ACA Penalty Assessments Place Focus on ACA Reporting
|
03/08/2018
|
By: Jason Lacey
|
Late
last
year,
the
IRS
began
issuing
“226J”
letters
to
employers
with
proposed
ACA
penalty
assessments
for
2015.
Employers
that
received
these
letters
often
saw
eye-popping
penalty
amounts.
Most
assessments
were
at
least
$100,000,
with
reports
of
assessments
well
into
seven
figures.
But
the
news
has
not
been
all
bad.
Employers
who
have
engaged
with
the
IRS
have
generally
found
the
IRS
willing
to
work
with
them
to
provide
additional
time
to
evaluate
the
assessments
and
prepare
a
response.
Some
employers
have
succeeded
in
securing
significant
reductions
in
the
assessed
penalties.
A
consistent
theme
among
employers
who
received
penalty
assessment
letters
has
been
a
problem
with
their
reporting
on
Forms
1094-C
and
1095-C.
Many
of
the
proposed
penalty
assessments
can
be
traced
directly
to
errors
in
the
forms
that
were
filed
for
2015.
For
example,
employers
who
failed
to
answer
the
question
on
Form
1094-C
about
whether
they
offered
coverage
to
enough
of
their
full-time
employees
were
presumed
not
to
be
offering
coverage.
Problems
with
the
month-by-month
codes
used
on
Form
1095-C,
such
as
for
months
during
which
an
individual
was
not
employed,
also
have
been
a
source
of
issues.
All
of
these
notifications
point
to
at
least
one
clear
conclusion:
Getting
the
ACA
reporting
correct
makes
a
difference.
Reporting
is
not
just
an
academic
exercise.
The
IRS
Continue Reading...
|
|
Congress Repeals ACA's Auto-Enrollment Requirement
|
11/15/2015
|
By: Jason Lacey
|
Need
something
to
add
to
your
list
of
things
to
be
thankful
for
this
year?
As
part
of
the
Bipartisan
Budget
Act
of
2015,
Congress
has
repealed
the
auto-enrollment
requirement
under Section
18A
of
the
Fair
Labor
Standards
Act
(FLSA),
which
was
added
by
the
Affordable
Care
Act.
This
provision would
have
required
an
employer
that
has
more
than
200
full-time
employees
to
automatically
enroll
any
new
full-time
employee
in
one
of
the
employer's
health
plans,
unless
the
employee
affirmatively
opted
out
of
coverage.
Implementation
of
this
requirement
had
been
indefinitely
delayed,
pending
the
issuance
of
interpretive
guidance.
As
such,
employers
will
not
feel
any
immediate
impact
from
this
legislation.
But
the
auto-enrollment
requirement
raised
a
number
of
sticky
issues
that
were
likely
to
present
challenges,
so
the
repeal
is
a
welcome
development
for
regulation-weary
employers.
|
|
Supreme Court Upholds ACA Tax Credits in Federal Exchanges
|
06/25/2015
|
By: Jason Lacey
|
In
its
much-anticipated
decision
in
King
v.
Burwell,
the
Supreme
Court
has
upheld
the
availability
of
the
ACA's
premium
assistance
tax
credits
for
individuals
purchasing
insurance
through
a
federally
facilitated
exchange,
including
the
exchanges
maintained
for
residents
of
Kansas
and
Missouri.
Background.
This
case
addressed
a
seemingly
simple
proposition:
Whether
the
phrase
"an
Exchange
established
by
the
State"
meant
only
exchanges
actually
established
and
operated
by
one
of
the
50
states
or
the
District
of
Columbia
or
whether
it
also
included
exchanges
operated
by
the
federal
government
in
states
that
declined
to
establish
their
own
exchanges.
If
the
language
meant
only
exchanges
actually
established
and
operated
by
one
of
the
50
states
or
the
District
of
Columbia,
the
ACA's
premium
assistance
tax
credits
would
not
be
available
to
the
residents
of
the
34
states
that
did
not
establish
their
own
exchanges.
This
would
have
a
ripple
effect
under
the
ACA
by
potentially
limiting
the
impact
of
the
individual
mandate
and
the
employer
mandate
and
impairing
the
operation
of
the
individual
insurance
market.
The
Court's
Analysis. The
Supreme
Court
concluded
that
the
statutory
language (“an
Exchange
established
by
the
State”)
was
ambiguous
and
that
its
meaning
should
be
interpreted
in
the
context
of
the
broader
structure
of
the
ACA.
It
then
held
that
the
overall
statutory
scheme
of
the
ACA
compelled
the
conclusion
that
the
tax
credits
should
be
available
to
individuals
purchasing
coverage
through
federally
facilitated
exchanges.
Otherwise
the
individual
insurance
market
would
be
destabilized
in
states
with
federally
facilitated
exchanges,
likely
leading
to
Continue Reading...
|
|
New IRS Q&As Clarify ACA Reporting Issues
|
05/29/2015
|
By: Jason Lacey
|
The
IRS
has
updated
two
sets
of
Q&As
on
its
website
to
clarify
a
variety
of
issues
related
to
ACA
reporting
on
Forms
1094-C
and
1095-C.
Here
are
some
highlights:
- ALE
With
No
Full-Time
Employees.
An
employer
that
qualifies
as
an
"ALE
member"
does
not
have
to
report
under
Code
Section
6056
if
the
employer
does
not
have
any
full-time
employees
for
any
month
of
the
year.
This
might
happen,
for
example,
if
an
entity
is
part
of
a
larger
group
of
entities
that
collectively
employ
50
or
more
FTEs,
but
the
particular
entity
in
question
has
no
full-time
employees.
This
clarification
would
allow
the
employer
to
avoid
filing
Forms
1094-C
and
1095-C,
unless
the
employer
actually
provides
coverage
to
one
or
more
part-time
employees
under
a
self-insured
plan
sponsored
by
the
employer.
- Hand
Delivery
of
Form
1095-C.
An
employer
that
is
required
to
distribute
Form
1095-C
to
an
employee
may
hand
deliver
the
Form
1095-C.
It
was
unclear
under
prior
guidance
whether
the
only
permitted
distribution
methods
were
first
class
mail
and
electronic
delivery
(with
consent).
- Employee's
SSN
Required
for
Form
1095-C.
When
reporting
individuals
to
whom
coverage
is
provided
(either
on
Form
1095-B
or
Part
III
of
Form
1095-C),
there
is
an
option
to
use
an
individual's
date
of
birth
if
the
individual
has
not
provided
an
SSN.
However,
when
providing
Form
1095-C
to
an
employee,
the
employer
must
Continue Reading...
|
|
New ACA FAQs Clarify the Preventive Care Mandate
|
05/15/2015
|
By: Jason Lacey
|
A
new
set
of
tri-agency
FAQs
has
clarified
several
issues
related
to
the
preventive
care
mandate.
Among
the
highlights:
- BRCA
Testing.
A
plan
subject
to
the
preventive
care
mandate
must
cover (without
cost-sharing) BRCA
genetic
testing
for women
who
have
had
a
prior
non-BRCA-related
breast
cancer
or
ovarian
cancer
diagnosis,
even
if
those
women
are
currently
asymptomatic
and
cancer-free
and
even
if
there
is
no
family
history
of
BRCA-related
cancer.
- Contraception.
A
plan
subject
to
the
preventive
care
mandate
must
cover
(without
cost-sharing)
at
least
one
form
of
contraception
in
each
of
the
18
distinct
categories
of
contraceptive
methods
identified
by
the
FDA.
A
plan
may
use
reasonable
medical
management
techniques
to
encourage
use
of
specific
services
or
FDA-approved
items
within
a
particular
category
(such
as
steering
individuals
toward
generic
prescription
drugs),
so
long
as
the
plan
maintains
an
accessible
and
expedient
exceptions
process
to
allow
for
coverage
(without
cost-sharing)
of
a
particular
service
or
item
determined
by
an
individual's
attending
provider
to
be
medically
necessary
for
that
individual.
- Well-Woman
Preventive
Care
for
Dependents.
If
a
plan
subject
to
the
preventive
care
mandate
covers
dependent
children, such
children
must
be
provided
(without
cost-sharing)
the
full
range
of
recommended
preventive
services
applicable
to
them
based
on
their
age
group
and
health
condition.
This
may
include,
for
example,
covering
services
for
prenatal
care
of
a
pregnant
dependent
child.
- Colonoscopy
Continue Reading...
|
|
An ACA Anniversary
|
03/23/2015
|
By: Jason Lacey
|
It
should
not
go
without
notice
that
today
marks
the
fifth
anniversary
of
the
enactment
of
the
Affordable
Care
Act.
Love
it
or
hate
it,
it
is
difficult
to
imagine
a
single
piece
of
federal
legislation
in
the
last
30
years
that
has
dominated
the
landscape
in
the
way
the
ACA
has.
It
has
been
to
the
Supreme
Court
three
times
in
its
short
life,
with
the
outcome
of
the
third
visit
still
in
question.
It
has
spawned
thousands
of
pages
of
complex
regulations
that
affect
insurers,
employers,
and
individuals.
It
has
implemented
reforms
that
have
already
substantially
changed
both
the
individual
and
group
markets
for
health
insurance.
And
we're
just
getting
started.
What
will
the
next
five
years
bring?
A
wholesale
repeal
seems
unlikely,
but
can
never
be
totally
ruled
out.
On
many
of
the
elements
that
have
already
been
implemented,
a
shift
from
interpretation
to
enforcement
may
start
to
occur.
But
there
will
also
be
countless
further
pages
of
interpretive
guidance
to
digest.
And
one
more
big
piece
of
the
puzzle likely will
be
snapped
into
place
with
the
implementation
of
the
"Cadillac"
tax
in
2018.
Whatever
may
come,
the
ACA
seems
certain
to
provide
a
continued
source
of
conversation
and
complexity
that
will
impact
all
of
us.
So
raise
a
glass
(or
a
finger)
to
acknowledge
the
moment
and
look
forward
(or
not)
to
what
may
lie
ahead.
It's
sure
to
be
interesting.
|
|
Federal Legislation Would Clarify Wellness Plan Treatment Under ADA and GINA
|
03/16/2015
|
By: Jason Lacey
|
Federal
legislation
has
been
introduced
that
would
clarify
the
treatment
of
employer
wellness
plans
under
the
ADA
and
GINA.
It
is
styled
as
the
"Preserving
Employee
Wellness
Programs
Act."
Under
the
act,
any
wellness
plan
that
meets
the
requirements
imposed
by
regulations
issued
under
HIPAA
and
the
ACA
would
not
be
treated
as
violating
the
ADA
or
Title
I
or
Title
II
of
GINA
solely
because
the
plan
provides
a
reward.
The
legislation
would
respond
to
confusion
over
the
EEOC's
position
on
how
employer
obligations
under
the
ADA
and
GINA
intersect
with
the
HIPAA
and
ACA
rules
that
allow
providing
a
reward
(or
penalty)
to
employees
who
participate
in
a
"health-contingent"
wellness
program.
Although
the
EEOC
has
never
taken
a
formal
regulatory
position
on
the
issue,
it
has
sued
several
employers
over
their
wellness
programs,
including
at
least
one
program
that
appeared
to
satisfy
the
requirements
under
HIPAA
and
the
ACA
(see
prior
articles
here,
here,
and
here).
The
EEOC
is
said
to
be
working
on
a
set
of
regulations
to
address
this
issue
that
may
be
near
release.
Employers
will
want
to
keep
an
eye
on
both
these
legislative
and
regulatory
developments,
as
they
could
have
an
important
(and
hopefully
helpful)
impact
on
wellness
plan
design.
A
copy
of
Senate
Bill
620,
the
Preserving
Employee
Wellness
Programs
Act,
is
here.
|
|
ACA Back in Front of the Supreme Court
|
03/06/2015
|
By: Jason Lacey
|
The
Supreme
Court
heard
oral
arguments
this
week
in
King
v.
Burwell,
the
latest
challenge
to
the
Affordable
Care
Act.
At
issue
in
the
case
is
whether
the
tax
credits
that
are
available
to
subsidize
the
cost
of
health
insurance
coverage
are
available
in
all
of
the
public
exchanges
or
just
exchanges
that
are
operated
by
states.
If
the
credits
are
only
available
in
state-based
exchanges,
that
would
severely
limit
access
to
the
credits,
because
most
states
(37
of
them)
have
some
form
of
an
exchange
operated
by
the
federal
government.
This
could
have
an
impact
beyond
individual
access
to
the
tax
credits.
For
example,
whether
and
to
what
extent
large
employers
may
be
subject
to
penalty
under
the
"play-or-pay"
rules
depends
on
whether
and
to
what
extent
employees
of
those
employers
are
able
to
qualify
for
tax
credits.
If
tax
credits
aren't
available
to
employees
because
the
exchange
in
their
state
is
a
federally
operated
exchange
(as
in
Kansas),
the
employer
might
avoid
penalties,
even
if
it
is
not
offering
the
type
of
coverage
required
by
the
play-or-pay
rules.
It's
hard
to
predict
how
the
case
will
come
out.
The
court
is
expected
to
break
along
the
typical
ideological
lines,
with
the
result
depending
on
how
the
"swing"
votes
go.
We
should
have
an
answer
sometime
this
summer.
A
transcript
of
the
oral
arguments
is
here.
|
|
IRS Provides Preliminary Cadillac Tax Guidance
|
02/28/2015
|
By: Jason Lacey
|
The
IRS
recently
issued
Notice
2015-16,
which
represents
the
first
step
in
yet
another
significant
ACA
guidance
project
that
will
unfold
over
the
next
two
years.
This
project
will
flesh
out
the
scope
and
mechanics
of
so-called
“Cadillac”
tax
enacted
as
part
of
the
ACA.
Here
is
an
overview
of
the
initial
guidance.
Background
Beginning
in
2018,
a
40%
excise
tax
will
be
imposed
on
the
value
of
“applicable
employer-sponsored
coverage”
provided
to
an
employee
each
year,
to
the
extent
that
value
exceeds
a
threshold
amount.
The
statutory
thresholds
are
$10,200
for
self-only
coverage
and
$27,500
for
other-than-self-only
coverage.
There
are
some
potential
upward
adjustments
to
the
threshold
amounts,
including
for
cost
of
living,
although
the
thresholds
are
not
anticipated
to
adjust
as
quickly
as
the
growth
in
healthcare
costs.
Items
Included
in
Applicable
Coverage
Notice
2015-16
begins
to
clarify
the
coverage
that
will
(and
will
not)
be
included
in
“applicable
employer-sponsored
coverage”
for
purposes
of
the
Cadillac
tax,
in
addition
to
major
medical
coverage.
- Executive
Physicals
and
HRAs.
Executive
physical
programs
and
HRAs
will
be
included.
- HSAs.
Employer
contributions
to
HSAs
and
employee
salary-reduction
contributions
to
HSAs
will
be
included.
Employee
after-tax
contributions
(i.e.,
employee
contributions
made
outside
a
cafeteria
plan)
will
not
be
included.
- On-Site
Clinics.
Coverage
through
on-site
clinics
generally
will
be
included,
but
the
IRS
is
considering
an
exception
for
on-site
clinics
that
offer
only
“de
Continue Reading...
|
|
IRS Provides Limited Penalty Relief for Tax Credit Overpayments
|
01/29/2015
|
By: Jason Lacey
|
Individuals
who
obtained
premium
tax
credits
to
offset
the
cost
of
purchasing
insurance
through
a
public
exchange
during
2014
must
reconcile
those
credits
when
they
file
their
2014
tax
returns.
If
it
turns
out
they
received
more
credits
than
they
were
entitled
to
receive,
they
must
pay
back
some
or
all
of
the
excess.
Tax
Problems.
This
repayment
obligation
could
trigger
a
couple
of
tax
problems
for
the
individual.
First,
they
may
end
up
with
a
tax
liability
on
their
return
when
they
were
otherwise
expecting
a
refund
(or
at
least
not
expecting
to
pay
anything).
Second,
they
could
owe
a
penalty
for
underpaying
estimated
taxes
(not
paying
their
tax
liability
soon
enough).
Limited
Penalty
Relief.
The
IRS
has
provided
penalty
relief
for
2015
(relating
to
the
2014
tax
year)
to
address
these
two
problems.
However,
the
relief
is
limited
to
certain
penalties
associated
with
reconciliation
of
the
premium
tax
credit.
There
is
no
relief
for
penalties
associated
with
underpayments
due
to
responsibility
for
the
individual
mandate
penalty.
Late
Payment
Relief.
The
tax
code
imposes
a
delinquency
penalty
for
late
payment
of
taxes
that
are
due.
This
penalty
will
be
abated
for
2014
for
taxpayers
who
(1)
are
otherwise
current
with
filing
and
payment
obligations,
(2)
have
a
balance
due
for
2014
due
to
excess
premium
tax
credits,
and
(3)
report
the
excess
tax
credits
on
a
timely
filed
(including
extensions)
2014
tax
return.
Estimated
Tax
Penalty
Relief.
The
tax
code
also
imposes
a
penalty
for
underpayment
of
estimated
taxes.
This
penalty
will
be
Continue Reading...
|
|
The Save American Workers Act
|
01/12/2015
|
By: Jason Lacey
|
Congress
is
already
at
work
in
early
2015
and
attempting
to
make
changes
to
the
Affordable
Care
Act.
The
House
passed
legislation
to
change
the
definition
of
full-time
employment
from
30
hours
per
week
to
40
hours
per
week.
Now
its
up
to
the
Senate
to
pass
a
similar
measure.
While
Congress
seems
intent
on
making
changes
to
the
Affordable
Care
Act,
the
White
House
isn't
likely
to
sign
off
on
such
a
measure.
Stay
tuned
for
further
developments
as
the
measure
works
its
way
through
the
Senate.
The
introduction
of
this legislative
proposal is
likely
to
be just
the
first
of
many actions
Congress
will
take in
the
coming
months.
|
|
IRS and HHS Rein in Minimum Value Plans
|
11/05/2014
|
By: Jason Lacey
|
New
guidance
from
the
IRS
and
HHS
aims
to
quickly
scuttle
the
use
of
health
plans
designed
to
push
the
limits
of
minimum
value.
These
plans
(sometimes
referred
to
in
the
market
simply
as
“minimum
value
plans,”
“MVPs,”
or
“MV
lite”)
aimed
to
reduce
cost
by
excluding
coverage
for
key
benefits,
such
as
physician
services
or
inpatient
hospitalization,
but
were
nonetheless
said
to
provide
minimum
value
because
they
qualified
under
the
MV
calculator.
The
Concept.
The
idea
behind
MVPs
was
to
create
a
plan
that
would
allow
a
large
employer
to
avoid
all
penalties
under
the
ACA’s
employer
shared
responsibility
mandate
at
relatively
low
cost.
As
minimum
essential
coverage
that
provided
minimum
value,
an
MVP
would
allow
a
large
employer
to
avoid
all
penalties,
so
long
as
the
plan
was
affordable.
And
due
to
the
relatively
low
cost,
employers
could
make
MVPs
affordable
with
little
or
no
premium
subsidy.
But
the
effect
of
MVPs
was
not
limited
to
penalty
avoidance
by
employers.
Employees
who
are
offered
coverage
under
an
affordable,
minimum
value
plan
are
ineligible
for
premium
tax
credits
(PTCs)
through
state
and
federal
exchanges,
even
if
they
turn
down
the
employer-sponsored
coverage.
And
with
MVPs,
this
meant
employees
could
be
knocked
out
of
PTC
eligibility
with
an
offer
of
coverage
under
a
plan
that
intentionally
excluded
a
significant
category
of
benefits
(e.g.,
inpatient
hospitalization).
This
may
well
have
been
their
undoing.
MV
Calculator.
Why
did
this
seem
to
work?
It
all
came
down
to
the
MV
calculator.
Final
HHS
regulations
and
Continue Reading...
|
|
CMS Indefinitely Delays HPID Implementation
|
11/01/2014
|
By: Jason Lacey
|
On
the
eve
of
the
deadline
for
large
controlling
health
plans
(CHPs)
to
obtain
an
HPID,
CMS
has
announced
that
it
is
indefinitely
delaying
enforcement
of
the
regulations
that
require
obtaining
an
HPID
and
using
the
HPID
in
covered
transactions.
The
announcement
is
effective
October
31,
2014
and
applies
“to
all
HIPAA
covered
entities,
including
healthcare
providers,
health
plans,
and
healthcare
clearinghouses.”
What
Does
This
Mean
for
Large
Health
Plans?
The
immediate
impact
of
this
announcement
appears
to
be
that
large
CHPs
are
no
longer
required
to
obtain
an
HPID
by
the
November
5,
2014
deadline.
Whether
or
when
they
may
be
required
to
do
so
in
the
future
will
depend
on
when
(or
if)
CMS
decides
to
begin
enforcing
the
regulations
again.
What
Does
This
Mean
for
Small
Health
Plans?
The
deadline
for
small
CHPs
to
obtain
an
HPID
was
November
5,
2015.
Technically,
that
deadline
has
been
suspended
as
well,
although
with
a
year
between
now
and
then,
it’s
possible
that
CMS
could
reverse
course
and
begin
enforcing
the
rule
again
before
then.
So
small
plans
should
monitor
the
status
of
the
rule,
but
likely
will
not
want
to
attempt
to
obtain
an
HPID
until
further
notice.
Where
Did
This
Come
From?
The
CMS
announcement
references
a
September
23,
2014
report
from
the
National
Committee
on
Vital
and
Health
Statistics
(NCVHS).
In
that
report,
the
NCVHS
unequivocally
recommended
that
covered
entities
not
begin
using
an
HPID
in
transactions
involving
health
plans.
The
report
argues
that
there
is
already
a
Continue Reading...
|
|
CMS FAQs Clarify HIPAA Health Plan Identifier (HPID) Requirement
|
10/13/2014
|
By: Jason Lacey
|
Health
plans,
including
some
employer-sponsored
plans,
face
a
looming
deadline
to
obtain
a
HIPAA
health
plan
identifier
(HPID).
There
have
been
many
questions
surrounding
this
requirement,
particularly
as
it
applies
to
employer-sponsored
plans.
Recent
FAQ
guidance
from
CMS
(here)
has
provided
some
key
clarifications,
although
questions
remain.
Here's
what
you
need
to
know.
Background.
HIPAA
requires
health
plans
and
other
covered
entities
to
engage
in
certain
covered
transactions
in
a
standardized
way.
This
is
sometimes
referred
to
as
the
HIPAA
"transactions
rule."
The
details
of
that
rule
are
beyond
what
can
be
addressed
here.
But
the
key
thing
to
understand
is
that
the
ACA
amended
the
transactions
rule
to
require
health
plans
to
obtain
a
specific
identifier
(the
HPID)
to
be
used
in
connection
with
covered
transactions.
Deadline.
For
plans
that
are
required
to
get
an
HPID,
the
deadline
is
November
5,
2014,
unless
the
plan
is
a
"small"
health
plan,
in
which
case
the
deadline
is
November
5,
2015.
Small
Health
Plan.
A
small
health
plan
is
a
plan
that
has
$5
million
or
less
in
annual
receipts.
The
CMS
FAQs
tell
us
that
annual
receipts
mean
premiums
paid
during
the
last
full
fiscal
year,
in
the
case
of
fully
insured
plans,
and
health
care
claims
paid
during
the
last
full
fiscal
year,
in
the
case
of
self-insured
plans.
Plans
that
are
partially
insured
and
partially
self-insured
combine
the
premiums
and
health
care
claims
paid
to
determine
their
total
annual
receipts.
Stop-Loss
Premiums.
It's
not
clear
whether
annual
receipts
are
intended
to
Continue Reading...
|
|
New 125 Plan Election Change Addresses Key ACA Concern
|
09/29/2014
|
By: Jason Lacey
|
Employers
considering
the
look-back
measurement
method
to
identify
full-time
employees
for
purposes
of
the
ACA’s
employer
shared
responsibility
mandate
have
expressed
concern
about
the
impact
on
employees
who
are
treated
as
full-time
for
a
stability
period
but
experience
a
reduction
in
actual
hours
of
service.
Locked-In
Status.
Employers
recognize
that
these
employees
may
prefer
to
drop
employer-sponsored
coverage
upon
the
reduction
in
hours.
But
employers
that
want
to
avoid
penalty
exposure
under
the
ACA
must
continue
to
make
these
employees
eligible
for
coverage,
because
they
are
recognized
as
full-time.
And
because
there
is
no
loss
of
eligibility,
the
employees
cannot
make
a
voluntary
decision
to
drop
coverage
in
the
middle
of
the
year.
There
is
no
change
in
status
that
will
support
an
election
change
under
the
existing
125
plan
regulations.
The
employees
are
locked-in.
New
Election
Change.
A
recent
notice
from
the
IRS
provides
important
relief
from
this
problem
by
adding
a
new
election-change
event
to
the
cafeteria-plan
rules.
An
employee
can
now
make
a
mid-year
election
to
revoke
health
plan
coverage
(not
including
health
FSA
coverage)
upon
a
reduction
in
hours
of
service,
if
the
following
conditions
are
satisfied:
- The
employee
has
been
in
a
full-time
position
and
changes
to
a
position
that
is
reasonably
expected
to
average
less
than
30
hours
of
service
per
week,
even
if
that
change
does
not
result
in
a
loss
of
health
plan
eligibility.
- The
employee
represents
to
the
employer
that
the
employee
Continue Reading...
|
|
PCORI Fee Increases Slightly
|
09/20/2014
|
By: Jason Lacey
|
The
IRS
has
announced
that,
for
plan
years
ending
on
or
after
October
1,
2014
and
before
October
1,
2015,
the
Patient
Centered
Outcomes
Research
Institute
Trust
Fund
tax
(or
"PCORI fee")
will
be
$2.08
per
covered
life,
up
slightly
from
the
rate
of
$2.00
per
covered
life
that
applied
for
plan
years
ending
on
or
after
October
1,
2013
and
before
October
1,
2014.
For
insured
plans,
the
PCORI fee
is
paid
by
the
insurance
carrier,
but
for
self-insured
plans,
the
plan
sponsor
(typically
the
employer)
is
responsible
for
calculating
and
paying
the
fee.
Payment
of
the
fee
is
due
by
July
31
of
the
year
following
the
calendar
year
in
which
the
plan
year
ends.
Thus,
for
example,
for
plan
years
ending
in
2014,
the
PCORI fee
is
due
by
July
31,
2015.
IRS Form
720
must
be
filed
along
with
payment
of
the
fee.
The
announcement
(Notice
2014-56)
is
available
here.
|
|
Halbig Decision Shouldn't Change Employer Planning for ACA Implementation
|
08/15/2014
|
By: Jason Lacey
|
The
recent
decision
by
the
Court
of
Appeals
for
the
D.C.
Circuit
in
Halbig
v.
Burwell
(here)
is
certainly
a
major
development
in
the
ongoing
saga
of
health
care
reform
implementation.
If
it
holds
up,
it
would
have
a
significant
impact
on
the
ACA
as
a
whole,
since
both
the
employer
and
individual
mandates
are
affected
by
the
presence
(or
absence)
of
premium-assistance
tax
credits.
But
this
likely
isn't
the
end
of
the
line
for
tax
credits
in
federally
facilitated
exchanges
(which
currently
includes
the
Kansas
exchange).
The
result
in
the
case
was
not
unexpected,
given
the
makeup
of
the
3-judge
panel.
And
there
is
a
further
expectation
that
the
case
will
be
given
reconsideration
by
the
full
D.C.
Circuit,
which
may
lean
the
other
way.
(The
government's
lawyers
have
already
requested
such
reconsideration.)
So
the
decision
could
be
short-lived.
Even
if
the
decision
stands,
the
Fourth
Circuit's
opposing
decision
in
King
v.
Burwell
( here)
creates
a
"circuit
split"
on
the
issue,
making
the
issue
ripe
for
Supreme
Court
review.
And
we
know
the
Supreme
Court
has
been
creative
in
its
interpretation
of
things
related
to
the
ACA,
like
what
is
or
isn’t
a
“tax."
Concluding
that
the
statutory
reference
to
state-based
exchanges
really
means
either
a
state-based
exchange
or
a
federally
facilitated
exchange
might
not
be
a
big
stretch.
It's
also
unclear
what
immediate
precedential
impact
(if
any)
the
case
has.
The
ruling
would
be
controlling
in
the
D.C.
Circuit,
but
it
may
have
limited
impact
outside
of
the
circuit,
Continue Reading...
|
|
New ACA FAQ Addresses Elimination of Contraceptive Coverage
|
07/18/2014
|
By: Jason Lacey
|
A
new
FAQ
(Part
XX
in
the
series)
addresses
the
disclosure
obligations
of
an
employer
that
elects
to
eliminate
contraceptive
coverage
in
light
of
the
Supreme
Court's
Hobby
Lobby
decision.
It
describes
obligations
under
ERISA
and,
specifically,
the
employer's
obligation
to
update
its
SPD
by
adoption
of
a
new
SPD
or
summary
of
material
modifications
(SMM).
60-Day
Deadline.
SMMs
generally
must
be
provided
by
210
days
after
the
end
of
the
plan
year
in
which
a
plan
modification
occurs.
However,
a
modification
that
is
a
material
reduction
in
covered
services
or
benefits
under
a
group
health
plan
must
be
provided
within
60
days
after
the
date
the
modification
is
effective.
The
FAQ
indicates
that
a
decision
to
reduce
or
eliminate
contraceptive
coverage
would
be
considered
a
material
reduction
in
covered
services
or
benefits,
thereby
requiring
notice
within
60
days.
What
About
SBCs?
Interestingly,
the
FAQ
makes
no
reference
to
the
summary
of
benefits
and
coverage
(SBC).
In
general,
if
there
is
a
mid-year
plan
modification
that
affects
the
content
of
a
previously
provided
SBC,
notice
of
the
modification
must
be
provided
at
least
60
days
in
advance
of
the
effective
date
of
the
change.
Perhaps
the
failure
to
address
this
obligation
reflects
a
conclusion
that
elimination
of
all
or
a
portion
of
contraceptive
coverage
would
not
affect
the
content
of
the
SBC
and,
therefore,
does
not
trigger
the
advance-notice
requirement.
(A
review
of
the
sample
SBC
on
the
DOL's
website
shows
no
reference
to
contraception
or
other
preventive
care.)
But
any
employer
considering
Continue Reading...
|
|
Considering the Scope and Impact of the Supreme Court's Hobby Lobby Decision
|
07/10/2014
|
By: Jason Lacey
|
The
Supreme
Court's
Hobby
Lobby
decision
answered
the
question
whether
certain
for-profit
employers
may,
on
religious
grounds,
avoid
complying
with
the
ACA's
contraception
mandate.
But
in
doing
so,
it
raised
a
number
of
other
questions
regarding
the
scope
and
impact
of
its
decision.
Background.
The
Hobby
Lobby
case
involved
three
for-profit
corporations
(Hobby
Lobby,
Mardel,
and
Conestoga
Wood
Specialties)
whose
owners
objected,
on
religious
grounds,
to
fully
complying
with
the
portion
of
the
ACA's
preventive-care
mandate
that
requires
most
health
plans
to
provide
coverage
(without
cost-sharing)
for
all
FDA-approved
contraceptive
methods
for
women.
Specifically,
these
owners
objected
to
a
subset
of
contraceptive
methods
that
they
believed
to
be
abortive
-
drugs
such
as
"Plan
B"
and
devices
such
as
IUDs.
Ruling
in
favor
of
these
employers,
the
court
held
that
a
separate
federal
statute,
the
Religious
Freedom
Restoration
Act
(RFRA),
prevented
enforcement
of
the
contraception
mandate
against
these
employers
because
doing
so
would
violate
a
sincerely
held
religious
belief
of
the
employers
and
because
the
mandate
to
provide
coverage
was
not
the
"least
restrictive
means"
of
implementing
the
government's
interest
in
ensuring
access
to
these
contraceptive
methods.
Which
Employers?
One
question
that
remains
after
the
court's
decision
is
which
employers
might
be
able
to
obtain
a
similar
reprieve
from
compliance
with
the
mandate.
On
its
face,
the
decision
applies
to
closely
held
for-profit
corporations
whose
owners
have
sincerely
held
religious
beliefs
that
are
shared
by
the
corporation.
But
many
definitional
issues
remain.
|
|
IRS Provides Final Guidance on Play-or-Pay Requirements
|
02/15/2014
|
By: Jason Lacey
|
On
February
12,
2014,
the
IRS
published
its
long-awaited
final
regulations
on
the
employer
play-or-pay
mandate
under
health
care
reform
(here).
Although
the
final
regulations
do
not
make
significant
wholesale
changes
to
the
proposed
regulations,
they
do
provide
some
important
clarifying
rules
and
transitional
guidance
that
will
help
smooth
the
path
to
full
implementation
of
the
employer
shared
responsibility
mandate.
Background.
By
way
of
brief
background,
the
employer
shared
responsibility
(pay-or-play)
mandate
under
health
care
reform
requires
an
"applicable
large
employer"
(generally
an
employer
with
50
or
more
full-time-equivalent
employees)
to
offer
affordable,
minimum
value
health
insurance
coverage
to
its
full-time
employees
(defined
as
employees
working
an
average
of
30
or
more
hours
per
week).
Applicable
large
employers
that
fail
to
offer
minimum
essential
coverage
to
at
least
95%
of
their
full-time
employees
generally
face
an
annual
penalty
of
$2,000
per
full-time
employee,
if
at
least
one
of
the
employer's
full-time
employees
obtains
subsidized
coverage
through
the
public
insurance
exchange.
Applicable
large
employers
that
offer
minimum
essential
coverage
to
at
least
95%
of
their
full-time
employees
but
do
not
ensure
that
the
coverage
is
both
affordable
and
provides
minimum
value
generally
face
a
penalty
of
$3,000
per
full-time
employee
that
obtains
subsidized
coverage
through
the
public
exchange.
Key
issues
under
these
rules
include
determining
who
is
an
applicable
large
employer,
who
is
a
full-time
employee,
and
whether
coverage
offered
to
an
employee
is
affordable.
Details,
Details.
The
specific
provisions
of
the
final
regulations
touch
on
many
different
areas
to
a
degree
Continue Reading...
|
|
HHS Proposes 2015 Reinsurance Contribution Amount and Plan Maximums
|
11/27/2013
|
By: Jason Lacey
|
HHS
has
issued
is
proposed
Notice
of
Benefit
and
Payment
Parameters
for
2015
(here).
It
is
frankly
a
pretty
mind-numbing
piece
of
regulatory
handiwork,
but
it
includes
a
few
interesting
nuggets
for
employers.
Transitional
Reinsurance
Program.
The
notice
discusses
the
transitional
reinsurance
program
at
some
length
but
has
three
proposals
that
are
particularly
noteworthy.
(1)
2015
Contribution
Rate.
The
proposed
contribution
rate
for
2015
is
$44
per
covered
life,
as
compared
to
$63
per
covered
life
for
2014.
(2)
Change
in
Payment
Schedule.
The
payment
schedule
is
proposed
to
change
so
that
the
fee
would
be
paid
in
two
installments
instead
of
one. The
first
installment
will
generally
be
due
in
January
following
the
benefit
year,
and
the
second
installment
will
generally
be
due
in
November
or
December
following
the
benefit
year.
Both
installments
will
be
based
on
the
same
enrollment
count.
For
the
2014
benefit
year,
it
is
anticipated
that
this
will
result
in
the
$63
fee
being
paid
as
follows:
$52.50
in
January
2015
and
$10.50
in
late
2015.
For
the
2015
benefit
year,
it
is
anticipated
that
this
will
result
in
the
proposed
$44
fee
being
paid
as
follows:
$33
in
January
2016
and
$11
in
late
2016.
(3)
Exclusion
for
Self-Administered
Self-Insured
Plans.
Several
groups
that
sponsor
self-insured
plans
(notably
multiemployer
self-insured
plans)
have
been
lobbying
for
an
exemption
from
the
transitional
reinsurance
fee.
(There
is
some
merit
to
their
arguments,
since
the
transitional
reinsurance
program
will
not
benefit
them,
but
that's
beside
the
point
here.)
While
this
proposed
notice
does
Continue Reading...
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|
White House and CMS Announce Administrative Delay in ACA Insurance Mandates
|
11/15/2013
|
By: Jason Lacey
|
Yielding
to
growing
political
pressure,
the
White
House
(here
and
here)
and
CMS
(here)
announced
yesterday
an
administrative
delay
in
enforcement
of
insurance
market
reforms
under
the
Affordable
Care
Act,
thereby
allowing
insurance
carriers
to
retain
non-conforming
policies
for
one
more
year.
This
addresses
concerns
over
the
"keep
what
you've
got"
issue.
Insurers
had
been
in
the
process
of
announcing
the
termination
or
cancelation
of
policies
that
did
not
meet
all
the
requirements
that
are
scheduled
to
apply
to
insurance
policies
beginning
January
1,
2014.
This
includes
the
requirements
to
cover
all
"essential
health
benefits"
and
provide
first-dollar
preventive
care
coverage.
Policy
holders
facing
cancelation
had
expressed
frustration
after
believing
enactment
of
the
ACA
would
not
deprive
them
of
their
coverage.
The
delay
does
not
affect
all
policies
-
just
those
issued
in
the
individual
and
small
group
markets.
(Many
policies
issued
in
connection
with
employer
sponsored
plans
are
large
group
policies
and
will
not
be
affected.
Similarly,
self-insured
health
plans
are
not
affected.)
Also,
the
delay
is
not
automatic.
The
administrative
guidance
authorizes
state
insurance
commissioners
to
allow
carriers
to
maintain
non-conforming
policies,
but
it
is
up
to
each
state
to
decide
whether
it
will
provide
that
flexibility.
And
even
in
states
that
grant
carriers
the
right
to
maintain
their
policies,
it
is
up
to
the
carriers
to
decide
whether
a
policy
will
be
retained.
So
the
guidance
is
far
from
a
universal
solution.
In
many
cases,
states
and
insurance
carriers
have
already
taken
significant
steps
toward
complying
with
Continue Reading...
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|
New Hardship Exemption from Individual Mandate
|
10/29/2013
|
By: Jason Lacey
|
In
the
wake
of
the
troubled
rollout
of
the
public
exchanges,
which
has
delayed
the
ability
of
many
individuals
and
small
businesses
to
enroll
in
coverage
offered
through
the
exchanges,
HHS
has
announced
(here)
a
new
hardship
exemption
from
the
individual
mandate.
Anyone
who
enrolls
in
coverage
through
an
exchange
by
the
end
of
the
initial
exchange
enrollment
period
(March
31,
2014)
will
be
exempt
from
the
individual
mandate
during
the
period
in
2014
before
the
date
the
exchange-based
coverage
becomes
effective.
Background.
The
individual
mandate
is
the
rule
that
requires
most
Americans
to
maintain
health
insurance
coverage
or
pay
a
penalty.
It
takes
effect
January
1,
2014.
But
there
are
a
number
of
exemptions
available.
Those
who
qualify
for
an
exemption
will
not
owe
a
penalty
even
if
they
fail
to
maintain
insurance
coverage.
One
exemption
category
is
for
"hardships,"
as
defined
by
the
government.
Exchange
Enrollment
Period
and
Coverage
Effective
Date.
The
initial
exchange
enrollment
period
began
October
1,
2013
and
runs
through
March
31,
2014.
No
coverage
under
the
exchange
becomes
effective
before
January
1,
2014.
Beginning
in
December,
those
who
enroll
in
coverage
on
or
before
the
15th
of
the
month
will
have
coverage
that
becomes
effective
on
the
first
day
of
the
next
month.
Those
who
enroll
after
the
15th
of
the
month
will
have
coverage
that
becomes
effective
on
the
first
day
of
the
second
following
month.
For
example,
an
individual
who
enrolls
for
coverage
on
January
10,
2014
will
have
coverage
effective
as
of
February
Continue Reading...
|
|
It's Exchange Day
|
10/01/2013
|
By: Jason Lacey
|
If
you're
looking
at
a
list
of
the
milestones
for
implementation
of
health
care
reform,
you'll
see
that
we've
just
reached
a
big
one:
the
opening
of
the
public
insurance
exchanges.
Ok,
so
the
day
is
largely
symbolic.
Nothing
really
takes
effect
today.
It
just
happens
to
be
the
first
day
we
can
go
take
a
look
at
what's
available
through
these
new
marketplaces
and
begin
the
process
of
enrolling
for
coverage
if
we
want.
Coverage
purchased
through
the
exchanges
between
now
and
December
15
won't
be
effective
until
January
1,
2014.
But
it
still
feels
like
there
has
been
a
lot
of
anticipation
in
the
run-up
to
the
opening
of
the
exchanges.
I
happened
to
be
awake
after
midnight
last
night,
so
I
decided
to
try
out
the
portal
for
the
Kansas
exchange.
We
don't
have
a
state-based
exchange
(the
federal
government
is
running
one
for
us),
so
I
went
to
the
federal
exchange
website
(www.healthcare.gov)
and
starting
working
my
way
through
the
process.
I
didn't
get
very
far.
One
of
the
first
things
you
have
to
do
is
set
up
an
account.
This
requires
selecting
a
user
name
and
password
and
also
answering
a
series
of
three
security
questions,
so
you
can
retrieve
your
user
name
and
password
later
if
you
forget.
The
user
name
and
password
part
worked
fine.
And
the
interface
would
allow
me
to
answer
the
security
questions,
but
it
wouldn't
tell
me
what
the
questions
were.
It
felt
a
little
like
that
bit
Johnny
Carson
used
to
do
Continue Reading...
|
|
Exchange Notice Reminder - Due by October 1
|
09/19/2013
|
By: Jason Lacey
|
Just
a
reminder
that
the
employer
exchange
notice
must
be
distributed
to
existing
employees
(all
employees)
by
October
1.
- Read
prior
coverage
here
and
here.
- Links
to
the
DOL
model
notices
are
here
and
here.
- Links
to
DOL
guidance
are
here
and
here.
|
|
New Guidance Will Limit HRAs and Employer Use of Individual Market Coverage
|
09/16/2013
|
By: Jason Lacey
|
A
continuing
area
of
uncertainty
under
health
care
reform
has
been
the
treatment
of
health
reimbursement
arrangements
(HRAs)
and
other
arrangements
that
might
be
used
to
allow
employees
to
purchase
health
insurance
through
individual
policies
with
the
employer
subsidizing
some
or
all
of
the
cost.
A
new
notice
from
the
IRS,
HHS,
and
DOL
(here)
provides
some
clarity
on
these
-
and
some
related
-
issues.
Employer
Payment
Plans.
As
a
preliminary
matter,
this
guidance
gives
us
a
new
term:
"employer
payment
plan."
This
refers
to
an
arrangement
by
which
an
employer
provides
payment
or
reimbursement
of
individual
market
insurance
premiums
in
the
manner
described
in
an
old
Revenue
Ruling
(Rev.
Rul.
61-146).
Historically,
these
employer
payment
plans
have
been
permissible
and
have
allowed
employers
to
provide
pre-tax
subsidies
of
individual
market
coverage.
Integration
of
Plans
with
Individual
Market
Coverage.
A
concern
with
HRAs
and
employer
payment
plans
is
that
they
may
be
treated
as
violating
two
key
health
care
reform
mandates:
the
prohibition
on
annual
limits
and
the
requirement
to
provide
no-cost
preventive
care
services.
Previous
FAQ
guidance
(see
coverage
here)
said
that
HRAs
would
be
treated
as
satisfying
the
annual
limit
rule
if
they
were
"integrated"
with
other
coverage
that
satisfies
the
annual
limit
rule.
This
guidance
effectively
confirms
that
treatment
and
provides
a
similar
rule
for
preventive
care.
But
the
guidance
goes
on
to
say
that
HRAs
and
employer
payment
plans
may
not
be
treated
as
integrated
with
individual
market
coverage.
Thus,
an
HRA
or
employer
payment
plan
Continue Reading...
|
|
No Penalty for Failure to Provide Exchange Notice
|
09/13/2013
|
By: Jason Lacey
|
In
a
single
FAQ
posted
to
its
website
this
week,
the
DOL
acknowledged
that
"there
is
no
fine
or
penalty
under
the
law"
for
failing
to
provide
the
notice
to
employees
describing
the
public
insurance
exchanges
(or
"Marketplaces").
Many
of
us
had
come
to
this
conclusion
already,
so
it
was
not
entirely
a
new
development.
But
at
a
minimum
it
provides
some
further
comfort
that
there
will
not
be
a
serious
consequence
to
employers
who
might
foot-fault
on
the
requirement
(e.g.,
overlook
an
employee
when
distributing
the
notice).
Does
this
lack
of
a
penalty
give
employers
license
to
willfully
ignore
the
notice
requirement?
It
could
be
interpreted
that
way.
After
all,
if
the
police
said
they
would
no
longer
issue
speeding
tickets,
would
anyone
feel
compelled
to
pay
attention
to
the
signs?
But
I
don't
recommend
taking
it
too
far.
Here
are
at
least
three
reasons
complying
with
the
requirement
may
be
important
even
in
the
absence
of
an
express
penalty.
- The
DOL
will
still
be
looking
for
evidence
of
compliance
with
the
requirement.
We
won't
know
this
for
sure
until
after
October
1,
but
I
suspect
when
the
EBSA
folks
at
DOL
open
an
audit
and
send
out
their
standard
(and
quite
lengthy)
list
of
documents
to
be
reviewed
in
connection
with
the
audit,
the
exchange
notice
will
be
on
the
list.
If
you
can't
produce
evidence
that
you
distributed
it,
you
are
likely
to
receive
a
stern
talking-to.
Worse
still,
if
the
failure
appears
to
be
Continue Reading...
|
|
IRS Clarifies Impact of Preventive Care Services on HDHPs
|
09/09/2013
|
By: Jason Lacey
|
The
IRS
has
provided
an
expected,
but
welcome,
clarification
(see
Notice
here)
regarding
the
impact
of
providing
no-cost
preventive
care
services
under
a
high-deductible
health
plan.
Background.
To
be
eligible
to
contribute
to
a
health
savings
account
(HSA),
an
individual
must
be
covered
under
a
qualifying
high-deductible
health
plan
(HDHP)
and
must
not be
covered
under
any
low-deductible
coverage,
other
than
permitted
coverage.
Permitted
coverage
incudes
coverage
for
preventive
care
services
within
the
meaning
of
Internal
Revenue
Code
Section
223(c)(2)(C).
Health
Care
Reform.
Under
health
care
reform,
non-grandfathered
health
plans
are
required
to
offer
specified
preventive
care
services
without
cost
sharing.
This
rule
applies
to
non-grandfathered
plans
that
otherwise
meet
the
requirements
to
be
an
HDHP.
But
the
preventive
care
services
required
under
health
care
reform
are
not
quite
the
same
as
preventive
care
services
described
in
guidance
under
Code
Section
223(c)(2)(C).
And,
of
course,
there
cannot
be
a
deductible.
So
we
have
wondered:
Will
compliance
with
the
preventive
care
mandate
under
health
care
reform
risk
causing
a
plan
to
no
longer
qualify
as
an
HDHP?
Guidance.
The
assumption
has
been
that
the
IRS
would
not
view
preventive
care
services
provided
in
accordance
with
health
care
reform
as
impermissible
low-deductible
coverage.
Otherwise
HDHPs
could
effectively
no
longer
exist,
unless
they
remained
grandfathered.
That
assumption
has
now
been
confirmed:
"[A] health
plan
will
not
fail
to
qualify
as
an
HDHP
under
section
223(c)(2)
of
the
Code
merely
because
it
provides
without
a
deductible
the
preventive
care
health
services
required
under
section
2713
of
the
PHS Act
to
Continue Reading...
|
|
Final Regs Make Few Changes to Contraception Mandate
|
07/10/2013
|
By: Jason Lacey
|
Final
tri-agency
regulations
were
released
recently
on
the
religious
employer
exemption
from
health
care
reform's
contraception
mandate,
and
there
is
little
change
from
the
approach
outlined
in
the
proposed
regulations
(see
discussion
here).
In
short,
the
regulations
finalize
a
moderate
expansion
of
the
definition
of
"religious
employer,"
but
continue
to
require
religiously
affiliated
nonprofit
organizations
to
seek
an
"accommodation"
that
allows
individuals
covered
under
their
plans
to
obtain
contraception
coverage
at
no
cost
through
an
insurance
carrier.
Applicability
Date.
A
key
piece
of
the
final
regulations
is
the
effective-date
provision,
which
provides
nonprofit
organizations
some
additional
time
to
comply
with
the
accommodation
requirement.
The
regulations
generally
apply
for
plan
years
beginning
on
or
after
January
1,
2014,
rather
than
applying
for
plan
years
beginning
on
or
after
August
1,
2013,
as
previously
expected.
Nonprofit
organizations
that
had
been
relying
on
a
one-year
safe
harbor
from
application
of
the
mandate
(see
description
here
and
here)
may
continue
relying
on
the
safe
harbor
until
the
first
plan
year
beginning
on
or
after
January
1,
2014.
CMS
has
updated
its
guidance
on
the
nonenforcement
safe
harbor
(here).
Definition
of
Religious
Employer.
The
definition
of
religious
employer
is
unchanged
from
the
proposed
regulations.
Although
not
intended
to
expand
the
number
of
organizations
that
qualify
as
religious
employers,
the
change
is
intended
to
clarify
that
religious
employers
providing
educational,
charitable,
and
social
services
may
qualify
for
the
exemption
even
though
some
of
their
constituents
or
employees
may
not
be
of
the
same
Continue Reading...
|
|
Play-or-Pay Delayed
|
07/02/2013
|
By: Jason Lacey
|
It’s
been
a
big
week
for
employee
benefits
law,
starting
with
the
Supreme
Court’s
Windsor
decision
on
DOMA
last
Wednesday,
the
administration’s
release
of
a
final
rule
on
the
religious
employer
exemption
to
the
contraception
mandate,
and
now
a
surprise
temporary
reprieve
for
employers
from
the
play-or-pay
penalties
that
were
scheduled
to
take
effect
in
2014.
Transition
Relief.
In
a
blog
post
published
quietly
on
Tuesday
afternoon,
a
senior
Treasury
Department
official
said
that
the
administration
had
been
listening
to
concerns
raised
by
employers
about
the
time
needed
to
implement
various
aspects
of
the
health
care
reform
law
and
would
be
publishing
formal
guidance
within
the
next
week
delaying
enforcement
of
the
employer
shared
responsibility
(or
“play-or-pay”)
mandates
until
2015.
However,
the
post
affirmed
that
qualifying
individuals
purchasing
health
insurance
coverage
through
exchanges
in
2014
would
continue
to
have
access
to
premium
assistance
tax
credits.
And
a
related
post
on
the
White
House
Blog
asserted
that
exchange
implementation
is
proceeding
"full
steam
ahead"
and
is
"on
target."
What
Does
the
Delay
Mean?
We
won’t
know
all
the
specifics
until
the
formal
guidance
is
released
(and
even
then
there
are
likely
to
be
questions).
But
in
broad
terms,
it
appears
that
large
employers
will
not
need
to
be
ready
to
comply
with
the
play-or-pay
requirements
until
at
least
January
1,
2015.
So,
for
example
-
- It
may
not
be
necessary
to
implement
the
look-back
measurement
period
regime
until
later
this
year,
or
perhaps
even
2014.
Continue Reading...
|
|
PCORI Trust Fund Tax is Deductible
|
06/12/2013
|
By: Jason Lacey
|
An
internal
IRS
memorandum
released
this
week
provides
informal
guidance
clarifying
that
the
PCORI
trust
fund
tax
is
generally
deductible
for
income-tax
purposes
when
paid
by
an
insurer
or
the
sponsor
of
a
self-insured
plan.
By
way
of
brief
background,
the
PCORI
trust
fund
tax
is
a
$1
(increasing
to
$2)
tax
on
the
average
number
of
covered
lives
under
a
health
insurance
policy
or
self-insured
health
plan.
It
funds
the
Patient
Centered
Outcomes
Research
Institute,
which
studies
the
comparative
effectiveness
of
medical
treatment
options.
Given
the
relatively
small
dollar
amount
of
the
tax
when
calculated
for
a
single
employer,
the
ability
to
deduct
the
tax
will
not
make
a
huge
difference.
But
it
is
a
welcome
clarification
just
the
same.
Reminder. For
plans
with
plan
years
ending
after
October
1,
2012
and
on
or
before
December
31,
2012,
the
tax
must
be
paid
and
a
return
filed
by
July
31,
2013.
The
IRS
recently
published
drafts
of
the
Form
720
and
related
instructions
that
must
be
used
to
pay
the
tax.
|
|
Employer Exchange Notice: DOL Guidance and Model Notice
|
05/10/2013
|
By: Jason Lacey
|
A
new
technical
release
from
the
DOL
provides
important
guidance
for
employers
on
the
obligation
to
give
employees
a
notice
regarding
health
coverage
available
through
the
public
exchanges.
Effective
Date.
As
discussed
in
a
prior
post,
this
notice
obligation
was
scheduled
to
become
effective
March
1,
2013,
but
was
delayed
until
guidance
was
issued.
Under
this
new
guidance,
notice
must
be
given
to
all
current
employees
by
October
1,
2013,
and
must
be
given
to
each
new
employee
hired
on
or
after
October
1,
2013,
within
14
days
of
the
start
date.
Covered
Employers.
Although
this
notice
requirement
was
enacted
as
part
of
health
care
reform,
it
applies
to
employers
through
the
FLSA.
So
all
employers
to
which
the
FLSA
applies
are
required
to
provide
the
notice.
It
does
not
matter
whether
the
employer
offers
health
coverage
to
employees
or
whether
the
employer
is
subject
to
the
play-or-pay
mandates.
Who
Gets
the
Notice?
The
notice
must
be
given
to
all
employees,
whether
full-time
or
part-time
and
whether
or
not
covered
under
the
employer's
health
insurance
plan.
However,
notice
is
not
required
to
be
given
to
dependents
or
other
individuals
who
may
be
covered
under
the
employer's
plan.
Content
Requirements
and
Model
Notice.
The
notice
must
provide
employees
with
information
about
the
public
exchanges
and
inform
them
that
they
may
be
eligible
for
a
tax
credit
to
subsidize
coverage
obtained
through
the
exchange.
But
the
notice
must
also
advise
that
employees
who
choose
to
obtain
coverage
through
the
exchange
will
lose
any
employer
Continue Reading...
|
|
Minimum Value Regulations Clarify Treatment of Wellness Incentives
|
05/04/2013
|
By: Jason Lacey
|
Buried
deep
within
new
regulations
on
the
arcane
"minimum
value"
requirement
is
important
new
guidance
on
how
employer
wellness
incentives
will
impact
both
the
minimum
value
and
affordability
analysis
with
respect
to
employer-provided
health
coverage.
Most
Wellness
Impact
is
Disregarded.
The
rule
described
in
the
regulation
is
fairly
simple,
although
not
favorable
to
employers.
For
purposes
of
determining
whether
health
coverage
is
affordable
to
employees,
any
reward
associated
with
participation
in
a
wellness
program
(other
than
related
to
tobacco
use)
is
ignored.
This
generally
has
the
effect
of
increasing
the
amount
the
employee
is
treated
as
contributing
toward
the
cost
of
coverage,
thereby
making
the
coverage
less
affordable.
Example.
Assume,
employees
generally
are
required
to
pay
$200
per
month
for
employee-only
coverage.
But
if
the
employees
participate
in
a
health
risk
assessment
and
basic
biometric
screening,
they
receive
a
discount
of
$50
per
month
(making
the
monthly
cost
$150).
For
purposes
of
determining
whether
the
coverage
is
affordable,
the
employees
are
treated
as
having
to
pay
$200
per
month
for
coverage,
even
though
they
may
actually
qualify
to
pay
only
$150
per
month.
There
is
a
similar
rule
for
minimum
value,
to
the
extent
the
wellness
incentive
impacts
the
cost-sharing
structure
of
the
plan
(deductible,
coinsurance,
or
copayments).
Non-tobacco
wellness
programs
are
ignored
in
determining
the
plan's
cost
sharing,
which
impacts
the
determination
whether
the
plan
provides
minimum
value.
For
example,
if
a
plan
has
a
$2,000
deductible
but
provides
a
$500
reduction
for
participating
in
a
non-tobacco-related
wellness
plan,
the
plan
Continue Reading...
|
|
More ACA FAQs: Mini-Med Plans and Clinical Trials
|
05/01/2013
|
By: Jason Lacey
|
We
are
now
up
to
Part
XV
of
the
tri-agency
FAQs
providing
guidance
on
various
ACA-related
issues.
The
most
important
guidance
in
these
FAQs
relates
to
the
treatment
of
mini-med
plans
that
obtained
a
waiver
from
the
prohibition
on
annual
limits.
But
the
FAQs
also
acknowledge,
in
so
many
words,
that
there
are
some
issues
on
which
further
guidance
simply
will
not
be
provided
before
2014,
so
we're
going
to
have
to
use
our
best
judgment.
Changing
the
Plan
Year
on
Mini-Med
Plans.
Employers
and
insurance
carriers
offering
mini-med
plans
were
required
to
obtain
a
waiver
from
the
prohibition
on
annual
limits.
Under
the
waiver
program,
plans
were
allowed
to
continue
until
the
end
of
the
plan
year
ending
in
2014.
Creative
employers
and
carriers
began
exploring
whether
they
could
change
their
plan
years
now
and
effectively
extend
waiver
through
most
of
2014.
For
example,
a
plan
with
a
plan
year
ending
June
30
might
change
to
a
plan
year
ending
November
30
and
rely
on
the
waiver
until
November
30.
These
FAQs
provide,
unequivocally,
that
a
change
in
the
plan
year
will
not
be
effective
to
extend
a
plan's
waiver.
The
waiver
only
applies
until
the
end
of
the
plan
year
ending
in
2014,
based
on
the
plan
year
the
plan
was
using
when
it
applied
for
the
waiver.
In
other
words,
nice
try.
Why
would
this
matter?
Well,
it
now
appears
that
mini-med
coverage
extending
into
2014
will
be
sufficient
to
allow
employers
with
fiscal
year
plans
to
avoid
some
of
the
Continue Reading...
|
|
New SBC Guidance and Templates
|
04/24/2013
|
By: Jason Lacey
|
The
latest
set
of
Affordable
Care
Act
FAQs
(Part
XIV)
announces
the
release
of
updated
templates
for
the
SBC
and
uniform
glossary.
The
updated
templates
are
designed
to
provide
employers
and
insurers
with
tools
to
comply
with
the
SBC
requirement
for
the
second
year
of
applicability.
Note
that
many
fiscal-year
plans
may
not
yet
have
begun
their
first
year
of
applicability
for
the
SBC
requirement,
which
essentially
begins
with
the
first
open-enrollment
period
beginning
on
or
after
September
23,
2012.
Limited
Template
Changes.
The
updated
templates
reflect
only
two
significant
changes.
They
add
language
for
describing
whether
the
coverage
does
(or
does
not)
provide
minimum
essential
coverage
(MEC),
and
they
add
language
for
describing
whether
the
coverage
does
(or
does
not)
provide
minimum
value
(MV).
There
is
no
change
in
the
language
describing
whether
benefits
are
(or
are
not)
subject
to
annual
limits,
and
the
template
keeps
the
same
two
coverage
examples
(childbirth
and
diabetes).
Extended
Enforcement
Relief.
Perhaps
the
most
significant
guidance
in
the
FAQs
is
an
extension
of
much
of
the
helpful
enforcement
relief
that
was
provided
through
previous
FAQs.
For
example:
- Compliance
emphasis.
IRS,
DOL,
and
HHS
will
continue
to
emphasize
"assisting
(rather
than
imposing
penalties
on)
plans,
issuers
and
others
that
are
working
diligently
and
in
good
faith
to
understand
and
come
into
compliance
with
the
new
law"
(Part
VIII,
Q2)
and
"will
not
impose
penalties
on
plans
and
issuers
that
are
working
diligently
and
in
good
faith
to
comply"
(Part
IX,
Q8).
Continue Reading...
|
|
2013 ACA Deadlines: What Employers Should be Thinking About Right Now
|
04/17/2013
|
By: Jason Lacey
|
2013
is
a
relatively
light
year
in
the
overall
scope
of
health
care
reform
implementation.
Few
mandates
or
requirements
have
2013
effective
dates.
And
so
much
will
be
happening
in
2014
that
it
tends
to
overshadow
2013.
But
employers
still
have
a
number
of
things
to
be
thinking
about
this
year.
Here
are
ten
items
to
consider
putting
on
your
checklist.
1.
SBCs.
The
requirement
to
distribute
a
summary
of
benefits
and
coverage
(SBC)
in
connection
with
open
enrollment
applies
to
open-enrollment
periods
beginning
on
or
after
September
23,
2012.
So
employers
with
fiscal-year
plans
may
still
be
getting
ready
for
their
first
covered
open-enrollment
periods.
For
employers
that
have
already
distributed
SBCs,
any
mid-year
change
in
plan
terms
that
affects
the
content
of
the
SBC
must
be
described
in
a
notice
of
modification
given
at
least
60
days
in
advance
of
the
effective
date
of
the
modification.
Also,
distribution
of
the
SBC
is
not
a
one-time
event.
It
may
be
required
annually
or
even
more
frequently,
such
as
in
connection
with
special
enrollments
or
upon
request.
2.
W-2
Reporting.
Currently,
only
large
employers
are
required
to
comply
with
the
obligation
to
report
the
aggregate
cost
of
applicable
employer-sponsored
coverage
in
box
12
(code
DD)
of
an
employee’s
W-2.
Large
employers
generally
are
employers
that
issued
250
or
more
W-2s
in
the
preceding
calendar
year.
So
whether
an
employer
is
subject
to
this
requirement
can
change
from
year
to
year,
depending
on
changes
in
the
number
of
employees
and
W-2s
issued.
Employers
Continue Reading...
|
|
PPACA Waiting Period Rules: 90 Days Means 90 Days
|
03/27/2013
|
By: Jason Lacey
|
HHS,
DOL,
and
IRS
recently
proposed
regulations
interpreting
the
health
care
reform
mandate
limiting
health
plan
waiting
periods
to
no
more
than
90
days.
The
guidance
is
fairly
straightforward,
but
does
not
include
one
clarification
we
were
anticipating:
3
months
cannot
be
used
as
a
substitute
for
90
days.
90
days
means
90
days.
Period.
What
is
a
waiting
period?
Under
the
rules,
a
waiting
period
is
any
period
of
time
that
must
pass
before
coverage
may
become
effective
for
anyone
who
has
otherwise
satisfied
the
plan's
eligibility
criteria.
Eligibility
criteria
that
are
based
solely
on
the
lapse
of
a
time
period
count
as
part
of
the
waiting
period.
So,
for
example,
if
a
plan
requires
employees
to
work
in
a
particular
job
classification
to
be
eligible
for
coverage,
time
spent
working
in
an
ineligible
job
classification
does
not
count
as
a
waiting
period,
and
the
90-day
period
may
be
imposed
once
an
employee
moves
to
an
eligible
job
classification.
But
if
a
plan
merely
requires
60
days
of
full-time
employment
to
become
eligible,
those
60
days
of
employment
count
toward
the
waiting
period,
so
another
90
days
may
not
be
imposed.
Variable-hour
employees. We
know
from
the
regulations
on
the
look-back
measurement
method
(see
coverage here)
that
we
may
need
some
time
(up
to
12
months
or
so)
to
determine
whether
a
variable-hour
employee
meets
an
eligibility
requirement
relating
to
average
hours
worked.
These
proposed
regulations
clarify
that
the
period
during
which
a
variable-hour
employee's
hours
of
service
are
being
measured
Continue Reading...
|
|
Domino's Founder Not Required to Comply with Contraception Mandate
|
03/17/2013
|
By: Jason Lacey
|
I
have
left
this
topic
alone
for
awhile
because
it
can
be
a
real
hot-button.
But
it’s
hard
to
ignore
the
latest
news,
which
adds
to
the
growing
number
of
conflicting
opinions
on
whether
private
businesses
may
seek
an
exemption
from
the
ACA’s
contraception
mandate
on
grounds
of
religious
freedom.
The
latest
case
involves
Domino’s
Farms,
a
private
business
owned
by
Thomas
Monaghan,
the
founder
of
Domino’s
Pizza.
He
is
a
devout
Roman
Catholic
and
offers
his
employees
a
health
plan
that
does
not
cover
contraceptives
or
abortions.
A
federal
court
in
Detroit
has
granted
a
preliminary
injunction
(here)
preventing
the
federal
government
from
enforcing
the
contraception
mandate
against
Domino’s
Farms.
This
is
significant
because
Domino’s
Farms
is
a
private
business
and
not
a
church
or
church-affiliated
non-profit
organization,
so
it
would
otherwise
be
required
to
provide
contraceptive
coverage
at
no
cost
under
its
health
plan
or
face
a
steep
penalty.
As
I’ve
written
about
previously
on
this
blog
(here),
Hobby
Lobby
stores
sought
the
same
relief
from
a
court
in
Oklahoma
late
last
year,
but
were
denied
on
the
basis
that
private
business
entities
cannot
hold
religious
beliefs.
|
|
New ACA FAQ Guidance Addresses Cost Sharing, Preventive Care, and Expatriate Plans
|
03/10/2013
|
By: Jason Lacey
|
Two
more
sets
of
tri-agency
FAQs
have
been
released,
providing
additional
interpretive
guidance
on
the
Affordable
Care
Act.
They
are
Part
XII
and
Part
XIII
in
the
series.
Cost-Sharing
Limitations.
Part
XII
includes
two
important
clarifications
on
the
cost-sharing
limitations
that
will
apply
to
group
health
plans
beginning
in
2014.
(1)
Deductible.
The
rule
that
limits
the
annual
deductible
under
a
plan
to
$2,000
for
self-only
coverage
and
$4,000
for
family
coverage
will
apply
only
to
non-grandfathered
plans
in
the
individual
and
small-group
markets.
Grandfathered
plans
and
large-group
plans
will
be
permitted
to
impose
higher
deductibles.
This
may
be
important
for
large-group
plans
that
want
to
offer
an
option
with
a
high
deductible
that
meets
the
minimum
requirements
for
a
60%
actuarial
value
plan.
(2)
Out-of-pocket
maximum.
The
rule
that
limits
overall
cost-sharing
under
a
plan
to
$5,000
for
self-only
coverage
and
$10,000
for
family
coverage
will
apply
to
all
non-grandfathered
plans.
So
even
large-group
plans
will
be
limited.
Preventive
Care.
Part
XII
also
provides
detailed
guidance
on
miscellaneous
issues
related
to
the
requirement
for
non-grandfathered
plans
to
offer
preventive-care
services
without
cost-sharing.
Some
highlights:
(1)
Out-of-network
services.
Plans
generally
are
permitted
to
impose
cost-sharing
with
respect
to
preventive-care
services
obtained
out
of
network.
However,
if
a
service
that
is
required
to
be
covered
by
the
plan
is
not
available
through
any
in-network
provider,
the
plan
must
cover
the
out-of-network
service
without
cost-sharing.
(2)
Over-the-counter
items.
Some
of
the
covered
preventive-care
items
include
over-the-counter
drugs
and
devices,
such
as
aspirin.
A
plan
is
only
Continue Reading...
|
|
DOL Updates Health Plan Self-Compliance Tools
|
03/07/2013
|
By: Jason Lacey
|
The
DOL
has
updated
the
self-compliance
tools
it
makes
available
to
group
health
plans
to
include
a
new
checklist
relating
to
health
care
reform.
The
health
care
reform
checklist
goes
through
a
series
of
detailed
questions
that
will
help
a
plan
sponsor
confirm
that
it
is
in
compliance
with
the
key
group
market
reforms,
such
as
coverage
of
dependent
children
to
age
26
and
cost-free
preventive
care.
There
are
particularly
extensive
provisions
addressing
grandfathered
plan
status
and
the
SBC
requirement.
A
second
checklist
relates
to
the
HIPAA
portability
provisions
and
related
requirements
for
group
health
plans,
including
mental
health
parity.
(See
related
prior
coverage
here.)
Plan
sponsors
or
administrators
would
be
well-advised
to
go
through
these
lists
once
a
year
or
so
to
determine
if
there
are
any
areas
in
which
their
plans
are
deficient.
It
is
always
easier
to
correct
problems
that
are
identified
before
the
DOL
finds
them.
|
|
The Landscape Becomes Clearer for State Insurance Exchanges
|
02/19/2013
|
By: Jason Lacey
|
Employers
are
not
directly
affected
by
the
establishment
of
state
insurance
exchanges
under
health
care
reform,
but
understanding
the
exchange
landscape
helps
clarify
the
bigger
picture
of
health
care
reform
and
how
employers
fit
within
that.
So
here's
where
we
are
today:
The
deadline
ran
last
Friday
for
states
to
file
applications
to
run
an
exchange
in
partnership
with
the
federal
government
for
2014.
Some
did
that,
but
as
I've
written
about
previously
(here),
the
response
has
been
underwhelming.
States
that
do
not
have
their
own
exchanges
and
do
not
partner
with
the
federal
government
will
default
to
having
a
federally
facilitated
exchange.
The
Kaiser
Family
Foundation
has
an
interesting
graphic
(here)
that
illustrates
what's
going
on
in
each
state.
It
reflects
that
only
17
states
(plus
the
District
of
Columbia)
will
run
their
own
exchanges,
7
states
will
have
partnership
exchanges,
and
26
states
will
default
to
the
federal
exchange.
Depending
on
your
political
view,
that's
either
a
good
first
step
toward
national
uniformity
in
the
health
insurance
market
or
a
lot
of
federal
involvement.
Either
way,
a
lot
of
questions
remain,
including
whether
and
how
these
exchanges
will
be
fully
functional
by
October
(when
they
need
to
begin
enrollment
for
2014)
and
what
the
exchange
interface
will
look
like.
The
federal
government
continues
to
believe
it
is
on
track
(see
here),
but
there
is
a
lot
of
ground
to
cover
between
now
and
then.
|
|
Health Care Reform and Full-Time Employees - Part 8: Putting It All Together
|
02/18/2013
|
By: Jason Lacey
|
Note:
This
is
one
in
a
series
of
posts
addressing
new
rules
from
the
IRS
that
may
be
used
to
determine
which
employees
are
full-time
employees
for
purposes
of
applying
the
play-or-pay
penalties
under
health
care
reform.
Although
the
penalties
do
not
become
effective
until
2014,
it
may
be
necessary
to
begin
collecting
data
on
employees
soon,
so
it's
a
good
time
to
begin
thinking
about
these
rules.
Let's
review
what
we
know
from
the
previous
posts
in
this
series.
(1)
It's
important
to
identify
full-time
employees,
because
if
we
want
to
avoid
the
play-or-pay
penalties,
we
have
to
make
sure
all
full-time
employees
are
offered
appropriate
coverage.
(2)
In
many
cases,
we
can
determine
whether
an
employee
is
full-time
or
not
by
looking
at
hours
worked
over
a
prior
period,
known
as
the
measurement
period.
(3)
An
employee's
status
for
a
measurement
period
remains
the
same
during
a
stability
period
associated
with
that
measurement
period.
(4)
We
can
utilize
a
brief
administrative
period
between
a
measurement
period
and
a
stability
period
to
allow
time
for
such
things
as
making
enrollment
elections
and
allowing
coverage
to
become
effective
at
the
beginning
of
a
month
or
year.
(5)
When
applying
the
look-back
measurement
method,
it's
useful
to
distinguish
between
new
hires
and
ongoing
employees.
New
hires
that
are
reasonably
expected
to
be
full
time
upon
hire
must
be
offered
coverage
within
3
months.
New
hires
that
are
variable
hour
or
seasonal
employees
do
not
have
to
be
offered
coverage
until
the
end
of
an
initial
measurement
period,
Continue Reading...
|
|
Agencies Propose Changes to Contraception Mandate for Religious Employers
|
02/06/2013
|
By: Jason Lacey
|
The
IRS,
DOL,
and
HHS
have
proposed
two
key
changes
in
the
rules
that
exempt
certain
religious
employers
from
complying
with
the
mandate
to
cover
all
FDA-approved
contraception
and
sterilization
procedures
for
women
(see
proposed
rules
here).
1.
Definition
of
Religious
Employer
Employers
that
are
"religious
employers"
are
wholly
exempt
from
compliance
with
the
mandate.
The
new
rules
would
modify
the
definition
of
religious
employer
slightly.
The
definition
would
still
be
limited
to
houses
of
worship
(churches,
synagogues,
mosques,
and
the
like)
and
religious
orders.
But
the
change
would
clarify
that
those
organizations
will
not
fail
to
be
religious
employers
even
if
they
also
provide
educational,
charitable,
or
social
services,
without
regard
to
whether
the
persons
served
share
the
same
religious
values.
Example.
A
church
with
a
parochial
school
that
employs
teachers
or
serves
students
who
are
not
necessarily
of
the
same
religious
faith
may
still
qualify
as
a
religious
employer.
2.
Broader
Accommodation
for
Non-Profit
Religious
Organizations
A
non-profit
organization
that
is
not
a
church
or
religious
order
but
that
meets
specified
criteria
would
be
provided
an
"accommodation"
exempting
the
organization
from
directly
providing
contraceptive
coverage.
The
criteria
are:
- The
organization
opposes
some
or
all
of
the
required
contraceptive
coverage
on
religious
grounds
- The
organization
is
a
non-profit
entity
- The
organization
holds
itself
out
as
a
religious
organization
- The
organization
self-certifies
that
it
meets
the
first
three
criteria
This
change
is
intended
to
exempt
organizations
such
as
religious-affiliated
non-profit
institutional
health
care
Continue Reading...
|
|
New Health Care Reform FAQs Answer Some Questions and Raise Others
|
02/01/2013
|
By: Jason Lacey
|
The
IRS,
DOL,
and
HHS
have
released
their
11th
series
of
FAQs
(here)
addressing
various
issues
related
to
health
care
reform
implementation.
Exchange
Notice
Requirement.
In
a
helpful
clarification,
the
agencies
confirmed
that
employers
will
not
have
to
provide
a
notice
to
employees
regarding
insurance
exchanges
until
“regulations
are
issued
and
become
applicable.”
By
statute,
the
notice
is
required
to
be
distributed
by
March
1,
2013.
This
guidance
effectively
allows
employers
to
delay
compliance
until
further
notice.
Stand-Alone
HRAs.
Three
of
the
FAQs
address
issues
related
to
health
reimbursement
arrangements
(HRAs).
The
technical
clarifications
are
as
follows:
(1)
An
HRA
cannot
be
treated
as
“integrated”
with
individual
insurance
coverage.
(2)
An
HRA
can
only
be
treated
as
“integrated”
with
major-medical
coverage
if
participation
in
the
HRA
is
conditioned
on
being
enrolled
in
that
major-medical
coverage.
(3)
Most
amounts
credited
to
an
HRA
before
January
1,
2014,
will
continue
to
be
available
for
reimbursements
on
and
after
January
1,
2014
without
causing
the
HRA
to
violate
the
annual-limit
rules
under
Section
2711
of
the
Public
Health
Service
Act.
While
all
of
this
seems
straightforward
enough,
the
proverbial
elephant
in
the
room
is
the
fundamental
question
whether
stand-alone
HRAs
will
be
deemed
to
violate
the
prohibition
against
annual
and
lifetime
limits
under
Section
2711
of
the
Public
Health
Service
Act.
These
FAQs
are
the
strongest
indication
yet
that
future
guidance
will
say
they
do
violate
the
prohibition,
effectively
eliminating
stand-alone
HRAs.
Plan
sponsors
that
maintain
stand-alone
HRAs
-
or
are
considering
implementing
one
for
2014
-
will
want
Continue Reading...
|
|
What's Up With This Transitional Reinsurance Fee Anyway?
|
01/31/2013
|
By: Jason Lacey
|
A
fundamental
insurance-market
reform
under
the
Affordable
Care
Act
is
that,
beginning
in
2014,
insurance
carriers
that
want
to
sell
individual
policies
will
be
required
to
make
those
policies
available
to
all
applicants
(guaranteed
issue)
and
will
be
required
to
set
the
premiums
for
those
policies
based
on
a
"community"
rating,
with
variations
based
only
on
the
tier
of
coverage
purchased
(individual
or
family),
age
of
the
insured,
geographic
area,
and
tobacco
use
by
the
insured.
This
is
intended
to
ensure
that
individuals
have
access
to
health
insurance
without
regard
to
health
factors
that
might
otherwise
make
insurance
prohibitively
expensive
or
simply
unavailable.
That
all
sounds
pretty
good,
unless
you're
the
insurance
carrier
trying
to
figure
out
how
to
absorb
the
additional
risks
associated
with
having
to
cover
people
at
a
set
price
without
regard
to
how
much
health
care
expense
they
may
consume.
But
the
Affordable
Care
Act
makes
some
provision
for
them
too.
For
2014,
2015,
and
2016,
there
will
be
a
transitional
reinsurance
program
through
which
insurers
may
offload
some
of
the
additional
risk
assumed
in
connection
with
these
policies.
And
it's
a
pretty
big
program
-
$12
billion
in
2014,
$8
billion
in
2015,
and
$5
billion
in
2016.
So
who's
going
to
pay
for
that?
Answer:
Group
health
plans.
Beginning
in
2014,
group
health
plans
will
be
required
to
pay
a
fee
for
each
individual
covered
under
the
plan
that
will
be
used
to
fund
the
transitional
reinsurance
program.
The
fee
is
paid
once
a
year.
Plans
will
Continue Reading...
|
|
Health Care Reform and Full-Time Employees - Part 7: Rehires and Changes in Job Classification
|
01/30/2013
|
By: Jason Lacey
|
Note:
This
is
one
in
a
series
of
posts
addressing
new
rules
from
the
IRS
that
may
be
used
to
determine
which
employees
are
full-time
employees
for
purposes
of
applying
the
play-or-pay
penalties
under
health
care
reform.
Although
the
penalties
do
not
become
effective
until
2014,
it
may
be
necessary
to
begin
collecting
data
on
employees
soon,
so
it's
a
good
time
to
begin
thinking
about
these
rules.
Now
that
we’ve
got
a
handle
on
the
general
rules
-
measurement
periods,
stability
periods,
new
hires,
and
ongoing
employees
-
let’s
look
at
a
couple
of
nuanced
points:
rehired
employees
and
employees
who
change
job
classifications.
Rehires
-
General
Rule.
Here’s
the
basic
question
with
a
rehired
employee:
Should
the
employee
be
treated
as
a
new
hire
(meaning
she
starts
over
on
plan
eligibility)
or
should
the
employee
retain
the
classification
she
had
when
she
terminated?
For
better
or
worse,
the
rule
on
this
is
pretty
clear.
If
the
period
of
time
between
termination
and
rehire
is
at
least
26
weeks,
then
the
employee
is
treated
as
a
new
hire.
If
not,
then
the
employee
generally
retains
the
same
classification
she
had
when
she
terminated,
at
least
for
the
remainder
of
that
stability
period.
Example
1.
A
long-term
employee
terminates
employment
on
February
10,
2014.
At
the
time
of
termination,
the
employee
was
being
treated
as
a
full-time
employee
for
a
12-month
standard
stability
period
that
began
January
1,
2014.
The
employee
is
then
rehired
on
June
30,
2014.
Because
the
rehire
date
is
less
Continue Reading...
|
|
Employers and Exchanges: What Do You Want to Know?
|
01/20/2013
|
By: Jason Lacey
|
Each
year
the
American
Bar
Association’s
Joint
Committee
on
Employee
Benefits
(JCEB)
holds
a
conference
where
regulators
from
the
IRS,
Treasury,
DOL,
and
HHS
are
invited
to
join
with
private
lawyers
and
advisors
for
an
open
discussion
on
current
topics.
It’s
both
an
opportunity
to
learn
and
an
opportunity
to
share
ideas.
This
year’s
conference
is
in
March,
and
I’ve
been
invited
to
help
facilitate
a
session
on
the
state
and
federal
insurance
exchanges
that
will
go
into
effect
later
this
year.
As
I’m
preparing,
I’m
thinking
specifically
about
how
the
exchanges
will
relate
to
employers
and
employer-provided
group
health
coverage.
And
I’m
wondering
what
questions
employers
might
have
about
the
exchanges
and
how
they
will
be
affected.
So
what
are
your
thoughts
and
questions?
Send
me
an
email
if
you’ve
got
something
on
your
mind.
I
can’t
promise
I’ll
get
you
an
answer,
but
I
will
try
to
work
your
feedback
into
my
presentation,
and
who
knows
-
maybe
we’ll
have
some
opportunity
to
shape
the
regulators’
thinking
on
how
the
exchanges
will
or
should
impact
employers.
|
|
Health Care Reform and Full-Time Employees - Part 6: Ongoing Employees
|
01/12/2013
|
By: Jason Lacey
|
Note:
This
is
one
in
a
series
of
posts
addressing
new
rules
from
the
IRS
that
may
be
used
to
determine
which
employees
are
full-time
employees
for
purposes
of
applying
the
play-or-pay
penalties
under
health
care
reform.
Although
the
penalties
do
not
become
effective
until
2014,
it
may
be
necessary
to
begin
collecting
data
on
employees
soon,
so
it's
a
good
time
to
begin
thinking
about
these
rules.
As
we’ve
noted,
these
rules
on
full-time
employees
apply
differently
depending
on
whether
the
employee
in
question
is
a
new
hire
or
an
“ongoing
employee,”
and
we've
looked
previously
at
the
impact
on
new
hires.
So
let’s
look
at
them
in
the
context
of
ongoing
employees.
Here's
the
good
news:
It’s
pretty
straightforward.
Ongoing
Employee
Defined.
We
first
need
to
start
with
a
definition
of
“ongoing
employee,”
so
we
know
how
to
distinguish
them
from
new
hires.
An
ongoing
employee
is
an
employee
who
has
been
employed
for
one
full
standard
measurement
period.
That’s
it.
So
once
you
know
what
your
standard
measurement
period
is,
you
know
how
to
identify
your
ongoing
employees.
Test
Everyone,
Every
Period.
All
ongoing
employees
will
be
tested
for
full-time
status
during
each
standard
measurement
period.
It
doesn’t
matter
whether
they
were
previously
full-time
or
not.
At
the
end
of
each
standard
measurement
period
we’ll
look
back
at
the
hours
worked
by
each
ongoing
employee
during
that
period
and
determine
whether
they
averaged
30
or
more
hours
per
week.
If
so,
they
must
be
treated
as
full-time
for
the
associated
Continue Reading...
|
|
Health Care Reform Timeline on HHS Website
|
01/11/2013
|
By: Jason Lacey
|
HHS
has
posted
a
health
care
reform
timeline
to
its
website
(here).
Although
it
covers
more
than
just
the
employer-related
features
of
the
law
-
and,
in
fact,
doesn’t
directly
address
all
of
the
group
health
plan
mandates
and
other
issues
affecting
employers
-
it
provides
a
helpful
overview
if
you
want
to
quickly
see
what’s
been
implemented
already
or
what’s
yet
to
come.
See
also:
Health
Care
Reform
Calendar
(covering
August
1,
2012
through
July
31,
2013)
|
|
IRS Proposes Comprehensive Regulations on PPACA’s Play-or-Pay Penalties
|
01/07/2013
|
By: Jason Lacey
|
The
IRS
has
released
important
new
guidance
on
the
play-or-pay
penalties
under
Internal
Revenue
Code
Section
4980H
in
the
form
of
proposed
regulations
(here)
and
a
set
of
FAQs
(here).
The
guidance
comprehensively
addresses
a
number
of
key
issues
regarding
the
penalties
and
steps
that
may
be
taken
to
avoid
them.
For
the
sake
of
brevity,
only
a
few
highlights
will
be
noted
here.
Covered
Employers.
All
common-law
employers
that
are
“applicable
large
employers”
(generally
50
or
more
FTEs)
are
subject
to
the
penalty
rules,
including
tax-exempt
and
governmental
entities.
Entity
Aggregation.
The
Code's
entity-aggregation
rules
(relating
to
controlled
groups
and
affiliated
service
groups)
apply
for
purposes
of
determining
whether
an
entity
is
an
“applicable
large
employer.”
However,
in
an
important
clarification,
the
regulations
confirm
that
each
member
of
a
controlled
or
affiliated
group
is
allowed
to
determine
separately
whether
it
will
comply
with
the
requirements
of
Section
4980H
or
pay
the
penalty,
and
non-compliance
by
one
group
member
will
not
be
imputed
to
other
group
members.
"All"
Full-Time
Employees
Means
95%.
The
requirement
to
offer
minimum
essential
coverage
to
all
full-time
employees
will
be
satisfied
if
the
employer
offers
coverage
to
at
least
95%
of
its
full-time
employees
(or,
if
less,
all
full-time
employees
but
five).
This
is
a
welcome
interpretation
of
the
statutory
language
that,
at
a
minimum,
will
provide
some
protection
against
inadvertent
failures
to
comply.
Dependents.
The
regulations
confirm
that
Section
4980H
requires
offering
coverage
to
both
full-time
employees
and
their
dependents.
However,
the
rules
define
“dependent”
to
Continue Reading...
|
|
Health Care Reform and Full-Time Employees - Part 5: New Hires
|
01/04/2013
|
By: Jason Lacey
|
Note:
This
is
one
in
a
series
of
posts
addressing
new
rules
from
the
IRS
that
may
be
used
to
determine
which
employees
are
full-time
employees
for
purposes
of
applying
the
play-or-pay
penalties
under
health
care
reform.
Although
the
penalties
do
not
become
effective
until
2014,
it
may
be
necessary
to
begin
collecting
data
on
employees
soon,
so
it's
a
good
time
to
begin
thinking
about
these
rules.
Prior
posts
in
this
series
have
addressed
the
structural
rules
that
will
apply
to
the
process
of
determining
which
employees
are
full-time
employees
-
things
like
measurement,
stability,
and
administrative
periods.
Now
it’s
time
to
start
looking
at
how
these
rules
will
apply
to
some
specific
classifications
of
employees.
Employees
may
be
initially
sorted
into
one
of
two
groups:
new
hires
and
ongoing
employees.
This
post
will
discuss
the
treatment
of
new
hires.
I’ll
discuss
ongoing
employees
in
the
next
post
in
this
series.
New
hires
will
be
treated
one
of
two
ways.
1.
New
Full-Time
Employees.
If,
based
on
the
facts
at
the
time
of
hire,
the
new
employee
is
reasonably
expected
to
work
full
time
right
away
(average
of
30
or
more
hours
per
week)
and
is
not
a
seasonal
employee,
the
employee
must
be
treated
as
a
full-time
employee
immediately.
Employees
hired
as
full-time
employees
must
be
offered
coverage
within
3
months
to
avoid
penalty
exposure.
2.
New
Variable-Hour
Employees.
If,
based
on
the
facts
at
the
time
of
hire,
it
cannot
be
determined
whether
the
employee
will
be
full
time
because
the
employee’s
Continue Reading...
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|
Fiscal Cliff: Taxing Employer-Sponsored Health Coverage
|
12/27/2012
|
By: Jason Lacey
|
Almost
as
soon
as
the
Affordable
Care
Act
passed
in
March
2010,
the
emails
began
coming,
and
they
all
said
something
like
this:
Obamacare
increases
your
taxes
by
making
your
employer-provided
health
coverage
taxable
to
you.
Some
even
referenced
a
specific
provision
of
the
Affordable
Care
Act
as
authority.
True
or
false?
False.
Or
at
least
mostly
so.
The
kernel
of
truth
was
a
reference
to
the
provision
of
the
Affordable
Care
Act
that
requires
employers
to
report
the
value
of
employer-provided
health
coverage
on
the
employees'
W-2s.
But
it
is
only
an
information-reporting
requirement.
There
is
no
increase
in
taxable
income
as
a
result.
Fast-forward
2-1/2
years,
however,
and
we
find
ourselves
in
the
midst
of
frantic
politicking
to
attempt
to
avert
the
so-called
fiscal
cliff.
Desperate
times
lead
to
desperate
measures,
and
it
seems
that
even
the
most
sacred
of
sacred
cows
are
now
being
considered
for
slaughter.
Today's
news
brings
a
report
that
this
includes
the
long-standing
tax
exclusion
for
employer-provided
health
coverage.
It
is
an
enormous
tax
expenditure
for
the
federal
government.
Eliminating
it
would
reportedly
raise
as
much
as
$150
billion
in
additional
revenue
in
one
year.
But
it
has
also
been
a
linchpin
of
the
employment-based
health-care-financing
scheme
in
this
country.
To
encourage
employers
to
provide
health
coverage
to
their
employees,
we
allow
the
employers
to
claim
a
tax
deduction
for
the
cost
of
that
coverage,
but
we
do
not
tax
the
employees
on
it.
We
also
allow
employees
to
pay
their
share
of
the
cost
of
coverage
with
pre-tax
Continue Reading...
|
|
Short Stay at Supreme Court for Contraception Mandate
|
12/27/2012
|
By: Jason Lacey
|
The
women's
health
preventive-care
mandate
-
specifically
the
obligation
for
non-grandfathered
plans
to
cover
all
FDA-approved
contraceptive
methods
without
cost-sharing
-
had
a
short
stay
at
the
Supreme
Court
this
week.
Hobby
Lobby
stores,
and
a
related
company
named
Mardel,
had
requested
a
preliminary
injunction
preventing
the
government
from
enforcing
the
mandate
against
them
(see
prior
coverage
here
and here).
They
were
denied
relief
by
both
a
federal
district
court
in
Oklahoma
and
the
Tenth
Circuit
Court
of
Appeals
in
Denver,
so
they
asked
the
Supreme
Court
to
grant
the
injunction.
In
a
brief opinion,
Justice
Sotomayor
denied
the
request,
concluding
that
the
company
had
not
met
the
very
high
standard
for
relief.
The
company
needed
to
show
its
legal
rights
in
the
matter
were
"indisputably
clear"
in
order
to
obtain
an
injunction
before
the
lower
courts
had
ruled
on
the
merits
of
the
case.
The
Supreme
Court
has
not
previously
decided
whether
a
closely
held
for-profit
corporation
may
hold
and
exercise
religious
beliefs,
and
prior
rulings
on
the
issue
by
lower
courts
have
been
inconsistent,
so
the
law
is
not
"indisputably
clear."
The
ruling
is
largely
procedural
and
does
little
to
address
the
merits
of
the
underlying
claims.
Hobby
Lobby
may
continue
challenging
the
mandate,
but
it
will
be
required
to
comply
with
the
mandate
(or
pay
a
penalty),
unless
and
until
a
court
rules
in
its
favor.
The
mandate
becomes
effective
January
1,
2013,
for
most
calendar-year,
non-grandfathered
plans.
|
|
HHS Releases List of Conditionally Approved State Insurance Exchanges
|
12/21/2012
|
By: Jason Lacey
|
HHS
has
released
a
list
of
the
state
insurance
exchanges
that
have
received
conditional
approval
for
operation
in
2014
(with
open
enrollment
beginning
in
October
2013)
-
and
the
list
is
short.
States
receiving
conditional
approval
for
state-based
exchanges:
- Colorado
- Connecticut
- District
of
Columbia
- Kentucky
- Maryland
- Massachusetts
- Minnesota
- New
York
- Oregon
- Rhode
Island
- Washington
States
receiving
conditional
approval
for
state
partnership
exchanges:
- Delaware
This
could
leave
as
many
as
at
least
39
states
(including
Kansas)
in
which
qualified
health
plans
will
be
available
in
2014
only
through
a
federally
facilitated
exchange.
States
still
have
until
February
15,
2013
to
file
declaration
letters
and
applications
to
establish
a
state
partnership
exchange.
For
additional
background
on
exchanges
and
exchange
implementation,
see
here,
here,
and
here.
|
|
IRS Provides Guidance on New Medicare Taxes
|
12/15/2012
|
By: Jason Lacey
|
The
IRS
has
released
several
guidance
items
on
the
new
Medicare
taxes
that
take
effect
beginning
January
1,
2013:
- Proposed
regulations
on
0.9%
additional
Medicare
tax
on
earned
income
(here).
- Updated
Questions
and
Answers
for
the
Additional
Medicare
Tax
(here).
- Proposed
regulations
on
the
new
3.8%
Medicare
tax
on
net
investment
income
(here).
- Net
Investment
Income
Tax
FAQs
(here).
There
is
considerable
detail
in
all
of
this,
but
here
are
a
few
highlights:
Additional
Medicare
Tax
on
Wages
- The
employer
must
begin
withholding
the
0.9%
after
$200,000
in
taxable
wages
paid.
The
employee
may
not
opt
out
of
withholding,
even
if
the
employee
will
not
owe
the
tax.
- Withholding
by
an
employer
may
not
be
sufficient
to
cover
all
tax
actually
due
by
an
employee,
so
the
employee
may
be
required
to
make
estimated-tax
payments.
This
can
occur
when,
for
example,
two
married
individuals
have
combined
wages
that
exceed
the
threshold
amount,
but
neither
individual's
wages
exceed
$200,000.
- If
an
employer
employs
two
married
individuals,
the
employer
is
not
required
to
withhold
the
additional
tax
from
either
employee
unless
and
until
that
employee's
wages
exceed
$200,000.
This
is
the
case
even
if
the
combined
wages
paid
to
the
two
employees
exceed
$250,000
(meaning
the
employees
will
be
subject
to
the
tax).
- If
wages
are
paid
to
a
single
employee
by
two
or
more
related
Continue Reading...
|
|
Final Regulations Released on PCORI Trust Fund Tax
|
12/10/2012
|
By: Jason Lacey
|
The
IRS
has
released
its
final
rule
on
the
Patient-Centered
Outcomes
Research
Institute
(PCORI)
trust-fund
tax.
Background
on
the
tax
and
the
proposed
regulation
released
earlier
this
year
is
here.
The
final
regulation
does
not
make
significant
changes
to
the
proposed
rule.
It
is
mostly
significant
for
it
is
confirmation
of
certain
positions
that
health
insurers
and
health-plan
sponsors
had
sought
relief
on,
including:
- Retiree-Only
Plans.
The
tax
applies
to
retiree-only
plans,
even
though
those
plans
are
generally
exempt
from
the
group-market
reforms
enacted
as
part
of
the
Affordable
Care
Act.
- COBRA
Coverage.
Individuals
receiving
COBRA
coverage
under
a
plan
are
counted
as
covered
lives
for
purposes
of
the
tax.
- Integrated
Insured
and
Self-Funded
Coverage.
The
tax
applies
to
both
the
insured
and
self-funded
portions
of
a
plan
or
arrangement,
when
the
same
individual
is
covered
under
both
portions.
For
example,
if
a
plan
provides
fully
insured
high-deductible
coverage
integrated
with
a
self-funded
HRA,
the
tax
applies
to
both
the
insured
portion
and
the
self-funded
HRA.
However,
if
a
plan
includes
an
insured
option
and
a
self-funded
option
as
alternatives
(i.e.,
an
individual
may
be
covered
under
one
or
the
other
but
not
both),
the
tax
may
be
calculated
separated
for
each
option
under
the
plan,
meaning
individuals
receiving
only
insured
coverage
do
not
have
to
be
counted
for
purposes
of
calculating
the
tax
on
the
self-funded
coverage.
- HRAs
and
Health
FSAs.
There
is
no
blanket
exclusion
for
Continue Reading...
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|
Proposed Regulations Sketch Out Framework for Identifying Essential Health Benefits
|
12/07/2012
|
By: Jason Lacey
|
New
proposed
regulations
from
HHS
have
outlined
a
framework
for
identifying
the
package
of
"essential
health
benefits"
(EHB)
that
must
be
offered
by
certain
health
plans
beginning
in
2014.
Affected
Plans.
The
plans
directly
affected
by
the
rules
include
"qualified
health
plans"
(or
"QHPs")
that
will
be
offered
through
an
exchange,
and
any
other
non-grandfathered
individual
and
small-group
insurance
policies,
whether
or
not
offered
through
an
exchange.
Defining
Essential
Health
Benefits.
Rather
than
defining
a
package
of
essential
health
benefits
that
must
be
covered
by
all
affected
plans,
the
regulations
propose
that
essential
health
benefits
be
determined
on
a
state-by-state
basis
by
reference
to
an
"EHB-benchmark
plan"
identified
by
each
state
(or
identified
by
default,
if
the
state
does
not
make
an
affirmative
designation).
The
benchmark
plan
may
be
selected
from
one
of
the
following:
- The
largest
plan
by
enrollment
in
any
of
the
3
largest
small-group
insurance
products
in
the
state.
- Any
of
the
largest
3
state
employee
health
benefit
plans
by
enrollment.
- Any
of
the
largest
3
national
health
plan
options
available
to
Federal
employees
under
the
Federal
Employees
Health
Benefit
Program.
- The
largest
insured
commercial
HMO
operating
in
the
state.
An
Appendix
to
the
proposed
regulations
lists,
for
each
state,
the
plan
that
the
state
has
already
designated
as
its
benchmark
plan
or
that
will
be
the
default
plan,
if
the
state
does
not
make
an
affirmative
designation.
List
of
Largest
State
Small-Group
Products.
Earlier
this
year,
HHS
Continue Reading...
|
|
Agencies Release Joint Proposed Regulation on Wellness Plans
|
12/03/2012
|
By: Jason Lacey
|
The
IRS,
DOL,
and
HHS
have
issued
a
joint
proposed
regulation
addressing
wellness
plans
and
the
wellness
exception
to
the
HIPAA
nondiscrimination
rules.
Background.
Section
2705
of
the
Public
Health
Service
Act,
as
added
by
the
Affordable
Care
Act,
provides
statutory
affirmation
of
the
wellness-plan
rules
that
have
existed
by
regulation
for
several
years
as
part
of
the
HIPAA
nondiscrimination
rules
(rules
that
prohibit,
among
other
things,
discrimination
on
the
basis
of
health
factors).
It
also
gives
the
relevant
governmental
agencies
(IRS,
DOL,
and
HHS)
express
authority
to
issue
further
rules
on
wellness
plans
that
increase
the
permissible
reward
or
penalty
to
as
much
as
50%
of
the
cost
of
associated
heath-plan
coverage.
Proposed
Regulations.
The
proposed
regulations
largely
follow
the
structure
of
the
existing
wellness-plan
regulations,
requiring,
among
other
things,
that
wellness
programs
requiring
a
particular
health
outcome
(e.g.,
smoking
cessation,
biometric
screening
results,
minimum
BMI,
etc.)
provide
reasonable
alternatives
and
limit
the
reward
or
penalty
offered
or
imposed
in
connection
with
the
plan.
However,
there
are
a
couple
of
points
worth
highlighting:
- Participation
v.
Health-Contingent.
The
proposed
regulations
label
wellness
programs
as
either
"participatory"
or
"health-contingent."
It
is
only
the
health-contingent
programs
that
are
subject
to
more
rigorous
regulation
under
the
proposed
rules.
Participatory
programs
include
fitness-club
memberships,
general
health
education,
and
other
similar
programs
that
do
not
provide
for
a
reward
or
include
any
conditions
based
on
satisfying
a
standard
related
to
a
health
factor.
- Size
of
Reward.
The
requirements
that
must
Continue Reading...
|
|
Task Force Releases Two New Draft Preventive-Care Recommendations
|
11/27/2012
|
By: Jason Lacey
|
The
U.S.
Preventive
Services
Task
Force
has
posted
new
draft
recommendations
addressing
screening
for
HIV
and
hepatitis
C.
The
recommendation
for
HIV
is
to
screen
all
individuals
ages
15-65.
It
is
proposed
as
a
“grade
A”
recommendation.
The
recommendation
for
hepatitis
C
is
to
screen
high-risk
adults.
It
is
proposed
as
a
“grade
B”
recommendation.
These
recommendations
are
of
interest
to
non-grandfathered
group
health
plans.
If
finalized,
they
would
add
to
the
menu
of
preventive-care
services
required
to
be
covered
without
cost-sharing.
Under
regulations
issued
in
2010,
any
“items
or
services
that
have
in
effect
a
rating
of
A
or
B
in
the
current
recommendations
of
the
United
States
Preventive
Services
Task
Force”
are
required
to
be
covered.
However,
a
new
recommendation
does
not
apply
until
the
first
plan
year
beginning
on
or
after
the
date
that
is
one
year
after
the
recommendation
becomes
effective.
|
|
Health Care Reform and Full-Time Employees - Part 4: Administrative Periods
|
11/24/2012
|
By: Jason Lacey
|
Note:
This
is
one
in
a
series
of
posts
addressing
new
rules
from
the
IRS
that
may
be
used
to
determine
which
employees
are
full-time
employees
for
purposes
of
applying
the
play-or-pay
penalties
under
health
care
reform.
Although
the
penalties
do
not
become
effective
until
2014,
it
may
be
necessary
to
begin
collecting
data
on
employees
soon,
so
it's
a
good
time
to
begin
thinking
about
these
rules.
As
we
have
already
seen,
an
employer
may
use
a
measurement
period
to
determine
whether
an
employee
is
a
full-time
employee,
and
any
such
full-time
employee
must
be
offered
health-plan
coverage
during
the
following
stability
period,
if
the
employer
wants
to
avoid
an
automatic
penalty
for
that
employee.
But,
of
course,
enrollment
can
take
some
time.
The
employee
may
have
multiple
coverage
options
to
consider
and
enrollment
forms
to
fill
out.
And
the
employer
will
almost
certainly
need
time
to
calculate
the
employee's
hours
of
service
during
the
measurement
period.
So
it
wouldn't
work
very
well
if
the
stability
period
had
to
begin
immediately
after
the
measurement
period.
A
Time
For
Transition.
Recognizing
this,
the
IRS’s
guidance
allows
employers
to
use
an
"administrative
period"
in
connection
with
their
measurement
and
stability
periods.
This
allows
for
a
reasonable
transition
period
between
the
measurement
and
stability
periods.
It
also
allows
the
initial
measurement
period
to
begin
at
a
convenient
time,
such
as
at
the
beginning
of
a
month
or
payroll
cycle.
Ground
Rules. Like
the
measurement
and
stability
periods,
employers
have
flexibility
in
defining
the
administrative
period,
but
Continue Reading...
|
|
Government Wins a Round on the Contraception Mandate
|
11/23/2012
|
By: Jason Lacey
|
In
the
tally
of
recent
cases
involving
the
women’s
health
preventive-care
mandate
and
for-profit
employers
(see,
for
example,
here,
here,
and
here),
mark
one
down
in
the
government’s
column.
Earlier
this
week,
a
federal
court
in
Oklahoma
ruled
against
Hobby
Lobby
(prior
coverage
here),
concluding
that
the
company
(as
distinct
from
its
owners)
did
not
have
religious
views
or
freedoms
that
would
be
infringed
by
enforcement
of
the
mandate.
Hobby
Lobby
has
already
appealed
the
decision
to
the
Tenth
Circuit
court
of
appeals,
so
we
may
soon
have
a
higher
court
weighing
in
on
the
issue.
Additional
coverage
of
both
the
decision
and
the
appeal
is
available
here
and
here.
|
|
Another Court Blocks Enforcement of the Contraception Mandate
|
11/20/2012
|
By: Jason Lacey
|
This
case,
involving
a
for-profit
bible-publishing
company
(prior
coverage
here),
is
very
similar
to
two
others
decided
recently
(see
here
and
here).
The
court
concluded
that
enforcement
of
the
women's
health
preventive-care
mandate
was
likely
to
violate
the
employer's
free-exercise
of
religion,
so
it
temporarily
barred
enforcement
of
the
mandate (court's
order here).
The
Washington
Times
has
further
coverage
here.
There
is
considerable
analysis
in
the
court's
opinion
in
this
case
on
the
issue
of
whether
a
corporation
can
hold
or
exercise
religious
rights.
Although
the
court
concludes
a
corporation
does
have
that
right,
it
is
a
very
fact-specific
analysis
that
may
not
lend
itself
to
broad
applicability.
It
should
also
be
noted
that
the
view
adopted
by
this
court
and
others
that
have
ruled
similarly
is
not
universally
held.
In
October,
a
Missouri
federal
court
ruled
that
the
mandate
did
not
limit
a
for-profit
employer's
free-exercise
of
religion
to
a
degree
that
warranted
barring
enforcement
of
the
mandate.
So
judges
may differ
in
their
view
and
application
of
these
standards,
and
how
that
ultimately
will
be
resolved
may
not
be
known
unless
and
until
these
cases
work
their
way
to
the
Supreme
Court.
|
|
HHS Grants 11th Hour Second Extension of State Exchange Deadline
|
11/16/2012
|
By: Jason Lacey
|
In
a
letter
from
HHS
secretary
Kathleen
Sebelius
released
late
yesterday,
HHS
has
given
states
another
month
to
file
the
Declaration
Letter
necessary
to
show
their
intent
to
establish
a
state-based
insurance
exchange
for
2014.
The
deadline
is
now
December
14,
2012.
A
state's
Blueprint
Application
for
a
state-based
exchange
will
be
due
the
same
time.
The
original
deadline
for
filing
both
the
Declaration
Letter
and
the
Blueprint
Application
was
November
16,
2012
(see
here).
Last
week,
HHS
extended
the
deadline
for
filing
the
Blueprint
Application
to
December
14,
2012,
but
left
the
November
16
deadline
in
place
for
the
Declaration
Letter
(see
here).
HHS
also
previously
extended
until
February
15,
2013
the
deadline
for
filing
a
Declaration
Letter
and
Blueprint
Application
for
states
that
want
to
establish
state
partnership
exchanges,
rather
than
full-blown
state-based
exchanges
(see
here).
That
deadline
remains
in
place.
|
|
Health Care Reform and Full-Time Employees - Part 3: Stability Periods
|
11/14/2012
|
By: Jason Lacey
|
Note:
This
is
one
in
a
series
of
posts
addressing
new
rules
from
the
IRS
that
may
be
used
to
determine
which
employees
are
full-time
employees
for
purposes
of
applying
the
play-or-pay
penalties
under
health
care
reform.
Although
the
penalties
do
not
become
effective
until
2014,
it
may
be
necessary
to
begin
collecting
data
on
employees
soon,
so
it's
a
good
time
to
begin
thinking
about
these
rules.
So
we
know
it’s
important
to
identify
which
employees
are
full-time
(and
which
are
not),
and
we
know
we
can
use
a
measurement
period
of
up
to
12
months
to
collect
the
data
we
need
to
make
the
determination
about
full-time
status.
The
next
question
then
is
what
that
means
going
forward.
How
long
do
the
determinations
we
make
during
the
measurement
period
last? That’s
where
the
stability
period
comes
in.
Stability
Period
Related
to
Measurement
Period.
Each
measurement
period
(whether
an
initial
measurement
period
or
a
standard
measurement
period)
will
have
an
associated
stability
period.
If
an
employer
determines
that
an
employee
did
not
work
full-time
during
a
measurement
period,
the
employer
is
permitted
to
treat
the
employee
as
a
part-time
employee
during
the
following
stability
period.
Similarly,
employees
determined
to
be
full-time
during
the
measurement
period
are
treated
as
full-time
during
the
following
stability
period.
Actual
Facts
Don't
Change
the
Current
Period.
The
key
is
that
an
employee’s
status
during
the
stability
period
remains
the
same,
regardless
of
how
many
hours
the
employee
actually
works
during
the
stability
period.
For
example,
if
an
employee
Continue Reading...
|
|
HHS Extends Deadlines for States to Make Exchange Decisions
|
11/12/2012
|
By: Jason Lacey
|
HHS
has
released
a
fact
sheet
extending
a
key
deadline
for
states
to
take
the
steps
necessary
to
establish
either
a
state-based
insurance
exchange
or
a
state
partnership
exchange.
This
modifies
the
timetable
set
out
in
HHS's
previously
released
Blueprint
for
establishing
an
insurance
exchange
(see
coverage
here).
The
highlights:
- State-Based
Exchange. To
create
a
state-based
exchange,
states
still
must
file
a
Declaration
Letter
by
November
16,
2012,
but
they
will
now
have
until
December
14,
2012
to
complete
the
required
Blueprint
Application.
- State
Partnership
Exchange. To
create
a
state
partnership
exchange,
states
have
until
February
15,
2013
to
file
a
Declaration
Letter
and
Blueprint
Application.
They
must
indicate
in
those
documents
what
roles
they
intend
to
fill
in
the
partnership
exchange
(plan
management
functions,
consumer
assistance
functions,
or
both).
- 2015
Deadlines. States
that
want
to
adopt
a
different
exchange
model
for
2015
than
they
use
in
2014
must
submit
a
Declaration
Letter
by
November
18,
2013
and
a
Blueprint
Application
by
December
16,
2013.
Kansas
Governor
Sam
Brownback
recently
affirmed his
position
that
Kansas
will
not
participate
in
the
exchange
system
at
any
level
for
2014
(his
signature
is
necessary
for
the
state
to
file
a
Declaration
Letter),
so
Kansas
residents
will
be
covered
by
a
federally
facilitated
exchange
for
2014,
absent
a
change
in
position
before
the
February
15,
2013
deadline
to
apply
for
a
state
partnership
exchange.
|
|
Federal Court in Michigan Halts Enforcement of Contraception Mandate Against For-Profit Company
|
11/04/2012
|
By: Jason Lacey
|
A
federal
district
court
in
Michigan
has
entered
an
order
temporarily
halting
the
government's
ability
to
enforce
the
women's
health
preventive-care
mandate
against
a
for-profit
company
on
the
basis
that
the
mandate
would
violate
the
company's
free-exercise
of
religion.
As
explained
by
the
court:
"Plaintiffs
argue
that
the
HRSA
Mandate,
which
forces
them
to
choose
between
providing
health
insurance
that
includes
contraception
without
cost-sharing
or
incurring
a
financial
penalty,
substantially
burdens
their
free
exercise
of
religion.
Under
the
Religious
Freedom
Restoration
Act,
Plaintiffs
seek
a
preliminary
injunction
to
prohibit
the
Government
from
enforcing
the
HRSA
Mandate
against
them."
Weighing
the
relative
risks
to
the
government
and
the
company
in
blocking
enforcement
of
the
mandate,
the
court
observed:
"The
harm
in
delaying
the
implementation
of
a
statute
that
may
later
be
deemed
constitutional
must
yield
to
the
risk
presented
here
of
substantially
infringing
the
sincere
exercise
of
religious
beliefs.
The
balance
of
harms
tips
strongly
in
Plaintiffs'
favor.
A
preliminary
injunction
is
warranted."
This
case
and
others
like
it
(see
here,
here,
and
here)
are
of
interest
because
they
provide,
or
seek
to
provide,
a
targeted
exemption
for
certain
for-profit
employers
from
the
mandate,
even
though
the
government's
regulations
would
exempt
only
non-profit
organizations,
and
even
then
only
those
that
are
engaged
directly
in
religious
activity,
not
just
guided
by
religious
beliefs
or
principals.
The
issue
sets
up
considerable
tension
at
the
intersection
of
religious
freedom
and
women's
health
and
could
represent
the
ticket
for
PPACA's
next
trip
to
the
Supreme
Continue Reading...
|
|
Health Care Reform and Full-Time Employees - Part 2: Measurement Periods
|
10/31/2012
|
By: Jason Lacey
|
Note:
This
is
one
in
a
series
of
posts
addressing
new
rules
from
the
IRS
that
may
be
used
to
determine
which
employees
are
full-time
employees
for
purposes
of
applying
the
play-or-pay
penalties
under
health
care
reform.
Although
the
penalties
do
not
become
effective
until
2014,
it
may
be
necessary
to
begin
collecting
data
on
employees
soon,
so
it's
a
good
time
to
begin
thinking
about
these
rules.
We
know
a
critical
issue
in
looking
at
the
play-or-pay
penalties
is
determining
which
employees
are
full-time
and
which
are
not.
An
initial
step
in
that
process
is
identifying
the
period
to
be
used
for
making
that
determination.
Looking
Back
vs.
Looking
Forward.
For
employees
who
work
varying
schedules
and
hours,
it
can
be
difficult
to
predict
whether
or
when
those
employees
will
average
30
or
more
hours
per
week.
So
Notice
2012-58
allows
an
employer
to
look
back
over
a
defined
period
to
make
that
determination.
This
look-back
period
is
referred
to
as
a
“measurement
period.”
As
the
name
suggests,
it
is
the
period
over
which
the
employer
will
measure
an
employee’s
hours
worked
and
determine
whether
the
employee
was
above
or
below
the
30-hour
threshold.
Two
Types.
There
are
two
types
of
measurement
periods:
an
“initial
measurement
period”
and
a
“standard
measurement
period.”
They
are
conceptually
similar,
but
operate
differently
and
serve
slightly
different
functions.
Initial
Measurement
Period.
The
initial
measurement
period
applies
to
newly
hired
variable-hour
and
seasonal
employees.
Although
the
length
of
the
initial
measurement
period
must
be
the
same
for
all
Continue Reading...
|
|
Health Care Reform and Full-Time Employees - Part 1: The Problem
|
10/18/2012
|
By: Jason Lacey
|
Note:
This
is
one
in
a
series
of
posts
addressing
new
rules
from
the
IRS
that
may
be
used
to
determine
which
employees
are
full-time
employees
for
purposes
of
applying
the
play-or-pay
penalties
under
health
care
reform.
Although
the
penalties
do
not
become
effective
until
2014,
it
may
be
necessary
to
begin
collecting
data
on
employees
soon,
so
it's
a
good
time
to
begin
thinking
about
these
rules.
Background.
The
play-or-pay
penalties
essentially
penalize
applicable
large
employers
that
do
not
provide
adequate,
affordable
group
health
coverage
to
full-time
employees.
So
for
employers
that
want
to
either
ensure
they
avoid
penalty
exposure
or
assess
their
potential
exposure
to
penalties,
a
critical
issue
is
determining
which
employees
are
full-time
employees.
The
law
generally
defines
"full
time"
for
this
purpose
as
working
an
average
of
30
or
more
hours
per
week.
Guidance
from
the
IRS
indicates
that
this
may
be
determined
on
a
monthly
basis,
in
which
case
employees
working
an
average
of
130
or
more
hours
per
month
are
treated
as
full
time.
Month-by-Month
Determination.
The
structure
of
the
penalty
rules
contemplates
a
month-by-month
determination
and
calculation.
An
employer
that
decides
to
"pay"
rather
than
"play"
must
calculate
for
each
month
in
the
year
the
number
of
full-time
employees
it
had
for
that
month
and
the
corresponding
penalty
amount
that
is
due.
But
for
employers
that
intend
to
offer
group
health
coverage
to
employees
so
they
can
avoid
most
or
all
of
the
penalties,
making
a
month-by-month
determination
is
largely
impractical.
This
could
literally
result
in
Continue Reading...
|
|
Bible Publisher Files Lawsuit Over Contraception Mandate
|
10/04/2012
|
By: Jason Lacey
|
In
the
ongoing
saga
over
the
contraception
rules
under
health
care
reform's
preventive-care
mandate
(see
prior
coverage
here
and
here),
the
Washington
Times
has
a
recent
article reporting
that
a
for-profit
Bible
publisher
is
suing
to
obtain
relief
from
the
law.
It
claims
it
is
a
"religious
employer"
and
should
be
exempt
from
the
requirement
to
provide
free
access
to
contraception.
HHS's
regulations
limit
the
religious-employer
exemption
to
non-profit
organizations
engaged
in
ecclesiastical
functions
(essentially
houses
of
worship)
and,
thus,
categorically
deny
exemption
for
any
for-profit
employer.
This
aspect
of
health
care
reform
has
proven
especially
controversial
and
contentious,
because
it
touches
on
two
hot-button
issues:
(1)
the
line
between
government
regulation
and
religious
freedom,
and
(2)
the
ability
of
women
to
access
certain
health-care
products
and
services.
Given
the
battle
lines
that
have
been
drawn
already,
the
issues
seem
unlikely
to
be
resolved
soon.
|
|
One Week Until D-Day for SBCs
|
09/16/2012
|
By: Jason Lacey
|
One
week
from
today
-
September
23
-
is
a
key
date
in
compliance
with
the
obligation
to
provide
health
plan
participants
with
the
four-page
summary
of
benefits
and
coverage
(SBC).
Plans
holding
open-enrollment
periods
on
or
after
September
23,
2012
generally
are
required
to
provide
the
SBC
to
eligible
employees
at
the
same
time
enrollment
materials
are
distributed.
Most
calendar-year
plans
will
not
be
holding
open
enrollment
until
October
or
November,
so
they
will
not
need
to
distribute
the
SBC
yet.
But
it's
not
too
soon
to
begin
confirming
who
will
prepare
the
SBC,
who
will
send
it
out,
and
how
it
will
be
sent.
For
a
primer
on
the
SBC
requirements,
see
here.
For
other
prior
coverage
related
to
the
SBC,
see
here
and
here.
|
|
Women's Preventive Care Mandate Continues to Draw Challenges
|
09/13/2012
|
By: Jason Lacey
|
Another
lawsuit
has
been
filed
by
a
private
employer
challenging
the
health
care
reform
mandate
regarding
coverage
of
women's
preventive
care.The
Washington
Post
is
reporting
that
Hobby
Lobby
stores
has
filed
a
lawsuit
in
Oklahoma
City
seeking
relief
from
the
mandate
on
the
grounds
that
it
unconstitutionally
interferes
with
the
company's
deeply
held
religious
beliefs
(or
at
least
those
of
its
owner).
The
company
specifically
objects
to
the
requirement
that
its
health
plan
cover
the
"morning-after
pill"
and
other
similar
drugs
or
devices
that
can
prevent
the
implantation
of
a
fertilized
egg,
which
the
company
views
as
tantamount
to
abortion.
According
to
the
article,
Hobby
Lobby
maintains
a
calendar
year,
non-grandfathered,
self-insured
health
plan
covering
more
than
13,000
eligible
employees
nationwide.
This
means
that,
absent
relief
from
the
court,
the
company
will
be
required
to
offer
the
full
range
of
women's
preventive
care
services
under
its
plan
by
January
1,
2013,
or
it
will
face
a
penalty
of
as
much
as
$1.3
million
per
day
($100
per
participant)
for
each
day
the
plan
fails
to
comply.
Our
discussion
of
a
similar
lawsuit
filed
in
Colorado
is here.
A
general
description
of
the
women's-preventive-care
mandate
is here.
Other
coverage
on
the
mandate
is
here.
|
|
IRS Will Not Enforce Individual Mandate
|
09/12/2012
|
By: Jason Lacey
|
The
New
York
Times
has
an
article reporting
that
the
IRS
will
not
use
its
agents
or
other
resources
to
enforce
the
individual
mandate
under
health
care
reform
once
it
goes
into
effect
in
2014.
Individuals
who
fail
to
maintain
appropriate
health
coverage
will
be
subject
to
a
penalty
beginning
in
2014.
The
penalty
is
to
be
paid
in
the
same
manner
as
a
tax.
This
presumably
will
require
an
addition
to
the
individual
income
tax
return
(Form
1040)
where
taxpayers
will
certify
whether
they
have
the
required
coverage.
If
they
do
not
have
the
coverage,
the
penalty
will
be
added
to
the
tax
due,
meaning
it
will
either
be
offset
against
any
refund
or
will
need
to
be
paid
along
with
any
other
tax
due
with
the
return.
But
the
law
specifically
exempts
the
penalty
from
the
provisions
of
the
tax
code
relating
to
enforcement
and
collection
-
things
such
as
the
IRS's
ability
to
impose
a
lien
or
levy
to
assist
with
collection.
So
the
IRS
has
apparently
decided
that
it
will
not
even
look
for
non-compliant
taxpayers,
since
it
would
not
have
the
tools
to
compel
payment
of
the
penalty
anyway.
The
Times
article
refers
to
some
projections
that
only
1%
of
Americans
will
even
be
subject
to
the
penalty
for
failing
to
maintain
insurance.
So
on
a
large-scale
basis,
the
IRS
simply
may
not
view
the
risks
of
noncompliance
as
serious
enough
to
warrant
devoting
resources
to
enforcement.
|
|
Health Care Reform Calendar
|
09/07/2012
|
By: Jason Lacey
|
Here
is
a
summary
of
key
compliance
dates
for
health
care
reform
mandates
over
the
next
12
months
or
so.
August
1,
2012
- Women's
Preventive
Care.
Non-grandfathered
plans
must
cover
women's
preventive
care
services
without
cost
sharing
for
plan
years
beginning
on
or
after
August
1,
2012.
September
23,
2012
- SBC.
A
summary
of
benefits
and
coverage
(SBC)
must
be
provided
in
connection
with
any
open-enrollment
period
beginning
on
or
after
September
23,
2012.
October
1,
2012
- PCORI
Trust
Fund
Tax.
The
PCORI
trust
fund
tax
($1
per
covered
individual)
is
due
with
respect
to
plan
years
ending
on
or
after
October
1,
2012.
January
1,
2013
- Health
FSA
Cap.
The
maximum
employee
contribution
to
a
health
FSA
is
limited
to
$2,500
for
plan
years
beginning
on
or
after
January
1,
2013.
- Medicare
Tax.
Additional
Medicare
tax
of
0.9%
must
be
withheld
with
respect
to
wages
paid
on
or
after
January
1,
2013,
to
the
extent
wages
exceed
$200,000
for
the
calendar
year.
(Additional
Medicare
tax
of
3.8%
on
net
investment
income
of
high-income
taxpayers
also
applies
beginning
January
1,
2013.)
January
31,
2013
- W-2
Reporting.
Large
employers
(issued
250
or
more
W-2s
in
2011)
must
issue
W-2s
for
2012
showing
the
aggregate
cost
of
applicable
employer-sponsored
health
coverage
(report
in
Box
12,
Code
DD).
March
1,
2013
- Insurance
Exchange
Notice.
Employers
must
distribute
to
all
current
employees
by
March
1,
2013
a
notice
describing
Continue Reading...
|
|
IRS, DOL, and HHS Issue Joint Guidance on 90-Day Waiting Period Limitation Under PPACA
|
09/04/2012
|
By: Jason Lacey
|
Notice
2012-59
provides
guidance
on
the
requirement
under
Section
2708
of
the
Public
Health
Service
Act
(added
by
PPACA)
that
a
group
health
plan
not
apply
any
waiting
period
that
exceeds
90
days.
The
rule
applies
for
plan
years
beginning
on
or
after
January
1,
2014.
Among
the
clarifications
offered
by
the
guidance:
- Definition
of
Waiting
Period.
A
"waiting
period"
is
defined
as
a
period
of
time
that
must
pass
before
coverage
can
become
effective
for
an
individual
who
is
otherwise
eligible
to
enroll
under
a
plan.
Eligibility
conditions
based
solely
on
the
lapse
of
time
cannot
exceed
90
days,
but
other
eligibility
conditions
(e.g.,
working
full
time
or
working
in
a
covered
job
classification)
are
permissible,
even
if
they
have
the
effect
of
excluding
an
individual
from
coverage
under
the
plan
for
more
than
90
days.
- Determining
Full-Time
Status
for
Variable-Hour
Employees.
If
a
plan
limits
coverage
to
full-time
employees,
it
may
take
a
reasonable
period
of
time
to
determine
whether
a
newly
hired
employee
meets
the
full-time
standard,
if
it
is
not
clear
on
the
date
of
hire
that
the
employee
will
work
the
required
number
of
hours
(e.g.,
30
hours
per
week).
In
general,
this
determination
must
be
made
within
a
year
after
the
employee
is
hired,
and
if
the
employee
satisfies
the
eligibility
requirements,
coverage
must
be
offered
beginning
within
13
months
after
the
date
of
hire.
Otherwise,
the
plan
may
be
treated
as
indirectly
avoiding
the
90-day-waiting-period
requirement.
This
notice
Continue Reading...
|
|
IRS Provides Important Guidance on Full-Time Employees and the Play-or-Pay Penalties
|
09/04/2012
|
By: Jason Lacey
|
Beginning
in
2014,
employers
may
be
subject
to
the
play-or-pay
penalties
under
health
care
reform
if
they
fail
to
offer
health
coverage
to
full-time
employees,
so
it
will
be
important
to
understand
which
employees
are
considered
"full
time"
under
those
rules.
In
general,
"full
time"
means
working
an
average
of
30
or
more
hours
per
week.
In
some
cases
it
will
be
clear
that
an
employee
is
(or
is
not)
a
full-time
employee.
But
in
other
cases,
an
employee's
work
hours
may
be
expected
to
vary
over
time,
making
it
difficult
to
know
whether
the
employee
will
be
working
an
average
of
30
or
more
hours
per
week.
It
would
be
an
administrative
nightmare
to
determine
a
variable-hour
employee's
eligibility
for
health
plan
coverage
on
a
weekly
or
even
monthly
basis,
depending
on
the
hours
worked
by
the
employee
during
that
period.
This
would
also
be
largely
impractical,
since
it
often
would
not
be
known
until
the
end
of
a
period
whether
the
employee
worked
enough
hours
during
that
period
to
have
been
eligible
for
coverage.
Recognizing
this,
IRS
Notice
2012-58
provides
a
framework
for
employers
to
make
eligibility
determinations
for
variable-hour
employees
over
longer
periods
(up
to
12
months)
and
rely
on
those
determinations
for
a
specified
future
period
without
regard
to
actual
hours
worked.
These
determinations
will
be
respected
both
for
purposes
of
plan
eligibility
and
for
purposes
of
applying
the
play-or-pay
penalties.
In
other
words,
by
following
the
framework
established
in
Notice
2012-58,
employers
can
better
quantify
which
employees
Continue Reading...
|
|
House Committee Pressure IRS Over Health Care Reform Premium Subsidies
|
08/24/2012
|
By: Jason Lacey
|
The
House
Oversight
and
Government
Reform
Committee
has
sent
a
letter
to
IRS
commissioner
Douglas
Shulman
asking
the
IRS
to
produce
background
information
and
analysis
supporting
the
final
premium-tax-credit
regulations
released
in
May.
The
tax
credit
is
the
federal
subsidy
provided
by
PPACA
for
insurance
coverage
purchased
by
qualifying
individuals
through
an
exchange.
The
issue
underlying
this
brouhaha
is
the
IRS's
position
that
the
tax
credit
is
available
to
qualifying
individuals
for
coverage
purchased
through
any
exchange,
including
an
exchange
established
and
operated
by
the
federal
government
in
a
state
that
has
declined
to
establish
its
own
exchange.
(For
a
summary
of
the
different
ways
in
which
exchanges
may
be
established,
click
here.)
Some
have
argued
that
this
position
is
not
supported
by
the
statutory
language
in
PPACA
and
the
Internal
Revenue
Code,
which
says
the
tax
credit
is
available
for
coverage
purchased
through
an
exchange
established
by
a
state.
It
is
unlikely
the
House
Committee's
inquiry
will
amount
to
much
more
than
political
theater.
But
it
will
highlight
what
has
become
a
popular
line
of
attack
on
the
health-care-reform
law
since
it
was
upheld
by
the
Supreme
Court
in
June.
|
|
HHS Provides Enforcement Safe Harbor for Claim-Denial Notices by Governmental Plans
|
08/20/2012
|
By: Jason Lacey
|
The
Department
of
Health
and
Human
Services
(HHS)
has
issued
an
enforcement
safe
harbor
relating
to
the
content
of
benefit-claim
denial
notices
issued
by
non-federal
governmental
health
plans.
Under
health
care
reform,
all
non-grandfathered
group
health
plans
are
required
to
follow
the
DOL's
rules
and
regulations
regarding
the
content
of
notices
of
adverse
benefit
determinations.
Among
other
things,
those
rules
require
providing
(1)
a
statement
about
a
participant's
right
to
bring
suit
under
ERISA,
and
(2)
contact
information
for
the
federal
Employee
Benefits
Security
Administration
(EBSA)
or
a
state
insurance
department.
Non-federal
governmental
plans
are
not
subject
to
ERISA,
so
participants
do
not
have
the
right
to
sue
under
ERISA
to
seek
recovery
of
benefits.
In
addition,
participants
in
non-federal
governmental
plans
are
not
provided
services
by
the
EBSA,
because
they
do
not
have
rights
under
ERISA.
The
enforcement
safe
harbor
clarifies
that
non-federal
governmental
plans
can
exclude
ERISA
right-to-sue
language
and
EBSA
contact
information
from
their
benefit-denial
notices
and
they will
not
be
treated
as
violating
the
health-care-reform
mandates.
Contact
information
is
not
required
to
be
provided
for
a
state
insurance
department
either,
unless
the
plan
actually
uses
an
insurance
policy
issued
by
a
carrier
subject
to
regulation
by
a
state
insurance
department.
There
are
some
nuances
to
the
safe
harbor,
so
HHS's
notice
should
be
carefully
reviewed
by
any
non-federal
governmental
plan
intending
to
rely
on
the
safe
harbor.
But
on
the
whole
this
should
come
as
a
welcome
(and
practical)
clarification
for
affected
plans.
|
|
HHS Clarifies Enforcement Safe Harbor for Contraceptive Coverage
|
08/17/2012
|
By: Jason Lacey
|
HHS
has
updated
its
enforcement
safe
harbor
relating
to
required
contraceptive
coverage
and
non-profit
organizations
that
object
to
such
coverage
for
religious
reasons.
The
updated
safe
harbor
clarifies
three
items:
- The
safe
harbor
is
available
to
non-profit
organizations
with
religious
objections
to
some
but
not
all
contraceptive
coverage.
- Organizations
that
took
some
action
as
of
February
10,
2012
that
was
intended
to
limit
or
exclude
contraceptive
coverage
but
that
was
unsuccessful
are
not,
solely
for
that
reason,
precluded
from
relying
on
the
safe
harbor.
- Organizations
that
are
not
sure
whether
they
qualify
for
the
broader
religious-employer
exemption
may
utilize
the
safe
harbor
without
prejudicing
their
ability
to
rely
on
the
religious-employer
exemption
in
the
future.
With
regard
to
item
1,
the
specific
language
of
the
revised
notice
says
that
since
February
10,
2012,
the
plan
must
have
"consistently
not
provided
all
or
the
same
subset
of
the
contraceptive
coverage
otherwise
required
at
any
point
.
.
.
."
Although
this
language
will
not
win
any
awards
for
clarity,
it
appears
to
mean
that
the
safe
harbor
is
not
an
all-or-nothing
rule.
An
employer
may
be
able
to
offer
some
types
of
contraceptive
coverage
but
exclude
others
on
religious
grounds
and
remain
within
the
safe
harbor.
With
regard
to
item
2,
the
guidance
does
not
provide
any
examples
of
situations
where,
despite
its
best
efforts,
an
employer
might
be
unable
to
exclude
contraceptive
coverage.
Perhaps
it
contemplates
a
case
such
as
one
where
Continue Reading...
|
|
HHS Releases "Blueprint" for Approval of Insurance Exchanges
|
08/15/2012
|
By: Jason Lacey
|
The
Department
of
Health
and
Human
Services
(HHS)
has
released
a
"Blueprint"
describing
the
process
by
which
states
must
apply
to
obtain
approval
to
operate
an
insurance
exchange
beginning
in
2014.
The
document
also
details
the
features
and
activities
an
exchange
will
be
required
to
offer.
Although
the
finer
points
of
this
document
are
primarily
of
interest
to
states
that
will
be
seeking
to
operate
an
exchange
(either
alone
or
in
partnership
with
the
federal
government),
it
provides
employers
some
sense
of
how
and
when
the
exchanges
will
come
together.
Among
the
highlights:
- There
are
three
exchange
models:
(1)
state-based
exchanges
(operated
largely
by
the
states);
(2)
state
partnership
exchanges
(operated
largely
by
the
federal
government
but
with
some
state
involvement);
and
(3)
federally
facilitated
exchanges
(operated
almost
exclusively
by
the
federal
government).
- States
wanting
to
participate
under
any
of
these
models
must
receive
approval
or
conditional
approval
from
HHS
by
January
1,
2013.
A
"declaration
letter"
and
"exchange
application"
must
be
submitted
no
later
than
November
16,
2012.
- An
exchange
must
be
operational
for
an
open-enrollment
period
beginning
October
1,
2013.
- Required
exchange
activities
will
include
(1)
providing
consumer
support
for
coverage
decisions;
(2)
facilitating
eligibility
determinations
for
individuals;
(3)
providing
for
enrollment
in
qualified
health
plans
(QHPs);
(4)
certifying
health
plans
as
QHPs;
and
(5)
operating
a
Small
Business
Health
Options
Program
(SHOP).
From
this
we
can
see
that
the
exchange
landscape
will
be
better
defined
by
Continue Reading...
|
|
Health Care Reform and the Debate Over "Affordability"
|
08/12/2012
|
By: Jason Lacey
|
Now
that
PPACA
has
been
largely upheld
and
we
steam
full-speed-ahead
toward
2014,
one
issue
we
are
likely
to
hear
a
lot
more
about
is
"affordability"
-
specifically,
what
is
the
maximum
amount
an
employee
should
be
required
to
pay
for
employer-sponsored
health
coverage
before
the
employee
will
be
allowed
to
opt
out
of
the
employer
plan
and
obtain
federally
subsidized
health
coverage
through
an
exchange.
This
seemingly
innocuous
issue
is
turning
into
something
of
a
multi-headed
monster,
as
illustrated
by
an
article
in
today's
New
York
Times.
The
rule
at
the
center
of
this
is
disarmingly
simple
to
state:
If
an
employee
is
required
to
pay
more
than
9.5%
of
household
income
to
obtain
group
health
coverage
through
an
employer-sponsored
plan,
the
employee
can
instead
obtain
coverage
through
an
exchange
and
receive
a
premium
subsidy
tax
credit
that
will
bring
the
out-of-pocket
cost
down
to
9.5%
of
household
income
(or
even
less).
But
then
things
get
complicated.
- What
does
the
9.5%
amount
relate
to?
Employers
typically
offer
multi-tier
coverage
under
their
plans,
with
options
ranging
from
employee-only
coverage
to
full
family
coverage
(and
often
two
tiers
in
between).
Is
the
threshold
9.5%
of
the
cost
of
employee-only
coverage
or
something
else?
- If
a
large
employer
has
employees
that
obtain
subsidized
coverage
through
an
exchange,
the
employer
may
be
subject
to
a
$3,000/year
penalty
for
each
such
employee.
Can
an
employer
that
wants
to
avoid
all
penalties
structure
its
plan
so
that
the
plan
is
Continue Reading...
|
|
Employers Consider What to do With MLR Rebates
|
08/10/2012
|
By: Jason Lacey
|
The
New
York
Times
has
an
article
today
illustrating
a
practical
problem
for
employers
that
receive
MLR
rebates
with
respect
to
their
group
health
plans.
Employers
have
several
options
for
using
the
portion
of
the
rebate
attributable
to
employee
premium
contributions,
including:
pay
it
back
in
cash,
reduce
future
premiums,
or
enhance
future
benefits.
But
there
are
some
nuances
and
administrative
considerations
that
accompany
each
option,
and
in
any
case
the
employer
may
have
a
fiduciary
obligation
to
use
that
portion
of
the
rebate
in
a
fair
and
reasonable
manner
for
the
benefit
of
the
covered
employees.
So
many
employers
are
proceeding
with
due
deliberation
in
their
decision-making.
At
the
same
time,
however,
the
covered
employees
have
all
received
notices
from
the
insurance
carrier
that
a
rebate
was
paid
(see
our
prior
coverage
of
this
notice
rule
here),
and
they're
wondering
where
their
money
is.
So
the
problem
is
that
employers
need
a
little
time
to
figure
out
the
right
thing
to
do,
but
the
longer
they
take,
the
more
employees
suspect
something
nefarious
is
going
on.
Employers
don't
have
a
firm
legal
deadline
for
deciding
what
to
do
with
the
MLR
rebate
(although
many
will
need
to
do
something
within
three
months
to
avoid
a
compliance
issue
with
the
ERISA
trust
rule).
But
the
practical
pressure
from
employees
may
weigh
in
favor
of
doing
something
sooner
rather
than
later.
For
prior
coverage
on
considerations
related
to
the
MLR
rebate,
see
here and
here.
|
|
DOL Adds An FAQ on SBCs and Medicare Advantage Plans
|
08/08/2012
|
By: Jason Lacey
|
The
DOL
has
posted
one
additional
FAQ
to
its
website
addressing
the
narrow
question
whether
a
summary
of
benefits
and
coverage
(SBC)
must
be
provided
with
respect
to
a
Medicare
Advantage
benefit
option
under
a
group
health
plan.
The
DOL
takes
a
nonenforcement
position,
meaning
a
group
health
plan
that
offers
a
Medicare
Advantage
benefit
option
will
not
be
treated
as
failing
to
satisfy
the
SBC
requirement
if
it
does
not
provide
an
SBC
with
respect
to
the
Medicare
Advantage
option.
*
Reminder:
SBCs
generally
must
be
provided
in
connection
with
a
plan's
first
open-enrollment
period
beginning
on
or
after
September
23,
2012.
For
prior
coverage
of
SBCs,
see
here.
|
|
Federal Government Prepares to Run Health Insurance Exchanges in Many States
|
08/05/2012
|
By: Jason Lacey
|
Health
insurance
exchanges
-
marketplaces
for
the
purchase
of
insurance
policies
-
are
a
key
piece
of
the
health
care
reform
legislation.
The
law
contemplates
that
each
state
will
operate
its
own
exchange
or
will
form
regional
exchange
partnerships.
But
it
is
becoming
increasingly
apparent
that
many
states
(including
Kansas)
cannot
or
will
not
have
exchanges
in
place
by
2014,
when
that
piece
of
the
law
goes
into
effect.
The
New
York
Times
is
reporting
that
as
many
as
half
of
the
states
will
not
have
their
own
exchanges
in
place
by
2014,
leaving
it
to
the
federal
government
to
set
up
and
operate
an
exchange
for
residents
of
those
states.
And
very
little
is
known
at
this
point
about
what
the
federal
exchange
will
look
like
or
how
it
will
function.
Although
the
exchanges
are
viewed
largely
as
a
marketplace
for
individuals
to
purchase
insurance
coverage,
there
will
be
many
important
ways
in
which
employers
will
interact
with
them.
Small
employers
(generally
100
or
fewer
employees)
will
be
able
to
purchase
group
coverage
through
the
"SHOP"
portion
of
an
exchange.
Employers
will
be
sharing
information
with
exchanges,
so
the
employers
will
know
whether
any
employees
are
receiving
subsidized
exchange-based
coverage
and
the
exchanges
will
know
whether
individuals
have
affordable
coverage
available
to
them
through
their
employers.
And
employers
will
be
required
to
provide
employees
with
information
about
their
right
to
obtain
exchange-based
coverage
and
the
consequences
of
doing
that.
|
|
Colorado Federal Court Bars Enforcement of Required Coverage for Contraception
|
07/31/2012
|
By: Jason Lacey
|
The
health
care
reform
mandate
to
provide
no-cost
coverage
for
women's
contraception
and
sterilization
(see
our
prior
coverage
here)
has
proven
controversial. Now
a
federal
court
in
Colorado
has
issued
an
order
preventing
the
government
from
enforcing
the
requirement
against
a
private
employer
that
objects
to
the
requirements
on
religious
grounds.
Although
several
organizations
across
the
country
have
sued
to
bar
the
enforcement
of
this
requirement,
the
Colorado
case
is
the
first
in
which
a
court
has
ruled
that
the
requirement
may
not
be
enforced.
Other
courts
have
dismissed
challenges
to
this
requirement.
The
substantive
and
procedural
legal
background
to
this
case
is
fairly
complex.
But
boiled
down,
the
court
concluded
the
employer
stood
a
good
chance
of
proving
that
the
contraception
mandate
would
violate
the
Religious
Freedom
Restoration
Act
-
a
federal
statute
that
is
intended to
ensure
there is
no
substantial
burden
placed
by
the
government
on
the
free
exercise
of
religion.
Based
on
the
likelihood
of
harm to
the
employer,
the
court
temporarily
barred
the
government
from
enforcing
the
requirement.
There
are
several
unique
aspects to
this
case.
- The
employer
is
a
private
employer,
not
a
church
or
religious-oriented
non-profit
organization.
But
its
owners
have
taken
very
specific
steps
to
provide
that
the
business
will
be
operated
in
a
manner
consistent
with
the
owners'
religious
beliefs,
which
the
court
found
persuasive
in
evaluating
whether
the
contraception
requirement
might
burden
the
free
exercise
of
religion.
- The
employer's
group
health
plan
is
not
a
grandfathered
plan,
and
Continue Reading...
|
|
It's Almost August. Do You Know Where Your MLR Rebate Is?
|
07/25/2012
|
By: Jason Lacey
|
I
have
an
article
in
the
July
edition
of
the
ABA
Health
eSource
(an
online
publication
of
the
American
Bar
Association
Health
Law
Section)
discussing
various
considerations
for
group
health
plans
that
receive
MLR
rebates.
It
expands
on
some
of
our
prior
coverage
on
MLR
rebates
(see,
for
example, here)
and
addresses
both
ERISA
and
tax
issues.
Rebates
are
due
from
insurers
by
August
1,
so
employers
with
insured
group
health
plans
could
be
seeing
checks
any
day
now.
|
|
IRS Posts FAQs on New Medicare-Tax Withholding
|
07/22/2012
|
By: Jason Lacey
|
The
IRS
has
posted
a
set
of
FAQs
to
its
website
that
provide
guidance
on
withholding
the
new
0.9%
Medicare
tax
that
will
apply
beginning
in
2013.
The
new
tax
was
enacted
as
part
of
health
care
reform
and
goes
into
effect
with
respect
to
wages
paid
on
or
after
January
1,
2013.
The
tax
is
an
additional
0.9%
on
all
wages
received
in
excess
of
a
threshold
amount.
The
threshold
amount
is
$200,000
in
the
case
of
a
single
individual
and
$250,000
in
the
case
of
a
married
individual
who
files
a
joint
tax
return.
But
regardless
of
an
employee's
marital
status
or
household
income,
employers
are
required
to
begin
withholding
the
tax
once
they
have
paid
an
employee
$200,000
in
wages
during
a
year.
Example.
An
employee
has
received
$180,000
in
wages
during
2013
and
then
receives
a
bonus
of
$50,000
in
December
2013.
In
addition
to
all
other
required
tax
withholding,
the
employer
must
withhold
the
new
0.9%
Medicare
tax
on
$30,000
of
the
bonus.
Some
of
the
clarifications
provided
in
the
FAQs:
- The
obligation
to
withhold
the
new
tax
only
applies
once
an
employee
has
received
$200,000
in
wages
and
only
to
the
extent
wages
for
the
year
exceed
$200,000.
- Non-cash
taxable
fringe
benefits
provided
to
an
employee
who
has
received
at
least
$200,000
in
other
taxable
wages
are
subject
to
the
new
tax,
even
though
not
paid
in
cash.
- The
withholding
requirement
does
apply
to
tipped
employees
who
Continue Reading...
|
|
Ten Things Employers Should Know About the SBC
|
07/21/2012
|
By: Jason Lacey
|
We
have
put
out
an
Issue
Alert
describing
ten
basic
considerations
for
employers
regarding
the
new
Summary
of
Benefits
and
Coverage
(SBC)
required
as
part
of
health
care
reform.
The
Issue
Alert
has
more
details,
but
the
bottom
line
is
that
many
employers
will
need
to
begin
complying
with
this
requirement
in
the
next
few
months.
Now
that
we
know
health
care
reform
is
sticking
around
for
a
while,
it's
time
to
begin
thinking
about
things
like
who
will
be
responsible
for
preparing
the
SBC
and
how
(and
when)
it
will
be
distributed
to
plan
participants
and
beneficiaries.
|
|
HHS Updates MLR Guidance
|
07/18/2012
|
By: Jason Lacey
|
The
Department
of
Health
and
Human
Services
(HHS)
has
issued
three
new
Q&As
updating
its
guidance
on
the
medical
loss
ratio
(MLR)
rules.
Although
the
guidance
is
directed
primarily
at
insurance
carriers,
it
provides
some
helpful
information
to
employers
and
participants
in
insured
group
health
plan
about
new
notices
they
may
be
receiving
in
the
near
future.
- For
plans
that
will
be
receiving
MLR
rebates,
the
carrier
must
provide
a
rebate
notice
to
all
"subscribers,"
which
includes
all
current
plan
participants.
Those
participants
should
be
receiving
notices
on
or
before
August
1,
2012.
- For
insurers
that
meet
the
MLR
standard,
a
notice
to
that
effect
must
be
provided
to
all
plan
participants
with
the
first
"plan
document"
distributed
on
or
after
July
1,
2012.
The
guidance
clarifies
that
the
notice
may
be
provided
separately
(i.e.,
distributed
before
any
plan
documents
are
distributed).
The
guidance
also
provides
examples
of
documents
that
constitute
"plan
documents"
for
this
purpose.
For
our
prior
coverage
of
MLR
rebates
and
the
important
considerations
that
apply
under
ERISA
if
and
when
a
rebate
is
received,
click here.
|
|
Health Care Reform Mandates: Women's Preventive Health Care
|
07/10/2012
|
By: Jason Lacey
|
Now
that
the
dust
has
settled
some
on
the
Supreme
Court's
decisions
regarding
health
care
reform
(see
our
prior
coverage
here
and
here),
it's
time
to
begin
thinking
about
some
of
the
new
mandates
that
are
coming
online
in
the
next
few
weeks
and
months.
First
up:
coverage
of
women's
preventive-health-care
services
by
non-grandfathered
plans,
which
may
be
required
as
soon
as
August
1,
2012.
Although
some
of
the
regulatory
guidelines
on
this
mandate
were
released
as
recently
as
February
and
March
of
this
year,
it
seems
like
an
eternity
ago
with
all
that's
happened
in
the
meantime.
So
here's
a
refresher.
- For
plan
years
beginning
on
or
after
August
1,
2012,
non-grandfathered
plans
are
required
to
cover
women's
preventive-health-care
services
without
cost
sharing,
as
part
of
the
plan's
general
coverage
of
preventive-care
services.
- The
services
required
to
be
covered
are
based
on
guidelines
issued
by
the
Health
Resources
and
Services
Administration
(HRSA).
They
include:
(1)
well-woman
visits;
(2)
screening
for
gestational
diabetes;
(3)
breastfeeding
support,
supplies,
and
counseling;
and
(4)
all
FDA-approved
contraceptive
methods
and
sterilization
procedures.
- Certain
religious
employers
are
exempt
from
the
requirement
to
cover
contraceptive
services,
but
the
exemption
is
a
narrow
one.
For
this
purpose
a
religious
employer
is
one
that
(1)
has
the
inculcation
of
religious
values
as
its
purpose;
(2)
primarily
employs
persons
who
share
its
religious
tenets;
(3)
primarily
serves
persons
who
share
its
religious
tenets;
and
(4)
is
Continue Reading...
|
|
Supreme Court Upholds Health Care Reform Law
|
06/29/2012
|
By: Jason Lacey
|
In
its
much-anticipated decision yesterday,
the
Supreme
Court
upheld
the
Patient
Protection
and
Affordable
Care
Act
(PPACA),
putting
an
end
to
the
constitutional
challenges
that
have
threatened
the
law
since
the
day
it
was
enacted.
The
manner
in
which
the
law
was
upheld
came
as
a
surprise
to
many.
Rather
than
conclude
that
the
law
reflected
a
constitutional
exercise
of
Congress's
commerce
power,
the
Court
seized
upon
the
government's
back-up
argument
and
upheld
the
law
as
a
valid
exercise
of
Congress's
taxing
power.
And
in
a
further
twist,
it
was
Chief
Justice
John
Roberts,
generally
viewed
as
a
political
conservative,
who
cast
the
decisive
vote,
siding
with
four
justices
who
are
generally
considered
political
liberals.
Although
the
legal
underpinnings
of
the
Court’s
decision
are
somewhat
complex,
the
bottom
line
for
employers
is
clear:
Nothing
has
changed.
The
law
that
went
into
effect
March
23,
2010,
and
has
been
in
effect
ever
since,
remains
intact.
In
theory,
this
means
employers
should
not
need
to
do
anything
more
than
maintain
business
as
usual,
continuing
their
efforts
to
implement
the
law
as
its
provisions
become
effective.
But
in
reality
many
employers
will
have
been
sitting
on
the
sidelines,
waiting
to
see
how
the
case
would
be
resolved.
Those
employers
may
now
find
themselves
playing
catch-up.
In
the
short
term,
employers
need
to
be
preparing
to
comply
with
new
measures
that
are
coming
into
effect
in
the
next
few
months—things
like
the
uniform
summary
of
benefits
and
coverage
(SBC),
the
PCORI
trust-fund
taxes,
W-2
reporting,
and
the
$2,500
Continue Reading...
|
|
The Supreme Court's Decision on Health Care Reform Looms
|
6/11/2012
|
By: Jason Lacey
|
Sometime
in
the
next
two
weeks
or
so,
we
expect
to
see
the
much-anticipated
ruling
from
the
Supreme
Court
on
the
constitutionality
of
PPACA.
What
that
ruling
will
look
like
remains
anybody's
guess.
But
from
the
issues
that
were
argued
at
the
Court,
we
can
identify
some
possible
outcomes
and
begin
to
consider
what
that
might
mean
for
employers.
The
Issues
At
its
core,
the
litigation
over
health
care
reform
involves
the
constitutionality
of
one
small
piece
of
the
law:
the
individual
mandate.
The
question
is
whether
Congress
has
the
power
to
require
Americans
to
obtain
health
insurance
or
pay
a
penalty.
The
case
also
touches
on
two
related
points
that
are
relevant
in
considering
possible
outcomes.
(1)
Does
an
arcane
tax
statute
called
the
Anti-Injunction
Act
prohibit
the
Court
from
even
considering
the
case
before
the
individual
mandate
goes
into
effect
in
2014?
(2)
If
the
individual
mandate
is
unconstitutional,
can
it
be
"severed"
from
the
rest
of
the
legislation
and
tossed
aside
by
itself,
or
does
the
whole
law
fail?
The
Possible
Outcomes
Given
these
issues,
there
are
at
least
four
possible
outcomes
for
the
case.
- Wait
and
See.
The
Court
could
decide
the
Anti-Injunction
Act
applies,
thereby
precluding
a
decision
at
least
until
2014.
(Most
people
following
the
case
think
this
outcome
is
unlikely,
but
it
remains
a
possibility.)
- Full
Speed
Ahead.
The
Court
could
decide
the
individual
mandate
is
valid,
leaving
the
law
fully
intact.
- Partial
Invalidity.
The
Court
could
decide
the
Continue Reading...
|
|
IRS Provides Guidance on $2,500 Health FSA Cap
|
05/31/2012
|
By: Donald Berner
|
The
IRS issued
Notice
2012-40
yesterday
(click
here
for
the
notice),
providing
a
number
of
important
clarifications
regarding
the
$2,500
cap
on
health
FSA contributions
that
applies
beginning
in
2013.
The
most
surprising
development
is
the
IRS's
interpretation
that
the
cap
applies
on
a
plan-year
basis,
rather
than
a
calendar-year
basis.
This
is
important
for
employers
with
fiscal-year
plans. They
will
be
able
to
wait
until
the
first
plan
year
beginning
after
December
31,
2012,
to
implement
the
cap,
rather
than
using
the
transition
rule
or
early
implementation
of
the
cap
to
ensure
contributions
during
the
2013
calendar
year
do
not
exceed
the
cap,
as
was
previously
thought
necessary.
Other
key
guidance
points
include:
- Clarification
that
unspent
amounts
carried
over
during
a
grace
period
will
not
count
against
the
cap
for
the
plan
year
in
which
the
grace
period
occurs.
- Confirmation
that
the
cap
only
applies
to
employee
salary-reduction
contributions
to
a
health
FSA.
Employer
contributions (e.g.,
flex
credits)
and
salary-reduction
contributions
to
dependent-care
FSAs
do
not
count,
nor
do
amounts
credited
to
HSAs
or
HRAs.
In
addition
to
interpretive
guidance,
the
Notice
provides
a
limited
correction
rule
that
will
allow
fixing
some
good-faith
mistakes.
If
a
mistaken
election
to
contribute
more
than
$2,500
to
a
health
FSA
in
a
year
is
properly
corrected,
the
error
will
not
jeopardize
the
plan's
status
as
a
qualifying
cafeteria
plan.
Of
academic
interest,
the
Notice
also
requests
comments
on
the
use-it-or-lose-it
rule.
The
implication
is
that
the
$2,500
cap
may
be
low
enough
Continue Reading...
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DOL FAQ's Update Guidance on the Summary of Benefits and Coverage (SBC)
|
5/29/2012
|
By: Donald Berner
|
The
Department
of
Labor
(DOL) recently
posted
a
new
set
of
FAQs
(click
to
here
to
read
the
FAQ)
to
its
website
providing
additional
guidance
on
the
requirement
under
health
care
reform
to
give
health
plan
participants
a
four
page
uniform
summary
of
benefits
and
coverage
(SBC). Some
highlights
include:
- A
new
electronic-distribution
safe
harbor
that
specifically
allows
for
distribution
of
the
SBC
with
online
enrollment
materials.
- A
transition
rule
for
arrangements
that
are
partly
insured
and
partly
self-funded
(e.g.,
an
insured
high
deductible
plan
with
integrated
self-insured
HRA)
that
allows
using
two
or
more
partial
SBCs
for
the
first
year
of
applicability.
- A
non-enforcement
rule
for
expatriate
coverage
during
the
first
year
of
applicability,
effectively
suspending
the
requirement
to
provide
an
SBC
for
expatriate
coverage
during
the
first
year.
- Assurance
that
penalties
will
not
be
imposed
during
the
first
year
of
applicability
on
employers
"that
are
working
diligently
and
in
good
faith
to
comply"
with
the
rules.
The
detailed
requirements
for
preparation
and
distribution
of
the
SBC are
described
in
final
regulations
issued
by
the
IRS,
DOL,
and
HHS earlier
this
year. (Click
here
to
see
the
final
regulation.)
The
requirement
to
distribute
an
SBC
generally
applies
to
the
first
open
enrollment
period
beginning
on
or
after
September
23,
2012.
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|
Premium Refunds from Health Insurers May Trigger ERISA Issues
|
05/09/2012
|
By: Donald Berner
|
As
part
of
the
insurance-market
reforms
enacted
by
the
Patient
Protection
and
Affordable
Care
Act
(PPACA),
insurance
carriers
are
required
to
spend
a
minimum
percentage
of
premiums
(generally
85%)
on
medical
care
and
quality
improvement.
If
this
percentage
--
the
"medical
loss
ratio"
--
is
not
satisfied,
premiums
must
be
returned
to
the
policyholder
to
the
extent
necessary
to
reach
the
required
percentage.
A
recent
report
by
the
Kaiser
Family
Foundation
(read
here)
estimates
that
under
this
rule,
carriers
nationwide
will
be
rebating
as
much
as
$1.3
billion
in
total
premiums
collected
during
2011.
Of
that,
employer-sponsored
plans
are
expected
to
receive
approximately
$900
million,
and
at
least
some
rebates
are
expected
in
every
state
except
Hawaii.
When
a
rebate
is
received
with
respect
to
an
ERISA-covered
plan,
care
must
be
taken
to
determine
whether
some
portion
of
the
rebate
is
a
"plan
asset".
If
so,
it
must
be
treated
in
a
manner
that
complies
with
the
ERISA fiduciary
obligations
that
apply
to
handling
plan
assets.
The
Department
of
Labor
(DOL)
has
provided
some
specific
guidance
on
this
issue
(read
here).
The
guidance
instructs
that
the
rebate
generally
must
be
allocated
between
the
employer
and
the
plan
participants.
The
portion
allocable
to
the
participants
is
a
plan
asset
and
must
either
be
returned
to
the
participants
or
used
exclusively
for
their
benefit.
The
facts
of
each
arrangement
must
be
considered,
but
a
rebate
generally
will
be
allocated
between
the
employer
and
the
plan
participants
based
on
their
relative
contributions
to
the
premiums
Continue Reading...
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|
IRS Regulations Describe New Health Plan Fee
|
05/04/2012
|
By: Donald Berner
|
Recent
IRS regulations
provide
guidance
to
employers
and
insurers
on
the
calculation
and
payment
of
a
new
fee
on
health
plans.
The
fee
is
part
of
health
care
reform
and
will
be
used
to
fund
the
Patient
Centered
Outcomes
Research
Institute.
The
first
fee
payments
will
be
due
by
July
31,
2013,
and
relate
to
plan
years
ending
on
or
after
October
1,
2012.
Employers
are
responsible
for
calculating
and
paying
this
fee
with
respect
to
any
self-insured
health
plans
they
sponsor.
Insured
plans
are
subject
to
the fee
also,
although
the
insurance
carrier
is
responsible
for
calculating
and
paying
the
fee.
The
fee
is
$1
(increasing
to
$2
in
the
second
year),
multiplied
by
the
average
number
of
lives
covered
under
the
plan
during
the
year.
A
key
issue
in
calculating
the
fee
is
determining
the
average
number
of
lives
covered
by
a
plan
during
a
year.
(Covered
lives
include
not
only
covered
employees,
but
also
spouses,
dependent
children,
COBRA beneficiaries,
retirees,
and
any
other
persons
with
coverage
under
the
plan.)
The
regulations
give
employers
four
options
for
calculating
this
number.
Two
of
the
options
involve
counting
the
actual
number
of
covered
lives
under
the
plan
as
of
certain
dates
during
the
plan
year.
A
third
option
uses
a
formula
based
on
"snapshots"
of
the
number
of
employees
in
the
plan
at
various
points
during
the
plan
year,
and
the
fourth
option
uses
a
formula
based
on
the
number
of
participants
shown
on
the
Form
5500
for
the
plan.
The
fee
applies
to
all
self-insured
Continue Reading...
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Editors
Don Berner, the Labor Law, OSHA, & Immigration Law Guy
Boyd Byers, the General Employment Law Guy
Jason Lacey, the Employee Benefits Guy
Additional Sources

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