Tuesday, November 25, 2014

Obamacare FAQ of the Month: Health Plan Identifiers, Transitional Reinsurance Fees, Premium Reimbursement Arrangements, and ACA Subsidies

November 2014
By: Peter E. Hansen, Esq.

November was a busy month for the Affordable Care Act; the federal government released three pieces of regulatory guidance, and the Supreme Court agreed to hear a case that could significantly impact the future of the ACA. First, the government announced that it would delay enforcement of the Health Plan Identifier (“HPID”) requirements, which require health plans to obtain unique identification numbers for HIPAA transactions. As a result, health plans that did not obtain a HPID will not be penalized until further notice.

Second, the Employee Benefits Security Administration extended the deadline for submitting information relating to the transitional reinsurance fees from November 15, 2014 to December 5, 2014. For additional information on the fees, see the October Obamacare FAQ of the month. Significantly, this extension provides those of you who did not submit the enrollment counts required to pay the fees with a few more days to comply with the transitional reinsurance fee regulations.

Third, the Department of Labor released yet another FAQ directed at employers who attempt to comply with the ACA by providing either pre-tax or post-tax reimbursement for the purchase of an individual market policy. The guidance clarifies that such arrangements violate at least two federal regulations and will be subject to penalties of up to $100 per day. We have been cautioning employers against reimbursing employees’ personal health care premiums for months now, and since this is the third piece of regulatory guidance directed at premium reimbursement arrangements, it appears that such arrangements will be a point of emphasis for future audits. In short, if you think you may be engaged in something similar to a premium reimbursement arrangement, you should verify that the arrangement complies with current laws as soon as possible.

Finally, the Supreme Court agreed to decide whether tax credits are available to individuals who purchase coverage through a federally-funded health insurance exchange. This comes as no surprise given that two courts – the Fourth Circuit and the D.C. Circuit – recently reached opposite conclusions on this very issue, but the case is significant in that it poses the most serious current threat to the ACA. We will not know the outcome until 2015 at the earliest, so until then, stay tuned.

Questions? Suggestion for a future Obamacare FAQ of the Month? Please contact WS Attorney Peter E. Hansen at (262) 560-9696, or email pehansen@wesselssherman.com.