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Knowing Your Options Outside of Open Enrollment

While the annual Open Enrollment period focuses on ACA-compliant individual major medical insurance, there are still other forms of insurance available for potential enrollees.

Knowing Your Options

According to healthinsurance.org, “ACA-compliant coverage refers to a major medical health insurance policy that conforms to the regulations set forth in the Affordable Care Act (Obamacare)…This means they must include coverage for the ten essential benefits with no lifetime or annual benefit maximums, and must adhere to the consumer protections built into the law.”

Unless you qualify for a special enrollment period, you cannot receive ACA-compliant individual health insurance coverage outside of the annual Open Enrollment Period, which typically runs from November 1st until December 15th of each year.

If you missed out on Open Enrollment but still need individual health insurance, you still have a few options available:

  1. COBRA

According to the U.S. Department of Labor, “The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. Qualified individuals may be required to pay the entire premium for coverage up to 102 percent of the cost to the plan.”

  1. Qualifying Life Event (QLE)

There are certain life circumstances called Qualifying Life Events (QLEs) that can qualify you for a special enrollment period. Special enrollment periods allow you to obtain ACA-compliant health coverage outside of the annual Open Enrollment period for you and your eligible dependents. The most common QLEs pertain to:

  • Loss of health coverage
  • Changes in household
  • Changes in residence
  1. Non-ACA Compliant plans

Non-ACA compliant plans, also referred to as short-term medical plans, have recently become more appealing to a growing number of people due to their lower rates. According to the Henry J Kaiser Family Foundation, “Late last year (2017), President Trump issued an executive order directing the Secretary of Health and Human Services to take steps to expand the availability of short-term health insurance policies, and a proposed regulation to increase the maximum coverage term under such policies was published in February.”

So, what separates the ACA-compliant health plans from the ones that are not? One of the biggest factors being the ACA’s ten essential health benefits. Non-ACA compliant plans do not need to adhere to the numerous rules and regulations laid out in the Affordable Care Act.

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I Missed Open Enrollment and Need Health Coverage — What Are My Options?

The next official ACA Open Enrollment period isn’t slated to begin until November 1, 2019. But depending on your circumstances, you may not have to wait that long to obtain coverage.

Qualifying Life Events and Special Enrollment Periods

Sometimes our circumstances change, and if they change due to specific events, you and your dependents may be able to secure health insurance through a Special Enrollment Period. When this occurs, it is called a Qualifying Life Event, otherwise referred to as a QLE.

There are several types of Qualifying Life Events that may grant you a Special Enrollment Period. Some of the most common examples include:

  • Loss of health coverage
    • Losing existing health coverage – including job-based, individual, and student plans
    • Losing eligibility for Medicare, Medicaid, or CHIP
    • Turning 26 and losing coverage through a parent’s plan
  • Changes in household size
    • Getting married or divorced
    • Having a baby or adopting a child
    • Death in the family
  • Changes in residence
    • Moving to a different ZIP code or county
    • A student moving to or from the place they attend school
    • A seasonal worker moving to or from the place they both live and work
    • Moving to or from a shelter or other transitional housing
  • Other qualifying events
    • Changes in your income that affect the coverage you qualify for
    • Gaining membership in a federally recognized tribe, or status as an Alaska Native Claims Settlement Act (ANCSA) Corporation shareholder
    • Becoming a U.S. citizen
    • Leaving incarceration (jail or prison)
    • AmeriCorps members starting or ending their service

Non-ACA Health Plans

Haven’t experienced a QLE but still need health coverage? A non-ACA health plan could be the answer. Also referred to as Short Term Medical Plans, recent legislative changes have loosened the restrictions surrounding these plans and have increased their appeal.

Previously, a Short-Term Medical plan could only provide coverage for up to 90 days. But due to recent regulatory changes, these plans can now be continued for up to a year.  Additionally, in some cases applicants may now renew their plan for up to three years.

Because Short-Term Medical Plans are considered non-ACA health plans, it is worth noting that they may not cover all that an ACA health plan would. For example, applicants could be denied coverage due to a pre-existing medical condition, maternity care may not be covered, and there could be an annual dollar limit on coverage. However, these plans are also typically less expensive than ACA plans and could be a good alternative for individuals seeking more affordable options.

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Short-Term Health Insurance Soon Available For Up To 36 Months

New Rule Loosens Current Restrictions

Effective October 2, 2018, a new rule will allow individuals to purchase short-term, limited-duration health insurance coverage for a period of less than 12 months, and renew such coverage for up to 36 months. Under current law, the maximum coverage period for short-term, limited-duration health insurance is less than 3 months, and these policies cannot be renewed.

Notably, short-term, limited-duration health insurance is:

  • Not required to comply with the Affordable Care Act’s ban on pre-existing condition exclusions and lifetime and annual dollar limits.
  • Not required to comply with the Affordable Care Act’s essential health benefits requirement, which requires individual health insurance policies to cover, among other things, hospitalizations, emergency services, and maternity care.
  • Not “minimum essential coverage,” meaning that policyholders may remain liable for an individual mandate penalty for any month in 2018.

Click here to read the new rule. A fact sheet is also available.

Check out our Health Care Reform section for more on the Affordable Care Act.

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Understanding IRS ‘Pay or Play’ Penalty Letters

Employers Have Opportunity to Respond Before ‘Pay or Play’ Penalty Assessment

The Internal Revenue Service (IRS) is currently issuing Letter 226-J to certain applicable large employers (ALE)—generally those with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year—it believes owe a penalty for failing to comply with the Affordable Care Act’s employer shared responsibility provisions (“pay or play” provisions). In conjunction with Letter 226-J, employers will receive Form 14764, which they can use to respond to Letter 226-J. Employers who submit Form 14764 to the IRS will generally receive one of 4 letters back:

  • Letter 227-J, which acknowledges receipt of Form 14764 and the employer’s agreement to pay the penalty;
  • Letter 227-K, which acknowledges receipt of Form 14764 and shows that the penalty has been nullified;
  • Letter 227-L, which acknowledges receipt of Form 14764 and shows that the penalty has been revised; or
  • Letter 227-M, which acknowledges receipt of Form 14764 and shows that the penalty amount did not change.

For more information on IRS “pay or play” penalty letters, click here.

Visit our “Pay or Play” (Employer Shared Responsibility) section for more on pay or play compliance.

 

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Form 5500 Filing Deadline for Many Health Plans is July 31

Certain Group Health Plans Required to File

Group health plan administrators are reminded that Form 5500 must be filed with the U.S. Department of Labor (DOL) by the last day of the seventh month after the plan year ends. For calendar-year plans, that due date falls on July 31.

Who Must File Form 5500

In general, all group health plans covered by the Employee Retirement Income Security Act (ERISA) are required to file Form 5500. However, group health plans (whether fully insured, unfunded [meaning its benefits are paid as needed directly from the general assets of the plan sponsor], or a combination of the two) that covered fewer than 100 participants as of the beginning of the plan year are exempt from the Form 5500 filing requirement. For more on the Form 5500 requirement, click here.

How to File Form 5500

Forms 5500 must be filed electronically with the DOL using either the IFILE web-based filing system or an approved vendor’s software.

Visit our ERISA section for more ERISA compliance information.

 

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Individual Mandate Exemptions Available for 2017 Tax Returns

Affordability, Tax Filing Threshold, and Other Exemptions Available

Under the Affordable Care Act’s (ACA) ”individual mandate” (also called individual shared responsibility) provision, every individual must have minimum essential health coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return for tax year 2017.

Among other exemptions, individuals may claim the following exemptions from the individual mandate by filing Form 8965Health Coverage Exemptions, along with his or her 2017 tax return:

  • Affordability Exemption: The lowest-priced coverage available to the individual, through either a Health Insurance Marketplace or employer-based group health plan, would have cost the individual more than 8.16% of his or her household income for plan years beginning in 2017, as computed on the tax return.
  • Tax Filing Threshold Exemption: The individual’s gross income or household income was less than the applicable minimum threshold for filing a tax return (see ”2017 Federal Tax Filing Requirement Thresholds”).
  • Short Coverage Gap Exemption: The individual went without coverage for less than three consecutive months during the year.
  • Medicaid Expansion Exemption: The individual’s household income is below 138% of the federal poverty line for his or her family size, and at any time during the year, the individual resided in a state that did not participate in the Medicaid expansion under the ACA. States that did not expand Medicaid for all of 2017 include: Alabama, Florida, Georgia, Idaho, Kansas, Maine, Mississippi, Missouri, Nebraska, North Carolina, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, and Wyoming.

Click here to learn more about individual mandate exemptions.

Be sure to visit our Individual Mandate (Individual Shared Responsibility) section for additional details.

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Deadline to File Paper Returns With IRS was February 28

Employers subject to the Affordable Care Act’s (ACA) information reporting requirements are reminded that the deadline to electronically file ACA information returns with the IRS is April 2.

The reporting deadlines in 2018 are for the 2017 calendar year, and are as follows:

  • Applicable large employers (ALEs)—generally those with 50 or more full-time employees, including full-time equivalents—must electronically file Forms 1094-C and 1095-C with the IRS no later than April 2. The deadline to file paper returns was February 28.
  • Self-insuring employers that are not considered ALEs, and other parties that provide minimum essential health coverage, must electronically file Forms 1094-B and 1095-B with the IRS no later than April 2. The deadline to file paper returns was February 28.

Note: Employers filing 250 or more Forms 1095-B or 1095-C are required to electronically file them with the IRS.

Additional information on electronic filing can be found on the IRS’s ACA Information Returns (AIR) Program webpage.

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Certain Employers Required to Electronically File Returns

Employers subject to the Affordable Care Act’s (ACA) information reporting requirements are reminded that the deadlines to file and furnish Forms 1094 and 1095 are quickly approaching. The reporting deadlines in 2018 are for reporting information on the 2017 calendar year, and are as follows:

  • Applicable large employers (ALEs)—generally those with 50 or more full-time employees, including full-time equivalents—must file Forms 1094-C and 1095-C with the IRS no later than February 28, 2018 (or April 2, 2018 if filing electronically). ALEs must also furnish a Form 1095-C to all full-time employees by March 2, 2018.
  • Self-insuring employers that are not considered ALEs, and other parties that provide minimum essential coverage, must file Forms 1094-B and 1095-B with the IRS no later than February 28, 2018 (or April 2, 2018, if filing electronically). These entities are also required to furnish a Form 1095-B to “responsible individuals” (may be the primary insured, employee, former employee, or other related person named on the application) by March 2, 2018.

Electronic Filing Requirements

Reporting entities filing 250 or more Forms 1095-B or Forms 1095-C must electronically file them with the IRS. Additional information on electronic filing can be found on the IRS ACA Information Returns (AIR) Program webpage.

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‘Cadillac Tax’ Delayed Until 2022

Tax Previously Set to Become Effective in 2020

President Trump has signed the Extension of Continuing Appropriations Act, which (among other things) delays implementation of the “Cadillac Tax,” the Affordable Care Act’s excise tax on high-cost employer-sponsored health coverage, until 2022. Previously, this tax—which would impose a 40% tax on plans that cost more than $10,200 (for self-only coverage) and $27,500 (for family coverage)—was set to become effective in 2020.

Please visit our Cadillac Tax page for more information.

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Health Care Reform Updates

Administration Eliminates Cost-Sharing Reduction Payments

Cuts to Take Effect Immediately

The Trump administration announced yesterday that it will no longer make cost-sharing reduction (CSR) payments to insurance companies under the Affordable Care Act (ACA). According to a statement issued by the U.S. Department of Health and Human Services (HHS), the agency’s decision to discontinue these payments immediately follows a legal review by HHS, the Department of Treasury, the Office of Management and Budget, and an opinion from the U.S. Attorney General.

Background

The ACA requires insurers to offer plans with reduced deductibles, copayments, and other means of cost sharing to eligible individuals who purchase plans through the Health Insurance Marketplace. In turn, insurers receive CSR payments arranged by the Secretary of HHS to cover the costs they incur because of this requirement. Whether CSR payments were properly appropriated by Congress has been the subject of litigation since 2014.

To read the HHS statement, click here.

Visit our section on Health Care Reform for more information about ACA requirements.