Under the Patient Protection and Affordable Care Act of 2010 (“PPACA”) each state is required to establish an American Health Benefit Exchange (“Exchange”) that:

• facilitates the purchase of qualified health plans;
• provides for the establishment of a small business health program that is designed to assist qualified small employers in the state with facilitating the enrollment of their employees into qualified health plans offered in the small group market in their state; and
• meets certain organizational and operational requirements.

Although the Exchanges are not set to come on line until January 1, 2014, employers have an obligation in 2013 to inform current employees and new hires of the availability of the Exchange, of the employees ability to shop for coverage and if eligible to obtain coverage from the Exchange.

The employers notice must be in writing and must be issued by the following deadlines:

• Information to new hires: March 1st and
• Information to current employees: March 13th

The notice should explain:

• General information concerning the employers health plan,
• The employee’s right to purchase health insurance coverage through a state Exchange;
• The services provided by the Exchange;
• How to contact the Exchange;
• The employee’s possible eligibility for government subsidies under the Exchange if the employer’s share of the aggregate cost of benefits is less than 60%; and
• The employee’s possible loss of an employer subsidy, if any, (in the form of a tax-free contribution to the employer-provided health coverage) if the employee purchases health insurance coverage through the Exchange.

PPACA guidance on the “aggregate cost of benefits” defines it as the aggregate cost of applicable employer-sponsored coverage. Thus the aggregate cost for an individual employee is the total cost of coverage under all applicable employer-sponsored health coverage provided to the individual employee. The amount reported may differ among a company’s employees depending on each employee’s specific election of coverage (i.e. PPO, HMO, single, family, etc.). The cost of coverage under a particular group health plan is referred to as the “reportable cost,” and the aggregate cost of applicable employer-sponsored coverage is referred to as the “aggregate reportable cost.” The aggregate reportable cost generally includes both the portion of the cost paid by the employer and the portion of the cost paid by the employee, regardless of whether the employee paid for that cost through pretax or after-tax contributions. In addition, the aggregate reportable cost also includes any portion of an employer-sponsored group health plan’s cost of coverage that is includable in the employee’s gross income.

For the purposes of the notice requirement, “applicable employer-sponsored coverage” means coverage under any group health plan (including onsite primary-care medical clinics) made available to the employee by an employer that is excludable from the employee’s gross income under Section 106 or would be excludable if it were employer-provided coverage. (Thus, employee-pay-all group health coverage is included.) However, when calculating the applicable employer-sponsored coverage do not include the following coverage:

• Long-term care
• Accident or disability income insurance, or any combination of the two
• Supplement to liability insurance
• Liability insurance, including general liability insurance and automobile liability insurance
• Workers compensation or similar insurance
• Automobile medical payment insurance
• Credit-only insurance
• Other similar insurance coverage, specified in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits
• Any coverage under a separate policy, certificate or contract of insurance that provides benefits substantially for treatment of the mouth (including any organ or structure within the mouth) or for treatment of the eye
• Coverage only for a specified disease or illness
• Hospital indemnity or other fixed indemnity insurance

©2002-2012 Fowler White Boggs P.A.

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We all occasionally grab a quick bite on the go. With fall in full swing, and our schedules filling up, it is much more tempting to drive through and pick up dinner rather than slaving over the stove after a non-stop day. Consider this:  What if the menu was labeled with calorie information and you could see that the Hardee’s Thickburger you wanted to order contained 910 calories.  A healthy caloric intake for an average person is 2000 calories per day – that’s also stated on the menu.  The burger just became ½ of your daily allotment of calories. That information would definitely prompt anyone to reconsider their choices.

Menu labeling, as outlined in the Patient Protection and Affordable Health Care Act (PPACA), might actually change the way we eat, when we eat out!  That is exactly what the National Restaurant Association and the National Association of Convenience Stores is grappling with.  In the wake of the Supreme Court upholding the PPACA, it is not just the medical and insurance communities buzzing. The food industry is wadding through their own set of new rules regarding how they present their product and interact with consumers.

As outlined in Section 4205, nutritional menu labeling is required for chain restaurants across the country. The provisions include labeling requirements for restaurants and food vendors, with 20 or more outlets. Calories have to be posted on menus and menu boards, including drive-thru menus. Display tags with additional information, including fat, saturated fat, carbohydrates, sodium protein, and fiber must be available in writing, upon request. Vending machine companies that operate at least 20 machines are also subject to these requirements. For buffet-style or self-serve restaurants, a sign must be placed adjacent to each food and beverage item listing calories per item or serving.  There are some exceptions that will not require calorie disclosure. Items not listed on the menu such as condiments, daily specials or temporary offerings. If an item appears on the menu less than 60 days per calendar year, or a test market items appears on a menu for less than 90 days, they are both exempt.

The Food and Drug Administration (FDA) considered Section 4205 effective immediately. However, without detailed guidance from the FDA, these provisions cannot be required.  The final FDA regulations are expected by the end of 2012.  Industry implementation would become effective six months after publication, in early 2013.  If a restaurant that is not required to comply with Section 4205, voluntarily registers with the FDA and follows the federal disclosure guidelines, they are not subject to any state or local nutrition disclosure requirements.

There is more at stake here then complying with disclosure regulations. For owners and operators in the food industry there are real costs to be considered. The new menu requirements alone will demand printing new menus and menu boards. Nutritional analysis may have to be performed to accurately report the information to the consumer. All of these added expenses could mean thousands in unbudgeted expenditures, and will result in consumer behavioral changes where the full financial impact cannot be determined – until after the fact.

It is interesting to contemplate how each of us will react to menu labeling. Will it help change the health of our country? The jury’s still out, but we are eagerly anticipating the verdict.

© 2012 by McBrayer, McGinnis, Leslie & Kirkland, PLLC

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