The Department of Health and Human Services (HHS) and the IRS on Friday released hundreds of pages of new guidance, including a proposed notice of benefit and payment parameters for 2016. Although the annually updated notice primarily regulates insurers offering individual and group health products, some of the items affecting employer plans include:
Reinsurance proposals. The reinsurance contribution that employers with self-funded plans and insurers must pay would shrink to $27 per covered life for the 2016 benefit year. Technical changes to the covered-lives counting method and to expatriate plan compliance are also proposed.
Cost-sharing limit. The cost-sharing limit for 2016 would increase to $6,850 for self-only coverage and $13,700 for other plans.
Minimum value. HHS proposes that employer plans must not only meet the 60% quantitative test for minimum value, but also provide "substantial coverage of both inpatient hospital services and physician services."
Other items. Proposed changes to the essential health benefit (EHB) rules would allow states to update their benchmarks for 2017 and define "habilitative services." Employers don't have to cover all EHBs, but they affect compliance with the annual dollar and cost-sharing limits and the summary of benefits and coverage. Other proposals include giving participants in noncalendar-year group health plans the ability to special enroll at plan year-end in ACA exchange coverage, even if they are eligible to renew their group coverage.
IRS addresses individual mandate, employer “flex credits.” Friday also brought three new pieces of guidance from IRS including amendments to the final minimum essential coverage (MEC) rules for individuals, a notice identifying hardship exceptions to the individual mandate, and a revenue procedure detailing the 2016 contribution percentages that will determine affordable coverage and eligibility for premium tax credits.
The final IRS rules say employer "flex credit" contributions to a cafeteria plan reduce an employee's coverage cost if they can't be received as taxable benefits and can only be used to pay for MEC and medical expenses. The final rules also address how health reimbursement arrangements and wellness programs affect the affordability of coverage and identify hardship exceptions that individuals can claim on federal tax returns without receiving a separate determination.
House GOP lawsuit filed. Also on Friday, Republicans filed their lawsuit challenging what they see as the Administration’s overreach in implementing the ACA. The suit challenges the IRS’s authority to unilaterally delay the employer mandate and the Administration’s ability to issue ACA subsidies designed to help people with their deductibles and co-payments. Many legal experts believe the suit will be dismissed because it’s questionable whether the House has standing to bring it, but legal challenges to the ACA are proving to be a real wild card.