April 30, 2012
The Internal Revenue Service (IRS) on April 26, 2012, issued three notices regarding approaches to determining whether an employer-sponsored health plan provides minimum value and associated reporting requirements as added by the Patient Protection and Affordable Care Act (Affordable Care Act).
Notice 2012-31 describes and requests comments on several possible approaches to determining whether health coverage under an eligible employer-sponsored plan provides "minimum value." "Minimum value" is important to employers because it is one of the factors that determines whether or not an employer is required to pay an "assessable payment." The "assessable payment" is a penalty or tax that applies to most large employers if any full-time employee (FTE) receives a premium tax credit from the government to assist in purchasing health coverage through a state-based Affordable Insurance Exchange (Exchange). An FTE is not eligible for a premium tax credit unless the employer-sponsored plan’s coverage is either: 1) unaffordable; or 2) does not provide minimum value. It is this second requirement that Notice 2012-31 addresses.
Notice 2012-32 requests comments on Code Section 6055, which requires health insurance issuers, sponsors of self-insured health plans, and government-sponsored health insurance programs that provide minimum essential coverage to file annual returns reporting information for each individual for whom minimum essential coverage is provided.
Notice 2012-33 requests comments on Code Section 6056, which requires reporting for applicable large employers that are subject to the employer shared responsibility payment under Code Section 4980H.
Separately, the Department of Health and Human Services’ (HHS) Center for Consumer Information & Insurance Oversight (CCIIO) released a request for comments on verifying access to employer-sponsored health coverage for purposes of determining eligibility for advance payments of the premium tax credit in an Exchange. The bulletin requests comments on a proposed interim strategy and potential regulatory approach for verification of an applicant’s access to qualifying coverage in an employer-sponsored plan. HHS also solicits comments on the development of a long-term verification strategy.
Comments on the three IRS notices are due June 11, 2012. There is no specified comment due date for the CCIIO bulletin.
The Aon Hewitt bulletin, which provides a summary of the IRS notices and the CCIIO request for comment, is
Aon Hewitt bulletin.
IRS Notice 2012-31 is available
IRS Notice 2012-31.
IRS Notice 2012-32 is available
IRS Notice 2012-32.
IRS Notice 2012-33 is available
IRS Notice 2012-33.
The CCIIO "Verification of Access to Employer-Sponsored Coverage Bulletin" is available
Verification of Access to Employer-Sponsored Coverage Bulletin.
On April 20, 2012, the Department of Health and Human Services' (HHS) Center for Consumer Information and Insurance Oversight (CCIIO) released technical guidance regarding the medical loss ratio (MLR) regulation. The Patient Protection and Affordable Care Act (Affordable Care Act) requires insurance companies to spend 80% (individual and small group markets) or 85% (large group markets) of premium dollars on medical care and health care quality improvement, rather than on administrative costs. Insurance companies that do not comply must provide a rebate to their customers. HHS published final rules implementing MLR requirements on December 7, 2011. This technical guidance provides questions and answers on the following topics: applicability of the MLR to certain types of plans; employer groups of one; counting employees for determining market size; individual association policies; offering policyholders a "premium holiday"; reinsurance and reporting; exchange user fees; states with a higher MLR standard; "mini-med" experience—application of the adjustment; and form of rebate.
The CCIIO technical guidance is available
CCIIO Technical Guidance (CCIIO 2012-002): Questions and Answers Regarding the Medical Loss Ratio Regulation.
On April 30, 2012, the Internal Revenue Service (IRS) published a final rule on the disclosure of return information under Internal Revenue Code Section 6103(1)(21) to carry out eligibility requirements under the Patient Protection and Affordable Care Act (Affordable Care Act). The regulations define certain terms and prescribe certain items of return information, in addition to those items prescribed by statute that will be disclosed, under Section 6103(1)(21). Through Section 6103(1)(21)(A), the IRS will disclose to the Department of Health and Human Services (HHS) certain items of return information for any relevant taxpayer, meaning any individual listed, by name and Social Security number or adoption taxpayer identification number, on the application whose income may bear upon a determination of the eligibility of an individual for an insurance affordability program. Comments on the proposed rules are due by July 30, 2012.
The proposed rules are available
Federal Register/Vol 77 No. 83.
On April 27, 2012, the Internal Revenue Service (IRS) issued inflation-adjusted limits for contributions to a health savings account (HSA) for calendar year 2013 (Revenue Procedure 2012-26). For calendar year 2013, the limit on contributions for an individual with self-only coverage under a high-deductible health plan is $3,250 ($6,450 for family coverage). A high-deductible health plan for calendar year 2013 is defined as a health plan with an annual deductible that is not less than $1,250 for self-only coverage ($2,500 for family coverage). The limit on annual out-of-pocket expenses is $6,250 for self-only coverage ($12,500 for family coverage). The limit on catch-up contributions for individuals age 55 or older is $1,000.
The full text of Revenue Procedure 2012-26 is available
The Equal Employment Opportunity Commission (EEOC) issued updated enforcement guidance on the employer use of arrest and conviction records in employment decisions under Title VII of the Civil Rights Act on April 25, 2012. Additionally, the agency also released a "Question and Answer (Q & A)" document about the guidance.
According to the EEOC, the updated guidance is supported by federal court precedent concerning the application of Title VII to employers’ consideration of a job applicant or employee’s criminal history and incorporates judicial decisions issued since the passage of the Civil Rights Act of 1991. The guidance also "updates relevant data, consolidates previous EEOC policy statements on this issue into a single document and illustrates how Title VII applies to various scenarios that an employer might encounter when considering the arrest or conviction history of a current or prospective employee." Among other topics, the guidance discusses:
The EEOC news release is available
EEOC Issues Enforcement Guidance .
The EEOC enforcement guidance is available
EEOC Enforcement Guidance .
The EEOC Q & A document is available
Questions and Answers About the EEOC’s Enforcement Guidance on the Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII .
On April 20, 2012, the Equal Employment Opportunity Commission (EEOC) issued a ruling that protects transgender employees from discrimination in the workplace. In its decision, the EEOC concluded that "Intentional discrimination against a transgender individual because that person is transgender, is by definition, discrimination 'based on ...sex' and such discrimination therefore violates Title VII of the Civil Rights Act." The opinion was delivered on April 23 to lawyers for Mia Macy, a transgender woman who claimed she was denied employment with the Department of Alcohol, Tobacco, Firearms and Explosives (ATF) after the agency learned of her gender transition. According to the agency, the decision will apply to all EEOC enforcement and litigation activities at the commission and in its field offices throughout the country. It also will be binding on all federal agencies and departments.
The EEOC ruling is available
EEOC Rules That Transgender Employees Are Protected Under Federal Sexual Discrimination Law.
The Department of Labor (DOL) submitted its second annual report to Congress on self-insured group plans, as required by the Patient Protection and Affordable Care Act (Affordable Care Act). The Affordable Care Act requires the Secretary of Labor to provide Congress with an annual report containing general information on self-insured employee health benefit plans and financial information regarding employers that sponsor such plans. The report must use data from the Annual Return/Report of Employee Benefit Plan (the "Form 5500"), which many self-insured health plans are required to file annually with the DOL. The first report was provided to Congress in March 2011. According to the 2012 report, approximately 14,800 health plans filing a Form 5500 for 2009 were self-insured and 6,300 mixed self-insurance with insurance ("mixed-insured"). These plans respectively covered 24 million and 26 million participants and held assets totaling $38 billion and $81 billion. The DOL also submitted two detailed appendices.
The DOL's 2012 Annual Report on Self-Insured Group Health Plans is available
2012 Annual Report on Self-Insured Group Health Plans.
Appendix A of the report (Group Health Plans Report: Abstract of 2009 Form 5500 Annual Reports Reflecting Statistical Year Filings) is available
Appendix B of the report (Self-Insured Health Benefit Plans 2012) is available
On April 23, 2012, the Social Security Board of Trustees released two annual reports detailing the financial health of the Social Security trust funds. The first, "The 2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds," finds that the combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2033, three years sooner than projected last year. The DI Trust Fund will be exhausted in 2016, two years earlier than last year’s estimate. The trustees also project that OASDI program costs will exceed noninterest income in 2012 and will remain higher throughout the remainder of the 75-year period.
The second report, the "2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds," states that Medicare's Part A Hospital Trust Fund will be solvent until 2024, the same as estimated last year. In this report, the trustees state that the trust fund would have gone bankrupt in 2016 without the Medicare provisions found in the Patient Protection and Affordable Care Act (Affordable Care Act), even though some of these provisions have not yet been implemented.
The SSA news release is available
Social Security Board of Trustees: Projected Trust Fund Exhaustion Three Years Sooner Than Last Year.
The "2012 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds" is available
The 2012 OASDI Trustees Report.
The "2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds" is available
2012 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
The U.S. Chamber of Commerce released a white paper entitled, "Private Retirement Benefits in the 21st Century: A Path Forward," on April 23, 2012. In response to concerns about retirement security, the Chamber’s Employee Benefits Committee developed the report to "offer guidelines on initiatives and reforms that will bolster the voluntary employment-based retirement benefits system and retirement security for workers." According to the Chamber, the report provides detailed guidelines to "help employers create and maintain retirement plans, and for workers to increase their savings. It also identifies ways to make retirement assets last for future retirees." Recommendations include:
In response to the report findings, the Pension Benefit Guaranty Corporation (PBGC) released a statement indicating that the "Chamber of Commerce is giving retirement security the attention it deserves."
The "Private Retirement Benefits in the 21st Century: A Path Forward" report is available
Private Retirement Benefits in the 21st Century: A Path Forward .
The U.S. Chamber of Commerce press release is available
U.S. Chamber Outlines Path Forward for Private Retirement Benefits .
The PBGC press release is available
PBGC: U.S. Chamber White Paper “Giving Retirement Security the Attention it Deserves” .