Bulletins

IRS to adjust affordability percentage and penalty amounts

The IRS announced in Notice 2015-87 that it intends to increase the percent used in each of the three affordability safe harbors to 9.66% for plan years beginning in 2016.

The safe harbors are used to determine if an employer meets the Affordable Care Act (ACA) affordability requirement to provide coverage at a cost not to exceed 9.5% of one of the following:

ACA Reporting Deadline Extended

The IRS released Notice 2016-4 on Monday giving employers and insurers additional time to meet the ACA reporting deadline

Reminder: Large employers must report health care value on Form W-2

Only employers who issued more than 250 Form W-2's in 2014 need to comply

The aggregate cost of employer-sponsored health insurance must be reported on 2015 Form W-2s for employers who issued more than 250 Form W-2s in 2014. The reporting requirement is a provision established by the Affordable Care Act. Small employers (those who issued fewer than 250 Form W-2s in 2014) are temporarily exempt from the requirement until the IRS revokes the interim relief.

ACA auto-enroll provision repealed

Employers with more than 200 full-time employees won’t be required to auto-enroll full-time employees into a health plan following a repeal of the Affordable Care Act (ACA) provision.

The ACA requirement was shelved as part of the recent budget deal – the Bipartisan Budget Act of 2015 – signed into law earlier this month. The deal followed weeks of negotiations between Congressional leaders and the White House to avoid a government shutdown.

President signs PACE Act

Late yesterday, President Obama signed into law a measure allowing states to decide whether groups with 51-100 employees are subject to the small-group community rating structure defined by the Affordable Care Act (ACA).

In a rare bipartisan effort, the Protecting Affordable Coverage for Employees (PACE) Act was overwhelmingly approved by both the House and Senate and sent to the President earlier in October. 

Transition reinsurance fee submission deadline looms

The form self-insured health plan sponsors need to submit the transition reinsurance fee, mandated by the Affordable Care Act, is now available on pay.gov. The deadline for submitting the completed online form is November 15, 2015. 

Opposition to Cadillac Tax grows

The Cadillac Tax is one of a limited number of Affordable Care Act provisions yet to be implemented. Slated for adoption in 2018, the 40% nondeductible excise tax would be imposed on annual health insurance premiums that exceed $10,200 for individual coverage and $27,500 for family. The amounts, for both insured and self-funded plans, will be indexed for inflation after 2018.

Employers must follow guidelines when issuing MLR rebates

Distribution of rebates varies depending on plan type

Area insurers are beginning to issue 2014 plan year Medical Loss Ratio (MLR) rebates. The Affordable Care Act requires insurers to meet MLR requirements each year. If an insurer doesn’t meet the minimum MLR (spend 80 to 85 percent of its premium dollars on health care or activities that improve health care quality), then the insurer must issue a rebate to the affected individual and group policyholder by August 1, 2015.

Employers should prepare now for new IRS reporting requirement

Employers will soon face a major ACA compliance deadline, and this is not one to postpone till the last minute.

Organizations that averaged more than 50 full-time equivalent employees (FTEs) in 2014, as well as self-insured groups, must file information returns with the IRS in early 2016.

“The reporting requirements are onerous and depend on data that employers should start gathering now,” said Mary Amundsen, PHR, PPACAP.

PCORI fee due July 31

Self-insured health and HRA plans must file form; carriers pay fee on behalf of fully insured plans

Employers who are responsible for paying the annual Patient-Centered Outcomes Research Trust Fund fee should use the updated Form 720. The fee is an Affordable Care Act provision to help fund the Patient-Centered Outcomes Research Institute (PCORI), which aims to help patients better understand the prevention, treatment and care options available and the science behind them.

IRS reporting updates following form and instruction release

Employer health plans must meet new IRS reporting guidelines for 2015

Large employers, those with 50 or more full-time equivalents (FTEs), and sponsors of self-insured plans are required to file information returns to share with employees and the IRS. The reports are effective for coverage offered in 2015 and must be given to employees by January 31 of the year following the coverage year (2016) and must be filed with the IRS by February 28 (March 31 if filed electronically).

Form W-2s must report value of employer-sponsored health insurance

Requirement only affects employers who issued more than 250 Form W-2s in 2013

This bulletin serves as a reminder of the employer Form W-2 reporting requirement under the Affordable Care Act.

Those not required to comply with the reporting requirement for 2014 include: 

Transition reinsurance form available on Pay.gov

Deadline for submission is November 15

Today, the long-awaited form self-insured plans sponsors need to submit the transition reinsurance fee, mandated by the Affordable Care Act, was posted on pay.gov. The deadline for submitting the completed form to the Centers for Medicare and Medicaid Services (CMS) is November 15, 2014.

IRS allows additional mid-year cafeteria plan changes

Participants in a section 125 cafeteria plan generally are unable to make mid-year plan changes without experiencing a qualified change in status such as marriage, the birth of child or a change in employment status that affects benefit eligibility.

Given these restrictions, new coverage requirements under the Affordable Care Act (ACA) posed challenges for employees who pay health insurance premiums with pre-tax dollars through a premium-only plan. The IRS has addressed those challenges in Notice 2014-55.

ACA requires self-insured plans to secure health plan identifier (HPID) and certify compliance with electronic transaction requirements

ACA requires self-insured plans to secure health plan identifier (HPID) and certify compliance with electronic transaction requirements

A provision within the Affordable Care Act requires the Department of Health and Human Services (HHS) to develop new requirements for electronic transactions sent between Covered Entities and a method to certify compliance with the new rules.

IRS increases affordability percentage for 2015

Employers subject to the shared responsibility penalty within the Affordable Care Act (ACA) must ensure that the health coverage they offer to employees provides minimum value and is affordable.

For 2015, employers will satisfy the affordability requirement if the amount of premium employees pay for the lowest-cost, self-only coverage does not exceed 9.56% of the employee’s household income, up from 9.5% in 2014. The increase was released recently in IRS Revenue Procedure 2014-37.

Large employers subject to new IRS reporting requirements

IRS releases draft forms

Two new IRS reporting requirements will be used by the Internal Revenue Service to determine if individuals and employers are in compliance with Affordable Care Act (ACA) provisions.

Employers must follow guidelines when issuing MLR rebates

Distribution of rebates varies depending on plan type

Area insurers are beginning to issue 2013 plan year Medical Loss Ratio (MLR) rebates. The Affordable Care Act requires insurers to meet MLR requirements each year. If an insurer doesn’t meet the minimum MLR (spend 80 to 85 percent of its premium dollars on health care or activities that improve health care quality), then the insurer must issue a rebate to the affected individual and group policyholder by August 1, 2014.

Is your small business eligible for health care tax credits in 2014?

As most know, January 1, 2014, marked the launch of many key Affordable Care Act (ACA) provisions. Two big ones:  the opening of the Health Insurance Marketplace and rating changes.

Under the new community-rating rules, small-group health plans are no longer subject to medical underwriting, and premium rates can only vary based on age, tobacco use, and geographic location.

To avoid drastic premium increases, most small employers with fewer than 50 full-time equivalent employees took advantage of the opportunity to renew coverage before the new 2014 rating rules.