All posts tagged PPACA compliance

On November 18, 2016, the IRS released Notice 2016-70 to extend the due date for employers to furnish Form 1095-C or 1095-B under the Affordable Care Act’s employer reporting requirement. Employers will have an extra 30 days to prepare and distribute the 2016 form to individuals. The due dates for filing forms with the IRS are not extended.

Background

Applicable large employers (ALEs), who generally are entities that employed 50 or more full-time and full-time-equivalent employees in 2015, are required to report information about the health coverage they offered or did not offer to certain employees in 2016. To meet this reporting requirement, the ALE will furnish Form 1095-C to the employee or former employee and file copies, along with transmittal Form 1094-C, with the IRS.

Employers, regardless of size, that sponsored a self-funded (self-insured) health plan providing minimum essential coverage in 2016 are required to report coverage information about enrollees. To meet this reporting requirement, the employer will furnish Form 1095-B to the primary enrollee and file copies, along with transmittal Form 1094-B, with the IRS. Self-funded employers who also are ALEs may use Forms 1095-C and 1094-C in lieu of Forms 1095-B and 1094-B.

Extended Due Dates

Specifically, Notice 2016-70 extends the following due dates:

  • The deadline for furnishing 2016 Form 1095-C, or Form 1095-B, if applicable, to employees and individuals is March 2, 2017 (extended from January 31, 2017).
  • The deadline for filing copies of the 2016 Forms 1095-C, along with transmittal Form 1094-C (or copies of Forms 1095-B with transmittal Form 1094-B), if applicable, with the IRS is:
    • If filing by paper, February 28, 2017.
    • If filing electronically, March 31, 2017.

Prior to the IRS announcement, a process existed for employers to file Form 8809 to request a 30-day extension of the due date to furnish forms to individuals. Notice 2016-70 explains that the new extended due date applies automatically so individual requests are not needed. Employers that had already submitted extension requests will not receive a reply.

More Information

Notice 2016-70 also provides guidance to taxpayers who do not receive a Form 1095-B or 1095-C by the time they file their 2016 individual tax return.

Lastly, the IRS encourages employers, insurers, and other reporting entities to furnish forms to individuals and file reports with the IRS as soon as they are ready.

Originally published by www.thinkhr.com

Following the November 2016 election, Donald Trump (R) will be sworn in as the next President of the United States on January 20, 2017. The Republicans will also have the majority in the Senate (51 Republican, 47 Democrat) and in the House of Representatives (238 Republicans, 191 Democrat). As a result, the political atmosphere is favorable for the Trump Administration to begin implementing its healthcare policy objectives. Representative Paul Ryan (R-Wis.) will likely remain the Speaker of the House. Known as an individual who is experienced in policy, it is expected that the Republican House will work to pass legislation that follows the health care policies in Speaker Ryan’s “A Better Way” proposals. The success of any of these proposals remains to be seen.

Employers should be aware of the main tenets of President-elect Trump’s proposals, as well as the policies outlined in Speaker Ryan’s white paper. These proposals are likely to have an impact on employer sponsored health and welfare benefits. Repeal of the Patient Protection and Affordable Care Act (ACA) and capping the employer-sponsored insurance (ESI) exclusion for individuals would have a significant effect on employer sponsored group health plans.

Trump Policy Proposals

President-elect Trump’s policy initiatives have seven main components:

  • Repeal the ACA. President-elect Trump has vowed to completely repeal the ACA as his first order of Presidential business.
  • Allow health insurance to be purchased across state lines.
  • Allow individuals to fully deduct health insurance premium payments from their tax returns.
  • Allow individuals to use health savings accounts (HSAs) in a more robust way than regulation currently allows. President-elect Trump’s proposal specifically mentions allowing HSAs to be part of an individual’s estate and allowing HSA funds to be spent by any member of the account owner’s family.
  • Require price transparency from all healthcare providers.
  • Block-grant Medicaid to the states. This would remove federal provisions on how Medicaid dollars can and should be spent by the states.
  • Remove barriers to entry into the free market for the pharmaceutical industry. This includes allowing American consumers access to imported drugs.

President-elect Trump’s proposal also notes that his immigration reform proposals would assist in lowering healthcare costs, due to the current amount of spending on healthcare for illegal immigrants. His proposal also states that the mental health programs and institutions in the United States are in need of reform, and that by providing more jobs to Americans we will reduce the reliance of Medicaid and the Children’s Health Insurance Program (CHIP).

Speaker Ryan’s “A Better Way” Proposal

In June 2016, Speaker Ryan released a series of white papers on national issues under the banner “A Better Way.” With Republican control of the House and Senate, it would be plausible that elected officials will begin working to implement some, if not all, of the ideas proposed. The core tenants of Speaker Ryan’s proposal are:

  • Repeal the ACA in full.
  • Expand consumer choice through consumer-directed health care. Speaker Ryan’s proposal includes specific means for this expansion, namely by allowing spouses to make catch-up contributions to HSA accounts, allow qualified medical expenses incurred up to 60 days prior to the HSA-qualified coverage began to be reimbursed, set the maximum contribution of HSA accounts at the maximum combined and allowed annual high deductible health plan (HDHP) deductible and out-of-pocket expenses limits, and expand HSA access for groups such as those with TRICARE coverage. The proposal also recommends allowing individuals to use employer provided health reimbursement account (HRA) funds to purchase individual coverage.
  • Support portable coverage. Speaker Ryan supports access to financial support for an insurance plan chosen by an individual through an advanceable, refundable tax credit for individuals and families, available at the beginning of every month and adjusted for age. The credit would be available to those without job-based coverage, Medicare, or Medicaid. It would be large enough to purchase a pre-ACA insurance policy. If the individual selected a plan that cost less than the financial support, the difference would be deposited into an “HSA-like” account and used toward other health care expenses.
  • Cap the employer-sponsored insurance (ESI) exclusion for individuals. Speaker Ryan’s proposal argues that the ESI exclusion raises premiums for employer-based coverage by 10 to 15 percent and holds down wages as workers substitute tax-free benefits for taxable income. Employee contributions to HSAs would not count toward the cost of coverage on the ESI cap.
  • Allow health insurance to be purchased across state lines.
  • Allow small businesses to band together an offer “association health plans” or AHPs. This would allow alumni organizations, trade associations, and other groups to pool together and improve bargaining power.
  • Preserve employer wellness programs. Speaker Ryan’s proposal would limit the Equal Employment Opportunity Commission (EEOC) oversight over wellness programs by finding that voluntary wellness programs do not violate the Americans with Disabilities Act of 1990 (ADA) and the collection of information would not violate the Genetic Information Nondiscrimination Act of 2008 (GINA).
  • Ensure self-insured employer sponsored group health coverage has robust access to stop-loss coverage by ensuring stop-loss coverage is not classified as group health insurance. This provision would also remove the ACA’s Cadillac tax.
  • Enact medical liability reform by implementing caps on non-economic damages in medical malpractice lawsuits and limiting contingency fees charged by plaintiff’s attorneys.
  • Address competition in insurance markets by charging the Government Accountability Office (GAO) to study the advantages and disadvantages of removing the limited McCarran-Ferguson antitrust exemption for health insurance carriers to increase competition and lower prices. The exemption allows insurers to pool historic loss information so they can project future losses and jointly develop policy.
  • Provide for patient protections by continuing pre-existing condition protections, allow dependents to stay on their parents’ plans until age 26, continue the prohibitions on rescissions of coverage, allow cost limitations on older Americans’ plans to be based on a five to one ratio (currently the ratio is three to one under the ACA), provide for state innovation grants, and dedicate funding to high risk pools.

Speaker Ryan’s white paper also addresses more robust protection of life by enforcing the Hyde Amendment (which prohibits federal taxpayer dollars from being used to pay for abortion or abortion coverage) and improved conscience protections for health care providers by enacting and expanding the Weldon Amendment.

Speaker Ryan also proposes other initiatives including robust Medicaid reforms, strengthening Medicare Advantage, repealing the Independent Payment Advisory Board (IPAB) that was once referred to as “death panels,” combine Medicare Part A and Part B, repealing the ban on physician-owned hospitals, and repealing the “Bay State Boondoggle.”

Process of Repeal

Generally speaking, the process of repealing a law is the same as creating a law. A repeal can be a simple repeal, or legislators can try to pass legislation to repeal and replace. Bills can begin in the House of Representatives, and if passed by the House, they are referred to the Senate. If it passes the Senate, it is sent to the President for signature or veto. Bills that begin in the Senate and pass the Senate are sent to the House of Representatives, which can pass (and if they wish, amend) the bill. If the Senate agrees with the bill as it is received from the House, or after conference with the House regarding amendments, they enroll the bill and it is sent to the White House for signature or veto.

Although Republicans hold the majority in the Senate, they do not have enough party votes to allow them to overcome a potential filibuster. A filibuster is when debate over a proposed piece of legislation is extended, allowing a delay or completely preventing the legislation from coming to a vote. Filibusters can continue until “three-fifths of the Senators duly chosen and sworn” close the debate by invoking cloture, or a parliamentary procedure that brings a debate to an end. Three-fifths of the Senate is 60 votes.

There is potential to dismantle the ACA by using a budget tool known as reconciliation, which cannot be filibustered. If Congress can draft a reconciliation bill that meets the complex requirements of our budget rules, it would only need a simple majority of the Senate (51 votes) to pass.

Neither President-elect Trump nor Speaker Ryan has given any indication as to whether a full repeal, or a repeal and replace, would be their preferred method of action.

The viability of any of these initiatives remains to be seen, but with a Republican President and a Republican-controlled House and Senate, if lawmakers are able to reach agreeable terms across the executive and legislative branches, some level of change is to be expected.

One thing rings true when it comes to the Affordable Care Act (ACA): “expect the unexpected.” I know this sounds cliché, but it was my best attempt to describe the experience HR professionals encounter as they attempt to comply with this somewhat murky piece of legislation. Last year on December 28, we were alerted a month from the approaching deadline that the forms and filing requirements had moved two and three months out to address challenges. This was a fairly drastic move within a month of a significant compliance deadline.

As a leading provider of ACA solutions to hundreds of employers, we are finding this concern about uncertainty spills into the 2016 tax season. To provide some useful guidance, I thought it would be helpful to share with you a roll-up of common questions and key issues we are receiving from our clients over the past several months:

  1. Will the ACA be delayed again in 2016? We do not see the filing requirements delayed again in 2016. The delay for 2015 was a one-time delay, and the IRS has signaled this to be the case on their conference calls.
  2. What changes do we need to be concerned with in the 1094-C and 1095-C forms? Overall, the changes to these forms are minor in 2016. The 2015 Qualifying Offer, a form of transition relief, was eliminated from the 1094 form. The biggest changes are with two contingent offer of coverage codes 1J and 1K. The idea behind these new offer codes is that employer coverage is contingent upon not having coverage available elsewhere. If this better describes how you offer coverage, you may want to consider selecting these codes over the traditional 1A or 1E.
  3. Will it be easier to work with name/TIN mismatches flagged through the corrections process? In the first year it was difficult to work with IRS requested corrections because you often could not identify which covered individual generated the error (we didn’t know if it was the employee, a dependent, or both). Several IRS conference calls have signaled they will be providing more detail on the corrections this year. If your ACA solution communicates with the IRS Affordable Care Act Information Returns (AIR) system, you will likely be able to display the detail of this error message and act on it. A side-note: remaining corrections from 2015 do not have a specific due date, but should be addressed as soon as possible.
  4. Why do we still have transition relief in 2016? The expectations for many is that transition relief was simply a 2015 phenomenon. While non-calendar year and 2015 Qualifying Offer Transition Relief have been eliminated, 4980H Transition Relief has remained into 2016 for “non-calendar” plans that meet certain criteria. This means that employers who might be facing shared responsibility penalties in 2016 can still take advantage of one of the two types of relief: 1) if you average 50 to 99 FTEs you are shielded for the 2015 non-calendar year plan for the months that spill into 2016 (e.g., a July 1 plan will be shielded for the first six months of 2016), or 2) the same applies for 100+ clients in terms of being able to leverage the 70 percent offer requirement.
  5. Will it be easier this year? This is a general question that depends on the solution you use. Overall, we believe the answer is a resounding “YES!” With our solution, a large number of clients are able to take advantage of an automated renewal process that transitions setup from 2015 and trends existing employees from December 31, 2015, into 2016. Vendors have learned how to make this process easier for their customers after all the pain they experienced in 2015. Everything from data collection, filing and corrections process should be more automated this year.

Originally published by www.ubabenefits.com

 

Since the current version of the Form I-9, Employment Eligibility Verification, expired on March 31, 2016, employers have been awaiting a new, updated form. On August 25, 2016, the federal Office of Management and Budget (OMB) approved a revised Form I-9. Consequently, the U.S. Citizenship and Immigration Services (USCIS) has 90 days to update the form and must publish a revised form by November 22, 2016. According to the OMB Notice of Action, this new Form I-9 will expire on August 31, 2019 — a three-year validation period similar to previous validation periods. In the meantime, employers may continue using the current version of Form I-9 (with a revision date of 03/08/2013 N) until January 21, 2017. After January 21, 2017, all previous versions of Form I-9 will be invalid.

Changes to the Form

Many of the Form I-9 changes were designed to help with completing the form and assist in reducing technical errors. For instance, new smart error-checking features have been added when the form is completed using an Adobe PDF viewer or application. Some other new features include:

  • Addition of a supplement where more than one preparer or translator is used to complete Section 1 (translator certification where an employee must check that he or she did or did not use a preparer or translator in completing the form).
  • Controls within the form for users to electronically access the instructions, print the form, and clear the form.
  • Drop-down calendars and lists.
  • Embedded instructions for completing each field.
  • Provision of additional spaces to enter multiple preparers and translators.
  • Quick-response matrix barcode (QR code) that generates once the form is printed and may be used to streamline audit processes.
  • Rather than all other names used, only requiring employees to provide other last names used in Section 1.
  • Removing the requirement that aliens authorized to work provide both foreign passport information and Form I-94 in Section 1 after attestation of such status.
  • Separating instructions from the form.
  • Specific area to enter additional information that employers are currently required to notate in the form’s margins.
  • Validations on certain fields to ensure information is entered correctly.

The new Form I-9 instructions also provide revised abbreviations for use on the form. Employers should use these abbreviations although longer, commonly used abbreviations may still be acceptable. For example, “Permanent Resident Card” is now “Perm. Resident Card (Form I-551).”

Related Rulemaking

Also important, the federal Office of Special Counsel (OSC) has proposed to revise regulations implementing a section of the Immigration and Nationality Act concerning unfair immigration-related employment practices. In these revised regulations, the OSC proposes a new definition of discrimination along with a revision to the language related to unfair documentary practices. The proposed definition clarifies that discrimination is the act of intentionally treating an individual differently, regardless of the explanation for the discrimination, and regardless of whether it is because of animus or hostility, to include the process related to completing the Form I-9.

There is also a proposed unfair documentary practices portion to prohibit unfair immigration-related employment practices. It would replace the current document abuse provision, which prohibits requiring more or different documents than presented if the employee presented documents from the list of acceptable documents. This also goes to an employer’s rejection of employee-completed Section 1 — which may be considered a discriminatory employment practice.

Currently, the USCIS provides this guidance in the prevention of discrimination in the Form I-9 process.

What to Do

As a response to the many pending changes to the Form I-9 and related laws, the next step for employers is to review current policies and procedures. For instance, employers will still be permitted to print and complete the new Form I-9 by hand, but that may not be a permanent option. In fact, employers and employees may elect to fill out any or all sections of the form by computer, by hand (printed), or a combination of both.

ThinkHR will keep you informed as more information is released. The USCIS suggests that employers visit I-9 Central and subscribe to GovDelivery to ensure receipt of the latest news on the revised Form I-9.

Originally published by www.thinkhr.com

On June 8, 2016, Ohio Governor John Kasich signed legislation (H.B. 523) making Ohio the 25th state to adopt a workable medical marijuana law. The legislation will allow seriously ill patients to use and purchase medical cannabis that will be cultivated and processed in-state.

With regards to employment, the bill does not:

  • Require an employer to permit or accommodate an employee’s use, possession, or distribution of medical marijuana.
  • Prohibit an employer from taking any adverse employment action an employer may take under current law because of a person’s use, possession, or distribution of medical marijuana.
  • Permit a person to sue an employer for taking an adverse employment action related to medical marijuana.
  • Prohibit an employer from establishing and enforcing a drug-testing policy, drug-free workplace policy, or zero-tolerance drug policy or interfere with federal restrictions on employment, including U.S. Department of Transportation regulations.

In addition, a person who is discharged from employment because of the person’s medical marijuana use will be found to have been discharged for just cause under the Unemployment Compensation Law if the use violated an employer’s drug-free workplace policy, zero-tolerance policy, or other formal program or policy regulating medical marijuana use and will be thus ineligible for unemployment benefits.

The bill also maintains the rebuttable presumption that an employee is ineligible for workers’ compensation if the employee was under the influence of marijuana and being under the influence of marijuana was the proximate cause of the injury, regardless of whether the marijuana use is recommended by a physician.

The law goes into effect September 8, 2016.

Originally published by www.thinkhr.com

0608blogWith the passage of the Affordable Care Act (ACA), the federal government became much more involved in what had always been a heavily regulated, but predominately private industry. What many people have forgotten is that the ACA was not the first legislation to be passed that involved private and employer-sponsored health and welfare plans.

The Employee Retirement Income Security Act (ERISA) is not just about retirement plans. For example, it requires health and welfare plans to generate and retain certain documents related to the plan, such as the Summary Plan Description (SPD), and requires the plan sponsor to distribute certain notices to plan participants and beneficiaries. (For more in formation about how ERISA may impact you, request UBA’s publication, “Reporting and Plan Documents under ERISA and Cafeteria Plan Rules.”)

The Health Information Technology for Economic and Clinical Health (HITECH) Act has affected the way private health information is handled when it is stored on or transmitted via an electronic device. The Health Insurance Portability and Accountability Act (HIPAA) of 1996 has also had a strong impact on health and welfare plans but, like ERISA, it has not always been heavily regulated.

The passage of the ACA has shined a light on many other prior pieces of legislation. With both the Employee Benefits Security Administration (EBSA) and the IRS having enforcement rights over the ACA, and everyone looking for revenue, the searchlight is starting to shine brighter, and the beam is becoming wider.

What does this mean for sponsors of health and welfare plans? Basically, it means that regulations that were previously considered to be guidelines now need to be taken more seriously, and where there are gaps, plan sponsors need to be sure to take the time to address them before an audit by the EBSA or Office of Civil Rights (OCR) results in fines. While the OCR has always conducted health plan audits for HIPAA compliance, the agency is really going to be stepping up enforcement in 2017, and is compiling a list of potential plans to audit before the end of 2016.

One of the requirements of HIPAA is that the covered entity must safeguard the Protected Health Information (PHI) of plan participants. HIPAA defines a covered entity as a health care provider or health plan, which includes insurance carriers, government programs, and welfare benefit plans. However, many plans require other entities to have access to that same information in order to fulfill the benefit obligations of the plan to the plan participants. For example, the plan has to transmit participant data or enrollment forms to the insurance broker or carrier so the participant can begin receiving benefits of the plan, such as going to see a doctor.

In order for the covered entity to be sure that the PHI of the plan participant is kept safe under the HIPAA requirements, it can enter into a Business Associate Agreement (BAA) with the other party so that they can exchange PHI information for business purposes. A business associate could be an insurance broker, COBRA vendor, HR or benefits database vendor, IT vendors, or offsite shredding vendor. A BAA outlines the responsibilities for each party, helps to protect the other party in case of a security breach, and defines how the PHI that is exchanged can be used.

A covered entity should also outline policies and procedures that identify the employees who need access to PHI and limit access to those employees, in addition to limiting the amount and type of information disclosed.

Originally published by United Benefit Advisors – Read More

DOL Increases Audits to Enforce ACA Compliance

Categories: Compliance News, Team K Blog
Comments Off on DOL Increases Audits to Enforce ACA Compliance
Employers subject to COBRA can also be subject to a DOL audit of the documents, procedures and processes related to those benefits. In March 2012, the IRS provided a plan for COBRA audits and published a guide on audit techniques for examiners to determine an employer’s COBRA compliance. Read more