IRS Issues Proposed Regulations Addressing Certain Minimum Essential Coverage Reporting Issues Under Code Section 6055
The IRS issued proposed regulations on August 2, 2016, clarifying certain minimum essential coverage (“MEC”) reporting issues related to IRS Forms 1095-B and 1095-C, Part III. Form 1095-B is used to report MEC by insurance carriers for fully-insured MEC and by small employers with self-insured MEC who are not otherwise subject to the employer shared responsibility provisions of the Affordable Care Act. Form 1095-C, Part III is used by large employers with self-insured MEC. A change that is of significant interest to reporting entities is the revised safe harbor for soliciting TINs (e.g., SSNs) from covered participants. The revised safe harbor still requires up to three attempts to obtain a covered participant’s TIN pursuant to specific procedures set out in the proposed regulations. The covered participant’s date of birth may continue to be used as a substitute for solicited TINs missing when reporting is due. A reporting entity does not… Continue Reading
In May, we provided information about the release of final HHS regulations implementing ACA Section 1557 and their potential effects on healthcare providers, insurers, and employer-provided healthcare coverage. Chris Beinecke wrote an article discussing these implications in greater detail. A link to this article, which was recently published in the Dallas Business Journal, is available here.
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 (“ACA”) with respect to the 2015 plan year is July 31, 2016. The PCORI Fee is assessed to fund the Patient-Centered Outcomes Research Institute. This fee 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 dollar amount for plan years ending after September 30, 2015 and before October 1, 2016 is $2.17. Additional information regarding calculating, reporting, and paying the PCORI Fee can be found on the IRS’s website, which is available here. IRS Form 720… Continue Reading
On July 13, 2016, the IRS released drafts of the 2016 Forms 1094 and 1095 used to satisfy the Affordable Care Act’s employer shared responsibility and individual mandate provisions under Internal Revenue Code Sections 6055 and 6056. The accompanying draft instructions for completing the forms were not released, but we expect them to be published by the end of August. The forms themselves have not substantively changed. The instructions for recipients of Form 1095-C (attached as part of draft Form 1095-C itself) include some subtle changes to offers of coverage reported by employers in Form 1095-C, Part II, Line #14, as the IRS indicated earlier this year. 1I – In 2015, this code reflected an employer’s use of the 2015 Qualifying Offer Transition Relief. This code is “reserved” and will be unused in 2016. 1J and 1K – These new codes reflect conditional offers made to spouses. The draft instructions… Continue Reading
Proposed Regulations Issued Addressing Expatriate Coverage, Excepted Benefits, and Essential Health Benefits
On June 10, 2016, the IRS, DOL, and HHS released proposed regulations clarifying when expatriate health coverage qualifies for exceptions under the Affordable Care Act (the “ACA”), when certain coverage will qualify as excepted benefits under the ACA, and how self-insured and large group insured plans should define essential health benefits. Expatriate Coverage In general, an expatriate health plan will be exempt from the ACA’s plan design requirements; the PCORI, Transitional Reinsurance, and Health Insurer fees; and will qualify as minimum essential coverage for covered individuals subject to U.S. tax law if the following are true: At least 95% of the primary enrollees are expatriates (disregarding non-U.S. citizens residing in their home country); The insurance carrier or plan administrator in conjunction with a third party administrator meets certain business criteria; The plan covers inpatient, outpatient, physician, and emergency services; The plan is reasonably believed to meet the ACA’s minimum value… Continue Reading
Section 1557 of the Affordable Care Act (the “ACA”) prohibits discrimination in certain health care programs and activities on the basis of race, color, national origin, sex, age, or disability. HHS recently issued final rules under Section 1557, which specify gender identity discrimination and sexual stereotyping as forms of sex discrimination. However, these rules only apply to “covered entities” as defined for this purpose. The term “covered entity” includes health care systems or providers that accept Medicare Part A or Medicaid and insurance carriers and/or third party administrators (“TPA”) that receive federal funding through participation in the public insurance marketplace, which will also have to comply with respect to benefits offered to their own employees. While HHS interprets the rule to impact an insurance carrier’s and/or a TPA’s entire book of business, a TPA is not responsible for discrimination due to a plan sponsor’s self-insured plan design decisions beyond the… Continue Reading
On April 20, 2016, the U.S. Departments of Labor, Health and Human Services, and Treasury issued a set of Frequently Asked Questions (“FAQs”) addressing certain provisions under the Affordable Care Act, the Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”), and the Women’s Health and Cancer Rights Act of 1998 (“WHCRA”). The FAQs provide guidance on several topics, including coverage of colonoscopies and contraceptives, rescissions of coverage, disclosures required for claims related to out-of-network emergency services, coverage for individuals participating in approved clinical trials, reference-based pricing, various topics related to the MHPAEA, and coverage under the WHCRA. The FAQs are available here.
The DOL recently announced in a new Frequently Asked Questions (“FAQ”) that health plans and insurers will be required to use a new Summary of Benefits and Coverage (“SBC”) template for plan years beginning on or after April 1, 2017. The DOL, along with the U.S. Departments of Health and Human Services and the Treasury, intend to “expeditiously” revise the new SBC template based on comments they receive concerning the proposed template that was published last month. Interested parties may submit comments regarding the proposed SBC template until March 28, 2016. The FAQ is available here.
Dave and Busters, Inc. (“D&B”) began restructuring its workforce in 2013 to reduce the number of employees who were considered full-time under the Affordable Care Act (the “ACA”), thus minimizing D&B’s potential exposure to the employer shared responsibility payments under the ACA. Part of this well-documented reduction strategy included shifting many employees who had previously worked full-time schedules into part-time positions, which also resulted in a loss of eligibility under D&B’s group medical plans. In a class action filed against D&B, the plaintiffs maintain that D&B violated ERISA Section 510 because it engaged in unlawful discrimination against a participant or beneficiary for exercising any right to which he or she is entitled under the provisions of an employee benefit plan subject to ERISA. The defendant countered that future ineligibility for coverage alone was not enough to sustain a violation under ERISA Section 510. The U.S. District Court (S.D.N.Y.) noted that… Continue Reading
The IRS recently released Notice 2016-4, which extends the deadlines for filing certain information reporting returns required under the Affordable Care Act. In particular, the due date for employers to furnish Forms 1095-C to individuals to report employer-provided minimum essential coverage (and offers of such coverage) has been extended from February 1, 2016 to March 31, 2016. Similarly, the deadline for insurers (and self-insured employers with fewer than 50 full-time employees) to provide Forms 1095-B to individuals receiving minimum essential coverage has been extended to March 31, 2016. Furthermore, the deadline for submitting the required transmittal forms to the IRS (i.e., Form 1094-C for employers and Form 1094-B for insurers and small self-insured employers) has been extended from March 31, 2016 to June 30, 2016 (if filing electronically) and from February 29, 2016 to May 31, 2016 (if not filing electronically). Notice 2016-4 is available here.