August 01, 2022 - Health Care Reform Update

New Figure Set at 9.12% for 2023

Under the Affordable Care Act’s employer shared responsibility (pay or play) rules, applicable large employers—generally those who have 50 or more full-time employees (including full-time equivalent employees)—may be subject to a penalty if they do not offer affordable coverage that provides minimum value to their full-time employees and their dependents.

For plan years beginning in 2023, the Internal Revenue Service announced that coverage will generally be considered affordable if the employee's required contribution for the lowest-cost self-only health plan offered is 9.12% or less of his or her household income for the taxable year.

This is the most substantial decrease in this percentage since these rules were implemented (down from 9.61% in 2022). It is the lowest this percentage has ever been set, at 0.38% below the statutory affordability percentage of 9.5%. As a result, many employers may have to substantially lower their employee contributions for 2023 to meet the adjusted percentage.

Given that employers are unlikely to know an employee's household income, they may use a number of safe harbors to determine affordability, including reliance on Form W-2 wages.

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July 15, 2022 - Health Care Reform Update

2022 ACA Reporting is Due in Early 2023 

The IRS has released draft 2022 versions of Forms 1094-C, 1095-C, 1094-B and 1095-B that employers will use in early 2023 to report under Internal Revenue Code Sections 6055 and 6056 for the 2022 calendar year. Draft instructions related to these forms for the 2022 calendar year have not yet been released.

Form 1095-B no longer includes references to the individual mandate penalty in the “Instructions for Recipients” section. No other substantive changes were made to the draft forms for 2022 reporting. However, certain changes may be made once these forms are finalized or when draft or final instructions are released.

A proposed rule issued in late 2021 extended the annual furnishing deadlines under both Sections 6055 and 6056 for an additional 30 days. This rule is in proposed form and has not been finalized. However, reporting entities may rely on the rule even before it is finalized. Reporting entities are encouraged to furnish statements to individuals as soon as they are able.

Employers should become familiar with these forms for reporting for the 2022 calendar year. However, these forms are draft versions only and should not be filed with the IRS or relied upon for filing. Employers should monitor future developments for the release of 2022 draft instructions for these forms.

© 2022 HR 360, Inc.

June 14, 2022 - Health Care Reform Update

The Fee is $2.79 per Covered Life for Plan Years Ending on or After Oct. 1, 2021, and Before Oct. 1, 2022

The Affordable Care Act (ACA) requires health insurance issuers and self-insured plan sponsors to pay Patient-Centered Outcomes Research Institute fees (PCORI fees). Issuers and plan sponsors are generally required to pay the PCORI fees annually by July 31 of each year. However, the PCORI fee payment for plan years ending in 2021 is due Aug. 1, 2022, since July 31, 2022, is a Sunday.

The fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return). In general, the PCORI fees are assessed, collected and enforced like taxes. The PCORI fee applies separately to “specified health insurance policies” and “applicable self-insured health plans,” and is based on the average number of lives covered under the plan or policy.

Using Part II, Number 133 of Form 720, issuers and plan sponsors are required to report the average number of lives covered under the plan separately for specified health insurance policies and applicable self-insured health plans. That number is then multiplied by the applicable rate for that tax year ($2.66 for plan years ending on or after Oct. 1, 2020, and before Oct. 1, 2021, or $2.79 for plan years ending on or after Oct. 1, 2021, and before Oct. 1, 2022). The fees for specified health insurance policies and applicable self-insured health plans are then combined to equal the total tax owed.

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June 03, 2022 - Health Care Reform Update

Requirement not applicable to grandfathered plans, excepted benefits and account-based plans, such as HRAs, FSAs and HSAs

The Transparency in Coverage Final Rules (TiC Final Rules) require group health plans and health insurance issuers to disclose on a public website detailed pricing information in three separate machine-readable files (MRFs). Specifically, the following information must be disclosed:

• First file: In-network provider negotiated rates for covered items and services (the “In-network Rate File”);
• Second file: Historical payments to and billed charges from out-of-network providers (the “Allowed Amount File”); and
• Third file: In-network negotiated rates and historical net prices for covered prescription drugs (the “Prescription Drug File”)—this particular MRF requirement is delayed until further notice.

The files must be publicly available and accessible free of charge without any restrictions. Employers should coordinate with their carriers and TPAs, and confirm whether written agreements addressing MRFs are in place, to ensure the files will be available by the applicable deadline.

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May 04, 2022 - Health Care Reform Update

The Notice Includes Benefit and Payment Standards for 2023 

On April 28, 2022, the Department of Health and Human Services (HHS) issued a final Notice of Benefit and Payment Parameters (NBPP) for 2023. This final rule describes benefit and payment parameters under the Affordable Care Act (ACA) that apply for the 2023 benefit year. Finalized standards in the rule include:

• Updated annual limitations on cost sharing—The finalized 2023 maximum annual limit on cost sharing is $9,100 for self-only coverage and $18,200 for other-than-self-only coverage.
• The individual mandate’s affordability exemption—The finalized 2023 required contribution percentage is 8.17%.
• Standardized plan options in the Exchanges—The final rule requires insurers in the federally facilitated Exchanges (FFEs) and state-based Exchanges using the federal platform (SBE-FPs) to offer certain standardized plan options beginning with the 2023 plan year.

HHS declined to adopt standards from the proposed rule prohibiting discrimination based on sexual orientation and gender identity in benefit design and insurer marketing practices, by qualified health plans, and by states and Exchanges. Instead, HHS deferred finalizing these provisions to future rulemaking on ACA Section 1557.

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February 21, 2022 - Health Care Reform Update

Guidance Covers Majority of States

The Centers for Medicare & Medicaid Services (CMS) has released enforcement letters for a majority of states regarding the enforcement of certain provisions of the Consolidated Appropriations Act of 2021 (CAA). The CAA, enacted on Dec. 27, 2020, established new protections for consumers related to surprise billing (under the No Surprises Act) and transparency in health care.

The letters address:

• CMS’s understanding of the provisions each state is enforcing, either directly or through a collaborative enforcement agreement;
• The provisions that CMS will directly enforce;
• Whether the federal independent dispute resolution process and the federal patient-provider dispute resolution process apply in each state, and in what circumstances.

Currently, there are seven states without enforcement letters: Alaska, Arizona, Illinois, Nevada, New York, Ohio and Tennessee. CMS has also created a No Surprises Act webpage, which provides fact sheets on what the rules cover, consumer information about the rights and protections available, and information on how to resolve out-of-network payment disputes.

 

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February 10, 2022 - Health Care Reform Update

The FAQs Ensure Plans have Flexibility in Providing OTC COVID-19 Tests  

On Feb. 4, 2022, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) jointly issued FAQs (FAQs Part 52) regarding coverage of over-the-counter (OTC) COVID-19 tests. Beginning Jan. 15, 2022, plans and issuers must cover these tests without cost-sharing requirements, prior authorization or other medical management requirements during the public health emergency.

These FAQs modify and clarify the guidance in FAQs Part 51, which specified that plans and issuers must cover OTC COVID-19 tests available without an order or individualized clinical assessment by a health care provider.

The new FAQs include the following guidance:  

• Plans and issuers have flexibility in how they establish a direct-to-consumer shipping program and direct coverage through an in-person network in order to qualify for the safe harbor.
• The Departments will not take enforcement action against a plan or issuer that is temporarily unable to provide adequate access to OTC COVID-19 tests through its direct coverage program due to a supply shortage.
• Plans and issuers are permitted to take reasonable steps to prevent, detect and address fraud and abuse.
• The OTC test coverage requirements do not apply to tests that use a self-collected sample but require processing by a laboratory or other health care provider to return results.   

The FAQs also address how a plan’s or issuer’s coverage of OTC COVID-19 tests impacts health flexible spending arrangements (FSAs) and similar account-based plans.

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January 04, 2022 - Health Care Reform Update

Additional Guidance on Good Faith and Reasonable Interpretations

The Consolidated Appropriations Act of 2021 (CAA) created new requirements for brokers and consultants to disclose any direct or indirect compensation they may receive for referral of services to ERISA-covered group health plan sponsors. The requirements began on Dec. 27, 2021.

On Dec. 30, 2021, the U.S. Department of Labor (DOL) announced a temporary enforcement policy for these new requirements in Field Assistance Bulletin No. 2021-03. According to the DOL, a person will not be treated as having failed to make required disclosures to a responsible plan fiduciary as long as the person made disclosures in accordance with a good faith, reasonable interpretation of the law. The Field Assistance Bulletin provides guidance on what is considered a good faith and reasonable interpretation in the form of eight questions and answers.

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November 23, 2021 - Health Care Reform Update

Until the Rule is Finalized, the General Furnishing Deadline (Jan. 31) Continues to Apply

On Nov. 22, 2021, the IRS released a proposed rule that would extend the annual furnishing deadlines for Sections 6055 and 6056 reporting under the Affordable Care Act (ACA). This proposed rule would essentially make permanent the furnishing deadline extension that has been provided for each prior year of ACA reporting. Specifically, the proposed rule would:

• Extend the due date for furnishing statements to individuals under Sections 6055 and 6056 by 30 days from Jan. 31 each year; and
• Provide additional penalty relief related to furnishing statements to individuals under Section 6055 for every year in which the individual mandate penalty is zero. Under this relief, employers would generally only have to provide Form 1095-B to covered individuals upon request.

The proposed rule also provides that transitional good-faith relief from penalties for the reporting of incorrect or incomplete information on information returns or statements that has been provided in past years is not available for reporting for tax year 2021 and subsequent years. This good-faith relief was intended to be transitional to accommodate public concerns with implementing new reporting requirements under the ACA. These reporting requirements have now been in place for six years, and the IRS has determined that transitional relief is no longer appropriate. Therefore, the IRS has discontinued the transitional good-faith relief after tax year 2020.

This rule is in proposed form and has not been finalized. As a result, the general furnishing deadline (Jan. 31) continues to apply. However, even if the rule is finalized, reporting entities are generally encouraged to furnish statements to individuals as soon as they are able.

© 2022 HR 360, Inc.

October 06, 2021 - Health Care Reform Update

Premium Discounts for COVID-19 Vaccination Generally Must be Offered as Part of a Wellness Program 

On Oct. 4, 2021, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued FAQs addressing rules regarding premium incentives for COVID-19 vaccinations and rapid coverage of preventive services for COVID-19.

Premium Incentives for COVID-19 Vaccinations

The FAQs clarify that a group health plan (or health insurance issuer offering coverage in connection with a group health plan) may offer participants a premium discount for receiving a COVID-19 vaccination. However, plans generally may not condition eligibility for benefits or coverage on vaccination status, and any discount must comply with the final wellness program rules.

Under these rules, a premium discount that requires an individual to obtain a COVID-19 vaccination would be considered an activity-only wellness program, which is a type of health-contingent wellness program. These programs must comply with the regulations’ five nondiscrimination criteria, including an incentive limit and a requirement to offer a reasonable alternative standard in some cases. The maximum permissible reward (or penalty) under a health-contingent wellness program that is part of a group health plan (and is not related to tobacco use) is 30% of the cost of coverage.

Rapid Coverage of Preventive Services for COVID-19

According to the FAQs, effective Jan. 5, 2021, plans and issuers must cover, without cost sharing, any COVID-19 vaccines and their administration immediately once the particular vaccine becomes authorized under an emergency use authorization (EUA) or approved under a biologics license application (BLA). This coverage must be provided consistent with the scope of the EUA or BLA, including any amendment, such as to allow for an additional dose to certain individuals, booster doses or the expansion of the age demographic for whom the vaccine is authorized or approved.

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August 24, 2021 - Health Care Reform Update

Proposal Would Effectively Eliminate Paper Filings for Most Employers

On July 23, 2021, the IRS published a proposed rule that would expand the requirement to file certain information returns electronically, including those under the Affordable Care Act’s (ACA) reporting requirements in Internal Revenue Code Section 6055 and Section 6056.

• For Form 1094 series, Forms 1095-B and 1095-C, Form 1099 series, and Form 5498 series, electronic filing would be required for entities that file 100 or more returns for due dates in 2022, and 10 or more returns after that. The proposal would also require aggregation of most information returns when calculating these thresholds.
• Entities that file at least 10 returns of any type would be required to electronically file Form 5330 for tax years ending on or after the date final rules are published, and Form 8955-SSA for plan years beginning on or after Jan. 1, 2022.
• For entities required to file Form 5500, the proposed rule would require entities that file at least 10 returns of any type to file Form 5500 electronically, effective for plan years beginning after Dec. 31, 2021.

This proposal would effectively eliminate paper filings for most employers. However, the proposed rule has not been finalized and is not effective at this time.

© 2022 HR 360, Inc.

August 20, 2021 - Health Care Reform Update

The Departments Intend to Amend Existing Religious and Moral Exemptions

On Aug. 16, 2021, the Departments of Health and Human Services (HHS), Labor (DOL) and the Treasury (Departments) issued a frequently asked question (FAQ) regarding enforcement of the contraceptive coverage mandate under the Affordable Care Act (ACA). This FAQ indicates that the Departments intend to amend existing religious and moral exemptions to the contraceptive coverage mandate in light of recent litigation.

The ACA requires non-grandfathered health plans to cover certain women’s preventive health services without cost sharing, including all FDA-approved contraceptives. In 2018, the Departments published final regulations that expanded the exemptions and accommodations to the contraceptive mandate to apply to any entities with religious or moral objections to the contraceptive coverage requirement. On July 8, 2020, the U.S. Supreme Court upheld these regulations as a valid exercise of power.

The new FAQ indicates that the Departments intend to issue regulations within six months to amend the 2018 final regulations. The FAQ does not provide any additional detail or specify the types of changes that may be made.

© 2022 HR 360, Inc.

July 14, 2021 - Health Care Reform Update

The Fee is $2.54 per Covered Life for Plan Years Ending in 2020

The Affordable Care Act (ACA) requires health insurance issuers and self-insured plan sponsors to pay Patient-Centered Outcomes Research Institute fees (PCORI fees). Issuers and plan sponsors are generally required to pay the PCORI fees annually by July 31 of each year. However, the PCORI fee payment for plan years ending in 2020 is due Aug. 2, 2021, since July 31, 2021, is a Saturday.

The fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return). In general, the PCORI fees are assessed, collected and enforced like taxes. The PCORI fee applies separately to “specified health insurance policies” and “applicable self-insured health plans,” and is based on the average number of lives covered under the plan or policy.

Using Part II, Number 133 of Form 720, issuers and plan sponsors are required to report the average number of lives covered under the plan separately for specified health insurance policies and applicable self-insured health plans. That number is then multiplied by the applicable rate for that tax year ($2.54 for plan years ending on or after Oct. 1, 2019, and before Oct. 1, 2020). The fees for specified health insurance policies and applicable self-insured health plans are then combined to equal the total tax owed.

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June 17, 2021 - Health Care Reform Update

Supreme Court Determined there was No Legal Right to Sue

On June 17, 2021, the U.S. Supreme Court rejected a lawsuit challenging the constitutionality of the Affordable Care Act’s (ACA) individual mandate in a 7-2 ruling.

This lawsuit was filed in 2018 by 18 states as a result of the 2017 tax reform law that eliminates the individual mandate penalty. In 2012, the U.S. Supreme Court upheld the ACA on the basis that the individual mandate is a valid tax. With the penalty’s elimination, the appeals court in this case determined that the individual mandate is no longer valid under the U.S. Constitution.

The Supreme Court determined that the plaintiffs in this case did not have a legal right to sue. As a result, the ACA as it exists today will remain in place. The Court did not make any determinations on any other issue in the case, including the validity of the individual mandate or whether the rest of the ACA can be severed from the individual mandate provision. However, this case is now concluded.

© 2022 HR 360, Inc.

June 04, 2021 - Health Care Reform Update

2021 ACA Reporting is Due in Early 2022

The IRS has released draft 2021 versions of Forms 1094-C, 1095-C, 1094-B and 1095-B that employers will use in early 2022 to report under Internal Revenue Code Sections 6055 and 6056 for the 2021 calendar year. Draft instructions related to these forms for the 2021 calendar year have not yet been released.

No substantive changes were made to the draft forms for 2021 reporting. These forms are substantively identical to the final 2020 versions. However, certain changes may be made once these forms are finalized, or when draft or final instructions are released.

Employers should become familiar with these forms for reporting for the 2021 calendar year. However, these forms are draft versions only, and should not be filed with the IRS or relied upon for filing. In addition, employers should monitor future developments for the release of 2021 draft instructions for these forms.

© 2022 HR 360, Inc.

May 06, 2021 - Health Care Reform Update

The Notice Includes Additional Benefit and Payment Standards for 2022

On May 5, 2021, the Department of Health and Human Services (HHS) published a second Notice of Benefit and Payment Parameters (NBPP) for 2022 that finalized the remainder of the standards included in the proposed notice issued at the end of 2020. The first final 2022 NBPP was published Jan. 19, 2021.

This second NBPP describes additional benefit and payment parameters under the Affordable Care Act (ACA) that apply for the 2022 benefit year, including the following:

• The annual out-of-pocket maximum limitation will increase to $8,700 (self-only coverage) and $17,400 (family coverage) for 2022. This amount is $400 lower than was initially proposed.
• The required contribution percentage for catastrophic coverage eligibility will decrease from 8.27% for 2021 to 8.09% for 2022.
• An additional special enrollment period (SEP) for Exchange coverage to allow Exchange enrollees who lose premium tax credit eligibility to change to a new plan, and allow individuals who were unaware that an SEP triggering event occurred to select a new qualified health plan within 60 days.

The first 2022 NBPP finalized provisions including updated user fees for issuers offering plans through the Exchange, establishment of a new Exchange direct enrollment option, Exchange payment standards related to individual coverage HRAs (ICHRAs) or qualified small employer HRAs (QSEHRAs), and amended Section 1332 waiver procedures.

© 2022 HR 360, Inc.

March 26, 2021 - Health Care Reform Update

The Special Enrollment Period will Now be Available through Aug. 15, 2021, via HealthCare.gov

On March 23, 2021, the Centers for Medicare & Medicaid Services (CMS) announced that it is extending access to a special enrollment period (SEP) through Exchanges on the federal www.HealthCare.gov platform due to the coronavirus (COVID-19) pandemic. Originally available through May 15, 2021, the extended SEP provides three additional months for enrollment, allowing eligible individuals to enroll in Exchange coverage through Aug. 15, 2021.

Now through Aug. 15, 2021, this SEP is available through Exchanges using the www.HealthCare.gov platform to all Exchange-eligible consumers who are submitting a new application or updating an existing application. States using their own Exchange platforms are strongly encouraged to make a similar SEP available in their states. Consumers seeking to take advantage of this SEP can find out if they are eligible by visiting www.HealthCare.gov. Consumers will have 30 days after they submit their application to choose a plan.

As a result of the American Rescue Plan Act (ARPA), additional premium cost savings is available through www.HealthCare.gov starting April 1, 2021, that may lower premium costs or allow individuals to enroll in a higher-level plan at the same cost. Also, beginning in early July, consumers who are eligible for unemployment compensation for any week during 2021 may be eligible for additional cost savings through the Exchange.

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February 04, 2021 - Health Care Reform Update

These Codes were Previously Reserved on the 2020 Instructions for Forms 1094-C and 1095-C

On Feb. 2, 2021, the Internal Revenue Service (IRS) provided two additional codes from Code Series 1, that can be used on Form 1095-C, line 14, for reporting offers of individual coverage HRAs (ICHRAs) under Section 6056. These codes were previously reserved on the instructions for Forms 1094-C and 1095-C.

• 1T. ICHRA offered to employee and spouse (no dependents) with affordability determined using employee's primary residence location ZIP code.
• 1U. ICHRA offered to employee and spouse (no dependents) using employee's primary employment site ZIP code affordability safe harbor.

These additional codes may be used when an employer offers ICHRA coverage to an employee and his or her spouse, but not to any dependent children.

When the final forms and instructions for reporting under Section 6056 were released back in October 2020, they included eight additional codes in Code Series 1 (Codes 1L-1M) that may be used to report offers of ICHRA coverage.

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February 02, 2021 - Health Care Reform Update

The Order Directs Federal Agencies to Review Existing Policies to Determine whether they Undermine the ACA

On Jan. 28, 2021, President Joe Biden issued an executive order that is intended to strengthen the Affordable Care Act (ACA) and Medicaid. The executive order directs the Department of Health and Human Services (HHS) to consider establishing a special enrollment period through Federally Facilitated Exchanges due to the coronavirus (COVID-19) pandemic. 

The order also directs HHS, the Treasury and the Department of Labor (DOL) to review all existing regulations and guidance, and other agency actions to determine whether they are inconsistent with the policy of the executive order, and consider whether to suspend, revisit or rescind those actions. Finally, the executive order revokes two prior executive orders issued by the Trump administration.

An executive order is a broad policy directive that directs federal agencies to consider new regulations or guidance to implement the order’s policies. The order itself does not make any changes to existing regulations. As a result, the executive order’s specific impact will remain largely unclear until agencies can issue further guidance.

© 2022 HR 360, Inc.

February 02, 2021 - Health Care Reform Update

The Special Enrollment Period will be Available Feb. 15 – May 15, 2021, through HealthCare.gov

On Jan. 28, 2021, the Centers for Medicare & Medicaid Services (CMS) announced a new special enrollment period (SEP) due to the coronavirus (COVID-19) pandemic through Exchanges using the federal www.HealthCare.gov platform. States using their own Exchange platforms are strongly encouraged to make a similar SEP available in their states.

Starting on Feb. 15, 2021, and continuing through May 15, 2021, Exchanges using the www.HealthCare.gov platform will make a SEP available to all Exchange-eligible consumers who are submitting a new application or updating an existing application. Beginning on Feb. 15, 2021, consumers seeking to take advantage of this SEP can find out if they are eligible by visiting www.HealthCare.gov. Consumers will have 30 days after they submit their application to choose a plan.

Consumers do not need to provide any documentation of a qualifying event (such as loss of a job or birth of a child), which is typically required for SEP eligibility.

© 2022 HR 360, Inc.