Mastering the ACA Part III

Transcription

1 Mastering the ACA Part III Rossdale CLE February 18, 2015 Monica A. Kelley These materials are provided for general informational purposes only and should not be construed as legal advice or legal opinion on any specific facts or circumstances. You are urged to consult a lawyer concerning any specific legal questions you may have. Forms? What Forms? Applicable large employers are subject to the reporting requirements enacted by 1514(a) of the Patient Protection and Affordable Care Act. Recently the IRS released final forms and instructions 1094-C and 1095-C. Employer must provide the IRS with data on each full-time employee. Provide employees with a statement to use for claiming premium tax credit (if applicable). 2 1

2 Form C Employer-Level Data Transmittal of Forms 1095-C Controlled group information Months when minimum essential coverage was available Full-time employee count 3 Form C Certification of eligibility for alternative methods of reporting Qualifying offer Qualifying offer transition relief Section 4980 transition relief 98% offer 4 2

3 Form 1095-C Information about Employee Contact person for Employee questions Employee Offer and Coverage for every month of the year. Employee share of lowest cost monthly premium for self-only minimum value coverage. Applicable Section 4980H Affordability Safe Harbor. 5 Form 1095-C Information about covered individuals (spouse, children) if the plan is selfinsured. Name of covered individuals and their SSN Months of coverage 6 3

4 Distribution to Employees Give forms to employee by January 31 of the year following the year to which the Form 1095-C relates (February 1, 2016, for calendar year 2015) Statement must be furnished on paper by mail unless the recipient affirmatively consents to receive the statement in an electronic format. 7 ACA Employer Mandate and Taft-Hartley Funds The problem: Employer contributes to Taft-Hartley fund under a collective bargaining agreement Employer has no control over cost to employee, compliance of coverage, affordability of coverage Pay or play penalties for failure to offer coverage, or for unaffordable coverage, apply to employer, not to Taft-Hartley fund. 8 4

5 ACA and Taft-Hartley Transition relief for Pay or Play Employer required by CBA or participation agreement to contribute to Taft-Hartley fund Employer contributes to Fund on behalf of employee Employee will be covered when s/he meets Fund s eligibility conditions Coverage provides minimum value and is affordable Coverage is offered to dependents This is interim guidance, not in the final regulations, but in the preamble. 9 ACA and Taft-Hartley Reporting for Taft-Hartley employees: Full-time union employees must be reported on, even if employer is contributing to Taft-Hartley fund Taft-Hartley fund may prepare returns and employee statements for employees in its fund Employer remains responsible for reporting Employer must include Taft-Hartley-covered employees in its count. 10 5

6 ACA and Taft-Hartley What does this mean for employers? Need to communicate with Taft-Hartley fund administrators to obtain information Find out whether/how Taft-Hartley funds will handle reporting Need to consider affordability to employees Considerations for bargaining 11 Premium Reimbursement A strategy for smaller employers and partnerships used to be to reimburse premiums for individual health insurance policies. Regulators have made clear that this is not permissible in most cases under the ACA. Premium reimbursement is considered a group health plan. Plan is considered to impose limit on benefits. 12 6

7 Premium Reimbursement Even after-tax reimbursements don t avoid group health plan treatment Unless the amount is available to the employee as cash, and Meets Department of Labor safe harbor for voluntary plans. 13 Premium Reimbursement Exception for plans that cover < 2 current employees retiree plan single employee Partners count as employees Self-employed may still be able to deduct cost of individual coverage. Limited wraparound coverage exception but not available yet. 14 7

8 Resources DOL/EBSA website on Health Care Reform (including FAQs) IRS website on ACA Tax Provisions: Act/Affordable-Care-Act-Tax-Provisions 15 8