Viewing posts from: March 2015

New SBCs Delayed until January 1, 2016

Posted March 30, 2015 by PHaynes


SBC Used delayed until Jan 1, 2016 PPACA FAQs XXIV

You may have read our December 2014 blog-post about how these new SBCs will be different from our current ones.  Now, you’ll have the remainder of 2015 to work through those changes.

Set out below is an additional Frequently Asked Question (FAQ) regarding implementation of the Affordable Care Act. This FAQ has been prepared jointly by the Departments of Labor, Health and Human Services, and the Treasury (collectively, the Departments). Like previously issued FAQs (available at and, this FAQ answers questions from stakeholders to help people understand the Affordable Care Act and benefit from it, as intended.

Summary of Benefits and Coverage

Public Health Service (PHS) Act section 2715, as added by the Affordable Care Act and incorporated by reference into the Employee Retirement Income Security Act and the Internal Revenue Code, directs the Departments to develop standards for use by a group health plan and a health insurance issuer offering group or individual health insurance coverage in compiling and providing a summary of benefits and coverage (SBC) that “accurately describes the benefits and coverage under the applicable plan or coverage.”  On February 14, 2012, the Departments published joint final regulations to implement the disclosure requirements under PHS Act section 2715 and an accompanying document announcing the availability of templates, instructions, and related materials.(1) After the 2012 final regulations were published, the Departments released six sets of FAQs regarding implementation of the SBC requirements.(2) After consideration of the comments and feedback from interested stakeholders, on December 30, 2014, the Departments published a notice of proposed rulemaking, as well as a new set of proposed SBC templates, instructions, an updated uniform glossary, and other materials.(3)

Q1. In the December 2014 notice of proposed rulemaking, the Departments proposed changes to the SBC regulations, as well as a new SBC template and associated documents.  Changes to the SBC regulations, template, and associated documents were proposed to apply beginning September 1, 2015.  When do the Departments intend to finalize changes to the regulations, SBC template, and associated documents?

The Departments intend to finalize changes to the regulations in the near future, which are intended to apply in connection with coverage that would renew or begin on the first day of the first plan year (or, in the individual market, policy year) that begins on or after January 1, 2016 (including open season periods that occur in the Fall of 2015 for coverage beginning on or after January 1, 2016).

The Departments also intend to utilize consumer testing and offer an opportunity for the public, including the National Association of Insurance Commissioners, to provide further input before finalizing revisions to the SBC template and associated documents.  The Departments anticipate the new template and associated documents will be finalized by January 2016 and will apply to coverage that would renew or begin on the first day of the first plan year (or, in the individual market, policy year) that begins on or after January 1, 2017 (including open season periods that occur in the Fall of 2016 for coverage beginning on or after January 1, 2017).

The Departments are fully committed to updating the template and associated documents (including the uniform glossary) to better meet consumers’ needs as quickly as possible.


  1. See final regulations, published at 77 FR 8668 (February 14, 2012) and guidance document published at 77 FR 8706 (February 14, 2012).
  2. See Affordable Care Act Implementation FAQs Part VII (available at and; Part VIII (available at and; Part IX (available at and; Part X (available at and; Part XIV (available at and; and Part XIX (available at and
  3. See proposed regulations published at 79 FR 78577 (December 30, 2014).
  4. See AP Benefit Advisors’ December 214 post about these new SBCs. 

Popular Benefits Legislation Blogs

Posted March 30, 2015 by Megan DiMartino

Rulings and documents pertaining to PPACA legislation have been released at a furious pace over the last few months, leaving many businesses struggling to catch up. Falling behind on benefits compliance can prove costly at a crucial time like this. Additionally, businesses that continue to offer leading-edge employee benefits retain the best and brightest in a competitive job market. Here are a few of the latest rulings and documents regarding benefits compliance for 2015 and beyond:

For more on upcoming benefits rulings and legislation, continue to visit our blog, or contact us.

EEOC – To offer wellness guidance (at last)?

Posted March 23, 2015 by PHaynes


WASHINGTON- The U.S. Equal Employment Opportunity Commission (EEOC) on March 20 voted to send a Notice of Proposed Rulemaking (NPRM) on the interplay of the Americans with Disabilities Act (ADA) and the Affordable Care Act (ACA) with respect to wellness programs to the White House Office of Management and Budget (OMB) for clearance.

This proposed rule, which was approved by a bipartisan vote, would amend the regulations implementing the equal employment provisions of the ADA to address the interaction between Title I of the ADA and financial incentives as part of wellness programs offered through group health plans.

The submission of the NPRM to OMB represents the start of the regulatory process. After OMB approval, the proposed rule will be published in the Federal Register for a 60-day public notice and comment period. The NPRM cannot be made public prior to its publication in the Federal Register.

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its web site at


Webinar: The Top 10 Affordable Care Act and IRS Compliance Issues for 2015

Posted March 23, 2015 by Megan DiMartino

Join AP Benefit Advisors General Counsel and Vice President-Compliance, Patrick Haynes, as he reviews the top 10 Affordable Care Act and IRS compliance issues facing employers in 2015. Nuances relating to electronic distribution rules, FSA requirements, definition changes and premium tax credit reconciliation discrepancies will be discussed in this complimentary webinar. Topics to be discussed include:

  • ACA Employer Mandate Reporting: IRS Forms 1094/1095
  • Wellness Program Compliance Issues (HIPAA, GINA and PPACA)
  • Definition changes – Spouse, Domestic Partner, Civil Union, etc.
  • Health Care FSAs: Grace Periods, Rollover & Run-Out Periods
  • Opt-out Credit Guidance – major impact on PPACA Affordability Testing
  • And 5 additional ACA/IRS compliance issues

​Open to all HR professionals – but not brokers, agents, TPAs
This is NOT an HRCI pre-approved webinar – credits Do Not apply.

Date & Time: Tue, Mar 31, 2015 12:00 PM – 12:35 PM EDT

Space is limited – click on this link  to register:

​Open to all HR professionals – but not brokers, agents, TPAs, PEOs

IRS Releases Publication 969 – Ready for Tax Season

Posted March 20, 2015 by PHaynes

The IRS’ latest version of Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans has been published to their website.

IRS_Publ_969Publication 969 provided general rules for:

  • HSAs – Health Savings Accounts
  • HCFSAs – Health Care Flexible Spending Arrangements/Accounts
  • HRAs – Health Reimbursement Arrangements
  • MSAs – Medical Savings Accounts

What’s new for 2014?

There are no major changes for the 2014 tax year.  The IRS did add references to IRS Notice 2013-54 and 2015-17, which provide guidance on health care reform’s application to HCFSAs and HRAs.  Also, they revised the publication to include the HSA contribution limits and HDHP OOPMaxes (Out Of Pocket Maximums that Qualified High Deductible Health Plans may use).


HHS Explains Application of Annual Cost-Sharing Limit to Family HDHP Coverage

Posted March 16, 2015 by Megan DiMartino


HHS has posted an FAQ explaining how the annual cost-sharing limit under healthcare reform will affect high-deductible health plan (HDHP) coverage. In the preamble to final 2016 parameters regulations issued last month, HHS established that the cost-sharing limit for self-only coverage should apply to all covered individuals, whether or not they are covered by a self-only plan. The new FAQ explains the agency’s position by applying it to a hypothetical HDHP with a $10,000 family deductible.

The FAQ notes that under the HSA rules, HDHP family coverage cannot provide any benefits until covered expenses (other than for preventive care) exceed the minimum annual deductible for family coverage. For 2015, that minimum family deductible is $2,600. (A plan could have an embedded individual deductible, but it would have to be higher than the family minimum.) But family HDHP coverage could impose a much higher deductible. (We note that the deductible could not, however, exceed the HDHP out-of-pocket maximum for family coverage, which is $12,900 for 2015.) For example, if the HDHP had a family deductible of $10,000—higher than the self-only annual limit on cost sharing ($6,600 for 2015)—the plan would have to begin covering the expenses of any family member whose expenses exceeded the self-only annual cost-sharing limit, notwithstanding the plan’s higher family deductible. The FAQ indicates that this policy applies starting in the 2016 plan year (when the self-only annual limit on cost-sharing will increase to $6,850). To view the FAQ, click on the PDF below.

This interpretation of health care reform’s annual cost-sharing limitation effectively embeds an individual out-of-pocket limit in all family group health plans with a higher family deductible—whether or not the high-deductible coverage is meant to make employees HSA-eligible. (The annual cost-sharing limit on spending for covered essential health benefits applies to all non-grandfathered, nonexcepted group health plans, as the PHSA provision is incorporated by reference into both the Code and ERISA.) That will likely affect plan costs, so it will probably require sponsors and insurers to reconsider and adjust benefits, premiums, or both. Given the significance of this policy, we wonder why it was articulated only in the preamble to the regulations (making it harder to find), and not in the regulatory language itself. Whatever the reason, any doubt about the agency’s commitment to this position left by the regulations should be eliminated by this FAQ reinforcing the point. Fortunately, the FAQ makes it clearer that plans will not have to apply this rule until their 2016 plan years, so sponsors and insurers will have time to respond.

Cost Sharing FAQ

Court Rules Premium Increase Is Loss of Coverage for COBRA Purposes

Posted March 10, 2015 by Megan DiMartino


A federal trial court has ruled that a premium increase may be considered a loss of coverage for purposes of determining whether an employee has experienced a COBRA qualifying event. The case was brought by two employees who were suspended without pay and subsequently terminated. For both, coverage under their employer’s health plan automatically continued during their suspensions—a fact they first became aware of months later, upon receiving invoices for the full accumulated premium amount (both employer and employee contributions). The employees sued the employer (in its role as plan administrator) for failure to provide a timely COBRA election notice and for breach of fiduciary duty under ERISA. The employer argued that the employees did not experience a COBRA qualifying event at the time of suspension because they had a reduction of hours but no loss of coverage—rather, coverage continued until the employees either requested cessation of coverage or terminated employment. The employees claimed there was a loss of coverage because of the premium increase when they became obligated to pay both the employee and employer shares of their premiums.

The court ruled for the employees without a trial. While acknowledging the employer’s correct assertion that a reduction in hours alone is not sufficient to trigger a COBRA notice obligation, the court explained that the employer too narrowly construed “loss of coverage” as a loss of eligibility. The court agreed with the employees that the premium increase constituted a loss of coverage, citing IRS regulations under which losing coverage means ceasing to be covered under the same terms and conditions as in effect immediately before the qualifying event. Because the loss was triggered by the reduction in hours, the employees experienced a qualifying event, and the employer did not meet its COBRA notice obligations. The court further ruled that the employer’s failure to adequately inform the employees of the premium increase resulting from the suspension constituted a breach of its ERISA fiduciary duty, noting that a fiduciary is obligated to communicate material facts that participants need to know for their own protection. The court declined to assess penalties (because the employees’ complaint sought only the invalidation of the retroactive invoices) but stated that the employees were free to petition for further relief.

FMLA Final Rule Defines Spouse According to “Place of Celebration” Rule

Posted March 3, 2015 by Megan DiMartino

dept-of-laborThe DOL has issued a final rule revising the regulatory definition of “spouse” for purposes of the FMLA. Effective March 27, 2015, spousal status will be determined based on the marriage’s “place of celebration” rather than the employee’s “state of residence.” Under the place of celebration rule, all legally married couples will have consistent FMLA rights regardless of where they live. The final rule, which is unchanged from the proposed rule, expressly includes individuals in lawfully recognized same-sex and common-law marriages, including those validly entered into outside of the United States so long as they could have been entered into in at least one state.

The FMLA entitles eligible employees of covered employers to take a specified amount of unpaid, job-protected leave for certain family and medical reasons. The change in spousal definition means that eligible employees, regardless of state of residence, will be able to take FMLA leave to care for a same-sex spouse with a serious health condition, qualifying exigency leave due to a same-sex spouse’s covered military service, or military caregiver leave to care for a same-sex spouse who is a covered service-member with a serious illness or injury. The change also entitles eligible employees to take FMLA leave to care for the child of their same-sex spouse (i.e., the employee’s stepchild) regardless of whether the employee provides day-to-day care or financial support for the child (and thus stands “in loco parentis”). Similarly, leave may be taken to care for the same-sex spouse of an employee’s parent (i.e., the employee’s stepparent), regardless of whether the stepparent ever stood in loco parentis to the employee.

The final rule provides consistency for employers operating in multiple states and aligns the FMLA’s definition of spouse with other federal laws using the place of celebration rule. While most federal benefits laws are now administered using the place of celebration rule, some are still statutorily bound to the state of residence rule. The Supreme Court has agreed to address the constitutionality of state laws prohibiting same-sex marriage with a decision expected this June. A ruling in favor of same-sex marriage will eliminate the need for the place of celebration vs. state of residence distinction, while a ruling upholding states’ rights to ban same-sex marriage (or refuse to recognize same-sex marriages performed in other states) will leave the onus on federal agencies to determine how “spouse” will be defined for purposes of various federal laws.

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