Affordable Care Act

The IRS has released proposed regulations that implement two significant new reporting requirements for employer group health plans.  Employers and insurers that provide minimum essential health coverage must report information to the IRS about the coverage provided to each individual for each month, with a copy of the statement to the individual.  Employers with at least 50 full-time employees must report additional information to the IRS, with a copy to each full-time employee, to indicate whether the coverage they offer (if any) is affordable and provides minimum value.  Both reporting requirements will become effective in 2015.  Reporting entities must develop administrative systems and procedures before the effective date so that they will be able to begin collecting the required information in 2015.

Below is summary of the requirements for private employers sponsoring single-employer plans followed by a discussion of the reporting requirements.

Section 6055 Returns Section 6056 Returns
Who Must File Insurer, for insured plans. Employer, for self-insured plans Employers with 50 or more full-time employees (regardless of whether or how coverage is   provided)
Form 1095-B 1095-C
Content
  • name, address, and EIN of employer
  • name, address, and TIN of insurer (for insured plans)
  • name, address, TIN of each employee or retiree and each covered spouse and/or dependent
  • for each covered individual, the months of the year for which coverage was provided
  • other information required by IRS in later guidance
  • name, address, and EIN of employer
  • name and phone number of employer’s contact person
  • whether the employer offered minimum essential coverage to its full-time employees each month of the year
  • the number of full-time employees each month, and the name, address, and TIN of each employee
  • for each full-time employee, the months when coverage was available and the months when coverage was provided
  • for each full-time employee, the employee’s share of the monthly premium for self-only coverage under the lowest-cost option (if any) that provides minimum value
  • other information required by IRS (see list below for information the IRS expects to require)
Additional   Content for Notice to Individual
  • contact phone number for entity required to file statement
  • policy number (for insured plans)
none
Due Date for Returns To the IRS: February 28 (or by March 31, if filing electronically).

To the individual: January 31


Continue Reading Health Coverage Reporting Rules Create New Burdens for Employers

A federal appeals court recently ruled that a private equity fund might be responsible for the unfunded pension liabilities of its bankrupt portfolio company.  This ruling could have broader repercussions for private investment funds and the companies they own.  If the companies are considered to be related employers under the rules that govern employee benefits, they might acquire other unexpected obligations, such as the obligation to provide health care to their employees.
Continue Reading Private Investment Funds Face Potential Liability for Portfolio Companies’ Employee Benefits

A federal court of appeals has ruled unanimously that the employer mandate under the Affordable Care Act is a valid exercise of Congress’s constitutional power to regulate commerce.  The employer mandate requires employers with more than 50 full-time employees to provide affordable health coverage or pay a penalty.  The plaintiffs argued that the Commerce Clause of the Constitution does not give Congress the power to force employers to purchase health insurance for their employees.
Continue Reading ACA Employer Mandate Survives Constitutional Challenge

Final regulations issued recently clarify and confirm the contraceptive coverage exemption and accommodation for religious institutions.  The Affordable Care Act generally requires non-grandfathered group health plans and insurance policies to cover the cost of contraceptives.  A religious employer, however, is entirely exempt from this requirement under the final regulations and under related guidelines issued by the Health Resources and Services Administration.

The final regulations also confirm that certain other organizations with religious objections to the coverage are eligible for an “accommodation.”  Under the accommodation, the organization does not need to provide the coverage under its health plan, but its insurer or third party administrator does.  Student health plans arranged by eligible organizations are also eligible for the religious accommodation.  The regulations, which were issued by the Departments of Treasury, Labor, and Health and Human Services, explain who ultimately pays for coverage under the accommodation.
Continue Reading Final Rules Confirm Contraceptive Coverage Exemption and Accommodation for Religious Institutions

The Affordable Care Act’s “pay or play” mandate goes into effect starting in 2014.  Under the mandate, large employers (employers with 50 or more full-time employees) must either provide health coverage to their employees or pay an excise tax.  The chart below shows when the “pay or play” penalty applies and how to calculate the

The Departments of Treasury, Labor, and Health and Human Services (collectively, the “Departments”) recently issued a set of Frequently Asked Questions (Part XV) (the “FAQs”), which provide that, starting in 2014, employers and health insurance issuers must implement two new requirements under ACA that apply to non-grandfathered group health plans:

(1) a prohibition on discriminating against health care providers that are licensed or certified under state law; and

(2) a mandate to cover routine patient costs or services for participation in certain clinical trials for life-threatening diseases.

The FAQs state that the Departments do not intend to issue regulations implementing these two requirements in the near future and therefore employers and health insurance issuers must implement the requirements based on a good-faith, reasonable interpretation of the statutory provisions.  The FAQs also delay, until at least 2015, implementation of requirements to disclose publicly certain information regarding group health plans, such as financial information, cost-sharing requirements, and data on claim denials and enrollment.
Continue Reading New FAQs Issued on Nondiscrimination, Clinical Trial, and Reporting Requirements under the Affordable Care Act

On April 23, 2013, the Departments of Labor, Health and Human Services and the Treasury (the “Departments”) issued an updated template and sample completed template for summaries of benefits and coverage (“SBCs”) that must be provided for coverage beginning in 2014.  The Departments also released Frequently Asked Questions that include the following guidance:

  • The only change to the existing SBC template is the addition of statements regarding whether a group health plan offers minimum essential coverage that meets the requirements for providing minimum value.  (See ACA’s Cost-Sharing Limitations on Employer Health Coverage for an explanation of the minimum essential coverage and minimum value requirements.)  If an employer or issuer is unable to modify the SBC template to include this additional information and continues to use the template provided for 2013, the new information for 2014 may be disclosed in a separate document that is provided with the SBC.  No other changes have been made to the SBC template, including to the examples that must be included, to the instructions for providing SBCs, or to the uniform glossary.
  • The Departments have extended for another year enforcement relief that they issued last year.  Pursuant to this relief, the Departments will not impose penalties on plans and issuers that are working diligently and in good faith to provide the required SBC content in a format that is consistent with the final regulations.  In addition, the Departments have also extended the safe harbor for providing SBCs electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage under the plan.
  • Because annual limits on essential health benefits will no longer be permissible starting in 2014, a plan may, at its option, delete the following row that appears on the first page of the SBC template:  “Is there an overall limit on what the plan pays?”.  Otherwise, the plan should answer “no” to this question.
  • If an educational institution, such as an institution of higher education, maintains insured health coverage for its students, the institution will have met its requirements for providing SBCs if another party, such as the health insurance issuer, timely provides completed SBCs to the students.
    Continue Reading Departments Publish Updated SBC Template, Making Few Changes for 2014

The Affordable Care Act has numerous provisions that restrict the amounts that employer-sponsored health plans may require employees to pay for health care.  These provisions include prohibitions on annual and lifetime dollar limits on essential health benefits, restrictions on out-of-pocket maximums, and requirements to provide preventive care services and items at no cost to participants.  The rules apply to insured and self-insured plans and some, but not all, apply to grandfathered plans as well as non-grandfathered plans.  This article summarizes ACA’s cost-sharing requirements for employer-sponsored group health plans and guidance that the Departments of Labor, Health and Human Services, and Treasury (the “Departments”) have recently released implementing these requirements. 
Continue Reading ACA’s Cost-Sharing Limitations on Employer Health Coverage