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Tag Archives: PPACA

The $36,500 per employee, per year, per mistake PPACA penalty

Posted in Health Care Reform

And the gloves are off! The IRS has threatened employers with PPACA penalties of $36,500 per employee, per year, nondeductible. Makes those $2,000 and $3,000 penalties look like small potatoes, right?

The targets of this particular Q&A are employers who maintain “non-integrated” “employer payment plans.” These are new terms, which include reimbursement plans such as health reimbursement arrangements (HRAs, excluding retiree-only and excepted benefits HRAs). Those should generally have been eliminated by January 1, 2014, or amended to be integrated with group health coverage. The federal agencies dropped this bomb on employers on the cusp of open enrollment season last …

Affordable Care Act Update: Agencies Extend Reprieve for Employer Pay-or-Play Mandate

Posted in Health Care Reform

Hot off the press are the final regulations for the employer shared responsibility provisions of the Affordable Care Act (more commonly referred to as the “pay-or-play mandate”). In fact, the regulations are so new that they will not actually be published in the Federal Register until tomorrow, February 12. For those of you who are dying to get a first glimpse, a pre-publication version can be found here.

While the regulations are extensive (227 pages), many of the provisions of the proposed regulations have been retained. However, there are a couple important transition rules buried in the final regulations …

October 1, 2013 Health Care Reform Exchange Notice Deadline for All Employers Subject to the FLSA

Posted in Health Care Reform

As a reminder, under health care reform, all employers to which the Fair Labor Standards Act (“FLSA”) applies, not just “applicable large employers,” are required to distribute health care exchange notices to their employees by October 1, 2013.  Given that health care reform is chock full of big penalties, it puzzled me that I couldn’t find a penalty for failure to provide this notice. Last week, the DOL published Frequently Asked Questions that confirmed, “there is no fine or penalty under the law for failing to provide the notice.” Nonetheless, health care reform involves so many inter-related statutes, pages of …

Health Care Reform Update: Planning Now for Significant 2014 Deadlines

Posted in Health Care Reform

The Affordable Care Act (the “ACA”) makes sweeping changes to the current health insurance landscape. Though some of these changes are already in force, the most significant provisions of the ACA become effective on January 1, 2014. This includes the “pay or play mandate,” the individual coverage mandate, and certain significant taxes and fees that are imposed on employers.

While many employers are already in the midst of planning for these significant changes, other employers have yet to examine how these new requirements will impact business operations, health coverage costs, benefit plan design, and coverage of employees. Employers are required …

Employer Excise Taxes Under Health Care Reform – Contraceptive Coverage Mandate, New Proposed Regulations and HHS Due Process and Privacy Report Deadline Was 1/1/13

Posted in Health and Welfare Plans, Health Care Reform

As you may have heard, the U.S Supreme Court denied Hobby Lobby an injunction against the PPACA contraceptive coverage mandate. Employers who maintain health care plans are required to pay excise taxes for failure to comply with a particular aspect of the law, regardless of whether coverage is affordable. As we previously explained, these nondeductible taxes are computed per affected individual, per day, and they may be substantial. Hobby Lobby will purportedly accrue taxes of $1.3 million per day if it continues to maintain its plan, but fails to provide the mandated coverage.

On December 28, the IRS issued

Health Care Reform Survives Supreme Court Scrutiny – But Not Entirely Intact

Posted in Health and Welfare Plans, Health Care Reform

Health care reform just got a clean bill of health from the United States Supreme Court. The Court today ruled on the constitutionality of the Patient Protection and Affordable Care Act (“PPACA”), and generally upheld the legislation in a 5-4 decision written by Chief Justice John G. Roberts. Roberts was joined in his opinion by the four justices who had been appointed to the Court by Democratic presidents. In an expected development, certain individual justices wrote and/or joined concurring and dissenting opinions as well. The Court upheld the individual mandate to purchase health coverage, concluding that the mandate is permissible …

Supreme Court Wraps Up Oral Arguments On Health Care Reform – Day Three

Posted in Health Care Reform

On Wednesday, March 28, the Supreme Court wrapped up three days of oral arguments related to the constitutionality of certain portions of the health care reform legislation. As noted in my immediately previous blog related to the arguments, the Court focused on two issues in this last day of argument including: (a) whether the entire health care reform legislation must be invalidated in the event that the individual mandate is struck down, and (b) whether the provision of the legislation that expands the Medicaid program, and thus increases the financial burdens imposed on the states under that program, is constitutional. …

Health Care Reform Reaches The Supreme Court – Two Days Down, One to Go

Posted in Health Care Reform

The Supreme Court on Tuesday, March 27 heard oral arguments on the most pivotal issue concerning the implementation of the health care reform legislation. The issue before the Court on Tuesday concerned the constitutionality of the individual mandate that is at the heart of the recent legislation (i.e., the obligation imposed on all covered individuals, effective in 2014, to either purchase health care coverage or pay a penalty for refusing to do so). This was the sole issue before the Court during two hours of oral arguments. Although other issues are being reviewed during three days of oral arguments, this …

Implementing $2,500 FSA Limits for Non-Calendar Year Plans – Start Now

Posted in Fringe Benefits, Health and Welfare Plans, Health Care Reform

Beginning January 1, 2013, the Patient Protection and Affordable Care Act (“PPACA”) requires plan sponsors to limit pre-tax health flexible spending account (“FSA”) contributions to no more than $2,500 per calendar year. There are currently no limits on health FSA contributions. Thus, many employers have plan-imposed contribution limits in excess of the new $2,500 limit.  This change is anticipated to be a revenue-raiser.  Because the new limit is lower than most existing plan-imposed pre-tax FSA contribution limits, affected employees will pay taxes on more of their salary.

Given the January 1, 2013 effective date, many employers think they can wait …

The Early Retiree Reinsurance Program — Go Forth and Spend

Posted in Health and Welfare Plans, Health Care Reform, Retirement Plans

The Patient Protection and Affordable Care Act (“PPACA”) contained a provision that established the Early Retiree Reinsurance Program (“ERRP”), the goal of which was to encourage plan sponsors to retain health care coverage for retirees through at least 2013. The ERRP was designed to provide reimbursement to eligible sponsors of employment-based plans for a portion of the costs of providing health coverage to early retirees (and eligible spouses, surviving spouses and dependents of such retirees) during the period beginning on the date on which the program is established and ending on January 1, 2014. Under PPACA, $5 billion was appropriated …

Health care compliance Form 8928 excise tax self-reporting requirements: Have you done your due diligence for 2011 and determined the due date for your return, if required?

Posted in Health Care Reform

While conducting a health care reform webinar recently, we received questions that suggested the need to remind employers sponsoring group health care plans about their self-reporting obligations, and significant potential exposure to excise taxes. We are referring to excise taxes that are effective right now, not the new excise taxes that are slated for 2014 and 2018.

Sections 4980B, 4980D, 4908E, and 4980G of the Internal Revenue Code impose excise taxes for various failures of health care coverage requirements. For example, Section 4980B excise taxes apply to COBRA failures, and Section 4980D excise taxes apply for failure to comply with …

Supreme Court Gets Into The Act On Health Care Reform

Posted in Health Care Reform

The table now is set for the last chapter in our long (and, to many, excruciating) debate over the constitutionality of the health care reform legislation enacted in 2010. At a conference last Thursday, November 10, the members of the United States Supreme Court voted to consider an appeal of one of the lower court decisions dealing with the constitutionality of the landmark legislation. Oral arguments likely will be scheduled for March, 2012 (ironically around the two year anniversary of the passage of the legislation). In turn, a decision is expected around the end of the Court’s session in June, …

Health Care Shared Responsibility’s Missing Link – Reconciliation With The Employer

Posted in Health and Welfare Plans, Health Care Reform

The Patient Protection and Affordable Care Act (PPACA) shared responsibility provisions require speculation about whether health care coverage will be affordable for an individual. Whether affordable coverage was available, whether an individual was eligible for a premium credit, and whether an employer was subject to penalties, cannot be determined until after the individual files a personal tax return. PPACA shared responsibility provisions address reconciliation of the speculation between the individual and federal agencies. Proposed regulations regarding premium tax credits and Notices 2011-36 and 2011-73 regarding shared responsibility for employers spotlight a missing linking: reconciliation with the employer.

PPACA Penalty for

Health Care Plan Summary of Benefits and Coverage: Still No Final Model, But Substantial Excise Taxes Are Looming Anyway

Posted in Health and Welfare Plans, Health Care Reform

In our prior blog, we explained that under principles of triage, employers may need to focus on the current annual enrollment and wait to take care of the Summary of Benefits and Coverage (“SBC”). Although the SBC does not need immediate attention, we caution employers not to wait too long or take the SBC responsibilities too lightly. The penalties for failing to satisfy the SBC requirements are severe. This blog will explain what those penalties are and the steps to take to avoid them. In a subsequent blog, we will provide more details regarding specific content requirements and the …

CLASS Dismissed – No Actuarially Sound Federal Long-Term Care Program Developed

Posted in Health and Welfare Plans, Health Care Reform

The Patient Protection and Affordable Care Act gave the Secretary of Health and Human Services, Kathleen Sebelius, a hefty to-do list. One of those tasks was to develop at least three actuarially sound long-term care benefit plans that met specified criteria and would remain solvent for 75 years. This was to pave the way for the Community Living Assistance Services and Support (“CLASS”) program. CLASS was a key aspect of health care reform, intended to help elderly and disabled individuals maintain independence, and according to the Congressional Budget Office, to help pay for health care reform by reducing the federal …

Is The Judicial Ping Pong Game Over Health Care Reform Coming To A Merciful Close?

Posted in Health Care Reform

The Obama administration was faced with a deadline to ask for an en banc review by the 11th Circuit Court of Appeals of a decision that declared the health care reform legislation’s individual mandate unconstitutional. Under applicable court rules, such a request had to be filed by Monday, September 26. A decision to seek such a review would have caused further delay, and very likely would have delayed the timing of a decision on the legislation by the Supreme Court until after the 2012 national elections.

Perhaps eager to get the constitutional questions over the health care reform legislation resolved …

Health Care Plan Annual Enrollment Triage: The Summary of Benefits and Coverage Standards Have Not Been Issued Yet and May Just Have to Wait

Posted in Health and Welfare Plans, Health Care Reform

M*A*S*H* taught us how to do triage, and MacGyver taught us to creatively think our way out of an impossible situation. Both are skills that may come in handy for the many employers who maintain calendar year health plans and who were in the process of preparing for annual enrollment when the Summary of Benefit and Coverage (SBC) proposed regulations were recently announced.

The SBC requirements do not apply to this year’s enrollment process, and, as a practical matter, this proposed guidance is probably too late and incomplete for many employers to address right now. Further, for an insured plan, …

PPACA Standards For Coverage Of Preventive Care Extended To Contraceptives

Posted in Health Care Reform

On Monday, August 1, 2011, the Obama administration announced new guidelines that require health care plans to cover certain women’s preventive services, including birth control and voluntary sterilization. The action taken by the United States Department of Health and Human Services (the “HHS”) adopts recommendations made by the Institute of Medicine, which recently issued a report dealing with a review of women’s health needs. In that report, the Institute of Medicine concluded that contraceptive coverage was justified because nearly half of all pregnancies in the United States are unintended and a significant percentage of these pregnancies lead to abortions. Thus, …

Being Culturally and Linguistically Appropriate in Health Claims and Appeals

Posted in Health and Welfare Plans, Health Care Reform

Most everyone wants to be culturally appropriate. But just what does that mean? The answer to that question became a little clearer for non-grandfathered group health plans in the context of notices to be provided for internal health claims and appeals. Plan sponsors will need to pay attention, as compliance with new guidance is required for plan years beginning on or after January 1, 2012.

Sixth Circuit Declares Health Reform Law Individual Mandate Constitutional

Posted in Health Care Reform

The Sixth Circuit U.S. Court of Appeals in Cincinnati recently considered an appeal challenging the constitutionality of the Patient Protection and Affordable Care Act (“PPACA”), the federal health care reform law passed in 2010. Specifically, the lawsuit challenged PPACA’s requirement that most Americans purchase or have qualifying health insurance coverage. Late last month, the Court of Appeals issued an opinion affirming the decision of the district and declaring the requirement constitutional.…

After Earlier Grace, Departments Now Relax Certain Health Claims Procedure Requirements

Posted in Health and Welfare Plans, Health Care Reform

Fresh off an extension this past spring of an enforcement grace period with respect to internal health claims and appeals requirements, sponsors of non-grandfathered group health plans received some more welcome news recently with the relaxation of certain group health claims procedure requirements first announced in interim final rules issued in July 2010. Although plan sponsors have been challenged to keep up with the various pieces of claims procedure guidance issued by the regulatory agencies over the past year, they may find these recent changes to be, in many ways, worth the wait and effort.…

Department of Labor Extends More Grace on Internal Health Claims and Appeals

Posted in Health and Welfare Plans, Health Care Reform

In Technical Release 2011-01, the Department of Labor has extended the enforcement grace period with respect to certain internal claims and appeals requirements applicable to non-grandfathered health plans under the Patient Protection and Affordable Care Act (PPACA) and its implementing regulations. The internal health claims and appeals requirements generally apply to non-grandfathered plans as of the first plan year beginning on or after September 23, 2010. The requirements do not apply to grandfathered plans.…