ACA

• Where it’s been, Where it is today,

Where it might go

The ACA

Saga

Where it’s been,

where it is today,

and

where it might go

Legal Disclaimer

This presentation is designed to provide general information and

guidance related to the Affordable Care Act, but is not all

encompassing and has not been customized for any client's

particular situation. PlanSource does not provide legal or tax

advice. To ensure compliance with the requirements imposed by

the Affordable Care Act, we encourage you to consult your legal

and/or tax counsel for advice specific to your particular situation.

This information is provided on an "as is" basis without any

warranty of any kind. PlanSource disclaims any liability for any

loss or damage from reliance on this document. Further, this

information does not create an attorney-client relationship.

3

Will the webinar be recorded?

Yes!(We will send you a link to the recording

after the webinar).

4

Will the slides be available?

Yes!(We will send you a link to the PDF

after the webinar).

5

How do you ask questions?

Type your question into

the “Questions” panel

Our Awesome Speakers

Jake Dekelver

ACA Consultant

PlanSource

Jeana Parker

VP Strategic Initiatives

PlanSource

ACA: Where it’s been

A look back

History of PPACA

Goal:

Provide more American’s access to affordable, quality health insurance and reduce the growth in U.S. health care spending

How:

“Expand affordability, quality and availability of public health insurance throughconsumer protections, regulations, subsidies, taxes and insurance

exchanges”

Enacted in 2010

Source: https://obamacarefacts.com/obamacare-facts/

Coverage

to age 26Right to

appeal

ins.

company

decisions

Limitations

on Rate

Increases

Acces

s to

CHIP

New Benefits, Rights, and Protections

Source: https://obamacarefacts.com/obamacare-facts/

Insurance

company

limitations and

protections Small

employer

credits

Employer

Mandate

Tax

Break

s

Medicaid

Expansion

Coverage

denials

Life-

time

limits

Annual

Limits

Subsidies

Coverage

for pre-

existing

conditions

Expand

coverage

Individual

mandate

Where the ACA Meets the IRS

10

Section: 6056

Applicable Large Employers

(ALEs) need to file information

returns with the IRS and provide

statements to their measured

FTEs about the health insurance

coverage offered.

Section: 6055

Health Insurance Providers as

well as sponsors of self-insured

health plans must file information

with the Internal Revenue Service

(IRS) about the health plan

coverage they offer.

Insurance ProvidersApplicable Large

Employers

Source: http://www.nisbenefits.com/pdfs-6055-6056/Code%20Section%206055%20-

%20What%20Information%20Must%20be%20Reported.pdf

What Are The Reporting Requirements?

11

Due dates below are for the 2017 reporting year

Due to Employees

January 31, 2018

Electronically due to IRS

April 2, 2018

Self-Insured

ALE Employers

Health Insurance Providers

Non ALE Self-Insured

Employers

Self-Insured and

Fully Insured ALE

Employers

Section

6055

Form 1095-B

Form 1094-B

9.6 M

6.5 M

4.1 M

1.5 M 1.2 M

Employer Plans Medicaid Marketplace Other (i.e. Medicare,military insurance,

etc.)

Non-marketplace(individual plans)

Enrollment Counts by Segments

“Trends in Health Insurance Enrollment, 2013-15”

12

Affordable Care Act’s impact:

22.8 m (newly insured) - 5.9 m (lost coverage) = 16.9 m (net increase)

Rand Study

H.R.1628 – American Health Care Act of 2017

Status:

• Introduced on March 20, 2017

• Sponsored by Rep. Diane Black

• There have been 191 Amendments presented since this bill was introduced

• Passed the House on May 4, 2017

• Senate amendment version known as the Health Care Freedom Act of 2017, failed to pass in the Senate on July 28, 2017

PlanSource ACA Totals

700+

Employers

3786

1094-Cs Transmitted

Over 1.7 Million

Employees Measured922K

1095-Cs Transmitted

<4% IRS

Corrections

Requested

What now?

The employer mandate is the law and we should press forward to ensure

employers are prepared for the 2017 tax year filing

Next Steps

Stay the Course

ACA: Where it is today

In the now

Technology Needs

1

Measure Employees

2 3 4 5 6

Two Measurement Options

18

To determine full-time status

Look-Back Method Monthly Method

Full-time status during stability period

based upon hours worked during

measurement period

130 or more hours in January

Offer coverage by February 1

19

Look-Back Method Determine which EEs qualify as FT in advance of the coverage period

Employee status (full-time or part-

time) is based on the measurement

period and won’t change during the

stability period, regardless of the

actual hours worked during the

stability period.

Three Periods

1. Measurement period

(look-back period)

2. Administrative period

(max of 90 days)

3. Stability period

Two Types of Employees

20

Note: You still must comply with the reporting requirements for both groups of employees.

Two Phases of Measurement

21

Ongoing Measurement

All-Standard Look-Back

Measurement

Determine which employees qualify as full-time

The challenge: Since new hires get their own measurement period and all employees are subject to

measurement each year, you’re in a constant state of measurement.

New Hire Measurement

Expected FT-Measure Monthly

Expected PT-Initial Look-Back Measurement

22

Existing Employees

2014 2016 2017

MEASURE FOR 2017 PLAN YEAR

STABILITY FOR 2017 PLAN

YEAR

New Hire Measurement – Expected Full-Time

23

• Expected Full-Time employees are measured monthly until standard

measurement/stability takes over

• Employees who are not Expected Full-Time upon hire are placed into an

initial measurement upon hire

Employees can be defined as “Expected Full-Time” if they work in a job class where they are

expected to work 30+ hours per week upon hire. This is used to determine how to measure the

employee from the hire date until standard measurement takes over.

24

New Hire Measurement

2016 2017

The new hire requires a separate measurement period

2018

MEASURE FOR 4/1/2016 NEW HIRE (12 Months)

MEASURE FOR 2017 PLAN YEAR

STABILITY FOR 2017 PLAN YEAR

Technology Needs

1

Measure Employees

2

Manage Stability Changes

3 4 5 6

26

Variable Hour Employee

2014

New hire was eligible and enrolled in coverage. . . .

2016 2017 2018

27

2014

…. Then lost eligibility in a subsequent measurement period

2016 2017 2018

Initial Measurement

Standard Measurement

Variable Hour Employee

28

Rehired Employees

2016 2017

Non-Educational Employer

2018

Rule of Parity Logic

<4 weeks Continuing employee

>= 4 & < 13 weeks Compare employment gap

>= 13 weeks Treat as new hire

29

Rule of Parity SummaryEducational vs. non-educational employers

Rule of Parity Logic

Non-Educational Employer Timeframes

<4 weeks Automatically continuing employee

>= 4 & < 13 weeks Compare employment gap

>= 13 weeks Automatically new hire

Educational Employer Timeframes

<4 weeks Automatically continuing employee

>= 4 & < 26 weeks Compare employment gap

>= 26 weeks Automatically new hire

Measurement Best Practice

There are a number of reasons why this is a good practice.

The most obvious is that offers of coverage need to be made in a timely

manner. Not offering coverage timely can put an employer in a penalty

situation. In addition, coverage may not be terminated timely, costing

the employer thousands in premium payments.

Perform measurement consistently throughout the year

Technology Needs

1

Measure Employees

2

Manage Stability Changes

3

Capture Offers

4 5 6

Offers of Coverage

When an employee is offered

coverage under an employer plan, it

must meet the definition of minimum

essential coverage.

• Have an “Actuarial Value” of

60% or more

• Cover the 10 Essential Health

Benefits

Minimum Essential

Coverage (MEC)

Affordability

W2

Box 1

Pay

Rate

Poverty

• Uses the employee’s annual salary from

Box 1 of their W2

• Hourly Rate

• Uses the Federal Poverty Level for a one

person household

*For plan years beginning in 2017, a health plan will be considered

affordable if the cost of employee-only coverage does not exceed 9.69% of

an employees annual household income.

Safe Harbor

Safe Harbor Best Practice

Once the safe harbor is selected for the year it should not be changed.

Therefore it is critical to carefully consider your demographic and make

sure you have done your due diligence to ensure the option being used

doesn’t create a penalty situation for a large number of employees.

Safe Harbor Setup

Safe Harbor Considerations

W2

Box 1

Pay

Rate

Poverty

High

Ability to MonitorAdmin

Complexity Level

Employee

Premium Level

HighNo

MediumYesMedium

LowYesLow

Technology Needs

1

Measure Employees

2

Manage Stability Changes

3

Capture Offers

4

Determine Form

Coding

5 6

1094-C Information

Part I:

Contains Basic

Information, ALE

Name, Address,

Contact, Number of

1095-C forms, etc.

Part II:

Form Counts, Eligibility

Certifications, Authorized

Signature

Part III:

95% of FTEs Offered MEC

Listed Month by Month,

Employee Counts, etc.

https://www.irs.gov/pub/irs-pdf/f1094c.pdf -- https://www.irs.gov/pub/irs-pdf/f1095c.pdf

1095-C Coding

Part I:

Employee and

Employer Information

Part II:

• Line 14: Was Coverage

Offered?

• Line 15: Employee Cost of

Lowest Plan Offered

• Line 16: Reasons for

Coverage

Part III:

Self-Insured Enrollee

Information

https://www.irs.gov/pub/irs-pdf/f1095c.pdf

Technology Needs

1

Measure Employees

2

Manage Stability Changes

3

Capture Offers

4

Determine Form

Coding

5

Print and Mail

Employee Forms

6

Due to Employees

January 31, 2018

Frequently Misunderstood

Assumption: Corrections made after a form is mailed/provided to the employee should always be marked as a corrected form.

Response: Forms should only be marked as “corrected” if they have been transmitted to the IRS prior to the correction.

1095-C

Assumption: We allow PT employees to enroll in coverage. I need to provide a form for them.

Response: Only self-insured groups need to create forms for PT employees who are enrolled in the plan.

Technology Needs

1

Measure Employees

2

Manage Stability Changes

3

Capture Offers

4

Determine Form

Coding

5

Print and Mail

Employee Forms

6

IRS Trans-mission

and Corrections

Initial Transmission

Due on April 2, 2018

Advantages to Using Benefits Administration Technology for ACA

Benefit Plan EnrollmentBenefit Effective DatesPlan EligibilityOffers of CoverageCost of CoverageBenefit Effective DatesSpouse Conditional OfferDependent Demographics*Dependent Enrollment*

Employee DemographicsClassification (FT/PT)

Payroll Hours

Benefits Information HRIS Info Already in Benefits System

Payroll

*Only for self-insured groups

Note: Stand-alone reporting solutions require all of the above information

Data Element Used For HRIS Payroll Ben Admin

Employee Demographics 1095-C and Mailing X X X

Employee Classifications Measurement, Offer Creation, 1095-C

Coding

X X X

Payroll Hours Measurement X

Earnings (W2-Box 1 or Pay Rate) 1095-C Coding, Affordability Calculation X

Benefit Plan Enrollment (incl. effective dates, term

dates)

1095-C Coding X

Benefit Plan Details (MV, etc.) 1095-C Coding X

Plan Eligibility Offer Creation X

Offers of Coverage 1095-C Coding X

Lowest Cost of Coverage 1095-C Coding, Affordability Calculation X

Conditional Spouse Coverage 1095-C Coding X

Dependent Demographics and Enrollment* 1095-C Self-Insured Enrollees X

ACA: Where it might go

43

A Look Into the Future

This Week’s Activities

44https://www.whitehouse.gov/the-press-office/2017/10/12/presidential-executive-order-promoting-healthcare-choice-and-competition

Executive Order/Subsidy Payments

Oct. 12th

President Trump

subsidy payments

President Trump signs

executive order

Applies pressure to

congress to take quick

action

This executive order is

intended to promote

healthcare choice and

competition

Oct. 17th

Senators strike a deal to

reinstate subsidy payments

Bipartisan deal to fund

critical subsidies

Future of ACA

Need of reporting even after….

Health Care Freedom Act (Senate version) effectively

maintained the employer mandate until 2025

Other proposals have maintained the IRS reporting

obligations under IRS Code 6055 and 6056

ACA alternatives are likely to still require some sort of reporting

46

Q&A