Presentation on theme: "Affordable Care Act Requirements for employers. Market Reforms ACA introduced a number of “market reforms” to the health insurance market Market Reforms."— Presentation transcript:
Market Reforms ACA introduced a number of “market reforms” to the health insurance market Market Reforms created federal minimum requirements with respect to coverage, premiums, benefits, cost-sharing, and consumer protection ALL employers offering insurance coverage to employees MUST ensure the plan complies with the market reforms; including small employers that voluntarily provide coverage If employer provides coverage that violates one or more of the market reforms, it will be subject to STIFF PENALTIES
Market Reforms *Those listed are required for all non-grandfathered health plans Nondiscrimination based upon health status. Dependent coverage through 26 Prohibition on rescissions (retroactive cancellation of policy) No cost sharing for preventive health services Services offered without co-pays or deductibles Coverage of pre-existing health conditions Cost sharing limits & minimum actuarial value calculation (defined at 60%) Prohibition on annual and lifetime dollar limits TASC Small Group Market must cover essential health benefits 10 Broad Categories
Communication Requirements All employers offering health plans must provide a summary of benefits and coverage (not exceeding four pages in length): At application time Prior to time of enrollment or reenrollment When insurance policy is issued Notice of material changes no later than 60 days prior to the date the modification is to become effective PENALTY – If the above communication requirements are not met employer may face penalties up to $1,000 PER VIOLATION Marketplace notice at time of hire Notice of choice of physician, a notice of expanded claims and appeals procedures, and a notice of material modifications to coverage PENALTY – If above communication requirements are not met employer may face potential penalties of $100/DAY/VIOLATION
Grandfathered Plans (March 23, 2010) Lose grandfathered status if changed in ways that “substantially cut benefits or increase costs for consumers” – majority no longer in existence Exempt from the following Market Reforms Nondiscrimination based on health status No cost sharing for preventive Health services Cost sharing limits Subject to the following Market Reforms Prohibition on lifetime limits Prohibition on annual limits (group market only) Summary of benefits and coverage Coverage of preexisting health conditions Dependent coverage until 26 years Prohibitions on arbitrary rescission
Group Plan or Penalty “Excise Tax” against employers (large or small) who offer insurance that is not compliant with market reforms Once an employer discovers OR could through reasonable diligence have discovered a non-willful violation of market reform requirements, the employer has a 30-DAY WINDOW within which to correct the problem Employers must “self report” on Form 8928 Although the law appears not to require the filing of Form 8928 for any unintentional failures corrected within the 30 days of when the violation should have been discovered through reasonable diligence, Form 8928 suggests such a filing. It may be prudent to file Form 8928 to trigger statutory limitations periods for tax assessments; however, if this form is filed, with over 300 days passing this year, we are not sure the IRS response given the 30 day window
Group Plan or Penalty ACA market reforms have abolished a number of employer choices with respect to employee benefits. Absent integration with a group health care plan, employers may no longer reimburse their employees health care premiums or allow employees to pay for their insurance with pre-tax dollars PENALTY – “Tax” for a violation of $100 per day per violation per individual to whom the failure relations until the violations are resolved. In the case of failures that were due to reasonable cause and not to willful neglect, the Secretary of the Treasury may “waive part or all of the tax imposed to the extent that the payment of the tax would be excessive relative to the failure involved.” In the case of non-willful failures by an employer offering a single plan, the “tax” is capped at 10 percent of the aggregate amount paid or incurred by the employer during the preceding taxable year for group health plans, or $500,000, whichever is less. When the failure is not attributable to reasonable cause, no such cap exists.
Employer Contact Us Directly There are additional issues and requirements with ACA we don’t have time to cover and may require specific information for your business Large Employer – over 50 FTE Single Employer Common Control Test and Constructive Ownership – over 50 FTE
Small Employer Health Insurance Premium 2014 & 2015 Fewer than 25 employees Pay at least 50% of FTE’s premium costs Only claim for 2 consecutive years MUST ENROLL IN A PLAN OFFERED THROUGH THE SMALL BUSINESS HEALTH OPTIONS PROGRAM (SHOP) Phase-outs based on number of employees and average wage Seasonal Workers, Owners, Partners, Shareholders and Family Members of owners, partners, and shareholders are excluded If you have additional questions on if you qualify, please contact us
TASC Under Notice 2013-54, all standalone employer health reimbursement plans, unless they are specifically excepted from ACA requirements through other statutory provisions, violate the ACA and can no long be continued in 2014 and beyond. Single Participant Plans are specifically excepted from ACA requirements under IRC §9831(a) Also exempted from ACA Market Reform Accident-Only Coverage Disability Coverage Certain Limited-Scope Dental and Vision Benefits Certain Long-Term Care Benefits Benefits Under an Employee Assistance Program, if NOT Significant Benefits in the Nature of Medical If you have specific questions with TASC or interest in TASC, please provide you name and phone number on provided sign up sheet for Dan Pavek
Review Your Plans Given the stiff penalties, it is imperative that employers review their plans and ensure compliance with ACA requirements. In summary, the following types of employer health reimbursement plans now violate the market reform rules and subject their sponsors to the potential $100 per-day per-employee penalty. Standalone §105 medical reimbursement plans (that are not excepted) Employer payment plans reimbursing individual health insurance premiums Standalone §125 salary-reduction plans for employee health insurance premiums The following types of employer health plans are permitted. ACA-approved group health plans ACA-approved group health plans with a high-deductible health plan (HDHP) An HRA integrated with an ACA-approved group health plan A §125 FSA plan properly coupled with an employer-provided group health plan (as explained above) Group health plans acquired through the SHOP exchange (This SHOP plan may then allow for §125 salary- reduction arrangements and may also qualify the employer for the small employer health insurance premium credit.) The possible penalties for violating the market reforms of the ACA are extreme. And, the IRS appears set to enforce them. The IRS has posted the following Q & A to its website http://www.irs.gov/uac/Newsroom/Employer-Health-Care-Arrangements http://www.irs.gov/uac/Newsroom/Employer-Health-Care-Arrangements
Affordable Care Act Requirements for Individuals
Individual Requirements Beginning in 2014 EVERYONE must either: Maintain Minimum Essential Coverage Demonstrate a Coverage Exemption Make a Shared Responsibility Payment
Minimal Essential Coverage Documents to Bring in with Tax Return Information New Forms Form 1095-A: Statement received if obtained insurance on the Exchange Form 1095-B: Statement received from insurance agent (voluntary – BCBS will not be providing this statement per our understanding) Form 1095-C: Statement received from employer (voluntary) With the insurer and employer forms being voluntary, please provide us with the following: Coverage provider’s name and policy number Months of coverage for all individuals in the family unit (see handout) Proof of payment See 2014 Health Insurance Information Worksheet Handout
Demonstrate a Coverage Exemption Uninsured less than 3 months of the year Lowest price coverage available to them would cost more than 8% of their household income. Please note, HOUSEHOLD income, this includes not just your dependents (ie – working college student that meets filing requirements) but anyone living in your household (ie – significant other, child living at home not attending school) Income is too low/no filing requirement - may file their tax return to claim a refund, but still exempt from the individual responsibility payment Member of a federally recognized tribe or eligible for services through an Indian Health Services provider Member of a recognized health care sharing ministry Member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare Incarcerated Not legally present in the US
Apply for Exemption Depending on the exemption you qualify for there are two options for applying for an exemption: Exemption Application on Healthcare.gov Expect to Extend Must have Exemption Code before tax return can be filed 2014 Federal Tax Return
Make a Shared Responsibility Payment The “Roberts Tax” Required if: Do NOT have the Minimum Essential Coverage for EVERY month of the year Do NOT have a Claimed Exemption for the months without Minimum Essential Coverage 2014 – The GREATER of: 1% of income over the tax-filing threshold $95 per person for the year ($47.50 per member under 18), with a maximum of $285 per family If you do not have coverage or you qualify for the exemption, please note your tax return preparation fee will be higher this year.
Additional Notes Engagement Letter 1099-Misc Veterinarians & Attorneys $600 or greater rental or services
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