The IRS has released final 2016 forms and instructions for ACA reporting under Code Sections 6055 and 6056. This Final Forms for ACA Reporting Released ACA Compliance Bulletin provides an overview of the changes that were made.
• Final forms and instructions for reporting under Sections 6055 and 6056 are available.
• Two new “Offer of Coverage” codes are included on Form 1095-C, to indicate conditional offers to spouses.
• Other minor changes were made from the 2015 forms and clarifications have been added to the instructions on certain topics.
At most companies, insurance premiums vary only by the type of plan selected and family size. However, as a result of the Affordable Care Act, some employers are looking to base health insurance premiums off of an employee’s salary instead in an effort to make coverage more affordable for lower-wage earners. This Salary Based Health Insurance Premiums article examines the benefits and disadvantages of starting a salary-based premium program.
Employers that sponsor group health plans have some different options available to them for designing their plans’ enrollment process. When it comes to enrollment, health plan sponsors should have rules in place regarding:
When employees can enroll in the health plan;
When employees’ elections for group health plan coverage take effect; and
What method is used for making elections.
There are some federal laws that impact how employers can design the enrollment process. For example, the Affordable Care Act (ACA) limits waiting periods for initial enrollment and requires applicable large employers (ALEs) to provide an annual opportunity for full-time employees to elect coverage. Also, the rules for Section 125 plans (or cafeteria plans) limit when employees can make changes to their pre-tax elections during a plan year.
On April 12, 2016, the Internal Revenue Service (IRS) issued Revenue Procedure 2016-24 to index the contribution percentages in 2017 for purposes of determining the affordability of an employer’s plan under the Affordable Care Act (ACA).
For plan years beginning in 2017, the ACA’s affordability contribution percentages are adjusted to:
• 9.69 percent under the pay or play rules
• 9.69 percent under the premium tax credit eligibility rules
• 8.16 percent under an exemption from the individual mandate
ACA Changes Overview
The Affordable Care Act (ACA) has brought significant changes to the health care industry. This article (ACA Changes Overview) summarizes some of the main trends that have resulted from the ACA over the past few years.
The Affordable Care Act (ACA) imposes a fee on health insurance issuers and plan sponsors of self-insured health plans to help fund the Patient-Centered Outcomes Research Institute. The fee, called the Patient-Centered Outcomes Research Institute (PCORI) fee, is calculated based on the average number of lives covered under the policy or plan.
The fee applies to policy or plan years ending on or after Oct. 1, 2012, and before Oct. 1, 2019. The PCORI fee is filed using IRS Form 720, Quarterly Federal Excise Tax Return. Although Form 720 is a quarterly return, for PCORI fees, Form 720 must be filed annually only, by July 31 of each year.
This ACA Overview On PCORI Fees includes a chart issued by the Internal Revenue Service (IRS) on the application of the PCORI fee to common types of health coverage or arrangements. Please contact Ardent Solutions for more information on the PCORI fee.
There is no standard procedure or format for a compliance audit, however, every plan sponsor should periodically perform an audit of its employee benefit plans for compliance with ERISA and other legal requirements. Here are some resources to help identify & correct compliance failures before they are discovered by the DOL.
The DOL’s compliance assistance webpage will will assist employers and employee benefit plan officials in understanding and complying with the requirements of ERISA as it applies to the administration of employee retirement, health and other welfare benefit plans. Tools on this website include:
Health Benefits Advisor interactive Website assists employers in understanding and complying with federal group health plan laws
Health and Welfare Plan Compliance Checklist – a high level quick check. By answering 20 questions this checklist will provide you with a base line of what needs to be addressed in greater detail. Any question answered “No” equals an area where additional work is required.
Ardent Solutions Compliance Guide This Guide is designed to provide general information with respect to Health and Welfare Plan compliance. No representation is made that the information provided is comprehensive or anything more than an overview. The information contained in this Guide is not intended, and should not be viewed as, legal advice. Specific questions about the tax or legal implications of your policy or related matters should be referred to a qualified ERISA and employee benefits attorney.
If problems are discovered during a compliance audit, they should be addressed promptly. Knowingly continuing the same practice or not correcting a violation, may be construed as “willful” leading to possible criminal penalties and considered a breach of fiduciary duty if later revealed during a DOL audit.
If you are looking for a partner to provide the advice, tools, and support to proactively keep your benefits plan up to speed with dynamic and fluctuating legislative regulations, and ensuring compliance is seamlessly integrated into your business — contact Ardent Solutions today 1-855-770-4118 or http://ardentsolutionsllc.com/contact/ to learn more.
To help employees understand what IRS Form 1095 means for them, we have prepared some communication pieces that can be shared with employees.
Health care reform requires employees to provide certain health insurance information when filing their 2015 tax return. To avoid paying a tax penalty, employees will need to reference Form 1095 to show whether they had minimum essential coverage, as defined and required by the ACA, during the year.
Today (12/28) the Internal Revenue Service (IRS) sent out a belated Christmas present to employers and other plan sponsors when it announced it was delaying the 2016 Affordable Care Act reporting requirements. In Notice 2016-4 the IRS announced that the deadline for providing to individuals the 2015 Form 1095-B and Form 1095-C is delayed from February 1, 2016 to March 31, 2016. Similarly, the deadline for filing with the IRS Forms 1094-B and 1094-C is delayed from February 29 to May 31, 2016 for non-electric filers and from March 31 to June 30, 2016 for electronic filers.
Because of the delay, some employees will not receive their forms until after the April 15 tax filing deadline. The IRS indicates that these employees do not have to file an amended tax return. They should simply keep their forms in a file should they need them later.
Many employee benefits laws apply to all group health plans, regardless of the size of the sponsoring employer. However, there are a few compliance requirements that only apply to large employers, such as the ACA’s employer shared responsibility rules. This Employee Benefit Compliance Checklist for Large Employers Legislative Brief provides a compliance checklist for large employers.