View From The Rock

Requirements and time deadlines of the Affordable Care Act

• October 29, 2015
• Mark Hughes CPA CFE
• • Personal Finance
  • Tax

Health Care Reform brings uncertainty for businesses of all sizes. The Affordable Care Act (ACA) was signed into law on March 23, 2010. Various provisions of the ACA have been phased in over the years and will continue to be phased in for years to come.

Existing ACA Requirements

• Allow children up to age 26 to remain covered as dependents on health plans
• Insurers and self-insured plan sponsors must adopt an internal claim and appeal process that meets certain standards and provide for an external appeal process
• Group health plan may not impose annual dollar limits on essential health benefits or impose pre-existing condition exclusions for any enrollees
• Provide women’s preventive health services with no cost-sharing requirements
• Provide a Summary of Benefits and Coverage (SBC) to eligible employees for annual enrollments and for other enrollments upon request
• Insurers must meet Medical Loss Ratio thresholds or issue a rebate; Plan sponsors must comply with ERISA plan asset rules when utilizing or distributing certain rebates
• Patient-Centered Outcomes Research Institute (PCORI) fee is paid by the insurer or self-insured employers sponsoring group health plans, and is adjusted annually by the Secretary of Treasury
• Health Flexible Spending Account (FSA) Annual Limits
• Waiting Period must not exceed 90 days
• Medicare Tax Increase for high wage earners
• Value of Health Care Coverage must be reported on Form W-2 for larger employers
• Provide a Notice to Employees of Insurance Marketplace and Subsidies following date of hire
• Health Insurance Marketplaces begin operating for individual coverage and employers in the small group market (SHOP)
• Individual Mandate requires most taxpayers to obtain minimum essential coverage or pay a penalty
• Health Insurer Fee paid by insurers to fund insurance marketplace subsidies
• Reinsurance Fee imposed on insurers and employers sponsoring a self-insured group health plan
• COBRA Notice must include information about coverage through the Marketplaces
• Small Group Insurance Reform limits rating based on age, geography and tobacco use

ACA Implementation Timeline

2015

• Employer Shared Responsibility requires employers with 50 or more full-time employees, including full-time equivalents (FTEs), to provide full-time employees with affordable coverage that meets minimum value standards or potentially pay a penalty. Employers with 50-99 full-time employees and FTEs may qualify for transition relief until 2016.
• Individual Mandate Penalties Increase
• Small Group Transition Relief to “keep your plan” may be permitted (depends on state and carrier)

2016

• Employer Annual Reporting of Employee Coverage to the IRS
• Employer Penalties are assessed for failure to offer affordable, minimum value coverage to one or more full-time employees that receive subsidized coverage through the Marketplace for 2015 reporting year
• Small Group definition expands to include employers with less than 100 employees (states vary on effective date)
• Non-discrimination rules for fully-insured plans expected
• Individual Mandate Penalties Increase

2017

• Access to Insurance Marketplace may be expanded to allow access to Large Group employers (may vary by state)
• New Summary of Benefits and Coverage (SBC) and Uniform Glossary requirements
• All employers participating in the Small Group market must be subject to Adjusted Community Rating

2018 and beyond

• Excise Tax on High-Cost “Cadillac” Plans becomes effective
• PCORI fee expected to be eliminated in 2019