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Judge Rules ACA Unconstitutional – 12-18-2018

On December 14, U.S. District Judge Reed O'Connor released his ruling on the first of five counts in Texas v. United States. The case challenged the constitutionality of the ACA's individual mandate in light of the Tax Cuts and Jobs Act of 2017, which zeroed out the individual mandate penalty. Judge O'Connor's ruling was that the individual mandate, with no accompanying tax penalty, is unconstitutional. The decision also determined that the individual mandate is such an essential part of the ACA that the ACA cannot function without the individual mandate in place. As a result, his ruling finds the entire ACA invalid.
 
However, this ruling is not final and is expected to be engaged in appeals for the next several months, which will likely culminate in a hearing before the Supreme Court. This means that the ACA continues to be the law of the land and compliance with the ACA is still being enforced. Coverage for the 2019 plan year remains unaffected by the ruling.

Source: National Association of Health Underwriters

President Trump Signs Prescriptions Drug Gag Clause Legislation – 10-19-2018

On Wednesday, President Trump signed into law ;S. 2553, the Know the Lowest Price Act, and S. 2554, the Patient Right to Know Drug Price Act. The legislation was passed by the House and Senate last month with bipartisan support and will ban “gag clauses” that prevent pharmacists from telling customers when they can save money on their prescriptions by paying out of pocket for the retail price of the drug, rather than using their insurance and making the co-payment. These bills comprise portions of President Trump’s “America First” prescription drug initiative that were released as part of a blueprint to lower drug prices in May.

S. 2554 applies to private plans and would ban health insurers and group health plans from preventing pharmacists from telling consumers that it would be more cost effective to pay out of pocket, as opposed to paying their insurance co-payment. Meanwhile, S. 2553 addresses patients covered under Medicare Part D and Medicare Advantage plans and prohibits a prescription drug plan under Medicare from restricting a pharmacist from providing complete price information for a medication to a beneficiary.

The passage of both bills comes after multiple states had already taken action to stop the practice. Connecticut, Georgia, Maine and North Carolina passed legislation last year banning the practice of gag clauses. The success of these bans set the stage for 10 other states around the nation to introduce bills, which ultimately acted as a catalyst for federal legislation.

Souurce: National Association of Health Underwriters

Summary Plan Descriptions (SPD) – 05-02-2018

The Summary Plan Description or SPD is an important written document that a plan administrator must provide automatically and free of charge to participants of an ERISA-covered health benefit plan. The SPD provides information on when an employee can begin to participate in the plan, how service and benefits are calculated, when and in what form benefits are paid, and how to file a claim for benefits. 

Who Must Comply

The requirements apply generally to group health plans. A group health plan is an employee benefit plan established or maintained by an employer or by an employee organization (such as a union), or both, that provides medical care to employees and their dependents directly or through insurance, reimbursement or otherwise.

Types of information covered in a SPD:

Provides plan participants and beneficiaries with information about their rights, benefits, and responsibilities under the plan and how it works, including:

  • Basic rights and responsibilities of participants under ERISA (model language is available--see 29 C.F.R. § 2520.102-3(t)(2));
  • Eligibility requirements;
  • Description of plan benefits and how to file a claim for benefits;
  • Applicable premiums, cost-sharing, deductibles and copayments; and
  • Notices and descriptions required under COBRA, HIPAA, and other health coverage laws.

Which Members Must Be Provided the SPD:

  • Each participant covered under the plan
  • Plan participants and beneficiaries, as well as the U.S. Department of Labor, or DOL, also have the right to obtain a copy of the SPD upon request

When is the SPD Due:

  • Within 90 days after the employee becomes covered under the group plan. (New plans have 120 days after becoming subject to ERISA to distribute the SPD.)
  • The SPD must be current within 120 days prior to the date of distribution, and must be accompanied by any summary of material modification or change in information required to be included in the SPD which has not been incorporated into the document being furnished.

An updated SPD must be furnished every 5 years if changes are made to SPD information or the plan is amended. Otherwise, it must be furnished every 10 years.

Additional IRS Revision to HSA Family limit - 4-30-2018

IRS Revenue Procedure 2018-27 returns the annual limit for 2018 HSA family contributions to $6,900. This follows and supersedes Revenue Procedure 2018-18, which was published this past March.

The IRS acknowledged that the $50 reduction to the limit on HSA deductions for family HDHP coverage imposed “administrative and financial burdens.” The notice reflected that these burdens fell on individuals who had already made the maximum contribution for the year based on the announcement made in 2017 (Revenue Procedure 2017-37), but also on employer plans where individuals had established annual salary reductions based on the $6,900 limit.

-National Association of Health Underwriters-

HSA Contribution Limit Adjustment – 03-09-2018

The IRS released Revenue Procedure 2018-10  which modifies and supersedes certain sections of Revenue Procedure 2017-58 and supersedes Revenue Procedure 2017-37 to reflect by new tax  law (pub. L no. 115-97 enacted December 22, 2017.  This law changed the annual inflation adjustment factor from the "Consumer Price Index" (CPI) to a new factor known as "chained CPI."  These changes are effective as of the beginning of 2018. 

As a result, the HSA family contribution limit has been affected for 2018.  The limit has been decreased from $6,900 to $6,850.  All the other contribution limits, HDHP limits and out-of pocket limits remain the same for 2018.

ACA's Individual Mandate - Still In Force - 2-9-2018

Posted on February 9, 2018 by nahucompliance

The new tax law passed by Congress and signed by the President does not repeal the individual mandate as many people have assumed. The tax law actually zeroes out the individual mandate penalty. And, importantly, this action takes effect in 2019.

The actual law text is:

SEC. 11081. ELIMINATION OF SHARED RESPONSIBILITY PAYMENT FOR
INDIVIDUALS FAILING TO MAINTAIN MINIMUM ESSENTIAL COVERAGE.

(a) IN GENERAL.—Section 5000A(c) is amended—
     (1) in paragraph (2)(B)(iii), by striking ‘‘2.5 percent’’ and inserting ‘‘Zero percent’’, and
     (2) in paragraph (3)—
           (A) by striking ‘‘$695’’ in subparagraph (A) and inserting ‘‘$0’’, and
           (B) by striking subparagraph (D).
     (b) EFFECTIVE DATE.—The amendments made by this section shall apply to months beginning after December 31, 2018.

For individuals who question whether the IRS will continue to enforce the individual mandate, knowing that penalties will go away next year, only time will tell. For the 2018 tax filing season, the IRS has stated that they will not accept tax returns that omit information specifying whether an individual had coverage or whether they qualified for an exemption from the individual mandate.
Opinions are mixed on what effect no penalty assessment will have on how many people maintain health coverage. Employers may find that some employees will drop employer-sponsored coverage since the employees will no longer face a penalty if they don’t have coverage.

Some individuals may no longer purchase individual health insurance. But, the extent to which individuals purchased coverage to avoid the somewhat low individual mandate penalty is unknown.

One likely outcome is that there will be an uptick in adverse selection. Adverse selection occurs when individuals who believe that they will have medical expenses seek out or retain health insurance coverage when they might not otherwise do so. Until the extent of any adverse selection is understood, insurers are likely to be conservative in their pricing or in their decisions on which markets they will participate in.

Health Care Legislation Update - 2-2-2018

A major victory was achieved for health insurance recipients on Monday night in the continuing resolution that is keeping the federal government funded. The package included a moratorium in 2019 of the Health Insurance Tax on all plans and an additional two-year delay of the Cadillac Tax on employer-sponsored health insurance plans until 2022.

This is very good news for EVERYONE with health insurance!

 

Fast Facts From NAHU - 9-29-2017

  • HHS Secretary Dr. Tom Price resigned his position effective immediately. Acting Assistant Secretary for Health Don Wright will serve as acting secretary until a new nominee is confirmed by the Senate.
  • Citing a lack of support, Senate Republicans scrapped a vote of the Graham-Cassidy plan to repeal/replace the ACA. NAHU released a press statement expressing our concerns with the legislation and called for a returned focus on market stability.
  • Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) resumed bipartisan negotiations on legislation to stabilize markets ahead of the 2018 plan year, including possible temporary funding of the ACA's cost sharing reduction payments.
  • President Trump is expected to release an executive order next week to permit the sale of insurance across state lines, through a reinterpretation of ERISA.
  • A Tax Reform framework was released this week as lawmakers begin the process of overhauling the nation's Tax Code through the budget-reconciliation process. NAHU is closely monitoring negotiations as they relate to provisions governing employer-sponsored insurance.

-National Association of Health Underwriters-

 

The Senate Voted 49-51 to Reject the Health Care Freedom Act - 7-28-2017

Shortly after 1:30 a.m. today, the Senate voted 49-51 to reject the Health Care Freedom Act (HCFA), a "skinny repeal" of the ACA. The pared-down version was attempted after previous efforts to pass a more sweeping repeal of the law have failed. Senate Majority Leader Mitch McConnell (R-KY) began floating the idea early in the week before ultimately releasing the text of the bill at 10 p.m. Thursday, just two hours before the vote. Republican Senators Susan Collins (ME), Lisa Murkowski (AK), and John McCain (AZ) joined all Democrats in voting no, while all other Republicans voted in favor. With the failure of this vote, congressional Republicans will no longer be able to use the budget reconciliation process to repeal provisions of the ACA until the next fiscal year and will instead have to move legislation under regular order that would require 60 votes for passage in the Senate.

Until any legislation or regulations are formally enacted into law, the ACA remains the law of the land and all of its mandates, penalties, and enforcement remains in effect.

-National Association of Health Underwriters-

Questions About Passing The American Health Care Act Bill - 5-15-2017

With the passing of the American Health Care Act bill, questions abound.  Everyone should know that the bill is not law and it is NOWHERE NEAR BEING PERFECT.

It now goes to the Senate for revisions and additional polishing. It could be until this year end before we see what a final version would look like. Meanwhile, these are some talking points of the bill:

  • IT DOES NOT eliminate coverage for pre-existing conditions.
  • Carriers must provide guaranteed issue policies.
  • If you have a pre-existing condition and you live in a state that does not seek a waiver from the AHCA and the ACA’s rating system, you cannot be charged more than any other folks buying a new plan in your State.
  • Anyone on a plan cannot be dumped due to a pre-existing condition, nor charged more if a condition develops. If you change coverage, you will not be charged higher than others and this is true of waiver or non waiver states.
  • If you are uninsured and have a pre-existing condition, Congress is setting aside a fund to help with coverage. (Arguably not enough, but a work in progress)

We must all wait to see what the Senate does.  We are still a long way from “repeal and replace”.

The American Health Care Act what happens to Obamacare Now? 4-6-2017

The GOP pulled its Obamacare replacement bill before it could go to a vote on Friday, March 24. This begs the question… is that the end of the Affordable Care Act (ACA) repeal and replace plan? Will another bill be drafted?  The GOP appears to be drafting another bill as we speak.

As of right now there are many more questions than answers. Most answers and guidance will be coming in the future. What we do know is that the ACA remains in place as written. As of now nothing has changed.

Subsidies for those who qualify, essential health benefits, no pre-existing conditions remain in effect. The law, as written, remains the law.

Is the individual mandate still in effect?

Yes it is!  This has not changed. The existing healthcare reform law requires taxpayers to show that they have minimum essential coverage or pay a penalty. Consult a tax professional if you have questions.

If passed, The American Health Care Act (AHCA) would have eliminated the individual and employer mandates and the penalties associated with this provision of the law.

The IRS also provides ACA information and resources that may be helpful but does not serve as a replacement for professional guidance.

Will there be a 2018 open enrollment?

At this point, yes!  Every year since the ACA’s individual mandate took effect the open enrollment period for individual health insurance plans begins sometime in the fall. However, what will the Federal Marketplace look like? How will the Trump administration promote it?  Time will tell.

Need coverage now?

We encourage consumers to discuss their health insurance options with a licensed agent, visit www.healthcare.gov or call the Federal Marketplace 1-800-318-2596.

Again, all tax-related questions should be directed to a tax professional.

 

House Republicans Released the American Health Care Act - 03-10-2017



Source: National Association of Health Underwriters

Keep your plan extension – 03-06-2017

For small groups on non-grandfathered or “grand mothered” health plans. February 23rd 2017 CMS released new guidance that Transitional Relief/Keep your plan for small groups has been extended, yet again, for a extra year. The extended transitional policy will allow health insurance issuers, at their option, to continue group coverage to policies that would otherwise be terminated or cancelled providing that all policies end by December 31, 2018.

NAHU - Recommended ACA Reconciliation Repeals - 12-20-2016

The National Association of Health Underwriters is the leading professional association for health insurance agents, brokers, general agents, and consultants. NAHU members work every day with individuals, families, and employers of all sizes to help them purchase health insurance coverage and use that coverage in the best possible way. We are a dedicated group of more than 100,000 benefit specialists across the nation who advocate on behalf of our clients – American health insurance consumers.

The professional health insurance agent and broker community looks forward to the potential opportunities of working toward healthcare stability. To make the healthcare insurance market more efficient and more responsive to American employers and individual health consumers, we believe some changes need to be made to ensure access, choice, and affordability. As we look forward to the commencement of the 115th Congress, we anticipate that a reconciliation bill will be introduced to repeal budget-relevant provisions of the Affordable Care Act. We would like to respectfully recommend the repeal of the following items be included in any such reconciliation legislation:

Premium Tax Credits, Cost-Sharing Tax Credits, and Tax Credits to Territories
Repeal of these tax credits, but a suggested delay of the effective date to January 2019 in order to allow time for a replacement mechanism to be put in place to prevent a destabilization of the market by the immediate implementation of the repeal of these tax credits.

Small Business Tax Credit
Repeal of the small business tax credit with a suggested delay of the effective date to January 2019 to allow for any businesses currently qualifying from the small business tax credit to receive the benefit through the two-year maximum allotted for, and to prevent a destabilization of the small group market by the immediate implementation of the repeal of these tax credits.

Repeal of the Individual Mandate Penalty
In order to comply with the budget-relevant provisions of reconciliation, we request a repeal of the individual mandate penalty and further action to repeal the individual mandate in future legislation.

Repeal of Employer Mandate Penalty
In order to comply with the budget-relevant provisions of reconciliation, we request a repeal of the employer mandate penalty and further action to repeal the employer mandate in future legislation.

Repeal of Health Insurance Tax
Permanently eliminate the national premium tax (HIT tax) that will add more than $500 annually in costs to a typical family policy, with the total cost in 2016 of $11.3 billion.

Repeal Excise/Cadillac Tax
Permanently repeal the “Cadillac Tax,” which will impose a 40% excise tax on health plans that exceed certain cost thresholds beginning in 2020, following the two-year delay passed in December 2015.

Repeal of Medical Loss Ratio Requirement
A full repeal of the medical loss ratio requirement that carriers must abide by. Lifting the restriction that 80% of premium dollars must be spent on medical costs and 20% on administrative costs will provide relief to health insurance carriers struggling to meet the current restrictions, which will result in lowering premium costs and encouraging carriers to remain in the health insurance market. Since health insurance plans have already been approved for 2017, we suggest an effective date of January 1, 2018.

-National Association of Health Underwriters-

Preparing for ACA’s Employer Reporting in 2017 - 11-14-2016

Posted on November 14, 2016 by nahucompliance

Despite the results of the election, compliance with the ACA goes on, unless and until Congress takes action. Even then, odds are that changes to the ACA will take time to be implemented.

As such, with 2016 drawing to a close, employers are reminded that they have to calculate whether they will be an Applicable Large Employer (ALE) for 2017. An employer who is an ALE has employer shared responsibility requirements under the Affordable Care Act (ACA).

Employers with 50 or more full-time and full-time equivalent employees during the previous year are deemed to be ALEs (applicable large employers) who must report to the IRS and to employees. Therefore, employers who averaged 50 or more full-time and full-time equivalent employees during the calendar year 2015 are considered ALEs for 2016 and must report in 2017. Reporting in 2017 reflects enrollment and offers of coverage for 2016.

Employers who meet the ALE definition must report whether or not they offer an insured or self-insured health plan. Employers who meet the ALE definition must report even if they don’t offer any health coverage to employees. And, employers who are too small to be ALEs, but who offer self-insured health coverage, must report to the IRS regarding coverage offered to their employees.

The deadlines for reporting for coverage year 2016 are as follows:

  • Deadline to distribute forms to employees and covered individuals will be January 31, 2017
  • Deadline to file paper forms with the IRS will be February 28, 2017
  • Deadline to file electronically with the IRS will be March, 31, 2017.

The requirement to furnish the Form 1095-C is met if the form is addressed and mailed on or before the due date. Statements must be mailed or hand delivered unless the recipient has affirmatively consented to receive the statement electronically.
Employers can obtain an automatic 30-day extension of time to file forms to the IRS by completing Form 8809 — Application for Extension of Time To File Information Returns. This form must be filed in advance of the due date for the returns. It should be filed as soon as an employer determines that an extension of time is necessary.

An extension of time to furnish statements to employees is not automatic. A letter requesting an extension must be sent to the IRS. Instructions on filing for this extension are found on page 6 of the instructions for Forms 1094-C and 1095-C. The instructions can be found here.

Penalties for failing to report or making errors in reporting can be sizeable. It’s important to note that the IRS will no longer operate under a “good faith compliance” standard for this year’s reporting.

  • The penalty for failure to file a correct information return is $260 per return
  • The penalty for failure to provide a correct payee statement is $260 for each statement with the failure
  • There are limits to the size of the penalties unless there is “intentional disregard” to file and furnish the required statements.

Penalties may be waived due to reasonable cause. However, ignorance of the requirement to file is unlikely to gain a penalty waiver. As such, employers who discover that they should have filed this past year would be wise to file as soon as possible or consult with tax advisors.

Important Carrier Updates for the Individual 2017 Plan Year
9-14-2016

As the Affordable Care Act nears the fourth annual open enrollment (November 1st – January 31st) many large carriers have announced they will be exiting some markets as of December 31st  or not participating in the 2017 plan year. This means that individuals will be left with fewer choices for insurance providers & plans in the upcoming year.

UnitedHealthcare will not participate or solicit major medical products on the Federal Exchange (Marketplace) or in the direct to the consumer sales, off exchange in Florida, for the 2017 plan year.

Humana will be reducing their direct to consumer, off exchange, 2017 footprint or remove it completely. Humana will have a very small offering on the Federal Exchange (only in certain counties) which have yet to release.

Aetna has announced that they will not solicit major medical products on the Federal Exchange in 2017. However, Aetna “may” continue to offer their direct to consumer major medical products and allow individuals to renew, off exchange, for the 2017 plan year.

This is a moving and evolving target. Please open and read all mail from the insurance company as to any offerings and enrollment process for 2017.

2016 Top 4 Changes to ‘Pay or Play’ 9-8-2016

The following are the top 4 changes to pay or play for 2016:

  1. Transition Relief Expired: The transition relief which delayed compliance with the pay or play requirements for ALEs with 50 to 99 full-time employees (including FTEs) in 2015 is now expired for employers with calendar year health plans. For ALEs with non-calendar year health plans, this transition relief, along with the transition relief for dependent coverage, continues to apply for any calendar month during the 2015 plan year that falls in 2016.
  2. New Affordability Threshold: If an employee's share of the premium for employer-provided coverage in 2016 would cost the employee more than 9.66% (formerly 9.56%) of his or her annual household income, the coverage is considered unaffordable to that employee. Employers offering unaffordable coverage may be subject to a pay or play penalty.
  3. Coverage Thresholds Increased: For 2016, ALEs will now be liable for a penalty if they:
    • Do not offer health coverage or offer coverage to fewer than 95% (formerly 70%) of their full-time employees (and their dependents), and at least one full-time employee receives a premium tax credit; or
    • Offer health coverage to at least 95% (formerly 70%) of their full-time employees (and their dependents), but at least one full-time employee receives a premium tax credit.
  4. Increased Noncompliance Penalties: For 2016, the general annual penalty for ALEs that do not offer coverage or offer coverage to fewer than 95% of their full-time employees (and their dependents) is $2,160 (formerly $2,080) per full-time employee, minus up to 30 full-time employees. For ALEs offering coverage to at least 95% of their full-time employees (and their dependents), the general annual penalty is $3,240 (formerly $3,120) per full-time employee that receives a premium tax credit.

Check out our Pay or Play section for valuable calculators and a toolkit for employers.

Health Reimbursements Arrangements Are Not for Wimps!
3-7-2016

HRAs, as they are lovingly called, have undergone a major transformation over the last six years due to the ACA. With all the guidance coming out from different sources, it’s hard to keep track, let alone stay compliant. One day you can use them to reimburse premiums. The next you’re told you can’t by the IRS, but there are still those in the marketplace that said you could. Then we had to modify how HRAs were “integrated” into our group health plans. Because if they weren’t, you might be subject to a penalty for not offering minimum essential coverage. Now there are calculations to consider with HRAs regarding affordability. While all of this “new” guidance is in effect, employers and their advisors are still trying to build compliant plan designs with HRAs, FSAs and HSAs, working together.

Obama Administration Releases Extensive New Health Insurance Market Requirements 3-7-2016

On the evening of February 29, CMS released almost 700 pages of regulatory guidance related to implementation of the ACA.. These documents cover hundreds of topics spanning virtually all aspects of the American private and public health coverage systems. Most of the new rules will be effective for the 2017 coverage year on forward, although some provisions are effective sooner.

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