IRS Delays Nondiscrimination Rules for Fully Insured Health Plans

Nondiscrimination Rules Delayed

Under the health care reform law, non-grandfathered, fully insured group health plans were set to be subject to federal nondiscrimination rules for the first time. These rules, which have historically applied only to self-insured health plans, prohibit discrimination in favor of highly compensated individuals (HCIs). They are found in Section 105(h) of the Internal Revenue Code (the Code). 

Health Care Reform: IRS Q&As on OTC Drugs and Debit Cards

The Patient Protection and Affordable Care Act (PPACA) changed the rules for reimbursement of over-the-counter (OTC) medicines and drugs through plans such as health flexible spending arrangements (FSAs) and health reimbursement arrangements (HRAs). After December 31, 2010, OTC medicines and drugs (except insulin) may only be reimbursed with a prescription.

How Will the 2010 Elections Affect Health Care Reform?

The 2010 Mid-Term Elections

The recent elections, held on November 2, 2010, are bringing big changes to Washington. Results of a few races are still to be finalized in the days after the elections, but it is already clear that we are looking at a new political landscape.


Republicans have taken control of the House of Representatives, gaining at least 60 seats there. These wins give the party the largest House majority it has had since the 1940s. However, Democrats are set to maintain a slim majority in the Senate.

Definition of “Dependent” For Health Plans

Many health plans provide coverage for dependent children of the plan’s participants. Traditionally, health plans have had significant flexibility in determining which individuals would be eligible to be covered as dependents. However, some states have adopted requirements mandating dependent coverage for certain individuals under insured plans. Also, under the Patient Protection and Affordable Care Act, which was enacted in March 2010, health plans that offer dependent coverage must cover most children up to age 26, effective on the first day of the first plan year on or after September 23, 2010.

Health Care Reform: Grandfathered Plans

EXECUTIVE SUMMARY

In March 2010, President Obama signed sweeping health care legislation into law. The health care reform law contains many provisions that will affect your business and your employees. The extent of the impact will depend, in part, on whether you maintained a health care plan on March 23, 2010, the date the primary legislation was enacted. If your company sponsored a plan on that date, it is considered a “grandfathered” plan.

• Grandfathered plans are group health plans or health insurance coverage in which an individual was enrolled on March 23, 2010, the date of enactment of the legislation.
• These plans can avoid many of the new health care reform provisions.
• The “grandfathered” protections still apply even if family members join current coverage or new employees join a current plan.
• Plans can lose grandfathered status if they make significant changes to benefits or costs.

This Herbruck Alder Legislative Brief provides information to help you understand what makes a plan “grandfathered.” It also describes the provisions that do not apply to grandfathered plans, as well as major provisions that do apply. Please read below for more information.

IRS Releases Information on Claiming Small Employer Health Care Tax Credit

The Patient Protection and Affordable Care Act (PPACA) was enacted on March 23, 2010. PPACA includes a tax credit for small businesses that provide health care coverage to their employees. The tax credit is effective for tax years beginning in 2010. The credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.

On September 7, 2010, the Internal Revenue Service (IRS) released a draft version of the form that small businesses and tax-exempt organizations will use to calculate the small business health care tax credit when they file income tax returns. The IRS also announced how eligible tax-exempt organizations – which do not generally file income tax returns – will claim the credit during the 2011 filing season.

Health Care Reform: Nondiscrimination Rules Apply to New Fully-Insured Group Health Plans

Under health care reform, some fully-insured group health plans will be required to comply for the first time with federal nondiscrimination rules related to compensation. These rules prohibit discrimination in favor of highly-compensated individuals (HCIs). They will apply to non-grandfathered fully-insured plans only and are effective for plan years beginning on or after September 23, 2010.

This Herbruck Alder Legislative Brief describes the nondiscrimination rules that apply to non-grandfathered group health plans under health care reform. Please click below for more information.

Health Care Reform: DOL Provides Grace Period for Internal Claims And Appeals Rules

The Patient Protection and Affordable Care Act (PPACA) requires non-grandfathered group health plans to adopt an improved internal claims and appeals process and follow minimum requirements for external review. This requirement is generally effective for plan years beginning on or after September 23, 2010.

Interim final regulations implementing the appeals process rules were issued on July 23, 2010. On September 20, 2010, the Department of Labor supplemented the regulations with Technical Release 2010-02. This guidance establishes a grace period until July 1, 2011 for some of the standards contained in the regulations.

Health Care Reform: Open Enrollment Compliance Checklist

Health care reform, in the form of the Patient Protection and Affordable Care Act, brings many changes for employers and their health plans. As sponsors of group health plans prepare to comply with health care reform’s many requirements, they need to be aware of how health care reform will affect their plans for the coming plan year. Many changes are effective on the first day of the first plan year beginning on or after September 23, 2010, or January 1, 2011 for calendar year plans.

This Herbruck Alder Legislative Brief provides a compliance checklist for employers to review in advance of the 2011 plan year and open enrollment season. Please contact your Herbruck Alder representative for assistance.

COBRA Common Questions: Notification Requirements

The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires that covered employers provide former employees and dependents who lose group health benefits with an opportunity to continue group health insurance coverage. Individuals who are eligible for health coverage under COBRA are known as “Qualified Beneficiaries.” 

This Herbruck Alder Legislative Brief provides answers to commonly-asked questions regarding COBRA’s general notice requirements.

Health Care Reform: DOL Issues Implementation FAQ Guidance

The Patient Protection and Affordable Care Act (PPACA) was enacted on March 23, 2010 and amended by the Health Care and Education Reconciliation Act of 2010 on March 30, 2010. The health care reform legislation includes many changes related to health care coverage and raises a number of questions for employers.

The Department of Labor recently issued guidance in the form of Frequently Asked Questions to assist in implementing these changes. The FAQs cover issues related to general compliance, grandfathered plans, appeals process requirements, dependent coverage of adult children, out-of-network emergency services and discrimination in favor of highly-compensated employees.

Health Care Reform: Interim Final Rules on a Patients’ Bill of Rights

The Departments of Treasury, Labor (DOL) and Health and Human Services (HHS) have issued interim final rules related to the provisions of the Patient Protection and Affordable Care Act (PPACA) regarding pre-existing condition exclusions, lifetime and annual limits, rescissions and other patient protections. Most of these provisions are effective for plan years beginning on or after September 23, 2010.

Plan sponsors should become familiar with these requirements in order to determine whether the new rules apply to their plans and whether their plans must be amended accordingly.
 
Click below for the Herbruck Alder Legislative Brief that describes the provisions of PPACA regarding these rules, as well as the clarifications made by the interim final rules.

Tax Cut Legislation Implications For Employers

Congress Passes Tax Cut Bill
On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Tax Relief Act). The Act is a multi-billion dollar tax cut package that extends certain tax provisions known as the “Bush tax cuts.” Specifically, certain provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) are extended for two years.

Health Care Reform: Grandfathered Plans Can Change Insurance Carriers

New Rule for Grandfathered Plans

Under the Patient Protection and Affordable Care Act (PPACA), health plans that existed on March 23, 2010 are generally considered “grandfathered plans.” Grandfathered plans are exempt from some of the health care reform requirements, including coverage of preventive care services with no cost-sharing and patient protections such as guaranteed access to OB-GYNs and pediatricians.

Regulations were issued on June 17, 2010 regarding grandfathered plans. These regulations provided that certain changes to an existing plan could cause the plan to lose its grandfathered status. For example, plans could lose grandfathered status by significantly increasing costs or reducing benefits under the plan. Under the initial rule, plans would also lose grandfathered status by changing insurance policies, even if no other prohibited changes were made to the plan.

The Departments of Labor, Health and Human Services and Treasury (the Departments) have now amended the grandfathered plan regulations to permit insured group health plans to change insurance policies or carriers. Under the amended rule, group health plans will no longer automatically lose their grandfathered status merely because of a change in the plan’s insurance policy, certificate or contract of insurance. However, making any other prohibited change will still cause a loss of grandfathered status.

Health Care Reform: New Form W-2 Reporting Requirements

The Patient Protection and Affordable Care Act (PPACA) was enacted on March 23, 2010 and amended by the Health Care and Education Reconciliation Act of 2010 on March 30, 2010. Health care reform brings a number of changes to employers and plan sponsors. One such change is the requirement to report the aggregate cost of employer-sponsored health coverage on an employee’s Form W-2, effective for tax years beginning after December 31, 2010.

Small Businesses Eligible for Health Care Tax Credit

Under the recently enacted health care reform law, many small businesses and tax-exempt organizations that provide health insurance coverage to their employeees not qualify for a special tax credit.  The credit is:

• Designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have.
• In general, it is available to small employers that pay at least half the cost of single coverage for their employees.  
• It is available for tax years beginning in 2010 (an enhanced version of the credit will be effective beginning in 2014).

Click below for Small Businesses Eligible for Health Care Tax Credit and Small Business Health Care Tax Credit: Steps to Determine Eligibility.

Health Care Reform Timeline

On March 23, 2010, President Obama signed into law the health care reform bill, the Patient Protection and Affordable Care Act. This legislation, along with the Health Care and Education Reconciliation Act of 2010, makes sweeping changes to the U.S. health care system. These changes will be implemented over the next several years. This Legislative Brief provides a timeline of the implementation of key reform provisions that affect employers and individuals.

Click below for more information and contact Herbruck Alder with any questions about how you can prepare for health care reform.

Health Care Reform: Regulations Issued on Grandfathered Plans

The health care reform law passed earlier this year brings many changes to employers and health plans. The extent of the impact will depend, in part, on whether you maintained a health care plan on March 23, 2010, the date the primary legislation was enacted. If your company sponsored a plan on that date, it is considered a "grandfathered" plan. Grandfathered plans are exempt from certain health care reform requirements, such as no cost-sharing for preventive care and other patient protections.

On June 14, 2010, the Departments of Health and Human Services (HHS), Labor and Treasury issued regulations regarding grandfathered plans. Importantly, it clarifies what types of changes can be made to existing plans that will allow them to retain their "grandfathered" status.

Click below for the Herbruck Alder Legislative Brief that summarizes the new regulations to follow.