What’s New

DOL Releases Final Rule Expanding Association Health Plans

The U.S. Department of Labor (DOL) has issued a final rule expanding the opportunity of unrelated employers of all sizes (but particularly small employers) to offer employment-based health insurance through Association Health Plans (AHPs). Significantly, the final rule applies to “large group” cover age rules under the Affordable Care Act (ACA) to qualifying AHPs.

The final rule confirms that AHPs may be formed by employers in the same trade, industry, line of businesses, or profession. They may also be formed based on a geographic test such as a common state, city, county or same metropolitan area (even if the metropolitan area includes more than one State).

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IRS Issues Affordability Percentage Adjustment for 2019

The IRS released the inflation adjusted amounts for 2019 relevant to determining whether employer-sponsored coverage is “affordable” for purposes of the Affordable Care Act’s (“ACA’s”) employer shared responsibility provisions and premium tax credit program. For plan years beginning in 2019, the affordability percentage is 9.86% of an employee’s household income or applicable safe harbor.

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PCORI Fees Due by July 31, 2018

Employers that sponsor self-insured group health plans, including health reimbursement arrangements (HRAs) should keep in mind the upcoming July 31, 2018 deadline for paying fees that fund the Patient-Centered Outcomes Research Institute (PCORI). As background, the PCORI was established as part of the Affordable Care Act (ACA) to conduct research to evaluate the effectiveness of medical treatments, procedures and strategies that treat, manage, diagnose or prevent illness or injury. Under the ACA, most employers sponsors and insurers will be required to pay PCORI fees until 2019 (the fee does not apply to plan years ending on or after October 1, 2019).

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IRS Adjusts 2018 HSA Contribution Limit – Again

The IRS has announced it is modifying the annual limitation on deductions for contributions to a health savings account (“HSA”) allowed for taxpayers with family coverage under a high deductible health plan (“HDHP”) for the 2018 calendar year. Under Rev. Proc. 2018 – 27, taxpayers will be allowed to treat $6,900 as the annual limitation, rather than the $6,850 limitation announced in Rev. Proc. 2018 – 18 earlier this year.

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EEOC’s Status Report Creates Uncertainty for Wellness Programs

The U.S. District Court of the District of Columbia in American Association for Retired Persons (AARP) v. EEOC, the EEOC stated that “it does not currently have plans to issue a Notice of Proposed Rulemaking addressing incentives for participation in employee wellness programs by a particular date certain, but it also has not ruled out the possibility that it may issue such a Notice in the future.”

Employers continue to face uncertainty as to wellness program incentives subject to the ADA and GINA (i.e., those with medical exams or disability-related inquiries) as the EEOC awaits confirmation of Janet Dhillon as EEOC Chair and considers “a number of policy choices available.”

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CMS Extends Transition Relief for Non-Compliant Plans

The Centers for Medicare & Medicaid Services (CMS) announced a one-year extension to the transition policy (originally announced November 14, 2013 and extended several times since) for individual and small group health plans that allows issuers to continue policies that do not meet ACA standards.  This means individuals and small businesses may be able to keep their non-ACA compliant coverage through the end of 2019, depending on the policy year.

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IRS Adjusts HSA Contribution Limit

The IRS has released adjusted contribution limits for health savings accounts (HSAs) due to changes made by the Tax Cuts and Jobs Act (TCJA). The new HSA contribution limit for individuals with family high deductible health plan (HDHP) coverage is $6,850, a $50 reduction from the previously announced inflation-adjusted amount for 2018.

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Agencies Release Proposed Regulations on Short-term Limited Duration Insurance

The U.S. Department of Labor, Treasury, and Health and Human Services (Agencies) released proposed regulations that expand the availability of short-term limited duration insurance(STLDI). STLDI is offered in the individual (non-group) insurance market and is generally used by students or individuals between jobs. Therefore, the direct impact to employers is limited; however, there is some concern that this rule may disrupt the individual and small group markets and is seen by some as a further step by the Trump administration to erode Obama-era regulations.

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Stop Gap Funding Bill Delays Several ACA Taxes and Extends Chip Funding

On January 22, 2018, Congress passed, and President Donald Trump signed into law, the stopgap government funding bill (The Bill), ending the government shutdown. The Bill delays the Cadillac Tax and medical device tax for an additional two (2) years, suspends the applicability of the Health Insurer Fee for 2019, and extends federal funding for the Children’s Health Insurance Program (CHIP) for another six (6) years.

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