Text of Interim Final Regs Relating to Status as a Grandfathered Health Plan under the Patient Protection and Affordable Care Act
121 pages. (This is a repeat item from yesterday afternoon's bulletin issue of this newsletter.) Filed Monday morning with the Office of the Federal Register; scheduled for publication on June 17. The regs generally are effective as of today (June 14). Excerpt:
[T]hese interim final regulations provide that a group health
plan or health insurance coverage no longer will be
considered a grandfathered health plan if a plan sponsor or
(Employee Benefits Security Administration; U.S. Department of Health and Human Services; Internal Revenue Service)
- Eliminates all or substantially all benefits to diagnose
or treat a particular condition. The elimination of benefits
for any necessary element to diagnose or treat a condition is
considered the elimination of all or substantially all
benefits to diagnose or treat a particular condition;
- Increases a percentage cost-sharing requirement (such as
coinsurance) above the level at which it was on March 23,
- Increases fixed-amount cost-sharing requirements other
than copayments, such as a $500 deductible or a $2,500 out-
of-pocket limit, by a total percentage measured from March
23, 2010 that is more than the sum of medical inflation and
15 percentage points.
- Increases copayments by an amount that exceeds the
greater of: a total percentage measured from March 23, 2010
that is more than the sum of medical inflation plus 15
percentage points, or $5 increased by medical inflation
measured from March 23, 2010;
- For a group health plan or group health insurance
coverage, an employer or employee organization decreases its
contribution rate by more than five percentage points below
the contribution rate on March 23, 2010; or
- With respect to annual limits (1) a group health plan, or
group or individual health insurance coverage, that, on March
23, 2010, did not impose an overall annual or lifetime limit
on the dollar value of all benefits imposes an overall annual
limit on the dollar value of benefits; (2) a group health
plan, or group or individual health insurance coverage, that,
on March 23, 2010, imposed an overall lifetime limit on the
dollar value of all benefits but no overall annual limit on
the dollar value of all benefits adopts an overall annual
limit at a dollar value that is lower than the dollar value
of the lifetime limit on March 23, 2010; or (3) a group
health plan, or group or individual health insurance
coverage, that, on March 23, 2010, imposed an overall annual
limit on the dollar value of all benefits decreases the
dollar value of the annual limit (regardless of whether the
plan or health insurance coverage also imposes an overall
lifetime limit on the dollar value of all benefits).
IRS, HHS, and DOL Issue Regulations on Grandfathered Health Plans
Excerpt: "The final regulations describe in detail exactly which changes to a health plan will adversely affect its grandfathered health plan status. Any health plan changes that are not specifically prohibited (e.g., benefit improvements) will not cause a health plan to lose its grandfathered status."
(Ballard Spahr LLP)
IRS Proposed Assessment of Listed Transaction Penalties Upon Small Businesses
Excerpt: "Many taxpayers adopted 419(e) plans based upon representations of insurance professionals that the plans were legitimate welfare benefit plans and had no idea they were engaging in a listed transaction. Vociferous complaints from these taxpayers caused Congress to impose a moratorium on assessment of section 6707A penalties. The moratorium expired on June 1, 2010 . . . ."
(Fox Rothschild LLP)
Tax Credit for Small Employers under Health Care Reform
Excerpt: "The tax credit is effective for tax years beginning in 2010 through 2013, and is designed to encourage small employers to begin offering health coverage or continue health coverage already in effect."
(Katten Muchin Rosenman LLP)
Federal Agencies Issue Regulations on Grandfathered Health Plans
Excerpt: "The proposed regulations address at what point changes to a group health plan or health insurance coverage in which an individual was enrolled on March 23, 2010, are significant enough to cause the plan or health insurance coverage to cease to be a grandfathered health plan."
The Essentials of Health Care Reform: A Primer for Employers
21 pages. Excerpt: "The collective goal of these articles is to explain the individual mandate, health insurance Exchanges and the employer shared responsibility requirements. Initially we will examine the bigger picture of the basics and the mechanics of this new health care coverage system. After we review how this system operates, we will then cover the requirements specifically that directly apply to the employer/plan sponsor in greater detail."
(Gallagher Benefit Services, Inc.)
Changes in Federal Workers' Leave Benefits Extended to Heterose.xual Partners and Grandparents
Excerpt: "Federal workers may use sick leave or funeral leave in cases of ailing or deceased domestic partners starting July 14, the Office of Personnel Management said . . . . Unlike other recent changes to federal personnel policies that apply only to same-s.ex partners, the new orders also apply to opposite-sex domestic partners."
(The Washington Post; free registration required)
Small Businesses Hit by Health Plan Hikes While Awaiting Tax Credits
Excerpt: "Insurers that have raised rates for small businesses this year include: Blue Shield of California, which raised rates by 58% to 75% for some plans; Aetna, which imposed a 25% increase for small business health savings account plans; and Anthem Blue Cross, which plans to raise rates by about 13% for small business plans."
(California HealthCare Foundation)
Covering Health Issues, 5th Edition: 2010 Update
Excerpt: "[The Alliance has published] a completely updated online edition of 'Covering Health Issues,' made possible by the Robert Wood Johnson Foundation. Each of the 12 chapters has been revised to reflect the provisions of the Patient Protection and Affordable Coverage Act of 2010."
(Alliance for Health Reform)
New Health Care Rules Could Add Costs, and Benefits, to Some Insurance Plans
Excerpt: "The tempest involves an issue known as 'grandfathering.' Consistent with Obama's promise, the legislation said health plans in existence when the law was enacted are exempt from some of its requirements. But the law left it to the administration to decide how much a health plan can change without forfeiting that exemption."
(The Washington Post; free registration required)
Reactions to New Federal Rules on Changes in Health Benefits
Excerpt: "The rules, released June 14, 2010, spell out when plans would lose their grandfathered status, including if they make major increases in premiums, modest increases in co-payments or significantly cut benefits. The administration estimates that half of all employers, including two-thirds of small employers, could lose their grandfathered status by 2013."
(Henry J. Kaiser Family Foundation)
Health Reform Act Adds to Cost of Large Employer VEBAs (PDF)
Pages 3-4 of 5 pages. Excerpt: "[VEBAs] established by trade associations or through specific legislation or bankrup.tcy orders appear to be excluded from the annual fee imposed upon 'health insurance providers.' But the typical arrangement, whereby a large employer provides its employee health insurance benefits through its own VEBA, appears to be subject to the annual fee."
(Katten Muchin Rosenman LLP)
GAO Proactive Testing of ARRA Tax Credits for COBRA Premium Payments
9 pages. Excerpt: "Employers claiming COBRA credits use quarterly or annual payroll tax returns to report the number of former employees on COBRA and the amount of premiums paid. These returns do not require employers to provide any supporting information about individuals enrolled in COBRA or premiums paid on their behalf, potentially allowing unscrupulous employers to lower their payroll taxes by fraudulently claiming COBRA credits."
(U.S. Government Accountability Office)
Sixty-Six Large Firms Capture Honors for Their Healthy Workplace Policies
Excerpt: "According to the news release, winners were honored in one of three categories: Platinum, for established workplace well-being programs with measurable success and documented outcomes; Gold, for creating cultural and environmental changes that support employees who are committed to long-term behavior changes; and Silver, for employers who have launched programs or services to promote living a healthier lifestyle."
Employer Health Costs to Rise 9% in 2011
Excerpt: "Employers can expect medical costs to increase by 9% in 2011, a decrease of 0.5% from 2010, according to a new report from the PricewaterhouseCoopers LLP (PwC) Health Research Institute."
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Executive Compensation; Benefits in General
California G.ay-Marriage Trial Could Have National Implications
Excerpt: "After a months-long break, a landmark federal trial challenging California's ban on same-s.ex marriage ends Wednesday with closing arguments. The outcome could have wide-ranging implications. . . . If [the judge] strikes down California's ban on g.ay marriage, he could do it in a way that sweeps away anti-g.ay-marriage laws throughout the nation."
(Morning Edition via National Public Radio)
Employers Still 'In the Driver's Seat' on Pay and Benefits
Excerpt: "When and if the economy improves, entrepreneurs might not find as much top-quality talent willing to work under creative compensation arrangements. For now, though, they are capitalizing on one of the few advantages afforded by the recession."
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