aca where it might go - discover plansource · future of aca need of reporting even after…....
TRANSCRIPT
ACA
• Where it’s been, Where it is today,
Where it might go
The ACA
Saga
Where it’s been,
where it is today,
and
where it might go
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).
4
Will the slides be available?
Yes!(We will send you a link to the PDF
after the webinar).
5
How do you ask questions?
Type your question into
the “Questions” panel
Our Awesome Speakers
Jake Dekelver
ACA Consultant
PlanSource
Jeana Parker
VP Strategic Initiatives
PlanSource
ACA: Where it’s been
A look back
History of PPACA
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 throughconsumer protections, regulations, subsidies, taxes and insurance
exchanges”
Enacted in 2010
Source: https://obamacarefacts.com/obamacare-facts/
Coverage
to age 26Right to
appeal
ins.
company
decisions
Limitations
on Rate
Increases
Acces
s to
CHIP
New Benefits, Rights, and Protections
Source: https://obamacarefacts.com/obamacare-facts/
Insurance
company
limitations and
protections Small
employer
credits
Employer
Mandate
Tax
Break
s
Medicaid
Expansion
Coverage
denials
Life-
time
limits
Annual
Limits
Subsidies
Coverage
for pre-
existing
conditions
Expand
coverage
Individual
mandate
Where the ACA Meets the IRS
10
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.
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.
Insurance ProvidersApplicable Large
Employers
Source: http://www.nisbenefits.com/pdfs-6055-6056/Code%20Section%206055%20-
%20What%20Information%20Must%20be%20Reported.pdf
What Are The Reporting Requirements?
11
Due dates below are for the 2017 reporting year
Due to Employees
January 31, 2018
Electronically due to IRS
April 2, 2018
Self-Insured
ALE Employers
Health Insurance Providers
Non ALE Self-Insured
Employers
Self-Insured and
Fully Insured ALE
Employers
Section
6055
Form 1095-B
Form 1094-B
9.6 M
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)
Enrollment Counts by Segments
“Trends in Health Insurance Enrollment, 2013-15”
12
Affordable Care Act’s impact:
22.8 m (newly insured) - 5.9 m (lost coverage) = 16.9 m (net increase)
Rand Study
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
PlanSource ACA Totals
700+
Employers
3786
1094-Cs Transmitted
Over 1.7 Million
Employees Measured922K
1095-Cs Transmitted
<4% IRS
Corrections
Requested
What now?
The employer mandate is the law and we should press forward to ensure
employers are prepared for the 2017 tax year filing
Next Steps
Stay the Course
ACA: Where it is today
In the now
Technology Needs
1
Measure Employees
2 3 4 5 6
Two Measurement Options
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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
19
Look-Back Method Determine which EEs qualify as FT in advance of the coverage period
Employee status (full-time or part-
time) is based on the measurement
period and won’t change during the
stability period, regardless of the
actual hours worked during the
stability period.
Three Periods
1. Measurement period
(look-back period)
2. Administrative period
(max of 90 days)
3. Stability period
Two Types of Employees
20
Note: You still must comply with the reporting requirements for both groups of employees.
Two Phases of Measurement
21
Ongoing Measurement
All-Standard Look-Back
Measurement
Determine which employees qualify as full-time
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.
New Hire Measurement
Expected FT-Measure Monthly
Expected PT-Initial Look-Back Measurement
22
Existing Employees
2014 2016 2017
MEASURE FOR 2017 PLAN YEAR
STABILITY FOR 2017 PLAN
YEAR
New Hire Measurement – Expected Full-Time
23
• 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
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.
24
New Hire Measurement
2016 2017
The new hire requires a separate measurement period
2018
MEASURE FOR 4/1/2016 NEW HIRE (12 Months)
MEASURE FOR 2017 PLAN YEAR
STABILITY FOR 2017 PLAN YEAR
Technology Needs
1
Measure Employees
2
Manage Stability Changes
3 4 5 6
26
Variable Hour Employee
2014
New hire was eligible and enrolled in coverage. . . .
2016 2017 2018
27
2014
…. Then lost eligibility in a subsequent measurement period
2016 2017 2018
Initial Measurement
Standard Measurement
Variable Hour Employee
28
Rehired Employees
2016 2017
Non-Educational Employer
2018
Rule of Parity Logic
<4 weeks Continuing employee
>= 4 & < 13 weeks Compare employment gap
>= 13 weeks Treat as new hire
29
Rule of Parity SummaryEducational 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
Measurement Best Practice
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.
Perform measurement consistently throughout the year
Technology Needs
1
Measure Employees
2
Manage Stability Changes
3
Capture Offers
4 5 6
Offers of Coverage
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
Minimum Essential
Coverage (MEC)
Affordability
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.
Safe Harbor
Safe Harbor Best Practice
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.
Safe Harbor Setup
Safe Harbor Considerations
W2
Box 1
Pay
Rate
Poverty
High
Ability to MonitorAdmin
Complexity Level
Employee
Premium Level
HighNo
MediumYesMedium
LowYesLow
Technology Needs
1
Measure Employees
2
Manage Stability Changes
3
Capture Offers
4
Determine Form
Coding
5 6
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.
https://www.irs.gov/pub/irs-pdf/f1094c.pdf -- https://www.irs.gov/pub/irs-pdf/f1095c.pdf
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
https://www.irs.gov/pub/irs-pdf/f1095c.pdf
Technology Needs
1
Measure Employees
2
Manage Stability Changes
3
Capture Offers
4
Determine Form
Coding
5
Print and Mail
Employee Forms
6
Due to Employees
January 31, 2018
Frequently Misunderstood
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.
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.
Technology Needs
1
Measure Employees
2
Manage Stability Changes
3
Capture Offers
4
Determine Form
Coding
5
Print and Mail
Employee Forms
6
IRS Trans-mission
and Corrections
Initial Transmission
Due on April 2, 2018
Advantages to Using Benefits Administration Technology for ACA
Benefit Plan EnrollmentBenefit Effective DatesPlan EligibilityOffers of CoverageCost of CoverageBenefit Effective DatesSpouse Conditional OfferDependent Demographics*Dependent Enrollment*
Employee DemographicsClassification (FT/PT)
Payroll Hours
Benefits Information HRIS Info Already in Benefits System
Payroll
*Only for self-insured groups
Note: Stand-alone reporting solutions require all of the above information
Data Element Used For HRIS Payroll Ben Admin
Employee Demographics 1095-C and Mailing X X X
Employee Classifications Measurement, Offer Creation, 1095-C
Coding
X X X
Payroll Hours Measurement X
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
ACA: Where it might go
43
A Look Into the Future
This Week’s Activities
44https://www.whitehouse.gov/the-press-office/2017/10/12/presidential-executive-order-promoting-healthcare-choice-and-competition
Executive Order/Subsidy Payments
Oct. 12th
President Trump
subsidy payments
President Trump signs
executive order
Applies pressure to
congress to take quick
action
This executive order is
intended to promote
healthcare choice and
competition
Oct. 17th
Senators strike a deal to
reinstate subsidy payments
Bipartisan deal to fund
critical subsidies
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