October 29, 2020 - Health Care Reform Update

Rule Requires Disclosure of Personalized Cost-sharing Information

On Oct. 29, 2020, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a final rule regarding transparency in coverage that imposes new transparency requirements on group health plans and health insurers in the individual and group markets. The final rule requires plans and issuers to disclose:

• Cost-sharing estimates to participants, beneficiaries and enrollees through an internet-based self-service tool, beginning with the 2023 plan year; and
• In-network provider-negotiated rates and historical out-of-network allowed amounts on their public website, for plan years beginning on or after Jan. 1, 2022.

These provisions only apply to non-grandfathered coverage, including both insured and self-insured group health plan sponsors.

© 2020 HR 360, Inc.

October 27, 2020 - Health Care Reform Update

Contribution Limit to Remain the Same in 2021

The IRS has announced that the contribution limit for health flexible spending arrangements (health FSAs) will remain at $2,750 in 2021. For 2020, the contribution limit was also set at $2,750.

© 2020 HR 360, Inc.

October 20, 2020 - Health Care Reform Update

2020 ACA Reporting is Due in Early 2021

The IRS has released final 2020 forms and instructions for use in early 2021 to report under IRS Code Sections 6055 and 6056 for the 2020 calendar year. 

• 2020 Form 1094-B and Form 1095-B (and related instructions) will be used by providers of minimum essential coverage (MEC), including self-insured plan sponsors that are not ALEs, to report under Section 6055.
• 2020 Form 1094-C and Form 1095-C (and related instructions) will be used by applicable large employers (ALEs) to report under Section 6056, as well as for combined Section 6055 and 6056 reporting by ALEs who sponsor self-insured plans. 

The forms and instructions include a number of changes and clarifications related to 2020 reporting. 

• The deadline for furnishing statements to individuals under Sections 6055 and 6056 has been extended to March 2, 2021.
• Good faith relief from penalties for reporting incorrect or incomplete information has been extended to 2020 reporting.
• The IRS has extended relief from penalties for reporting entities that furnish individual statements under Section 6055 only upon request for 2020 calendar year reporting.
• The “Plan Start Month” box on Form 1095-C is now required for 2020 reporting.
• Certain additions were made to the 2020 Forms 1095-B and 1095-C related to individual coverage HRAs (ICHRAs). Form 1095-B includes a new code G to be used on line 8, Origin of the Health Coverage, to identify coverage under an ICHRA. In addition, Form 1095-C includes new codes in Code Series 1 for reporting offers of ICHRAs, as well as new lines for reporting required information. 

Employers should become familiar with these forms and instructions for reporting for the 2020 calendar year. Individual statements must be furnished by March 2, 2021, and IRS returns must be filed by Feb. 28, 2021 (March 31, 2021, if filed electronically).

© 2020 HR 360, Inc.

October 15, 2020 - Health Care Reform Update

2020 ACA Reporting is Due in Early 2021

The IRS has released draft 2020 instructions for Forms 1094-B and 1095-B, and draft 2020 instructions for Forms 1094-C and 1095-C that employers will use in early 2021 to report under IRS Code Sections 6055 and 6056 for the 2020 calendar year. Draft forms related to this reporting were previously released in July 2020.

The draft instructions include a number of changes and clarifications related to 2020 reporting.

 

• The deadline for furnishing statements to individuals under Sections 6055 and 6056 has been extended to March 2, 2021.
• Good faith relief from penalties for reporting incorrect or incomplete information has been extended to 2020 reporting.
• The IRS has extended relief from penalties for reporting entities that furnish individual statements under Section 6055 only upon request for 2020 calendar year reporting.
• The “Plan Start Month” box on Form 1095-C is now required for 2020 reporting.
• Certain additions were made to the 2020 draft Forms 1095-B and 1095-C related to individual coverage HRAs (ICHRAs). Draft Form 1095-B includes a new code G to be used on line 8, Origin of Health Coverage, to identify coverage under an ICHRA. In addition, draft Form 1095-C includes additional codes in Code Series 1 for reporting offers of ICHRAs, as well as new lines for reporting required information.

 

Employers should become familiar with these forms and instructions for reporting for the 2020 calendar year. However, these are draft versions only, and should not be filed with the IRS or relied upon for filing.

© 2020 HR 360, Inc.

October 05, 2020 - Health Care Reform Update

2020 Furnishing Deadline Delayed and Additional Transition Relief Granted

The IRS has delayed the deadlines by which employers must furnish 2020 Forms 1095-C and 1095-B in early 2021. For 2020, the furnishing deadline was Feb. 1, 2021, Since Jan. 31, 2021, is a Sunday. The IRS has provided an additional 30 days for furnishing the 2020 Form 1095-B and Form 1095-C, extending the due date from Feb. 1, 2021, to March 2, 2021. The deadline for filing with the IRS under Sections 6055 and 6056 remains March 1, 2021 (since Feb. 28, 2021, is a Sunday), or March 31, 2021, if filing electronically.

The IRS provided additional relief from penalties related to failures to furnish 2020 forms to individuals under Section 6055 only, under certain circumstances. Under this relief, employers will only have to provide Form 1095-B to covered individuals upon request.

The IRS also provided a final extension of good-faith relief from penalties related to incorrect or incomplete information returns filed for the 2020 calendar year under Sections 6055 and 6056. This is the last year that the IRS intends to provide good-faith relief from penalties, since it was intended to be transitional relief only.

© 2020 HR 360, Inc.

September 25, 2020 - Health Care Reform Update

The America First Health Care Plan aims to Protect People with Preexisting Conditions and Combat Surprise Medical Billing

On Sept. 24, 2020, President Donald Trump introduced his plan for affordable, high-quality health care, called the America First Health Care Plan. This plan, issued in an executive order, is primarily aimed at protecting people with preexisting conditions and combating surprise medical billing.

The executive order directs the Departments of Health and Human Services (HHS), Labor and the Treasury to maintain and build upon existing actions to:

• Expand options for affordable health care and access to affordable medicines;
• Ensure consumers have access to meaningful price and quality information before the delivery of care; and
• Reduce waste, fraud and abuse in the health care system.

The executive order specifically directs HHS to work with Congress to reach a legislative solution to end surprise medical billing by Dec. 31, 2020. If a legislative solution is not reached by that date, the executive order directs HHS to take administrative action to prevent out-of-pocket expenses that cannot be reasonably foreseen.

An executive order is a broad policy directive used to establish how laws will be enforced by the administration. The order does not make any changes to existing laws or regulations, but directs federal agencies to issue new guidance to implement the order’s policies. As a result, the executive order’s specific impact will remain largely unclear until agencies issue further guidance or Congress takes action in response to the order.

© 2020 HR 360, Inc.

September 23, 2020 - Health Care Reform Update

Whether Justice Ginsburg’s Seat should be Filled Prior to the November Election is the Subject of Much Controversy

On Sept. 18, 2020, U.S. Supreme Court Justice Ruth Bader Ginsburg passed away at the age of 87. Under federal law, the President is responsible for nominating a new Supreme Court Justice, and the nominee must be confirmed by the U.S. Senate.

On Sept. 26, 2020, President Donald Trump nominated federal circuit court judge Amy Coney Barrett to fill the vacancy, and the Senate plans to hold a vote on this nomination. However, a number of Democrats in Congress believe that the nomination process should not take place until after the November election.

Currently, a lawsuit seeking to invalidate the ACA in its entirety is pending before the Supreme Court, with oral arguments scheduled for November. If a new Supreme Court Justice is confirmed before the election, it could greatly impact the outcome of that litigation. It is widely expected that President Trump’s nominee will have a more conservative viewpoint and would be more likely to invalidate the ACA. In contrast, a Supreme Court Justice nominated by Democratic Party candidate Joe Biden would be more likely to uphold the ACA.

Until a nominee is ultimately confirmed, the practical impact of this decision remains to be seen. As a result, employers may want to closely monitor developments related to the Supreme Court nomination.

© 2020 HR 360, Inc.

August 31, 2020 - Health Care Reform Update

The Adjusted Penalty Amounts for 2021 are $2,700 and $4,060

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 dependent children.

Two separate penalties can apply under the employer shared responsibility rules—the Section 4980H(a) penalty and the Section 4980H(b) penalty.

• The Section 4980H(a) penalty can apply when an ALE does not offer coverage to “substantially all” full-time employees (and dependents). The annual Section 4980H(a) penalty is calculated as the ALE’s number of full-time employees (minus 30) x $2,000 (as adjusted).
• The Section 4980H(b) penalty can apply when an ALE does not offer coverage to all full-time employees, or the ALE’s coverage is unaffordable or does not provide minimum value. The annual Section 4980H(b) penalty is calculated as $3,000 (as adjusted) x the number of the ALE’s full-time employees who receive an Exchange subsidy.

After 2014, the applicable per-employee dollar amounts of $2,000 and $3,000 are increased based on the premium adjustment percentage for the year. The IRS announced that, for the 2021 calendar year, the adjusted $2,000 amount is $2,700 and the adjusted $3,000 amount is $4,060.

© 2020 HR 360, Inc.

July 28, 2020 - Health Care Reform Update

Series of Four Executive Orders Issued

On July 24, 2020, President Donald Trump issued the following series of executive orders in an effort to lower drug prices: 

• Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen: directs federally qualified health centers to pass along massive discounts on insulin and epinephrine received from drug companies to certain low-income Americans.
• Executive Order on Increasing Drug Importation to Lower Prices for American Patients: intended to allow state plans for safe importation of certain drugs, authorize the re-importation of insulin products made in the United States, and create a pathway for widespread use of personal importation waivers at authorized pharmacies in the United States.
• Executive Order on Access to Affordable Life-saving Medications: intended to prohibit secret deals between drug manufacturers and pharmacy benefit manager middlemen, ensuring patients directly benefit from available discounts at the pharmacy counter. 

President Trump also announced a fourth executive order intended to ensure that the United States pays the lowest price available in economically comparable countries for Medicare Part B drugs. However, the order's implementation is delayed until Aug. 25, 2020, to give pharmaceutical executives a chance to propose an alternative.

© 2020 HR 360, Inc.

July 22, 2020 - Health Care Reform Update

New Figure Marks Slight Increase from 2020

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 health insurance coverage that provides minimum value to their full-time employees and their dependents.
 
For plan years beginning in 2021, 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 9.83% or less of his or her household income for the taxable year. For plan years beginning in 2020, the applicable percentage is 9.78%.
 
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.

© 2020 HR 360, Inc.

July 22, 2020 - Health Care Reform Update

2018 Final Rule Allows Policies Lasting up to 12 Months

On July 17, 2020, a federal appeals court upheld a 2018 final rule expanding short-term, limited-duration insurance (STLDI) for purposes of the Affordable Care Act (ACA). The final rule:

• Provides a maximum coverage period for STLDI of up to 12 months; and
• Allows STLDI to continue for up to 36 months in total, taking into account renewals or extensions.

The plaintiffs in this case argued that extending the duration of STLDI is inconsistent with HIPAA’s plain text and an unreasonable interpretation in light of the ACA’s structure and purpose. However, the Court of Appeals for the District of Columbia upheld the final rule as a reasonable exercise of federal agencies’ authority. The court ruled that federal agencies are entitled to deference in defining STLDI because Congress delegated the authority to define STLDI to those federal agencies. The court also concluded that the interpretation of STLDI in the final rule was reasonable, pointing out that, between 1997 and 2016, STLDI had historically been defined under HIPAA as lasting up to 12 months in duration.

© 2020 HR 360, Inc.

July 14, 2020 - Health Care Reform Update

2019 ACA Reporting is Due in Early 2020

The IRS has released draft 2020 versions of Forms 1094-C and 1095-C that employers will use in early 2021 to report on the group health insurance coverage they offered during the 2020 calendar year. Draft instructions related to these forms for the 2020 calendar year have not yet been released. In addition, draft 2020 versions of Forms 1094-B and 1095-B (and related instructions) are not available at this time.

The draft 2020 Forms 1094-C and 1095-C are substantially similar to the final 2019 versions. However, the draft Form 1095-C includes:

• Additional codes in Code Series 1 related to offers of individual coverage health reimbursement arrangements (ICHRAs); and
• A new section to enter the zip code used to determine affordability for an ICHRA, if one was offered to the employee.

© 2020 HR 360, Inc.

July 10, 2020 - Health Care Reform Update

Plans Would Be Allowed Cost-sharing Changes without Losing Grandfather Status

On July 10, 2020, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a proposed rule that would provide greater flexibility for grandfathered group health plans to make certain changes to cost-sharing requirements without losing grandfather status.

Specifically, the proposed rule would make the following amendments to current rules:

• Flexibility for High Deductible Health Plans (HDHP): Grandfathered group health plans that are HDHPs would be allowed to increase certain cost-sharing amounts (such as deductibles) without losing grandfather status, to the extent necessary for maintaining HDHP status. According to the Departments, this change would help ensure that participants and beneficiaries of grandfathered HDHPs remain eligible to contribute to health savings accounts (HSAs).
• Alternative inflation adjustment for fixed-amount cost-sharing increases: Permitted increases to certain fixed cost-sharing amounts (such as copayments, deductibles and out-of-pocket maximums) would be determined, in part, by reference to the greater of either the Consumer Price Index measure of medical inflation (which applies under existing rules) or the most recently published “premium adjustment percentage.” This percentage is published annually by HHS and reflects the cumulative, historic growth from 2013 through the preceding calendar year in premiums for private health insurance, excluding Medigap and property and casualty insurance. According to the Departments, adding this alternate inflation measure would help grandfathered plans account for changes in the costs of health coverage over time.

The Departments also issued FAQs regarding the proposed rule. The proposal would not allow non-grandfathered plans to become grandfathered or to regain grandfather status, and also would not impact grandfathered individual health coverage.

 

© 2020 HR 360, Inc.

July 08, 2020 - Health Care Reform Update

Additional Employers May Opt Out of Providing Contraceptive Coverage

On July 8, 2020, the U.S. Supreme Court upheld two regulations expanding exemptions from the contraceptive coverage mandate under the Affordable Care Act (ACA). Under the regulations, plan sponsors that object to providing contraceptive coverage based on sincerely held religious beliefs or moral convictions will not be penalized for failing to include contraceptive coverage in the plan’s benefits.

In January 2019, two federal courts temporarily blocked these regulations from taking effect nationwide. However, in a 7-2 decision, the Supreme Court ruled that the Trump administration had the authority under the ACA to provide exemptions from the contraceptive mandate for employers with religious and conscientious objections. The Supreme Court remanded the case to the lower courts to dissolve the nationwide preliminary injunction.

As a result, additional employers may now be able to opt out of providing the ACA’s mandated contraceptive coverage.

© 2020 HR 360, Inc.

July 07, 2020 - Health Care Reform Update

Issuers Now Have Until Aug. 17 to Submit 2019 Annual Reporting Form

The Centers for Medicare & Medicaid Services (CMS) announced a relaxed enforcement policy related to the medical loss ratio (MLR) reporting deadline, due to the public health emergency posed by the coronavirus (COVID-19).

The Affordable Care Act (ACA) generally requires issuers to submit an Annual MLR Reporting Form to CMS by July 31 of the year following the end of an MLR reporting year. However, under this relaxed policy, CMS will not take enforcement action against an issuer that submits the 2019 reporting form by Aug. 17, 2020, instead of July 31, 2020. This allows issuers an additional 18 days to report their 2019 MLR data.

In addition, in an effort to support continuity of coverage for enrollees who may struggle to pay premiums because of illness or loss of income resulting from COVID-19, CMS is allowing issuers to prepay a portion or all of the estimated MLR rebate to enrollees for the 2019 MLR reporting year, under the following conditions:

• Issuers that elect to take advantage of this flexibility must do so to the extent consistent with state law or other applicable state authority, for all eligible enrollees in a given state and market, and in a non-discriminatory manner.
• If, after filing the 2019 MLR Annual Reporting Form, an issuer determines that the prepayment is less than the total 2019 rebate amount owed to an enrollee, the issuer must provide that enrollee with the remaining portion of the rebate in accordance with applicable time frames. An issuer that fails to do so will be required to pay the enrollee the remaining portion of the rebate plus interest, at 10% annually, accruing from the date payment was due.

In light of the unique circumstances presented by the prepayment of estimated MLR rebates, issuers may modify the standard MLR rebate notices, as appropriate. To assist issuers, CMS has provided revised, suggested model notices for the individual market that reflect the prepayment of MLR rebates, along with instructions for completing the notices. 

© 2020 HR 360, Inc.

June 15, 2020 - Health Care Reform Update

Final Rule Removes Gender Identity, Termination of Pregnancy, and Notice and Tagline Provisions

On June 12, 2020, the U.S. Department of Health and Human Services (HHS) issued a final rule that revises the implementation of the Affordable Care Act’s Section 1557 nondiscrimination provisions on gender identity and language access. Specifically, the final rule:

• Removes gender identity and termination of pregnancy from being included as sex discrimination; and
• Eliminates the requirement that covered health programs and activities distribute nondiscrimination notices and tagline translation notices in at least 15 languages to patients and customers.

The final rule is scheduled to be published in the Federal Register on June 19, 2020, and will become effective 60 days after publishing. The final rule does not affect the substantive Section 1557 provisions related to nondiscrimination on the basis of disability, race, color, age, national origin or sex.

HHS’ press release and fact sheet on the final rule contain additional details.

© 2020 HR 360, Inc.

June 08, 2020 - Health Care Reform Update

Transition Relief for Calculating the Average Number of Covered Lives Also Available

On June 8, 2020, the IRS issued Notice 2020-44, which increases the Patient-Centered Outcomes Research Institute (PCORI) fee amount for plan years ending on or after Oct. 1, 2019, and before Oct. 1, 2020. It also provides transition relief for calculating the average number of lives covered under the plan for this period (which is what the PCORI fee is based on).
 
Specifically, the PCORI fee amount for plan years ending on or after Oct. 1, 2019, and before Oct. 1, 2020, is increased to $2.54 multiplied by the average number of lives covered under the plan. Plan sponsors may use any reasonable method for calculating the average number of covered lives for this period, in addition to existing methods, so long as it is applied consistently for the duration of the plan year.
 
As a reminder, employers of certain self-insured health plans are responsible for paying PCORI fees annually. Fees for plan years that ended in 2019 are due July 31, 2020.

© 2020 HR 360, Inc.

May 26, 2020 - 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 2019 are due July 31, 2020.

Under the Affordable Care Act, PCORI fees were originally scheduled to apply to policy or plan years ending on or after Oct. 1, 2012 and before Oct. 1, 2019. However, in Dec. 2019, PCORI fees were extended for an additional 10 years. Thus, the fee continues to apply for the 2020-2029 fiscal years.

Employers must report and pay the required PCORI fees annually via IRS Form 720. For plan years that ended between Jan. 1, 2019, and Sep. 30, 2019, 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.

© 2020 HR 360, Inc.

May 26, 2020 - Health Care Reform Update

Standards Will Apply for the 2021 Benefit Year

On May 14, 2020, the Department of Health and Human Services (HHS) published its final Notice of Benefit and Payment Parameters for 2021. This final rule describes benefit and payment parameters under the Affordable Care Act (ACA) that apply for the 2021 benefit year.

Finalized standards in the rule include:

• Updated annual limitations on cost-sharing: The finalized 2021 maximum annual limit on cost sharing is $8,550 for self-only coverage and $17,100 for other than self-only coverage.
• The individual mandate’s affordability exemption: The finalized 2021 required contribution percentage is 8.27%.
• Special enrollment periods (SEPs) in the Exchanges: The final rule revises certain existing rules related to SEPs.

In addition, HHS did not finalize any changes to the current automatic re-enrollment process discussed in the proposed rule, after receiving opposition to these proposed changes during the comment period. For more information on the final Notice of Benefit and Payment Parameters for 2021, please review the HHS fact sheet.

© 2020 HR 360, Inc.

April 28, 2020 - Health Care Reform Update

Supreme Court Requires Federal Government To Make Risk Corridor Payments

On April 27, 2020, the U.S. Supreme Court ruled that the federal government must reimburse health insurance issuers for losses that they suffered under the Affordable Care Act’s (ACA) risk corridor program.

The risk corridor program was a temporary ACA initiative that was enacted to encourage issuers to participate in the ACA’s online health insurance exchanges (or marketplaces) for the first three years of operation (2014-2016). Although the federal government owed over $12 billion to issuers under the program, appropriations bills passed by Congress prevented taxpayer dollars from being used for risk corridor payments.

In an 8:1 decision, the Supreme Court ruled that issuers have a right to payment under the risk corridors program and that the appropriations bills did not repeal this obligation. This ruling does not impact any existing ACA reforms for employer-sponsored health plans. It also does not impact another ACA case that the Supreme Court has agreed to hear (Texas vs. Azar), which challenges the constitutionality of the entire ACA.

© 2020 HR 360, Inc.