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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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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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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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Congress Engages in Some Holiday Spending on Benefits

January 6, 2016

Authors

Brian Berglund

Congress Engages in Some Holiday Spending on Benefits

January 6, 2016

by: Brian Berglund

Congress’s recent $1.8 trillion holiday shopping spree (aka The Consolidated Appropriations Act, 2016, which became law on December 18, 2015) included a few employee benefit packages. We recently unwrapped the packages. Here is what we found.

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1.   Cadillac Tax Delayed. The largest present under the employee benefits tree is a delay in the so-called “Cadillac” tax, which as originally enacted imposed a 40% nondeductible excise tax on insurers and self-funded health plans with respect to the cost of employer-sponsored health benefits exceeding statutory limits. The tax is now scheduled to take effect in 2020 rather than 2018. Once – or if – the delayed tax provision becomes effective, it will be deductible. The cost of this gift is $17.7 billion.

Since the Cadillac tax is basically unadministrable in its current form, we can’t imagine there is even one person at Treasury

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Post-Holiday Gift – ACA Reporting Deadlines Relaxed for 2016

December 29, 2015

Authors

benefitsbclp

Post-Holiday Gift – ACA Reporting Deadlines Relaxed for 2016

December 29, 2015

by: benefitsbclp

We have been shouting the ACA reporting compliance deadlines from the rooftops for months now.  Well, I guess it is a case of the “boy who cried wolf”.  At the eleventh hour, the IRS has caved to a slew of complaints, concerns and continuing questions about the new (and complex) ACA reporting requirements and given employers a post-holiday present in the form of IRS Notice 2016-4.   But is it too little too late? The Notice relaxes the current deadlines for those who are not ready to file (or still have unanswered questions preventing them from filing).  Specifically, the Notice provides:

  • an automatic 60-day extension for furnishing Forms 1095-C and 1095-B to employees, and
  • an automatic three-month extension for filing the required forms with the IRS.

By “automatic”, we mean that no action is required (and nothing needs to be sent to the IRS) to avail yourself

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Five Years into Health Care Reform – A Quick Look at What’s Still on the Horizon

February 13, 2015

Authors

benefitsbclp

Five Years into Health Care Reform – A Quick Look at What’s Still on the Horizon

February 13, 2015

by: benefitsbclp

Time flies when you’re having fun… or something like that?! Next month will mark the fifth year anniversary of the enactment of the Patient Protection and Affordable Care Act (as amended by the Health Care and Education Reconciliation Act). This is a law of many names including the ACA, PPACA, health care reform, Obamacare (amongst others that we can’t in good conscience commit to writing – especially in a professional publication) and a law of many facets. As we approach the five year mark of living with this law, many questions have been answered (at least in part, right?). After all, numerous reports have recounted the staggering number of pages of guidance issued in connection with the ACA – remember Rep. Richard Hudson’s exaggeration that we have 33,000 pages of guidance and Senator Mitch McConnell’s estimate at 22,000 pages? And both these figures were announced in the first half of

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Being Proactive v. Reactive – ACA’s Prohibition on Discrimination in Group Health Insurance

December 17, 2014

Authors

benefitsbclp

Being Proactive v. Reactive – ACA’s Prohibition on Discrimination in Group Health Insurance

December 17, 2014

by: benefitsbclp

Back in 2010, the ACA enacted a new rule prohibiting insured group health plans from “discriminating” (on the basis of eligibility or provision of benefits) in favor of highly compensated individuals (called “HCIs”). This rule generally became effective January 1, 2011 for calendar year plans; however, there is and has been an enforcement delay pending issuance of IRS regulations. We’ve heard through the grapevine that this is a “high priority” item for the Service, but to date we’ve seen nothing.

Once guidance is issued, we expect a flurry of changes in group health insurance plans and separation practices. The days of “one-off” arrangements for the benefit of separating executives (i.e., terminated exec can stay on active plan and/or receive contributions like an active employee) are likely going to be a thing of the past.

Unless a plan has and continues to have “grandfathered status” (as defined under the statute and

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Reimbursing Employees for Individual Health Insurance Policies Subjects Employers to Hefty Excise Taxes

December 4, 2014

Authors

benefitsbclp

Reimbursing Employees for Individual Health Insurance Policies Subjects Employers to Hefty Excise Taxes

December 4, 2014

by: benefitsbclp

What, you may ask? That’s right. It no longer works to reimburse employees for the purchase of an individual health insurance policy. I know, many of you have always done this. Well, not any longer under guidance issued under the Affordable Care Act (ACA). Beginning with an IRS Notice issued in September 2013 and most recently in November 2014 DOL FAQs, the federal government has made it clear that this practice does not work under the ACA. While it flew under the radar for some, this rule became effective in 2014.

 

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Why, you may ask? When an employer reimburses an employee for an individual health insurance premium, or pays the premium directly to the insurer, it has (perhaps inadvertently) established a “group health plan” which is subject to the so-called

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Self-Insured Plans – One More Reminder – Get those SSNs!

October 16, 2014

Authors

benefitsbclp

Self-Insured Plans – One More Reminder – Get those SSNs!

October 16, 2014

by: benefitsbclp

Annual open enrollment is always a complicated time for benefits teams…. Questions abound: Is the coverage offered legally compliant? What is the latest and greatest notice that must be included in the annual open enrollment package? Have the rules changed regarding how we send the notices?

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Well, this year is no different. With the advent of the employer mandate’s enforcement, there are many new requirements that benefits and HR teams are grappling with to ensure compliance. We wanted to take a moment to post a specific reminder about collecting social security numbers for self-insured plans providing minimum essential coverage.

As you are likely aware, self-insured plans will need to begin the onerous reporting process to comply with Code Sections 6055 and 6056 beginning in Q1 2016. But, what may have slipped

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