TAX MATTERS. tax notes. Private Health Insurance Exchanges: Tax and ERISA Issues. By Vanessa A. Scott

Size: px
Start display at page:

Download "TAX MATTERS. tax notes. Private Health Insurance Exchanges: Tax and ERISA Issues. By Vanessa A. Scott"

Transcription

1 Private Health Insurance Exchanges: Tax and ERISA Issues By Vanessa A. Scott Vanessa A. Scott is with Sutherland Asbill & Brennan LLP. As companies explore new options for maintaining employer-provided health coverage in the wake of the Affordable Care Act, many are considering private health insurance exchanges. Vanessa A. Scott However, uncertainties regarding the application of the Internal Revenue Code and ERISA may stall broad adoption. Scott describes the types and key attributes of private exchanges, highlights the advantages of a private exchange, and explores potential obstacles under the code and ERISA that may hamper broader adoption among large employers. A. Private Exchanges Overview Private corporate health insurance exchanges represent a relatively new option for the delivery of health benefits to active employees. However, employer interest in private exchanges has risen dramatically in recent years, particularly among large employers. 1 The reasons for that strong employer interest are understandable: Private exchanges promise more predictable cost trends and expanded employee coverage choices, and they may reduce or eliminate the administrative burdens associated with designing and managing employer-sponsored coverage. The health insurance exchange concept is integral to the Affordable Care Act and its primary goal of reducing the ranks of the uninsured. Yet, because the private exchange concept was not contemplated under current laws and regulations governing employer-sponsored health plans (nor the ACA), the concept is fraught with legal and regulatory 1 Aon Hewitt Corp., Corporate Health Care Exchange Survey, The Time Is Now: Rethinking Health Care Coverage (2012). TAX MATTERS tax notes uncertainty. That uncertainty threatens to stall broad implementation, particularly among riskadverse large employers. This article describes the types and key attributes of private exchanges, highlights the advantages of a private exchange, and explores potential obstacles under the Internal Revenue Code and ERISA that may hamper broader adoption among large employers. 1. What is a private exchange? Private health exchanges are best described as health insurance marketplaces that connect employees with an array of competing insurance coverage choices at multiple price points. Private exchanges are usually supported by a user-friendly online platform and decision support tools that allow participants to make customized coverage decisions and direct cost comparisons. The health insurance exchange concept is sometimes compared with online portals such as Expedia or Amazon, in which buyers are presented an array of choices that can be selected based on individual criteria, then sorted based on cost and other key attributes. Although private exchange designs and characteristics may vary, private exchanges offered to large employer groups generally give employees a platform of health insurance coverage options, Web-based comparative tools, and third-party administrative hosting tailored for each covered employee population. At the core of the private exchange approach is the employer s ability to define a fixed employer premium subsidy amount that may vary based on factors such as coverage tier, benefit options, wellness activities, or actual cost fluctuations. Several consulting firms offer private exchanges for active and, more often, retired employees. In addition to consultant-sponsored health insurance exchanges for employer groups, the market also offers insurer-sponsored exchanges, business association exchanges, and online vendor-based exchanges. Those exchanges have historically catered to the small or midsized group market and the individual market, as opposed to the large group market now serviced by consultant-sponsored exchanges. 2. Types of private exchanges. Most private exchange models can be classified into one of three categories: individual market exchanges, group market exchanges, and self-insured exchanges. TAX NOTES, March 31,

2 a. Individual market exchanges. Individual market exchanges are generally offered directly to individuals and families, although they may also be offered through small employers that do not have an employer-sponsored group health plan. These exchanges are often sponsored by an individual insurance issuer or a broker entity that has contracted with multiple issuers to provide individual market policies on the exchange sponsor s platform. Individuals shop for and purchase coverage with after-tax dollars, often assisted by Web-based choice tools and online or call-based decision support systems. The employer often has no control over the coverage options on the exchange and cannot provide pretax subsidies to assist with the purchase of the individual coverage. 2 However, individuals purchasing coverage may be able to deduct premium costs as medical expenses under section 213(a). Private exchanges for the individual market operate in a manner almost identical to the public exchange market for individuals. However, in the individual private exchange market, federal premium tax subsidies under section 36B are unavailable to policyholders, and participating issuers are not required to meet the issuer participation standards that apply to qualified health plans on the public exchanges. But because coverage on a private individual exchange is not tied to the policyholder s employment, the policy may be portable and often can be renewed by the policyholder even if she changes jobs. Private health exchanges offering individual policies also operate under a fundamentally different set of insurance regulations than exchanges offering fully insured or self-insured group coverage. Individual policies are subject to individual insurance market regulation and approval by the state in which the policy is licensed and offered, even if the policy is not on a public exchange. As a result, under private exchange models for individual policies, neither the employer nor the private exchange vendor directly influences benefit coverage features or premiums. b. Group market exchanges. Group market exchanges offer group health policies to employers for the benefit of their employees and dependents. Although group market exchanges can take many forms, the exchanges adopted by larger employer groups present an array of benefit coverage choices established by the exchange sponsor (often a consulting group), linked with a broad range of insurance carriers that have been invited to participate in the exchange sponsor s platform. Vendors offering group market exchanges attract insurance carriers to their exchange platform by providing access to thousands of insured lives, pooled 3 across a range of participating employers, ideally with 1,000 or more employees each. The exchange sponsor creates a benefit structure for the platform and shops the structure to large employers, offering a turnkey benefits solution with a broader range of insurers and benefit options than an individual employer (whether insured or selfinsured) could access independently. Exchange vendors offer employers a variety of services, including plan design and management, the development of a subsidy strategy, budget support, call center support, data warehousing, and assumption of the ERISA notice and reporting requirements. Employers that agree to participate in the sponsor s private exchange provide the vendor direct access to their employee population, and the vendor generally takes on the marketing, enrollment, and administration responsibilities traditionally handled by the employer as plan sponsor. Upon adopting the private exchange, the employer s role is often limited to providing employees a fixed pretax subsidy for the purchase of coverage and acting as a conduit for information between the employee population and the exchange sponsor. A group market private exchange may provide multiple premium funding options, such as a health reimbursement account (HRA) or a cafeteria plan under section 125, although there is some uncertainty about permissible account structures. Employees may use employer subsidies and their own pretax dollars, if necessary, to shop for coverage among the carriers on the exchange. However, in a group private exchange structure, participating employees are ineligible for federal premium tax assistance, and the coverage is not portable once the employee s employment terminates. c. Self-insured exchanges. In response to large employer concerns regarding the standard fully insured private exchange model, some private exchange vendors have constructed a self-insured exchange platform option. In a self-insured private exchange, two or more insurance carriers offer access to the issuer s provider networks and administer medical claims incurred by employees. The employer pays the medical claims out of its general assets, just as it would in a traditional self-insured plan arrangement; however, in theory, employees benefit from the price competition that arises from having competing networks available on the same platform. Although self-insured group exchanges 2 See Notice , IRB For issuer participation, not risk purposes TAX NOTES, March 31, 2014

3 4 Section 5000A. Comparison of Healthcare Delivery Models Private Employer- Sponsored/ Self-Insured a Public Exchange Exchange: Group Self-Insured X Private Exchange: Group Fully Insured Private Exchange: Individual Policies Employer selects/manages plans Employer is plan sponsor/ fiduciary X X X Pretax employer contribution allowed X X X Individuals may qualify for public subsidy X Broad range of competing plans or options X X X Coverage is portable for the individual X X Subject to state insurance rules X X X a All employer-sponsored options listed are assumed to be affordable for purposes of code section 36B and provide minimum value. allow employers to retain control over the management and delivery of coverage to their employees, they are not as attractive to carriers, because covered lives cannot be pooled across employers. As a result, they generally offer fewer benefit options to employees, and vary little from a traditional selfinsured plan arrangement in practice. Employees participating in a self-insured exchange are ineligible for federal premium tax subsidies, although coverage can be purchased, and employer subsidies can be provided, using pretax dollars. B. The ACA as a Driver for Private Exchanges The passage of the ACA and its attendant requirements for employer-sponsored plans is a key driver for increased employer interest in private exchanges. The ACA vests employers with a host of new compliance, notice, and reporting obligations that have the potential to increase costs and administrative complexity. As individual employers weigh the ACA s costs alongside the possibility of exiting or fundamentally changing their role in the employment-based healthcare delivery system, private exchanges have attracted the attention of employers as a potential third way. 1. Public exchanges versus private exchanges. As employers evaluate options for securing healthcare coverage for their workers, employees are also under new pressure to understand their own options for healthcare coverage. The ACA s individual mandate requires most U.S. individuals to obtain health insurance as of January 1, 2014, or face tax penalties. 4 Most individuals will satisfy the mandate through either an employer-sponsored plan, enrolling in a public exchange created under the ACA and operated by the federal or state government, or qualifying for coverage under expanded Medicaid eligibility rules. To some extent, private exchanges are designed to mirror the potential benefits that will be offered through the ACA s public exchanges. The ACA s state exchanges 5 provide a public purchasing platform for small businesses and individuals who cannot otherwise obtain or afford health insurance coverage. Similar to private exchanges, public exchanges will provide guaranteed access to coverage and will allow individuals to review, compare, and purchase health insurance coverage products directly from private issuers. However, unlike private exchanges, public exchanges will be operated and funded by the federal and state governments. The ACA provides for federal funding for state-sponsored exchanges until January 1, 2015; after that date, exchanges may charge fees to participating health insurance issuers for participation or establish other funding mechanisms. 6 The federal government will operate federally facilitated exchanges in states that do not develop their own exchanges. The benefits on a private exchange also differ from benefits on a public exchange. Unlike private exchanges, public exchanges are limited to medical, dental, and vision offerings from carriers approved by the federal or state government, while private 5 The term state exchanges, as used here, includes federally facilitated exchanges operated by the Department of Health and Human Services in states that elect not to operate a public exchange. 6 ACA section TAX NOTES, March 31,

4 exchanges have already ventured into ancillary benefit offerings such as life, disability, and even pet insurance. Finally, federal funds, generally in the form of tax credits under section 36B, will be made available to some low-income individuals who lack access to affordable coverage through other channels and therefore seek coverage through the public exchange. This is, perhaps, the most significant difference between the public and private exchanges from an employer perspective, because employees who receive coverage through a private exchange will not have access to federal premium tax assistance, regardless of income. 2. Large employer reaction to public exchanges. The number of large employers exploring a private exchange option is growing rapidly. In 2012, 56 percent of employers with 500 or more employees indicated that they would consider a private exchange as an alternative to a traditional employersponsored plan for active or retired employees. By 2013 that number had risen to 72 percent. Employers in industries with high turnover appear more inclined to seriously consider a private exchange option these include the service sector (51 percent), health services (61 percent), and retail/ wholesale (66 percent). Although states are permitted, but not required, to open public exchanges to large employers (generally, employers with more than 100 employees) beginning in 2017, many question whether the public exchange structure can be a viable delivery option for most large employers. A total of 17 states and the District of Columbia currently have a state-sponsored health insurance exchange. 7 The remaining 33 states are either launching an exchange in partnership with the federal government or will have the Department of Health and Human Services operate a state exchange for individual coverage on their behalf. However, serious problems with the launch of the federally operated exchanges have stymied participant enrollment and created considerable doubt about the long-term efficacy of the public exchanges. Even before the uncertainty spawned by the ineffective October 2013 launch, studies indicated that more than half of private employers did not consider sending their employees to the public exchanges as a viable alternative to the current system. 8 In addition to the uncertainty surrounding the public exchanges, the inconsistency of benefit offerings on statesponsored exchanges and the variability of approved carriers across states represent a potentially insurmountable administrative burden that will likely make public exchange plans an unsuitable option for large multistate employers seeking to deliver uniform benefits to employees across state lines. C. Potential Advantages of a Private Exchange The data suggest that interest in private exchanges as an alternative to a traditional employersponsored healthcare plan will continue to grow. Large employers examining private exchanges cite several appealing characteristics. 1. Access to a broader array of coverage options for employees. Sixty-five percent of employers cited increased plan choice as one of the primary reasons for considering a private exchange. 9 Sixty-two percent of employers also cited access to multiple vendors as a key incentive for considering a private exchange. 10 Thirty-two percent of employers with 5,000 or more employees offer only one medical plan option. 11 For employers with 500 to 4,999 employees, that number rises to 52 percent. 12 In contrast, most private exchanges offer four to seven healthcare coverage options. Broader coverage choice can lead to more efficient employee healthcare spending, because young employees who need less coverage can be offered less expensive plan options on a platform that also includes several more generous coverage options for older employees and employees with families. Depending on the exchange sponsor s chosen platform design, coverage options on a private exchange may vary based on the number of competing carriers and provider networks, as well as the number of benefit coverage options available. An exchange with significant carrier and network choice may provide employees access to geographically diverse preferred provider networks from various insurers but offer a limited number of benefit coverage alternatives. However, an exchange that offers a significant choice of benefit design may give employees several coverage options with varying deductibles, co-pays, and out-ofpocket limits. These options may be offered across a limited number of carriers, or through an overlapping provider network. In that case, employees would have access to several levels of coverage at various costs but would be served by a more limited range of carriers. 7 Centers for Medicare and Medicaid Services, State Health Insurance Marketplaces, available at IIO/Resources/Fact-Sheets-and-FAQs/state-marketplaces.html. 8 See Aon Hewitt survey, supra note 1. 9 Mercer National Survey of Employer-Sponsored Plans (2011, 2012). 10 Id. 11 Id. 12 Id TAX NOTES, March 31, 2014

5 2. Increased cost predictability. Employers sponsoring traditional self-insured plans find it difficult to accurately predict healthcare cost trends because of external variables beyond the employer s control, including participant claims, company growth or retraction, and unpredictable swings in provider costs. 13 A private exchange can foster greater cost predictability by giving employers the ability to cap annual employer contribution costs. By setting a fixed per-employee subsidy for health benefits, the employer can budget its year-to-year healthcare costs more accurately. The employer sets a maximum contribution rate for a given term, generally at an amount that will cover all or a portion of the premium cost for mid-tier healthcare coverage on the private exchange. Participants are permitted to shop the coverage offered on the private exchange with the employer subsidy and may elect to contribute additional pretax funds to buy up to top-tier plans or buy down to lower-tier, less expensive plans. Although this arrangement may not always result in short-term cost savings for the employer, it provides the employer the certainty of fixed healthcare costs over a given period Cost savings through market competition. Private exchanges attempt to use market forces to contain costs by pooling risk, increasing provider/ carrier choice, and enhancing buying power. This buying structure has the potential to create competition among participating issuers, which may result in reduced employer and employee costs. This is particularly true for a private exchange in which employees have access to the same level of benefits across an array of insurance issuers and can easily compare costs for the same or similar coverage. Even for a private exchange offering a more limited range of issuers, the ability to have two to three competing issuers at each benefit level can still result in design-based cost savings for the employee. Online comparison tools, which allow private exchange participants to easily compare coverage choices across carriers, further enhance the employee s ability to make effective price comparisons. Because the exchange design lends itself 13 Employee Benefit Research Institute, Issue Brief No. 373 (July 2012). According to this study, employer spending on healthcare coverage between 2000 and 2011 failed to track changes in general inflation rates, at times outpacing inflation as much as 10 percent. Moreover, during the same period, employee-only coverage costs increased sharply during some intervals, while family coverage costs fell over the same period. 14 Note, however, that in time the affordability requirement under section 36B may require large employers to increase this fixed amount to avoid penalties under section 4980H. COMMENTARY / TAX MATTERS to organic cost control, it may reduce the need for employers to shift rising costs to participants and dependents. 4. Reduced administrative and compliance burdens. Seventy percent of employers report being very or somewhat concerned about the amount of internal resources spent on benefits administration. 15 Private exchanges can reduce or eliminate the administrative burden associated with sponsoring a traditional self-insured plan. This allows staff to focus on other core competencies within the human resources function and potentially reduces operational costs. This benefit appeals to large employers, particularly those struggling with the added administrative burdens associated with ACA compliance. Under a private exchange model, an employer may cede some ACA and ERISA compliance duties to the exchange sponsor, including eligibility determinations and compliance with the requirements surrounding the employer-shared responsibility requirements under section 4980H. The exchange sponsor can step into the shoes of the plan sponsor by taking on duties including plan maintenance, benefit design, and employee communication. Because private exchanges also offer sophisticated online decision tools that assist employees with coverage choices and enrollment (similar to navigators in a public exchange), the employer may be relieved of two of the most labor-intensive roles for benefits staff. Further, consumer education resources offered by private exchanges can help employees become more conscientious, efficient consumers of healthcare coverage by providing transparency tools often unavailable under a traditional self-insured arrangement. 5. Orderly transition to a defined contribution structure. The percentage of employers offering a consumer-directed health plan (CDHP) rose from 20 percent in 2008 to 36 percent in However, because large employers have traditionally sponsored generous self-insured health plans that tend to buffer the true impact to employees of rising healthcare costs, employers often struggle with the inevitable cultural shift that can accompany an abrupt move to a comprehensive defined subsidy approach. Moreover, communication challenges and employee perception regarding employer benefit cutbacks often result in lower initial participant takeup rates for CDHPs, causing plan 15 Mercer National Survey of Employer-Sponsored Health Plans (2012). 16 Id. TAX NOTES, March 31,

6 sponsors to shy away from introducing defined contribution plan structures alongside a traditional self-insured health plan. Private exchanges can serve as a transition vehicle from the service-oriented delivery structure of a self-insured plan to a more self-service delivery structure as employees adapt to using the private exchange s decision tools, which provide the information needed to make more efficient purchasing choices. D. Unanswered Legal Questions While the value proposition of a private exchange appears promising, the concept also bears some legal and regulatory uncertainties. Those uncertainties are the natural result of an existing legal framework that does not contemplate the private exchange model. Private exchanges are largely unregulated as an entity, raising persistent concerns regarding the potential application of ERISA and tax rules for health plans. Large employers are familiar with the risks involved in pioneering a largely untested benefits structure in the midst of an unstable regulatory setting. The rapid proliferation of cashbalance pension plans in the mid-1990s, followed by adverse regulatory guidance that forced thousands of employers to freeze or cancel plans, stands as a cautionary tale of new benefits structures gone wrong. As a result, the uncertain regulatory environment for private exchanges presents the most overarching, significant stumbling block to private exchange implementation among large employers. 1. Application of HRA rules to private exchanges. Private exchanges in the group market rely heavily on a defined contribution structure in which employers subsidize employee premium costs with a fixed contribution amount. However, the tax consequences associated with a defined contribution account linked to a private exchange have yet to be fully determined. During the early stages of private exchange development, exchange sponsors gave employers the option to set aside employer premium subsidies in an HRA. An HRA is a tax-exempt reimbursement account that allows employers to contribute funds to employees that can be used for specified medical expenses, including, in some cases, premium costs. The reimbursement is excludable from the employee s income, and amounts that remain at the end of the year generally can be used to reimburse expenses incurred in later years. HRAs are considered account-based group health plans within the meaning of section 9832(a). Some private exchange vendors suggested that future platforms would offer the employer the option to use HRAs to subsidize the purchase of individual policies on a private exchange an approach that would truly mirror the public exchange and would allow employers to offer coverage to employees without the burdens associated with group market health coverage. However, the ACA has placed restrictions on the use of pretax vehicles to purchase health insurance coverage, including HRAs. Section 2711 of the Public Health Service Act (PHSA), as added by the ACA, generally prohibits plans from imposing lifetime or annual limits on the dollar value of essential health benefits, effective January 1, The preamble to the interim final regulations under PHSA section 2711 addressed the application of the dollar limit restriction to HRAs and other account-based arrangements that, by definition, limit benefit payments to the amount available in a participant s account. 17 The preamble distinguished between integrated HRAs, which are offered in connection with other coverage as part of an employersponsored group health plan, and HRAs that are not offered in connection with comprehensive coverage, referred to as stand-alone HRAs. According to the preamble, HRAs that are integrated with coverage that complies with the requirements of PHSA section 2711 satisfy the PHSA s annual limit requirements in combination. 18 However, the final rule did not address how an HRA might be considered integrated with other coverage, leaving the issue to be addressed in future guidance. In January 2013, the Labor Department issued frequently asked questions clarifying the agencies position on integrated HRAs. According to the FAQs, an HRA is not considered integrated with employer-sponsored group health coverage unless the HRA is available only to employees who are actually covered by group health plan coverage provided by the employer that meets the annual and lifetime dollar limit requirements of PHSA section Also, the FAQs provided that an HRA cannot be integrated with an employer plan that provides coverage through individual policies in an attempt to meet the requirements of PHSA section Although the FAQs did not specifically prohibit the use of HRAs to fund group-market private exchange coverage, the guidance raised questions regarding whether and how an HRA can be properly integrated with a private exchange sponsor s benefit platform. In September 2013, Treasury, the Labor Department, and HHS issued further guidance regarding integrated HRAs in Technical Release and 17 T.D. 9491, 75 F.R , Id. at 75 F.R See Labor Department, FAQs About Affordable Care Act Implementation Part XI (Jan. 24, 2013). The FAQs did not expressly prohibit the use of HRAs to fund benefits under a private group health plan exchange TAX NOTES, March 31, 2014

7 Notice The guidance clarified than an HRA may be integrated with a group health plan sponsored by a third party, such as the employer of an employee s spouse. It also provided that integrated HRAs must allow employees to opt out of and waive future reimbursements from the HRA at least annually to satisfy ACA requirements. This new complexity surrounding the use of HRAs to fund employer-sponsored plans has caused private exchange sponsors to reevaluate the use of HRAs as a vehicle for funding employer premium subsidies. Although it appears that current HRA integration rules should apply to coverage offered on a private exchange, the guidance to date has not addressed the use of HRAs alongside private exchange coverage, and the path to full compliance remains unclear. 2. ERISA preemption. Most large employers offer self-insured plans, largely because of the administrative consistency associated with their preemption status. ERISA provides that some of its provisions supersede any and all state laws insofar as they may now or hereafter relate to any employee benefit plan. Under the general preemption clause of ERISA section 514(a), state laws are preempted to the extent that they relate to employee benefit plans subject to Title I of ERISA. However, ERISA section 514(b)(2)(A), known as the savings clause, represents an exception to the general rule. The savings clause provides that nothing in this title shall be construed to exempt or relieve any person from any law of any State which regulates insurance. While section 514(b)(2)(A) saves from ERISA preemption state laws regulating insurance, section 514(b)(2)(B) of ERISA, referred to as the deemer clause, provides that a state law purporting to regulate insurance generally cannot deem an employee benefit plan to be an insurance company (or in the business of insurance) for the purpose of regulating that plan as an insurance company. ERISA preemption for self-insured plans not only allows multistate employers to provide consistent health benefit designs to a multistate workforce, but it also shields the employer from exposure to a patchwork of state laws regarding the administration of benefits under the plan. However, because many private exchange structures for active employees are limited to fully insured plans, these plans are subject to state regulation. As such, the typical private exchange structure may expose large employer plans to the vagaries of state insurance laws. In response, some private exchange vendors have a self-insured private exchange product that offers greater choice among administrative service providers and networks but allows an employer to COMMENTARY / TAX MATTERS maintain a self-insured plan. However, these structures might also be subject to state regulations governing private health insurance purchasing alliances. Private purchasing alliances are purchasing entities through which employers and selfemployed individuals can purchase health coverage. Although most private purchasing alliance laws apply only to coverage issued by licensed insurance issuers, laws governing purchasing alliances could apply to self-insured private exchanges that rely on networks administered by statelicensed health insurance issuers. 20 It remains to be seen whether ERISA s deemer clause will shield self-insured private exchanges from state insurance regulation, or if self-insured private exchange structures will become subject to state laws regulating purchasing alliances. 3. Application of ACA nondiscrimination requirements to fully insured private exchange plans. The code allows employees to exclude from income reimbursements for medical care that are received through an employer-sponsored health plan. 21 For self-insured plans, this gross income exclusion is available to highly compensated employees only if the plan does not discriminate in their favor, either regarding eligibility to participate or benefits provided. 22 The ACA added section 2716 to the PHSA, which imposes on fully insured plans nondiscrimination rules similar to those governing self-insured plans. Under the new law, an insured group health plan that does not comply with the nondiscrimination rules may be subject to an excise tax, civil penalties, and a civil suit to enjoin compliance. In September 2010, Treasury issued a request for comments on the guidance necessary to implement the new nondiscrimination requirements for insured group health plans. In January 2011, after reviewing public comments, Treasury announced that enforcement of the nondiscrimination rule will be delayed until guidance is issued. 23 To date, no guidance has been issued, and it is unclear how insured plans will be asked to demonstrate compliance with the new law. Given that fully insured private exchange models dominate the market, the application of the ACA s nondiscrimination requirements could have a significant effect on large, 20 See Timothy S. Jost, Health Insurance Exchanges: Legal Issues, 37 J. L. Med. & Ethics 53, 62 (2009). Several states have adopted laws based on the National Association of Insurance Commissioners Private Health Voluntary Alliance Model Act, which regulates issuer involvement in private health insurance purchasing pools. 21 Section 105(a), (b). 22 Section 105(h)(2). 23 See Notice , IRB 259. TAX NOTES, March 31,

8 self-insured employers willingness to adopt or maintain a fully insured private exchange model. 4. Satisfaction of employer-shared responsibility requirements. The ACA s shared responsibility rules contain requirements for both individuals and large employers. Individuals must maintain minimum essential coverage. 24 Employers with 50 or more employees must offer their full-time employees the opportunity to enroll in minimum essential coverage under an eligible employer-sponsored plan. 25 Minimum essential coverage is defined, in part, as coverage under an employer-sponsored plan. 26 The statute does not define the term employer-sponsored plan. Applicable large employers that fail to offer affordable minimum essential coverage are subject to an assessable payment in the form of an excise tax. 27 Final rules regarding the individual responsibility requirement were issued in August Those rules confirm that employer-sponsored coverage qualifies as minimum essential coverage. However, the regulations do not contemplate whether private exchange plans can be considered employer-sponsored coverage for this purpose. 29 While it is likely that private exchange coverage will in fact constitute employer-sponsored coverage for purposes of the individual mandate, current guidance does not directly address this issue. Final employer-shared responsibility rules were issued in February While the final rules make several changes to the purposed rules issued in January 2013, they do not address whether an employer that provides access to a private exchange satisfies its ACA requirement to offer minimum essential coverage under an employer-sponsored plan. 5. Employee affordability calculations under a private exchange. The ACA requires large employers to offer their full-time employees affordable 24 Section 5000A. 25 ACA section 1513; section 4980H(a)(1). Employersponsored coverage is automatically deemed to be minimum essential coverage under the statute. However, the statute was drafted without considering private exchange structures. Therefore, guidance may also be necessary to confirm that private health exchanges sponsored by third parties and offered to employers meet the definition of minimum essential coverage. 26 Section 5000A(f)(1)(B). 27 Sections 4980H(b)(1) and 36B. 28 T.D. 9632, 78 F.R However, the final regulations define an employersponsored plan as group health insurance coverage offered by an employer to an employee that is (1) a governmental plan; (2) any other plan offered in the small or large group market in a state; (3) a grandfathered health plan; or (4) a self-insured group health plan under which coverage is offered by, or on behalf of, an employer to an employee. Id. at 78 F.R T.D. 9655, 79 F.R healthcare coverage. 31 Under one safe harbor, coverage will generally be considered affordable if the amount of an employee s required contribution for self-only coverage for the lowest-cost option under the plan does not exceed 9.5 percent of his Form W-2 income. 32 This is referred to as the Form W-2 affordability safe harbor. 33 If a large employer offers coverage that is not affordable, and one or more of its employees is certified as having received a premium tax credit or cost-sharing reduction, the employer may be liable for an assessable payment under section 4980H(b). The diversity of coverage options available through some private exchanges creates several options for testing under the Form W-2 affordability safe harbor. The lowest-cost option may be subject to testing on a carrier-by-carrier basis, or may be selected across all carriers. However, it is unclear whether all potential testing options would be permissible. Under a private exchange structure, an employer would certainly prefer to have the option to select the lowest-cost self-only option that offers minimum value across all carriers for purposes of the Form W-2 affordability safe harbor, rather than testing affordability on a carrier-by-carrier basis. However, until further guidance is issued, it is unclear whether this method complies with the current safe harbor rules as applied to private exchanges. 6. HIPAA compliance issues. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) and implementing regulations promulgated by HHS prohibit the wrongful disclosure of individually identifiable health information by a covered entity, such as a health plan or a covered entity s business associate. 34 Covered entities are required to comply with notice and reporting requirements under HIPAA, to provide specified health record information to participants upon request, and to comply with rules regarding the privacy and security of health data. The HIPAA privacy and security rules do not contemplate a structure under which a private exchange, perhaps acting as a health plan, may be 31 Section 36B(c)(2)(C)(i). 32 T.D. 9655, 79 F.R Section 36B(c)(2)(C)(i), (d)(2); prop. reg. section H-5. In early 2013, Treasury issued proposed regulations providing two additional affordability safe harbors (rate of pay, and federal poverty level) to avoid employer liability under section 4980H(b). Both the Form W-2 safe harbor and the federal poverty level safe harbor require an employer to test against the lowest-cost coverage under the plan. Prop. reg. section H-5(e)(2)(ii), (iv). These safe harbors were substantially adopted under the final regulations. Reg. section H- 5(e)(2)(ii), (iv) CFR section et seq TAX NOTES, March 31, 2014

9 required to share health data with multiple issuers, the exchange sponsor, or the participating employer, one or more of which may be either a covered entity or a business associate for HIPAA purposes. As such, the roles and responsibilities of these parties under HIPAA are unclear. E. Conclusion Employers are clearly eager to test private health insurance exchanges as an alternative to traditional employer-sponsored plans for active employees. Private exchanges offer unique potential for cost savings and administrative flexibility in the delivery of health benefits for a large employer population. However, employers considering a private exchange for active employees also appreciate that the concept is still immature and untested. Because private exchanges were not contemplated under the code, ERISA, or the ACA, regulatory gaps will exist in the short term. As a result, large employers may hesitate to fully embrace private exchanges until the regulatory landscape is more stable, and legal uncertainties regarding private exchanges are addressed by regulators. COMMENTARY / TAX MATTERS Experts don t have all the answers. They just always know where to fi nd them. Whether you re looking for the latest tax news headline or an in-depth analysis of a recent treaty, you can always turn to the leading tax policy and news source. You ll discover Tax Analysts has the timely, accurate, and comprehensive information you need. To see why experts rely on us, please visit taxanalysts.com. TAX NOTES, March 31,

Frequently Asked Questions About Private Health Insurance Exchanges

Frequently Asked Questions About Private Health Insurance Exchanges Frequently Asked Questions About Private Health Insurance Exchanges Updated October 23, 2013 Private health insurance exchanges or private exchanges have attracted increased attention, especially from

More information

Private Health Insurance Exchanges: A Potentially Viable Alternative for Employer-Provided Health Care in Uncharted Waters

Private Health Insurance Exchanges: A Potentially Viable Alternative for Employer-Provided Health Care in Uncharted Waters Private Health Insurance Exchanges: A Potentially Viable Alternative for Employer-Provided Health Care in Uncharted Waters As companies explore new mechanisms for maintaining employer-provided health care

More information

American employers need prompt action on these six significant challenges. We urge Congress and the administration to address them now.

American employers need prompt action on these six significant challenges. We urge Congress and the administration to address them now. In June 2014, the Board of Directors of the American Benefits Council (the Council) approved a long-term public policy strategic plan, A 2020 Vision: Flexibility and the Future of Employee Benefits. It

More information

Affordable Care Act (ACA) Frequently Asked Questions

Affordable Care Act (ACA) Frequently Asked Questions Grandfathered policies Q1: What is grandfathered health plan coverage? A: The interim final rule on grandfathering under ACA generally defines grandfathered health plan coverage as coverage provided by

More information

INTRODUCTION. Background

INTRODUCTION. Background The purpose of this publication is to present highly focused information on the healthcare reimbursement aspects of the Affordable Care Act (ACA) based on the information available as of the date of this

More information

INTRODUCTION. Penalties waived until 6/30/15? Description of Payment/Reimbursement Arrangement: Employer with 50 or more FTEs

INTRODUCTION. Penalties waived until 6/30/15? Description of Payment/Reimbursement Arrangement: Employer with 50 or more FTEs The purpose of this publication is to present highly focused information on the healthcare reimbursement aspects of the Affordable Care Act (ACA) based on the information available as of the date of this

More information

Important Effective Dates for Employers and Health Plans

Important Effective Dates for Employers and Health Plans Brought to you by Krempa Associates, Inc. Important Effective Dates for Employers and Health Plans On March 23, 2010, President Obama signed the health care reform bill, or Affordable Care Act (ACA), into

More information

Important Effective Dates for Employers and Health Plans

Important Effective Dates for Employers and Health Plans Brought to you by Hipskind Seyfarth Risk Solutions Important Effective Dates for Employers and Health Plans On March 23, 2010, President Obama signed the health care reform bill, or Affordable Care Act

More information

Self-Insured Health Insurance Coverage

Self-Insured Health Insurance Coverage Bernadette Fernandez Analyst in Health Care Financing June 25, 2010 Congressional Research Service CRS Report for Congress Prepared for Members and Committees of Congress 7-5700 www.crs.gov R41069 c11173008

More information

OVERVIEW OF PRIVATE INSURANCE MARKET REFORMS IN THE PATIENT PROTECTION AND AFFORDABLE CARE ACT AND RESOURCES FOR FREQUENTLY ASKED QUESTIONS

OVERVIEW OF PRIVATE INSURANCE MARKET REFORMS IN THE PATIENT PROTECTION AND AFFORDABLE CARE ACT AND RESOURCES FOR FREQUENTLY ASKED QUESTIONS OVERVIEW OF PRIVATE INSURANCE MARKET REFORMS IN THE PATIENT PROTECTION AND AFFORDABLE CARE ACT AND RESOURCES FOR FREQUENTLY ASKED QUESTIONS Brief Prepared by MATTHEW COKE Senior Research Attorney LEGISLATIVE

More information

Employer Reporting of Health Coverage Code Sections 6055 & 6056

Employer Reporting of Health Coverage Code Sections 6055 & 6056 Brought to you by Hickok & Boardman HR Intelligence Employer Reporting of Health Coverage Code Sections 6055 & 6056 The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue

More information

January 2014. Background. EAPs

January 2014. Background. EAPs Yes, Employers, There Is an Escape Clause! Christmas Eve Guidance Exempts Some EAPs and Limited Scope Dental and Vision Plans From HIPAA and Affordable Care Act January 2014 On December 24, 2013, the Departments

More information

The following ECFA guide discusses some important aspects of the law and penalties that will be in effect on or before 06/30/2105.

The following ECFA guide discusses some important aspects of the law and penalties that will be in effect on or before 06/30/2105. Dear reader, Since we are aware that many of our clients are non-profits, charitable organizations, mission agencies and similar groups operating both in the USA and overseas, we feel the need to make

More information

What s News in Tax Analysis That Matters from Washington National Tax

What s News in Tax Analysis That Matters from Washington National Tax What s News in Tax Analysis That Matters from Washington National Tax The Impact of the Affordable Care Act on International Assignees and Their Health Care Plans Employers and individuals in the United

More information

Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements

Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements Notice 2013-54 I. PURPOSE AND OVERVIEW This notice

More information

Important Effective Dates for Employers and Health Plans

Important Effective Dates for Employers and Health Plans Brought to you by Sullivan Benefits Important Effective Dates for Employers and Health Plans On March 23, 2010, President Obama signed the health care reform bill, or Affordable Care Act (ACA), into law.

More information

U.S. Department of Labor TECHNICAL RELEASE 2013-03 DATE: SEPTEMBER 13, 2013 SUBJECT: I. PURPOSE AND OVERVIEW

U.S. Department of Labor TECHNICAL RELEASE 2013-03 DATE: SEPTEMBER 13, 2013 SUBJECT: I. PURPOSE AND OVERVIEW U.S. Department of Labor Employee Benefits Security Administration Washington, D.C. 20210 TECHNICAL RELEASE 2013-03 DATE: SEPTEMBER 13, 2013 SUBJECT: APPLICATION OF MARKET REFORM AND OTHER PROVISIONS OF

More information

Healthcare Reform Provisions Unique to Small Employers/Financial and Other Benefits Concerns for All Employers (updated May 2, 2014)

Healthcare Reform Provisions Unique to Small Employers/Financial and Other Benefits Concerns for All Employers (updated May 2, 2014) /Financial and Other Benefits Concerns for All Employers (updated May 2, 2014) Lisa L. Carlson, J.D., Area Senior Vice President, Compliance Counsel Gallagher Benefit Services, Inc. While most healthcare

More information

Health Care Reform Update: What's Coming in 2014 for HRAs and Cafeteria Plans. WEBCAST Q&As. Thursday, October 24, 2013

Health Care Reform Update: What's Coming in 2014 for HRAs and Cafeteria Plans. WEBCAST Q&As. Thursday, October 24, 2013 Health Care Reform Update: What's Coming in 2014 for HRAs and Cafeteria Plans WEBCAST Q&As Thursday, October 24, 2013 HRAs Q: Is a medical expense reimbursement plan (employer contribution only) under

More information

Guidance on the Application of Code 4980D to Certain Types of Health Coverage Reimbursement Arrangements

Guidance on the Application of Code 4980D to Certain Types of Health Coverage Reimbursement Arrangements Guidance on the Application of Code 4980D to Certain Types of Health Coverage Reimbursement Arrangements Notice 2015-17 I. PURPOSE AND OVERVIEW This notice reiterates the conclusion in previous guidance

More information

IRS Notice 2015-87: A Grab Bag of ACA, HRA and FSA Guidance

IRS Notice 2015-87: A Grab Bag of ACA, HRA and FSA Guidance IRS Notice 2015-87: A Grab Bag of ACA, HRA and FSA Guidance CALLAN CARTER Please note: This article was updated on March 8, 2016 In a welcome set of Questions and Answers, IRS Notice 2015-87 (the Notice

More information

Notice 2015-87 I. PURPOSE AND OVERVIEW

Notice 2015-87 I. PURPOSE AND OVERVIEW Further Guidance on the Application of the Group Health Plan Market Reform Provisions of the Affordable Care Act to Employer-Provided Health Coverage and on Certain Other Affordable Care Act Provisions

More information

The Insurance Mandates of the Affordable Care Act

The Insurance Mandates of the Affordable Care Act 1 A. Affordable Care Act Individual Mandate The Insurance Mandates of the Affordable Care Act 1. All citizens of the United States are subject to the individual mandate as are all permanent residents and

More information

Affordable Care Act (ACA) Violations Penalties and Excise Taxes

Affordable Care Act (ACA) Violations Penalties and Excise Taxes Brought to you by The Insurance Exchange Affordable Care Act (ACA) Violations Penalties and Excise Taxes The Affordable Care Act (ACA) includes numerous reforms for group health plans and creates new compliance

More information

The health insurance marketplaces, or exchanges, created

The health insurance marketplaces, or exchanges, created Employee Benefits Report 2121 N Glenville Drive Richardson, TX 75082 866.881.2255 www.mgmbenefits.com Health Insurance November 2013 Volume 11 Number 11 Private Exchanges: An Option Worth Exploring An

More information

Employer's guide to health care reform

Employer's guide to health care reform Employer's guide to health care reform Employer's guide to health care reform: the complete small business resource With the Affordable Care Act (ACA) in full swing, it s important you understand what

More information

ADVERSE SELECTION ISSUES AND HEALTH INSURANCE EXCHANGES UNDER THE AFFORDABLE CARE ACT

ADVERSE SELECTION ISSUES AND HEALTH INSURANCE EXCHANGES UNDER THE AFFORDABLE CARE ACT Draft: 6/22/11 Reflects revisions to the June 17 draft as discussed during the Health Insurance and Managed Care (B) Committee conference call June 22, 2011 Background ADVERSE SELECTION ISSUES AND HEALTH

More information

Health Care Reform: New Rules for Excepted Benefits

Health Care Reform: New Rules for Excepted Benefits Caring For Those Who Serve March 31, 2014 1901 Chestnut Avenue Glenview, Illinois 60025-1604 1-800-851-2201 www.gbophb.org Health Care Reform: New Rules for Excepted Benefits On December 24, 2013, the

More information

Health Reform in a Nutshell: What Small Businesses Need to Know Now.

Health Reform in a Nutshell: What Small Businesses Need to Know Now. Health Reform in a Nutshell: What Small Businesses Need to Know Now. With the passage of the most significant reform of America s modern-day health care system, many small business owners and human resources

More information

Employment & Employee Benefits Developments

Employment & Employee Benefits Developments Employment & Employee Benefits Developments January 2015 New Health Care Compliance Considerations for Employers in 2015 Over the past year, the U.S. Departments of Labor (the DOL ), Treasury and Health

More information

Health Care Reform New Restrictions on Tax-Favored Health Coverage for HRAs, FSAs, Premium Payment or Reimbursement Plans, and Cafeteria Plans

Health Care Reform New Restrictions on Tax-Favored Health Coverage for HRAs, FSAs, Premium Payment or Reimbursement Plans, and Cafeteria Plans Caring For Those Who Serve 1901 Chestnut Avenue Glenview, Illinois 60025-1604 1-800-851-2201 www.gbophb.org November 21, 2013 [updated July 29, 2015] Health Care Reform New Restrictions on Tax-Favored

More information

Reimbursement Arrangements for Individual Insurance Plans

Reimbursement Arrangements for Individual Insurance Plans Reimbursement Arrangements for Individual Insurance Plans By Employee Benefits Corporation s Compliance Department compliance@ebcflex.com Date April 24, 2014 2014 Employee Benefits Corporation 2014 Employee

More information

Health Reform. Employer Penalty Delay: What are the Consequences? Impact of the Delay on Employers

Health Reform. Employer Penalty Delay: What are the Consequences? Impact of the Delay on Employers Health Reform Employer Penalty Delay: What are the Consequences? Martin Haitz (484) 270-2575 martin.haitz@marcumfs.com Issued date: 07/29/13 The employer penalty provisions and two reporting requirements

More information

the Affordable Care Act: What Colorado Businesses Need to Know

the Affordable Care Act: What Colorado Businesses Need to Know 22 About questions the Affordable Care Act: What Colorado Businesses Need to Know 1 What is the Affordable Care Act? Who is impacted (small, large businesses and self-insured)? The Patient Protection and

More information

Health care reform at-a-glance. August 2014

Health care reform at-a-glance. August 2014 Health care reform at-a-glance August 2014 Employer mandate Shared responsibility payment for failing to offer coverage to at least 95%* of all fulltime employees (FTE) and children if any FTE gets subsidy

More information

HEALTH CARE REFORM: Grandfathered Health Plans

HEALTH CARE REFORM: Grandfathered Health Plans HEALTH CARE REFORM: Grandfathered Health Plans Guidance concerning grandfathered health plan status was issued on June 17, 2010, by the Departments of Labor, Treasury and Health and Human Services with

More information

Rules on Penalties, Affordability, and Minimum Value

Rules on Penalties, Affordability, and Minimum Value Up in Smoke? IRS Filters Out Most Wellness Programs From Affordability and Minimum Value Tests and Clears the Air on COBRA and Retiree Medical Coverage May 2013 Employers may only take into account whether

More information

Health care reform at-a-glance. December 2013

Health care reform at-a-glance. December 2013 December 2013 Employer mandate Play or pay penalty for failing to offer coverage to at least 95% of all full-time employees (FTE) and children if any FTE gets subsidy in exchange $2,000 (indexed) times

More information

The Large Business Guide to Health Care Law

The Large Business Guide to Health Care Law The Large Business Guide to Health Care Law How the new changes in health care law will affect you and your employees Table of contents Introduction 3 Part I: A general overview of the health care law

More information

Self-funded Employer s Guide. Transitional Reinsurance Fee and Patient-Centered Outcomes Research Institute Fee

Self-funded Employer s Guide. Transitional Reinsurance Fee and Patient-Centered Outcomes Research Institute Fee Self-funded Employer s Guide Transitional Reinsurance Fee and Patient-Centered Outcomes Research Institute Fee To fund some of the changes mandated by the Affordable Care Act (ACA), several new taxes and

More information

Health Care Reform Frequently Asked Questions

Health Care Reform Frequently Asked Questions Health Care Reform Frequently Asked Questions On March 23, 2010, President Obama signed federal health care reform into law, also known as the Patient Protection and Affordability Act. A second, or reconciliation

More information

Defined Contribution Approach to Benefit Planning

Defined Contribution Approach to Benefit Planning Defined Contribution Approach to Benefit Planning 1 Sue Sieger, ACFCI, CAS Senior Compliance Consultant Employee Benefits Corporation sue.sieger@ebcflex.com The material provided in this webinar is by

More information

Reporting Requirements for Employers and Health Plans

Reporting Requirements for Employers and Health Plans Brought to you by Cross Employee Benefits Reporting Requirements for Employers and Health Plans The Affordable Care Act (ACA) created a number of federal reporting requirements for employers and health

More information

Health Care Reform Implications for Employers with Seasonal Employees

Health Care Reform Implications for Employers with Seasonal Employees Health Care Reform Implications for Employers with Seasonal Employees Many industries (e.g. ski resorts, retail, restaurants, agriculture, fishing and tourism) have a significant number of seasonal employees.

More information

HRA used to purchase health policy in the individual market. HRA used to purchase individual health policy through a public or private exchange

HRA used to purchase health policy in the individual market. HRA used to purchase individual health policy through a public or private exchange October 18, 2013 Authors: Kathryn B. Amin, Jon W. Breyfogle, Christine L. Keller, William F. Sweetnam and Brigen L. Winters If you have questions, please contact your regular Groom attorney or any of the

More information

SUMMARY OF GUIDE CONTENTS... 1 HIGHLIGHTS OF TAX-ADVANTAGED PLANS... 2 EMPLOYEE SALARY REDUCTION PLANS... 5

SUMMARY OF GUIDE CONTENTS... 1 HIGHLIGHTS OF TAX-ADVANTAGED PLANS... 2 EMPLOYEE SALARY REDUCTION PLANS... 5 This Guide is for informational and educational purposes only. It does not constitute legal advice or a comprehensive guide to issues to be considered by employers in establishing tax-advantaged benefits

More information

HEALTH REFORM UPDATE GRANDFATHERED GROUP HEALTH PLANS August 3, 2010

HEALTH REFORM UPDATE GRANDFATHERED GROUP HEALTH PLANS August 3, 2010 HEALTH REFORM UPDATE GRANDFATHERED GROUP HEALTH PLANS August 3, In July, the Departments of Treasury, Labor, and Health and Human Services jointly released the Interim Final Rules for Group Health Plans

More information

Health Care Reform How it Will Affect Employers and their Group Health Plans. Benecon Comments and Observations

Health Care Reform How it Will Affect Employers and their Group Health Plans. Benecon Comments and Observations Health Care Reform How it Will Affect Employers and their Group Health Plans This Health Care Reform Summary applies to all employers (including government and church plans) that provide health coverage

More information

One of the more visible changes soon to be brought MONTANA S HEALTH INSURANCE A PREVIEW OF MARKETPLACE

One of the more visible changes soon to be brought MONTANA S HEALTH INSURANCE A PREVIEW OF MARKETPLACE A PREVIEW OF MONTANA S HEALTH INSURANCE MARKETPLACE by Gregg Davis and Christina Goe One of the more visible changes soon to be brought to the forefront by passage of the Affordable Care Act (ACA) is the

More information

Self-insured Plans under Health Care Reform

Self-insured Plans under Health Care Reform Brought to you by Good Neighbor Insurance Self-insured Plans under Health Care Reform The Affordable Care Act (ACA) includes numerous reforms affecting the health coverage that employers provide to their

More information

Health Reform in a Nutshell: What Small Businesses Need to Know Now.

Health Reform in a Nutshell: What Small Businesses Need to Know Now. Health Reform in a Nutshell: What Small Businesses Need to Know Now. With the passage of the most significant reform of America s modern-day health care system, many small business owners and human resources

More information

Health Care Reform Frequently Asked Questions

Health Care Reform Frequently Asked Questions Health Care Reform Frequently Asked Questions On March 23, 2010, President Obama signed federal health care reform into law, also known as the Patient Protection and Affordability Act. A second, or reconciliation

More information

Affordable Care Act FAQ

Affordable Care Act FAQ Affordable Care Act FAQ Based on regulatory guidance issued as of March 2014 and subject to change. Contents General ACA Questions... 1 ACA Marketplace... 1 ACA Employer Shared Responsibility... 2 ACA

More information

COMPLIANCE ADVISOR. 2014 Affordable Care Act Compliance Checklist

COMPLIANCE ADVISOR. 2014 Affordable Care Act Compliance Checklist COMPLIANCE ADVISOR August 2013 2014 Affordable Care Act Compliance Checklist IN THIS ISSUE: 1 2 3 4 5 6 7 8 9 10 11 12 Grandfathered Plan Status Confirmation No Annual Dollar Limits on Essential Health

More information

EMPLOYER SHARED RESPONSIBILITY:

EMPLOYER SHARED RESPONSIBILITY: EMPLOYER SHARED RESPONSIBILITY: PLAY OR PAY DISCUSSION GUIDE WHY THE MATH DOESN T WORK TO DROP COVERAGE 1 EVERYONE IS REQUIRED TO MAINTAIN HEALTH COVERAGE The Affordable Care Act (ACA) is ushering in

More information

Christy Tinnes, Brigen Winters and Christine Keller, Groom Law Group, Chartered

Christy Tinnes, Brigen Winters and Christine Keller, Groom Law Group, Chartered Preparing for Health Care Reform A Chronological Guide for Employers This Article provides an overview of the major provisions of health care reform legislation affecting employers and explains the requirements

More information

Health Care Reform: Ready or Not, Here it Comes! Presented by:

Health Care Reform: Ready or Not, Here it Comes! Presented by: Broader Perspective. Business Solutions. Health Care Reform: Ready or Not, Here it Comes! Presented by: Ryan Fridborg, MAOD, SPHR Executive Vice President, Employee Benefits rfridborg@boltonco.com Marilyn

More information

Plan Comparison Chart

Plan Comparison Chart To help you understand the differences between FSAs, HRAs, and HSAs, please review the chart below. It will assist in deciding which account would complement the health plans your organization offers.

More information

National Health Insurance Reform

National Health Insurance Reform JANUARY2011 National Health Insurance Reform Impact Year by Year With the passage of National Health Insurance Reform it is crucial that employers and plan sponsors have clear information about the impact

More information

How ACA is Changing Employer Health Benefits and the Marketplace Presented by:

How ACA is Changing Employer Health Benefits and the Marketplace Presented by: North Carolina State Health Plan How ACA is Changing Employer Health Benefits and the Marketplace Presented by: J. Richard Johnson Senior Vice President, Public Sector Health Practice Leader rjohnson@segalco.com

More information

Health Care Reform Impacts Grandfathered Employer-Sponsored Group Health Plans: Now What?

Health Care Reform Impacts Grandfathered Employer-Sponsored Group Health Plans: Now What? April 2010 EMPLOYEE BENEFITS & EXECUTIVE COMPENSATION UPDATE Health Care Reform Impacts Grandfathered Employer-Sponsored Group Health Plans: Now What? This bulletin discusses certain provisions of The

More information

PENALTIES Employer Shared Responsibility under the Affordable Care Act (ACA)

PENALTIES Employer Shared Responsibility under the Affordable Care Act (ACA) PENALTIES Employer Shared Responsibility under the Affordable Care Act (ACA) What employers need to know to make informed decisions about ACA compliance. Employer Shared Responsibility Under the employer

More information

Kansas Health Policy Authority Small Business Health Insurance Steering Committee

Kansas Health Policy Authority Small Business Health Insurance Steering Committee How Health Coverage Works: Coverage Delivery, Risk Assessment, and Regulation The following summarizes the document How Private Health Coverage Works: A Primer 2008 Update published by the Kaiser Family

More information

Treasury, IRS Release Final Rules on Employer Information Reporting Requirements Under Health Care Law

Treasury, IRS Release Final Rules on Employer Information Reporting Requirements Under Health Care Law March 6, 2014 Treasury, IRS Release Final Rules on Employer Information Reporting Requirements Under Health Care Law The Department of the Treasury and the IRS late yesterday (March 6, 2014) released long

More information

The Affordable Care Act: What Public Employers Need to be Doing Now

The Affordable Care Act: What Public Employers Need to be Doing Now The Affordable Care Act: What Public Employers Need to be Doing Now April 30, 2014 J. Richard Johnson IPMA-HR Webinar Copyright 2014 by The Segal Group, Inc. All rights reserved. 1 ACA Update Discussion

More information

Your guide to health care reform provisions

Your guide to health care reform provisions Your guide to health care reform provisions February 2014 edition Since the Patient Protection and Affordable Care Act (PPACA) was enacted in March 2010, businesses have been impacted by federal health

More information

Nevada Employer s Guide to the Affordable Care Act. Nevada Division of Insurance

Nevada Employer s Guide to the Affordable Care Act. Nevada Division of Insurance Nevada Employer s Guide to the Affordable Care Act Nevada Division of Insurance Nevada Employer s Guide to the Affordable Care Act State of Nevada Department of Business and Industry Division of Insurance

More information

Health Care Reform. Employer Action Overview

Health Care Reform. Employer Action Overview Health Care Reform Page 1 of 6 Health Care Reform Immediatemmediate Employer Action Required Notes Employers must provide a reasonable break time for employees who are nursing mothers to express breast

More information

Answers about. Health Care REFORM. for your business

Answers about. Health Care REFORM. for your business Answers about Health Care REFORM for your business Since the time of its enactment in 2010, the health care reform law has remained controversial at least in part due to a constitutional challenge to the

More information

Employer s guide to health care reform

Employer s guide to health care reform Employer s guide to health care reform Employer s guide to health care reform Benefits strategies and resources for small businesses Small businesses are the innovators, modernizers and visionaries that

More information

Self-insured Plans under Health Care Reform

Self-insured Plans under Health Care Reform Brought to you by Cottingham & Butler Self-insured Plans under Health Care Reform The Affordable Care Act (ACA) includes numerous reforms affecting the health coverage that employers provide to their employees.

More information

COMMENTARY. The Affordable Care Act: Considerations for Employers with Unionized Workers JONES DAY

COMMENTARY. The Affordable Care Act: Considerations for Employers with Unionized Workers JONES DAY March 2014 JONES DAY COMMENTARY The Affordable Care Act: Considerations for Employers with Unionized Workers The Affordable Care Act ( ACA ) infuses new complexities into collective bargaining negotiations

More information

Old Law, New Impact: The Mental Health Benefit Parity Requirement

Old Law, New Impact: The Mental Health Benefit Parity Requirement Old Law, New Impact: The Mental Health Benefit Parity Requirement The Mental Health Parity and Addiction Equity Act (MHPAEA) has been on the books for years. Yet some employers are about to feel the law's

More information

Health Reimbursement Arrangements

Health Reimbursement Arrangements Health Reimbursement Arrangements Health Reimbursement Arrangements (HRAs) are plans designed to help employers and employees lower health care costs. Allowed under sections 105 and 106 of the Internal

More information

Health Policy Essentials: Private Health Insurance. Bernadette Fernandez, Annie Mach, & Namrata Uberoi February 13, 2015

Health Policy Essentials: Private Health Insurance. Bernadette Fernandez, Annie Mach, & Namrata Uberoi February 13, 2015 Health Policy Essentials: Private Health Insurance Bernadette Fernandez, Annie Mach, & Namrata Uberoi February 13, 2015 Briefing Agenda What is the purpose of private health insurance (PHI)? How is PHI

More information

HEALTH CARE REFORM INFORMATION FOR BUSINESSES March 2013

HEALTH CARE REFORM INFORMATION FOR BUSINESSES March 2013 PARTNERS: Dennis V. King, CPA Charles R. Alleman, Jr., CPA Robert N. Jensen, Jr., CPA Thomas E. Engman, CPA SENIOR PARTNER: David F. King, CPA 27200 Tourney Road, Suite 475 Valencia, California 91355 tel

More information

Decreasing Costs. Employee Benefits Tax. Medical Device Excise Tax. What It Is

Decreasing Costs. Employee Benefits Tax. Medical Device Excise Tax. What It Is Decreasing Costs Employee Benefits Tax Starting in 2018, the ACA will impose a 40 percent excise tax on high-value plans, where the value of benefits exceeds thresholds of $10,200 for individuals and $27,500

More information

IRS Proposes Rules for Federal Subsidy of Health Insurance Purchased in State Exchanges

IRS Proposes Rules for Federal Subsidy of Health Insurance Purchased in State Exchanges IRS Proposes Rules for Federal Subsidy of Health Insurance Purchased in State Exchanges August 2011 The Internal Revenue Service (IRS) on August 12, 2011 issued proposed regulations relating to the federal

More information

Keeping up with the new health care reform law. Helping you better understand what to expect and when to expect it. anthem.com/ca 14376CAEENABC 8/10

Keeping up with the new health care reform law. Helping you better understand what to expect and when to expect it. anthem.com/ca 14376CAEENABC 8/10 Keeping up with the new health care reform law Helping you better understand what to expect and when to expect it. 14376CAEENABC 8/10 anthem.com/ca 1 Staying up to date Here s a timeline of what you can

More information

Employer s guide to health care reform requirements

Employer s guide to health care reform requirements Employer s guide to health care reform requirements June 2015 edition As the Affordable Care Act (ACA) continues to be implemented, you ll need to remain aware of the policies and provisions that affect

More information

Health Care Exchanges: The New Paradigm for Employer-Based Health Coverage. by Kenneth L. Sperling, CEBS

Health Care Exchanges: The New Paradigm for Employer-Based Health Coverage. by Kenneth L. Sperling, CEBS Innovations in Health Care Health Care Exchanges: The New Paradigm for Employer-Based Health Coverage by Kenneth L. Sperling, CEBS Nine out of ten employers surveyed plan to respond to the Patient Protection

More information

Patient Protection and Affordable Care Act of 2009: Immediate Health Insurance Market Reforms

Patient Protection and Affordable Care Act of 2009: Immediate Health Insurance Market Reforms Patient Protection and Affordable Care Act of 2009: Immediate Health Insurance Market Reforms Provision Notes Standards Development Applicability Effective Date PPACA Statutory Annual and Lifetime Limits

More information

Health Care Reform: What to Expect in 2013 2014. Employee Benefits Series. Health Care Reform 2015 COMPLIANCE CHECKLIST

Health Care Reform: What to Expect in 2013 2014. Employee Benefits Series. Health Care Reform 2015 COMPLIANCE CHECKLIST Health Care Reform: What to Expect in 2013 2014 Employee Benefits Series Health Care Reform 2015 COMPLIANCE CHECKLIST This checklist is designed to help employers who sponsor group health plans review

More information

Reimbursement Vehicles and the ACA: Impacts for Employers

Reimbursement Vehicles and the ACA: Impacts for Employers FACT SHEET Reimbursement Vehicles and the ACA: Impacts for Employers The Internal Revenue Service ( IRS ) has issued guidance on the application of certain provisions of the Affordable Care Act ( ACA )

More information

Helbling Benefits Consulting Your Health Care Reform Partner

Helbling Benefits Consulting Your Health Care Reform Partner Helbling Benefits Consulting Your Health Care Reform Partner Will you be hit with penalties due to health care reform? Once the employer mandate becomes effective, some employers may have to pay a penalty

More information

THE IMPACT OF THE HEALTH CARE REFORM LAW ON SELF-INSURED ERISA HEALTH AND WELFARE BENEFIT PLANS: A GUIDE FOR EMPLOYERS

THE IMPACT OF THE HEALTH CARE REFORM LAW ON SELF-INSURED ERISA HEALTH AND WELFARE BENEFIT PLANS: A GUIDE FOR EMPLOYERS THE IMPACT OF THE HEALTH CARE REFORM LAW ON SELF-INSURED ERISA HEALTH AND WELFARE BENEFIT PLANS: A GUIDE FOR EMPLOYERS Daly D. E. Temchine, Esq. Copyright 2010, Epstein Becker & Green, P.C. THE IMPACT

More information

Fast Forward. 2015 Employer Mandate: Pay or Play?

Fast Forward. 2015 Employer Mandate: Pay or Play? Fast Forward 2015 Employer Mandate: Pay or Play? Employer Mandate Beginning Jan. 1, 2015, the Affordable Care Act (ACA) will impose an employer mandate that states that grandfathered and non-grandfathered

More information

State of Wisconsin / OFFICE OF THE COMMISSIONER OF INSURANCE

State of Wisconsin / OFFICE OF THE COMMISSIONER OF INSURANCE State of Wisconsin / OFFICE OF THE COMMISSIONER OF INSURANCE Scott Walker, Governor Theodore K. Nickel, Commissioner Wisconsin.gov 125 South Webster Street P.O. Box 7873 Madison, Wisconsin 53707-7873 Phone:

More information

Private Exchanges. What Are They? And What Issues Do They Present?

Private Exchanges. What Are They? And What Issues Do They Present? Private Exchanges What Are They? And What Issues Do They Present? Presented by Christopher Condeluci, J.D., Venable LLP, Washington, D.C. For NCSL Fall Forum, November 30, 2011 The Drivers of Health Care

More information

HEALTH REFORM AND MULTIEMPLOYER PLAN COVERAGE 2014 AND BEYOND

HEALTH REFORM AND MULTIEMPLOYER PLAN COVERAGE 2014 AND BEYOND WWW.BKLAWYERS.COM HEALTH REFORM AND MULTIEMPLOYER PLAN COVERAGE 2014 AND BEYOND ABA SECTION OF LABOR AND EMPLOYMENT LAW EMPLOYEE BENEFITS COMMITTEE MID- WINTER MEETING 201 BLITMAN & KING LLP Franklin Center,

More information

Update: Health Insurance Reforms and Rate Review. Health Insurance Reform Requirements for the Group and Individual Insurance Markets

Update: Health Insurance Reforms and Rate Review. Health Insurance Reform Requirements for the Group and Individual Insurance Markets By Katherine Jett Hayes and Taylor Burke Background Update: Health Insurance Reforms and Rate Review The Patient Protection and Affordable Care Act (ACA) included health insurance market reforms designed

More information

IRS Proposes Rules on Effect of Wellness Incentives on Play or Pay Obligations

IRS Proposes Rules on Effect of Wellness Incentives on Play or Pay Obligations IRS Proposes Rules on Effect of Wellness Incentives on Play or Pay Obligations A newly proposed IRS regulation provides additional guidance on how employers subject to the health reform law s play or pay

More information

Updates to Affordable Care Act: Law, Regulatory Explanation and Analysis, 2014

Updates to Affordable Care Act: Law, Regulatory Explanation and Analysis, 2014 Updates to Affordable Care Act: Law, Regulatory Explanation and Analysis, 2014 Chapter 2. Individuals 205. Individual Health Insurance Mandate In December 2013, the Administration announced that individuals

More information

Patient Protection and Affordable Care Act (H.R. 3590)

Patient Protection and Affordable Care Act (H.R. 3590) on Health Reform Passing comprehensive health care reform has been a priority of the President and Congress. The U.S. House of Representatives passed the Affordable Health Care for America Act on November

More information

Cynthia G. Tudor, Ph.D., Director, Medicare Drug Benefit and C & D Data Group Cheri Rice, Director, Medicare Plan Payment Group

Cynthia G. Tudor, Ph.D., Director, Medicare Drug Benefit and C & D Data Group Cheri Rice, Director, Medicare Plan Payment Group DEPARTMENT OF HEALTH & HUMAN SERVICES Centers for Medicare & Medicaid Services 7500 Security Boulevard Baltimore, Maryland 21244-1850 CENTER FOR MEDICARE TO: FROM: SUBJECT: All Part D Sponsors Cynthia

More information

Some employers have tried

Some employers have tried Employee Benefits Report Dealey, Renton& Associates Insurance Broker s An ESOP Compan y Oakland Pasadena Santa Ana http://deale yrenton.com 800. 545.3090 CA License #0020739 Health Benefits January 2015

More information