IRS to Begin Enforcing 4980H Penalties on Large Employers Before End of 2017

On November 2, 2017, the IRS issued guidance regarding the enforcement of Employer Shared Responsibility payments, otherwise known as the Section 4980H penalty. Questions 55-58 of the IRS Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act indicate that the IRS is moving forward with assessing penalties on Applicable Large Employers (“ALEs”) who failed to offer appropriate health care coverage under Section 4980H for the 2015 calendar year.

An ALE is generally an employer who employs at least 50 full-time employees during the calendar year. An ALE will be assessed a penalty for the 2015 year if any full-time employee received a premium tax credit or cost-sharing reduction and either: (a) the employer failed to provide minimum essential health coverage to 95% of its full-time employees; or (b) the employer offered minimum essential health coverage to 95% of its full-time employees, but the coverage was not affordable or did not provide minimum value. Read More ›

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“A Trap for the Unwary” – Does Your Self-Funded Health Plan Provide Transgender Benefits? It Might Need to Soon.

Assistant Secretary of Labor Phyllis Borzi recently offered informal guidance on the broad scope of nondiscrimination regulations proposed under Section 1557 of the Affordable Care Act. During her remarks at the ABA Labor Section Employee Benefits Committee Meeting in February, Ms. Borzi indicated that the proposed regulations would apply to any health plan that receives federal funds, including a self-funded plan that uses a third party administrator that receives federal funds.  Ms. Borzi characterized the proposed regulations as a “trap for the unwary,” noting that many self-funded plans assume that the nondiscrimination rules will not apply to them.  In light of Ms. Read More ›

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IRS Issues More Guidance On Employers That Pay For Individual Health Insurance Policies for Employees – Gives Limited Relief to Small Employers

I have blogged more on the topic of how the Health Care Reform Act applies to employers that reimburse employers for individual health insurance policies than any other topic in the last year.  At one point in time, as indicated in my post of June 11, 2014, The IRS Meant What It Said in Notice 2013-54 – Employers Who Pay For Individual Health Insurance Policies for Employees On a Pre-Tax Basis Face Massive Penalties, it looked like such arrangements might be permissible if done on an after-tax basis.  However, as noted in my post of November 13, 2014, Agencies Come Down Hard on Various Employer Health Plans and Arrangements, the IRS clarified that was not the case in a series of FAQs it issued that same month. Read More ›

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Health Care Reform 2015 – An Update

2015 is a significant year for health care reform because the large employer shared responsibility penalties under Internal Revenue Code Section 4980H take effect for most large employers.  See our SW Benefits Update, Health Care Reform’s Employer Shared Responsibility Penalties:  A Checklist for Employers, for a detailed explanation of the large employer penalties.

Many people are under the mistaken impression that Health Care Reform might go away because of the recent changes in Congress.  As explained below, that is not likely anytime in the near future.  Accordingly, large employers may wish to move forward now with their large employer penalty compliance efforts. Read More ›

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HHS Extends November 17 Deadline to Submit Covered Lives Data under Reinsurance Program

The Health Care Reform Act created the transitional reinsurance program, which requires most self-insured health plans to make contributions to HHS for the 2014, 2015, and 2016 calendar years, in an attempt to stabilize premiums in the individual market.  The contribution amount is determined by the number of covered lives under each plan.  For 2014, the contribution amount is $63 per covered life.  The number of covered lives must be calculated and submitted to HHS by November 15 of each year.  The first filing was due November 17, 2014 for the 2014 calendar year (November 15, 2014 was a Saturday).

HHS has extended this November 17, 2014 deadline until December 5, 2014Read More ›

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November 5 Deadline to Obtain HPID Delayed by HHS

On October 31, 2014, HHS announced a delay, “until further notice,” in the enforcement of the regulations pertaining to Health Plan Identifiers (HPIDs) and their use in HIPAA standard electronic transactions.  For more information on the HPID requirements, please see our October 1, 2014 SW Benefits Update, “HIPAA Requires Many Health Plans to Obtain a Health Plan Identifier by November 5, 2014.”  This enforcement delay applies to all HIPAA-covered entities, including healthcare providers, health plans, and healthcare clearinghouses.

The decision to delay enforcement was based, in part, on a recommendation by the National Committee on Vital and Health Statistics (NCVHS), which is an advisory body to HHS.  Read More ›

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Accurate Documentation of Welfare Plans May Save Employers Certain Costs and Headaches Down the Road

ERISA requires all pension and welfare benefit plans to be maintained in a written plan document.  The DOL and several courts have taken a broad view of what constitutes a “written plan document,” and while pension plans are usually very well documented, many welfare plans consist of a loose, and often out-of-date, collection of insurance policies, certificates of coverage and summary plan descriptions.

While a loose collection of documents may technically satisfy the ERISA written plan document rule, there are many other reasons an employer may want to consider more formal, updated plan documents:

•  The DOL has recently started to focus more on welfare plan audits.  Read More ›

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November 15 Deadline for Self-Insured Health Plans under Reinsurance Program

The Health Care Reform Act created the transitional reinsurance program, which requires most self-insured health plans to make contributions to HHS for the 2014, 2015, and 2016 calendar years.  The contribution amount is determined by the number of covered lives under each plan.  The number of covered lives must be calculated and submitted to HHS by November 15 of each year.  The first filing is due November 15, 2014 for the 2014 calendar year.

Covered lives may be calculated using several different methods, similar to the methods that are used to calculate covered lives for PCORI fees.  Contributing entities should begin making these calculations using the various permitted counting methods so that they have time to establish the most cost-effective method for determining their 2014 contribution amount prior to the deadline. Read More ›

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HIPAA Business Associates Agreements – Reminder of September 22 Deadline

On January 17, 2013, the U.S. Department of Health and Human Services (HHS) issued a final rule under HIPAA making substantial changes to the rules for vendors that provide services to HIPAA-covered plans, such as third-party administrators, pharmacy benefit managers and certain brokers – known in the HIPAA world as “Business Associates.” Under this final rule, Business Associates are required, for the first time, to comply with the HIPAA Security Rule, many provisions of the HIPAA Privacy Rule and are subject to direct enforcement by HHS. As a brief reminder, and as we discussed in our Employee Benefits Update 2013 End of Year Plan Sponsor “To Do” List Part 2 – Health and Welfare, existing agreements with Business Associates must be amended to comply with the requirements of this final rule on or before September 22, 2014. Read More ›

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Subsidized Post-Termination COBRA Benefits

Nancy Campbell recently wrote a newsletter that discussed how health care reform impacts COBRA. One of the issues that Nancy addressed is subsidized COBRA and severance arrangements. The purpose of this blog is to dive deeper into the issues employers should consider when providing subsidized post-termination COBRA benefits.

• Providing Post-Termination Medical Benefits on an After-Tax Basis. Sections 105 and 106 of the Code exclude employer-provided health coverage and benefits from an employee’s gross income if certain requirements are met. One requirement that must be met for self-funded health insurance plans to qualify for this exclusion from gross income is compliance with the nondiscrimination rules of Section 105(h) of the Code. Read More ›

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