premium tax credit

For the second time in three years, the U. S. Supreme Court has upheld a key provision of the Affordable Care Act. The Supreme Court ruled last week in King v. Burwell that premium tax credits are available to lower-income individuals who buy health insurance on a federal exchange, as well as to those who buy insurance on a state exchange. The ruling means that the Affordable Care Act will persist in its current form, at least for now, and employers must continue to grapple with its restrictions, mandates, and reporting requirements.
Continue Reading Supreme Court Saves Affordable Care Act Again

New proposed regulations modify the rules that would allow employers to offer limited wraparound health coverage as an “excepted benefit” to employees who purchase individual health coverage through an Exchange.  Although the new rules relax some of the controversial requirements proposed in 2013, they also create new restrictions and reporting requirements.

The new proposed regulations include a sunset date that generally allows the coverage to remain in effect for only three years (or for the duration of a collective bargaining agreement, if longer).  The preamble of the new proposal explains that the rules will operate as a pilot program that will allow the agencies to evaluate their effect on employer-provided health coverage.  Employers have until January 22, 2015, to comment on the proposed regulations. 
Continue Reading Agencies Propose Pilot Program for Wraparound Health Coverage

Yesterday two federal courts of appeal reached opposite conclusions on the question whether individuals in 34 states are eligible for federal subsidies when they purchase health insurance coverage.  Depending on how this issue is resolved, it could have a significant impact on the future of the Affordable Care Act, including the employer mandate scheduled to take effect in 2015.
Continue Reading Key Component of Affordable Care Act Might Be Invalid

The Affordable Care Act requires an employee to have a minimum amount of health coverage starting in 2014, and requires an employer to offer affordable health coverage to its employees.  But how do these health mandates apply to the employee’s spouse and dependents?  Recent IRS regulations fill in several pieces of this puzzle.

Several provisions of the Affordable Care Act work together to expand health coverage.  An individual mandate requires most individuals to maintain minimum essential health coverage or pay a penalty.  In order to encourage employers to offer health coverage to their employees, an employer mandate imposes an excise tax on large employers that fail to offer affordable, minimum value coverage to their full-time employees.  If a lower-income individual is not eligible for affordable coverage from another source and purchases individual health insurance, the individual receives a refundable premium tax credit that helps make the coverage affordable.  Although these provisions are related, each provision applies in a different way to an employee’s family members.  The family coverage rules have important implications for the design and administration of employer group health plans.Continue Reading IRS Clarifies Family Health Coverage Mandates