Transitional Reinsurance Reporting Deadline Extended

The Center for Medicare & Medicaid Services (“CMS”) granted a last minute extension for filing the Annual Enrollment and Contributions Submission Form as part of the Affordable Care Act’s Transitional Reinsurance Program. On Friday, November 14th, CMS announced that the reporting deadline of November 15th is extended until 11:59 pm on December 5, 2014. This extension gives health insurance issuers and certain self-funded group health plans a little more time to complete the Submission Form which can be found on the Pay.gov website. The payment deadlines are unchanged. The deadlines for payment of the transitional reinsurance fee remain as January 15, 2015 and November 15, 2015.

The CMS announcement as well as the revised reinsurance contribution deadlines for the 2014 benefit year can be viewed here.

Posted in health insurance, Health Plans, Patient Protection and Affordable Care Act | Tagged , , , , , | 1 Comment

Skinny Plans Do Not Provide Minimum Value Coverage

In an announcement made November 4th, the Internal Revenue Service (IRS) issued guidance indicating that “skinny plans” will not help employers avoid all of the “play or pay” penalties under the Affordable Care Act.  In Notice 2014-69, the IRS states group health plans that do not offer substantial coverage for in-patient hospitalization services or for physician services (or both), do not provide the minimum value intended by the minimum value requirement.  Consequently, employees covered by those plans will be eligible for premium tax credits for coverage through the Health Insurance Marketplace beginning in 2015.

The IRS, along with the Department of Health and Human Services, anticipates issuing final regulations by March 1, 2015, to provide that plans failing to provide in-patient hospitalization services or physician services do not provide minimum value.  The regulations will apply to all plans (other than Pre-November 4, 2014, plans) on the date the regulations become final.  There is limited grandfathering available for Pre-November 4th plans.  For an employer who has entered into a binding written commitment to offer one of these Non-Hospital/Non-Physician Services Plans, or started enrolling employees in one of these plans, by November 4, 2014; then the employer will not be subject to the employer mandate penalties in 2015.  However, to be eligible for this relief, the plan year must begin no later than March 1, 2015.

Posted in Patient Protection and Affordable Care Act | Tagged , , | Leave a comment

Delay of HPID Regulations Announced by CMS

With the November 5th deadline looming, the Centers for Medicare & Medicaid Services (“CMS”) announced that effective October 31, 2014, the enforcement of the regulations pertaining to the use of the Health Plan Identifier (“HPID”) is delayed until further notice.  This enforcement delay applies to all HIPAA covered entities, including healthcare providers, health plans, and healthcare clearinghouses.  As a result, HIPAA covered entities will not be penalized for failing to obtain an HPID number.

The stated reason for the delay is to give CMS time to review recommendations from the National Committee on Vital and Health Statistics (“NCVHS”), an advisory board to the U.S. Department of Health and Human Services.  In a September 23, 2014 letter, NCVHS outlined some of the committee’s concerns regarding the lack of benefit and value in the use of reporting of HPIDs in health care transactions. Some of the concerns expressed by NCVHS in the September 23rd letter include the following:

  • Lack of clear business need and purpose for using HPID and Other Entity Identifier (“OEID”) in health care administrative transactions;
  • Confusion about how the HPID and OEID would be used in administrative transactions, including strong concerns that HPID might replace the current Payer ID;
  • Challenges faced by health plans with respect to the definitions of controlling health plan and sub-health plan;
  • Use of HPID for group health plans that do not conduct HIPAA standard transactions; and
  • Cost to health plans, clearinghouses, and providers if software has to be modified to account for the HPID.

The NCVHS offered two recommendations.  First, that all covered entities will not use HPID in administrative transactions and that the current Payer ID will not be replaced with HPID.  Second, that HHS should further clarify when and how the HPID would be used in health plan compliance certification and if there will be a connection with the Federally-facilitated Marketplace.  The enforcement delay will allow time for HHS to review NCVHS’s recommendations and consider any next steps.  Text of the CMS announcement can be found here.

Posted in Uncategorized | Tagged , , , | Leave a comment

State and 39 schools ask court to spare them from employer mandate

Below is a news release issued from the Office of the Indiana Attorney General:

FOR IMMEDIATE RELEASE:
Thursday, October 9, 2014

State and 39 schools ask court to spare them from employer mandate
AG:  Federal court hears arguments in legal challenge to ACA tax penalties

INDIANAPOLIS – Today in U.S. District Court, attorneys for the State of Indiana and 39 school corporations argued their case in their legal challenge asking the court to strike down the “employer mandate” tax penalties of the Affordable Care Act or ACA.

U.S. District Court Judge William T. Lawrence heard oral argument from the State and schools and from the federal government defendants in the lawsuit State et al. v. IRS et al., one of several legal challenges to the ACA’s employer mandate currently pending before the nation’s federal courts.

“Before we plaintiffs accept the federal government’s claim that it can impose burdensome employer mandate penalties on state government and schools, we first must ask whether the federal law truly authorizes that – and the court is the proper place to bring that question to be answered. We appreciate the opportunity for the state and schools to present our arguments,” Indiana Attorney General Greg Zoeller said.

The Attorney General’s Office represents the state government plaintiffs in the legal challenge filed against the Internal Revenue Service last year; the 39 school corporations in Indiana who are co-plaintiffs are represented by a private law firm, Bose McKinney and Evans LLP.

The Affordable Care Act mandates that employers with 50 or more full-time workers provide employer-sponsored health insurance; if employers don’t, then they face a tax penalty if even one of their workers obtains insurance with tax credits using the new healthcare purchasing exchanges.  Under the ACA, the IRS tax penalty employers face for noncompliance is equal to $2,000 per employee for every employee in the organization, even if only one worker were misclassified for benefits and obtained insurance with tax credits through the exchanges.

In their lawsuit, the State and schools contend that under the 10th Amendment, the federal government cannot impose such employer penalties on state and local government employers which are separate levels of government; such penalties would be an unconstitutional tax.  Moreover, the plaintiffs contends the IRS is interpreting the Affordable Care Act incorrectly, and that the wording of the ACA that Congress passed allows the IRS to impose tax penalties only in those states where healthcare purchasing exchanges are operated by the state government, and not elsewhere.

Sixteen states and the District of Columbia operate state-run exchanges and eight states have joint federal-and-state-run hybrid exchanges. Indiana is one of 26 states that opted not to establish its own state-operated insurance purchasing exchange, meaning the federal government operates an exchange for Indiana residents.  The plaintiffs’ lawsuit contends the plain wording of the ACA statute is clear:  That without a state-operated exchange, Indiana therefore is exempt from the employer mandate tax penalties of the ACA, the IRS cannot penalize the state government or school corporations and the IRS’s broad interpretation of the ACA – applying the mandate to all states – exceeds its authority and violates the Administrative Procedures Act.

Zoeller noted the employer mandate penalties are not merely a nuisance or inconvenience.  Many schools rely upon part-time employees such as bus drivers, cafeteria workers and coaches who would not qualify for full-time employee insurance, but a single mistake in health benefits classification could trigger Draconian tax fines for a small public school corporation.  For state government itself, with 28,000 executive branch workers, a similar error in misclassifying just one full-time employee for benefits as part-time could potentially trigger $56 million in IRS tax penalties, if the IRS’s interpretation of the ACA were implemented.  In light of the risk to their resources, the plaintiffs urge the U.S. District Court to declare the employer mandate does not apply in exempt jurisdictions such as Indiana where purchasing exchanges aren’t state-operated.

At today’s oral argument, Indiana Solicitor General Thomas M. Fisher argued for the state government and attorney Andrew McNeil argued for the 39 school co-plaintiffs.  Neither the state’s nor schools’ attorneys represent private employers or private individuals in this lawsuit. The IRS and other federal defendants were represented by attorneys from the U.S. Department of Justice.  Judge Lawrence took the arguments under advisement and will rule on motions for summary judgment at a later date.

The State et al. v. IRS et al. case is one of several legal challenges questioning whether the IRS correctly interprets the ACA as passed by Congress.  On September 30, a separate federal district court in Oklahoma considering a similar case struck down the insurance tax credits in that state, on the grounds that the ACA did not authorize them in a state without a state-run exchange.  An appeal of that case is expected.  A similar ruling in July by a three-judge federal appeals panel in Washington D.C. awaits review by the full appeals court.  Yet another federal appeals court in Virginia allowed subsidies via federal exchanges, and that case has been appealed to the U.S. Supreme Court.

NOTE:  More information about the State et al. v. IRS et al. lawsuit is at this link.  http://bit.ly/Tng93D  
Additional details are at this link: http://bit.ly/1gJDVRw

-30-

MEDIA CONTACT:
Bryan Corbin
Public Information Officer
Office of the Indiana Attorney General
317.233.3970
Bryan.Corbin@atg.in.gov

Posted in Patient Protection and Affordable Care Act | Tagged , , , , , , , , , | Leave a comment

The IRS Acknowledges Reality

On September 18, 2014, the IRS issued a technical notice related to election changes under cafeteria plans. IRS Notice 2014-55 specifically permits a cafeteria plan to allow an employee to revoke his or her election under a cafeteria plan for coverage under the employer’s group health plan if the employee’s hours of service are reduced to less than 30 hours per week. Prior to this notice, it would not have been permissible for a cafeteria plan to permit revocation of a cafeteria plan election under these circumstances. This notice is significant because: (a) the IRS is formally acknowledging that employee hours are being cut under 30 to avoid ACA shared responsibility penalties; and (b) the cuts are so significant that the IRS feels it is necessary to issue a formal notice on the topic.

Following is a link to the notice:  Notice 2014-15

Posted in Uncategorized | Leave a comment

“Piling On”: IRS Issues Instructions on ACA Reporting Requirements

On August 28, 2014, the IRS issued draft instructions on the reporting requirements for employers subject to the employer shared responsibility provisions. The draft instructions for Forms 1094-C and 1095-C are thirteen pages in length, filled with mind-numbing complexity that will cause fits for all large employers.

Employers with at least fifty full-time employees (including full-time equivalent employees) will be required to utilize IRS Forms 1094-C and 1095-C to report information to the IRS regarding offers and enrollment in health coverage. Form 1094-C must be used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee.

The Form 1094-C requires an employer to certify the eligibility of full-time employees for health coverage. The instructions describe the various types of transition relief that are available to applicable large employers for 2015.   This form must be filed by the employer under penalties of perjury.

The Form 1095-C requires large employers to provide the name, address, social security number, months of coverage and the employee’s share of the lowest cost monthly premium for health coverage.

Large employers are required to file Forms 1094-C and 1095-C by February 28 following the calendar year if the employer is filing paper copies. If the employer files electronically, the forms are due by March 31. In general, employers that are filing 250 or more Forms 1095-C during the calendar year must file the returns electronically. The first returns will be due in 2016; however, the IRS is permitting employers to file voluntarily in 2015. I am not quite sure why any employer would voluntarily file in 2015.

In addition, large employers will be required to provide each full-time employee with Form 1095-C. The employer generally must mail the statement to the employee’s last known permanent address. It is also permissible to furnish the statement electronically if the employer obtains affirmative consent from the employee.

The IRS will not impose penalties under Internal Revenue Code §§ 6721 and 6722 for 2015 returns and statements filed and furnished in 2016 on employers that can show that they have made good faith efforts to comply with the information reporting requirements. This reprieve may represent the only real piece of good news that came from this most recent IRS publication.

Posted in Patient Protection and Affordable Care Act | Tagged , , , , , , , , , , , | Leave a comment

Indiana School Leaders and Job Creators Describe Harmful Effects of Health Care Law

Below is an announcement issued by Education & The Workforce Press:

 

FOR IMMEDIATE RELEASE
September 5, 2014
CONTACT: Press Office
(202) 226-9440

 

Indiana School Leaders and Job Creators Describe Harmful Effects of President’s Health Care Law

 

WASHINGTON, D.C. – The Subcommittee on Health, Employment, Labor, and Pensions, chaired by Rep. Phil Roe (R-TN), held a field hearing in Greenfield, Indiana to examine the health care challenges facing the state’s classrooms and workplaces. According to a local news report:Hoosier business owners and education officials aired out their concerns about the Affordable Care Act to Congress without having to go all the way to Washington D.C. … The chambers there are clearly smaller than the halls of Congress, but that’s exactly the way committee members wanted it. Several panelists were concerned about how ACA has been affecting their budgets.As witnesses made clear, the president’s health care law is undermining the success of the nation’s schools and workplaces –Schools

  • The most significant impact is on our special needs students. These students need and want consistency … It is best for our special needs students to have the same bus driver for their routes. Unfortunately, we now must split the route between two drivers. By using different drivers for the same route, our special needs students are subject to constant change which is uncomfortable for our special needs students and not in their best interests. – Mr. Danny Tanoos, Superintendent, Vigo County School Corporation, Terre Haute, IN
  • Like many community colleges our funding is very limited. It does not allow us to absorb large unfunded mandates such as any employee who reaches 30 hours being offered health insurance. We would have to pass along such increases on the backs of students by increasing tuition. As a result many of those who are at the lowest income levels trying to improve their lives would no longer be able to afford college. – Mr. Tom Snyder, President, Ivy Tech Community College of Indiana, Indianapolis, IN
  • The Patient Protection and Affordable Health Care Act (PPACA) has had and continues to have a severe and disproportionately disruptive effect on our high performing school district. We have identified three categories in which these negative effects have occurred in our school district. There is the impact on our students, the impact on our employees, and the impact on the school district itself. These intertwined and interactive effects, taken together, are serious now and appear to be increasing in their severity over time. – Mr. Michael Shafer, Chief Financial Officer, Zionsville Community Schools, Zionsville, IN

Workplaces

  • In summary, since the ACA took effect, our company and employees have seen premiums increase dramatically while deductibles and out-of-pocket costs have been raised, all during a period when the overall health of our employees has improved … From the experience of IDS, I can say that the Affordable Care Act is anything but affordable for our company and employees. – Mr. Mark DeFabis, President, Integrated Distribution Services, Plainfield, IN
  • We offer health insurance to our full time employees although not affordable by government standards … This cost to our business is roughly in the area of $2.42 to $3.23 per hour per employee depending on hours worked. To meet the proposed guidance of not to exceed 9.5% of income that cost would move into the $2.87 to $5.15 range per hour per employee! Representing an 18 to 59% raise in cost per hour per employee. Where is the AFFORDABLE in this act? – Mr. Daniel Wolfe, President, Wolfe’s Auto Auctions, Terre Haute, IN
  • The Affordable Care Act’s reporting mandates will absolutely ‘bury’ our Human Resources Department … The forms must be filed electronically for companies with over 250 employees, such as Draper. However, there is no guidance or process yet established to explain how to do this … Our HR Department’s worst fear is that the final versions will be made available on December 15, with a December 31 deadline for submission! – Mr. Nate LaMar, International Regional Manager, Draper, Inc., Spiceland, IN

Congressman Luke Messer (R-IN) noted during the hearing, “Our nation’s school children and hourly workers shouldn’t be forced to pay the price of that law.” Chairman Roe echoed the sentiment: “Our children and working families deserve better.”

To read witness testimony, opening statements, or watch an archived webcast of the hearing, visit www.edworkforce.house.gov/hearings.

# # #

Posted in Patient Protection and Affordable Care Act, Uncategorized | Tagged , , , , , , , , , , , , , , , , , | Leave a comment