making it a total turn-key solution all under one roof. One of the most urgent challenges employers are facing is the fast-approaching October 1, 2013 deadline that requires by law written communication and education of their health plan and the existence of an exchange to all full time employees prior to October 1, 2013! The WellMEC compliance system manages exchange communications for employers, creating and delivering communications privately labeled to their business to all employees, all the while certifying plan documents to be compliant and taking care of benefit plan development, billing, eligibility, and enrollments.

“Employees can call and get answers to their health care questions from trained agents that are right here in the US,” said Mirts. “Not only that, but we also assist employees in filling out applications to the exchange to make sure they are completed properly – and to protect employers from steep excise taxes that are not tax deductible they would otherwise pay due to employees qualifying for subsidies.”

The penalties Mirts mentioned are steep, indeed. If an employer is subject to the penalty and fails to offer any full-time employee health coverage, and if any full-time employee enrolls in the exchange and receives a tax subsidy to purchase coverage, the employer is subject to a penalty equal to the number of the business’ full-time employees, minus 30, times $2,000 per year. If an employer offers its employees health insurance, but that coverage does not provide a “minimum value” as required by the law, or if the employee’s contribution for self-only coverage is greater than 9.5% of the employee’s household income, the employee is eligible to receive a tax subsidy to purchase coverage through the exchange. The employer must pay a penalty tax of $3,000 per year for each of these employees.

“These regulations have not been employer-friendly,” said Renfro.

In addition to paying a steep price for employees that qualify for a subsidy, those employees automatically become whistle-blowers under OSHA protection. This means that if employers treat them any differently, they could face a class-action lawsuit. What’s worse is that employers won’t find out which employees qualify for subsidies until January 1, 2015.

“These taxes and mandates have been the driving force behind the creation of WellMEC,” said Mirts. “Renfro is right; none of these regulations have been beneficial for employers and ultimately our economy. Thankfully, we’ve built a solution that helps employers attract, retain and motivate employees to stay, and stay healthy.”

For more information on WellMEC or Enrollment First, Inc., visit http://www.wellmec.net or http://www.enroll1st.com.

WellMEC is protected by patent pending. ID 16202001.