Affordable Care Act

Indicator Codes for Employee Offer and Coverage (Form 1095-C, Line 14)

Posted on by tomdaly

In case you don’t recognize the format, this is an excerpt from an IRS favorite: Instructions for Forms 1094-C and 1095-C.

Code Series 1— Offer of Coverage.   The Code Series 1 indicator codes specify the type of coverage, if any, offered to an employee, the employee’s spouse, and the employee’s dependents. The term “dependent” has the specific meaning set forth in the Definitions section of these instructions. In addition, for this purpose an offer of coverage is treated as made to an employee’s dependents only if the offer of coverage is made to an unlimited number of dependents regardless of the actual number of dependents, if any, an employee has during any particular calendar month.  An offer of COBRA continuation coverage that is made to a former employee upon termination of employment should not be reported as an offer of coverage on line 14. For a terminated employee, code 1H (No offer of coverage) should be entered for any month for which the offer of COBRA continuation coverage applies.  An offer of COBRA continuation coverage that is made to an active employee (for instance, an offer of COBRA continuation coverage that is made due to a reduction in the employee’s hours that resulted in the employee no longer being eligible for coverage under a plan) is reported in the same manner and using the same code as an offer of that type of coverage to any other active employee.  If the type of coverage, if any, offered to an employee was the same for all 12 months in the calendar year, enter the Code Series 1 indicator code corresponding to the type of coverage offered in the “All 12 Months” box or in each of the 12 boxes for the calendar months.

  • 1A. Qualifying Offer: Minimum essential coverage providing minimum value offered to full-time employee with employee contribution for self-only coverage equal to or less than 9.5% mainland single federal poverty line and at least minimum essential coverage offered to spouse and dependent(s).

    This code may be used to report for specific months for which a Qualifying Offer was made, even if the employee did not receive a Qualifying Offer for all 12 months of the calendar year. However, an employer may not use the Alternative Furnishing Method for an employee who did not receive a Qualifying Offer for all 12 calendar months (except in cases in which the employer is eligible for and reports using the Alternative Furnishing Method for 2015 Qualifying Offer Method Transition Relief as described in these instructions).

  • 1B. Minimum essential coverage providing minimum value offered to employee only.
  • 1C. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) (not spouse).
  • 1D. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to spouse (not dependent(s)).
  • 1E. Minimum essential coverage providing minimum value offered to employee and at least minimum essential coverage offered to dependent(s) and spouse.
  • 1F. Minimum essential coverage NOT providing minimum value offered to employee; employee and spouse or dependent(s); or employee, spouse and dependents.
  • 1G. Offer of coverage to employee who was not a full-time employee for any month of the calendar year (which may include one or more months in which the individual was not an employee) and who enrolled in self-insured coverage for one or more months of the calendar year.
  • 1H. No offer of coverage (employee not offered any health coverage or employee offered coverage that is not minimum essential coverage, which may include one or more months in which the individual was not an employee).
  • 1I. Qualifying Offer Transition Relief 2015: Employee (and spouse or dependents) received no offer of coverage; received an offer that is not a qualifying offer; or received a qualifying offer for less than 12 months.

2015 ACA Reporting is Delayed

Posted on by tomdaly

In Notice 2016-4, the IRS has extended the due dates for certain 2015 Affordable Care Act information reporting requirements.

Specifically, the Notice extends:

  • the due date for furnishing to individuals the 2015 Form 1095-B and Form 1095-C from February 1, 2016, to March 31, 2016, and

  • the due date for filing with the IRS the 2015 Form 1094-B, Form 1094-C and Form 1095-C from February 29, 2016, to May 31, 2016, if not filing electronically, and from March 31, 2016, to June 30, 2016 if filing electronically.

For detailed information about these Forms, please see our earlier article.

In the Notice, the IRS also grants special relief to certain employees and related individuals who receive their Form 1095-C or Form 1095-B, as applicable, after they have filed their returns:

  • For 2015 only, individuals who rely upon other information received from employers about their offers of coverage for purposes of determining eligibility for the premium tax credit when filing their income tax returns will NOT be required to amend their returns once they receive their Forms 1095-C or any corrected Forms 1095-C.

  • For 2015 only, individuals who rely upon other information received from their coverage providers about their coverage for purposes of filing their returns will NOT be required to amend their returns once they receive the Form 1095-B or Form 1095-C or any corrections.

Thus, generally, employers should not be concerned that furnishing these Forms on a delayed basis in accordance with the Notice will force employees to file amended 2015 income tax returns.

Finally, the extensions do not require the submission of any request or other documentation to the IRS and have no effect on information reporting provisions for other years.

From the great folks at Jackson Lewis P.C. © 2015

See more at National Review

10 Things to Buy with $695

Posted on by tomdaly

(Instead of paying the federal penalty in 2016 for having no health insurance)

  1. About 7 years and 2 months of Netflix
  2. 330 Sucre signature macaroons
  3. A 500-mile Uber ride
  4. 2 Dat Dog beef or pork dogs a week for the next year
  5. A Tropical Isle Hand Grenade for you and 90 of your closest friends
  6. 1478 rolls of toilet paper
  7. Over 100 burgers from Five Guys plus all the peanuts you can eat
  8. 2 Saints tickets for this Sunday and about 11 overpriced beers in the Superdome
  9. 388 Fiery Doritos Locos Tacos from Taco Bell
  10. Approximately 115 Old Fashioneds at Cure during happy hour

…or you could always go for a backyard roller coaster.

Improving the Consumer Experience at HealthCare.gov?

Posted on by tomdaly

At Benefit Administration Group, it is all about people and personal service.  Buying health insurance can be confusing and bad decisions can be costly.  We think it is important to have trained Application Counselors available to our clients.  If you don’t want to go it alone, we are happy to help.

Let’s take a look at some of the things HealthCare.gov has been up to (from a recent email blast)!

“Over the last few months, our team has been hard at work, applying lessons learned and taking steps to make enrollment quicker and smoother for both returning and new customers.”

Hey, what do ya know? Us too! What a coincidence.

“Directions, buttons, and page designs were improved to better communicate information and next steps to people visiting the website.”

Brains, words, and conversations are being used to better communicate information at BAG.

“New information has been added to the website to help each consumer understand exactly where they are in the enrollment process and what steps remain.”

Well, no new information to be added here. The Account Manager is fully equipped with information and works for each consumer to stay on top of the enrollment process and ensure that the time-sensitive steps are completed.

“When returning consumers come back to HealthCare.gov, they will be able to easily find their current plan if it is available again for next year and compare it with other available plans in their area without having to manually search by entering a 14-digit plan identification number.”

Something in common! We will not have you manually searching for plans with a 14-digit ID number either. BAG hand picks the best available plans for you, presents your renewal options, and weighs the choices with you first-hand.

“Improvements to our information technology infrastructure and “back end” have enhanced the website’s stability and performance compared to last year and will provide a faster and smoother experience for consumers when they visit the website.”

As far as our stability and performance goes, it’s guaranteed that we won’t “crash” in the middle of the process.

“We’ve made simplifications to our system that resulted in a reduction of hardware on the website by 40 percent. While visitors to the website will not see evidence of these improvements on their computer screen, users should find the website to be faster and more responsive than previous years.”

No need to simplify our system… just people helping people. More responsive than your computer, and visitors will definitely see the evidence.

2015 Forms 1094-B, 1095-B, 1094-C, and 1095-C

Posted on by tomdaly

The Internal Revenue Service (IRS) has released finalized forms and instructions for 2015 to help employers prepare for compliance with the new information reporting provisions under the Affordable Care Act (ACA). Employers are required to report for the first time in early 2016 for calendar year 2015.  These forms will be due out by the end of January.

Who is Required to Report
As a reminder, Forms 1094-B and 1095-B will be 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.

Large employers (generally those with 50 or more full-time employees, including full-time equivalents or FTEs) will 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.

Note: 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. Form 1095-C includes separate sections for reporting under each provision.

2015 Forms and Instructions
Final versions of the 2014 forms were previously released for those employers that chose to voluntarily comply for the 2014 calendar year. The following forms and instructions are now available for 2015:

Forms 1095-B and 1095-C must be electronically filed if the employer is required to file at least 250 of the specific form.

For More Information
Additional details on the information reporting requirements for providers of minimum essential coverage, including self-insuring employers, are available in IRS Questions and Answers. More information about the information reporting requirements for large employers subject to “pay or play” is available in separate IRS Questions and Answers.

Changing, updating, or cancelling your Marketplace plan

Posted on by tomdaly

If you have a 2015 plan through the Health Insurance Marketplace, you have limited opportunities to make changes outside the Open Enrollment Period.

The deadline for changing or enrolling in a 2015 plan was February 15, 2015.

Changing 2015 plans: With Special Enrollment Period only

You can change Marketplace insurance plans outside Open Enrollment only if you qualify for a Special Enrollment Period due to a life change like getting married, having a baby, or losing other coverage.

Find out if you’re eligible for a Special Enrollment Period.

Updating your 2015 coverage: All year when you have life changes

You should update your 2015 Marketplace information all year by reporting any changes to your income and household.

  • Some changes – like having a baby, adopting a child, getting married, or losing other coverage – will qualify you for a Special Enrollment Period.
  • If you report an income change but don’t qualify for a Special Enrollment Period, you can adjust the amount of premium tax credit you take in advance every month. This will make sure your savings stay right for your income level all year.
    • If your income goes up, you may be taking more advance payments of your premium tax credit than you qualify for. If you don’t report the change, you may have to pay money back on your next federal tax return.
    • If your income goes down, you may be able to take more advance payments of your premium tax credit, lowering what you have to pay for premiums each month. You also could qualify for free or very-low-cost coverage through Medicaid or the Children’s Health Insurance Program (CHIP) instead of a Marketplace plan.

Learn how to update your coverage information for 2015.

Cancelling your 2015 plan

If you get other health coverage during the year or for some other reason need to cancel your 2015 health plan, you can do that any time. You can cancel coverage for everyone in your household or just certain people.

Learn how to cancel your 2015 coverage.

Cadillac Tax Explained

Posted on by tomdaly

The Cadillac Tax is the next BIG provision of the Affordable Care Act to begin in 2018.  That may seem like an eternity from now.  But, given the potential impact to employer groups, I thought it was at least worth a closer review.  Below is the most digestible information I could find (from our good friends at Cigna):

Overview

Scheduled to take effect in 2018, the “Cadillac Tax” is a 40% non-deductible excise tax on employer-sponsored health coverage that provides high-cost benefits.

On February 23, 2015, the Internal Revenue Service (IRS) issued a notice covering a number of issues concerning the Cadillac Tax, and requested comments on the possible approaches that could ultimately be incorporated into proposed regulations. No regulations have been issued to date.

CADILLAC TAX
What it is/fee duration Permanent, non-deductible, annual tax beginning in 2018 on high-cost employer-sponsored health coverage.
Purposes
  • Reduce tax preferred treatment of employer provided health care
  • Reduce excess health care spending by employees and employers
  • Help finance the expansion of health coverage under the Patient Protection and Affordable Care Act (PPACA)
Amount
  • The tax is 40% of the cost of health coverage that exceeds predetermined threshold amounts.
  • Cost of coverage includes the total contributions paid by both the employer and employees, but not cost-sharing amounts such as deductibles, coinsurance and copays when care is received.
  • For planning purposes, the thresholds for high-cost plans are currently $10,200 for individual coverage, and $27,500 for family coverage.
  • These thresholds will be updated for 2018 when final regulations are issued and thereafter indexed for inflation in future years.
  • The thresholds will also be increased:
    • If the majority of covered employees are engaged in specified high-risk professions such as law enforcement and construction, and
    • For group demographics including age and gender.
  • For pre-65 retirees and individuals in high-risk professions, the threshold amounts are currently $11,850 for individual coverage and $30,950 for family coverage.
Who calculates and pays
  • Insured: Employers calculate and insurers pay
  • Self-funded: Employers calculate and pay
How a group health plan’s cost is determined
  • The tax is based on the total cost of each employee’s coverage above the threshold amount.
  • The cost includes contributions toward the cost of coverage made by employers and employees.
  • The statute states that costs of coverage will be calculated under rules similar to the rules for calculating COBRA premium.
How the tax will be paid Forms and instructions for paying the tax are not yet available.
Tax implications Cadillac Tax payments are not deductible for federal tax purposes.
Applicable types of coverage
  • Insured and self-insured group health plans (including behavioral, and prescription drug coverage)
  • Wellness programs that are group health plans
  • Health Flexible Spending Accounts (FSAs)
  • Health Savings Accounts (HSAs)(Employer pre-tax contributions only)*
  • Health Reimbursement Accounts (HRAs)*
  • Archer Medical Savings Accounts (MSAs) (Employer pre-tax contributions only)*
  • On-site medical clinics providing more than de minimis care*
  • Executive Physical Programs*
  • Pre-tax coverage for a specified disease or illness
  • Hospital indemnity or other fixed indemnity insurance
  • Federal/State/Local government-sponsored plans for its employees
  • Retiree coverage
  • Multi-employer (Taft-Hartley) plans
Excluded types of coverage
  • U.S.-issued expatriate plans for most categories of expatriates
  • Coverage for accident only, or disability income insurance, or any combination thereof
  • Supplemental liability insurance
  • Liability insurance, including general liability insurance and automobile liability insurance
  • Worker’s compensation or similar insurance
  • Automobile medical payment insurance
  • Credit-only insurance
  • Other insurance coverage as specified in regulations under which benefits for medical care are secondary or incidental to other insurance benefits
  • Long Term Care
  • Standalone dental and vision*
  • Coverage for the military sponsored by federal, state or local governments*
  • Employee Assistance Programs*
  • Employee After-Tax Contributions to HSAs and MSAs*
  • Coverage for a specified disease or illness and hospital indemnity or other fixed indemnity insurance if payment is not excluded from gross income

*As indicated by IRS notice issued on February 23, 2015 and subject to future regulatory clarification.

How it works: Examples based on current threshold amounts

Self-only coverage
A $12,000 individual plan would pay an excise tax of $720 per covered employee:
$12,000 – $10,200 = $1,800 above the $10,200 threshold
$1,800 x 40% = $720

Family coverage
A $32,000 family plan would pay an excise tax of $1,800 per covered employee:
$32,000 – $27,500 = $4,500 above the $27,500 threshold
$4,500 x 40% = $1,800

These charts show how the tax increases as the plan’s cost increases.

Self-only coverage

Plan Cost $11,000 $12,000 $13,000 $14,000 $15,000
Tax $320 $720 $1,120 $1,520 $1,920

Family coverage

Plan Cost $28,000 $30,000 $32,000 $34,000 $36,000
Tax $200 $1,000 $1,800 $2,600 $3,400

Marriage and the Affordable Care Act

Posted on by tomdaly

Last week’s Supreme Court decisions made it a historic week for our great Country.  The latest challenge to State-based subsidies in the Affordable Care Act was defeated AND the Court affirmed that the Constitution guarantees a right to same-sex marriage.  That is some pretty significant ground to cover, and whether you are for or against these rulings, you cannot deny that meaningful change has come.

While change has made many things much easier (see – Ruling changes financial plans for same-sex couples), there are a few idiosyncrasies to be aware of, relative to the ACA and tying the knot:

  • Eligibility for spouse’s group plan – If your spouse has access to affordable, minimum-value health coverage through his/her employer, you are NOT eligible for a subsidy through the Exchange regardless of income.  This means even if you already have a subsidized health plan, when you marry someone who is able to add you to his/her policy as a spouse, you lose your subsidy. Some call this the family/marriage “glitch”. It would be nice to see this fixed at some point!
  • Combined income means revised subsidy determination – When individuals get married, their definition of affordability under the law changes and so does their subsidy determination.  Unfortunately, married people do not get as much help as singles at the lower income levels. To use an example, Bob and Steve are both 40 years old and both earn $25,000/year. Unmarried, they each qualify for a subsidy of $153/month (or $306/month combined).  That combined subsidy reduces to $192 when the couple gets married.  That is almost a 40% reduction in their subsidy. The impact is even more profound when additional dependents are in the mix, when incomes are lower AND when ages are higher.
  • Qualifying life event – Do not forget that marriage is one of the triggering events for a Special Enrollment Period. This is a time outside of the open enrollment period during which you and your family have a right to sign up for health coverage. In the Marketplace, you qualify for a special enrollment period 60 days following certain life events that involve a change in family status (for example, marriage or birth of a child) or loss of other health coverage. Job-based plans must provide a special enrollment period of 30 days.

These laws were written with the intention of making life easier/better for all.  But, we are responsible to know the rules and when/how they apply to us.  If you need any help navigating these waters, don’t ever hesitate to ask.

Exchange Notices: Clarifying a Complex Process

Posted on by jburgess10

If you’re an employer with over 50 employees, and one decides to seek subsidized health coverage from an Insurance Marketplace/Exchange, you’ll likely face a complex web of paperwork, regulations, and processes driven by Exchange Notices. How you respond to Exchange Notices makes all the difference between remaining compliant with Affordable Care Act (ACA) regulations, and facing significant penalties.

Receiving an Exchange Notice

When an employee chooses health coverage from a Marketplace/Exchange and is granted a subsidy, you’ll receive an Exchange Notice.

  1. Employee seeks subsidized health care through a Marketplace/Exchange
  2. Subsidy Granted
  3. You receive an Exchange Notice
  4. Your Options: Pay a fine to the IRS or Appeal with Exchange or Department of  Health and Human Services

Appeals Trigger Research & Paperwork.
Lots of Research & Paperwork.

To prove you met the requirements of the ACA, you’ll need to manually find and combine information from multiple systems – unless you have a provider like Benefit Administration Group with the right systems and expertise.

PROVING YOU’RE IN COMPLIANCE TAKES THREE PIECES OF INFORMATION 

  1. Proof employee was offered coverage
  2. Proof coverage was affordable and provided minimum value
  3. Proof of your employee’s salary

The Reconciliation Process

Once you’ve gathered the right information, the reconciliation process filled with paperwork begins – and time is ticking.

Managing Exchange Notices and Penalties:
the ”Final Step.”

Your Offer of coverage doesn’t meet ACA requirements means YOU pay a fine.

Your offer of coverage meets ACA requirements mean NO fine but Government may try to recoup the subsidy from the employee.

Stay ahead of ACA requirements and let Benefit Administration Group guide you through the rough waters of the ACA.

Pay or Play Penalty Calculators

Posted on by jburgess10

The Pay or Play Penalty Calculators in your online HR library have been updated to include the inflation-adjusted penalty amounts for 2015. There are two separate calculators for 2015, depending on an employer’s number of full-time employees (including full-time equivalents):

To use the updated calculators, simply enter data on the number of full-time employees and employees receiving a premium tax credit or cost-sharing reduction for a month, and the spreadsheet will calculate the estimated penalty for the month.

Compliance Timeline
As a reminder, employers with 100 or more full-time employees (including full-time equivalents) are subject to the pay or play requirements starting in 2015, while those with 50 to 99 full-time employees(including full-time equivalents) do not need to comply until 2016 if they meet certain eligibility criteria related to workforce size, maintenance of workforce and overall hours of service, and maintenance of previously offered health coverage.

As employers begin pondering the “play or pay” question, the answer is not necessarily as straightforward as some expected. More than a few employers, it seems, are maintaining the status quo on their health benefit programs and focusing on making sure that their health plan offerings meet the affordability and other requirements under the PPACA.

These employers are not necessarily making a long-term commitment to providing health benefits to employees. Instead, they are postponing a decision until they see:

  • How difficult and costly it is to comply with the “shared responsibility” provision requiring that employers provide coverage to all full-time equivalent employees.
  • How the state health insurance exchanges will operate and what types of plans they will offer at what prices.
  • The impact of all of these changes on the overall cost of health benefits.

All aspects of PPACA compliance will be very specific to the employer involved. Everything from differences in employee demographics and income levels, to hours worked, to benefits strategy will have a tremendous impact on compliance and decision making. However, there are a few key things for all employers to keep in mind.