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Cadillac Tax Delayed and Made Deductible

The President recently signed into law H.R. 2029, the Consolidated Appropriations Act, 2016 (the ?Ç£Act?Ç¥). Among the numerous changes made by the Act were significant modifications to the ?Ç£Cadillac Plan Tax,?Ç¥ which is a 40 percent excise tax on any excess benefit provided under a ?Ç£high cost?Ç¥ employer sponsored health plan. First, the implementation of this tax has been delayed by two years so that it will not become effective until tax years beginning after December 31, 2019. Second, the tax payment will now be permitted as a deductible business expense. The Act is available?áhere.

IRS Notice Provides Additional Guidance on the Application of the ACA to Employer-Provided Health Coverage

On December 16, 2015, the Internal Revenue Service released Notice 2015-87 (the ?Ç£Notice?Ç¥), which provides guidance related to the application of market reform provisions of the Affordable Care Act (the ?Ç£ACA?Ç¥) to health reimbursement arrangements (?Ç£HRAs?Ç¥) and other types of employer-provided health coverage, primarily addressing questions concerning the reimbursement of premiums for individually purchased health insurance policies. The Notice also clarifies how HRA contributions, flex credits and opt-out payments may impact certain determinations under the employer shared responsibility provisions of the ACA (i.e., the ?Ç£play or pay?Ç¥ rules). Furthermore, the Notice provides guidance regarding (1) the application of COBRA continuation coverage rules to unused amounts in health flexible spending accounts for employers that adopted the carryover provisions permitted under IRS Notice 2013-71, and (2) penalty relief for employers that make good faith efforts to comply with ACA reporting requirements. A copy of the Notice is available?áhere.

Health and Welfare Plan Year-End Action Items

As 2015 draws to a close, there are several health and welfare plan action items to address for 2015 and early 2016. For non-calendar year plans, the specific timing for certain items described below may vary. Employer shared responsibility provisions under the Affordable Care Act (?Ç£ACA?Ç¥): Determine applicable large employer/applicable large employer member status for 2016. Determine whether any changes will be made to the measurement process for 2016, 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 ACA?ÇÖs 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 2016 to avoid a potential Internal Revenue Code (?Ç£Code?Ç¥) Section 4980H(a) penalty (projected to be $2,160 per ACA full-time employee,… Continue Reading

ACA Final Regulations on Grandfathered Plans, Preexisting Condition Exclusions, Lifetime and Annual Limits, and Other Matters

The U.S. Departments of Health and Human Services, Labor, and the Treasury jointly issued final regulations on November 18, 2015, addressing a variety of topics under the Affordable Care Act (?Ç£ACA?Ç¥), including, (1) the preservation of grandfathered plan status, (2) the prohibition on preexisting condition exclusions, (3) the prohibition on lifetime and annual dollar limits for essential health benefits, (4) the prohibition on rescissions of coverage, (5) the extension of certain dependent child coverage to age 26, (6) internal claims and appeals and external review rules, and (7) certain patient protection rules (including rules regarding the designation of a primary care physician and coverage for emergency services). These final regulations primarily combine previously issued proposed and interim final regulations, posted ACA FAQs, technical notices and other informal guidance for each of these topics with relatively few noteworthy changes for employer-provided group health plans. The final regulations will generally be effective… Continue Reading

Affordable Care Act Auto-Enrollment Requirement Repealed

The recently enacted Bipartisan Budget Act of 2015 repeals Section 18A of the Fair Labor Standards Act of 1938 (the ?Ç£FLSA?Ç¥). The repealed provision, which was added by Section 1511 of the Patient Protection and Affordable Care Act, would have required employers with more than 200 full-time employees to automatically enroll new employees (and continue enrollment of existing employees) in a health benefits plan offered through the employer. Prior to its repeal, enforcement of Section 18A of the FLSA had been delayed pending issuance of implementing regulations by the U.S. Department of Labor. The Bipartisan Budget Act of 2015 is available here.

DOL, HHS, and Treasury Issue Joint FAQs on ACA and MHPAEA

On October 23, 2015, the U.S. Departments of Labor (?Ç£DOL?Ç¥), Health and Human Services (?Ç£HHS?Ç¥), and Treasury issued a set of Frequently Asked Questions (?Ç£FAQs?Ç¥) addressing certain provisions under the Affordable Care Act (?Ç£ACA?Ç¥) and Mental Health Parity and Addiction Equity Act of 2008 (?Ç£MHPAEA?Ç¥). The FAQs provide guidance on several topics, including coverage of preventive services, wellness programs, and required disclosures under the MHPAEA. The FAQs can be found here.

Transitional Reinsurance Submission Due by November 16

For the Affordable Care Act?ÇÖs 2015 Transitional Reinsurance Program (the ?Ç£Program?Ç¥), the Centers for Medicare and Medicaid Services recently released the ?Ç£Annual Enrollment and Contributions Submission Form Manual?Ç¥ (the ?Ç£Manual?Ç¥). The Manual describes the steps a Contributing Entity (or a third party on behalf of a Contributing Entity) must follow to submit the required forms and make the payments required under the Program. Annual enrollment counts and other required information (including supporting documentation, if applicable) must be submitted on the prescribed form by Monday, November 16, 2015. The Transitional Reinsurance Fee, which is equal to $44 per covered life, is due either (1) in a single payment made on or before January 15, 2016, or (2) in two installments due by January 15, 2016 and November 15, 2016, respectively. The Manual is available?áhere.

PACE Act Modifies Definition of Small Group Market under ACA

Last week, President Obama signed into law the Protecting Affordable Coverage for Employees Act (the ?Ç£PACE Act?Ç¥), which amended the Affordable Care Act (?Ç£ACA?Ç¥). Prior to passage of the PACE Act, the definition of ?Ç£small employer?Ç¥ for purposes of state-based health insurance markets under the ACA was set to expand as of January 1, 2016 to include employers with 51 to 100 employees (from the current definition of small employer, which includes only employers with 1 to 50 employees). Under the PACE Act, this expansion will not occur under the ACA because it likely would have caused significant health insurance premium increases for mid-size employers (51 to 100 employees), due to coverage mandates and rating requirements imposed on health insurance offered in the small group market. Although no longer required under the ACA, states have the option to treat employers with 51 to 100 employees as small employers for this… Continue Reading

IRS Proposes Revisions to Minimum Essential Coverage Reporting

The IRS announced it intends to propose regulations under Internal Revenue Code Section 6055 relating to reporting of minimum essential coverage under the Affordable Care Act. Notice 2015-68, which was released on September 17, 2015, explains that the new rules will cover, among other topics, (1) the use of a truncated taxpayer identification number for reporting the plan sponsor of an insured group health plan and (2) rules for determining how to report coverage for an individual who is covered by multiple plans that provide minimum essential coverage. The Notice also invites comments relating to taxpayer identification number (“TIN“) solicitation by reporting entities and provides rules under which a reporting entity may be entitled to relief from penalties for failure to report a TIN with respect to 2015 coverage. Notice 2015-68 can be found?áhere.

HHS Requests Comments for Transparency Reporting for Qualified Health Plans; Transparency Reporting for Non-QHPs and Non-Grandfathered Plans to be Proposed Later

The U.S. Department of Health and Human Services (?Ç£HHS?Ç¥) recently issued a request for comments on the transparency provisions of Section 1311(e)(3) of the Affordable Care Act (the ?Ç£ACA?Ç¥), which requires issuers of qualified health plans (?Ç£QHPs?Ç¥) to submit and make available transparency in coverage data. The proposed data collection would collect information from QHP issuers in federally facilitated exchanges under the ACA. Separately, HHS, the U.S. Department of Labor, and the Treasury (collectively, the ?Ç£Departments?Ç¥) issued a notice of their intent to propose transparency reporting for non-QHP issuers and non-grandfathered group health plans in the future. The requirements for such reporting may differ from the information requested for QHPs. HHS?ÇÖ request for comments is available here. The Departments?ÇÖ joint notice is available here.

October 2021