Washington policy update: March 2020 Benefits and Compensation Bulletin

Posted by Robert Davis, Christine Drager, Maria Moliterno on March 27, 2020.

  • Supreme Court to Review Latest ACA Challenge: The Supreme Court has announced that it will review a 5th Circuit Court of Appeals ruling that the Affordable Care Act’s (ACA) Individual Mandate is unconstitutional. In 2012, the Supreme Court ruled in a different case that Congress cannot require individuals to purchase health insurance, but nonetheless allowed the individual mandate to stand because it was a tax consistent with Congress’s taxing powers. In 2017, Congress amended the ACA to eliminate any penalty associated with the mandate, which prompted this latest lawsuit.  Basically, the argument is that the individual mandate without a penalty is not a tax, and thus is unconstitutional. The 5th Circuit Court of Appeals agreed, but refused to rule on the issue of whether the individual mandate could be severed from the rest of the ACA. If the Supreme Court upholds the 5th Circuit’s ruling and determines the individual mandate is not severable from the rest of the ACA, then the employer shared responsibility rules and group health plan mandates would be invalidated as well. A final decision is expected sometime in 2021.
  • GAO Issues report on Executive Retirement Plans:  The Government Accountability Office issued a report in January 2020 on the oversight of Executive Retirement Plans. Some employers sponsor retirement plans covering only a select group of employees. These types of plans are designed to ignore statutory limits on compensation and amount of benefits but at the same time do not include the same statutory protections offered for qualified private sector employer sponsored plans.
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Washington policy update: August 2019 Benefits and Compensation Bulletin

IRS offers new options for stand-alone HRAs, including one that can be used to purchase individual health insurance

Posted by Robert Davis, Christine Drager, and Maria Moliterno on August 26, 2019.

Following enactment of the Affordable Care Act (ACA) of 2010, the IRS issued a series of rulings generally preventing employers from offering stand-alone HRAs (Health Reimbursement Arrangements) that active employees could use to purchase health insurance in the individual market, or pay other out-of-pocket medical expenses. But new regulations that will become applicable in 2020 will offer employers two new alternatives—the Individual Coverage HRA (ICHRA) and the Excepted Benefits HRA—that employers can use to provide stand-alone HRAs to active employees if certain conditions are met.
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