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The Patient Protection and Affordable Care Act (ACA) was signed into law on March 23, 2010, bringing many changes for employers and health plans. The law continues to evolve as regulations are released. This monthly alert brings you information on the major provisions and regulations coming from Washington, connects you to valuable tools in understanding and complying with the law, and keeps you informed of Michigan legislation enacted in response to ACA.
On Friday, January 20, 2017, President Trump signed his first Executive Order, titled "Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal."
The Executive Order instructs the Secretary of the Department of Health and Human Services (HHS) and the heads of all other executive departments and agencies with authority, or responsibility, under the ACA to exercise all authority and discretion to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the ACA that would impose a fiscal burden on any state, or cost a fee, tax, penalty, or regulatory burden on individuals, families, health care providers, health insurers, patients, recipients of health care services, purchasers of health insurance, or makers of medical devices, products, or medications.
44North recommends that employers wait for confirmation from various federal agencies that regulations they are in the process of complying with (notably, ACA-related reporting) are on hold for the time being. We are, unfortunately, in a "wait and see" period.
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 AHCA BILL |
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House Passes AHCA Bill
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 On May 4, 2017, the U.S. House of Representatives passed House Resolution 1628 , a reconciliation bill aimed at "repealing and replacing" the Patient Protection and Affordable Care Act (ACA). The bill, titled the "American Health Care Act of 2017" or "AHCA," will now be sent to the Senate for debate, where amendments can be made, prior to the Senate voting on the bill.
It is widely anticipated that in its current state the AHCA is unlikely to pass the Senate. Employers should continue to monitor the text of the bill and should refrain from implementing any changes to group health plans in response to the current version of the AHCA.
The AHCA makes numerous changes to current law, much of which impact the individual market, Medicare, and Medicaid. Some provisions in the AHCA also impact employer group health plans. A summary of major provisions developed by the National Association of Health Underwriters (NAHU) can be found here.
It is unknown at this time if the AHCA can pass the Senate, or what might be changed in the text of the bill in order to earn votes in an attempt to pass the bill.
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| IRS INFORMATION LETTERS |
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HSA Ineligibility Due to Medicare Entitlement
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The IRS has released an
information letter confirming that individuals are disqualified from establishing a health savings account (HSA) if their contributions are attributable entirely to a period when they are entitled to Medicare. The letter responds to an inquiry from an individual who had retired from his job and enrolled in Medicare before returning to work for the same employer. Upon rehire, the employee enrolled in the employer's group health plan and was provided with an HSA. After learning that his Medicare enrollment made him ineligible for the HSA, he questioned whether he must pay a fine to the IRS for establishing an HSA and receiving employer contributions when he was ineligible to participate. The IRS's letter confirms that the employee's Medicare enrollment made him ineligible to contribute to an HSA, and consequently disqualified him from establishing an HSA. The letter directed the employee to withdraw the funds from the account and include them in his income, but explained that no fine would be due.
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FSAs Cannot Reimburse Insurance Premiums
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The IRS has issued an information letter confirming that health flexible spending arrangements (health FSAs) cannot reimburse premiums for Medicare or other health insurance. The letter responds to a health FSA participant's request for information about the rules on submitting Medicare premium expenses for reimbursement. The health FSA administrator had denied the participant's claims, citing a provision of the 2007 proposed IRS cafeteria plan regulations that prohibits health FSAs from reimbursing health insurance premiums. The letter explains that, as stated in the regulations and in IRS Publication 969, health FSAs cannot reimburse health insurance premium payments. Because Medicare premiums are health insurance premiums, they cannot be reimbursed by a health FSA. The letter notes that different rules-described in IRS Publication 502-apply for purposes of the itemized deduction for medical expenses; those rules treat health insurance premiums, including Medicare premiums, as medical expenses.
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| PCORI FEE |
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44North is hosting a webinar focused on the what and how of filing Form 720 on Tuesday, June 27th, at 11am. Click here to register.
The IRS revised
Form 720 (Quarterly Federal Excise Tax Return) in 2013 to include the reporting and payment of patient-centered outcomes research institute (PCORI) fees. The Patient Protection and Affordable Care Act imposes the PCORI fee on certain health insurers and self-insured health plan sponsors for policy or plan years ending on or after October 1, 2012 and before October 1, 2019 to help fund clinical effectiveness research.
The insurer or plan sponsor filing Form 720 must report the average number of covered lives under health insurance policies and self-insured health plans subject to the PCORI fee. The
instructions briefly explain the alternative methods for calculating the average number of covered lives, which include special transition rules. The average number of covered lives is then multiplied by the rate per covered life ($2.00 as adjusted per year) to determine the amount of the fee.
A reminder will be sent to all registered attendees prior to the webinar and will contain any handout materials.
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| COMPLIANCE RECAP |
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April 2017
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In April, government agencies ramped up their activities by issuing a final rule, updating guidance, and announcing increased Health Insurance Portability and Accountability Act of 1996 (HIPAA) enforcement.
2018 Medicare Part D Benefit Parameters
Report on IRS' Processing of Forms 1094-C and 1095-C
The Inspector General determined that some of the IRS' processes and procedures do not function as intended. As a result, the IRS has been unable to accurately and completely identify noncompliant employers who are potentially subject to the employer shared responsibility payment, unable to process paper information returns timely and accurately, and unable to identify validation errors correctly. Further, the IRS' implementation of a post-filing compliance validation system is being delayed until May 2017.
Man-in-the-Middle Attacks on ePHI
The U.S. Department of Health and Human Services Office for Civil Rights (OCR) issued its
Man-in-the Middle Attacks and "HTTPS Inspection Products" guidance. The OCR warns organizations that have implemented end-to-end connection security on their internet connections using Secure Hypertext Transport Protocol (HTTPS) about using HTTPS interception products to detect malware over an HTTPS connection because the HTTPS interception products may leave the organization vulnerable to man-in-the-middle (MITM) attacks. In an MITM attack, a third party intercepts internet communications between two parties; in some instances, the third party may modify the information or alter the communication by injecting malicious code.
OCR provides a partial list of products that may be affected. Also, OCR provides a method that organizations can use to determine if their HTTPS interception product properly validates certificates and prevents connections to sites using weak cryptography.
OCR emphasized that covered entities and business associates must consider the risks presented to the electronic protected health information (ePHI) transmitted over HTTPS. Further, OCR encouraged covered entities and business associates to review OCR's recommendations for valid encryption processes to ensure that ePHI is not unsecured and the U.S. Computer Emergency Readiness Team's recommendations on protecting internet communications and preventing MITM attacks.
Self-Insured Group Health Plans Annual Report
The Department of Labor (DOL) released its Report to Congress - Annual Report on Self-Insured Group Health Plans. The report provides statistics on self-insured employee health benefit plans and financial status of employers that sponsor such plans. The report uses data from the Form 5500 that many self-insured health plans are required to file annually with the DOL.
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| HR CORNER |
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Website Accessibility for Individuals with Disabilities
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What Does "Website Accessibility" Mean?
Almost every company and organization has a website. Accessing information via the internet has become the norm. But what about individuals with disabilities? How do they access that same content? Are websites and the content on them accessible to someone with a visual or hearing impairment?
School districts across Michigan are addressing this topic because of various complaints filed against them with the US Department of Education's Office for Civil Rights (OCR) which allege the districts' websites violate Section 504 of the 1973 Rehabilitation Act and Title II of the Americans with Disabilities Act (ADA). These laws combined prohibit discrimination on the basis of disability in all activities of state and local government and entities that receive federal financial assistance. A copy of a OCR letter sent to a school district in Washington can be accessed on the US Dept. of Ed's
website
. [http://bit.ly/2qnCaQP]
Per an OCR press release, the following are some common problems affecting many of the websites investigated by the agency:
- Important images are missing text descriptions, called "alt tags" or "alt text," describe the images to blind and low-vision users who use special software;
- Important content of the website could only be access by people who can use a computer mouse, which meant that content was not available to those who are blind, many who have low-vision, and those with disabilities affecting fine motor control;
- Parts of the website used color combinations that made text difficult or impossible for people with low-vision to see; and
- Videos were not accurately captioned, so they were inaccessible to people who are deaf. [OCR Press Release 6/29/16 http://bit.ly/2qWUfIl]
An OCR investigation often results in the entity being investigated agreeing to make their website accessible through a range of actions, including, making all new website content and functionality accessible to people with disabilities.
Websites of other State or Local Government Entities and Private Entities
The US Department of Justice (DOJ) is another entity with ADA enforcement authority. In 2010, the DOJ released a Notice of Proposed Rulemaking related to website accessibility in places of public accommodation under Title III of the ADA, which would apply to businesses that are open to the public. In 2014, the DOJ released a Notice of Propose Rulemaking related to website accessibility of state and local government under Title II of the ADA. Both sets of rulemaking have been delayed indefinitely. However, the DOJ is encouraging voluntary compliance. The DOJ published a
Toolkit for State and Local Governments
[https://www.ada.gov/pcatoolkit/chap5toolkit.htm] which private entities may also find useful.
Despite these delays in the rulemaking process, the DOJ, advocacy groups and private citizens continue to file lawsuits alleging ADA violations based on the theory that the ADA, in its current form, applies to businesses transacting business through websites and mobile apps. In 2016, over 240 lawsuits were filed against companies alleging ADA violations for failing to maintain websites that are accessible to visually impaired individuals. The companies sued included Netflix, Domino's Pizza, Potbelly Sandwich, Reebok, Panera Bread and AMC Theatres.
44North's Solution
As our clients are implementing policies and procedures to ensure that their websites, including all documents posted to them, are accessible to the broadest audience possible, 44North is also determining how we can help in this process. This may include ensuring benefits related documents are created in an accessible manner. Ultimately, our goal is to provide documents that conform to the standards expected by the regulating agencies.
Additional Resources
Alt+Shift video "Why Accessibility Matters": https://www.youtube.com/watch?v=UqHyKub9iVo
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The information in this newsletter is based on 44North's review of the national healthcare reform legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services.
Questions or comments? Please email us at
[email protected] .
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Does Your Plan Renew This Month?
DON'T FORGET!
- Due 7 months after the plan year ends.
- SAR, if applicable, is due 2 months later.
Health Plan Related Notices and Disclosures
:
- SPD
- SMM
- SBC
- For full list click here.
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