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5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
from Spencer’s Benefits Reports: On July 15, the Senate Health, Education, Labor, and Pensions (HELP) Committee approved by a vote of 13-10 the Affordable Health Choices Act. The Committee began work on the bill on June 17 and discussed more than 300 amendments proposed to the original draft of the legislation.
According to a statement from the HELP Committee, “The nonpartisan Congressional Budget Office estimates the bill to cost less than $615 billion over ten years.”
Many of the Senate HELP provisions are similar to a July 14 bill in the House (H.R. 3200). Major provisions of the proposed legislation as approved by the HELP Committee are as follows (including comparable House proposals):
Premium payments for insurance policies within each market would be permitted to vary only by family structure, geographic region, the actuarial value of benefits provided, tobacco use, and age. Rates specifically would not be permitted to vary based on health status, gender, class of business, or claims experience. Rating by age would be permitted to vary by no more than a factor of two-to-one. Insurers would be permitted to incentivize health promotion and disease prevention practices. Guaranteed issue and guaranteed renewability would be required in all states in each individual and group health insurance market.
The House bill has similar insurance reforms and also would establishe minimum standards for medical loss ratios.
Under the Senate HELP proposal, health insurers offering group or individual policies would be required to publically report the percentage of total premium revenue that is expended on clinical services, quality, and all other nonclaims costs as determined by the Secretary of Health and Human Services (HHS).
All individual and group coverage policies un der the Senate proposal would be required to continue offering dependent coverage for children until the child attains age 26, according to regulations to be established by the HHS Secretary. No individual or group health insurance policy would be permitted to establish lifetime or annual limits on the dollar value of benefits for any enrollee or beneficiary.
The Senate bill would establish state insurance exchanges, called Affordable Health Benefit Gateways, which would be administered through a governmental agency or non-profit organization. Coverage offered through the Gateways would have to include an essential health care benefits package that would provide at least ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance abuse services, prescription drugs, rehabilitative services and devices, laboratory services, preventive and wellness services, and pediatric services. The Gateways would include a public health insurance option (see below).
If individuals like their current coverage, they could keep it. Licensed health insurers would be able to sell health insurance policies outside of the Gateways. Any resident would be able to purchase health insurance outside the Gateways, including policies that do not meet standards to be a qualified health plan. States would regulate health insurance sold outside the Gateways.
The House bill would establish a national exchange with an option for individual states to operate an exchange.
The HHS would establish a community health insurance option (public plan) under which premiums would be sufficient to cover the plan’s cost. The HHS would negotiate rates for provider reimbursement. Negotiated reimbursement rates would not be higher than the average of all Gateway reimbursement rates. A “Health Benefit Plan Start-up Trust Fund” would be created to provide loans for the initial operations of the community health insurance plan.
Qualified nonprofit entities would administer the community health insurance plan in the same manner as current Medicare program contracting.
The House bill also has a public plan option. The House version, which also is intended to be self-sustaining, initially would base payment rates on Medicare reimbursement rates.
Under the Senate proposal, employers with more than 25 employees that do not offer qualifying coverage or that pay less than 60% of their employees’ monthly premiums would be subject to a $750 annual fee per uninsured full-time employee and $375 per uninsured part-time employee. For employers subject to the assessment, the first 25 workers would be exempted. Beginning in 2013, the penalty amounts would be adjusted using the Consumer Price Index for Urban Consumers. Employers with 25 or fewer employees would be exempt from penalties and are eligible for program credits.
Employers with 50 or fewer full-time workers that pay 60% or more of their employees’ health insurance premiums would be permitted to receive tax credits for subsidizing coverage. Credit amounts would be based on the type of employee coverage, the size of the employer, and the proportion of time the employer paid employee health insurance expenses. Tax credits would be available for up to three consecutive years.
Under the House bill, employers would have the option of providing health insurance coverage for their workers or contributing funds on workers’ behalf. Employers that choose to offer coverage would have to meet minimum benefit and contribution requirements (72.5% for individual coverage and 65% for family coverage). Large employers that do not provide health insurance coverage would pay a fee based on 8% of their payroll. For small employers that do not provide health insurance, the House proposal includes graduated rates of 2% of payroll for employers with payrolls in excess of $250,000 to $300,000; 4% for employers with payrolls in excess of $300,000 to $350,000; and 6% for employers with payrolls in excess of $350,000 to $400,000. Employers with less than $250,000 in payroll would have no contribution requirement.
Both the Senate HELP proposal and H.R. 3200 would create a temporary reinsurance program to provide reimbursement to employers that provide health care benefits to retirees older than age 55 but not yet eligible for Medicare. The Senate proposal would only be open to individuals and their dependents who live in states that have not yet established Gateways. The H.R. 3200 provision would provide 80% coverage for annual expenses between $15,000 and $90,000.
Under the Senate proposal, all individuals would be required to obtain health insurance coverage. Exemptions would be made for individuals for whom affordable health care coverage is not available or for those for whom purchasing coverage creates an exceptional financial hardship. The minimum penalty for not purchasing coverage would be no more than $750 per year. Individuals deemed to lack availability to affordable coverage, American Indians, individuals living in states where Gateways are not yet established, and individuals without coverage for fewer than 90 days would be exempt from the mandate and penalty.
Under the House bill, except in cases of hardship, once market reforms and affordability credits are in effect, individuals would be responsible for obtaining and maintaining health insurance coverage. Those who choose not to obtain coverage would pay a penalty based on 2.5% of adjusted gross income (AGI) above a specified level.
Low-income and moderate-income Americans who enroll in plans through the Senate-proposed Gateways would be eligible for premium credits. Credits would be provided on a sliding scale, so that those with the lowest incomes receive the most help. The premium credits would be on a sliding scale up to 400% of the poverty line ($88,080 for a family of four), with those at the lower end receiving more. Gateways, which would provide information on health insurance options, would administer these credits.
H.R. 3200 also would provide “affordability credits” up to 400% of the poverty level.
An analysis of the Senate bill as approved by the HELP Committee, along with statements from committee members, is available at http://help.senate.gov/Maj_press/2009_07_15_b.pdf.
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