Health Care Reform Updates & Human Resource News Alerts

Health Care Reform News

HR360::Health Care Reform
  • Final Rule Shortens Allowable Duration of Short-Term Insurance, Adds Issuer Notice Requirement

    Posted on December 02, 2016
    Print

    Rule Generally Applicable Beginning January 1, 2017

    The U.S. Departments of Treasury, Labor, and Health and Human Services recently published a final rule that restricts the allowable duration of short-term, limited-duration insurance to less than three months and requires issuers to prominently display a new notice in the contract and application materials provided in connection with such insurance. The final rule is applicable to policy years beginning on or after January 1, 2017.

    Background
    Under the Affordable Care Act (ACA), short-term, limited-duration insurance is exempted from certain market reforms, including the annual dollar limit prohibition and the pre-existing condition exclusion. In exchange, the ACA limits the allowable duration of short-term, limited-duration insurance to less than twelve months after the original effective date of the contract, and declines to qualify such insurance as minimum essential coverage necessary for an individual to satisfy the individual mandate.

    New Coverage Period Restriction
    The new final rule revises the definition of short-term, limited-duration insurance so that the coverage must be less than three months in duration after the original effective date of the contract, including any period for which the policy may be renewed. While the revised definition applies for policy years beginning on or after January 1, 2017, the Department of Health and Human Services will not take enforcement action against an issuer with respect to the issuer’s sale of a short-term, limited-duration insurance product before April 1, 2017 on the ground that the coverage period is three months or more, provided that the coverage ends on or before December 31, 2017 and otherwise complies with the definition of short-term, limited-duration insurance in effect under federal regulations. In addition, states may also elect not to take enforcement actions against issuers with respect to such coverage sold before April 1, 2017.

    New Notice Requirement for Issuers
    Effective for policy years beginning on or after January 1, 2017, issuers of short-term, limited-duration insurance must prominently display the following notice in the contract and in any application materials provided in connection with enrollment in such coverage in at least 14 point type:

    "THIS IS NOT QUALIFYING HEALTH COVERAGE (‘‘MINIMUM ESSENTIAL COVERAGE’’) THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON’T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT WITH YOUR TAXES."

    Click here to read the final rule in its entirety.

    © 2012 - 2013 HR 360, Inc.
  • How Hiring Holiday Help May Impact an Employer’s ALE Status

    Posted on November 28, 2016
    Print

    Employers May Apply a Reasonable, Good Faith Interpretation of the Term 'Seasonal Worker'

    Employers that hire seasonal workers this holiday season are reminded that there is an exception when measuring workforce size to determine whether they are an applicable large employer (ALE) subject to the Affordable Care Act's employer shared responsibility ("pay or play") and corresponding information reporting provisions.

    Seasonal Worker Exception
    If an employer's workforce exceeds 50 full-time employees (including full-time equivalent employees) for 120 days or less (or 4 calendar months) during the preceding calendar year, and the employees in excess of 50 who were employed during that period were seasonal workers, the employer is not considered an ALE for the current calendar year. A seasonal worker for this purpose is an employee who performs labor or services on a seasonal basis (e.g., retail workers employed exclusively during holiday seasons are seasonal workers).

    Seasonal Worker Versus Seasonal Employee
    While the terms 'seasonal worker' and 'seasonal employee' are both used in the pay or play provisions, only the term 'seasonal worker' is relevant for determining whether an employer is considered an ALE. For this purpose, employers may apply a reasonable, good faith interpretation of the term 'seasonal worker.' For more information on the difference between a seasonal worker and a seasonal employee under pay or play, please refer to IRS Pay or Play Q&A #54.

    © 2012 - 2013 HR 360, Inc.
  • December ACA Webinar Dates

    Posted on November 23, 2016
    Print

    Spanish-Language Recording Also Available

    The U.S. Small Business Administration (SBA) and the U.S. Small Business Majority (a national nonprofit advocacy organization) are continuing their Affordable Care Act 101 Webinar Series for small businesses. The hour-long webinars are scheduled to take place on two Thursdays in December.

    The series is designed to help business owners understand key pieces of the law, including the small business health care tax credit and employer shared responsibility provisions ("pay or play"). The webinars also provide updates regarding the Small Business Health Insurance Marketplace (SHOP). The same webinar is offered each time.

    The webinars will take place on the following dates:

    After registering, you will receive a confirmation email with all of the information needed to access the webinar by telephone. A brief question and answer period will follow each presentation.

    Note: A Spanish-language recording of the ACA 101 webinar is also available.

    © 2012 - 2013 HR 360, Inc.
  • Deadlines Extended for Furnishing Forms 1095-B and 1095-C in Early 2017

    Posted on November 18, 2016
    Print

    Good Faith Penalty Relief Also Extended 

    The IRS has extended the due dates for furnishing 2016 Forms 1095-B and 1095-C to covered individuals and full-time employees, respectively, from January 31, 2017, to March 2, 2017. In addition, the IRS is also extending good faith penalty relief to reporting entities who can show they made good faith efforts to comply with the calendar year 2016 information reporting requirements.

    Who is Required to Report
    Applicable large employers (generally those with 50 or more full-time employees, including full-time equivalents or FTEs) must use Forms 1094-C and 1095-C to report information to the IRS and to their full-time employees about their compliance with the employer shared responsibility provisions ("pay or play") and the health care coverage they have offered in a calendar year. Alternatively, Forms 1094-B and 1095-B are used by insurers, self-insuring employers, and other parties that provide minimum essential health coverage (regardless of size, except for large self-insuring employers) to report information on this coverage to the IRS and to covered individuals. Employers subject to both reporting provisions (generally self-insured employers with 50 or more full-time employees, including FTEs) will satisfy their reporting obligations using Forms 1094-C and 1095-C.

    Note: Reporting entities are required to report in early 2017 for coverage offered (or not offered) in calendar year 2016.   

    Furnishing Deadline Extension
    The IRS has extended the due dates for furnishing 2016 Forms 1095-B and 1095-C to covered individuals and full-time employees, respectively, from January 31, 2017, to March 2, 2017. However, the deadline to file 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS was not extended, and remains February 28, 2017 (or March 31, 2017, if filing electronically).

    Good Faith Penalty Relief Extension
    Internal Revenue Code sections 6721 and 6722 impose penalties for failing to file and furnish an accurate and complete information return, including Forms 1094 and 1095. However, the IRS is extending penalty relief to reporting entities that can show that they made good faith efforts to comply with the calendar year 2016 information reporting requirements. This relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement.

    In determining good faith, the IRS will take into account whether an employer made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing its ability to transmit information to the IRS. In addition, the IRS will take into account the extent to which the employer is taking steps to ensure that it will be able to comply with the reporting requirements for calendar year 2017.
     
    Extensions Apply to Calendar Year 2016 Reporting Only
    The extensions for furnishing Forms 1095-B and 1095-C apply to calendar year 2016 reporting only and have no effect on the requirements for other years or on the effective dates or application of the pay or play provisions. Specifically, the IRS does not anticipate extending due dates or good faith penalty relief to reporting for calendar year 2017.

    © 2012 - 2013 HR 360, Inc.
  • How Employers Can Appeal a Marketplace Notice

    Posted on November 17, 2016
    Print

    Appeals Due Within 90 Days

    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 penalties under the Affordable Care Act's "pay or play" provisions for applicable large employers (generally those with 50 or more full-time employees, including full-time equivalents), such employers may seek to appeal an employee's eligibility determination.

    Employer Appeals Process
    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.

    This appeal can generally be filed two ways, either by:

    1. Filling out the Employer Appeal Request Form; or
    2. Submitting a letter with the following information:
      • Business name
      • Employer ID Number (EIN)
      • Employer's primary contact name, phone number, and address
      • The reason for the appeal
      • Information from the Marketplace notice received, including date and employee information

    Employers should mail the appeal request form or letter—with a copy of the Marketplace notice—to the address provided by Healthcare.gov. After the appeal is filed, the employer will get a letter saying the appeal was received; the letter will provide a description of the appeals process and instructions for submitting additional materials if needed.

    Note: 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.

    © 2012 - 2013 HR 360, Inc.
  • No Minimum Participation Rate Requirement to Enroll in SHOP Coverage Through December 15

    Posted on November 15, 2016
    Print

    Eligible Employers May Use SHOP to Offer Employees Insurance

    The U.S. Department of Health and Human Services is informing employers interested in purchasing coverage through the Small Business Health Options Program (SHOP) Marketplace that they may enroll in 2017 coverage from November 15 through December 15 without meeting their state's Minimum Participation Rate (MPR) requirement.

    SHOP Marketplace
    In general, employers can use the SHOP Marketplace to purchase coverage if they:

    • Have 50 or fewer full-time equivalent employees (although some states may make the SHOP Marketplace available to businesses with up to 100 employees);
    • Have at least an office or employee work site within the state whose SHOP Marketplace the employer wishes to use;
    • Offer coverage to all of their full-time employees (generally those working an average of 30 hours or more per week); and
    • Meet the applicable MPR requirement (in most states, at least 70% of full-time employees must enroll to satisfy this requirement).

    Now through December 15, eligible employers may enroll in SHOP Marketplace coverage without satisfying their state's MPR requirement. For more information, please visit the SHOP Marketplace website.

    © 2012 - 2013 HR 360, Inc.

    HR News and Alerts

    HR360::Health Care Reform
    • Final Rule Shortens Allowable Duration of Short-Term Insurance, Adds Issuer Notice Requirement

      Posted on December 02, 2016
      Print

      Rule Generally Applicable Beginning January 1, 2017

      The U.S. Departments of Treasury, Labor, and Health and Human Services recently published a final rule that restricts the allowable duration of short-term, limited-duration insurance to less than three months and requires issuers to prominently display a new notice in the contract and application materials provided in connection with such insurance. The final rule is applicable to policy years beginning on or after January 1, 2017.

      Background
      Under the Affordable Care Act (ACA), short-term, limited-duration insurance is exempted from certain market reforms, including the annual dollar limit prohibition and the pre-existing condition exclusion. In exchange, the ACA limits the allowable duration of short-term, limited-duration insurance to less than twelve months after the original effective date of the contract, and declines to qualify such insurance as minimum essential coverage necessary for an individual to satisfy the individual mandate.

      New Coverage Period Restriction
      The new final rule revises the definition of short-term, limited-duration insurance so that the coverage must be less than three months in duration after the original effective date of the contract, including any period for which the policy may be renewed. While the revised definition applies for policy years beginning on or after January 1, 2017, the Department of Health and Human Services will not take enforcement action against an issuer with respect to the issuer’s sale of a short-term, limited-duration insurance product before April 1, 2017 on the ground that the coverage period is three months or more, provided that the coverage ends on or before December 31, 2017 and otherwise complies with the definition of short-term, limited-duration insurance in effect under federal regulations. In addition, states may also elect not to take enforcement actions against issuers with respect to such coverage sold before April 1, 2017.

      New Notice Requirement for Issuers
      Effective for policy years beginning on or after January 1, 2017, issuers of short-term, limited-duration insurance must prominently display the following notice in the contract and in any application materials provided in connection with enrollment in such coverage in at least 14 point type:

      "THIS IS NOT QUALIFYING HEALTH COVERAGE (‘‘MINIMUM ESSENTIAL COVERAGE’’) THAT SATISFIES THE HEALTH COVERAGE REQUIREMENT OF THE AFFORDABLE CARE ACT. IF YOU DON’T HAVE MINIMUM ESSENTIAL COVERAGE, YOU MAY OWE AN ADDITIONAL PAYMENT WITH YOUR TAXES."

      Click here to read the final rule in its entirety.

      © 2012 - 2013 HR 360, Inc.
    • How Hiring Holiday Help May Impact an Employer’s ALE Status

      Posted on November 28, 2016
      Print

      Employers May Apply a Reasonable, Good Faith Interpretation of the Term 'Seasonal Worker'

      Employers that hire seasonal workers this holiday season are reminded that there is an exception when measuring workforce size to determine whether they are an applicable large employer (ALE) subject to the Affordable Care Act's employer shared responsibility ("pay or play") and corresponding information reporting provisions.

      Seasonal Worker Exception
      If an employer's workforce exceeds 50 full-time employees (including full-time equivalent employees) for 120 days or less (or 4 calendar months) during the preceding calendar year, and the employees in excess of 50 who were employed during that period were seasonal workers, the employer is not considered an ALE for the current calendar year. A seasonal worker for this purpose is an employee who performs labor or services on a seasonal basis (e.g., retail workers employed exclusively during holiday seasons are seasonal workers).

      Seasonal Worker Versus Seasonal Employee
      While the terms 'seasonal worker' and 'seasonal employee' are both used in the pay or play provisions, only the term 'seasonal worker' is relevant for determining whether an employer is considered an ALE. For this purpose, employers may apply a reasonable, good faith interpretation of the term 'seasonal worker.' For more information on the difference between a seasonal worker and a seasonal employee under pay or play, please refer to IRS Pay or Play Q&A #54.

      © 2012 - 2013 HR 360, Inc.
    • December ACA Webinar Dates

      Posted on November 23, 2016
      Print

      Spanish-Language Recording Also Available

      The U.S. Small Business Administration (SBA) and the U.S. Small Business Majority (a national nonprofit advocacy organization) are continuing their Affordable Care Act 101 Webinar Series for small businesses. The hour-long webinars are scheduled to take place on two Thursdays in December.

      The series is designed to help business owners understand key pieces of the law, including the small business health care tax credit and employer shared responsibility provisions ("pay or play"). The webinars also provide updates regarding the Small Business Health Insurance Marketplace (SHOP). The same webinar is offered each time.

      The webinars will take place on the following dates:

      After registering, you will receive a confirmation email with all of the information needed to access the webinar by telephone. A brief question and answer period will follow each presentation.

      Note: A Spanish-language recording of the ACA 101 webinar is also available.

      © 2012 - 2013 HR 360, Inc.
    • Deadlines Extended for Furnishing Forms 1095-B and 1095-C in Early 2017

      Posted on November 18, 2016
      Print

      Good Faith Penalty Relief Also Extended 

      The IRS has extended the due dates for furnishing 2016 Forms 1095-B and 1095-C to covered individuals and full-time employees, respectively, from January 31, 2017, to March 2, 2017. In addition, the IRS is also extending good faith penalty relief to reporting entities who can show they made good faith efforts to comply with the calendar year 2016 information reporting requirements.

      Who is Required to Report
      Applicable large employers (generally those with 50 or more full-time employees, including full-time equivalents or FTEs) must use Forms 1094-C and 1095-C to report information to the IRS and to their full-time employees about their compliance with the employer shared responsibility provisions ("pay or play") and the health care coverage they have offered in a calendar year. Alternatively, Forms 1094-B and 1095-B are used by insurers, self-insuring employers, and other parties that provide minimum essential health coverage (regardless of size, except for large self-insuring employers) to report information on this coverage to the IRS and to covered individuals. Employers subject to both reporting provisions (generally self-insured employers with 50 or more full-time employees, including FTEs) will satisfy their reporting obligations using Forms 1094-C and 1095-C.

      Note: Reporting entities are required to report in early 2017 for coverage offered (or not offered) in calendar year 2016.   

      Furnishing Deadline Extension
      The IRS has extended the due dates for furnishing 2016 Forms 1095-B and 1095-C to covered individuals and full-time employees, respectively, from January 31, 2017, to March 2, 2017. However, the deadline to file 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS was not extended, and remains February 28, 2017 (or March 31, 2017, if filing electronically).

      Good Faith Penalty Relief Extension
      Internal Revenue Code sections 6721 and 6722 impose penalties for failing to file and furnish an accurate and complete information return, including Forms 1094 and 1095. However, the IRS is extending penalty relief to reporting entities that can show that they made good faith efforts to comply with the calendar year 2016 information reporting requirements. This relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement.

      In determining good faith, the IRS will take into account whether an employer made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to employees and covered individuals, such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS, or testing its ability to transmit information to the IRS. In addition, the IRS will take into account the extent to which the employer is taking steps to ensure that it will be able to comply with the reporting requirements for calendar year 2017.
       
      Extensions Apply to Calendar Year 2016 Reporting Only
      The extensions for furnishing Forms 1095-B and 1095-C apply to calendar year 2016 reporting only and have no effect on the requirements for other years or on the effective dates or application of the pay or play provisions. Specifically, the IRS does not anticipate extending due dates or good faith penalty relief to reporting for calendar year 2017.

      © 2012 - 2013 HR 360, Inc.
    • How Employers Can Appeal a Marketplace Notice

      Posted on November 17, 2016
      Print

      Appeals Due Within 90 Days

      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 penalties under the Affordable Care Act's "pay or play" provisions for applicable large employers (generally those with 50 or more full-time employees, including full-time equivalents), such employers may seek to appeal an employee's eligibility determination.

      Employer Appeals Process
      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.

      This appeal can generally be filed two ways, either by:

      1. Filling out the Employer Appeal Request Form; or
      2. Submitting a letter with the following information:
        • Business name
        • Employer ID Number (EIN)
        • Employer's primary contact name, phone number, and address
        • The reason for the appeal
        • Information from the Marketplace notice received, including date and employee information

      Employers should mail the appeal request form or letter—with a copy of the Marketplace notice—to the address provided by Healthcare.gov. After the appeal is filed, the employer will get a letter saying the appeal was received; the letter will provide a description of the appeals process and instructions for submitting additional materials if needed.

      Note: 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.

      © 2012 - 2013 HR 360, Inc.
    • No Minimum Participation Rate Requirement to Enroll in SHOP Coverage Through December 15

      Posted on November 15, 2016
      Print

      Eligible Employers May Use SHOP to Offer Employees Insurance

      The U.S. Department of Health and Human Services is informing employers interested in purchasing coverage through the Small Business Health Options Program (SHOP) Marketplace that they may enroll in 2017 coverage from November 15 through December 15 without meeting their state's Minimum Participation Rate (MPR) requirement.

      SHOP Marketplace
      In general, employers can use the SHOP Marketplace to purchase coverage if they:

      • Have 50 or fewer full-time equivalent employees (although some states may make the SHOP Marketplace available to businesses with up to 100 employees);
      • Have at least an office or employee work site within the state whose SHOP Marketplace the employer wishes to use;
      • Offer coverage to all of their full-time employees (generally those working an average of 30 hours or more per week); and
      • Meet the applicable MPR requirement (in most states, at least 70% of full-time employees must enroll to satisfy this requirement).

      Now through December 15, eligible employers may enroll in SHOP Marketplace coverage without satisfying their state's MPR requirement. For more information, please visit the SHOP Marketplace website.

      © 2012 - 2013 HR 360, Inc.