On March 23, 2010, President Obama signed the comprehensive health reform bill, the Patient Protection, and the Affordable Care Act, into law.
In February 2015, the IRS provided guidance on the final version of forms employers are subject to in regards to the PPACA mandate. The information will be used by the IRS to administer and individuals to show compliance with the individual shared responsibility provision. The following are important reporting obligations which are key in administering the ACA individual and employer requirement mandates. Statements and employer reporting will be furnished to IRS and individuals in 2016, to report coverage information in calendar year 2015.
6055 Reporting requirements applies to all entities providing minimum essential coverage to its employees. The health plan issuer (insurance company for fully insured plans or the employer for self-insured plans) Entities must report healthcare coverage information to the IRS. The reports identifies which individuals were covered and for how many months within the year.
1094 B – Reporting transmittal form to be filed with the IRS
1095 B – Provided to insured individual and filed with the IRS
6056 Reporting applies to applicable large employers (ALEs), generally 50 or more full-time and full-time equivalent employees and responsible for a shared responsibility payment. Large employers are required to offer a qualified plan or pay a penalty.
1094 C – Transmittal form to IRS
1095 C – Provided to insured individual and filed with the IRS
Requirements for Reporting
On July 7, 2014, Governor Brown signed California Senate Bill 1446 (“SB 1446) allowing certain small businesses to avoid having their current group health insurance policies cancelled because they do not comply with the Affordable Care Act (“ACA”) requirements, the law goes into effect immediately.
Under the ACA, all health plans must comply with a variety of new requirements, such as the obligation to cover the 10 “essential health benefits” and the prohibition on pre-existing conditions limitations. Policies that did not meet these requirements had to be cancelled at the end of 2014. This led to many individuals and businesses receiving cancellation notices and required group to change to ACA compliant plans.
President Obama announced (and the Centers for Medicare & Medicaid Services issued) a “transitional policy” that allows insurers to offer renewals of non-ACA complaint plans that would ordinarily be cancelled, and for affected individuals and small businesses to re-enroll in such coverage.
California lawmakers sought passage of SB 1446, which applies to group health benefit plans of “small employers” A small employer is defined as businesses with 50 or fewer employees on at least 50% of working days during the preceding calendar quarter or preceding calendar year, the majority of whom were employed within California.
Policies are allowed to renew under their current plans until January 1, 2015, and may continue to be in force until December 31, 2015. By January 1, 2016, however, the plans will have to be amended to comply with the ACA requirements.
California small employers have a choice between renewing their existing coverage, or moving to a new plan that complies with all of the ACA’s rules.
FOR IMMEDIATE RELEASE
MARCH 26, 2014
COVERED CALIFORNIA OUTLINES APPLICATION DEADLINES FOR OPEN ENROLLMENT, BRACES FOR INFLUX OF ENROLLEES
Covered California today confirmed its March 31 deadline for open enrollment in an exchange health insurance plan and announced its policies for completing an application for health care coverage.
Covered California, the state run program responsible for overseeing the implementation of the Affordable Care Act, just released the standards for benefit plans that will be made available to Californians. The benefits within these plans will be the same from one carrier to another and consumers cannot be denied coverage due to pre-existing conditions.
There are four plan levels, Bronze, Silver, Gold and Platinum. Tax subsidies and credits will be based on the percentage of federal poverty level for the individual enrolling. The less income earned the greater the financial assistance provided.
Covered California’s website is www.CoveredCA.com. There will be up to date information, resources, tools to help you estimate your cost, and will provide information on insurance carriers that will be allowed to participate in Covered California when the open enrollment begins in late fall of 2013 for effective date January 1, 2014.
Take a moment to familiarize yourself with our links to Health Plans & Rates for 2014 and look over Healthcare Reform Frequently Asked Questions.
Beginning January 1, 2014, employers will be subject to a number of provisions that affect the health benefits they provide to full-time employees. Employers with over 50 employees may pay penalties for employees who receive tax credits for health insurance through The Exchange.
In 2014, small businesses (with less than 100 employees) and individuals will have access to purchase private health insurance coverage through the Exchange.
The Exchange is a marketplace which will provide one stop shopping for health insurance with detailed information about benefit coverage and costs. Each state will create its own Exchange called the Small Business Health Options Program (SHOP). SHOP Exchanges will be administered through a governmental agency.
The act requires employers to issue a notice to employees containing information about SHOP Exchanges, the availability of premium assistance (if the actuarial value of the employer’s plan is below 60 percent), and the availability of free choice vouchers in the upcoming plan year (2014). The Department of Labor expects that the timing for the distribution of notices will be late summer or fall of 2013.
Individuals and Families with income between 133-400% of the federal poverty level can purchase coverage with premium and cost-sharing credits.
The SHOP Exchange Plan coverage designs will be determined by the level of coverage you choose. There will be four levels of coverage: Platinum, Gold, Silver and Bronze. All California carriers must offer all levels of coverage. There are numerous other rules governing exchange plans, such as insurance premium rating rules and the actuarial value of benefits that can be sold in the Exchange.
Private health insurance sold in the exchange must contain “Essential Benefits.”
“Essential Benefits” are defined as coverage for the following:
In addition to the “Essential Benefits” described above, there are other required changes that must be made to the coverage such as:
New employer penalties
Under the act, certain penalties will be imposed on employers with 50 or more full-time employees, if any of the following applies:
Employers with 50 or more employees will be required to calculate how many full-time (or full-time equivalent, working 30+ hours per week) employees they employ in order to determine whether or not it must comply with the act’s 2014 provisions; seasonal employees may be included for this purpose.
New Employer Administrative Reporting
Finally, the act may require employers to annually report to the IRS a number of pieces of data, including
“Free Choice Vouchers Through the Exchange”
If an employee has an income below 400 percent of the federal poverty level, and the contribution to the group health coverage is between 8 percent and 9.8 percent of the employee’s family income, and the employee does not participate in the employer’s health plan, he or she may qualify for a “free choice voucher.” The employer must pay to the exchange the value of what the employer would have paid towards the employee’s cost of health coverage under the plan