Health Care Reform Updates & Human Resource News Alerts

Health Care Reform News

HR360::Health Care Reform
  • IRS Issues New Guidance on Individual Mandate Affordability Exemption

    Posted on December 08, 2017
    Print

    Guidance Covers Individuals & Families Without Access to a Bronze-Level Plan

    The Internal Revenue Service has issued guidance to individuals and families seeking to claim an affordability exemption from the Affordable Care Act’s individual shared responsibility ("individual mandate") tax penalty.

    Under the Affordable Care Act, individuals are currently required to have minimum essential health coverage, qualify for an exemption from that requirement, or pay the individual mandate tax penalty. Individuals and families ineligible for coverage under a group health plan can, among other things, qualify for an exemption from the individual mandate if the lowest-priced bronze-level plan available to them on the Health Insurance Marketplace would cost more than 8.16% of their household income, accounting for any premium tax credit. This is known as the "affordability exemption."

    However, for purposes of determining their affordability exemption eligibility for tax year 2017, the IRS is advising individuals who live in rating areas where no bronze plan was offered for 2017 that they may generally use the lowest-cost metal plan available in the Marketplace serving the rating area in which the individual resides that would cover all nonexempt members of the individual’s family as the applicable plan.

    Additional guidance from the IRS is available here.

     

    © 2017 HR 360, Inc.
  • How Holiday Help May Impact Your ALE Status

    Posted on December 01, 2017
    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 #26.

    © 2017 HR 360, Inc.
  • IRS Releases 2017 Version of Publication 5223 Regarding Substitute ACA Information Reporting Forms

    Posted on November 21, 2017
    Print

    Publication Outlines Requirements for Substitute Forms 1094-B, 1095-B, 1094-C and 1095-C

    The tax year 2017 version of IRS Publication 5223 is now available, which sets forth the general rules and specifications for preparing substitute Forms 1094-B, 1095-B, 1094-C, and 1095-C. Paper forms that conform to the specifications listed in the publication may be privately printed and filed as returns with the IRS.

    In particular, Publication 5223 addresses the 2017 requirements for:

    • Using official IRS forms to file Affordable Care Act (ACA) information returns with the IRS;
    • Preparing acceptable substitutes of the official IRS forms to file ACA information returns with the IRS; and
    • Using official or acceptable substitute forms to furnish information to recipients.

    You may review IRS Publication 5223 in its entirety for additional details on the rules and specifications for preparing substitute Forms 1094-B, 1095-B, 1094-C, and 1095-C.

    © 2017 HR 360, Inc.
  • Reminder: Second Transitional Reinsurance Program Payment Due Nov. 15

    Posted on November 13, 2017
    Print

    Final Payment Due for Contributing Entities That Opted for Two-Part Contribution

    The second transitional reinsurance contribution payment for the 2016 benefit year is due November 15, 2017 for issuers and certain self-insured group health plans (referred to as "contributing entities") that did not previously pay the entire 2016 benefit year contribution in one payment. The contributions are part of the three-year Transitional Reinsurance Program established by the Affordable Care Act, which began in 2014 and ended with the 2016 benefit year.

    Contribution Process
    The Transitional Reinsurance Program required contributing entities to make contributions to support payments to individual market issuers that cover high-cost individuals. For the 2016 benefit year, contributing entities were given the option to either:

    1. Pay the entire 2016 benefit year contribution in one payment (no later than January 17, 2017 reflecting $27.00 per covered life); or
    2. Make two separate payments, 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.

    Click here for more on the Transitional Reinsurance Program.

    © 2017 HR 360, Inc.
  • HHS Proposes Allowing Brokers to Further Aid 2018 SHOP Enrollment

    Posted on November 09, 2017
    Print

    SHOPs Can Begin Relying on the Proposed Rule

    The U.S. Department of Health and Human Services (HHS) has issued a proposed rule to provide states with greater flexibility in the operation and establishment of the Small Business Health Options Program (SHOP) Exchange. Among other items, the rule proposes allowing employers to directly enroll in SHOP coverage through a SHOP-registered agent or broker. If finalized, this enrollment approach would generally be available in federally-facilitated SHOPs (FF-SHOPs), including state-based Exchanges using the federal platform for SHOP, for plan years beginning on or after January 1, 2018. State-based Exchanges operating their own SHOPs could also adopt the new approach.

    While HHS considers comments on its proposed rule, the agency is permitting FF-SHOPs (including state-based SHOPs using the federal platform), SHOP-registered brokers, and employers to begin operating in accordance with the proposed rule, starting on the first date on which employers can complete a group enrollment for a plan year that would take effect in 2018 (e.g., for plans with effective dates on or after January 1, 2018). State-based Exchanges operating their own SHOPs have this same flexibility.

    Click here for more information on the HHS proposal.

    © 2017 HR 360, Inc.
  • IRS to Begin Mailing 'Pay or Play' Penalty Letters

    Posted on November 07, 2017
    Print

    Employers Will Have Opportunity to Respond Before Penalty Assessment

    The Internal Revenue Service (IRS) has announced that it will begin mailing employers letters informing them of their potential liability for a "pay or play" penalty for the 2015 calendar year in late 2017. However, before any penalty is assessed and notice and demand for payment is made, employers will have an opportunity to respond to the agency.

    What Will the Letter Contain?
    The IRS plans to issue Letter 226J to applicable large employers (ALE)—generally those with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year—if it determines that, for at least one month in the year, one or more of the ALE's full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee). Letter 226J will include, among other things:

    • A penalty payment summary table, itemizing the proposed payment by month;
    • An "employee premium tax credit list" which lists, by month, the ALE's employees who for at least one month in the year were full-time employees allowed a premium tax credit and for whom the ALE did not qualify for an affordability safe harbor or other relief;
    • A description of the actions the ALE should take if it agrees or disagrees with the proposed penalty payment; and
    • Form 14764, a response form.

    The response to Letter 226J will be due by the response date shown on the letter, which generally will be 30 days from the date of Letter 226J. Letter 226J will also contain the name and contact information of a specific IRS employee that the ALE should contact if the ALE has questions about the letter.

    How Does an ALE Make a Pay or Play Penalty Payment?
    If, after correspondence between the ALE and the IRS, the IRS determines that an ALE is liable for a penalty payment, the IRS will assess the payment and issue a notice and demand for payment, Notice CP 220J. That notice will instruct the ALE on how to make a payment, if any. Notably, ALEs will not be required to include the payment on any tax return that they file or to make a payment before notice and demand for payment.

    Click here for more information from the IRS.

    © 2017 HR 360, Inc.

    HR News and Alerts

    HR360::Health Care Reform
    • IRS Issues New Guidance on Individual Mandate Affordability Exemption

      Posted on December 08, 2017
      Print

      Guidance Covers Individuals & Families Without Access to a Bronze-Level Plan

      The Internal Revenue Service has issued guidance to individuals and families seeking to claim an affordability exemption from the Affordable Care Act’s individual shared responsibility ("individual mandate") tax penalty.

      Under the Affordable Care Act, individuals are currently required to have minimum essential health coverage, qualify for an exemption from that requirement, or pay the individual mandate tax penalty. Individuals and families ineligible for coverage under a group health plan can, among other things, qualify for an exemption from the individual mandate if the lowest-priced bronze-level plan available to them on the Health Insurance Marketplace would cost more than 8.16% of their household income, accounting for any premium tax credit. This is known as the "affordability exemption."

      However, for purposes of determining their affordability exemption eligibility for tax year 2017, the IRS is advising individuals who live in rating areas where no bronze plan was offered for 2017 that they may generally use the lowest-cost metal plan available in the Marketplace serving the rating area in which the individual resides that would cover all nonexempt members of the individual’s family as the applicable plan.

      Additional guidance from the IRS is available here.

       

      © 2017 HR 360, Inc.
    • How Holiday Help May Impact Your ALE Status

      Posted on December 01, 2017
      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 #26.

      © 2017 HR 360, Inc.
    • IRS Releases 2017 Version of Publication 5223 Regarding Substitute ACA Information Reporting Forms

      Posted on November 21, 2017
      Print

      Publication Outlines Requirements for Substitute Forms 1094-B, 1095-B, 1094-C and 1095-C

      The tax year 2017 version of IRS Publication 5223 is now available, which sets forth the general rules and specifications for preparing substitute Forms 1094-B, 1095-B, 1094-C, and 1095-C. Paper forms that conform to the specifications listed in the publication may be privately printed and filed as returns with the IRS.

      In particular, Publication 5223 addresses the 2017 requirements for:

      • Using official IRS forms to file Affordable Care Act (ACA) information returns with the IRS;
      • Preparing acceptable substitutes of the official IRS forms to file ACA information returns with the IRS; and
      • Using official or acceptable substitute forms to furnish information to recipients.

      You may review IRS Publication 5223 in its entirety for additional details on the rules and specifications for preparing substitute Forms 1094-B, 1095-B, 1094-C, and 1095-C.

      © 2017 HR 360, Inc.
    • Reminder: Second Transitional Reinsurance Program Payment Due Nov. 15

      Posted on November 13, 2017
      Print

      Final Payment Due for Contributing Entities That Opted for Two-Part Contribution

      The second transitional reinsurance contribution payment for the 2016 benefit year is due November 15, 2017 for issuers and certain self-insured group health plans (referred to as "contributing entities") that did not previously pay the entire 2016 benefit year contribution in one payment. The contributions are part of the three-year Transitional Reinsurance Program established by the Affordable Care Act, which began in 2014 and ended with the 2016 benefit year.

      Contribution Process
      The Transitional Reinsurance Program required contributing entities to make contributions to support payments to individual market issuers that cover high-cost individuals. For the 2016 benefit year, contributing entities were given the option to either:

      1. Pay the entire 2016 benefit year contribution in one payment (no later than January 17, 2017 reflecting $27.00 per covered life); or
      2. Make two separate payments, 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.

      Click here for more on the Transitional Reinsurance Program.

      © 2017 HR 360, Inc.
    • HHS Proposes Allowing Brokers to Further Aid 2018 SHOP Enrollment

      Posted on November 09, 2017
      Print

      SHOPs Can Begin Relying on the Proposed Rule

      The U.S. Department of Health and Human Services (HHS) has issued a proposed rule to provide states with greater flexibility in the operation and establishment of the Small Business Health Options Program (SHOP) Exchange. Among other items, the rule proposes allowing employers to directly enroll in SHOP coverage through a SHOP-registered agent or broker. If finalized, this enrollment approach would generally be available in federally-facilitated SHOPs (FF-SHOPs), including state-based Exchanges using the federal platform for SHOP, for plan years beginning on or after January 1, 2018. State-based Exchanges operating their own SHOPs could also adopt the new approach.

      While HHS considers comments on its proposed rule, the agency is permitting FF-SHOPs (including state-based SHOPs using the federal platform), SHOP-registered brokers, and employers to begin operating in accordance with the proposed rule, starting on the first date on which employers can complete a group enrollment for a plan year that would take effect in 2018 (e.g., for plans with effective dates on or after January 1, 2018). State-based Exchanges operating their own SHOPs have this same flexibility.

      Click here for more information on the HHS proposal.

      © 2017 HR 360, Inc.
    • IRS to Begin Mailing 'Pay or Play' Penalty Letters

      Posted on November 07, 2017
      Print

      Employers Will Have Opportunity to Respond Before Penalty Assessment

      The Internal Revenue Service (IRS) has announced that it will begin mailing employers letters informing them of their potential liability for a "pay or play" penalty for the 2015 calendar year in late 2017. However, before any penalty is assessed and notice and demand for payment is made, employers will have an opportunity to respond to the agency.

      What Will the Letter Contain?
      The IRS plans to issue Letter 226J to applicable large employers (ALE)—generally those with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year—if it determines that, for at least one month in the year, one or more of the ALE's full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee). Letter 226J will include, among other things:

      • A penalty payment summary table, itemizing the proposed payment by month;
      • An "employee premium tax credit list" which lists, by month, the ALE's employees who for at least one month in the year were full-time employees allowed a premium tax credit and for whom the ALE did not qualify for an affordability safe harbor or other relief;
      • A description of the actions the ALE should take if it agrees or disagrees with the proposed penalty payment; and
      • Form 14764, a response form.

      The response to Letter 226J will be due by the response date shown on the letter, which generally will be 30 days from the date of Letter 226J. Letter 226J will also contain the name and contact information of a specific IRS employee that the ALE should contact if the ALE has questions about the letter.

      How Does an ALE Make a Pay or Play Penalty Payment?
      If, after correspondence between the ALE and the IRS, the IRS determines that an ALE is liable for a penalty payment, the IRS will assess the payment and issue a notice and demand for payment, Notice CP 220J. That notice will instruct the ALE on how to make a payment, if any. Notably, ALEs will not be required to include the payment on any tax return that they file or to make a payment before notice and demand for payment.

      Click here for more information from the IRS.

      © 2017 HR 360, Inc.