The Patient Protection and Affordable Care Act (ACA) remains intact after several failed attempts by Congressional Republicans to repeal and replace the law. However, executive action taken throughout the month of October will result in substantive changes to various components of the ACA.
An opt-out arrangement offered as part of a group health plan can provide significant advantages to employers. Through such an arrangement, employees who have alternative sources of coverage are incentivized to forego participation in the employer plan. In exchange for the waiver, the employee receives a (taxable) payment. However, recent developments - both regulatory and judicial - may undermine the effectiveness of opt-out arrangements in certain circumstances.
In September 2016, the Equal Employment Opportunity Commission (EEOC) released a new version of the EEO-1 reporting form. The new form, which would require employers to supply employee pay and hours data, was to go into effect in March 2018 for reporting year 2017. The EEOC indicated that the inclusion of pay data would facilitate the agency’s investigations into gender, race, and ethnicity pay discrimination.
In April 2016, San Francisco Board of Supervisors passed the Paid Parental Leave Ordinance (PPL) - the first local mandate in the nation to require fully paid parental leave for new parents. Under PPL, covered employers are required to provide supplemental income to eligible employees who take parental leave and receive Paid Family Leave (PFL) benefits through the State. PPL took effect January 1 of this year, but its application is phased-in over the course of the year.
Effective July 1, 2017, Assembly Bill 72 will limit the surprise medical bills that patients in California receive when treated by an out-of-network provider at an in-network healthcare facility. These surprise bills, also referred to as the practice of balance-billing, affect patients nationwide. While California previously passed similar legislation aimed at limiting surprise bills in the context of emergency care, this newest law is the State's biggest step towards further minimizing a patient's exposure to unexpected medical costs.
On June 5, the U.S. Supreme Court (the Court) issued a unanimous decision in the case of Advocate Health Care Network et al. v. Stapelton et al. that expands the ERISA exemption for church plans to include plans established by church-affiliated organizations. The decision is a departure from prior “plain text” judicial readings of the exemption, but it aligns with the interpretations of other federal agencies.
The PCORI Fee Applies to Health Insurance Issuers and Self-funded Health Plans
Under the Affordable Care Act, health insurance issuers and self-funded health plans are required to pay an annual Patient-Centered Outcomes Research Institute Fee (PCORI), set to expire in 2019. Because health insurance issuers are subject to this fee, the sponsor of a fully-insured health plan does not need to take any action. However, sponsors of self-funded health plans (including level-funded arrangements) are obligated to comply. Payment of the PCORI fee must be submitted to the IRS by July 31 of the year following the last day of the plan year. This year, payment is due no later than Monday, July 31, 2017
Conversion is an important feature in employer-sponsored life insurance plans that can allow an employee to maintain coverage after experiencing a loss of eligibility by converting group coverage to an individual policy. Critically, though, the responsibility to adequately inform the employee about the conversion option falls upon the employer rather than the insurer. This duty is underscored in a recent decision by a U.S. District Court, Erwood v. Life Insurance Company of North America (Erwood).
Employers subject to the San Francisco Health Care Security Ordinance (HCSO) must complete and submit the online 2016 Annual Reporting Form by May 1, 2017. Covered employers who fail to make this required submission by the deadline will be subject to penalties of $500 per quarter.