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  • 2018 ACA and Compliance Updates. Trends and Employer Best Practices CASBO Meeting - October 25, 2017

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    Insurance Products offered are: Not FDIC-insured; not a deposit in, obligation of, nor insured by any federal government agency; not guaranteed or underwritten by the bank; not a condition to the provisions or terms of any banking service or activity.

    Insurance services, benefits consulting services and insurance products are offered through Key Insurance & Benefits Services, Inc. (“KIB”), which is a licensed insurance broker and agent. Insurance policies are obligations of the insurers that issue the policies. Insurance products may not be available in all states. KIB and KeyBank are separate entities, and when you purchase risk management services, business consulting services or insurance products you are doing business with KIB, and not KeyBank.

    1. 2018 ACA Employer Reporting

    2. ACA & Compliance Reminders

    3. Medical Trends and Employee Benefits Best Practices

    Agenda

    ©2017. KeyCorp. 171011-304713

  • 2018 ACA Employer Reporting

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    Effective with the 2015 tax year, mid- size (50-99 FT and FTEs) and large employers (>100 FT and FTEs) were required to file annual reports with the IRS on the terms and conditions of their health care coverage for full-time employees during the prior year.

    Entities that provide “minimum essential coverage” are required to file annual reports that provide information on each individual for whom they provide the coverage.

    This requirement applies to all, applicable, mid-size and large employers including fully- insured/self-insured, grandfathered/non-grandfathered, government entity, etc.

    The reporting requirements are categorized as Code Sections 6055 (Individual Mandate) and 6056 (Employer Mandate).

    Employer Reporting to IRS and HHS

    https://www.irs.gov/affordable-care-act

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    ACA Provision Compliance

    Employer Mandate

    Employer/Plan Sponsor

    1094-C

    Affordability

    Employer/Plan Sponsor

    1095-C, Part II

    Individual Mandate

    Fully-insured Health Plan?

    Insurer 1095-B

    Self-insured Health Plan?

    Employer/Plan Sponsor

    1095-C, Part III

    ACA Provision

    Reporting Responsibility

    Form

    https://www.irs.gov/affordable-care-act

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    1095 Form Distribution to Plan Participants

    For the 2016 calendar/tax year, the IRS had extended the 1095-C Form distribution date to plan participants from January 31, 2017 to March 2, 2017.

    The expectation is that for the 2017 calendar/tax year, the 1095-C Form distribution date to plan to plan participants will remain as postmarked by January 31, 2018.

    Employer Reporting to the IRS An employer subject to the ACA’s Employer Mandate and Affordability provisions (>50 full-time & full-time equivalent employees), will need to report the following forms to the IRS by their corresponding deadline dates.

    Employer ACA Reporting Deadline Dates

    Form 2017 Calendar/Tax YearReporting Deadline

    1094-C 3/31/2018

    1095-C If sending hard-copy: 2/28/2018

    If electronic: 4/2/2018

    https://www.irs.gov/affordable-care-act

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    On July 28, 2017, the Internal Revenue Service (IRS) released new 1094-C and 1095-C Forms for employer/plan sponsor use in reporting health plan compliance with the Affordable Care Act’s (ACA) Employer Mandate and Affordability provisions in the 2017 calendar/tax year.

    IRS Instructions for 2017 Reporting

    Overall, the new 1094-C and 1095-C Forms for 2017 are unchanged from the 2016 versions with the one exception of the removal of any ACA Transition Relief.

    For a copy of the 2017 version of each form, follow the links to:

    https://www.irs.gov/pub/irs-dft/f1094c-- dft.pdf

    https://www.irs.gov/pub/irs-dft/f1095c--dft.pdf

    For a copy of the IRS “2017 Instructions for Forms 1094-C and 1095-C” follow the link to: https://www.irs.gov/pub/irs-dft/i109495c--dft.pdf

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    ACA Transition Relief

    Two ACA Transition Relief Safe Harbors that an employer could claim on Line 22 of the 1094-C Form.

    1. Qualifying Offer Method Transition Relief

    2. Section 4980H Transition Relief.

    Generally, ACA Large employers (100+ FT & FTE) with fiscal plan years, or, ACA Mid-size employers (50-99 FT & FTE) were able to claim one of the ACA Transition Relief Safe Harbors in 2015.

    2016 One ACA Transition Relief Safe Harbor

    1. Section 4980H Transition Relief

    Only ACA Mid-size employers (50-99 FT & FTE) with fiscal plan years could claim ACA transition relief and only for those months in 2016 prior to “the 1st Day of the 1st New Plan Year in 2016”.

    2015 ACA Transition Relief is

    no longer available to any employer of any size.

    2017

    https://www.irs.gov/affordable-care-act

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    1094 – C Form Revisions – 2017 Form

    Only applied to ACA Mid-size Employers with fiscal health plan years and only to those month in 2016 that are part of a health plan year that

    began in 2015.

    No longer available.

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    1095-C Form Revisions – 2017 Form

    No change to the form, however, a new “Instructions for Recipient” section has been

    added. This added section is for communications purposes only and does not change how the employer/plan sponsor completes the form.

  • ACA & Compliance Reminders

    Medicare Part D, SBCs and Open Enrollment Compliance

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    • Created by the Medicare Prescription Drug, Improvement and Modernization Act of 2003. (Program went into effect in 2006.)

    • Allows Medicare Parts A & B enrollees to add prescription drug filled at a pharmacy to their benefit coverage.

    What is Medicare Part D?

    If a retiree does not elect Medicare Part D when first eligible, he will pay a penalty to join at a later date….

    UNLESS….

    the retiree provides a “Certificate of Creditable Coverage.”

    https://www.cms.gov/

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    “Creditable” coverage defined as benefits with an actuarial value at, or above, Medicare Part D benefits.

    If coverage is NOT creditable, then employer sends a Certificate of non-Creditable Coverage.

    Certificate must be provided by October 15th (the beginning date of the Medicare Part D Open Enrollment) to all Medicare-eligible participants in the employer-

    sponsored group health plan.

    Issued every October by employers sponsoring group health plans offering drug coverage to a Medicare Part D eligible individual.

    Certificate of Creditable Coverage?

    For a copy of the 2017 CMS Creditable Coverage Medicare Part D Letter, follow the link to:

    https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/Model-Notice-Letters.html

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    Some of the changes to the SBC template include:

    • Reduced template from 8 pages to 5 pages; • Added a cost fracture example; • Updated claims/pricing data in the example

    calculator; • New minimum essential coverage and

    minimum value language; and • Update glossary.

    On April 6, 2016, the Department of Labor (DOL) updated the ACA Summary of Benefits Coverage (SBC) template intended for use as of April 1, 2017.

    Reminder The SBC must be included in any new hire enrollment material as well as the annual open enrollment materials for all employees.

    You can access a copy of the new SBC template at: http://www.dol.gov/ebsa/healthreform/re gulations/summaryofbenefits.html

    SBC Template Updated

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    Open Enrollment Compliance

    The ACA Summary of Benefits Coverage is not the only employee benefits compliance document that needs to be included in a plan sponsor’s open enrollment materials. Other ACA & compliance documents include:

    ● HIPAA Notice of Privacy Practices/Special Enrollment Rights/Pre-existing Condition Exclusion

    ● CHIPRA Employee Notification of State Premium Assistance

    ● Wellness Program Disclosure

    ● Women’s Health and Cancer Rights Act (WHCRA)

    ● Newborns’ and Mothers’ Health Protection Act (NMHPA)

    ● Genetic Information Non-Discrimination Act (GINA)

    ● Opt-out Mental Health Parity and Addiction Equity Act Notice (if applicable)

    ● Notice Regarding Employer Contribution to Health Savings Account (if applicable)

    For many plan sponsors, these compliance documents should already be included in the plan’s ERISA-compliant Summary Plan Description (SPD).

    For plan sponsors not subject to ERISA, they are still responsible for providing these documents to the plan participants.

    https://www.healthcare.gov/health-care-law-protections/summary-of-benefits-and-coverage/

  • Medical Trends and Employer Best Practices What’s Next. . . . . .

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    Economic Drivers  Income: Higher incomes are associated with relatively higher health spending so, as

    incomes are rising on average, healthcare spending is increasing.

     Demographics: The American workforce has been aging as the Baby Boomer generation reaches retirement. An older workforce typically comes with increased he