Affordable Care Act Update
July 1, 2015
Supreme Court Ruling on Healthcare Subsidies
The Supreme Court of the United States released its opinion in the King v. Burwell case concerning a provision in the Patient Protection and Affordable Care Act (PPACA) and ruled that subsidies will continue to be available in all states, not just those with state-based exchanges. The Court considered two possible scenarios in its decision: adhere to the strict reading of the law that subsidies may only be available in exchanges established by the state, or rule in favor of the intent of the law for universal availability of subsidies in all states and all exchanges. The health insurance agent and broker community stands at the ready to assist both individuals and employers with their health coverage and compliance needs created by the Supreme Court's action. Call us today to learn more about this ruling. 231-995-9000
June 11, 2015
Interesting Times Ahead.........................
Obama Gives “Impassioned Defense” Of ACA Ahead Of Supreme Court Ruling.
Media reporting on President Obama’s speech to the Catholic Health Association puts his remarks on the Affordable Care Act in the context of the uncertainty over the looming Supreme Court decision in King v. Burwell, which could eliminate subsidies for millions of Americans. The coverage, much of which comments on the intensity of President’s tone, tends to reflect positively on both the speech and the ACA itself.
The New York Times [Share to Facebook] [Share to Twitter] (6/10, Shear, Subscription Publication) reports that Obama defended the health law “as a moral and practical victory that was decades in the making,” citing statistics “showing that the law has helped slow the growth of health care costs, and that it has failed to produce the terrible side issues that Republicans had once predicted.” According to the Times, the speech Tuesday at the annual conference of the Catholic Health Association “was part of a broader effort to shape and define the president’s biggest domestic accomplishment in the face of partisan attacks.” Meanwhile, the White House denied that the speech’s timing was related the upcoming King v. Burwell ruling.
The Los Angeles Times [Share to Facebook] [Share to Twitter] (6/10, Levey) says Obama gave an “impassioned defense” of the law, which “is widely credited by independent analyses with driving the largest decline in the nation’s uninsured rate in at least a half-century.” Those coverage gains “are now jeopardized by the legal challenge before the Supreme Court.”
The Washington Post [Share to Facebook] [Share to Twitter] (6/10, Nakamura) reports in its “Post Politics” blog that Obama said the ACA is now “woven into the fabric of America,” adding, “There’s something deeply cynical about the ceaseless partisan attempts to roll back progress.” The President touted the expansion of health coverage under the law, saying, “There’s a reality day-to-day on the ground that people are experiencing — their lives are better.”
USA Today [Share to Facebook] [Share to Twitter] (6/10, Jackson) says Obama “aggressively defended the law,” while the Huffington Post [Share to Facebook] [Share to Twitter] (6/10, Young) reports the President “restated the moral case for his health care reform law” and asserted that healthcare is a right. The Hill [Share to Facebook] [Share to Twitter] (6/10, Ferris) describes the speech as an “emotional plea,” and Politico [Share to Facebook] [Share to Twitter] (6/10, Wheaton) says the address “was part victory lap and part plea: an assertion of the law’s success, even as the courts and the Republican-controlled Congress threaten to dismantle the overhaul.”
According to Bloomberg News [Share to Facebook] [Share to Twitter] (6/10, Olorunnipa), the speech was “the most visible sign of a White House effort to shape the political battleground in the aftermath of the court’s decision – a linchpin moment whether favorable or not, said Ron Pollack, executive director of Families USA.”
The AP [Share to Facebook] [Share to Twitter] (6/10, Kuhnhenn) notes Obama’s “stout defense of a law that remains unpopular with the public,” reporting that he “poked fun at opponents for issuing ‘unending Chicken Little warnings’ about what would go wrong under his health care program.” The AP adds that, “anticipating the president’s speech, Senate Majority Leader Mitch McConnell...said it was Obama who was ‘jousting with reality again.’”
The Hill [Share to Facebook] [Share to Twitter] (6/10, Carney) quotes McConnell (R) as saying on the Senate floor, “Sometimes the divide between the White House and reality can be stark. ... I now imagine the families threatened with double-digit premium increases would beg to differ, as would the millions of families who received cancellation notices for the plans they had and that they wanted to keep.” McConnell went on to say that “the president’s comments ‘may border on the absurd.’” Sen. John Thune (R-SD) also weighed in, arguing that “the truth is...not only is ObamaCare not working, it’s rapidly unraveling.” The Wall Street Journal [Share to Facebook] [Share to Twitter] (6/10, Radnofsky, Subscription Publication) quotes RNC spokesman Michael Short as saying, “The president’s spin doesn’t change the fact Obamacare is a deeply flawed law that no one read before Democrats rammed it through Congress on a highly partisan basis.”
Meanwhile, TIME [Share to Facebook] [Share to Twitter] (6/10, Dias) examines the President’s decision to speak before the Catholic Health Association, noting the group recently filed an amicus brief defending the health law in King v. Burwell. The Washington Times [Share to Facebook] [Share to Twitter] (6/10, Howell) reports that the speech “to a cheering” CHA “audience...avoided a major point of contention between the administration and faith-based nonprofits – notably Catholic universities, hospitals and charities – who object to Obamacare’s birth-control rules on employers.” CBS News [Share to Facebook] [Share to Twitter] (6/10) notes CHA “has consistently supported the law, even as other Catholic groups objected to provisions in the law regarding” contraception coverage.
Also covering the President’s speech are ABC News [Share to Facebook] [Share to Twitter] (6/9), NBC News [Share to Facebook] [Share to Twitter] (6/9), McClatchy [Share to Facebook] [Share to Twitter] (6/10, Clark), Politico [Share to Facebook] [Share to Twitter] (6/10, Wheaton), MSNBC [Share to Facebook] [Share to Twitter] (6/9), CNBC [Share to Facebook] [Share to Twitter] (6/9), CNN [Share to Facebook] [Share to Twitter] (6/9, Bradner, Cnn), the New Orleans Times-Picayune [Share to Facebook] [Share to Twitter] (6/10, Alpert), the New York Daily News [Share to Facebook] [Share to Twitter] (6/10, Joseph), National Journal [Share to Facebook] [Share to Twitter] (6/10, Scott, Subscription Publication), Congressional Quarterly [Share to Facebook] [Share to Twitter] (6/10, Subscription Publication), Kaiser Health News [Share to Facebook] [Share to Twitter] (6/9), Modern Healthcare [Share to Facebook] [Share to Twitter] (6/9, Subscription Publication), Religion News Service [Share to Facebook] [Share to Twitter] (6/10, Cathy Lynn Grossman |, Service), the Allentown (PA) Morning Call [Share to Facebook] [Share to Twitter] (6/9), the Syracuse (NY) Post-Standard [Share to Facebook] [Share to Twitter] (6/10), and the Lehigh Valley (PA) Express Times [Share to Facebook] [Share to Twitter] (6/9).
2015 IRS REPORTING
The Affordable Care Act (ACA) created new reporting requirements under Internal Revenue Code (Code) Sections 6055 and 6056. Under these new reporting rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) to their employees.
On Feb. 8, 2015, the Internal Revenue Service (IRS) released final versions of forms and related instructions that employers may use to report under Sections 6055 and 6056 for 2014. These forms are not required to be filed for 2014, but reporting entities may voluntarily file them in 2015 for 2014 coverage.
Forms and instructions for 2015 reporting have not yet been released and may contain some changes from these 2014 versions.
On Feb. 9, 2015, the IRS also issued Publication 5196, Understanding Employer Reporting Requirements of the Health Care Law, to help employers prepare for reporting in 2016.
Few Changes in Final Forms
The final versions of the forms do not differ significantly from the draft versions. In general, the final instructions were edited to clarify existing requirements. However, the final instructions for Forms 1094-C and 1095-C did include a new option for applicable large employers (ALEs) reporting information for nonemployees (such as nonemployee directors, retired employees or nonemployee COBRA beneficiaries) covered under employer-sponsored self-insured health coverage.
Section 6055 Forms and Instructions
The following forms and instructions are available for use under Section 6055:
Form 1094-B, Transmittal of Health Coverage Information Returns
Form 1095-B, Health Coverage
Instructions for Forms 1094-B and 1095-B
Section 6056 Forms and Instructions
The following forms and instructions are available for use under Section 6056:
Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return
Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
Instructions for Forms 1094-C and 1095-C
Section 6055 Reporting
Under Section 6055, every person that provides minimum essential coverage (MEC) to an individual during a calendar year must file Forms 1094-B (a transmittal) and 1095-B (an information return), including:
Health insurance issuers or carriers;
Self-insured health plan sponsors;
Government agencies that administer government-sponsored health insurance programs; and
Any other entity that provides MEC.
Self-insured plan sponsors that are also ALEs subject to the employer shared responsibility rules will report information about the coverage in Part III of Form 1095-C, instead of on Form 1095-B. In general, an employer with 50 or more full-time employees (including full-time equivalents) during the prior calendar year is considered an ALE.
Section 6056 Reporting
All ALEs (as defined under the employer shared responsibility rules) must file Form 1094-C (a transmittal) and Form 1095-C (an information return) for each full-time employee.
Form 1094-C is used to report summary information for each employer to the IRS and to transmit Forms 1095-C to the IRS.
Form 1095-C is used to report information about each employee.
These forms help the IRS determine whether an ALE owes penalties under the employer shared responsibility rules, as well as whether an employee is eligible for premium tax credits.
Form 1095-C will generally be used by ALEs to satisfy both the Section 6055 and 6056 reporting requirements, as applicable.
An ALE that sponsors a self-insured plan will complete all sections of Form 1095-C to report the information required under both Sections 6055 and 6056. Therefore, these ALEs will be able to use a single form to report information regarding whether an employee was covered.
An ALE that provides insured coverage will also report on Form 1095-C, but will complete only the sections of Form 1095-C related to Section 6056.
ALEs will also be providing only a single employee statement (with the Section 6056 information, and, with respect to employers with a self-insured group health plan, Section 6055 information).
New Option for ALEs Reporting Enrollment Information for Nonemployees
The final instructions for Forms 1094-C and 1095-C include a new option for ALEs reporting information for nonemployees (such as nonemployee directors, retirees or nonemployee COBRA beneficiaries).
This new option allows employers to report employer-sponsored self-insured health coverage for nonemployees (and their family members) using either Forms 1094-B and 1095-B or Form 1095-C, Part III.
This option applies only for ALEs offering self-insured health coverage for any individual who enrolled in the coverage for one or more calendar months of the year, but was not an employee for any calendar month of the year, such as:
A nonemployee director;
A retired employee who retired in a previous year;
A terminated employee receiving COBRA coverage who terminated employment during a previous year; and
A nonemployee COBRA beneficiary.
A nonemployee does not include an individual who obtained coverage through the employee’s enrollment, such as a spouse or dependent obtaining coverage when an employee elects family coverage.
Under this new option, ALEs may report enrollment for these individuals using either:
Forms 1094-B and 1095-B; or
Form 1095-C, Part III.
If the Form 1095-C is used with respect to an individual who was not an employee for any month of the calendar year, Part II must also be completed by using Code 1G on Line 14 in the “All 12 Months” box (or the box for each month of the calendar year).
In the case of a nonemployee who enrolls in the coverage under a self-insured health plan, all family members who are covered individuals due to the individual’s enrollment must be included on the same Form 1095-B or Form 1095-C as the individual who is offered, and enrolls in, the coverage.
Changes to Alternative Methods of Reporting Under Section 6056
The final instructions for Forms 1094-C and 1095-C also made several changes to the alternative methods of reporting under Section 6056. Two alternative methods of reporting are available under Section 6056—the Qualifying Offer Method (and the Qualifying Offer Method Transition Relief for 2015) and the 98 Percent Offer Method.
The Qualifying Offer Method (and the Qualifying Offer Method Transition Relief for 2015) allows eligible ALEs to provide simplified employee statements to certain employees, in lieu of a copy of the Form 1095-C. The final instructions added to the list of information that must be included in these simplified employee statements. A statement is now required that directs the employee to see IRS Publication 974, Premium Tax Credit (PTC), (currently in draft form) for more information on eligibility for the premium tax credit.
Also, the final instructions clarified that ALEs may not use the alternative method of furnishing Form 1095-C to employees under the Qualifying Offer Method (or the Qualifying Offer Method Transition Relief for 2015) for employees who enrolled in self-insured coverage. For these employees, the ALE must furnish the information reporting enrollment in the self-insured coverage on Form 1095-C, Part III. The ALE may provide this information to the employee by furnishing a copy of Form 1095-C as filed with the IRS (with or without the statements regarding any qualifying offer the employee received or the employee’s premium tax credit eligibility).
The 98 Percent Offer Method is generally available to ALEs that offer MEC that is affordable and provides minimum value to at least 98 percent of the employees on whom it reports in its Section 6056 return. The final instructions clarify that ALEs must also offer MEC to those employees’ dependents to be eligible to use the 98 Percent Offer Method. For this purpose, the term “dependent” is defined to include an employee’s child, but does not include a spouse.
Additional Changes in the Final Instructions
The final instructions also made the following changes and clarifications:
The Employer Identification Number (EIN) may be truncated on any statements furnished to employees or individuals, but not on any forms filed with the IRS (previously, truncation of EINs was not allowed on any forms).
When determining the total employee count for the ALE for purposes of Form 1094-C, Part III, Column (c), an ALE may now choose to use either the first or last day of the first payroll period that starts during each month, or the first or last day of each month.
All ALEs, including U.S. ALEs, should include a country code with the employee’s address in Part I of Form 1095-C.
An offer of coverage is treated as having been made to an employee’s dependents only if the offer of coverage is made to an unlimited number of dependents, regardless of the actual number of dependents (if any) an employee has during any particular calendar month.
If spouses (or employee and dependent) are employed by the same ALE, and one employee enrolled in a coverage option that also covered the other employee(s) (for example, family coverage that provided coverage to the other employee spouse and their employee dependent child), the enrollment information should be reflected only on the Form 1095-C for the employee who enrolled in the coverage (but it would report the other employee family members as covered individuals).
An ALE is not required to file a Form 1095-C for an individual who, for all months of a calendar year, is either not an employee of the ALE or is in a limited non-assessment period. However, for the months in which the employee was an employee of the ALE, he or she would be included in the total employee count reported on Form 1094-C, Part III, Column (c). (Also, if the employee enrolled in self-insured employer-sponsored coverage during the limited non-assessment period, the employer must file a Form 1095-C for the employee in order to report coverage information for the year.)
For purposes of reporting, an offer to a spouse includes an offer to a spouse that is subject to a reasonable, objective condition, regardless of whether the spouse meets the condition. For example, an offer to a spouse that is available only if the spouse certifies that he or she does not have access to health coverage from another employer is treated as an offer of coverage to the spouse for reporting purposes. (Note that this treatment is for reporting purposes only, and generally will not affect the spouse’s eligibility for the premium tax credit if the spouse did not meet the condition and therefore did not have an actual offer of coverage.)
Please contact Great Northern Benefits for more information on reporting under Code Sections 6055 and 6056, or see the IRS’ Q&As on Section 6055.
What is an HSA?
Great Northern Benefits wants to be the agency you look to for information and service. We want to work with you to help you manage your healthcare benefit dollars!
Voluntary Benefits (employee-paid) are a great way to offer additional coverage to your employees. Employees can buy dental, vision, life, and disability products directly from vendors through a payroll deduction. The choices are personal and based on individual need. Voluntary Benefits are appealing in that they cost employers next to nothing, are a great way to enhance employee morale, and are great recruitment and retainage tools.
Please contact Great Northern Benefits at email@example.com for additional information. One can also self-quote and enroll by clicking on the "Request for Quote" tab on our website and following the prompts.