SOX FOR HEALTH PLANS?

Transcription

1 SOX FOR HEALTH PLANS? IRS Excise Tax Requirements For Failing to Report Plan Violations Who Must File the IRS Form 8928, Requirement for Self- Reporting? Cynthia Marcotte Stamer, Esq. Managing Shareholder Cynthia Marcotte Stamer, PC, A Member of STAMER CHADWICK SOEFJE PLLC Main Office: 5851 Legacy Circle, 6th Floor, Plano, Texas Mail Room: 3948 Legacy Drive, Suite 106, Box 397, Plano, Texas (469) cstamer@solutionslawyer.net Cynthia Marcotte Stamer. All Righs Reserved. A MEMBER OF STAMER CHADWICK SOEFJE PLLC 5851 LEGACY CIRCLE, 6TH FLOOR, PLANO, TEXAS TELEPHONE (469) E:MAIL: CSTAMER@SOLUTIONSLAWYER.NET

2 About Cynthia Marcotte Stamer, Esq. Cynthia Marcotte Stamer is nationally known for her nearly 25 years of work, publications and presentations on employee benefit, health care and human resources matters. A Fellow in the American College of Employee Benefits Counsel, Vice Chair of the American Bar Association (ABA) TIPS Employee Benefits Committee, Immediate Past Chair and the current Welfare Committee Co-Chair of the ABA RPTE Employee Benefit & Other Compensation Group, a Council Member of the ABA Joint Committee on Employee Benefits, Past Chair of the ABA Health Law Section Managed Care & Insurance Section and Board Certified in Labor and Employment Law, Ms. Stamer is known and valued for her ability to draw upon her expansive knowledge of the complex tapestry of federal and state judicial precedent and statutory, regulatory, contracting, other laws and industry operations to help payers, plan sponsors and other employee benefit and insurance industry clients manage risk and achieve objectives. Ms. Stamer continuously advises and represents health and other employee benefit plans, their fiduciaries, insurers, sponsors, administrators and other vendors about the design, documentation, administration and defense of employee benefit and insurance programs, ethics, compliance and management processes and tools for administering these and other processes, and ERISA and other employee benefit, insurance, tax, licensing, privacy and data security, human resources, contracting, technology, risk management and other legal compliance and operational concerns. She designs and writes insured and self-insured health, 24-hour and other occupational injury benefit and risk management, disability management, corporate health and wellness, disease management, utilization, audit, patient empowerment, deferred compensation and pension and other employee benefit, insurance and retirement programs. Her work includes leading edge development and use of 24-hour coverage and other occupational injury, ex-pat and other medical tourism products, min-med and other limited benefit plans, fraternal benefit and association plans, hi-deductible health plans and deductible reimbursement programs. Ms. Stamer also designs and advises clients about fiduciary process and risk management, claims and appeals administration. She counsels and defends clients about regulatory compliance; defends clients in ERISA, contract, and other disputes by private plaintiffs, as well as litigation, audits, licensing board and other enforcement actions by state insurance departments, the Department of Labor, the Internal Revenue Service, the Office of Civil Rights, the Centers for Medicare & Medicaid Services, the Department of Justice, State Attorneys General and other federal and state regulators. She also has extensive experience counseling third party administrators, insurers, self-insured employee benefit plans and their sponsors, medical bill audit, utilization management, cafeteria plan administrators and sponsors, reinsurers, fiduciary liability and other E&0 carriers, consulting firms, brokers, and others about product design and defense; licensure; contract review, drafting, interpretation and enforcement; corporate and broker ethics, regulatory compliance and risk management programs; managed care contracting and compliance; electronic and paper claims and appeals administration under ERISA, clean claims and prompt pay, workers compensation, and other laws; coordination of benefits with Medicare, Medicaid, CHIP, TRICARE, and other third party liability sources; subrogation and assignment; federal and state health care, insurance, tax, labor, licensing and other matters. The author of Claim s Processing Under the New World Order" "The Health Care Eligibility Toolkit, and A Plan Sponsor s HIPAA Privacy & Compliance Toolkit, and many other implementation processes and aids, she regularly advises, develops processes and procedures, and conducts training for insurers, plan fiduciaries and administrators, third party administrators and other service providers, employers, their professional associations and others. A popular lecturer and widely published author of thousands of publications on health, disability, and other employee benefits, insurance, health care and human resources matters. Ms. Stamer publishes the HR & Benefits Update. Her insights on health care, health insurance, human resources and related matters appear in the Atlantic Information Service, Bureau of National Affairs, World At Work, The Wall Street Journal, Business Insurance, the Dallas Morning News, Managed Healthcare, Health Leaders, and a many other national and local publications. To register to receive the HR & Benefit Update, arrange for training or for additional information about Ms. Stamer, her experience, involvements, see or contact Ms. Stamer as follows: Cynthia Marcotte Stamer, P.C., 3948 Legacy Drive, Suite 106, Box 397, Plano, Texas 75023, Telephone: (469) to cstamer@solutionslawyer.net Cynthia Marcotte Stamer. All Rights Reserved. Page 2

3 THE FINE PRINT This presentation and any materials and/or comments are training and educational in nature only. They do not establish an attorney-client relationship, are not legal advice, and do not serve as a substitute for legal advice. No comment or statement in this presentation or the accompanying materials is to be construed as an admission. The presenter reserves the right to qualify or retract any of these statements at any time. Likewise, the content is not tailored to any particular situation and does not necessarily address all relevant issues. Because the law is rapidly evolving and this presentation provides an overview, this program and its materials also may not be fully updated to reflect the current state of law in any particular jurisdiction or circumstance as of the time of the presentation. Furthermore, the rapidly evolving rules also makes it highly likely that subsequent developments may impact the currency and completeness of this discussion. The presenter and the program sponsor disclaim, and have no responsibility to provide any update or otherwise notify any participant of any such change, limitation, or other condition that might affect the suitability of reliance upon these materials or information otherwise conveyed in connection with this program. Parties participating in the presentation or accessing of these materials are solely responsible for and are urged to engage competent legal counsel for consultation and representation in light of the specific facts and circumstances presented in their unique circumstance Cynthia Marcotte Stamer. All Rights Reserved. Page 3

4 THE FINE PRINT Circular 230 Compliance. The following disclaimer is included to ensure that we comply with U.S. Treasury Department Regulations. Any statements contained herein are not intended or written by the writer to be used, and nothing contained herein can be used by you or any other person, for the purpose of (1) avoiding penalties that may be imposed under federal tax law, or (2) promoting, marketing or recommending to another party any tax-related transaction or matter addressed herein.* 2015 Cynthia Marcotte Stamer. All Rights Reserved. Page 4

5 IRS Form 8928 Health Plan's "SOX Employers and plan sponsors must report on Form 8928 to report excise taxes due for certain health plan violations. Page #

6 Finding IRS Form Page #

7 Form 8928 Used To Report Health Plan Violation Excise Taxes For: 4980B: COBRA Violations (ER* Pays $100 Per QB Per Day Noncompliance Period, Subject To Min. & Max Fine Rules) 4980D Code Chapter 100 Group Health Plan Violations (ER** Pays $100 Per Day Per Victim 4980E/ Employer W/HDC Contributing To Any Employee s Archer MSA Failure To Make Comparable MSA Contributions For All Participating Employees (35% aggregate ER s Contributions) 4980G - Failure Of Employer To Make Comparable Health Savings Account Contributions For All Participating Employees (35% aggregate ER s Contributions) *Plan If Multiemployer Plan ** N/A To Certain Violations Of Certain Fully Insured Small Employer Plans Page 7

8 Form 8928 Excise Taxes 4980D ACA Health Plan Violations Excise tax on any failure of a group health plan to meet the requirements of chapter 100 (relating to ACA group health plan requirements equal to $100 for each day in the noncompliance period with respect to each individual to whom such failure relates Page 8

9 Form 8928 Excise Taxes 4980D ACA Health Plan Violations Duty To Report & Pay Health plans sponsored by a single employer, tax is imposed on the plan sponsor Sponsor usually the employer N/A to health plans sponsored by governmental employers N/A to health insurance issuers Does apply to church sponsored health plans Page 9

10 Form 8928 Excise Taxes 4980D ACA Health Plan Violations Duty To Report & Pay Noncompliance Period Means The Period Beginning on the date such failure first occurs, and Ending on the date such failure is corrected. Page 10

11 Form 8928 Excise Taxes Deadlines To Report & Pay Generally must file Form 8928 & pay the excise tax by the due date of the employer s federal income tax return, without taking into account any extensions Automatic six-month extension of time for filing Form 8928 available Extension does not extend the time to pay the excise taxes due Page 11

12 Form D ACA Group Health Plan Violation Excise Tax Amount Generally $100 per day, per individual, per violation, subject to the following minimums and maximums: If IRS discovers on audit, minimum excise tax is: $2,500 or If not de minimus, up to $15,000. For single employer plans, maximum excise tax for unintentional failures = lesser of: 10 percent of the aggregate amount paid by the employer during the preceding tax year for group health plan coverage, or $500,000 Page 12

13 Form D ACA Group Health Plan Violation Excise Tax Amount For multiple employer health plan, maximum tax limited to lesser of: 10% amount paid or incurred by such trust during such taxable year to provide medical care w/in meaning of IRC 9832 (d)(3) directly or through insurance, reimbursement, or otherwise, or $500,000 All plans of part of same trust forms treated as one plan. Page 13

14 Form D ACA Group Health Plan Violation Excise Tax Exception No Excise Tax If: Failure due to reasonable cause and not to willful neglect For plan other than a church plan, failure corrected during the 30-day period beginning on the first date the person otherwise liable for such tax knew, or exercising reasonable diligence would have known, that such failure existed; and For church plan, failure corrected before the close of the correction period under the IRC 414(c)(4)(C) Burden of Proof Considerations Important Page 14

15 Form D ACA Group Health Plan Violation Excise Tax Exception Failure Corrected If Retroactively Undone To The Extent Possible, And Person To Whom The Failure Relates Is Placed In A Financial Position Which Is As Good As Such Person Would Have Been If Failure Not Occurred. Page 15

16 Form 8928 Excise Taxes 4980D ACA Health Plan Violations Duty To Report & Pay Secretary can waive all or part of tax for failure due to reasonable cause and not to willful neglect to the extent Secretary finds payment of tax would be excessive relative to the failure involved. Page 16

17 Form 8928 Excise Taxes 4980D ACA Health Plan Violations Duty To Report & Pay N/A To Small Employer Plans If: Provides Health Insurance Coverage Solely Through A Contract With A Health Insurance Issuer Failure Solely Because Health Insurance Coverage Offered By The Insurer Small Employer = (On Controlled Group Basis) Page 17

18 Form 8928 Excise Taxes 4980D ACA Health Plan Violations Duty To Report & Pay N/A To Small Employer Plans If: Provides Health Insurance Coverage Solely Through A Contract With A Health Insurance Issuer Failure Solely Because Health Insurance Coverage Offered By The Insurer Small Employer = (On Controlled Group Basis) Page 18

19 NOTICE Code 4980D & Form 8928 penalty relief for small employers and certain S-Corporations who have illegal employer payment plans (e.g., premium reimbursement programs) through 6/30/15 Clarifies mere increase in an employee s compensation, without conditioning the payment of the additional compensation on the purchase of health coverage (or otherwise endorsing a particular policy, form, or issuer of health insurance) is not a violation of the ACA Cynthia Marcotte Stamer. All Rights Reserved. Page 19

20 Form 8928 Excise Taxes: Health Plan Violations Page 20

21 Form 8928 Excise Taxes: Health Plan Violations The Nitty Gritty Tips & Cautions Questions Discussion Page 21

22 SOX FOR HEALTH PLANS? IRS Excise Tax Requirements For Failing to Report Plan Violations Who Must File the IRS Form 8928, Requirement for Self- Reporting? Cynthia Marcotte Stamer, Esq. Managing Shareholder Cynthia Marcotte Stamer, PC, A Member of STAMER CHADWICK SOEFJE PLLC Main Office: 5851 Legacy Circle, 6th Floor, Plano, Texas Mail Room: 3948 Legacy Drive, Suite 106, Box 397, Plano, Texas (469) cstamer@solutionslawyer.net Cynthia Marcotte Stamer. All Righs Reserved. A MEMBER OF STAMER CHADWICK SOEFJE PLLC 5851 LEGACY CIRCLE, 6TH FLOOR, PLANO, TEXAS TELEPHONE (469) E:MAIL: CSTAMER@SOLUTIONSLAWYER.NET