Cadillac Tax and Other Key ACA Taxes Repealed

Dec 23, 2019 | Legislative Updates

On Dec. 20, 2019, President Trump signed into law a spending bill that prevents a government shutdown and repeals the following three taxes and fees under the Affordable Care Act (ACA):

• The Cadillac tax on high-cost group health coverage, beginning in 2020;
• The medical devices excise tax, beginning in 2020; and
• The health insurance providers fee, beginning in 2021.

The law also extends PCORI fees to fiscal years 2020-2029. (more…)

Proposed Rule on Health Care Transparency to Affect Some Employer Plans

Nov 18, 2019 | Legislative Updates

On Nov. 15, 2019, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued a proposed rule regarding transparency in coverage that would impose new transparency requirements on group health plans and health insurers in the individual and group markets. Specifically, the proposed rule would require plans and issuers to disclose:

• Cost-sharing estimates to participants, beneficiaries and enrollees upon request; and
• In-network provider-negotiated rates and historical out-of-network allowed amounts on their website.

The proposals would only apply to non-grandfathered coverage, and would also apply to self-insured group health plan sponsors.

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Pay or Play Penalties Will Increase for 2019 and 2020

Sep 12, 2019 | Legislative Updates

On Sept. 11, 2019, the IRS updated their Questions and Answers (Q&As) on the employer shared responsibility rules under the Affordable Care Act (ACA), to include adjusted penalty amounts for 2019 and 2020. According to the FAQs, the penalty amounts will be increased as follows:

• For calendar year 2019, the adjusted $2,000 amount is $2,500 and the adjusted $3,000 amount is $3,750.
• For calendar year 2020, the adjusted $2,000 amount is $2,570 and the adjusted $3,000 amount is $3,860.

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Affordability Percentages will Decrease for 2020

Jul 27, 2019 | Legislative Updates

On July 23, 2019, the IRS issued Revenue Procedure 2019-29 to index the contribution percentages in 2020 for determining affordability of an employer’s plan under the Affordable Care Act (ACA). For plan years beginning in 2020, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

• 78% of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility; and
• 24% of the employee’s household income for the year, for purposes of an individual mandate exemption (adjusted under separate guidance). Although this penalty was reduced to zero in 2019, some individuals may need to claim an exemption for other purposes.

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Individual Coverage HRAs – Paying Individual Insurance Premiums

Jul 3, 2019 | Legislative Updates

Beginning in 2020, employers of all sizes may implement a new HRA design – an individual coverage HRA (ICHRA) – to reimburse their eligible employees for insurance policies purchased in the individual market or Medicare premiums.

Final rules released by the Departments of Labor, Health and Human Services (HHS) and the Treasury (Departments) permit employers to offer an ICHRA as an alternative to traditional group health plan coverage, subject to certain conditions. One of these conditions is that employees and dependents who are covered by an ICHRA must be enrolled in individual insurance coverage or Medicare coverage for each month they are covered by the ICHRA. Also, employers that sponsor ICHRAs must comply with an annual notice requirement.

Employers may allow employees to pay for off-Exchange health insurance on a tax-favored basis, using a Section 125 cafeteria plan, to make up any portion of the premium that is not covered by the employer’s ICHRA. (more…)

HSA/HDHP Limits Increase for 2020

May 28, 2019 | Legislative Updates

The IRS released Revenue Procedure 2019-25 to announce the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2020. These limits include:

• The maximum HSA contribution limit;
• The minimum deductible amount for HDHPs; and
• The maximum out-of-pocket expense limit for HDHPs.

These limits vary based on whether an individual has self-only or family coverage under an HDHP.

The IRS limits for HSA contributions increase for 2020. Eligible individuals with self-only HDHP coverage will be able to contribute up to $3,550 for 2020, while eligible individuals with family HDHP coverage will be able to contribute up to $7,100 for 2020. The HDHP cost-sharing limits also increase for 2020. (more…)