Tag: employee health insurance
Is Your Employer Group Health Plan Design Compliant with the Section 1557 Nondiscrimination Rules?
As an employer, you are likely subject to Title VII of the Civil Rights Act. But did you know that your group health plan may also be subject to similar nondiscrimination rules? Employers should carefully analyze whether and to what extent they must comply with Section 1557, which is the nondiscrimination section of the Affordable Care Act. Similar to Title VII, it prohibits discrimination on the basis of race, color, national origin, sex, age, or disability; however, this law specifically regulates health programs and activities.
If you or your health plan are deemed a covered entity under Section 1557, you have some additional compliance measures to undertake, which include:
-Ensuring your group health plan offers compliant coverage (changes must be made by January 1, 2017)
-Posting appropriate notices within significant publications, on the premises, and on your website
-Ensuring proper grievance procedures are adopted and followed (if applicable)
Here are the questions you should be asking:
- Does a covered entity exist?
- If yes, will the employer be liable?
- Does the employer’s group health plan offer compliant coverage?
- Are the employer’s physical facilities compliant?
- Are the proper notices included in significant publications and posted on the premises and websites?
- Are the appropriate grievance procedures being followed?
- If Section 1557 in not applicable, why should I care?
While this is not a comprehensive review, please be aware that health programs or activities receiving federal funds must carefully scrutinize their responsibilities under Section 1557. A “covered entity” is an entity that operates a health program or activity, any part of which receives Federal financial assistance. The definitions of “health program or activity” and “federal financial assistance” are:
“Health program or activity means the provision or administration of health related services, health-related insurance coverage, or other health related coverage, and the provision of assistance to individuals in obtaining health-related services or health-related insurance coverage. For an entity principally engaged in providing or administering health services or health insurance coverage or other health coverage, all of its operations are considered part of the health program or activity, except as specifically set forth otherwise in this part. Such entities include a hospital, health clinic, group health plan, health insurance issuer, physician’s practice, community health center, nursing facility, residential or community-based treatment facility, or other similar entity. A health program or activity also includes all of the operations of a State Medicaid program, a Children’s Health Insurance Program, and the Basic Health Program.”
“Federal financial assistance. (1) Federal financial assistance means any grant, loan, credit, subsidy, contract (other than a procurement contract but including a contract of insurance), or any other arrangement by which the Federal government provides or otherwise makes available assistance in the form of: (i) Funds; (ii) Services of Federal personnel; or (iii) Real and personal property or any interest in or use of such property, including: (A) Transfers or leases of such property for less than fair market value or for reduced consideration; and (B) Proceeds from a subsequent transfer or lease of such property if the Federal share of its fair market value is not returned to the Federal government. (2) Federal financial assistance the Department provides or otherwise makes available includes Federal financial assistance that the Department plays a role in providing or administering, including all tax credits under Title I of the ACA, as well as payments, subsidies, or other funds extended by the Department to any entity providing health-related insurance coverage for payment to or on behalf of an individual obtaining health related insurance coverage from that entity or extended by the Department directly to such individual for payment to any entity providing health-related insurance coverage.”
If the employer operates a health program or activity and receives federal financial assistance, the employer must next determine if it can be held responsible for violations of Section 1557.
Providing a health plan for employees and receiving federal financial assistance in some other capacity will not necessarily mean that the employer can be liable under Section 1557. Instead, there are only three instances where employer liability is at issue for discrimination in employee health benefit programs.
A covered entity that provides an employee health benefit program to its employees and/or their dependents shall be liable for violations of this part in that employee health benefit program only when:
- The entity is principally engaged in providing or administering health services, health insurance coverage, or other health coverage (such as hospitals, carriers, TPAs, etc);
- The entity receives Federal financial assistance a primary objective of which is to fund the entity’s employee health benefit program (such as by receiving Retiree drug subsidies); or
- The entity is not principally engaged in providing or administering health services, health insurance coverage, or other health coverage, but operates a health program or activity, which is not an employee health benefit program, that receives Federal financial assistance; except that the entity is liable under this part with regard to the provision or administration of employee health benefits only with respect to the employees in that health program or activity.
If the employer can be liable, it must ensure it offers compliant coverage, has disability accessible premises, posts the required notices, and follows grievance procedures (for employers with 15 or more employees).
Compliant Coverage, Notices & Grievance Procedures, and Physical Location Accessibility
If subject to Section 1557, the employer must ensure nondiscriminatory plan coverage is in effect by January 1, 2017. Again, coverage cannot discriminate on the basis of race, color, national origin, sex, age, or disability; however, the law also specific requirements with regard to gender identity and transition exclusions and limitations.
Notices describing Section 1557 must be posted and must include taglines for at least the top 15 languages spoken in in the applicable state by individuals with limited English proficiency.
In a conspicuously-visible font size, the Notices must be posted:
- In significant publications and significant communications targeted to beneficiaries, enrollees, applicants, and members of the public, (except for significant publications and significant communications that are small-sized, such as postcards and tri-fold brochures, which instead use a shorter notice with only 2 taglines);
- In conspicuous physical locations where the entity interacts with the public (i.e., where other legal notices are posted for employees); and
- In a conspicuous location on the covered entity’s Web site accessible from the home page of the covered entity’s Web site.
With respect to the Web site requirement, the Preamble provides the following additional information:
We stated that covered entities may satisfy the requirement to post the notice on the covered entity’s home page by including a link in a conspicuous location on the covered entity’s home page that immediately directs the individual to the content of the notice elsewhere on the Web site. Similarly, we stated with regard to the requirement to post taglines that covered entities can comply by posting ‘‘in language’’ Web links, which are links written in each of the 15 non-English languages posted conspicuously on the home page that direct the individual to the full text of the tagline indicating how the individual may obtain language assistance services. For instance, a tagline directing an individual to a Web site with the full text of a tagline written in Haitian Creole should appear as ‘‘Kreyo`l Ayisien’’ rather than ‘‘Haitian Creole.’’
Sample notices and procedures can be found within the regulations and on the government website:
For the final regulations click here: https://www.gpo.gov/fdsys/pkg/FR-2016-05-18/pdf/2016-11458.pdf
The notices and translated taglines are here: http://www.hhs.gov/civil-rights/for-individuals/section-1557/translated-resources/
FAQs can be found here: https://www.hhs.gov/sites/default/files/2016-05-13-section-1557-final-rule-external-faqs-508.pdf
The following link provides information on taglines: http://www.hhs.gov/civil-rights/for-individuals/section-1557/1557faqs/top15-languages/index.html
Finally, HHS has since listed the top 15 languages by state: https://www.hhs.gov/sites/default/files/resources-for-covered-entities-top-15-languages-list.pdf
Additionally, Section 1557 requires that physical locations be disability compliant, and the employer must adopt grievance procedures to handle Section 1557 complaints consistently.
Nondiscrimination Compliance with Health Plan Coverage Even if Section 1557 if Inapplicable
Please note that even if an employer is not subject to Section 1557, the Office for Civil Rights of the Department of Health and Human Services (OFR) may refer a discriminatory design to the EEOC for investigation. Please see the Preamble to the regulations at https://www.gpo.gov/fdsys/pkg/FR-2016-05-18/pdf/2016-11458.pdf :
Where … the alleged discrimination relates to the benefit design of a self-insured plan—for example, where a plan excludes coverage for all health services related to gender transition—and where OCR has jurisdiction over a claim against an employer under Section 1557 because the employer falls under one of the categories in § 92.208, OCR will typically address the complaint against that employer.
As part of its enforcement authority, OCR may refer matters to other Federal agencies with jurisdiction over the entity. Where, for example, OCR lacks jurisdiction over an employer responsible for benefit design, OCR typically will refer or transfer the matter to the EEOC and allow that agency to address the matter.
Therefore, careful attention to Section 1557’s requirements is important for plan design regardless of direct employer liability under the law.
This correspondence is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
Questions? Contact us to learn more.
Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2018 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or firstname.lastname@example.org.
Client Alert: PCORI Payment Due July 31st
Reminder: Plan Sponsors of Certain Applicable Self-Funded Health Plans Must Make PCORI Fee Payment By July 31, 2015
Please let this serve as a reminder that the Patient-Centered Outcomes Research Institute (PCORI) fee is due by July 31st and must be reported on Form 720. The fee will be used to partially fund the PCORI which was implemented as part of the Patient Protection and Affordable Care Act.
Instructions are found HERE (see Part II).
The Form 720 itself is found HERE (see Part II).
Form 720, as well as the attached Form 720-V to submit payment, must be used to report and pay the requisite PCORI fee to the IRS. While Form 720 is used for other purposes to report excise taxes on a quarterly basis, for purposes of this PCORI fee, it is only used annually and is due by July 31st of each relevant year.
As previously advised, plan sponsors of applicable self-funded health plans are liable for this fee imposed by Code section 4376. For plan years ending on or after October 1, 2013 and before October 1, 2014, the fee is $2.00 per covered life. For plan years ending on or after October 1, 2014 and before October 1, 2015, the fee is $2.08 per covered life. The fee increases per year and concludes with plan years ending on or after October 1, 2018 and before October 1, 2019. [For calendar year plans, the fee runs from 2012 through 2018 plan years.]
The fee is due no later than July 31 of the year following the last day of the plan year.
There are specific calculation methods to be used to configure the number of covered lives and special rules may apply depending on the type of plan being reported. For example, HRAs and health FSAs that are not excepted from reporting only must count the covered participant and not the spouses and dependents. The Form 720 instructions do not outline all of these rules.
For more information regarding this fee payment and how to report it appropriately, please contact Elizabeth H. Latchana at 517.377.0826 or email@example.com.
This correspondence is intended to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
SCOTUS Same-Sex Marriage Decision May Impact Employee Benefits Plans
On Friday, June 26, 2015, the U.S. Supreme Court issued the 5-4 landmark decision in Obergefell v Hodges striking down same-sex marriage bans across the country as unconstitutional under the Fourteenth Amendment. Continue reading SCOTUS Same-Sex Marriage Decision May Impact Employee Benefits Plans
Supreme Court of the United States Upholds Affordable Care Act Subsidies, Siding with the Administration in King v Burwell
In a historic 6-3 decision, the Supreme Court today upheld that the federal tax subsidies available to Americans who purchase health insurance through the Federal Health Insurance Marketplace (Federal Marketplace) are legal under the Affordable Care Act (ACA). Continue reading Supreme Court of the United States Upholds Affordable Care Act Subsidies, Siding with the Administration in King v Burwell
Accountable Care Organizations 2.0
Attorney Michael James spoke to the Michigan Association of CPAs yesterday on his presentation “Accountable Care Organizations 2.0”. The presentation addressed the hundreds of pages of recently proposed regulations related to ACOs that represent the most dramatic overhaul of the Medicare Shared Savings Program since its inception. Other insights in the presentation:
- Current Regulatory Environment for Integrated Models
- How the Environment Evolves Under Proposed Regulations
- Various Requirements Needed for ACOs
- Potential Risks Under Current ACO Models Continue reading Accountable Care Organizations 2.0
Client Alert: New Guidance Related to Wellness Programs Released
Employers and plan sponsors that maintain wellness programs need to carefully review those programs to ensure compliance with various employment and benefit laws, including recently released guidance under the Patient Protection and Affordable Care Act (“PPACA”) and Title I of Americans with Disabilities Act (“ADA”). Nondiscrimination compliance issues surrounding employer wellness programs have been a hot topic since the issuance of the final regulations related to the prohibition against discrimination based on health status pursuant to the PPACA in 2013. Continue reading Client Alert: New Guidance Related to Wellness Programs Released
Client Alert: More Changes to the Summary of Benefits & Coverage (SBC)
Plan sponsors have work to do on their summary of benefits and coverage (“SBC”) in the coming months. The government recently published proposed regulations related to the Patient Protection and Affordable Care Act’s (“PPACA”) SBC requirement. The proposed regulations would modify the 2012 final regulations and are intended to streamline and shorten the SBC in order to make it more useful and user-friendly to individuals, issuers, and group health plans.
The proposed regulations also incorporate a number of clarifying FAQs released by the government after the adoption of the 2012 final regulations. In conjunction with the release of the proposed regulations, the government contemporaneously made available proposed revisions to the SBC template, Continue reading Client Alert: More Changes to the Summary of Benefits & Coverage (SBC)
Client Alert: Cadillac Tax on High Cost Employer Health Plans Approaching
The Internal Revenue Service (IRS) recently issued Notice 2015-16 commencing the regulatory process to develop guidance on what’s been called the Cadillac Tax, i.e., the excise tax on high cost employer-sponsored health coverage.
Employers and plan sponsors, especially those with negotiated collective bargaining agreements, need to start actively planning now to mitigate exposure to the Patient Protection and Affordable Care Act’s (“PPACA”) Cadillac Tax under Code section 4980I, which is scheduled to go into effect for taxable years beginning on or after January 1, 2018. Continue reading Client Alert: Cadillac Tax on High Cost Employer Health Plans Approaching
Client Alert and Reminder: Form W-2 Reporting Due, Disclosure Due to CMS for Medicare Part D
Reminder: Form W-2 Reporting on Aggregate Cost of Employer Sponsored Coverage
Unless subject to an exemption, employers must report the aggregate cost of employer-sponsored health coverage provided in 2014 on their employees’ Form W-2 (Code DD in Box 12) issued in January 2015. Please see IRS Notice 2012-9 and our previous e-mail alerts for more information.
For a helpful IRS link that includes a chart setting forth various types of coverage and whether reporting is required, click here. Please note this is a summary only and Notice 2012-9 should also be consulted. Continue reading Client Alert and Reminder: Form W-2 Reporting Due, Disclosure Due to CMS for Medicare Part D