As part of the legislation to end the federal government shutdown, the President signed into law a bill that affects certain provisions of the Affordable Care Act (ACA).
- Delays the Cadillac Tax until 2022: The Cadillac Tax, which previously was scheduled to take effect in 2020, will now take effect in 2022. The ACA imposes a 40 percent excise tax, known as the Cadillac tax, on the cost of coverage of an employer-sponsored plan exceeding $10,200 for single coverage and $27,500 for family coverage.
- Establishes a Health Insurance Provider Fee Moratorium in 2019: The fee will not be collected in 2019. The fee is effective for 2018, but was not collected for 2017. Self-funded health benefit plans are not affected by this fee.
The IRS has extended the deadline for distributing Form 1095 to employees as mandated by reporting requirements under the Affordable Care Act. Applicable sponsors of self-funded health plans that are required to provide Form 1095 to their employees now have until March 2, 2018, rather than Jan. 31, 2017. No extension was provided for filing the Form 1094 Transmittal and Form 1095 with the IRS which remains Feb. 28, 2018, for paper filers or April 2, 2018, for electronic filers. Electronic filing is required for parties filing 250 or more forms.
The IRS also indicated that transitional relief from penalties has been extended to reporting entities that can show that they have made good-faith efforts to comply with the information-reporting requirements under sections 6055 and 6056 for 2017 both for furnishing to individuals and for filing with the IRS with incorrect or incomplete information. 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. No relief is provided to reporting entities that fail to file an information return or furnish a statement by the extended due date.
Starmark® has provided a spreadsheet, available in the Document Center, that employers may use to help them with compiling the data needed for the forms. For help with completing the forms or filing with the IRS, see your accountant, tax adviser and/or payroll services company.
The Internal Revenue Service has provided answers to common questions about the employer mandate and potential penalties.
Here are recently released questions with summarized answers:
Q: How does an employer know that it owes an employer shared responsibility payment?
A: The general procedures the IRS will use to propose and assess the employer shared responsibility payment are described in Letter 226J. The IRS plans to issue Letter 226J to an applicable large employer if it determines that, for at least one month in the year, one or more of the applicable large employer’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the applicable large employer did not qualify for an affordability safe harbor or other relief for the employee).
Q: Does an employer that receives a Letter 226J proposing an employer shared responsibility payment have an opportunity to respond to the IRS about the proposed payment, including requesting a pre-assessment conference with the IRS Office of Appeals?
A: Yes. Applicable large employers will have an opportunity to respond to Letter 226J before any employer shared responsibility liability is assessed and notice and demand for payment is made. Letter 226J will provide instructions for how the applicable large employer should respond in writing, either agreeing with the proposed employer shared responsibility payment or disagreeing with part or all or the proposed amount.
Q: How does an employer make an employer shared responsibility payment?
A: If, after correspondence between the applicable large employer and the IRS or a conference with the IRS Office of Appeals, the IRS or IRS Office of Appeals determines that an applicable large employer is liable for an employer shared responsibility payment, the IRS will assess the employer shared responsibility payment and issue a notice and demand for payment, Notice CP 220J.
Q: When does the IRS plan to begin notifying employers of potential employer shared responsibility payments?
A: For the 2015 calendar year, the IRS plans to issue Letter 226J informing applicable large employers of their potential liability for an employer shared responsibility payment, if any, in late 2017.
Follow this link to the IRS FAQ about the employer mandate.
Follow this link to review the complete answers to recently released questions about the employer mandate and potential penalties. (Questions 55 through 58)
For more information about the employer mandate, read our two-page overview of the employer mandate or our in-depth guide to understanding the provision. Both have been updated to provide the most current information and are available in the Healthcare Reform Toolkit.
Starmark® is mailing a letter to all employers to remind them of the 6055 and 6056 reporting requirements.
||Regardless of the group’s size, a report will be available in the Starmark Document Center to assist the employer with filings.
|Jan. 31, 2018
||A statement is due to the employee, which shows data for employees and their dependents covered for each month.
|Feb. 28, 2018
||Filings with the IRS are due, if filing via paper.
|Mar. 31, 2018
||Filings with the IRS are due, if filing electronically.
Note: It is the employer’s responsibility to collect the pertinent information and file the appropriate documents for all employees.
Employers should consult a professional benefit adviser or legal counsel regarding how the law may impact their business and specific self-funded benefit plan.
A sample of the employer letter is available here.
If you’re looking for help keeping up with the two bills in Congress about healthcare reform, we can help.
We’ve compiled a chart highlighting certain differences and similarities among provisions contained in the Better Care Reconciliation Act, a bill introduced on June 22, 2017, in the Senate; the American Health Care Act, a bill passed by the House of Representatives on May 4, 2017; and the Affordable Care Act.
Follow this link (revised on July 20, 2017) to review the chart or to print it out and keep it for your reference.
The U.S. Departments of Labor, Health and Human Services and the Treasury have answered a question about the implementation of the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008, as amended by the Affordable Care Act (ACA) and the 21st Century Cures Act (Cures Act).
Q: Does MHPAEA apply to any benefits a plan or issuer may offer for treatment of an eating disorder?
A: Yes. Eating disorders are mental health conditions, and, therefore, treatment of an eating disorder is a “mental health benefit” within the meaning of that term as defined by MHPAEA.
Comments about eating disorders may be sent to firstname.lastname@example.org by Sept. 13, 2017.
As required by the Cures Act, the departments also indicated they are soliciting comments about:
- Questions on non-quantitative treatment limitation model forms and steps to improve disclosures, as well as ways to improve state market conduct examinations and/or federal oversight of compliance by plans and issuers. Comments on these disclosure issues and model forms may be sent to email@example.com by Sept. 13, 2017.
- A draft model form that participants, enrollees or their authorized representatives could – but would not be required to – use to request information from their health plan or issuer regarding non-quantitative treatment limitations that may affect their mental health and substance abuse disorder benefits or to obtain documentation after an adverse benefit determination to support an appeal. Follow this link for a copy of the draft model form.
For the complete answer to the question about MHPAEA and for more information about the comments being solicited, read “FAQS about Mental Health and Substance Use Disorder Parity Implementation and the 21st Century Cures Act Part 38,” which was released on June 16, 2017.
Non-grandfathered plans are required to provide 100 percent coverage for some statins for individuals who meet certain criteria, beginning Nov. 15, 2017.
Last year, the U.S. Preventive Services Task Force (USPSTF) recommended that adults without a history of cardiovascular disease (such as coronary artery disease or stroke) use a low- to moderate-dose statin to prevent heart disease and mortality when the following criteria are met:
1) the adult is age 40 to 75 years;
2) has one or more cardiovascular risk factors (such as high cholesterol, diabetes, high blood pressure or smoking); and
3) has a calculated 10-year risk of a cardiovascular event of 10% or greater.
A non-grandfathered plan is required to provide 100 percent coverage for an in-network preventive service beginning with the plan year that begins one year after the date the USPSTF recommendation was issued. USPSTF issued the statin recommendation on Nov. 15, 2016.
For more information on preventive health, follow this link.