Global Health Care Update
This bimonthly Update summarizes recent legislative developments and trends related to health care and highlights recently passed and pending legislation that may require employers to take action to comply with new rules or review existing plans.
Action May Be Required
Russia—Employers are required to provide periodic health checkups for employees who work on computers more than 50% of their normal work time. At the end of March 2014, the Ministry of Labor and Social Affairs published a Letter entitled “On Obligatory and Periodic Medical Checks for Employees.” Employers must provide employees who read from or input data in a computer at least 50% of their work time an initial health checkup and checkups every two years. The checkups must be conducted by neurologists and opthalmologists.
U.S. Health Care Reform
The U.S. Departments of Treasury, Health and Human Services (HHS), and Labor (DOL) issued guidance on
Patient Protection and Affordable Care Act (Affordable Care Act) provisions affecting preventive services, cost sharing, health care flexible spending arrangements (FSAs), and summaries of benefits and coverage (SBCs).
In addition to the COBRA guidance discussed above, the FAQs issued by the Treasury, HHS, and DOL on May 2, 2014 provided guidance on the following:
■Coverage of Preventive Services: A group health plan or health insurance issuer will be considered to be in compliance with the requirement to cover tobacco use counseling and interventions if, for example, the plan or issuer covers, without cost sharing, screening for tobacco use and, for those who use tobacco, at least
two tobacco cessation attempts per year (as defined in the FAQs).
■Limitations on Cost Sharing: The FAQs discuss what costs a plan may count towards the out-of-pocket maximum where an individual pays more for out-of-network services or for brand-name prescription drugs.
■Health FSA Carryover and Excepted Benefits: Unused carryover amounts in a health FSA that satisfy the modified “use-or-lose” rule should not be taken into account when determining if the health FSA satisfies the maximum benefit payable limit prong under the excepted benefits regulations.
■SBCs: The FAQs also provide guidance on templates for SBCs and on the continued application of previously issued enforcement and transition relief guidance, including specific safe harbors, with respect to the
requirements to provide an SBC and a uniform glossary.
The U.S. House of Representatives approved with a 268‒150 vote the Expatriate Health Coverage Clarification Act of 2014 on April 29, 2014. Among other provisions, the bill would exempt health plans for expatriates who are primary enrollees from certain Affordable Care Act provisions. The Senate is unlikely to consider the bill, and in a Statement of Administration Policy, President Obama expressed opposition to the legislation.
The U.S. government announced updates to model notices informing workers of their eligibility to continue health care coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). The updates clarify that if workers are eligible for COBRA continuation coverage when leaving a job, they may choose to instead purchase coverage through the Exchange, as created by the Affordable Care Act. Individuals and families who are eligible for employer-sponsored coverage generally must be informed of their right to COBRA continuation coverage at the start of employment. They also must be informed of their right to purchase COBRA coverage when separating from a job. The proposed changes to the model notices would offer information on more affordable options available through the Exchange, where those individuals and families may be eligible for financial assistance that would not otherwise be available for COBRA continuation coverage. In most cases, workers and their families eligible for, but not enrolled in, COBRA continuation coverage would be able to enroll in Exchange coverage outside of the normal open enrollment period.
In coordination with this announcement, the government agencies released a frequently asked question (FAQ), a clarifying bulletin, and proposed regulations:
■FAQ: The DOL, HHS, and Treasury published FAQs About Affordable Care Act Implementation (Part XIX) related to the proposed changes to the model notices. One of the FAQs (found under "Update DOL Model Notices") specifically addresses COBRA general and election notices.
■Clarifying Bulletin: HHS’s Center for Consumer Information and Insurance Oversight published a clarifying bulletin regarding a special enrollment period in the Exchange for individuals already enrolled in COBRA continuation coverage.
■Proposed Regulations: Proposed regulations related to COBRA notification requirements were released by the DOL’s Employee Benefits Security Administration (EBSA) on May 2, 2014. The proposed regulations contain amendments to notice requirements of the health care continuation coverage (COBRA) provisions of Part 6 of Title I of ERISA to better align the provision of guidance under the COBRA notice requirements with
The U.S. Internal Revenue Service (IRS) issued inflation-adjusted limits for contributions to a health savings account (HSA) for calendar year 2015 (Revenue Procedure 2014-30). For calendar year 2015, the limit on contributions for an individual with self-only coverage under a high-deductible health plan is USD 3,350 (USD 6,650 for family coverage). A high-deductible health plan for calendar year 2015 is defined as a health plan with an annual deductible that is not less than USD 1,300 for self-only coverage (USD 2,600 for family coverage). The limit on annual out-of-pocket expenses is USD 6,450 for self-only coverage (USD 12,900 for family coverage). The limit on catch-up contributions for individuals age 55 or older is USD 1,000.
The U.S. HHS finalized regulations on the transitional reinsurance fees that group health plans must pay beginning in 2014. With relatively few changes, the final regulations set the reinsurance fee for 2015 at USD 44 per covered life; adjust the timing for the collection of reinsurance contributions, starting in 2014; exclude self-insured and self-administered group health plans from having to pay the reinsurance fee in 2015 and 2016; include a specific definition of major medical coverage; clarify how certain covered lives are counted; describe audits of contributing entities subject to the fee; and set the 2015 maximum cost-sharing amounts.
In Costa Rica, same-sex partners will be entitled health care benefits provided by the social security system. The Costa Rica Social Insurance Fund (CCSS or Caja Costarricense de Seguro Social) announced its intention to provide benefits to same-sex partners even though the country does not recognize same-sex marriage. The reform is expected to be implemented in September 2014.
In Ontario (Canada), Bill 21, An Act to amend the Employment Standards Act, 2000 in respect of family
caregiver, critically ill child care and crime-related child death or disappearance leaves of absence received Royal Assent on April 29, 2014. The amended Act will come into force October 29, 2014. This new legislation builds on the existing family medical leave provisions by creating three new job-protected leaves:
■Family Caregiver Leave: up to eight weeks of unpaid, job-protected leave for employees to provide care or support to a family member with a serious medical condition;
■Critically Ill Child Care Leave: up to 37 weeks of unpaid, job-protected leave to provide care to a critically ill child; and
■Crime-Related Child Death or Disappearance Leave: up to 52 weeks of unpaid, job-protected leave for parents of a missing child and up to 104 weeks of unpaid, job-protected leave for parents of a child who died as a result of a crime.
Medicare patients would be paying more for health care under the Australian government’s 2014 budget.
Individuals would be assessed an AUD 7.00 copay for visits to general practitioners; they also would pay more for pharmaceutical drugs. The Medicare rebate for optometry would be reduced. The Medicare levy would increase from 1.5% to 2.0%. The Medicare levy surcharge and private health insurance offset thresholds would be frozen.
The Australian government has announced that it would scale back plans for its parental leave program. The government pledged that mothers would be entitled to 26 weeks of government-paid leave at their actual wage or the national minimum wage, whichever was greater, plus superannuation. Paid leave would be capped at
AUD 75,000 for women earning AUD 150,000 or more per year. Citing budgetary concerns, Prime Minister Abbott announced that the earnings threshold would be reduced to AUD 100,000, and paid leave would be capped at AUD 50,000 for six months.
Under provisions included in the 2014 budget, employees in New Zealand would be entitled to additional parental leave. The length of the parental leave period would be extended in two phases—from the current 14 weeks to 16 weeks as of April 1, 2015 and to 18 weeks as of April 1, 2016. Parental leave benefits would be extended to employees who recently changed jobs, seasonal and casual workers, and workers with more than one employer. As of April 1, 2016, permanent carers, including permanent guardians and grandparents, would be entitled to parental leave benefits paid by the state. Parental leave would be more flexible; employees could return to work for a short period without losing their benefit. Also, the parental leave tax credit would increase from NZD 150 to NZD 220 per week for ten weeks (currently eight weeks).
Employers in South Korea should review their Human Resource policies to ensure compliance with changes affecting pregnant employees and part-time employees. Effective July 1, 2014, female employees are entitled to 120 days’ maternity leave in the event of a multiple birth. At least 60 days’ leave must be taken post-birth.
Seventy-five days’ leave must be paid. Effective September 25, 2015, female employees are entitled to request a two-hour reduction in daily work time during the first 12 weeks of pregnancy and after 36 weeks of pregnancy in workplaces with 300 or more employees. Employers are required to accommodate the request. If the employee works less than eight hours each day, her work time may not be less than six hours. Employees cannot reduce pay during the period of reduced work time. The new rules on work time reduction apply to workplaces with less than 300 employees as of March 26, 2016. Employers are reminded that employees applying for child care leave on or after January 14, 2014 may take this leave until the child reaches age eight (previously, age six).
New rules apply to social security disability benefits in Norway, effective January 1, 2015. Eligibility requirements for disability insurance include the following: 1) individual must be between age 18 and age 67; 2) individual must have contributed to the National Insurance Scheme in the three years prior to disability; 3) illness or injury must be the primary reason that earning ability is impaired; 4) appropriate treatment must be carried out; 5) income capacity must be reduced by at least 50% due to illness or injury; and 6) earnings ability is permanently reduced by 40% (30% for an occupational injury or illness).
Disability insurance will be calculated according to the following rules: 1) the amount is based on average income in the top three of the last five years; income is capped at six times the Basic Amount; 2) disability insurance equals 66% of the calculation base, adjusted for the degree of disability; 3) a minimum benefit is guaranteed; 4) if a spouse or partner dies, the disability insurance recipient may receive a survivor’s benefit; and 5) if the disabled individual has dependents under age 18, he or she will receive a dependent allowance.
Individuals will be permitted to work while receiving disability insurance. A disabled individual will be permitted to earn up to 0.4 times the Basic Amount; current disability recipients will be permitted to earn up to NOK 60,000 for a transitional period until 2019. Individuals who are 100% disabled will automatically receive a retirement pension at age 67. Disability insurance will be taxed as income.
Dutch citizens would no longer have free choice with regard to the selection of their physician if amendments to the Health Insurance Act are passed. Under the draft amendments, health insurers would no longer be required to reimburse individuals for care received outside of their network.
An employee in France may voluntarily give his or her days off to another employee who cares for a child under age 20 with a chronic illness or disability. The employee must obtain consent of his or her employer for the transfer. For the employee receiving these days, the period of absence will be counted as actual work for the calculation of seniority rights. The new law entered into force May 11, 2014.
In the United Kingdom, the Children and Families Act 2014, introducing changes to flexible work time and shared parental leave, received Royal Assent. The Act will introduce the changes to flexible working in June 2014 and to shared parental leave in 2015 (for babies due on or after April 5, 2015). Much of the detail on how the system will work will be contained in separate regulations.
Under shared parental leave, parents would be permitted to share up to 50 weeks’ leave and 37 weeks’ pay. Employees would be required to notify employers at least eight weeks prior to the leave start date; they would be permitted to change plans up to two times. Employers could require that employees take leave in a single block; employers and employees may agree to periodic blocs of leave. If leave were up to six months in total, employees would have the right to return to the same job. If leave were longer than six months, they would have the right to return to a similar job.
Under pending legislation, paternity leave would be extended in the Netherlands. The Council of Ministers has approved draft legislation that would give fathers three days of unpaid paternity leave in addition to the current entitlement of two days’ paid leave. In the event of the death of the mother during childbirth, the father would be entitled to the mother’s maternity leave.
* * * *
For more information on the topic and countries in this newsletter, please refer to the Aon Hewitt Country Profiles eGuide. You can learn more about the Country Profiles eGuide here.
About Aon Hewitt
Aon Hewitt empowers organizations and individuals to secure a better future through innovative talent, retirement and health solutions. We advise, design and execute a wide range of solutions that enable clients to cultivate talent to drive organizational and personal performance and growth, navigate retirement risk while providing new levels of financial security, and redefine health solutions for greater choice, affordability and wellness. Aon Hewitt is the global leader in human resource solutions, with over 30,000 professionals in 90 countries serving more than 20,000 clients worldwide. For more information on Aon Hewitt, please visit www.aonhewitt.com.
Copyright 2014 Aon plc