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ACA Small Market “Fix” (PACE Act), 2015 Transitional
Reinsurance Fee & Year-End Action Items
Andrea Esselstein, JDGroup Benefits Compliance
Team Leader
Luke ClarkSenior Consultant
Group Benefits
Thursday October 8, 2015 2–2:30 P.M.
“PACE” YOURSELF FOR 2016
Effective
October 1, 2015
Small Market “Fix”
(PACE Act)
Transitional
Reinsurance Due
Date
November 15, 2015
»
AGENDAAFFORDABLE CARE ACT (ACA) IMPLEMENTATION HIGHLIGHTS
3
IN THE NEWS: The PACE Act
ACA TIMELINE: 2016 REPORTING REQUIREMENTS
TRANSITIONAL REINSURANCE FEE: Update
STRATEGIC CONSIDERATIONS: 2016 Action Steps for Employers
HARD AT WORK…
5
THE PROTECTING AFFORDABLE COVERAGE
FOR EMPLOYEES (PACE) ACT
BREAKING NEWS!October 8, 2015
President Signs
PACE Act
Passed In Congress
October 1, 2015
Small Group Market
“Fix”
Each state will continue to determine IF AND WHEN to
expand the definition of the small group health insurance
marketplace to include companies with 51-99 employees
Initially, under the ACA, small group is defined as fewer
than 50 employees from 2014 – 2016 to expand to
fewer than 100 in 2016
State-by-state variances will remain as states, along
with state insurance departments, determine the
definition of the small group market
The small group definition in the following states has already
been changed to 1-100 employees. District of Columbia, CA,
CO, MD, NY, VA and VT
6
OVERVIEW
• No Rating Based on Employee Health History
• Rating for Adults Limited to 3:1 Ratio (Oldest to Youngest)
• One-year Age Bands from 21-63
• 63 & Older
• Single Age Band < Age 21
• Geography within a State
• Tobacco Use = 1.5:1
• Coverage Tier
COST IMPACT?
COMMUNITY RATING
No Immediate Impact
• Grandfathered Plans
• 100 + Employees
Greatest Impact
• 2015 Rates may Substantially Increase (< 50 Full-time Employees)
• Employers in States Shifting to Community Rating
• Largest Rate Increases for Young Healthy Groups
• Potential Decrease for Older Unhealthy Groups
COST CONTROL INCENTIVE FOR GROUPS IN 2016 AND BEYOND?
NEW FEDERAL RULES FOR RATING EMPLOYER PREMIUMS: SMALL GROUP MARKET
»
COMPLIANCE UPDATE2015 - 2016 REMINDERS
2
0
1
4…
KEY ACA REQUIREMENTS IMPACTING EMPLOYERS HIGH-LEVEL TIMELINE & QUICK REMINDERS
Ban on Lifetime Dollar
Limits (2010) &
Annual Dollar Limits
for Essential Health
Benefits (2014)
Preventive Care
Without Cost Sharing (2011)
Women’s Preventive
Care (2012)
(Non-GF Plans)
$2,550 Flexible
Spending Account
(FSA) Limitation (2015)
Form W-2 Reporting
Employers Filing at Least
250 Forms W-2 in 2014
Report Aggregate Value of
Health Coverage on 2015
Form W-2 (2012)
Ban on Preexisting
Condition Exclusions (2014)
Dependent Coverage
Expansion to Age 26
Regardless of Access to
Employer-Sponsored
Health Coverage
90 Day Waiting
Period Limitation (2014)
Exchange Notice (01.01.13)
Must be Distributed to New
Hires within 14 Days of Hire
(ALL Employees -- Regardless
of Eligibility)
▼ONGOING REQUIREMENTS
2014…
2014 – 2015…
2011 - 2013…
Employer Coverage
Mandate, Penalty
Exposure & Reporting
Requirements
“Shared Responsibility”
Guaranteed Issued Coverage for
COBRA Continuants &
Pre-65 Retirees
COBRA Notices Modifications
of New Exchange Options
Payment of
Transitional
Reinsurance Fee through Pay.Gov
Summary of Benefits and
Coverage (SBC): 4 Page
“Mini-SPD” (2012)
Revised Template: 2014
NEW 2 1/2 Page Template
Effective September 2015
ACA TIMELINE
2015 and Beyond
Limits to Out-of-Pocket Maximums for HDHPs (2015)
2015: $6,600 (Individual) & $13,200 (Families)
2016: $6,850 (Individual) & $13,700 (Families)
2015-2016
2015-2016
2016 -2018
On June 26, 2015, the U.S. Supreme Court ruled that all
couples, regardless of gender, have a fundamental right of
marriage, leading to the legalization of same-sex
marriages nationwide. Also on June 26, 2015, the U.S.
Supreme Court rules to uphold subsidies in all states.
Employer Reporting Requirements Effective
IRS Section 6055: Reporting information required by insurers and
small self-funded employers as to which individuals are enrolled in
Minimum Essential coverage.
IRS Section 6056: Reporting information required by large employers
full-time employees (those employed for one month or more) were
offered coverage and the lowest amount an employee may pay to receive Minimum Value coverage.
Cadillac Tax
Effective 2018 40% Excise Tax on High-Value Plans
In 2018, this tax on both fully insured and self-funded plans applies to the plan value in excess of $10,200 ($850 / month)
for single coverage; $27,500 ($2,292 / month) for other than self-only coverage (family coverage). Costs align with Cost-of-Living adjustment not Medical Inflation
ONGOING REQUIREMENTS
▼
EEOC Rules Define “Voluntary” Wellness
Title 1 of ADA applies to 15+ employees
Wellness programs in Group Health Plans providing incentives
for “disability related inquires or medical examinations.”
Tobacco-free incentives provided based on cotinine testing
results. No applicable regulations for affidavits.
UPCOMING KEY DATES
October 2015
MEDICARE PART-D NOTICE
Distribute Medicare Part D notice of Creditable or Non-Creditable RX coverage to Medicare-eligible
Employees by October 15th
FILE 5500 ANNUAL REPORT
October 15th deadline for submission to IRS for calendar year plans; timely request for extension
Form 5558. Distribute by December 15, 2015
FINALIZE PLAN ELIGIBILITY ASSESSMENT
Employer with 50 or more full-time employees (including full-time equivalents) subject to ACA
“Shared Responsibility” coverage mandate beginning January 1, 2016
PLAN DOCUMENTS TO REFLECT ANY ELIGIBILITY CHANGES
Incorporate any changes in the definition of eligible employees within plan documents, open
enrollment material and employee handbooks if describing eligibility and plan participation
EMPLOYER REPORTING OBLIGATIONS
Compliance with IRS Code Section 6055 & 6056
2016
Open Enrollment
CHECKLIST
SNAPSHOTSeveral Listed Notices
are NOT Specifically
Required within
Open Enrollment
11
»
REPORTING REQUIREMENTS REMINDERS
13
EMPLOYER REPORTING REQUIREMENTS
IRS Reporting Begins
for Employers with 50-
99 Full-time Employees
in 2015, EVEN
THOUGH Not Subject
to the Employer
Coverage Mandate &
Penalty Exposure until
Plan Years on or after
January 1, 2016.
Required to Report?
Employers with
50 or more
Full-time Employees
(including Full-time
Equivalent Employees)
IRS Section 6055: Reporting information required by
insurers and small self-funded employers as to which
individuals are ENROLLED in Minimum Essential coverage.
IRS FORM 1095-B OR Combined Form 1095-C
IRS Section 6056: Reporting information required by ALL
large employers as to whether full-time employees (those
employed for one month or more) were OFFERED coverage
and the lowest amount an employee may pay to receive
Minimum Value coverage.
IRS FORM 1095-C
»
TRANSITIONAL REINSURANCE
FEE
TRANSITIONAL REINSURANCE FEEHIGHLIGHTED EMPLOYER CONSIDERATIONS
2015: $44 ANNUALLY PER COVERED LIFE
Applies to Both Fully Insured and
Self-Insured Group Health Plans (GHPs)Fully Insured Plans: Insurer Responsible for Paying the Fee
Self-Funded Plan Sponsors
Required to Register & Pay Fee
www.Pay.gov
Covered Lives includes Dependents
(Employee, Spouse & Child = 3 Covered Lives)
November 16, 2015
Number of Covered Lives Reported by
Self-Funded Sponsors (Employers)
First Installment
$33 Per Covered Life Due
No Later than January 15, 2016
Second Installment
$11 Per Covered Life Due by
November 15, 2016
ACA & ERISA
COMPLIANCE
IRS REPORTING
REQUIREMENTS
ACA PENALTY EXPOSURE
CADILLAC TAX
HIPAA &
DOL AUDITS
TRANSITIONAL REINSURANC FEE
ACA & ERISA
COMPLIANCE
IRS REPORTING
REQUIREMENTS
ACA PENALTY EXPOSURE
CADILLAC TAX
HIPAA &
DOL AUDITS
Supporting Documentation – CSV File
Completion of this file this year is not needed unless the Reporting Entity or Contributing
Entity is filing on behalf of 4 or more Contributing Entities
TRANSITIONAL REINSURANCE FEE
Timeline
1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov
Register on Pay.gov
Or Confirm Your
Password From
Previous Year
One Payment Contribution
Submit Payment
By
November 16, 2015
Two Payment Contribution
Submit First Payment
By November 16, 2015
And
Schedule Second Payment
Full Contribution Payment
Amount Due
By
January 15, 2016
Two Part Contribution
Second Payment Due
By
November 15, 2016
Two Part Payment Contribution
First Payment Due
By
January 15, 2016
ESSENTIAL DATES
January, February & March 2016
PAY TRANSITIONAL REINSURANCE FEE
Payment of ACA Transitional Reinsurance Program fees
are due January 15, 2016
PROVIDE EMPLOYEES WITH FORM 1095-C STATEMENTS
Deliver coverage information statements to employees using IRS
Form 1095-C by February 1, 2016
FILE IRS INFORMATIONAL RETURNS FORMS 1094-C & 1095-C
Employers subject to the reporting requirements must file information returns
by March 1, 2016 (one day later than the standard deadline because
February 28, 2016 is a Sunday) or by March 31, 2016, if filing electronically
2016 TAKEAWAYS
Action Items & Highlighted Considerations
for Employers TODAY
Highlighted Considerations for Employers TODAY
Invest in Employee Outreach Effort ASAP
Introduce New Initiatives during the 2016 Open Enrollment Communication Opportunity
Educate Employees about New Forms in Completing their Individual Tax Returns in 2016
(Reflecting 2015 Coverage - Applies to All American Citizens)
Promote Preventive Care with Employees & Families
Comply with the Exchange Notice Requirement (Cover Letter Option within New Hire Packet)
Revise COBRA Notices to Provide Notice of New Exchange Options -- Reflecting 2014
Guaranteed Issue Coverage for COBRA Constituents & Pre-65 Retirees
Assess Spousal Affidavit Options (Employee Attestation) in Offering Coverage to Legal Spouses
Evaluate Spousal Surcharge and/or Carve Out Options to Avoid Offering a Non-Competitive
“Magnet” Plan
Reiterate the Value of Current Benefits with Employees & Families
20
ACA & ERISA
COMPLIANCE
IRS REPORTING
REQUIREMENTS
ACA PENALTY EXPOSURE
CADILLAC TAX
HIPAA &
DOL AUDITS
HEALTH CARE REFORM IMPLEMENTATIONAnticipate, Integrate & Overcome Change
Oswald’s Answer…Comprehensive Compliance Risk Assessment Toolkit
Assure preparation & recordkeeping needs for a DOL audit
Evaluate spousal coverage trends to avoid offering a
non-competitive “magnet” plan
Assess ongoing steps for the IRS employer reporting
requirements (Forms 1094 & 1095)
Strategize today to avoid the 2018 Cadillac Tax
Leverage analytics tools & best practices for data-focused
decision making
Enhance communication initiatives as employees face
increasingly complex decisions
Thank you for joining us!
Contact information:
Andrea Esselstein, J.D.
Luke Clark, Senior Consultant
