Affordable Care Act - Why the ACA is top of everyone s mind.

Transcription

1 Affordable Care Act - Why the ACA is top of everyone s mind. Disclaimer: The information and materials contained herein are for general information only and in no way constitute legal advice.

2 The Affordable Care Act ACA Created to increase the quality and affordability of health insurance Lower the uninsured rate Reduce the costs of healthcare for individuals and the government Give an individual the stability and flexibility needed to make informed choices about their health

3 FIRST WHO ARE YOU? AND WHAT ARE YOUR RESPONSIBILITIES?

4 Size Matters Which Sandbox are You? Small group? Mid-Size ALE? Large ALE?

5 ACA: Large Group Employer Obligations and Options in 2015 How many FT + (PT monthly hrs./120) = Perform for 6 consecutive months; add; divide by 6; round down? FTE Do not have to comply in 2015 BUT have to certify numbers to IRS This means tracking FTE 100+ Have to comply with the ALE rules in 2015 Offer A/MV Coverage to all Eligible employees or face potential fines/penalties CAUTION: If you have over 100 FTEs as of , and your numbers drop later in the year, make sure there are sound business reasons for the drop unrelated to ACA

6 Penalties involved in ACA $2,000 Sledgehammer 4980H(a) $3,000 Tackhammer 49080H(b) ADDITIONAL penalties to those above. $100 for each day of the failure as to each individual to whom the failure relates. (Code section 4980D) $100 per day is payable as to each individual for whom failure to comply with 90 day limitation occurs. (PHSA Section 2723) For plans subject to ERISA, a plan participant or the DOL may bring suit under section 502 to enjoin the failure.

7 Large ALE s Failure to Offer Coverage: Sec. 4890H(a) Penalties Sledgehammer Penalties Does the ALE offer Minimum Essential Coverage (MEC) to substantially all eligible employees? Yes No No 4980h(a) penalty payment owed by employer. Eligible EE seeks coverage through Marketplace and receives premium tax credits. Employer must pay $2,000 per annum for all eligible EEs (minus 80/30) REGARDLESS of whether Eligible EEs have coverage. Minimum Essential Coverage 2015 Substantially all defined as 70% of eligible ee s 2016 Substantially all defined as 95% of eligible ee s Offer to Everyone!!

8 A/MV Failures and Penalties Sec. 4890H(b) Penalties TackHammer Penalties Did I offer to all Full Timers working 30+ hrs. on average? Plan meets Minimum Value? Was offer Affordable? Yes No No penalty owed by employer. If Employee seeks Marketplace Coverage Defined: Minimum Value (M/V): the plan s share of the total allowed costs of benefits is at least 60% of such costs Affordable (A): 9.5% or less of employee income Employer must pay $3,000 penalty for all employees who buy coverage through Marketplace and receive premium tax credits.

9 How Does an Employee receive a Subsidy/PTC? Enroll in Marketplace Coverage Complete 1411 Certification to be approved For Premium Tax Credit (PTC) file a Form 8962, and attach it to federal income tax return for that year. Household income must be in excess of Medicaid eligibility (100% or 138% of FPL) and under 400% of the FPL to qualify 400% of federal poverty level currently set at $95,400 for a family of four in 2015 based on 2014 federal poverty levels

10 Source: wnloads/employer-coveragetool.pdf-++

11 AWARD OF SUBSIDIZED COVERAGE PROCESS

12 What is a Section 1411 Certification? Section 1411 of the Affordable Care Act ( ACA ) establishes the procedures for determining an individual's eligibility for exchange subsidies, such as the IRC 36B premium tax credit Treas. Reg H-1(a)(40) (40) Section 1411 Certification. The term Section 1411 Certification means the certification received as part of the process established by the Secretary of Health and Human Services under which an employee is certified to the employer under section 1411 of the Affordable Care Act as having enrolled for a calendar month in a qualified health plan with respect to which an applicable premium tax credit or cost-sharing reduction is allowed or paid with respect to the employee.

13 HHS NOTICE OF SUBSIDIZED COVERAGE

14 1411 Certification when PTC or Subsidy not available? Offered minimum essential coverage by employer that is affordable and provides minimum value. Enrollment in employer s minimum essential coverage (MEC) blocks subsidy eligibility regardless of whether it s affordable or provides minimum value. Medicaid Eligible Medicare Eligible Earnings over 400% Federal Poverty Level

15 Appeals Process First Bite 45 CFR day period from the date the Section 1411 Certification is received to appeal whether employee is eligible for exchange subsidies Employer has opportunity to submit relevant evidence to support the appeal Presumably this will be eligibility/enrollment info related to the employee and the employer s health plan Will also likely include evidence that the plan is affordable and provides minimum value Exchange will decide appeal within 90 days of receipt of the appeal Notice of the determination will go to the employer and the employee [T]he appeal decision does not foreclose any appeal rights the employer may have TRANSLATION: under subtitle F of the Code Exchange appeal determination has no effect on employer s ability to appeal IRS pay or play penalties.

16 Employee receive a Subsidy/PTC in Error? If it turns out employee was NOT eligible, the IRS will collect monies paid Income % as to FPL Individual Repay limit Family of 4 Repay Limit Under 200% Under $22,980 $300 Under $47,100 $ % to 299% $22,980- $34, % to 399% $34,470- $45, %+ $45,960+ No Limit Repay All $750 $47,100- $70,650 $1,250 $70,650- $94,200 $1,500 $2,500 $94,200+ No Limit repay All

17 IRS Appeals Process 1094/1095C Employer Files February/March 2016 IRS uses this information to determine whether the employer may owe pay/play penalties Employee Return Employee Files April 15, 2016 unless extension granted IRS compares this to Employer Forms (and probably Marketplace enrollment) IRS sends letter To Employer we believe you owe $. Employer has an opportunity to Appeal decision.

18 1094C/1095C FORM REPORTING REQUIREMENTS

19 Small Employers FTEs Employers Applicable Large Employers (100+) No Health Plan No Reporting No Health Plan File 1095-C parts I and II No Health Plan File 1095-C parts I and II Fully-Insured Plan No Reporting Fully-Insured Plan File 1095-C Parts I and II (insurer files 1095-B) Fully-Insured Plan File 1095-C Parts I and II (insurer files 1095-B) Self-Insured File 1095-B only Self-Insured File 1095-C Parts I, II and III Self-Insured File 1095-C Parts I, II and III

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21 1. Employers with 50 or more FTE; Used to report info about each full time employee to the gov t. 2. Penalties for failure to furnish correct payee statements (Section 6722) $100 per return up to maximum of $1.5 M. 3.Each ALE is responsible for own 1095 s when filing in aggregate group.

22 Codes for Line 14: 1A: Offer of MV/A Coverage (using FPL) 1B-1D: Offer to employee but not spouse or dependents. 1E: Offer of MV coverage Affordability Question 1F: Offer MEC 1G: Self-Insured: PT persons enrolled in coverage 1H: No Offer of Coverage 1I: Employer Claiming Transitional Relief Used for EACH employee offered coverage at any time during the year.

23 Line H Safe Harbor Codes: 2A: Employee not Employed on ANY DAY in that Month 2B: Employee not Full-Time and did not enroll in MEC or if employment and coverage terminated b4 the end of month. 2C: Employee enrolled in coverage offered. 2D: Employee in Limited Non-Assessment Period 2F: Affordability based on W2 Safe Harbor 2G: Affordability based on FPL 2H: Affordability based on Rate of Pay Safe Harbor 2I: Non-calendar year transitional relief applies to employee for that month. Used for EACH employee offered coverage at any time during the year.

24 All months FPL Affordability MEC EE; SP; Dep. One of more months in % of its full-time employees s not subject to 4980H in ALE s who are eliminating the first 80 All months 98% of EE is filed Minimum Value Affordable (3 Safe harbors) MEC to Dep.

25 All employees Number of Full Timers Mark if part of control group If Relief Code: A B First 80 free

26 List the members of your control group here. Each individual EIN must complete a If there is a control group situation, one 1094 filing must file an AUTHORITATIVE filing and file in aggregate all totals.

27 Carol start date: Hired Full-Time Terminated Coverage terminated However, coverage would have continued through the end of November had she remained employed.

28 Fred enrolled: Terminated employment Benefits Terminated EOM Rehired and Coverage resumed

29 Which Sandbox? Who is eligible? Track to Report ACA Proof of offer of coverage Prepare to Defend Decisions Process to obtain Subsidies

30 Presented by: Alicia J. Haff, JD (210) Presented by: Heather Garcia (512) (210) San Pedro Avenue, Ste. 155 San Antonio, Texas \ Disclaimer: The information and materials contained herein are for general information only and in no way constitute legal advice.