Tag: HHS

COVID Updates – Long COVID May Qualify as an ADA Disability

President Biden announced on July 26 that Americans experiencing “long COVID-19” symptoms may qualify as having a disability under the Americans with Disabilities Act (“ADA”), based on guidance issued jointly by the U.S. Department of Justice (“DOJ”) and the U.S. Department of Health and Human Services (“HHS”). With COVID-19 cases rising 64 percent week-over-week as of August 4, and more attention being paid to the long-term ramifications of the disease, this is an issue that could affect many employers.

Long (or long-haul) COVID refers to a prolonged illness experienced by someone who caught the virus but continues to have symptoms weeks or months following the initial diagnosis. Scientists are still studying why some people are more vulnerable to long COVID than others. Typical symptoms include breathlessness, fatigue, memory loss and a general sense of “brain fog,” although persistent symptoms lasting for months can be vague, even for those who initially were asymptomatic.

The guidance from the DOJ and HHS explains that long COVID can be a disability under the ADA, which prohibits discrimination against, and requires reasonable accommodation for, qualified individuals with disabilities. However, the agencies emphasized that an “individualized assessment is necessary to determine whether a person’s long COVID condition or any of its symptoms” limits their ability to work.

It is important to note that President Biden’s statement and agencies’ guidance do not carry the weight of law. The practical implication of the guidance for employers is to raise awareness that they may have to provide paid time off, benefits and reasonable accommodations (such as the ability to work remotely or other flexible work arrangements) for employees who are suffering from long COVID symptoms. Reviewing and making adjustments to existing policies in light of this guidance may be appropriate. Please contact us for additional information and assistance.

Given the fluid nature of COVID-19’s impact, we will continue to provide employer-updates on important issues, including legislative and regulatory changes at both the federal and state levels.

If you have questions about this issue, please contact Aaron Davis or your Fraser Trebilcock attorney.

Aaron L. Davis is Shareholder and Chair of Fraser Trebilcock’s labor law practice. You can reach him at adavis@fraserlawfirm.com or (517) 377-0822. 

[Client Alert]: 2021 Adjustments for ACA’s OOP Limits, Penalty Amounts, and Affordability

HHS Announces OOP Limitations for 2021

With the passage of the Affordable Care Act (ACA), group health plans became required to apply an out-of-pocket limitation to certain in-network benefits… meaning that once an individual or family out-of-pocket (OOP) limit was met, the plan could not charge additional OOP costs for essential health benefits. These OOP limits include both the plan’s deductible as well as cost-sharing amounts for essential health benefits (EHB) in-network as set forth under the ACA.

Although self-insured plans and large-group insured plans are not required to cover all EHBs (while small-group insured plans are), to the extent they do, in-network OOP expenses for EHBs cannot exceed the maximum OOP limit. Additionally, group health plans may not impose annual or lifetime dollar limitations on EHBs whether offered in-network or out-of-network.

The Department of Health and Human Services (HHS) has released the 2021 plan year inflation-adjusted OOP limits applicable to non-grandfathered plans.

  • Self-only coverage:      $8,550 (was $8,150 for 2020)
  • Family coverage:         $17,100 (was $16,300 for 2020)

See PPACA; HHS Notice of Benefit and Payment Parameters for 2021.

Employers with non-grandfathered group health plans must update their maximum annual OOP limits.

These rules do not apply to ACA grandfathered plans. [Please note that these cost-sharing limits are different than the maximum out-of-pocket limits for purposes of being HSA-qualifying high deductible health plans.]

HHS Announces ACA Employer Mandate (Pay or Play) Penalty Amounts for 2021

Under the ACA, applicable large employers must offer certain group health plan coverage to their full-time employees; otherwise they will risk significant penalties.

Applicable large employers are those who employ 50 or more full-time or full-time equivalent employees in the preceding calendar year. Employees of related employers (within a controlled group or affiliated service group) are counted in this determination.

  • Part A requires employers to offer minimum essential coverage to 95% of their full-time employees.  See Section 4980H(a).
  • Part B requires the offered coverage be affordable and meet the minimum value standards.  See Section 4980H(b).

Specifically, the Part A Penalty is imposed on an employer who fails to offer minimum essential coverage (MEC) to at least 95% of the employer’s full-time employees (FTEs) and dependents as defined under the ACA, and if one of its FTEs receives subsidized coverage through the Marketplace or public health insurance exchange. The penalty amount is multiplied by the number of FTEs, minus 30. Special rules exist for applicable large employer members which are part of a controlled group.

The Part B Penalty amount is imposed on an employer who fails to offer coverage that meets the minimum value (MV) requirements or fails to be affordable, again as defined under the ACA, with respect to each one of its FTEs who receives subsidized coverage through the Marketplace or public health insurance exchange.

The Internal Revenue Service (IRS) has released the 2021 inflation-adjusted penalty amounts under the Affordable Care Act’s Employer Shared Responsibility Mandate (Pay or Play):

  • Part A Penalty:     $2,700 (was $2,570 for 2020)
  • Part B Penalty:     $4,060 (was $3,860 for 2020)

See Q&A 55 on Employer Shared Responsibility Provisions under the ACA.

Specifically, HHS finalized the premium adjustment percentage as 1.3542376277 for the 2021 benefit year, which is then multiplied by the original 2015 penalty amounts (Part A was $2,000 and Part B was $3,000) and rounded down to the nearest multiple of ten.

By way of example, an employer with 200 FTEs who fails to offer MEC to 95% of those employees (and if at least one of those FTEs receives subsidized coverage through the Marketplace or an exchange), the penalty assessed for the year will be $459,000 (200-30 = 170 x $2,700). The larger the employer, the larger the penalty.  If the same employer offers coverage to 95% of its FTEs but that coverage is not affordable or doesn’t provide minimum value, the penalty assessed will be based on the number of employees who receive subsidized coverage through the Marketplace or an exchange. If 20 FTEs receive subsidized coverage for each month of the year, the 2021 penalty would be $81,200 ($4,060 x 20).

Affordability Rates for 2021

As discussed above with respect to ACA penalties, an applicable large employer who does not offer affordable employer-sponsored group health plan coverage could face steep penalties.

For 2021, the ACA affordability requirement applies to the lowest-cost self-only coverage option that offers minimum value and must not exceed 9.83 percent of an employee’s household income. Please see Rev. Proc. 2020-36. This is a increase from 2020 (which was 9.78%).

As it is difficult to determine an employee’s household income, three safe-harbors are available for employers to use to determine affordability:

  1. Form W-2, based on an employee’s W-2 wages as reported in Box 1;
  2. Rate of Pay, based on the employee’s hourly wage rate, multiplied by 130 hours per month; and
  3. Federal Poverty Line, based on the individual federal poverty level as of six months prior to the beginning of the plan year, divided by 12…

Employers must be sure to carefully consider the safe harbors available and calculation of the lowest-cost employee coverage that should be charged.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

We have created a response team to the rapidly changing COVID-19 situation and the law and guidance that follows, so we will continue to post any new developments. You can view our COVID-19 Response Page and additional resources by following the link here. In the meantime, if you have any questions, please contact your Fraser Trebilcock attorney.

Elizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 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 elatchana@fraserlawfirm.com.

Brian T. Gallagher is an attorney at Fraser Trebilcock specializing in ERISA, Employee Benefits, and Deferred and Executive Compensation. He can be reached at (517) 377-0886 or bgallagher@fraserlawfirm.com.

Client Alert: COVID-19 Related Guidance and Effect on Group Health Plans

The government is quickly issuing guidance to address the overwhelming concerns over the coronavirus pandemic and to cover testing and treatment of COVID-19. Below are highlights involving recent changes affecting group health plans.

FFCRA’s Health Provisions

This past Wednesday, March 18, 2020, the Families First Coronavirus Response Act (“FFCRA”) was signed into law.  In part, the FFCRA requires coverage of testing for COVID-19. Specifically, group health plans (including grandfathered plans) and health insurance issuers offering group or individual health insurance coverage must provide coverage, without cost sharing or prior authorization or medical management requirements, for the following items and services:

  • Certain diagnostic products for the detection of SARS-CoV-2 or the diagnosis of the virus causing COVID-19 approved or authorized under certain provisions of the Federal Food, Drug and Cosmetic Act; and
  • Items and services furnished to an individual during health care provider office visits, urgent care and emergency room visits relating to furnishing or administration of the above diagnostic products or to evaluate that such individual needs the product.

These requirements are effective on March 18, 2020 for services and items furnished on or after March 18, 2020.

High Deductible Health Plans, HSAs, and COVID-19

The IRS has issued Notice 2020-15 to address concerns over medical expenses and testing relating to COVID-19. The link to the Notice can be found here: https://www.irs.gov/pub/irs-drop/n-20-15.pdf

Specifically, the Notice provides that a qualifying high deductible health plan (“HDHP”) with accompanying health savings accounts (“HSAs”) will not lose its qualifying HDHP status if it provides health benefits associated with testing for and treatment of COVID-19 prior to the deductible being met. IRS Notice 2020-15 states, in relevant part:

Part of the response to COVID-19 is removing barriers to testing for and treatment of COVID-19. Due to the nature of this public health emergency, and to avoid administrative delays or financial disincentives that might otherwise impede testing for and treatment of COVID-19 for participants in HDHPs, this notice provides that all medical care services received and items purchased associated with testing for and treatment of COVID-19 that are provided by a health plan without a deductible, or with a deductible below the minimum annual deductible otherwise required under section 223(c)(2)(A) for an HDHP, will be disregarded for purposes of determining the status of the plan as an HDHP.

Therefore, an employee participating in such a HDHP will not be disqualified from contributing to HSAs merely because the plan provided no or low-deductible health benefits for testing and treatment of COVID-19.

Catastrophic Plans and COVID-19

The Department of Health and Human Services (“HHS”) has issued guidance stating that, although catastrophic plans may not provide coverage of essential health benefits before the deductible being met (except as otherwise required), it will not take enforcement action against any health insurance issuer that does so for the purposes of diagnosing and/or treating COVID-19:

To facilitate the nation’s response to COVID-19, until further notice, HHS will not take enforcement action against any health insurance issuer that amends its catastrophic plans to provide pre-deductible coverage for services associated with the diagnosis and/or treatment of COVID-19.

Please see https://www.cms.gov/CCIIO/Resources/Files/Catastrophic-Coverage-of-COVID-19.pdf.

Needless to say, the law and guidance are rapidly evolving in this area. Please check with your Fraser Trebilcock attorney for the most recent updates.

This alert serves as a general summary, and does not constitute legal guidance. Please contact us with any specific questions.

Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 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 elatchana@fraserlawfirm.com.

Client Alert: 2020 Adjustments for ACA’s OOP Limits, Penalty Amounts, and Affordability

Government has Issued the 2020 Adjustments for ACA’s OOP Limits, Penalty Amounts, and Affordability

HHS Announces OOP Limitations for 2020

With the passage of the Affordable Care Act (ACA), group health plans became required to apply an out-of-pocket limitation to certain in-network benefits… meaning that once an individual or family out-of-pocket (OOP) limit was met, the plan could not charge additional OOP costs for essential health benefits. These OOP limits include both the plan’s deductible as well as cost-sharing amounts for essential health benefits (EHB) in-network as set forth under the ACA.

Although self-insured plans and large-group insured plans are not required to cover all EHBs (while small-group insured plans are), to the extent they do, in-network OOP expenses for EHBs cannot exceed the maximum OOP limit. Additionally, group health plans may not impose annual or lifetime dollar limitations on EHBs whether offered in-network or out-of-network.

The Department of Health and Human Services (HHS) has released the 2020 plan year inflation-adjusted OOP limits applicable to non-grandfathered plans.

  • Self-only coverage:      $8,150 (was $7,900 for 2019)
  • Family coverage:         $16,300 (was $15,800 for 2019)

See https://www.govinfo.gov/content/pkg/FR-2019-04-25/pdf/2019-08017.pdf.

Employers with non-grandfathered group health plans must update their maximum annual OOP limits.

These rules do not apply to ACA grandfathered plans. [Please note that these cost-sharing limits are different than the maximum out-of-pocket limits for purposes of being HSA-qualifying high deductible health plans.]

HHS Announces ACA Employer Mandate (Pay or Play) Penalty Amounts for 2020

Under the ACA, applicable large employers must offer certain group health plan coverage to their full-time employees; otherwise they will risk significant penalties.

Applicable large employers are those who employ 50 or more full-time or full-time equivalent employees in the preceding calendar year. Employees of related employers (within a controlled group or affiliated service group) are counted in this determination.

  • Part A requires employers to offer minimum essential coverage to 95% of their full-time employees.  See Section 4980H(a).
  • Part B requires the offered coverage be affordable and meet the minimum value standards.  See Section 4980H(b).

Specifically, the Part A Penalty is imposed on an employer who fails to offer minimum essential coverage (MEC) to at least 95% of the employer’s full-time employees (FTEs) and dependents as defined under the ACA, and if one of its FTEs receives subsidized coverage through the Marketplace or public health insurance exchange. The penalty amount is multiplied by the number of FTEs, minus 30. Special rules exist for applicable large employer members which are part of a controlled group.

The Part B Penalty amount is imposed on an employer who fails to offer coverage that meets the minimum value (MV) requirements or fails to be affordable, again as defined under the ACA, with respect to each one of its FTEs who receives subsidized coverage through the Marketplace or public health insurance exchange.

The Department of Health and Human Services (HHS) has released the 2020 inflation-adjusted penalty amounts under the Affordable Care Act’s Employer Shared Responsibility Mandate (Pay or Play):

  • Part A Penalty:                  $2,570 (was $2,500 for 2019)
  • Part B Penalty:                  $3,860 (was $3,750 for 2019)

Specifically, HHS finalized the premium adjustment percentage as 1.2895211380 for the 2020 benefit year, which is then multiplied by the original 2015 penalty amounts (Part A was $2,000 and Part B was $3,000) and rounded down to the nearest multiple of ten.

By way of example, an employer with 200 FTEs who fails to offer MEC to 95% of those employees (and if at least one of those FTEs receives subsidized coverage through the Marketplace or an exchange), the penalty assessed for the year will be $436,900 (200-30 = 170 x $2,570).  The larger the employer, the larger the penalty.  If the same employer offers coverage to 95% of its FTEs but that coverage is not affordable or doesn’t provide minimum value, the penalty assessed will be based on the number of employees who receive subsidized coverage through the Marketplace or an exchange.  If 20 FTEs receive subsidized coverage for each month of the year, the 2020 penalty would be $77,200 ($3,860 x 20).

Affordability Rates for 2020

As discussed above with respect to ACA penalties, an applicable large employer who does not offer affordable employer-sponsored group health plan coverage could face steep penalties.

For 2020, the ACA affordability requirement applies to the lowest-cost self-only coverage option that offers minimum value and must not exceed 9.78 percent of an employee’s household income. Please see Rev. Proc. 2019-29. https://www.irs.gov/pub/irs-drop/rp-19-29.pdf. This is a decrease from 2019 (which was 9.86%).

As it is difficult to determine an employee’s household income, three safe-harbors are available for employers to use to determine affordability:

  1. Form W-2, based on an employee’s W-2 wages as reported in Box 1;
  2. Rate of Pay, based on the employee’s hourly wage rate, multiplied by 130 hours per month; and
  3. Federal Poverty Line, based on the individual federal poverty level as of six months prior to the beginning of the plan year, divided by 12…

The reduction in the affordability percentage may likely mean that employers will have to reduce what employees pay for self-only coverage in order to maintain compliance, depending on what safe-harbor the employer uses.

Employers must be sure to carefully consider the safe harbors available and calculation of the lowest-cost employee coverage that should be charged.

Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2019 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 elatchana@fraserlawfirm.com.

New Requirements for Nursing Facilities Under the Affordable Care Act

Compliance, Quality Assurance & Performance Improvement Programs for Skilled Nursing Facilities and Nursing Facilities

Continue reading New Requirements for Nursing Facilities Under the Affordable Care Act