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.

March 19, 2020 - Health Care Reform Update

EBSA Releases Annual Enforcement Report on MHPAEA

The DOL’s Employee Benefits Security Administration (EBSA) released its annual enforcement report on the Mental Health Parity and Addiction Equity Act (MHPAEA) for 2019. According to EBSA, vigorous enforcement of MHPAEA is one of its top enforcement priorities.

MHPAEA is a federal law that prevents group health plans and health insurance issuers that provide mental health or substance use disorder benefits from imposing less favorable benefit limitations on those benefits than medical and surgical benefits.

In fiscal year 2019, EBSA closed 186 health plan investigations, 183 of which included reviews of MHPAEA compliance. These investigations resulted in 12 citations for MHPAEA violations. As an example of the size and scope of these investigations, in the course of one investigation involving a service provider, the service provider reported providing services to 99 self-insured and 210 fully insured plans, covering 67,724 participants.

When EBSA identifies MHPAEA violations, it asks the plan to make necessary changes to any noncompliant plan provision and to pay any improperly denied benefit claims. EBSA may also require the plan or service provider to provide notice to potentially affected participants and beneficiaries.

Click here for more information on MHPAEA.

© 2020 HR 360, Inc.

March 13, 2020 - Health Care Reform Update

EHB Generally Includes Coverage for the Diagnosis and Treatment of Coronavirus

On March 12, 2020, the Centers for Medicare & Medicaid Services (CMS) issued frequently asked questions (FAQs) on essential health benefits (EHB) coverage and the coronavirus (COVID-19). EHB are a core set of items and services under the Affordable Care Act that:

• Reflect the scope of benefits covered by a typical employer; and
• Cover at least 10 specified categories of items and services.

According to CMS, EHB generally includes coverage for the diagnosis and treatment of COVID-19. However, the exact coverage details and cost-sharing amounts for individual services may vary by plan, and some plans may require prior authorization before these services are covered. In addition, all EHB-benchmark plans cover medically necessary hospitalizations, including isolation and quarantine, although the cost-sharing and specific coverage limitations associated with these services may vary by plan.

A COVID-19 vaccine does not currently exist. If the CDC recommends a new vaccine, plans are not required to cover the vaccine until the beginning of the plan year 12 months after the CDC issues the recommendation. However, plans may voluntarily choose to cover a vaccine for COVID-19, with or without cost-sharing, prior to that date.

© 2020 HR 360, Inc.

March 02, 2020 - Health Care Reform Update

Supreme Court Will Review ACA’s Constitutionality

On March 2, 2020, the U.S. Supreme Court agreed to hear a legal challenge to the Affordable Care Act (ACA). The case involved is Texas v. Azar, a lawsuit challenging the constitutionality of the ACA’s individual mandate.

In December 2019, a federal appeals court ruled in the case that the individual mandate is unconstitutional and directed the lower court to determine whether the rest of the ACA can remain in place. It is expected that the Supreme Court will review the case during its next term and issue a ruling in the spring or summer of 2021.  

While this legal challenge is pending, all existing ACA provisions will continue to be applicable and enforced. 

© 2020 HR 360, Inc.

February 11, 2020 - Health Care Reform Update

Policies Renewed Under Extended Non-Enforcement Policy Must Comply by Jan. 1, 2022

On Jan. 31, 2020, the Department of Health and Human Services (HHS) extended an existing transition policy for certain health plans that do not comply with the Affordable Care Act (ACA) for an additional year, to policy years beginning on or before Oct. 1, 2021. Any plans that are renewed under this extended transition policy must comply with the specified requirements by Jan. 1, 2022.

In states that allow it, coverage subject to the non-enforcement policy will not be considered to be out of compliance with key ACA market reform requirements, 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.

Plans renewed under this transition policy are often called “grandmothered” plans. Originally announced in 2013, the transition policy has already been extended several times.

© 2020 HR 360, Inc.

February 01, 2020 - Health Care Reform Update

If Finalized, These Standards Will Apply for the 2021 Benefit Year 

On Jan. 31, 2020, the Department of Health and Human Services (HHS) published its proposed Notice of Benefit and Payment Parameters for 2021. This proposed rule describes benefit and payment parameters under the Affordable Care Act (ACA) that would be applicable for the 2021 benefit year.

Proposed standards included in the rule include:

• Updated annual limitations on cost-sharing: The proposed 2021 maximum annual limitation 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 proposed 2021 required contribution percentage is 8.27% of household income. While the individual mandate penalty was reduced to $0, it is still part of the ACA and annual changes to this percentage are provided for under the law.
• Special enrollment periods (SEPs) in the Exchanges: The proposed rule would revise certain existing rules related to SEPs. For example, the proposed rule would shorten the time between the date a consumer enrolls in a plan through certain SEPs and the effective date of that plan, and would allow an SEP for individuals who are provided a qualified small employer health reimbursement arrangement (QSEHRA) with a non-calendar year plan year.

The proposed rule is also seeking comments on additional issues to address in the future, such as a new automatic re-enrollment process through the Exchange for consumers with $0 plans after premium tax credits are applied. In an effort to reduce eligibility errors and potential government misspending, the rule proposes that a consumer’s premium tax credit would be discontinued or reduced for a new plan year unless the consumer returns to the Exchange during the annual open enrollment period to update their application and receive a new eligibility determination.

Comments on the proposed rule must be submitted by March 2, 2020.

© 2020 HR 360, Inc.

December 23, 2019 - Health Care Reform Update

Bill Also Reinstates PCORI Fees Through 2029

On Dec. 20, 2019, President Trump signed into law a spending bill that repeals the following three taxes and fees under the Affordable Care Act (ACA):

• The Cadillac tax on high-cost group health coverage, beginning in 2020;
• The medical device excise tax, beginning in 2020; and
• The health insurance providers fee, beginning in 2021.

In addition, the bill reinstates Patient-Centered Outcomes Research Institute (PCORI) fees for the 2020-2029 fiscal years (under the ACA, PCORI fees were scheduled to apply to policy or plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2019). As a result, specified health insurance policies and applicable self-insured plans must continue to pay these fees through 2029.

Click here to read the text of the bill.

© 2020 HR 360, Inc.

December 19, 2019 - Health Care Reform Update

Lower Court Will Determine Whether the Remainder of the ACA Can Stand 

On Dec. 18, 2019, a federal appeals court ruled in Texas v. Azar that the Affordable Care Act’s (ACA) individual mandate is unconstitutional due to the elimination of the individual mandate penalty in 2019. The appeals court remanded the case to the lower court to determine whether the rest of the ACA can remain in place without the individual mandate.

This ruling is expected to be appealed to the Supreme Court. As a result, a final decision is not expected to be made until that time. In addition, it is likely that any ruling eliminating the ACA will be stayed pending appeal.

© 2020 HR 360, Inc.

December 17, 2019 - Health Care Reform Update

Bill Would Repeal Cadillac Tax, Medical Devices Tax, and Providers Fee

On Dec. 17, 2019, the U.S. House of Representatives passed a short-term continuing spending resolution to prevent a government shutdown and continue funding through September 2020. If signed into law, the spending bill would repeal the following three largely unpopular taxes and fees under the Affordable Care Act:

• The Cadillac tax on high-cost group health coverage, beginning in 2020;
• The medical device excise tax, beginning in 2020; and
• The health insurance providers fee, beginning in 2021.

This bill would need to be passed by the Senate and signed into law by President Trump before taking effect.

 

 

© 2020 HR 360, Inc.

December 10, 2019 - Health Care Reform Update

The 2019 ACA Reporting is Due in Early 2020

The IRS has released final 2019 versions of Forms 1094-C, 1095-C, 1094-B, and 1095-B that employers will use in early 2020 to report on the group health insurance coverage they offered during the 2019 calendar year. Instructions on how to complete Forms 1094-C and 1095-C and Forms 1094-B and 1095-B for the 2019 calendar year have also been released. The 2019 forms and instructions are substantially similar to the 2018 versions.

Note that Section 6055 reporting continues to be required, despite the fact that the individual mandate penalty has been reduced to $0. However, the IRS has already provided transition relief from penalties related to failures to furnish 2019 forms to individuals under Section 6055, under certain circumstances. Under this relief, employers will only have to provide Form 1095-B to covered individuals upon request. Forms 1094-B and 1095-B must still be filed with the IRS.

For 2019 calendar year reporting, individual statements must be furnished by March 2, 2020, and IRS returns must be filed by Feb. 28, 2020 (or March 31, 2020, if filed electronically).

© 2020 HR 360, Inc.

December 06, 2019 - Health Care Reform Update

Documents Would Satisfy Proposed Coverage Disclosure Requirements

On Nov. 15, 2019, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a proposed rule regarding transparency in coverage for group health plans and health insurers in the individual and group markets. 

The DOL has also issued the following three appendices, which would be required disclosures under the proposed rule:

• Proposed Transparency in Coverage Model Notice
• Proposed Negotiated Rate Data Elements
• Proposed Allowed Amount Data Elements

The proposed rule would require plans and issuers to disclose cost-sharing estimates to participants, beneficiaries and enrollees upon request, as well as post in-network provider-negotiated rates and historical out-of-network allowed amounts on their websites. The newly released proposed required disclosure documents are intended to be used to satisfy the disclosure requirements under the proposed rule.

These proposals would apply to issuers of insured plans and sponsors of self-insured group health plans. However, they would not apply to grandfathered plans. The Departments have requested comments on both the proposed rule and the required disclosure documents. Comments must be submitted by Jan. 14, 2020.

© 2020 HR 360, Inc.

December 02, 2019 - Health Care Reform Update

2019 Furnishing Deadline Delayed and Additional Transition Relief Granted

The IRS has delayed the deadlines by which employers must furnish 2019 Forms 1095-C and 1095-B in early 2020. 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 2, 2020.
• 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 2, 2020. 

The deadline for filing with the IRS under Sections 6055 and 6056 remains Feb. 28, 2020 (or March 31, 2020, if filing electronically).

The IRS provided additional relief from penalties related to failures to furnish 2019 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 extended good-faith relief from penalties related to incorrect or incomplete information returns filed for the 2019 calendar year under Sections 6055 and 6056.

© 2020 HR 360, Inc.

November 14, 2019 - Health Care Reform Update

The 2019 ACA Reporting is Due in Early 2020

The IRS has released draft 2019 versions of Forms 1094-C, 1095-C, 1094-B, and 1095-B that employers will use in early 2020 to report on the group health insurance coverage they offered during the 2019 calendar year. Draft instructions on how to complete Forms 1094-C and 1095-C and Forms 1094-B and 1095-B for the 2019 calendar year have also been released. The draft 2019 forms and instructions are substantially similar to the final 2018 versions. Note that Section 6055 reporting continues to be required, despite the fact that the individual mandate penalty has been reduced to $0.

© 2020 HR 360, Inc.

November 11, 2019 - Health Care Reform Update

Fee Amount to Increase to $15,522,820,037 in 2020

The IRS has announced that the health insurance providers fee amount will be $15,522,820,037 in 2020. Employers are generally not responsible for paying the health insurance providers fee. However, health insurance carriers may shift the cost of the fee onto employers that sponsor an insured plan, either by a corresponding increase in premiums or by separately charging the entity for a portion of the fee.

© 2020 HR 360, Inc.

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.

© 2020 HR 360, Inc.

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.

© 2020 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.

© 2020 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.

© 2020 HR 360, Inc.