ACA transitions as Congress deliberates
As the new Congress prepares to dismantle the Affordable Care Act, guidance about ACA provisions and related matters continues to emerge from other quarters. All of the matters discussed in this Legal Alert may be affected by actions taken by Congress or the new administration.
Texas court enjoins enforcement of certain nondiscrimination requirements
A federal judge in North Texas has issued a nationwide preliminary injunction that finds particular aspects of the regulations under Section 1557 of the ACA relating to sex discrimination to be unlawful.
Section 1557 prohibits certain healthcare providers, health insurers and health plans from discriminating on the basis of race, color, national origin, age, disability or sex. The statute prohibits sex discrimination by making the nondiscrimination rules for educational institutions under Title IX applicable to entities that receive funding from the U.S. Department of Health and Human Services to operate health programs or activities.
In issuing final regulations under Section 1557, HHS included rules prohibiting discrimination based on gender identification and the termination of pregnancy. HHS declined to incorporate certain Title IX provisions that include:
· An exemption for religious organizations where the requirements of Title IX are inconsistent with the organization’s religious tenets
· A rule of construction that prohibits Title IX from being interpreted to either require or prohibit the performance or coverage of abortion-related services.
The court viewed certain HHS positions as inconsistent with the statutory terms of Section 1557. Specifically, the court found that that the reference to Title IX in the statutory provisions of Section 1557 incorporates a definition of sex discrimination that does not include discrimination based on gender identity.
It held that the statute incorporates Title IX's exemption for religious organizations and rule of construction for abortion services. Finally, the court viewed the Religious Freedom Restoration Act as allowing religious organizations to decline to perform or provide coverage for sex reassignment surgery or abortion-related services as a matter of course.
The ruling affects a few specific provisions in the Section 1557 regulations; for example, the regulation that prohibits a health plan from categorically excluding coverage for sex reassignment surgery. As a result, entities subject to Section 1557 may consider the effect this court order has on any changes they were making to comply with Section 1557's rules on gender identity.
The injunction extends only to Section 1557 and not to other federal guidance on gender identity, including guidance issued for federal contractors.
Section 1557 notices
Health plan sponsors will often find that third-party administrators of their health plans are including the nondiscrimination notice and foreign language taglines in determination letters that they send to claimants under the plan. In the preamble to the Section 1557 regulations, HHS states that the notification requirement applies to significant individual notices as well as those for broader distribution.
As a result, health plan sponsors should consider adding a notice and taglines to significant communications that they send to individual plan participants, such as claim appeal determination letters, as well as broader communications, such as summary plan descriptions, summaries of benefits and coverage, and annual enrollment materials.
Court declines to enjoin EEOC wellness program regulations
A federal district court declined to issue a preliminary injunction against the EEOC's recent wellness program regulations under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act. The court did not accept the AARP's argument that the maximum incentive allowed under the regulations — which was largely based on limits set forth in the ACA — is too high to meet the voluntariness standard required under the ADA.
IRS publishes guidance on reporting requirements
The IRS has issued new question-and-answer guidance to employers on completing Forms 1094-C and 1095-C. The new guidance addresses specific topics, such as how to report coverage offered to employees whose coverage begins or ends during a month or who obtain coverage through COBRA.
Absent specific legislative or regulatory relief, employers, and insurers and other health plans sponsors, will need to be prepared to meet the deadlines for employer and individual mandate reporting for 2016. These deadlines include providing reports:
· To employees no later than March 2, 2017
· To the IRS no later than February 28, 2017 (for paper filings)
· To the IRS no later than March 31, 2017 (for electronic filings)
FAQs address special enrollment and other issues
If an individual declines coverage under a group health plan in favor of individual health insurance coverage, including coverage purchased through the marketplace, and later loses eligibility for that coverage, the individual will be considered to incur a special enrollment event and must be allowed to enroll for coverage under the group health plan.
This opportunity does not need to be offered if the individual causes his or her own loss of individual coverage through a failure to pay timely premiums, fraud or intentional misrepresentation. It will be worth considering this ruling in the event the marketplace is eliminated, even if it is replaced by an interstate insurance market or any other feature under new health care reform legislation.
The same set of FAQs addresses updates to recommendations for women’s health care, which could affect the preventive coverage offered under calendar-year group health plans, beginning on January 1, 2018. It also covers the provisions in the Cures Act that allow a small employer to establish a stand-alone HRA for the purpose of paying individual health insurance premiums.
DOL finalizes claim procedure rules for disability benefits
In view of changes that the ACA introduced to claims procedures for health plans, the Department of Labor issued final regulations with new claims procedure rules for disability benefits. The new regulations require, for example, that plans provide claimants an opportunity to respond to new evidence or new grounds for denial introduced on appeal; and determination notices need to meet certain language assistance requirements if a claimant resides in a county where 10% or more of the population speaks a particular foreign language.
The new rules apply not only to disability benefit plans, but to retirement plans that provide disability benefits. However, they apply only when the plan itself makes a determination of disability. They do not apply, for example, where a plan simply relies on a determination made by the Social Security Administration.
As a result of the new rules, claims procedures set forth in plan documents and summary plan descriptions may need to be revised by the first day of the first plan year beginning in 2018.