Treasury Tackling Final Issues Under the ACA, Agency Official Says

The Treasury Department is hammering out final issues with Affordable Care Act compliance, from employer reporting requirements to health insurer fees, and should have some guidance out soon, Treasury's benefits tax counsel said.          

George H. Bostick, speaking Nov. 8 on a panel at the American Bar Association's 7th Annual Labor and Employment Law Conference in New Orleans, said Treasury is still working on: 

 • final regulations on the employer shared-responsibility proposed rules under tax code Section 4980H;

 • final regulations on reporting minimum essential coverage under Section 6055 and proposed rules on ACA employer information reporting requirements under Section 6056;

• Public Health Service Act Section 2716, which prohibits insured plans from discriminating in favor of highly compensated employees; and

• final regulations on the ACA Section 9010 fee—a flat amount divided among insurers according to their market share. Treasury is trying to address whether multiemployer plans are subject to this fee, Bostick said. The Internal Revenue Service proposed the rule in March, which would implement ACA fees on insurers, projected to amount to $8 billion in 2014.         

Bostick said further guidance on Section 2708 of the PHSA and its 90-day waiting period limit for enrolling employees in health-care coverage is in the works, and that the Labor Department, which is taking the lead on the matter, will issue the guidance.         

 Compliance Issues        

The panel also reviewed the most important compliance issues concerning the ACA.         

 Acknowledging it is here to stay. Kathryn L. Moore, University of Kentucky College of Law professor, Lexington, Ky., said the ACA has withstood political challenges and legal challenges, so employers should assume it is here to stay. The next legal challenge concerns whether employers can be forced to contribute to health plans that have to provide contraceptive care coverage under the ACA requirements, she said. It seems likely the U.S. Supreme Court will grant certiorari in one of these contraceptive cases, Moore said.        

Utilizing a retiree-only plan. Martha Jo Wagner of Griffith & Wheat PLLC, Washington, said if a plan only covers retirees, it isn't subject to the ACA.         

Keeping the plan grandfathered.  Health plans that existed on March 23, 2010, when the ACA took effect, are grandfathered, Bernard T. King of Blitman &  King LLP, Syracuse, N.Y., said. If a plan loses this status, by substantially reducing benefits or increasing employee costs, then the plan will have to provide more benefits. Deductibles can't be increased, there are added governmental reporting requirements and the plan will be subject to certain external appeal procedures, he said.         

 Amending the plan. Health plan sponsors must amend their non-grandfathered plans, or plans that lose their grandfathered status, for the ACA requirements, Wagner said.         

Processing claims.  The ACA imposes new internal and external review procedures, Wagner said. Under the new internal review procedures, there are three important changes, she said. First, if a group health plan fails to comply with the proper process, the claim is deemed to have been denied, meaning the claimant can go straight to filing a lawsuit, she said. The court will apply de novo review, because there is no decision on the claim, she said. Second, claimants have an opportunity to submit written materials and get access to their files, she said. Third, claimants have the opportunity to respond to additional evidence from the reviewer, she said.        

Under the external review procedures, plans may have a choice between federal and state rules, Wagner said. Only medical judgment or rescissions of coverage are available for review, she added. Also, there is a big difference between standard review procedures, which allow 45 days for review, or expedited review procedures, which allow 72 hours.       

Health insurance marketplaces.  Bostick discussed the health insurance marketplaces, including the Small Business Health Options Program (SHOP) marketplaces for small employers and the qualified health plans issuing individual policies, and how they are designed to spread risk and address the unpredictability of cost.        

Deciding to pay or play.  Employers have a choice of whether to provide insurance or pay a penalty. Bostick said under the Section 4980H shared-responsibility rules, Treasury is working on how employees know when there is an offer of coverage by the employer.

 Excerpted from a story that ran in Pension & Benefits Daily (11/8/2013).