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Key Developments

CMS published proposed rule on Medicaid eligibility system funding

Posted on April 14, 2015

The Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would indefinitely extend the federal government’s 90 percent funding for states to improve their Medicaid eligibility and enrollment systems. The proposed rule would also extend the government-enhanced contribution of 75 percent of costs for maintenance and operations activities. Additionally, the rule proposes changes to the standards and conditions that state Medicaid systems must meet to qualify for the continued funding.

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CMS issues proposed rule on mental health parity

Posted on April 8, 2015

The Centers for Medicare and Medicaid Services (CMS) published a proposed rule that applies the Mental Health Parity and Addiction Equity Act to Medicaid and the Children’s Health Insurance Program (CHIP). The federal mental health parity law requires that health plans providing behavioral health care coverage do so with the same terms covering medical and surgical care. The CMS proposed rule applies the law to Medicaid enrollees who receive services through managed care organizations and alternative benefit plans. It applies it to all CHIP participants regardless of whether their care is provided through fee-for-service or managed care.

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Supreme Court transcript of King v. Burwell arguments posted

Posted on March 4, 2015

The Supreme Court of the U.S. heard oral arguments today in the King v. Burwell case, which challenges the availability of tax subsidies for individuals who purchase their health insurance on a marketplace created by the federal government. The case centers around language in the Affordable Care Act (ACA) which states that an individual is eligible for a premium subsidy, via a tax credit, if he or she is “enrolled through an exchange established by the State.” Based on this statutory language, those in state based exchanges are not at risk of losing their subsidies. The Supreme Court’s decision will apply only to the 34 states that have federally facilitated exchanges. The oral arguments featured two high-profile lawyers, Michael A. Carvin of the Washington, D.C., law firm of Jones Day, for the challengers, and U.S. Solicitor General Donald B. Verrilli, Jr., defending the Administration.

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IRS releases new ACA rules

Posted on February 24, 2015

The Internal Revenue Service (IRS) issued final temporary regulations for how it will assess the health insurance tax in 2015, including how it defines a covered entity, which is subject to the fees. The IRS also released guidance on the excise tax on high cost employer-sponsored health coverage, or “Cadillac tax”, which is scheduled to go into effect in 2018. This notice is intended to initiate and inform the process of developing regulatory guidance on the tax.

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CMS issues final rule on benefit and payment parameters for 2016

Posted on February 23, 2015

The Centers for Medicare and Medicaid Services (CMS) issued a final rule on the U.S. Department of Health and Human Services (HHS) Notice of Benefit and Payment Parameters for 2016. The final rule builds on previously issued standards to further strengthens transparency, accountability, and the availability of information for consumers about their health plans. The rule finalizes the annual open enrollment period for 2016 to begin on November 1, 2015 and run through January 31, 2016. CMS also released its final annual letter to issuers, which provides additional guidance on these and related standards for plans participating in the Federally-facilitated Marketplace.

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IRS delays penalties on small employer HRAs

Posted on February 19, 2015

The Internal Revenue Service (IRS) announced in guidance that small businesses (less than 50 employees) now have until July to end arrangements in which they give their workers tax-free payments to buy coverage on the individual market, or else face significant tax penalties. In the past, some employers have chosen to contribute to HRAs instead of providing insurance. With a health reimbursement arrangement (HRA), employees pay out-of-pocket for health services and submit claims to be paid by the employer. Some workers used these contributions to subsidize their health insurance premiums.

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IRS issues notice on tax penalties related to premium tax credits

Posted on January 27, 2015

The Internal Revenue Service (IRS) issued a notice that provides some relief from tax penalties for taxpayers who find out when they file their taxes that they received an overpayment of premium tax credits for buying health insurance under the Affordable Care Act (ACA). The notice offers limited relief for taxpayers who have a balance due on their 2014 income tax return as a result of reconciling advance payments of the premium tax credit against the premium tax credit allowed on the tax return. To qualify for the relief, however, taxpayers must meet certain requirements and the relief applies only for the 2014 taxable year.

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CMS issues FAQ on Medicaid plan marketing rules

Posted on January 20, 2015

The Centers for Medicare and Medicaid Services (CMS) posted a document which clarifies whether Medicaid managed care plans can market their private qualified health plans (QHP) to potential enrollees. CMS says federal rules do not prohibit Medicaid plans from providing information about QHPs to potential enrollees who might enroll in such a plan as an alternative to the Medicaid plan. However, CMS recommends that plans consult contracts and their state Medicaid agencies for more information on what is allowed.

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HHS issues proposed rule on summary of benefits and coverage

Posted on January 5, 2015

The U.S. Department of Health and Human Services (HHS) issued a proposed rule, simultaneously released by the Internal Revenue Service (IRS) and the Department of Labor (DOL), regarding the summary of benefits and coverage (SBC) and the uniform glossary for health insurance coverage in the group and individual markets under the Affordable Care Act (ACA). The proposed rule would change disclosure requirements to help plans and individuals better understand their health coverage and allow for informed comparisons of coverage options. The proposed regulation also makes amendments to the template for the SBC, instructions, sample language, guides for coverage example calculations, and the uniform glossary.

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IRS issues proposed rule on excepted benefits

Posted on January 5, 2015

The Internal Revenue Service (IRS) issued a proposed rule, simultaneously released by the Department of Labor (DOL) and the U.S. Department of Health and Human Services (HHS), amending the conditions under which wraparound coverage can be considered an excepted benefit. The proposed regulation sets forth five requirements under which limited benefits provided through a group health plan that wrap around either eligible individual insurance or coverage under a Multi-State Plan constitute excepted benefits. These conditions include coverage of additional benefits, quantity limits, nondiscrimination, and plan eligibility and reporting requirements. The proposed rule also includes a pilot program that would allow limited wraparound coverage to be offered as excepted benefits to coverage for a limited time.

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