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The ACA has introduced a number of terms that are either brand new or newly applied to healthcare, and many are especially important to know when filling out 2015 tax returns. Besides the “pay or play” employer mandate and penalty, there are many other mandates – and corresponding penalties – that must be attended to in order to avoid noncompliance. Understanding key terminology is an important piece of the puzzle.
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As we come up on the 2016 tax season, many organizations with 100+ full-time equivalent employees are preparing to include health insurance information in tax returns for the first time (in accordance with the ACA employer mandate). In addition, organizations are also examining all of the other ACA mandates to ensure they meet the requirements around mandates such as dependent coverage, lifetime and cost-sharing limits, waiting periods, preventive care, patient protections, and cafeteria plans.
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The 2015 tax year is coming to a close, which means that 2015 tax penalties for ACA noncompliance are likely top of mind for many employers right now. While the employer mandate has received much of the press and attention, there are also many more ACA mandates that require action on the part of all organizations that provide group health coverage(not just those with 100+ employees).
In our rapidly changing world, innovation is no longer just a buzzword and instead has become part of the everyday business vernacular. For the healthcare industry in particular, innovation is the name of the game these days with the ACA driving creative entrepreneurs to develop increasingly progressive and transparent options – resulting in better and more affordable healthcare. For traditional brokers and insurance carriers who have been in the game for decades, there is a sudden urgency to get on board or get off the train.
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Most grandfathered plans are offered by smaller organizations* (less than 200 people) that have typically offered traditional fully-funded plans through insurance carriers. But while grandfathered plans may have some cost-containment advantages, they also significantly limit the amount of change that can be made to coverage – in costs, delivery, and services. In addition, grandfathered plans don’t cover many of the key consumer benefits that newer ACA plans do. Consequently, employees could face disadvantages when it comes to securing the same patient benefits, rights and regulations as those on updated plans.
As we close in on the 2016 healthcare enrollment period, it may be time to look at whether your organization still offers – and hopes to keep – at least one grandfathered healthcare plan. Employer-sponsored grandfathered plans are those that have had at least one person enrolled since March 23, 2010 and have not significantly cut benefits or increased costs for employees. Grandfathered plans are not required to cover preventative care or certain patient rights and responsibilities.
When it comes to the employer mandate, there will always be exceptions and special circumstances that will add another layer of challenge to determining full-time equivalency (FTE) – which in turn determines who receives group health coverage. Two particular circumstances are unpaid leave (e.g. FMLA, educational employment breaks) and COBRA.
In previous posts on employment status under the ACA, we have focused on full-time equivalency (FTE) and how it’s determined for applicable large employers (ALES), and the various types of employment and how they accrue up to FTE. Today’s post centers on the ever-important measurement periods, set amounts of time that employers use to establish full-time (FT) or part-time (PT) employment status.
A recent New York Times article reported on the lack of employees enrolling in employer-sponsored healthcare, especially among small-midsize businesses that pay lower hourly wages (e.g. retail and hospitality). One of the biggest reasons for the dearth of employee enrollment in these industries is that the government definition of “affordable” coverage (9.5% or less of annual income) can mean something very different for a minimum-wage employee.
On October 7, 2015 President Obama signed into law the Protecting Affordable Coverage for Employees (PACE) Act, allowing organizations with 51-100 employees to maintain large employer status.
