Showing 21 posts in Health Insurance Exchange.
The US Supreme Court's Ruling on the Affordable Care Act will not Change Employers' Responsibilities
On June 25, 2015, the Supreme Court of the United States issued a ruling related to the Patient Protection and Affordable Care Act (the "Act") in the case of King v Burwell. The issue that the Court addressed was whether tax credits were available to individuals who purchased health insurance coverage through a Health Insurance Exchange ("Exchange") that was established by the Federal government.
An Exchange serves as a marketplace where individuals can compare various health insurance plans and ultimately purchase health insurance coverage. The Act requires an Exchange to be established in each State. If a State fails to establish its own Exchange, the Federal government is required to step in and establish the Exchange for that State. The Court's decision had the potential to preclude tax credits for individuals purchasing insurance through the Federal Exchanges in 34 States, including Michigan.
This issue was of significant importance because of its implications for the Act's Employer Mandate, which generally requires large employers to offer health insurance coverage to their full-time employees. The tax credits provided under the Act serve as the lynchpin for liability under the Employer Mandate. Despite the fact that a large employer may fail to offer health insurance coverage to its full-time employees, it will not be penalized if those employees do not obtain coverage through the Exchange and receive a tax credit. Therefore, large employers located in States that have a Federal Exchange could arguably avoid penalties for their failure to offer coverage to their full-time employees; such employees would not receive a tax credit when purchasing health insurance coverage on the Exchange and would not trigger the penalty. Read More ›
On February 18, 2015, the Internal Revenue Service (“IRS”) provided further guidance related to the issue of how certain employer health insurance reimbursement arrangements are treated under the Affordable Care Act (“ACA”).
As we explained in a previous post, after the Health Insurance Marketplace opened for business, many employers recommended that their employees use it to purchase individual health insurance policies, with the promise that the premium costs would be reimbursed by the employer. In fact, such employee reimbursement strategies were aggressively marketed to employers as a solution to reduce costs and comply with the requirements of the ACA. Little did these employers (and marketers) know, such arrangements exposed the employers to significant penalties under the ACA.
Prior guidance made clear that such arrangements – whether funded on a pre- or post-tax basis – may be subject to the ACA’s market reforms. Employers that offer reimbursement arrangements that violate the ACA are subject to a $100 per day per affected employee penalty.
Reimbursing Individual Health Insurance Policy Premiums May Result in Significant Penalties for Employers
Employers, including municipal employers, have historically struggled to develop a health insurance benefit program for their employees that provides quality benefits and is cost-effective. After the Health Insurance Marketplace opened for business, many employers recommended that their employees use it to purchase individual health insurance policies, with the promise that the premium costs would be reimbursed by the employer. In fact, such employee reimbursement strategies were aggressively marketed to employers as a solution to reduce costs and comply with the requirements of the Patient Protection and Affordable Care Act (“ACA”). Little did these employers (and marketers) know, such arrangements exposed the employers to significant penalties under the ACA.
In September 2013, the IRS issued Notice 2013-54 that made clear that an employer arrangement that paid for employees’ individual health insurance policy premiums on a pre-tax basis violated the ACA. An employer that offered such an arrangement would be subject to a $100 per day per affected employee penalty ($36,500 per year, per employee).
On Nov. 7, the U.S. Supreme Court decided it would hear a case concerning the health insurance subsidies provided to millions of Americans under the Patient Protection and Affordable Care Act. A June 2015 decision is expected in the case of King v. Burwell, which challenges the Internal Revenue Service’s authority to regulate tax-credit subsidies for coverage purchased through health insurance marketplaces established by the federal government (such as the Michigan health insurance marketplace). Nationwide, more than four out of five people who have received coverage through a federal marketplace are getting a tax credit. Read More ›
In a recently released 26 page report the Department of Health and Human Services revealed that federal subsidies cover 76 percent of premiums for those who have signed up for coverage under the Affordable Care Act in the 36 federally administered markets. According to the Los Angeles Times, the total cost of subsidies could exceed $16.5 billion this year, which is significantly higher than the $10 billion cost that the Congressional Budget Office projected earlier this year. Read More ›
Categories: Health Care Reform, Health Insurance Exchange
Foster Swift health care attorneys are getting ready to attend the 20th Annual Health Law Institute March 6 and 7. The Institute provides attorneys with the opportunity to learn about the most recent statutory, regulatory, and case law developments in the health care industry. Co-sponsored by the Health Care Law Section of the State Bar of Michigan, this educational opportunity offers a range of presentations from numerous leaders in the health care legal community. Read More ›
Technical glitches. Partisan rancor. Breathless media coverage. The rollout of the online Health Insurance Marketplaces (also known as Exchanges) did not lack for drama or controversy. The unveiling of the Marketplaces, one of the key elements of the Patient Protection and Affordable Care Act, was perhaps the most anticipated and controversial website launch in history. The website www.healthcare.gov was flooded with traffic from the moment it opened on October 1, 2013 and many interested consumers ran into trouble. While most of the extensive media coverage of the Marketplaces focused on problems nationally, we wanted to take a look at how Michigan’s Marketplace (and consumers) fared. Read More ›
Categories: Health Care Reform, Health Insurance Exchange
On March 7 and 8, 2013, the members of Foster Swift’s Health Care Law Group attended the 19th Annual Health Law Institute. This two-day institute, which is co-sponsored by the Institute for Continuing Legal Education and the Health Care Law Section of the State Bar of Michigan, focused on recent legal developments in health care law. Specific topics addressed at this year’s Health Law Institute included: Read More ›
As previously discussed, the Patient Protection and Affordable Care Act requires employers to provide notice to their employees related to Health Insurance Exchanges (the “Notice”). The specifics concerning the Notice may be found here. The Notice was required to be given to each current employee not later than March 1, 2013. Read more about the delay ›
Over the past several weeks, the nation has seen a flurry of announcements issued by states as to how such states will implement and operate the health insurance exchanges (“HIE”) required by the Affordable Care Act. States have three options as to how they may run their HIEs: Read More ›
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