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Affordable Care Act (ACA)

LeClairRyan’s Affordable Care Act team is strategically positioned to help employers of all types and sizes successfully implement changes currently and soon-to-be required by the nation’s unprecedented healthcare reform initiatives. Comprised of attorneys and professionals with a depth of experience in areas of law related to healthcare, health insurance, employee benefits, fraud and abuse, taxation, and information technology, our team structure mirrors the cross-disciplinary nature of the Affordable Care Act (ACA).

Our distinctive strengths include:

Please use the website links at the bottom of this page to access user-friendly information about the Small Business Health Options Program (SHOP) and Health Insurance Marketplace, both of which opened for business on October 1, 2013, as well as employers' new ACA tax benefits and responsibilities and the latest regulations and information issued by the U.S. Department of Labor.

Affordable Care Act (ACA) Website Links

Federal Government Healthcare Website: Learn how small business owners can shop for health insurance through the Small Business Health Options Program (SHOP) and help their employees determine which options best suit their insurance needs. This site also provides information for individuals and families wishing to shop the Health Insurance Marketplace in their state. Both programs open for business on October 1, 2013.

IRS Affordable Care Act Tax Provisions: The ACA contains new tax benefits and responsibilities for employers. This site helps business owners discern what tax provisions apply to them based on the size of their business and workplace structure.

The IRS also provides guidance on how the ACA's tax provisions will affect individuals and families, insurers (including self-insured organizations), tax-exempt and government organizations, and certain business types.

U.S. Department of Labor:
Learn about the latest ACA regulations and guidance issued by the U.S. Department of Labor and download model notices informing employees about insurance coverage options and changes. This site also offers answers to frequently asked questions about the implementation of the ACA.

The Department of Labor Technical Release 2011-02 (PDF): Guidance on External Review for Group Health Plans and Health Insurance Issuers Offering Group and Individual Health Coverage, and Guidance for States on State External Review Processes.

  • Employment compliance
    Our attorneys help employers navigate the myriad of ways in which the Affordable Care Act (ACA) affects employer-employee relations by providing strategies designed to prevent statutory penalties and noncompliance liability.

    Our distinctive strengths include:
    • Assessing which provisions, such as the “employer mandate,” apply to a business
    • Determining which employees must receive available health benefits, including helping business owners and management correctly classify employees who fall into hard to decide categories such as “variable hour employees” and employees who move in and out of “full-time” status
    • Providing employers with counsel related to new ACA “whistleblower” protections that prohibit retaliation against employees who report violations or participate in investigations or proceedings concerning potential violations
    • Defending discrimination claims, including those under the broad provision prohibiting discrimination in healthcare plans and programs based on both traditional, federally protected categories as well as new categories such as “gender identity,” “sex stereotyping,” and “pregnancy-related conditions”

    Group Leader: Brian G. Muse
  • Corporate structures / mergers and acquisitions
    Just as it has become increasingly apparent that the Affordable Care Act (ACA) affects the manner in which operating businesses handle taxation as well as employee benefits and staffing issues, acquisitive companies are realizing that the nation’s healthcare reform also affects mergers, acquisitions and the sale of businesses. Our attorneys advise acquirers and sellers on the narrow, yet precarious, nexus between M&A and ACA law.

    Acquisitive businesses must re-engineer their due diligence, risk allocation and post-closing business structure analysis to account for the sometimes surprising and often counterintuitive consequences of undertaking merges and acquisitions during the buildup to the full enactment of the ACA and beyond.

    Simply placing a new business in a separate subsidiary or affiliate may provide protection against some potential liabilities, but may not be an adequate shield against ACA penalties. Likewise, cutting back employee hours post-acquisition may not successfully qualify the target’s former employees as part-time employees.

    Careful consideration by owners and management of these corporate issues and more are paramount to ensuring that acquisitive companies comply with the ACA and minimize liability.
  • Tax and ERISA
    The Affordable Care Act (ACA) is dramatically changing employer tax benefits and responsibilities as well as healthcare obligations under the Employee Retirement Income Security Act of 1974 (ERISA). Employers of all types and sizes are faced with the daunting task of determining what aspects of the ACA apply to them and how they should proceed to ensure compliance.

    Members of our team advise employers on the following:
    • Tax implications of the ACA, including tax reporting compliance, audits and tax controversies, and tax minimization strategies
    • ERISA and non-ERISA plans, including plan design and plan compliance for single employer and multi-employer plans
    • Innovative approaches to benefit plans that ensure compliance and minimize employer costs
    • Aggregation determinations under Internal Revenue Code Section 414(m) for affiliated service groups
    • Coordinating the provisions of collective bargaining agreements with governmental regulations under the ACA, ERISA, and other provisions of state and federal law
    • Employee/independent contractor status and related tax implications under the ACA

    In addition, members of our team help multistate and international employers ensure that fringe benefit programs, including health and welfare plans, comply with state and federal laws during a time when new regulations are still being issued and implications of court decisions, such as the U.S. Supreme Court’s landmark decision pertaining to the Defense of Marriage Act, can vary from state to state.

    When necessary, we collaborate with our firm’s litigators on matters involving governmental investigations of plans, including U.S. Department of Labor and Internal Revenue Service investigations (both civil and criminal) as well as litigation initiated by employees.

    Group Leader: Elizabeth J. Atkinson
  • Healthcare investigations and regulatory litigation
    Our team is comprised of skilled litigators who have a depth of experience handling healthcare investigations and regulatory litigation (qui tam) such as those that will arise as a result of the Affordable Care Act.

    We have prosecuted and defended a variety of matters involving healthcare entities and enjoy a proven record of achieving positive and quantifiable results for our clients. Members of our team include a former federal prosecutor for the Criminal Division of the U.S. Department of Justice and a former director of risk management for a mid-sized health system. Our clients benefit from their insightful understanding of the federal government investigative and regulatory process and healthcare compliance programs geared toward limiting provider liability.

    Government Investigations
    Our attorneys handle a variety of civil and criminal healthcare investigations, with a particular emphasis on investigations and litigation under the False Claims Act. In every matter we handle – from high-profile criminal fraud and abuse matters to corporate compliance issues to complex Stark Law and Anti-Kickback Statute and HIPAA matters, our approach is uniquely tailored to our client’s needs and the circumstances at hand.

    Government investigations often require cooperative interaction with or voluntary disclosure to regulators. Other times, they call for an aggressive litigation stance during a federal or state trial. Regardless of the required approach, our attorneys work vigorously to defend our client’s interests.

    Internal inquiries and civil and criminal investigations by federal and state authorities often involve bet-the-company issues and significant collateral proceedings. Accordingly, our healthcare attorneys collaborate with litigators on related teams and attorneys with a depth of experience in Food and Drug Administration and life sciences regulations.
  • Self-insured plans, TPA and stop loss agreements
    Private Employer Self-Insured Health Plans, Third Party Administrator Agreements and Stop Loss Insurance Agreements

    Employer self-insurance plans can be an effective solution to Affordable Care Act (ACA) costs and regulation, but only if agreements are properly drafted. Our attorneys represent small and large companies renewing self-insured health insurance plans for their employees or arranging new self-insured programs. We analyze programs for ACA compliance as well as third party administrator (TPA) agreements and stop loss insurance agreements for risk reduction.

    TPA agreements and stop loss agreements must be consistent to effectively reduce the risk of disputes and litigation. Members of our team provide thorough answers to numerous questions related to these agreements. For example, which entity determines that a particular treatment is experimental and therefore not covered? Should it be the TPA, the employer or the stop loss insurer? What happens if the TPA notice to the employer or reinsurer is untimely? Are TPA agreements negotiable?

    Our attorneys work independently and with healthcare consultants to analyze TPA and stop loss agreements with an eye toward reducing conflicts and threats of litigation between companies, their TPAs and stop loss carriers. Contract analysis also reduces litigation risks between employees, participants and company self-insured programs. In addition, we have experience handling TPA and stop loss disputes when they arise and have a track record of achieving favorable outcomes for our clients.
  • Collective bargaining
    For the unionized employer, the advent of the Affordable Care Act (ACA) requires careful, tactical planning for upcoming collective bargaining negotiations. Our attorneys, who have significant experience in healthcare law and union negotiations, are uniquely qualified to guide employers through this process.

    Initially, unionized employers must evaluate whether their health insurance plan is “grandfathered” and not subject to certain ACA requirements. Grandfathered plans are exempt from, among other requirements, certain discrimination provisions, limits on out-of-pocket expenses, deductibles and co-insurance for preventative care services and the prohibition on pediatricians serving as primary care physicians. On the other hand, health insurance plans may lose their grandfathered status if certain benefits are eliminated; the co-insurance, deductibles or out-of-pocket expenses are increased by certain percentage ratios; or if an employer’s contribution decreases by more than five percentage points.

    In addition, only “large employers” – those with 50 or more full-time employees – are required under the ACA to offer health insurance or pay a penalty. Unionized employers may choose to layoff employees to get below the employee threshold, subcontract out certain types of work to avoid hiring more employees, or reduce employee hours to decrease the number of full-time employees. However, an employer’s ability to take any of these measures is dependent on the wording of its collective bargaining agreement.

    Similarly, the ACA requires a host of changes to health insurance, such as limiting eligibility periods to 90 days and insuring dependents up the age of 26. Many existing union health plans do not include these provisions. To bring them into compliance, unionized employers cannot make unilateral changes, but must negotiate such changes with the union.

    Employers who ignore the ACA when negotiating with a union will suffer costly consequences. While healthcare reform has certainly made the collective bargaining process more complex, company owners and managers who carefully consider the ACA’s requirements will mitigate the risks associated with noncompliance.

    Group Leader: Joseph P. Paranac
  • Defending fiduciary, ERISA and employment claims
    Fiduciary and ERISA Claims
    The Patient Protection and Affordable Care Act, Public Law 111-148, and the Healthcare and Education Reconciliation Act of 2010, Public Law 111-152, collectively, the Affordable Care Act (ACA), created new challenges for employers, fiduciaries and their liability insurers alike. As employers, regulators, administrators and courts begin to struggle with understanding the scope and requirements of the ACA, employers, fiduciaries and liability insurers will be faced with extensive challenges in avoiding ACA violations and related litigation.

    LeClairRyan’s multidisciplinary ACA team has the skill and experience necessary to help employers, fiduciaries and liability insurers navigate the following areas: ERISA litigation; whistleblower defense; fiduciary defense; employment and benefits litigation; and defense of administrative matters, especially with respect to the U.S. Department of Labor and Internal Revenue Service.

    For example, the ACA amended ERISA by adding its substantive requirements to ERISA thereby requiring plan sponsors and fiduciaries to adhere to plan requirements mandated by the ACA. In short, by incorporating the ACA’s coverage mandates for individual, group, self-insured and fully insured employer-sponsored health plans, ERISA now requires accountability of plan fiduciaries and gives participants the right to sue for benefits and breaches of fiduciary duty regarding the administration of plan benefits.

    More specifically, Section 1201 of the ACA incorporates its new healthcare coverage mandates for individual, group and self-insured employer-sponsored health plans into Section 715 of ERISA (Title I, Part 7). The ACA healthcare coverage mandates are not minor. Instead, these mandates include measures for: preventive care; contraceptives; limited deductibles and out-of-pocket maximums; elimination of pre-existing condition exclusions; and a list of essential health benefit requirements, including emergency services, hospitalization, prescription drugs, maternity and newborn care, mental health and substance abuse, rehabilitative services and devices, laboratory services and pediatric services. Thus, to the extent employers continue to sponsor health plans, they must do so in compliance with these new mandates. Additionally, the ACA made employee-sponsored health plans subject to external reviews by independent bodies such that administrative reviews will be commonplace.

    Whistleblower and Discrimination Claims
    The ACA, with the enactment of Section 1558, follows the form of earlier federal legislation, such as Sarbanes-Oxley and Dodd-Frank, in providing whistleblower protections for employees who approach regulators regarding an employer’s failure to meet the ACA’s requirements for reporting, recordkeeping and benefits.

    Section 1558 of the ACA, which amends the Fair Labor Standards Act of 1938 (FLSA), protects employees against retaliation by their employers for: (1) reporting a violation of Title I of the ACA, which relates to consumer protections, such as prohibitions on lifetime coverage limits, preexisting conditions exclusions, requirements to cover preventive services without cost sharing, and prohibitions on using certain factors to set premium rates; (2) refusing to participate in an activity the employee reasonably believes to be a violation of Title I; (3) assisting or participating in a whistleblower proceeding under Section 1558; and (4) receiving a tax credit or cost-sharing reduction as a result of participation in a Health Insurance Exchange (HIE) or Marketplace (i.e., employer retaliation against employees who trigger employer penalties by seeking coverage or an exchange).

    Additionally, Section 1557 of the ACA extends the reach of federal nondiscrimination laws to prohibit discrimination in healthcare programs on the basis of race, color, national origin, sex, sex stereotypes, gender identity, age and disability. Health insurers, hospitals and all other entities receiving federal funds are covered under this new law, as are employers that receive federal funding, including educational institutions. Under Section 1557, an individual may not “be excluded from participation in, be denied the benefits of, or be subjected to discrimination under, any health program or activity, any part of which is receiving federal financial assistance, including credits, subsidies, or contracts of insurance.”

    These statutory enactments will create substantial opportunities for employees to file and proceed with whistleblower and employment-based claims in a highly technical and complicated area in which plan sponsors and management can easily overlook possible legal exposure. Our team can assist employers in implementing appropriate safeguards and telephone hotlines to avoid such exposure. We also have a depth of experience handling a full spectrum of complex employment litigation involving regulatory issues.

    Workforce Restructuring Claims
    Employers faced with the complexity of complying with the ACA and potential penalties of noncompliance are examining their options closely. Employers near the threshold of 50 full-time employees and even large employers in collective bargaining agreements are actively and – at times – openly discussing workforce restructuring in the form of reduced hours and staffing. However, decisions to restructure workforces to avoid providing health plan benefits are positioning numerous employers for possible collective litigations. For example, Section 510 of ERISA, which prohibits companies from making employment decisions specifically to prevent an employee from obtaining or keeping benefits coverage, could trigger ACA claims resulting from the extensive coverage mandates under the umbrella of ERISA. A related issue is the aggregation requirements of the ACA and the issues associated with the improper identification of common law employees. Members of our team routinely handle workplace restructuring matters and provide related guidance to corporate counsel and employer groups.

    Group Leader: James P. Anelli
  • Physician and hospital guidance
    Physicians, hospitals and other healthcare providers face enormous challenges in complying with the myriad of complex regulatory provisions under the Affordable Care Act (ACA). The anticipated influx of newly insured patients receiving healthcare coverage via the Health Insurance Marketplace (Exchanges), the continued evolution of “value-based purchasing” and similar “pay-for-performance” programs, the increased use of “bundled payments” and other modifications to both public and private health insurance reimbursement all demand extraordinary organizational agility to assure continued competitiveness.

    Hospitals, health systems and group physician practices must also embrace their roles as employers under the labyrinth of new Internal Revenue Service and U.S. Department of Labor rules and regulations arising from the ACA. Changes in tax policy and employee benefit requirements alter the human resources landscape and can be particularly problematic for small providers.

    Despite such challenges and impediments, however, the ACA offers significant opportunities for hospitals and physicians with the knowledge and savvy to avoid pitfalls and the foresight to improve not only the quality of patient care but their competitive positions in their respective fields.

    LeClairRyan’s ACA team members and especially those focused on physicians and hospitals provide unique insight and practical counsel to such organizations for matters arising under the dual roles of employer and healthcare provider. Our attorneys have experience as hospital in-house counsel and healthcare facility executives as well as many years in private practice representing physicians and hospitals on a variety of regulatory and transactional matters.

    In addition, decades of involvement in health reform issues provide a firm foundation for our attorneys’ understanding of not only the fundamental requirements of the ACA, but the law’s legislative and regulatory intent beyond that expressed in published agency guidance – the so-called “lore” surrounding the statutes and regulations. Our attorneys have a depth of experience serving as a strategic partner, business counsel and compliance advisor so that healthcare organizations not only survive but thrive in this ever-changing environment.

    Group Leader: Patrick J. Hurd 
  • Sunshine Act regulatory compliance
    The Sunshine Act – established under the Affordable Care Act (ACA) – requires medical industry companies to disclose all consulting fees, travel reimbursements, research grants and other gifts with values over $10 that they give to physicians and teaching hospitals.

    Manufacturers of “covered” drugs, devices, biologicals and medical supplies as well as group purchase organizations (GPOs) must perform data collection to comply with the ACA’s Sunshine Act regulatory scheme referred to as “open payments.”

    Members of our team have the skill and knowledge necessary to help healthcare industry manufacturers and GPOs comply with the data collection, registration, submission, attestation, review and publication processes required by the Centers for Medicare and Medicaid Services to disclose payments to physicians and teaching hospitals as well as certain ownership interests. In addition, we have drafted company policies for manufacturers and assisted in policy implementation and software installation necessary to comply with the Sunshine Act.