As expected, the 114th Congress began its term by attacking provisions of the Affordable Care Act (ACA). On Tuesday, the House of Representatives voted unanimously in favor of the Hire More Heroes Act of 2015 (H.R. 22), a bill that would exempt employees covered under TRICARE or other health insurance provided by the Veterans Administration from being counted toward the Affordable Care Act’s 50-employee employer mandate threshold. Under the healthcare law’s employer responsibility requirements, an employer with at least 100 full-time employees (including full-time equivalent employees) will be required to provide health insurance that meets certain ACA standards to their full-time employees starting in 2015, or pay a penalty. For employers with 50 to 100 full-time employees, this pay-or-play employer mandate becomes effective in 2016. Employees falling under the categories specified in the Hire More Heroes Act would not count toward these thresholds. Given the new composition of the Senate, it is possible this measure will clear that chamber as well.
Articles Discussing Health Care Reform.
Proposed Regulations Would Expand Definition of Excepted Benefits to Cover Certain Types of Limited Wraparound Coverage
On December 19, 2014, the U.S. Departments of Labor, Health and Human Services, and Treasury published proposed regulations that would treat certain limited health coverage that wraps around eligible individual health insurance or multi-state plan coverage offered by the U.S. Office of Personnel Management (OPM) as an “excepted benefit.” Excepted benefits are exempt from numerous requirements generally applicable to group health plans, including the requirements of HIPAA and the insurance market reforms of the Affordable Care Act (ACA).
The Affordable Care Act and Staffing: One Size Does Not Fit All
Since its enactment in 2010, the Affordable Care Act (ACA) has generated debate and questions about the law’s impact on third-party staffing arrangements. With the effective date of the ACA’s “pay-or-play” employer mandate just weeks away for many employers, confusion still exists about how “staffing firms” and their clients should prepare. This task is complicated by the fact that numerous staffing operational models exist and call for different approaches. The lack of clear definitions regarding staffing relationships in the IRS final rule1 implementing the employer mandate under Section 4980H of the Code2 (Final Rule) further complicates the issue. Synchronizing the vague definitions in the Final Rule with the varying models for staffing firms is needed to provide a better understanding of how staffing companies and their clients should respond.
ACA Outlook: What Will 2015 Hold for the Affordable Care Act and Employers?
For many employers, the effective date of the Affordable Care Act’s “play-or-pay” mandate is only weeks away. The impending deadline comes amid questions about the future—and perhaps viability—of the law itself. Entering 2015, the ACA faces challenges both in a new Republican-controlled Congress and in the Supreme Court. Yet, the political and legal uncertainty surrounding the ACA should not deter employers from ensuring they are prepared for the “play-or-pay” mandate and other upcoming requirements.
Supreme Court to Determine Validity of Federal Subsidies of Health Insurance Purchased on Federally Established Exchanges
The U.S. Supreme Court has agreed to weigh in on the issue of whether the IRS has the authority, under the Affordable Care Act (ACA), to extend tax credits to consumers shopping on the federal Marketplaces.
Affordable Care Act Update: Hospitalization Services Required for Plan to Meet Minimum Value
On November 4, 2014, the Internal Revenue Service (IRS) released guidance (Notice 2014-69) clarifying that certain group health plans that do not provide for hospitalization services or physician services or both will fail to satisfy the minimum value requirements for purposes of the employer mandate of the Affordable Care Act (ACA). This means employers that do not qualify for transition relief and offer such health plans will not be considered to meet the requirements of the employer mandate and may be subject to a penalty.
IRS Releases Draft ACA Reporting Form Instructions
On August 28, the Internal Revenue Service (IRS) released draft instructions for completing health insurance reporting forms required under the Affordable Care Act (ACA). The release of the instructions comes a month after the IRS released the draft forms employers and insurers must use to report information regarding health care coverage.
Agencies Issue New Regulations Governing ACAs Contraception Mandate
On August 27, 2014, new interim final regulations were published by several administrative agencies entitled “Coverage of Certain Preventive Services Under the Affordable Care Act.” On the same day, the agencies released a Notice of Proposed Rulemaking with the same title. As we have previously written, the Patient Protection and Affordable Care Act (ACA) imposes insurance coverage obligations on both non-profit and for-profit religious organizations. These coverage mandates have been the subject of extensive litigation.
DOJ Demonstrates Continued Focus on FCA Claims against Healthcare Entities
In 2009, Attorney General Eric Holder and Former U.S. Department of Health and Human Services Secretary Kathleen Sebelius created an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement. According to the U.S. Department of Justice, the task force yielded historic results resulting in the recovery of $12.1 billion from January 2009 through September 2013. Of that amount, the DOJ claims it recovered more than $2 billion each year for healthcare fraud, reaching $2.6 billion in 2013. In 2014, this trend has continued with two Florida hospitals settling FCA claims with the DOJ last spring for $85 million and $7 million and another two healthcare entities recently settling with the DOJ for $2.2 million and $35 million.
The Department of Health & Human Services Clarifies Applicability of Certain Provisions of the Affordable Care Act to Health Insurance Issuers in Puerto Rico
The Affordable Care Act (“ACA”) and its regulations have been incorporated into the Puerto Rico Health Insurance Code, as amended, and guidance has been issued by the Office of the Insurance Commissioner to such effect. The Department of Health & Human Services (“HHS”), however, has recently clarified that the following requirements imposed under the ACA, will not apply to individual or group health insurance in the U.S. territories, including Puerto Rico: (i) guaranteed availability; (ii) community rating; (iii) single risk pool; (iv) rate review; (v) medical loss ratio; and (vii) essential health benefits.
IRS Issues Draft ACA Reporting Forms
On July 24, 2014, the Internal Revenue Service (IRS) released draft forms that employers will use to report on health coverage that they offer to their employees. In March, the IRS issued final rules implementing the health coverage reporting requirements under the Affordable Care Act (ACA). The information reporting requirements become effective for the 2015 tax year.
Circuits Split Regarding Validity of Federal Subsidies of Health Insurance Purchased on Federally-Established Exchanges
Two federal appeals courts have issued opposing decisions regarding whether the IRS has the authority under the Affordable Care Act (“ACA”) to extend federal tax subsidies to individuals who obtain health insurance coverage through a federal Marketplace (also known as an Exchange).
Federal Courts Issue Conflicting Decisions on Affordable Care Act Subsidies
Executive Summary: On July 22, 2014, two different federal appeals courts issued conflicting decisions on the availability of subsidies for health insurance purchased by individuals on Exchanges established by the federal government under the Affordable Care Act (ACA). A three-member panel of the D.C. Circuit Court of Appeals held that the subsidy is only available for insurance purchased on an Exchange established by one of the 50 states. Accordingly, that court invalidated an IRS regulation that authorizes the subsidy also for insurance purchased on a federal Exchange. Halbig v. Burwell, (D.C. Cir. July 22, 2014). However, Fourth Circuit Court of Appeals reached the opposite conclusion, finding the language of the ACA ambiguous and deferring to the IRS interpretation. Thus the Fourth Circuit upheld the IRS regulation. King v. Burwell (4th Cir. July 22, 2014).
Health Plans That Intend to Drop Contraceptive Coverage Must Notify Plan Participants
In response to the recent U.S. Supreme Court holding in Burwell v. Hobby Lobby that closely held, for-profit entities with religious objections to certain aspects of the Affordable Care Act’s (ACA) birth control requirements could avoid the mandate by invoking the Religious Freedom Restoration Act, the Department of Labor has released guidance to address this eventuality. In the latest set of Frequently Asked Questions (FAQs) on the ACA’s implementation, the DOL explains that group health plans offered by closely held, for-profit businesses that intend to cease providing all or some contraceptive coverage must notify plan participants within 60 days after the adoption of a modification or change to the plan’s coverage.
Democratic Lawmakers Introduce Measure to Counter Hobby Lobby Decision
As expected, Democratic members of the House and Senate have introduced legislation in response to the U.S. Supreme Court’s recent ruling in Burwell v. Hobby Lobby. The Court in this contentious decision held that closely-held for-profit entities with religious objections to certain aspects of the birth control mandate imposed by the Affordable Care Act could avoid the mandate by invoking the Religious Freedom Restoration Act (RFRA). As discussed in a press release on the new measure, the Protect Women’s Health from Corporate Interference Act of 2014 (H.R. 5051, S. 2578) would: