Brown & Brown Benefit Advisors continually monitor and are well versed in the provisions that will affect your employee benefits program. We provide our clients with the necessary guidelines and requirements to comply with the law. Below are useful resources and references.
- PCORI Fee Amount Adjusted for 2020 (pdf)¬† The Affordable Care Act (ACA) imposes a fee on health insurance issuers and self-insured plan sponsors in order to fund comparative effectiveness research. These fees are widely known as Patient-Centered Outcomes Research Institute (PCORI) fees, and were originally scheduled to expire for plan or policy years ending on or after Oct. 1, 2019. However, a federal spending bill enacted at the end of 2019 extended the PCORI fees for an additional 10 years.
- Extension on Filing for NJ Individual Mandate (pdf)¬† Effective for Tax Year 2019, New Jersey‚Äôs 1095 compliance requirements for their individual state mandate will take effect. Employers sitused in New Jersey or who employ New Jersey residents must now comply with these requirements by sending the 1095 forms to the New Jersey government using the same system for filing W-2 paperwork, the MFT SecureTransport system.¬† Employers and other coverage providers must send this information to the State for processing; however, on March 19, 2020, the deadline was extended from March 31, 2020 to May 15, 2020. No further extensions are expected. The deadline to send these forms to primary enrollees is still March 2, 2020 and has not been extended.
- IRS Allows HDHPs To Cover Coronavirus Costs (pdf) On March 11, 2020, the Internal Revenue Service (IRS) issued Notice 2020-15 to advise that high deductible health plans (HDHPs) can pay for 2019 Novel Coronavirus (COVID-19) testing and treatment before plan deductibles have been met, without jeopardizing their status. According to the IRS, this also means that individuals with HDHPs that cover these costs may continue to contribute to their health savings accounts (HSAs).
- The IRS also noted that any COVID-19 vaccination costs count as preventive care and can be paid for by an HDHP without cost sharing.
Please be advised that any and all information, comments, analysis, and/or recommendations set forth above relative to the possible impact of COVID-19 on potential insurance coverage or other policy implications are intended solely for informational purposes and should not be relied upon as legal advice. As an insurance broker, we have no authority to make coverage decisions as that ability rests solely with the issuing carrier. Therefore, all claims should be submitted to the carrier for evaluation. The positions expressed herein are opinions only and are not to be construed as any form of guarantee or warrantee. Finally, given the extremely dynamic and rapidly evolving COVID-19 situation, comments above do not take into account any applicable pending or future legislation introduced with the intent to override, alter or amend current policy language.
- U.S. Supreme Court Will Hear Challenge to ACA (pdf)¬† On March 2, 2020, the United States Supreme Court agreed to hear a legal challenge to the Affordable Care Act (ACA). The case involved is Texas v. Azar, a lawsuit challenging the constitutionality of the ACA‚Äôs individual mandate.
- No Statue of Limitations Applies for ACA Pay or Play Penalties (pdf)¬† On Feb. 21, 2020, the IRS Office of Chief Counsel released a memorandum clarifying that there is no applicable statute of limitations on pay or play penalty assessments under the Affordable Care Act (ACA). This means that there is no time limit for the IRS to issue a penalty assessment for employers that do not comply with the pay or play rules for a given year.
- Patient-Centered Outcomes Research Institute Fees (PCORI Fees) (pdf)¬† ¬†The Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute (PCORI) to help patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. The Institute‚Äôs research is funded, in part, by fees paid by health insurance issuers and sponsors of self-insured health plans.
- Reporting and Paying the PCORI Fees (pdf)¬† The Affordable Care Act (ACA) imposes a fee on health insurance issuers and plan sponsors of self-insured health plans to help fund the Patient-Centered Outcomes Research Institute. The fee, called the Patient-Centered Outcomes Research Institute (PCORI) fee, is calculated based on the average number of lives covered under the policy or plan.PCORI fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return). These fees are due each year by July 31 of the year following the last day of the plan year. For plan years ending in 2018, the PCORI fees were due by July 31, 2019. For non-calendar year plans ending between Jan. 1, 2019, and Sept. 30, 2019, a final PCORI fee payment will be due July 31, 2020. The IRS instructions for filing form 720 include information on reporting and paying the PCORI fees.
- Cadillac Tax and Other Key ACA Taxes Repealed (pdf) On Dec. 20, 2019, President Trump signed into law a spending bill that prevents a government shutdown and repeals the following three taxes and fees under the Affordable Care Act (ACA): The Cadillac tax on high-cost group health coverage, beginning in 2020; the medical devices excise tax, beginning in 2020; and the health insurance providers fee, beginning in 2021.¬† The law also extends PCORI fees to fiscal years 2020-2029.
- Federal Appeals Court Issues ACA Ruling (pdf)¬† On Dec. 18, 2019, a federal appeals court ruled in Texas v. Azar that the Affordable Care Act‚Äôs (ACA) individual mandate is unconstitutional due to the elimination of the individual mandate penalty in 2019. The appeals court remanded the case to the lower court to determine whether the rest of the ACA can remain in place without the individual mandate.
- The lower court is now tasked with determining whether the rest of the ACA may be severed from the individual mandate provision. However, this ruling is expected to be appealed to the Supreme Court. As a result, a final decision is not expected to be made until that time. In addition, it is likely that any ruling eliminating the ACA will be stayed pending appeal.
- Final Forms for 2019 ACA Reporting Released (pdf)¬† On Dec. 9, 2019, the Internal Revenue Service (IRS) released final 2019 forms and instructions for reporting under Internal Revenue Code (Code) Sections 6055 and 6056.¬† The 2019 forms and instructions are substantially similar to the 2018 versions. Note that Section 6055 reporting is still required, despite the fact that the individual mandate penalty has been reduced to $0, although transition relief from penalties is available in certain circumstances.¬† Click on the pdf for forms and instructions.
- IRS Provides Transition Relief for 2019 ACA Reporting (pdf)¬† On Dec. 2, 2019, the Internal Revenue Service (IRS) issued Notice 2019-63 to:
- Extend the due date for furnishing forms under Sections 6055 and 6056 for 2019 from Jan. 31, 2020, to March 2, 2020;
- Extend good-faith transition relief from penalties related to 2019 information reporting under Sections 6055 and 6056; and
- Provide additional penalty relief related to furnishing 2019 forms to individuals under Section 6055. Under this relief, employers will only have to provide Form 1095-B to covered individuals upon request.
- 2020 ACA Overview and Compliance Checklist (pdf)¬† The Affordable Care Act (ACA) has made a number of significant changes to group health plans since the law was enacted in 2010. Many of these key reforms became effective in 2014 and 2015, including health plan design changes, increased wellness program incentives and the employer shared responsibility penalties.¬† Certain changes to some ACA requirements take effect in 2020 for employers sponsoring group health plans, such as increased dollar limits. To prepare for 2020, employers should review upcoming requirements and develop a compliance strategy.¬† This ACA Overview provides an ACA compliance checklist for 2020.
- ACA Health Insurance Providers Fee Will Increase in 2020 (pdf) The Affordable Care Act (ACA) imposes an annual, non-deductible fee on the health insurance sector, allocated across the industry according to market share. On Sept. 4, 2019, the Internal Revenue Service (IRS) issued Notice 2019-50 to index the applicable fee amount for 2020. Under Notice 2019-50, the applicable amount for the 2020 fee year is $15,522,820,037.
- IRS Expands Preventive Care for HDHPs to Include Chronic Conditions (pdf)¬† On July 17, 2019, the IRS released Notice 2019-45 to add care for a range of chronic conditions to the list of preventive care benefits that can be provided by a high deductible health plan (HDHP) without a deductible.
- Affordability Percentages Will Decrease for 2020 (pdf) On July 23, 2019, the Internal Revenue Service (IRS) issued Revenue Procedure 2019-29 to index the contribution percentages in 2020 for purposes of determining affordability of an employer‚Äôs plan under the Affordable Care Act (ACA).
- Final Notice of Benefit & Payment Parameters for 2020 (pdf)¬† On April 19, 2019, the Department of Health and Human Services (HHS) released its final Notice of Benefit and Payment Parameters for 2020.¬† This rule describes benefit and payment parameters under the Affordable Care Act (ACA) that apply for the 2020 benefit year.
- Cadillac Tax Highlights and Timeline of Extensions (pdf)¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† Proposed or final regulations have not yet been issued on the ACA‚Äôs Cadillac tax. The Internal Revenue Service (IRS) issued some guidance describing potential approaches for a number of issues and invited comments on these approaches. Taxpayers may not rely on this guidance, although some approaches could be incorporated in future regulations. The IRS is expected to issue final guidance on the Cadillac tax requirement before it becomes effective in 2022.
- Individual Mandate Penalty Eliminated in 2019 (pdf)¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬† ¬†On Dec. 22, 2017, President Donald Trump signed into law the tax reform bill, called the Tax Cuts and Jobs Act.¬† This tax reform bill makes significant changes to the federal tax code. The bill does not impact the majority of the Affordable Care Act (ACA) tax provisions. However, it does reduce the ACA‚Äôs individual shared responsibility (or individual mandate) penalty to zero, effective beginning in 2019.¬† As a result, beginning in 2019, individuals will no longer be penalized for failing to obtain acceptable health insurance coverage.
- IRS Issues Pay or Play Enforcement Guidance (pdf)
The Affordable Care Act (ACA) requires applicable large employers (ALEs) to offer affordable, minimum value health coverage to their full-time employees or pay a penalty. This employer mandate provision is also known as the ‚Äúemployer shared responsibility‚ÄĚ or ‚Äúpay or play‚ÄĚ rules. An ALE is only liable for a pay or play penalty if one or more of its full-time employees receive a subsidy for coverage under an Exchange.
- Employer Shared Responsibility Provision (ESRP) Estimator (Website)
The Taxpayer Advocate Service developed the ESRP Estimator to help employers understand how the provision works and learn how the provision may apply to them. This tool helps determine whether an employer is an Applicable Large Employer and estimate the maximum amount of potential liability for the employer shared responsibility payment that could apply.
- Are You an Applicable Large Employer (pdf)
The IRS issued this publication (Publication 5208) in March 2018, to help employers determine whether they are considered applicable large employers under the ACA’s employer shared responsibility provisions. Also, they provide a fact sheet on their website.
- Identifying Full-Time Employees: The Look Back Measurement Method (pdf)
Under the ACA, applicable large employers may be subject to a penalty if they do not offer health coverage to their full-time employees. This Legislative Brief provides an overview of the look-back measurement method for identifying full-time employees.