Agencies Come Down Hard on Various Employer Health Plans and Arrangements

Nancy K. Campbell • November 13, 2014

As we move into 2015, employers continue to grapple with numerous Health Care Reform concepts.  Employers should be cautious regarding arrangements promoted to avoid health care penalties because the agencies are cracking down, as shown below.

On November 4, 2014, the IRS and other agencies indicated that they have become aware that group health plans that do not provide coverage for in-patient hospitalization and physician services are being promoted to employers as providing “minimum value coverage” that would allow the employer to avoid some Health Care Reform penalties if other requirements are met.  The Departments believe that such plans do not provide minimum value coverage and are going to implement regulations to this effect in 2015.  For more information, see IRS Notice 2014-69 .

In a similar vein, on November 6, 2014, the agencies issued additional Health Care Reform FAQs, making the following clarifications:

•  Q&A 1 clarifies that both employer pre-tax and after-tax reimbursements for individual health insurance policies violate Health Care Reform rules;

•  Q&A 2 clarifies that employers cannot offer employees with high claims risk a choice between enrollment in its standard group health plan or cash.  Such an arrangement violates rules prohibiting discrimination based on health status factors; and

•  Q&A 3 reiterates that employers cannot set up HRAs and allow employees to purchase individual policies using the HRA funds.

Skinny plans, which often cover preventive care but little else, do not appear to be impacted by any of these rule changes, at least for the time being.  Skinny plans do not purport to provide minimum value, but, rather, are designed and marketed to provide “minimum essential coverage.”  By offering a skinny plan to substantially all of its full-time employees (70% in 2015, and 95% in later years), an employer may avoid the Section 4980H subsection (a) penalty, but could still be subject to subsection (b) penalties given that such plans do not provide minimum value coverage.

Employee burnout: what it is and how to prevent it

By Mardy Gould • May 24, 2024
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1 While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health. Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.

Form 720 and PCORI fee FAQs

By Mardy Gould • May 23, 2024
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization? Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness. Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
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