Healthcare Reform Updates

CMS Extends Transition Relief for Non-Compliant Plans through 2019

On April 9, 2018, the Centers for Medicare & Medicaid Services (CMS) announced a one-year extension to the transition policy (originally announced November 14, 2013 and extended several times since) for individual and small group health plans that allows issuers to continue policies that do not meet ACA standards.  The transition policy has been extended to policy years beginning on or before October 1, 2019, provided that all policies end by December 31, 2019.  This means individuals and small businesses may be able to keep their non-ACA compliant coverage through the end of 2019, depending on the policy year.  Carriers may have the option to implement policy years that are shorter than 12 months or allow early renewals with a January 1, 2019 start date in order to take full advantage of the extension.

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Cadillac Tax Delayed Until 2022

What: On January 22, 2018, Congress passed and President Trump signed into law a two-year delay on the Affordable Care Act's 40 percent excise tax on high-cost employer-sponsored health coverage known as the Cadillac tax.

When: The Cadillac tax, was previously set to become effective in 2020. With the extension, this has been delayed until 2022. 

Who: The Cadillac tax will generally apply to the monthly cost of an employee's employer-sponsored health coverage that exceeds a threshold amount specified in the law. Generally, for insured coverage, the insurer is responsible for paying the tax. For self-insured coverage, the employer will be responsible for the tax. 

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DOL Releases Proposed Rule Expanding Association Health Plans

Earlier this month, the U.S. Department of Labor (DOL) issued a proposed rule to expand the opportunity of unrelated employers of all sizes (but particularly small employers) to offer employment-based health insurance through Association Health Plans (AHPs). This rulemaking follows President Trump’s October 12, 2017 Executive Order 13813, “Promoting Healthcare Choice and Competition Across the United States,” which stated the Administration’s intention to prioritize the expansion of access to AHPs.

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New Maryland Paid Sick Leave Law

The Maryland General Assembly voted on January 12, 2018 to override Governor Hogan’s veto of the “Maryland Healthy Working Families Act,” a bill that will require Maryland employers to provide “Earned Sick and Safe Leave” (ESS) to employees.  The law will go into effect on February 11, 2018 unless the General Assembly acts to delay its implementation.

The new paid sick leave law applies to all employers in the State of Maryland (including a unit of State or local government), regardless of size.  Employers with 15 or more employees will be required to provide employees with paid leave for the reasons listed below, and employers with fewer than 15 employees will be required to provide unpaid leave for those same reasons.  The number of employees is calculated by using the average monthly number of all employees (including full-time, part-time, temporary, and seasonal) who were employed during the immediately preceding 12 months.

Employers must allow employees to earn ESS at a rate of at least one hour for every 30 hours worked, up to 40 hours a year.  Employees may carry over ESS from year-to-year, although the carryover amount may be capped at 64 hours. The total amount of ESS that an employee may actually use in a year may also be capped at 64 hours.  As is the case with comparable laws in jurisdictions such as Montgomery County and the District of Columbia, employers may use Paid Time Off (“PTO”) plans to meet their Maryland ESS obligations.

Employees may take ESS for the following reasons:

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