Despite Recent Court Ruling – ACA Enforcement Is Still the Law of the Land… For Now

On December 14th, the U.S. District Court for the Fifth Circuit in Texas ruled the Affordable Care Act (ACA) unconstitutional in light of the Tax Cuts and Jobs Act of 2017 which eliminated the tax penalty under the individual mandate. The district court sided with 20 Republican state attorneys general that argued since the individual mandate was eliminated, the entire law was invalidated. The ruling went further and also ruled that all of the consumer protections under the ACA were tied to the individual mandate and they were also unconstitutional. These include the prohibition against insurers charging patients more for pre-existing conditions, allowing children to stay on their parent’s plans until age 26, and removal of caps on coverage.

What’s Next?

The judge in the case did not rule the law has to be enjoined immediately, however, it is unclear when the ruling would take effect. Sixteen Democratic state attorneys general and the District of Columbia filed a motion asking the court to clarify the impact of the ruling and confirm that the ACA “is still the law of the land.” Additionally, a series of appeals will most likely keep the ruling from being enacted anytime in the near future… thus:

  • People can still enroll in ACA health plans in states with extended deadlines (without an extension, exchange enrollment ended on December 14th.);
  • There is no impact on 2019 plans that people may have recently enrolled in. Immediately following the ruling, Seema Verma, Administrator of the Centers for Medicare & Medicaid Services, stated the ruling “has no impact on current coverage or coverage in a 2019 plan;”
  • Employers still face IRS deadlines to file forms 1095-B and 1095-C. (1095-B and 1095-C forms must be delivered to individuals by March 4, 2019. The 1094 and 1095 B & C forms must be filed with the IRS by February 28th if filing paper and April 1st if filing electronically);
  • The Employer Mandate is still in force, penalties have been and will continue to be assessed for failure to file these returns;
  • With the Employer Mandate still in force, Applicable Large Employers (ALEs) should continue to follow the Employer Shared Responsibility Rules (ESR) to avoid a penalty. This means offering a plan that meets minimum value and affordability to at least 95% of your full time employees (defined as those working at least 30 or more hours per week).

The case will most likely make its way to the U.S. Fifth Circuit Court of Appeals and then to the U.S. Supreme Court before any definitive action can be considered.

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Tell your Senators to Preserve the Employer-Based System and Permanently Repeal the Cadillac/excise Tax!

The National Association of Health Underwriters (NAHU)

Operation Shout!

DGBTakeActionOn May 4, the House of Representatives passed H.R. 1628, the American Health Care Act (AHCA), a reconciliation bill to repeal and replace portions of the ACA. It will now be considered by the Senate, where it is expected to be significantly altered, including possibly addressing two critical NAHU policy priorities: the employer exclusion of health insurance and the Cadillac/excise Tax. NAHU strongly opposes any efforts that would undermine the employer-sponsored health insurance system by eliminating or placing a cap on the employer-tax exclusion of health insurance and is strongly advocating a full repeal of the Cadillac/excise Tax, which under the AHCA would only be temporarily delayed.

More than 175 million Americans currently receive their coverage through the employer-based system, largely due to the tax exclusion where employers provide contributions for an employee’s health insurance that are excluded from that employee’s compensation for income and payroll tax purposes. Proposals that would cap the exclusion would devalue the benefit and serve as one of the largest tax increases in history for middle-class Americans, forcing many to drop employer-sponsored insurance, including dependent coverage, and be forced to seek coverage in the volatile individual market, where premiums are ever-increasing. Employers would be incentivized to only offer coverage to their employees that would fall below the value of the cap in order to avoid paying any increased taxes, potentially resulting in a race to the bottom for employers to sponsor insurance that wouldn’t meet the cap’s thresholds and further shifting costs onto employees.

In addition to opposing proposals to cap the exclusion, we are strongly advocating a complete repeal of the Cadillac/excise Tax. Currently set to take effect in 2020 under a two-year delay, this tax calls for a 40% excise tax on the amount of the aggregate monthly premium of each primary insured individual that exceeds the year’s applicable dollar limit, which will be adjusted annually to the Consumer Price Index plus one percent. Given that the pace of medical inflation is well beyond that of general inflation, the tax is destined to outgrow itself in short order and many employers will be impacted by the cost of the tax and the enormous compliance burden that the tax creates. The AHCA, as passed by the House, would only delay the tax until fiscal year 2026.

Over the coming weeks, as the Senate debates the AHCA and the other healthcare-reform proposals, we urge all agents, brokers and your clients to tell your senators not to do anything that would undermine the employer-sponsored health insurance system and to fully repeal the Cadillac/excise tax. You can help us spread the message by taking action below:

  1. Contact your senators. Send an Operation Shout today asking your senators to oppose any changes the employer tax exclusion and to support a full repeal of the Cadillac/excise Tax. You can also call your senators at the numbers below.
  2. Tell your employer clients to take action. Your employer clients would be most directly impacted by the elimination or cap of the employer tax exclusion and are seeking a full repeal of the Cadillac/excise Tax. Tell them to take action here.
  3. Share your story. As a licensed insurance specialist who works closely with employers to help them offer and utilize employer-sponsored health insurance, stories about how the employer tax exclusion directly impacts your clients will demonstrate the value of the exclusion and the need to preserve it, as well as the need to fully repeal the Cadillac/excise Tax. We will share your stories with appropriate legislators and staff. You can share your story here.

Take Action today and tell your senators to preserve the employer-based system and permanently repeal the Cadillac/excise Tax!
DGBTakeAction

Don’t want to send an email? No problem, you can also reach your senators by phone:
Sen. Richard Blumenthal (D) can be reached at (202) 224-2823.
Sen. Christopher Murphy (D) can be reached at (202) 224-4041.

This call to action is designed as an email message to your legislators. You are welcome to use the prepared text as talking points to call your legislators, or to expand on the prepared message to share your personal story on how this issue will impact you and your clients.

How New York’s canceling health coverage for 130,000 workers

Article written by Michael W. Ferguson, as seen in the New York Post

New York’s state legislators are thinking small — literally.

The state’s definition of “small business” expanded Jan. 1, thanks to legislation passed in 2013. Many firms that thought of themselves as medium-size are now legally considered “small.” One consequence: They’re barred from choosing self-insurance — a form of health coverage that allows employers to pay their employees’ medical bills directly.

State legislators must restore this vital health care option for these newly small businesses. If they don’t, firms may have to slash their benefits — or stop offering them altogether.

Firms that offer conventional health insurance pay monthly premiums to insurers to cover medical claims for their employees. Companies that self-insure, by contrast, pay the doctor when an employee goes in for a check-up or an operation.

That can save businesses big money. By one estimate, companies can cut their health care costs by up to 25 percent by self-insuring.

Self-insurance also enables employers to provide higher-quality care. Because they’re not bound to the generic health care options provided by insurers, they can customize coverage for their employees’ unique needs.

Continue reading

Don’t Let Confusion & Inactivity Hurt YOUR Health Plan

health-plan-control-dg-blog2These days change and added regulations are happening at a rapid pace and at Diversified Group, we’re here to help our client employers avoid confusion.

That being said, here are a few words of advice we can give that may help you…

Don’t Tolerate a Sky-High Renewal – Planning can come to a halt when your renewal arrives and you find that your rates have gone through the roof. Stay calm and ask your broker or TPA for every alternative. This is very common when the overall benefits environment is in chaos.

Be Prepared for Higher Claim Costs – Rapid change can stifle your efforts to match your benefit objectives with the needs of your covered group. Make sure your plan design gives you the flexibility you’ll need to adapt when claim costs are rising.

Even in the face of healthcare reform, you can find the light at the end of the tunnel. By now we know the Affordable Care Act is here to stay. And, whenever such an overhaul of our healthcare system takes place it is important to be proactive, take a step back and assess your current situation. Here are some tips for you to consider:

Tip: Examine the Benefits of Self-Funding

If your current plan is not self-funded, it’s time you understood how it can help your organization. Not only can it give you the tools and flexibility to meet the needs of your employees, but the information gained in the claims administration process will help identify areas where wellness and disease management programs can help employees make better healthcare decisions. These programs may help transform at-risk behavior patterns that can lead to chronic illness such as diabetes.

Tip: Administration Must Include Compliance

When Diversified Group administers a partially self-funded health plan, compliance assistance is a standard part of the process. That means going beyond ERISA, COBRA, HIPAA and FMLA compliance. We make sure our clients understand the timelines and potential penalties associated with the Affordable Care Act and comply with the reporting requirements that apply to self-funded plans.

Diversified Group can help you sift through the turmoil, get and maintain control of your plan while always managing future risks. For more words of advice and tips from us, download our free white paper today.

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News on the New Proposed Healthcare Tax/Assessment in Connecticut (SB21)

Article is from theCT mirror | April 29, 2014 | by: Arielle Levin Becker

Business groups question Malloy health reform funding plan

Gov. Dannel P. Malloy’s proposal to hire nine workers to help develop a state-level health reform initiative isn’t, in itself, especially controversial.

But the way the governor wants to pay for it — by imposing a new fee on health insurance policies — has drawn opposition from business groups. One has warned that the state could face a lawsuit if the measure passes.

At issue is how the state would come up with $3.2 million for expenses and new staff to work on a project, known as the state innovation model, or SIM. The project is aimed at improving the quality of health care by changing the way private insurers and public programs like Medicaid pay for it, creating a system that rewards keeping patients healthy rather than doing more tests or procedures.

Instead of using state tax dollars to fund the project’s development, Malloy proposed raising the money by charging a fee to health insurance companies and health plans, based on membership.

Click to Read Entire Article on ctmirror.org

DG Compliance Alert – Health Care Reform Update

February 26, 2014 – Diversified Group Compliance Update

IMPORTANT: FINAL REGULATION FOR EMPLOYER SHARED RESPONSIBILITY (PLAY OR PAY) RELEASED 

Good Afternoon,

On February 9, 2014, the Treasury Department and IRS issued final regulations on PPACA Employer Shared Responsibility (Play or Pay). The final rules provide some transitional relief that will come as welcome news to many employers. The changes in the final regulation are intended to provide a more phased in approach to full compliance with Employer Shared Responsibility.

Some of the key changes from the proposed regulations are summarized in the attached Compliance Update. Click here to read our Compliance Update.

If you have any questions on any of these topics, please feel free to contact Dave Follansbee by email:dfollansbee@diversifiedgb.com or by telephone at: (860) 295-6531.

healcare-reformQuestions about Play or Pay?Attend our upcoming Client Seminar on March 26th!

We will be holding a client seminar on March 26th at the Homewood Suites in Glastonbury, CT to help you better understand Play or Pay and how it impacts your company. Be sure to keep an eye on your in-box for your invitation!