Healthcare Reform Updates

Court Vacates EEOC’s Wellness Program Incentives Rules Effective January 1, 2019

In an opinion dated December 20, 2017, in American Association for Retired Persons (AARP) v. EEOC, the federal court in the District of Columbia vacated, effective January 1, 2019, the portions of the final regulations that the EEOC issued last year under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) addressing wellness program incentives.  The current regulations will remain effective for 2018 while the EEOC reconsiders and promulgates new rules.

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IRS Extends Deadline for Furnishing Forms 1095, Extends Good Faith Transition Relief

The Internal Revenue Service (IRS) has released Notice 2018-6, extending the deadline for furnishing Forms 1095-B and 1095-C to individuals from January 31, 2018 to March 2, 2018, as well as penalty relief for good-faith reporting errors. 

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Massachusetts Releases Proposed Regulations on EMAC Supplement; HIRD Form Returns

On August 1, 2017, Massachusetts Governor Charlie Baker signed H.3822, which increases the existing Employer Medical Assistance Contribution (EMAC) and imposes an additional fee (EMAC Supplement) on employers with employees covered under MassHealth (Medicaid) or who receive subsidized coverage through ConnectorCare (certain plans offered through Massachusetts’ Marketplace).  The increased EMAC and the EMAC Supplement are effective for 2018 and 2019 and are intended to sunset after 2019. 

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IRS Updates Employer Mandate FAQs:  Indicates that Penalty Letters are Imminent

The Internal Revenue Service (IRS) has updated its list of frequently asked questions (FAQs) on the Affordable Care Act’s employer shared responsibility provisions – also known as the “pay or play” mandate.  In particular, questions 55 through 58 provide guidance for employers who may be subject to shared responsibility payments.  The FAQs indicate that the IRS will begin sending penalty letters to applicable large employers (ALEs) that owe penalties for calendar year 2015 “in late 2017.”  Around this time last year, the IRS had indicated that penalty letters for 2015 would be coming “in early 2017;” however, those letters never materialized.  Based on the latest update to its FAQs, it appears that the IRS has worked out the kinks in its systems and is prepared to begin sending penalty letters.

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IRS Increases Health FSA Contribution Limit for 2018, Adjusts Other Benefit Limits

On October 20, 2017, the Internal Revenue Service (IRS) released Revenue Procedure 2017-58, which raises the health Flexible Spending Account (FSA) salary reduction contribution limit by $50 to $2,650 for plan years beginning in 2018. The Revenue Procedure also contains the cost-of-living adjustments that apply to dollar limitations in certain sections of the Internal Revenue Code.  The following summarizes other adjustments relevant to individuals and employer sponsors of welfare and fringe benefit plans.

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