IRS Proposed Safe Harbors on Employee Health Coverage Required by Obama Care

On May 3, 2013 the Internal Revenue Services published proposed Safe Harbors to comply with the Affordable Care Act.  The first safe harbor is a plan with a $3,500 integrated medical and drug deductible, 80 percent plan cost-sharing, and a $6,000 maximum out-of-pocket limit for employee cost-sharing.  The second safe harbor is a plan with a $4,500 integrated medical and drug deductible, 70 percent cost-sharing, a $6,400 maximum out-of-pocket limit, and a $500 employer contribution to a Health Savings Account.  The third plan with a $3,500 medical deductible, $0 drug deductible, 60 percent plan medical expense cost-sharing, 75 percent plan drug cost-sharing, a $6,400 maximum out-of-pocket limit, and drug co-pays of $10/$20/$50 for the first, second and third prescription drug tiers, with 75 percent coinsurance for specialty drugs.

These safe harbors can help home health agencies and hospices to comply with rules.  It will not reduce the cost of compliance or eliminate penalties for non-compliance.  We recommend you work with a qualified insurance broker and shop with the state agency exchange to obtain the lowest cost possible.  Remember you must be in compliance by January 1, 2014.  We will be covering more information about the impact of the Affordable Care Act at our Home Health, Hospice, and Private Duty Leadership Conferences in Hawaii in September. 

To read the proposed rule please go to:

http://www.gpo.gov/fdsys/pkg/FR-2013-05-03/pdf/2013-10463.pdf