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Health reform update covers new fees, reporting, compliance

By - Last modified: February 23, 2012 at 11:44 AM

Tighter compliance, new fees and clear communication with benefit-plan members are part of the 2012 requirements for health care reform, a local attorney said this morning.

Stephen R. Kern, with Harrisburg-based McNees Wallace & Nurick, presented at the 2012 Legislative and Legal Update session held by the Lancaster County Business Group on Health, an affiliate of the Lancaster Chamber of Commerce & Industry.

Some pieces of the Patient Protection and Affordable Care Act, signed by President Barack Obama on March 23, 2010, still are ambiguous and lack clear guidelines, including cafeteria benefit-plan regulations and nondiscrimination rules, Kern said.

Several regulations will see more strict compliance standards this year, he said. The federal Office of Civil Rights in November began a pilot program to audit compliance for the Health Information Technology for Economic and Clinical Health Act. They will be ongoing through the end of the year, conducted by national auditing firm KPMG.

"The names of the entities and the findings will not be published, but the compliance risks, vulnerabilities and best practices will be shared," Kern said, helping health care businesses learn what audits will be looking for in compliance.

Employers will have to provide a Summary of Benefits and Coverage to employees under specific federal guidelines, Kern said.

Employers are required to provide the summary document during open enrollment if the date is on or after Sept. 23. If enrollment begins before that, it must be provided on the first day of the plan year.

Any "material modifications" to benefit plans, defined as "any change an average participant would consider important," requires 60-day advanced notice to employees, Kern said. The advance notice requirement goes into effect Sept. 23.

The federal act also will require employers to report the total cost of employer-sponsored group health plan coverage — both employer and employee contributions — on W-2 forms. If a business provides W-2 forms for fewer than 250 employees, it is exempt from the requirement.

The Department for Health and Human Services recently released a pre-regulatory notice on essential health benefits.

"HHS punted it over to the states ... each individual state determining what are essential health benefits," Kern said.

If states do not pick from one of four benchmarking options, the essential health benefits would default to the federal definition, he said.

There also will be a new mandated fee in 2012, slated for "comparative clinical effectiveness research," he said. The fee is required from insurers and businesses with self-insured plans, for $1 multiplied by the average number of covered lives on a plan for 2012. The fees go into effect for plan years ending after Sept. 30, he said.