Regulatory & Compliance Update

On this week's show, hosts Doug Field and Ron Bachman talk with one of the industry's top legal experts, Chris Condeluci, principal and sole shareholder of CC Law & Policy. Starting at ten minutes, Chris and the hosts discuss purchasing an individual market plan on a tax-free basis, potential changes for small employers to be aware of and other policy changes affecting health care consumerism today and in the future.

Dating back to January 2013, Treasury, HHS and the DOL have issued six pieces of guidance (and they have also codified this guidance in regulations) providing that employers will be subject to an excise tax penalty of $100 per day/per violation if they provide a tax-free contribution to employees to purchase an individual market plan. In other words, the Federal Departments’ guidance effectively prohibits the tax-free purchase of an “individual” market plan.

However, the House of Representatives recently passed legislation that would reverse the federal departments’ guidance, at least as the guidance applies to small employers (i.e., employers with fewer than 50 “full-time equivalent employees”). Prospects of passage in the Senate are less clear, but policy analysts suggest that this legislation could get signed into law by the year’s end.

In addition, policymakers on Capitol Hill and in the federal departments continue to pursue changes impacting consumer-driven health plans, ranging from providing an exception for employee FSA and HSA contributions from the Cadillac Tax (or another limitation on the “exclusion”) to limiting the number of HSA-eligible health plans that can be offered on the Federally-facilitated Exchange.