Proposed IRS rule limits employers’ dependent coverage obligation
 
Employer-paid health coverage for employees must be available to their children under age 26 but there would be no obligation to make such dependent coverage affordable, the IRS says in a proposed rule published Jan. 2.
 
For employees themselves, on the other hand, coverage would have to be affordable, defined as an employee contribution that doesn’t exceed 9.5% of the employee’s household income.
 
The new proposal also gives employers some two years to comply with dependent coverage rules under the Affordable Care Act’s employer mandate. The mandate applies to employers with 50 or more full-time equivalent employees.
 
A number of employers currently offer coverage only to their employees, and not to dependents, the IRS says. For them, “expanding their health plans to add dependent coverage will require substantial revisions to their plans,” the proposal notes. Given the burden of compliance, the IRS would allow employers to put off dependent coverage until 2015, provided their efforts to meet the dependent requirement begin in 2014. That also is the year actual coverage of employees themselves must begin.  
 
Under the law, a full-time employee is a person employed at least 30 hours a week on average. An employer will be subject to the new requirement, for example, if it has 40 full-time employees working 30 hours a week and 20 half-time employees working 15 hours a week.
 
The proposed IRS rule is available at www.gpo.gov/fdsys/pkg/FR-2013-01-02/pdf/2012-31269.pdf.
 
Fiscal agreement includes no home health cuts, but sequester remains on table
The fiscal cliff agreement negotiated by congressional lawmakers contains no cuts or copay for home health. However, a 2% Medicare rate cut as part of the so-called sequestration process will come up for debate again in two months.
 
The agreement also officially repeals the long-term insurance provisions of the Affordable Care Act, known as the Community Living Assistance Services and Supports (CLASS) Act. HHS indicated last year that it would not implement the program because it couldn’t find a way to make it financially sustainable (HHL 10/24/11).
 
Instead, the compromise bill puts in place a 15-member long-term care commission which  “shall develop a plan for the establishment, implementation, and financing of a comprehensive, coordinated, and high-quality system that ensures the availability of long-term services and supports,” according to the bill.
 
The bill also contains another “doc fix,” averting a 26.5% cut to physicians’ Medicare rates.
 
For more on the deal and its impact on your operations, turn to your next issue of HHL.