Employer Responsibility Under the Affordable Care Act

Here's a helpful chart from the Kaiser Family Foundation to decipher the penalties employers may have for not offering ACA coverage in 2018.

The Affordable Care Act does not require businesses to provide health benefits to their workers, but applicable large employers may face penalties if they don’t make affordable coverage available. The employer shared responsibility provision of the Affordable Care Act penalizes employers who either do not offer coverage or do not offer coverage that meets minimum value and affordability standards. These penalties apply to firms with 50 or more full-time equivalent employees. This flowchart illustrates how those employer responsibilities work.

Read the article.

Kaiser Family Foundation (5 March 2018). "Employer Responsibility Under the Affordable Care Act" [Web Blog Post]. Retrieved from address https://www.kff.org/infographic/employer-responsibility-under-the-affordable-care-act/

2016 Draft Forms & Instructions Released: Affordable Care Act Reporting Update

Great feature from The National Law Review by Damian A. Myers,

Since our last ACA Reporting Update, the extended deadlines to distribute Forms 1095-B and 1095-C to covered individuals and employees and to file the forms with the IRS have passed.  The IRS has stated, however, that late forms can still be submitted via electronic filing and the forms that received an error message should be corrected.  By many accounts, the first ACA reporting season presented numerous challenges.  From collecting large amounts of data to compiling the forms, to working with service providers that faced their own unique challenges, to facing form rejections and error notifications from an inadequate IRS electronic filing system, employers and coverage providers faced obstacles nearly every step of the way.  Nevertheless, most employers and coverage providers were able to get the forms filed and put the 2015 ACA reporting season behind them.

But, alas, there is no rest for the weary. In late-July, the IRS released new draft 2016 Forms 1094-B and 1095-B (the “B-Series” Forms) and Forms 1094-C and 1095-C (the “C-Series” Forms).  Additionally, on August 1, the IRS released draft instructions to the C-Series Forms (as of the date of this blog, draft instructions for the B-Series Forms have not been released).  For the most part, the 2016 ACA reporting requirements are similar to the 2015 requirements, subject to various revisions described below.

  • Various changes have been made to the forms and instructions to reflect that certain forms of transition relief are no longer applicable. For example, the non-calendar year transition relief (for plan years starting in 2014) that applied in 2015 does not apply in 2016. Similarly, changes have been made to reflect that the “Section 4980H Transition Relief” is still relevant only for non-calendar year plans though the end of the plan year ending in 2016.  The Section 4980H Transition Relief exempts applicable large employers (“ALEs”) with 50-99 full-time employees from penalties under Section 4980H of the Internal Revenue Code (the “Code”) and reduces the 95% threshold to 70% for other ALEs.  The relief also exempts ALEs from having to offer coverage to dependents if certain requirements are met. For calendar year plans, the threshold is at 95% throughout 2016 and dependent coverage must be offered during each month of the year.

  • The draft instructions to the C-Series Forms provide more detail and examples on how ALEs should prepare the forms. Instead of referring to “employers” throughout the instructions, the IRS has replaced that term in most cases with “ALE Member.”  The reason for this change is to highlight the fact that each separate ALE Member must file its own forms. Examples related to completing the authoritative Form 1094-C highlight that each separate entity (determined based on employer identification number) is required to file its own authoritative Form 1094-C.

  • As promised by the IRS last year, there are two new indicator codes for Line 14 of Form 1095-C. These new codes ask employers to indicate whether a conditional offer was made to a spouse. An offer of coverage to a spouse is conditional if it is subject to one or more reasonable, objective conditions. For example, if a spouse must certify that he or she is not eligible for group health coverage through his or her employer, or is not eligible for Medicare, in order to receive an offer of coverage, the offer is considered conditional.

  • The draft instructions to the C-Series Forms reflect that the good faith compliance standard applicable to 2015 forms (under which filers could avoid reporting penalties upon a showing of good faith) no longer applies for 2016 ACA reporting. Going forward, reporting penalties may be waived only upon the standard showing of reasonable cause.

  • The draft instructions to the C-Series Forms include new information related to coding for COBRA continuation coverage. There has been some uncertainty regarding how to treat offers of COBRA continuation coverage since the IRS removed relevant guidance from its Frequently Asked Questions website in February 2016. Similar to the 2015 instructions, the draft 2016 instructions provide that offers of COBRA coverage after termination from employment should be coded with 1H (Line 14) and 2A (Line 16) whether or not the COBRA coverage is elected. The new instructions now state that this coding sequence also applies for other, non-COBRA post-employment coverage, such as retiree coverage, when the former employee was a full-time employee for at least one month of the year.

In the case of an offer of COBRA coverage following a reduction in hours, the basic coding requirement is the same as in 2015 – the offer of COBRA coverage is treated as an offer of coverage on Line 14 of the Form 1095-C. The draft instructions expand on this basic requirement to explain how to code Lines 14 and 16 when the offer of COBRA coverage is not made to a spouse or dependent.  In general, for purposes of Code Section 4980H, an offer of coverage made once per year to an employee and his or her spouse and dependents is treated as an offer for each month of the year even if the coverage is declined for the employee, spouse, and/or dependents.  Under general COBRA rules, only those individuals enrolled in coverage immediately prior to the qualifying event receive an offer of COBRA coverage.

So how does this play out when an employee with a spouse and dependents elects self-only coverage during open enrollment and later loses that coverage due to a reduction in hours? The draft instructions treat the initial offer of coverage at open enrollment and the offer of COBRA coverage as two separate offers of coverage.  To determine the proper coding, the employer must look at who had the opportunity to enroll at each offer.  During open enrollment, the employee, spouse and dependent had the opportunity to enroll.  Thus, until the reduction in hours and loss of coverage, the coding should be 1E (offer to employee, spouse and dependent) in Line 14 and 2C (enrolled in coverage) in Line 15.

In contrast, the offer of COBRA coverage was only available to the employee and, therefore, after the reduction in hours, the coding should be 1B (offer to employee only) in Line 14. If the employee does not elect the COBRA coverage, code 2B (part-time employee) could be inserted in Line 16.  If, however, the employee does elect COBRA coverage, it appears that code 2C (enrolled in coverage) should still be inserted in Line 16.  Although this latter coding sequence is likely intended to protect the spouse and dependents from being “firewalled” from a premium credit, there appears to be nothing to indicate that the employer should not be assessed a penalty for failing to make an offer to the employee’s dependents.

  • The draft instructions for the C-Series Forms provide additional insight into how to calculate the number of full-time employees for purposes of column (b) in Part III of the Form 1094-C. The draft instructions clarify that the determination of full-time employee status is based on rules under Code Section 4980H and related regulations and not on other criteria established by an employer. Note that, currently, the draft instructions state that the monthly measurement period must be used for this purpose, but it appears that this is a mistake and that it should reference both the monthly measurement and look-back measurement methods. The IRS may clarify this in the final instructions.

  • One important non-change in the draft instructions is that the specialized coding for employees subject to the multiemployer plan interim guidance remains in effect for 2016 reporting. The interim guidance provides that an employee is treated as having received an offer of coverage if his or her employer is obligated pursuant to a collective bargaining agreement to contribute to a multiemployer plan on the employee’s behalf, provided that the multiemployer plan coverage is affordable and has minimum value and the plan offers dependent coverage to the eligible employee. The coding for such as employee is 1H (no offer of coverage) for Line 14 and 2E (multiemployer plan interim guidance) for Line 16.

There will undoubtedly be tweaks to the draft instructions to the C-Series forms, but significant changes appear unlikely. Given that only five months remain in 2016, employers should start planning now for 2016 ACA reporting based on the draft instructions and make alterations as necessary when final instructions and other guidance is released.

See the original article Here.


Myers, D. A. (2016 August 4). 2016 draft forms & instructions released: affordable care act reporting update. [Web blog post]. Retrieved from address https://www.natlawreview.com/article/2016-draft-forms-instructions-released-affordable-care-act-reporting-update

Obama to push retirement reforms

Originally posted January 20, 2015 by Allen Greenberg on Benefits Pro.

President Obama planned to announce several initiatives at his State of the Union on Tuesday night that, according to the White House, will give 30 million more workers a way to save for retirement through their employers.

The president’s proposals would be funded by closing retirement tax loopholes for the wealthy.

“Americans face a daunting array of choices when it comes to retirement savings. While some workers are automatically enrolled in a retirement savings plan by their employer (with an option to opt out), others have to open an account, manage contributions, and research and select investments on their own,” the administration said in a fact sheet released in advance of the president’s speech.

“Meanwhile, tax loopholes have allowed some high-income Americans to accumulate tens of millions of dollars in tax-preferred accounts that were intended to help workers save for a secure retirement, not to provide tax shelters for the wealthiest few.”

Under Obama’s proposals:

  • Every employer with more than 10 employees that does not offer a retirement plan would be required to automatically enroll their workers in an IRA. Auto-IRAs would let workers opt out of saving, if they choose.


  • Any employer with 100 or fewer employees who offers an auto-IRA would get a $3,000 tax credit. The president also will propose to triple the existing “start-up” credit, so small employers who newly offer a retirement plan would receive a $4,500 tax credit to help them offset administrative expenses. Small employers who already offer a plan and add auto-enrollment would get an additional $1,500 tax credit.
  • Access to retirement plans would be extended to part-time workers. This would happen by requiring employers who offer plans to permit employees who have worked for them for at least 500 hours per year for three years or more to make voluntary contributions to the plan. Employers now are allowed to exclude employees who work less than 1,000 hours per year.
  • Contributions to tax-preferred retirement plans and IRAs would be capped once balances are about $3.4 million, enough to provide an annual income of $210,000 in retirement.

Along those lines, the Investment Co. Institute on Tuesday released a survey that found a strong majority of households — including those with and those without retirement plan accounts — disagree with proposals to remove or reduce tax incentives for retirement saving in defined contribution accounts.

The American Benefits Council said the president’s proposal send a mixed message.

“Retirement savings policy need not be a ‘zero sum game.’ Restricting savings for some workers does not help others achieve retirement security,” said ABC President Jim Klein.

The ABC, echoing the concerns of others in the retirement industry, takes issue with Obama's proposed contribution cap, saying that once interest rates rise, it would impact far more than the handful of high-income Americans with outsized IRA account balances. The cap, according to the White House, would provide an annual income of $210,000 in retirement.

“Portraying the president’s proposal as limiting retirement plan balances to ‘about $3.4 million’ is very misleading," Klein said. "In fact, the proposal limits annual benefits that can be paid at age 62. In today’s extremely low interest rate environment, that equates to about $3.4 million. But given historical interest rates the government uses for pension calculations, the allowable account balance for a 35-year-old worker would be about $300,000.”

That said, the ABC commended Obama for trying to find ways to make it easier for smaller employers to expand access to retirement plans.


Dental gap: Coverage slips through reform's cracks


Originally post December 9, 2014 by Bob Herman on www.businessinsider.com

Dental care is a peculiar niche of the U.S. healthcare system. Even though teeth and gums are just as much part of the human body as kidneys or elbows, they are insured differently — a lot differently.

When the Patient Protection and Affordable Care Act was written and debated, comprehensive dental insurance never really became a focal point. Lawmakers ultimately created a few provisions that may boost access to oral care, but dental coverage still escapes the grasp of millions of Americans.

Dental plans garnered national attention after it was discovered that HHS overstated 2014 enrollment figures in the ACA's insurance exchanges. The government included almost 400,000 stand-alone dental plans, which are much cheaper and separate from standard health plans. After accounting for those, the number of people who were enrolled in full-service medical plans was 6.7 million. A House committee plans to grill CMS Administrator Marilyn Tavenner on the numbers Tuesday.

Lost in that discussion, however, is the question of how much the law has done to advance dental care. Not enough, advocates argue.

The Affordable Care Act mandated pediatric dental services as one of the 10 essential health benefits for health plans, but adult dental services were excluded. In addition, all health plans must cover oral health risk assessments for children up to 10 years old with no copayment, coinsurance or deductible. The law also allowed states to expand Medicaid and its related dental benefits to more low-income children and adults.

But large gaps in coverage remain, primarily for adults who don't qualify for Medicaid. “More children have been enrolled (in dental plans) through the Affordable Care Act,” said Maxine Feinberg, president of the American Dental Association. “However, it really only helped adults in a minimal way.”

About 187 million people have some form of dental insurance, according to the National Association of Dental Plans. Coverage is provided through two main outlets: employers or public programs like Medicaid and the Children's Health Insurance Program.

A majority of people who have dental insurance get it through their employer. Almost nine in 10 employers with 200 or more workers and about half of all companies offer dental benefits, according to the Kaiser Family Foundation. The most common forms of coverage are like “prepaid gift cards,” Feinberg said. Routine cleanings and other preventive services are completely covered, and all other dental care needs are covered up to a yearly maximum figure.

But that leaves about 130 million Americans who have to pay for their dental care completely out of pocket or rely on supplemental dental policies. That figure includes millions of Medicare beneficiaries. Traditional Medicare does not cover dental care unless it's an emergency procedure during a hospital stay.

Medicare, Medicaid pitfalls

Cost and a lack of dental providers are cited as the key barriers for obtaining care. In some instances, the results have been lethal. The most famous case was Deamonte Driver, a 12-year-old boy in Maryland who died in 2007 after bacteria from an infected tooth spread to his brain. Deamonte's family lost its Medicaid coverage. More recently, in 2011, Kyle Willis, 24, died in Ohio after a wisdom tooth infection forced him to the emergency department. Mr. Willis had no insurance and couldn't afford antibiotics.

Ultimately, the Affordable Care Act is expected to bring some kind of dental coverage to 8.7 million kids and 17.7 million adults by 2018, according to an ADA-commissioned analysis conducted by actuarial consulting firm Milliman. A vast majority of those gains will be through Medicaid expansion, and some asterisks apply.

Medicaid dental benefits for adults vary widely in each state. Some states like Connecticut and New York offer extensive coverage that includes preventive cleanings and restorative services like fillings and crowns. But others offer zero dental coverage, or only cover emergency services that relieve tooth pain and infection. That means many people who live in states expanding Medicaid eligibility may only benefit marginally, and some others in non-expansion states won't benefit at all. The ADA study said of the 26 states expanding Medicaid, nine provide “extensive” adult dental benefits.

The scenario also assumes patients can find dentists accepting Medicaid. Only one-third of practicing dentists take Medicaid patients due to lower reimbursement rates.

Dr. Richard Manski, a dentistry professor at the University of Maryland who has studied dental insurance said the state programs that prioritize dental care actually offer “robust” coverage. But “the problem with the Medicaid plans is there's always a fixed pot of money,” he said.

Dental benefits are often the first to get cut when states need to get their Medicaid budgets in order. Even the federal government has encouraged state Medicaid programs to tinker with their dental care benefits when money gets thin. In 2011, then-HHS Secretary Kathleen Sebelius wrote letters to governors saying that limiting or eliminating dental care benefits is an effective way to save Medicaid funds.

The impact of the ACA's exchanges on dental care is similarly cloudy. Although dental benefits for children up to age 19 are required for all health plans sold on the individual and small-group markets, each exchange can take a different approach, said Colin Reusch, senior policy analyst at the Children's Dental Health Project. Some exchanges require health insurers to embed pediatric dental coverage. Others allow the benefits to be sold in stand-alone policies, requiring people to pay a separate premium.

The average cost differential between a medical policy with embedded dental coverage and a medical policy without dental coverage on the federally run exchanges ranges from $33.45 per month for a family with one child to $70.05 for a family with three or more children, said Evelyn Ireland, executive director of the National Association of Dental Plans.

Mr. Reusch said he's hopeful the gap between dental and medical care can be bridged, even though the ACA will leave many without dental insurance and nothing has changed with Medicare. Providers in accountable care organizations or patient-centered medical homes are now somewhat responsible for the oral health of patients, especially if dental issues ultimately lead to more complex health problems.

“In the long term, that's really beneficial in terms of shifting the oral healthcare delivery system towards integration, which is where we want to go,” Mr. Reusch said.