Category Archives: Benefit news

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Guide for electronically filing ACA Information Returns for software developers and transmitters
The Internal Revenue Service (IRS) has published its Guide for Electronically Filing Affordable Care Act (ACA) Information Returns (AIR) for Software Developers and Transmitters (Processing Year [PY] 2018). The guide outlines the communication procedures, transmission formats, business rules, and validation procedures for information returns transmitted electronically through the AIR System.

For more information, click here.

Health insurance provider fee moratoriums released
The IRS has published questions and answers regarding the health insurance provider fees on its website. The posting offers perspective on several issues, including the following:

• Under the 2019 moratorium, is there a health insurance provider fee in 2019?
• Must Form 8963 be filed in the 2019 fee year?
• Do the 2017 or 2019 moratoriums affect the 2018 fee year?
• Does the 2019 moratorium apply to fee year 2019 or data year 2019?

For more information, click here.

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Proposed rule regarding association health plans
The Department of Labor (DOL) has issued a proposed rule under Title I of ERISA. The rule would broaden the criteria under ERISA section 3(5) for determining when employers may join together in an employer group or association that is treated as the “employer” sponsor of a single multiple-employer “employee welfare benefit plan” and “group health plan” as those terms are defined in Title I of ERISA.

To read the proposed rule, click here.

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Results of medical loss ratio for 2016
The Centers for Medicare and Medicaid Services (CMS) published a report summarizing the results of the medical loss ratio (MLR) data submitted by health insurance companies to the agency for group and individual market health insurance coverage in 2016.

To learn more, click here.

Actuarial value calculator and methodology for 2019
In a memorandum, the CMS announced the release of its 2019 Actuarial Value Calculator and Methodology.

For more information, click here.

IRS Letter 226J requesting “shared responsibility” payments under the ACA

If your human resources (HR) or finance team has received Internal Revenue Service (IRS) Letter 226J—which provides an initial estimate of the tax penalty for noncompliance in 2015 of the Patient Protection and Affordable Care Act (ACA) employer mandate—you should make every effort to respond within 30 days, indicating your agreement or demonstrating other facts that could reduce or eliminate the proposed tax penalty.

The IRS’s guidance on the Letter and penalties comes in the form of Questions & Answers (#55-58), “Making an Employer Shared Responsibility Payment.” In general, the guidance discusses the ACA’s requirements and provides information on how employers should respond to the Letter, with instructions on disagreeing with the IRS’s penalty determination and additional steps that group health plan sponsors may take, including appeals.

Here are a few key facts about the employer mandate:

• Employers are “applicable large employers” (ALEs) if they have at least 100 full-time employees. The ACA required ALEs to offer “affordable coverage” to at least 70% of these employees in 2015. The coverage percentage increased to 95% in 2016.
• Affordable coverage means that employee contributions for self-only coverage are less than 9.5% of the employee’s household income. The self-only cost is the marker in the ACA rules, even if the employee elected an option to cover more than just themselves under the health benefit plan. The rules permit use of an employee’s W-2 wages as a safe harbor substitute for the employee’s household income. In addition, your healthcare coverage must be the equivalent of at least a bronze-level plan on the health insurance exchange, covering 60% of the costs. This is known as minimum essential coverage (MEC).
• An ALE had to send IRS Forms 1095-C for 2015 to employees early in 2016 to use in their personal income tax filings. The Form 1095-C summarized the months in which you offered an employee (and qualified dependents) healthcare coverage. Concurrently, ALEs filed Forms 1094-C with the IRS. This form indicated the number of full-time employees who were offered coverage in 2015, either in each month or for the entire year.
• Based on the information in Forms 1095-C and 1094-C, the IRS determines the initial tax penalty for a failure to offer affordable coverage to 70% of full-time employees for at least one month during the year.

There are several other details ALEs must assess and examine, including new IRS Form 14764 (employer response form) and Form 14765 (a list of employees who allegedly caused the failure).

For information about and responding to the IRS’s Letter 226J, please contact your Milliman consultant.

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

Issues and challenges in measuring and improving the quality of healthcare
The Congressional Budget Office (CBO) released a new paper providing an overview of the current state of measuring healthcare quality. The agency uses the Medicare program to illustrate the key issues and challenges that arise in doing so.

To download the paper, click here.

Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) enforcement report published
The Centers for Medicare and Medicaid Services (CMS) has published a new report to increase transparency with respect to enforcement of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). Although CMS has taken action to ensure compliance with MHPAEA since its enactment in 2008, this report only includes MHPAEA investigations completed in 2016 and beyond.

To download the report, click here.


CMS proposed rules would impact Part D drug costs and plan designs

On November 16, 2017, the Centers for Medicare and Medicaid Services (CMS) released 713 pages of proposed changes to Medicare Advantage (MA) and the Medicare Part D prescription drug benefit. The proposed changes (file code CMS-4182-P) would take effect for contract year 2019 and are intended to manage utilization of opioids, reduce costs, and provide more plan choices. The updates present major changes to the way the programs operate. According to CMS, “the proposed changes would result in an estimated $195 million in savings a year for the Medicare program over 5 years (2019 through 2023).”

Some significant impacts on Part D that plans need to be aware of would include:

Midyear formulary changes: Plans would have more flexibility to immediately incorporate generic drugs as soon as they are available.

• Plans could assess the cost impact of each new generic drug based on member utilization to weigh against administration and disruption issues.
• This proposed rule could be significant, especially if the increases in generic approvals continue. According to Milliman’s internal research, there were about 14 and 31 significant first generic launches in 2015 and 2016, respectively. And this year the U.S. Food and Drug Administration (FDA) has continued to speed up the generic approval process.

Opioid treatment: Plans would be able to restrict access and manage opioid utilization. The proposed rules codify and expand upon the current Part D Opioid Drug Utilization Review Policy and Overutilizing Monitoring System.

Biosimilars: Plans would be able to categorize certain low-cost biosimilars as generics for low-income subsidy (LIS) cost sharing and non-LIS catastrophic cost sharing. Because the LIS copays in 2018 will be $3.35 for generics and $8.35 for brands, this is likely not to have a large impact on 1) lowering member costs, or 2) increasing biosimilar utilization.

Point-of-sale costs: The proposal includes a request for information (RFI) regarding applying price concessions and rebates at the point of sale, which could lower member cost sharing when taking brand medications that offer rebates, but may increase premiums and government cost.

Meaningful differences testing: With the elimination or modification of this testing, plans may be able to add more enhanced alternative Part D plans to their product portfolios in the same region.

A link to the Fact Sheet issued by CMS can be found here. CMS is accepting comments until January 16, 2018.