The proposed deadline for providing revised Summaries of Benefits and Coverage and Glossary of Terms (collectively, SBC templates) to health plan members has been delayed.
In December 2014, the U.S. Departments of Labor, Health and Human Services and the Treasury proposed changes to the SBC regulations and SBC templates that would take effect Sept. 1, 2015.
However, the departments recently released a Frequently Asked Question (FAQ) that indicates the proposed regulations will apply to plan years new or renewing on or after Jan. 1, 2016. Revised SBC templates will be finalized by January 2016 and will apply to health coverage that would renew or begin on the first day of the first plan year that begins on or after Jan. 1, 2017.
Read this FAQ for more information.
The IRS has released the final versions of the forms and instructions that will be used to report health coverage information to the IRS and to enrollees beginning in 2016 (for tax year 2015) under Sections 6055 and 6056 of the Internal Revenue Code.
The Patient Care and Affordable Care Act requires health insurers, employers and government programs that provide minimum essential coverage to file an annual information report with the IRS indicating the individuals who were covered each month by minimum essential coverage. Additionally, large employers subject to the employer coverage mandate must report coverage information to the IRS and to all employees that were offered health coverage by the employer.
Applicable large employers use the following final forms to comply with Sections 6055 and 6056:
- Form 1095-C (Employer-Provided Health Insurance Offer and Coverage)
- Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns)
Here are instructions: Instructions for Forms 1094-C and 1095-C
All other employers use:
Here are the instructions: Instructions for Forms 1094-B and 1095-B
For more information about Section 6055 and 6056 reporting requirements, view our flyer.
The Patient Protection and Affordable Care Act requires group health plans and health insurance issuers offering group and individual coverage to provide a Summary of Benefits and Coverage (SBC) and Glossary of Health Coverage and Medical Terms in a culturally and linguistically appropriate manner under certain circumstances.
When populations speaking Spanish, Chinese, Tagalog or Navajo reach 10 percent of the population in a county, federal regulations require SBCs and glossaries sent to addresses literate in these non-English languages to be translated.
Follow this link to review an updated list of counties, published by the Centers for Medicare and Medicaid, requiring translated SBCs and glossaries when 10 percent of the population of a county meets the criteria listed above.
Last month, the U.S. Departments of Health and Human Services, Labor and the Treasury released a proposed rule addressing the Summary of Benefits and Coverage (SBC) and the Glossary of Health Coverage and Medical Terms mandated by the Patient Protection and Affordable Care Act. The proposed rule would be effective for open enrollments or plan years that begin on or after Sept. 1, 2015.
The proposed rule calls for a shorter SBC with various language revisions and the addition of a third coverage example, along with revisions to the Glossary.
For more information, review the following documents posted to the Department of Labor website:
To learn more about SBCs and the Uniform Glossary, follow this link to the Department of Labor website or this link for more information from Starmark.
The Internal Revenue Service has published new questions and answers about the Patient-Centered Outcomes Research Institute (PCORI) Fee on its website. Brokers and employers may want to review the following information provided by the IRS:
Q: Does the PCORI fee apply to an applicable self-insured health plan that has a short plan year?
A: Yes. The PCORI fee applies to a short plan year of an applicable self-insured health plan. A short plan year is a plan year that spans fewer than 12 months and may occur for a number of reasons. For example, a newly established applicable self-insured health plan that operates using a calendar year has a short plan year as its first year if it was established and began operating beginning on a day other than Jan. 1. Similarly, a plan that operates with a fiscal plan year experiences a short plan year when its plan year is changed to a calendar year plan year.
Q: What is the PCORI fee for the short plan year?
A: The PCORI fee for the short plan year of an applicable self-insured health plan is equal to the average number of lives covered during that plan year multiplied by the applicable dollar amount for that plan year. Thus, for example, the PCORI fee for an applicable self-insured health plan that has a short plan year that starts on April 1, 2013, and ends on Dec. 31, 2013, is equal to the average number of lives covered for April through Dec. 31, 2013, multiplied by $2 (the applicable dollar amount for plan years ending on or after Oct. 1, 2013, but before Oct. 1, 2014).
Q: What is the PCORI fee due date for the short plan year?
A: The due date for the PCORI fee is July 31 of the year following the last day of the plan year (including a short plan year).
Q: Can a plan sponsor or policy issuer that overpaid the PCORI fee due July 31 reduce the PCORI fee due the following July 31 for the amount of the prior year’s overpayment?
A: No. Plan sponsors and policy issuers cannot reduce the PCORI fee due July 31 for any overpayment from a prior year. If a plan sponsor or policy issuer overpaid the PCORI fee reported on a previously filed Form 720, it should file Form 720X, Amended Quarterly Federal Excise Tax Return, for an overpayment of a previously filed PCORI liability. Form 720X is available on IRS.gov.
Q: How should corrections to a previously filed Form 720 be made, for example one that determined a fee using an incorrect applicable dollar amount?
A: A plan sponsor or policy issuer should make corrections to a previously filed Form 720 by filing a Form 720X, Amended Quarterly Federal Excise Tax Return, including adjustments that resulted in an overpayment. Form 720X may be filed anytime within the applicable limitation period. Form 720X is available on IRS.gov.
For more information about the PCORI Fee, read this flyer.
Filed under FAQs, PPACA Fees
The Centers for Medicare & Medicaid Services (CMS) extended the deadline for reporting enrollment counts (not payment dates) until Dec. 5, 2014, for the Reinsurance Assessment Fee on Pay.gov.
Please note the payment date(s) have not changed. The first payment installment (or combined payment) is still due on Jan. 15, 2015, and the second payment is due Nov. 15, 2015 for those who choose to pay in two installments.
The announcement is also available on the CMS website.
The following are three frequently asked questions regarding compliance of premium reimbursement arrangements and the Affordable Care Act Implementation, paraphrased from information published jointly by the Department of Labor, HHS and the Treasury.
Q: An employer offers employees cash to reimburse the purchase of an individual market policy. Does this arrangement comply with market reforms?
A: No, the employer’s payment arrangement in this scenario would still be considered part of a plan, fund or other arrangement established or maintained for the purpose of providing medical care to employees, regardless of whether the money was pre-tax or post-tax to the employee. Because the arrangement would be considered a group health plan, it would be subject to the market reform provisions of the Affordable Care Act applicable to group health plans.
Q: An employer offers employees with high claims risk a choice between enrollment in its standard group health plan or cash. Does this comply with market reforms?
A: No, this is considered discrimination based on one or more health factors and does not comply with market reforms and may, depending on the facts and circumstances, also result in discrimination in favor of highly compensated individuals in violation of Internal Revenue Code section 125 cafeteria plan nondiscrimination rules.
Q: A vendor markets a product to employers claiming that employers can cancel their group policies, set up a CODE section 105 reimbursement plan that works with health insurance brokers or agents to help employees select individual insurance policies, and allows eligible employees to access the premium tax credits for Marketplace coverage. Is this permissible?
A: No, these arrangements are considered group health plans and therefore employees participating in such arrangements are ineligible for premium tax credits or cost-sharing reductions for Marketplace coverage (from an Exchange). Also, such employer health care arrangements cannot be integrated with individual market policies to satisfy the market reforms and will trigger penalties such as excise taxes.
More information is available in this flyer.