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Recent Executive and Regulatory Action Related to the Affordable Care Act

As September 2017 drew to a close, it appeared significant legislative efforts to repeal and replace the Affordable Care Act (ACA) were on hold until at least 2018 and would likely be joined by a bipartisan approach to amend and “save” the ACA. Against that backdrop, October 2017 was a busy month for both executive and regulatory action intended to loosen certain ACA requirements to allow greater flexibility to offer lower cost health insurance coverage options to consumers than is feasible under the existing ACA. Some of these actions are likely to put pressure on the long-term viability of the public insurance marketplace (e.g. Healthcare.gov and state-run insurance exchanges), potentially unraveling a key component of the ACA if not the ACA itself, which may cause Congress to act, perhaps improving the chances of repealing and replacing the law. The October actions included: Interim final regulations expanding the types of entities… Continue Reading

2017 Health and Welfare Plan Year-End Action Items

The following is a list of action health and welfare plan action items that should be addressed by plan administrators for the end of 2017 and start of the 2018 plan year. Please note that for non-calendar year plans, the specific timing requirements described below may vary. Employer shared responsibility provisions under the Affordable Care Act (ACA): Determine applicable large employer/applicable large employer member status for 2018. Determine whether any changes will be made to the measurement process for 2018 such as a change in method (e.g., monthly versus look-back), changes to period duration if the look-back measurement method is used, or other variations among permissible employee categories under the employer shared responsibility provisions. Update employer measurement policy as needed. Ensure minimum essential coverage will be offered to at least 95 percent of ACA full-time employees for each month during 2018 to avoid potential Internal Revenue Code (IRC) Section 4980H(a)… Continue Reading

Stop-Lost: Common Issues That May Cause Gaps in Your Stop-Loss Coverage

Once an employer is comfortable it can handle some exposure to fluctuating claims costs, it may opt to self-insure its group health plan in order to save money in the long run by avoiding paying the profit margin insurance carriers build into the premiums of fully-insured coverage. Some employers will forego some of the expected savings and purchase stop-loss coverage from an insurance carrier to help limit claims cost volatility. Under a stop-loss insurance policy, the insurance carrier will reimburse claims costs that exceed an agreed-upon dollar threshold. The employer is usually the insured on the stop-loss policy, although sometimes the group health plan itself is the insured under the policy instead. There are two primary types of stop-loss coverage: (i) individual; and (ii) aggregate. Stop-loss coverage will always include individual stop-loss and frequently includes aggregate coverage. (i) Individual stop-loss – Also referred to as specific stop-loss, individual stop-loss coverage… Continue Reading

House Republicans Unveil Draft Healthcare Reform Legislation

The House Energy and Commerce and Ways and Means Committees introduced two bills on March 6, 2017, collectively entitled the American Health Care Act. The Energy and Commerce bill primarily addresses Medicaid and other state-based program funding issues while the Ways and Means bill focuses on fees and taxes under the Affordable Care Act (“ACA”), insurance subsidies, and other provisions that directly affect employer-provided health coverage. It’s important to note what these bills are and what they aren’t. The bills do not represent the complete repeal of the ACA or the final word on what the American Health Care Act may look like when finished.  These are reconciliation bills intended to repeal and replace portions of the ACA by a simple majority vote in a way that would not be subject to a blocking filibuster in the Senate if brought to a vote. The trade-off is reconciliation bills are limited… Continue Reading

Which Plans are Subject to the DOL’s Final Rules for Disability Claims Procedures?

Overview On December 19, 2016, the U.S. Department of Labor (DOL) issued final rules revising the claims procedures for ERISA plans that make disability determinations affecting plan benefits.  The DOL noted that nearly two-thirds of all ERISA litigation involves claims under long-term disability plans, and the final rules are intended to improve the “full and fair review” of disability claims under ERISA § 503 and ERISA Reg. § 2560.503-1 by expanding the procedural requirements.  It’s debatable whether the new procedures will actually cut down on the volume of future litigation once individuals have exhausted the appeals process, but the final rules should lead to a better administrative record for review during litigation. The final rules generally make the disability claims procedures more consistent with the procedures for group health plans as modified by the Affordable Care Act (ACA), although the unique timelines for disability procedures remain intact, there is no… Continue Reading

2016 Health and Welfare Plan Year-End Action Items

There are a number of health and welfare plan action items to address as 2016 closes and 2017 begins. The election results have created uncertainty in the minds of many regarding whether certain legal obligations will remain in effect (or be enforced). Employers should assume Affordable Care Act (ACA) and other existing obligations will continue unless and until repealed or otherwise affected by subsequent guidance. It is not clear how soon change may occur after the inauguration on January 20, 2017. Based on the promises by both President-Elect Trump and the Republican Party to repeal and/or replace the ACA, we expect that revenue related ACA requirements, such as the employer shared responsibility provisions, are more likely to be affected during 2017 than other ACA requirements like the preventive services mandates that merely impact plan design. Other changes, such as those suggested by the President-Elect in his healthcare position statement or… Continue Reading

The Sandbox Bully: Health Savings Accounts (HSAs), Onsite Clinics, and Telemedicine

Employers are increasingly looking toward alternatives like telemedicine and onsite clinics to help lower the cost of their group health plans, particularly those employers that feel they are running out of room to further pare down medical plan design(s) or shift cost sharing to employees. Telemedicine is relatively easier to implement than an onsite clinic which requires a sufficient concentration of participants (which can include employees and their dependents) in a given location to be effective.  This is less of an issue for health care systems which also have the advantage of being able to operate an onsite clinic as an own-use facility.  Note:  It is possible for multiple employers to share an onsite clinic with clever separate accounting and administration, but that is beyond the scope of this article. For all of their advantages, HSAs do not easily co-exist with many other benefits.  This article focuses on the HSA… Continue Reading

IRS Releases Final Instructions for Forms 1094-B/1095-B and 1094-C/1095-C

IRS Releases Final Instructions for Forms 1094-B/1095-B and 1094-C/1095-C

The IRS recently released final instructions for the 2016 Forms 1094 and 1095.  Highlights of the changes and clarifications included in the final instructions are provided below. While a of the few items are “neutral” and merely reflect pre-programmed changes under the Affordable Care Act that were already known and set to occur, many of the changes and clarifications are welcome news. Form 1094-B Highlights There are no substantive changes for 2016. View the 2016 Form 1094-B here. Form 1095-B Highlights The statement, “Do not attach to your tax return. Keep for your records.” was inserted underneath the main heading, suggesting that the form will continue to not be required for direct substantiation purposes as part of a personal income tax filing in the future. Part I, Lines #2 and #3 and Part IV, columns (b) and (c) have been updated to reflect that TINs may be substituted for SSNs.… Continue Reading

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