COMPLIANCE ALERT

New Year Updates in the Midst of the Shutdown

Government Shutdown Impact to Plans

During this extended shutdown, employers may be wondering how much impact this will have on employer plans.  Here are some ideas, but as guidance is provided, we’ll keep you apprised:

  • Only one out of 8 IRS employees is still working in essential roles.  Employers are required to submit all reporting on time, and the Affordable Care Act (ACA) reporting portal is live and ready for 2018 ACA reporting.  However, employers receiving an IRS ACA penalty letter should note the appeals office is shut down, so there is no one to call to extend your 30-day response deadline.  Be sure to let us know right away if you get a penalty letter so we can work fast.
  • Clarity on EEOC wellness incentive rules, final rules on new HRA concepts for 2020, and other important guidance may be delayed to the point updated rules might not be able to take effect in 2020.
  • The federal court case which deems the ACA unconstitutional (but leaves the law intact during the appeals process) will have a difficult time getting through the federal appeals circuit during the shutdown.

The longer Congress is working on resolving this, the more challenging it will be to see a successful delay or repeal of expensive taxes like the health insurance tax (HIT) and “Cadillac tax.”

2019 Federal Poverty Level (FPL)

The federal poverty level (FPL) for 2019 is now ready.  It is scheduled to be published in the federal register soon.  At the new $12,490 single FPL, employers looking to remain FPL affordable for plan years on/after 2/1/19 will will want to charge employees no more than $102.62/mo for single coverage.  As a reminder, the FPL affordability threshold for employers with January 2019 plan years was $99.75/mo.

Courts Once Again Block Contraceptive Exemptions

Just as we saw with the interim final rules over a year ago, federal courts have also blocked the final rules from late 2018 which would have expanded exemptions to the contraceptive mandate for employers effective January 14, 2019.  So we remain under the rules we have had for a long time, being that churches are exempt, while religious non-profits and closely-held for profit employers must follow a structured accommodation process if they object for religious reasons to some or all of the mandate.

Proposed Indexing for 2020 OOP Limits and ACA Penalties

The annual notice of proposed benefit and payment parameters we usually see in November has finally been provided.

  • The fact sheet shows the government proposing out-of-pocket (OOP) limits to be raised to $8,200 per person and $16,400 per family for 2020, about a 3.8% increase over 2018 OOP limits of $7,900/$15,800.
  • This calculation also impacts the ACA employer mandate penalties annually. This would potentially increase the subsection (a) penalty to $2,590 and (b) penalty to $3,890 (just over a 3.6% increase from 2018 penalties of $2,500/$3,750).

Please let your IMA Benefits team know if you have any questions; we will continue to monitor regulator guidance and offer meaningful, practical, timely information.

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This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.