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Play Time is Over: IRS Reveals Process for Assessing ACA Penalties

November 27, 2017

Authors

Serena Yee, Katharine Finley and Meredith Jacobowitz

Play Time is Over: IRS Reveals Process for Assessing ACA Penalties

November 27, 2017

by: Serena Yee, Katharine Finley and Meredith Jacobowitz

The Affordable Care Act (ACA) introduced a “pay or play” scheme, effective January 1, 2015, in which Applicable Large Employers (ALEs) must offer affordable qualifying healthcare to their full-time employees (and their dependent children) or pay a penalty. Despite President Trump’s first Executive Order (discussed here) directing a rollback of the Affordable Care Act (ACA) and instructing the Secretary of Health and Human Services to minimize the “unwarranted economic and regulatory burden of the act,” the Internal Revenue Service (IRS) quietly updated its Questions and Answers on Employer Shared Responsibility Provisions Under the ACA to include the first official guidance detailing the process for enforcement of the penalty. Notably, this update coincided with an IRS announcement that penalties for the 2015 calendar

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Automatic 30-Day Extension of Due Dates for Participant Statements and Reinstatement Good-Faith Compliance Standard Granted!

November 21, 2016

Authors

Sarah Bhagwandin

Automatic 30-Day Extension of Due Dates for Participant Statements and Reinstatement Good-Faith Compliance Standard Granted!

November 21, 2016

by: Sarah Bhagwandin

ACAOn Friday, IRS and the Department of Treasury issued Notice 2016-70 granting an automatic 30-day extension for furnishing 2016 Forms 1095-B, Health Coverage, and 1095-C, Employer-Provided Health Insurance Offer and Coverage, to individuals for employers and other providers of minimum essential coverage (MEC).  These forms must now be provided to individuals by March 2, 2017 rather than January 31, 2017.  Coverage providers can seek an additional hardship extension by filing a Form 8809.  Notice 2016-70 provides that individual taxpayers do not need to wait to receive the Forms 1095-B and 1095-C before filing their tax-returns.

The due date for 2016 ACA filings (Forms 1094-B, 1094-C, 1095-B, 1095-B) with the IRS remains February 28, 2017 (or March 31 if filed electronically).   Employers and

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We Received an Exchange Subsidy Notice…Now What?

August 9, 2016

Authors

Serena Yee and Chris Rylands

We Received an Exchange Subsidy Notice…Now What?

August 9, 2016

by: Serena Yee and Chris Rylands

ACA Blue HighlightThe Affordable Care Act exchanges/marketplaces are required to notify employers of any employees who have been determined eligible for advance payments of the premium tax credit or cost-sharing reductions (i.e., subsidy) and enrolled in a qualified health plan through the exchange.

A few weeks ago the U.S. Department of Health and Human Services (HHS) began issuing these notices to employers for 2016. If you received such a notice, this means that at the time of applying for health care coverage through the exchange, the employee indicated that:

  • you made no offer of health coverage;
  • you offered health coverage, but it either wasn’t affordable or didn’t offer minimum value; or
  • he or she was unable to enroll in the health coverage due to a waiting period.

Now, receipt

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“King” of the Road

July 6, 2015

Authors

Chris Rylands and Lisa Van Fleet

“King” of the Road

July 6, 2015

by: Chris Rylands and Lisa Van Fleet

ACAIn Roger Miller’s 1964 hit by the above name, he tells the tale of “a man of means by no means,” a man just scraping to get by. While he may not have a phone, a pool, pets, or cigarettes (and really, what does he need that last item for anyway?), after the Supreme Court’s 6-3 decision on June 25, however, such a man might be able to secure a premium tax credit to help pay for health insurance (yes, we realize he’d probably be Medicaid eligible, but just work with us here).

But what does the ruling mean for employers? At first, it might appear that it doesn’t mean very much; life under the Affordable Care Act will continue to move along much as it has for the last few

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Individual Mandate Regulations Address Affordability – And Why Employers May Care

December 16, 2014

Authors

benefitsbclp

Individual Mandate Regulations Address Affordability – And Why Employers May Care

December 16, 2014

by: benefitsbclp

ACAJust before Thanksgiving, the IRS issued final regulations on the individual mandate under the Affordable Care Act (“ACA”). The individual mandate requires individuals to maintain health insurance (i.e., “minimum essential coverage”) or pay a penalty.

The regulations adopt in part, and clarify proposed regulations addressing how affordability of employer-sponsored coverage is determined for purposes of the regulations and certain types of exemptions from the individual mandate for individuals who cannot afford coverage. This matters to employers because it could impact whether they will be required to pay a play or pay penalty. If employer-sponsored coverage is unaffordable, and the employee does not enroll in it, then the employee may be eligible for a premium tax credit for ACA Marketplace/Exchange coverage. Receiving that tax credit could

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Election Day Surprise: Skinny Plans Will Need to Fatten Up

November 4, 2014

Authors

Chris Rylands and Serena Yee

Election Day Surprise: Skinny Plans Will Need to Fatten Up

November 4, 2014

by: Chris Rylands and Serena Yee

Early this morning, the IRS, in a coordinated effort with the DOL and HHS, issued guidance that basically said that so-called “skinny” plans won’t get employers out of the “play or pay” penalties. Limited grandfathering is available for so called “Pre-November 4, 2014” plans. All of this will be finalized in future regulations, but the guidance sets out what the agencies expect the regulations to say.

Skinny plans, for those unaware, were an attempt to circumvent the ACA rules requiring plans to provide minimum value. They cover preventive services, as required by the ACA, but exclude other substantial hospitalization and/or physician services. Some consultants had discovered that these plans technically satisfied the ACA’s minimum value standard even though they did not really comport with the spirit of the law. Skinny plans were not designed to provide health coverage; but rather; were intended

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Check it Out and Check it Off: 2015 Group Health Plan Checklist

October 14, 2014

Authors

benefitsbclp

Check it Out and Check it Off: 2015 Group Health Plan Checklist

October 14, 2014

by: benefitsbclp

460326385With 2015 just around the corner, certain mandates under the Patient Protection and Affordable Care Act, as amended (“ACA”) are about to become effective. Health plans also have several existing enrollment and annual notice requirements. Below is a checklist of upcoming ACA mandates that employers must implement in preparation for or in 2015 and a summary of existing enrollment and annual notice requirements.

For a refresher on the ACA mandates which became effective this year, please see our 2014 group health plan checklist here.

I. ACA Requirements That Apply to All Group Health Plans (Whether Grandfathered or Not)

On or beginning with the dates specified below, a group health plan must comply with the following requirements, regardless of its status as a “grandfathered health plan”:

Obtain a Health Plan Identifier Number (HPID).

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Dealing with Changes to an Employee’s Measurement Period

September 30, 2014

Authors

Serena Yee

Dealing with Changes to an Employee’s Measurement Period

September 30, 2014

by: Serena Yee

Recently the IRS issued Notice 2014-49, offering guidance for situations in which the measurement period or method applicable to an employee changes.

Background

Under the Affordable Care Act, as amended (“ACA”) an applicable large employer risks the imposition of a penalty tax under Code section 4980H in connection with a failure to offer full-time employees (and their dependents) minimum essential coverage under an eligible employer-sponsored plan that is both affordable and provides minimum value.  This is sometimes called the “play or pay” penalty.

There are two methods an employer may use to identify full-time employees for purposes of Code section 4980H – the monthly method and the look-back method.  Under the look-back  method, employers average an employee’s hours of service during a predetermined period (i.e., the measurement period) to determine whether to treat the employee as a full-time employee for the period that follows

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Kind of Halbig Deal

July 22, 2014

Authors

Chris Rylands

Kind of Halbig Deal

July 22, 2014

by: Chris Rylands

You may have heard about the potentially crippling blow to ACAMoney Puzzle (as some have described) dealt by a three-judge panel of the D.C. Circuit Court of Appeals today in Halbig v. Burwell.  Basically, a group of individuals and employers challenged the IRS rule that allowed tax credits to help pay for individual coverage through federally-run ACA marketplaces.  Their argument was that the literal reading of the statute only allowed these subsidies for individual policies purchased through state-run marketplaces.

At first blush, this might not sound all that important to employers, but it very well could be.  If this ruling holds, then it would undercut the ability of the IRS to impose the employer shared responsibility/“play or pay” penalties.

Recall

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Speaker Boehner’s Lawsuit and the ACA

July 14, 2014

Authors

Chris Rylands

Speaker Boehner’s Lawsuit and the ACA

July 14, 2014

by: Chris Rylands

The CapitolUnless you’ve been hiking Mount Kilimanjaro for the last month, you’ve no doubt heard about Speaker Boehner’s proposed lawsuit against the President.  The Speaker, and apparently many House Republicans, are upset that the President has not, in their view, upheld his oath of office by faithfully executing the laws passed by Congress.

A draft resolution released last week shows that the focus of the lawsuit will be none other than the already much-litigated Affordable Care Act.  Regardless of how one feels about the lawsuit or ACA, it’s impossible to ignore the great irony in House Republicans suing the President for not faithfully executing over a law they’ve tried to repeal some 40 times.

It’s easy to see the political reason, though: the Republicans think it’s a

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