Aon Hewitt Legislative Reporting

Risk. Reinsurance. Human Resources.

Global Health 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.

Recent Developments Africa and the Middle East

Jordan

Health subsidy for seniors.

The Cabinet has reportedly agreed to waive health insurance contributions from subscribers age 70 and up. The annual JD 72 will now come from general revenue. The government introduced an exemption for those age 80 and up last year and plans to stretch the subsidy to age 60 and up next year. The goal is to ultimately provide free health insurance to all ages.

Kuwait

Expatriate health insurance crisis resolved.

A health coverage termination that impacted renewals of expatriate temporary residence permits has been resolved. A Health Ministry spokesman advised the Press last month that it has made adequate arrangements for expatriate health insurance coverage for the transition from recent termination of their health insurance contract to a new government insurance company due in about three years. He also noted that the sharp hike in health insurance premiums for expatriates will not arrive until completion of the expatriate-only hospitals which is at least two years away. Meanwhile, Kuwait's first new public hospital in three decades will not provide care to foreigners.

United Arab Emirates

Dubai health insurance deadline set.

The Dubai Executive Council has now set firm deadlines for compliance with the new mandatory health insurance program. All Dubai residents must have health insurance by March 31, 2017. From December 31, 2017, all visitors to Dubai must have health insurance coverage. In addition, the Dubai Health Authority has instructed all locally operating health insurers that they

February-March 2017

Global Health Update | Aon Hewitt | February-March 2017 2

must cover care provided in Sharjah and Northern Emirates as many in the Dubai workforce commute from neighboring emirates.

Zimbabwe

Health scheme in development.

The Cabinet has approved draft legislation outlining a National Health Insurance Scheme (NHIS) and has charged the Ministry of Public Service, Labour and Social Welfare with fleshing out the plan. The scheme, which would extend coverage to the 90% of Zimbabweans currently uninsured, would be financed by a levy on workers and administered by the National Social Security Authority (NSSA). Stakeholders have misgivings about this plan which bypassed a skeptical Tripartite Negotiating Forum (TNF) and is, so far, short on funding details.

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Americas Brazil

Safety rules relaxed.

The Labor Ministry has issued an ordinance easing the occupational safety rules under the 2010 Norm 12. The norm had listed 340 safety violations that inspectors could fine employers for immediately. Under the ordinance, inspectors will now report violations and unless they pose an immediate threat to workers, a compliance timetable of up to 12 months will be negotiated.

Canada

Consultation on harassment and sexual violence.

On February 14, 2017, the Minister of Employment Workforce Development and Labour announced consultations in order to understand:

The prevalence of workplace harassment and violence in Canadian workplaces;

The types of harassing and violent behaviours that Canadians are experiencing in their workplaces;

The types of risks that are contributing to workplace harassment and violence;

The types of preventative measures, responses, and supports that are being provided; and

The types of resources that would be useful towards achieving its goal of having workplaces free from harassment and sexual violence.

The consultation ran through March 3, 2017.

Source: Taking action against harassment and sexual violence in federal workplaces

Courtesy of Aon Canada

British Columbia 2017 Budget features MSP phase out.

On February 21, 2017, British Columbia released its Budget and Fiscal Plan 2017/18—2019/20 (Budget).

The Budget indicates that British Columbia intends to begin the process of eliminating Medical Services Plan (MSP) premiums. Effective January 1, 2018, MSP premiums will be reduced by 50% for households with an annual family net income of up to $120,000. In addition, the income threshold below which households are fully exempt from MSP premiums will be increased by $2,000 (e.g., from $24,000 to $26,000 for a single individual and from $33,000 to $35,000 for a couple with two children).

Employers currently paying some or all of the MSP premiums for their employees may benefit from savings resulting from the reduction and eventual elimination of these premiums. An Aon Hewitt Information Bulletin provides additional details here.

Courtesy of Aon Canada

Guidance on duty to accommodate workers with substance dependence.

On February 21, 2017, the Canadian Human Rights Commission published Impaired at work: a guide to accommodating substance dependence.

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The purpose of the guide is to help federally regulated employers understand that substance dependence is a form of disability protected by the Canadian Human Rights Act. This means that when an employee is dependent on drugs or alcohol, an employer has an obligation to accommodate and support their recovery.

Source: Updated federal policy on substance dependence now available for Canadian employers.

Courtesy of Aon Canada

United States

Insurance consumer protection agreement (also repeated in European Union)

A January 16 press release announced a bilateral agreement between the U.S. and the EU on insurance and reinsurance. It would relax the regulatory environment for U.S.-based insurers in EU markets and vice versa while improving consumer protection and information exchange between supervisors. The agreement must now be approved by the respective legislatures. It could face resistance in the U.S. over its close ties to the previous administration's Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which the current administration aims to dismantle.

EEOC Releases Guidance for Workers and Mental Health Providers

The United States Equal Employment Opportunity Commission (EEOC) has released guidance for workers, mental health providers, and employers to help educate about federal disability rights laws and how to safely seek legal protections. The guidance includes a publication on the job rights of employees and applicants with a mental health condition and a fact sheet for mental health providers.

"Depression, PTSD, & Other Mental Health Conditions in the Workplace: Your Legal Rights" is written in a question and answer format targeted at workers, briefly explaining a worker's rights provided by the Americans with Disabilities Act. The fact sheet, "The Mental Health Provider's Role in a Client's Request for a Reasonable Accommodation at Work," is also presented in a question and answer format and clarifies the provider's role. The fact sheet includes a section on required documentation employers can point to when telling an employee what they need to evaluate the worker's condition and need for accommodation.

The guidance is available here.

The fact sheet is available here.

The Centers for Medicare and Medicaid Services Publishes Proposed Rule on Market Stabilization.

On February 17, 2017, the Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) published a proposed rule addressing the stabilization of the individual and small group markets. This proposed rule would amend standards related to special enrollment periods, guaranteed availability, and the timing of the annual open enrollment period in the individual market for the 2018 plan year; standards related to network adequacy and essential community providers for qualified health plans; and the rules around actuarial value requirements. Comments on the proposed rule are due by March 7, 2017.

The CMS proposed rule is available here.

Courtesy of Aon U.S.

CMS Issues Guidance Allowing “Grandmothered” Health Plans to Renew Through 2018.

On February 23, 2017, the Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) published guidance addressing “grandmothered” health care plans as part of the Affordable Care Act. If a current health

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insurance policy is not grandfathered but was in effect prior to 2014, the plan is considered a transitional, or a “grandmothered” policy. These plans, which were not fully Affordable Care Act compliant, and were purchased between March 23, 2010, and October 1, 2013 (in some states, policies purchased through December 31, 2013), are considered grandmothered. The latest CMS guidance allows grandmothered plans (at a state’s discretion) to renew until as late as October 1, 2018, as long as they terminate no later than December 31, 2018 (this is the same as an extension that was issued in 2016, but with the deadlines pushed out by one year).

The CMS guidance is available here.

Courtesy of Aon U.S.

President's Order Directs Executive Branch to Halt or Delay Affordable Care Act Implementation.

On January 20, 2017, President Trump issued an Executive Order that directs the heads of executive departments and agencies with responsibilities under the Affordable Care Act, including the Secretary of Health and Human Services, to use their authority to waive, defer, or delay the implementation of a potentially broad array of provisions under the Affordable Care Act “to the maximum extent permitted by law.” Among the provisions would be any requirement imposing a “tax, penalty, or regulatory burden” on individuals, insurers, and others. The Order also directs the departments and agencies to use their authority to provide greater flexibility to states and to encourage the development of an open interstate healthcare and health insurance market. For more information, see the Aon Hewitt bulletin, President Trump Issues Executive Order on Affordable Care Act, in the Aon Hewitt Publications section of this newsletter.

The Executive Order is available here.

The Aon Hewitt bulletin, which summarizes the Executive Order, is available here.

Courtesy of Aon U.S.

Congress Passes Budget Resolution Enabling Expedited Repeal of Affordable Care Act.

Congress has passed a fiscal 2017 budget resolution providing for a budget reconciliation process that will allow the Affordable Care Act to be repealed on an expedited basis with simple majority votes, if Congress so chooses. The House and Senate passed the budget resolution on January 13, 2017, and January 12, 2017, respectively. The votes were 227-198 in the House and 51-48 in the Senate.

S. Con. Res. 3 is available here.

Courtesy of Aon U.S.

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Asia

China

Occupational health agenda.

The State Council has elevated occupational safety and occupational disease treatment to inclusion in the 13th Five-Year Plan (2016-20). Along with urging technological advances and setting stricter penalties (including plant closures) to curb occupational injury, the government plans to enhance benefits for victims and upgrade both diagnosis and treatment facilities. Another front in this campaign will be to help migrant workers and other vulnerable populations who often don't have employment contracts to claim compensation from their employers.

Disabled worker levy formula revised.

The Administrative Measures for Collection and Use of Employment Security Funds for the Disabled introduces a new calculation for setting employer contributions to the Disabled Persons' Employment Security Fund. Established in 1990, the fund pays for rehabilitation and training of disabled workers. Companies with disabled employees below a certain threshold have been levied an amount based on a percentage (1.5% on average but higher in the largest cities) of average local salary. The new formula, on a slow phase-in that started in 2015, makes it a percentage of average salary in the company, which is making a huge increase in contributions for affected multinationals.

Smart health care initiative.

An interministerial action plan aims to engage over 100 companies over the next four years to provide universal access to high-tech diagnostic, health management, and elder care services. New technologies, some still in development, will create a unified information sharing system, assess individual health status, and track major trends. In addition, there will be wearable devices for health management and monitoring, as well as home care robots.

Hong Kong

Consultation report on Voluntary Health Insurance Scheme (VHIS).

The Food and Health Bureau has published a report evaluating response to the 2014-15 public consultation on the VHIS. The consultation drew largely positive responses to its proposals for minimum quality, transparency, and coverage requirements in the health insurance sector. Mandatory coverage would include pre-existing conditions, and cost-sharing would be limited. The minimum requirements of guaranteed acceptance with premium loading cap (supported by a publicly funded “High Risk Pool”) and portable policy will be dropped. The government will now revise the proposal in light of this feedback and consult with stakeholders on the draft regulations. Guidelines and a tax regime should be finalized in 2018 and a VHIS office will be in place by then.

2017-18 Budget highlights.

The 2017-18 Budget put forward a few proposals related to health care and the Mandatory Provident Fund (MPF):

The Financial Secretary is working out the details of a tax deduction to encourage the purchase of "regulated health insurance products."

There would be unspecified compensation, "necessary financial support," to employers for the gradual removal of the MPF offsetting mechanism.

The minimum eligibility age for the Elderly Health Care Voucher Scheme would drop from 70 to 65.

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India

Remuneration, commission limits set for insurers.

The Insurance Regulatory and Development Authority (IRDA) recently published Regulation 25/137/2016 implementing the insurer remuneration rules under Insurance Laws (Amendment) Act 2015. It sets caps on the commissions and remuneration that may be paid to insurance agents and insurance intermediaries, including brokers. Other rewards including incentive compensation, gratuities, and competition prizes may not bring the total over those thresholds. Different limits are set for life insurance, health insurance, and general insurance. Insurers must have a detailed written policy on commissions, remuneration, and rewards approved by their board of directors. The rules go into effect on April 1, 2017.

Employee State Insurance Corporation (ESIC) threshold lifted.

The Ministry of Labour and Employment has finalized the regulation raising the monthly wage threshold for mandatory ESIC coverage from Rs 15,000 to Rs 21,000, effective January 1, 2017. Overtime pay does not count towards this threshold. Employers contribute 4.75% of salary and the worker pays 1.75% for sickness, disability, maternity, and death benefits. This move coincides with a new "employer friendly" ESIC scheme to facilitate registration during the first quarter of 2017.

2017-18 Budget recommends free choice for retirement and health schemes.

Union Budget 2017-18 and the Economic Survey touch on a few interesting topics:

The Economic Survey proposes giving workers a choice of the Employee Provident Fund (EPF) or the National Pension Scheme (NPS). They should also have the option of diverting their health care premiums from Employee State Insurance (ESI) to a private health insurer. This would be the worker's decision, not the employer's.

The NPS would allow partial withdrawals of up to 25% of employee contribution for people who have contributed at least three years. This would apply for withdrawals made after April 1, 2017.

The NPS contribution ceiling for self-employed people would double to 20%.

The budget confirms that the long-running project of consolidating various labour laws into four codes (wages, industrial relations, social security, and welfare and safety and working conditions) remains a top priority but did not offer a timetable.

The Economic Survey broached the topic of consolidating an array of social programs into a universal basic income.

Iran

Insurer minimum capital requirements set.

The Cabinet has endorsed a proposal on setting minimum capital requirements for insurance companies. For existing firms, it would be IRR 1 trillion, while new insurers would need an additional 2-300 billion (life and nonlife, respectively) and the floor for reinsurers will be IRR 2.5T (down from 4T). Industry regulator Central Insurance of Iran also announced the imminent release of corporate governance codes for the insurance sector. Meanwhile, the regulator has reportedly suspended the issuing of new licenses for general insurers as part of an effort to encourage more specialist insurers.

Kazakhstan

Contributions for compulsory health insurance scheme modified.

The Ministry of Health has amended the contribution rules under its obligatory national health insurance scheme:

Employer contributions, which were slated to start at 2% on July 1, 2017 then rise to 5% in 2020, will start at 1% in July, then plateau at 3% in 2020.

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The employee contribution will still start at 1% in 2019 then rise to 2% in 2020.

Foreigners with permanent residence will face the same contribution level as Kazakh citizens while visiting foreigners will be exempt from the scheme, but must supply evidence of their own health insurance.

Self-employed professionals will pay 5% from July 1, 2017.

Kazakh citizens temporarily residing in another country will contribute 5% of the minimum wage from January 1, 2018.

South Korea

Health reform agenda.

The Health Ministry has outlined a health reform initiative centered on a more equitable model for health insurance premiums. As premiums are based on a worker's wages, with assets factored in only for the self-employed, the wealthy often register as dependents or get very modest low-commitment jobs just to appear on a company payroll. While about 80% of the population would benefit from lower health insurance fees, the others would see a much higher rate reflecting assets, interest income, and pensions. The legislation is expected to arrive in May 2017 and should come into force in the second half of 2018.

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Europe Austria

Re-entry rules following sick leave.

A part-time re-entry arrangement for people returning to work after at least six weeks of sick leave will come into effect on July 1, 2017. The details should be negotiated between employer and employee. A worker must be on the job at least three months to qualify. Workers will generally be entitled to a partial subsidy of the pay lost while working part-time. This "compensation payment" is supplied by the health insurance fund. The reduced hours scheme runs from one to six months, renewable up to 18 months total. Working hours must average at least 50% of normal hours, but may range from 30% to 75%.

Czech Republic

Smoking ban passed.

Parliament has passed the Anti-Smoking Bill and it now awaits the President's signature. The current smoking law's list of places where smoking is forbidden will be replaced by the more sweeping "all interior premises that are freely accessible to the public." The bill would allow for smoking in "structurally separated premises" that could not spread smoke to protected areas. The President, a chain smoker, is nonetheless expected to sign the bill and it should take effect on May 31, 2017.

European Union

Occupational safety initiatives.

The European Commission has unveiled a 21st century "action plan" for occupational safety and health (OSH). Among the initiatives:

Several more carcinogenic chemicals would face new constraints, including exposure limits.

The commission will consult with social partners on modernization and strengthening of OSH rules. It will also coordinate with Member States on sharing best practices.

New guidance and tools will help small businesses comply with OSH rules.

The announcement appends FAQs on occupational health modernization and workplace carcinogens.

Insurance consumer protection agreement.

A January 16 press release announced a bilateral agreement between the U.S. and the EU on insurance and reinsurance. It would relax the regulatory environment for U.S.-based insurers in EU markets and vice versa while improving consumer protection and information exchange between supervisors. The agreement must now be approved by the respective legislatures. It could face resistance in the U.S. over its close ties to the previous administration's Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which the current administration aims to dismantle.

Georgia

Purge of universal health rules challenged.

A governmental decree that came into force on March 1 stripped universal health coverage from the estimated 550,000 citizens who have private health insurance coverage. The health insurance sectors warns that there is a

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fundamental misunderstanding behind this that has unintended consequences for about 150,000 of the affected policyholders and for the insurance industry. The health insurance products for that large minority of the private health insurance market are "built package" policies designed to complement, not replace universal health care. If these policies no longer have a role in the market, the overburdened universal health system will get a new influx of members so the government is urged to revise the decree to at very least exempt the built package policies.

Ireland

Relaxation of community rating rules proposed.

The Health Insurance Authority (HIA) has opened a public consultation on lifetime community rating in private health insurance. The "late entry loading," a premium supplement of 2% per year for people who first take out life insurance above age 34, appears to have had some unintended consequences. People joining a new scheme through their employers are often erroneously charged the loading supplement and people who move to or back to Ireland are penalized for coverage gaps they didn't choose. A review of the late-entry loading scheme will consider the Australian model which has been modified to cap the loading period at 10 years and to exclude significant periods spent overseas from the penalty period. Submissions are welcome through March 3, 2017.

Poland

Health administration to devolve to the local level.

The Health Ministry has previewed a health reform agenda featuring devolution of the National Health Fund (NFZ) role to Provincial Health Offices. The health contribution would be eliminated and all residents of Poland would be entitled to free basic health care financed by general revenues. Raising health care to 6% of the GDP by 2025 would shrink waiting lists and raise health sector salaries. The bill on NFZ dissolution should arrive in late 2017 and is expected to be implemented in 2018.

Romania

Tax relief for pensioners, private health insurance.

Parliament has passed legislation that exempts state pension income from the 5.5% health levy and makes all state pensions under 2,000 lei (US $470) per month fully tax-exempt. This took effect on February 1, 2017. The Prime Minister has also secured quick passage of measures raising the minimum state pension by 30% to 520 lei per month and increasing the minimum wage by 16% to 1,450 lei per month.

In addition, a new incentive to patronize the private health sector took effect on February 1, 2017. A subscription to a private hospital will now earn a tax exemption of up to EUR 400 per year. The employer will be responsible for deducting this amount from payroll taxes if the plan is paid by the employee. If the plan is sponsored by the company, the employee has to personally apply for deduction by asking for reimbursement from the fiscal authorities.

Slovenia

Health insurance reform bill.

The Health Ministry has posted information on its draft health care and health insurance reform bill. In short:

Voluntary top-up health insurance would be eliminated and there would be a new compulsory health insurance scheme with contributions based on income level. The monthly premium would range from EUR 20 to EUR 75.

The basket of services under this scheme and a list of services not covered would be readily accessible.

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Sickness leave would be limited to one year or 18 months within a two-year period. Those exceeding that amount would be evaluated for a disability pension.

With few exceptions, including work injuries and occupational diseases, the disability benefit would be 80% of pay with a minimum set at 80% of minimum wage and maximum at two and a half times average pay.

There will be a temporary cash infusion to the health system in an effort to clear the backlog on waiting lists by the end of 2017.

The ministry aims to launch a public consultation on the bill and open a web portal for it early this year.

Sweden

Rehab coordinators for disabled workers.

The Social Minister announced that following successful completion of a pilot project, the government will convene a working group to develop the occupation of rehabilitation coordinator. Workers on disability leave will have rehab coordinators both to help them return to the workforce and to serve as liaison with social insurance, health providers, and the employer.

Regulatory environment for consultancy services.

The Minister for Financial Markets has assigned the Swedish Pensions Agency and the Swedish Financial Supervisory Authority (FI) to draft legislation reforming the consultancy services in the PPM defined contribution system. Asserting that the sector has become rife with "rogue actors," the minister said that a tighter regulatory environment will include mandatory licensing from the FI for anyone entering the field. The system would have greater sustainability and transparency as well as lower fees. Companion legislation would transpose the EU Insurance Distribution Directive (IDD) 2016/97/EU ensuring greater consumer protection in the insurance sector. IDD would reinforce the government's PPM efforts with a clearer definition of consultancy services to confirm that companies offering these services are subject to financial regulation.

Switzerland

Corporate governance guidance for insurance sector.

Swiss financial regulator, FINMA, has published the completely revised Circular 2017/2 Corporate governance, risk management and internal control system at insurers, which expands on earlier corporate governance guidance for the sector. Among the requirements that came into effect on January 1, 2017:

Insurers must transition to stringent new director independence guidelines by December 31, 2019. Most notably, at least one-third of the board must be independent.

An "objective and independent" risk management and internal control system must be established.

A compliance function must produce an annual report on the insurer's compliance risk.

Ukraine

Tax regime for temporary disability benefit.

New State Social Insurance Fund (SSIF) guidelines clarify the income tax status of temporary disability benefits. These benefits come under the definition of salary under personal income tax rules and it is the employer's duty to withhold it. The guidelines note that all other social benefits delivered from SSIF are exempt from personal income tax.

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© 2017 Aon plc This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Aon Hewitt’s preliminary analysis of publicly available information. The content of this document is made available on an “as is” basis, without warranty of any kind. Aon Hewitt disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Aon Hewitt reserves all rights to the content of this document.