Health & Welfare Notes
Vol. 20, Issue 5 September/October 2015
Reminder: Reporting Transitional Reinsurance Fee Enrollment Count is Due By November 16, 2015
The Affordable Care Act created a three-year transitional reinsurance program that reimburses certain health insurers in the individual market for losses they sustain when they enroll individuals who are higher-cost claimants. Health insurers (for insured health plans) and self-insured group health plans must contribute to this program by paying fees over the three-year period, 2014, 2015 and 2016. The submission required for the second year’s fees must be filed by November 16, 2015, using the same online process used for last year’s submissions (i.e., via www.pay.gov).
The fees are assessed on plans that provide major medical coverage. The fees are paid on a per-person basis for each “covered life” under the plan, including dependents. For 2015, the fees are $44 per covered life and for 2016, the fees will be $27 per covered life. The deadline to register the 2015 benefit year’s enrollment count is November 16, 2015. The reinsurance contribution payment(s), however, are not due by that date but must be scheduled for payment by that date; payment options include: (1) the entire fee for 2015 can be made in one payment no later than January 15, 2016 reflecting $44.00 per covered life; or (2) in two separate payments: the first payment due by January 15, 2016 reflecting $33.00 per covered life; and the second payment due by November 15, 2016 reflecting $11.00 per covered life.
Submission Process for 2015. The official online form that needs to be completed is called the 2015 ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form (the 2015 Form). It became available online on October 1, 2015. CMS has posted a web-based training to assist plan sponsors in completing the 2015 Form. Plan sponsors will have to count enrollment in the plan for the first nine months of 2015, using either the same method that was used in 2014 or any of the other permissible methods. There are four different counting methods permitted to determine the average number of covered lives (enrolled employees, dependents, retirees, and COBRA-qualified beneficiaries who are not also covered by Medicare). The counting methods are similar to the PCORI fee methods; however, the reinsurance fee count is based on the calendar year and not the plan year. Retiree major medical coverage is generally subject to the fee, but retiree coverage that pays secondary to Medicare is not subject to the fee. If the plan sponsor is reporting for itself there is no need to upload supporting documentation with the Form as was required last year. However, supporting documentation of the enrollment count and fee payment should be kept for at least 10 years. Plan sponsors that relied upon a third-party administrator (TPA) to do the submission for 2014 and intend to do the same this year should contact their TPA immediately to make sure the TPA is prepared to handle this for 2015.
Major Change for Self-Insured, Self-Administered Plans. Plans that are self-insured and self-administered are not required to pay the fees in 2015 or 2016. To be regarded as self-administered, self-insured plans must retain responsibility for claims processing, claims adjudication (including internal appeals) and enrollment. Additional exceptions permit a self-insured group health plan to use a third-party administrator (TPA) in certain limited circumstances, but still avoid paying the fee if: it uses a TPA only for pharmacy benefits or for certain ancillary benefits (e.g., limited-scope dental/vision); it uses a TPA for a de minimis amount of services (up to 5 percent); or it uses a TPA to obtain or lease a provider network, and obtain provider network development, claims re-pricing, and similar services. Based on information currently available from the Department of Health and Human Services, plan sponsors eligible for the self-administered exemption do not need to take affirmative action to claim it. In other words, no filing or submission is required for 2015 fees. Plan sponsors that may be eligible for this exemption should work with legal counsel to determine if it is applicable. [Excerpts from Segal Consulting, update, 10/7/2015]
Reporting for ACA Mandates: Final Forms and Additional Guidance
On September 17, 2015, the Internal Revenue Service (IRS) issued final 1094-B, 1095-B, 1094-C, 1095-C forms and instructions that employers, plan sponsors and group health insurers will use to report health coverage under the individual and employer mandates as required by the Affordable Care Act (ACA). The IRS has issued additional guidance on these new reporting requirements.
The new forms and instructions closely adhere to drafts published earlier this year with a few clarifications. For example:
If an employer offers a health reimbursement account (HRA) to employees who enroll in its insured health plan, the employer is no longer required to report on coverage under the HRA, as the rules previously suggested. A similar exception applies in certain other situations where the availability of one type of minimum essential coverage is contingent on enrollment in another.
An offer of COBRA coverage on termination of employment is no longer to be reported as an offer of coverage on Form 1095-C, even if the terminated employee actually enrolls under COBRA.
In determining its status as an applicable large employer (subject to the employer mandate), an employer is to disregard employees actually enrolled in TRICARE or Veterans Administration coverage.
When Form 1094-B is provided to individuals (but not to the government), social security numbers may be truncated.
The IRS has published guidance (some still in draft form) relating to the reporting requirements, including:
Notice 2015-68 heralding regulations that are soon to be proposed under Section 6055-B, regarding the reporting of coverage under the individual mandate. The Notice also provides temporary guidance on when a reporting entity may provide a current enrollee’s birthdate in lieu of a Social Security number by making certain solicitations for the Social Security number.
IRS Publications 5164 and 5165, which include information on electronic reporting under the Affordable Care Act Information Return System (the AIR System), including information on registration, application for a Transmitter Control Code, and testing. Registration and the TCC applications are available now. Testing for 2015 is scheduled to become available in early November. These publications, guides and updates can be accessed on the IRS website’s page, Affordable Care Act Information Returns (AIR) Program at https://www.irs.gov/for-Tax-Pros/Software-Developers/Information-Returns/Affordable-Care-Act-Information-Return-AIR-Program .
The IRS has also announced the introduction of a new website, ACA Information Center for Applicable Large Employers, specifically designed to provide guidance for applicable large employers, which are subject to the employer mandate and related reporting requirements under the Internal Revenue Code. https://www.irs.gov/Affordable-Care-Act/Employers/ACA-Information-Center-for-Applicable-Large-Employers-ALEs
[Excerpts from Legal Alert, Ballard Spahr LLP, 9/30/2015]
Disclaimer – This newsletter’s purpose is to inform our clients and colleagues of recent legislative health care-related developments. It is not intended, nor should it be used, as a substitute for specific legal advice.
Health and Welfare Notes is prepared four to six times annually and will accompany Retirement News. If there are questions concerning the information discussed, call richard Gabriel associates and ask for Gabe Zinni, Karen Irwin, Cindy Swartz or Nancy Cunningham.
richard Gabriel associates
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