Summary of Federal Laws
CUA Compliance Partners
Miscellaneous Tax Issues
Patient Protection and Affordable Care Act
Public Law 111-148
This law amends the Public Health Service Act, as well as the Internal Revenue Code and ERISA.
Under Section 6041 of the IRC, persons engaged in a trade or business who make payments of at least $600 per year to another person must file an information return (Form 1099) with the IRS and provide a copy to the payee.
Under the Patient Protection and Affordable Care Act the information reporting requirements are expanded beginning with payments made after Dec. 31, 2011. Payments to corporations will no longer be automatically exempt from reporting requirements. Second, the types of payments that trigger reporting are expanded to include amounts paid in consideration of property and other gross proceeds.
The list of payments prior to Jan. 1, 2012 includes *rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits and income.*
For payments made after Dec. 31, 2011, the following are examples of payments included in the reporting requirement: *payments for merchandise such as office equipment, food, bottled water, and other items, possibly including travel, telephone and Internet service.*
See IRS Notice 2010-51 for a summary and request for comments on the new reporting requirements,
which includes a requirement that businesses, including non-profit and tax exempt organizations annually report to the IRS payments they made to suppliers of goods and services during the previous year totaling more than $600.
A copy of the report must also go to the vendor. The university would have to obtain the TIN from the vendor to include it on the report. Credit card payments are exempt.
Notice regarding delaying employer shared responsibility provisions of PPACA until 2015. Employers who wish to use a 12 month stability period in 2015, will need a full look back 12 month measurement period, thus still requiring tracking of # and hours of employees in 2014.
Final Rule on Additional Medicare Tax, 78 Fed. Reg. 71468, Nov. 29, 2103
This is a 0.9% Medicare surtax, and the rules set forth the process for employers who are required to withhold the tax on individual earners making over $200,000 in a given calendar year. If the employer fails to deduct, the employer can be liable until the employee pays the tax. The tax went into effect Jan. 1, 2013.
Final Rule on Medicaid and Children's Health Insurance Program: Essential Health Benefits in Alternative Benefit Plans, Eligiblity Notices, Fair Hearings and Appeal Processes and Premiums and Cost Sharing; Exchange: Eligiblity and Enrollment, to be published in July 15, 2103 Federal Register. All 606 pages.See page 356 for the statement that a simple attestation from an applicant that he or she qualifies will suffice for an applicant applying to an exchange.
One Year Delay on Implementation of Employer Mandate, July 2, 2013 Announcement by Treasury (Assistant Secretary for Tax Policy)
Treasury states it will provide an additional year before the Affordable Care Act (ACA) mandatory employer and insurer reporting requirements begin, and will provide formal guidance concerning the transition during the week of July 8. The transition relief will make it impractical to determine which employers owe shared responsibility payments (under section 4980H) for 2014. The government thus extends transition relief to employers on shared responsibility payments. These payments will not apply for 2014. Any employer shared responsibility payments will not apply until 2015. The contraceptive mandate is not affected by this rule.
For the cases and regulations affecting/contesting the contraceptive mandate please see the Religious Issues page.
Incentives for Non-Discriminatory Wellness Programs in Group Health Programs, Final Rule, 78 Fed. Reg. 33157, June 3, 2013. Effective August 2, 2013, these final regulations increase the maximum permissible reward under a health-contingent wellness program offered in connection with a group health plan (and any related health insurance coverage) from 20 percent to 30 percent of the cost of coverage. The final regulations further increase the maximum permissible reward to 50 percent for wellness programs designed to prevent or reduce tobacco use. These regulations also include other clarifications regarding the reasonable design of health-contingent wellness programs and the reasonable alternatives they must offer in order to avoid prohibited discrimination.
American Council on Education Letter to Treasury Department (July 16, 2013) on the proposed rule issued by Treasury Department implementing the employer shared responsibility mandate under the ACA. The comments outline how the department could revise the final regulations to ensure campuses can continue to employ students in work study programs and cooperative education programs and internships as well as meet the goals of the ACA to ensure broad access to sufficient, affordable health insurance coverage.
Medicare, Medicaid, Children's Health Insurance Programs; Transparency Reports and Reporting of Physician Ownership or Investment Interests; Final Rule. 78 Fed. Reg. 9458, Feb. 8, 2013. Effective date: These regulations are effective on April 9, hat provision requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered under title XVIII of the Act (Medicare) or a State plan under
title XIX (Medicaid) or XXI of the Act (the Children's Health Insurance Program, or CHIP) to report annually to the Secretary certain payments or other transfers of value to physicians and teaching hospitals.
Section 1128G of the Act also requires applicable manufacturers and applicable group purchasing organizations (GPOs) to report certain information regarding the ownership or investment interests held by
physicians or the immediate family members of physicians in such entities.2013.
Student Health Insurance, PPACA, Health Insurance Market Rules, Final Rule, 78 Fed. Reg. 13406, Feb. 27, 2013. Section 147.145 of the final rule provides that non-grandfathered student health insurance coverage is not subject to the single risk pool requirement of Sec. 1312(c) of the Affordable Care Act (ACA), or to the guaranteed availability or guaranteed renewability requirements of Secs. 2702 and 2703 of the ACA. As a result, the final rule permits separate risk pooling and experience rating for student coverage based on the eligible campus population of students and their dependents. The final rule is effective April 29, 2013.
PPACA, Miscellaneous Minimum Essential Coverage Provisions, 78 Fed. Reg. 7348, Feb. 1, 2013. Includes Student Health Insurance Plans. The proposed rule at §156.602 declares that self-funded student health coverage offered to students by an institution of higher education as defined in the Higher Education Act, where the institution assumes the risk for payment of claims, qualifies as minimum essential coverage under the Affordable Care Act (ACA). Individuals covered by these plans would not be subject to the shared responsibility payment for not maintaining minimum essential coverage required by Sec. 5000A of the ACA.
Proposed Rules on Employer Shared Responsibility for Health Coverage, issued by IRS 1-2-13 (see actual Federal Register Notice) to amend 26 CFR Parts 1, 54, and 301. See Gallagher Benefit Services Jan. 2013 newsletter titled Defintion of a Large Employer under New Employer Shared Responsibility Regulations.
See also IRS Proposes Regulations for Employer Penalty under PPACA for a summary of when the penalty would be triggered. No penalty is triggered unless at least one full time employee obtains subsidized Exchange Coverage. The employer would then have a chance to show it met the mandatory coverage minimum value and affordablity test.
Q and A on the Employer Shared Responisiblity Provisions under the Affordable Care Act, IRS web page, 12-28-12 The Provisions are effective Jan. 1, 2014.
National Federation of Independent Business et al v. Sebelius et al., June 28, 2012 U.S. Supreme Court
With Chief Justice Roberts as swing vote, Supreme Court found the Patient Protection and Affordable Care Act Constitutional. As summarized on the SCOTUS blog: "
American Council on Education comments on Proposed Rules Relating to Student Health Insurance, April 12, 2011. See also Sara Lipka's article dated April 13, 2011 in the Chronicle titled Student Health Plans Merit Special Treatment Under the New Health Care Law, Colleges and Insurers Say.
Student Health Insurance Final Rule, 77 Fed. Reg. 16453, March 21, 2012
This rule brings all except for self funded student health plans under the purview of the PPACA by defining student health insurance as a type of individual health coverage. The contraceptive mandate is made applicable to student health insurance plans as well, through this action. The amendment applies to plans effective for policy years beginning after July 1, 2012, with non-profit religious institutions of higher edcation qualifying for a one year transition plan until the plan year beginning after August 1, 2013. The rule becomes effective April 20, 2012. There is a phase in for restrictions on annual dollar limits, with no annual dollar limits for policy years beginning on or after Jan. 1, 2014. If the student health insurance plan is not a grandfathered plan, then effective with the upcoming policy year, religious institutions of higher education will be required to maintain on file a self certification as to the qualfication for the exemption and sending a *requisite notice* to students enrolled in the plan. This notice presumably means the notice that the institution the plan qualifies for a safe harbor, and may have to direct the student as to where to find contraceptive coverage. As with much of the mandate and related abortion coverage (see below on health exchanges) the rules are anything but clear.
See "Catholic Colleges Upset by HHS Rule Requiring Student Health Plans to Comply with Mandate" posted 3/21/12 in the National Catholic Register. The article notes as follows:
Catholic colleges and universities do not qualify for the narrow religious exemption to the mandate. Rather, they will likely fall under a second set of guidelines that the Obama administration describes as its “accommodation” for religious freedom.
The implementation of that accommodation has not yet been finalized and is currently the subject of a 90-day public comment period.
However, initial statements by the administration have suggested that religious organizations will be required to contract with an insurance provider, or third-party administrator, in the case of self-insured organizations, that will offer the coverage that the organizations find objectionable
Certain Preventive Services Under the Affordable Care Act, 77 Fed. Reg. 16501, March 21, 2012.
Advanced Notice of Proposed Rulemaking. Comments due June 19, 2012.
This rule sets up the questions and proposals for making insurance companies and third party administrators cover the cost of contraceptive coverage when the entity with the plan is a religious entity with objections to the contraceptive mandate. This is the so called Obama *accommodation* for religious employers. All religious employers should read this rule and other rules on this page. The rule notes that states with religious exemptions to contraceptive mandates would not be allowed to continue offering the exemption for religious organizations to the extent it conflicts with this rule.
PPACA: Establishment of Exchanges and Qualified Health Plans: Exchange Standards for Employers; Final Rule, Interim Final Rule to be posted March 27, 2012 in Federal Register. See page 627 forward for segregation of funds for abortion services, along with the requirement when calculating cost of providing abortion services, to estimate the cost at not less then $1 per month per enrollee. See also Section 1303 of the PPACA.
(Middle District Fla. No 12-CV-88) (filed Feb. 21, 2012)
Geneva College v. Kathleen Sebelius et al. (Western District Pennsylvania) (filed Feb. 21, 2012)
States of Nebraska et al. v. U.S. Dept. Health and Human Services, et al. (U.S. District Court District of Nebraska) (filed Feb. 23, 2012)
Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services under PPACA, 77 Fed. Reg. 8725 (Feb. 15, 2012)
These regulations finalize, without change, interim final regulations from Aug. 3, 2011 that require religiously affiliated organizations, either self insured or with group insurance coverage to offer contraceptive coverage. Per a statement on 2-10-12 the White House tried to quiet the firestorm brought on by the 1-20-12 statement by Sebelius by stating that Catholic Universities and hospitals and other religiously affilated organizations may be able to obtain an out from the mandate as long the charities insurer provides contraceptive coverage to the covered employees and beneficiaries. The economics of this game plan have not been worked out, and some have pointed out there is a limited pot of health care dollars, and one way or another employees of universities and hospitals, along with the insitutions themselves, may be subsidizing the cost of the coverage.
Proposed Rule, Summary of Benefits and Coverage and Uniform Glossary, PPACA, 76 Fed. Reg. 52442, August 22, 2011. This document contains proposed regulations (implementing 2715 of the Act) regarding disclosure of the summary of benefits and coverage (SBC) and the uniform glossary for group health plans and health insurance coverage in the group and individual markets under the Patient Protection and Affordable Care Act. The proposed rule sets standards for group health plans and their plan administrators and health insurance issuers offering group or individual coverage that will govern who provides an SBC, when it will be provided and how it will be provided. Compliance would be required by March 23, 2012.
Amendment to the Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act, 75 Fed. Reg. 70114, Nov. 17, 2010. Effective Nov. 15, 2010.
The interim final regulations, published on June 17, 2010, with various additions and clarifications on other dates. This amendment modifies the interim final regulations plan to cease to be a grandfathered health plan if the plan entered into a new policy, certificate, or contract of insurance. The modification provides that a group health plan does not cease to be grandfathered health plan coverage merely because the plan (or its sponsor)
enters into a new policy, certificate, or contract of insurance after March 23,2010.Notwithstanding the ability to change health insurance coverage pursuant to the modification made by the amendment, if the new policy,
certificate, or contract of insurance includes changes described in paragraph (g)(1) of the interim final
regulations, the plan ceases to be a grandfathered health plan. There are, in other words, many ways to cease being a grandfathered plan, the law is slanted that way, so many will not try to maintain this status, as they lose flexiblity on other issues.
IRS Notice 2010-69 Interim Relief with Respect to Form W-2 Reporting on the Cost of Coverage of Group Health Insurance under Section 6051(a)(14) issued Nov. 1, 2010
This notice provides interim relief to employers with respect to reporting the cost of coverage under an employer-sponsored group health plan on Form W-2, Wage and Tax Statement, pursuant to § 6051(a)(14) of the Code. Specifically, this notice provides that reporting the cost of such coverage will not be mandatory for 2011 Forms W-2. The Treasury Department and the IRS have determined that this relief is appropriate to provide employers with additional time to make any necessary changes to their payroll systems or procedures in preparation for compliance with the reporting requirement.
Section 2713. Coverage of Preventive Services
‘‘SEC. 2713. COVERAGE OF PREVENTIVE HEALTH SERVICES.
‘‘(a) IN GENERAL.—A group health plan and a health insurance issuer offering group or individual health insurance coverage shall, at a minimum provide coverage for and shall not impose any cost sharing requirements for—
‘‘(1) evidence-based items or services that have in effect a rating of ‘A’ or ‘B’ in the current recommendations of the United States Preventive Services Task Force;
‘‘(2) immunizations that have in effect a recommendation from the Advisory Committee on Immunization Practices of the Centers for Disease Control and Prevention with respect to the individual involved; and
‘‘(3) with respect to infants, children, and adolescents, evidence-informed preventive care and screenings provided for in the comprehensive guidelines supported by the Health Resources and Services Administration.
‘‘(4) with respect to women, such additional preventive care and screenings not described in paragraph (1) as provided for in comprehensive guidelines supported by the Health Resources and Services Administration for purposes of this paragraph.
‘‘(5) for the purposes of this Act, and for the purposes of any other provision of law, the current recommendations of the United States Preventive Service Task Force regarding breast cancer screening, mammography, and prevention shallbe considered the most current other than those issued in
or around November 2009.
Nothing in this subsection shall be construed to prohibit a plan or issuer from providing coverage for services in addition to those recommended by United States Preventive Services Task Force or to deny coverage for services that are not recommended by such Task Force.
Affordable Care Act Tax Provisions for Large Employers: IRS page with summary, reporting and payment and provisions.
updated 4/5/13 CCR
updated 12/4/13 to add medicare tax