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Aon Hewitt Washington Report

February 13, 2012

Agencies Release Final Regulations Regarding Summary of Benefits and Coverage and Uniform Glossary Requirements

On February 9, 2012, the Departments of Health and Human Services (HHS), Labor (DOL), and Treasury (the agencies) jointly released final regulations and a guidance document to implement a provision in the Patient Protection and Affordable Care Act (Affordable Care Act) that requires all group health plans and health insurance issuers to provide consumers with two new disclosure forms to assist them in understanding and comparing their health coverage options. The new disclosure forms include:

  • A Summary of Benefits and Coverage (SBC); and
  • A Uniform Glossary (Glossary) of common health insurance words, such as “copay” and “deductible.”

The Aon Hewitt report, which focuses on the issuance of the SBC and Glossary to participants and beneficiaries, is available here.

The full text of the final regulations is temporarily available here.

The SBC and Uniform Glossary—Templates, Instructions, and Related Materials are available here.

The HHS press release is available here.

Agencies Answer Employer Questions on Automatic Enrollment, Employer Shared Responsibility, and Waiting Periods

The Departments of Labor (DOL), Health and Human Services (HHS), and Treasury released Technical Release 2012-01 (IRS Notice 2012-17) on February 9, 2012 that provides some additional information regarding three provisions of the Patient Protection and Affordable Care Act (Affordable Care Act)—automatic enrollment, employer shared responsibility, and the 90-day limit on waiting periods. In addition, the document outlines various approaches the agencies are considering proposing in future regulations or other guidance. Comments on the proposed approaches are due by April 9, 2012.

The Aon Hewitt report on Technical Release 2012-01 (IRS Notice 2012-17) is available here.

EBSA Technical Release 2012-01 is available here.

IRS Notice 2012-17 is available here.

HHS, Obama Administration Revise Contraceptive Coverage Policy Under Affordable Care Act; Release Final Rules

On February 10, 2012, the Department of Health and Human Services (HHS) issued final rules that finalize, without change, interim final regulations authorizing the exemption of group health plans and group health insurance coverage sponsored by certain religious employers from having to cover certain preventive health services under provisions of the Patient Protection and Affordable Care Act (Affordable Care Act). The White House, in conjunction with the release of the final rules, also issued a fact sheet (“Women’s Preventive Services and Religious Institutions”) that clarifies the new policy specific to contraceptive coverage. In a statement, the Obama administration indicated that the new policy "Ensures women can get contraception without paying a co-pay and fully accommodates important concerns raised by religious groups by ensuring that objecting non-profit religious employers will not have to provide contraceptive coverage or refer women to organizations that provide contraception." The policy states that if a woman works for a religious employer with objections to providing contraceptive services as part of its health plan, the religious employer will not be required to provide, pay for, or refer for contraception coverage, but her insurance company will be required to directly offer her contraceptive care free of charge.

The HHS final rules are temporarily available here.

The White House fact sheet is available here.

California Ban on Same-Sex Marriage Ruled Unconstitutional

California’s ban on same-sex marriage is unconstitutional, a three-judge panel of the Ninth Circuit Court of Appeals ruled on February 7, 2012. In a 2-1 decision, the Court of Appeals ruled that the California ban violated the Equal Protection Clause of the U.S. Constitution since it targeted a minority group by withdrawing a right that it had possessed (i.e., the right to marry), without a legitimate reason for doing so.

For employers with employees in California, the decision preserves the status quo. The court continued an order blocking the resumption of same-sex marriages while litigation continues. The ruling is likely to be appealed to the U.S. Supreme Court.

The Aon Hewitt bulletin, which briefly discusses background and impact to employer sponsored health and welfare plans, is available here.

IRS Releases Guidance on Claiming Expanded Veterans Tax Credit

The Internal Revenue Service (IRS) on February 9, 2012, released guidance and forms that employers can use to claim the newly expanded tax credit for hiring veterans. The IRS also announced that employers will have more time to file the required certification form for employees hired on or after November 22, 2011, and before May 22, 2012. The VOW to Hire Heroes Act of 2011, enacted November 21, 2011, provides an expanded Work Opportunity Tax Credit (WOTC) to businesses that hire eligible unemployed veterans and for the first time also makes the credit available to certain tax-exempt organizations. According to the IRS, the credit can be as high as $9,600 per veteran for for-profit employers or up to $6,240 for tax-exempt organizations. The amount of the credit depends on a number of factors, including the length of the veteran’s unemployment before hire, hours a veteran works, and the amount of first-year wages paid. Employers that hire veterans with service-related disabilities may be eligible for the maximum credit.

The IRS press release is available here.

IRS Notice 2012-13 is available here.

PBGC Issues New Policy Statement Outlining Premium Penalty Relief for Plans That Have Never Paid Premiums

On February 9, 2012, the Pension Benefit Guaranty Corporation (PBGC) issued a policy statement that allows pension plans that have never paid required PBGC premiums to do so without penalty for a limited period of time. According to the PBGC, after this time period ends, PBGC will step up enforcement efforts against such plans and resume penalty charges.

The PBGC policy statement is available here.