September 17, 2019 - Health Care Reform Update

No Waiver or Transition Relief is Currently Available

Recently, the Internal Revenue Service released an information letter regarding the Affordable Care Act's employer shared responsibility (pay or play) penalties. The information letter is intended to clarify the applicability of the penalties in light of President Trump's 2017 executive order broadly directing federal agencies to waive, delay or grant exemptions from ACA requirements that may impose a financial burden.

The information letter:

• Confirms that the ACA's pay or play penalties continue to apply to applicable large employers (ALEs) that fail to offer affordable, minimum value health coverage to their full-time employees (and dependents).
• Indicates that the law does not provide for any waiver of the pay or play penalties.
• Reiterates that, while several forms of transition relief were available for 2015 and 2016, no transition relief is available for 2017 and future years.

This information letter confirms the IRS' position that the executive order does not change the law, and that the ACA's provisions are still effective until changed by Congress. As a result, the ACA's pay or play penalties still apply. ALEs must continue to comply with this requirement, including paying any penalties that may be owed.

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September 17, 2019 - Health Care Reform Update

Updates Also Include Payment Information

The Internal Revenue Service has updated its Q&As on the Affordable Care Act's employer shared responsibility (pay or play) requirements, including the penalty amounts that will apply for 2020. Each year, penalty amounts are increased based on the premium adjustment percentage for the year.  

For 2020, the adjusted penalty amounts are $2,570 (for employers not offering coverage) and $3,860 (for employers offering coverage that is not affordable or does not provide minimum value). The updated Q&As also address the following topics on making a payment:

• Employer responses to Letter 226J (the letter the IRS uses to propose and assess payments);
• How to make a payment;
• IRS notification to employers of potential penalty liability.

Click here to view the Q&As in their entirety.

© 2019 HR 360, Inc.

July 26, 2019 - Health Care Reform Update

New Figure Marks Decrease from 2019

Under the employer shared responsibility ("pay or play") provisions of the Affordable Care Act, 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 2020, the Internal Revenue Service has announced that coverage will generally be considered affordable if the employee's required contribution for the lowest-cost self-only health plan offered is 9.78% or less of his or her household income for the taxable year. For plan years beginning in 2019, the applicable percentage is 9.86%.
 
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.

© 2019 HR 360, Inc.

July 15, 2019 - Health Care Reform Update

Fees Apply to Employers Sponsoring Certain Self-Insured Plans

As a reminder, employers that sponsor certain self-insured health plans are responsible for Patient-Centered Outcomes Research Institute (PCORI) fees. Fees for plan years that ended in 2018 are due July 31, 2019.

Employers must report and pay the required PCORI fees annually via IRS Form 720. For plan years that ended between January 1, 2018 and September 30, 2018, the fee is $2.39 multiplied by the average number of lives covered under the plan. For plan years that ended between October 1, 2018 and December 31, 2018, the fee is $2.45 multiplied by the average number of lives covered under the plan.

For more information on filing due dates and applicable rates, click here.

© 2019 HR 360, Inc.

May 31, 2019 - Health Care Reform Update

Rule Would Revise Interpretation of Section 1557

The Department of Health and Human Services (HHS) has released a proposed rule that would eliminate portions of its existing regulations under Section 1557 of the Affordable Care Act (ACA), which addresses nondiscrimination in certain health care programs. The new rule, if finalized, would (among other things) remove gender identity and termination of pregnancy as “discrimination on the basis of sex” under Section 1557. A 2016 federal court injunction prohibited HHS from enforcing these provisions. 

In addition, under the proposed rule:

• Covered entities would no longer need to mail notices and "taglines" concerning nondiscrimination and the availability of language assistance services in 15 languages; and
• Section 1557 would apply to the health care activities of entities not principally engaged in health care, but only to the extent they are funded by HHS. 

The proposed revisions will not take effect until finalized by HHS. The agency has prepared a fact sheet with more information on these and other provisions of the proposed rule.

© 2019 HR 360, Inc.

May 20, 2019 - Health Care Reform Update

Q&As Provide More Clarity for Employers after Court Decision

The U.S. Department of Labor (DOL) has issued questions and answers on the scope of its enforcement relief for association health plans (AHPs), described in an earlier policy statement. The guidance comes in the wake of a federal court decision striking down part of a 2018 DOL rule that had expanded access to the plans.
 
Key points in the new Q&As include:

• AHPs formed under pre-rule guidance from the DOL are not affected by the court decision.
• Enforcement relief does not extend to actions taken after the court’s ruling by AHPs formed under the DOL rule, including marketing to, and signing up, new employer members after the court’s decision. Existing employer members may, however, continue to enroll new employees upon special enrollment events and consistent with the plan’s eligibility requirements (e.g., enrolling new hires).
• Enforcement relief extends through the remainder of the contract term that was in force at the time of the court decision, even if the term is longer than one year.

For additional information, please see the DOL Q&As or contact the Employee Benefits Security Administration at 1-866-444-3272.

© 2019 HR 360, Inc.

May 14, 2019 - Health Care Reform Update

Fees Apply to Employers Sponsoring Certain Self-Insured Plans

As a reminder, employers that sponsor certain self-insured health plans are responsible for Patient-Centered Outcomes Research Institute (PCORI) fees. Fees for plan years that ended in 2018 are due July 31, 2019.

Employers must report and pay the required PCORI fees annually via IRS Form 720. For plan years that ended between January 1, 2018 and September 30, 2018, the fee is $2.39 multiplied by the average number of lives covered under the plan. For plan years that ended between October 1, 2018 and December 31, 2018, the fee is $2.45 multiplied by the average number of lives covered under the plan.

For more information on filing due dates and applicable rates, click here.

© 2019 HR 360, Inc.

May 13, 2019 - Health Care Reform Update

Employers Will File Forms 1094 and 1095 through State W-2 Filing System in 2020

New Jersey recently updated its website information on employer health coverage reporting. As part of the state’s individual health insurance mandate, starting with tax year 2019, employers must provide New Jersey taxpayers and the state with the same 1094 and 1095 health care coverage information they sent the IRS in tax year 2018, using federal Forms 1094 and 1095 B and C, as appropriate (unless those forms are discontinued).
 
Employers will file the forms electronically through New Jersey’s system for filing W-2 forms by February 15, 2020. Further instructions will be posted mid-year on the state’s website. The reporting requirement also applies to out-of-state employers that withhold and remit New Jersey income tax for New Jersey residents.

For more information, please contact the New Jersey Department of the Treasury.

© 2019 HR 360, Inc.

May 07, 2019 - Health Care Reform Update

DOL Appeals Court Decision, Issues Policy Statement

The U.S. Department of Labor (DOL) has appealed a March federal court decision striking down parts of the DOL rule on association health plans (AHPs). The rule had expanded employers’ ability to join in AHPs to purchase health coverage. The agency also issued a statement that employers currently participating in insured AHPs can generally maintain that coverage through the end of the current plan year or contract term, meaning their employees can generally keep their coverage.

At the end of the plan year, issuers will only be able to renew AHP coverage that complies with the relevant market requirements for that employer’s size (such as, for small employers, the essential health benefits requirement and premium rating rules).
 
In the interim, the DOL said it will not pursue enforcement actions for violations stemming from actions taken before the court’s decision in good faith reliance on the AHP rule. The agency nevertheless urged employers to carefully consider their near-term coverage options.
  
For more information, please contact the DOL.

 

© 2019 HR 360, Inc.

April 23, 2019 - Health Care Reform Update

HHS Issues Key Rule for 2020

A new rule from the U.S. Department of Health and Human Services (HHS) addresses, among other things, the requirement under the Affordable Care Act that non-grandfathered group health plans limit annual out-of-pocket cost-sharing for coverage of essential health benefits under the plan. Under the rule, these out-of-pocket expenses may not exceed $8,150 for self-only coverage or $16,300 for family coverage in 2020.

© 2019 HR 360, Inc.

April 01, 2019 - Health Care Reform Update

Policies Renewed Under Extended Non-Enforcement Policy Must Comply by January 1, 2021

A previously extended non-enforcement policy which allows health insurance issuers, at their option, to continue group coverage that would otherwise be terminated or cancelled has been further extended to policy years beginning on or before October 1, 2020, provided that all policies come into compliance by January 1, 2021. Health insurance issuers that renew coverage under the extended non-enforcement policy are required to provide standard notices to affected small businesses for each policy year.

Coverage subject to the non-enforcement policy will not be considered to be out of compliance with key Affordable Care Act provisions, including:

• The requirement to cover a core package of items and services known as essential health benefits;
• The requirement that any variations in premiums be limited with regard to a particular plan or coverage to age, tobacco use, family size, and geography;
• The requirements regarding guaranteed availability and renewability of coverage; and
• The requirements relating to coverage for individuals participating in approved clinical trials.

Click here to review the extended non-enforcement policy.

© 2019 HR 360, Inc.

March 29, 2019 - Health Care Reform Update

DOL Rule Called 'End-Run' Around Affordable Care Act

A federal judge has ruled that two parts of the Department of Labor (DOL) rule expanding employers' ability to join in association health plans (AHPs) violate ERISA. AHPs are group health plans sponsored by a group of employers. In June 2018, the DOL issued a rule allowing AHPs to offer coverage to some or all employers in a state, city, county, or multistate metro area, or to businesses in a common trade, industry, line of business, or profession in any area, including nationwide. 

The March 28 federal court opinion stated that the rule was an "end-run" around the Affordable Care Act, and that the DOL exceeded its authority when it defined "employer" in the rule to include associations of disparate employers. The court also struck down a part of the DOL rule that expanded memberships in AHPs to working owners without employees.

The court directed the DOL to reconsider how the remaining provisions of the June 2018 rule are affected by the opinion. Further legal and regulatory developments are expected.

© 2019 HR 360, Inc.

February 06, 2019 - Health Care Reform Update

Form 1095 Furnishing Deadline is March 4

The IRS deadlines for filing and furnishing Forms 1094 and 1095 are fast approaching. As a reminder:

• Employers with 50 or more full-time employees (including full-time equivalent employees) generally must furnish a Form 1095-C to all full-time employees no later than March 4, 2019.
• Self-insured employers with fewer than 50 or more full-time employees (including full-time equivalent employees) generally must furnish a Form 1095-B to all responsible individuals—typically the primary insured, an employee or former employee, or other related person named on the application for insurance—no later than March 4, 2019. 
• All Forms 1094 and 1095 must be filed with the IRS no later than February 28, 2019 (or April 1, 2019, if filing electronically).

© 2019 HR 360, Inc.

December 15, 2018 - Health Care Reform Update

Further Legal Developments Expected

A federal district court in Texas has ruled the entirety of the Affordable Care Act (ACA) unconstitutional. However, the decision is expected to be swiftly appealed. In the meantime, pending further legal developments, the ACA remains in effect.

© 2019 HR 360, Inc.

November 30, 2018 - Health Care Reform Update

Furnishing Deadline Moved to March 4

The IRS has moved back the deadlines by which employers must furnish Forms 1095-C and 1095-B in early 2019. As a result:

• Employers with 50 or more full-time employees (including full-time equivalent employees) generally must furnish a Form 1095-C to all full-time employees no later than March 4, 2019.
• Self-insured employers with fewer than 50 or more full-time employees (including full-time equivalent employees) generally must furnish a Form 1095-B to all responsible individuals—typically the primary insured, an employee or former employee, or other related person named on the application for insurance—no later than March 4, 2019. 

The deadline for employers to file all Forms 1094 and 1095 with the IRS remains February 28, 2019 (or April 1, 2019, if filing electronically).

© 2019 HR 360, Inc.

November 15, 2018 - Health Care Reform Update

Contribution Limit to Increase $50 in 2019

The IRS has announced that the contribution limit for health flexible spending arrangements (health FSAs) will be $2,700 in 2019. For 2018, the contribution limit is $2,650.

© 2019 HR 360, Inc.

October 23, 2018 - Health Care Reform Update

If Finalized, Proposal Would Become Effective for 2020 Plan Year

A new proposed rule would permit all employers to offer health reimbursement arrangements (HRAs) to reimburse employees' individual health insurance policy premiums if certain conditions are met. Currently, many employers are prohibited from offering such HRAs. If finalized, the proposal would be effective for plan years beginning on or after January 1, 2020.

In general, the proposal would permit an HRA to reimburse premiums for individual health insurance policies only if:

• Individuals verify their enrollment in individual health insurance coverage;
• The HRA is offered on the same terms to all employees within a class;
• The employer does not offer both a traditional group health plan and the HRA to the same class of employees;
• Participants can opt out of the HRA annually; and
• Employers provide eligible participants with a written notice describing the HRA's terms.

Click here for more information on the proposal.  

© 2019 HR 360, Inc.

October 01, 2018 - Health Care Reform Update

Form Instructions Also Released

The IRS has released the Forms 1094-C, 1095-C, 1094-B, and 1095-B that employers will use in early 2019 to report on the group health insurance coverage they offered during the 2018 calendar year. Instructions on how to complete Forms 1094-C and 1095-C and Forms 1094-B and 1095-B have also been released.

© 2019 HR 360, Inc.

September 13, 2018 - Health Care Reform Update

Policy Effective for Tax Year 2018

The Centers for Medicare and Medicaid Services (CMS) has announced that individuals will be able to claim hardship exemptions from the Affordable Care Act's individual mandate for tax year 2018 on their 2018 federal income tax return. Previously, individuals were only permitted to claim these exemptions on their federal income tax return if first approved by the Health Insurance Marketplace. In addition, individuals claiming a hardship exemption will no longer be required to present documentary evidence or provide a written explanation of their hardship upon claiming the exemption.

Among other things, individuals are generally eligible to claim a hardship exemption for any month before, during, or after he or she:

• Experienced a fire, flood, or other natural or human-caused disaster;
• Filed for bankruptcy; or
• Had unpaid medical expenses that resulted in substantial debt.

For more information, please read the CMS announcement.

© 2019 HR 360, Inc.

August 03, 2018 - Health Care Reform Update

New Rule Loosens Current Restrictions

Effective October 2, 2018, a new rule will allow individuals to purchase short-term, limited-duration health insurance coverage for a period of less than 12 months, and renew such coverage for up to 36 months. Under current law, the maximum coverage period for short-term, limited-duration health insurance is less than 3 months, and these policies cannot be renewed.

Notably, short-term, limited-duration health insurance is:

• Not required to comply with the Affordable Care Act's ban on pre-existing condition exclusions and lifetime and annual dollar limits.
• Not required to comply with the Affordable Care Act's essential health benefits requirement, which requires individual health insurance policies to cover, among other things, hospitalizations, emergency services, and maternity care.
• Not "minimum essential coverage," meaning that policyholders may remain liable for an individual mandate penalty for any month in 2018.

Click here to read the new rule. A fact sheet is also available.

© 2019 HR 360, Inc.