The ACA Saga ACA. Where it s been, Where it is today, Where it might go. Where it s been, where it is today, and where it might go

Transcription

1 The ACA Saga Where it s been, where it is today, and where it might go ACA Where it s been, Where it is today, Where it might go

2 Legal Disclaimer This presentation is designed to provide general information and guidance related to the Affordable Care Act, but is not all encompassing and has not been customized for any client's particular situation. PlanSource does not provide legal or tax advice. To ensure compliance with the requirements imposed by the Affordable Care Act, we encourage you to consult your legal and/or tax counsel for advice specific to your particular situation. This information is provided on an "as is" basis without any warranty of any kind. PlanSource disclaims any liability for any loss or damage from reliance on this document. Further, this information does not create an attorney-client relationship.

3 Will the webinar be recorded? Yes! (We will send you a link to the recording after the webinar). 3

4 Will the slides be available? Yes! (We will send you a link to the PDF after the webinar). 4

5 How do you ask questions? Type your question into the Questions panel 5

6 Our Awesome Speakers Jeana Parker VP Strategic Initiatives PlanSource Jake Dekelver ACA Consultant PlanSource

7 ACA: Where it s been A look back

8 History of PPACA Enacted in 2010 Goal: Provide more American s access to affordable, quality health insurance and reduce the growth in U.S. health care spending How: Expand affordability, quality and availability of public health insurance through consumer protections, regulations, subsidies, taxes and insurance exchanges Source:

9 New Benefits, Rights, and Protections Tax Break s Coverage denials Employer Mandate Right to appeal ins. company decisions Individual mandate Expand coverage Insurance company limitations and protections Acces s to CHIP Coverage to age 26 Annual Limits Lifetime limits Limitations on Rate Increases Small employer credits Medicaid Expansion Subsidies Coverage for preexisting conditions Source:

10 Where the ACA Meets the IRS Insurance Providers Applicable Large Employers Section: 6055 Health Insurance Providers as well as sponsors of self-insured health plans must file information with the Internal Revenue Service (IRS) about the health plan coverage they offer. Section: 6056 Applicable Large Employers (ALEs) need to file information returns with the IRS and provide statements to their measured FTEs about the health insurance coverage offered. Source: %20What%20Information%20Must%20be%20Reported.pdf 10

11 What Are The Reporting Requirements? Due dates below are for the 2017 reporting year Health Insurance Providers Non ALE Self-Insured Employers Section 6055 Self-Insured ALE Employers Self-Insured and Fully Insured ALE Employers Form 1095-B Due to Employees January 31, 2018 Form 1094-B Electronically due to IRS April 2,

12 Trends in Health Insurance Enrollment, Affordable Care Act s impact: 22.8 m (newly insured) m (lost coverage) = 16.9 m (net increase) 9.6 M Enrollment Counts by Segments 6.5 M 4.1 M 1.5 M 1.2 M Employer Plans Medicaid Marketplace Other (i.e. Medicare, military insurance, etc.) Non-marketplace (individual plans) Rand Study 12

13 H.R.1628 American Health Care Act of 2017 Status: Introduced on March 20, 2017 Sponsored by Rep. Diane Black There have been 191 Amendments presented since this bill was introduced Passed the House on May 4, 2017 Senate amendment version known as the Health Care Freedom Act of 2017, failed to pass in the Senate on July 28, 2017

14 PlanSource ACA Totals Over 1.7 Million Employees Measured Cs Transmitted 922K 1095-Cs Transmitted 700+ Employers <4% IRS Corrections Requested

15 What now? Next Steps Stay the Course The employer mandate is the law and we should press forward to ensure employers are prepared for the 2017 tax year filing

16 ACA: Where it is today In the now

17 Technology Needs Measure Employees

18 Two Measurement Options To determine full-time status Look-Back Method Monthly Method Full-time status during stability period based upon hours worked during measurement period 130 or more hours in January Offer coverage by February 1 18

19 Look-Back Method Determine which EEs qualify as FT in advance of the coverage period Three Periods 1. Measurement period (look-back period) 2. Administrative period (max of 90 days) 3. Stability period Employee status (full-time or parttime) is based on the measurement period and won t change during the stability period, regardless of the actual hours worked during the stability period. 19

20 Two Types of Employees Note: You still must comply with the reporting requirements for both groups of employees. 20

21 Two Phases of Measurement Determine which employees qualify as full-time Ongoing Measurement All-Standard Look-Back Measurement New Hire Measurement Expected FT-Measure Monthly Expected PT-Initial Look-Back Measurement The challenge: Since new hires get their own measurement period and all employees are subject to measurement each year, you re in a constant state of measurement. 21

22 Existing Employees MEASURE FOR 2017 PLAN YEAR STABILITY FOR 2017 PLAN YEAR 22

23 New Hire Measurement Expected Full-Time Employees can be defined as Expected Full-Time if they work in a job class where they are expected to work 30+ hours per week upon hire. This is used to determine how to measure the employee from the hire date until standard measurement takes over. Expected Full-Time employees are measured monthly until standard measurement/stability takes over Employees who are not Expected Full-Time upon hire are placed into an initial measurement upon hire 23

24 New Hire Measurement The new hire requires a separate measurement period MEASURE FOR 2017 PLAN YEAR STABILITY FOR 2017 PLAN YEAR MEASURE FOR 4/1/2016 NEW HIRE (12 Months) 24

25 Technology Needs Measure Employees Manage Stability Changes

26 Variable Hour Employee New hire was eligible and enrolled in coverage

27 Variable Hour Employee. Then lost eligibility in a subsequent measurement period Initial Measurement Standard Measurement 27

28 Rehired Employees Non-Educational Employer Rule of Parity Logic <4 weeks Continuing employee >= 4 & < 13 weeks Compare employment gap >= 13 weeks Treat as new hire 28

29 Rule of Parity Summary Educational vs. non-educational employers Rule of Parity Logic Non-Educational Employer Timeframes <4 weeks Automatically continuing employee >= 4 & < 13 weeks Compare employment gap >= 13 weeks Automatically new hire Educational Employer Timeframes <4 weeks Automatically continuing employee >= 4 & < 26 weeks Compare employment gap >= 26 weeks Automatically new hire 29

30 Measurement Best Practice Perform measurement consistently throughout the year There are a number of reasons why this is a good practice. The most obvious is that offers of coverage need to be made in a timely manner. Not offering coverage timely can put an employer in a penalty situation. In addition, coverage may not be terminated timely, costing the employer thousands in premium payments.

31 Technology Needs Measure Employees Manage Stability Changes Capture Offers

32 Offers of Coverage Minimum Essential Coverage (MEC) Affordability Safe Harbor When an employee is offered coverage under an employer plan, it must meet the definition of minimum essential coverage. Have an Actuarial Value of 60% or more Cover the 10 Essential Health Benefits W2 Box 1 Pay Rate Poverty Uses the employee s annual salary from Box 1 of their W2 Hourly Rate Uses the Federal Poverty Level for a one person household *For plan years beginning in 2017, a health plan will be considered affordable if the cost of employee-only coverage does not exceed 9.69% of an employees annual household income.

33 Safe Harbor Best Practice Safe Harbor Setup Once the safe harbor is selected for the year it should not be changed. Therefore it is critical to carefully consider your demographic and make sure you have done your due diligence to ensure the option being used doesn t create a penalty situation for a large number of employees.

34 Safe Harbor Considerations Admin Complexity Level Ability to Monitor Employee Premium Level W2 Box 1 High No High Pay Rate Medium Yes Medium Poverty Low Yes Low

35 Technology Needs Measure Employees Manage Stability Changes Capture Offers Determine Form Coding

36 1094-C Information Part I: Contains Basic Information, ALE Name, Address, Contact, Number of 1095-C forms, etc. Part II: Form Counts, Eligibility Certifications, Authorized Signature Part III: 95% of FTEs Offered MEC Listed Month by Month, Employee Counts, etc

37 1095-C Coding Part I: Employee and Employer Information Part II: Line 14: Was Coverage Offered? Line 15: Employee Cost of Lowest Plan Offered Line 16: Reasons for Coverage Part III: Self-Insured Enrollee Information

38 Technology Needs Measure Employees Manage Stability Changes Capture Offers Determine Form Coding Print and Mail Employee Forms Due to Employees January 31, 2018

39 Frequently Misunderstood 1095-C Assumption: We allow PT employees to enroll in coverage. I need to provide a form for them. Response: Only self-insured groups need to create forms for PT employees who are enrolled in the plan. Assumption: Corrections made after a form is mailed/provided to the employee should always be marked as a corrected form. Response: Forms should only be marked as corrected if they have been transmitted to the IRS prior to the correction.

40 Technology Needs Measure Employees Manage Stability Changes Capture Offers Determine Form Coding Print and Mail Employee Forms IRS Transmission and Corrections Initial Transmission Due on April 2, 2018

41 Advantages to Using Benefits Administration Technology for ACA Data Element Used For HRIS Payroll Ben Admin Benefits Information Benefit Plan Enrollment Benefit Effective Dates Plan Eligibility Offers of Coverage Cost of Coverage Benefit Effective Dates Spouse Conditional Offer Dependent Demographics* Dependent Enrollment* HRIS Info Already in Benefits System Employee Demographics 1095-C and Mailing X X X Employee Classifications Measurement, Offer Creation, 1095-C Coding Employee Demographics Classification (FT/PT) Payroll Payroll Hours Measurement X X X X Payroll Hours Earnings (W2-Box 1 or Pay Rate) 1095-C Coding, Affordability Calculation X Benefit Plan Enrollment (incl. effective dates, term dates) 1095-C Coding X Benefit Plan Details (MV, etc.) 1095-C Coding X Plan Eligibility Offer Creation X Offers of Coverage 1095-C Coding X Lowest Cost of Coverage 1095-C Coding, Affordability Calculation X Conditional Spouse Coverage 1095-C Coding X Dependent Demographics and Enrollment* 1095-C Self-Insured Enrollees X *Only for self-insured groups Note: Stand-alone reporting solutions require all of the above information

42 ACA: Where it might go

43 A Look Into the Future 43

44 This Week s Activities Executive Order/Subsidy Payments Oct. 12th Oct. 17th President Trump subsidy payments President Trump signs executive order Senators strike a deal to reinstate subsidy payments Applies pressure to congress to take quick action This executive order is intended to promote healthcare choice and competition Bipartisan deal to fund critical subsidies 44

45 Future of ACA Need of reporting even after. Health Care Freedom Act (Senate version) effectively maintained the employer mandate until 2025 Other proposals have maintained the IRS reporting obligations under IRS Code 6055 and 6056 ACA alternatives are likely to still require some sort of reporting

46 Q&A 46