President Trump signed a short-term spending bill into law on January 22, 2018 after its passage in the House and Senate. While the primary purpose of the bill was to end the Federal government shutdown and fund government operations through February 8, 2018, the bill also included several provisions related to broader health policy:
 
A.  The Children’s Health Insurance Program (CHIP) is extended for six years.  Federal funding had previously ceased on September 30, 2017.
 
B.  Three health taxes created under the Affordable Care Act are temporarily suspended or delayed:
 
1.  Excise Tax on High-Cost Health Coverage:
The effective date of the 40% excise tax on health coverage exceeding certain thresholds (commonly referred to as the Cadillac Tax) is postponed from January 1, 2020 to January 1, 2022.  The multiemployer threshold for computing the excise tax was set at $27,500 per year based on a January 1, 2018 effective date and is expected to be adjusted for inflation.
 
Both fully insured and self-funded health funds, including retiree only funds, are subject to this excise tax.  Projected retiree medical liabilities that included this tax for 2020 and 2021 will now be lower, as the tax amounts for these years will now be removed from the liability calculation.
 
2.  Health Insurer Fee for Fully Insured Plans:
This bill suspends the insurer tax for calendar year 2019.  The insurer fee, which began in 2014, was temporarily suspended in 2017 before being re-implemented for 2018.  As a result, fully insured funds with 2019 renewals should see lower premium levels than they would otherwise have seen. 
 
3.  Medical Device Tax:
The 2.3% medical device excise tax began on January 1, 2013 and is imposed on manufacturers and importers of certain medical devices. The tax was suspended for 2016 and 2017 and was slated to return for 2018.  This bill further suspends the tax for calendar years 2018 and 2019.

Horizon Actuarial Services, LLC has six consultants slated to speak at the International Foundation of Employee Benefit Plans’ (IFEBP) 61st Annual Conference in Honolulu in November. The conference is expected to draw over 5,000 attendees.

Cary Franklin will participate in three sessions for the Trustees Masters Program: “Using Fund Professionals Wisely,” ”Case Studies” and “Open Issues & Future Challenges.” Additionally, Cary will conduct a session at the main Annual Conference titled “Understanding the Actuary’s Math.” This session is intended to help Trustees and others gain insight into what their actuaries are saying.

Aruna Vohra will also speak at the Trustees Masters Program on “Retiree Health Care Exchanges.” At the main Annual Conference, Aruna will facilitate the “Health and Welfare Case Study” and answer questions on hot topics affecting the industry. In addition, she will be a co-speaker at the session “ACA—The Devil is in the Details.”

Stan Goldfarb will lead a workshop titled “Emerging Pension Issues,” covering a variety of topics, including participants working past normal retirement age, recovering overpayments, PBGC premiums, national pension efforts, frozen plans and bankruptcies and pensions.

Mary Ann Dunleavy will serve on a panel “Working Effectively with Your A-Team”, discussing how to best work with fund professionals, including participation at trustees’ meetings, managing priorities, understanding expectations and professional standards, reliance on counsel and efficient communications.

Jason Russell will present “Directions in Defined Benefit and Defined Contribution Plans,”  highlighting the research of the International Foundation and Horizon Actuarial Services regarding retirement plan trends. Jason will also appear at “Ask the Actuaries/Consultants,” giving participants an open forum to pose questions and share information.

A listing of the speakers and sessions can be downloaded via the link below.

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    Horizon Actuarial 2015 IFEBP Speaker List
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Additionally, Stephanie Patrick contributed a chapter to the IFEBP’s book “Self-Funding Health Benefit Plans” titled “The Role of the Actuary and Actuarial Considerations.” This timely book, edited by John C. Garner, provides a comprehensive look at how self-funded plans will be affected by the latest industry issues, including the Affordable Care Act. The book will be available for purchase at the conference’s bookstore.

We look forward to seeing you at the  IFEBP 61st Annual Conference.

On June 17, 2015, the Internal Revenue Service (IRS) and Pension Benefit Guaranty Corporation (PBGC) issued guidance on the Multiemployer Pension Reform Act of 2014 (MPRA), which was signed into law last December.

The IRS’s guidance comes in the form of a revenue procedure regarding the application and approval process for benefit suspensions under MPRA.  The IRS has posted the revenue procedure on its website.  The revenue procedure was issued in conjunction with temporary and proposed regulations providing guidance on benefit suspensions.

The PBGC’s guidance comes in the form of an interim final regulation on the partition rules under MPRA.  The PBGC has posted a press release regarding the regulation on its website, which includes a link to the regulation itself.  The regulation provides guidance on the process of applying for a partition, including information required from the plan sponsor as part of the application.

The Patient Protection and Affordable Care Act ("ACA") contains complex rules regarding employer shared responsibility, often called the “pay or play” requirement.  These rules require employers to offer minimum essential health coverage to full-time employees, or pay a penalty if even one employee receives a subsidy in the public insurance exchange.  There has been some guidance from the Internal Revenue Service (IRS) and Department of Labor (DOL) on these rules, but very little of it specifically addresses issues affecting multiemployer health and welfare plans.

​Proposed regulations issued by the IRS on December 27, 2012 contained a transition rule that provided limited relief through 2014 for employers who contribute to multiemployer health and welfare plans.  The IRS requested comments on its proposed regulations by March 18, 2013, with a public hearing scheduled for April 23, 2013.

In response to the IRS’s request for comments, Horizon Actuarial Services, LLC and the Mechanical Contractors Association of America (MCAA) prepared a joint letter asking that there be a general exemption for collectively-bargained employees who are covered under multiemployer health and welfare plans. The letter noted that multiemployer plans have unique characteristics, and they play a very important role in providing comprehensive health coverage to thousands of workers and their families.  The letter also commented on issues regarding the transition rule through 2014 and additional issues that will arise in 2015 and beyond, after the transition rule expires.

A copy of the letter can be found below.

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       MCAA/Horizon Comments to IRS on ACA
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The following is a summary of information posted on the DOL website.

The Departments of Health and Human Services (HHS), Labor and the Treasury (the Departments) just released a Frequently Asked Question (FAQ) regarding implementation of the market reform provisions of the Patient Protection and Affordable Care Act (PPACA).  This FAQ answers a question about the timeline of Summary of Benefits and Coverage requirement under PPACA.
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Like previously-issued FAQs, this FAQs answer questions from stakeholders to help people understand the new law and benefit from it, as intended.  The Departments anticipate issuing further responses to questions and issuing other guidance in the future.  The question and their answer is reproduced below and can also be found on the DOL website.

Question: On August 22, 2011, the Departments issued proposed regulations and proposed templates in connection with implementation of the Summary of Benefits and Coverage and Uniform Glossary requirements of PHS Act § 2715.  An applicability date “beginning March 23, 2012” was proposed. At the same time, the Departments invited comments generally, as well as on a range of discrete issues, including the timing of the application of the SBC requirement.

My plan anticipates that preparation of the summary of benefits and coverage will take several months and require significant resources. In light of the March 23, 2012 proposed applicability date, we are considering moving forward with implementation of the Summary of Benefits and Coverage requirements, using the proposed rules and templates, but are concerned that the final rules and templates will differ from the proposed rules and templates, which would prompt additional implementation costs. What is the timeline for the issuance of future guidance on the summary of benefits and coverage? What actions should my plan be taking now, if any?

Answer: The Departments received many comments on the proposed regulations and templates and intend to issue, as soon as possible, final regulations that take into account these comments and other stakeholder feedback.

PHS Act section 2715 provides that group health plans and health insurance issuers shall provide the Summary of Benefits and Coverage and Uniform Glossary pursuant to standards developed by the Departments. Accordingly, until final regulations are issued and applicable, plans and issuers are not required to comply with PHS Act section 2715.
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It is anticipated that the Departments’ final regulations, once issued, will include an applicability date that gives group health plans and health insurance issuers sufficient time to comply.

The Patient Protection and Affordable Care Act (PPACA) created the Community Living Assistance Services and Support (CLASS ACT) program as a way to provide better long-term care insurance options.

However, after 19 months of analysis, HHS has determined that they are not able to implement a financially sustainable, voluntary, self-financed long-term care insurance program.
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The October 14, 2011 letter from HHS Secretary Kathleen Sebelius to Congress discussing the findings is posted on the HHS website.

On August 17, 2011, the Departments of Labor, Health and Human Services (HHS), and Treasury released proposed regulations regarding the Patient Protection and Affordable Care Act (PPACA) requirement to distribute a uniform explanation of coverage.  The new rules are intended to provide individuals with more useful information to enable them to better understand their options when making coverage and enrollment decisions.

Two New Forms

Under the new rules, health plans will be required to provide their participants with two new forms: (1) an easy-to-understand “Summary of Benefits Coverage” (SBC) and (2) a standard glossary of commonly-used health care plan terminology.  The new rules also require health insurers to provide these forms to their customers.

A notable requirement of the new SBC is that it must include “coverage examples” that describe coverage and cost sharing for certain common health care scenarios.  Currently, the three scenarios required on the SBC are having a baby, treating breast cancer, and managing diabetes.

A template of the SBC can be found on the Department of Labor website.  The four-page uniform glossary of terms that must be provided to all participants can also be found on the Department of Labor website.

Effective Date and Compliance

The new rules will take effect on March 23, 2012, and they will apply to all group health plans, both grandfathered and non-grandfathered.  Health plans must provide these new forms to participants as part of any package of materials that is sent to them prior to their first enrollment in coverage, and 30 days prior to their re-enrollment or renewal of coverage.  They must also provide the new forms upon request, within seven days.

If there is a material modification in any of the terms of the plan that would affect the content of the SBC, the plan must provide notice of the modification to enrollees not later than 60 days prior to the date on which such modification will become effective.

Plans may be imposed a fine of up to $1,000 for each instance of willful non-compliance. In calculating the amount of the penalty, each failure with respect to an individual participant or beneficiary is considered a separate offense.

Public Comment and Where to Get More Information

The proposed regulations are open to public comment through October 21, 2011.  For more information on making comments, refer to the proposed regulations.

A news release regarding the proposed regulations and other information (both regarding the proposed regulations and other aspects of PPACA) can be found on the Department of Labor website.  A fact sheet of the new requirements can be found at HealthCare.gov.

The Centers for Medicare & Medicaid Services (CMS) have announced new a Cost Threshold and Cost Limit under the Early Retiree Reinsurance Program (ERRP).  The new Cost Threshold will be $16,000, up from the current level of $15,000.  The new Cost Limit will be $93,000, up from $90,000.  The new Threshold and Limit are effective for plan years beginning on or after October 1, 2011.

The CMS also recently issued new guidance for plans on how to comply with the maintenance of contribution requirement under the ERRP. The guidance provides flexibility in satisfying the requirement, while also helping to ensure that a plan does not violate the prohibition against using ERRP reimbursement as general revenue. To the extent a plan is unable to use the maintenance of contribution approaches described in the new guidance, the plan may demonstrate compliance in other ways, provided that upon audit the plan can demonstrate how its approach is consistent with the ERRP statutory and regulatory requirements.

The guidance identifies the plan years for which a plan must comply with the maintenance of contribution requirement, the costs that are to be used to determine the level of contribution toward the plan, the baseline period that may be used to determine the required contribution level, and various methodologies a plan may utilize to measure the maintenance of contribution. Examples are also provided in the guidance.

Plans participating in ERRP should evaluate their maintenance of contribution approaches in light of this new guidance.

This is a summary of the guidance.  A more detailed explanation can be found on the Towers Watson website.



Horizon Actuarial Services, LLC is an independent company and is not affiliated with Towers Watson.

On August 1, 2011, the Department of Health and Human Services (HHS) amended an interim final regulation on the Patient Protection and Affordable Care Act (PPACA) to expand the list of preventative women’s services. The new services were added based on recommendations by the independent Institute of Medicine (IOM), which was commissioned determine what preventive services are necessary for women’s health and well-being.

The new services must be covered without cost-sharing by non-grandfathered health plans, regardless of whether they are insured or self-insured.

The following eight (8) categories of women’s services are now included on the list of mandatory preventive services:

1. well-woman visits
2. gestational diabetes screening
3. HPV DNA testing
4. sexually-transmitted infection counseling
5. HIV screening and counseling
6. FDA-approved contraception methods and contraceptive counseling
7. breastfeeding support, supplies and counseling
8. domestic violence screening and counseling

Non-grandfathered group health plans will need to provide these additional preventive services for plan years beginning on or after August 1, 2012. For calendar year plans, this means compliance is required beginning January 1, 2013.

There will be a cost impact for plans that do not currently cover these services and for plans that currently impose cost sharing on these services or supplies (e.g., contraceptives). In addition, plan documents and SPDs will need to be amended to reflect coverage of these new preventive items and services.

Public comments on this amendment to the preventive service interim final regulation are due October 3, 2011.
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This is a summary of the guidance.  A more detailed explanation can be found on the Towers Watson website.


Horizon Actuarial Services, LLC is an independent company and is not affiliated with Towers Watson.