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Key Developments

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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CMS issues 2016 draft guidance on federal exchange participation

Posted on December 21, 2014

The Centers for Medicare and Medicaid Services published a draft letter to insurers who want to offer qualified health plans (QHP) in the federally run exchanges in 2016. The letter outlines key requirements that insurers must follow, including provider network and patient safety standards. It also explains how CMS plans to review plan rate increases and conduct oversight of marketing, agents, and brokers. The initial submission window for 2016 QHP applications would be from March 16 to April 15 2015. Certification notices and agreements with insurers would be sent between Aug. 17 and Sept. 15, according to the draft guidance.

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CMS releases monthly Medicaid and CHIP enrollment report

Posted on December 20, 2014

The Centers for Medicare and Medicaid Services released a report showing state Medicaid and Children’s Health Insurance Program (CHIP) enrollment and growth. The data shows that Medicaid and CHIP grew by 9.7 million enrollees between the beginning of the first Affordable Care Act (ACA) open enrollment period and October 2014- that’s a 17 percent growth in average monthly enrollment, compared to the July-September 2013 period. Additionally, the report finds that enrollment in states that expanded Medicaid increased by 24 percent since first open enrollment, compared to 7 percent in states that did not expand. In total, Medicaid and CHIP had 68.5 million enrollees in October, an increase of about 400,000 over the previous month.

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