Viewing posts from: December 2019

2019 Year End Round Up: ACA Changes – The Good, the Bad and the Ugly

Posted December 30, 2019 by Patrick Haynes

On December 20, 2019, President Trump signed into law the 2020 Further Consolidated Appropriations Act—spending legislation which also included important changes for employer-sponsored health plans, repealing several taxes enacted as part of the Affordable Care Act (ACA) and extending one.  Here’s the roundup:

Gone (the Good):

  • The Cadillac Tax,
  • HIT (Health Insurance Tax),
  • Medical Device Tax, and
  • The Parking and Public Transit Benefits Tax.

Extended (the Bad):  PCORI has been extended for another decade.  **However, as of June 1, 2020, the IRS has yet to set the rate for 1/1 plans ending 12/31/2019.  It is expected to be at or above the $2.45 per person charge.  June 8, 2020 update:  IRS released $2.54 per person rate (details here).**

TBD (the Ugly):

  • Individual mandate still up in the air (a divided panel in the US Court of Appeals, 5th Circuit, rules 2-1 in favor of 20 states led by Texas, that filed suit seeking to strike down the ACA); and
  • no ACA regulations (still/yet) on making 105(h) applicable to fully-insured plans.

The Details

  • Repealed:  Cadillac Tax. This measure would have imposed a 40% excise tax on plans with annual premiums exceeding $10,800 for individuals or $29,500 for a family. Implementation of the tax was supposed to happen in 2018 and has currently been delayed to 2022. While the Cadillac tax was never levied, its looming existence has made it very difficult for employers to plan future benefit levels and costs. Moreover, the way that the tax was structured would have led to many employer plans, not just the “gold-plated” ones, being subject to an excise tax in future years.
  • Repealed: Health Insurance Tax (HIT). This provision, which went into effect in 2014, imposed an annual tax on health insurers. Actuarial analyses have found that the tax added to the cost of coverage purchased in all market segments, including individual, large and small employers. In 2018, Congress enacted a one-year suspension of the tax, but it was scheduled to go back into effect at the end of 2019. If it had not been repealed, the HIT would have imposed a $16 billion tax on health plans in 2020.
  • Repealed:  Medical Device Tax. This was a 2.3% excise tax on the value of medical devices (x-ray machines, hospital beds, MRI machines) sold within the United States. Since it went into effect in 2013, it was suspended twice. Critics of the tax cite research that shows that it lowered the medical device industry’s research and development spending.
  • Extended until 2029/2030:  Patient-Centered Outcomes Research Institute (PCORI). This annual fee is a tax on health plans, which was included in the ACA as an initial funding mechanism for the federal program which funds research on the comparative effectiveness of medical treatments. The fee (which is set annually and was $2.45 per person covered by the plan in 2019) is paid by insurers for fully-insured plans and employers sponsoring self-insured plans. It was set to sunset this year, with the last payment due on July 31, 2019 for calendar year plans and July 31, 2020 for non-calendar year plans. The Appropriations Act extends the PCORI fee for another 10 years, extending the financial and administrative burden on insurers and employers.  Insurers and Employers (with HRAs or any other self-funded plans) will be paying PCORI fees until 2029 or 2030 depending upon their plan year.
  • Retroactive-Repeal:  Parking Tax (and Return of Employee Only Parking).  Medical Device Tax.  Section 512(a)(7), enacted as part of the 2017 Tax Cuts and Jobs Act (the “2017 Act”), required tax-exempt organizations to include in unrelated business taxable income their costs for providing “qualified transportation fringe benefits” to their employees. The 2020 Act repeals section 512(a)(7) in its entirety and retroactive to the date of its enactment — in other words, it is as if section 512(a)(7) never existed.
    • It is expected that the IRS will issue guidance relating to the repeal – rules for amending Forms 990-T that included the parking tax, and for claiming refunds of those taxes.
    • In the meantime, tax-exempt organizations may cease making any estimated tax payments related to the repealed parking tax.
    • Also, just in time for the new year, nonprofits can consider promptly re-installing “employee parking only” signage that was removed in response to the 2017 Act
  • Also, the IRS issued a set of Questions-and-Answers on 12/19/2019, explaining the Individual Shared Responsibility provisions of the ACA after the elimination of the individual shared responsibility penalty. These Q&A’s:
    • define MEC (Minimum Essential Coverage);
    • explain how an individual can determine if their plan meets MEC;
    • explain who is subject to MEC requirements; and
    • provide a list of exemptions from the general coverage requirement rules.

Should you have any questions – please reach out to your Account Manager or Account Executive.  Thank you.

Links:


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.
AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.
Photo Credit: Photo by Mahir Uysal on Unsplash

 

Happy Holidays from AP Benefit Advisors!

Posted December 19, 2019 by Megan DiMartino

 


AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

HRCI & SHRM Pre-Approved Webinar | Department of Labor Audits: How to Prepare and What to Expect – Your Survival Guide

Posted December 12, 2019 by Megan DiMartino

The DOL (U.S. Department of Labor) audits of welfare benefit plans are happening with greater frequency for companies of all sizes. Are you ready to spend months preparing to comply with and survive the audit? Did you know the following can be the basis for a DOL Audit:

  • Complaints by welfare benefit plan participants to the Employee Benefits Security Administration (EBSA), the DOL agency responsible for administering and enforcing the provisions of Title I of the Employee Retirement Income Security Act (ERISA);
  • Inaccurate or late filings of the Form 5500 Annual Report;
  • National enforcement initiatives investigating compliance with ERISA and the Affordable Care Act (ACA);
  • The transfer of cases from the Internal Revenue Service (IRS) to the DOL; or
  • Random selection?

Please join us for this HRCI* and SHRM** pre-approved, complimentary, one-hour webinar as Patrick Haynes, AP Benefit Advisors’ General Counsel and VP of Compliance, helps prepare you in what to expect if a DOL audit comes your way.

Webinar details:

  • Thursday, December 19, 2019
  • 2:00pm – 3:00 pm EST
  • No cost to attend
  • This webinar is open to all HR and Finance Professionals – but not to brokers, agents, TPAs and PEOs

Register Now


*The use of this seal confirms that this activity has met HR Certification Institute’s® (HRCI®) criteria for recertification credit pre-approval.

**AP Benefit Advisors, LLC is recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP or SHRM-SCP. This program is valid for 1 PDC for the SHRM-CP or SHRM-SCP. For more information about certification or recertification, please visit shrmcertification.org.


For more information, contact info@apbenefitadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

AP Benefit Advisors’ webinar and website resources are designed for U.S.-based organizations. Our privacy and GDPR policy should be reviewed here. Please opt-out if you do not agree to these terms and conditions.

IRS Offers Another Extension for 1094s and 1095s

Posted December 3, 2019 by Patrick Haynes

IRS Offers Another Extension for 1094s and 1095s

A   The IRS has, once again, come out with a holiday gift for employers. In the recently-released Notice 2019-63, the IRS provided additional reporting relief for employers for the 2019 calendar year. In short, the Notice provides:

The due date to provide Forms 1095-C or 1095-B to employees and individuals is extended 30 days from Friday, January 31, 2020 to Monday, March 2, 2020.

B  Please note:

            • This is a firm deadline. The IRS is not offering an additional 30-day extension beyond March 2, 2020.
            • All requests for an additional 30-day extension will be denied (the IRS will not even respond).

 

C  Is there relief for carriers providing coverage details?

  • New for this year, the IRS is giving carriers (aka coverage providers) a limited “pass” with providing the 1095-B statements to individuals (whereas filing must still be made to the IRS).
  • The 2019 ACA-individual mandate penalty remains zero ($0), and individuals do need to report whether they had coverage or not.
  • Carriers that wish to qualify for this relief have to post a notice on their websites that the form is still available upon request, along with the promise that they provide the form within 30 days of each

D  Does this relief apply to self-funded plans?

No.  Employers with self-funded plans must still report about their FTEs (Full-Time-Employees) on Part III of Form 1095-C, and on Part IV of Form 1095-B.

E  What if we cover folks other than FTEs?

Self-funded employers may take advantage of this relief if they are reporting on any employee who was not full-time for any part of 2019 (such as covered part-time employees, covered retirees, or COBRA QBs).

      To take advantage of this relief, the self-funded employer would need to:

  • Post a notice prominently on its website (vaguely described but not defined)that the forms are available on request; and
  • Promise to respond to the request within 30 days.
  • Generally, retirees and COBRA QB would not have access to an Employer’s website, so that may be defined further in subsequent guidance (but, savings from printing and mailing could be achieved).
  • The extreme lateness of this guidance and the possible perceived value associated with doing less work (if you can reliably separate out these populations) may be outweighed even with an extension to March 2, 2020.

F  Is there good news in this Notice?

  • Good faith penalty relief is also extended for the 2019 forms.
  • Employers/carriers who work in good faith to complete the forms will not be assessed penalties if there is missing or inaccurate information.
  • The IRS takes the employer’s (or carrier’s) efforts with its good faith compliance – reasonable efforts to prepare the reports, efforts to gather and transmit the data to appropriate parties, etc.
  • Employers should never file late with the IRS or miss the deadline to furnish forms to participants. The IRS expects timeliness but the “good faith relief” efforts permit compliance even if you aren’t perfect with your data.

G  Final reminder about 1094-C deadlines:

  • Smaller ALEs must file their paper forms with the IRS on/before February 28, 2020.
  • ALEs with 250 or more employees must file electronically by March 31, 2020.

Please consult your 1094/1095 service providers about these deadlines (as deadlines outlined in your services agreement may not change).  Finally, should you have any questions or comments, please reach out to your Account Executive or Account Manager.

 

 

 

 

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