USA: Alliant Compliance Fast Facts & FAQ – August 5 2016

Asinta’s partner in the United States, Alliant, has provided us with the following information.

Proposed ACA Reporting Rules Regarding HRAs and SSN Solicitation

Proposed regulations were issued clarifying the employer requirement to solicit a Taxpayer Identification Number (generally the Social Security Number) and what to do in the case of missing or incorrect TINs. In addition, proposed regulations were issued that would incorporate guidance from IRS Notice 2015-68 regarding HRA reporting. We are in the process of reviewing these materials and will issue a client alert in the next few days.

New Instructions for Forms 1094/1095C

As you may recall, the IRS released updated draft Forms 1094C and 1095C last month, and has now issued draft instructions to go along with them. The new instructions contain some helpful clarifications and additions, highlighted below.

· Multiemployer Plan Relief Extended for 2016. The draft instructions for Form 1095-C, Line 14 extend the existing interim relief for multiemployer plans for another year. The instructions state that this approach may change for 2017 and later years.

· Reporting “Conditional” Offers of Spousal Coverage (e.g., offer of coverage to an employee’s spouse only if the spouse is not eligible under a plan sponsored by another employer). Two new codes were added for this purpose (1J and 1K) to be used on Form 1095-C, Line 14.

· COBRA and Retiree Coverage. The draft instructions clarify (1) how to report for the month in which an employee terminates and (2) that an employer is treated as having made an offer to the employee’s dependents for an entire plan year if the employer provided the employee an effective opportunity to enroll dependents at least once for the plan year, even if the employee declined to enroll the dependents in the coverage (and as a result, the dependents did not receive an offer of COBRA coverage.) The draft instructions also confirm that an offer of non-COBRA retiree coverage to a former employee (or the employee’s spouse or dependents) should not be reported as an offer of coverage on Form 1095-C, Line 14.

In addition to these substantive changes, there were other modest changes to the definitions section and to remove content related to transition relief items that have since expired.

New HHS Resources on Section 1557 Nondiscrimination Rule Compliance

HHS has released a variety of new resources to help plans subject to the ACA’s Section 1557 non-discrimination requirements comply. Section 1557 prohibits discrimination in certain health programs and activities on the basis of race, color, national origin, sex (including gender and gender identity), age, or disability. Final regulations implementing Section 1557 apply to health programs and activities funded or administered by HHS including federal and state Exchanges, Exchange insurers, and providers that receive reimbursements through Medicare or Medicaid. The new resources include: an enforcement summary with specific case enforcement examples and resolutions, a 3 page summary of the rule, fact sheets on key provisions of the rule, and additional translated resources. HHS also released a Section 1557 slide deck and presenter’s guide.

We should continue to assess our self-funded plans to see which plans have a blanket transgender exclusion and inquire about any ties to federal funds (like hospital clients accepting Medicare and Medicaid payments). Also, for plans without blanket exclusions we should ask how TPAs process claims related to gender dysphoria and generally about their approach to complying with Section 1557. The new HHS resources are available here.

FAQ of the Week

Q. My client has a general purpose FSA that runs on a calendar year plan, however their medical plan runs on a 10/1 plan year. This year my client is implementing a CDHP with an HSA. For employees enrolled in the FSA plan, when will they be eligible for HSA contributions?

A. Employees enrolled in the general purpose FSA are ineligible for HSA contributions for the entire FSA plan year (ending 12/31/16). If the FSA plan has a grace period, the employee is ineligible for HSA contributions during the entire grace period if they have any money in their FSA at the beginning of the grace period. However, if their FSA account is $0 at the beginning of the grace period, they could ignore the grace period and would be HSA eligible at the end of the FSA plan year, or 1/1/2017.

Thanks again to Alliant for providing us with this content!