"Based on what we know today" has become Karen Vines' favorite phrase as she talks to clients about health benefits.
Knowledge is changing daily, she said Tuesday, as government agencies write the regulations to implement the Patient Protection and Affordable Care Act signed into law in March. And many of the regulations are "interim final rules" that will require further clarification.
Vines, director of business development and client services at IMA of Kansas, and Jason Lacey, a partner at Foulston Siefkin, helped about 100 businesspeople sort through some of the health care benefits changes that will go into effect beginning later this month.
One of the biggest decisions facing businesses is whether to maintain grandfathered status for their health plans, Lacey said.
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Grandfathered plans will be exempt from some of the mandates of the new law. For example, companies could continue to give preferential coverage to their top executives, eliminating co-pays or waiting periods, Lacey said.
But companies that treat their executives differently and don't maintain grandfathered status will be subject to a fine of $100 per employee per day, Vines said. That could add up to more than $18 million a year for a company with 500 employees.
Maintaining grandfathered status will be difficult because it requires making next to no changes to health plans that were in effect March 23, when the law was signed.
One person asked, for example, whether grandfathered status would be jeopardized if the total premium went up but the employer's dollar share remained the same. Most likely, Lacey said.
Another asked how standalone medical, dental and prescription plans will be affected. Dental plans aren't part of the new law, Vines said, but prescription medications probably will be considered essential health benefits, which are required.
Lacey said the law's requirements go into effect with the first health plan year beginning after Sept. 23. For many businesses, that will mean Jan. 1. A business whose plan year begins Sept. 1 won't be affected for nearly a year.
However, he said, some modifications to Section 125, or cafeteria, plans will be required as of Jan. 1, regardless of when a plan year begins. That means over-the-counter drugs no longer will be eligible for reimbursement for flexible spending plans. And on Jan. 1, 2013, the maximum allowable reimbursement drops to $2,500.