Let’s Play Whack-An-ACA-Rule!

June 16th, 2016

WARNING: This is a whimsical look at the difficulty of combining several agency rules with compliance under the ACA. If you have any questions regarding the compliance issues raised in this piece, contact your Hays Team representative and we can provide more detailed guidance.

If you have ever been to a state fair or an arcade, you’ve probably seen the “Whack-A-Mole” game If you haven’t, the goal is for the player to hit the heads of as many pesky moles as possible before they pop down into their hole in the box. But, each time you whack one mole with the foam mallet, another pops up somewhere else. Other than the obvious thrill of playing and winning, why is a Compliance Director writing about this game? And what does this have to do with the Affordable Care Act (ACA)?

It seems we have all been playing “Whack-An-ACA-Rule.” For example, let’s consider the rules related to nondiscriminatory wellness plans. Maybe you decide to reward employees who meet certain biometric standards, such as lowering blood pressure, by giving them a 30 percent discount on their full healthcare premium. If a single-only premium is $600, the employee contribution is set at $200, and the employee satisfies the entire wellness program criteria, he or she gets a premium contribution discount of $180 (30 percent of $600). That employee’s actual monthly contribution is now only $20 and they are healthier. Wow! But wait…the ACA steps in and says, not so fast — is this “affordable?” Of course, you say — it’s $20! But the ACA says affordability must be calculated based on the full non-discounted premium. So, you hit one mole on the head by encouraging potentially healthier outcomes but the next mole — affordability criteria — pops up right behind you.

So, how do we “hit” the next mole? Maybe we reduce the starting single contribution amount to ensure that it is “affordable” under the ACA. But then, for financial reasons, you have to reduce the size of the wellness reward. Doing so may impact the employee’s motivation to work at lowering his or her blood pressure, which contradicts the point of the wellness program and runs counter to the ACA’s goals.

Head spinning? Let’s keep playing.

Next, you implement a High Deductible Health Plan (HDHP) so that employees can establish health savings accounts (HSAs). You are careful to make sure the maximum out-of-pocket (OOP) limits do not exceed limits established by the HSA rules. The HSA maximum annual OOP limit for family coverage is $13,100, but you set the family deductible at $10,000. This means the plan will not pay for covered services until the family, either collectively or even just one member, has incurred $10,000 in deductible expense. So far, so good. But wait, the ACA steps in and says, not so fast — the single allowable OOP max for an individual in 2016 is $6,850. OOP includes deductibles, copayments, coinsurance, and any other OOP expense. Therefore, you need to “embed” a single deductible of no more than $6,850 for any single family member. That’s yet another mole popping up through the hole.

You thought you complied with the rules and you did — just not all of them, unfortunately.

Ultimately, you have designed your wellness plan to be a little less well but a little more affordable, and your HDHP now has an embedded deductible for family coverage. Next, add one more plan design roadblock: although the HSA rules only consider in-network cost for OOP maximums, the current guidance suggests the ACA will take into account all costs next year, including out-of-network, so you need to be ready for that mole.

There is one way to beat the game: enlist your friends to help! In the case of the ACA, your friends are your Hays Team and our Research and Compliance department. We can help you hit all the current moles and anticipate the ones that may be just about to pop up.