Deadlines and Reminders

Posted by on January 15, 2015 | Be the First to Comment

Compliance deadlines for health and welfare plans continue to abound as we start 2015. In the listing below, we focus on compliance deadlines during the first half of 2015. Although Jan. 1 has passed, we have also included items having compliance deadlines related to plan years beginning during 2015. (For Jan. 1, 2015 and fourth quarter 2014 compliance deadlines, see our Oct. 13, 2014 post.) If you have any questions about compliance deadlines, or wish to get additional information on them, please contact your Lockton account team.

Jan. 31, 2015

  • Deadline to issue Forms W-2 for the 2014 taxable year that include:
    • Taxable income for certain coverage provided during 2014 (e.g., life insurance in excess of $50,000 for which the employee did not pay the full Table I rate on an after-tax basis, and health coverage for non-dependent domestic partners paid by employer or by employee on pre-tax basis).
    • Reportable health plan values during 2014 as required by the ACA (exemption for small employers).
    • Employer and employee pre-tax health savings account (HSA) contributions for the 2014 taxable year.

Feb. 15, 2015

  • Last day of Health Insurance Marketplace open enrollment for coverage during 2015.

March 1, 2015

  • Deadline to provide Medicare Part D Creditable and/or Non-creditable Coverage Notices to CMS (calendar year group health plans).
  • Deadline for filing annual Form M-1 on behalf of multiple employer welfare arrangements (MEWAs) providing health coverage unless they meet a filing exemption.

April 14, 2015

  • For group health plans that became subject to HIPAA privacy rules on April 14, 2003 and are self-insured, deadline for reminder notice regarding health plan’s HIPAA Privacy Notice (due every third year, unless otherwise provided, such as in enrollment packets; insurer provides for insured coverage).

July 31, 2015

  • Deadline for employers to file Form 720 and pay PCORI fee with respect to self-insured calendar-year health plans and other self-insured health plans that have plan years ending on or after October 1, 2014 and before January 1, 2015.
  • Deadline to file Form 5500 for plan years ending Dec. 31. 2014 (unless extension is obtained).

Various Dates (as indicated)

  • Make changes to comply with final Mental Health Parity and Addiction Equity Act (MHPAEA) regulations, including providing coverage for treatment of mental health and substance abuse disorders in non-hospital settings (e.g., in residential treatment facilities) with no greater cost sharing than applies to coverage for medical or surgical treatment in non-hospital settings (e.g., skilled nursing facilities). Applies to group health plans for plan years beginning on or after July 1, 2014.
  • For employers not required to do so starting Jan. 1, 2015, begin providing health coverage to prevent play or pay penalties (subject to various exceptions, caveats and transition rules, including those that apply to employers with non-calendar year plans and employers with fewer than 100 full-time employees).
  • Non-grandfathered health plans begin covering the following preventive services with no cost sharing:
    • Healthy diet and physical activity counseling for adults at risk of cardiovascular disease (for plan years beginning on or after Sept. 1, 2015).
    • Hepatitis B screening for persons at risk for infection (for plan years beginning on or after June 1, 2015).
    • Hepatitis C screening for adults at high risk for infection, as well as a one-time screening for adults born between 1945 and 1965 (for plan years beginning on or after July 1, 2014).
    • Lung cancer screening for certain current and former smokers who are 55 to 80 years of age (for plan years beginning on or after Jan. 1, 2015).
  • Non-grandfathered group health plans (other than high-deductible health plans offered in connection with health savings accounts) must limit in-network out-of-pocket expenses for essential health benefits to no more than $6,600 for self-only coverage and $13,200 for other coverage. Applies for plan years beginning in 2015.
    • Such plans may, however, apply separate limits on out-of-pocket expenses for two or more types of essential health benefits so long as all limits on out-of-pocket expenses for in-network essential health benefits total no more than the $6,600/$13,200 overall limits.
    • For example, such a plan may limit out-of-pocket expenses for prescription drugs that are essential health benefits to $2,600/$5,200 and apply separate limits of $4,000/$8,000 on out-of-pocket expenses for all other essential health benefits.
    • CAUTION: High-deductible health plans offered in connection with health savings accounts must, for plan years beginning in 2015, limit in-network out-of-pocket expenses to no more than $6,450 for self-only coverage and $12,900 for other coverage.

The Collision of Progressive Politics and Fiscal Limitations: Vermont Slams the Brakes on its Single-Payer Healthcare Initiative

Posted by on December 24, 2014 | Be the First to Comment

vermont

Posted on behalf of Ed Fensholt, J.D. – Senior Vice President and Director – Lockton Compliance Services

Something worth noticing played out in the Green Mountain State last week. Vermont, no stranger to progressive politics, abandoned its single-payer healthcare initiative, almost four years after becoming the first state to enact such legislation.

The state’s action is noteworthy because it illuminates the fiscal challenges sometimes inherent in worthy social welfare legislation. Vermont passed with great fanfare a universal coverage law shortly after enactment of the federal Affordable Care Act (ACA). But the failure of the state legislature to include a plan for raising revenue to pay for universal coverage suggested the law, from the beginning, was more aspirational than realistic. As it turns out, that’s precisely the case.

The law gave Vermont until 2013 to come up with a plan to finance universal coverage, a deadline the state missed by more than a year. Only recently did a plan surface, and it called for an 11.5 percent payroll tax on employers and an additional income tax of up to 9.5 percent. Vermont’s governor, Peter Shumlin, concluded the tax hit was too steep a hill for the state’s employers and other taxpayers to climb, and pulled the plug.

During the debate on the Affordable Care Act in 2009, several of the more progressive political players on Capitol Hill publicly applauded the Act as the best way to take America to a universal coverage platform like those in Canada and other western industrialized nations. But if Vermont’s lesson is indicative of the cost to the nation of a federal universal coverage initiative, one might legitimately question just how a nation barreling toward a $20 trillion national debt could afford such an initiative without crushing tax increases or doubling down on our aggressive borrowing.

A closer look at the budgeting process behind the Affordable Care Act might suggest the ACA was never intended to move the nation to single payer, but to shift to private parties—employers mostly—the cost of insuring the bulk of the nation’s employees. Congressional Budget Office cost estimates, for example, cap projections for public health insurance exchange enrollment at 19 million Americans, acknowledging the Act’s estimated $1 trillion price tag over 10 years cannot accommodate subsidized coverage for more than about six percent of us.

Perhaps what Vermont’s action tells us above all else is that we must remember we cannot have it all. There are only so many dollars in the public treasury. While it’s absolutely worthwhile to think about all the things we’d like to do with that money, we must remember that there is a very finite list of things we’re able to do with it.

Problem Solved? Congress Exempts Expat Coverage from Some ACA Rules

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Posted on behalf of Mark Holloway, J.D. – Senior Vice President and Director – Lockton Compliance Services

One of the areas in the employee benefit world where agency guidance has been sorely needed is the application of federal tax and ERISA rules, particularly rules added by the Affordable Care Act (ACA), to health insurance plans that cover foreign-bound U.S. employees (expatriates). 78431584     

The application to expatriate health coverage of the ACA’s various  benefit mandates and taxes and fees, and the extent to which such coverage satisfies the ACA’s  individual and employer mandates, resulted in a mishmash of complex and nearly unworkable rules. The federal agencies realized the complexity of these issues and issued FAQ guidance that exempted insured expatriate programs from some of the ACA requirements through 2015; see our blog post. Subsequent guidance pushed the compliance date for plan years ending through Dec. 31, 2016. Even with the regulatory leeway, U.S. health insurers argued the complexity and associated costs of the ACA rules created a competitive disadvantage with non-U.S. insurers writing expatriate coverage that did not comply with all of the ACA-related mandates. 

We now have some good news, sort of. Buried in the budget bill signed by the President last week is the “Expatriate Health Coverage Clarification Act of 2014” (EHCCA) that exempts some expat coverage from several thorny ACA-related requirements, and treats the coverage as adequate for both the individual and employer mandates…but only if the coverage meets several specific and potentially difficult requirements.

The new rules and their potential accommodations apply to insurance contracts issued or renewed on or after July 1, 2015. Unfortunately, the law does not exempt expat coverage from meeting the tax reporting requirements under the ACA (the so called “Section 6055/6056 reporting rules” that apply beginning in calendar year 2015) and does nothing to exempt expatriate coverage from pre-ACA ERISA rules, such as COBRA and mental health parity requirements.

Nevertheless, the EHCCA does hold some advantages for expat coverage that can clear three hurdles. Here they are:

Hurdle #1 – Expat Plan’s Enrollees Must Be Substantially All “Qualified Expats”

To qualify for the relief, the expatriate health plan must be a group health plan (including a self-funded plan) or insured program where substantially all “primary enrollees” meet one of the three criteria below (the law refers to these as “qualified expatriates”).   Primary enrollees include not only the employee, but other enrollees including the employee’s spouse, children and other family members, such as domestic partners. 

The three types of qualified expatriates are:

  1. Expatriates outside the U.S.  – Persons who work outside the U.S. for a period of at least 180 days in a consecutive 12-month period that overlaps the plan year.
  2. U.S.-bound inpatriates – Foreign workers transferred or assigned to the U.S. on temporary assignment who need access to health insurance in multiple countries and their employer offers them multinational benefits, such as tax equalization, cross-border moving expenses, etc. Persons who are not U.S. nationals and who reside in their country of citizenship do not qualify.
  3. Students/missionaries/charity workers – These individuals also meet the definition of qualified expatriate, subject to future criteria to be determined by the federal agencies.

The new law does not define “substantially all.” However, the U.S. Department of Labor has issued rulings on when a plan covers persons “substantially all” of whom are nonresident aliens, to determine whether ERISA applies to the plan.  Those rulings, some up which are decades old, seem to indicate that at least 93 percent of the plan’s enrollees must fit within the criterion to meet the “substantially all” threshold.  It remains to be seen if the agencies will adopt a similar standard for an expatriate health plan under the new law. 

Hurdle #2 – Expat Plan’s Coverage Must Meet Specific Criteria

Assuming the plan clears the first hurdle, the coverage must then meet specific criteria to qualify for the partial exemption from the ACA discussed below.  These conditions include:

  • Insurance coverage for inpatient hospital services, outpatient facility and physician services, and emergency care.
  • The plan has an actuarial value of at least 60 percent and substantially all of the plan’s benefits cannot be ACA excepted benefits (dental, vision, etc.).
  • If the plan provides for coverage of children, that coverage extends through age 26.
  • If the coverage is insured, the insurer is licensed to sell insurance in more than two countries and meets network adequacy and other standards, including maintaining call centers and providing global evacuation and repatriation coverage.
  • The coverage satisfies the applicable pre-ACA ERISA standards for health insurance, including mental health/substance abuse parity,  48 hours of maternity care, COBRA, claims appeal requirements, distribution of summary plan descriptions and filing of Form 5500 (as applicable).  Expat coverage issued by a U.S. carrier typically meets these requirements, but often coverage issued by a foreign carrier does not.

Keep in mind that ERISA will apply to expat coverage except if the plan is established and maintained outside the United States primarily for the benefit of persons, substantially all of whom are nonresident aliens.  

Hurdle #3 – Insurer Agrees to Handle ACA Tax Reporting

ACA tax reporting still applies to the expat coverage (the dreaded “Section 6055/6056 reporting”), but the IRS forms can be supplied electronically to the enrollee without consent, unless the enrollee explicitly refuses electronic delivery.  

Significantly, if the insurance carrier does not agree to facilitate the tax reporting, then the expat coverage falls outside the scope of the new law and becomes subject to the full array of ACA mandates.  It remains to be seen whether the federal agencies would assess penalties on the insurer – which may be outside the agencies’ jurisdiction if the carrier is not licensed in the U.S. – or whether penalties could accrue to a U.S.-based employer/plan sponsor.

If My Expat Plan Clears All the Hurdles, What Relief Applies?

First, the good news:   Expat plans that meet the criteria above do not have to comply with the following ACA mandates:

  • Dollar limits on essential health benefits
  • Waiting period limits of 90 days
  • Out-of-pocket maximums for in-network care
  • Cost sharing on in-network preventive care
  • Rigorous claim appeal procedures
  • Preexisting condition exclusions
  • Retroactive coverage terminations (except fraud)
  • Distribution of summaries of benefits and coverage (SBCs)

Coverage under the expat plan is also deemed to satisfy the individual and employer mandates and is exempt from the ACA’s taxes and fees, including the transitional reinsurance fee, PCORI fee, and the insurance company excise tax (after 2015, subject to transition rules).  The new law contains an exemption for some expat coverage with respect to the “Cadillac tax” on high value health plans that will apply in 2018 (see discussion below).

Now, the not-so-good news:   The exemption from the Cadillac tax does not apply with respect to a U.S.-bound inpat (second bullet under Hurdle #1, above), if the person is assigned, rather than transferred, to the U.S. 

What Next?

The federal agencies – IRS, DOL and HHS – will need to issue regulatory guidance on the new requirements.  It is unclear whether plans can rely on the existing FAQ guidance though 2016 or will need to comply when coverage is renewed on or after July 1, 2015 (the law’s effective date).

Looking Forward: Health Reform in 2015 – a Webcast

Posted by on December 2, 2014 | Be the First to Comment

Mark your calendar: the Lockton Benefit Group Compliance Services Practice is hosting a affordable care actcomplimentary webcast at 2 p.m. CT on Thursday, January 22, 2015. Employers hoping to stay abreast of the latest health reform developments (and take a look at what lies ahead) will want to join the event.

Continuing education credits are available. Please click for registration details.

 

 

EEOC Criticized by Senate Committee for Wellness Litigation

Posted by on November 14, 2014 | Be the First to Comment

workplace wellness guy on a fitness ballSome of you have expressed dismay at recent EEOC litigation challenging routine (and ACA/HIPAA-compliant) wellness programs for alleged violations of the Americans with Disabilities Act (ADA).

Turns out Congress is a bit dismayed too.   At a hearing yesterday of the Senate Committee on Health, Education, Labor & Pensions, the agency was taken to task by the ranking Republican, Senator Lamar Alexander.

Here’s the press release and the Senator’s remarks.

I am also concerned that EEOC has not offered any guidance on voluntary employer wellness plans to encourage healthy lifestyle choices, yet is filing lawsuits against employers who offer these plans to employees on the basis of disability discrimination.

Wellness plans with premium discounts were specifically authorized in the healthcare law with strong bipartisan support—one of the few provisions of the Affordable Care Act with both Republican and Democrat buy in.

EEOC was scheduled to publish two proposed rules on wellness plans last June and invite comments on the proposals – but there has been no action.

These wellness plan lawsuits are sending a confusing message to employers – reliance on the healthcare law’s authorization of wellness plans does not mean you won’t get sued.

The Congressional sentiment probably only bodes well for employers…an EEOC victory in any such litigation might well inspire Congress to pass legislation providing that ACA- and HIPAA-compliant wellness programs receive a free pass under the ADA.