How to prepare for earlier reporting in 2017

How to prepare for earlier reporting deadlinesLast December, most employers were relieved when the IRS provided extensions of employee notifications and filing deadlines for Affordable Care Act (ACA) reporting. Unfortunately, this may have set up those same employers for failure as it will seem like these deadlines are coming 2 months earlier in 2017. To prevent this from happening, here are 4 ways to prepare for earlier reporting in 2017.

1. Give yourself plenty of cushion to submit required filings on time.

This year employers must provide 1095-Cs to employees by the end of January, indicating month-by-month coverage provided through the end of the previous December.

ACA Reporting Deadlines_with citationThese forms are required of most employers;

  • Employers of any size that sponsored a self-insured health plan providing minimum essential coverage must distribute to enrolled employees and file with the IRS Form 1095-B, showing a health plan enrollment.
  • Applicable large employers with 50 or more full-time employees or equivalents must distribute to enrolled employees and file with the IRS Form 1095-C, showing compliance with employer shared responsibility/minimum essential coverage requirements.

2. It’s now 95%, not 70%.

Unfortunately, last years extended reporting deadlines may not be the only things that trips up employers this year. Starting in 2016, all organizations with 50 or more full-time employees or equivalents must insure 95 percent of their full-time employees to avoid liability under the ACA’s shared responsibility provisions, and the resulting penalties.

The thing is, some employers may not understand that it’s not a 95% average for the year, it’s 95% for each month. If an employer had a month where they fell below 95%, then the employer is exposed. The employer could be facing penalties for the months when they were below the threshold.

The IRS will ask for payroll and benefits data, this will help them determine whether the indicator codes used on Form 1095-C are accurate. With last year’s 70% threshold, employers had a lot more leeway.

3. Exchange notices have been arriving.

Employers also need to be on the lookout for exchange subsidy notices. Notices pertaining to 2015 coverage, are now being sent from the ACA’s Health Insurance Marketplace. These notices allege that a full-time employee received subsidized coverage on an exchange because the employer failed to provide qualifying coverage.

4. Determining eligibility is an on-going effort.

The coverage provided to each full-time employee needs to be tracked and recorded every month. This needs to be an ongoing process for employers to get ready for the next year’s annual reporting. Employers can find relief by working with companies who offer tracking services that work in conjunction with payroll companies as part of their coverage. FreedomCare is one of the only options that provides this integration.

Employers that were close to the 50 or more full-time employee threshold last year need to make sure they stay on top of their eligibility. They need to run the numbers each month to make sure they aren’t on the hook. It would be terrible to find out too late and be liable for penalties for the whole year.

Reach out to FreedomCare, we can help you calculate and determine whether or not an employer needs to offer coverage. Trust us, it’s much less expensive than paying the penalties.

Forgotten details of ACA Compliance

Forgotten details of the ACAAs 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

Employers on the hook for $228 billion in ACA penalties

Employers on the hook for $228 billion2016 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.

3 reasons to self-fund health benefits under the ACA

3 reasons to self fund acaSelf-funding controls costs.

Under the ACA, fully insured carriers are facing higher exposure to claims without the ability to include rate adjustment factors for health conditions and demographics. New rules limit the insurance carriers’ ability to charge higher premiums for older, riskier individuals now that certain risk reduction strategies are not allowed. These costs will most likely be passed on to employers and individuals.

Self-funding keeps the employers best interest as the priority.

There are some fixed costs of administering a self-funded healthcare plan, such as claims processing, stop loss premiums and administrative fees. Self-funded employers only pay the direct costs of administering employee claims. If the employee base is relatively healthy, having a self-funded plan can be one of the best ways to manage rising costs. When employers choose to self-fund their health plan, they have access to all claims submitted, including Minimum Essential Coverage (MEC) plans. The claims administrator should be able to provide reports of what claims were paid and when they were paid.

Self-funding is customizable.

The costs of fully insured plans are unpredictable for employers since carriers have control over monitoring employee health and underwriting for risk. With fully insured plans, employers don’t have access to employee health claims which is a significant advantage of self-funded plans.

In conclusion, the ACA has changed the healthcare landscape. But your self-funded client will be better positioned to save on healthcare costs while providing a quality health benefit plan that meets or even exceeds the requirements of the ACA. Take advantage of our experience and quality products, give FreedomCare a call today.