Transitional Relief Extended for Grandmothered Plans
February 17, 2021
On February 3, 2021, Commissioner Ridling issued Bulletin Number 2021-01 to announce a one-year extension of transitional relief for certain non-grandfathered individual and small group policies known as “grandmothered” policies. The bulletin follows the recent CMS extension of the federal nonenforcement policy concerning specific ACA compliance requirements for these plans.
On November 14, 2013, CMS announced a transitional policy with respect to the healthcare reform mandates for coverage in the individual and small group markets. This nonenforcement policy provided relief from certain market reforms, including prohibitions of coverage exclusions based on pre-existing conditions and requirements to cover essential health benefits and limit annual out-of-pocket spending.
Under the policy, state authorities could permit health insurance issuers to continue coverage that would otherwise have been cancelled for failure to comply with the ACA requirements. The commissioner has historically allowed insurers the option to continue such coverage. Bulletin 2021-01 represents the most recent extension of this policy and applies to renewals for plan or policy years beginning on or before October 1, 2022, and coverage extending through December 31, 2022.
Accordingly, small employers who are currently covered by such grandmothered policies issued in the state should be aware of the bulletin. These employers should work with their advisors and insurers regarding possible renewal of the coverage.
Bulletin Number 2021-01 »
Tax Relief Announced for Hurricane Sally Victims
September 29, 2020
On September 21, 2020, the IRS announced that state residents who were victims of Hurricane Sally are eligible for certain tax relief. Under AL-2020-02, affected taxpayers will have until January 15, 2021, to file various individual and business tax returns and make tax payments.
The announcement followed the recent disaster declaration for individual assistance issued by the Federal Emergency Management Agency. Taxpayers who reside or have a business in Baldwin, Escambia, and Mobile counties, as well as any other counties added later to the disaster area, qualify for the relief.
Accordingly, certain deadlines falling on or after September 14, 2020, and before January 15, 2021, are postponed through January 15, 2021. This includes individual and business tax filers that had a valid extension to file their 2019 return due to run out on October 15, 2020. However, because tax payments related to these 2019 returns were due on July 15, 2020, those payments are not eligible for this relief.
The January 15, 2021, deadline applies to the third quarter estimated tax payment due on September 15. It also applies to the quarterly payroll and excise tax returns normally due on November 2. Additionally, the relief extends to the filing of Form 5500 series returns that were due on or after September 14, 2020, and before January 15, 2021.
Affected taxpayers should refer to Revenue Procedure 2018-58, which specifies the scope of the available relief, for further information. The postponement of time to file and pay does not apply to information returns in the W-2, 1094, 1095, 1097, 1098 or 1099 series; to Forms 1042-S, 3921, 3922 or 8027; or to employment and excise tax deposits. However, penalties on deposits due on or after September 14 and before September 29 will be abated as long as the deposits are made by September 29, 2020.
Impacted employers should be aware of the potential relief and may want to consult with their tax advisors for further information.
IRS Announcement »
Rev. Proc. 2018-58 »
Transitional Relief Extended for Grandmothered Plans
June 23, 2020
On June 15, 2020, Insurance Commissioner Ridling issued Bulletin Number 2020-14 to announce a one-year extension of transitional relief for certain nongrandfathered individual and small group policies known as “grandmothered” policies. The bulletin follows the CMS extension of the federal nonenforcement policy with respect to specific ACA compliance requirements for these plans through December 31, 2021.
As background, on November 14, 2013, CMS issued a letter outlining a transitional policy with respect to the healthcare reform mandates for coverage in the individual and small group markets. This nonenforcement policy provided relief from specific market reforms, including requirements to cover essential health benefits and limit annual out-of-pocket spending and prohibitions of coverage exclusions based on pre-existing conditions.
Under the policy, state authorities could choose to allow health insurance issuers to continue coverage that would otherwise have been cancelled for failure to comply with the ACA requirements. The commissioner had previously announced the state’s intent to allow insurers the option to continue such coverage. Bulletin 2020-14 represents the most recent extension of this policy.
Accordingly, small employers who are currently covered by such grandmothered policies issued in Alabama should be aware of the bulletin. These employers should work with their advisors and insurers regarding possible renewal of the coverage.
Bulletin Number 2020-14 »
Health Insurance Flexibility Encouraged
April 28, 2020
On April 17, 2020, the Commissioner Ridling issued Bulletin No. 2020-07 regarding the need for flexibility in health insurance coverage in light of the coronavirus pandemic. The bulletin is directed at all insurers writing health insurance in the state.
The bulletin follows the declaration of a public emergency in the state and the issuance of local “shelter-in-place” orders. The duration of the emergency declaration is unknown at this time.
As a result, the commissioner urges health insurers to consider exercising flexibility with respect to maintaining employee health plan coverage. Specifically, insurers are encouraged to permit employers to continue covering employees under group policies even if the employees would otherwise become ineligible due to a reduction in hours, an “actively-at work” provision, or other eligibility requirements. Insurers are also encouraged not to increase premiums. The commissioner will not take enforcement action with respect to filed forms and rates against insurers that adjust policies and procedures to conform to these suggestions. The bulletin further reminds insurers of their COBRA obligations.
Employers with group policies issued in the state should be aware of these developments, particularly if seeking to continue coverage for employees with reduced hours due to the pandemic. However, it is important to keep in mind that most group health plans are governed by ERISA, which generally requires an amendment to update eligibility requirements. Additionally, notice must be provided to affected individuals. Accordingly, interested employers may want to discuss potential plan eligibility requirement changes with their insurer and document provider.
Bulletin No. 2020-07 »
Coronavirus Cancellation Policy Recommendations
April 14, 2020
On March 30, 2020, the Department of Insurance issued Bulletin No. 2020-05 in relation to policy cancellations or nonrenewals due to the coronavirus (COVID-19) pandemic. The bulletin applies to all commercial and personal lines of insurance, including property, casualty, disability, accident and health, and life insurance policies.
The bulletin follows Gov. Ivey’s declaration of a public health emergency in the state and “shelter in place” orders issued by local government entities. These mitigation efforts to limit the spread of the COVID-19 virus have resulted in worker displacement and business disruption.
As a result, affected individuals and entities may be unable to timely pay insurance premium payments. Accordingly, the Commissioner of Insurance recommends insurers consider certain actions for policies in force as of March 13, 2020. These measures include relaxing premium payment due dates, extending grace periods, waiving late fees and penalties, and allowing premium payment plans to avoid a lapse in coverage. Insurers are asked to consider policy cancellation only after expending all efforts to work with policyholders to maintain coverage.
Insurers and producers are also requested to provide alternative payment options, such as online or electronic transfers, to avoid the need for in-person transactions.
The bulletin is primarily directed at insurers. However, employers should also be aware of these developments and the possibility of premium payment flexibility, as necessary.
Bulletin No. 2020-05 »
Department of Insurance Issues Coronavirus Coverage Bulletin
March 17, 2020
On March 13, 2020, the Department of Insurance issued Bulletin No. 2020-02 regarding coronavirus (COVID-19) coverage and preparedness. The directive is issued to all insurance carriers authorized to transact health insurance in the state.
The Bulletin is released as part of the state’s proactive planning effort to address COVID-19. The outlined steps are designed to assist individuals and regulated entities in combating the urgent health challenge.
Accordingly, the Bulletin requests that health insurance carriers waive any cost sharing for COVID-19 lab tests so that cost does not hinder Alabamians from receiving testing. Carriers are also asked to waive cost sharing for in-network provider office visits and urgent care center visits, as well as for emergency room visits when testing for the coronavirus. If an insurance carrier doesn’t have an in-network provider with appropriate training and experience to meet the needs of someone needing treatment, the department requests that carriers provide an out-of-network option at the cost available for those in network.
The department asks that insurance carriers review their telehealth programs to ensure they’re equipped to meet demand amid any increased need for services. Additionally, the department requests that insurers immediately cover the cost of a COVID-19 vaccine at no cost sharing for covered members once the vaccine is developed and available to the public.
The memo is directed at insurers, but employer should also be aware of these developments.
Bulletin No. 2020-02 »
Extended Relief for Non-ACA-compliant Small Group and Individual Policies and Plans
May 29, 2019
On May 13, 2019, Insurance Commissioner Ridling released Bulletin 2019-04 to extend the ability of health insurance carriers in the individual and small group market to continue transitional health insurance plans that renew for a policy year starting on or before October 1, 2020, as long as the coverage comes into ACA compliance by January 1, 2021.
As background, on March 25, 2019, CMS provided guidance for a transition policy extension that allows insurers the option to renew non-grandfathered non-ACA-compliant plans, as long as the state allows for such an extension. Such transition policies are not required to be in compliance with certain ACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit. This bulletin applies this most recent federal extension to Alabama and allows the issuer to renew these non-ACA compliant plans either as an early renewal or short policy year to implement the extension.
Small employers that are interested in renewing their non-ACA-compliant plan should work with their advisors and insurers.
Bulletin 2019-04 »
IRS Provides Tax Relief for Victims of Severe Storms, Tornados and Straight-Line Winds
March 19, 2019
The IRS recently published guidance containing certain relief for individuals and businesses affected by severe storms, tornadoes and straight-line winds that took place on March 3, 2019, in Alabama. Specifically, the IRS offered extensions in relation to certain tax filing deadlines. The extensions apply automatically to any individual or business in an area designated by the Federal Emergency Management Agency as qualifying for individual assistance.
Specifically, individuals and businesses that reside in Lee County may qualify for tax relief. As a result of this relief, individuals or businesses that had forms due on or after March 3, 2019, and before July 31, 2019, have additional time to file the form through July 31, 2019. As it relates to benefits, the relief would generally apply to quarterly payroll, employment and excise tax filings due, as well as to any employers that may have previously applied for a Form 5500 filing extension. However, the extension of time to file and pay does not apply to the W-2, 1094, 1095, 1097, 1098 or 1099 information return series.
Impacted employers should discuss their filing obligations with their CPA or tax professional, with this relief in mind.
IRS News Release »
Alabama Enacts Data Breach Notification Law
June 12, 2018
On March 28, 2018, Gov. Ivey signed SB 318, the Alabama Data Breach Notification Act, into law. This law requires covered entities to implement reasonable, appropriate security measures to protect personal information on state residents from a security breach. Further, it requires employers to notify employees and applicants about any breach of personal information and if the breach is likely to cause substantial harm.
A covered entity is defined as "a person, sole proprietorship, partnership, government entity, corporation, nonprofit, trust, estate, cooperative association, or other business entity that acquires or uses sensitive personally identifying information." Thus, any public or private employer that acquires or uses certain personal information on Alabama residents, including on employees and applicants, is subject to the security measure requirements and breach notification provisions.
Personal information is defined as a resident's first name or first initial and last name in combination with one or more of the following with respect to the same resident:
- A non-truncated Social Security number or tax ID number
- A non-truncated driver's license number, state-issued ID card number, passport number, military ID number or other unique ID number issued on a government document used to verify the identity of a specific individual
- A financial account number, including a bank account number, credit card number or debit card number, in combination with any security code, access code, password, expiration date or PIN, that's necessary to access the financial account or to conduct a transaction that will credit or debit the financial account
- Any information regarding an individual's medical history, mental or physical condition, or medical treatment diagnosis by a health care professional
- An individual's health insurance policy number or subscriber identification number and any unique identifier used by a health insurer to identify the individual
- A user name or email address, in combination with a password or security question and answer that would permit access to an online account affiliated with the covered entity that's reasonably likely to contain or is used to obtain sensitive personally identifying information
Covered entities that experience a breach must notify affected residents within a reasonable time to conduct an appropriate investigation, but no later than 45 days from the determination that a breach has occurred and is reasonably likely to cause substantial harm (with certain exceptions). Importantly, if a covered entity's third-party agent experiences a breach in the agent's system, the agent must notify the covered entity as soon as possible, but no later than 10 days following the determination of the breach or reason to believe the breach occurred. If more than 1,000 Alabama residents are affected by a breach, covered entities must notify the state attorney general and consumer reporting agencies with specific information. Therefore, covered entities need to review third-party service agreements to ensure they're meeting these requirements and to ensure breach procedures are in place should an incident occur.
In addition, the law imposes reasonable security requirements for covered entities and third-party vendors, including an assessment based on the security measures as a whole.
Therefore, employers with employees in Alabama should familiarize themselves with the specific data breach notification requirements, and they should update security measures to adequately protect the data they hold and respond appropriately to any potential data incident. This law is effective May 1, 2018.
SB 318 »
Law on Group Health Coverage for Autism Spectrum Disorder Amended
June 13, 2017
On May 19, 2017, Gov. Ivey signed HB 284 into law, amending Alabama Code sections 10A-20-6.16, 27-21A-23 and 27-54A-2 related to the provision of coverage for autism spectrum disorder. The amendment requires fully insured plans issued in Alabama to employers with at least 51 employees to provide coverage for diagnosis, screening and treatment of autism spectrum disorders for plan participants who are age 18 or younger (under the pre-amended law, the age was 9 or younger).
The amendment is effective for health benefit plans delivered, executed, issued, amended, adjusted or renewed in Alabama on or after Oct. 1, 2017.
HB 284 »