Health Care Reform Updates & Human Resource News Alerts

Health Care Reform News

HR360::Health Care Reform
  • IRS Issues Guidance on the Maximum Individual Mandate Payment for 2016

    Posted on August 23, 2016
    Print

    Guidance Provides 2016 Monthly National Average Premium for Bronze Plans

    The Affordable Care Act's "individual mandate" provision requires every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a penalty payment when filing his or her federal income tax return. Recently, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-43, which provides information needed to determine the maximum penalty that may be due for 2016.

    Calculating the Payment
    The penalty in 2016 will be calculated in one of two ways. In general, individuals will pay whichever of the following amounts is higher:

    • 2.5% of the individual's yearly household income above his or her applicable filing threshold; or
    • $695 per person for the year ($347.50 per child under 18). The maximum penalty per family using this method is $2,085.

    The maximum penalty is capped at the cost of the national average premium for a bronze level health plan available through a Health Insurance Marketplace in 2016.

    New Guidance
    According to the new IRS guidance, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through a Health Insurance Marketplace in 2016 is:

    • $223 per individual; and
    • $1,115 for a family with five or more members.

    The guidance is effective for taxable years ending after December 31, 2015.

    © 2012 - 2013 HR 360, Inc.
  • IRS Releases 2016 Draft Instructions for Forms 1094-B and 1095-B

    Posted on August 17, 2016
    Print

    Forms Due in 2017, Used to Report Minimum Essential Coverage

    The IRS has released the 2016 Draft Instructions for Forms 1094-B and 1095-B to help employers prepare for calendar year 2016 information reporting. Employers are required to report in early 2017 for calendar year 2016.

    Who is Required to Report
    The Affordable Care Act requires insurers, self-insuring employers, and other parties that provide minimum essential health coverage to annually report information on this coverage to the IRS and to covered individuals using Forms 1094-B and 1095-B.

    Note: Self-insured employers with 50 or more full-time employees, including full-time equivalents, generally will satisfy their reporting obligations using Forms 1094-C and 1095-C. 2016 Draft Instructions for these forms were previously released.

    Key Proposed Changes for 2016 Reporting
    Among other minor changes, the 2016 draft instructions differ from the 2015 instructions as follows:

    • Updated Penalty Amounts: As previously announced, the penalty for failure to file a correct information return or provide a correct payee statement generally is now $260 for each return or statement for which such failure occurs (formerly $250), with a maximum penalty of over $3 million (adjusted for inflation).
    • "Good Faith Efforts" Penalty Relief Eliminated: For 2015 reporting, the IRS offered penalty relief to reporting entities that made "good faith efforts" to comply with the information reporting requirements. This penalty relief has been eliminated for 2016 reporting, though penalties may be waived if a reporting failure occurs due to reasonable cause and not willful neglect.

    2016 Draft Forms
    The following draft forms are also now available for 2016:

    © 2012 - 2013 HR 360, Inc.
  • CMS Announces 2016 Transitional Reinsurance Program Contribution Rate and Deadlines

    Posted on August 15, 2016
    Print

    Form Used to Submit Program Contribution Expected Soon

    The Centers for Medicare & Medicaid Services (CMS) has announced the 2016 benefit year contribution rate and deadlines for the Affordable Care Act (ACA) Transitional Reinsurance Program. 

    Background
    The Transitional Reinsurance Program is a three-year program established by the ACA which requires employers sponsoring certain self-insured plans ("contributing entities") to make contributions to support payments to individual market issuers that cover high-cost individuals.

    To successfully complete the reinsurance contribution process, contributing entities (or third-party administrators or administrative services-only contractors on their behalf) must register on www.pay.gov and submit their annual enrollment count of the number of covered lives of reinsurance contribution enrollees for the applicable benefit year by the submission deadline.

    New Contribution Amounts and Deadlines
    The 2016 Reinsurance Contribution Rate is $27.00 per covered life. For the 2016 benefit year, CMS will offer contributing entities the option to pay:

    • The entire 2016 benefit year contribution in one payment, no later than January 17, 2017 reflecting $27.00 per covered life; or
    • In two separate payments for the 2016 benefit year, with the first remittance due by January 17, 2017 reflecting $21.60 per covered life, and the second remittance due by November 15, 2017 reflecting $5.40 per covered life.

    The annual enrollment count submission deadline for the 2016 benefit year is November 15, 2016. While not yet available, the 2016 ACA Transitional Reinsurance Program Annual Enrollment and Contributions form is expected to be available on www.pay.gov in time for the submission deadline.

    © 2012 - 2013 HR 360, Inc.
  • IRS Releases 2016 Draft Instructions for Forms 1094-C and 1095-C

    Posted on August 10, 2016
    Print

    Forms Due in 2017, Used to Report ACA Compliance & Offers of Health Coverage

    The IRS has released the 2016 Draft Instructions for Forms 1094-C and 1095-C to help employers prepare for calendar year 2016 information reporting. Employers are required to report in early 2017 for calendar year 2016.

    Who is Required to Report
    Under the Affordable Care Act, applicable large employers ("ALEs")—generally those with 50 or more full-time employees, including full-time equivalent employees—use Forms 1094-C and 1095-C to report information to the IRS and to their employees about their compliance with the employer shared responsibility provisions ("pay or play") and the health care coverage they have offered.

    Key Changes for 2016 Reporting
    Among other changes, the 2016 draft instructions clarify:

    • The reporting rules which require employers who are Members of an "Aggregated ALE Group"—a group of ALE Members treated as a single employer under the Internal Revenue Code—to file Forms 1094-C and 1095-C, even if the ALE Member has fewer than 50 full-time employees of its own;
    • The indicator codes that should be used to report offers of COBRA continuation coverage on lines 14 and 16 of Form 1095-C; and
    • The definitions of "full-time employee" and "Employee Required Contribution" for purposes of Forms 1094-C and 1095-C reporting.

    2016 Draft Forms
    The following draft forms are also now available for 2016:

    © 2012 - 2013 HR 360, Inc.
  • Reminder: Employer Appeal Request Form Available for Employers Receiving Marketplace Notices

    Posted on August 08, 2016
    Print

    Appeals Must Be Made Within 90 Days

    As a reminder, Health Insurance Marketplaces are now sending letters to notify certain employers that one or more of their employees has been determined eligible for advance premium tax credits and cost-sharing reductions and has enrolled in a Marketplace plan. Because these events may trigger employer penalties under the Affordable Care Act's "pay or play" provisions, employers may seek to appeal an employee's eligibility determination. An employer appeal request form is available from the U.S. Department of Health and Human Services for this purpose.

    Employer Appeals Process
    Marketplaces must notify employers within a reasonable timeframe following any month of the employee's eligibility determination and enrollment. Employers have 90 days from the date stated on the Marketplace notice to file an appeal. In the appeal, the employer may assert that it provides its employee access to affordable, minimum value employer-sponsored coverage or that its employee is enrolled in employer coverage, and therefore that the employee is ineligible for advance payments of the premium tax credit or cost-sharing reductions.

    An appeal will not determine if the employer is subject to a "pay or play" penalty, as only the IRS, not the Marketplace or the Marketplace Appeals Center, can make such determinations. Click here for more on the appeals process.

    © 2012 - 2013 HR 360, Inc.
  • Proposed Changes to Treatment of EINs and TINs in Minimum Essential Coverage Reporting (Form 1095-B)

    Posted on August 04, 2016
    Print

    Certain Employer Requests for TINs Would Satisfy "Responsible Manner" Penalty Relief Requirement

    The IRS is proposing changes to how providers of minimum essential coverage must report employer identification numbers (EINs) and taxpayer identification numbers (TINs) when reporting information on that coverage, as well as the manner in which employers must solicit information on missing or incorrect TINs in order to avoid information reporting penalties.

    Background
    Section 6055 of the Internal Revenue Code requires any entity that provides minimum essential coverage to an individual to report certain information about that coverage to the IRS and furnish a statement to the responsible individual for those enrolled in the plan containing the same information. Among other items, the reporting entity must report its name, address, and EIN, as well as the name, address, and TIN of the responsible individual and each individual covered under the policy or program.

    Information returns under section 6055 generally are filed using Form 1095-B, though self-insured employers that qualify as applicable large employers generally must report information required under section 6055 in Part III of Form 1095-C. Entities that fail to timely file and furnish correct returns and statements are subject to certain penalties, which may be waived if the failure is due to reasonable cause and not due to willful neglect—that is, if a reporting entity demonstrates that it acted in a responsible manner and that the failure is due to significant mitigating factors or events beyond the reporting entity’s control.

    Proposed Changes
    Highlights of the proposed rule regarding the treatment of EINs and TINs in minimum essential coverage reporting include the following:

    • Clarification that the reporting entity's EIN and the TINs of responsible and covered individuals may be truncated on statements furnished to individuals; and
    • In cases of a missing or incorrect TIN, the reporting entity is treated as acting in a responsible manner for purposes of penalty relief if the reporting entity makes certain solicitations for the TIN at various times as specified in the rule.

    The proposed rule expressly provides that a TIN solicitation made to the responsible individual for a policy or plan is treated as a TIN solicitation of every covered individual on the policy or plan. As a result, the filer does not need to make separate solicitations from the responsible individual for each covered individual, nor does it need to separately solicit the TINs of each covered individual by contacting each covered individual directly.
     
    Effective Date
    The regulations are generally proposed to apply for taxable years ending after December 31, 2015, and may be relied on for calendar years ending after December 31, 2013 until final regulations are released. 

    © 2012 - 2013 HR 360, Inc.

    HR News and Alerts

    HR360::Health Care Reform
    • IRS Issues Guidance on the Maximum Individual Mandate Payment for 2016

      Posted on August 23, 2016
      Print

      Guidance Provides 2016 Monthly National Average Premium for Bronze Plans

      The Affordable Care Act's "individual mandate" provision requires every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a penalty payment when filing his or her federal income tax return. Recently, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-43, which provides information needed to determine the maximum penalty that may be due for 2016.

      Calculating the Payment
      The penalty in 2016 will be calculated in one of two ways. In general, individuals will pay whichever of the following amounts is higher:

      • 2.5% of the individual's yearly household income above his or her applicable filing threshold; or
      • $695 per person for the year ($347.50 per child under 18). The maximum penalty per family using this method is $2,085.

      The maximum penalty is capped at the cost of the national average premium for a bronze level health plan available through a Health Insurance Marketplace in 2016.

      New Guidance
      According to the new IRS guidance, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through a Health Insurance Marketplace in 2016 is:

      • $223 per individual; and
      • $1,115 for a family with five or more members.

      The guidance is effective for taxable years ending after December 31, 2015.

      © 2012 - 2013 HR 360, Inc.
    • IRS Releases 2016 Draft Instructions for Forms 1094-B and 1095-B

      Posted on August 17, 2016
      Print

      Forms Due in 2017, Used to Report Minimum Essential Coverage

      The IRS has released the 2016 Draft Instructions for Forms 1094-B and 1095-B to help employers prepare for calendar year 2016 information reporting. Employers are required to report in early 2017 for calendar year 2016.

      Who is Required to Report
      The Affordable Care Act requires insurers, self-insuring employers, and other parties that provide minimum essential health coverage to annually report information on this coverage to the IRS and to covered individuals using Forms 1094-B and 1095-B.

      Note: Self-insured employers with 50 or more full-time employees, including full-time equivalents, generally will satisfy their reporting obligations using Forms 1094-C and 1095-C. 2016 Draft Instructions for these forms were previously released.

      Key Proposed Changes for 2016 Reporting
      Among other minor changes, the 2016 draft instructions differ from the 2015 instructions as follows:

      • Updated Penalty Amounts: As previously announced, the penalty for failure to file a correct information return or provide a correct payee statement generally is now $260 for each return or statement for which such failure occurs (formerly $250), with a maximum penalty of over $3 million (adjusted for inflation).
      • "Good Faith Efforts" Penalty Relief Eliminated: For 2015 reporting, the IRS offered penalty relief to reporting entities that made "good faith efforts" to comply with the information reporting requirements. This penalty relief has been eliminated for 2016 reporting, though penalties may be waived if a reporting failure occurs due to reasonable cause and not willful neglect.

      2016 Draft Forms
      The following draft forms are also now available for 2016:

      © 2012 - 2013 HR 360, Inc.
    • CMS Announces 2016 Transitional Reinsurance Program Contribution Rate and Deadlines

      Posted on August 15, 2016
      Print

      Form Used to Submit Program Contribution Expected Soon

      The Centers for Medicare & Medicaid Services (CMS) has announced the 2016 benefit year contribution rate and deadlines for the Affordable Care Act (ACA) Transitional Reinsurance Program. 

      Background
      The Transitional Reinsurance Program is a three-year program established by the ACA which requires employers sponsoring certain self-insured plans ("contributing entities") to make contributions to support payments to individual market issuers that cover high-cost individuals.

      To successfully complete the reinsurance contribution process, contributing entities (or third-party administrators or administrative services-only contractors on their behalf) must register on www.pay.gov and submit their annual enrollment count of the number of covered lives of reinsurance contribution enrollees for the applicable benefit year by the submission deadline.

      New Contribution Amounts and Deadlines
      The 2016 Reinsurance Contribution Rate is $27.00 per covered life. For the 2016 benefit year, CMS will offer contributing entities the option to pay:

      • The entire 2016 benefit year contribution in one payment, no later than January 17, 2017 reflecting $27.00 per covered life; or
      • In two separate payments for the 2016 benefit year, with the first remittance due by January 17, 2017 reflecting $21.60 per covered life, and the second remittance due by November 15, 2017 reflecting $5.40 per covered life.

      The annual enrollment count submission deadline for the 2016 benefit year is November 15, 2016. While not yet available, the 2016 ACA Transitional Reinsurance Program Annual Enrollment and Contributions form is expected to be available on www.pay.gov in time for the submission deadline.

      © 2012 - 2013 HR 360, Inc.
    • IRS Releases 2016 Draft Instructions for Forms 1094-C and 1095-C

      Posted on August 10, 2016
      Print

      Forms Due in 2017, Used to Report ACA Compliance & Offers of Health Coverage

      The IRS has released the 2016 Draft Instructions for Forms 1094-C and 1095-C to help employers prepare for calendar year 2016 information reporting. Employers are required to report in early 2017 for calendar year 2016.

      Who is Required to Report
      Under the Affordable Care Act, applicable large employers ("ALEs")—generally those with 50 or more full-time employees, including full-time equivalent employees—use Forms 1094-C and 1095-C to report information to the IRS and to their employees about their compliance with the employer shared responsibility provisions ("pay or play") and the health care coverage they have offered.

      Key Changes for 2016 Reporting
      Among other changes, the 2016 draft instructions clarify:

      • The reporting rules which require employers who are Members of an "Aggregated ALE Group"—a group of ALE Members treated as a single employer under the Internal Revenue Code—to file Forms 1094-C and 1095-C, even if the ALE Member has fewer than 50 full-time employees of its own;
      • The indicator codes that should be used to report offers of COBRA continuation coverage on lines 14 and 16 of Form 1095-C; and
      • The definitions of "full-time employee" and "Employee Required Contribution" for purposes of Forms 1094-C and 1095-C reporting.

      2016 Draft Forms
      The following draft forms are also now available for 2016:

      © 2012 - 2013 HR 360, Inc.
    • Reminder: Employer Appeal Request Form Available for Employers Receiving Marketplace Notices

      Posted on August 08, 2016
      Print

      Appeals Must Be Made Within 90 Days

      As a reminder, Health Insurance Marketplaces are now sending letters to notify certain employers that one or more of their employees has been determined eligible for advance premium tax credits and cost-sharing reductions and has enrolled in a Marketplace plan. Because these events may trigger employer penalties under the Affordable Care Act's "pay or play" provisions, employers may seek to appeal an employee's eligibility determination. An employer appeal request form is available from the U.S. Department of Health and Human Services for this purpose.

      Employer Appeals Process
      Marketplaces must notify employers within a reasonable timeframe following any month of the employee's eligibility determination and enrollment. Employers have 90 days from the date stated on the Marketplace notice to file an appeal. In the appeal, the employer may assert that it provides its employee access to affordable, minimum value employer-sponsored coverage or that its employee is enrolled in employer coverage, and therefore that the employee is ineligible for advance payments of the premium tax credit or cost-sharing reductions.

      An appeal will not determine if the employer is subject to a "pay or play" penalty, as only the IRS, not the Marketplace or the Marketplace Appeals Center, can make such determinations. Click here for more on the appeals process.

      © 2012 - 2013 HR 360, Inc.
    • Proposed Changes to Treatment of EINs and TINs in Minimum Essential Coverage Reporting (Form 1095-B)

      Posted on August 04, 2016
      Print

      Certain Employer Requests for TINs Would Satisfy "Responsible Manner" Penalty Relief Requirement

      The IRS is proposing changes to how providers of minimum essential coverage must report employer identification numbers (EINs) and taxpayer identification numbers (TINs) when reporting information on that coverage, as well as the manner in which employers must solicit information on missing or incorrect TINs in order to avoid information reporting penalties.

      Background
      Section 6055 of the Internal Revenue Code requires any entity that provides minimum essential coverage to an individual to report certain information about that coverage to the IRS and furnish a statement to the responsible individual for those enrolled in the plan containing the same information. Among other items, the reporting entity must report its name, address, and EIN, as well as the name, address, and TIN of the responsible individual and each individual covered under the policy or program.

      Information returns under section 6055 generally are filed using Form 1095-B, though self-insured employers that qualify as applicable large employers generally must report information required under section 6055 in Part III of Form 1095-C. Entities that fail to timely file and furnish correct returns and statements are subject to certain penalties, which may be waived if the failure is due to reasonable cause and not due to willful neglect—that is, if a reporting entity demonstrates that it acted in a responsible manner and that the failure is due to significant mitigating factors or events beyond the reporting entity’s control.

      Proposed Changes
      Highlights of the proposed rule regarding the treatment of EINs and TINs in minimum essential coverage reporting include the following:

      • Clarification that the reporting entity's EIN and the TINs of responsible and covered individuals may be truncated on statements furnished to individuals; and
      • In cases of a missing or incorrect TIN, the reporting entity is treated as acting in a responsible manner for purposes of penalty relief if the reporting entity makes certain solicitations for the TIN at various times as specified in the rule.

      The proposed rule expressly provides that a TIN solicitation made to the responsible individual for a policy or plan is treated as a TIN solicitation of every covered individual on the policy or plan. As a result, the filer does not need to make separate solicitations from the responsible individual for each covered individual, nor does it need to separately solicit the TINs of each covered individual by contacting each covered individual directly.
       
      Effective Date
      The regulations are generally proposed to apply for taxable years ending after December 31, 2015, and may be relied on for calendar years ending after December 31, 2013 until final regulations are released. 

      © 2012 - 2013 HR 360, Inc.