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IRS Releases Guidance for ACA Employer Shared Responsibility Payment Process

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

IRS Issues Helpful Guidance Regarding Qualified Small Employer Health Reimbursement Arrangements

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

New Exemptions from ACA Contraceptive Coverage Mandate

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.

Court Requires Federal Agencies to Address Issues regarding Out-of-Network Physician Payments for Emergency Services

The Affordable Care Act (“ACA”) provides that if a group health plan or health insurer offers coverage for emergency services and such services are provided by an “out-of-network” provider, the cost-sharing required (i.e., copayment or coinsurance) must be the same as would apply to in-network services. On June 28, 2010, HHS, DOL, and the Treasury (collectively, the “Agencies”) published an Interim Final Rule regarding this emergency services provision. In order to address the risk that patients could still, in some states, be balance billed for the difference between the out-of-network providers’ charges and the amount paid by the health plan or health insurer, the Agencies included in the Interim Final Rule a requirement that a health plan or health insurer must provide benefits for out-of-network emergency services in an amount equal to the greatest of the following: (i) the in-network negotiated rate; (ii) the rate based on the same method… Continue Reading

Court Issues Stay on Proceedings in Challenge to ACA Section 1557 Nondiscrimination Regulations

The federal district court for the Northern District of Texas recently granted a stay on proceedings in the case of Franciscan Alliance, Inc. v. Price, pending reconsideration by HHS of the final regulations (the “Nondiscrimination Regulations”) it issued under Section 1557 of the Affordable Care Act (the “ACA”). Section 1557 of the ACA prohibits discrimination in certain healthcare programs and activities on the basis of sex and other protected traits. The Nondiscrimination Regulations specify gender identity discrimination and sexual stereotyping as forms of sex discrimination. In Franciscan Alliance, eight states and three religiously affiliated healthcare providers challenged two aspects of the Nondiscrimination Regulations. In December of 2016, the court issued a preliminary nationwide injunction enjoining HHS from “enforcing its expanded definition of sex discrimination” under the Nondiscrimination Regulations. (Please see our prior blog post discussing the court’s decision to issue the injunction and note that Sylvia Burwell was the Secretary… Continue Reading

Federal Departments Issue New FAQ and Model Disclosure Request Form under Mental Health Parity and Addiction Equity Act

On June 16, 2017, a new FAQ, Part 38, was jointly issued by the federal Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Departments”) regarding the application of certain requirements under the Mental Health Parity and Addiction Equity Act (“MHPAEA”), as amended by the Affordable Care Act and the 21st Century Cures Act. In particular, this new FAQ addresses the question of whether the MHPAEA applies to benefits that a group health plan or health insurance issuer may offer for treatment of an eating disorder. Generally, the MHPAEA prohibits plans and issuers from imposing financial requirements or treatment limitations on “mental health benefits” and “substance use disorder benefits” (collectively, “MH/SUD Benefits”) that are more restrictive than the predominant financial requirements and treatment limitations that apply to substantially all medical and surgical benefits. The FAQ clarifies that eating disorders are mental health conditions; therefore, treatment of an… Continue Reading

Upcoming Deadline for Annual Reporting and Payment of PCORI Fee Under the Affordable Care Act

The deadline for plan sponsors of self-insured health plans to report and remit the Patient-Centered Outcomes Research Institute fee (“PCORI Fee”) due under the Affordable Care Act with respect to the 2016 plan year is July 31, 2017. For this purpose, a plan year that ended during 2016 is considered a 2016 plan year. The PCORI Fee is assessed to fund the Patient-Centered Outcomes Research Institute and applies to plan years ending on or after October 1, 2012, and before October 1, 2019. Plans should report and remit the PCORI Fee, which is based on a flat dollar amount multiplied by the average number of lives covered under the plan for the applicable plan year, via a second quarter IRS Form 720.The applicable covered lives fee amount for plan years that ended after December 31, 2015, and before October 1, 2016 is $2.17. The applicable covered lives fee amount for… Continue Reading

Executive Order Intended to Ease Religious-Based Objections to Women’s Contraceptive Services

On April 17, 2017, President Trump signed an executive order (the “EO”) that includes a request to the Secretaries of Treasury, Labor, and Health and Human Services to consider amending regulations related to a plan sponsor’s ability to make a conscience-based objection to, and opt out of, complying with the preventive services mandate under the Affordable Care Act (the “ACA”). Under the ACA, non-grandfathered group health plans must generally provide coverage for specified preventive services, including women’s contraceptive services. Although the EO broadly indicates the entire ACA preventive services mandate, the context of the order suggests the focus is on women’s contraceptive services. Religious employers, narrowly defined as houses of worship, are currently exempt from the requirement to cover women’s contraceptive services, but there is no exemption for non-profit religiously affiliated employers or any for-profit organization. The EO appears to request the agencies make it easier for religiously-affiliated employers to… 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 “Act“). The Energy and Commerce bill primarily addresses Medicaid and other state-based program funding issues, while the Ways and Means bill focuses on the fees and taxes, insurance subsidies, and other provisions that directly affect employer-provided health coverage under the Affordable Care Act (the “ACA“). It is important to note what these bills are and what they are not. The bills do not represent the complete repeal of the ACA or the final word on what the Act may ultimately look like when finished. These are reconciliation bills intended to repeal and replace certain portions of the ACA by a simple majority vote in a way that would not be subject to a filibuster in the Senate if brought to a vote there. The trade-off… Continue Reading

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