A Full Service Employee Benefit and Compliance Solution for Employers

By: Marilyn Monahan, Monahan Law Office

Published by The Orange County Association of Health Underwriters (OCAHU) and posted with permission of OCAHU

This is a summary of some recent developments of interest to consultants and employers:

IRS 1094/1095 Reporting: The President signed an executive order relating to the ACA that included, among other terms, instructions to government agencies to defer, grant exemptions from, and delay, any provision of the ACA that imposes a burden, cost, fee, or penalty on purchasers of health insurance. However, to date, the obligation to furnish and file the 2016 Forms 1094-C and 1095-C has not been lifted. Employers are still obligated to prepare, furnish, and file these forms by the established deadlines.

The instructions for the 1094/1095 forms, while substantially similar, do include some changes from last year. In particular, some of the indicator codes have changed. Employers preparing the 2016 forms need to be aware of these changes.

Summary of Benefits and Coverage (SBC): New templates for the Summary of Benefits and Coverage (SBC) have been issued. The new templates must be used as of the first day of the first plan year on or after April 1, 2017. If your plan is fully insured, the insurer will provide updated forms. If your plan is self-funded, the employer will be responsible for preparing the new forms.

Mandated Benefits: In 2016 the California legislature passed, and Governor Brown signed, some mandated benefit bills that require health insurers and HMOs to include coverage for certain benefits in their plans. First, insurance policies and HMO contracts issued, amended, renewed, or delivered on or after January 1, 2017, must provide coverage for a 12-month supply of FDA-approved, self-administered hormonal contraceptives when dispensed at one time (SB 999; chapter 499). Second, insurance policies and HMO contracts issued, amended, renewed, or delivered on or after January 1, 2017, cannot require a referral for in-network reproductive or sexual health care services (AB 1954; chapter 495). Third, the legislature deleted the sunset date for earlier legislation that requires insurers and HMOs to cover behavioral health treatment for pervasive developmental disorders or autism.

Health Insurance and Balance Billing: Have your clients ever complained to you after they chose an in-network hospital for treatment, only to be surprised by a large bill from an out-of-network doctor working at the hospital? AB 72 (Chapter 492) is designed to address that problem. AB 72 applies to insurance policies and HMO contracts issued, amended, or renewed on or after July 1, 2017.

AB 72 is very detailed, but it essentially says that when being treated at an in-network hospital (or certain other facilities), an insured patient shall pay the same cost-sharing (copayments, coinsurance amounts) for services provided by an out-of-network doctor working at the facility as the patient would pay an in-network doctor. If the doctor charges more than that amount, and does not refund the difference in a timely manner, the excess will be subject to interest.

If the patient’s insurance policy or HMO contract covers out-of-network providers, the patient may consent to pay the doctor more than the in-network amount. However, the doctor (not the hospital) has to provide the patient with a written consent 24 hours in advance, and not at the time of admission or “at any time when the [patient] is being prepared for surgery or any other procedure,” and the consent must include an estimate, among other requirements.

(Editor’s Note: Special thanks to Marilyn Monahan for her legal brief. She promises to provide additional information in later issues of the COIN! Marilyn Monahan can be contacted at Marilyn A. Monahan, 4712 Admiralty Way, #349, Marina del Rey, California 90292; (310) 301-3300 (o) (310) 301-3309 (fax) or email her at marilyn@monahanlawoffice.com.