Employee Benefits Compliance, Individual Mandate

Two Health Plan Updates: Info Reporting & ACA section 1557

doing taxes

It’s nearing the end of the plan year for many group health plans.  Here are two (short) unrelated updates for group health plan sponsors who are thinking about 2017  information reporting that will be due next year and also about plan benefits for 2018.

1- IRS says individual tax returns must include health coverage information

The bottom line:  Employers who must provide 1095-Bs and 1095-Cs may want to make sure they furnish them timely to employees (by January 31, 2018), since employees must include this information to obtain tax refunds so are more likely than in prior years to request forms if employers do not timely provide them.

Additional detail: The IRS website includes the following Statement on Health Care Reporting Requirement:

“For the upcoming 2018 filing season, the IRS‎ will not accept electronically filed tax returns where the taxpayer does not address the health coverage requirements of the Affordable Care Act.‎ The IRS will not accept the electronic tax return until the taxpayer indicates whether they had coverage, had an exemption or will make a shared responsibility payment. In addition, returns filed on paper that do not address the health coverage requirements may be suspended pending the receipt of additional information and any refunds may be delayed.”

The IRS statement also notes that this process “reflects the requirements of the ACA and the IRS’s obligation to administer the health care law” and that the 2018 filing season will be the first time the IRS will not accept tax returns that omit this information.

2- Temporary hold on ACA 1557 requirement that plans cover gender transition-related services

The bottom line: Plans are not currently required to provide coverage for gender transition-related services.  However, insurers might not be amending their plans until there is a final court decision.

Additional detail: ACA section 1557 prohibits group health plans and insurers from discriminating based on gender identity and termination of pregnancy, among other things.  Under the Obama administration, HHS interpreted this rule to require plans and insurers who were subject to the rule to provide coverage for transition-related services (related to gender reassignment) and abortion.  A recent court decision (Franciscan Alliance. Inc. v Price ) imposed a temporary nationwide injunction blocking enforcement of these rules during the litigation, and issued a “stay” (delay) of the litigation while HHS reconsiders the rule. Plans and insurers subject to the rule are those who receive funds from HHS.  This includes funds for Medicare and Medicaid policies, and exchange policies.  Such covered entities must comply with ACA 1557 for all policies they sell, not just for those policies for which they receive HHS funds.  Cautionary note:  Plans that currently cover transition-related health services should consider whether they want to wait for a final court decision before making any changes.