2 2:30 P.M. Thursday October 8, 2015 ACA Small Market Fix (PACE - - PowerPoint PPT Presentation
2 2:30 P.M. Thursday October 8, 2015 ACA Small Market Fix (PACE Act), 2015 Transitional Reinsurance Fee & Year-End Action Items Andrea Esselstein, JD Luke Clark Group Benefits Compliance Senior Consultant Team Leader Group
Andrea Esselstein, JD
Group Benefits Compliance Team Leader
Luke Clark
Senior Consultant Group Benefits
Small Market “Fix” (PACE Act)
November 15, 2015
AFFORDABLE CARE ACT (ACA) IMPLEMENTATION HIGHLIGHTS
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October 8, 2015 President Signs PACE Act Passed In Congress October 1, 2015 Small Group Market “Fix”
Each state will continue to determine IF AND WHEN to expand the definition of the small group health insurance marketplace to include companies with 51-99 employees Initially, under the ACA, small group is defined as fewer than 50 employees from 2014 – 2016 to expand to fewer than 100 in 2016 State-by-state variances will remain as states, along with state insurance departments, determine the definition of the small group market The small group definition in the following states has already been changed to 1-100 employees. District of Columbia, CA, CO, MD, NY, VA and VT
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Health History
Ratio (Oldest to Youngest)
21-63
No Immediate Impact
Greatest Impact
Increase (< 50 Full-time Employees)
Community Rating
Young Healthy Groups
Unhealthy Groups
NEW FEDERAL RULES FOR RATING EMPLOYER PREMIUMS: SMALL GROUP MARKET
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HIGH-LEVEL TIMELINE & QUICK REMINDERS
Ban on Lifetime Dollar Limits (2010) & Annual Dollar Limits for Essential Health Benefits (2014) Preventive Care Without Cost Sharing
(2011)
Women’s Preventive Care (2012) (Non-GF Plans) $2,550 Flexible Spending Account (FSA) Limitation
(2015)
Form W-2 Reporting Employers Filing at Least 250 Forms W-2 in 2014 Report Aggregate Value of Health Coverage on 2015 Form W-2 (2012) Ban on Preexisting Condition Exclusions
(2014)
Dependent Coverage Expansion to Age 26 Regardless of Access to Employer-Sponsored Health Coverage 90 Day Waiting Period Limitation
(2014)
Exchange Notice (01.01.13) Must be Distributed to New Hires within 14 Days of Hire (ALL Employees -- Regardless
▼ ONGOING
REQUIREMENTS
2014… 2014 – 2015… 2011 - 2013…
Employer Coverage Mandate, Penalty Exposure & Reporting Requirements “Shared Responsibility” Guaranteed Issued Coverage for COBRA Continuants & Pre-65 Retirees COBRA Notices Modifications
Payment of Transitional Reinsurance Fee through Pay.Gov Summary of Benefits and Coverage (SBC): 4 Page “Mini-SPD” (2012) Revised Template: 2014
NEW 2 1/2 Page Template Effective September 2015
Limits to Out-of-Pocket Maximums for HDHPs (2015) 2015: $6,600 (Individual) & $13,200 (Families) 2016: $6,850 (Individual) & $13,700 (Families)
2015-2016 2015-2016 2016 -2018
On June 26, 2015, the U.S. Supreme Court ruled that all couples, regardless of gender, have a fundamental right of marriage, leading to the legalization of same-sex marriages nationwide. Also on June 26, 2015, the U.S. Supreme Court rules to uphold subsidies in all states. Employer Reporting Requirements Effective IRS Section 6055: Reporting information required by insurers and small self-funded employers as to which individuals are enrolled in Minimum Essential coverage. IRS Section 6056: Reporting information required by large employers full-time employees (those employed for one month or more) were
receive Minimum Value coverage. Cadillac Tax Effective 2018 40% Excise Tax on High-Value Plans In 2018, this tax on both fully insured and self-funded plans applies to the plan value in excess of $10,200 ($850 / month) for single coverage; $27,500 ($2,292 / month) for other than self-only coverage (family coverage). Costs align with Cost-of-Living adjustment not Medical Inflation ONGOING REQUIREMENTS
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EEOC Rules Define “Voluntary” Wellness Title 1 of ADA applies to 15+ employees Wellness programs in Group Health Plans providing incentives for “disability related inquires or medical examinations.” Tobacco-free incentives provided based on cotinine testing
MEDICARE PART-D NOTICE Distribute Medicare Part D notice of Creditable or Non-Creditable RX coverage to Medicare-eligible Employees by October 15th FILE 5500 ANNUAL REPORT October 15th deadline for submission to IRS for calendar year plans; timely request for extension Form 5558. Distribute by December 15, 2015 FINALIZE PLAN ELIGIBILITY ASSESSMENT Employer with 50 or more full-time employees (including full-time equivalents) subject to ACA “Shared Responsibility” coverage mandate beginning January 1, 2016 PLAN DOCUMENTS TO REFLECT ANY ELIGIBILITY CHANGES Incorporate any changes in the definition of eligible employees within plan documents, open enrollment material and employee handbooks if describing eligibility and plan participation EMPLOYER REPORTING OBLIGATIONS Compliance with IRS Code Section 6055 & 6056
Several Listed Notices are NOT Specifically Required within Open Enrollment
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IRS Reporting Begins for Employers with 50- 99 Full-time Employees in 2015, EVEN THOUGH Not Subject to the Employer Coverage Mandate & Penalty Exposure until Plan Years on or after January 1, 2016. Required to Report? Employers with 50 or more Full-time Employees (including Full-time Equivalent Employees)
IRS Section 6055: Reporting information required by insurers and small self-funded employers as to which individuals are ENROLLED in Minimum Essential coverage.
IRS FORM 1095-B OR Combined Form 1095-C
IRS Section 6056: Reporting information required by ALL large employers as to whether full-time employees (those employed for one month or more) were OFFERED coverage and the lowest amount an employee may pay to receive Minimum Value coverage.
IRS FORM 1095-C
HIGHLIGHTED EMPLOYER CONSIDERATIONS 2015: $44 ANNUALLY PER COVERED LIFE
Applies to Both Fully Insured and Self-Insured Group Health Plans (GHPs)
Fully Insured Plans: Insurer Responsible for Paying the Fee
Self-Funded Plan Sponsors Required to Register & Pay Fee
www.Pay.gov
Covered Lives includes Dependents (Employee, Spouse & Child = 3 Covered Lives) November 16, 2015 Number of Covered Lives Reported by Self-Funded Sponsors (Employers) First Installment $33 Per Covered Life Due No Later than January 15, 2016 Second Installment $11 Per Covered Life Due by November 15, 2016
ACA & ERISA COMPLIANCE IRS REPORTING REQUIREMENTS ACA PENALTY EXPOSURE CADILLAC TAX HIPAA & DOL AUDITS
ACA & ERISA COMPLIANCE IRS REPORTING REQUIREMENTS ACA PENALTY EXPOSURE CADILLAC TAX HIPAA & DOL AUDITS
Completion of this file this year is not needed unless the Reporting Entity or Contributing Entity is filing on behalf of 4 or more Contributing Entities
1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov
Register on Pay.gov Or Confirm Your Password From Previous Year One Payment Contribution Submit Payment By November 16, 2015 Two Payment Contribution Submit First Payment By November 16, 2015 And Schedule Second Payment Full Contribution Payment Amount Due By January 15, 2016 Two Part Contribution Second Payment Due By November 15, 2016 Two Part Payment Contribution First Payment Due By January 15, 2016
PAY TRANSITIONAL REINSURANCE FEE Payment of ACA Transitional Reinsurance Program fees are due January 15, 2016 PROVIDE EMPLOYEES WITH FORM 1095-C STATEMENTS Deliver coverage information statements to employees using IRS Form 1095-C by February 1, 2016 FILE IRS INFORMATIONAL RETURNS FORMS 1094-C & 1095-C Employers subject to the reporting requirements must file information returns by March 1, 2016 (one day later than the standard deadline because February 28, 2016 is a Sunday) or by March 31, 2016, if filing electronically
Action Items & Highlighted Considerations for Employers TODAY Highlighted Considerations for Employers TODAY
(Reflecting 2015 Coverage - Applies to All American Citizens)
Guaranteed Issue Coverage for COBRA Constituents & Pre-65 Retirees
“Magnet” Plan
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ACA & ERISA COMPLIANCE IRS REPORTING REQUIREMENTS ACA PENALTY EXPOSURE CADILLAC TAX HIPAA & DOL AUDITS
Anticipate, Integrate & Overcome Change
Oswald’s Answer…
Comprehensive Compliance Risk Assessment Toolkit
Assure preparation & recordkeeping needs for a DOL audit Evaluate spousal coverage trends to avoid offering a non-competitive “magnet” plan Assess ongoing steps for the IRS employer reporting requirements (Forms 1094 & 1095) Strategize today to avoid the 2018 Cadillac Tax Leverage analytics tools & best practices for data-focused decision making Enhance communication initiatives as employees face increasingly complex decisions
Andrea Esselstein, J.D. aesselstein@oswaldcompanies.com Luke Clark, Senior Consultant
lclark@oswaldcompanies.com