Creative Director vs. Design Director: Key Differences for Recruiters
New Developments in Health Care Reform
1.
2. Copyright 2015- Not to be reproduced without express permission of Benefit Express Services, LLC
New Developments in
Health Care Reform
By
Larry Grudzien
Attorney at Law
3. Impact of Health Reform on HRAs and
Cafeteria Plans
Copyright 2015- Not to be reproduced without express permission of Benefit Express Services, LLC
• Impact of Health Care Reform on HRAs and Cafeteria Plans
• Transitional Rules for application of the Employer Mandate for
2015
• New Waiting Period Rules
• Reporting Requirements for Employers for 2015
• Rules for allowing employees to drop employer coverage and
enroll on the Marketplace
• Contraceptive coverage after Hobby Lobby
• Other Developments
Agenda
5. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Cannot reimburse employees for individual medical
premiums.
• Must be integrated with group medical plan.
• Can be free standing for other coverages (dental & vision).
• Can be free standing for retiree benefits
HRAs
6. Impact of Health Reform on HRAs and
Cafeteria Plans
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• For Health FSAs to avoid the requirements of Health Care
Reform, they must meet the requirements of an “excepted
benefit.”
• Free standing health FSAs are still possible if reimburse
excepted benefits.
• What requirements apply if a Health FSA is not an excepted
benefit?
• Limit for 2015 is $2,550.
Health FSAs
7. Impact of Health Reform on HRAs and
Cafeteria Plans
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• A health FSA is considered an “excepted benefit” if it satisfies
two conditions:
Maximum Benefit Condition: The maximum benefit payable under the
health FSA to any participant in the class for a year cannot exceed two
times the employee's salary reduction election under the health FSA for
the year (or, if greater, the amount of the employee's salary reduction
election for the health FSA for the year, plus $500), and
Availability Condition: Other nonexcepted group health plan coverage
(e.g., major medical coverage) must be made available for the year to
the class of participants by reason of their employment.
Health FSAs
8. Impact of Health Reform on HRAs and
Cafeteria Plans
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• For medical premiums to be reimbursed, it must be made
after-tax and not conditioned on purchasing coverage
• Possible to reimburse premiums of other coverage:
Dental
Vision
Disability
Life insurance
Voluntary benefits
When is it possible reimburse individual
premiums under a Cafeteria Plan?
9. Impact of Health Reform on HRAs and
Cafeteria Plans
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• On May 13, 2014, the IRS issued Q&A guidance restating the
conclusion in Notice 2013-54, that an employer is considered
to establish a type of group health plan-called an "employer
payment plan"-if it reimburses employees' premiums for
individual health insurance policies.
• Q/A-1 provides that the employer's exposure to excise taxes
of $36,500 per year (i.e., $100 per day) for each employee
affected by the failures. This excise tax liability requires self-
reporting on IRS Form 8928. Adverse consequences are also
possible under ERISA and the PHSA.
• Q/A-2 indicates that the DOL issued substantially identical
guidance in Technical Release 2013-03, and HHS is expected
to announce soon that it concurs.
Recent Guidance
10. Impact of Health Reform on HRAs and
Cafeteria Plans
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• On February 18, 2015, the IRS released Notice 2015-17
which provides transition relief from the assessment of excise
tax under Code Section 4980D for failure to satisfy market
reforms in certain circumstances.
• The transition relief applies to employer healthcare
arrangements that constitute:
Employer payment plans, as described in Notice 2013-54, if the plan is
sponsored by an employer that is not an Applicable Large Employer
(ALE) under Code § 4980H(c)(2) and §§54.4980H-1(a)(4) and -2;
S corporation healthcare arrangements for 2-percent shareholder-
employees;
Medicare premium reimbursement arrangements; and
TRICARE-related health reimbursement arrangements (HRAs).
Recent Guidance
11. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The IRS will not impose excise taxes otherwise assessable
under Code § 4980H for employer payment plans maintained
in 2014 or the first six months of 2015 (i.e., through June 30,
2015) for employers that are not “applicable large employers”
(ALEs) for those periods.
• Employers eligible for the relief are also excused from the
requirement to self-report these violations on Form 8928.
• The Notice relief does not apply to stand-alone HRAs or other
arrangements to reimburse any expenses other than
insurance premiums.
Recent Guidance
12. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The Notice also addresses “2% shareholder-employee
healthcare arrangements,” under which a Subchapter S
corporation pays for or reimburses premiums for individual
health insurance coverage for a “2% shareholder” where the
payment or reimbursement is included in income and the
premiums are deductible by the 2% shareholder-employee
under Code § 162(l).
• Pending the issuance of additional guidance on these
arrangements, the Notice provides that an S corporation will
not be subject to Code § 4980D or required to file Form 8928
solely as a result of having a 2% shareholder-employee
health care arrangement.
Recent Guidance
13. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The Notice permits an employer’s reimbursement of Medicare
Part B or Part D premiums to be integrated with another group
health plan offered by the employer, but only if:—
The employer offers a group health plan (other than the premium
reimbursement arrangement) to the employee that does not consist
solely of excepted benefits and offers coverage providing minimum
value;
The employee participating in the premium reimbursement is actually
enrolled in Medicare Parts A and B;
Premium reimbursement is available only to employees who are
enrolled in Medicare Part A and Part B or Part D; and
Reimbursement is limited to Medicare Part B or Part D premiums and
premiums for excepted benefits, including Medigap premiums.
Recent Guidance
14. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The Notice confirms that an employer may increase an
employee’s taxable compensation, not conditioned on the
purchase of health coverage, without creating an employer
payment plan (or any group health plan at all).
• The Notice reiterates the IRS’s position that an employer’s
payment or reimbursement of employees’ individual health
insurance premiums is a group health plan subject to the
market reforms even if the payments or reimbursements are
made on an after-tax basis.
Recent Guidance
15. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Allow up to $500 carryover to 2014 and later
• Carryover can allowed to be used for all or the next plan year
• Many unanswered questions from guidance
• Cafeteria plan must be amended to allow
Health FSAs
16. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Notice 2014‐55 addresses cafeteria plan elections in two specific
situations related to the availability of coverage through a Health
Insurance Exchange (or Marketplace).
• An employee may want to revoke an election under his or her
employer’s plan in order to purchase coverage through an Exchange if:
The employee’s hours of service are reduced so that the employee is expected to
average less than 30 hours of service per week, but the reduction does not affect
eligibility for coverage under the employer’s group health plan; or
The employee would like to cease coverage under the employer’s group health plan
and purchase coverage through an Exchange, without having a period of either
duplicate coverage or no coverage.
• In each of these situations, Notice 2014‐55 permits a cafeteria plan to
allow an employee to prospectively revoke his or her election for
coverage under the employer’s group health plan during a period of
coverage.
Participation in Cafeteria Plan
18. Impact of Health Reform on HRAs and
Cafeteria Plans
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• For 2015, employer mandate will apply to those employers
with 100 or more full-time employees if transitional rules are
met.
• For the application of the $2,000 penalty in 2015 -30
employee reduction is increased to 80.
• To avoid the $2,000 penalty in 2015, employer must offer
coverage to 70% of all full time employee, instead of 95%.
• Large employer determination for 2015, can be made over
either calendar year 2014 or any consecutive 6 month period
in 2014.
Large Employer for Employer Mandate
Purposes
19. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Large Employers will not be subject to the employer mandate
penalties until the first day of the plan year in 2015 for
employees who are either enrolled or were eligible to enroll in
the plan as of February 9, 2014.
• If these employees are offered affordable, minimum value
coverage no later than the first day of the 2015 plan year, the
large employer will not be liable for a penalty with respect to
these employees for the months in 2015 before the plan year
begins.
Large Employers with Noncalendar
Plans
20. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Transition relief for employers with a significant percentage of
employees eligible for or covered under a non‐calendar year
plan, if the large employer:
Had at least one quarter of its employees covered under those
non‐calendar year plans as of any date in the 12 months ending on
February 9, 2014; OR
Offered coverage under those plans to one third or more of its
employees during the open enrollment period that ended most recently
before February 9, 2014.
Large Employers with Noncalendar
Plans
21. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Transition relief is extended to employers that have a
significant percentage of full‐time employees eligible for or
covered under a non‐calendar year plan, if the employer:
ƒHad at least one third of its full‐time employees covered under those
non‐calendar year plans as of any date in the 12 months ending on
February 9, 2014; OR
Offered coverage under those plans to one half or more of its full‐time
employees during the open enrollment period that ended most recently
before February 9, 2014.
Large Employers with Noncalendar
Plans
22. Impact of Health Reform on HRAs and
Cafeteria Plans
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• If either of these transition policies apply, the employer will not
be liable for a penalty for months in 2015 before the 2015 plan
year begins with respect to employees who are offered
affordable, minimum value coverage no later than the first day
of the 2015 plan year and who would not have been eligible
for coverage under any calendar year group health plan
maintained by the employer as of February 9, 2014.
Large Employers with Noncalendar
Plans
23. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Employers with 50 to 99 full-time employees (including full-time
equivalents) will not be subject to penalties until their first plan year on
or after January 1, 2016 if all of the following conditions are met:
Employer does not modify its plan year after February 9, 2014 to begin on a later
calendar date;
Employer must not reduce workforce nor hours of service during 2014 to avoid
compliance;
Employer must not eliminate or materially reduce health coverage offered on February
9, 2014 through the last day of the 2015 plan year:
• The employer contribution toward employee-only coverage must continue at either the same
percentage of the total cost of coverage, or at least 95% of the dollar amount contributed on February
9, 2014.
• If benefits are changed, the coverage provides minimum value after the change and
• Employer does not amend its plan to reduce eligibility of employees or their dependents
• The final regulations require employers to certify to the IRS their
eligibility for this transition relief.
Employers with 50-99 employees
24. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Employers may adopt a transition measurement period that is
shorter than 12 consecutive months but that is no less than
six consecutive months and that begins no later than July 1,
2014, and ends no earlier than 90 days before the first day of
the plan year beginning on or after January 1, 2015.
• May use with a stability of up to 12 months.
• May use 12 month measurement period in 2015 for 2016.
Measurement Period
26. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Period cannot exceed 90 calendar days.
• Applies for plan years beginning in 2014.
• Employer can impose up to a 30 day. orientation period
before the waiting period
• Employer may be subject to an assessable payment if it fails
to offer affordable minimum value coverage to certain newly-
hired full-time employees by the first day of the fourth full
calendar month of employment.
Rules
27. Impact of Health Reform on HRAs and
Cafeteria Plans
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• For example, if an employee is hired as a full-time employee
on January 6, a plan may offer coverage May 1 and comply
with both provisions.
• However, if the employer is an applicable large employer and
starts coverage May 6, which is one month plus 90 days after
date of hire, the employer may be subject to an assessable
payment under Code § 4980H.
Example
29. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Beginning in 2016 (for information on 2015), insurers and self-funded
plans will be required to report information about health coverage
provided during the prior year to all enrollees, including Taxpayer
Identification Numbers of all covered individuals and the specific dates
that such individuals had such health coverage, as required by Code §
6055.
• In addition, employers with 50 or more full-time equivalent employees
will be required to report information about health coverage offered
during the prior year to full-time employees, including information about
the lowest cost option offered and whether the minimum value
requirements were satisfied, as required by Code § 6056.
• In February 2015, the IRS published final forms and instructions for
2014 .
• The information will be reported on new IRS Forms 1094 and 1095, and
not on Form W-2, as many had hoped.
Overview
30. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Good Faith Standard for 2015 Penalty Relief.
Both the Code §§ 6055 & 6056 final rules provide for no reporting
penalties for any optional 2014 reporting, and a good faith effort
standard for imposing 2015 reporting penalties for incorrect or
incomplete filings.
Transition relief is available for 2015
31. Impact of Health Reform on HRAs and
Cafeteria Plans
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• An applicable large employer member who employs an average of
50 or more full-time employees or full-time employee equivalents in
the prior calendar year must file the required Code § 6056 form
(and furnish a copy to each full-time employee).
• In other words, if your company is subject to the employer mandate
rules, it must file the required form (and furnish a copy to each full-
time employee).
• In addition, all employers who sponsor self-funded group health
plans, insurers, government agencies and others that provide
minimum essential coverage (reporting entities) must file the
required Code § 6055 form (and furnish a copy to each “responsible
individual,” defined as a primary insured, employee, former
employee, uniformed services sponsor, parent, or other related
person named on an application who enrolls one or more
individuals, including him or herself, in minimum essential
coverage).
Employers Subject to the Reporting
Requirement
32. Impact of Health Reform on HRAs and
Cafeteria Plans
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• To report for employer responsibility purposes (Code § 6056),
a large employer may hire a third party agent (e.g., plan
administrator) to file on its behalf, but the large employer
member remains liable for the reporting.
• Special rules apply for governmental units and multiemployer
plans.
Employers Subject to the Reporting
Requirement
33. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Form 1095–C (or a substitute form) will be used by self-
insured employers to meet both the employer responsibility
and the minimum essential coverage reporting requirements.
• An employer that provides insured coverage will also report
on Form 1095–C, but will complete only the employer section.
• Employers who are not subject to the employer mandate
requirements, health insurance issuers, self-insured,
multiemployer plans, and providers of government-sponsored
coverage, will report on Form 1095–B (or a substitute form).
• In addition, filers will be required to submit a single Form
1094-B and a single Form 1094-C as a “transmittal form” to
the IRS with the Forms 1095-B or 1095-C, respectively.
Forms Used for Filing
34. Impact of Health Reform on HRAs and
Cafeteria Plans
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• A link to the forms is provided below:
Form 1094-B,Transmittal of Health Coverage Information Return:
http://www.irs.gov/pub/irs-pdf/f1094b.pdf
Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer
and Coverage Information Return: http://www.irs.gov/pub/irs-
pdf/f1094c.pdf
Form 1095-A, Health Insurance Marketplace Statement:
http://www.irs.gov/pub/irs-pdf/f1095a.pdf
Form 1095-B, Health Coverage: http://www.irs.gov/pub/irs-
pdf/f1095b.pdf
Form 1095-C, Employer Provided Health Insurance Offer and
Coverage: http://www.irs.gov/pub/irs-pdf/f1095c.pdf
Forms Used for Filing
35. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The forms are filed with the IRS, in either paper or electronic
format (but electronic format is required if at least 250 such
returns are filed).
• Statements are also required to be provided to the full-time
employee or responsible individual.
• In order to deliver the form to the full-time employee or
responsible individual electronically, actual consent from the
full-time employee or responsible individual to receive the
form electronically is required (similar to the W-2 process).
• If the form is mailed, sending it to the full-time employee or
responsible individual’s last known address, via first class mail
satisfies these rules.
Method of Filing Forms
36. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The timelines track the Form W-2 rules.
• For example, the form is generally filed with the IRS by Feb.
28 (March 31 for electronic filing), and furnished to full-time
employees or responsible individuals by January 31.
• The information on the form pertains to the prior calendar year
and the first forms are due in 2016 (reporting information for
2015).
Due Date for Filing Forms
37. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Failure to timely and correctly report this information
(including employee’s SSN) may result in reporting penalties
under Code sections 6721 and 6722 for the large employer,
employer who is not a large employer, insurer or other entity
providing minimum essential coverage, which together
generally results in $200 per return risk (maximum of $3
million) per year.
Penalties of Noncompliance
39. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Marketplaces are required by health care reform to have an
initial open enrollment period, an annual open enrollment
period, and certain special enrollment periods.
Initial, Annual, and Special Enrollment
Periods Required for Marketplaces
40. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Annual Enrollment Period for Marketplaces
The annual open enrollment period for 2015 is set to begin November
15, 2014 and extend through February 15, 2015. Coverage will be
effective January 1, 2015 only for applications received by December
15, 2014.
Starting in 2014, the Marketplace must provide advance written notice
to each enrollee about annual open enrollment no earlier than
September 1, and no later than September 30.
Initial, Annual, and Special Enrollment
Periods Required for Marketplaces
41. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Special Enrollment Marketplaces for Marketplaces
• Health care reform requires Marketplace to offer special enrollment
periods.
• Under final Marketplace regulations, the Marketplaces must allow
qualified individuals and enrollees to enroll in a QHP or change from
one to another as a result of the following triggering events:
A qualified individual or dependent loses minimum essential coverage;
A qualified individual gains a dependent or becomes a dependent through
marriage, birth, adoption, or placement for adoption;
An individual, who was not previously a citizen, national, or lawfully present
individual gains such status;
A qualified individual’s enrollment or non-enrollment in a QHP is
unintentional, inadvertent, or erroneous and is the result of the error,
misrepresentation, or inaction of the Marketplace or HHS;
Initial, Annual, and Special Enrollment
Periods Required for Marketplaces
42. Impact of Health Reform on HRAs and
Cafeteria Plans
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• An enrollee adequately demonstrates to the Marketplace that the QHP in which he or she
is enrolled substantially violated a material provision of its contract in relation to the
enrollee;
• An individual is determined newly eligible or newly ineligible for advance payments of the
premium tax credit or has a change in eligibility for cost-sharing reductions, regardless of
whether such individual is already enrolled in a QHP. (The Marketplace must permit
individuals whose existing coverage through an eligible employer-sponsored plan will no
longer be affordable or provide minimum value for his or her employer’s upcoming plan
year to access this special enrollment period prior to the end of his or her coverage through
such eligible employer-sponsored plan);
• A qualified individual or enrollee gains access to new QHPs as a result of a permanent
move;
• An Indian may enroll in a QHP or change from one to another one time per month; and
• A qualified individual or enrollee demonstrates to the Marketplace that the individual meets
other exceptional circumstances (as defined by the Marketplace).
Initial, Annual, and Special Enrollment
Periods Required for Marketplaces
43. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The special enrollment period generally is 60 days from the
date of the triggering event.
• Coverage must be effective as of the first day of the following
month for elections made by the 15th of the preceding month
and on the first day of the second following month for
elections made between the 16th and the last day of a month
(but coverage must be effective on the date of birth, adoption,
or placement for adoption, when that is the special enrollment
triggering event).
Initial, Annual, and Special Enrollment
Periods Required for Marketplaces
44. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Outside Open Enrollment
Outside Open Enrollment, an individual’s choices and savings will depend
on whether his or her COBRA coverage is running out or he or she is
ending it early.
If the individual’s COBRA coverage is ending outside Open Enrollment, he
or she will qualify for a special enrollment period.
This means the individual can enroll in a private health plan through the
Marketplace.
An individual may qualify for tax credits that can lower his or her monthly
premiums and for lower out-of-pocket costs.
If an individual is ending your COBRA coverage early outside Open
Enrollment, he or she will not be able to enroll in a Marketplace plan at all,
with or without lower costs.
Participation in COBRA
45. Impact of Health Reform on HRAs and
Cafeteria Plans
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• During Open Enrollment
During the Open Enrollment period an individual can drop your COBRA
coverage and get a plan through the Marketplace instead.
This is true even if the individual’s COBRA coverage hasn’t run out.
When COBRA coverage ends and an individual applies for a
Marketplace plan during Open Enrollment, he or she may qualify for tax
credits that can lower his or her monthly premiums and for lower out-of-
pocket costs.
Participation in COBRA
46. Impact of Health Reform on HRAs and
Cafeteria Plans
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• A former employee who may enroll in COBRA or continuation
coverage under state law is considered eligible for minimum
essential coverage only for months that the individual is
enrolled in the coverage.
• A former employees on COBRA are only disqualified from
eligibility for premium tax credits for months in which they
actually enroll in employer-sponsored coverage.
• Family members of former employees would be accorded the
same treatment.
Participation in COBRA
48. Impact of Health Reform on HRAs and
Cafeteria Plans
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• For plans subject to the Employee Retirement Income
Security Act (ERISA), ERISA requires disclosure of
information relevant to coverage of preventive services,
including contraceptive coverage.
• Specifically, the Department of Labor’s longstanding
regulations provide that, the summary plan description (SPD)
shall include a description of the extent to which preventive
services (which includes contraceptive services) are covered
under the plan.
• if an ERISA plan excludes all or a subset of contraceptive
services from coverage under its group health plan, the plan’s
SPD must describe the extent of the limitation or exclusion of
coverage.
Disclosure Requirements
49. Impact of Health Reform on HRAs and
Cafeteria Plans
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• For plans that reduce or eliminate coverage of contraceptive
services after having provided such coverage, expedited
disclosure requirements for material reductions in covered
services or benefits apply.
• It require disclosure not later than 60 days after the date of
adoption of a modification or change to the plan that is a
material reduction in covered services or benefits.
• Other disclosure requirements may apply, for example, under
State insurance law applicable to health insurance issuers.”
Disclosure Requirements
51. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Two federal appeals courts ruled on a key provision of the
ACA – and reached opposite conclusions.
• At issue is the component of the ACA that allows individuals
who earn between 100% – 400% of the federal poverty level
(FPL), or $11,670 and $46,680 for an individual, to be eligible
to receive a subsidy to purchase insurance in a Health
Insurance Marketplace (www.HealthCare.gov).
• Specifically at issue is the actual language of the ACA
provision that says individuals living in states that have a
Marketplace “established by the State” are eligible to receive
subsidies if they meet the income eligibility criteria specified in
the ACA.
A Tale of Two Decisions: Circuit
Courts Divided on ACA Tax Credits
52. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The D.C. Circuit ruled 2-1 that the Internal Revenue Service
(IRS) lacks the authority to allow subsidies to be provided in
federally-facilitated Marketplaces.
• Conversely, the Fourth Circuit – based in Richmond, VA –
ruled that the law’s language is ambiguous, and that the IRS
is free to allow the subsidies in all states, including those with
federally-facilitated Marketplaces.
• Because there is uncertainty about the provision’s application,
the question may end up in the Supreme Court.
A Tale of Two Decisions: Circuit
Courts Divided on ACA Tax Credits
53. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The Obama administration has indicated that it will appeal the
D.C. Circuit’s ruling.
• The Justice Department will ask the entire D.C. Circuit
appeals court panel to review the decision (called an en banc
hearing).
• That panel is dominated by judges appointed by Democrats,
7-4.
• The court’s rules indicate that the ruling will not become
effective for 45 days to give the government time to ask for an
en banc hearing, or 7 days after the en banc hearing has
been denied.
A Tale of Two Decisions: Circuit
Courts Divided on ACA Tax Credits
54. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The U.S. Supreme Court has accepted review of a case
challenging the provision of premium tax credits on federal
Exchanges.
• It is expected that this case will be argued before the
Supreme Court in the spring, with a decision near the end of
the Court’s current term in June 2015.
• If the Court finds the regulation invalid, both the individual
mandate and Code § 4980H employer shared responsibility
penalties would be affected.
A Tale of Two Decisions: Circuit
Courts Divided on ACA Tax Credits
55. Impact of Health Reform on HRAs and
Cafeteria Plans
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• DOL released updated model COBRA notices in May
• Both General Notice (sometimes called the COBRA Rights
Notice) and Election Notice models
• Located at: – http://www.dol.gov/ebsa/cobra.html
COBRA Notices Updated
56. Impact of Health Reform on HRAs and
Cafeteria Plans
Copyright 2015- Not to be reproduced without express permission of Benefit Express Services, LLC
• Revised COBRA General Notice:
Emphasizes ACA Marketplace, Medicaid, and possible spouse group
health coverage (and possible lower cost)
Simplifies multiple qualifying events
Contains a fair amount of wordsmithing (around 150 changes in total—
many minor)
COBRA Notices Updated
57. Impact of Health Reform on HRAs and
Cafeteria Plans
Copyright 2015- Not to be reproduced without express permission of Benefit Express Services, LLC
• Revised COBRA Election Notice:
Emphasizes ACA Marketplace, Medicaid, and possible spouse group
health coverage (and possible lower cost)
• “Cost” referenced 14 times!
Notes end of preexisting condition exclusions
Simplifies multiple qualifying events
Warns of subsequent restrictions on switching to other coverage
COBRA Notices Updated
58. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Revised COBRA Election Notice:
Detailed Marketplace discussion
• Enrollment rules and deadlines
• Marketplace contact information
• Switching coverage
• Special enrollment windows
Factors to consider:
• Premiums
• Networks
• Drug formularies
COBRA Notices Updated
59. Impact of Health Reform on HRAs and
Cafeteria Plans
Copyright 2015- Not to be reproduced without express permission of Benefit Express Services, LLC
• Section 213 of "Protecting Access to Medicare Act of 2014" repeals
the annual deductible limit requirement for small employer insured
health plans that was to be effective for plan years beginning on or
after Jan. 1, 2014.
• The repeal of the Affordable Care Act's (ACA) deductible limit is
retroactively effective to the date of the ACA's enactment in March
2010.
• President Obama signed the Protecting Access to Medicare Act of
2014 into law on April 1, 2014.
• Section 1302(c)(2)(A) of the ACA provided that deductible limits for
2014 could not exceed $2,000 for a plan covering a single
individual, or $4,000 for any other plan.
• The proposed deductible limits for 2015 would be $2,150 for self-
only coverage and $4,300 for other than self-only coverage.
New Law Repeals Deduction Limits for
Small Employer Insured Health Plans
60. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The overall cost-sharing limits for plan years beginning in
2014 for non-grandfathered plans are the same as the
maximum out-of-pocket expense limits for self-only and family
coverage for HSA-compatible high-deductible health plans
(HDHPs) for taxable years beginning in 2014.
• For 2014, these limits are $6,350 for self-only coverage and
$12,700 for family coverage.
• The limits for 2015 are $6,600 for self-only coverage and
$13,200 for other than self-only coverage.
• For HSA-compatible HDHP for 2015, the limits are $6,450 for
self-only coverage and $12,900 for family coverage.
Cost -Sharing Limits update for 2015
61. Impact of Health Reform on HRAs and
Cafeteria Plans
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• CMS indicated that an on-line process will be available at
www.pay.gov to offer a “one-stop” resource for registration,
submission of headcount and payment to CMS by December 5.
• Either the self-insured plan sponsor or the plan’s TPA can complete
the reinsurance contribution process, including payment, on behalf
of the self-funded plan.
• Whichever entity does so will be required to complete these steps:
Register on pay.gov, so payment can be made when the time comes.
Enter the plan’s enrollment data in a on-line form called the “ACA
Transitional Reinsurance Program Annual Enrollment and Contributions
Submission Form.”
Prior to the submission of the form:
Attach “supporting documentation.”
Attest to the accuracy of the information.
Schedule payment for early 2015.
Reinsurance Fees
62. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The “vast majority” of taxpayers will just need to check a box
on their tax returns indicating that they had health coverage in
2014.
• Taxpayers will use the information on Form 1095-A to
compute the premium tax credit on their tax return and to
reconcile the advance credit payments made on their behalf
with the amount of the actual premium tax credit, which will be
reported on Form 8962 .
• Taxpayers who did not have minimum essential coverage for
2014 and who are claiming an exemption from the individual
mandate must report their coverage exemption on the now
finalized Form 8965, and attach it to Form 1040.
Individual Mandate
63. Impact of Health Reform on HRAs and
Cafeteria Plans
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• The IRS released Notice 2014-69 which provides that health
plans that fail to provide substantial coverage for in-patient
hospitalization services or for physician services (or for both)
referred to as Non-Hospital/Non-Physician Services Plan) do
not provide the minimum value intended by the minimum
value requirements for the employer mandate.
• For an employers who has entered into a binding written
commitment to adopt, or have begun enrolling employees in,
a Non-Hospital/Non-Physician Services Plan prior to
November 4, 2014 based on the employer's reliance on the
results of use of the MV Calculator (a Pre-November 4, 2014
Non-Hospital/Non-Physician Services Plan), they will not be
penalized for not meeting the employer mandate for the 2015
plan year if that plan year begins not later than March 1 2015.
Defining Minimum Value
64. Impact of Health Reform on HRAs and
Cafeteria Plans
Copyright 2015- Not to be reproduced without express permission of Benefit Express Services, LLC
• On October 31, 2014, CMS announced a delay, until further
notice, in enforcement of 45 CFR 162, Subpart E, the
regulations pertaining to health plan enumeration and use of
the Health Plan Identifier (HPID) in HIPAA transactions
adopted in the HPID final rule.
• This enforcement delay applies to all HIPAA covered entities,
including healthcare providers, health plans, and healthcare
clearinghouses.
Enforcement Delay of HPID
65. Impact of Health Reform on HRAs and
Cafeteria Plans
Copyright 2015- Not to be reproduced without express permission of Benefit Express Services, LLC
• CMS has announced that online enrollment will be available for 2015 coverage
through the Small Business Health Options Program (SHOP—the Exchange for
small businesses) beginning November 15, 2014.
• Online enrollment was delayed in 2013 , and employers were directed to work
with an agent, broker, or insurer to complete and submit paper applications for
2014 .
• The bulletin explains that, for 2015, employers will be able to choose coverage,
complete an application, and enroll entirely online.
• Employers can also work with a registered agent or broker, who will have
enhanced online capabilities.
• CMS Bulletin: Get Health Care for Your Small Business (Oct. 8, 2014)
• Available at:
http://content.govdelivery.com/accounts/USCMSHIM/bulletins/d3f753
Online Enrollment in SHOP Exchange
Available for 2015
67. Impact of Health Reform on HRAs and
Cafeteria Plans
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• Larry Grudzien, Attorney at Law
Phone: 708-717-9638
Email: larry@larrygrudzien.com
Website: www.larrygrudzien.com
Contact Information