The slew of new and/or updated regulation, issued guidance, proposals and Supreme Court rulings have kept legal teams busy in 2015. But, ACA reporting requirements — which start in 2016 — dominated the list of inquiries from clients over the past year.
“We have been just absolutely inundated with those questions,” says Suzanne Spradley, senior vice president, senior counsel, at NFP. Many vendors are facing the same deluge of requests, which is creating a quagmire for employers, she says. “We’re finding a lot of the vendors aren’t completely ready.”
Along with reporting requirements, how to measure and define full-time and part-time employees are the main questions Karen McLeese has been fielding. “The big time-consumer for sure for large employers is the ACA reporting,” says McLeese, vice president of employee benefits regulatory affairs for CBIZ. “That is just consuming people’s energy.”
While health reform accounts for about half of the questions Spradley fields, there are still plenty of other topics that keep her busy, such as ERISA, HIPAA and COBRA. “The questions don’t go away,” she says. “Compliance will continue to be an ongoing need for a number of years.”
The Supreme Court ended the debate about the ACA’s future when it ruled in June that subsidies used to purchase health insurance on the federally facilitated marketplace are legal. “Now, this law is here to stay,” Spradley says.
King v. Burwell challenged the legality of tax credits allowed to purchase health insurance under the ACA. The issue was the wording of the IRS rule that says individuals qualify for subsidies when they buy health insurance through an exchange “established by the state.”
A ruling in favor of the plaintiffs, four residents of Virginia, would have had a major impact on the law. But the 6-3 ruling upholding the subsidies carried no drama. “It really ended up being a non-event,” Spradley says. Tweaks to the healthcare law could happen in the future, “but a wholesale repeal is not likely,” McLeese says.
This summer, the Supreme Court also legalized gay marriage nationwide, which is leading to more employers eliminating health coverage for domestic partners, Spradley says.
While the June 26 ruling is straightforward, it’s a good reminder that plan documents must be consistent with the law and the employer’s intent, McLeese adds. “You better be sure your rule book is consistent with how you play the game,” she says.
The 5-4 decision in Obergefell v. Hodges requires states to issue marriage certificates to same-sex couples as well as recognize same-sex marriages performed in other states.
The Department of Labor made headlines this year while its proposed fiduciary rule was debated during four days of hearings held in August.
While some revisions could be made, the conflict of interest rule will likely be unchanged when it becomes a final regulation, says Grace Vogel, senior strategy and policy adviser at PricewaterhouseCoopers. “For the most part, we believe that the most significant provisions will stand,” says Vogel, a former FINRA executive. The final rule could be released in the first quarter of 2016, she says.
Groups that oppose the rule were hoping to delay the proposal via a rider in the omnibus bill that would require the DOL to respond to the public comments it collected and hold another comment period before issuing the final regulation. However, the spending bill did not include a provision to delay the proposal, which would impose fiduciary requirements on retirement advisers.
In late October, the Equal Employment Opportunity Commission issued a proposed rule aiming to clarify how wellness incentives apply to the health information of a spouse participating in an employer-sponsored wellness program. The proposed rule will amend regulations related to Title II of the Genetic Information Nondiscrimination Act, allowing employers who offer wellness programs as part of a group health plan to provide incentives in exchange for an employee’s spouse providing information about his or her current or past health status.
The Cadillac tax was one of the most-discussed topics of 2015, and it will likely stay on that list in the near future. The ACA’s excise tax on high-cost plans would force employers to pay a 40% tax on plans exceeding $27,500 for a family or $10,200 for an individual. An estimated 40% of employers could be subject to the tax by 2028, according to the Kaiser Family Foundation.
“That is one of the biggest issues that we’re watching,” says Marcy Buckner, vice president of government affairs at the National Association of Health Underwriters. This year, the IRS issued two rounds of guidance on the Cadillac tax, Notice 2015-16 and Notice 2015-52.
The year ended with a win for those who oppose the tax when President Obama on Dec. 18 signed into law a $1.1 trillion spending package, which included a two-year delay of the Cadillac tax. The Obama administration has said it opposes a repeal of the tax, and it’s possible that the president could pressure the Treasury Department to complete the final regulation before he leaves office, Buckner says.
Still, the public and private sectors, as well as Democrats and Republicans, have joined together in an effort to repeal the tax. A coalition of public and private employers, unions and other organizations dedicated to repealing the tax, the Alliance to Fight the 40, was created in late July. In Congress, there is bipartisan support — both Reps. Frank Guinta (R-N.H.) and Joe Courtney (D-Conn.) have bills calling for repeal.
In the meantime, while the debate continues, advisers need to be formulating a plan with their clients in preparation for the tax, Buckner says. “We’re encouraging our agents to talk about it now,” she says.
One part of the ACA that was successfully repealed was the expanded definition of a small employer. Both the House and Senate passed legislation this year to maintain the current definition of a small employer as 1-50 employees. The ACA had called for increasing the definition to 1-100 employees starting Jan. 1, 2016. Obama signed the Protecting Affordable Coverage for Employees Act (PACE) in October to rescind the expanded definition.
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