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July 2020 Compliance Recap

July was a busy month in the employee benefits world.

The U.S. Supreme Court (Supreme Court) upheld the religious exemption and moral exemption final rules to the Patient Protection and Affordable Care Act (ACA) contraceptive mandate. The Internal Revenue Service (IRS) released the indexed 2021 ACA affordability percentage.

The President signed a law extending the Paycheck Protection Program (PPP) application deadline. The IRS released draft ACA reporting forms for 2020. The Department of Health and Human Services (HHS),  the Department of Labor (DOL), and the Department of the Treasury (Treasury) (collectively, the Departments) released proposed rules on grandfathered health plans.

A U.S. court of appeals upheld the short-term limited-duration insurance (STLDI) final rule. HHS  published a revised confidentiality of substance use disorder patient records final rule. The IRS issued a  private letter ruling on health reimbursement arrangement (HRA) and profit-sharing plan contributions. The IRS also issued an information letter on submitting claims for dependent care assistance plan  (DCAP) reimbursement.

The DOL published a new Family and Medical Leave Act (FMLA) forms and released requests for information on Paid Leave and FMLA. The President issued four executive orders on drug pricing.


Supreme Court Upholds Religious Exemption and Moral Exemption to the ACA Contraceptive Mandate

On July 8, 2020, the Supreme Court reversed the 3rd Circuit decision and held that the Departments had the authority to issue the final regulations and ordered the nationwide preliminary injunction to be dissolved.

As background, the ACA requires that non-grandfathered group health plans and health insurance issuers offering non-grandfathered group or individual health insurance coverage provide coverage of certain specified preventive services, including contraceptive services, without cost-sharing. The Departments released two final rules on November 7, 2018, regarding contraceptive coverage exemptions based on religious beliefs and moral beliefs. These rules finalize the Departments’ interim final rules that were published on October 13, 2017.

Read more about the contraceptive coverage exemptions court cases and final rules.


IRS Releases the Indexed 2021 Affordability Percentage

The IRS released the indexed affordability percentage of 9.83% for plan years beginning in 2021. An employer uses the affordability percentage to determine whether it has offered affordable coverage under the ACA’s employer shared responsibility provisions to avoid Penalty B.

Read more about the affordability percentage.


PPP Application Deadline Extended

On July 4, 2020, the President signed a law extending the PPP application deadline allowing businesses to apply for the loan until August 8, 2020.

Read more about the PPP.


IRS Releases Draft ACA Reporting Forms for 2020

The IRS released draft 1094-B, 1095-B, 1094-C, and 1095-C forms. The draft 1094-B and 1094-C forms do not contain any substantive changes from the 2019 1094-B and 1094-C forms. Under the instructions section of the draft 1095-B form, an additional code “G” has been added, which would apply on line 8 to designate enrollment in an individual coverage health reimbursement arrangement (ICHRA).

The draft 1095-C form, under Part II, adds a data field for “employee’s age on January 1.” Also, under  Part II, line 17 has been added for “ZIP code,” which is the ZIP code used for determining affordability of an ICHRA or an employee’s primary residence ZIP code. The instructions for Part II add eight additional codes to reflect offers of ICHRA coverage. The instructions for Part II line 15 add information on how the required employee contribution is calculated to determine affordability of ICHRA coverage.

The IRS has not yet released the separate instructions for these ACA reporting forms.


The Departments Release Proposed Rules on Grandfathered Health Plans

In response the President’s Executive Order 13765 “Minimizing the Economic Burden of the Patient  Protection and Affordable Care Act Pending Repeal” issued on January 20, 2017, the Departments issued proposed rules for grandfathered health plans that would make changes to certain types of cost-sharing requirements without causing a loss of grandfathered status.

Read more about the proposed rules.


U.S. Court of Appeals Upholds Short-Term Limited Duration Insurance Final Rule

As background, on August 1, 2018, the Departments released a final rule that amended the definition of short-term, limited-duration insurance (STLDI). HHS also released a fact sheet on the final rule. The final rule allows consumers to purchase STLDI policies that are less than 12 months in length and may be renewed for up to 36 months.

Read more about the STLDI final rule.


HHS Published a Revised Confidentiality of SUD Patient Records Final Rule

HHS published a revised Confidentiality of SUD Patient Records final rule. The final rule outlines confidentiality protections for patient records created by federally assisted substance use disorder treatment programs (SUD records). The CARES Act contained modifications to the SUD confidentiality laws that expanded the circumstances under which SUD records may be used and disclosed in accordance with the HIPAA rules regarding treatment, payment, and health care operations.

Read more about the SUD confidentiality provisions under the CARES Act.


Download the complete recap to read about:

  • IRS Issues Private Letter Ruling on HRA and Profit-Sharing Plan Contributions
  • IRS Issues Information Letter on Submitting Claims for DCAP Reimbursement
  • DOL Publishes New FMLA Forms
  • DOL Releases RFIs on Paid Leave and FMLA
  • President Issues Executive Orders on Drug Pricing
  • Supreme Court Upholds Religious Exemption and Moral Exemption to the ACA Contraceptive Mandate
  • PPP Application Deadline Extended
  • IRS Releases Draft ACA Reporting Forms for 2020
  • U.S. Court of Appeals Upholds Short-Term Limited Duration Insurance Final Rule
  • HHS Published a Revised Confidentiality of SUD Patient Records Final Rule
  • Proposed Rules on Grandfathered Health Plans