The Cadillac tax, which would have imposed a 40 percent excise tax on employer-sponsored health benefits whose value exceeds certain thresholds beginning in 2022, has been repealed.
The 40 percent excise tax would have been imposed on plan administrators and insurers when the cost of employer-sponsored health coverage exceeds $11,200 for single coverage and $30,150 for family coverage for plans beginning in 2022.
The tax was delayed twice: in 2015 and 2018. It was repealed as part of the fiscal year 2020 appropriations legislation passed in 2019.
Required disclosures to participants and beneficiaries
The federal government is proposing a rule that would require self-funded, non-grandfathered employer-based group health plans and health insurers offering non-grandfathered group and individual health coverage to disclose cost-sharing information to participants, beneficiaries and enrollees upon request.
The Transparency in Coverage proposed rule was released by the U.S. Departments of Health and Human Services, Labor and the Treasury in late November 2019. The rules would be effective one year after the effective date of the final rule.
Continue reading here.
A new federal rule requires hospitals operating in the U.S. to publish their prices for items and services on their websites, effective Jan. 1, 2021. According to the rule, these requirements will promote price transparency in healthcare and public access to hospital standard charges. The rule requires each hospital to establish and make public annually a list of its standard charges for items and services by location. Continue reading
The Patient-Centered Outcomes Research Institute (PCORI) fee has been extended 10 years through 2029.
PCORI will continue to use these fees to fund research to compare different medical treatments and interventions to determine what treatments are most effective with the help of clinicians, purchasers, policymakers and patients. The non-profit organization’s mission is to help doctors and patients make evidence-based healthcare decisions.
Before the extension, the fee expired with policy or plan years ending Sept. 30, 2019, (with payment due July 31, 2020). Insurers of fully insured plans and sponsors of self-funded plans ending between Oct. 1, 2018, and Sept. 30, 2019, were assessed a fee of $2.45 per average number of covered lives.
We will provide more information about the fee as it becomes available.
The IRS has extended the deadline for employers (reporting entities) to furnish individuals the 2019 Form 1095-B, Health Coverage, and the 2019 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from Jan. 31, 2020, to March 2, 2020.
The IRS also extended the good-faith transition relief from Section 6722 penalties to the 2020 information-reporting requirements under Sections 6055 of the IRS Code provided certain conditions are met. However, the relief does not apply to reporting entities’ that offer self-funded health benefit plans, and their requirement to furnish a Form 1095-C to full-time employees, but does extend relief to the requirement to furnish a Form 1095-C to part-time employees for any month of 2019, provided the following two conditions are met:
- First, the reporting entity posts a notice prominently on its website stating that responsible individuals may receive a copy of their 2019 Form 1095-B upon request, accompanied by an email address and a physical address to which a request may be sent, as well as a telephone number that responsible individuals can use to contact the reporting entity with any questions.
- Second, the reporting entity furnishes a 2019 Form 1095-B to any responsible individual upon request within 30 days of the date the request is received. The due date for employers filing the 2019 Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS remains Feb. 28, 2020, if not filing electronically, or March 31, 2020, if filing electronically.
In early January, we will provide a spreadsheet, available in the Document Center, that employers may use to help them with compiling the data needed for the forms. For help with completing the forms or filing with the IRS, see your accountant, tax adviser and/or payroll services company.
A non-grandfathered group health plan’s annual in-network out-of-pocket maximum for Essential Health Benefits for the 2020 plan year cannot exceed $8,150 (currently $7,900) for a self-only plan and $16,300 (currently $15,800) for other than self-only coverage, an increase of slightly more than 3 percent from 2019.
The new cost-sharing amounts were released by the U.S. Department of Health and Human Services’ Notice of Benefit and Payment Parameters for 2020. The in-network individual out-of-pocket maximum applies to all individuals, regardless of whether an individual has a self-only plan or other than self-only coverage.
Next week, Starmark clients with a self-funded health benefit plan design that are required to pay the Patient-Centered Outcomes Research Institute (PCORI) fee will receive a letter via mail providing their group’s “average covered lives” during the plan year ending in 2018 (using the Snapshot Count method).
As a courtesy, the Broker of Record will receive a duplicate copy of the letter sent to their group(s). The letter will also be posted to the Document Center on the Starmark website for the employer, the Broker of Record and the broker’s managing general agent to view.
The Affordable Care Act and associated regulations require health insurance issuers and plan sponsors of self-funded group health plans to file and pay an annual PCORI fee.
Plan sponsors of self-funded health plan years ending in 2018, are required to pay the fee to the IRS and file Form 720 by July 31, 2019.
Click here to view a sample letter.