The next phase of the Employer Shared Responsibility (ESR) mandate.
As we move into the next phase of the Employer Shared Responsibility (ESR) mandate and organize systems for 2016 eligibility requirements, we wanted to share critical updates and information you’ll need to be aware of as you continue to manage Affordable Care Act (ACA) requirements for your organization:
- Auto-enrollment Provision Repealed
- States that Expanded Medicaid as of November 3, 2015
- 2016 Limits
- Updates on Transitional Reinsurance Fee (TRF)
- 1095-C: Filing for an Extension
- Health e(fx) Updates
1. Auto-enrollment Provision Repealed
On November 2, 2015, President Obama signed H.R. 1314, the “Bipartisan Budget Act of 2015,” which among other things, repealed the Fair Labor Standards Act’s auto-enrollment requirement. Essentially, employers that were subject to the FLSA and employed more than 200 full-time employees, now do not have to auto-enroll new, full-time employees into one of the employer’s health plans.
2. States that Expanded Medicaid as of November 3, 2015
The Supreme Court’s 2012 ACA ruling allowed each state’s governor and leadership to decide upon its participation in Medicaid. As of Tuesday, November 3, 30 states and the District of Columbia chose to expand Medicaid (see figure above).
This was part of the ACA’s broader effort to ensure health insurance coverage for all U.S. residents. From 2014 to 2017, the federal government will pay 100% of the difference between a state’s current Medicaid eligibility level and the ACA minimum. In 2017, this drops to 95% and after 2020, moves and remains at 90%.
Health e(fx) is tracking these states and their minimums to ensure affordability is calculated for each employee at the mandated level.
3. 2016 Limits
While 2016 limits and penalty amounts have been announced, please note the IRS has not announced the specific penalty amounts that will apply. (As you may remember, last year’s suggested amounts included an increase to penalties but were not applied.)
As final rulings are published, Health e(fx) will notify you and all system parameters will be adjusted accordingly.
|Failure to offer MEC||$2,080||$2,160|
|Not affordable or MV||$3,120||$3,240|
|Transitional Reinsurance Fee||$44||$27|
|Max OOP (non-grandfathered)
**Must embed self only OOP Limit
4. Updates on Transitional Reinsurance Fee (TRF)
It’s that time again – the 2015 ACA Transitional Reinsurance Program (TRP) annual enrollment and contributions submission form (2015 Form) is online at Pay.Gov/public/form/start/70746962. Forms must be submitted no later than Monday, November 16, 2015.
For help and information on completing this form or creating supporting documentation, use the 2015 Reinsurance Contributions Form Completion and Submission Web-Based Training.
Answers to 3 Common TRP Questions
Section 1341 of the ACA established a TRP to stabilize premiums in the individual market both in and out of marketplaces. The TRP collects from contributing entities to fund reinsurance payments to issuers of non-grandfathered, ACA-compliant, reinsurance-eligible individual market plans; the administrative costs of operating the reinsurance program; and the U.S. Treasury’s General Fund from 2014 through 2016.
Q: Who makes contributions?
A: Pursuant to 45 CFR 153.20, a contributing entity means:
- A health insurance issuer, or
- For the 2014 benefit year: a self-insured group health plan whether or not it uses a third-party administrator, and
A self-insured group health plan includes a group health plan that is partially self-insured and partially insured, where the health insurance coverage does not constitute major medical coverage.
- For 2015 and 2016 benefit years: a self-insured group health plan that uses a third-party administrator in connection with a) claims processing; b) adjudication (including the management of internal appeals); or c) plan enrollment for services other than for pharmacy benefits or excepted benefits within the meaning of section 2791(c) of the PHS Act.
• A self-insured group health plan includes a group health plan that is partially self-insured and partially insured, where the health insurance coverage does not constitute major medical coverage.
- To note: Notwithstanding the information above, a self-insured group health plan that uses an unrelated third party to obtain provider network and related claim re-pricing services, or for up to five percent of claims processing or adjudication or plan enrollment will not be deemed to use a third-party administrator, based on either the number of transactions processed by the third party, or the value of the claims processing and adjudication and plan enrollment services provided by the third party.
Reinsurance contributions are required for major medical coverage that is considered part of a commercial book of business. For the purpose of reinsurance contributions, “major medical coverage” is defined in 45 CFR 153.20 as a catastrophic plan, an individual or a small group market plan subject to the actuarial value requirements under 45 CFR 156.140, or health coverage for a broad range of services and treatments provided in various settings that provides minimum value as defined in 45 CFR 156.145. A contributing entity must make reinsurance contributions on behalf of its enrollees in plans that provide “major medical coverage,” as defined under 45 CFR 153.20, unless one of the exceptions provided under 45 CFR 153.400 applies to such coverage.
Although a contributing entity is responsible for the reinsurance contributions, it may elect to use a third-party administrator or administrative services-only contractor for submission of enrollment data and the transfer of the reinsurance contributions.
Q: How are reinsurance contributions made?
A. HHS implemented a streamlined approach to complete the contributions process through Pay.Gov. To successfully complete the reinsurance contribution process, contributing entities, or third-party administrators, or administrative services-only contractors on their behalf, must register on this site.
If you created a Pay.Gov account for the 2014 benefit year, you can use it for the 2015 benefit year. This is required regardless of if you are in a transitional year or have a non-calendar year plan.
How it works:
- Pay.Gov allows you to access 2014’s ACA Transitional Reinsurance Program Annual Enrollment Contributions Submission Form.
- Enter the annual enrollment count for the 2014 benefit year.
- From there, access the 2015 ACA Transitional Reinsurance Program Annual Enrollment Contributions Submission Form and enter the annual enrollment count for the 2015 benefit year. (Please note that there are specific forms for each benefit year.)
- The form auto-calculates the annual contribution amount owed based on the annual enrollment count.
- From there, schedule a payment for the calculated reinsurance contributions on the payment page.
Q: What are the payment options?
A: For the 2015 benefit year, HHS offers contributing entities two ways to pay:
- the entire 2015 benefit year contribution in one payment no later than January 15, 2016, reflecting $44 per covered life; or
- in two separate payments for the 2015 benefit year:
a. The first due by January 15, 2016, reflecting $33 per covered life
b. The second due by November 15, 2016, reflecting $11 per covered life.
Health e(fx) note: For our customers who are fully implemented, we provide the count methods and contribution amounts:
- Log into Health e(fx).
- Go to Communications/Federal Returns/Transitional Reinsurance fee calculations. Enter your 5500 numbers (if applicable).
- Click “Run Report.”
- You’ll also see a PCORI calculator for your annual PCORI fee calculation for your Form 720 filing.
5. 1095-C: Filing for an Extension
This past July, the IRS indicated that employers could request ACA deadline extensions for filing information returns and furnishing ACA statements to payees.
While these reporting requirements were initially scheduled for 2014, the IRS postponed them until 2015 – and now everyone is moving to meet the deadlines. Here are the dates to be aware of:
- By February 1, 2016: Employers need to furnish Form 1095-B or Form 1095-C to employees,beginning with the 2015 tax year.
- By March 1, 2016: Employers need to furnish Form 1095-B or Form 1095-C to the IRS,beginning with the 2015 tax year. Filing this electronically? You have until March 31, 2016.
How to request an extension for these 2016 deadlines
On a July 2 conference call, an IRS spokesperson stated that deadlines extensions are available for the 1094-C, 1094-B, 1095-C, and 1095-B.
To request an extension, file IRS Form 8809, Application for Extension of Time to File Information Returns, which is already used to request filing extensions deadlines for Forms W-2 and 1099.
IRS regulations allow filers to request an automatic 30-day extension on Form 8809, and an additional 30-day extension if:
- the first automatic 30-day extension was granted by the IRS.
- the additional extension is filed before the expiration of the automatic 30-day extension.
- NOTE: The deadline extension to furnish ACA forms to employees is noted in Publication 1220 Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G. Please click here for more information, page 120.
While employers can also request an extension to furnish Forms 1094-C,1095-B, and 1095-C to recipients, these requests are not automatically approved. And, if approved, extensions allow only a maximum of 30 days from the original due date.
To request this extension, employers must submit a letter to the IRS with the following information: Payer or employer name, TIN, address, type of return, specify that the extension request is to provide statements to recipients, reason for the delay, signature of payer or duly authorized person, file name (for electronic file transmission).
The letter can be sent by mail or fax:
Internal Revenue Service
Attention: Extension of Time Coordinator
240 Murall Drive Mail Stop 4360
Kearneysville, WV 25430
Fax: 877-477-0572 or 304-579-4105
The request must be postmarked no later than the date the statements are due to the recipients. Only the payer or authorized agent may sign the letter requesting the extension for recipient copies; however, if a transmitter has a contractual agreement with a payer to file extension requests on the payer’s behalf, the transmitter should state so in the letter requesting the extension.
- Refer to Form 8809’s instructions for more on Form 5498-QA extension requests. When requesting an extension for recipient copies, be sure to include the reason an extension is needed.
- The paper Form 8809 and the online fill-in Form 8809 cannot be used to request an extension of time to furnish statements to recipients.
6. Health e(fx) Updates
The next Health e(fx) release will be completed on November 24, 2015. This will include the fully operational and functional audit process and submission readiness for print/mail and IRS filing. Training modules and webinars will be available shortly after the release, and release notes will be sent to you in the coming days.