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Deep Dive: DOL Appeals Federal Court’s Association Health Plan Ruling and Issues Interim Guidance

May 9, 2019

Authors

Steve Evans and Charlene McHugh

Deep Dive: DOL Appeals Federal Court’s Association Health Plan Ruling and Issues Interim Guidance

May 9, 2019

by: Steve Evans and Charlene McHugh

As we predicted in our last Deep Dive, the Department of Labor (DOL) has appealed the District Court for the District of Columbia’s ruling in State of New York, et al. v. United States Department of Labor, et al. which vacated key portions of the DOL’s association health plan regulation (AHP Rule). The DOL filed its Notice of Appeal with the federal district court (D.D.C.) on April 26.

In response to the Court’s ruling (and before filing its appeal) the DOL had published a Q&A-style discussion of the ruling’s impact. After filing its appeal, the DOL published an official statement (DOL Statement) outlining interim guidance for previously-formed AHPs and employers who began participating in an AHP in reliance on the AHP Rule. The DOL Statement clarifies that these employers and AHPs may continue their coverage for

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Deep Dive: Association Health Plan Considerations following the Court Order Vacating the DOL’s Final Rule

April 26, 2019

Authors

Steve Evans and Charlene McHugh

Deep Dive: Association Health Plan Considerations following the Court Order Vacating the DOL’s Final Rule

April 26, 2019

by: Steve Evans and Charlene McHugh

On March 28, 2019, the Federal District Court for the District of Columbia issued an opinion and order vacating key portions of the Department of Labor’s regulation, published in June 2018, which had expanded the definition of “employer” under Section 3(5) of ERISA (the “AHP Rule”), thereby broadening the scope of association health plans (“AHPs”).  According to the Court, it is unreasonable to interpret “employer” as including working owners and groups that do not have “a true commonality of interest” and doing so leads to “absurd results” and is an “end run” around the Affordable Care Act.  The Court’s opinion was issued with immediate effect and has cast doubt on the future use of AHPs, especially self-insured AHPs.

As background, the AHP rule was promulgated in response to President Trump’s October 12, 2017, Executive Order, which directed the DOL to expand access to and

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Deep Dive: Association Health Plans, Part 6: Forming an AHP: Legal and Governance Structure

July 20, 2018

Authors

Brian Berglund

Deep Dive: Association Health Plans, Part 6: Forming an AHP: Legal and Governance Structure

July 20, 2018

by: Brian Berglund

On October 12, 2017, President Trump signed a “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States” (the “Executive Order”) to “facilitate the purchase of insurance across state lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people.”  One of the stated goals in the Executive Order is to expand access to and allow more employers to form Association Health Plans (“AHPs”).  In furtherance of this goal, the Executive Order directed the Department of Labor to consider proposing new rules to expand the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”).  The Department of Labor issued its proposed rule on January 5, 2018 and its final rule on June 19, 2018.

In Part 1 of this “Deep Dive” series, we

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Deep Dive: Association Health Plans, Part 5: The Final AHP Rule

June 28, 2018

Authors

Brian Berglund

Deep Dive: Association Health Plans, Part 5: The Final AHP Rule

June 28, 2018

by: Brian Berglund

On October 12, 2017, President Trump signed a “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States” (the “Executive Order”) to “facilitate the purchase of insurance across state lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people.” One of the stated goals in the Executive Order is to expand access to and allow more employers to form Association Health Plans (“AHPs”). In furtherance of this goal, the Executive Order directed the Department of Labor to consider proposing new rules to expand the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”). The Department of Labor issued its proposed rule on January 5, 2018 and its final rule on June 19, 2018.

In Part 1 of this “Deep Dive” series, we examined the

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J, K, L, M and N: What’s In a Letter?

June 21, 2018

Authors

Meredith Jacobowitz and Serena Yee

J, K, L, M and N: What’s In a Letter?

June 21, 2018

by: Meredith Jacobowitz and Serena Yee

Over the last few months, the Internal Revenue Service (IRS) has been replying to responses to their Letter 226-J, which notifies employers of a proposed Employer Shared Responsibility Payment (ESRP). The IRS has recently updated its website to include additional information on its Letter 227 series. The various letters either close the ESRP case or provide the employer with next steps.

If you responded to a Letter 226-J, the reply from the IRS will come in the form of one of the following four 227 letters:

  • Letter 227-J. If you submitted a completed Form 14764, ESRP Response agreeing to the ESRP amount proposed in your Letter 226-J, the IRS will acknowledge its receipt using Letter 227-J and provide instructions for making the ESRP. If full payment is not received within 10 days, the IRS will issue a Notice and Demand for the outstanding balance.
  • Letter 227-K. You
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Deep Dive: Association Health Plans, Part 4

June 13, 2018

Authors

Brian Berglund and Cass Hollis

Deep Dive: Association Health Plans, Part 4

June 13, 2018

by: Brian Berglund and Cass Hollis

On October 12, 2017, President Trump signed a “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States” (the “Executive Order”) to “facilitate the purchase of insurance across state lines and the development and operation of a healthcare system that provides high-quality care at affordable prices for the American people.”  One of the stated goals in the Executive Order is to expand access to and allow more employers to form Association Health Plans (“AHPs”).  In furtherance of this goal, the Executive Order directed the Department of Labor to consider proposing new rules to expand the definition of “employer” under Section 3(5) of the Employee Retirement Income Security Act of 1974 (“ERISA”).  The Department of Labor issued its proposed rule on January 5, 2018.

In Part 1 of this “Deep Dive” series, we examined the history of AHPs and the effects of the changes

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Play Time is Over: IRS Reveals Process for Assessing ACA Penalties

November 27, 2017

Authors

Serena Yee, Katharine Finley and Meredith Jacobowitz

Play Time is Over: IRS Reveals Process for Assessing ACA Penalties

November 27, 2017

by: Serena Yee, Katharine Finley and Meredith Jacobowitz

The Affordable Care Act (ACA) introduced a “pay or play” scheme, effective January 1, 2015, in which Applicable Large Employers (ALEs) must offer affordable qualifying healthcare to their full-time employees (and their dependent children) or pay a penalty. Despite President Trump’s first Executive Order (discussed here) directing a rollback of the Affordable Care Act (ACA) and instructing the Secretary of Health and Human Services to minimize the “unwarranted economic and regulatory burden of the act,” the Internal Revenue Service (IRS) quietly updated its Questions and Answers on Employer Shared Responsibility Provisions Under the ACA to include the first official guidance detailing the process for enforcement of the penalty. Notably, this update coincided with an IRS announcement that penalties for the 2015 calendar

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“Who” May Object to the Contraceptive Coverage Mandate, and why?

October 31, 2017

Authors

benefitsbclp

“Who” May Object to the Contraceptive Coverage Mandate, and why?

October 31, 2017

by: benefitsbclp

New rules issued by the Trump administration, including both interim final and temporary regulations effective October 6, 2017, significantly expand “who” may object to the Patient Protection and Affordable Coverage Act’s (PPACA) contraceptive coverage mandate and why those entities or individuals may object.

Background:

Under the PPACA, the Health Resources and Services Administration (HRSA), a division of the United States Department of Health and Human Services (HHS), has the authority to require that certain preventive care and screenings for women be covered by specific group health plans and health insurance issuers.  HRSA has used that discretion to require, among other things, contraceptive coverage.  HHS, the Department of Labor, and the Department of the Treasury, the agencies tasked with enforcing that requirement, have permitted certain health insurance issuers and group health plans with religious objections, such as non-profit organization and church plans, to receive an exemption or accommodation from this requirement. 

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What a Difference an “H” Makes…Again

May 5, 2017

Authors

Chris Rylands and Sarah Bhagwandin

What a Difference an “H” Makes…Again

May 5, 2017

by: Chris Rylands and Sarah Bhagwandin

Health Care ReformAfter weeks of “will they or won’t they” that rivals some of the great TV sitcom near romances for suspense (even though it was considerably shorter), House Republicans passed the American Health Care Act (“AHCA”) just before going on recess (more information on the bill here and here).   As with the version that was released in early March, this is designed to meet the Republicans’ promise to “repeal and replace” the ACA.  As before, in many respects, the AHCA is less “repeal and replace” and more “retool and repurpose,” but there are some significant changes that could affect employers, if this bill becomes law as-is.

Below is a brief summary of the most important points (many of which may look familiar from our prior post on the original iteration of

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Stop-Loss Policies, How Low Can You Go?

April 20, 2017

Authors

Katharine Finley and Chris Rylands

Stop-Loss Policies, How Low Can You Go?

April 20, 2017

by: Katharine Finley and Chris Rylands

Stop-LossOn April 5, the “Self-Insurance Protection Act” passed the House and moved to the Senate.  This bill, if enacted, would amend ERISA, the Public Health Service Act and the Internal Revenue Code (the “Big 3” statutes containing ACA rules) to exclude from the definition of “health insurance coverage” any stop-loss policies obtained by self-insured health plans or a sponsor of a self-insured health plan.  No additional guidance is given regarding what would constitute a “stop-loss policy” under the proposed definition.  According to this fact sheet from one Congressional committee, the law appears to address concerns that HHS might one day decide to try and regulate stop-loss insurance.  In our opinion, that seems unlikely under the current administration, but it could be a regulatory priority in future administrations.

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