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As reported in our “2018 End of Year Plan Sponsor “To Do” List (Part 1) Health & Welfare,” the Tax Cuts and Jobs Act repealed the individual mandate, which spawned a lawsuit challenging the whole of the Affordable Care Act (“ACA”).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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New Plan Year, New Wellness Program – Some Things to Keep in Mind

As a follow-up to our recent blog Count Down to Open Enrollment – Some Quick Thoughts, below is a little more detail on how seemingly simple wellness program design changes can have significant legal consequences.

  • HIPAA – Employers feeling extra generous this plan year may want to increase their wellness program’s financial incentive.  It is important that such employers remain mindful of the limitations under HIPAA, i.e., 30% of the total cost of health plan coverage, or 50% for programs designed to prevent or reduce tobacco use.  As noted in our previous blog “Wellness Rules Under the ADA – Will There Ever Be Certainty?
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Count Down to Open Enrollment – Some Quick Thoughts

As open enrollment approaches for the 2019 calendar year, below are some items employers may want to consider:

  • Wellness program changes – Many employers change their wellness programs during open enrollment.  This is a reminder that even small changes to a wellness program may have significant consequences.  For example, if an employer increases wellness rewards, it may impact not only whether a program complies with the 30% test under HIPAA but it may also impact affordability under Code Section 4980H.  Making changes to a wellness program structure may also create problems.  For example, employers with tobacco surcharges might allow people to avoid surcharges by attesting that they do not use tobacco. 
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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. 
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The Family Medical Leave Act and Benefit Plans: What comes first – the Law or the Employer’s Established Policy?

An employer that employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year is subject to the Family Medical Leave Act (“FMLA”). Therefore, often when I am reviewing an employee benefits plan or policy I flag language that states something like: “You may be eligible to continue your coverage pursuant to the FMLA. Contact the company for more information.”  What does this mean?

Group Health Plan

For purposes of the FMLA, a group health plan is generally a plan that provides health care to employees, former employees, or families of such employees or former employees. Read More ›

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Association Health Plans – A New Frontier?

On June 21, 2018, the Department of Labor published the final association health plan (“AHP”) rule, which can be accessed at: https://www.gpo.gov/fdsys/pkg/FR-2018-06-21/pdf/2018-12992.pdf.  83 FR 28912 (June 21, 2018).  The final rule is short, just shy of three pages in length (see page 28961 to 29964), and provides that a bona fide group or association shall be deemed to be able to act in the interest of an employer within the meaning of section 3(5) of ERISA by satisfying the criteria set forth in the final rule.  The requirements are relatively straightforward and are summarized below:

  • Bona fide group or association of employers – There are eight requirements that must be met to satisfy this standard. 
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Wellness Rules Under the ADA – Will There Ever Be Certainty?

We previously blogged about the EEOC’s final rules, published in the Federal Register on May 17, 2016, that explain how the Americans with Disabilities Act (“ADA”) applies to employer sponsored wellness programs. These rules clarified when an employee health program, which includes a disability-related inquiry or medical examination, is considered “voluntary” under the ADA.  The EEOC’s rules stated, amongst other things, that an employer may offer incentives for employees who participate in a wellness program as long as the incentive does not exceed 30% of the total cost of self-only coverage.

We also previously blogged that this incentive provision was under scrutiny by the U.S. Read More ›

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