Q4 Quarterly Compliance Recap 2019

Over the past quarter, we’ve seen many important employee benefit compliance updates hit the news. To keep you up to date on the latest legislative updates, here is your quarterly compliance recap! Simply click the legal alert titles to read the full story or watch a short recap video.

IRS Releases Guidance for Employers Offering Individual Coverage HRAs

A Note from Danielle Capilla, Alera Group's Director of Compliance, Employee Benefits 

The IRS has released the long-anticipated guidance regarding affordability for applicable large employers who wish to utilize individual coverage health reimbursement arrangements, which will allow employers to begin launching these plans in 2020. ICHRAs can be a great tool in certain situations, but employers who wish to stop all group health coverage in lieu of ICHRAs should only do so with assistance from their broker and legal counsel.

On September 27, the Internal Revenue Service (IRS) released proposed regulations on the application of the Affordable Care Act’s (ACA) employer shared responsibility provisions to a new type of Health Reimbursement Arrangement (HRA) available starting in 2020.  In June 2019, the Department of Labor, the Department of Health and Human Services, and the Treasury Department (the “Departments”) released a final rule concerning HRAs that can be integrated with individual market coverage or Medicare.  This new type of HRA is referred to as an Individual Coverage HRA, or ICHRA.  The rule, based on an executive order from President Trump in 2017, is intended to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with non-group coverage.

Video Recap: https://vimeo.com/374445742/e81147cba9

Massachusetts Employers Must File HIRD Form by December 15

A Note from Danielle Capilla, Alera Group's Director of Compliance, Employee Benefits 

As part of Massachusetts’ expanded Employer Medical Assistance Contribution (EMAC) program, employers with 6 or more employees in Massachusetts must submit a health insurance responsibility disclosure (HIRD) form annually, which collects information about employer-sponsored health insurance offerings. Employers throughout the Commonwealth should have received email communication from the Department of Revenue (DOR) indicating that the HIRD form must be completed by December 15, 2019.

Clients with six or more employees working in the state of Massachusetts will want to ensure they understand and comply with the HIRD Form rules by December 15.

As part of Massachusetts’ expanded Employer Medical Assistance Contribution (EMAC) program, employers with 6 or more employees in Massachusetts must submit a health insurance responsibility disclosure (HIRD) form annually, which collects information about employer-sponsored health insurance offerings.  Employers throughout the Commonwealth should have received email communication from the Department of Revenue (DOR) indicating that the HIRD form must be completed by December 15, 2019. 

Video Recap: https://vimeo.com/371410604/f441fdb36a



Health FSA Contribution Limit Increases to $2,750 for 2020 Plan Years

A Note from Danielle Capilla, Alera Group's Director of Compliance, Employee Benefits 

Employers who have been awaiting the 2020 FSA contribution limits will be pleased to see that the IRS has confirmed the limit of $2750, representing an increase of $50 over 2019.

On November 6, 2019, the Internal Revenue Service (IRS) released Revenue Procedure 2019-44, which raises the health Flexible Spending Account (FSA) salary reduction contribution limit by $50 to $2,750 for plan years beginning in 2020. The Revenue Procedure also contains the cost-of-living adjustments that apply to dollar limitations in certain sections of the Internal Revenue Code. 

Video Recap: https://vimeo.com/371888795/ca5bafefa2

 

IRS Releases Draft 2019 ACA Reporting Forms and Instructions

A Note from Danielle Capilla, Alera Group's Director of Compliance, Employee Benefits 

All employers who were applicable large employers (50 or more full time employees) in 2018, and were required to offer affordable, minimum value, minimum essential coverage to their full time employees in 2019 will be pleased to know that the IRS has released draft reporting forms and instructions for the upcoming 2020 reporting deadline. It is important to note that despite the individual mandate penalty being reduced to $0, the 1095-B requirements are still in effect in 2020.

The IRS has released draft forms and instructions for the 2019 B-Series and C-Series reporting forms (Forms 1094-B, 1095-B, 1094-C and 1095-C) used by employers and coverage providers to report certain information to full-time employees and the Internal Revenue Service (IRS). 

Video Recap: https://vimeo.com/373432229/204718d7e9

 

What Employers Need to Know About the New Transparency Rules

A Note from Danielle Capilla, Alera Group's Director of Compliance, Employee Benefits 

Employers who sponsor group health plans, whether fully insured or self-funded, should familiarize themselves with the requirements outlined in the proposed rule and watch for additional news on this topic. Currently, it is too soon to answer specific questions on how this rule might be implemented, or if it will even be finalized, but if it is finalized it has the potential to create new employer obligations.

Following President Trump’s Executive Order on Improving Price and Transparency in American Healthcare, one final and one proposed rule was released by HHS and CMS that aim to increase price transparency for hospitals and insurance companies.  These rules would have an impact on employers who sponsor group health plans. 

Video Recap: https://vimeo.com/377141264/e09f82331d

IRS Extends Deadline for Furnishing Form 1095-C, Extends Good-Faith Transition Relief

A Note from Danielle Capilla, Alera Group's Director of Compliance, Employee Benefits 

Applicable large employers and small self-funded groups will be pleased to see the IRS has given reporting relief in 2020. Applicable large employers will have more time to complete the reporting process, and small self-funded employers who meet certain criteria will not have to furnish B forms to employees.

The Internal Revenue Service (IRS) has released Notice 2019-63, which extends the deadline for furnishing 2019 Forms 1095-B and 1095-C to individuals from January 31, 2020 to March 2, 2020.  The Notice also provides penalty relief for good-faith reporting errors and suspends the requirement to issue Form 1095-B to individuals, under certain conditions. 

Video Recap: https://vimeo.com/377142148/5bf2a52914



Congress Passes Spending Bill that Repeals Three Major ACA Taxes, Extends PCORI

A Note from Danielle Capilla, Alera Group's Director of Compliance, Employee Benefits 

Employers will be thrilled to learn that the threat of the Cadillac Tax has ended, and the HIT Tax has been terminated. The PCORI fee, however, will be continued through 2029. Employers who wound down their process for PCORI fee payments will need to put them back into place for the time being.

On December 20, 2019, the House and Senate, with the final signature from President Trump, passed a bipartisan legislative package of spending bills to avoid a government shutdown.  This package of bills is collectively referred to as the Further Consolidated Appropriations Act, 2020 (the “Act”). 



Video Recap: https://vimeo.com/380518142/40002ea536

 

We hope that this quarterly compliance recap is a helpful resource to you and your team! If you have any questions regarding any of the alerts above, please reach out to us at info@aleragroup.com for more information.

 

Danielle Capilla | Director of Compliance, Employee Benefits  

Danielle is the Director of Compliance for Alera’s Employee Benefits division. She previously served as the Senior Vice President of Compliance and Operations and Chief Compliance officer at United Benefit Advisors (UBA). Additionally, she served as an Adjunct Professor at DePaul University. She worked as a Senior Writer Analyst at Wolters Kluwer and as a Law Clerk at Clifford Law Offices.

Danielle graduated with a B.A. in Sociology, History, and Business at Tulane University. She earned her JD in Health Law from DePaul University College of Law.

About the Authors.  These alerts were prepared for Alera Group by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act.  Contact Peter Marathas or Stacy Barrow at pmarathas@marbarlaw.com or sbarrow@marbarlaw.com

The information provided in these alerts are not, are not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients.  This is not legal advice.  No client-lawyer relationship between you and our lawyers is or may be created by your use of this information.  Rather, the content is intended as a general overview of the subject matter covered.  This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein.  Those reading this alert are encouraged to seek direct counsel on legal questions.

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