Health Care Reform Roundup – Issue 9

Proskauer - Employee Benefits & Executive Compensation Blog

After health care reform efforts failed in late-Spring/early-Summer, things have been quiet. However, Congress returned to DC this week. Although legislative focus now appears to be on general tax reform, we expect some health care reform legislation (whether stand-alone or as part of tax reform) during the new session. Recent developments are provided below.

  • Senator Hatch Introduces Bills to Repeal Individual/Employer Mandates. Senator Orrin Hatch has introduced two bills that would separately repeal the Affordable Care Act’s (ACA) individual and employer mandates. The American Liberty Restoration Act would eliminate the individual mandate effective after December 31, 2016. The American Jobs Protection Act would eliminate the employer mandate effective after December 31, 2016. These bills would also eliminate the ACA reporting requirements set forth in Internal Revenue Code §§ 6055 and 6056 (i.e., Forms 1094/5-B and C).
  • Draft 2017 ACA Reporting Forms and Instructions Released. Unless Senator Hatch’s legislation (or other health care reform legislation) is enacted, employers will be required to comply with the ACA reporting requirements for 2017. The IRS recently released draft ACA reporting forms and instructions for 2017. Although not much has changed, below are key changes.
    • References to transition relief have been removed now that all relief (except the multiemployer interim guidance) has ended.
    • Errors in the dollar amount in Line 15 (i.e., the cost of coverage) will not result in penalties or the need to correct if the difference between the correct amount and the entered amount is $100 or less.
    • The IRS clarified that there is no separate Line 16 code if an employee is offered coverage but declines. Instead, employers should enter the applicable affordability safe harbor code, or if none applies, leave Line 16 blank.
    • Importantly, the good faith compliance standard made available for 2015 and 2016 no longer applies. ACA reporting errors and late filings are now subject to the generally applicable reasonable cause standard.
  • ACA Preventive Care Recommendations. The United States Preventive Services Task Force (“USPSTF”) recently issued a new recommendation regarding preventive coverage services. Under the ACA, non-grandfathered group health plans must cover in-network preventive services without cost-sharing. Among the various definitions of preventive services are those that the USPSTF recommends with an “A” or “B” rating. On September 5, 2017, the USPSTF gave a “B” rating to vision screening for amblyopia (sometimes referred to as “lazy eye”) or its risk factors in children aged 3 to 5. This recommendation would require non-grandfathered plans to cover without cost-sharing this vision screening for plan years beginning on or after September 5, 2018.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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