Health Care Reform

Sections 4980B, 4980D, 4980E, and 4980G of the Internal Revenue Code impose excise taxes for various failures of health care coverage requirements. For example, §4980B excise taxes apply to COBRA failures, and §4980D excise taxes apply for failure to comply with Code Chapter 100 group health plan requirements. Excise tax penalties for violations of COBRA, HIPAA, and other rules have existed for many years. Several new health reform rule violations also require reporting and payment of excise taxes.  Employers and plan sponsors must use Form 8928 (Sept. 2011) to report excise taxes due for failures to meet certain requirements of the Public Health Services Act, COBRA, HIPAA, MSA, or HSA contributions. Form 8928 includes the excise taxes under Code § 4980D created by PPACA.

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The 2010 health reform law (PPACA), Section 2715 of the PHSA, requires that health plans provide a Summary of Benefits and Coverage (SBC) and a Uniform Glossary of commonly used terms. The goal is to have a uniform summary of important provisions that will assist individuals in understanding their coverage and provide the ability to compare it to other available options on an “apples to apples” basis.  The law required the Department of Health & Human Services (HHS) to provide guidance by March 23, 2011, although HHS did not do so until August 18, 2011, when it issued proposed regulations.[1] HHS, IRS, and DOL have issued final regulations.[2]

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On January 20, 2012, the U.S. Department of Health and Human Services (HHS) issued what was supposed to be the final rule about preventive care services that must be offered in group health plans.  This guidance, issued under the authority of section 2713 of the Public Health Service Act, enacted as part of health reform (the Patient Protection and Affordable Care Act), requires group health plans to provide various preventive care services for women without cost sharing, including contraceptive and sterilization services.  On Feb. 10, 2012, after a firestorm of protest from religious organizations,[1] HHS announced modifications to the final rule to include a new exemption for religious run social organizations in addition to the one for religious organizations.

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