HEALTH CARE

Checking the pulse of health care in 2016

BY PHILIP SAUL

To a large degree, employers have been consumed over the last few years determining which aspects of the Affordable Care Act (ACA) apply and how to be in compliance with the law. The most recent task, absorbing both time and resources, has been the ACA reporting requirements for Applicable Large Employers (ALE). While that issue will remain front and center for the foreseeable future, there are other significant compliance concerns of which employers should be aware. Many are an offshoot — or even part of the next wave — of the ACA.

Here are some things to keep in mind this year that could impact your business:

HEALTH INSURANCE PORTABILITY & ACCOUNTABILITY ACT (HIPAA) PRIVACY & SECURITY

With many stories of breaches over the last year, privacy has become top of mind. If an employer has reason to handle Private Health Information (PHI), their processes should be evaluated to ensure minimum standards for encryption and security controls are met and a notification process is in place should a data breach occur. Key steps include designating a privacy officer and creating an information security program per appropriate regulations. Many employers have started offering various ID protection products to health care plan members as an additional benefit to help employees deal with security and privacy concerns. AFFORDABLE CARE ACT REPORTING — NOW WHAT?

Now that ALEs are required to begin ACA reporting, other issues may emerge. For example, what happens if an employee who was offered “affordable” coverage from their employer has been collecting a subsidy through the public exchange, even though they were not eligible? Technically, the employee owes this money back via their taxes. Employers may be faced with issues like this as ACA reporting begins to identify discrepancies.

FUNDING

Both large and small employers are exploring funding alternatives to fully insured medical plans in an effort to reduce ACA-related taxes. Funding, however, can affect things relative to compliance and the ACA. Self-insured groups, for instance, potentially have access to additional PHI, which may impact how an employer deals with the Health Insurance Portability and Accountability Act (HIPAA) and privacy. Self-insured employers are affected differently regarding ACA compliance (reporting, fees, etc.). As an employer evaluates funding options, careful attention should be paid to related compliance and ACA changes.

U.S. DEPARTMENT OF LABOR (DOL) AUDITS

What if you got a U.S. Department of Labor (DOL) audit tomorrow and had 10 days to respond? Would you be able to produce copies of your Summary Plan Description, benefit booklets, enrollment package, Summary of Benefits and Coverage, 5500s, COBRA notices, etc., to comply with the deadline? Employers should ensure they have up-todate documents regarding the administration of their benefits plan. Now that the reporting requirements have become a reality, there could be an uptick in audit activity.

COVERAGE CONSIDERATIONS

Many employers are reviewing plan provisions to ensure they align with current regulatory guidance as well as their own company culture. Some, for instance, previously included domestic partner coverage for same-sex couples. Now with the option of marriage for both same-sex and opposite-sex couples, employers should consider if they want to continue with domestic partner provisions and perhaps be required to expand them to opposite-sex domestic partners. (Related to this, employers should review documentation requirements to make sure they are consistent for same-sex and opposite-sex couples).

HEALTH care

Other key issues regarding coverage considerations include employee defi nitions (full-time, part-time, variable, contract/1099) and eligibility requirements (when a person is eligible to be covered under the plan). Th e loose use of the “contract/1099” employee defi nition has been problematic for some employers. Th is defi nition has been used in the past to avoid costs, such as providing benefi ts to a segment of employees. If, in reality, the contract employee functions as a regular full-time employee, this may emerge as a problem in a future audit — or even in a lawsuit directly from the employee. While the use of the contract/1099 employee defi nition is widely used, the employer should review documentation related to these positions to confi rm they clearly outline the roles and responsibilities of workers under this designation.

It is worthwhile to note that in an election year many employers tend to gravitate toward a “wait-and-see” posture in hopes that any perceived adverse sections of a particular legislation are changed. While it is not unheard of for changes to be made (e.g., employer ACA fees were delayed from the original date and the Cadillac tax has been postponed for a few years), we caution employers to at least have a contingency plan to be in compliance for any applicable regulations by the deadline.

It is a daunting task to keep up with the vast array of regulations and compliance issues. Employers should keep up to date on relevant updates and engage a knowledgeable resource with the expertise to stay informed. Audits may not be a common occurrence now, but the frequency is anticipated to increase and fi nancial penalties can be substantial. n

PHILIP SAUL is principal at Digital Benefi t Advisors, a national team of local employee benefi ts advisors. He has more than two decades of experience in the insurance industry. Digital Benefi t Advisors is an endorsed partner of the VSCPA. psaul@digitalbenefi tadvisors.com

When it comes to accountants professional liability insurance… doesONE SIZE notfit ALL

That’s why it’s so important to have insurance advisors who specialize in working with CPAs that can tailor your professional liability insurance to the size of your firm. The AICPA Professional Liability Insurance Program: • All size firms and areas of practice are eligible • Premium credits for AICPA Audit Quality Center and Private Companies Practice Section (PCPS) membership, risk control training, peer review, and more • CPA NetProtect® — pays for certain costs associated with privacy breaches and provides liability coverage for network damage claims such as cyber attacks*

Please contact Richard Bacher at Aon Insurance Services at 1.800.221.3023 or visit www.cpai.com/onesize today!

Endorsed by: Underwritten by: Administered by:

*CPA NetProtect® is offered for an additional fee as part of the AICPA Professional Liability Insurance Program. Aon Insurance Services is the brand name for the brokerage and program administration operations of Affinity Insurance Services, Inc. (TX 13695), (AR 100106022); in CA & MN, AIS Affinity Insurance Agency, Inc. (CA 0795465); in OK, AIS Affinity Insurance Services, Inc.; in CA, Aon Affinity Insurance Services, Inc. (CA 0G94493), Aon Direct Insurance Administrators and Berkely Insurance Agency; and in NY, AIS Affinity Insurance Agency. One or more of the CNA companies provide the products and/or services described. The information is intended to present a general overview for illustrative purposes only. It is not intended to constitute a binding contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. The statements, analyses and opinions expressed in this publication are those of the respective authors and may not necessarily reflect those of any third parties including the CNA companies. “CNA” is a service mark registered by CNA Financial Corporation with the United States Patent and Trademark Office. Certain CNA Financial Corporation subsidiaries use the “CNA” service mark in connection with insurance underwriting and claims activities. Copyright © 2016 CNA. All rights reserved. E-11344-516 VA