Transitional Reinsurance Deadline Extended To December 5, 2014

November 17, 2014 at 2:46 pm | Posted in CMS, Compliance, Uncategorized | Leave a comment
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This past Friday, CMS extended the deadline for contributing entities to submit their 2014 enrollment counts for the transitional reinsurance program contributions.  The deadline has now been extended until 11:59 p.m. on December 5, 2014.  The January 15, 2015 and November 15, 2015 payment deadlines remain the same.

Click Here for the CMS announcement.

Obama Administration Creates 2014 Hardship Exemption for Individuals Seeking Marketplace Insurance Coverage

November 5, 2013 at 10:12 am | Posted in CMS | Leave a comment

Last week the Center for Medicare and Medicaid Services (CMS) announced that there would be no individual mandate tax penalties for individuals who simply enroll for coverage in a Marketplace (aka Exchange) no later than March 31, 2014 regardless of when their health insurance coverage actually starts. The CMS announcement states that:

Specifically, if an individual enrolls in a plan through the Marketplace prior to the close of the initial open enrollment period, when filing a federal income tax return in 2015 the individual will be able to claim a hardship exemption from the shared responsibility payment for the months prior to the effective date of the individual’s coverage, without the need to request an exemption from the Marketplace. Additional detail will be provided in 2014 on how to claim this exemption. 

A copy of the entire CMS announcement and Q & A on the hardship exemption can be found here: Q&A.

CMS Issues Guidance Clarifying Policy on Income Verification by Health Exchanges: Federal Exchanges Provide Full Income Verification; State Exchanges May Use Relaxed Verification

August 12, 2013 at 12:32 pm | Posted in Affordable Care Act, CMS, Federal Laws, Health Care, Health Insurance Exchanges, Health Insurance Marketplace, Medical, PPACA, Regulations | Leave a comment
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From the Wednesday, August 7, 2013, Bloomberg News

The Centers for Medicare & Medicaid Services released guidance Aug. 5 clarifying the circumstances in which state-based health insurance marketplaces would be allowed to accept less than full income verification from consumers applying for federal subsidies to help them purchase health coverage.

In the two-page guidance, presented in a “Frequently-Asked-Questions” format, CMS said the marketplaces, or exchanges, “would always use data from tax filings and Social Security data to verify household income information provided on an application, and in many cases, will also use current wage information that is available electronically.”

CMS said exchanges would be permitted to bypass certain income verification requirements only during 2014 — the first year exchanges will begin operation — and only in limited circumstances, which it went on to specify.

Final Rule Sparks Controversy

The guidance follows CMS’s release in July of a comprehensive final rule (CMS 2334-F) covering exchange eligibility determinations. Among other things, the rule said exchanges would not need to verify household income in every case where an applicant’s self-reported income had dropped by more than 10 percent below the most recent data available from the Internal Revenue Service (130 HCDR, 7/8/13).

In those circumstances, CMS said it would allow exchanges to require follow-up verification from a “statistically significant sample” of applicants who were unable to provide the initial verification information.

The July announcement triggered concerns that CMS was opening the door to fraud by allowing applicants for federal subsidies — also known as “premium tax credits” — to “self attest” as to their income eligibility.

At an Aug. 1 hearing of the House Ways and Means Committee, Rep. Dave Camp (R-Mich.), the committee’s chairman, questioned whether IRS could effectively monitor premium tax credit payouts under the self-attestation and sampling procedures established by CMS in the final rule (149 HCDR, 8/2/13).

No Exceptions on Federal Exchange

In the Aug. 5 guidance, CMS clarified that exceptions to the full income verification requirements would apply only to exchanges operated in the 16 states and District of Columbia that have opted to build and operate their own exchanges.

In the 34 states not building their own exchanges — where the so-called federally facilitated exchange will operate — CMS said it will require full income verification in all instances. “Since publication of the final rule, we have ascertained that there are sufficient resources to ask every individual in this circumstance for such documentation with no exceptions,” the CMS guidance said.

Verification Process Explained

In explaining how income verification would be handled on the exchanges, the CMS guidance said information provided by an applicant would first be checked against information from the IRS and Social Security Administration.

If IRS and SSA are unable to verify the income data provided, then the information will be compared with wage information from employers provided to the exchanges by Equifax, a credit-reporting and income database firm.

If Equifax is not able to substantiate the applicant’s income information, the exchange must request an explanation or additional documentation, according to the guidance.

After requesting the additional documentation, if the applicant meets all other eligibility requirements for premium tax credits, the exchange will provide premium tax credits or other cost-sharing reductions for 90 days.

If the applicant fails to provide the additional documentation within the specified time frame, the exchange will determine eligibility based on the most recent IRS and SSA data available. If the data are unavailable, then the exchange will discontinue any advance payments of the premium tax credits, the guidance said.

Limited Exception to Requirements

CMS said “for 2014 only,” it will permit state-based exchanges (not the federally facilitated exchange) to bypass the full income verification requirements when all the following factors exist:

  • the exchange has income information from the IRS;
  • the applicant reports projected annual household income more than 10 percent below the most recent data available from IRS and SSA;
  • Equifax data from an employer is unavailable; and
  • the applicant does not provide a reasonable explanation for the inconsistency between what he or she reported and IRS and SSA data.

“In all other cases in which the data submitted by the individual cannot be verified using IRS and SSA data or Equifax data, and the individual does not provide a reasonable explanation for any discrepancy … the marketplace must request additional documentation,” the guidance said.

It emphasized that applicants must attest, under penalty of perjury, that they are not providing false or fraudulent information to the exchange. The guidance also noted that IRS will require repayment of tax credits if an applicant’s income for the year following receipt of the credit shows the applicant is not eligible.

Employer’s Prescription Drug Plan Creditable Disclosure Requirement to CMS – Nothing has Changed

October 18, 2011 at 10:34 am | Posted in CMS, Creditable Coverage, Prescription | Leave a comment
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In September we emailed a client alert announcing the new October 15thdeadline for employer plan sponsors to distribute the required annual Medicare Part D Creditable Coverage Notices to their affected employees, retirees, and their dependents.

We received a few calls from clients inquiring about the date for employer plan sponsors to complete the Online Disclosure requirement to the Centers for Medicare and Medicaid Services (CMS) regarding the creditable or non-creditable status of their prospective group health plan’s prescription drug program.  The date of the Online Disclosure requirement has not changed.  Generally, disclosure of the plan’s prescription drug creditable status remains due within 60 days of the beginning of the Plan year. 

Examples of reporting deadlines:

Plan Year Begins Online Due Date to Report to CMS
January 1 March 1
February 1 April 1
March 1 May 1
April 1 June 1
May 1 July 1
June 1 August 1
July 1 September 1
August 1 October 1
September 1 November 1
October 1 December 1
November 1 January 1
December 1 February 1

The only exceptions to the above Online Disclosure requirement are if: (1) the prescription drug program is terminated, or (2) the prescription drug program loses its creditable coverage status. If either of those events were to occur, the employer plan sponsor must provide Online Disclosure to CMS within 30 days of the event’s occurrence.

As always, we welcome the chance to answer any questions about these two distinct employer plan sponsor requirements and deadlines.

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