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

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

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

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 …

Health Care Reform Finally Reaches The Supreme Court – Day One!

The health care reform legislation finally is having its day (well, actually several days) in court — in the United States Supreme Court no less. Other than for those fixated on the upcoming Final Four (unfortunately, the author’s team already has been eliminated and thus I am free to write this) or on the triumphant return of Tiger Wood to the pinnacle of golf, it has been quite difficult to miss all the media attention aimed at this week’s arguments before the Supreme Court concerning the health care reform legislation passed by Congress in 2009. The Court has scheduled six …

Summary of Benefits & Coverage Q&A’s Posted

We now have Q&A’s on the health care Summary of Benefits and Coverage.  This guidance is incredibly late and is not binding, but it may be of assistance to everyone rushing to get this documentation put together and distributed. We only have a fraction of the time Congress allotted for this undertaking, and this needs to be given high priority to prevent substantial penalties.  Good thing you don’t have anything else to do, right?…

The Early Retiree Reinsurance Program — Go Forth and Spend

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 Plan Summary of Benefits and Coverage Distribution Deadline Quickly Approaching for Employers

Employers who maintain health plans may recall from our prior blogs (see “Health Care Plan Annual Enrollment Triage: The Summary of Benefits and Coverage Standards Have Not Been Issued Yet and May Just Have to Wait” and “Health Care Plan Summary of Benefits and Coverage: Still No Final Model, But Substantial Excise Taxes are Looming Anyway“) that they would soon need to address the new Summary of Benefits and Coverage (“SBC”), although urgent action would need to wait until the issuance of final guidance. Well, the wait is over. The Departments of Treasury, Labor, and Health …

Independent Contractor Misclassification

On our sister blog – Employer Law Report – Sara Hutchins Jodka discusses the IRS Voluntary Compliance Settlement Program. This program was designed to provide eligible employers partial relief from the federal employment taxes and penalties that typically result from misclassifying workers as independent contractors. Given the amount of attention that federal and state agencies are paying to this issue, it is important to consider whether your independent contractor arrangements are likely to survive scrutiny. Being required to reclassify individuals as employees can have costly tax and employee benefit ramifications, particularly as we approach the prospect of “large” employer health …

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?

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

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

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

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 …

Form W-2 Reporting of Employer Healthcare Coverage: IRS Webinar on October 31

As I mentioned at the Cleveland Employment Relations seminar yesterday, the IRS has begun its outreach regarding the new requirement (“ACA 9002”) to report employer health care coverage on Form W-2.  Here are links to our prior blog on the topic, FAQs subsequently posted by the IRS, and information on an IRS webinar that will occur on October 31.  If you issue more than 250 Forms W-2, you will be subject to this reporting requirement for the 2012 calendar year (reporting in January 2013), and you may want to attend the webinar.  Just be sure to check with …

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

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?

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

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, …

Health Care Reform Update: Grandfathered Plans

The Department of Labor (“DOL”) has published Frequently Asked Questions describing the scope of the anti-abuse rule (available here). Generally, transferring employees from one grandfathered plan or benefit package (transferor plan) to another (transferee plan) will cause the transferee plan to relinquish grandfather status if amending the transferor plan to replicate the terms of the transferee plan would have caused the transferor plan to relinquish grandfather status. An exception exists where the employer has a bona fide employment-based reason to transfer the employees.…

11th Circuit Court of Appeals Rules Individual Mandate Unconstitutional, But Rest of Health Reform Law is Severable from Mandate

The U.S. Court of Appeals for the Eleventh Circuit in Atlanta on Friday ruled, in the 26-state challenge to the Patient Protection and Affordable Care Act (PPACA) in Florida v, U.S. Dept. of Health and Human Services, that the health care reform law’s requirement that nearly all Americans have health insurance is unconstitutional. This ruling comes two months after the U.S. Court of Appeals for the Sixth Circuit upheld the constitutionality of PPACA.…

PPACA Standards For Coverage Of Preventive Care Extended To Contraceptives

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, …

Washington Simmers…And It’s Not the Heat!

Most Americans (other than those focused solely on the resolution of the NFL lockout) have taken notice of the partisan scramble going on here in Washington these days over the debt ceiling limit and our seemingly out-of-control federal deficit. As I write this, partisan bickering and veto threats are the order of the day—even as the August 2 debt ceiling deadline looms.

Political shenanigans such as this often leave little time for policy driven legislation–and that certainly seems the case this year. Still, I thought it might be helpful to take a quick glimpse at the health care and retirement …

Being Culturally and Linguistically Appropriate in Health Claims and Appeals

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

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

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.…

Health Care Reform Update: Gearing Up for Form W-2 Reporting

What must you do to comply with the new Form W-2 reporting requirements? If you cannot answer that question, you are not alone. The good news is that you have a little bit of time to bone-up before these requirements become effective. The following set of Q&As is designed to help you better understand the Form W-2 reporting rules.

Who is subject to this reporting requirement? Employers who provide applicable employer-sponsored health coverage for their employees must report the aggregate cost of this coverage in the information reported on Form W-2. This includes private employers; federal, state, and local government …

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