As 2015 comes to an end, we are pleased to present you with our traditional End of Year Plan Sponsor “To Do” Lists. Like last year, we are presenting our “To Do” Lists in three separate Employee Benefits Updates. Part 1 of the series will cover year-end health and welfare plan issues, Part 2 will cover qualified plan issues, and Part 3 will cover executive compensation issues. Each Employee Benefits Update will provide you with a “To Do” List of items on which you may want to take action before the end of 2015 or in early 2016. As always, we appreciate your relationship with Snell & Wilmer and hope that these “To Do” Lists help focus your efforts over the next few months.

Part 1 - Health & Welfare Plans “To Do” List

• Consider Impact of Supreme Court Case Legalizing Same-Sex Marriage in All 50 States: As reported in our July 2, 2015 blog post, “Obergefell v. Hodges – Same-Sex Marriage Now Legal in All 50 States,” the Supreme Court held that the “Fourteenth Amendment requires a State to license a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when their marriage was lawfully licensed and performed out-of-State.” As a result, employers will start to have more gay and lesbian employees get married and request benefits for their spouse. Prior to the Obergefell v. Hodges decision, the IRS and Treasury ruled that same-sex married couples would be treated as married for all federal tax purposes if they were married in a jurisdiction that recognizes same-sex marriage, which is known as the “state of celebration” standard. Practically, for employers offering health and welfare coverage to both opposite-sex spouses and same-sex spouses, this means that the federal taxation of spousal benefits is the same for both spouses. While there is no specific federal law that requires employers to offer health and welfare benefits to spouses, employers who offer coverage to opposite-sex spouses, but not same-sex spouses, could face discrimination claims under city, state or federal law. Discrimination claims under city or state laws are arguably preempted by the Employee Retirement Income Security Act of 1974, as amended (ERISA), but claims under Title VII of the Civil Rights Act, a federal law, are not preempted. Recently the Equal Employment Opportunity Commission ruled that discrimination based on sexual orientation is a form of sex discrimination under Title VII. Offering uniform benefits to all spouses is not only easier to administer, but avoids potential discrimination lawsuits. Employers who decide to offer coverage to same-sex spouses will have to update and amend their plans to treat same-sex spouses the same as opposite-sex spouses with respect to, among other things, the Consolidated Omnibus Budget Reconciliation Act (COBRA), special enrollment rights and the ability to pay health benefits on a pre-tax basis. Employers who do not currently offer health and other welfare benefits to same-sex spouses should reconsider whether they now want to do so to avoid discrimination claims.
  
  As we reported in our April 3 blog post, “State of Celebration Standard Now in Effect for FMLA,” the DOL also updated its regulations relating to the Family and Medical Leave Act (FMLA). The regulatory definition of “spouse” under the FMLA was changed from a “state of residence” standard to a “state of celebration” standard. This means that employers must now look to the law of the place in which the marriage was performed rather than the law of the state in which the employee resides.
• Reconsider Domestic Partner Benefits: As same-sex marriage is now legal in all 50 states, employers should consider whether domestic partner benefits are still needed. Many employers originally offered same-sex domestic partner benefits in an effort to treat such couples the same as opposite-sex couples. However, such benefits may not be needed because employees with same-sex partners can now marry without having to leave their state of residence. In fact, it may be viewed as discriminatory to provide domestic partner benefits to same-sex couples and not to opposite-sex couples. As a result, employers may want to review their domestic partner benefit policies, while noting that some states may have laws that require employers to offer same-sex domestic partner benefits. Careful consideration should be taken before eliminating same-sex domestic partner benefits. If taken away too quickly, same-sex couples may feel like they are being rushed to marry. Although many same-sex couples are rushing to the courthouse to get married, other weddings will take time to plan. Employers should be mindful of this. 
• Report and Pay Reinsurance Fees: The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the Health Care Reform Act) created the transitional reinsurance program, which requires most self-insured health plans to make contributions to the Department of Health and Human Services (HHS) for the 2014, 2015 and 2016 calendar years. The contribution amount is determined by the number of covered lives under each plan. The number of covered lives must be calculated and submitted to HHS by November 15 of each year. The first filing was due November 15, 2014 for the 2014 calendar year. The second filing was due November 16, 2015 (with November 15 falling on a Sunday) for the 2015 calendar year. See the CMS webpage on reinsurance fees for contribution deadlines. For 2015, the contribution amount is $44 per covered life. Data submissions and payments can be made online using Pay.gov. Covered lives may be calculated using several different methods, similar to the methods that are used to calculate covered lives for PCORI fees. Results can differ significantly depending on the counting method used. For more information on the permissible counting methods, please see our October 10, 2014 SW Benefits Update, “Reinsurance Program Requires Self-Insured Health Plans to File Enrollment Data by November 15 and Pay Fee Later.”
• Comply with Large Employer Shared Responsibility Rules if Applicable, or Pay Penalties: As reported in our February 25, 2014 SW Benefits Update, “Health Care Reform’s Employer Shared Responsibility Penalties: A Checklist for Employers,” the large employer shared responsibility penalties took effect January 1, 2015 for most large employers. Large employers are subject to penalties if any full-time employee receives a premium tax credit or cost-sharing reduction and either: (1) the employer fails to offer minimum essential health coverage to substantially all (70% in 2015 and 95% in later years) of its full-time employees (and their natural born and adopted children); or (2) the employer offers minimum essential health coverage to substantially all of its full-time employees (and their natural born and adopted children), but the coverage is either not affordable or does not provide minimum value. These rules are incredibly complicated and are explained in much greater detail in the above-referenced Checklist. In the short-term, employers should:
• Determine and Document Whether They are a Large Employer for 2015: Employers may make this determination using Worksheet #1 of the Checklist.
• Decide Whether to Use the Monthly Measurement Method or the Look-Back Measurement Method to Track Full-Time Employees: Penalties are assessed with respect to full-time employees. A full-time employee is an employee who, with respect to a calendar month, is employed on average at least 30 hours per week or 130 hours for the month. Under the monthly measurement method, a company determines each employee’s status as a full-time employee by counting the hours of service for the month. This method can be difficult to administer, especially for variable hour employees, because a company will not usually be able to determine until the end of the month, after it is too late to avoid penalties, whether an employee is full-time for the month. As a result, the IRS allows employers to use an alternative look-back measurement method. Under the look-back measurement method, a company may determine the status of an employee as a full-time employee during a future period (called a “stability period”) based upon the hours of service of the employee in a prior period (called a “measurement method”). See Worksheet #3 of the Checklist for more information on these two methods. Employers should document which method they decide to use.
• Consider Who Are Your Common Law Employees: The penalties apply with respect to full-time common law employees, which makes it very important for employers to properly classify and count all common law employees. Careful consideration should be given to 1099 independent contractors and employees hired through staffing firms. Failing to properly take all common law employees into account can easily cause an employer to fail the 70% coverage test for 2015 and the 95% coverage test in later years. For more information, please see our June 12, 2013 Legal Alert “Another Reason Not to Misclassify Employees.” See Worksheet #2 of the Checklist for more information on the staffing firm issue.
• Revise Staffing Firm Agreements: As noted, the penalties apply with respect to a large employer’s full-time common law employees. Therefore, penalties could apply with respect to full-time employees performing services for an employer that is a client of a staffing firm. To avoid paying potential penalties for employees assigned to the client-employer by the staffing firm, a client-employer must make an offer of coverage to each of its full-time common law employees received from the staffing firm. However, the IRS provides relief to employers receiving employees from staffing firms if certain requirements are met. When the assigned employee is a full-time common law employee of the client-employer, an offer of health coverage made by the staffing firm to the assigned employee will be treated as an offer of health coverage made by the client-employer. For this purpose, an offer of coverage is treated as made on behalf of a client-employer only if the fee the client-employer pays to the staffing firm for an employee enrolled in health coverage under the staffing firm’s health plan is higher than the fee the client-employer would pay to the staffing firm for the same employee if the employee did not enroll in health coverage under the plan. Employers intending to take advantage of this relief should revise their staffing firm contracts to reflect the above requirements.
• Adopt Appropriate Plan Amendments: Many plan sponsors will need to amend plans to comply with these rules. For example, plans will need to use a 30 hour or lesser eligibility standard, eliminate exclusions that make the employer fail the substantially all coverage percentage test, cover natural born and adopted children through the end of the month in which they turn age 26, and document whether they are using the monthly or look-back measurement method to track full-time employee status. For employers who use the look-back measurement method, COBRA changes may also be needed. See Worksheet #4 of the Checklist for more information.
• Be Prepared to Conduct Code Section 6055 and 6056 Reporting:
• Small and Large Employers with Self-Insured Health Plans Must Report Minimum Essential Coverage (MEC): Starting in 2016, Section 6055 of the Internal Revenue Code (the “Code”), which was added by the Health Care Reform Act, requires all entities providing MEC to submit information to the IRS concerning each covered individual for the 2015 calendar year. Section 6055 also requires these entities to provide statements containing similar information to certain covered individuals. MEC is broadly defined to include any group health plan or group health insurance that is not an excepted benefit (e.g., stand-alone dental or vision plan). Employers who have not yet determined how this reporting is going to be completed (e.g., by a third-party vendor or done internally) should do so immediately. Unlike Section 6056 discussed below, all employers sponsoring self-insured health plans must report on all covered employees, regardless of the size of the employer or the status of the covered employee (e.g., part-time). Employers sponsoring insured health plans are not required to comply because the insurance company must conduct this reporting. However, these employers may need to collect and provide employee information to the insurer so the insurer can meet its Section 6055 obligations. Generally, entities reporting under Section 6055 must use Form 1094-B (the IRS transmittal form) and Forms 1095-B (individual statements). Large employers sponsoring self-insured health plans may use combined reporting to comply with both Section 6055 and Section 6056 by completing one form per individual, permitting large employers sponsoring self-insured health plans to disregard Forms 1094-B and 1095-B. The applicable deadlines can be found on the IRS webpage for Section 6055 reporting. For more information, please see our October 24, 2014 SW Benefits Update, “Section 6055 Reporting of Health Plan ‘Minimum Essential Coverage’ for Small and Large Employers.” All final forms and instructions for Section 6055 reporting can be accessed on the IRS webpage for providers of MEC.
• Large Employers Must Report on Health Coverage Offered to Full-Time Employees: Starting in 2016, Section 6056 of the Code, which was also added by the Health Care Reform Act, requires applicable large employers to annually report to the IRS information regarding health coverage offered to full-time employees in the 2015 calendar year. Additionally, starting in 2016, applicable large employers must provide individual statements to each full-time employee regarding the type of coverage that was offered to that employee in the 2015 calendar year. All applicable large employers must comply, regardless of whether the employer sponsors a self-insured or fully insured health plan, or if the employer does not offer health coverage to its employees. Similar to Section 6055 reporting, employers should immediately determine how this reporting is going to be completed if they have not done so already. Employers must use Form 1094-Cand Forms 1095-C to complete this reporting. For the applicable deadlines, please see the IRS webpage for Section 6056 reporting. For more information, please see our October 28, 2014 SW Benefits Update, “Section 6056 Reporting of Health Coverage Information for Large Employers.” All final forms and instructions for Section 6056 reporting can be accessed on the IRS webpage for large employers.
• Consider Whether to Seek Reporting Extensions: As stated in our August 3, 2015 SW Benefits Blog, “ACA Information Reporting Penalties Have Been Increased,” the penalties for reporting failures have recently been increased. Employers should avoid late filing and furnishing. If an employer already anticipates needing more time to meet its reporting obligations, the employer may seek an extension. For more information on extensions, please see our September 14, 2015 SW Benefits Blog, “New Draft Instructions Released for ACA Information Reporting,” and the final instructions for Forms 1094-C and 1095-C (pages three and five).
• Consider Whether to Allow Two New Cafeteria Plan Change Events as Announced in IRS Notice 2014-55: Employers should consider whether to amend their Code Section 125 plans to allow two new change events announced in IRS Notice 2014-55. That Notice now allows employees to make certain mid-year health coverage changes when they reduce below 30 hours of service or enroll in a qualified health plan through a Health Exchange. Employers who want to permit either of these two new changes must amend their Code Section 125 plans by the end of the plan year in which the changes are allowed. However, a special rule applies to plans that permit changes during the 2014 plan year. Such plans must be amended by the last day of the 2015 plan year (i.e., December 31, 2015 for calendar year plans). For more information, please see our September 23, 2014 SW Benefits Update, “When Did You Last Amend Your Section 125 Cafeteria or Flexible Benefit Plan? Now May Be A Good Time to Dust It Off and Update It.”
• Continue to Track and Comply with Health Care Reform Changes: Employers should continue moving forward with implementation of the Health Care Reform Act. See our checklist that provides a more detailed summary of the principal requirements under the Health Care Reform Act, beginning with those that first became effective in 2010 and continuing through those that will become effective in 2018. The purpose of that checklist is to provide a summary of the principal requirements under the Health Care Reform Act that apply to employer-sponsored group health plans. The Health Care Reform Act and its related guidance go into much more detail and should always be consulted when considering its application to any particular plan.
• If a Group Health Plan is a Grandfathered Plan, Review Grandfathered Status: Group health plans that were in existence on or before March 23, 2010 and that have not undergone significant changes since then (grandfathered plans) have to comply with some, but not all, of the requirements under the Health Care Reform Act. Employers that have made any changes to their health plans or added a wellness component in 2015, or in connection with open enrollment for an upcoming plan year, should consider whether those changes cause the plan to lose grandfathered status. If grandfathered plan status is lost, the plan must comply with additional requirements that apply to non-grandfathered plans as of the date grandfathered status is lost.
• Cover Preventive Services without Cost Sharing in Non-Grandfathered Health Plans: Non-grandfathered group health plans were first required to provide coverage for preventive services without cost sharing for plan years beginning on or after September 23, 2010. Non-grandfathered group health plans were required to cover additional women’s preventive services without cost sharing for plan years beginning on or after August 1, 2012 (i.e., January 1, 2013 for calendar year plans). Plan sponsors and insurers that are subject to the preventive services mandate should periodically review and update their plans to ensure that they are covering all of the preventive services described in the recommendations and guidelines, which change from year-to-year. Information about the recommendations and guidelines is available at the Healthcare.gov website, which is updated periodically.
• Update Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Policies and Business Associate Agreements: On January 25, 2013, HHS issued the HIPAA Omnibus Rule, which updated covered entities’ responsibilities. Employers that sponsor their own self-insured health plans are covered entities. Among other things, the final rule clarifies a covered entity’s obligation with respect to a breach of unsecured protected health information, known as the “breach notification rule.” The breach notification rule sets forth the covered entity’s responsibility to identify what caused the breach and immediately remedy those causes. Employers should have updated their HIPAA Privacy and Security Policies and Procedures to comply with the final rule’s September 23, 2013 deadline. In addition, the final rule clarifies that business associates are also responsible for protecting protected health information. Business associates are usually vendors of the covered entity that handle protected health information. If not already included in the business associate agreement, employers should add language providing that any subcontractor that business associate utilizes will enter into a written contract with the business associate and abide by the same rules as the business associate. Covered entities generally should have updated these business associate agreements by September 23, 2013. However, the final rule provided transitional relief to certain entities, allowing those that qualify to have until September 22, 2014 to comply. Regardless, as noted in our September 8, 2014 SW Benefits Update, “HIPAA Business Associate Agreements – Reminder of September 22, 2014 Deadline,” all existing agreements with business associates should have been amended by September 22, 2014 to comply with the requirements of the final rule.
• Don’t Forget About Possible Requirements for Certain Self-Insured Plans to Obtain a Health Plan Identifier (HPID): HHS regulations required many health plans to obtain an HPID by November 5, 2014. However, on October 31, 2014, HHS delayed this deadline indefinitely. For more information on the delay, please see our November 4, 2015 SW Benefits Blog, “November 5 Deadline to Obtain HPID Delayed by HHS.” It is possible that the enforcement of the HPID regulations is on permanent hold, but no formal guidance has yet been issued. HHS released a request for information concerning the HPID regulations with a public comment period open until July 28, 2015. HHS will analyze these comments and issue formal guidance in the future.
• Obtain HIPAA Standard Electronic Transaction Certifications: The Health Care Reform Act generally mandated that rules be established to require health plans to obtain certifications demonstrating compliance with HIPAA standard electronic transactions. On January 2, 2014, HHS issued proposed regulations to that effect. The proposed regulations build upon the HPID regulations discussed above, requiring certain health plans to submit information and documentation that demonstrates compliance with the standards and operating rules adopted by HHS for specified electronic transactions. According to the proposed regulations, the first certification and submission must be completed by December 31, 2015 (technically, a second certification and submission is also due on December 31, 2015, but the requisite operating rules for these transactions have not been adopted yet). Despite the lack of guidance from HHS, there is reason to believe this deadline is delayed because the regulations are still in proposed form and the enforcement of the certification regulations requires HPID information (which does not exist due to the delay in the enforcement of the HPID regulations discussed above). Presumably, HHS will issue formal guidance before the December 31, 2015 deadline to provide clarification.
• Review Wellness Programs: As reported in our July 17, 2013 Health Care Alert, “Final Wellness Rules May Require Review of Existing Wellness Programs,” final wellness regulations were issued by the agencies (i.e., DOL, HHS, and Treasury) that apply to employer-sponsored group health plans for plan years beginning on or after January 1, 2014. Importantly, the final regulations provide that health-contingent welfare plans that do not address tobacco use may offer rewards of up to 30% of the cost of employee-only coverage. If the welfare plan is designed to prevent tobacco use, a reward of up to 50% may be offered. In addition, the final regulations provide that wellness programs must offer a reasonable alternative (or waive the standard) for those participants for whom it is unreasonable to meet the standard because of a medical condition (activity-based wellness programs), or for those participants who do not meet the initial standard on screening (outcome-based wellness programs). On April 16, 2015, the Equal Employment Opportunity Commission (the “EEOC”) issued proposed regulations concerning wellness programs. For the most part, the EEOC proposed regulations align with the 2013 final regulations, although there are some exceptions. For more information on the EEOC proposed regulations, please see our April 21, 2015 SW Benefits Blog, “Wellness Programs: Agencies Issue Helpful Guidance but Look Before You Leap,” and our May 9, 2015 SW Benefits Blog, “EEOC Proposed Regulations May Require Revisions to Your Tobacco Prevention Wellness Program.” Additionally, the EEOC recently released proposed regulations and Q&As concerning wellness programs and the Genetic Information Nondiscrimination Act. See the EEOC fact sheet for a summary of these proposed regulations.
• Review Employee Assistance Programs: Final regulations were released on October 1, 2014 concerning the criteria necessary for benefits offered through an Employee Assistance Program (EAP) to qualify as excepted benefits. Excepted benefits are generally exempt from the requirements of the Health Care Reform Act. In order to qualify for this relief: (1) the program cannot provide “significant benefits in the nature of medical care;” (2) the benefits cannot be coordinated with benefits under another group health plan; (3) no employee premiums or contributions can be required to participate in the EAP; and (4) there must be no cost-sharing under the EAP. The regulations do not provide detailed elaboration upon the meaning of “significant” medical benefits. The regulations provide examples and generally state that the amount, scope and duration of covered services are taken into account. These final regulations apply for plan years beginning on or after January 1, 2015. Employers who have not yet confirmed that their EAPs comply with each of these four requirements may wish to do so promptly.
• Distribute Summaries of Benefits and Coverage (SBC): The Health Care Reform Act requires employers offering group health plan coverage to provide employees with an SBC, which summarizes the health plan or coverage offered by the employer. More information on the SBC requirements, including the SBC template, can be found on the DOL webpage. On June 12, 2015, the agencies issued final regulations, which amend the original final regulations issued in 2012. A summary of these final regulations can be found on the fact sheet issued by the agencies. The final regulations contain minor changes to the SBC requirements, including rules for online access to insurance documents, fines for willful violations and the elimination of duplicative distributions. The recent final regulations did not include a new SBC template. However, the agencies anticipate issuing a new SBC template by January 2016 to be used for open enrollment periods that occur in the fall of 2016 for coverage beginning on or after January 1, 2017.
• Provide 60-Day Advance Notice of Changes Impacting SBC: As reported in our July 19, 2012 Health Care Reform Legal Alert, “Summary of Benefits and Coverage for Group Health Plans,” the Health Care Reform Act requires group health plans to give participants 60-day advance notice before making any material modification in plan benefits or coverage that is not reflected in the most recently provided SBC. This applies to both benefit enhancements and reductions.
• Update Summary Plan Descriptions (SPDs) if Needed: SPDs must be updated once every 5 years if the plan has been amended during the 5-year period and once every 10 years for other plans. SPDs may need to be updated.
• Distribute Summary Annual Report: Distribute a summary annual report, which is a summary of the information reported on the Form 5500. The summary annual report is generally due nine months after the plan year ends. If the Form 5500 was filed under an extension, the summary annual report must be distributed within two months following the date on which the Form 5500 was due.
• Gear Up for the Cadillac Tax: Effective January 1, 2018, the Health Care Reform Act requires employers to pay a 40% excise tax on the value of health plans that exceed $10,200 for an individual and $27,500 for a family, indexed for inflation. On February 23, 2015, the IRS issued Notice 2015-16, which initiated the process of developing guidance for the Cadillac tax. Notice 2015-16 describes potential approaches that could be incorporated in future guidance and invited comments on these potential approaches and other issues concerning how to enforce the Cadillac tax. On July 30, 2015, the IRS issued Notice 2015-52, which continued the process of developing regulatory guidance. Notice 2015-52 supplements Notice 2015-16 by addressing additional issues, including the identification of the taxpayers who may be liable for the excise tax, employer aggregation, the allocation of the tax among the applicable taxpayers and the payment of the applicable tax. Legislators from both political parties have voiced support for the repeal of the Cadillac tax, but no legislation has been passed. For now, employers should not rely on informal comments from legislators and should assume that the Cadillac tax will not be repealed. Employers may wish to begin preparing for the Cadillac tax and assess possible plan design changes, if necessary, to avoid the Cadillac tax.
• Comply with Mental Health Parity Requirements: In general, the mental health parity rules require group health plans to ensure that financial requirements (e.g., co-pays, deductibles and coinsurance) and quantitative and non-quantitative treatment limitations (e.g., visit limits, days of coverage maximums and medical necessity standards) applicable to mental health or substance use disorder benefits are no more restrictive than the predominant requirements or limitations applied to substantially all medical/surgical benefits. The parity rules concerning financial requirements and treatments limitations were created by the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), which supplemented the Mental Health Parity Act of 1996. In November 2013, final regulations were issued implementing the provisions of MHPAEA. The final MHPAEA regulations apply to group health plans for plan years beginning on or after July 1, 2014. Therefore, employers sponsoring calendar-year plans should have complied with these parity requirements starting on January 1, 2015. Employers who have not done so should consider doing so now.
• Ensure Group Health Plans Administer Out-of-Pocket Maximums According to New HHS Policy: The Health Care Reform Act imposes annual limits on out-of-pocket maximums (i.e., the maximum amount the enrollee has to pay for coverage) for all non-grandfathered health plans, including self-insured and large group health plans. The expenses that apply for purposes of this annual limit on enrollee cost sharing include deductibles, coinsurance and copayments, but exclude premiums. For plan years beginning in 2016, the maximum annual limitation on enrollee cost-sharing is $6,850 for self-only coverage and $13,700 for family coverage. HHS recently took the position that the self-only maximum annual limitation on cost-sharing applies to each individual, regardless of whether the individual is enrolled in self-only or family coverage. This position was taken by HHS in the final Notice of Benefit and Payment Parameters of 2016 and in a separate set of FAQs. On May 26, 2015, DOL, HHS and Treasury issued a set of FAQs affirming HHS’s interpretation and confirming that this new HHS policy will apply to plans beginning in 2016. The HHS policy effectively embeds an individual out-of-pocket maximum within a family out-of-pocket maximum for group health plans with family out-of-pocket maximums exceeding the annual limit on cost-sharing for individuals ($6,850 for 2016). Employers sponsoring health plans with high out-of-pocket maximums should ensure that this new HHS policy is being followed.
  
  Additionally, employers sponsoring high-deductible health plans (HDHPs) must still comply with the annual cost-sharing limits established by the IRS for HDHPs compatible with health savings accounts (HSAs). By way of background, the IRS imposes annual cost-sharing limits for HSA-compatible HDHPs, separate from the annual limits established by the Health Care Reform Act. For 2016, the IRS limits are $6,550 for self-only coverage and $13,100 for family coverage, while the Health Care Reform Act limits are $6,850 and $13,700 respectively. These limits are not consistent with one another, as the IRS limits are lower than the Health Care Reform Act limits. Currently, the IRS has not issued guidance requiring the IRS self-only limit for HSA-compatible HDHPs to be applied to family coverage. Accordingly, it appears that HSA-compatible HDHPs offering family coverage will comply with both requirements (i.e., the requirements not to exceed the annual cost-sharing limits imposed by the IRS for HSA-compatible HDHPs and the annual cost-sharing limits imposed by the Health Care Reform Act) if they apply the Health Care Reform Act embedded cost-sharing limit ($6,850 for 2016) for each individual enrolled in family coverage and do not exceed the IRS family coverage limit ($13,100 for 2016) for the aggregate family out-of-pocket maximum. 
• Continue to Report and Pay Patient-Centered Outcomes Research Institute (PCORI) Fees: Health insurance issuers and sponsors of self-insured health plans must continue to report and pay PCORI fees. For health insurance issuers and plan sponsors of self-insured plans with calendar-year policy or plan years, the first IRS Form 720 and payment was due July 31, 2013. The PCORI fee for a plan or policy year is equal to the average number of lives covered under the plan or policy, multiplied by an applicable dollar amount. For the first year, the applicable dollar amount was $1. This amount was increased to $2 for the second year and to $2.08 for the third year. For the fourth year (i.e., plan years that end on or after October 1, 2015 and before October 1, 2016) the applicable dollar amount is $2.17. Future amounts will be adjusted to reflect inflation in National Health Expenditures, as determined by HHS. More information about PCORI fees can be found in our August 9, 2012 Health Care Reform Legal Alert, “Health Care Reform’s New Research Fees: What Employers Need to Know.”
• Continue to Comply with IRS Form W-2 Reporting of the Cost of Employer-Sponsored Group Health Plan Coverage: Beginning with the Form W-2 issued in January 2013 (i.e., the Form W-2 issued for the 2012 calendar year), employers were required to report to employees the cost of their employer-sponsored group health plan coverage. This reporting is for informational purposes only and is intended to communicate the cost of health care coverage to employees. It does not change how such benefits are taxed. This requirement continues to apply for future years. More information about the reporting requirement can be found in our July 26, 2012 Health Care Reform Legal Alert, “W-2 Reporting of Employer-Sponsored Group Health Coverage.”