Final 2015 Health Care Reporting Forms Now Available

IRSThe Internal Revenue Service has released the final versions of two key 2015 forms and the related instructions that employers and insurers will send to the IRS and individuals this winter to report health care coverage they offered or provided.  The IRS released draft forms and instructions for 2015 this summer and the final forms and instructions for 2015 are largely unchanged from the previously released drafts.

To help employers in their preparations to meet new information reporting requirements the IRS has launched a new web page for employers.

“The IRS is working to make it as easy as possible for employers to get the information they need about the new reporting requirements. Although the vast majority of employers will not be subject to these rules because they have fewer than 50 employees, we have assembled an array of information on the IRS web site to help all employers,” said IRS Commissioner John Koskinen. “We especially encourage smaller and mid-size business to review the information to help resolve any questions they may have, including whether they are exempt from or subject to the new information reporting requirements.”

The 2015 version of Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, used by employers with 50 or more full-time employees are now available on IRS.gov. Form 1095-B,Health Coverage, primarily used by insurers and health coverage providers, including employers that sponsor self-insured plans, is also available on IRS.gov.

The health care law requires certain employers and providers to submit the 2015 forms to the IRS and individuals in early 2016. Though earlier versions of the forms were available for voluntary use in tax-year 2014, the upcoming tax season will be the first time that reporting is mandatory.

Understanding ACA Reporting Requirements

This article, Understand ACA Reporting Requirements, recently published in BenefitsPro, outlines the basics for ACA reporting. We recommend checking it out as a guideline!

Let’s explore a few of the details:

What are we talking about? The requirement mandates applicable large employers (those with 50 or more full-time equivalent employees) and small employers (under 50 full-time equivalent employees) sponsoring self-funded health plans to report on group health coverage offered to employees or to disclose that health coverage was not offered to employees in 2015.

There are two reports employers must prepare: (1) an annual information return that is filed with the Internal Revenue Service (IRS), and (2) statements to provide to full-time employees about the group health plan coverage offered. As such:

  • Internal Revenue Code § 6056 requires applicable large employers with fully-funded health insurance to provide the annual statement (IRS Form 1095-C) to each full-time employee detailing the employer’s health coverage offer.
  • Internal Revenue Code § 6055 requires employers that provide minimum essential coverage under a self-funded (uninsured) plan to provide the annual statement to covered employees (either IRS Form 1095-B or 1095-C, based on company size

When must these be filed?

  • 2015 Form 1095 (employee statement): Due February 1, 2016.
  • 2015 Form 1094 (transmittal form with copies of Forms 1095-C): Due February 29, 2016 (or March 31, 2016, if filing electronically).

What information should employers be collecting? Employers will need the following information in order to complete the reports:

  • Identifying information for the employer and employee, such as name and address.
  • Names of full-time employees for each month of the year.
  • Information about the health coverage offered by month, if any.
  • The employees’ share of the monthly premium for the lowest-cost self-only minimum value coverage.
  • Months each employee was enrolled in the coverage.
  • Months the employer met an affordability safe harbor with respect to an employee and whether other relief applied for an employee.
    If the employer offers a self-funded plan, information about the covered individuals enrolled in the plan, by month.
  • Information about whether the employer offered coverage to 70 percent of full-time employees and their dependents in 2015 (after 2015, this threshold changes to 95 percent).
  • Total number of Forms 1095-C the employer issued to employees.
  • Information about members of the aggregated applicable large employer group, if any.
  • Full-time employee counts by month.
  • Total employee counts by month.
  • Whether employers are eligible for certain transition relief

To check out the full article by BenefitsPro author, Laura Kerekes, please click here.

Understanding the ACA’s “Pay or Play Provisions”

file15Under the Affordable Care Act’s employer shared responsibility provisions (commonly referred to as the employer mandate) certain employers (called applicable large employers or ALEs) must either offer minimum essential coverage that is “affordable” and that provides “minimum value” to their full-time employees (and their dependents), or potentially make an employer shared responsibility payment to the IRS.

For this reason, the employer shared responsibility provisions are sometimes referred to as “the pay or play provisions.”

Who has to offer coverage?

Applicable large employers.  Employers with 50 or more “full-time equivalent” employees need to offer coverage or may be fined for failing to provide coverage to their full-time employees (and their dependents).   In determining whether you have 50 or more full-time equivalent employees, you must include the hours worked by your part-time employees.

For purposes of the employer shared responsibility provisions:

  • a full-time employee is, for a calendar month, an employee who works on average at least 30 hours of service per week, or 130 hours of service per month.
  • a dependent is an employee’s child (including a child who has been legally adopted or placed for adoption) who has not reached the age of 26.  Spouses are not considered dependents and neither are stepchildren or foster children.

How do you avoid the penalties?

ALEs must offer minimum essential coverage that is “affordable” and provides “minimum value” to their full-time employees. For more information on what coverage counts as minimum essential coverage, please click here.

How is this information reported?

Applicable large employers (ALE) must report to the IRS information about the health care coverage, if any, they offered to full-time employees.  ALEs also must furnish to employees a statement that includes the same information provided to the IRS.

Picture1What are the ALE reporting requirements?

Under IRS Code Section 6056, applicable large employers are required to report to the IRS whether they offer qualifying coverage to their full-time employees and their employees’ dependents. The reporting is needed by the IRS for the administration of the employer mandate requirements and to determine the assessment of penalties under IRS Code Section 4980H.

The reporting is required beginning in early 2016 to report information about 2015. There are multiple components to the reporting requirements. As an applicable large employer you will be required to complete at least two components:

  • Transmittal of Form 1094-C to the IRS
  • Distribution of Form 1095-C to Employees

If your plan design includes offering fully-insured medical plans, your insurance provider will also be completing two components:

  • Transmittal of Form 1094-B to the IRS
  • Distribution of Form 1095-B to your Employees

Note: Employers also face penalties for incorrect filing or untimely filing of these forms.

Will We See You at the Private Exchange FORUM?

ihc-FORUM-2014-logo-no-tagKTP’s very own, Barry Eyre, is moderating a session at the Private Exchange FORUM in Baltimore on September 2nd! His panelists include representatives from the University of Minnesota Physicians; the National Restaurant Association; and EIIA (Educational & Institutional Insurance Administrators).

In his session, “Employer Perspectives on Private Exchange and Defined Contribution,” employers will discuss their perspectives on the private exchange market, whether they performed due diligence with respect to implementing a defined contribution in conjunction with a private exchange and why they made the decision they did.

The topic of private exchanges is a huge one, and if you’re considering the move to a private exchange, this session is for you! For the full agenda, please click here.  We hope to see you there!

Will We See You In Chicago?

Barry EyreKTP’s very own, Barry Eyre, is moderating a session at this week’s Private Healthcare Exchanges Conference in Chicago! His guest panelists include representatives from MetLife, Nationwide, Voya Financial, and ARAG Legal!

His session looks at carriers’ strategies for addressing the rapidly evolving private exchange marketplace.  The strategies these carriers have will directly impact which exchanges offer particular carriers.  Carrier strategies can vary based on size of target client, geography, and competing carriers on a particular exchange.   Exclusivity requirements have the potential to impact the choice availability to plan sponsors as they select a private exchange.  This session will explore the strategic development process of voluntary benefit carriers as they seek to gain market share.

Have a question you would like to have answered by our panelists? E-mail me at jjones@ktpadvisors.com!

Evaluating Private Exchanges: A Two-Step Process

CaptureWe are pleased to share an excerpt from this article featured on the Private Exchange Blog, authored by our Director of Private Exchange Advisory Services, Jennifer Jones. This article appeared as the lead story in June’s Institute of HealthCare Consumerism’s (IHC) HealthCare Exchange Solutions newsletter:

Since the passage of the Affordable Care Act, interest in private health care exchanges has exploded. Private exchanges have been coined a “game changer” in the employee benefits space, and they remain one of the hottest topics when discussing employee benefits. Private exchanges are described as the “optimum or quintessential solution” – sophisticated, turnkey technology, which will help employers save money, ease HR and administrative burdens and create happy employees and retirees!

Each private exchange boasts that they can help employers control costs and promote health care consumerism with a one-stop shopping experience, turning benefits selection into a retail shopping experience. So if private exchanges offer so much value to an employer’s benefit strategy, why aren’t more of them lining up?

The reality is that the private exchange market is still in its infancy, and there are still a lot of unknowns.  Most employers may be very slow to move their benefit strategy to a health care exchange, because they are simply unaware of the variety of solutions available under the “private exchange” label. There are currently over 180 distinct private exchanges (or marketplaces) available in the United States, yet many employers can only name about five – mainly those run by branded consulting firms and insurance carriers.

So, the questions remain: how do employers know if a private exchange is right for their benefit strategy? And if a private exchange is the right solution, how do employers properly vet and evaluate the exponentially expanding private exchange market?

We have found that determining if a private exchange is right for any organization is really a two-step process.

First, an employer needs to decide what they hope to accomplish by moving to an exchange. By reflecting on their own structure and strategy around employee benefits and determining what they want to accomplish by moving to an exchange will streamline the decision-making process. Understanding your needs as an employer is critical to be able to evaluate an exchange offering. Time spent upfront to understand your goals could help to eliminate a lot of mismatched vendors from consideration.

The second step is vetting and evaluating the different exchanges based on the employer’s specific strategy, structure and budget. To properly evaluate all the players in the private health insurance exchange market, it is important to get an independent perspective and know the right questions to ask.

 

To find out more including the essential questions to ask and why their important, read the full article here.

Breaking News: The Supreme Court Ruled 6-3 that Subsidies Were Legal

AAEAAQAAAAAAAAI8AAAAJDljN2E2ZWIzLWU2NWMtNDFjYi1hM2I0LTNhMmQ1N2FjODEwNwThe Affordable Care Act scored a major win today, as the Supreme Court ruled that subsidies used to purchase health insurance on the federally facilitated marketplace are legal. The 6-3 decision in King v. Burwell means that tax credits will continue to be valid in the 34 federally-facilitated marketplace (FFM) states. Millions of consumers will keep their legal HealthCare.Gov subsidies and the IRS will continue to be able to issue subsidies to those who buy plans on the federal website (HealthCare.Gov).

For more information on the ruling, please click here.

CVS to pay $1.9B for Target’s Pharmacy Business

635699795552685572-cvs-target615CVS Health is buying Target’s pharmacy business for $1.9 billion. Under the terms of the deal, Target’s 1,660 pharmacy locations will become CVS branded and will operate under the CVS name in Target stores.

Additionally, CVS said it planned to rebrand about 80 clinic locations previously operated by Target under the MinuteClinic name, adding that they would be part of its plan to operate 1,500 clinics by 2017.

This acquisition of Target’s pharmacy business, simply adds to the already dominant CVS Health. The deal with Target comes just less than a month after CVS agreed to acquire nursing-home pharmacy operator Omicare Inc. in a $12.7 billion transaction. CVS Health is already the nation’s largest dispenser of prescription drugs, the biggest operator of health care clinics, and the second-largest pharmacy-benefits manager.

For more information on this deal, please click here.

Ask Me Anything: Five Questions About Private Health Insurance Exchanges

Concept image of the six most common questions and answers on a signpost.What kind of resources are typically available to employees on private exchanges (i.e. call center, online tools)?
There are a number of resources available to employees including technology-driven decision support during open enrollment, as well as call centers, videos, avatars, and other marketing materials. Additionally, some private exchanges offer a call center with highly trained advisors to help employees learn about their employer’s specific health benefits as well as guide them through the choice of plans and the enrollment process.

In your experience, who typically leads the communication plan with employees and what part would the employer play in this regard?
This varies greatly depending on the exchange. It is important to pick an exchange that truly minimizes the employer involvement without minimizing your access to information. The exchanges and carriers should both be involved in the communication process.

Implementing a new benefits strategy, such as moving onto a private health insurance exchange, requires senior management to communicate clearly the benefits for both the employees and the organization. Employee communications should be designed to educate them about the transition to a private exchange.

What is the typical timeline for choosing a private exchange?
The timeline is generally four to six months, depending on how far along an employer is in developing its specific goals and objectives. Depending on the complexity of the employer’s needs, desire to customize, contract negotiation, and set-up time, a longer timeline may be necessary.  If the employer is conducting its own due diligence of exchanges, the selection process can be much longer than six months.

Can the employer remain self-funded in the private healthcare exchange?
Yes. Some private exchanges allow employers to choose the funding mechanism that best fits their needs and goals. The employer may choose between two different funding methods: fully insured or self-funded. For example, there are private exchange strategies that offer “fully-insured” group health plans. In a fully- insured model, the employer contracts with an insurance company, effectively shifting all of the health risks of its employees to the insurer.  Private exchanges may also be utilized to offer “self-insured” group health plans. This allows the employer to continue to manage the employees’ utilization of benefits. The employer, however, assumes responsibility for paying all medical and drug claims.

What is the effect of wellness & health management programs on a private exchange?
In theory, wellness and health management programs accessed through an exchange will generate similar positive impact as off an exchange. There are a few private exchange solutions that have effectively integrated wellness as part of their offering.

Have a question we didn’t cover in this edition of Ask Me Anything? E-mail your question to Jennifer Jones at JJones@KTPadvisors.com. I’ll answer five more of your questions about private exchanges soon.