After managing to jettison the individual mandate requiring U.S. adults to carry health coverage, efforts are afoot in Congress to do away with the Affordable Care Act employer mandate, although there seem to be mixed views on the reality of the legislation making it to the president’s desk.
One bill, HR 4616, is currently in the House Ways and Means Committee awaiting further amendments before a vote can be made on it. The measure would suspend penalties for the employer mandate for 2015 through 2019, as well as postpone implementation of the “Cadillac tax” on high-cost employer-sponsored health plans for one more year, until 2022.
The Congressional Budget Office and the congressional Joint Committee on Taxation have estimated that the bill would increase the size of the federal budget deficit by $39.5 billion over the period from 2019 through 2028. This would be the result of decreased government revenue and additional spending.
The employer mandate requires applicable large employers (or ALES, which are firms with 50 or more full-time or full-time equivalent workers) to offer affordable health coverage that also covers certain minimum essential benefits as required by the ACA.
Employers that fail to offer health insurance could be fined up to $2,300 for every employee that wasn’t offered coverage, and up to $3,480 per employee who is eligible for an ACA exchange premium tax credit because they do not have access to affordable employer-sponsored health coverage.
This being an election year, however, pundits have told trade publications that they don’t think the legislation will be brought to vote in 2018.
For now, if you are an ALE that’s required to secure health insurance for your workers, you still have a number of obligations under the ACA. There has been no legislation that rolls back any requirements on employers in regards to securing coverage for their employees.
With that in mind, if you’re an ALE you need to keep the following top of mind:
The IRS is assessing penalties for ACA infractions – Employers that are flagged for possibly not providing affordable coverage that covers the minimum essential benefits, or have made filing errors, may receive a 226-J letter from the IRS.
The letters explain that the employer may be liable for a penalty, based on information obtained by the IRS from Forms 1095-C filed by the employer for a specific coverage year, and tax returns filed by the employer’s employees. If you receive a letter, you have 30 days to respond.
If you fail to respond, within 30 days, it will result in a final assessment of the proposed penalty.
You must still file Forms 1094-C and 1095-C, or risk a penalty for not doing so.
The IRS uses information on Forms 1095-C in applying the ESRP (employer shared responsibility payment) rules and deciding whether to assess penalties against the reporting employer. If you’re an ALE, you are required to file Form 1095-C annually with the IRS as well as send the forms to your employees. You must provide the forms to employees by Jan. 31, and to the IRS by March 31 of every year.
Failure to submit the forms to the IRS or provide them to employees as required can result in penalties. The penalties can be doubled if the IRS finds that an employer intentionally flouted the filing requirement.
Summary of Benefits and Coverage forms are still required – Not only are they still required, but the Centers for Medicare and Medicaid Services has, on occasion, rolled out new language and information that it requires all SBCs to include.
The SBC is designed so that your employees can easily compare plans, so they can make an informed decision about which health plan they should choose from your offerings.
If you fail to provide an SBC to your staff, it can result in penalties of $1,128 per employee.
While machinations continue in Washington, the full spectrum of employer-related rules of the ACA still applies. The administration has introduced new rules that would allow for “association” plans to be sold, but as of now no such plans have hit the market.
And due to the complexities of the ACA and the difficulty in having unlike employers band together for coverage, the marketplace may be slow to come up with products that are ACA-compliant (including complying with the affordability requirements of the law, as well as providing the minimum essential benefits as prescribed by the law).
That means ALEs should just continue complying with the law fully.