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TIMELINE

The following changes will take effect in 2017:

  • Anti-discrimination regulations established.
  • Benchmark plan election rules set.
  • New cost-sharing levels have been established.
  • Rates set for the PCORI Fee.
  • Report filing outlined in regulations implementing Sections 6055 and 6056 of the Internal Revenue Code will be due.
  • The April 2017 edition of the SBC and associated documents is mandated.

A group health plan’s annual in-network out-of-pocket maximum for Essential Health Benefits (EHBs) cannot exceed $7,150 for self-only coverage and $14,300 for all other coverage. The in-network individual out-of-pocket maximum applies to all individuals, regardless of whether the individual is covered by a self-only plan or family plan (including a high-deductible plan). Remember, self-funded group health plans are not required to cover EHBs. But, if they do, they cannot impose lifetime or annual dollar limits on those benefits.

Health plans and issuers that maintain an annual open enrollment period will be required to use the April 2017 edition of the SBC template and associated documents beginning on the first day of the first open enrollment period that begins on or after April 1, 2017, for plan years beginning on or after that date. For plans and issuers that do not use an annual open enrollment period, this SBC template and associated documents are required beginning on the first day of the first plan year that begins on or after April 1, 2017.

For more information and links to revised documents, follow this link.

The PCORI Fee is $2.26 per average number of covered lives for plan years ending on or after Jan. 1, 2017, through Sept. 30, 2017.

PCORI Fee

Regulations implementing Sections 6055 and 6056 of the Internal Revenue Code require employers to provide detailed information about their plan and enrollees.

Reporting Requirements

For plan years on or after Sept. 23, 2010, PPACA mandates the following provisions for self-funded health plans:

  • Removal of annual and lifetime dollar limits
  • Coverage for adult children to age 26
  • No pre-existing condition exclusions for persons younger than 19
  • Increased parity for out-of-network emergency services*
  • 100 percent coverage for certain preventive services*
  • Additional claim and appeal rights*

*The provision does not apply to grandfathered plans.

For plan years on or after Sept. 23, 2010, health plans may no longer impose annual and lifetime dollar limits.

For plan years on or after Sept. 23, 2010, PPACA mandates that health plans must offer coverage to adult children to age 26. Both married and unmarried children qualify for coverage. Beginning in 2014, children up to age 26 can stay on their parent’s employer plan even if they have another offer of coverage through an employer.

To avoid possible penalties, businesses subject to the employer mandate must provide health coverage to a dependent adult child through the end of the month in which he or she attains age 26. If coverage extends beyond the 26th birthday, the value of the coverage can continue to be excluded from the employee’s income for the full tax year (generally a calendar year) in which the adult dependent child turns 26.

For plan years on or after Sept. 23, 2010, health plans may no longer impose pre-existing condition exclusions for people younger than 19.

For plan years on or after Sept. 23, 2010, PPACA mandates increased parity for out-of-network emergency healthcare services. This provision does not apply to grandfathered plans.

For plan years on or after Sept. 23, 2010, PPACA mandates 100 percent coverage for certain in-network preventive services for adults and children. This provision does not apply to grandfathered plans.

For plan years on or after Sept. 23, 2010, PPACA mandates additional claim and appeal rights. This provision does not apply to grandfathered plans.

PPACA introduced the following provisions for 2011:

  • Changes to regulations about reimbursement for over-the-counter (OTC) drugs from flexible spending accounts (FSAs), health savings accounts (HSAs) and health reimbursement arrangements (HRAs)
  • Changes to tax on non-qualified HSA distributions

For plan years on or after Sept. 23, 2010, OTC drugs must be prescribed by a doctor to qualify for tax-free reimbursement under FSAs, HSAs and HRAs.

For plan years on or after Sept. 23, 2010, tax on non-qualified HSA distributions increases to 20 percent.

For 2012, PPACA introduced the following provisions:

  • Summary of Benefits and Coverage (SBC)
  • Women’s preventive health services

Assessed from 2013 to 2019, the fee funds research by the Patient-Centered Outcomes Research Institute (PCORI), which was established by the ACA to compare different medical treatments and interventions to determine what treatments are most effective.

For plan years that ended on or after Oct. 1, 2012, through Dec. 31, 2012, the fee is $1 per average number of covered lives.

(The fee will not apply to policy or plan years that begin after Sept. 30, 2019.)

Overview of Two New Fees

PCORI FAQ

PPACA requires that employers provide a Summary of Benefits and Coverage (SBC) for each health plan they offer to all members by the first day of open enrollment (or eligible enrollment) occurring on or after Sept., 23, 2012. Employers can be penalized up to $1,000 for each employee who fails to receive the SBC.

An SBC must provide:

  • A detailed summary of the health plan’s coverage
  • Examples of how the plan would pay for healthcare services
  • The phone number and website for customer service
  • The uniform Glossary of Health Coverage and Medical Terms

For more information on SBCs, read:

For plan years on or after Aug. 1, 2012, PPACA requires non-grandfathered health plans to provide coverage for contraceptive services to women without cost-sharing. Certain employers are exempt from this mandate.

The following PPACA provisions took effect in 2013:

  1. Auto-enrollment
  2. Exchange notice mandate
  3. A new limit for contributions to medical flexible spending accounts (FSAs)
  4. Patient Centered Outcomes Research Institute (PCORI) fee
  5. A change to tax deductions for employer-sponsored prescription plans for Part D eligible retirees
  6. New W-2 reporting standards

A PPACA regulation, initially set to take effect Jan. 1, 2014, mandates that employers with 200 or more employees automatically enroll all eligible employees in the employer-sponsored health plan with the option to opt out. However, the implementation date has been postponed, pending the issuance of final regulations.

Employers subject to the Fair Labor Standards Act were required to provide all employees (full time and part time) a notice regarding public health insurance exchanges, also known as health insurance marketplaces, beginning no later than Oct. 1, 2013.

Employers must also provide all new employees the notice at the time of hiring, beginning Oct. 1, 2013. In 2014, the U.S. Department of Labor considers a notice to be provided at the time of hire if the notice is provided within 14 days of an employee’s start date.

Federal agencies have issued model notices:

  • one for employers who sponsor a health plan
  • another for employers who do not sponsor a health plan.

Both notices are available on the U.S. Department of Labor website in English and Spanish.

For plan years on or after Jan. 1, 2013, annual employee salary reduction contributions to a medical FSA are limited to $2,500.

Assessed from 2013 to 2019, the fee funds research by the Patient-Centered Outcomes Research Institute (PCORI), which was established by the ACA to compare different medical treatments and interventions to determine what treatments are most effective.

Fee schedule for 2013

  • $1 per average number of covered lives for plan years that ended on or after Jan. 1, 2013, through Sept. 30, 2013
  • $2 per average number of covered lives for plan years that ended on or after Oct. 1, 2013, through Dec. 31, 2013

(The fee will not apply to policy or plan years that begin after Sept. 30, 2019.)

Overview of Two New Fees
PCORI FAQ

For plan years on or after Jan. 1, 2013, tax deductions are eliminated for employers that maintain prescription drug plans for Part D eligible retirees.

Beginning in 2014, employers are required to file 250 or more W-2 forms must report the total costs of their group health plan on the W-2s annually.

The following PPACA provisions take effect in 2014:

  • 90-day waiting period
  • Clinical trials
  • Cost sharing
  • Electronic funds transfers and remittance advice transactions
  • Essential Health Benefits (EHBs)
  • Health Plan Identifier (HPID)
  • No pre-existing exclusions for adults
  • Reinsurance Assessment Fee
  • Wellness Incentives

For plan years on or after Jan. 1, 2014, health plans may not impose a waiting period of more than 90 days. Starting with the 2014 plan year, employers may also impose an “orientation period” not to exceed one calendar month less one calendar day.

Effective Jan. 1, 2014, PPACA requires all self-funded nongrandfathered health plans to provide benefit coverage to “qualified individuals” for routine patient costs incurred during an “approved clinical trial.”

With this provision, items and services provided as part of an approved clinical trial must be covered by an employer-sponsored health plan consistent with typical coverage for a member not participating in a clinical trial. This requirement does not apply to grandfathered plans.

The coverage does not apply to the actual device, equipment or drug that is typically given to participating patients free of charge by the medical device or pharmaceutical company sponsoring the trial.

PPACA establishes annual limits on in-network out-of-pocket maximums on Essential Health Benefits for nongrandfathered plans. (This cost-sharing provision does not apply to grandfathered plans.) The annual out-of-pocket maximum will apply to the plan on the first day of the first plan year beginning on or after Jan. 1, 2014. The in-network annual out-of-pocket deductible may be divided across multiple categories of benefits, provided the aggregate of all separate out-of-pocket limits applicable to all Essential Health Benefits under the plan do not exceed the annual out-of-pocket maximums for that plan year.

Medical out-of-pocket maximums: In-network out-of-pocket maximums in 2014 may not exceed the following limits: $6,350/single, $12,700/family. In addition, all member cost-sharing, such as copayments, coinsurance and deductibles, must apply to the annual out-of-pocket maximum.

Maximums for a plan that uses more than one service provider to administer benefits: For the first plan year only beginning on or after Jan. 1, 2014, when a group health plan uses more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket maximums, federal agencies will consider the annual limitation on out-of-pocket maximums to be satisfied if both of the following conditions are satisfied:

  1. The plan complies with the out-of-pocket maximum requirements for major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and
  2. “To the extent the plan ... includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies with respect to prescription drug coverage), such out-of-pocket maximum does not exceed the dollar amounts set forth {above ($6,350/single, $12,700/family for 2014)}.”

Effective in 2015, all member in-network cost-sharing, such as copayments, coinsurance and deductibles, must apply to the annual out–of–pocket maximum. For plan years on or after Jan. 1, 2015, the in-network out–of–pocket maximum may not exceed $6,600 for single coverage and $13,200 for family coverage.

Effective Jan. 1, 2014, if a provider wants to receive payment electronically, a health plan must oblige and conduct the transaction in compliance with standards established by the U.S. Department of Health and Human Services (in January 2012). Healthcare providers are not required to accept payments from health plans electronically.

ERISA self-funded plans do not have to include 10 categories of benefits known as Essential Health Benefits (EHBs). However, if such self-funded plans do include EHBs for plan years beginning on or after Jan. 1, 2014, they are prohibited by PPACA from imposing lifetime or annual dollar limits on these benefits.

For plan years on or after Jan. 1, 2014, health plans may no longer impose pre-existing condition exclusions for adults.

Assessed from 2013 to 2019, the fee funds research by the Patient-Centered Outcomes Research Institute (PCORI), which was established by the ACA to compare different medical treatments and interventions to determine what treatments are most effective.

Fee schedule for 2014

  • $2 per average number of covered lives for plan years that ended on or after Jan. 1, 2014, through Sept. 30, 2014
  • $2.08 per average number of covered lives for plan years that ended on or after Oct. 1, 2014, through Dec. 31, 2014

(The fee will not apply to policy or plan years that begin after Sept. 30, 2019.)

Overview of Two Fees

PCORI FAQ

Assessed for the first nine months of the 2014 to 2016 calendar years, the Reinsurance Assessment Fee funds a three-year reinsurance program designed to reimburse companies that insure high-cost patients through the individual health insurance market.

In 2014, the fee is $63 per year per average covered life. In 2015, the fee is $44 per year per average covered life. In 2016, the amount of the fee is subject to change.

Overview of Two Fees

The final rule for incentives for nondiscriminatory wellness programs identifies standards for wellness programs offered by group health plans, both grandfathered and non-grandfathered, for plan years beginning on or after Jan. 1, 2014.

Issued by the U.S. Departments of Labor, Health and Human Services and the Treasury, the rule also:

  • Increases the allowable incentive for health-contingent programs from 20 percent to 30 percent of the cost of coverage.
  • Is designed to give every wellness program participant the opportunity to receive the full amount of any reward or incentive, regardless of any health factor.

Final Rule on Wellness Program Incentives – What it means for you

The PPACA Shared Responsibility for Employers Regarding Health Coverage rule, better known as the employer mandate, becomes effective in 2015.

An employer may be subject to a financial penalty if it either does not provide any health coverage to a certain percentage of employees*, or if the health coverage it does provide is unaffordable or does not provide minimum value. The requirements are established through the PPACA Shared Responsibility for Employers Regarding Health Coverage rule, better known as the employer mandate, Beginning in 2015, employers with at least 100 full-time employees and equivalents must comply with the employer mandate.

Compliance for employers with at least 50 but fewer than 100 full-time employees is delayed until 2016 if certain criteria are met.

*Full-time employees and equivalents

The following provisions take effect in 2015:

  • Changes to costs sharing limits
  • The employer mandate
  • An increase in the maximum annual salary reduction contribution for medical flexible spending accounts
  • A decrease in the Reinsurance Assessment Fee

In 2015, the fee is $44 per average covered life for the year.

For the 2015 benefit year, of the $44 annual per average covered life contribution rate, $33 per average covered life will be payable in January 2016. The remaining $11 per average covered life will be payable late in the fourth quarter of 2016.

Overview of Two Fees

The U.S. Department of Health and Human Services (HHS) published a proposed rule requiring all health plans to submit information and documentation demonstrating compliance with standards and operating rules for certain electronic transactions.

According to the proposed rule, controlling health plans* that obtain a Health Plan Identifier (HPID)** before Jan. 1, 2015, must meet the submission requirements for the first certification of compliance on or before Dec. 31, 2015.


*Controlling health plans control their own business activities, actions or policies, or are controlled by an entity that is not a health plan.

**On Oct. 31, 2014, HHS announced a delay in enforcing HPID requirements until further notice.

Administrative Simplification and Certification of Compliance for Health Plans Proposed Rule

Health Plan Identifier (HPID) Requirements

Assessed from 2013 to 2019, the fee funds research by the Patient-Centered Outcomes Research Institute (PCORI), which was established by the ACA to compare different medical treatments and interventions to determine what treatments are most effective.

Fee schedule for 2015

  • $2.08 per average number of covered lives for plan years that ended on or after Jan. 1, 2015, through Sept. 30, 2015
  • $2.17 per average number of covered lives for plan years that ended on or after Oct. 1, 2015, through Dec. 31, 2015

(The fee will not apply to policy or plan years that begin after Sept. 30, 2019.)

Overview of Two Fees

PCORI FAQ

Each covered entity must post the required notice and foreign language taglines or the anti-discrimination statement and top two foreign language taglines in the states in which the covered entity operates in a conspicuously visible font size in significant publications and communications, physical locations and the entity’s website, as identified by Section 1557 anti-discrimination regulations.

Anti-Discrimination Regulations

Assessed from 2013 to 2019, the fee funds research by the Patient-Centered Outcomes Research Institute (PCORI), which was established by the ACA to compare different medical treatments and interventions to determine what treatments are most effective.

For plan years that ended on or after Jan. 1, 2016, through Sept. 30, 2016, the fee is $2.17 per average number of covered lives.

(The fee will not apply to policy or plan years that begin after Sept. 30, 2019.)

PCORI Fee

Overview of Two Fees

PCORI FAQ

The following changes will take effect in 2016:

  • Anti-discrimination regulations established.
  • New cost-sharing levels have been established.
  • A uniform definition of habilitative services was adopted by HHS.
  • The first report filing outlined in regulations implementing Sections 6055 and 6056 of the Internal Revenue Code will be due.
  • Rates for the PCORI Fee have been set.
  • A new rate for the Reinsurance Assessment Fee has been established.

Regulations implementing Sections 6055 and 6056 of the Internal Revenue Code require employers to provide detailed information about their plan and enrollees. The first report is due in 2016 for the 2015 calendar year.

Section 6055 and 6056 reporting requirements

Covered entities must remove discriminatory exclusions from Plan Documents renewing on or after Jan. 1, 2017.

Anti-Discrimination Regulations

If a company’s health plan includes an annual or lifetime dollar maximum, the company must select a benchmark plan from one of the 51 EHB benchmark plans in a state or Washington, D.C., or in one of the three Federal Employee Health Benefit Programs that supports applying such dollar maximums for plan years on or after Jan. 1, 2017.

Benchmark Plan Election Rules

The Cadillac tax established by PPACA takes effect in 2020.

PPACA will impose a 40 percent excise tax on the cost of coverage of an employer-sponsored plan exceeding $10,200 for single coverage and $27,500 for family coverage.

Cadillac Tax

The Department of Health and Human Services has announced a delay in enforcing Health Plan Identifier (HPID) requirements. The announcement was made on Friday, Oct. 31, 2014. The new guidance delays enforcement of obtaining an HPID and use of an HPID in transactions until further notice.
Previously, self-funded health plans, excluding small health plans, were required to obtain a HPID by Nov. 5, 2014. Self-funded small health plans were required to obtain an HPID by Nov. 5, 2015. A health plan’s HPID was required to be used when the health plan is identified in a HIPAA standard transaction, beginning Nov. 7, 2016. (HIPAA defines a small health plan as one with annual receipts of $5 million or less.)

Health Plan Identifier (HPID) Requirements

HPID User Manual

HPID Quick Start

Text-only version from CMS website

The U.S. Department of Health and Human Services (HHS) published a proposed rule requiring all health plans to submit information and documentation demonstrating compliance with standards and operating rules for certain electronic transactions.

Controlling health plans that obtain a Health Plan Identifier (HPID)** on or after Jan. 1, 2015, and on or before Dec. 31, 2016 must meet the submission requirements for the first certification of compliance within 365 days of obtaining a HPID.


*Controlling health plans control their own business activities, actions or policies, or are controlled by an entity that is not a health plan.

**On Oct. 31, 2014, HHS announced a delay in enforcing HPID requirements until further notice.

Administrative Simplification and Certification of Compliance for Health Plans Proposed Rule

Health Plan Identifier (HPID) Requirements

The U.S. Department of Health and Human Services (HHS) published a proposed rule requiring all health plans to submit information and documentation demonstrating compliance with standards and operating rules for certain electronic transactions.

Controlling health plans* that obtain a Health Plan Identifier (HPID)** after Dec. 31, 2016, are not required to meet the requirements of the proposed rule for the first certification of compliance.


*Controlling health plans control their own business activities, actions or policies, or are controlled by an entity that is not a health plan.

**On Oct. 31, 2014, HHS announced a delay in enforcing HPID requirements until further notice.

Administrative Simplification and Certification of Compliance for Health Plans Proposed Rule

Health Plan Identifier (HPID) Requirements

A revised SBC must be provided to all employees by the first day of open enrollment for all plan years beginning Jan. 1, 2014. For all plan years, the SBC incorporates all plan changes and indicates whether the health plan provides minimum essential coverage and minimum value.

The in-network out-of-pocket maximum may not exceed $6,600 for single coverage or $13,200 for family coverage. This provision does not apply to grandathered plans.

Annual employee salary reduction contributions to a medical FSA are raised to $2,550 for plan years on or after Jan. 1, 2015. Previously, for plan years on or after Jan. 1, 2013, contributions were limited to $2,500.

Effective Dec. 31, 2014, the Patient Protection and Affordable Care Act no longer requires certificates of credible coverage to be issued. Previously, HIPAA required these certificates to be issued as proof of previous health coverage.

However, a former employee may require proof of coverage under a client’s health plan so that the individual can enroll in a new health plan under special enrollment rights. In this situation, CoreSource may be able to provide a certificate of prior coverage after Dec. 31, 2014, at a client’s request. Clients should discuss this issue with their Client Manager.

HHS amended the minimum value definition, affecting whether the employer is subject to a penalty and its employees eligible for subsidies. Plans will meet the minimum value requirement if they:

  • cover 60 percent of total allowed costs and
  • effective April 28, 2015, provide substantial coverage of both inpatient hospital and physician services.

A group health plan’s annual in-network out-of-pocket maximum for Essential Health Benefits (EHBs) cannot exceed $6,850 for self-only coverage and $13,700 for all other coverage. The final regulation also clarifies that the in-network individual out-of-pocket maximum applies to all individuals, regardless of whether the individual is covered by a self-only plan or family plan (including a high-deductible plan). Remember, self-funded group health plans are not required to cover EHBs. But, if they do, they cannot impose lifetime or annual dollar limits on those benefits.

HHS adopted a uniform definition of habilitative services (an Essential Health Benefit) for when the state-selected benchmark plan does not include these services or the state has not enacted its own definition. This definition is also found in the Uniform Glossary of Health and Coverage and Medical Terms: “Healthcare services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who is not walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology and other services for people with disabilities in a variety of inpatient and/or outpatient settings.” Self-funded plans do not have to include this definition. But if they do, they can’t put dollar limits on these benefits.

The U.S. Department of Health and Human Services set the 2016 contribution rate at $27 per year per average covered life.