3 things you need to know this week: June 17, 2013

We scan the news so you don’t have to! Here’s what we think are this week’s three must-reads from the world of benefits:

ACA plan-value calculators full of flaws, actuaries say

According to a recent report in The Washington Examiner, an online calculator created by the government to help self-funded insurers value their plans as mandated by the Affordable Care Act is under fire as being inaccurate, confusing and inflexible.

The tool, known as the “Minimum Value” calculator, walks companies through reporting benefits costs to establish whether plans meet the minimum value standard set for actuarial value. Get a failing number = pay sizeable penalties.

The Centers for Medicare and Medicaid Services unveiled a test version of the tool last fall, followed by a final version in February.

But Rich Stover, a partner at Buck Consultants told the Examiner that the MV calculator is unable to account for plan design “tweaks” featured in many large employer designs.  

Even more frustrating for employers, actuaries told the paper, is that the beta and final versions offered conflicting calculations and that while employers can opt not to use the MV calculator, doing so means incurring the expense to value their plans themselves.

How to prepare now for PCORI fees

Perhaps you’re just now getting your arms around ACA’s mandates and what to tell employees in preparation for 2014. You might be so busy that you’ve forgotten about one provision of the law that will affect you this year—in just a few weeks, in fact.

The Patient Centered Outcomes Research Institute (PCORI), established under ACA to help consumers understand their available treatment and care options, gets its funding in part from fees paid by guess who? Self-funded employers. If your health plans—medical, prescription, dental, wellness, even EAP—are self-funded, you’ll need to start paying PCORI fees by July 31 for the first plan year ending between October 1, 2012 and September 30, 2013.

The fees amount to $1 times the average covered lives in year one, $2 times average covered lives in year two and are indexed in year three and beyond. There are a bunch of different ways employers can calculate the average covered lives that are wordy and full of legal jargon. For details from the government on calculations, click here. For general Q&A info on PCORI, click here.

This week’s hidden gem: Could health care reform spur early retirement?

ACA has been named as the cause for many trickle-down effects on employers—rising costs, larger administrative burdens, workforce management shifts. Now, new research published in the Journal of Public Economics shows yet another side effect might be early employee retirements.

“The 2010 Patient Protection and Affordable Care Act will considerably weaken the link between employment and health insurance by making group coverage available to all individuals regardless of employment,” the report reads. “Many individuals will also receive explicit subsidies to purchase group coverage, and older individuals will also likely receive substantial implicit subsidies through a legal limit on their premiums relative to those paid by younger individuals. One possible consequence of this reform is that it may encourage earlier retirements, as all older workers will be able to maintain group coverage (often with generous subsidies) even if they retire before Medicare eligibility.”

Definitely food for thought there, we think.

Blogger Michael Kitces concurs, writing: “How many clients would still be working where they are today if health insurance availability was guaranteed regardless of where (or whether) they worked?”