Human Resources

Top 8 Issues for Employers under ACA

To be fully compliant employers face 8 key requirements.

  1. All “applicable large employers” are subject – The trick here is properly counting part-time and variable hour employees.
  2. January 1, 2015 was the “effective date” for the new requirements. – Even if employers qualify for temporary relief they must report 2015 calendar year data to the IRS.
  3. Employers must be able to identify their “full-time employees”. – The rules include look-back and stability periods to determine whether variable hour employees need to be offered coverage.
  4. IRS Form 1095-C is used to report employee-level data to the IRS. – This reporting uses a complicated set of codes and must be provided directly to employees and filed with the IRS. The form reports on a monthly basis whether the employer offered medical coverage to the employee, whether the coverage provided minimum value and was affordable.
  5. Self-Insured Plans need to report coverage data for employees and any covered dependents. – Regardless of the number of employees employers are required to complete Part III of Form 1095-C
  6. IRS Form 1094-C is used to report employer-level data to the IRS. – 1094-C is the “transmittal letter” to the IRS with employer-level demographic data including exemptions to the employer mandate.
  7. Employers must disclose their “controlled group” on the Form 1094-C. – The names and EINs of other ALE members must be listed. (This is the first time the IRS has required this disclosure.)
  8. Employers filing 205 or more Form 1095-C must file electronically. – The IRS required filers to use its electronic submission system. The complexity of this system will make it extremely difficult for large employers to file on their own behalf.

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

New Law Increases ACA Information Reporting Penalties

The Trade Preferences Extension Act of 2015 will increase the penalties employers are subject to under the Affordable Care Act’s information reporting provisions.

Information Reporting Penalties

Self-insuring employers that provide minimum essential health coverage (regardless of size) and large employers with 50 or more full-time employees (including full-time equivalents) that fail to comply with the information reporting requirements may be subject to the general reporting penalty provisions under Internal Revenue Code (IRC) sections 6721 (failure to file correct information returns) and 6722 (failure to furnish correct payee statements).

The penalty for failure to file an information return and the penalty for failure to provide a correct payee statement is increased from $100 to $250 for each return which such failure. The total penalty imposed for all failures during a calendar year cannot exceed $3,000,000, increased from $1,500,000.

Employers are required to report for the first time in early 2016 for calendar year 2015. The law will apply to returns and statements required to be filed after December 31, 2015.

Question: What does the Trade Preferences Extension Act of 2015 have to do with the Affordable Care Act?

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Major Legal Challenge Still Lies Ahead of ACA

At the center of the challenge is the Appropriations Clause of the Constitution.  Article I, Section 9, Clause 7 says, “No money shall be drawn from the Treasury, but in consequence of appropriations made by law.”

The lawsuit filed argues the administration is spending billions of dollars without the necessary appropriations from Congress.

The suit filed involves the fundamental question of executive power and Congress’s power of the purse. The issue is a provision of the health care law that requires insurance companies to reduce co-payments, deductibles and other out-of-pocket costs. The federal government reimburses insurers for the “cost-sharing reductions.” This type of assistance is different from the subsidies upheld by the Supreme Court last week. The subsidies, tax credits, help people pay insurance premiums.

The lawsuit challenges the Obama administration saying they did not receive, but needed, an appropriation to make these payments to insurance companies. Thus, President Obama requested the money as part of the budget he sent to Congress in April 2013, but Congress did approve the request. The administration began making the payments in early 2014, using money from a separate account established for tax refunds and tax credits.

In their lawsuit, House Republicans say, “Congress has not, and never has, appropriated any funds” for the cost-sharing reductions. The Obama administration argues that the House does not have standing to sue because its members have not suffered a concrete injury or specific harm. The case is “a generalized institutional dispute between the executive branch and one chamber of the legislative branch,” the Justice Department said.

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

 

Voluntary Certification gives businesses more confidence when dealing with a PEO

Currently businesses bear the responsibility when PEOs have failed to pay all wages and taxes, even when they may have already been paid to the PEO beforehand.

Under a new voluntary certification effective January 1, 2016, when a Certified PEO (CPEO) Regulation (H.R. 5771, Division B, Title 2, Section 206) contracts with a business, the CPEO becomes solely responsible for paying wages to employees, and collecting employment taxes on those wages. The CPEO is still responsible even if the client business has not made sufficient payment to the CPEO.

Prior to this Act, when a business enters or terminates a PEO agreement, at a time other than the beginning of a year, the business had to restart the taxable wage base for FICA and FUTA taxes. Now, CPEOs become successor employers and restarts are not necessary. The Act also establishes that certain credits apply to the client business and not to the CPEO, including Work Opportunity Tax Credits (WOTC), Research & Development Credits (R&D), Empowerment Zone Credits (EZ) and Indian Employment Credits (IEC). Previously it was at the PEOs discretion whether to take these credits themselves, or pass them on to their client companies.

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Videos Cover Basics of IRS Section 6055/6056 Reporting

UnitedhealthCare has provided two videos covering the basics of IRS section 6055 and section 6056 reporting to help give a better understanding of what the reporting is and what is required of employers, both fully insured and self-funded.

Section 6055 reporting supports the individual mandate.  It is the required reporting to the Internal Revenue Service of information relating to covered individuals that have been provided minimum essential coverage by health insurance issuers, certain employers and other entities that provide minimum essential coverage.

Section 6056 reporting supports the employer mandate. It is the required reporting to the IRS of information relating to offers of health insurance coverage by employers that sponsor group health plans.

Specifically, the videos cover:

  • What are sections 6055 and 6056 reporting (click to view videos)
  • When the provision becomes effective
  • When reporting needs to be done
  • Who is responsible to report
  • UnitedHealthcare’s approach to supporting fully insured and self-funded groups

All content for this Blog was provided by UnitedhealthCare.

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Pre-Active Medicine – CompanionDx

Anywhere between 40 and 75 percent of drugs are ineffective for individual patients. That means a large portion of patients may not only be wasting their money—but they may not be receiving the treatment or the results they seek.

Pre-Active medicine is a new diagnostic discipline that uses genetic insights to help prevent adverse drug reactions, misdiagnosis or other negative consequences of inadequate medical discovery.

CompanionDx™ is one of the only providers of both pharmacogenomics evaluations and cancer companion diagnostic testing. When used separately or in conjunction, these two types of tests are giving physicians the resources they need for more comprehensive patient treatment profiles—and that means more certainty when it comes to effective therapeutic decisions.

Tests include:
Pharmacogenomics testing
Cancer companion diagnostics testing
Colorectal cancer screening
NextGen Sequencing testing (in development)
 
You’ll receive easy-to-read test reports within 3-7 days.

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

ACA 2015 Tax Forms 1094 and 1095

The ACA forms chart is voluntary for employers that wish to file in 2015 for 2014. The return and transmittal forms are to be filed with the IRS on or before February 28 (March 31 if filed electronically) of the year following the calendar year of coverage.

Here’s the IRS link for complete instructions.
http://tinyurl.com/mgzhyoc

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Your HSA Contributions May Trigger Cadillac Tax

The Cadillac Tax is coming in 2018. – All “premiums” over the designated amounts, currently set at $10,200 for single coverage and $27,500 for family coverage, will be taxed at 40%.

BUT, the IRS and DOL are currently counting employee contributions into their own HSA’s as “premiums”.

So, if you are being a responsible healthcare consumer, choosing a high deductible plan and putting dollars into an account in order to pay medical expenses, those dollars, if pre-taxed in an employer’s Section 125 Plan, will now count against you!

If the IRS does adopt rules requiring employers to include employees’ pretax HSA contributions in calculating plan costs, employers are likely to redesign their high-deductible plans, such as capping pretax contributions or allowing only after-tax contributions to reduce the likelihood of triggering the excise tax.

Thanks to Susan Luskin, FLMI, CLU, CEBS, RHU, ChHC, Diversified Administration Inc, www.Div125.com, for pointing this out.

“Embedded” Out-of-Pocket Maximum Rule Clarified

HHS recently finalized regulations to verify the annual out-of-pocket maximums for an individual in 2016 are limited to the annual limit for self-only coverage. This applies to all individuals, including each individual under family coverage. The regulation provides that the embedded out-of-pocket limit applies to all plans.

This embedded rule means that plans (including self-funded plans) will now have to have embedded out-of-pocket limits for each individual covered under family coverage. For example, using the 2016 limits, if a family plan has an annual out-of-pocket limit of $12,000 and one family member incurs an expense of $25,000, that family member would be responsible for expenses up to $6,850 (the self-only out-of-pocket limit), and the remaining $18,150 would be paid in full by the plan. Additional expenses incurred by that family member would be paid by the plan with no cost sharing for the remainder of the plan year.

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Back to top

Submit your Feedback

      Sending...
x