Sonosky, Chambers, Sachse, Endreson & Perry, LLP Employer-Related Provisions in the Patient Protection and Affordable Care Act Applicable to Tribal Employers A Presentation for the National Indian Health Board 31st Annual Consumer Conference Samuel E. Ennis, J.D. September 10, 2014 sennis@sonoskysd.com Washington, DC Juneau, AK Anchorage, AK Albuquerque, NM San Diego, CA
What is the Affordable Care Act? • President Obama signed the Patient Protection and Affordable Care Act (ACA) into law on March 23, 2010. • The ACA facilitates access to health care coverage through a variety of strategies: • Medicaid Expansion. • Individual Mandate. • New insurance options and requirements for employers. • Most ACA provisions are effective as of January 1, 2014. Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 2
How does the ACA Affect Tribes as Employers? • Option of purchasing employee health insurance through the Federal Employee Health Benefits Program (FEHB) or the Small Business Health Options Program (SHOP). • Tribes considered to be “large employers” may be required to provide employees with affordable health coverage or else pay a tax penalty. • Tribes offering group health plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) must provide beneficiaries with benefit summaries . Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 3
Does the ACA Apply to My Tribe’s Health Plan? • The ACA exempts certain types of employer health plans from some otherwise-applicable provisions: • “Large Group Market Plans” for larger employers. • Grandfathered plans (plans that existed on March 23, 2010 and have not substantially changed coverage, cost-sharing, or premiums since that date). • E mployer’s self -insured health plan. • Collectively bargained fully-insured plan (until the expiration of the CBA). • These exemptions vary based on the type of plan, but generally include (among other things): • No requirement to provide Essential Health Benefits. • No requirement to provide preventive care without cost-sharing. • Exemption from certain appeal requirements for denied claims. • Majority of the ACA applies to ALL EMPLOYER HEALTH PLANS , regardless of Tribal status. This includes all rights and responsibilities in this presentation (unless otherwise noted). Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 4
Federal Employee Health Benefits Program Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 5
What is the Federal Employee Health Benefits Program? • The United States federal government insures its employees through the Federal Employee Health Benefits Program (FEHB). • Section 409 of the Indian Health Care Improvement Act (IHCIA) authorizes Tribes operating programs under the Indian Self Determination and Education Assistance Act (ISDEAA) to offer their employees FEHB coverage. 25 U.S.C. § 1647b. • Section 409 does not authorize Tribes to offer coverage through the Federal Employees Dental and Vision Program (FEDVIP). Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 6
Who is Eligible for FEHB Coverage? • In order to participate in FEHB, the Tribal employer must offer FEHB coverage to all of its eligible tribal employees (certain exceptions for unionized employees). There is no minimum enrollment percentage requirement. • An “eligible employee” is a full-time or part-time tribal employee who is considered a common law tribal employee by the IRS, as well as a seasonal tribal employee who works more than six months in a year. It does not include a contract employee, tribal retiree, or volunteer. • An employees spouse (including a valid common law marriage) and children under age 26 are also eligible (with some restrictions on foster children). • Tribal employees are eligible for FEHB coverage regardless of whether they’re tribal members, or even Indians. • An Indian tribe can continue to offer its tribal members coverage under a separate health plan. Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 7
When Can Employees Enroll in a FEHB Plan? • Tribal employees may enroll in FEHB when they are hired, during the Initial Enrollment Opportunity or annual Open Season, or if they experience a qualifying life event (QLE). • Initial Enrollment Opportunity occurs when the employer chooses to participate in the FEHB Program. • Annual Open Season is the annual time period when tribal employees can enroll, change, or cancel FEHB coverage. • QLE is a defined event allowing enrollment outside of the Annual Open Season, such as marriage, birth of a child, divorce, or loss of other group insurance coverage. Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 8
How Much Do FEHB Plans Cost? • Tribal employees may choose among any of the in-state plans offered through FEHB, as well as among any available national plans. Plan costs will vary on a plan-by-plan and region-by-region basis. • Employer’s required payment percentage of employee premium is statutorily set at approximately 72-75% of the total monthly premium, as well as a per- employee administrative fee of approximately $15-20 per month. • The tribal employer may optionally choose to contribute up to 100% of the premiums for its employees. • Current rates for each State and each plan are available on the OPM FEHB website. Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 9
Employer Shared Responsibility Payment Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 10
What is the Employer Mandate? • The ACA requires that “applicable large employers” either (1) provide their employees with health insurance or (2) pay a tax penalty called the “Employer Shared Responsibility Payment” (informally called the Employer Mandate). • Applicable large employers are those that “employed an average of at least 50 full- time employees on business days during the preceding calendar year.” 26 U.S.C. § 4980H(c)(2). • Beginning on January 1, 2015 (or January 1, 2016 for some employers), the IRS will levy the penalty on applicable large employers that either (1) do not offer health coverage to substantially all full-time employees and their dependents, or (2) offer coverage below a minimum level of comprehensiveness and/or affordability. Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 11
Does the Employer Mandate Apply to Indian Tribes? • The IRS has promulgated regulations applying the employer mandate to Indian tribal governments and 501(c)(3) tax exempt organizations. 26 C.F.R. § 54.4980H – 1(a)(23). • But the ACA definition of “applicable large employer” does not explicitly include Indian Tribal employers. 26 U.S.C. § 4980H(c)(2). • In the face of such statutory silence, courts have conducted a fact-intensive analysis to determine whether the federal law applies to a Tribe or a certain Tribal activity. • IRS can be expected to enforce the mandate against Tribal employers absent a legal challenge. Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 12
What are the Employer Mandate Penalties? • Two kinds of Employer Mandate penalties: • When the employer does not offer insurance to 95% of its full-time employees and their dependents. • When the employer offers insurance that is either unaffordable for the employee or does not provide a minimum level of coverage. • Neither penalty applies unless an employee (1) subsequently enrolls in a QHP through the individual Marketplace and (2) qualifies for an advance premium tax credit or a cost- sharing reduction. 26 U.S.C. § 4980H(a)(2), (b)(1)(B). This includes: • Any premium tax credit allowed under 26 C.F.R. § 36B. • Any cost sharing under section 1402 of the ACA, which includes cost sharing protections for Indians. 42 U.S.C. § 18071(d). • Any advance payment of such credit or reduction under section 1412 of the ACA. 42 U.S.C. § 18082. • Marketplaces will notify an employer that an employee has been determined eligible for advance payments of the premium tax credit or cost-sharing reductions. 45 C.F.R. § 155.310(h). Sonosky, Chambers, Sachse, Endreson & Perry, LLP NIHB Consumer Conference September 10, 2014 Employer-Related ACA Provisions Slide 13
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