Affordable Care Act Archives - Page 6 of 22

IRS Implementation of ACA’s Employer Shared Responsibility Provision Falls Short Based on the Results of a Recent Audit

by McDermott Will & Emery | May 3, 2017 | Employee Benefits, Health and Welfare Plans

Based on a recent audit conducted by the Treasury Inspector General for Tax Administration (TIGTA), the IRS’ processes and procedures to ensure compliance with the employer information reporting requirements mandated by the employer shared responsibility provision (the play or pay rules) of the Affordable Care Act (ACA), have fallen short of their intended goals. (see Audit Report No. 2017-43-027). According to TIGTA, due to faulty processes, the IRS did not have “accurate and complete data for use in its compliance strategy to identify noncompliant employers potentially subject to the employer shared responsibility payment.” System errors also resulted in the agency being unable to process paper information returns “timely and accurately,” TIGTA noted. Approximately 16,000 paper Forms 1094-C and 1.4 million paper Forms 1095-C had not been processed as of five months after May 31 (the deadline). The TIGTA offered several recommendations to the IRS to improve management practices. The IRS agreed with all but one of these recommendations and is developing a more accurate system for identifying employers that are not complying with the employer shared responsibility requirements.

DOL Health & Welfare Plan Audit Response and Protection: Reducing Risk Exposure to Avoid Costly Penalties

by McDermott Will & Emery | Apr 11, 2017 | Health and Welfare Plans

In a recent presentation, McDermott attorneys discussed how to prepare responses for a Department of Labor (DOL) investigative audit of a company’s health and welfare plan, including required documentation and procedures, DOL audit triggers, and key legal provisions that employers and employee benefits advisers should monitor regularly and review prior to responding to a DOL audit notification. One DOL survey found that nearly one-third of all health and welfare plan audits resulted in penalties in excess of $10,000 per examination. Employers and employee benefits advisers should evaluate and anticipate DOL audit risks and preemptively remedy potential defects to avoid painful and expensive assessments.

View the presentation slides here.

Structuring Private Equity Deals in 2017: Considerations for Buyers While They Wait for the Sun Capital Appeals to Play Out

by McDermott Will & Emery | Feb 28, 2017 | Employee Benefits, Employment, Labor, Retirement Plans

Sun Capital Partners III, LP v. New England Teamsters and Trucking Industry Pension Fund has been analyzed extensively over the past four years, as it has made its way from the US District Court for the District of Massachusetts to the First Circuit Court of Appeals and back again. With the case once again on appeal, we must wait to see how the latest court decision will further influence the structure of private equity deals. In the meantime, private equity funds should use the most recent District Court and First Circuit Sun Capital decisions as a road map for structuring deals where the target portfolio company has defined benefit pension plan or multiemployer pension plan liabilities.

Read full article.

The Challenges of the Trump Administration’s Vow to “Repeal and Replace” the Affordable Care Act

by McDermott Will & Emery | Feb 15, 2017 | Employee Benefits, Health and Welfare Plans

In the presentation “ACA Repeal/Replace Under the Trump Administration,” Susan Nash discusses the implications of President Trump and the GOP’s immediate vow to “repeal and replace” the Affordable Care Act (ACA), which was enacted in 2010 by the Obama Administration to reform the health care system in the US. A complete repeal is unlikely since many ACA changes will require a filibuster proof majority vote in the Senate. However, some changes can be made unilaterally through Executive action by Republicans through Budget Reconciliation, a special legislative process created by Congress to allow for expedited voting on bills that directly impact reviews and expenditures.

The presentation also highlights several proposals that the GOP has been working on to replace ACA, the non-enforcement of market reform requirements, the possible outcomes for the Trump Executive Order and the immediate ramifications for the insurance markets and millions of Americans.

View the presentation slides here.

IRS Adjusted ACA Fee Amounts for the 2017 Policy or Plan Years

by McDermott Will & Emery | Dec 6, 2016 | Health and Welfare Plans

Patient-Centered Outcomes Research Institute (PCORI) Fee

The Patient-Centered Outcomes Research Institute (PCORI) fee was established under the Affordable Care Act (ACA) to advance comparative clinical effectiveness research. The PCORI fee is assessed on issuers of health insurance policies and sponsors of self-insured health plans. The fees are calculated using the average number of lives covered under the policy or plan, and the applicable dollar amount for that policy or plan year. The past PCORI fees were—

$2 per life, for policy and plan years ending on or after October 1, 2013, and before October 1, 2014
$2.08 per life, for policy and plan years ending on or after October 1, 2014, and before October 1, 2015
$2.17 per life, for policy and plan years ending on or after October 1, 2015, and before October 1, 2016

The new adjusted PCORI fee is –

$2.26 per life, for policy and plan years ending on or after October 1, 2016, and before October 1, 2017

Employers and insurers will need to file Internal Revenue Service (IRS) Form 720 and pay the updated PCORI fee by July 31, 2017.

Transitional Reinsurance Fee

Like the PCORI fee, the transitional reinsurance fee was established under the ACA. It was designed to reinsure the marketplace exchanges. Contributing entities are required to make contributions towards these reinsurance payments. A “contributing entity” is defined as an insurer or third-party administrator on behalf of a self-insured group health plan. The past transitional reinsurance fees were:

$63 per covered life for 2014
$44 per covered life for 2015
$27 per covered life for 2016

The transitional reinsurance fee funds cease after 2016. Although 2016 this is the final year for transitional reinsurance fees, the US Department of Health and Human Services (HHS) requires that entities retain records relating to their contributions for at least 10 years.

HHS recently released a filings manual which identifies key dates for the 2016 fee contributions. Contributing entities must submit the 2016 form and schedule their fee contribution no later than November 15, 2016. As in prior years, entities can elect to pay:

The entire year’s contribution in one payment no later than January 17, 2017, or
Two separate payments for the benefit year, with the first remittance ($21.60 per covered life) due no later than January 17, 2017, and the second payment ($5.40 per covered life) due no later than November 15, 2017.

Payment can be made online.

Trump’s Obamacare: What Employers Can Expect

by McDermott Will & Emery | Nov 21, 2016 | Benefit Controversies, Health and Welfare Plans

In the aftermath of the recent election of Donald Trump as president of the United States and the Republicans’ retention of control over both the House and the Senate, many are beginning to assess the impact of a Republican controlled Congress and presidency on the future of the Affordable Care Act (ACA).

Read the full article.

This article was published on CFO.com, November 16, 2016.

Affordable Care Act Whistleblower Complaint Procedures

by McDermott Will & Emery | Oct 20, 2016 | Health and Welfare Plans

On October 11, 2016, the Occupational Safety and Health Administration published a final rule that establishes procedures and time frames for handling whistleblower complaints under the Affordable Care Act (ACA); for hearings before US Department of Labor (DOL) administrative law judges in ACA retaliation cases; review of those decisions by the DOL Administrative Review Board; and judicial review of final decisions.

Read the full article here.

Wellness Incentive Programs: Navigating Legal Landmines and Designing Effective Employee Communication Strategies

by McDermott Will & Emery | Oct 18, 2016 | Employee Benefits, Employment, Health and Welfare Plans

This year’s Employer Healthcare & Benefits Congress featured a presentation by Susan Nash that addressed the many shapes and sizes of wellness programs today. Programs are typically designed to promote health and to educate employees about prevention, but some are disease management oriented, while others are designed to improve the general overall health of an employee population.

Presentation focal points included:

HIPAA Nondiscrimination Rules
Tri-Agency Guidance under ACA on Wellness Programs
Americans with Disabilities Act and GINA
EEOC Enforcement of ADA and Final Regulations
Internal Revenue Code Limitations

View presentation slides.

Affordable Care Act Compliance: IRS Releases Draft 2016 Employer Reporting Forms and Instructions

by McDermott Will & Emery | Aug 30, 2016 | Health and Welfare Plans

On August 2, the Internal Revenue Service (IRS) released revised draft Forms 1094-C and 1095-C, and draft instructions for completing these forms for the 2016 reporting year (see here). Although these are not final versions, it is important for employers to review the updates and changes from the 2015 forms and instructions as they prepare for the 2016 filings.

The Affordable Care Act (ACA) created new reporting requirements under Sections 6055 and 6056 of the Internal Revenue Code (Code). The new rules require an applicable large employer (ALE) to report, on IRS Forms 1094-C and 1095-C, information about offers of health insurance coverage to full-time employees (FTEs) and the provision of minimum essential coverage (MEC). The Form 1094-C is also referred to as the “authoritative transmittal.” For 2016, an ALE is generally an employer with 50 or more FTE equivalents. Under Code Section 6056, an ALE must annually file with the IRS a report listing the offers of coverage made to its FTEs during the reporting year. In addition, ALEs must furnish a related statement of coverage information to FTEs. Under Code Section 6055, employers (including ALEs) who provide MEC under self-insured plans must also report MEC information for each individual covered under the employer’s self-insured plan. ALE status is determined on a controlled group basis, and each member of the controlled group is an “ALE Member” with an independent responsibility to file a Form 1094-C and Form 1095-Cs. Generally, the reporting is required at the employer identification number (EIN) level.

Under Code Section 6055, employers that are not ALEs must report MEC information on Forms 1094-B and 1095-B. Although these forms were also revised recently, draft instructions for completing these forms have not yet been released.

Read the full article here for the upcoming changes in detail, when to file and next steps to plan for.

Proposed Changes to Form 5500 Would Significantly Increase Reporting Obligations for Health and Welfare Plan Sponsors

by Joseph K. Urwitz and Megan Mardy | Aug 16, 2016 | Health and Welfare Plans

On July 11, 2016, the Department of Labor (DOL) and Internal Revenue Service (IRS) announced a proposal to implement significant changes to the forms and regulations that govern annual employee benefit plan reporting on Form 5500. The proposed changes, which were published in the Federal Register on July 21, 2016, would considerably increase the annual reporting obligations for nearly all health and welfare plans. The changes would also have a considerable impact on annual retirement plan reporting obligations. For more information about the effect of the proposed changes on retirement plan sponsors, see Proposed Changes to Form 5500 Reporting Requirements May Have Significant Impact on Retirement Plan Sponsors.

The DOL is seeking written comments on the proposed changes, which must be provided by October 4, 2016. The revised reporting requirements, if adopted, generally would apply for plan years beginning on and after January 1, 2019.

Read the full article here.

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