BeneTrac's reporting and tracking capabilities ensure employer and broker compliance with all Health Care Reform requirements, including mandatory coverage, tracking waivers, and reporting mandates. Stay up to date on Health Care Reform legislation with details of each regulation below:
June 25, 2015: U.S. Supreme Court Upholds Affordable Care Act Premium Tax Credits
On June 25, 2015, the United States Supreme Court rendered a decision in the King v. Burwell case, stating that premium tax credits are allowed for eligible individuals who sign up for health insurance coverage through federal as well as state health insurance marketplaces. With the ruling, Employer Shared Responsibility (ESR) provisions within the Affordable Care Act (ACA) remain unchanged.
How Does This Affect You?
Business owners should continue to monitor the law and understand their responsibilities. If you're what the ESR provisions define as an "Applicable Large Employer," you:
- must track and report to the IRS on Forms 1094-C and 1095-C beginning with this tax year:
- full-time employee status,*
- offers of health coverage, and
- the affordability and adequacy of coverage offered to full-time employees.
- may be subject to penalties for failing to file these forms on time
- may be subject to steep penalties for not offering your full-time employees and their dependents affordable and adequate health insurance.
*The Employer Shared Responsibility provisions of the ACA define a full-time employee as one who works 30 or more hours a week on average.
How BeneTrac Can Help
Understanding the Employer Shared Responsibility provisions of the ACA and keeping up with the regulations can be a daunting task. BeneTrac can help you navigate the complexities of the health insurance system and adapt to changes in the health care reform law.
If you're currently a BeneTrac ESR Services client, you'll continue to receive the information and ongoing analysis, monitoring, and reporting necessary to help stay in compliance with ACA provisions.
Otherwise, please ask us about BeneTrac ESR Services, where we'll work with you to determine if you're an applicable large employer and help you track, gather, and report information to the IRS. If you have questions or would like to sign up, please contact BeneTrac Client Service at 877-645-4342, option 1.
Information in this communication is accurate as of June 25, 2015.
February 10, 2014 – Additional Delay in Enforcement of Employer Shared Responsibility Provisions
On February 10, 2014, the U.S. Treasury Department announced a one-year delay in enforcement of the Employer Shared Responsibility (ESR) provisions of the Affordable Care Act for employers with between 50 and 99 full-time employees, including full-time equivalent employees, until 2016.
Companies with 100 or more full-time employees, including full-time equivalent employees, are still subject to the ESR provisions in 2015; however, those employers with 100 or more full-time employees who offer minimum essential coverage (MEC) may avoid a potential penalty if they offer coverage to at least 70 percent of their workforce (instead of the previous standard of 95 percent). This requirement returns to 95 percent in 2016 and beyond.
The ESR provisions, also known in the press as the "Employer Mandate," state the responsibility of applicable large employers (companies that employ 50 or more full-time employees and full-time equivalent employees) to provide qualified and affordable health insurance to their full-time employees and dependents or face a penalty.
July 3, 2013 – Delay in Enforcement of Employer Shared Responsibility Provisions
The U.S. Treasury Department announced a delay in enforcement of the Employer Shared Responsibility provisions of the Affordable Care Act until January 2015. These provisions state that all employers of 50 or more full-time employees (taking into account full-time equivalent employees) may potentially face steep penalties if they do not offer adequate health insurance (meeting several criteria) to employees who work an average of 30 or more hours a week and their dependents. Furthermore, the related reporting requirements that applied to 2014 have also been delayed to 2015.
June 13, 2013 – Employer Notice to Employees Requirement
Beginning October 1, 2013, employers are required to provide written notices to all employees — regardless of benefit enrollment status or full- or part-time status — about health coverage options, including notification about federal and state health insurance marketplaces. Employers can send the notices by mail or electronically. In 2014, an employer will have 14 days from the employee's start date to provide a notice.
The Department of Labor has provided model notices for employers who do not offer insurance, as well as for employers who offer coverage to some or all employees. Employers can also create their own notices, which must include:
- An explanation of the marketplaces;
- A reference to www.healthcare.gov for employees to get information;
- Information about premium subsidies that may be available to employees if they purchase a qualified health insurance plan through a marketplace; and
- Notification that employees may lose their employer contribution to the health plan if it is obtained through a marketplace.
COBRA election notices for continuation coverage must also include information about the marketplaces.
April 18, 2013 – What Employers Need to Know about Employer Shared Responsibility Provisions
The Employer Shared Responsibility (ESR) provisions of the Affordable Care Act address the issue of an employer's responsibility to provide health insurance coverage to employees. Effective January 1, 2014, large employers who have 50 or more full-time equivalent (FTE) employees could face substantial fees if they:
- Fail to offer their employees and their dependents health insurance coverage that meets the established minimum essential coverage (MEC) requirements, or
- Offer such coverage and it is deemed unaffordable or does not provide minimum value.
February 28, 2013 – Health Care Exchanges and ESR Provision Updates
Health Care Reform provisions continue to be implemented. Two recent developments include:
The projected new date will be late summer or early fall 2013 – the same time open enrollments are expected for the Exchanges.
- Employer Deadline to Provide Exchange Information to Employees Postponed
The original March 1, 2013 deadline for employers to provide specific written information to employees about Health Care Exchanges (Marketplaces) has been postponed by the Departments of Labor, Health and Human Services, and the Treasury.
- Employer Shared Responsibility Updates
The Employer Shared Responsibility (ESR) provisions of the Affordable Care Act address the issue regarding employers' responsibility to provide employees with health insurance coverage. The IRS recently provided clarification on multiple aspects of these provisions, including:
- Determining "household income" to assess an employer's offer of minimum essential coverage (MEC) will be based solely on the individual employee.
- An employer will be considered to offer MEC if it is offered to the greater of:
- All but 5 percent of full-time employees and their dependents, or
- All but 5 full-time employees and their dependents
January 15, 2013 – Summary of Major Changes in Health Care Reform
With the 2012 presidential election over, the landscape of health care reform will likely continue its course of implementation. As a brief recap, the following are some of the major health care reform changes thus far:
- Additional Medicare Tax: To help fund Health Care Reform, employers are required beginning on January 1, 2013, to withhold an additional 0.9 percent Medicare tax on employee wages exceeding $200,000. This change is to the employee portion of Medicare only; the employer portion has not changed. Employers must match the first 1.45 percent of the Medicare tax, not the new 0.9 percent additional tax.
- Form W-2 reporting: Employers with 250 or more Forms W-2 issued in the prior calendar year must report the value of certain employer-sponsored health benefits on employees' Forms W-2 issued in the current year. This provision became effective beginning with 2012 Forms W-2 issued in January 2013.
- Summary of Benefits and Coverage (SBC) and Uniform Glossary: To assist consumers in understanding their health insurance plan options, health insurance carriers as well as group health plans and their administrators are now required to provide applicants, enrollees, beneficiaries, and participants for certain plans with a Summary of Benefits and Coverage (SBC) and Uniform Glossary. The SBC is a summary of available health plans and must include topics such as covered benefits, cost-sharing requirements, limits on coverage, and excluded benefits. The Uniform Glossary provides a list of common health coverage terms, such as deductible and copayment, using consistent definitions.
- Small Business Tax Credit: Certain qualifying small businesses that offer health insurance to their employees may be eligible for a Small Business Health Care Tax Credit.
- Medical Loss Ratio Rebate: The Medical Loss Ratio provision of the Affordable Care Act requires that a minimum percent of premium payments collected by health insurance carriers be applied toward medical claims and quality improvement. Each year, health insurance carriers who do not meet the percentage threshold must rebate the excess premium to affected plan sponsors, policyholders or participants. The first rebates were issued by August 1, 2012. Employers who receive rebates have a number of options available to them.
- Employer Shared Responsibility Provision: Effective January 1, 2014, employers who have 50 or more full-time equivalents (FTE calculation based on both full and part-time employees) may be assessed a fee if they fail to offer their employees health insurance coverage that meets the established minimum coverage requirements and is deemed affordable. Affordability is based on the employee premium contribution as a percent of wages. Employers who fail to offer qualified and affordable coverage and have one or more employees obtain an insurance premium subsidy may be subject to substantial financial fees ($2,000 per full-time employee above the first 30 full-time employees, or $3,000 per individual receiving a subsidy, depending upon varying conditions).
Please note that this list is not exhaustive. You should contact your tax advisor to review the provisions and how they might apply to your specific business.
November 27, 2012 – Summary of Benefits and Coverage and Uniform Glossary Requirement
As part of the Affordable Care Act of 2010, health insurance carriers as well as group health plans and their administrators are now required to provide applicants, enrollees, beneficiaries, and participants with a Summary of Benefits and Coverage (SBC) and Uniform Glossary. The provision is applicable on the first day of the first open enrollment period on or after September 23, 2012.
The SBC is a summary of available health plans and must include topics such as covered benefits, cost-sharing requirements, limits on coverage, and excluded benefits. The Uniform Glossary provides a list of commonly used health coverage terms, such as deductible and copayment, with consistent definitions to help consumers better understand their health coverage options.
October 4, 2012 – Form W-2 Reporting Requirement
Beginning in 2012, employers who filed 250 or more Forms W-2 in the previous tax year are required to report the value of certain employer-sponsored health benefits on their employees' Forms W-2 (to be issued January 2013). Those who do not report the value of health coverage may be subject to costly penalties for failure to file correct returns.
March 8, 2012 – New Rules for Summary of Benefits and Coverage (SBC)
On February 9, 2012, the Department of Health and Human Services (HHS) released the final rules mandating that consumers have access to two key documents provided by health insurance carriers and self-funded group health plans – a Summary of Benefits and Coverage (SBC) and a uniform glossary of commonly used terms. The goal is to provide coverage information in a way that allows consumers to easily compare health plans to help choose the coverage that best fits their needs.
The SBC will be a summary of the plan or coverage, with a focus on key features such as:
- covered benefits;
- cost-sharing requirements;
- limits on coverage; and
- excluded benefits.
The rules state that consumers should receive the SBC:
- when shopping for coverage;
- when coverage is renewed;
- whenever material changes are made to the plan during the plan year; and
- on demand.
These rules go into effect for plan years beginning on or after September 23, 2012 to give insurers and plans more time for implementation.
November 29, 2011 – Delay of Summary of Benefits and Coverage Requirement
On November 17, 2011, the Departments of the Treasury, Health and Human Services, and Labor indefinitely delayed the summary of benefits and coverage (SBC) requirement that would have taken effect March 2012. The Departments released updated Frequently Asked Questions in response to the comments they have received regarding the proposed SBC regulations.
As part of this delay, group health plans and insurance carriers are not required to comply with the SBC requirement until final regulations have been issued. Although the timeframe for this requirement to go into effect has not been issued, the departments have stated that the date will give group health plans, insurance carriers, and plan administrators ample time to comply.
July 29, 2011 – Proposed Rule for Heath Insurance Exchanges
On July 11, 2011 the Department of Health and Human Services (HHS) released a proposed rule related to the establishment of Health Insurance Exchanges (HIX) under the Patient Protection and Affordable Care Act (PPACA).
Small Business Health Options Program (SHOP)
As part of the proposed rule, guidelines were set for employers to participate in SHOP – the small group provision of HIX.
- The goal of SHOP is to allow small businesses (up to 100 employees, as the state may direct) to purchase coverage at rates similar to that of a large group.
- One uniform application for SHOP for employees.
- Large groups (100+ employees) may purchase coverage from insurers within the SHOP beginning in 2017.
For specifics on the proposed rule and how it affects states, carriers, agents, brokers, and employers, please visit the Department of Health and Human Services.
HHS is accepting public comments on this proposed rule within 75 days of its release. All Exchange regulations are expected to be finalized by mid-2012.
July 21, 2011 – Claims Appeals and External Review Process Amended
Effective July 22, 2011, the U.S. Departments of Labor (DOL), Health and Human Services (HHS), and the U.S. Department of the Treasury have amended group health insurance plan regulations regarding claims appeals and the external review process.
Key Amendments Include:*
- Urgent care claim determinations may take up to 72 hours (the original timeframe under the DOL claims regulation), rather than 24 hours.
- Diagnosis and treatment codes are no longer required in claim denial notices.
- Except for certain minor errors, if a health plan fails to “strictly adhere” to all of the requirements, the claimant is deemed to have exhausted the internal claims and appeals process and can proceed to external review or court.
- The last day of the transition period for all health insurance issuers offering group and individual health insurance coverage is now December 31, 2011.
Covered employees must still appeal insurance claims through an internal review process. If a claim is denied, a claimant may be eligible for an independent external federal or state review.
*Amended regulations do not apply to grandfathered group health plans.
April 21, 2011 – Budget Deal Repeals Health Care Voucher Provision
President Obama signed into law a bill repealing a Health Care Reform provision that required employers who offer health coverage and pay a portion of the cost to give health insurance vouchers to low-earning employees.
Under the provision, which would have taken effect in 2014, employees who met certain conditions (based on household income, previous participation in an employer’s plan, and required premium contributions) would have been eligible for vouchers, allowing them to use employer funds to help pay for the cost of coverage received through health insurance exchanges.
April 18, 2011 – Bill Repeals 1099 Information Reporting Requirements
On April 14, 2011, President Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011.
Under this Act, businesses are no longer required to issue a Form 1099-MISC to corporations and non-corporate entities concerning the purchase of goods and services for any person or company to whom they paid more than $600 in a tax year. It also repeals a requirement for individuals to report rental income on Form 1099-MISC.
In order to offset lost revenue, the law requires individuals who receive excessive tax subsidies for state health care to pay back a larger amount than formerly required under the Patient Protection and Affordable Care Act of Health Care Reform.
March 31, 2011 – IRS Delays Forms W-2 Health Care Cost Reporting Requirements for Smaller Employers
On March 29, 2011, the IRS issued interim guidance regarding the W-2 provision of the Affordable Care Act.
According to IRS Notice 2011-28, employers that issue fewer than 250 Forms W-2 in 2011 will not be required to report the cost of employer-sponsored health coverage on their tax year 2012 Forms W-2.
Employers filing 250 or more Forms W-2 in 2011 will still be required to include the cost of employer-sponsored health coverage on the forms for tax year 2012.