Posted by Jeannie Wilcox on February 6, 2013 | 
Lockton’s Ed Fensholt, J.D. , Senior Vice President and Director, Compliance Services is part of the upcoming Health Reform Symposium on Tuesday, February 19, 2013 in Overland Park, Kansas – sponsored by the Kansas City Business Journal.
The event promises to help spell out the steps employers need to take now and what they’ll need to address in the coming months to address health reform. Lockton clients are invited to join the discussion of the deadlines and regulations that already are set and the ones still in the works.
Please click for times, location, and ticket costs.
Posted by Ed Fensholt on January 2, 2013 |
The IRS has released its first set of formal, proposed regulations, and a parallel set of questions and answers, on the health reform law’s “play or pay” mandate on employers. Lockton is preparing two separate Alerts to address the 144 pages of regulations, but here’s a sneak preview:
Some Non-Calendar Year Plans Get a Reprieve
Health reform’s “play or pay” mandate on employers applies January 1, 2014, but after pressure from many employer groups the IRS proposes to permit some employers with non-calendar year plans to delay coverage offers to their full-time employees until the first day of the plan year beginning in 2014. But many large retail, hospitality, staffing and seasonal employers will not be able to take advantage of this special accommodation unless they’re offering employees at least some coverage today. See our impending Alert (Part I) for the details.
Penalty Calculations Apply on an EIN-by-EIN Basis
In determining whether an employer is subject to the play or pay rules in the first instance, all full-time equivalent employees in the controlled group are counted.
But once it’s determined that a controlled group of employers is subject to the play or pay mandate, the mandate’s obligations and penalties would be applied–under the proposed regulations–not on a controlled group basis, but on an employer-by-employer (EIN-by-EIN) basis. This means that if one employer in a controlled group decides not to offer coverage to its full-time employees, only that employer–not every employer in the controlled group–would be penalized.
“All Full-Time Employees” Means 95 Percent…and “Dependents” Do Not Include Spouses
The health reform law requires an employer subject to the play or pay mandate to offer minimum essential coverage to all its full-time employees and dependents, or pay a penalty. The proposed regulations would deem an employer in compliance if it offered coverage to at least 95 percent of its full-time employees, and the employees’ children under age 26. The proposed rules would not require the employer to offer coverage to spouses.
Three Affordability Safe Harbors
When determining whether an offer of coverage to a full-time employee is “affordable” under the health reform law, an employer would be permitted to use one of three “affordability safe harbors,” one based on W-2 pay, one based on the employee’s rate of pay as of the beginning of the plan year, or one based on the federal poverty level.
Updated Rules on Measurement Periods
The guidance makes important changes to the “measurement period” and “stability period” concepts described by the IRS in late August, and summarized by our Alert on September 10, 2012.
Changes include guidance relating to breaks in employment, crediting hours for gaps in service by employees of school districts and other educational institutions, shrinking the measurement period to ignore gaps in coverage due to some unpaid leaves, special rules and restrictions on staffing companies, adjusting measurement periods to embrace payroll periods that extend outside a measurement period’s boundaries, and much more.
Cafeteria Plan “Change in Status” Rules
The guidance permits certain employees to change their cafeteria plan elections to take advantage of certain entitlements under the health reform law in 2014.
Effective Date and Reliance
Generally, the proposed regulations–when finalized–will apply for 2014 except where they deal with matters already addressed in earlier guidance (such as the IRS’s important Notice in late August, addressing how to determine “full-time employees” for 2014). However, employers may rely on the proposed regulations before they are finalized, if they find it helpful to do so. Generally, earlier guidance continues to apply for 2014.
Tags: affordability safe harbor, employer mandate, Fensholt, full-time employee, group, Health Reform, healthcare, healthcare reform, Lockton, measurement period, play or pay mandate, PPACA, reform, stability period, W-2 safe harbor
Posted by Ed Fensholt on December 12, 2011 |
The U.S. Supreme Court will decide next year whether the “individual mandate” under 2010’s federal health reform law is constitutional (and if not, whether the remainder of the law must also be thrown out). Although the date for arguments on these matters has not been set, last week the Court issued its briefing schedule on the issues to be argued.
The briefing schedule sets the deadlines by which the parties involved in the pending challenge to the law must submit their written arguments to the Court. Thus, the briefing schedule gives us a clue as to the timing of the ensuing oral arguments—wherethe parties literally argue their positions in the presence of, and take questions from, the Court’s justices. The Court tends to issue its decisions within weeks after oral arguments, so the briefing schedule also supplies some clues as to the timing of the Court’s decision.
With regard to the issue of the individual mandate’s constitutionality, the Court wants the Obama Administration’s brief (the Administration will argue that the mandate is constitutional) by January 6, and the brief of those opposed to the mandate by February 6. The Administration’s reply brief, which will challenge the opponents’ written arguments, is due March 7.
There is a similar briefing schedule on the question of whether, if the mandate is unconstitutional, the entire law must also be tossed aside.
This all suggests oral arguments may be heard as early as April, with a decision to follow by early to mid-summer. The Court has set aside at least five hours for oral arguments, well in excess of the typical hour reserved for arguments. This reflects, in part, that the Court is considering several weighty issues at once (the constitutionality of the individual mandate, its severability from the rest of the law, and some procedural issues), but also reflects the significance of those issues.
Tags: benefit, constitutional, Fensholt, group, health, Health Reform, healthcare, healthcare reform, individual mandate, insurance, legislation, Lockton, PPACA, reform, Supreme Court, unconstitutional
Posted by Ed Fensholt on November 18, 2011 |
Here’s some long-expected, but nevertheless welcome news. The U.S. Department of Labor (DOL) issued an announcement yesterday reassuring health plan sponsors that the Department will give them “sufficient time to comply” with final regulations (once the regulations are issued) dealing with the health reform law’s obligation on sponsors to supply 4-page plan summaries to enrollees.
Proposed regulations released in late August alluded to a compliance date of March 23, 2012…scant time for many insurers and plan sponsors to comply with the detailed rules for preparing and delivering the summaries. The proposed regulations, if finalized in current form, would require insurers and sponsors to distill a substantial amount of important plan-related information and place it in specific fonts and formats on four double-sided pages. The proposed regulations include very specific rules regarding when the summaries must be issued, and updates re-issued.
We have suspected from the start that the March 23, 2012, compliance date was too optimistic. The public comment period on the proposed regulations was not set to expire until late last month, and we suspected the DOL would receive a huge number of comments on the proposed regulations (yesterday’s announcement notes that the DOL did, in fact, receive “many” comments). As we are now only about four months out from late March, 2012, and still do not have final regulations, it is unthinkable that the DOL will adhere to a March 23, 2012, compliance date.
Here’s our best guess: We will receive final regulations very late this year or early next (the DOL says it will issue the final regulations “as soon as possible”) and the obligation to furnish plan summaries will apply for plan years that begin on or after January 1, 2013.
Tags: benefit, Fensholt, group, health, Health Reform, healthcare, healthcare reform, Lockton, PPACA, reform, sbc, sbc template, summary of benefit coverage
Posted by Jeannie Wilcox on September 28, 2011 |
Lockton Bene
fit Group Compliance Directors – and health reform experts – Ed Fensholt and Mark Holloway recently penned an article for Benefits Law Journal entitled Congress Repeals Expanded 1099 Reporting and IRS Issues W-2 Reporting Guidance. In addition to demystifying W-2 reporting of health coverage values, Fensholt and Holloway discuss the repeal by Congress of the 1099 reporting requirement. As they say in the Benefits Law Journal article, “The devil was in the details, but federal lawmakers vanquished the devil and passed H.R. 4, a Republican-sponsored measure that repeals the enhanced reporting obligation.” Read more.
Tags: 1099 reporting, benefit, Fensholt, group, health, Health Reform, healthcare, healthcare reform, Holloway, insurance, Lockton, PPACA, reform, repeal, w-2 reporting
