Group health plan sponsors and third party administrators of certain group health plans who already filed their Form 8963, “Report of Health Insurance Provider Information,” who expect that their group health plan will be  exempt in the 2014 fee year from the temporary risk adjustment fee assessment imposed by the Patient Protection & Affordable Care Act (ACA)  based on impending guidance scheduled for publication on September 2, 2014 in Notice 2014-47 may need to act quickly to meet the August 18, 2014 deadline for filing a corrected Form 8963, “Report of Health Insurance Provider Information.”

The temporary reinsurance fee and risk adjustment provisions of ACA are intended to generate $25 billion in revenues from assessments on insured and self-insured group health plans that the federal government plans to use to partially reimburse commercial insurers writing policies in public exchanges for individuals with high health care costs.

ACA generally provides that the reinsurance fee applies to covered entities that are not excluded under ACA in 2014, 2015, and 2016. Under Final Rules published March 5, 2014, the insurer pays the fee for insured plans but where a group health plan is self-insured, the plan itself pays the fee.   Final Rules published March 5, 2014 provide that self-insured and self-administered plans are exempt from the fees in 2015 and 2016, however.

The reinsurance fee equals the yearly rate times the number of plan participants. The yearly rate is $63 for 2014, $44 for 2015, and to be announced for 2016.

ACA § 9010 generally requires payment of the temporary risk adjustment fee ($64 per covered person for 2014) by every “covered entity.  ACA § 9010 defines the term “covered entity” to include every entity that provides health insurance for any United States health risk during the calendar year in which the fee is due (the fee year) other than those excluded under ACA § 9010(c)(2).  However,  ACA § 9010(c)(2) generally excludes from the definition of covered entity:

• Self-insured employers;
• Governmental entities;
• Certain nonprofit corporations; and
• Non-employer established voluntary employees beneficiary associations under Internal Revenue Code § 501(c)(9) entities.

Notice 2014-47 scheduled for publication on September 2 by the Department of Treasury (Treasury) will clarify the group health plans exempted from the obligation to pay the temporary risk adjustment fee imposed by Section 9010 of ACA on “covered entities” in IRB 2014-36 will clarify:

• When a group health plan qualifies as excluded from the general definition of “covered entity” under the exclusions set forth in ACA § 9010(c)(2); and
• That a controlled group does not have to report for a controlled group member who would not qualify as a covered entity in the 2014 fee year if it were a single-person covered entities.

According to Notice 2014-47:

• For the 2014 fee year, the IRS and Treasury will not treat any entity as a covered entity if it is excluded from the definition of a covered entity because it qualifies for one of the exclusions under § 9010(c)(2) for the entire 2013 data year or qualifies for one of the exclusions under § 9010(c)(2) for the entire 2014 fee year, which began on January 1, 2014. Since the IRS and Treasury will not treat such an entity as a covered entity, it should not report its net premiums written for the 2013 data year.
• For the 2014 fee year, a controlled group must report net premiums written only for those persons who are controlled group members at the end of the day on December 31 of the 2013 data year and who would qualify as a covered entity in the fee year if it were a single-person covered entity. A controlled group should not report net premiums written for any controlled group member who would not qualify as a covered entity in the 2014 fee year if it were a single-person covered entity. Such entity will be treated as a member of the controlled group for other purposes, however, such as joint and several liability for the fee amount allocated to the controlled group.
• The IRS and Treasury will publish additional guidance in the future about the scope of the exclusions in ACA § 9010(c)(2) from the general definition of the term covered entity for fee years after the 2014 fee year.
• Any entity that needs to correct a previously submitted Form 8963, “Report of Health Insurance Provider Information,” due to the clarification provided in this notice must do so by faxing the corrected Form 8963 to 877-797-0235 (a toll-free number) no later than Monday, August 18, 2014. The IRS cannot process a Form 8963 received after this date. The IRS and Treasury recognize that entities will not know whether they qualify for one of the exclusions under § 9010(c)(2) for the entire 2014 fee year until the end of 2014. Entities that reasonably project that they will qualify for an exclusion under § 9010(c)(2) for the entire 2014 fee year may submit a corrected Form 8963 on or before August 18, 2014, even though the 2014 fee year is not yet over.

The clarifying guidance of Notice 2014-47 comes as the Department of Health & Human Services (HHS) is warning group health insurers third party administrators (TPAs) of self-insured group health plans that are covered entities to get moving on their preparations to register and conduct required interactions with the EDGE Server that HHS plans to use to collect and administer the data necessary to administer the temporary reinsurance fee and risk adjustment provisions of ACA by mid-September, 2014.

Group health plans and their administrators are urged to evaluate and confirm their status and if necessary, file a corrected Form 8963 no later than August 18, 2014.  Additionally, any health insurance issuer or non-excepted group health plan should ensure that appropriate arrangements are in place to fulfill responsibilities for registration and use of the EDGE system as required to meet the reporting requirements.

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

• HHS Warns Insurers, TPAS Complete ACA Reinsurance & Risk Adjustment Edge Server Pre-Registration Steps By 9/27
• House Hearings Consider Authorizing House Lawsuit Challenging Constitutionality of Obama’s Health Care Reform Actions
• Review & Update HR & Benefit Practices For DOL Proposed Change In FMLA Regs, Other Rules Treating Some Same-Sex Couples As Spouses
• Employee & Other Whistleblower Complaints Common Source of HIPAA Privacy & Other Complaints
• Consider Fiduciary & Other Risk Management When Planning For ACA Transitional Reinsurance Costs, Other Plan Design Changes
• HHS Claims Average $69/Month Cost for Subsidized Coverage Shows ACA Success Challenged
• HIPAA Compliance & Breach Data Shares Helpful Lessons For Health Plans, Providers and Business Associates
• Review & Update HR & Benefit Practices For DOL Proposed Change In FMLA Regs, Other Rules Treating Some Same-Sex Couples As Spouses
• Employee & Other Whistleblower Complaints Common Source of HIPAA Privacy & Other Complaints
• Consider Fiduciary & Other Risk Management When Planning For ACA Transitional Reinsurance Costs, Other Plan Design Changes
• HHS Claims Average $69/Month Cost for Subsidized Coverage Shows ACA Success Challenged
• HIPAA Compliance & Breach Data Shares Helpful Lessons For Health Plans, Providers and Business Associates
• Review & Update Health Plan Notices, Language & Process For New Guidance On COBRA, Other Key Health Plan Rules
• 6/17 Workshop Helps Businesses Get Ready for Latest Affordable Care Act Rollout
• EEOC Suit Against Pipe Fitting Business Shows Disability Discrimination Risks For Employers Hiring Vets With PTSD
• PBGC Publishes Multiemployer Plans Valuation and Notice Requirements Final Rule
• Post-Windsor Same-Sex Participant Guidance May Require Mid-Year Plan Amendments
• Arkansas Judge Finds Arkansas Same-Sex Marriage Bans Unconstitutional; State Asks For Stay Pending Appeal
• Businesses Employing Children Should Review & Tighten Practices In Light of Tightened Rules & Increased Penalties
• Encrypt Mobile Devices & Clean Up Management Documentation Key HIPAA Compliance Messages In New HIPAA Settlements
• New OCR Guidance Assigns More HIPAA Homework Health Plans, Providers, Business Associates and Employers
• Agencies Clarify Applicability of ACA Out-Of-Pocket Versus Deductible Cost Sharing Limitations
• Medicare Secondary Payer Mandatory Reporting Threshold Clarified 
• Statistics, OSHA Lawsuit Against AT&T Operator & Other DOL Action Highlights Rising Retaliation Exposures
• Government Contractor SCA Violation Costs It $2M & 3 Year Government Contracts Disbarment
• Rules For Reporting ACA Health Insurance Provider Information Are Out
• IRS:  Insurers Taxed On ACA Annual Fee Assessments Collected From Customers
• 2013 Cumulative List of Plan Plan Qualification Requirements Helpful Resource To Monitor Plan Updates
• IRS Gives Temporary Nondiscrimination Relief For Closed Defined Benefit Plans
• New IRS Guidance On Claiming Small Business Health Care Tax Credit When No SHOP Enrollment Option
• IRS Updates, Supplements Cafeteria Plan & HSA Post-Windsor Same-Sex Participant Guidance
• IRS Published Covered Compensation Table For 2014 
• J.P. Morgan Chase Hit For $461M For Madoff-Related Bank Secrecy Act Violations
• Dermatology Practice To Pay $150K To Settle Charges It Breached  HIPAA Breach Notice Rule
• Employer Faces $2M FLSA Lawsuit For Alleged Worker Misclassification
• Agencies Proposes To Treat Certain EAP, Dental and Vision Only Plans As ACA & HIPAA Excepted Benefits
• Businesses Performing Income, Payroll Tax Duties For Employers Confirm Compliance With Updated IRS Procedures
• IRS To Tax Health Insurers On Assessments To Cover ACA Section 9010 Annual Fee
• 2014 Standard Mileage Rates Announced
• Careful Selection & Contracting With Vendors Critical Part of Health Plan Renewals
• USI Advisors Will Pay $1.27 Million To Settle Charges It Violated ERISA Fee Disclosure Requirements
• Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries
• Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s
• Employers & Plan Fiduciaries Reminded To Confirm Credentials & Bonding For Internal Staff, Plan Fiduciaries & Vendors Dealing With Benefits
• Federal Mandate That Employer Health Plans Must Cover 100% Of Contraceptive, Other Women’s Health Services With No Cost Sharing Now Effective
• Use NIH & Other Free Government Resources To Help Round Out Wellness Programs
• 12 Steps Every Employer With A Health Plan Should Do Now To Manage 2012-14 Health Plan Risks & Liabilities
• NLRB Moves To Promote Non-Union Employee Use of Collective Action Rights By Launching Webpage
• Making Wellness Work On A Shoestring Budget
• Tighten Defensibility of Criminal & Other Background Check Practices In Light of Labor Department Non-Discrimination Regulation & Enforcement Emphasis

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here. 

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.

The Department of Health & Human Services (HHS) is warning group health insurers third party administrators (TPAs) of self-insured group health plans and to get moving on their preparations to register and conduct required interactions with the EDGE Server that HHS plans to use to collect and administer the data necessary to administer the temporary reinsurance fee and risk adjustment provisions of the Patient Protection & Affordable Care Act (ACA).  HHS says insurers and TPAs have work to complete by 9/27 to prepare to comply with the EDGE system data reporting that HHS will require them to conduct as part of ACA’s reinsurance premium and risk adjustment risk sharing provisions.

The temporary reinsurance fee and risk adjustment provisions of ACA are intended to generate $25 billion in revenues from assessments on insured and self-insured group health plans that the federal government plans to use to partially reimburse commercial insurers writing policies in public exchanges for individuals with high health care costs.

ACA provides that the reinsurance fee applies in 2014, 2015, and 2016. Under Final Rules published March 5, 2014, the insurer pays the fee for insured plans but where a group health plan is self-insured, the plan itself pays the fee.   Final Rules published March 5, 2014 provide that self-insured and self-administered plans are exempt from the fees in 2015 and 2016, however.

The reinsurance fee equals the yearly rate times the number of plan participants. The yearly rate is $63 for 2014, $44 for 2015, and to be announced for 2016.

The Centers for Medicare and Medicaid Services (CMS) plans to run the first risk adjustment and reinsurance calculation estimates in mid-December, 2014 using data to be collected from insurers and TPAs on the EDGE system.

In an August 7, 2014 webinar, HHS gave issuers and TPAs an overview of the EDGE server implementation schedule and guidance on the key pre-registration tasks that must be completed prior to the start of the EDGE server registration process scheduled to begin on September 27, 2014.

HHS warned issuers and TPAs must be ready to start the EDGE registration process on September 27, 2014 in order to have sufficient time to set-up their servers and test their data submissions prior to the mid-December estimate calculations.

In the webinar, HHS outlined a series of key pre-registration activities that issuers and TPAs of self-insured health plans impacted by the new requirements need to complete between now and September 26, 2014, in order to prepare for EDGE implementation.

Review the pre-registration checklist, timeline and other information shared by CMS in the 90-minute presentation here.

For Advice, Training & Other Resources

If you need assistance monitoring these and other regulatory policy, enforcement, litigation or other developments, or to review or respond to these or other workforce, benefits and compensation, performance and risk management, compliance, enforcement or management concerns, the author of this update, attorney Cynthia Marcotte Stamer may be able to help.

Board Certified in Labor & Employment Law, Past Chair of the ABA RPTE Employee Benefit & Other Compensation Arrangements Group, Co-Chair and Past Chair of the ABA RPTE Welfare Plan Committee, Vice Chair of the ABA TIPS Employee Benefit Plans Committee, an ABA Joint Committee On Employee Benefits Council representative, Past Chair of the ABA Health Law Section Managed Care & Insurance Section, a Fellow in the American College of Employee Benefit Counsel, ABA, and State Bar of Texas, Ms. Stamer has more than 25 years’ experience advising health plan and employee benefit, insurance, financial services, employer and health industry clients about these and other matters. Ms. Stamer has extensive experience advising and assisting health plans and insurers about ACA, and a wide range of other plan design, administration, data security and privacy and other compliance risk management policies.  Ms. Stamer also regularly represents clients and works with Congress and state legislatures, EBSA, IRS, EEOC, OCR and other HHS agencies, state insurance and other regulators, and others.   She also publishes and speaks extensively on health and other employee benefit plan and insurance, staffing and human resources, compensation and benefits, technology, public policy, privacy, regulatory and public policy and other operations and risk management concerns. Her publications and insights appear in the Health Care Compliance Association, Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Modern Health Care, Managed Healthcare, Health Leaders, and a many other national and local publications.

You can review other recent human resources, employee benefits and internal controls publications and resources and additional information about the employment, employee benefits and other experience of the Cynthia Marcotte Stamer, PC here. If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information – including your preferred e-mail – by creating or updating your profile www.cynthiastamer.com or by registering to participate in the distribution of these and other updates on our HR & Employee Benefits Update distributions here including:

• Review & Update HR & Benefit Practices For DOL Proposed Change In FMLA Regs, Other Rules Treating Some Same-Sex Couples As Spouses
• Employee & Other Whistleblower Complaints Common Source of HIPAA Privacy & Other Complaints
• Consider Fiduciary & Other Risk Management When Planning For ACA Transitional Reinsurance Costs, Other Plan Design Changes
• HHS Claims Average $69/Month Cost for Subsidized Coverage Shows ACA Success Challenged
• HIPAA Compliance & Breach Data Shares Helpful Lessons For Health Plans, Providers and Business Associates
• Review & Update Health Plan Notices, Language & Process For New Guidance On COBRA, Other Key Health Plan Rules
• 6/17 Workshop Helps Businesses Get Ready for Latest Affordable Care Act Rollout
• EEOC Suit Against Pipe Fitting Business Shows Disability Discrimination Risks For Employers Hiring Vets With PTSD
• PBGC Publishes Multiemployer Plans Valuation and Notice Requirements Final Rule
• Post-Windsor Same-Sex Participant Guidance May Require Mid-Year Plan Amendments
• Arkansas Judge Finds Arkansas Same-Sex Marriage Bans Unconstitutional; State Asks For Stay Pending Appeal
• Businesses Employing Children Should Review & Tighten Practices In Light of Tightened Rules & Increased Penalties
• Encrypt Mobile Devices & Clean Up Management Documentation Key HIPAA Compliance Messages In New HIPAA Settlements
• New OCR Guidance Assigns More HIPAA Homework Health Plans, Providers, Business Associates and Employers
• Agencies Clarify Applicability of ACA Out-Of-Pocket Versus Deductible Cost Sharing Limitations
• Medicare Secondary Payer Mandatory Reporting Threshold Clarified 
• Statistics, OSHA Lawsuit Against AT&T Operator & Other DOL Action Highlights Rising Retaliation Exposures
• Government Contractor SCA Violation Costs It $2M & 3 Year Government Contracts Disbarment
• Rules For Reporting ACA Health Insurance Provider Information Are Out
• IRS:  Insurers Taxed On ACA Annual Fee Assessments Collected From Customers
• 2013 Cumulative List of Plan Plan Qualification Requirements Helpful Resource To Monitor Plan Updates
• IRS Gives Temporary Nondiscrimination Relief For Closed Defined Benefit Plans
• New IRS Guidance On Claiming Small Business Health Care Tax Credit When No SHOP Enrollment Option
• IRS Updates, Supplements Cafeteria Plan & HSA Post-Windsor Same-Sex Participant Guidance
• IRS Published Covered Compensation Table For 2014 
• J.P. Morgan Chase Hit For $461M For Madoff-Related Bank Secrecy Act Violations
• Dermatology Practice To Pay $150K To Settle Charges It Breached  HIPAA Breach Notice Rule
• Employer Faces $2M FLSA Lawsuit For Alleged Worker Misclassification
• Agencies Proposes To Treat Certain EAP, Dental and Vision Only Plans As ACA & HIPAA Excepted Benefits
• Businesses Performing Income, Payroll Tax Duties For Employers Confirm Compliance With Updated IRS Procedures
• IRS To Tax Health Insurers On Assessments To Cover ACA Section 9010 Annual Fee
• 2014 Standard Mileage Rates Announced
• Careful Selection & Contracting With Vendors Critical Part of Health Plan Renewals
• USI Advisors Will Pay $1.27 Million To Settle Charges It Violated ERISA Fee Disclosure Requirements
• Wal-Mart Settlement Shows ADA Risks When Considering Employee Return To Work Accommodation Requests & Inquiries
• Employer Pays $475,000 To Settle ADA Discrimination Lawsuit Challenging Medical Fitness Testing For EMTs, Firefighters & Other Public Safety Worker’s
• Employers & Plan Fiduciaries Reminded To Confirm Credentials & Bonding For Internal Staff, Plan Fiduciaries & Vendors Dealing With Benefits
• Federal Mandate That Employer Health Plans Must Cover 100% Of Contraceptive, Other Women’s Health Services With No Cost Sharing Now Effective
• Use NIH & Other Free Government Resources To Help Round Out Wellness Programs
• 12 Steps Every Employer With A Health Plan Should Do Now To Manage 2012-14 Health Plan Risks & Liabilities
• NLRB Moves To Promote Non-Union Employee Use of Collective Action Rights By Launching Webpage
• Making Wellness Work On A Shoestring Budget
• Tighten Defensibility of Criminal & Other Background Check Practices In Light of Labor Department Non-Discrimination Regulation & Enforcement Emphasis

If you or someone else you know would like to receive future updates about developments on these and other concerns, please be sure that we have your current contact information including your preferred e-mail by creating or updating your profile here. For important information about this communication click here. 

NOTE:  This article is provided for educational purposes.  It is does not establish any attorney-client relationship nor provide or serve as a substitute for legal advice to any individual or organization.  Readers must engage properly qualified legal counsel to secure legal advice about the rules discussed in light of specific circumstances.

The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations.  The Regulations now require that either we (1) include the following disclaimer in most written Federal tax correspondence or (2) undertake significant due diligence that we have not performed (but can perform on request).

ANY STATEMENTS CONTAINED HEREIN ARE NOT INTENDED OR WRITTEN BY THE WRITER TO BE USED, AND NOTHING CONTAINED HEREIN CAN BE USED BY YOU OR ANY OTHER PERSON, FOR THE PURPOSE OF (1) AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER FEDERAL TAX LAW, or (2) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY TAX-RELATED TRANSACTION OR MATTER ADDRESSED HEREIN.

©2014 Cynthia Marcotte Stamer. Limited, non-exclusive right to republished granted to Solutions Law Press, Inc. All other rights reserved.