More healthcare-related regulatory news for plan sponsors, including links to detailed information.
“Doc fix” bill to call for means testing of higher-income Medicare beneficiaries
A bipartisan, bicameral agreement on legislation to permanently repeal the Medicare physician payment formula—the “sustainable growth rate” (SGR)—was introduced in the House and Senate on March 19, with House and Senate leaders hoping to clear the proposal before the April 1 date when doctors would otherwise face a 21% cut to the reimbursements they receive under Medicare. The “doc fix” has been extended numerous times in the past via temporary patches without revenue offsets; the new proposal (unnumbered) reportedly includes some revenue raisers, in the form of “means testing” for more affluent Medicare recipients. The agreement is expected to cost about $200 billion (over 10 years), but only about $70 billion would be offset.
The initial legislative language released does not include the revenue provisions. However, documents released earlier from the bill’s negotiating team indicated that the $70 billion in offsets would be split between Medicare providers and beneficiaries. On the beneficiary side, the documents suggested phasing in a requirement that higher-income beneficiaries (possibly, for example, individuals/families with incomes of $133,000/$260,000) pay more for Medicare Parts B and D benefits and that beneficiaries pay more out-of-pocket expenses before Medigap supplemental policies pay out (i.e., it would prohibit first-dollar Medigap policies).
House approves bill exempting volunteer firefighters from ACA mandate
On March 16, the U.S. House voted 415-0 to approve the Protecting Volunteer Firefighters and Emergency Responders Act (H.R.1191), sending the bill to the Senate.
The bill would amend the tax code to exclude services rendered by bona fide volunteers providing firefighting and prevention services, emergency medical services, or ambulance services to a state or local government or a tax-exempt charitable organization from the category of “employees.” The Patient Protection and Affordable Care Act (ACA) mandates that large employers provide minimum essential healthcare coverage.
The bill defines “bona fide volunteer” as having compensation only in the form of reimbursement for (or reasonable allowance for) reasonable expenses incurred in the performance of volunteer services; or reasonable benefits (including length-of-service awards) and nominal fees customarily paid by similar entities for the services of volunteers.
By regulations, the Internal Revenue Service (IRS) already does not count volunteer fire departments or ambulances as employers under the ACA mandate, so the bill puts into law what the regulations provide.
Treasury, DOL, HHS release final rule on excepted benefits
The U.S. Departments of the Treasury, Labor (DOL), and Health and Human Services (HHS) have issued a final rule on excepted benefits to specify requirements for limited wraparound coverage to qualify as an excepted benefit.
The final rules permit group health plan sponsors, in limited circumstances, to offer wraparound coverage to employees who are purchasing individual health insurance in the private market, including in the health insurance marketplace. The rule sets forth two pilot programs for limited wraparound coverage. One pilot allows wraparound benefits only for multistate plans in the health insurance marketplace. The other allows wraparound benefits for part-time workers who enroll in an individual health insurance policy or in basic health plan coverage for low-income individuals established under the ACA. These workers could, under existing excepted benefit rules, qualify for a flexible spending arrangement (FSA) alternative to this wraparound coverage.
The final rules give employees who otherwise may not be able to get employer-based benefits access to high-level benefits.
To read the entire final rule, click here.