As you have almost certainly heard, the United States Supreme Court announced its decision to uphold the Patient Protection and Affordable Care Act ("Affordable Care Act") as constitutional on June 28. What this means for employer-sponsored group health plans is that all existing guidance remains in effect and your implementation of the Affordable Care Act should remain on track.
The Affordable Care Act provisions (still) on the immediate horizon for group health plans include the following:
New Summary of Benefits and Coverage and Advance Notice of Material Modification
As we described here, the Summary of Benefits and Coverage ("SBC") requirement becomes effective on the first day of the first open enrollment period, and plan year, beginning on or after September 23, 2012.
Once the SBC requirement is effective, any material modifications made to the plan or policy (as reflected in the SBC) during the year will need to be communicated at least 60 days prior to the effective date of the mid-year change (more flexible notice requirements apply for changes effective on reenrollment or renewal).
New Health FSA Limit
For plan years beginning on or after January 1, 2013,* a limit of $2,500 will be imposed on employee salary reduction contributions under a health flexible spending arrangement ("Health FSA"). According to recent Internal Revenue Service ("IRS") guidance, sponsors have until December 31, 2014 to formally amend their cafeteria plans to reflect this limit, although Health FSAs must be administered to comply with this new limit as of the applicable effective date.
*This delayed effective date was recently announced by the IRS (in the same guidance cited immediately above).
First Dollar Coverage for Women's Preventive Care Services—Non-Grandfathered Health Plans Only
For plan years beginning on or after August 1, 2012, most non-grandfathered health plans must expand the list of preventive care services provided without cost sharing to include certain women's preventive services.
Form W-2 Informational Reporting of Group Health Plan Costs
Effective for the Forms W-2 to be issued to employees in January 2013 for the current (2012) tax year, employers will be required to report in Box 12 the aggregate cost (reflecting both the employer's and employee's shares) of certain group health plan coverages—generally, medical plan costs are reported, but other coverages may need to be included.
Annual Reporting and Payment of Fees to Fund Patient-Centered Outcomes Research Trust Fund
Beginning for plan or policy years ending on or after October 1, 2012, sponsors (of self-insured plans) or insurance issuers (of insured plans) will be required to report and pay an annual fee of $1 ($2 in the second year) per covered life. These fees are currently proposed to be reported and paid once annually for the prior calendar year on the Form 720 Quarterly Federal Excise Return due each July 31 (first due July 31, 2013).
We have addressed various aspects of the Affordable Care Act in prior newsletters and alerts. We also plan to keep our clients updated as Affordable Care Act implementation continues. Links to these prior communications are available on our Employee Benefits Practice Group page.
If you have questions, please contact any of the attorneys in our Employee Benefits Practice Group.