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Compliance Recap - December 2017

December was a relatively busy month in the employee benefits world.

The Internal Revenue Service (IRS) delayed the reporting deadlines in 2018 for the 1095-B and 1095-C forms to individuals. President Trump signed the Tax Cuts and Jobs Act. The Centers for Medicare and Medicaid Services (CMS) released guidance on accommodation revocation notices.

A U.S. District Court vacated U.S. Equal Employment Opportunity Commission (EEOC) wellness rules effective January 1, 2019. The U.S Department of Health and Human Services’ Office of Child Support Enforcement (OCSE) issued Frequently Asked Questions to address employers’ duties regarding medical support notices.

The IRS released Form 8941 instructions regarding credit for small employer health insurance premiums and Form W-2 reporting guidance for Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs).

UBA Updates

UBA updated existing guidance: Contraception Mandate Rolled Back for Employers

IRS Extends 2018 Deadlines for 1095-B and 1095-C Forms to Individuals

On December 22, 2017, the Internal Revenue Service (IRS) issued Notice 2018-06, delaying the reporting deadlines in 2018 for the 1095-B and 1095-C forms to individuals. The 1095-B form is now due to the individual identified as the “responsible individual” on the form by March 2, 2018. The 1095-C form is now due to employees by March 2, 2018.

There is no delay for the 1094-C and 1094-B forms, or for forms due to the IRS.

Read more about the IRS Notice.

President Trump Signs Tax Bill

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (Act) that, among other items, eliminates the individual mandate penalty under the Patient Protection and Affordable Care Act (ACA). The Act reduces the penalty associated with the individual shared responsibility provision to zero, effective in 2019.

Per the Congressional Research Service’s summary, the bill amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses.

For businesses, the bill:

  • Reduces the corporate tax rate from a maximum of 35 percent to a flat 20 percent rate (25 percent for personal services corporations).
  • Allows increased expensing of the costs of certain property.
  • Limits the deductibility of net interest expenses to 30 percent of the business's adjusted taxable income.
  • Repeals the work opportunity tax credit.
  • Terminates the exclusion for interest on private activity bonds.
  • Modifies or repeals various energy-related deductions and credits.
  • Modifies the taxation of foreign income.
  • Imposes an excise tax on certain payments from domestic corporations to related foreign corporations.

The bill also repeals or modifies several additional credits and deductions for individuals and businesses.

In particular, the Act eliminates the business deduction for qualified mass transit and parking benefits starting in 2018, and eliminates the exclusion for bicycle commuting expenses for tax years 2018 through 2025. These benefits (except for bicycle commuting) will continue to be tax-exempt to employees. For 2018, employees can contribute up to a maximum of $260 per month for both qualified mass transit and parking expenses through an employer-sponsored qualified transportation plan under Section 132(f).

The Act’s elimination of the business deduction for qualified mass transit and parking benefits means that employers will be taxed on the value of providing qualified transportation fringe benefits.

CMS Releases Guidance on Accommodation Revocation Notices

The Patient Protection and Affordable Care Act (ACA) requires that non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage provide coverage of certain specified preventive services without cost sharing. Under the ACA and interim final regulations, objecting entities could use an accommodation process as part of the exemption from the ACA’s requirement to provide contraceptive coverage.

If an entity wants to revoke the accommodation, then the regulations require that written notification be given to participants and beneficiaries. The Centers for Medicare and Medicaid Services (CMS) released guidance on the two methods that can be used to provide accommodation revocation notices.

Read more about CMS’ guidance.

U.S. District Court Vacates EEOC Wellness Rules Effective January 1, 2019

On August 22, 2017, the United States District Court for the District of Columbia held that the U.S. Equal Employment Opportunity Commission (EEOC) failed to provide a reasoned explanation for its decision to adopt 30 percent incentive levels for employer-sponsored wellness programs under both the Americans with Disabilities Act (ADA) rules and Genetic Information Nondiscrimination Act (GINA) rules.

At that time, the court declined to vacate the EEOC’s rules because of the significant disruptive effect it would have. However, the court remanded the rules to the EEOC for reconsideration.

In September 2017, the EEOC filed a status report indicating its schedule to comply with the court order, including issuing a proposed rule by August 2018 and a final rule by October 2019. It stated that it did not expect to require employers to comply with a new rule before 2021.

The court found the EEOC’s process of not generating applicable rules until 2021 to be unacceptable. Instead, the court determined that one year was ample time for employers to adjust to new EEOC rules. The court vacated the EEOC rule effective January 1, 2019, and ordered the EEOC to promulgate any new proposed rules by August 31, 2018.

OCSE Issues FAQs Regarding Employers’ Duties Regarding Medical Support Notices

The U.S Department of Health and Human Services’ Office of Child Support Enforcement (OCSE) issued its “Medical Support – Answers to Employers’ Questions” FAQs, which instruct employers and plan administrators how to complete Parts A and B of the National Medical Support Notice (NMSN). The FAQs also provide, among other items, the following guidance:

  • When a plan receives a request for information by a child support agency that issued an NMSN, the plan administrator is permitted to disclose protected health information in response to the NMSN under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
  • Even if a recently terminated employee has elected self-only COBRA continuation coverage, a plan should enforce the NMSN to cover the child of that former employee. If the plan is subject to COBRA and if the child loses coverage due to a qualifying event, then the child is a qualified beneficiary with the right to elect COBRA continuation coverage.
  • A plan administrator may take all necessary steps to enroll the child named in the NMSN if coverage is available and the premiums can be deducted with the limits of the Consumer Credit Protection Act (CCPA). Such steps may include changing an employee’s coverage to a different option, even if it affects the employee’s premiums.

IRS Releases Form 8941 Instructions: Credit for Small Employer Health Insurance Premiums

The Internal Revenue Service (IRS) released its instructions for Form 8941 which eligible small employers use to figure the credit for health insurance premiums for tax years beginning after 2009. For tax years beginning after 2013, the credit is only available for period of two consecutive tax years. Generally, the maximum credit is a percentage of premiums that the employer has paid during the tax year for health insurance coverage that the employer provided to certain employees enrolled in a qualified health plan offered through the Small Business Health Options Program (SHOP) Marketplace.

IRS Releases Form W-2 Reporting Guidance for QSEHRAs

The IRS released its Form 8962 with instructions. Form 8962 is used by individual taxpayers to calculate and report a premium tax credit. The instructions provide a reminder to employers who provided a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) to their eligible employees. For each employee covered under its QSEHRA, the employer should report the annual permitted benefit by indicating Code FF in Box 12 of the employee’s Form W-2.

Question of the Month

What code should an employer use for Form 1095-C Line 14 if:

  • the employer offers minimum essential coverage (MEC) providing minimum value (MV) to a full-time employee that is affordable (using the Federal Poverty Level safe harbor for affordability) and
  • the employer offers at least MEC to the employee’s spouse and dependents?

Does the code change if the employee declines coverage because the employee is covered by the spouse’s group health plan?

The employer should use Code 1A in Line 14. The code doesn’t change if the employee waives coverage.

 

Download the PDF

 


Compliance Bulletin: 2018 Minimum Wage Rates

The current federal minimum wage rate is $7.25 per hour. However, many states have adopted minimum wage rates higher than the federal rate. When the state rate and the federal rate are different, employers must pay their employees the higher rate.

Affected employers should review their employees’ pay rates and update their minimum wage poster notices as necessary to ensure compliance with local wage and hour regulations.

Download the following PDF for helpful charts and tables with wage rate information by state.

 


Tax Bill Shakes Up Health — From Medicare To The ACA To Medical Education

The tax bill that Republican lawmakers are finalizing would have wide-reaching effects on health issues. But the GOP still has negotiating ahead to get a bill that both the House and Senate will support. That hasn't stopped some party leaders from looking forward to additional plans to revamp programs such as Medicare and Medicaid.

The Associated Press: Q&A: Tax Bill Impacts On Health Law Coverage And Medicare The tax overhaul Republicans are pushing toward final votes in Congress could undermine the Affordable Care Act's health insurance markets and add to the financial squeeze on Medicare over time. Lawmakers will meet this week to resolve differences between the House- and Senate-passed bills in hopes of getting a finished product to President Donald Trump's desk around Christmas. Also in play are the tax deduction for people with high medical expenses, and a tax credit for drug companies that develop treatments for serious diseases affecting relatively few patients. (Alonso-Zaldivar, 12/5)

The Fiscal Times: 6 Critical Differences That Must Be Resolved in the Republican Tax Bills The Senate bill’s repeal of the Obamacare mandate saves about $318 billion over 10 years but threatens to destabilize the individual markets, resulting in higher premiums and millions fewer people with health insurance. While House Republicans aren’t likely to balk at including repeal in the final bill, it could still be a problem for Sen. Susan Collins (R-ME), a pivotal vote in the upper chamber, whose support for the final package could depend on Congress’s treatment of separate measures designed to stabilize the Obamacare markets. (Rainey, 12/4)

The Atlanta Journal-Constitution: Perdue Says Further Health Care Changes ‘Absolutely’ Needed As House and Senate lawmakers open another phase of negotiations over a $1.5 trillion federal tax overhaul, some Republicans are emboldened about pursuing new cuts to the system of health care entitlements. U.S. Sen. David Perdue said Monday that lawmakers should “absolutely” seek changes to the Medicaid and Medicare programs to help maximize the impact of the tax cuts. He echoed other Republican officials who have suggested a push for more spending cuts should be in the works. (Bluestein, 12/4)

 

Read the original brief.

Source:
Kaiser Health News (5 December 2017). "Tax Bill Shakes Up Health — From Medicare To The ACA To Medical Education" [Web blog post]. Retrieved from address https://khn.org/morning-breakout/tax-bill-shakes-up-health-from-medicare-to-the-aca-to-medical-education/


OSHA Delays Electronic Reporting to Dec. 15, 2017

OVERVIEW

The Occupational Safety and Health Administration’s (OSHA) electronic reporting rule requires certain establishments to report information electronically from their OSHA Forms 300, 300A and 301. Under the rule, the first electronic reports were due on July 1, 2017.

However, on Nov. 24, 2017, OSHA issued a new final rule officially delaying the first electronic reporting deadline to Dec. 15, 2017. Affected establishments will need to submit their reports through the Injury Tracking Application (ITA) website by that time or face possible OSHA penalties.

ACTION STEPS

  • Affected establishments must create an account on the ITA website and submit information from their 2016 OSHA 300A form by December 15, 2017.
  • Other deadlines under the electronic reporting rule remain unaltered. Therefore, affected establishments should begin their preparations to submit information from all 2017 OSHA forms by July 1, 2018.

OSHA’s electronic reporting rule affects establishments that:

  • Are already required to create and maintain OSHA injury and illness records and have 250 or more employees;
  • Have between 20 and 249 employees and belong to a high-risk industry; and
  • Receive a specific request from OSHA to create, maintain and submit electronic records, even if they would otherwise be exempt from OSHA recordkeeping requirements.

The electronic reporting rule applies to establishments, not employers. An employer may have several worksites or establishments. In these situations, some establishments may be affected while others are not.

To determine whether an establishment is affected, employers must determine each establishment’s peak employment during the calendar year. During this determination, employers must count every individual that worked at that establishment, regardless of whether he or she worked full-time, part-time, or was a temporary or seasonal worker.

Finally, a firm with more than one establishment may submit establishment-specific data for multiple establishments.

Reporting Requirements


The data an employer must submit and the timeline for submitting this information to OSHA depends on the establishment size.

Establishments with 250 or more employees will be required to submit information from their OSHA Forms 300A, 300 and 301. However, in 2017, these establishments will only be required to submit data from their 300A Form. Establishments in high-risk industries with between 20 and 249 employees will be required to submit information only from their OSHA Form 300A.

For the first reporting year, the deadline has been delayed to Dec. 15, 2017. However, the final rule that delayed the first deadline did not alter subsequent deadlines, so reporting deadlines for 2018, 2019 and beyond remain as shown in the table above.

Submitting the Report

The ITA is a secure website that OSHA created specifically for the data required by the electronic reporting rule. The ITA allows employers three options to submit their reports:

  1. Manual entry;
  2. Comma-separated value (CSV) file upload; and
  3. Application programming interface (API) transmission.

The ITA offers affected establishment instructions and sample files and templates to help them complete the submission process.

OSHA-approved State Plans

The final rule required OSHA-approved State Plans to adopt the electronic rule or “substantially identical” requirements within six months of the final rule’s publication date. The final rule was published on May 12, 2016. This means that OSHA-approved State Plans have the authority to adopt reporting requirements that go above and beyond what is required by the federal rule. For this reason, establishments located in OSHA-approved State Plan jurisdictions should consult with their local OSHA offices to make sure they are satisfying all electronic reporting requirements.

However, the following OSHA-approved State Plans have not yet adopted the requirement to submit injury and illness reports electronically:

Similarly, state and local government establishments in IL, ME, NJ and NY are not currently required to submit their data through the reporting website.

More Information

Contact Hierl Insurance Inc. or visit the OSHA tracking of workplace injuries and illnesses webpage for more information regarding electronic reporting.

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Compliance Recap - October 2017

October was a busy month in the employee benefits world. President Trump announced a new Acting Secretary for the U.S. Department of Health and Human Services (HHS). Eric Hargan fills the position vacated by Tom Price, who resigned in late September 2017.

The Internal Revenue Service (IRS) issued the instructions for Forms 1094/1095 for the 2017 tax year, announced PCORI fees for 2017-18, and announced cost-of-living adjustments for 2018. President Trump issued an Executive Order on healthcare and announced an end to the Patient Protection and Affordable Care Act's cost sharing reductions.

The IRS, Employee Benefits Security Administration (EBSA), and Centers for Medicare and Medicaid Services (CMS) issued two interim final rules to allow a greater number of employers to opt out of providing contraception to employees at no cost through their employer-sponsored health plan.

The U.S. Department of Labor (DOL) issued a proposed rule to delay a disability claims procedure regulation's applicability date. The IRS provided additional guidance on leave-based donation programs' tax treatment and released an information letter on COBRA and Medicare. HHS released its proposed rule on benefits and payment parameters for 2019. The U.S. Department of the Treasury (Treasury) issued its Priority Guidance Plan for projects it intends to complete during the first half of 2018.

UBA Updates

UBA released seven new advisors in October:

UBA updated existing guidance:

IRS Issues 2017 Instructions for Forms 1094/1095

The IRS issued the instructions for Forms 1094-C and 1095-C for the 2017 tax year. Applicable large employers use Forms 1094-C and 1095-C to report information related to their employer shared responsibility provisions under the Patient Protection and Affordable Care Act (ACA).

Read more about the instructions and forms.

IRS Announces PCORI Fee for 2017-18

The IRS announced the Patient-Centered Outcomes Research Institute (PCORI) fee for 2017-18. The fee is $1.00 per covered life in the first year the fee is in effect. The fee is $2.00 per covered life in the second year. In the third through seventh years, the fee is $2.00, adjusted for medical inflation, per covered life.

For plan years that end on or after October 1, 2016, and before October 1, 2017, the indexed fee is $2.26. For plan years that end on or after October 1, 2017, and before October 1, 2018, the indexed fee is $2.39.

Read more about the PCORI fee.

IRS Announces Cost-of-Living Adjustments for 2018

The IRS released Revenue Procedures 2017-58 and Notice 2017-64 to announce cost-of-living adjustments for 2018. For example, the dollar limit on voluntary employee salary reductions for contributions to health flexible spending accounts (FSAs) is $2,650, for taxable years beginning with 2018.

Download the chart of 2018 annual benefit plan amounts.

Executive Order on Healthcare

On October 12, 2017, the White House released the Executive Order "Promoting Healthcare Choice and Competition Across the United States," signed by President Trump, that directs various federal agencies to explore options relating to association health plans, short-term, limited-duration insurance, and health reimbursement arrangements in the next 60-120 days.

Employers should not make any changes to their group health plans based on the Executive Order until regulations are issued.

Read more about the Executive Order.

President Trump Ends ACA Cost Sharing Reductions

President Trump announced that the ACA's cost sharing reductions for low income Americans would be stopped. The Department of Health and Human Services (HHS) confirmed that the payments would stop immediately.

Because the cost sharing reductions are different than the advance premium tax credit, this payment termination will not have a direct impact on employers at this time. However, employers with fully insured health plans might see group health plan rate increases in the future as insurance companies work to make up for revenue loss.

Read more about the payment termination.

Agencies Roll Back Contraceptive Mandate

The Internal Revenue Service, Employee Benefits Security Administration, and Centers for Medicare and Medicaid Services issued two interim final rules that were effective on October 6, 2017. These rules will allow a greater number of employers to opt out of providing contraception to employees at no cost through their employer-sponsored health plan.

The expanded exemption encompasses all non-governmental plan sponsors that object based on sincerely held religious beliefs, and higher education institutions' student health plan arrangements. The exemption also now encompasses employers who object to providing contraception coverage based on sincerely held moral objections and higher education institutions' student health plan arrangements. Further, if an insurance company has sincere religious beliefs or moral objections, it would be exempt from having to sell coverage that provides contraception. The exemptions apply to both non-profit and for-profit entities.

Read more about the contraceptive mandate rollback.

DOL Proposes Delay to Final Disability Claims Procedures Regulations' Applicability Date

The DOL issued a proposed rule to delay the applicability date of its final rule that amends the claims procedure requirements applicable to ERISA-covered employee benefit plans that provide disability benefits. The DOL's Fact Sheetcontains a summary of the final rule's requirements.

The DOL is delaying the applicability date from January 1, 2018, to April 1, 2018, to consider whether to rescind, modify, or retain the regulations and to give the public an additional opportunity to submit comments and data concerning the final rule's potential impact.

IRS Provides Additional Guidance on Leave-Based Donation Programs' Tax Treatment

Last month, the IRS provided guidance for employers who adopt leave-based donation programs to provide charitable relief for victims of Hurricane and Tropical Storm Irma. This month, the IRS issued Notice 2017-62 which extends the guidance to employers' programs adopted for the relief of victims of Hurricane and Tropical Storm Maria.

These leave-based donation programs allow employees to forgo vacation, sick, or personal leave in exchange for cash payments that the employer will make to charitable organizations described under Internal Revenue Code Section 170(c).

The employer's cash payments will not constitute gross income or wages of the employees if paid before January 1, 2019, to the Section 170(c) charitable organizations for the relief of victims of Hurricane or Tropical Storm Maria. Employers do not need to include these payments in Box 1, 3, or 5 of an employee's Form W-2.

IRS Releases Information Letter on COBRA and Medicare

The IRS released Information Letter 2017-0022 that explains that a covered employee's spouse can receive COBRA continuation coverage for up to 36 months if the employee became entitled to Medicare benefits before employment termination. In this case, the spouse's maximum COBRA continuation period ends the later of: 36 months after the employee's Medicare entitlement, or 18 months (or 29 months if there is a disability extension) after the employment termination.

CMS Releases 2019 Benefits Payment and Parameters Proposed Rule

The Centers for Medicare & Medicaid Services (CMS) released a proposed ruleand fact sheet for the 2019 Benefit Payment and Parameters. The proposed rule is intended to increase individual market flexibility, improve program integrity, and reduce regulatory burdens associated with the Patient Protection and Affordable Care Act (ACA) in many ways, including updates and annual provisions to:

  • Essential health benefits
  • Small Business Health Options Program (SHOP)
  • Special enrollment periods (SEPs)
  • Exemptions
  • Termination effective dates
  • Medical loss ratio (MLR)

CMS usually finalizes the Benefit Payment and Parameters rule in the first quarter of the year following the proposed rule's release. November 27, 2017, is the due date for public comments on the proposed rule.

Almost all the topics addressed in the proposed rule would affect the individual market and the Exchanges, particularly the Small Business Health Options Program (SHOP) Exchanges.

Of interest to small group health plans, CMS proposes to change how states will select essential health benefits benchmark plans. If CMS keeps this change in its final rule, then it will affect non-grandfathered small group health plans for benefit years 2019 and beyond.

Read more about the proposed rule.

Treasury Issues its Priority Guidance Plan

The Treasury issued its 2017-2018 Priority Guidance Plan that lists projects that it intends to complete by June 30, 2018, including:

  • Guidance on issues related to the employer shared responsibility provisions
  • Regulations regarding the excise tax on high cost employer-provided coverage ("Cadillac tax")
  • Guidance on Qualified Small Employer Health Reimbursement Arrangements (QSE HRAs)

Question of the Month

Q: Although the transitional reinsurance fee (TRF) expired, why might an employer have one TRF remittance due in November?

A: The TRF premium stabilization program was in place from 2014 to 2016. Calendar year 2016 was the last year for which the TRF was required. HHS offered employers with self-insured plans with an option to pay the TRF in one or two payments. If an employer chose to pay in two installments for the 2016 benefit year, then the employer's first payment was due by January 17, 2017, and its second payment is due by November 15, 2017.


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Critical compliance changes for next year: An open enrollment checklist

Keeping up-to-date with health care is one of our top priorities. From HR Morning, here is a comprehensive list of everything you need to know so far going into 2018.


As HR pros immerse themselves in negotiating plan changes for this year’s open enrollment, it’s critical to keep these new 2018 regulation changes front and center.

To help, here’s a checklist of changes you’ll need to be aware of when making plan-design moves:

1. Mental Health Parity reg changes enforced

Beginning January 1, 2018, plans that require “fail first” or “step therapy” could violate the Parity Act’s “non-quantitative treatment limitation” (NQTL) rules. Under the NQTL rules, plans can’t be more restrictive for mental health/substance abuse benefits than they are for medical/surgical ones.

Here’s an example of a fail-first strategy: Requiring mental health or addiction patients to try an intensive outpatient program before admission to an inpatient treatment if the same restriction doesn’t apply to medical/surgical benefits.

2. New Summary of Benefits and Coverage (SBC) template

Under the ACA, plans were required to start using the new SBC template on or after April 1, 2017.

For calendar year plans, that means this is the first enrollment with the new template, which includes new coverage examples and updates about cost-sharing. You can find more details on and instructions for the new form here: bit.ly/temp544

3. Women’s preventive care

The Women’s Preventive Services Guidelines were updated for 2018 calendar plans to include a number of items that must be covered without any cost-sharing. The list includes breast cancer screenings for average-risk women, screenings for cervical cancer, diabetes mellitus and more.

 

See the original article here.

Source:

Bilski J. (17 October 2017). "Critical compliance changes for next year: An open enrollment checklist" [Web blog post]. Retrieved from address http://www.hrmorning.com/critical-compliance-changes-for-next-year-an-open-enrollment-checklist/


Compliance Recap September 2017

Download the full Compliance Recap here.

September was a quiet month in the employee benefits world.

The Internal Revenue Service (IRS) issued final Forms 1094/1095, special per diem rates for 2017-18, and
guidance on the tax treatment of leave-based donation programs. The Centers for Medicare and Medicaid
Services (CMS) announced a Medicare special enrollment period for individuals impacted by recent
hurricanes. A U.S. District Court remanded a payment rate rule to the IRS, the Department of Health and
Human Services (HHS), and the Department of Labor (DOL) for further explanation of their rule.

UBA Updates

UBA released one new advisor in September: IRS Releases Draft Forms and Instructions for
2017 ACA Reporting.

IRS Issues Forms 1094/1095
The IRS issued Forms 1094-B, 1095-B, 1094-C, and 1095-C for the 2017 tax year. Coverage providers
use Forms 1094-B and 1095-B to report health plan enrollment. Applicable large employers use Forms
1094-C and 1095-C to report information related to their employer shared responsibility provisions under
the ACA.

IRS Issues 2017-18 Special Per Diem Rates
The IRS issued Notice 2017-54 to provide special per diem rates for taxpayers to use in substantiating
the amount of ordinary and necessary business expenses incurred while traveling away from home on or
after October 1, 2017.

IRS Provides Guidance on Tax Treatment of Leave-Based Donation Programs
Some employers adopted or will adopt leave-based donation programs to provide charitable relief for
victims of Hurricane and Tropical Storm Irma. These leave-based donation programs allow employees to
forgo vacation, sick, or personal leave in exchange for cash payments that the employer will make to
charitable organizations described under Internal Revenue Code Section 170(c).

The IRS’ Notice 2017-52 states that the employer’s cash payments will not constitute gross income or
wages of the employees if paid before January 1, 2019, to the Section 170(c) charitable organizations for
the relief of victims of Hurricane or Tropical Storm Irma. Employers do not need to include these
payments in Box 1, 3, or 5 of an employee’s Form W-2.

CMS Announces Special Enrollment Period for Hurricane Victims

CMS established a Medicare special enrollment period for individuals affected by Hurricanes Harvey, Irma,
and Maria. The special enrollment period will allow individuals to enroll, dis-enroll, or switch Medicare health
or prescription drug plans from the start of the incident period through the end of 2017.

Court Remands Regulations to HHS, DOL, and IRS

The United States District Court for the District of Columbia held that the Departments of Health and
Human Services, Labor, and the Treasury (the Departments) acted arbitrarily and capriciously by failing to
seriously respond to comments and proposed alternatives as part of the notice and comment process for
the Departments’ rule on how much plans are required to pay out-of-network physicians for emergency
health care services.

Under the Patient Protection and Affordable Care Act (ACA), group health plans cannot impose a higher
copayment or coinsurance rates for participants who receive emergency medical treatment from an out-of-network
provider.

Pursuant to that ACA provision, the Departments issued an interim final rule to establish that “a plan or
issuer satisfies the copayment and coinsurance limitations in the statute if it provides benefits for out-of-network
emergency services in an amount equal to the greatest of three possible amounts—

(1) The amount negotiated with in-network providers for the emergency service furnished;
(2) The amount for the emergency service calculated using the same method the plan generally uses
to determine payments for out-of-network services (such as the usual, customary, and
reasonable charges) but substituting the in-network cost-sharing provisions for the out-of-network
cost-sharing provisions; or
(3) The amount that would be paid under Medicare for the emergency service.”

Despite extensive public comment, the Departments issued the final rule without substantive revision. A
college of emergency physicians was dissatisfied with the Departments’ response to public comments
and filed suit against the Departments.

Although the court determined that the Departments failed to seriously respond to public comments, the
court declined to vacate the rule. The court remanded the case to the Departments for further explanation
of their rule.

Question of the Month

Q. How does the new child age rating structure affect employers in the small group market who are in
states that adopt the new age band?

A. The new child age rating bands will likely result in an increase in 2018 premiums.

As background, in December 2016, the Department of Health and Human Services (HHS) issued a final
rule that creates multiple child age bands rather than a single age band for individuals age 0 through 20,
for plan or policy years beginning on or after January 1, 2018.

Per HHS, establishing single-year age bands starting at age 15 will result in small annual increases in
premiums attributable to age for children age 15 to 20, which will help mitigate large premium increases
attributable to age due to the transition from child to adult age rating at age 21.

States are not required to adopt these new age rating bands. However, for employers in states that adopt
these new age rating bands, employers will see an increase in 2018 premiums at renewal if they have
employees or dependents who fall within the 14-20 age range.

Download the full Compliance Recap here.