Important ACA Deadlines and Consent Information

Filing of 2018 Forms

  • Forms must be furnished to employees no later than January 31, 2019.
  • Forms 1094-C and 1095-C must be filed to the IRS by February 28, 2019 if filing on paper.
  • Forms must be filed by April 1, 2019 if filing electronically.
  • For final 2018 1094-C and 1095-C instructions, please visit https://www.irs.gov/pub/irs-pdf/i109495c.pdf.

Consent to furnish 1095-C Statements electronically

Unless an employees has given specific consent to provide their form electronically, all forms must be furnished to employees by mail or delivered by hand.

For those employers that would like to furnish the forms electronically, the employee must confirm his or her consent electronically, to demonstrate the ability to retrieve the electronic form. A statement may be furnished electronically by informing the individual how to access the statement on the employer’s website. The consent must relate specifically to receiving the Form 1095-C electronically.

Tax Act Repeals the Penalties for the Individual Mandate

The employer mandate (a/k/a employer shared responsibility payment) has not been modified by the Tax Act, but the individual mandate penalty has been reduced to zero for years after 2018.  Thus, effective for years after December 31, 2018, the Tax Act effectively eliminates the individual mandate penalties.  Accordingly, beginning in 2019, the government will no longer attempt to collect the individual mandate penalties if an individual or family does not obtain healthcare coverage in 2019 and thereafter.  The elimination of the penalties does not technically remove the requirement to obtain healthcare coverage.  But without penalties there will be no enforcement and, in effect, no practical mandate to obtain coverage for 2019 and later years.

Reporting

The IRS requires an employer or insurance company to report on Form 1095 whether an individual had ACA compliant coverage for the tax year.  Employer reporting on Form 1095 was not eliminated by the new Tax Act. For 2018, nothing has changed with respect to the ACA individual mandate or reporting on IRS Form 1095.  Employers that fall above the threshold of 50 full-time and full-time equivalents should still report for the 2018 year.

Definitions for Health Plans

  • Self-Funded Plan: Employer pays fixed costs (administrative fees and stop-loss premium) and claims costs incurred by covered persons and receives reimbursements if claims costs exceed levels set in the policy.
  • Fully Insured Plan: (traditional insurance plan) Company pays premiums, insurer collects premiums and pays health care claims based on policy purchased by employer.
  • Grandfathered Plan: plan in existence on March 23, 2010 that has not been changed in ways that substantially cut benefits or increase costs for consumers as long as employers notify employers that the plan is grandfathered and they have continuously covered at least one person continuously since March 23, 2010.

Notification to employees of existence of Health Marketplace:

Effective October 1, 2013.  Notify new hires within 14 days of their employment. Template available on DOL website at https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/laws/affordable-care-act/for-employers-and-advisers/model-notice-for-employers-who-offer-a-health-plan-to-some-or-all-employees.pdf

Waiting Periods

Can’t be more than 90 days after employee becomes eligible. Can condition eligibility on completion of specified number of hours (no more than 1,200), completion of orientation period (not more than 30 days) or attaining job-specific certification/licensure.

Comply with W-2 Reporting Requirements

Employers must report cost of health coverage on employees’ W-2 forms, beginning Jan 2012 for large employers (those filing 250 or more W-2’s), optional for anyone with fewer than 250 employees until further guidance comes from the IRS.

Elimination of the ACA Individual Mandate Effective 2019

One of the significant updates for the Affordable Care Act, is the elimination of the Affordable Care Act’s individual mandate, effective 2019.

Under the current ACA regulations, the individual mandate requires most Americans to purchase a minimum level of health coverage. Those who fail to do so are liable for a penalty of $695 for an adult or 2.5 percent of household income, whichever is greater. The new Act accomplished the elimination of the individual mandate by reducing the penalty amounts to $0 and zero percent, respectively.

Employer Mandate and Other ACA Features Still in Place

The Act leaves many aspects of the ACA intact, including the individual marketplace, premium subsidies for those earning between 100% and 400% of the federal poverty rate, the ban on insurers charging more or denying coverage based on health factors, and Medicaid expansion.

Most significantly for employers, however, is the employer mandate and reporting requirements, which remain in force. Accordingly, applicable large employers will need to plan around the Code section 4980H(a) (“A”) penalty — which can apply if an employer does not offer minimum essential coverage to at least 95% of its full-time employees and at least one full-time employee buys subsidized marketplace coverage — and the Code section 4980H(b) (“B”) penalty — which can apply if an employer offers full-time employees coverage that is not affordable or does not meet minimum value requirements.

In 2018, A penalty is $2,320 (or $193.33 per month) multiplied by the total number of full-time employees (minus 30). The B penalty is $3,480 (or $290 per month) for each full-time employee who buys subsidized marketplace coverage (capped by the amount of the A penalty).

 

ACA Update

On June 22, 2017, a draft was released by the Senate Republicans to repeal and replace the Affordable Care Act. The Senate is drafting a new health care bill called the Better Care Reconciliation Act that substitutes the House bill, but still contains similar regulations. The Senate’s bill will have to face another vote before it lands on President Trump’s desk.

The Better Care Reconciliation Act includes changes to Medicaid, subsidy amounts, waiver process for states and the individual mandate. Until the bill is passed, all reporting requirements are still in effect. Employers should still continue to offer minimal essential coverage to their full-time employees who are working on an average of 30 hours per week.

ACA Updates

  • On May 4th, 2017 the House of Representatives approved the bill to repeal and replace major parts of the Affordable Care Act. The bill still needs to be approved by the Senate, which would need to happen through the budget reconciliation process. It is not certain yet whether the Senate would be permitted to pass the American Health Care Act (AHCA) in its current form.
  • Several key provisions were added to or modified such as Pre-existing Conditions, Health Status Underwriting, Essential Health Benefit Requirement for Insured Plans and Age Weighted Underwriting. Employers should become familiar with the AHCA provisions that most directly impact group health plans.
  • Currently, the ACA’s employer information reporting requirements are still in effect until further notice.

 

ACA Updates

  • All 1094 and 1095 forms should have been filed to the IRS at this time. The deadline to file electronically was March 31st 2017.
  • On March 6, 2017, House Republicans announced a bill to partially repeal and replace the Affordable Care Act (ACA). Nothing has yet been passed by Congress or signed into law by President Trump, and it’s uncertain whether the bill will ultimately be passed. The bill drafts are in their initial form and will likely go through significant debate and revision. There is still disagreement among members of Congress as to the details of the bill.

 

ACA Penalties

On 6/29/2015, the Trade Preferences Extension Act of 2015 was signed into law.  Hidden within this legislation is a provision that will increase penalties relating to filing returns and providing statements required under the Affordable Care Act (ACA).  The ACA already was set to impose penalties on employers who neglect to file the proper forms, for filing incorrect forms, or for failing to provide employees with the necessary statements.  These penalties are now going to be increased.  The general fee for non-compliance was $100 per instance, but now it will be $250.

Supreme Court ruling on government subsidies and federal tax credits

There was question as to the legality of the government subsidies or federal tax credits given to those eligible participants who purchased coverage through the federal exchange/marketplace for health insurance. This is because the way the Affordable Care Act was written, only state run exchanges were allowed to grant subsidies to eligible participants who enrolled in coverage through the exchange that is run by that state. On June 25, 2015, the U.S. Supreme Court upheld that eligible participants who enroll in health coverage through a state or federally run exchange are legally permitted to receive subsidies regardless of whether the exchange they purchased coverage from was a state run exchange or the federal exchange. This does not change any employer obligation under the ACA. It is business as usual.

2016 Out of Pocket Maximums | Self-Only Coverage

For 2016, the out of pocket maximums for self-only coverage will be $6,850 and for non-self-only coverage (family coverage) will be $13,700.  All plans will now have embedded out of pocket limits for each individual covered, even under a family plan.  For example, if an individual under a family plan has $20,000 health care expense, they are responsible for $6,850 and the plan is responsible for the other $13,150.

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