Monday, October 5, 2015

Senate Passes ACA Small Group Market Rule Repeal

On Oct. 1, 2015, the U.S. Senate passed legislation repealing the Affordable Care Act (ACA) requirement that the small group market in every state be expanded to include businesses with 51-100 employees.  
The Protecting Affordable Coverage for Employees (PACE) Act was passed by the U.S. House of Representatives earlier in the week. It has been reported that President Obama will sign the Act into law, although some sources previously indicated that he might veto it.

Small Group Market Expansion

Most states have historically defined “small employers” as those with 50 or fewer employees for purposes of defining their small group health insurance market.
Effective for 2016 plan years, the ACA expanded the definition of a “small employer” to include those that employed an average of between one and 100 employees.

The PACE Act eliminates the ACA’s new definition and gives states the option of expanding their small group markets to include businesses with up to 100 employees.
Impact on Employers

The expansion of the small group market was expected to have a significant effect on mid-size businesses. These businesses would have been required to buy coverage for employees in the small group market, which is more heavily regulated than the large group market.
This change was expected to increase premiums costs for employers and employees and reduce flexibility in plan design due to added small group market requirements.

Some states have already amended their state laws to adopt the expanded small group market definition. These states will have to take action to undo those changes.
Most states are taking already taking advantage of a transition rule provided by the Dept. of Health and Human Services (HHS). HHS has said it will not enforce small group market regulations for mid-size businesses if their policies are renewed by Oct. 1, 2016.

This means that many employers have already been able to delay moving from the large group to the small group market. The PACE Act will make this relief permanent.


Final 2015 forms for 6055 & 6056 reporting

The IRS has issued final 2015 forms for 1094-B, 1095-B, 1094-C and 1095-C for the 6055 & 6056 reporting due in the first quarter of 2016.

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-B, Health Coverage:

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

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.