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.

How to control your “out of control” insurance premium increases.

Insurance premiums expected to riseAmerica is sicker than we thought. The nation’s leading health insurers are seeking rate increases of 20 to 40 percent for the 2016 open enrollment season citing sicker than expected customers who purchased health benefit policies under the Affordable Care Act.

The rate requests, from some of the most popular health plans, suggest that the insurance market is still adjusting to the shock waves set off by the Affordable Care Act. Experts believe the root cause of this problem is the failure of several marketplaces to attract enough young, healthy applicants.

With increasing expenses already hurting your bottom line, how are you going to keep your business alive while facing inflated insurance premiums or massive penalties from the IRS?

  • Self-Insure your health benefits.

This isn’t a new concept, large companies have been self-insuring their health benefits and workers comp for years. We’ve now made it available to any size employer; so why would you pay a large insurance carrier for something you can do yourself?

  • Stop-loss or reinsurance to limit your liability.

When you self-insure, you need to have reinsurance to protect your business.

  • Claims funding is returned to you.Control your insurance premiums

When you self-insure, you are contributing monthly to a fund that claims are paid out of. Any money that goes unused will be returned to you on a quarterly basis. In a nutshell, you only pay for what you use and that unused money ends up back in your pocket.

  • Implement Health and Wellness Programs to keep your costs low

It’s no secret that America is unhealthy. Bringing health and wellness programs to your employees and encouraging yearly checkups can cut down on illnesses and increase the possibility of claims funding coming back to you.

Simple enough, right? Give FreedomCare a call to learn more about self-insuring and avoiding these premium increases.