Thursday, June 25, 2015

Supreme Court Verdict: Subsidies Through Federal Exchanges Will Stand

On Thursday morning the Supreme Court ruled in a 6-3 decision that subsidies provided to individuals through a Federal exchange would stand. This is a win for the Obama administration who felt that the case never should have made it to this point. Earlier this month after the G7 Summit in Krun, Germany the President stated the following:

"And so this should be an easy case. Frankly, it probably shouldn’t even have been taken up. And since we’re going to get a ruling pretty quick, I think it’s important for us to go ahead and assume that the Supreme Court is going to do what most legal scholars who’ve looked at this would expect them to do."

This morning the president got his wish, with only the most conservative members of the court  - Justices Scalia, Thomas and Alito - dissenting from the majority ruling.  Chief Justice Roberts penned the majority opinion which can be accessed by clicking here.

In the opinion the Chief Justice acknowledges that the wording is ambiguous, however states:

"the statutory scheme compels us to reject petitioners' interpretation because it would destabilize the individual insurance market in any state with a federal exchange, and likely create the very 'death spirals' that Congress designed the act to avoid,"

In his dissenting opinion Justice Scalia made his position quite clear:

"Under all the usual rules of interpretation... the government should lose this case," Scalia writes. "But normal rules of interpretation seem always to yield to the overriding principle of the present court: The Affordable Care Act must be saved."

So now, after the years of drama and waiting there will be no change to the structure and administration of the ACA subsidies.  This is good news to the nearly 6.4 million Americans that are currently receiving subsidies in the 34 exchanges being administered by the Federal government. The Kaiser Family Foundation estimates that there were $1,737,476,989  of monthly subsidy dollars at risk.

From an employer perspective it will continue to be business as usual. PCORI fees and Transitional Reinsurance fees will be due later this year and the new reporting requirements under sections 6055 & 6056 of the law have companies scrambling to find a solution to comply in the first quarter of 2016.

With the ruling now in the rear view mirror, the republican congress will likely now attempt to challenge specific aspects of the law, such as the medical device excise tax, 30-hour threshold for full-time employees and the Cadillac tax to name a few.

Greg Stancil is the Director of Healthcare Reform for Scott Insurance

Thursday, June 18, 2015

IRS releases draft of 2015 forms for 6055-6056 reporting

Fortunately for employers and vendors who have already started gathering data for the 2015 reporting there are very few changes to the forms.

The main forms that will be utilized by employers are the 1094-C and 1095-C forms. The 1094-C is unchanged and the 1095-C just has one additional voluntary field.  

A link to the forms is provided below:

Form 1094-B,Transmittal of Health Coverage Information Return: 

Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return:

Form 1095-A, Health Insurance Marketplace Statement:

Form 1095-B, Health Coverage:

 Form 1095-C, Employer Provided Health Insurance Offer and Coverage:

Friday, May 29, 2015

FAQ on Reporting Requirements

Yesterday the IRS released an FAQ on the reporting requirements under sections 6055 & 6056.  Click here to read the FAQ.

Click here to view the webinar we conducted earlier in the year on the reporting requirements.

Wednesday, March 4, 2015

King v/s Burwell Update

Update from Greg Stancil, Director of PPACA Compliance:

The oral arguments in the Supreme Court were held this morning. As I previously stated, the two swing votes should be with Justice Kennedy and Chief Justice Roberts.

Based on my review of coverage of the hearings the Chief Justice played his cards fairly close to the vest and didn’t seem to indicate which way he was leaning. He only asked a few questions.

Justice Kennedy asked questions of both sides and made the statement that:

limiting access to the tax credits to 16 states  — to states with PPACA exchanges established by the states, rather than the U.S. Department of Health and Human Services (HHS)  — would create a “serious constitutional problem.”

I’m not sure that necessarily shows which way he will vote, however Wall Street’s reaction seemed to indicate that they felt like the hearing went well for the administration,  as hospital stocks rose more than any other stocks on the S&P as of 12:00pm today.  A ruling against the administration in King v/s Burwell was is in Wall Street’s opinion a big threat to hospital stocks. So in reading the tea leaves (or the ticker) it seems they feel like the administration fared well.

The court is expected to rule in June.

Tuesday, February 24, 2015

Initial "Cadillac Tax" Guidance Released

The Internal Revenue Service released initial guidance on the Affordable Care Act's "Cadillac Tax" which is set to take effect in 2018.  The IRS says that  Notice 2015-16 ( is intended to “initiate and inform the process of developing regulatory guidance” and addresses several aspects of the Cadillac tax relating to: (1) the definition of applicable coverage; (2) the determination of the cost of applicable coverage; and (3) the application of the annual statutory dollar limit to the cost of applicable coverage.   
The IRS anticipates issuing another notice, before the publication of proposed regulations, describing potential approaches to a number of issues not addressed in Notice 2015-16, including procedural issues relating to the calculation and assessment of the excise tax.

Thursday, February 12, 2015

IRS issues final forms for employer shared responsibility and minimum essential coverage reporting requirements

The IRS has issued final forms for the employer shared responsibility and minimum essential coverage reporting requirements.

This reporting is voluntary this year reporting for the calendar year 2014, but is mandatory in 2016 reporting on the calendar year 2015. Copies of the forms and instructions can be found by following the links below.

For more information regarding the reporting requirements please plan to join our webinar on 2/26. You can register by following this link.

Form 1094-B,Transmittal of Health Coverage Information Return: 

Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Return:

Form 1095-A, Health Insurance Marketplace Statement:

Form 1095-B, Health Coverage:  

Form 1095-C, Employer Provided Health Insurance Offer and Coverage:

Instructions to the Form 1095-B and 1094-B: 

Instructions to Forms 1095-C and 1094-C: 

Wednesday, January 7, 2015

House bill targets ACA's 30-hour definition for full-time employees

From Business Insurance

Jerry Geisel

House bill targets ACA's 30-hour definition for full-time employees
The House of Representatives is expected to vote later this week on newly introduced legislation to ease the health care reform law’s definition of a full-time employee by changing it to those working an average of at least 40 hours per week, shielding more employers from a stiff financial penalty imposed by the law.

Under the Patient Protection and Affordable Care Act, employers with at least 100 employees are required, effective in 2015, to offer qualified coverage to full-time employees — defined as those working an average of 30 hours per week — or be liable for an annual $2,000 penalty per employee. The same requirement applies, effective in 2016, to employers with between 50 and 99 employees.
The measure, H.R. 30, introduced Tuesday by Rep. Todd Young, R-Ind., with 147 co-sponsors, would change the act’s definition of full-time employees to those working an average of 40 hours per week.

“Repealing this provision and restoring the traditional understanding of a 40-hour (workweek) is necessary to protect” the paychecks of employees, Rep. Young said in a statement.
The Obama administration strongly opposes the measure, and a presidential veto is likely if the measure receives final congressional approval.

“The issue is essentially that we would be putting even more workers in a situation where we could see some employers cutting back on their hours to try to avoid the requirement of providing them quality health insurance,” White House Press Secretary Josh Earnest said Tuesday at a briefing.
The House last year approved an identical measure, but the bill died in the Senate, controlled by Democrats at the time, when then-Majority Leader Harry Reid, D-Nev., declined to bring up the bill.
A companion bill is expected to be introduced — perhaps as soon as Wednesday — in the Senate.