Are You Familiar with the Affordable Care Act’s Anti-retaliation Rules?
Are you familiar with Fed-OSHA’s regulations on whistleblowing and employer retaliation under the Affordable Care Act.
The rules set forth procedures and time frames for reporting and processing whistleblower complaints by employees against their employers and expand the instances in which an employee can sue their employer for retaliation under the ACA.
OSHA has set a low bar for what it considers retaliation in these regulations.
The biggest threat to an employer is if they have employees who may file complaints if they feel slighted after their employer change their health plans or greatly increase the cost-sharing burden on them.
The rules
The ACA whistleblower regulations prohibit employers from retaliating against employees for, among other things:
- Receiving a subsidy for a marketplace plan;
- Raising concerns regarding employer practices that the employee believes violate the ACA;
- Reporting ACA violations;
- Cooperating with a federal investigation;
- Participating and/or cooperating in a proceeding associated with an alleged or actual violation;
- Refusing to participate in a policy or practice that would violate the ACA; and
- Receiving a premium tax credit or a cost-sharing reduction for enrolling in a qualified health plan.
An employee who believes that he or she has been retaliated against in violation of Title I of the ACA has 180 days after the alleged retaliation to file a complaint with OSHA.
What constitutes retaliation?
Retaliation can include several types of action, such as:
- Firing or laying off
- Reducing pay or hours
- Blacklisting
- Demoting
- Denying overtime or promotion
- Disciplining
- Denying benefits
- Failing to hire or rehire
- Intimidating
- Making threats
- Job reassignment that affects prospects for promotion
OSHA has published the “Filing Whistleblower Complaints under the Affordable Care Act” factsheet on the complaint process. As an employer you should read it to understand the rules. You can find them here: https://www.osha.gov/Publications/whistleblower/OSHAFS-3641.pdf
Employer best practices
Make sure that managers and HR personnel ensure strict confidentiality for employees’ ACA-related information and do not share it with other managers and supervisors.
Cover the regulations in your training and meetings for HR personnel, who in turn should train managers to ensure they understand the consequences of taking actions that may be construed as retaliatory.
Train managers on how to respond if an employee complains about their health insurance in light of the ACA. In such cases, the manager should refer the complaint to the HR or benefits personnel responsible for the company’s health insurance plan.
Retaliation scenario
Your HR department is notified by the Department of Health and Human Services that an employee has purchased coverage on a public insurance exchange and received tax subsidies to help pay for it.
An HR manager goes to the employee’s manager to complain, saying that it could cost the company a $2,000 penalty. The manager finds an excuse to reduce the employee’s hours and reassign him to a lesser position.
Help Your Employees Save Money on Drugs
Most employers are doing all they can to keep their employees’ health insurance and health care outlays to a minimum.
And while most of those efforts are focused on the upfront cost of insurance, co-pays and deductibles, many employers fail to help their employees control the very costs they actually have the most control over and one of those areas is medicine.
Helping your employees become wise consumers of health services can also cut your overall insurance costs as well as help your employees conserve more of their own funds if they have high co-pays and deductibles.
The cost of drugs can vary greatly between pharmacies to a shocking degree. And while your employees may have low co-pays for some drugs, if they go to the most expensive option when the insurance is covering the tab, it basically adds to the cost drivers for your insurance plan.
Here’s how wild the price swings can be. Consumer Reports recently surveyed pharmacies to price out a basket of five popular generic prescription drugs and here are the prices:
- Healthwarehouse.com: $66
- Costco: $150
- Various independents: $107
- Sam’s Club: $153
- Walmart: $518
- Kmart: $535
- Grocery stores: $565
- Walgreens: $752
- Rite Aid: $866
- CVS/Target: $928
It also pays to shop around from store to store and ask for discounts.
“A Rite Aid store near our headquarters in Yonkers, N.Y., was able to get the price of atorvastatin, the generic version of Lipitor, down to just $18 from $300 through a combination of in-store and external discount programs,” the report states. “But at another Rite Aid, we were told the cost could only be lowered to $127.”
Consumer Reports recommends that your employees:
- Use online discounts. There are a number of websites that can provide you with discount coupons or vouchers for drugs, including:
- GoodRx
- Blink Health
- WeRx.org
On these sites you enter the name of the drug, dosage and quantity and where you live and it will provide coupons or vouchers and identify which pharmacies you can use them at.
- Expand your shopping horizons. As you can see on the list above, prices vary tremendously. And combining shopping around with a good plan for using coupons and your employees can save themselves and your health plan boat loads of money.
They should also check out their local warehouse discount store as both Costco’s and Sam’s Club’s pharmacies were also quite reasonable.
Not to be outdone, neighborhood pharmacies and grocery store pharmacies were also much cheaper than the large regional drug store chains. “The absolute lowest prices we found in each city we called were almost always at these kinds of stores,” Consumer Reports wrote. - Ask pharmacies if they will honor online coupons. Pharmacies will almost always honor them, Consumer Reports found. But Consumer Reports mystery shoppers had to be persistent in getting the pharmacies to use them, since they often run prescriptions through insurance automatically, even when paying the retail cash price and using discount coupons would cost less.
One last thing
Consumer Reports recommended that once someone settles on pharmacy that consistently gives them good deals on pharmaceuticals, they should fill all of their prescriptions there.
That way it’s easier for them to spot “potentially dangerous interactions and other safety concerns.”
But if your employees notice that their pharmacy bills start rising noticeably, it may be time for them to start shopping around again. To stay on top of this requires regular checks to make sure that they are not seeing prices creep up.
Proposed Rule Would Allow Employers to Reimburse Staff for Health Premiums
The Trump administration is moving ahead with new regulations that would make it easier for employers to enter into health reimbursement arrangements (HRAs) with their employees, a practice that can be severely penalized under the Affordable Care Act.
Under the proposed regulations – issued by the departments of Labor, Treasury and Health and Human Services – employees would be allowed to shop and pay for their own coverage using tax-free HRAs that are set up by their employers.
Under the proposed rule, employers that offer traditional health insurance would be allowed to fund an HRA with up to $1,800 per year. The money in the HRA could be used to reimburse employees for certain medical expenses, as well as for premiums for health insurance policies or stand-alone dental benefits.
And offering HRAs used to help employees pay for individual health insurance premiums would count as an offer of coverage to satisfy the employer mandate under the ACA.
More options, lower costs
Administration officials said expanding HRAs would give employees more options in terms of health coverage, and it also would reduce costs and administrative burdens on employers.
If enacted, the new regulations would undo Obama administration guidance (as it was not actually written into the regulations) barring employers from paying into HRAs to help workers pay for health insurance premiums from policies they buy on the open market or on government-run exchanges.
Companies that were caught in such arrangements faced a hefty fine of up to $36,000 a year.
The employer mandate would stay intact but the proposed rule would allow an employer to satisfy the mandate by funding HRAs for its workers. Under the employer mandate, organizations with 50 or more full-time or full-time-equivalent employees are required to purchase “affordable” health coverage that covers at a minimum 10 essential benefits as outlined under the law.
HRAs must be affordable
The key is that the HRA must also be affordable under the proposed rules. That would depend in part on the amount the employer contributes to the HRA.
The agencies proposing the new regulations said in an announcement that they would provide further guidance on the HRA-specific affordability test.
Funds going into HRAs would be exempt from federal income and payroll taxes. Additionally, employers would be able to deduct the amount they put into HRAs from their taxes.
The proposed rule would also require employers that offer HRAs to allow a worker to opt out and instead claim a federal premium tax credit to purchase coverage on the individual exchanges.
This is the early part of the rule-making. The proposed regulations will have to go out for public comment before final rules are written and implemented.
Few Employees Get the Most out of Their Health Savings Accounts
While many health benefits advisers have been recommending that employees with health savings accounts use them as savings vehicles that can be tapped for future medical care, a new study finds that most people are spending the bulk of the funds.
The study by Willis Towers Watson found that 65% of workers were using their HSAs to pay for current medical expenses, and only 8% of them used them as savings vehicles for future medical expenses. The rest used their accounts only when necessary, and saved the remainder.
In short, many people are not taking full advantage of these plans. But all is not lost, with our help you can educate your staff who have HSAs on how to get the most out of them and also secure a more secure future for themselves when they will at some point need the money for medical procedures.
The study found that only 45% of employees surveyed had more than $5,000 stashed away in their HSA. So, in essence they are mostly being used as spending accounts.
Additionally, the study found that 45% of employees had chosen not to participate in their employer’s HSA plan.
One issue that’s confronting employees with HSA and 401(k) plans is deciding how much to allocate for each one. The study found that:
- 22% of financially adept employees followed the recommended strategy of maximizing their 401(k) contributions up to their company’s match before contributing to their HSA.
- 25% contributed to their HSA before their 401(k) if the 401(k) didn’t have a matching employer contribution, a strategy also recommended by financial experts.
FSAs also not optimized
Another area where a majority of employees fail to optimize their savings vehicles is flexible spending accounts. FSAs have a “use it or lose it” feature, meaning that most of the funds set aside have to be spent on medical expenses during the year, although a portion can be carried over to the next year.
Still, 32% said they had difficulties in spending all of the money in their FSA in any given year. On the flip side, 48% said they wished they had put more money into the account.
Both FSAs and HSAs are funded with pre-tax dollars from the employees’ salaries.
The takeaway
Willis Towers Watson recommends that employers educate their staff on how to get the most mileage out of their HSAs and provide online tools to help them decide if they should use their HSAs to pay for medical expenses or pay them out of pocket.
These online tools for making “save versus spend” decisions will often be on the HSA account’s portal or website. The tools may include retirement savings calculators and health care price transparency services.
The tools are most valuable as they can quickly help employees make sound and educated decisions. It’s been found in previous studies that one-third of employees access their HSA portals on a regular basis:
- 38% view their account information on a monthly basis
- 33% view their account information on a quarterly basis.
Getting a Head Start on Open Enrollment
As open enrollment is right around the corner, now is the time to gear up to maximize employee enrollment, help them make the best selections for their own personal circumstances, and stay compliant with relevant laws and regulations.
It’s a lot to take in as uncertainty has been a constant during the last many years with the onset of the Affordable Care Act, and now that its future is hazy at best.
Still, since health coverage and other employee benefits are an important part of your compensation package – and your competitive edge for talent – it’s important that you get it right.
Here are some pointers to make open enrollment fruitful for your staff and your organization.
Review what you did last year
Review the results of the previous year’s open enrollment efforts to make sure the process and the perks remain relevant and useful to workers. How effective were various approaches and communication channels, and did people give any feedback about the process itself?
Start early with notifications
You should give your employees notice at least a month before open enrollment to let them know it’s coming, as well as provide them with information on the various plans you are offering. Encourage them to read the information and come to your human resources point person with questions.
Help them sort through plans
You should be able to help them figure out which plan features fit their needs, and how much the plans will cost them out of their paycheck. Use technology to your advantage, particularly any registration portal that your plan provider offers. Provide a single landing page for all enrollment applications.
That said, you should hold meetings on the plans and also put notices in your employees’ paycheck envelopes.
Plan materials
Communicate to your staff any changes to a health plan’s benefits for the 2019 plan year through an updated summary plan description or a summary of material modifications.
Confirm that their open enrollment materials contain certain required participant notices, when applicable – such as the summary of benefits and coverage.
Check grandfathered status
A grandfathered plan is one that was in existence when the ACA was enacted on March 23, 2010 and is thus exempt from some of the law’s requirements. If you make certain changes to your plan that go beyond permitted guidelines, the plan is no longer grandfathered.
If you have a grandfathered plan, talk to us to confirm whether it will maintain its grandfathered status for the 2019 plan year. If it is, you must notify your employees of the plan status. If it’s not, you need to confirm with us that your plan comports with the ACA in terms of benefits offered.
ACA affordability standard
Under the ACA’s employer shared responsibility rules, applicable large employers must offer “affordable” plans, based on a percentage of the employee’s household income. For plan years that begin on or after Jan. 1, 2019, the affordability percentage is 9.86% of household income. At least one of your plans must meet this threshold.
Out-of-pocket maximum
The ACA’s out-of-pocket maximum applies to all non-grandfathered group health plans. The limit for 2019 plans is $7,900 for self-only coverage and $15,800 for family coverage.
Make sure your plan is in line with these figures.
Other notices
Consider also including the following notices:
- Initial COBRA notice.
- HIPAA notice. This may be included in the plan’s summary plan description.
- Notice of HIPAA special enrollment rights.
- HIPAA privacy notice.
- Summary plan description.
- Medicare Part D notices.
Get spouses involved
Benefits enrollment is a family affair, so getting spouses involved is critical. You should encourage your employees to share the health plan information with their spouses so they can make informed decisions on their health insurance together.
Also encourage any spouses who have questions to schedule an appointment to get questions answered.
Bill Would Make 40 Hours a Week Full Time for ACA Purposes
House Republicans are taking another stab and cutting around the edges of the Affordable Care Act with new legislation that would change the definition of “full-time” workers to individuals who work 40 hours a week, instead of the current 30 hours under the law.
The effort addresses one of the biggest points of contention among employers concerning the ACA, since employers with 50 or more full-time workers must offer them health plans that comply with the law. The legislation, HR 3798, is currently in play in the House of Representatives, although it has yet to be debated in committee.
The bill comes as another measure that would completely eliminate the mandate that all applicable large employers (those with 50 or more full-time employees or the equivalent in part-time workers’ hours) provide health coverage that is affordable and covers the minimum essential benefits as prescribed by the ACA.
What would it do?
Specifically, the bill would:
- Establish that full-time employee means someone who works 40 hours or more a week.
- Eliminate penalties for organizations that don’t offer health insurance to staff who work less than 40 hours a week, but more than 30. This would greatly ease the reporting requirements on employers.
- Suspend the employer mandate for the years 2015 to 2018, in order to suspend any penalties that may have been imposed on employers during that period.
- Halt the IRS’s current attempts to enforce the mandate and open the door for employers to obtain refunds from the IRS for any penalties already paid.
- Further delay implementation of the “Cadillac tax.” This is a 40% excise levy that would be applied to premiums over and above a certain maximum premium threshold. The tax has already been delayed a number of times and is scheduled to take effect in 2022.
- Change ACA reporting requirements. Employers currently must provide IRS Form 1095-B for fully insured group plans to employees who receive ACA-compliant coverage. The bill would only require employers to provide the form to workers that ask for it. That said, employers would still be required to report to the IRS every year.
The outlook
For now, the bill has yet to be debated in committee and with the legislative session drawing to a close in the coming months, it’s unclear if this measure could be passed out of committee and then the House floor in time for it to be debated in the Senate.
It joins the ranks of a few measures that are once taking aim at the ACA.
