Latest News
The Department of Health and Human Services (HHS) has issued
a final rule on the definition of essential health benefits (EHBs), the determination of actuarial value in the individual and small group markets, and the minimum value (MV) standard for large employers. The final rule implements a requirement in the Affordable Care Act (ACA) that the plans cover essential health benefits (EHBs) for 10 categories of care, including basic services such as hospitalization and emergency care, as well as mental health and maternity care. In addition, it has posted a MV standard calculator for employers to determine whether their offered coverage meets minimum requirements to avoid penalty excise taxes for unaffordable coverage.

• Read the final rule
• View FAQs on Essential Health Benefits
  

The Internal Revenue Service (IRS) has proposed long-awaited regulations (REG-138006-12) on the shared responsibility provisions under the Patient Protection and Affordable Care Act (PPACA) on employer provided health care coverage. Starting in 2014, tax code Section 4980H, added by PPACA, will require employers with at least 50 full-time and/or full-time equivalent employees to offer affordable health care coverage that provides a minimum level of coverage, or pay a penalty. According to Section 4980H, an employee is considered to be full time if he or she works at least 30 hours per week, and the proposed regulations “would treat 130 hours of service in a calendar month as the monthly equivalent of 30 hours of service per week.”

The IRS also released a series of questions and answers on employer shared responsibility issues, such as liability for the employer shared responsibility payment, how to calculate the employer shared liability payment, and transition relief. Comments on the proposed rules are due by March 18.

• Read the proposed regulations (REG-138006-12)
• IRS Questions and Answers
  

The Issue
President Obama signed the Patient Protection and Affordable Care Act (PL 111-148) on March 23, 2010.  The comprehensive health care reform law provides a number of sweeping changes for our nation's health care system that impact nonprofit organizations both as employers and service provides. Among the reforms include new community benefit requirements for nonprofit hospitals, new requirements for large nonprofit employers to provide health insurance to their employees, and creation of tax credits for qualifying small employers, including nonprofit organizations, to provide health insurance for their employees.

Patient Protection and Affordable Care Act

• Quick facts on the health care reform law

Small Employer Credit

• Learn more about the small employer health insurance credit

Nonprofit Employer Health Insurance Coverage

• Comprehensive Guide to Employer Coverage Responsibility
• Quick facts: Nonprofit employer responsibility for providing coverage

Supreme Court upholds health care reform legislation
On June 28, 2012 the Supreme Court, in a 5-4 decision, upheld the Patient Protection and Affordable Care Act . The ruling preserves a number of provisions that affect the tax-exempt sector, including the small employer health credit, which is available to eligible nonprofits as an incentive to provide employee health coverage. New rules for nonprofit hospitals also remain unchanged, including a provision that, beginning this year, requires a Community Health Needs Assessment (CHNA) every three years.

IMPLEMENTATION
Health Care Law Implementation: What Nonprofits Need to Know
Independent Sector held a webinar March 29, 2012 to examine how nonprofit employers are and will be affected by the Patient Protection and Affordable Care Act (also known as the health care reform law). We were joined by a health law and policy expert from Washington Council Ernst & Young who delved into the employer requirements  including reporting, health care insurance credits, the health care exchanges, insurance mandates and up-coming deadlines.

• View the webinar
• View the slides
  

What's Next?
Federal agencies are beginning the implementation process of this landmark legislation. Some of the law's provisions will take effect immediately, while others will be instituted over the next four years.

• Implementation timeline (PDF) - Key effective dates for health care reforms
• Department of Health and Human Services (HHS) guidance - Updated implementation and process resources for individuals and employers
• Department of Labor (DOL) guidance - Updated health reform regulatory information for all employers

Health Care Reform: Revenue Effects and Cost Estimates

• Joint JCT and CBO Revenue and Cost Estimate Tables (PDF)
• Revenue and Cost Estimates: Explanations (PDF)

Existing Health Care Coverage

Grandfathered Health Plans
As part of the Patient Protection and Affordable Care Act (PPACA), existing health care coverage plans that were in place prior to the enactment of the new health care law on March 23, 2010 are eligible to be "grandfathered," or exempted, from a number of new requirements provided that they meet five essential criteria to maintain grandfathered status. The Department of Health and Human Services (HHS) in conjunction with the Internal Revenue Service (IRS), and the Department of Labor (DOL) have released final rules for grandfathered health plans. A grandfathered health plan:

• Is not subject to the new health law mandate to provide first-dollar coverage for preventive care
• Must fulfill new requirement to extend dependent coverage to children under age 26
• Can exclude children who have employer-sponsored coverage through their own employer or a spouse's employer until 2014
• Is exempt from most PPACA requirements indefinitely as long as the plan maintains its grandfathered status

Maintaining Grandfathered Plan Status:
Grandfathered plans are allowed to make routine changes to their coverage structures, which includes changing insurers for group health coverage as long as the same level of coverage is maintained. Any of the following plan changes will result in an immediate and permanent loss of grandfathered status:

• Significant reduction in benefits
• Co-insurance charge increases
• Deductible increases
• Employer contribution decreases
• Change to annual limits

Independent Sector submitted comments to the IRS and HHS, urging more flexibility for employers to make changes to existing plans to take advantage of new market rates and the establishment of a waiver from the interim rule requirements for small to mid-sized nonprofits until the insurance exchanges are established in 2014.