In addition to maintaining the funding of the federal government through February 8, 2018, the recently enacted continuing resolution, H.R. 195, entitled the “Federal Register Printing Savings Act of 2017”, deferred by two additional years the date on which the excise tax on high cost employer-sponsored health coverage under the Affordable Care Act, the so-called “Cadillac Tax”, becomes effective. The effective date of the Cadillac Tax had previously been postponed until taxable years beginning after December 31, 2019 (see our prior blog post regarding that postponement). Under H.R. 195, the Cadillac Tax will now go into effect for taxable years beginning after December 31, 2021 (i.e., for calendar year health plans, January 1, 2022). View the text of H.R. 195.
In December 2017, two federal district courts granted nationwide preliminary injunctions from enforcement of the interim final rules providing for religious and moral exemptions from the contraceptive coverage mandate under the ACA issued in October 2017 by the U.S. Departments of Health and Human Services, Labor, and the Treasury (collectively, the “Departments”). Please see our earlier discussion of these exemptions. Both federal courts held that the Departments impermissibly bypassed the notice and comment rulemaking requirements of the Administrative Procedures Act and that the plaintiffs, consisting of six states, sufficiently demonstrated they would be harmed without an injunction. The timing of these injunctions is a cause for concern for any plan sponsors who have already acted in reliance on the interim final rules. The U.S. Department of Justice has indicated it disagrees with these rulings and may appeal. View Commonwealth of Pennsylvania v. Trump. View State of California v. Health and… Continue Reading
The DOL recently issued proposed regulations which broaden the criteria under ERISA for determining when a group of employers may join together as a single employer to sponsor a single group health plan under ERISA, in the form of an “association health plan” (“AHP”). Joining an AHP could be a more viable option for many small employers. Various federal and state laws affecting employer-sponsored health coverage, including the Affordable Care Act (the “ACA”), impose requirements that differ based on whether employer-sponsored health coverage is insured or self-funded and, if insured, whether it is offered in the “small group” or “large group” insurance market. The status of coverage as either small or large group coverage generally depends on how many employees the employer has and affects the employer’s compliance obligations under the ACA and other laws. Under current DOL guidance, a group of small employers that want to associate in order… Continue Reading
Extension of Due Dates for 2017 Individual Statements under Affordable Care Act Information Reporting
In Notice 2018-06, the IRS extended the due date, from January 31, 2018 to March 2, 2018, for employers (including applicable large employers), insurers, and other providers of “minimum essential coverage” in 2017 (“Reporting Entities”) to furnish statements to individuals on IRS Forms 1095-B and 1095-C, pursuant to the Affordable Care Act’s information reporting requirements (the “ACA Reporting Requirements”). The notice also extends the IRS’s transition relief from penalties that the Reporting Entities would otherwise incur for incorrect or incomplete information reported on their 2017 information statements to individuals or returns filed with the IRS. To obtain this transition relief, a Reporting Entity must show that it made a good faith effort to comply with the ACA Reporting Requirements in furnishing statements to individuals and filing its IRS returns. Notably, the notice does not extend the due date under the ACA Reporting Requirements for Reporting Entities to file their 2017… Continue Reading
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
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
The IRS recently updated its Questions and Answers on Employer Shared Responsibility Provisions under the Affordable Care Act (the “FAQs”) to include a description of the employer shared responsibility payments process in the form of revised FAQs #55 – 58. FAQ #58 indicates the IRS will send assessments for the 2016 reporting year in late 2017. A brief overview of this process is described below: The IRS will send Letter 226J to the employer. This letter will include: (i) the assessment amount the IRS believes is owed by the employer for each month of the prior reporting year; (ii) a list of the full time employees resulting in the assessment (the list will include the Form 1095-C Part II indicator codes provided to the IRS, if any, by the employer); (iii) the steps the employer should take if it agrees or disagrees with the assessment; and (iv) the steps the… Continue Reading
The IRS recently issued Notice 2017-67 (the “Notice”) containing 79 questions and answers that provide helpful guidance regarding the requirements for “qualified small employer health reimbursement arrangements” (“QSEHRAs”). As discussed in our prior blog posts (linked below), starting January 1, 2017, eligible small employers are permitted to offer employees a QSEHRA to reimburse substantiated medical care expenses, including premiums, of up to a specified maximum per year, provided that certain requirements are met. Among other items, the Notice addresses the QSEHRA requirements regarding employer and employee eligibility, the written employee notice, the substantiation of reimbursable expenses, and Form W-2 reporting of QSEHRA coverage. The Notice also discusses the impact of QSEHRA coverage on health savings account eligibility. View IRS Notice 2017-67. Our prior blog posts regarding QSEHRAs are available here: Small Employers Can Reimburse Premiums and Medical Expenses IRS Provides Transition Relief Regarding QSEHRA Notice Deadline Executive Order Directs Agencies… Continue Reading
Executive Order Directs Agencies to Consider Expanding HRAs and Alternatives to the Public Health Insurance Marketplace
On October 12, 2017, President Trump issued an Executive Order directing the U.S. Departments of Health and Human Services, Labor, and the Treasury to “consider proposing regulations or revising [existing] guidance” for health reimbursement arrangements (“HRAs”), association health plans (“AHPs”), and short-term coverage related to loosening existing requirements under the Affordable Care Act (“ACA”). While the Executive Order does not literally order the agencies to issue regulations or change existing guidance, it is likely that the agencies will do so. This process should take months, and thus the Executive Order is a signal of change rather than change itself. There are few details at this time, but a high-level summary including open issues is below: HRAs – The clear intent is to enable employers to offer HRAs to current employees that can be used to purchase insurance policies from the individual insurance market. This could be accomplished by either permitting HRAs to integrate… Continue Reading
The U.S. Departments of the Treasury, Labor, and Health and Human Services have issued new interim final rules to expand the exemptions from the contraceptive coverage mandate under the Affordable Care Act. The new exemptions encompass (i) non-governmental plan sponsors and institutions of higher learning that object to the mandate based on sincerely held religious beliefs, and (ii) certain entities and individuals that object to the mandate based on sincerely held non-religious moral convictions. The interim final rules keep the accommodation process as an optional process for certain exempt entities that wish to use it voluntarily. Exempt entities must ensure that the exclusion of contraceptive coverage is clear in the plan document. The interim final rules were effective October 6, 2017. The interim final rules are available here and here.