The Washington Report

---

If you elect to comment or engage with our content via third-party social media websites, you authorize Aon to have access to certain social media profile information. Please click here to learn more about information that may be collected when using these tools on Aon.com

August 1, 2018

Legislative

House Passes Package of Health Care Bills; Senate Passage Uncertain

On July 25, 2018, the House approved a package of health care bills. The bills move to the Senate, where passage is uncertain. In addition to passing a bill that would repeal the 2.3% excise tax on medical devices, the chamber also approved the following two bills:

• H.R. 6199 (Restoring Access to Medication and Modernizing Health Savings Accounts Act): The bill, which passed with a vote of 277–142, would repeal provisions of the Internal Revenue Code (Code) as added by the Affordable Care Act (ACA) that limit payments for medications from health savings accounts (HSAs), medical savings accounts, health flexible spending arrangements, and health reimbursement arrangements to only prescription drugs or insulin, thus allowing distributions from such accounts for over-the-counter drugs and menstrual care products. Additional provisions would include allowing individuals with HSAs to apply the purchase of gym memberships and certain sports equipment as qualified medical expenses and providing spouses with the opportunity to contribute to their partner’s HSA.
• H.R. 6311 (Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act): The bill, which passed with a vote of 242–176, would amend the Code and the ACA to modify the definition of a qualified health plan for purposes of the health insurance premium tax credit and allow individuals purchasing health insurance in the individual market to purchase a lower-premium copper plan. Among other provisions, the bill would increase the maximum contribution to HSAs, delay the annual fee for health insurance providers through 2021, and allow balances on flexible savings accounts to be carried over to the following year.

The above summaries only provide a brief overview of bill provisions. Please refer to any legislative summaries and full bill text for specific details. For additional information, please see the Aon bulletin entitled "House-Passed Health Care Bills Face Tough Road to Senate Passage" in the Publications section.

The full text of H.R. 6199 is available here.

The full text of H.R. 6311 is available here.

Summer Adjournment Begins for Congress

The House adjourned last week for summer recess and returns to the Hill after the Labor Day holiday. The Senate is in recess this week, but is tentatively scheduled to stay in session during most of August.

Health

Departments Release Final Regulations on Short-Term, Limited-Duration Insurance

On August 1, 2018, the Departments of Treasury, Labor, and Health and Human Services (the Departments) released final regulations amending the definition of short-term, limited-duration insurance for purposes of its exclusion from the definition of individual health insurance coverage. According to the news release, the regulations allow “for the sale and renewal of short-term, limited-duration plans that cover longer periods than the previous maximum period of less than three months. Such coverage can now cover an initial period of less than 12 months, and, taking into account any extensions, a maximum duration of no longer than 36 months in total.”

The final regulations become effective on October 2, 2018. For purposes of the applicability date, insurance policies sold on or after October 2, 2018, must meet the definition of short-term, limited-duration insurance contained in the final regulations in order to be considered such insurance.

The final regulations are temporarily available here.
(The final regulations will be published in the August 3, 2018, Federal Register.)

The news release is available here.

A fact sheet is available here.

CMS Releases Final Rule Adopting the Methodology for the Permanent Risk Adjustment Program Under the ACA for the 2017 Benefit Year

On July 24, 2018, the Centers for Medicare and Medicaid Services (CMS) posted a final rule that reissues, with additional explanation, the risk adjustment methodology that CMS previously established for transfers related to the 2017 benefit year, as part of the Affordable Care Act (ACA). The ACA established a permanent risk adjustment program to provide payments to health insurance issuers that enroll higher-risk populations, such as those with chronic conditions, funded by payments from those that enroll lower-risk populations. According to the CMS, the final rule “fills a void created by a federal district court’s vacating of the previously issued methodology, and enables the agency to resume the CMS-operated risk adjustment program in the individual and small group markets.” The provisions of the final rule became effective on July 30, 2018.

The final rule is available here. The CMS news release is available here.

Retirement

New PBGC Web Page Provides Guidance Including Policy on Two-Step Spinoff/Termination Transactions

The Pension Benefit Guaranty Corporation (PBGC) announced on July 25, 2018, that it has developed a new web page (“Staff Responses to Practitioner Questions”), that compiles PBGC staff responses to questions received from practitioners about PBGC requirements that may be of interest to other practitioners. The questions currently cover issues such as liens arising from large missed contributions, guaranteed benefits, and reportable events. Also included is a response to a question about whether a two-step transaction in which most participants in a plan are spun off to a new plan, followed by a termination of the remaining plan covering only retirees, is an acceptable strategy for avoiding premium payments. The PBGC indicated that since the vast majority of participants have not been fully paid, the transaction should be disregarded, and premiums should be assessed as if such transaction had not occurred. The agency intends to update the web page periodically as additional questions arise.

The new PBGC web page, “Staff Responses to Practitioner Questions,” is available here.

Aon Publications

House-Passed Health Care Bills Face Tough Road to Senate Passage

On July 25, 2018, the U.S. House of Representatives passed a package of health care bills that reforms the rules regarding health savings accounts and repeals and delays some health care taxes under the Affordable Care Act. But the legislation faces tough sledding in the U.S. Senate, where proponents have to reach a 60-vote threshold in order to break a filibuster.

In addition to passing a bill repealing the 2.3% excise tax on medical devices, the House passed two additional pieces of health care legislation, H.R. 6199 and H.R. 6311.

The Aon bulletin, which provides a brief overview of these two bills, can be found here.