Fees Apply to Employers Sponsoring Certain Self-Insured Plans
Effective for plan years ending on or after October 1, 2012, and before October 1, 2019, employers that sponsorcertain self-insured plans are responsible for new fees to fund the Patient-Centered Outcomes Research Institute (also known as PCORI). HRAs and health FSAs that are not treated as excepted benefits are generally subject to the fees. Fees are due no later than July 31st of the year following the last day of the plan year. The IRS has revised Form 720for affected employers to report and pay the required fees. Review our Health Care Reform Checklist for information on other requirements impacting employers and group health plans this year.
[/tab_item] [tab_item title=”Affordable Care Act Weekly Webinar Series”]
Posted on July 23 2013
Free Series for Small Business Owners to Help Understand the Law
The U.S. Small Business Administration (SBA), together with the Small Business Majority (a national nonprofit advocacy organization), has launched the Affordable Care Act 101 Weekly Webinar Series. The webinars feature guidance on key pieces of the law for small business owners provided by SBA representatives, followed by a question and answer period.
Topics being discussed in the webinars include:
- Small business tax credits—who is eligible and how to claim the credit;
- Shared responsibility (also known as “pay or play”);
- Cost containment; and
- Tools and resources available for small businesses to learn more about the law.
The free series will take place every Thursday from now through the opening of the Health Insurance Exchanges (Marketplaces) in October. The first series of webinars will cover the same content; a second round of webinars featuring new content will be held later this fall.
The registration links for the first series of webinars can be found by clicking here. After registering, you will receive a confirmation email with all of the information needed to access the webinar either by telephone or online.
Visit our Health Care Reform Blog section to stay on top of the latest Affordable Care Act updates.
[/tab_item] [tab_item title=”4 Things Employers Should Know About Providing the Health Insurance Exchange Notice”]
Notice Must Be Distributed to Current Employees No Later Than October 1, 2013
Following a delay in the original effective date, employers will need to comply with the new requirement to provide each employee a written notice with information about a Health Insurance Exchange (also known as a Marketplace) beginning this fall. Below are four important reminders about the notice.
- The notice requirement applies to employers covered by the federal Fair Labor Standards Act (FLSA). In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA also specifically covers certain entities such as hospitals, educational institutions, and government agencies.
- Employers must provide the notice to each employee, regardless of plan enrollment status (if applicable) or of part-time or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.
- The U.S. Department of Labor has provided two sample notices employers may use to comply with this requirement. The law requires that specific information be included in each notice. One model notice is available for employers that offer a health plan to some or all employees, and another model notice may be used by employers that do not offer a health plan.
- Notices must be provided to each current employee no later than October 1, 2013, and to each new employee at the time of hiring beginning October 1, 2013. In general, a notice will be considered provided at the time of hiring if it is provided within 14 days of an employee’s start date. The notice is required to be provided automatically and free of charge. Employers may distribute the notice by first-class mail, or electronically if certain requirements are met.
Technical Release 2013-02 includes additional details regarding this notice requirement.
Visit our section on Health Reform Resource for information on other notices required to be provided and to download additional model notices available for employers and group health plans.
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Posted on July 12 2013
Employer-Sponsored Coverage Considered “Minimum Essential Coverage”
The individual shared responsibility provision, which goes into effect on January 1, 2014, requires individuals of all ages (including children) to have minimum essential health coverage for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return. Below are five questions and answers related to the mandate that may be of interest to employers and employees.
1. What counts as minimum essential coverage? Minimum essential coverage includes employer-sponsored coverage (including COBRA coverage and retiree coverage), coverage purchased in the individual market, Medicare Part A coverage and Medicare Advantage, Children’s Health Insurance Program (CHIP) coverage, and certain other types of coverage.
Minimum essential coverage does not include coverage providing only limited benefits, such as coverage only for vision care or dental care, workers’ compensation, or disability policies.
2. If an employee receives coverage from a spouse’s employer, will that employee have minimum essential coverage? Yes. Employer-sponsored coverage is generally minimum essential coverage. If an employee enrolls in employer-sponsored coverage for himself and his family, the employee and all of the covered family members have minimum essential coverage.
3. Does an employee’s spouse and dependent children have to be covered under the same policy or plan that covers the employee? No. An employee, his or her spouse, and dependent children do not have to be covered under the same policy or plan. However, the employee, spouse, and each dependent child for whom the employee may claim a personal exemption on his or her federal income tax return must have minimum essential coverage or qualify for an exemption, or a payment will be owed.
4. A company’s health plan is “grandfathered.” Does the employer’s plan provide minimum essential coverage? Yes. Grandfathered group health plans provide minimum essential coverage.
5. Is transition relief available in certain circumstances? Yes. Notice 2013-42 provides transition relief from the shared responsibility payment for individuals who are eligible to enroll in employer-sponsored health plans with a plan year other than a calendar year (non-calendar year plans) if the plan year begins in 2013 and ends in 2014. The transition relief applies to an employee, or an individual having a relationship to the employee, who is eligible to enroll in a non-calendar year eligible employer-sponsored plan with a 2013-2014 plan year. The transition relief begins in January 2014 and continues through the month in which the 2013-2014 plan year ends.
For More Information You may review additional questions and answers in their entirety on the IRS website.
[/tab_item][tab_item title=”IRS Guidance on Delay of Pay or Play Requirements”]
No Penalties Will Be Assessed for 2014
Formal guidance released by the IRS provides additional details regarding the delay of the Health Care Reform “pay or play” requirements. Under those provisions, certain large employers (generally those with at least 50 full-time employees) who do not offer full-time employees affordable health insurance that provides a minimum level of coverage may be subject to a penalty tax.
According to the guidance, no penalties (also known as employer shared responsibility payments) will be assessed for 2014. The “pay or play” requirements will be fully effective for 2015 and employers are encouraged to maintain or expand health coverage in 2014 in preparation for compliance.
The delay is a result of transition relief being provided for 2014 with respect to certain employer and insurer reporting requirements. Such reporting will be necessary for the IRS to determine whether a penalty may be due, and, consequently, the transition relief makes it impractical to determine which employers owe shared responsibility payments for 2014. Once the information reporting rules are issued, employers are encouraged to voluntarily comply with the reporting requirements in 2014.
The delay does not affect the application or effective dates of other Health Care Reform provisions, including the individual shared responsibility requirements and employees’ access to premium tax credits for enrolling in qualified health plans through the Health Insurance Exchanges.
Be sure to visit our Health Care Reform Blog section to stay on top of the latest changes.