by Amy M. Gordon, Susan M. Nash and Jamie A. Weyeneth
If you are an employer that sponsors a fully insured medical plan option for your employees, and you had that fully insured medical plan option in place for the 2011 calendar year, you may be eligible for a Medical Loss Ratio rebate.
To read the full article, click here.
by Amy M. Gordon, Susan M. Nash and Maureen O’Brien
On June 28, 2012, the Supreme Court upheld the most significant provisions of the Patient Protection and Affordable Care Act (the Act), including the controversial individual mandate. The vote was 5-4 and the majority opinion was written by Chief Justice John Roberts. Ironically, the justices concluded that the mandate was not a valid exercise of Congress’ commerce clause power but was a proper use of Congress’ tax authority. One of the most complicated issues that everyone struggled with, the severability issue, is now moot because the individual mandate was upheld.
Click here to view the Supreme Court opinion.
Please join us for a webcast discussing the opinion on Friday June 29, 2012, from 12:00-2:00 p.m. EDT. To register, click here.
Thursday, March 29, 2012
12:00 – 1:15 pm EDT
To register, please click here.
On March 26–28, the Supreme Court of the United States will undertake an extraordinary six hours of oral argument to decide the fate of the health reform legislation known as the Patient Protection and Affordable Care Act. McDermott Will & Emery will be there, and will share the insights gleaned from three days of court-watching with clients and friends of the Firm.
McDermott has assembled a team of constitutional and health law authorities and seasoned political analysts to discuss the arguments and questions from the justices, make predictions about the ultimate decision and offer implications of possible decision outcomes, including the implications for providers, payors, products and employers who offer health insurance.
McDermott Speakers
M. Miller Baker, Partner
Jon Decker, Senior Professional Advisor
Amy Gordon, Partner
Joel Michaels, Partner
Paul Radensky, M.D., Partner
J. Peter Rich, Partner
This interactive webcast is the first of a two-part series. Our second webcast will occur within 24 hours of the Supreme Court’s ultimate decision, which is expected to be issued in the last week of June.
For more information, please contact McDermott Events.
by Amy M. Gordon, Joanna C. Kerpen and Susan M. Nash
Recently issued final regulations and related guidance clarify the requirement under the Patient Protection and Affordable Care Act that group health plans and health insurance issuers provide a summary of benefits and coverage and a uniform glossary. The guidance includes final regulations and sample summaries and instructions.
To read the full article, click here.
by Amy Gordon, Susan Nash and Ashley McCarthy
The Internal Revenue Service (IRS) has issued revised guidance, Notice 2011-28, regarding the requirement under the Patient Protection and Affordable Care Act (PPACA) that employers report to employees the cost of their employer-sponsored group health plan coverage on Forms W-2. This requirement applies to calendar year 2012 W-2s, which employees will receive from their employer in 2013.
The guidance provided assistance on calculating aggregate reportable cost. Aggregate cost may be calculated in accordance with one of several methods including the “COBRA applicable premium” method, the “premium charged” method (for fully-insured coverage), or a “modified COBRA premium” method.
In addition to medical coverage, employers must include in the cost of employer-sponsored group health plan coverage, coverage under an Employee Assistance Program, wellness program coverage, on-site medical clinic coverage (but only aggregate reportable cost to the extent that the coverage is provided under a group health plan and the employer charges a premium for such coverage to beneficiaries of federal continuation coverage [e.g., COBRA]), Health Flexible Spending Account coverage (FSA), but only where the employer itself contributes to the FSA or otherwise provides flex credits through a Internal Revenue Code Section 125 cafeteria plan, and coverage under a dental plan or vision plan if such plans are not excepted from the Health Insurance Portability and Accountability Act (HIPAA). Employers do not need to include in the cost of employer-sponsored group coverage the cost of coverage under a dental plan or vision plan if such plans are excepted from HIPAA, amounts contributed to an Archer medical savings account (MSA) or a Health Savings Account, amounts of any salary reduction election to an FSA, the cost of coverage under a multiemployer plan, cost of coverage under a Health Reimbursement Arrangement not included in aggregate reportable income, and the cost of coverage provided under a self-insured group health plan that is not subject to federal continuation coverage requirements (i.e., a church plan).
by Amy M. Gordon, Todd A. Solomon and Brian J. Tiemann
The U.S. Department of Health and Human Services (HHS) issued a bulletin on December 16, 2011, outlining and requesting comments on its proposed regulatory approach to allow states to define what is an “essential health benefit.”
To read the full article, please click here.
by Susan M. Nash and Elizabeth A. Savard
Group health plans that offer prescription drug coverage are required to issue a notice of creditable or non-creditable coverage to Medicare-eligible participants and beneficiaries each year prior to the annual Medicare Part D open enrollment period. In the past, the Medicare Part D open enrollment period ran from November 15 through December 31, so the notice had to be provided by November 15. The Patient Protection and Affordable Care Act moved the Medicare Part D open enrollment period earlier, beginning in 2011, to October 15 through December 7. Therefore, this year’s notice of creditable or non-creditable coverage must be provided by October 15, 2011.
A plan’s notice of creditable or non-creditable coverage describes whether prescription drug coverage under the plan is "creditable" — i.e., expected to pay out at least as much as standard Medicare prescription drug coverage, on average for all participants. This information is designed to help Medicare-eligible individuals avoid late enrollment penalties, which can apply when an individual who does not have creditable coverage fails to enroll in Medicare Part D when first eligible.
Plan sponsors will need to update their notices of creditable or non-creditable coverage to reflect the new dates for the Medicare Part D open enrollment period. The Centers for Medicare and Medicaid Services have updated their model notices of creditable and non-creditable coverage to reflect the new dates. No other substantive changes were made to the model notices. The updated notices are available here.
Live Knowledge Congress Webcast
Strategies to Deal with the Patient Protection & Affordable Care Act
September 13, 2011, Noon to 2 pm (EST)
Panel includes Susan Nash, Co-Chair of McDermott Will & Emery’s Health and Welfare Benefits Group.
The Patient Protection & Affordable Care Act (PPACA or “Health Reform Bill”) has been the subject of significant legal and policy debate since it was enacted in April 2010. The legislation has been both hailed as an important victory in the battle to improve the quality and accessibility of healthcare in the United States, and challenged as unconstitutional and ineffective in reducing medical costs and otherwise incenting choice and value in medical care and services.
Amidst this debate, legal and business strategies for dealing with the aspects of Health Reform that have been, or soon will be, implemented are often left in the background. These strategies are critical for ensuring compliance and optimizing business performance as PPACA rolls out. No matter how the broader policy or legal debate resolves, entities affected by PPACA must consider the Act’s impact on reimbursement, cost protection, and other day-to-day operational issues.
Strategies to Deal with the Patient Protection & Afford Care Act LIVE Webcast is a must-attend for healthcare professionals, health policy directors, health executives, pharmaceutical and medical device manufacturers and others who are interested in developing practical strategies to deal with healthcare reform. The Knowledge Group has assembled a panel of key thought leaders and regulators to discuss the fundamentals and updates regarding this topic.
Click here to register for the event.
To receive a discount courtesy of McDermott Will & Emery, please enter this code: will8992.
by Susan Nash and Jacob Mattinson
The Patient Protection and Affordable Care Act (the Act) revised the definition of “medical expenses” in the Internal Revenue Code as it relates to the reimbursement of funds used to purchase over-the-counter (OTC) medicine and drugs. Prior to January 1, 2011, the full cost of OTC medicine and drugs was considered a medical expense eligible for reimbursement from a flexible spending account (FSA) or health reimbursement arrangement (HRA). After January 1, 2011, the Act limits the definition of medical expenses to include only OTC medicine and drugs that are insulin or prescribed by a doctor.
Due to this change, if an FSA or HRA permits reimbursement for medical expenses, the HRA or FSA plan document must be amended, no later than June 30, 2011, to conform to the Act. Employers should, therefore, amend the plan document to provide that expenses for OTC medication and drugs will not be reimbursed without a prescription, with the exception of insulin. Alternatively, the employer may choose to amend the plan document to not provide for reimbursement of OTC medicine or drugs, even when the individual has obtained a prescription.
Please contact your regular McDermott attorney for assistance with any required amendments.
by Susan M. Nash, Amy M. Gordon, Todd A. Solomon, Raymond M. Fernando and Adrienne Walker Porter
On April 7, 2011, Governor Jerry Brown signed into law California Assembly Bill 36 (AB 36). AB 36 conforms certain California income and employment tax laws to certain changes to the United States Internal Revenue Code (the Code) and Internal Revenue Service (IRS) guidance relating to the favorable tax treatment of health benefits coverage for adult children under age 27. The favorable state tax treatment afforded under AB 36 applies retroactively as of March 30, 2010, which also conforms to the effective date of the parallel provisions under the Code. For a more detailed summary of AB 36, see our related On the Subject, "Health Care Reform: California Adopts Favorable Federal Tax Treatment of Health Coverage for Adult Children Under Age 27."
Background
The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the Act), generally requires group health plans that provide dependent coverage for children to continue to make such coverage available for adult children until age 26, beginning as of the first plan year commencing on or after September 23, 2010. Effective as of March 30, 2010, the Act also afforded certain favorable tax treatment under the Code with respect to such coverage. See our related On the Subject, "Health Care Reform: IRS Guidance on Health Coverage for Children Under Age 27."
Discrepancies Between State and Federal Tax Laws
Some states’ tax laws do not automatically conform to corresponding changes in federal tax laws. Thus, although the Act made various changes to the Code relating to the tax treatment of health coverage and reimbursements for children under age 27, some states’ tax laws did not automatically conform to those changes. California recently adopted AB 36 to conform to such changes under the Code.
Next Steps for Employers and Plan Administrators
Employers and plan administrators should take action now in the following ways:
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