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Upcoming ACA Reporting Deadlines

David Rook

Employers subject to Affordable Care Act (ACA) reporting under Internal Revenue Code Sections 6055 or 6056 should prepare now to comply with reporting deadlines

in early 2023.

For the 2022 calendar year, covered employers must: a) furnish statements to individuals by March 2, 2023; and b) file returns with the IRS by Feb. 28, 2023 (or March 31, 2023, if filing electronically).

Penalties may apply if employers are subject to ACA reporting and fail to file returns and furnish statements by the applicable deadlines.
 
Note that while the annual deadline for furnishing statements to individuals is Jan. 31, the IRS finalized a 30-day automatic extension to the annual furnishing deadline. Thus, the deadline for furnishing statements to individuals for the 2022 calendar year is extended from Jan. 31, 2023, to March 2, 2023.

In addition, the IRS has provided an alternative to automatically furnishing statements to covered individuals in certain situations.

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Topics: Compliance, ACA, PPACA

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IRS Extends ACA Affordability to Other Tiers of Coverage

Cory Jorbin, Esq.

Earlier this year the IRS announced proposed regulations extending ACA affordability to other tiers of employer-sponsored group medical coverage (employee + child/spouse, family, etc.). Today the IRS released final regulations.  

Previously, ACA affordability was based solely on the employee-only tier of coverage. If an employee was offered affordable, minimum-value coverage, the spouse and dependent children would not be eligible to purchase subsidized coverage on the exchange.

Under this new rule, if the family tier of coverage is not affordable, spouses and/or dependent children will now be eligible to purchase subsidized coverage on the exchange, provided they don’t have their own offer of affordable coverage.

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Topics: Compliance, ACA, PPACA

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ACA Affordability to Extend Beyond Employee-only Coverage

Jeff Griffin

Since its inception, the Affordable Care Act (“ACA”) has measured “affordability” based solely on the cost of employee-only coverage.  This so-called “family glitch” has meant that spouses and dependent children of employees who are offered affordable, minimum value coverage have not been eligible for federal tax credits (Premium Tax Credits; “PTCs”) to purchase coverage through the marketplace.  

As a result, even though such family members might not receive a penny of employer-subsidized health coverage, an employer’s satisfying mandate duties to the employee has always been “imputed” to children and spouses, thereby effectively blocking those family members from obtaining any federal money.

Recently the Internal Revenue Service (“IRS”) announced proposed regulations that would change this. This IRS change solely alters family access to federal marketplace coverage subsidy funding but does NOT expand the employer mandate to include family coverage.

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Topics: ACA, PPACA

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Debunking The Myth: The ACA & Increasing Group Health Insurance Rates

David Rook

Author's note: This post is not intended to defend nor criticize the merits of the Affordable Care Act (a political lightening rod if ever there was one). Rather, this post is merely intended to dispel a few myths as it relates to the ACA's spill-over impact on the group insurance market. 

While its effects on the individual insurance market can be debated (though most agree the ACA did very little to contain healthcare costs but did a terrific job of making healthcare more accessible), it’s a common misconception that the Affordable Care Act (also known as the ACA, or Obamacare) is causing group health insurance rates to dramatically increase. This myth, along with others that play into it, have been perpetuated frequently since the law’s passage in 2010 — especially since the individual and small business health insurance marketplaces opened in 2014.

The truth is health insurance rates were increasing long before Barack Obama ever got close to the White House. According to data from the Kaiser Family Foundation, the average cost of premiums for individual coverage increased about 32.5 percent between 2010 and 2017. But compared to the 8-year period prior (when premiums increased about 56 percent) that amount seems low. For family coverage, the numbers are even worse, showing a 36 percent increase since 2010, compared to 67 percent in the 8 years prior. 

In addition, it would appear the ACA is actually helping to slow our national health expenditures (NHE) as a percentage of GDP. The Centers for Medicare and Medicaid Services (CMS) has been tracking this data since 1960. CMS defines NHE as “health care goods and services, public health activities, government administration, the net cost of health insurance, and investment related to health care.” In other words, NHE is what we collectively spend on healthcare each year between health insurance rates, out-of-pocket expenses, and any health programs we take part in.

Between 2010 and 2016 (the latest year for which data is available), NHE increased from 17.4 percent to 17.9 — a mere half a percent (although one could also argue this could be due in part to effects of the recession). By contrast, in the 7-year period beforehand, NHE increased nearly two percent, going from 15.4 percent of GDP to 17.3. 

In order to figure out how we could actually fix this system, we have to understand the differences between what’s really broken about it and the myths out there. Here are three myths we can easily bust.

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Topics: Affordable Care Act, ACA, PPACA

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Practical Issues to Consider in Expanding Benefits Coverage to Transgender Employees

David Rook

Best-in-class employee benefits evolve with the times and our changing values. We saw marriage equality granted to all people in this country after Obergefell v. Hodges, opening employee benefits to many additional spouses and families. Now, we’re seeing more and more employers (including Fortune 100 and 500 companies) embrace transgender-inclusive health insurance plans as gender identity awareness improves. However, medical professionals have been stressing the importance of transgender health for years.

In 2008, the American Medical Association (AMA) first voiced its concerns for the discrimination of transgender individuals when it published a guidance supporting “public and private health insurance coverage for treatment of gender dysphoria as recommended by the patient's physician.” (This policy was updated in 2016).

In order to truly be an equal opportunity employer, you should have at least one transgender-inclusive health insurance plan in your employee benefits package. It’s not as complicated or expensive as it may sound. In fact, right here in our home state of Arizona, there are quite a few employers already offering such benefits.

Here are some practical issues you should consider when expanding your employee benefits to make sure they include transgender employees and how doing so could help you recruit and retain the workforce of the future — namely, millennials and generation Z, who see inclusivity as an important attribute of prospective employers.

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Topics: Employee Benefits, Affordable Care Act, Company Culture, ACA, Recruiting, Retention, Plan Design, employee culture, Arizona, employers, PPACA, Culture, LGBTQ

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Average Employer Contribution to Health Insurance Premiums

Jeff Griffin

One of the most common questions we receive as an employee benefits broker is how much the average employer contributes to their employees’ health insurance premiums. It’s a tough question because there are a lot of different factors involved, but luckily, there are some excellent resources available to help us source reliable answers.

In addition to our own proprietary client roster, one of our favorite resources is the annual Kaiser Family Foundation (KFF) Health Benefits Survey because it succinctly summarizes data from an accurate (and broad) representation of employers across the country and provides charts and graphs to make the information more easily digestible. This allows us to show our clients trends over long periods of time and perhaps help predict what they can expect for the upcoming year.

Here’s what the 2017 KFF Health Benefits Survey reported for employer contributions to health insurance and how the data compares to the previous benefits year.

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Topics: Employee Benefits, Affordable Care Act, ACA, CFO, CHRO, PPACA

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Healthcare vs. Health Insurance: Why the Difference Matters

David Rook

The term “healthcare” gets thrown around quite a bit these days. As HR professionals, you may have seen “healthcare” used interchangeably with “health insurance,” although it’s the layman doing so, rather than industry professionals. Healthcare and health insurance are two completely different things. They have different definitions, even though we, as a country, have largely co-mingled the two.

This co-mingling has led the county to erroneously focus on health insurance as an equal target of wrath for the rising cost of medical care, when in truth, healthcare has been the driving force. This understanding is critical if we’re to wrestle the ever escalating cost of medical care in this country.

Healthcare vs. Health Insurance

Healthcare

Healthcare is defined asthe field concerned with the maintenance or restoration of the health of the body or mind.” This also pertains to any “procedures or methods” related to the care of a person’s physical or mental health.

The industry in which medical professionals work is often referred to as the “healthcare industry.” Healthcare is provided by doctors, nurses, dentists, therapists, hospital systems, and pharmaceutical companies. The price these providers set for their products and services is the primary driver of health insurance costs.

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Topics: Employee Benefits, Affordable Care Act, Cost Containment, Education, PPACA

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Senate's ObamaCare Replacement Bill Would End Employer Mandate

Jeff Griffin

Determined to pass health care legislation before the July 4th break, the Senate on Thursday night released a draft ACA replacement bill called the Better Care Reconciliation Act (BCRA). As of this morning, at least five Republican Senators have said they won’t vote for the bill. GOP Senate leaders can only afford to lose two members of their 52-senator caucus in order for the bill to pass. (The loss of two would require Vice President Pence to cast the tie breaking vote, assuming not a single Democrat supports the bill.)

While passage as the bill stands now seems dubious, Republicans and the White House see this as one of the last chances they have to pass healthcare legislation before they can move on to tax reform, so amendments are likely to win back some of these Senators. That process, however, could push the vote to after the July 4 break. Still, Majority Leader Mitch McConnell is a seasoned politician, and many pundits doubt he’d call for a vote before the recess if he didn’t have a few aces up his sleeve.

Let's look at several elements of the bill which are particularly pertinent to employers:

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Topics: Employee Benefits, Affordable Care Act, ACA, Legislation, PPACA

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