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Department of the Treasury

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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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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IRS issues guidance on coverage of hospital services

Posted on November 5, 2014

New guidance issued by the Internal Revenue Service (IRS) states that employers must provide substantial coverage for in-patient hospitalization services in order to meet minimum Affordable Care Act (ACA) standards. Plans that fail to provide this coverage do not provide the minimum value intended by the minimum value requirement of the ACA. According to the guidance, any employer that has contracted with such a plan before this guidance was issued will be excluded from the requirement in 2015 if its plan year begins on or before March 1.

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IRS issues final rule on ACA write-off limit

Posted on September 19, 2014

The Internal Revenue Service (IRS) finalized a half-million-dollar cap on deductions that the biggest insurance companies can take for executive pay. This final rule will affect certain health insurance providers giving remuneration that exceeds the deduction limitation. According to a recent analysis, the little-known Affordable Care Act (ACA) provision amounted to about $1.3 million per executive for the largest insurers in 2013. The rule details what companies and employees are subject to the limit and how it should be applied.

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IRS posts employer mandate filing instructions

Posted on August 29, 2014

The Internal Revenue Service (IRS) posted a set of draft instructions to accompany the employer mandate and exchange filing forms released last month. The instructions are directed at marketplaces that have to report enrollees in qualified health plans, as well as employers and others that provide minimum essential coverage or are subject to the employer mandate.

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IRS releases final rules on tax credit and drug fee

Posted on July 24, 2014

The Internal Revenue Service (IRS) published a final rule clarifying its premium tax credit policy for those enrolling in health plans through Affordable Insurance Exchanges with complicated family and household situations. The rule clarifies that certain married individuals, including spouses in abusive relationships, and divorced or separated taxpayers, can be considered not married for the purposes of the Internal Revenue Code, under Section 7703(b).

The agency also released a final rule regarding the implementation of the Affordable Care Act’s (ACA) branded prescription drug fee. The rule  provides guidance on the annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs.

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Rule finalizes 90-day waiting limit

Posted on June 20, 2014

Today, the US Department of Health and Human Services (HHS), the Internal Revenue Service (IRS) and the Employee Benefits Security Administration (EBSA) released a final rule concerning the 90-day waiting period limitation. The final rule states that group health insurance plans cannot apply a waiting period that exceeds 90 days after the employee has been approved for coverage. The rule further states that small group plan orientation periods, the time it takes from hire to when the plan deems the employee is eligible for coverage, cannot exceed one month.

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IRS Q&A clarifies employer payment plans

Posted on May 27, 2014

According to a Q&A document recently released by the Internal Revenue Service (IRS), employers that do not offer health insurance but reimburse premiums for employees that purchase private insurance may be hit with a financial penalty. The Q&A states that employers utilizing this approach are effectively creating employer payment plans, which are beholden to the same rules and requirements as other group health plans under the Affordable Care Act (ACA). The IRS states that this arrangement does not comply with the ACA market reforms, and offering this option to employees may result in a $100/day excise tax per applicable employee for the employer.

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Administration releases more ACA guidance

Posted on May 5, 2014

Last Friday, the Centers for Medicare and Medicaid Services (CMS) posted a new bulletin on special enrollment periods and hardship exemptions under the Affordable Care Act (ACA). The bulletin provides information on how federally-facilitated Marketplaces (FFM) should address coverage for individuals that fall into the following four categories: hardship exemptions for individuals that obtained coverage effective May 1st, special enrollment periods for individuals eligible for or enrolled in COBRA, special enrollment periods for individuals whose plans are renewing outside of open enrollment, and special enrollment periods for AmeriCorps/VISTA/National Civilian Community Corps Members. The bulletin suggests that state-based Marketplaces (SBM) use these guidelines to help individuals that fall into these categories.

The administration also released a new FAQ set regarding ACA implementation. This FAQ, prepared jointly by the US Department of Treasury, the US Department of Health and Human Services, and the US Department of Labor, addresses questions concerning a myriad of health reform topics. Several of the issues addressed include updated Department of Labor Model Notices for COBRA, out-of-network and out-of-pocket charges, and Summaries of Benefits and Coverage (SBC).

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