In an earlier post, we reported on a troubling development in the draft 2015 instructions for Forms 1094-B and 1095-B which, if adopted, would have required sponsors of Health Reimbursement Arrangements (“HRA”) to issue separate Forms 1095-B and transmit on Form 1094-C when the HRA was integrated with fully-insured coverage. We argued in that post that this made little sense under the circumstances, as covered individuals were already receiving a Form 1095-B for the fully-insured coverage. We were therefore pleased to see the IRS change course in the final 2015 Instructions. There, the IRS adopted a rule under which,

“An employer with an insured major medical plan and HRA coverage for which an individual is eligible because the individual enrolls in the insured major medical plan is not required to report the coverage under the HRA for an individual covered by both arrangements.”

This rule applies only to coverage provided to active employees and only in instances where the employer sponsors both the fully-insured major medical plan and the HRA, however. Noting residual “confusion” about the reporting obligations that apply to retiree-HRAs, Notice 2015-68 offers some welcome clarification—which is the topic of this post.

Continue Reading The Affordable Care Act’s Reporting Requirements for Carriers and Employers (Part 16 of 24): Reporting for, and Clearing Up Confusion Over, Post-65 Retiree Health Reimbursement Arrangements

Written by Alden J. Bianchi

Regulations implementing the Affordable Care Act’s (ACA) employer shared responsibility rules including the substantive “pay-or-play” rules and the accompanying reporting rules were adopted in February.  Regulations implementing the reporting rules in newly added Internal Revenue Code Sections 6055 and 6056 came along in March. And draft reporting forms (IRS Forms 1094-B, 1094-C, 1095-B and 1095-C) and accompanying instructions followed in August.

With these regulations and forms, and a handful of other, related guidance items (e.g., a final rule governing waiting periods), the government has assembled a basic—but by no means complete—compliance infrastructure for employer shared responsibility. But challenges nevertheless remain. Set out below is a partial list of items that are unresolved, would benefit from additional guidance, or simply invite trouble.

Continue Reading The Affordable Care Act—Countdown to Compliance for Employers, Week 1: Going Live with the Affordable Care Act’s Employer Shared Responsibility Rules on January 1, 2015 . . . What Can Possibly Go Wrong?

Written by Alden J. Bianchi

A recent Washington Post article (“Glitch in health care law allows employers to offer substandard insurance,” September 12, 2014) highlights an Affordable Care Act compliance strategy being marketed heavily (and adopted widely) in industries that traditionally did not previously offer coverage to large cohorts of variable hour and contingent workers. (We discussed these arrangements in a previous post. The strategy—which is referred to commercially as a “minimum value plan” or “MVP”— involves an offer of group health plan coverage that, while similar in most respects to traditional major medical coverage, carves out inpatient hospital services.

The Washington Post article (and other commentary) engages in some hand-wringing about why these plans are inconsistent with the goals of the Act. One commentator fumed that an employer that offers these arrangements should “examine its conscience.” (Readers might recall a similar bout of hand-wringing that accompanied “skinny” plans.)

It’s time to take breath.

Continue Reading The Affordable Care Act—Countdown to Compliance for Employers, Week 15: Can a Plan That Fails to Cover Inpatient Hospitalization Services Provide Minimum Value?