Keyword: Regulations

Health Provisions in the Consolidated Appropriations Acts

Posted on by Megan England

On December 20, 2019, spending legislation was enacted which contains provisions affecting group health plans.  This legislation is comprised of the Consolidated Appropriations Act and the Further Consolidated Appropriations Act.  These Acts repeal three Affordable Care Act taxes but also extend the Patient Centered Outcomes Research Institute (PCORI) fees. 

The three repealed taxes include:

  • The Cadillac tax – a 40% excise tax on high-cost health plans
  • The Health Insurance Providers Fee for calendar years starting after December 31, 2020
  • The medical device tax for sales after December 31, 2019

The Cadillac tax was scheduled to go into effect on January 1, 2022 after a number of delays.  The medical device tax has been suspended since 2016 but was scheduled to go into effect in 2020.  These taxes have now been permanently repealed.  The health insurance providers fee began in 2014 but had been suspended for 2017 and 2019.  The fee returned for 2020 but is now repealed for 2021 and all future years.

PCORI fees had been in effect for plan years ending prior to September 30, 2019 and the seven years prior.  This fee has been reauthorized for another 10 years and applies to all self-insured group health plans and health insurers. 

PCORI Fees Due July 31st

Posted on by Megan England

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:

  1. 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.
  2. 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.
  3. 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.

Final Regulations for Basic Health Program Issued

Posted on by McKeogh Administrator

The Centers for Medicare & Medicaid Services (CMS) published final regulations on March 12, 2014 to establish the Basic Health Program (BHP) under the Affordable Care Act.  These regulations include eligibility and enrollment requirements for standard health plan coverage offered through the BHP, minimum benefits covered by such plans and federal funding available to states participating in the BHP.  These regulations are effective on January 1, 2015.  CMS also published a final methodology to determine the federal payments states may receive should they elect to participate in the BHP in 2015.

HHS Releases 2015 Benefit and Payment Parameters

Posted on by McKeogh Administrator

The Department of Health and Human Services (HHS) published on March 11, 2014 the final rule on benefit and payment parameters for 2015.  This rule includes oversight provisions related to the risk adjustment, reinsurance, and risk corridors programs as well as cost-sharing parameters and cost-sharing reductions.

In this rule, HHS finalized its provision that any self-insured group health plan that does not use a third party administrator for claims processing, adjudication, or plan enrollment for the 2015 and 2016 benefit years is excluded from making reinsurance contributions.

Cost-sharing limits for calendar year 2015 will be increased from $6,350 to $6,600 for self-only coverage. The limits for all other coverage will be increased from $12,700 to $13,200 for 2015.

These regulations are effective on May 12, 2014.

90 Day Waiting Period Final Regulations

Posted on by McKeogh Administrator

The U.S. Department of Labor (DOL), Treasury and Health and Human Services (HHS) jointly released final and proposed regulations on February 24, 2014 to implement the 90 day waiting period limit provision of the Affordable Care Act.

The final regulations state that a group health plan or group insurance issuer cannot impose a waiting period of more than 90 days from the date an individual becomes eligible for coverage.  Eligibility requirements which are based on number of hours worked are generally permitted as long as the maximum number of hours required is no more than 1200 hours in a 12 month period.

Enrollment may also be based on meeting other eligibility conditions such as being in an eligible job classification, attaining job-related licenses or completing an orientation period.  The departments issued a proposed rule limiting the maximum length of an orientation period to one month.

The final regulations are effective April 25, 2014.  The regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015.  For plan years that begin prior to that date, plans must comply with either the proposed rule or the final rule.

IRS Proposes Individual Mandate Regulations

Posted on by Megan England

The Internal Revenue Service (IRS) issued proposed regulations addressing the individual shared responsibility payment provisions of the Affordable Care Act. Beginning January 1, 2014, individuals are required to maintain minimum essential health coverage or pay a penalty known as a shared responsibility payment unless the individual qualifies for an exemption. Continue reading →