HRB 118 - ACA Reporting and Fee Reminders: Section 6055-6056, PCORI Fees and Transitional Reinsurance Fees; 2) Final HHS Rules Address Nondiscrimination in Health Plans; and 3) Update on Women's Preventive Health
Released May 31, 2016 I Download as a PDF
ACA Reporting and Fee Reminders
q Section 6055/6056 Reporting
The due date for electronically submitting the Affordable Care Act’s (ACA) required reports to the IRS is fast approaching. All 2015 Forms 1094-B and 1095-B, and the 2015 Forms 1094-C and 1095-C reports must be submitted electronically by June 30, 2016. The paper versions of these reports must have been filed with the IRS by May 31, 2016. In addition, individuals must have been given the relevant 2015 Form 1095-B and/or 1095-C benefit statements by March 31, 2016.
As background, the ACA imposes two Internal Revenue Code sections. One requires reporting of minimum essential coverage; the other requires employers subject to the employer shared responsibility provisions to report on offers of coverage. The forms for both of these reporting requirements are the Form 1094 transmittal and Form 1095 benefit statement. IRC Section 6055 reporting is accomplished on the B series of the form; the employer shared responsibility reporting is accomplished on the C series. A self-funded employer subject to shared responsibility can satisfy both its IRC Sections 6055 and 6056 reporting obligations by completing all parts of the Form 1095-C.
Any errors to the information contained in the forms that have already been submitted to the IRS must be corrected as soon as possible following discovery of the error. The Form 1094/1095 instructions provide the process for correcting the forms, depending on whether the forms have been submitted to the IRS and/or furnished to individuals.
The IRS’ ACA Information Center for Applicable Large Employers webpage provides information, forms, as well as helpful tools and videos to assist entities in completing their reporting obligations.
q PCORI Annual Fees
July 31st is fast approaching and it’s time to begin planning payment of the ACA’s Patient-Centered Outcomes Research (PCOR) fee. Virtually, all health plans, whether insured or self-funded are subject to these fees. The PCOR fee is assessed on the average number of lives covered under the policy or plan. For policy and plan years ending between October 1, 2015 and October 1, 2016, the fee is $2.17 per covered life.
The fee is to be paid once a year in connection with IRS Form 720, Quarterly Federal Excise Tax Return. For insured plans, the Form 720 is due by July 31st following the close of the policy year. For self-funded plans, the Form 720 is due by July 31st of the calendar year following the plan year end.
For additional information about the PCOR fee, see the IRS’ webpage, questions and answers and chart of plans subject to the fees.
q Transitional Reinsurance Fee
This will be the last year for collection of the transitional reinsurance fee. As background, the ACA imposes the transitional reinsurance fee, the goal of which is to help stabilize premiums in the individual market due to enrollment of higher risk individuals in the marketplace. All insurers and plan sponsors of self-funded plans are required to contribute to this reinsurance fund over a three year period from 2014 through 2016. The contribution rate for the 2016 benefit year is $27 per covered life. The annual enrollment count (based on first 9 months of year) must be submitted to HHS by November 15, 2016 on the “ACA Transitional Reinsurance Program Annual Enrollment Contributions Submission Form” available via www.pay.gov. The reporting form will auto-calculate contribution amounts and allow payments to be made in one or two installments.
Final HHS Rules Address Nondiscrimination in Health Plans
On May 18, 2016, the Department of Health and Human Services (HHS) released final rules relating to nondiscrimination in health plans, programs and activities pursuant to Section 1557 of the Affordable Care Act. In general, these rules mirror the proposed regulations released last fall, with a few clarifications.
As background, Section 1557 of the ACA provides for open access to health coverage, programs and activities by all individuals. In other words, individuals cannot be discriminated against or prohibited from participating in health related programs or denied health coverage on the basis of race, color, national origin, sex, age, or disability. With regard to sex discrimination, the final rules clarify that individuals cannot be denied or provided limited coverage for health services based on transgender matters.
Generally, these rules impact insurers who operate within or outside the federal and state marketplaces, including the Small Business Health Option Program (SHOP), both in the individual and group marketplaces who receive federally funding. The rules also apply to third-party administrators (TPAs) who administer employer group health plans. These rules do not apply directly to most employers. However, an employer subject to Title VI of the Civil Rights Act of 1964 (race, color, national origin), Title IX of the Education Amendments of 1972 (sex), the Age Discrimination Act of 1975 (age), or Section 504 of the Rehabilitation Act of 1973 (disability) must ensure that any act it takes including the design of its employee benefit plan is not discriminatory.
In addition, the final rules formally adopt the principle that affected entities must take steps to provide reasonable access for individuals with limited English proficiency, such offering a qualified interpreter if needed in order to ensure individuals understand their rights. The rules also provide a process for individuals to seek remedies for alleged discriminatory actions. Part of this process entails an initial review of the complaint by HHS to determine whether the alleged discriminatory decision or action rests with the employer or TPA.
The final rules become effective July 18, 2016. However, to allow insurers and group health plans to make the changes required by these rules, such as modify covered benefits, benefits limitations or restrictions, or cost-sharing mechanisms, such as coinsurance, copayments, and deductibles, the final rules become applicable on the first day of the first plan year beginning on or after January 1, 2017.
Additional information about Section 1557, including FAQs can be obtained from the HHS’ Office of Civil Rights website.
Update on Women’s Preventive Health Services
On May 16, 2016, the Supreme Court rendered its opinion in Zubik v Burwell, the combined case challenges to ACA’s contraceptive mandate for entities with religious opposition to providing contraceptive services. The Justices remanded these cases back to relevant courts of appeals that had previously rejected these challenges. These courts must now determine an approach going forward to accommodate the exercise of religious freedom while ensuring that women with access to health coverage receive full and equal health services, including contraceptive coverage.
About the Author: Karen R. McLeese is Vice President of Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law.
Ms. McLeese is based in the CBIZ Kansas City office.
The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could