Seeing the Big Picture – How Proposed Health Reimbursement Arrangements Might Harmonize with Existing Law

On October 29, 2018, proposed regulations were published in the Federal Register that would permit employers to offer two new types of health reimbursement arrangements (“HRAs”) that align with the requirements of the Affordable Care Act (the “ACA”). The proposed HRAs are designed to expand the availability of account-based group health plans. A summary of the proposed regulations – and the HRAs that they would permit if finalized – can be found in our November 7, 2018, blog, “Zombie Benefits – Are Health Reimbursement Arrangements Back from the Dead?

As an addendum to the proposed regulations, the IRS published Notice 2018-88, which considers the interaction of the new HRAs with the employer shared responsibility mandate set out in Code Section 4980H and the non-discrimination rules contained in Code Section 105(h). Read More ›

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Texas Judge Declares the Affordable Care Act Unconstitutional – What’s Next?

As reported in our “2018 End of Year Plan Sponsor “To Do” List (Part 1) Health & Welfare,” the Tax Cuts and Jobs Act repealed the individual mandate, which spawned a lawsuit challenging the whole of the Affordable Care Act (“ACA”).  The lawsuit, filed in the Northern District of Texas in February 2018 by the Texas and Wisconsin Attorneys General, leading a 20-state coalition, alleged that because the repeal of the individual mandate “renders legally impossible the Supreme Court’s prior savings construction of the Affordable Care Act’s core provision – the individual mandate – the Court should hold that all of the ACA is unlawful and enjoin its operations.” The plaintiffs argued that not only is the individual mandate now unlawful, but also that this core provision is not severable from the rest of the ACA. Read More ›

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A Holiday Surprise – IRS Extends Certain ACA Reporting Deadlines and Transition Relief

The IRS delivered welcome news to employers preparing to meet the Affordable Care Act’s (“ACA”) information reporting deadlines in early 2019 for the 2018 calendar year. In Notice 2018-94 (the “Notice”), the IRS extended the employer’s deadline to furnish Forms 1095-B and 1095-C to employees. The new deadlines are provided below.

Original Distribution Deadline Extended Distribution Deadline
Form 1095-B (to employees) January 31, 2019 March 4, 2019
Form 1095-C (to employees) January 31, 2019 March 4, 2019

It is important to note that the Notice does not extend the deadline for filing Forms with the IRS. The deadline to file with the IRS remains February 28, 2019 (for paper filings) and April 1, 2019 (for electronic filings). Read More ›

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Reminder for SBCs – Yes, Please!

The Affordable Care Act’s requirement that group health plans provide summaries of benefits and coverage (“SBCs”) to applicants and enrollees at various times is not new.  Nevertheless, because of the steep penalties for noncompliance (i.e., $1,000 per failure with respect to each participant or beneficiary and an excise tax of $100 per day with respect to each individual to whom such failure relates) we think it’s worthy of another blog post.  See our July 19, 2012 Newsletter Summary of Benefits and Coverage for Group Health Plans and follow-up August 11, 2016 blog post Departments Finally Publish Updated SBC Template and Instructions for additional background information. Read More ›

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Zombie Benefits – Are Health Reimbursements Arrangements (“HRAs”) Back From the Dead?

The Affordable Care Act (“ACA”) has not been kind to health reimbursement arrangements (“HRAs”).  Many employers got rid of HRAs, or integrated them with a major medical plan, in order to avoid significant penalties under the ACA.  At one point it appeared that after-tax HRAs did not have to comply with the ACA.  However, as noted in our March 11, 2015 SW Benefits Blog, “IRS Issues More Guidance On Employers That Pay For Individual Health Insurance Policies for Employees – Gives Limited Relief to Small Employers,” the IRS clarified that even after-tax HRAs are also subject to the ACA rules.

The proposed regulations that were published in the Federal Register on October 29, 2018 breathe new life into HRAs.  Read More ›

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The 95 Percent Test: Gearing up for Another Round of Employer Shared Responsibility Penalties

Late last year, the Internal Revenue Service (the “Service”) began enforcing penalties with respect to failures to comply with the employer shared responsibility provisions of Section 4980H of the Internal Revenue Code.  In the coming months, the Service is expected to begin assessing penalties with respect to such failures occurring in calendar year 2016.  These penalties are of two varieties:

  1. Section 4980H(a) penalties are assessed for any month in which an applicable large employer (“ALE”) does not offer minimum essential coverage to substantially all (95% for 2016 and future years) of its full-time employees and their dependents and at least one full-time employee receives a premium tax credit. 
Read More ›
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Health Plans – A Pain to Administer But Appreciated by Employees

Administering health plans is not the easiest task.  Such plans are subject to an alphabet soup of laws, including but not limited to ERISA, the Internal Revenue Code, COBRA, HIPAA, GINA, Mental Health Parity, the ADA, the ADEA, and Title VII.  However, a November 2017 American Benefits Council survey may make employers feel better about the time, energy, and resources they spend administering their health plans.

The November 2017 survey shows that employees prefer high quality benefit programs over additional pay by a nearly 2‑to‑1 margin.  This is surprising because many people assume “cash-is-king.”  The survey demonstrates otherwise and highlights how important employer-provided health benefits are to employees.  Read More ›

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Congress Kicks the Can Down the Road Again – Cadillac Tax On High Cost Employer Health Coverage Delayed to 2022

Section 4980I, which was added to the Internal Revenue Code by the Affordable Care Act, was originally supposed to take effect in 2018.  This tax is commonly called the “Cadillac tax” because it imposes a 40% excise tax on high cost employer sponsored health coverage.

The Consolidated Appropriations Act signed into law on December 18, 2015, delayed the effective date of the Cadillac tax to 2020.  And now, in the federal spending bill that was signed into law on January 22, 2018, Congress has again kicked the can down the road with another two-year delay to 2022.  This is welcome news for most employers.  Read More ›

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Approaching Deadlines for Affordable Care Act Reporting

As we recently reported in our “2017 End of the Year Plan Sponsor To Do List,” applicable large employers must continue to submit to the IRS and to employees information regarding offers of health coverage made to full-time employees in 2017.

The IRS recently published Notice 2018-06 (the “Notice”), which contains some relief with respect to the required reporting.  In particular, the Notice extends the deadline to distribute Forms 1095-C to employees and continues the application of good faith transition relief.  The Notice does not extend the deadline for filing Forms 1094-C or 1095-C with the IRS.

Extension of Deadline to Furnish Forms 1095-C to Employees

The Notice extends the deadline for furnishing Forms 1095-C to employees from January 31, 2018 to March 2, 2018 Read More ›

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New Disability Claims Regulations Take Effect for All Plans April 1, 2018

As noted in our previous blog post, The New Disability Claims Regulations: They Don’t Only Apply to Disability Plans, the Department of Labor (“DOL”) issued regulations that revise the ERISA claims procedure regulations for all employee benefit plans that provide disability benefits (the “New Regulations”).  These rules can impact not only short-term and long-term disability plans but also qualified retirement plans (e.g., a 401(k) plan), nonqualified retirement plans, and health and welfare plans.  The New Regulations were published in the Federal Register on December 19, 2016, and are based on the Affordable Care Act’s enhanced claims and appeals regulations for group health plans.  Read More ›

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