Compliance Center

The following details new developments in employee benefits that may be of interest to you.

IRS Announces 2018 Health FSA Limits

Issue Date: October 2017

In Revenue Procedure 2017-58, the IRS sets forth a variety of 2018 adjusted tax limits. Among other things, the notice addresses slightly increased limits for employee contributions toward health flexible spending accounts (FSAs). Therefore, employers who currently offer health FSAs may choose to increase the annual election limit for participants for the 2018 plan year.

Read More

Status of CSRs Remains Unclear: Impact on Individual Market Possible

Issue Date: October 2017

Cost-sharing reduction subsidies (CSRs) continue to play a prominent role in the debate concerning the future of the Affordable Care Act (ACA). They are one of two major sources of federal funding for individual health care. Republicans have long argued that the ACA did not contain language appropriating funds for the CSRs and that the payments made by the federal government to the insurers have been illegal. One lower court has agreed with the Republicans on this point, and the matter is currently making its way through the courts.

Read More

Contraceptive Exemption Expansion

Issue Date: October 2017

On October 6, the Department of Health & Human Services (HHS) released two separate interim final rules, with immediate effective dates, broadening the religious or moral exceptions to the general ACA rule requiring that group health plans offer contraceptive coverage with no cost-sharing. The rules were provided in response to President Trump’s executive order issued last May. The exemption is now available to most non-governmental organizations that claim either a religious or a moral objection to providing such coverage.

Read More

President Signs Executive Order Permitting the Creation of “Association” Health Plans

Issue Date: October 2017

President Trump has signed an executive order instructing regulatory agencies to draft new rules permitting the creation of “association” health plans, expanding Health Reimbursement Accounts (HRAs), and extending the time for which coverage can be offered under short-term health insurance policies. It is important to note that the executive order only instructs the regulatory agencies to develop new rules – it does not immediately change any existing rules or laws. New regulatory rules must also be written in a manner that complies with existing benefits laws such as ERISA, HIPAA, the Affordable Care Act (ACA), and provisions of the Internal Revenue Code.

Read More

How Employers Should Handle MLR Rebates

Issue Date: October 2017

For the sixth year in a row, employers who sponsor an insured group health plan may be receiving a Medical Loss Ratio (MLR) rebate from their insurers (self-funded medical benefit plans are not subject to these requirements). The rebates raise several fundamental questions for employers, including: 1). How much (if any) of the rebate must be distributed to plan participants? 2). How quickly must I distribute the participants’ share? 3).What options do I have in distributing the employees’ share? and 4). What are the tax consequences of the various distribution options that are available?

Read More

Legislation Introduced to Simplify Employer Reporting

Issue Date: October 2017

New bipartisan legislation has been proposed that provides a glimmer of hope that changes will be made to current IRS requirements. However, even if the bill is passed by both the Senate and the House, and is signed into law, the changes would not go into effect until 2019. As we near the end of 2017, employers need to prepare for the third year of the current ACA reporting requirements, and hope there will be relief in the near future.

Read More

Global Legislative Update – Quarter 4

Issue Date: October 2017

This is the latest edition of our global compliance update. Through our networks of worldwide insurance and benefits broker partners, we have developed a global legislative update to summarize recent legislative developments and trends in employee benefits across the world. This includes recently passed or pending legislation that may require employers to take action to comply with new rules.

Read More

Senate Tries to Repeal the ACA One More Time

Issue Date: September 2017

On September 13, 2017, Senate Republicans introduced a bill (referred to as The Graham-Cassidy bill) to try, one more time, to repeal and replace portions of the ACA. The bill contains many of the provisions included in legislation proposed earlier this year. New to this bill is a system that changes current federal spending on a number of ACA programs into block grants to states. In this update we focus primarily on issues that affect employer-sponsored benefits; however, we have provided an overview of the bill’s principal non-employer related provisions as well.

Read More

Wellness Program Updates

Issue Date: September 2017

New developments have arisen in the wellness area recently. One recent court case challenges the validity of the final regulations, and another alleges that Macy’s failed to comply with the final rules. The final rules establish how a wellness program should be structured to avoid violating nondiscrimination rules under HIPAA, the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA). There are no big changes here – at least not yet.

Read More

Employer Reporting – 2017 Draft Instructions Released

Issue Date: September 2017

The IRS released the 2017 draft forms and instructions for the ACA employer reporting requirement. The 2017 draft forms and instructions are very similar to those used for 2016. Given that they have only minor changes throughout along with a few clarifications of existing requirements, the most significant change is the deletion throughout of anything referring to §4980H transition relief, which is expired and no longer applicable.

Read More

Compliance Check-Up: Are Your Plans ERISA Compliant?

Issue Date: September 2017

The Employee Retirement Income Security Act of 1974 (ERISA) requires each group health and welfare benefit plan to have a written plan document and distribute a Summary Plan Description (SPD) to plan participants. Insurance companies provide Certificates of Coverage which explain the benefits, but most do not include all ERISA requirements. A simple way to comply with ERISA is by creating a Wrap Plan Document. We share some basic information about the value of a Wrap Plan Document and what is included:

Read More

IRS Decreases ACA “Affordability” Percentage

Issue Date: August 2017

The IRS issued guidance in Revenue Procedure 2017-36 that decreases the percentage from 9.69% to 9.56% for purposes of determining the affordability of employer-sponsored group health coverage in 2018. This percentage affects which applicable large employers may face potential penalties under §4980H(b) for failure to provide affordable coverage and which individuals may qualify for subsidized coverage through a public Exchange (Marketplace).

Read More

Employer Reporting – 2017 Draft Forms and Instructions

Issue Date: August 2017

With Congress failing to make any significant changes to the ACA, applicable large employers (ALEs) need to prepare for another year of ACA employer reporting. The IRS has released the 2017 draft forms employers will use to report 2017 plan data early in 2018. 2017 instructions have not yet been released.

Read More

The Senate Releases the Better Care Reconciliation Act of 2017

Issue Date: June 2017

On Thursday, June 22nd, the Senate released the Better Care Reconciliation Act of 2017 (BCRA), its version of a bill designed to make significant changes to the Affordable Care Act (ACA). This issue brief will focus on the specific elements of the Senate bill that most directly affect employers and the health benefits offered to employees. When it comes to the employer-related provisions, the BCRA is almost identical to the House’s American Health Care Act (AHCA).

Read More

UPDATE: New York Department of Financial Services (DFS) Releases PFL Premium Rate

Issue Date: June 2017

Since our New York Paid Family Leave update in May, DFS has confirmed that  benefits shall be community rated to ensure that all employees are similarly treated and are not subject to cost variations based on age, gender, geographic location or any other demographic factor.

Read More

Professional Employer Organizations – Issues and Implications

Issue Date: June 2017

It is common for employers to rely on more than one source when seeking workers to address needs for changing business demands and needs for different types of expertise. Professional Employer Organizations, or PEOs, are an increasingly common resource for employers. This Issue Brief highlights several important issues businesses should consider when retaining the services of a PEO. While the paper touches on some general employee issues and wage and hour questions, its primary focus is on PEOs as they relate to and intersect with employee benefits.

Read More

Reminder: PCORI Fees Due July 31

Issue Date: June 2017

Employers who sponsor self-funded medical plans must report and pay the ACA Patient-Centered Outcomes Research Institute (PCORI) fees no later than July 31, 2017. Health insurance carriers will pay the fee directly in the case of fully-insured plans. PCORI fees apply to plan years ending after Sept 30, 2012 and before Oct 1, 2019. The fee is paid using quarterly excise tax Form 720 and must be paid no later than July 31 of the year following the last day of the plan year. If any corrections need to be made for prior years, use Form 720X. The PCORI fee generally applies to all group health plans, but not to excepted benefits.

Read More

HSA Requirements – 2018

Issue Date: May 2017

Last week the IRS released the 2018 Health Savings Account (HSA) annual contribution limits, as well as the corresponding High-Deductible Health Plan (HDHP) deductible and out-of-pocket (OOP) maximum requirements. All amounts have increased slightly from those in place for 2017. We have included the updated dollar amounts and a summary of HSA-eligibility requirements within the update.

Read More

New York Paid Family Leave Developing Details

Issue Date: May 2017

Joining the ranks of California, New Jersey and Rhode Island, the state of New York has passed legislation that adds Paid Family Leave (PFL) benefits to the current Disability Benefits Law (DBL). All private employers with one or more employees working in New York will be required to offer PFL. Public employers are not required to offer this coverage, however. PFL benefits will begin on January 1st, 2018 and gradually increase to the full benefit by 2021, becoming the longest and most comprehensive PFL program in the nation.

Read More

The House Passes New Version of the AHCA

Issue Date: May 2017

On May 4, the House of Representatives narrowly passed the American Health Care Act (AHCA). The AHCA was first introduced in the House in March, but was pulled from consideration when Republicans did not have enough votes to pass the bill. Attention will now turn to the Senate, where many members (including Republicans) have said they will essentially start over.

Read More

Global Legislative Update – Quarter 1

Issue Date: March 2017

This is the third edition of our global compliance update. Through our networks of worldwide insurance and benefits broker partners, we have developed a global legislative update to summarize recent legislative developments and trends in employee benefits across the world. This includes recently passed or pending legislation that may require employers to take action to comply with new rules.

Read More

ACA Status Update

Issue Date: March 2017

It appears that the Affordable Care Act (ACA) will live on as the “law of the land,” in the words of Speaker Ryan. Last week left many heads spinning as voting on the American Health Care Act (AHCA) was first delayed and then called off entirely. Employers must continue to administer their plans in compliance with existing ACA rules and regulations, including the employer mandate and employer reporting requirements, for the foreseeable future. The only thing that has actually changed is that the IRS is accepting 2016 tax returns with no proof that individuals obtained minimum essential coverage. So now the question is…what’s next?

Read More

Republicans Release Health Policy Proposed Legislation

Issue Date: March 2017

House Republicans have released the “American Health Care Act” (AHCA), the first official draft of ACA “repeal and replace” legislation. As of March 9, the legislation is being reviewed, debated, and changed in the relevant House committees, so details are likely to change; however, much of what is contained in this draft is likely to move forward as Congress tries to finalize legislation that can pass both the House and the Senate.

Read More

UPDATE – Taxation of Indemnity Plans

Issue Date: March 2017

This year the IRS Office of Chief Counsel issued a memorandum clarifying the tax treatment of certain types of fixed indemnity plans offered by employers. Since the memorandum was released in January, several fixed indemnity plan insurance carriers have pushed back, stating that the interpretation of the IRS memo was too broad and should not affect the taxation of such plans, but rather was intended to more narrowly address unique wellness plans structured as a type of fixed indemnity plan. Supposedly the IRS plans to release additional clarification on the intent of the memo, but to date we have not seen anything.

Read More

IRS Issues Memorandum on Taxation of Indemnity Plans

Issue Date: February 2017

The IRS Office of Chief Counsel has issued a memorandum clarifying the tax treatment of certain types of fixed indemnity plans offered by employers. The memorandum states that the benefits provided by a fixed indemnity health plan must be treated as taxable income to an employee if the plan is employer-paid or if the employee can purchase the coverage on a pre-tax basis through a cafeteria plan.

Read More

Paid Family Leave Benefit and Statutory Disability Update

Issue Date: January 2017

Effective January 1, 2018, all New York employers will be required to include the NY Paid Family Leave (PFL) benefit in conjunction with the NY Disability Benefits Law (DBL) product from the same insurer or administrator. Employees become eligible for NY PFL after 26 weeks of employment. Benefits are scheduled to increase gradually from 2018 to 2021 and employees will be eligible for the full 12 weeks of paid leave by 2021.

Read More

Qualified Small Employer Health Reimbursement Arrangement

Issue Date: January 2017

The 21st Century Cures Act (“Act”), passed and signed into law in December, includes a provision creating what is called a “Qualified Small Employer Health Reimbursement Arrangement” (“QSEHRA”). A QSEHRA allows small employers who do not offer group health insurance to their employees to provide money to employees on a tax-free basis; the money can be used to pay for individual health insurance policies and to reimburse employees for certain medical expenses.

Read More

Trump Issues Executive Order Regarding the ACA

Issue Date: January 2017

On his first day in office, President Trump issued an executive order instructing regulatory agencies with authority over the Affordable Care Act (ACA) to take any action possible “to the maximum extent permitted by law…to waive, defer, grant exemptions from, or delay the implementation of…[the ACA].” The order itself does not actually change any current rules or regulations. It also does not grant agency heads any additional regulatory authority over what they already possess. However, it signals the Administration’s plan to make changes to the law through regulatory action as quickly as possible, even while Congress tries to address issues that will require statutory changes.

Read More

The Impact of the Election on Employer Sponsored Health Benefits

Issue Date: November 2016

The results of the 2016 election will obviously have a significant impact on employer sponsored benefits. In the short time since the election, much has already been written about how the governmental shift could affect a wide range of public policies. This issue brief, however, will focus only on employer sponsored health and welfare benefits, and specifically on parts of the Affordable Care Act (ACA) that directly affect employers. We will not address the many other healthcare-related issues such as Medicare, provider reimbursements, changes to prescription drug rules, etc., to which changes are also likely.

Read More

WageWorks Acquisition of ADP

Issue Date: November 2016

As you may have already heard, on November 1, 2016, WageWorks, Inc. entered into a definitive agreement with Automatic Data Processing, Inc. (ADP) to acquire their COBRA and Consumer Health and Spending Accounts (CHSA) businesses (HSA, FSA, HRA, Commuter, and Tuition Reimbursement), representing approximately 10,000 employer clients. We expect this transaction to close by the end of this month, subject to regulatory approval.

Read More

IRS Announces 2017 FINAL Forms and Instructions

Issue Date: October 2016

In Revenue Procedure 2016-55, released this week, the IRS set forth a variety of 2017 adjusted tax limits. Among other things, the notice addresses slightly increased limits for health flexible spending accounts (FSAs).

Read More

Employer Reporting – 2016 FINAL Forms and Instructions

Issue Date: October 2016

The IRS has released the 2016 final forms and instructions for the ACA employer reporting requirement. The final forms are almost identical to the draft forms released in August, with only minor clarifying language in the instructions. While final forms and instructions have been released for both the “B” and the “C” forms, this summary focuses primarily on the updates to the “C” forms required to be used by applicable large employers.

Read More

Global Legislative Update – Quarter 3

Issue Date: August | September 2016

This is the second edition of our global compliance update. Through our networks of worldwide insurance and benefits broker partners, we have developed a global legislative update to summarize recent legislative developments and trends in employee benefits across the world. This includes recently passed or pending legislation that may require employers to take action to comply with new rules.

Read More

Employer Reporting – 2016 Draft Forms and Instructions

Issue Date: August 2016

The IRS has released the 2016 draft forms and instructions for the ACA employer reporting requirement. The 2016 draft forms are very similar to the 2015 forms with only a few small changes; the most significant ones explain how to indicate §4980H transition relief for non-calendar year plans on Form 1094-C and coding conditional offers of coverage to spouses on Line 14 of Form 1095-C. The 2016 draft instructions are also similar, but now contain additional language and examples in many of the sections that incorporate clarification of existing requirements, including much of the guidance previously provided only via FAQ and other informal IRS guidance.

Read More

OCR Phase 2 HIPAA Audits Underway 

Issue Date: August 2016

The Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) has begun Phase 2 of its HIPAA Audit Program. The scope of this national audit includes covered entities and business associates of various industries and sizes, and all covered entities and business associates are eligible to be audited. Employers offering plans subject to HIPAA, along with employers acting as business associates for covered entities, should review current HIPAA compliance efforts to make sure all requirements are addressed; watch for communications from OCR; and respond to any inquiries from OCR within the required time frames.

Read More

Reminder: Employers Must Send Notice of Exchange to New Hires

Issue Date: July 2016

The ACA has required that employers provide employees with a written notice containing the information regarding exchanges and possible subsidies when purchasing individual coverage through a public exchange. Employers are required to provide the notice to each new employee at the time of hire. For new hires, a notice provided within 14 days of an employee’s start date will be considered timely. Since October, 2013 employers have been required to provide this notice. This is not a new requirement and this compliance alert is just a reminder that employers must be sending this notice.

Read More

§4980H Affordability – Opt-Out Guidance

Issue Date: July 2016

The Internal Revenue Service (IRS) has released proposed rules addressing the relationship between opt-out arrangements and affordability for purposes of subsidy eligibility through a public Exchange and potential §4980H(b) penalties. First addressed in Notice 2015-87 last December, the proposed rules confirm and further clarify that unconditional opt-out payments need to be added to the employee contribution for purposes of determining affordability, while conditional opt-outs generally do not

Read More

Global Legislative Update

Issue Date: June | July 2016

This is the first edition of our global compliance update. Through our networks of worldwide insurance and benefits broker partners, we have developed a global legislative update to summarize recent legislative developments and trends in employee benefits across the world. This includes recently passed or pending legislation that may require employers to take action to comply with new rules.

Read More

HHS Releases Discrimination Rule Affecting Transgender Benefits 

Issue Date: July 2016

The Department of Health and Human Services (HHS) recently released the Final Rule implementing Section 1557 of the Affordable Care Act (ACA), which prohibits certain types of entities from discriminating in health programs on the basis of race, color, national origin, age, disability, or sex (including gender identity-based discrimination). Most affected entities are not likely to have discrimination issues related to most of these categories; however, the new rules include significant requirements related to health coverage for transgender individuals that may force changes to current benefits.

Read More

Final SBC Template and Related Materials

Issue Date: June 2016

The Departments of Labor, Treasury, and Health and Human Services (“the Departments”) have released final versions of the Uniform Summary of Benefits and Coverage (SBC) template, instructions, sample language, and Uniform Glossary (“glossary”), along with a Coverage Examples Calculator and related instructions. Group health plans and issuers must begin using the final templates on the first day of the first open enrollment period, plan year, or policy year beginning on or after April 1, 2017.

Read More

Employer Reporting Errors

Issue Date: June 2016

Now that the deadline under Sections 6055 and 6056 for issuing statements to employees/covered individuals has passed, employers may begin to identify errors in the statements issued. And once statements are filed with the IRS, the IRS may identify errors or information that does not match its records. In both cases, employers must take steps to rectify the errors or address inconsistencies (or demonstrate reasonable cause) to avoid potential penalties under Code §§6721 and 6722.

Read More

Employer Exchange Subsidy Notices – Appeal or Not?

Issue Date: June 2016

Employers are starting to receive notices from public Exchanges indicating that one or more employees are currently receiving a subsidy when purchasing individual health insurance coverage through a public Exchange, which could potentially trigger employer penalties under §4980H. If an employer receives such a notice for one of its employees, the employer has a right, but is not required, to appeal when they feel an employee should not be receiving a subsidy because the employer offers minimum value, affordable coverage.

Read More

EEOC Final Rules on Wellness Programs

Issue Date: May 2016

The Equal Employment Opportunity Commission (EEOC) has released two separate sets of final regulations relating to wellness program compliance under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). Despite a few recent court rulings against the EEOC’s voluntary requirements for wellness programs, the final rules generally clarify and confirm what was previously set forth in the proposed rules issued last year while expressing EEOC’s reasons for disagreeing with the court decisions.

Read More

PCORI Fees Due July 31

Issue Date: April 2016

Employers who sponsor self-funded medical plans must report and pay the ACA Patient-Centered Outcomes Research Institute (PCORI) fees no later than July 31, 2016. Health insurance carriers will pay the fee directly in the case of fully-insured plans. PCORI fees apply to plan years ending after Sept 30, 2012 and before Oct 1, 2019. The fee is paid using quarterly excise tax Form 720 and must be paid no later than July 31 of the year following the last day of the plan year. If corrections need to be made for prior years, use Form 720X.

Read More

SFO HCSO Annual Reporting 

Issue Date: April 2016

Attention Covered Employers under the HCSO – The Annual Reporting deadline is approaching. To avoid penalties, Forms must be submitted by April 30, 2016. Online submission is available. The San Francisco Health Care Security Ordinance established several employer healthcare related obligations enforced by the Office of Labor Standards Enforcement (OLSE). This ordinance requires reporting to be filed documenting employee healthcare expenditures for 2015.

Read More

Form 1095 Deadline and Penalties

Issue Date: March 2016

As part of the ACA employer reporting requirements, certain employers must provide a Form 1095-C or 1095-B to all applicable employees by March 31, 2016. Employers subject to employer reporting requirements who fail to provide the required Form 1095s by the deadline may face penalties similar to those imposed for W-2 reporting.

Read More

Regulatory Agencies Release Updated SBC Template and Instructions 

Issue Date: March 2016

On February 22, 2016, the Departments of Labor, Treasury, and Health and Human Services (“the Departments”) released proposed updates to the Uniform Summary of Benefits and Coverage (SBC) template, instructions, and Uniform Glossary (“glossary”). The proposed documents build largely on the revised versions first proposed in December 2014; however, they incorporate additional stakeholder feedback-primarily from the NAIC-and the Departments are requesting public comments through the end of March before the documents are finalized.

Read More

Form 1095 – Employee Communications

Issue Date: January 2016

Many employers want to provide some type of communication along with, or before, the distribution of Form 1095s to relevant employees. Although any employee communication must be tailored to meet the employer’s specific circumstances, some general concepts are addressed here that can be adjusted as appropriate to help employees understand why Form 1095s are being provided, what type of information they provide, and how they are to be used.

Read More

Cadillac Tax – Delayed Effective Date

Issue Date: January 2016

In December, the Consolidated Appropriations Act, 2016 was signed into law which, amongst other provisions, effectively delayed the excise tax on high-cost health coverage (also known as the “Cadillac tax”) until January 1, 2020. In addition, the law made the excise tax deductible and provides for a study to determine whether appropriate age and gender benchmarks are being used to determine the Cadillac tax threshold adjustments.

Read More

IRS Releases Broad Range of Guidance in Notice 2015-87

Issue Date: January 2016

To end 2015, the IRS released Notice 2015-87, which provides guidance on a broad range of employee benefits compliance issues. The guidance is provided in a question-and-answer format, with comments requested on several issues that the IRS plans to address in forthcoming rules. The Notice supplements previous guidance on several issues, including Health Reimbursement Arrangements (HRAs) and Employer Payment Plans, providing additional clarification and, in some cases, transition relief or grace periods for compliance. It also builds upon existing regulations with respect to affordability; issues related to the employer shared responsibility provisions in Section 4980H and related reporting requirements; health flexible spending arrangements (health FSAs); health savings accounts (HSAs); and COBRA.

Read More

IRS Extends Deadline for Employer ACA Reporting

Issue Date: December 2015

The IRS has issued Notice 2016-4 extending the due date for employers to complete their 2015 ACA Form 1095 and 1094 reporting. The deadline for employers to provide a Form 1095 (C or B) to applicable employees and other covered individuals has been extended from February 1, 2016 to March 31, 2016. The deadline to provide the IRS with an employer Form 1094 (C or B) transmittal form and individual Form 1095s has been extended from February 29, 2016 to May 31, 2016 if the employer is not filing electronically, and from March 31, 2016 to June 30, 2016 if filing electronically.

Read More

Update Regarding Transit Benefits

Issue Date: December 2015

On Friday, December 18, a bill was signed which permanently increases the pre-tax mass transit limits to be in parity with the parking limits. Effective 1/1/2016, participants in a transportation fringe benefit plan may elect $255 per month on a pre-tax basis for transit expenses.  This amount is now in line with the monthly pre-tax parking limit.

In addition, the parity is retroactive for 2015 which means the amount transit commuters are eligible for 2015 is $250 per month on a pre-tax basis.  However, per the IRS, this retroactive benefit would only be for employees who deferred above the $130 per month pre-tax.  The difference between $130 per month and the additional amount deducted by an employer may be recouped through an amended W2.

EEOC Issue GINA Wellness Rules

Issue Date: November 2015

On Friday, October 30, the Equal Employment Opportunity Commission (EEOC) issued proposed rules that would amend the regulations implementing Title II of the Genetic Information Nondiscrimination Act (GINA) as they relate to incentives offered in exchange for health information about an employee’s spouse as part of an employer-sponsored wellness program. The proposed rules would provide a narrow exception to the prohibition on incentives that are contingent on the provision of genetic information. Specifically, they would allow employers offering an employer-sponsored wellness program to provide incentives to spouses who participate in the group health plan that are contingent upon completion of a health risk assessment (HRA).

Read More

PACE Act Changes the Definition of Small Group Insurance

Issue Date: October 2015

President Obama has signed legislation recently passed by Congress which changes how “small group” health insurance will be defined for rating and underwriting purposes. Previously, under the Affordable Care Act (ACA), a small group was scheduled to be defined as employers with fewer than 100 employees beginning in 2016. The PACE Act now defines a small employer as one that employed an average of not more than 50 on business days during the preceding calendar year. However, the act also gives states the option to define the small group market differently in each state. Most states are expected to move forward defining small groups as employers with no more than 50 employees, as was common prior to the ACA.

Read More

IRS Clarifies No ACA Employer Reporting Required for Most HRAs

Issue Date: September 2015

On September 17, 2015, the IRS issued Notice 2015-68 which includes new guidance making it clear that employers who offer an HRA integrated with a regular health plan will not be required to provide any additional reporting specific to the HRA. This is good news for large and small employers who sponsor HRAs.

In the notice the IRS indicates its intention to propose regulations clarifying a number of ACA employer reporting issues. Significantly, the guidance states that reporting is not required for an individual’s minimum essential coverage (MEC) as long as the individual is only eligible for that coverage while also covered under other plans for which reporting is required. This clarification directly addresses the confusion stemming from a provision in the draft reporting instructions, released by the IRS in early August, which appeared to indicate that reporting would be required for health reimbursement accounts (HRAs) integrated with fully-insured plans.

Read More

Cadillac Tax – 2015 IRS Notices

Issue Date: September 2015

The Internal Revenue Service (IRS) has released two separate notices this year requesting comments on how to administer the excise tax on high-cost health coverage (also known as the “Cadillac tax”) set to go into effect for the 2018 tax year. The notices described potential approaches to various aspects of the excise tax and requested public comment on a number of issues. These notices provide some indication of which way the IRS is leaning regarding the administration of the tax, but we will know more once proposed regulations are released later this year or early next year.

Read More

Employer Reporting – HRA Reporting

Issue Date: August 2015

In the recent draft instructions released by the IRS in regards to employer reporting on Forms 1094 and 1095, the IRS indicates that reporting is required for health reimbursement accounts (HRAs) integrated with fully-insured plans. This comes as a bit of a surprise to many who assumed that HRAs integrated with a major medical plan, regardless of funding method, would be considered “supplemental coverage” and not require any reporting. This guidance affects reporting requirements for both small employers and applicable large employers offering HRAs integrated with a fully-insured medical plan.

Read More

Small Group Market – Changing Definition

Issue Date: July 2015

Beginning in 2016, the definition of “small employer” for insurance rating and underwriting purposes changes. In general, employers with 51-100 full-time equivalents (FTEs) may now fall into the small employer category, and such groups will be subject to community rating and required to offer essential health benefits for the first time. However, transition relief issued by the Department of Health & Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) allows states and insurers to choose to renew current policies through October 1, 2016.

Read More

Supreme Court Rules on Same-Sex Marriage and Employee Benefits

Issue Date: July 2015

The U.S. Supreme Court ruled in Obergefell v. Hodges that all states must permit same-sex marriages within their borders and must recognize same-sex marriages performed in other states. This ruling puts to rest some of the big questions and the confusion that remained after the Court’s ruling on same-sex marriage and DOMA in 2013. Many employers must now consider how this decision affects their benefit plans.

Read More

Supreme Court Rules Subsidies are Available Through the Federal Marketplace

Issue Date: June 2015

In a 6-3 decision, the Supreme Court has ruled that Affordable Care Act (ACA) subsidies will continue to be available to certain individuals who purchase health insurance plans in states that use the federal Marketplace. This decision is important for employers as they work to implement the strategies necessary to comply with ACA employer requirements.

Read More

Affordability Considerations

Issue Date: June 2015

For purposes of individual eligibility for tax subsidies through a public exchange, and for compliance with the employer shared responsibility rules under Section 4980H, it is important to understand whether or not coverage offered under an employer-sponsored group health plan is “affordable.”

When setting plan contribution rates employers must consider IRS employer affordability safe harbors, the various elements that play into the determination of the employee contribution, and the penalties associated with failing to offer affordable coverage.

Read More

PCORI Fees Due July 31

Issue Date: June 2015

Employers who sponsor self-funded medical plans must report and pay the ACA Patient-Centered Outcomes Research Institute (PCORI) fees no later than July 31, 2015. Health insurance carriers/insurers will pay the fee directly in the case of fully-insured plans.

PCORI fees apply to plan years ending after Sept 30, 2012 and before Oct 1, 2019. The fee is paid using quarterly excise tax Form 720 and must be paid no later than July 31 of the year following the last day of the plan year. If any corrections need to be made for prior years, use Form 720X.

Read More

Employer Reporting Requirements

Issue Date: May 2015

Beginning in early 2016, employer reporting will be required for the first time based on data from the 2015 calendar year. Depending on the size of the employer and the funding arrangement of the benefits offered, employer reporting requirements vary in regard to what type of information needs to be reported (if any) and whether the employer is required to use Forms 1094-B and 1095-B (the “B” forms) or Forms 1094-C and 1095-C (the “C” forms).

This issue brief covers who is responsible for reporting and which forms should be used in different situations.

Read More

EEOC Issues Regulations Addressing ADA Requirements for Employer Wellness Programs

Issue Date: April 2015

The EEOC has issued long-awaited proposed regulations addressing ADA requirements for employer wellness programs. The guidance also addresses the interaction between the new EEOC rules and the existing ACA and HIPAA wellness rules.

Read More

Out-of-Pocket Maximums

Issue Date: March 2015

In final regulations published in February 2015, the Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) set forth 2016 various limits and coverage requirements for 2016. In regards to the out-of-pocket (OOP) maximum that applies to essential health benefits, the agencies not only set forth the 2016 limits, but also clarified in the preamble that the self-only OOP maximum applies to each individual, regardless of whether the individual is enrolled in single or family coverage. In addition, CMS recently provided an FAQ further clarifying its commitment to this new requirement that is effective for plan years beginning in 2016.

Read More

The New York City Transit Ordinance

Issue Date: February 2015

In October 2014, the New York City Transit Ordinance was signed into law. This law mandates that effective January 1, 2016, New York City employers with 20 or more full-time employees must offer pre-tax transit benefits. After a 6-month grace period, non-compliant employers will be subject to a civil penalty ranging from $100 and $250 per violation.

For purposes of this legislation, full-time employees are defined as working an average of 30 hours or more per week according to Section 1. Title 20 of the Administrative Code of the City of New York.

Employers will have 90 days to get in compliance before any penalties are imposed. If employers do not comply within that 90-day window, they will be charged with a “subsequent” violation and will pay an additional penalty of $250 per violation every 30 days until they are compliant.

Read More

Please contact your Frenkel Benefits account executive about setting up a pre-tax transit plan for your employees.

IRS Releases Final Reporting Forms and Instructions

Issue Date: February 2015

The IRS has released final forms and instructions for the ACA employer reporting requirement. Applicable large employers (ALEs, generally those with 50 or more FTEs), and small employers with self-funded group health plans, are required to report certain plan information to the IRS and to provide statements to employees, beginning in 2016 for calendar year 2015 health plan and coverage data. The final forms and instructions are similar to the proposed forms previously released by the IRS, with a few minor modifications.

Read More

SBC and Uniform Glossary Modifications

Issue Date: January 2015

On December 22, 2014, the Department of Labor (DOL), Health and Human Services (HHS) and the Treasury (IRS) jointly released proposed rules regarding the requirements relating to the summary of benefits and coverage (SBC) and the accompanying uniform glossary. Most notably, these proposed rules shorten the template to 2½ pages; add a new example to illustrate coverage; add new definitions to the uniform glossary; and provide updated templates, instructions, and other related documents.

Read More

CMS Extends the Deadline to Report Membership Data for the Transitional Reinsurance Contribution

Issue Date: November 2014

On Friday November 14th, the Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) announced an extension of the deadline for submission of plan membership data for the transitional reinsurance program (TRP). Employer/plan sponsors of self-funded plans were originally required to report membership by November 17th, 2014, but the filing deadline has now been extended to December 5th, 2014.

Read More

Employer Cannot Pay for Employee’s Individual Health Insurance

Issue Date: November 2014

In the most direct guidance released to date, the DOL has issued new FAQs that make it clear employers are not permitted to pay for the cost of individual health insurance for employees, even if the payments are made on an after tax basis. The guidance also prohibits employers from providing cash to employees to encourage them to waive the employer’s plan and purchase individual health insurance instead.

Read More

IRS Announces 2015 Adjustments for Certain Benefit Items

Issue Date: November 2014

In Revenue Procedure 2014-61, the IRS set forth a variety of 2015 adjusted tax limits. Among other things, the notice addresses benefits related limits for health flexible spending accounts (FSAs), adoption assistance, and qualified transportation benefits.

Read More

Health Plan Identifier (HPID) Requirement Delayed

Issue Date: November 2014

On October 31st, The Centers for Medicare and Medicaid Services (CMS) announced an indefinite delay in the Health Plans Identifier (HPID) requirements applicable to self-funded employer sponsored health plans. Officially described as an enforcement delay, the announcement means that large self-funded employers will not be required to obtain an HPID by November 5th, 2014 as originally required. No further information regarding a new deadline, or other changes to the HPID requirements, was contained in the announcement.

Read More

Transitional Reinsurance Contribution Form to be Available October 24th

Issue Date: October 2014

The first submission of membership numbers to the Department of Health and Human Services (HHS) for purposes of the transitional reinsurance contributions is due by November 15th of this year. Employers who sponsor self-funded health plans must report membership and schedule the first payment via a form on www.pay.gov. CMS has just announced that the form will be available on October 24th. In addition, CMS has provided a form manual with detailed instructions as to the submission process.

Read More

Self-Funded Employers Must Report Membership by November 17th, for Purposes of Making ACA Reinsurance Payments

Issue Date: October 2014

Employers who sponsor self-funded health plans must report their average membership numbers to the Department of Health and Human Services (HHS) no later than November 17th. The reported membership will be used to calculate the amount due for 2014 contributions to the transitional reinsurance program. Employers will also need to schedule the first payment at the time the membership is reported. The first reinsurance contribution payment must be made no later than January 15, 2015. The reinsurance fee will be paid by the health insurance company on behalf of fully-insured employer-sponsored plans.

Read More

Final Rules – 90 Day Waiting Period & Orientation Period

Issue Date: July 2014

Final regulations were released by the Departments of Labor (DOL), Health and Human Services (HHS), and the Treasury (IRS) (“The Departments”) regarding the Affordable Care Act (ACA) 90-day waiting period rules, including the new one month “orientation period,” which may be imposed prior to the start of the waiting period.

Read More

 

Please be aware that this does not represent legal or tax advice and is only Frenkel’s interpretation of the laws, regulations and statutes. It is highly recommended that you seek the advice of your legal and tax professional as to the applicability of this information to your particular situation.