Second Chance Open Enrollment Through April 30 For ObamaCare: How Will Employers React If a Second Chance Enroller Triggers an Employer Mandate Penalty?

February 23, 2015 at 9:04 am | Posted in Affordable Care Act, Health Care | Leave a comment
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The Hill reported today that the Obama administration (through CMS) will hold a second enrollment period for ObamaCare this year to give people a chance to avoid a new tax penalty for going without insurance. The enrollment period will run from March 15 to April 30, at the height of tax filing season, officials said. The announcement does not address the issue of whether any form of transitional relief would be available to a large employer who, until now, may have avoided a penalty under the employer mandate because of the failure of an employee to sign up for ACA coverage and possibly receive a premium subsidy. Arguably, such an employer would now be exposed again since employees lacking coverage will have another bite at the ACA health coverage subsidy apple.

Congressional Democrats and advocacy groups had been pushing for the new enrollment period, arguing that millions of people are still unaware of the penalty and should be able to sign up for ObamaCare once they learn of it. “Our intention in doing this is not to increase numbers for numbers sake, it’s to make sure that if there were people who were unaware of the fee that they aren’t disadvantaged by that,” Andy Slavitt, the Centers for Medicare and Medicaid Services’ deputy administrator, said on a call with reporters. The administration estimates that up to 6 million people will likely be forced to pay the fine for not having insurance during this year’s tax season, marking the first time that the penalty will be in effect. Officials said that they do not have an estimate for how many people will take advantage of the new enrollment period.
People signing up now will still have to pay a penalty for lacking insurance in 2014. Anyone who was uninsured last year will be hit with penalties of either $95 or 1 percent of their income — whichever is higher. That fine will spike this year to $325 or 2 percent of their income. Officials said that the new period is a one-year-only occurrence. “Our intention is that this is one year only for people who have not been in the communication loop around the tax penalty,” Slavitt said.
Separately, the administration announced that there had been an error on a tax return form for people with coverage under ObamaCare, causing some tax credits to be calculated either too high or too low. Officials said the problem affects around 50,000 people who have already filed their taxes, and that they are being contacted to correct the problem.
A link to the announcement can be found here: CMS Announces Special Enrollment Period for Tax Season

Vast Majority of Enrollees for Health Care through Exchanges are Obtaining Premium Assistance

January 5, 2015 at 1:53 pm | Posted in Affordable Care Act, Health Insurance Exchanges, Health Insurance Marketplace, HHS | Leave a comment
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Last week, HHS released a report on Affordable Care Act enrollment data via the state and federal Healthcare Marketplaces/Exchanges. It is reported that approximately 87 percent of people who selected health insurance plans through HealthCare.gov for coverage beginning Jan. 1, 2015 were determined eligible for financial assistance to lower their monthly premiums, compared to 80 percent of enrollees who selected plans over a similar period last year. In addition, more than 4 million people in both the state and federal Marketplaces signed up for the first time or reenrolled in coverage for 2015 during the first month of open enrollment. That includes more than 3.4 million people who selected a plan in the 37 states that are using the HealthCare.gov platform for 2015, and more than 600,000 consumers who selected plans in the 14 states that are operating their own Marketplace platform for 2015.

 

A complete copy of the HHS Release can be found here: 87 Percent of Those Who Selected 2015 Plans in First Month of Open Enrollment Are Getting Subsidies

 

Supreme Court to Hear Legal Challenge Federal Subsidies and Obamacare in March

December 23, 2014 at 10:53 am | Posted in Affordable Care Act, Health Care, Regulations | Leave a comment
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Supreme Court to Hear Legal Challenge Federal Subsidies and Obamacare in March

The  Supreme Court announced that on  March 4th it will hear arguments in King v. Burwell.  The case addresses the concept of statutory construction and the issue of whether  the federal government can legally hand out healthcare subsidies in 34 states that have federal exchanges since they opted out of creating their own state based exchanges. The plaintiffs  filed their opening brief on Monday which advance the argument that the literal text of the ACA does not allow for subsidies at federal exchanges. If the subsidy arrangement is struck down, the ACA will essentially have two different sets of requirements and risks for employers and employees across the country that will turn on their state of residence. In November the Supreme Court announced that it would take up the case, surprising many court-watchers and healthcare experts, since the matter had yet to be heard on reconsideration by a full en banc panel of judges in the D.C. Circuit Court of Appeals. An earlier 3 judge panel had found the subsidies to be unauthorized under the ACA..

A copy of the plaintiff’s129 page  brief can be found here:  129-page document

The D.C. Circuit Court of Appeals Agrees to Rehear ACA State/Federal Exchange Argument: The Obama Administration Gets a Second Bite at the Apple

September 4, 2014 at 12:47 pm | Posted in Affordable Care Act, Health Insurance Exchanges | Leave a comment
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The D.C. Circuit Court of Appeals has agreed to rehear argument and revisit its earlier ruling striking down Affordable Care Act (ACA) subsidies issued through federal exchanges as opposed to state exchanges. The announcement of the second hearing is a procedural victory for the Obama administration, which suffered a defeat in late July when a three-judge panel voted 2-1 that subsidies issued through federal exchanges were not allowed under the ACA. The two judges voting to strike down the subsidy language were appointed by a Republican President. A decision by the full D.C. appellate court (11 judges), in which Democratic appointees outnumber Republican appointee, is scheduled for oral argument on December 17.

 

Thousands at Risk of Losing Health Insurance Acquired Through Federal Marketplaces

August 18, 2014 at 10:07 am | Posted in Affordable Care Act, Compliance, Health Insurance Exchanges, Health Insurance Marketplace | Leave a comment
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The Washington Post reported on August 14th that Federal health officials are warning hundreds of thousands of people who have bought health plans through the federal insurance exchange that their coverage will be cut off unless they quickly provide proof that their citizenship or immigration status makes them eligible to be insured through the new marketplace.

The warnings were mailed last week to 310,000 people in the three dozen states that rely on the exchange. The letters give the recipients until Sept. 5th to send copies of green cards, citizenship documents or other information showing that they qualify for the coverage. If they miss the deadline, their coverage will end on Sept. 30th.

This move is the first step the administration has taken to hold consumers accountable when information on their applications conflicts with records on file at federal agencies or is missing altogether.

The action will affect only people with lingering eligibility issues involving their citizenship or immigration status. They are included in about 2 million cases of several kinds of application discrepancies involving people who have obtained coverage through the exchange.

Federal health officials announced that they will take separate action soon to resolve an even larger group of cases with discrepancies: those in which the income people listed on their insurance applications is out of sync with their federal tax records. In cases of unresolved income inconsistencies, the government could reduce — or eliminate — people’s federal insurance subsidies but could not end their coverage.

DOL Issues Compliance Guidance for Plans Contemplating Reducing Contraception Coverage in Wake of Hobby Lobby

August 5, 2014 at 11:18 am | Posted in Affordable Care Act, Department of Labor, ERISA, Health and Human Services | Leave a comment
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On July 17th the DOL, in reaction to the Supreme Court’s recent decision in Hobby Lobby, released FAQ guidance reminding employers and plan sponsors that ERISA requires them to disclose any type of contraception exclusion in their Summary Plan Description and to utilize a Summary of Material Modification if they are contemplating removing the benefit from their current plan. The guidance follows.

Set out below is an additional Frequently Asked Question (FAQ) regarding implementation of the Affordable Care Act. This FAQ has been prepared by the Departments of Labor, Health and Human Services (HHS), and the Treasury (collectively, the Departments). Like previously issued FAQs (available at http://www.dol.gov/ebsa/healthreform/), this FAQ answers a question from stakeholders to help people understand the law and benefit from it, as intended.

Disclosure with respect to Preventive Services

Q: My closely held for-profit corporation’s health plan will cease providing coverage for some or all contraceptive services mid-plan year. Does this reduction in coverage trigger any notice requirements to plan participants and beneficiaries?

Yes. For plans subject to the Employee Retirement Income Security Act (ERISA), ERISA requires disclosure of information relevant to coverage of preventive services, including contraceptive coverage. Specifically, the Department of Labor’s longstanding regulations at 29 CFR 2520.102-3(j) (3) provide that, the summary plan description (SPD) shall include a description of the extent to which preventive services (which includes contraceptive services) are covered under the plan. Accordingly, if an ERISA plan excludes all or a subset of contraceptive services from coverage under its group health plan, the plan’s SPD must describe the extent of the limitation or exclusion of coverage. For plans that reduce or eliminate coverage of contraceptive services after having provided such coverage, expedited disclosure requirements for material reductions in covered services or benefits apply. See ERISA section 104(b)(1) and 29 CFR 2520.104b-3(d)(1), which generally require disclosure not later than 60 days after the date of adoption of a modification or change to the plan that is a material reduction in covered services or benefits. Other disclosure requirements may apply, for example, under State insurance law applicable to health insurance issuers.

Although First in Universal Healthcare Requirement…Massachusetts Remains Near Last in a Functioning Website/Exchange

July 14, 2014 at 11:44 am | Posted in Affordable Care Act, Health Insurance Exchanges, Health Insurance Marketplace | Leave a comment
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As reported in the July 10, 2014 article from the Associated Press that follows, frustration abounds on Beacon Hill as the state is still hoping for a soon to be operational health insurance exchange/marketplace.

By BOB SALSBERG, Associated Press:

BOSTON (AP) Software ordered by Massachusetts to fix its hobbled health care exchange passed initial tests, renewing hopes that the state could finally have a fully operational website by year’s end, officials said Thursday.

The breakdown dramatically slowed the state’s transition to the federal Affordable Care Act from its own first-in-the-nation universal health insurance law that provided a model for President Barack Obama’s plan.

Massachusetts severed ties earlier this year with the lead contractor on its health exchange, CGI Group, and has been forced to shuffle more than 200,000 of its residents into temporary Medicaid coverage.

In May, state officials unveiled a “dual-track” approach that called for buying software that has powered insurance marketplaces in other states while also laying the groundwork for a switch over to the federal government’s health insurance market, should that be necessary.

Maydad Cohen, a special assistant to Gov. Deval Patrick, told the Massachusetts Health Connector board that the software cleared several key tests after its initial release last month, prompting federal officials to authorize the state to continue pursuing its current strategy.

A final decision on whether to go forward with the software solution is expected early next month following the rollout of an enhanced version of the program.

Cohen said the goal was a fully functional exchange before the next ACA enrollment period beginning Nov. 15.

“I don’t know where we are going to be at open enrollment right now, but I am increasingly, cautiously optimistic about our ability to deliver the product,” Cohen told reporters after briefing the board.

The total cost to taxpayers for the website breakdown remained unclear.

The state initially estimated the cost of the dual-track approach at $121 million. Officials said they would not be able to produce a final cost estimate until it finalized contract negotiations with Optum, a health care technology firm that was retained by the state.

Cohen said state officials hope the federal government agrees to pay the full tab for repairs. A separation agreement reached with CGI calls for paying the Montreal-based firm an additional $35 million on top of the $17 million the state already had paid toward an original $89 million contract.

The state also had paid out $138 million in fees for medical services through June 30 for the 237,000 residents forced into “provisional” Medicaid coverage because the connector was unable to determine their eligibility for ACA-compliant programs, Secretary of Administration and Finance Glen Shor said Thursday.

That total was before federal reimbursement, and Shor insisted the overall costs would not have been much higher had the state been able to enroll more people into permanent coverage. Officials remain confident that all residents will be moved off temporary coverage by next year.

Massachusetts has been given a waiver from most requirements of the federal law until Dec. 31.

Supreme Court Strikes Down ACA Contraception Mandate in Application to Family Owned Companies

June 30, 2014 at 12:06 pm | Posted in Affordable Care Act | Leave a comment
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This morning the Supreme Court announced, in a 5-4 decision, that the ACA’s contraception mandate violated the constitution’s religious protection clause in regards to its application to family or closely held corporation. The court took pains to say that its ruling did not reach publicly traded companies and that it was limited to only the issue of contraception. Justice Alito, writing for the majority, opined that closely held corporations cannot be required to provide contraception coverage under the ACA if they had religious objections. The IRS defines a closely held corporation as: one that has more than 50 percent of the value of its outstanding stock owned (directly or indirectly) by five or fewer individuals and is not a personal service corporation. “Protecting the free-exercise rights of closely held corporations thus protects the religious liberty of the humans who own and control them,” wrote Alito.

A copy of the opinion can be found here: http://www.supremecourt.gov/opinions/13pdf/13-354_olp1.pdf

IRS Says Employer Payment Plan for Marketplace Individual Coverage Triggers $36,500 per Employee per Year Penalty

May 27, 2014 at 3:25 pm | Posted in Affordable Care Act, Health Insurance Marketplace, IRS | Leave a comment
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Last week the IRS released the FAQS below which are intended to disincent employers from directing employees to a Marketplace/Exchange with the promise of reimbursing the employee for any premiums used for Exchange coverage since the “employer payment plan” is considered a “group health plan” that violates the ACA group health plan reforms.   Note that the first FAQ concludes:

“Consequently, such an arrangement fails to satisfy the market reforms and may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) under section 4980D of the Internal Revenue Code.”

Employer Health Care Arrangements

Q1. What are the consequences to the employer if the employer does not establish a health insurance plan for its own employees, but reimburses those employees for premiums they pay for health insurance (either through a qualified health plan in the Marketplace or outside the Marketplace)?

Under IRS Notice 2013-54, such arrangements are described as employer payment plans. An employer payment plan, as the term is used in this notice, generally does not include an arrangement under which an employee may have an after-tax amount applied toward health coverage or take that amount in cash compensation. As explained in Notice 2013-54, these employer payment plans are considered to be group health plans subject to the market reforms, including the prohibition on annual limits for essential health benefits and the requirement to provide certain preventive care without cost sharing. Notice 2013-54 clarifies that such arrangements cannot be integrated with individual policies to satisfy the market reforms. Consequently, such an arrangement fails to satisfy the market reforms and may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) under section 4980D of the Internal Revenue Code.

Q2. Where can I get more information?

On Sept. 13, 2013, the IRS issued Notice 2013-54, which explains how the Affordable Care Act’s market reforms apply to certain types of group health plans, including health reimbursement arrangements (HRAs), health flexible spending arrangements (health FSAs) and certain other employer healthcare arrangements, including arrangements under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy.

DOL has issued a notice in substantially identical form to Notice 2013-54, DOL Technical Release 2013-03, and HHS will shortly issue guidance to reflect that it concurs with Notice 2013-54. On Jan. 24, 2013, DOL and HHS issued FAQs that addressed the application of the Affordable Care Act to HRAs.

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