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HCR Update: 1099 Repeal Bill Passes Senate

Apr 29, 2011

Health Care Reform Update

April 15, 2011

1099 Repeal Bill Passes Senate 

Following months of procedural and political back and forth, stand-alone legislation that would repeal the 1099 tax reporting requirement for businesses included in the Affordable Care Act (or the health care reform law) was signed by President Barack Obama on April 15. This reporting requirement would have required businesses to file a 1099 form with the Internal Revenue Service  every time they spent more than $600 a year with another business - greatly increasing the burden on businesses.  

To offset the revenue losses by the repeal of this provision, the repeal legislation requires eligible individuals to repay the subsidies they are eligible for under the health care reform law if their income rises above 400% of the federal poverty level.  

Passage of the 1099 repeal legislation is considered a victory for business groups that have expressed opposition to the provision since the health care reform law's passage last year, but this also represents the first time the health care reform law has been successfully changed.

Update on new claims reporting requirement, applications for Early Retiree Reinsurance Program 

New training module outlines additional required data

Recently the U.S. Department of Health and Human Services (HHS) announced that additional data will be required when submitting requests for Early Retiree Reinsurance Program reimbursements in the form of a claim file. HHS has now posted ERRP Reimbursement Training: Claim List Online Training Module , which explains how the claim list requirement will be phased in and where it fits in the reimbursement flow, as well as the layout and field requirements. 

We strongly encourage individuals who work with the Early Retiree Reinsurance Program and data to review the training information. 

We will continue to support Early Retiree Reinsurance Program reporting

Our client reporting team is reviewing the materials and revising processes to meet this new requirement. What we have planned so far is outlined below, and we will provide additional details when we finalize that process.  

For plan sponsors/data aggregators who receive quarterly Early Retiree Information Workbooks and Early Retiree Lists: 

·         Plan sponsors/data aggregators will continue to receive quarterly Early Retiree Information Workbooks and Early Retiree Lists

·         We will provide the Early Retiree Reinsurance Program Secure Website Claim List Layouts or the Mainframe Claim List Layouts (as defined by HHS) to plan sponsors/data aggregators 

·         We will work with plan sponsors/data aggregators to set up secure FTP sites to transfer detail claims files larger than 8 MB between organizations, using one of these three options: 

1.       FTP with required PGP encryption

2.       SFTP (FTP SSH1 or SSH2) with optional PGP encryption

3.       FTPS (FTP over SSL) with optional PGP encryption

For data aggregators who receive monthly Early Retiree Reinsurance Program standard data feeds: 

·         We are reviewing the detail data fields required by the Early Retiree Reinsurance Program for the claim list layouts and we will do one of the following:

o        Add data fields to the current Early Retiree Reinsurance Program standard data feeds (as needed and if available) and pull data again to cover the Early Retiree Reinsurance Program reporting time period to date

o        Provide an explanation for how to work with current Early Retiree Reinsurance Program standard data feeds to create the required information

HHS announcement about Early Retiree Reinsurance Program applications

Also, on March 31, HHS announced that due to overwhelming response, it will no longer accept applications for the Early Retiree Reinsurance Program after April 30, 2011. Groups that have not already applied for the program and want to apply should do so immediately. This announcement does not affect groups that have already applied for and are participating in the program.

Now you have a single, reliable resource for health care reform information.

This content is provided solely for informational purposes: It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.


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