As we head into August with the 4th quarter rapidly approaching, the deadlines for the IRS required ACA form filings have passed. Unfortunately, a lot of employers still have questions or haven’t even filed yet.
Well back in July, the IRS held an Affordable Care Act Information Returns Program (AIR) webinar where they shared their publication, 1586. They covered a lot of information and clarified a lot of questions employers have been asking.
Just in case you aren’t sure what the AIR policies include;
Under the Affordable Care Act (ACA), insurance companies, self-insured companies, large businesses and businesses that provide health insurance to their employees must submit information returns to the IRS reporting on individual’s health insurance coverage.
ACA information returns include:
- Form 1094-B, Transmittal of Health Coverage Information Returns
- Form 1095-B, Health Coverage
- Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns
- Form 1095-C, Employer-Provided Health Insurance Offer and Coverage
The 1596 publication made it clear that the penalties for incorrect forms or forms that haven’t been filed could devastate an employer’s bottom line.
With this type of reporting, it’s more than just proofing your documents and filing. Employers need to consult professionals who can help them ensure their compliance. I have some good news though, some of these penalties are still preventable.
According to the IRS, corrections or late forms need to be filed as soon as possible. It’s better to file late then to not file at all. Don’t let these fines hit your business or your clients.
Use our years of experience and expertise and contact FreedomCare today to protect yourself and your clients.
In our continuously changing market, it can be difficult to guide your clients in what direction to go in when selecting benefits. With so many options available, it can get overwhelming very quickly. What if you offered them a solution that satisfies the laws, saves them money and allows for more control?
You’ve probably heard about the advantages of when a company chooses to self-insure their health benefits through a captive insurance company. They can save money on their premium contributions and more. But, what most people don’t know is that not only does a captive insurance company provide significant financial advantages, it also allows for control over a company’s benefits offering and the claims that come in.
The volume of claims data that can be accessed through a captive, in the right hands, can help employers target and improve their benefits offering for their employees and their families. Armed with the data of what their employees need, employers can develop wellness programs and incentives to keep their employees healthy and drive down the costs associated with their health plan. Traditionally captive insurance and self-insured plans were only available to larger employers and businesses. But through FreedomCare’s unique approach, we make them available to businesses of all sizes.
Our experienced self-insured team has developed seamless processes that allow our clients to manage their costs, plan for higher dollar claims and see great success with their plans.
Choosing FreedomCare allows you to have one place for everything you need to self-insure and form your captive solution. If you’re not offering this to your clients, you’re missing a huge potential opportunity.
You are probably getting used to the impact that health care reform (the ACA) has had on the insurance market and the laws. But have you taken the time to think strategically about your clients and their futures? Undoubtedly, your time is consumed with all the day-to-day activities required to manage your business and the relationships with your clients.
With different updates happening constantly, it can be difficult to keep up, here are 3 tips you can use to help keep the trust of your clients when dealing with the ACA.
Stay up to date on the laws and communicate updates asap.
- Research and educate yourself on the ever changing laws and regulations by following reputable news sites and our blog. Forward articles to your clients, share the information you’ve learned. This will allow your clients to rely on and trust you, in turn they will be more likely to come to you when issues arise.
Use the ACA as an opportunity.
- Try not to think of the ACA as a bad thing or a burden, use the ACA as an opportunity to help your clients help their employees. Sponsoring a benefits program not only satisfies the ACA employer mandate but can greatly improve employee retention among other things.
Present alternative options to traditional plans.
- Expand your options to include things like self-insurance, ACA tracking, voluntary benefits, telehealth and other offerings your clients might not even know about. If you can devise a complete coverage package for your clients saving them time and money, you have the best chance of keeping their trust and their business.
Let’s face it, your role as a broker is changing. As healthcare reform keeps presenting more pressing dilemmas for small-business owners, employers are looking towards you and other agents not just as salespeople but expert consultants. Your clients need your expertise, advice and counsel. In these constantly changing times there isn’t a client organization out there that’s not willing to talk to an adviser who seems to have some information or a seamless process for coping with all of the change. This includes every one of your clients as well, even the ones that haven’t been interested in the past.
Look through our previous articles on the sidebar and share with your clients, remember FreedomCare is here for whatever you need.
While you should enjoy time with your family, the end of the year will be here before you realize and unfortunately we can’t afford to take the summer off from the Affordable Care Act (ACA).
Here are 4 reasons why.
1. IRS penalties are accruing monthly.
We commonly refer to the IRS penalty amounts as an annual amount but the penalties are actually calculated on a monthly basis. Acting sooner rather than later and getting a compliant plan in place can save employers valuable dollars on penalties that won’t have the opportunity to accrue.
2. Exchange notices are arriving.
For every employee that logs onto the Insurance Exchange and receives a health care subsidy, a complex trail of communication and paperwork begins that requires employers to prove the status of their health care offering. If an employer has chosen to offer coverage that isn’t compliant or no coverage at all, they will have no choice but to pay the penalties.
3. Employee eligibility is constantly changing.
Employee status can change on a daily basis, so employers can’t afford to take a break from data collection and management. Employers have to be ready for whatever comes their way – even an IRS audit. ACA requirements have become tougher in 2016, employers must now offer affordable coverage to at least 95% of their full-time employees – up from 70% in 2015. As these and other changes take place, employers have to continue to calculate benefits eligibility and affordability for required employees.
4. Annual reporting is just around the corner.
Reporting is an annual event. But employers can’t take a break for the rest of the year, the ACA record keeping they do all year is essential for the next reporting season. This includes the information employers must provide to the IRS and their employees that demonstrates the health care coverage offered to employees meets minimum essential and affordability requirements of the ACA.
Bottom line? The ACA is complex and this year the rules are firmer than ever. Most organizations don’t have the expertise and processes to stay on top of these changes and take accurate action.
The good news is, we can help with all of these issues and more. But employers need to take the first step and not delay. Choose to benefit from our comprehensive expertise so you can look forward to smooth ACA compliance and a great rest of the year.
The ACA includes a number of fees that employers are required to pay in order to help support various aspects of healthcare reform. One of those fees, PCORI was just updated by the IRS for 2016. The deadline for these fees to be paid is July 31st, 2016.
What is PCORI and why does it matter to employers?
According to their website, “The Patient-Centered Outcomes Research Institute (PCORI) helps people make informed healthcare decisions, and improves healthcare delivery and outcomes, by producing and promoting high-integrity, evidence-based information that comes from research guided by patients, caregivers, and the broader healthcare community.” Under the ACA, all employer sponsored health plans are subject to PCORI fees.
Why was the PCORI fee created?
The PCORI fees were established under the Affordable Care Act (ACA) to advance comparative clinical effectiveness research. PCORI fees are 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.
How much is the 2016 PCORI fee?
When are the 2016 PCORI fees due and how do you pay?
For policy and plan years ending on or after October 1, 2015, and before October 1, 2016
Employers and insurers will need to file Internal Revenue Service (IRS) Form 720 and pay the updated PCORI fee by July 31, 2016.
Employers have one month to calculate and send payment to the IRS. This form is relatively simple, but is structured in a way as to cause some confusion about who it applies to.
Give FreedomCare a call to discuss how to calculate and what to do if your clients aren’t compliant.
As healthcare reform presents more pressing dilemmas for business owners, employers are looking towards insurance brokers to be their expert consultants. Brokers and agents who can devise a complete coverage package for their clients stands the best chance of keeping the decision-makers trust and the company’s business. Unfortunately, some brokers are forgetting about the little details of the ACA that can cost the most money. As a broker, it’s your responsibility to keep your clients informed.
Here are 7 details you or your clients may have missed.
Update employee handbooks
If an employee handbook doesn’t reflect a company’s current benefits offering or is not properly updated, efforts may be in vein. Especially once an audit rolls around, as both the IRS and the Department of Labor may request copies for examination.
Be explicit with the health care coverage offered to employee.
The ACA makes it mandatory for all large employers (those with 50 or more full-time employees/equivalents) to offer health care coverage to their 30+ hours a week employees. Failure to communicate with employees raises the risk of employees applying for subsidies on the exchange resulting in per-employee penalties that will add up quickly. Within the handbook, employers need to make sure the criteria for eligibility for health care coverage complies with the ACA.
Document employees who WAIVE coverage
Should employees waive their coverage, employer’s need to protect themselves with documentation. Healthcare.gov supplied the employer appeal request form earlier this year, which requires employers to provide a reason an employee wasn’t eligible for a subsidy and requests documents to support their case.
Don’t discount your full-time equivalent employees
Under the ACA, anyone employed by your company for 30 or more hours per week is eligible for an offer of health care coverage. That may include, “interns,” “temps,” and “part-timers.” The ACA defines who is eligible based on the hours of service and not the titles the company gives such workers. These workers may be eligible for health care and the employer will want to ensure that they are offered coverage if they fall within the eligibility definition.
Include legal waiting period for health care in employee handbook
90 days is the maximum acceptable waiting period for health care under the ACA. Not three months (as some months have 31 days), and not the day after the 90th day (as that exceeds 90 days). The language used must be firm, 90 means 90, an overage of days will come back to haunt employers.
Provide Summary of Benefits Coverage (SBC)
Just as important as offering coverage is educating your employees on what their coverage includes. An SBC breaks down the coverage for employees in an easy to understand format and must be provided beginning on the first day of the first open enrollment period under the ACA.
Calculate eligible employees correctly (or hire someone that can)
Calculating full-time employees is a no brainer for most employers but calculating seasonal or full-time equivalent employees is an area with huge error for most. It’s important to stay educated with the current changes to the law or contract a company to handle it, like FreedomCare.
Share this valuable information with your clients. With renewals coming up for next year, make their compliance a top priority and call FreedomCare. Quotes are generated in less than 2 business days.
- When a person files their taxes they must indicate if they have maintained minimum essential coverage all year. According to healthcare.gov, “If you can afford health insurance but choose not to buy it, you must pay a fee called the individual shared responsibility payment.” The IRS then verifies their answer with the data they receive from insurance carriers and employers to determine if their answer was true. If not, they will be issued a penalty letter due for payment.
Form distribution to employees
- By the end of January every year, employers must provide their employees with form 1095-B or 1095-C as applicable. Employees will need them while validating to the IRS and health exchanges of the type and cost of coverage they were offered and maintained. If employers miss the deadline by less than 30 days late on their delivery, the penalty is $50 per form. After the 30 days, employers will be penalized $250 per form that was not distributed to the employees.
Form filing to the IRS
- If the employer fails to offer compliant coverage they must indicate so on the 1094-C forms. The IRS will automatically calculate ‘A’ penalties due by the employer of $2,160 per employee per year (adjusts annually for inflation). The IRS will make their calculations from the information submitted in Section III of form and issue penalty letters to employers due for immediate payment.
- Employers will be receiving letters from the federal and state health insurance exchanges in regards to employees of theirs who went to these various exchanges, purchased coverage and received a premium subsidy. The combination of an employee purchasing coverage from an exchange and receiving a subsidy is the necessary element to trigger a ‘B’ penalty of $3,240 (adjusts annually for inflation).
Although non-compliant employers may have not yet paid these penalties, I can assure you they are coming and are very real.
FreedomCare offers employers across the country affordable options and services including Affordable Care Act compliance that eliminate all 5 of these penalties. Employers can sponsor benefits for their employees for less than paying the penalties. It is never too late for employers to become compliant.
2016 brought enforcement of required reporting for the Affordable Care Act (ACA) and thousands of US employers are not in compliance with the laws. This is going to translate into billions of dollars in tax penalties. Some employers chose to do nothing when it came to the law; others may think they are compliant. The opportunity for error was extensive. Brokers and employers trusted insurance companies to help them navigate the laws and choose a plan that met the requirements of the ACA.
The annual baseline budget projections by the Congressional Budget Office and Joint Committee on Taxation (CBO), is projecting employer responsibility penalties to total $228 billion over a 10-year period from 2017 to 2026. The individual mandate penalty will yield a projected $28 billion, along with high-premium employer plans (aka the Cadillac Tax) is expected to yield $18 billion.
You may have clients who have done nothing to avoid these penalties or even clients who think they’ve done all they need to do. We have tools and resources available to help you determine whether or not your clients are protected.
Congress has a 10-year projection of collecting these penalties from employers, the only solution is guaranteed compliance with a plan from FreedomCare.
According to a report done by PwC, medical inflation still outpaces general economic inflation by a 4.5% growth rate. It can be a difficult juggling act for employers to keep health insurance premiums from financially squeezing their business, while also providing a robust benefits package for employees.
There is no single reason healthcare costs keep rising but there are many drivers contributing to the increases. Soaring prices for medical services, unhealthy lifestyles and a lack of transparency concerning prices and quality are all factors that contribute to the spike in premiums.
Employers may have more options for controlling their company’s healthcare costs than they realize, here are 3 strategies your clients can implement to minimize costs without cutting benefits:
- Self-fund healthcare costs
- According to data from the U.S. Department of Health and Human Services, nearly 30% of employers with 100 to 499 employees, self-insure their benefits, and over 80% of employers with 500 or more employees choose to self-insure. FreedomCare’s self-funded plans allow for greater financial security and planning as the employer is billed each month a fixed and unchanging amount per employee per month. After a designated period, the employer may even qualify for a partial return of claims funding if claims were lower than expected. Since these plans are filed as self-funded, they are exempt from most state taxes and many of the federal healthcare law’s health insurance taxes which can also keep costs low.
- Implement a telehealth program
- According to PwC, 48% of U.S. employers made telehealth services available to employees in 2015 and close to a million people now receive care through remote monitoring. This is projected to save billions of dollars across the healthcare system. Unlimited 24/7 access to a leading telehealth provider is included with FreedomCare self-funded plans. This could save your clients thousands of dollars in potential emergency room and urgent care visits. Congress is also supporting telehealth research by dedicating $26 million in funding for telemedicine programs across rural communities.
- Offer Voluntary Benefits for purchase
- Voluntary benefits can help fill the gaps where a benefits plan may fall short. Giving employees the ability to supplement their plan through voluntary offerings can help improve employee retention and save employers valuable dollars.
By adopting these new healthcare benefits strategies and partnering with FreedomCare, your clients can lower their healthcare costs substantially. Give FreedomCare a call today.