The Affordable Care Act (ACA) requires applicable large employers (ALEs) to offer affordable, minimum value health coverage to their fulltime employees or pay a penalty. This employer mandate provision is also known as the “employer shared responsibility” or “pay or play”rules. An ALE is only liable for a pay or play penalty if one or more of its full-time employees receive a subsidy for coverage under an Exchange.
The employer shared responsibility final regulations provide guidance on determining affordability of an employer-sponsored plan, including three optional safe harbors that employers may use. This ACA Overview describes the ACA’s affordability determination and safe harbors for purposes of these rules.
Each year, the Kaiser Family Foundation and the Health Research & Educational Trust (HRET) conduct a survey to examine employer-sponsored health benefit trends. Here are the main points of the 2016 survey:
- Average premiums have risen nearly 60 percent for single coverage since 2006
- Preferred provider organizations (PPOs) were the most common plan type, followed by high deductible health plans (HDHPs) with a savings option—covering 48 and 29 percent of workers, respectively.
- The average deductible amount for single coverage was over $150 higher than last year—jumping to $1,478 from $1,318.
- The average in-network copayments were $24 for primary care and $38 for specialty care; in-network coinsurance amounts were 18 percent and 19 percent, respectively.
- Small and large firms both offer wellness programs, with 46 percent of small firms and 83 percent of large firms offering at least one.
- Eighty-two percent of workers in large firms and 13 percent in small firms are covered under some sort of self-funded (partially or fully) plan.
- Of the large firms offering health benefits, 39 percent cover some health care services through telecommunication.
- Of the firms polled, 56 percent offer health benefits to some workers, which is similar to recent years.
- Of the firms offering health coverage with 50 or more employees, 2 percent offer health benefits through a private exchange.
- March 2, 2017—New deadline for furnishing 2016 Forms 1095-B and 1095-C to individuals
- Feb. 28, 2017—Deadline for 2016 filing with the IRS in paper form
- March 31, 2017—Deadline for 2016 filing with the IRS electronically
Employer’s Guide to ACA Reporting
A Review of the Forms and Instructions for 2016
This guide reviews the 2016 forms and instructions and notes relevant changes from 2015. It also addresses IRS guidance on the solicitation of social security numbers (“SSNs”) or taxpayer identification numbers (“TINs”) and the treatment of cash “opt-out” payments for reporting purposes.
In mid-November, the Internal Revenue Service (IRS) issued Notice 2016-70, which extends the due date by 30 days for furnishing forms under Sections 6055 and 6056 for 2016 and extends good-faith transition relief from penalties related to 2016 Section 6055 and 6056 reporting. The IRS does not anticipate extending the deadlines or transition relief from penalties to reporting for 2017.
What Is Good-faith Transition Relief?
In determining good faith, the IRS will take into account whether a reporting entity made reasonable efforts to prepare for reporting the required information to the IRS and furnishing it to individuals (such as gathering and transmitting the necessary data to an agent to prepare the data for submission to the IRS or testing its ability to transmit information to the IRS).
Important Dates to Remember
The 2016 furnishing and reporting deadlines are as follows:
President-elect Donald Trump will be inaugurated on Jan. 20, 2017. In a video address published in late November, Trump released a plan for his first 100 days in office.
During his campaign, Trump called for a repeal of President Barack Obama’s health care reform legislation, the Affordable Care Act (ACA). However, his plan does not indicate that he will be repealing it in the first 100 days of his presidency. Instead, his plan is focused on issues that include proposals related to immigration, defense policies and trade deals.
HealthSure will continue to monitor the presidential transition and any changes that will be made, and provide updates as necessary.
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