The Affordable Care Act’s new reporting requirements and employer mandate are quickly approaching. Business owners need to understand their requirements under the ACA, and savvy business owners are using the advantages of the ACA (such as premium tax credits) to offer better, more affordable employee health benefits. As such, there are many ACA issues that you and your business should be following, but probably aren’t. This article contains an overview of three ACA issues that you probably aren’t following-- but should be.
1. ACA Lawsuits
Recently, a federal district judge in Oklahoma added yet another ruling against the premium tax credit lawsuit. This was the second ruling against the legality of premium tax credit availability in the federally-facilitated Marketplaces. In July, two U.S. Appeals Courts issued conflicting rulings on the legality of the Affordable Care Act’s Premium Tax Credits in the federally-run Marketplace, HealthCare.gov.
There were 36 states that opted not to set up exchanges; citizens of these states were defaulted to use the federal exchange. The legal issue lies within eligibility for the premium tax credits. The argument is that people in states without exchanges, who received tax credits through the federal exchange were not eligible to receive these credits. Although there have been multiple court cases and rulings on this subject, the public has remained largely unaware of the issue.
The rulings do not impact the premium tax credits immediately, and clients or consumers getting premium tax credits should know that the tax credits are still available; however, with subsequent cases coming up, you should keep a close eye on the legality of premium tax credits, especially if you are living in a state with a federally facilitated Marketplace.
2. Reporting Requirements for the Employer Shared Responsibility Provision
Employers who are subject to the Employer Shared Responsibility Provision will be required to provide information as to whether they offered full-time employees and their family members access to insurance that provides minimum essential coverage.
The IRS is requiring that employers file Forms 1094-C and 1095-C. Employers must also provide Form 1095-C to their full time employees.
Employers who are subject to the Employer Shared Responsibility Provision must provide Form 1095-C and employee statements to their full-time employees on or before January 31, at the end of the applicable calendar year.
The Internal Revenue Service (IRS) issued draft versions of the Affordable Care Act (ACA) reporting forms large employers will begin using next year to report health coverage. Here are links to the draft forms for employers:
3. The Upcoming Cadillac Tax
The “Cadillac tax” is an excise tax on high-cost health insurance plans offered by employers. Starting in 2018, the ACA will impose a 40 percent non-deductible excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year and $27,500 for families. The tax has been dubbed a "Cadillac" tax because it hits the most generous plans.
While the tax will not be enforced until 2018, you should take action now to restructure your healthcare benefit offerings to avoid the tax. For example, some employers have implemented wellness programs to improve the health of their population to help keep their premium costs down.