November Compliance Recap
November brought several developments of interest to group health plans.
Revised Dates for Open Enrollment in the Health Marketplaces/Exchange and Individual Penalties
The White House and HHS have announced that individuals who enroll in the marketplace by Dec. 23, 2013, will be eligible for coverage as of Jan. 1, 2014. (The original deadline was Dec. 15.) Open enrollment for 2014 coverage will remain open until March 31, 2014. However, because time is needed to process applications, coverage elected in late March will not be effective until May 1, 2014. HHS has issued a Q&A that says the 2014 individual mandate penalty will not be applied to people who enroll in the health marketplace by March 31, 2014. (This extension does not apply to coverage purchased outside the marketplace. However, there is an extension to obtain coverage until the start of the plan year for employees and dependents that are eligible for coverage through an employer that has a non-calendar year plan.) Open enrollment for 2015 has been changed to Nov. 15, 2014, through Jan. 15, 2015.
Transitional Reinsurance Fee
HHS has said that it intends to propose that the reinsurance and administration portion of the transitional reinsurance fee will be collected at the beginning of the year and the treasury portion of the fee at the end of the year. This would seem to mean that about $52.50 of the $63 per covered person fee for 2014 will be due in January 2015 and the remaining $10.50 in late 2015.
Additional Coverage Considered Minimum Essential
Non-citizens who are legally in the U.S. are required to have health coverage, or the individual mandate penalty will apply. HHS will allow coverage through a foreign plan to be considered minimum essential coverage if the foreign plan covers services provided in the U.S. Similarly, while U.S. citizens who are abroad generally must have minimum essential coverage, coverage under a foreign policy will be treated as minimum essential coverage. An employer/plan sponsor that offers this type of coverage must provide a notice to affected U.S. employees stating that the coverage is considered minimum essential coverage and include it in its information reporting to the IRS. (A model notice is not available.)
HHS has also clarified that employer-sponsored coverage will be considered minimum essential coverage for non-employee business owners covered under the plan (such as sole proprietors, LLC members and partners) and their covered dependents. While this interpretation is not surprising, the employer/plan sponsor must provide a notice to affected owners stating that the coverage is considered minimum essential coverage and include it in its information reporting to the IRS.
Question of the Month
Are the requirements for reporting health costs on W-2s the same for 2013 as they were for 2012?
Yes. The exemptions that were in effect for 2012 reporting remain in effect for 2013. This means that employers that filed fewer than 250 W-2s in 2012 are not required to show the cost of the employee's health coverage on their 2013 W-2 (issued in January 2014). Multiemployer plans also are not required to report on employees who have coverage through a collectively bargained multiemployer plan (although they will need to report the cost of coverage for employees for whom the employer directly provides coverage if it issued 250 or more W-2s in 2012.) Reporting on health reimbursement arrangements (HRAs) also remains optional.