Healthcare Reform Updates

Reminder: PCORI Fees Due July 31

Posted on July 15, 2019

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.

Receive more information on filing due dates and applicable rates.
© 2019 HR 360, Inc.

HHS Proposes Rolling Back ACA Nondiscrimination Regulations

Posted on May 31, 2019
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.

DOL Issues Additional Guidance on Scope of Enforcement Relief for AHPs

Posted on May 20, 2019
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.

Reminder: PCORI Fees Due July 31

Posted on May 14, 2019
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.

New Jersey Updates Information on Health Care Reporting Requirement

Posted on May 13, 2019
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.

AHP Coverage Can Generally Be Maintained Through Plan Year or Term

Posted on May 07, 2019
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.

2020 Cost-Sharing Limits for Most Group Health Plans Released

Posted on April 23, 2019
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.

Small Businesses May Be Able to Keep Existing Non-ACA Compliant Health Coverage Through 2020

Posted on April 01, 2019
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.

Review the extended non-enforcement policy.

Court Strikes Down Association Health Plan Rule

Posted on March 29, 2019
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.

Reminder: ACA Information Reporting Deadlines Approaching

Posted on February 06, 2019
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).

ACA Remains in Effect After Court Rules Law Unconstitutional

Posted on December 15, 2018
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.

IRS Moves Back Furnishing Deadlines for Forms 1095-C and 1095-B

Posted on November 30, 2018
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 Health FSA Contribution Limit Announced

Posted on November 15, 2018
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.

Administration Proposes Allowing All Employers to Offer HRAs to Reimburse Individual Health Insurance Policy Premiums

Posted on October 23, 2018
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.

IRS Releases Forms 1094 and 1095 for Early 2019 Reporting

Posted on October 01, 2018
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.

Hardship Exemptions from Individual Mandate Can Now Be Claimed on Tax Returns

Posted on September 13, 2018
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.

Short-Term Health Insurance Soon Available For Up To 36 Months

Posted on August 03, 2018
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.

Understanding IRS ‘Pay or Play’ Penalty Letters

Posted on June 01, 2018
Employers Have Opportunity to Respond Before ‘Pay or Play’ Penalty Assessment
The Internal Revenue Service (IRS) is currently issuing Letter 226-J to certain applicable large employers (ALE)—generally those with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year—it believes owe a penalty for failing to comply with the Affordable Care Act’s employer shared responsibility provisions (“pay or play” provisions). In conjunction with Letter 226-J, employers will receive Form 14764, which they can use to respond to Letter 226-J. Employers who submit Form 14764 to the IRS will generally receive one of 4 letters back:

• Letter 227-J, which acknowledges receipt of Form 14764 and the employer’s agreement to pay the penalty;
• Letter 227-K, which acknowledges receipt of Form 14764 and shows that the penalty has been nullified;
• Letter 227-L, which acknowledges receipt of Form 14764 and shows that the penalty has been revised; or
• Letter 227-M, which acknowledges receipt of Form 14764 and shows that the penalty amount did not change.

Learn more about IRS “pay or play” penalty letters.
© 2019 HR 360, Inc.

2019 ‘Pay or Play’ Affordability Percentage Set at 9.86%

Posted on May 21, 2018
Percentage Up from 2018
Under the employer shared responsibility (“pay or play”) provisions of the Affordable Care Act, applicable large employers—generally those who had 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 2019, 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 9.86% or less of his or her household income for the taxable year. For plan years beginning in 2018, the applicable percentage is 9.56%.

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.

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