Plans, Perks & Pay | Employee Benefits & Executive Compensation Blog

On November 10, 2020, the U.S. Supreme Court held oral arguments in California, et. al. v. Texas, et. al., the most recent challenge to the Patient Protection and Affordable Care Act (ACA).

On May 24, 2019, the U.S. Department of Health & Human Services (HHS) announced that it is issuing proposed revised regulations under Section 1557 of the Affordable Care Act that remove the redefinition of “sex” and certain regulatory burdens, including language taglines. The changes substantially roll back the original Obama-era regulations.

Recently, the IRS has been issuing 226J letters for the 2016 tax year. IRS Letter 226J is the penalty letter sent to employers who did not comply with the employer mandate under the Patient Protection and Affordable Care Act (ACA) in their offers of health coverage to employees. Frequently these penalties can be in the hundreds of thousands to millions of dollars. However, with the advice of counsel, you may be able to reduce, if not eliminate, the penalties, and changes can be made to avoid penalties in future years. It is important to note that while the individual mandate has been eliminated effective Jan. 1, 2019, by the current administration, the employer mandate still applies.

The battle over health benefits rages on. In the latest salvo, a group of states scored a major court victory against the Trump administration’s new “Association Health Plan” Final Rule, which was finalized in 2018. While this decision will have major ramifications, it is important to remember that association health plans may still be established under old rules that existed long before the final rule.

The case is styled New York v. United States Dep’t of Labor, No. CV 18-1747 (JDB), 2019 WL 1410370 (D.D.C. Mar. 28, 2019).

As previously noted, the individual mandate under the Patient Protection and Affordable Care Act (also known as the ACA, or more informally as Obamacare) still applies in 2018. Finding affordable coverage to avoid the penalty is essential.

One option available to individuals and families is joining a “health care sharing ministry” (HCSM) under Section 5000A of the Tax Code. If an individual is covered by an HCSM in any given month in 2018, then the individual will not be subject to the tax penalty for that month.

Section 11081 of the Tax Cuts and Jobs Act — the new tax reform law passed by Congress in late 2017 — repeals the so-called “individual mandate” under the Patient Protection and Affordable Care Act (also known as the ACA, or more informally as Obamacare).

For the 2017 tax year, the IRS has made it even more difficult for large employers to avoid penalties under the Patient Protection and Affordable Care Act (ACA), and major questions remain about how employers can avoid penalties due to missing or incorrect Social Security numbers.

The federal agencies charged with administering the Affordable Care Act released interim final regulations Oct. 6, 2017, that extended the exemption from providing contraceptive coverage to more employers and individuals effective immediately. Days later, the government settled dozens of lawsuits filed by organizations challenging the so-called “contraceptive mandate.” But several new cases challenging the expanded exemption were filed.

The Republican leadership in the House of Representatives has introduced legislation titled the American Health Care Act to repeal and replace the Affordable Care Act. The proposal actually would leave in place a significant portion of the ACA, including those parts affecting Medicare and many insurance reforms.

Among the ACA provisions that have been preserved are the prohibitions against health status underwriting and lifetime coverage limitations. Also preserved are coverage for pre-existing conditions, a cap on out-of-pocket expenditures, coverage for adult children to age 26, and guaranteed availability of coverage.

Donald Trump’s victory in the presidential election, combined with the Republican Party’s retention of a majority in both houses of Congress, is likely to lead to significant changes in laws, regulations and policies that will impact many aspects of life and business in the United States for the foreseeable future. In the coming weeks and months, many employers will be asking how the election will affect the benefits they provide to employees.