On Oct. 31, 2014, CMS announced that enforcement of HIPAA’s health plan identifier (HPID) requirement has been delayed indefinitely. As background, HIPAA requires health plans to obtain an HPID, which is to be used by the plan in certain HIPAA-related transactions. The HPID is a unique identifier for the plan, similar to a taxpayer identification number—a standard number that applies in all transactions so that the parties involved know the true identity of the plan.
The Department of Health and Human Services (HHS) and the Department of the Treasury (including the Internal Revenue Service) (collectively, the Departments) have become aware that certain group health plan benefit designs that do not provide coverage for in-patient hospitalization services are being promoted to employers. A plan that fails to provide substantial coverage for these services would fail to offer fundamental benefits that are nearly universally covered, and historically have been considered integral to coverage, under typical employer-sponsored group health plans. Promoters of these plans contend that the plans satisfy minimum value within the meaning of the Affordable Care Act (including section 36B(c)(2)(C)(ii)of the Internal Revenue Code (Code) and final HHS regulations under section1302(d)(2)(C) of the Affordable Care Act (referred to in this notice as minimum value or MV)), as determined through use of the on-line MV Calculator referred to in final HHS regulations and proposed Treasury regulations.
Set out below are additional Frequently Asked Questions (FAQs) regarding implementation of the Affordable Care Act. These FAQs have been prepared jointly by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (collectively, the Departments). Like previously issued FAQs (available at http://www.dol.gov/ebsa/healthreform/ and http://www.cms.gov/cciio/resources/fact-sheets-and-faqs/index.html), these FAQs answer questions from stakeholders to help people understand the new law and benefit from it, as intended.
October 30, 2014, the Internal Revenue Service announced the annual inflation adjustments for Health FSAs and Commuter Transit and Parking benefits in Revenue Procedure 2014-61.
The annual dollar limit on employee contributions to employer-sponsored Healthcare Flexible Spending Accounts (FSA) is increased to $2,550. This increase applies to plan years starting January 1, 2015 and going forward.
The 2015 monthly limit for Commuter Accounts will remain the same as the 2014 monthly amounts, $250 for qualified parking and $130 for transit expenses.
On Sept. 22, 2014, the IRS released two sets of FAQs discussing the informational reporting requirements under Internal Revenue Code Sections 6055 and 6056. Section 6055 requires employers that sponsor self-insured plans to report specific information to the IRS and to plan participants which will assist the IRS in administering and enforcing the individual mandate.
On Oct. 1, 2014, the IRS, EBSA and HHS released final regulations related to excepted benefits. As background, plans or programs that qualify as excepted benefits are generally exempt from PPACA’s mandates such as preventive care services and the prohibition on annual dollar limits.
On Sept. 18, 2014, the IRS published Notice 2014-56, setting the applicable dollar amount for plan years that end on or after Oct. 1, 2014, and before Oct. 1, 2015. As a reminder, the PCOR fee is calculated using the average number of lives covered under the plan and the applicable dollar amount for that plan year. The applicable dollar amount is $2 for plan years ending after Oct. 1, 2013, and before Oct. 1, 2014. Notice 2014-56 announces that the applicable dollar amount for plan years that end on or after Oct. 1, 2014, and before Oct. 1, 2015, is $2.08. For plan years ending on or after Oct. 1, 2015, the adjusted applicable dollar amount will be published in future Internal Revenue Bulletin guidance.
With respect to payment responsibility, if a plan is fully insured, then the insurance carrier is responsible for paying the fee. If a plan is self-insured, the plan sponsor is responsible for the fee. For this purpose, “plan sponsor” is defined as the employer for a single employer plan.
On Sept. 18, 2014, the IRS published Notice 2014-55, which creates two new Section 125 midyear qualifying events. The two new events apply in very specific situations and – like all Section 125 events – are optional. Employers who wish to include these new Section 125 qualifying events as options in their plan design need to amend the plan document accordingly.
American Benefits Group is a top national TPA that began its life as a pioneer of FSAs in the 1980s. Today the firm provides administrative services for all account based pre-tax plans including HSAs, commuter benefits, FSAs and HRAs for over 650 employers nationwide, including a large number of leading Wall Street financial firms, Main Street America and a few well known public companies.
The San Francisco Board of Supervisors passed an amendment to the Health Care Security Ordinance on June 17, 2014. The amendment phases in (over 3 years) a requirement that all heath care expenditures be made irrevocably and makes other changes to the HCSO. For more information, see the HCSO amendment as passed.
Two federal appeals courts issued conflicting rulings on a key provision of the Patient Protection and Affordable Care Act (PPACA) relating to the availability of premium tax credits and cost-sharing subsidies on the federally facilitated exchanges. First, the U.S. Court of Appeals for the D.C. Circuit, in Halbig v. Burwell, overturned this provision, stating that PPACA does not authorize the Internal Revenue Service (IRS) to provide premium tax credits and cost-sharing subsidies for insurance purchased on the federally facilitated exchanges (as the law does for insurance purchased on state-established exchanges). Shortly thereafter, the U.S. Court of Appeals for the Fourth Circuit, in King v. Burwell, upheld the same PPACA provision, stating that PPACA does authorize the IRS to provide premium tax credits and cost-sharing subsidies on federally facilitated exchanges. Parties in both cases plan to appeal the rulings, and the cases appear to be headed to the U.S. Supreme Court, particularly with the circuit split.
Under health care reform (PPACA), a new nonprofit corporation was established, the Patient Centered Outcomes Research Institute (PCOR). This corporation will be funded in part by PCOR/CER (comparative effectiveness research) fees paid by certain health insurance issuers or plan sponsors of applicable self-insured health plans. Please note that Health reimbursement Arrangements (HRA) are categorized as a self-insured health plans unless, in rare occasions, it is determined to be an excepted benefit (i.e. for vision and dental expenses only) and are therefore subject to this fee.
On May 2, 2014, the Centers for Medicare and Medicaid Services (part of HHS) issued a bulletin to deal with Special Enrollment Periods (SEPs).
HHS is concerned that former Model COBRA Continuation Coverage Election Notices (Model Election Notices) published by the Department of Labor and other documents provided by employers did not address, or did not sufficiently address, Marketplace options for persons eligible for COBRA.
The concern? Persons eligible for COBRA and their qualified beneficiaries may have had insufficient information to understand that they cannot voluntarily drop COBRA and enroll in the Marketplace outside of Marketplace open enrollment.
As a result, in accordance with 45 CFR 155.420(d)(9), HHS is providing an additional special enrollment period based on exceptional circumstances so that persons eligible for COBRA and COBRA beneficiaries are able to select Qualified Health Plans (QHPs) in the Federally Facilitated Marketplace (www.healthcare.gov).
On May 2, 2014, EBSA released an advanced copy of proposed rulemaking, which will be published in the May 7, 2014, Federal Register. The guidance amends notice requirements for COBRA so as to better align PPACA and COBRA notice requirements and to add information relating to special enrollment rights in the state health insurance exchanges.