On June 16, 2017, the Department of Labor (DOL) issued FAQ 38 implementing the Affordable Care Act (ACA) as it relates to the Mental Health Parity Act and Addiction Equity Act (MHPAEA) and the 21st Century Cures Act (Cures Act). The DOL is requesting comments on a draft model form for participants to use when requesting information about nonquantitative treatment limitations as well as confirming that benefits for eating disorders must comply with the MHPAEA.
The MHPAEA requires that financial requirements such as coinsurance and copayments and treatment limitations such as visit or day limits for mental health and substance use disorder benefits are no more restrictive than those placed on medical and surgical benefits. The regulations also state that a non-quantitative treatment limitation must be comparable.
The Cures Act requires that benefits for eating disorders are consistent with the requirements of MHPAEA. The DOL in this FAQ clarifies that the MHPAEA applies to any benefits a plan may offer for treatment of an eating disorder. Plans should review their plan information to ensure compliance with these regulations and guidance.
All comments regarding disclosures and eating disorders must be submitted by September 13, 2017.
The U.S. Treasury Department has denied the application to suspend benefits under the Multiemployer Pension Reform Act of 2014 that was submitted by the Automotive Industries Pension Fund in September 2016. Treasury noted in its denial letter that assumptions regarding mortality, Joint and Survivor election percentage by married participants, and the probability of benefit commencement by terminated vested participants over the age of 70 were considered not reasonable.
The Automotive Industries Pension Fund is projected to become insolvent in 2030 without the suspensions. As of January 1, 2016, the Plan had an unfunded benefit liability of over $700 million, was 60.7% funded, and covered over 25,000 participants.
As of the date of this posting, Treasury has received applications for benefit suspensions from a total of 15 multiemployer pension plans since MPRA took effect. Five have been denied, one has been approved, three have been withdrawn, and six are pending.
Complying with qualified domestic relations orders (QDROs) can be complicated. This article covers the basics of QDRO administration and points out the common mistakes plans make.
Are Your QDRO Practices Costing Your Plan Money?
Jim McKeogh and Mandy Notaristefano published this article in the October 2016 issue of Benefits Magazine.
The U.S. House of Representatives passed HR 1628, the American Health Care Act (AHCA), by a vote of 217-213 on May 4, 2017. This bill is the first step in the Trump Administration’s process to repeal and replace the Affordable Care Act, also known as the ACA or Obamacare.
The AHCA, as written, eliminates the individual mandate to buy health insurance, changes subsidies from income-based to age-based, ends Medicaid expansion, lessens coverage requirements for insurance companies and eliminates taxes on high-earners. The AHCA retains coverage for those with pre-existing conditions, but allows insurers to charge higher premiums to such individuals.
The bill will now head to the Senate. The GOP has a much narrower majority in the Senate (52-48) than in the House (238-193) and many Senate Republicans have already stated that they will likely rewrite the legislation or start over completely.
The ACA established the Patient Centered Outcomes Research Institute (PCORI) to fund research that can help patients and those who care for them make better-informed decisions about the healthcare choices they face every day, guided by those who will use that information. The research is funded in part by health insurers and sponsors of self-insured plans through PCORI fees.
Generally, the PCORI fees apply to group health plans (including self-insured plans). The IRS chart found HERE describes which health plans are subject to the fee. Those health plans are required to report and pay fees annually using IRS form 720. Form 720 is due July 31, 2017 for plan years ending in 2016 along with payment in the following amount:
- $2.17 per covered life for plan years ending between January 1, 2016 and September 30, 2016
- $2.26 per covered life for plan years ending between October 1, 2016 and December 31, 2016
There are three methods for calculating the number of covered lives:
- Actual Count Method – Calculate the lives covered for each day of the plan year and divide by the number of days in the plan year.
- Snapshot Method – Add the lives covered on a date during the first, second, or third month in each quarter, or an equal number of dates for each quarter, and divide the total by the number of dates on which a count was used. There are two methods for counting family members: Count the actual lives covered on the designated date; or Count the participants on the designated date and multiply by 2.35.
- Form 5500 Method – Add the participants at beginning of year and end of year as reported on the Form 5500 for the plan year (this method may be used only if the Form 5500 is filed no later than the due date for the fee imposed for that plan year).
For more information, click HERE for a question and answer page provided by the IRS.
The applicable dollar amount to determine PCORI fees will increase from $2.08 to $2.17 for plan years ending after September 30, 2015 and before October 1, 2016 according to Notice 2015-60 issued by the Internal Revenue Service (IRS) on October 9th.
Health insurance issuers and self-funded health plans are required to pay PCORI fees for Plan Years ending on or after October 1, 2012 and on or before September 30, 2019. These fees help fund the Patient-Centered Outcomes Research Institute (PCORI). The fee amount is calculated by multiplying the average number of covered lives during the Plan Year by the applicable dollar amount for that Plan Year.
The applicable dollar amount for each Plan Year is:
Plan Year ending between October 1, 2012 and September 30, 2013 $1.00
Plan Year ending between October 1, 2013 and September 30, 2014 $2.00
Plan Year ending between October 1, 2014 and September 30, 2015 $2.08
Plan Year ending between October 1, 2015 and September 30, 2016 $2.17
Beginning in 2016, group health plans and large employers will be required to file annual health coverage information returns under Internal Revenue Code Sections 6055 and 6056, which were added by the Affordable Care Act (ACA). Although all filers are encouraged to file information returns electronically, those who file 250 or more information returns are required to file electronically through the Affordable Care Act (ACA) Information Returns (AIR) system. To assist in developing software for use with the AIR system, the Internal Revenue Service (IRS) released Draft Publication 5165. This guide has information regarding the communication procedures, transmission formats and other rules for the following annual information returns filed electronically:
- Form 1094-B, Transmittal of Health Coverage Information Returns
- Form 1095-B, Health Coverage
- Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
- Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
The IRS will publish a final Publication 5165 at a later date.
The Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury released FAQ XXV addressing the compliance of wellness programs with the Affordable Care Act.
Highlights of FAQ XXV:
- Compliance with the wellness program regulations under ACA does not determine compliance with other laws nor does it determine the tax treatment of rewards provided by the wellness program.
- A wellness program will comply with the requirement to be “reasonably designed” if it:
has a reasonable chance of improving the health of, or preventing disease in, participating individuals;
- is not overly burdensome;
- is not a subterfuge for discrimination based on a health factor;
- is not highly suspect in the method chosen to promote health or prevent disease; and
- provides a reasonable alternative standard to qualify for the reward for anyone who does not meet the initial standard that is related to a health factor.
The Department of Health and Human Services has provided an extension of the deadline for contributing entities to submit their 2014 enrollment counts for the transitional reinsurance program contributions. The deadline has now been extended until December 5, 2014. The January 15, 2015 and November 15, 2015 payment deadlines have not been changed.
The Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury released FAQ Part XXII addressing the compliance of premium reimbursement arrangements with the Affordable Care Act. Sponsors of health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) or other arrangements that reimburse health premiums should confirm that reimbursements are not being made for individual coverage premiums.
Specifically, the guidance provided in this set of three questions states that:
- Employers cannot offer employees cash to reimburse the purchase of an individual policy.
- Employers cannot offer employees at risk of high claims a choice between the group health plan or cash to obtain individual insurance.
- Employers cannot cancel group policies, setup a Code section 105 reimbursement plan using brokers to help employees select individual policies and allow employees to access premium tax credits.