Human Resources

The Washington Report

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May 8, 2019


Departments Publish RFI Regarding State Relief and Empowerment Waivers

The Departments and CMS are asking for ideas “for additional waiver concepts that states may be able to use to develop innovative waiver programs that meet the Section 1332 guidelines,” including the following possibilities:

The DOL states that for an interim period of time it “will not pursue enforcement actions against parties for potential violations stemming from actions taken before the district court's decision in good faith reliance on the AHP rule's validity, as long as parties meet their responsibilities to association members and their participants and beneficiaries to pay health benefit claims as promised. Nor will the Department take action against existing AHPs for continuing to provide benefits to members who enrolled in good faith reliance on the AHP rule's validity before the district court's order, through the remainder of the applicable plan year or contract term.”

  • Waiver concepts that states could potentially use alone or in combination with other waiver concepts, state proposals, or policy changes;
  • Waiver concepts that could advance some or all of the principles outlined in the Section 1332 Guidance released in October 2018;
  • Waiver concepts that incorporate the entire range of waivable requirements allowed under Section 1332; and
  • How states might combine the flexibilities available under Section 1332 with other flexibilities that exist under federal law, including regulatory flexibility, Section 1115 Medicaid waivers, as well as state law.

Comments on the RFI are due by July 2, 2019.

The RFI is available here.

The CMS blog post is available here.

The October 2018 guidance is available here.


IRS Releases Revenue Procedure on Limited Expansion of Determination Letter Program for Individually Designed Plans

On May 2, 2019, the Internal Revenue Service (IRS) released Revenue Procedure 2019-20, in response to numerous requests to expand the agency’s determination letter program. Revenue Procedure 2019-20 expands the determination letter program for two specific categories:

  • Statutory Hybrid Plans: plan sponsors may submit determination letter applications for statutory hybrid plans for the 12-month period beginning September 1, 2019, and ending August 31, 2020.
  • Plan Mergers: plan sponsors may submit determination letter applications for certain merged plans on an ongoing basis.

A monetary sanction based on Voluntary Correction Program user fees may apply to plan document failures discovered by the IRS unrelated to statutory hybrid plan requirements or the plan merger. According to the IRS, as provided in prior guidance (Revenue Procedure 2016-37), plan sponsors will continue to be able to submit a determination letter application for initial plan qualification and for qualification upon plan termination.

IRS Revenue Procedure 2019-20 is available here.

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