2 2:30 P.M. Thursday October 8, 2015 ACA Small Market Fix (PACE - PowerPoint PPT Presentation

2 – 2:30 P.M. Thursday October 8, 2015 ACA Small Market “Fix” (PACE Act), 2015 Transitional Reinsurance Fee & Year-End Action Items Andrea Esselstein, JD Luke Clark Group Benefits Compliance Senior Consultant Team Leader Group Benefits

“PACE” YOURSELF FOR 2016 Transitional Effective Reinsurance Due October 1, 2015 Date Small Market “Fix” November 15, 2015 (PACE Act)

AGENDA » AFFORDABLE CARE ACT (ACA) IMPLEMENTATION HIGHLIGHTS IN THE NEWS: The PACE Act ACA TIMELINE: 2016 REPORTING REQUIREMENTS TRANSITIONAL REINSURANCE FEE: Update STRATEGIC CONSIDERATIONS: 2016 Action Steps for Employers 3

HARD AT WORK…

THE PROTECTING AFFORDABLE COVERAGE FOR EMPLOYEES (PACE) ACT  Each state will continue to determine IF AND WHEN to BREAKING NEWS! expand the definition of the small group health insurance October 8, 2015 marketplace to include companies with 51-99 employees President Signs  Initially, under the ACA, small group is defined as fewer PACE Act than 50 employees from 2014 – 2016 to expand to fewer than 100 in 2016 Passed In Congress  State-by-state variances will remain as states, along with state insurance departments, determine the October 1, 2015 definition of the small group market  The small group definition in the following states has already Small Group Market been changed to 1-100 employees. District of Columbia, CA, “Fix” CO, MD, NY, VA and VT 5

COMMUNITY RATING NEW FEDERAL RULES FOR RATING EMPLOYER PREMIUMS: SMALL GROUP MARKET OVERVIEW COST IMPACT? • No Rating Based on Employee No Immediate Impact Health History • Grandfathered Plans • Rating for Adults Limited to 3:1 • 100 + Employees Ratio (Oldest to Youngest) Greatest Impact 2015 Rates may Substantially • • One-year Age Bands from Increase (< 50 Full-time Employees) 21-63 Employers in States Shifting to • • 63 & Older Community Rating • Single Age Band < Age 21 Largest Rate Increases for • • Geography within a State Young Healthy Groups • Tobacco Use = 1.5:1 Potential Decrease for Older • Unhealthy Groups • Coverage Tier COST CONTROL INCENTIVE FOR GROUPS IN 2016 AND BEYOND? 6

» COMPLIANCE UPDATE 2015 - 2016 REMINDERS

KEY ACA REQUIREMENTS IMPACTING EMPLOYERS HIGH-LEVEL TIMELINE & QUICK REMINDERS 2 ▼ ONGOING REQUIREMENTS 0 1 2011 - 2013… 4 Preventive Care Form W-2 Reporting Summary of Benefits and … $2,550 Flexible Without Cost Sharing Employers Filing at Least Coverage (SBC): 4 Page Spending Account (2011) 250 Forms W-2 in 2014 “Mini - SPD” (2012) (FSA) Limitation Women’s Preventive Report Aggregate Value of Revised Template: 2014 (2015) Care (2012) Health Coverage on 2015 NEW 2 1/2 Page Template (Non-GF Plans) Form W-2 (2012) Effective September 2015 2014… Exchange Notice (01.01.13) Ban on Lifetime Dollar Dependent Coverage Ban on Preexisting Must be Distributed to New Limits (2010) & Expansion to Age 26 Condition Exclusions Hires within 14 Days of Hire Annual Dollar Limits Regardless of Access to (2014) (ALL Employees -- Regardless for Essential Health Employer-Sponsored of Eligibility ) Benefits (2014) Health Coverage 2014 – 2015… Guaranteed Issued Coverage for Employer Coverage Payment of 90 Day Waiting COBRA Continuants & Transitional Mandate, Penalty Period Limitation Pre-65 Retirees Reinsurance Fee Exposure & Reporting (2014) COBRA Notices Modifications through Pay.Gov Requirements of New Exchange Options “Shared Responsibility”

ACA TIMELINE 2015 and Beyond ONGOING ▼ REQUIREMENTS 2015-2016 EEOC Rules Define “Voluntary” Wellness Limits to Out-of-Pocket Maximums for HDHPs (2015) Title 1 of ADA applies to 15+ employees 2015: $6,600 (Individual) & $13,200 (Families) Wellness programs in Group Health Plans providing incentives 2016: $6,850 (Individual) & $13,700 (Families) for “disability related inquires or medical examinations.” Tobacco-free incentives provided based on cotinine testing results. No applicable regulations for affidavits. 2015-2016 Employer Reporting Requirements Effective On June 26, 2015, the U.S. Supreme Court ruled that all IRS Section 6055 : Reporting information required by insurers and couples, regardless of gender, have a fundamental right of small self-funded employers as to which individuals are enrolled in marriage, leading to the legalization of same-sex Minimum Essential coverage. marriages nationwide. Also on June 26, 2015, the U.S. IRS Section 6056 : Reporting information required by large employers Supreme Court rules to uphold subsidies in all states . full-time employees (those employed for one month or more) were offered coverage and the lowest amount an employee may pay to receive Minimum Value coverage. 2016 -2018 Cadillac Tax Effective 2018 40% Excise Tax on High-Value Plans In 2018, this tax on both fully insured and self-funded plans applies to the plan value in excess of $10,200 ($850 / month) for single coverage; $27,500 ($2,292 / month) for other than self-only coverage (family coverage). Costs align with Cost-of-Living adjustment not Medical Inflation

UPCOMING KEY DATES October 2015  MEDICARE PART-D NOTICE Distribute Medicare Part D notice of Creditable or Non-Creditable RX coverage to Medicare-eligible Employees by October 15 th  FILE 5500 ANNUAL REPORT October 15 th deadline for submission to IRS for calendar year plans; timely request for extension Form 5558. Distribute by December 15, 2015  FINALIZE PLAN ELIGIBILITY ASSESSMENT Employer with 50 or more full-time employees (including full-time equivalents) subject to ACA “Shared Responsibility” coverage mandate beginning January 1, 2016  PLAN DOCUMENTS TO REFLECT ANY ELIGIBILITY CHANGES Incorporate any changes in the definition of eligible employees within plan documents, open enrollment material and employee handbooks if describing eligibility and plan participation  EMPLOYER REPORTING OBLIGATIONS Compliance with IRS Code Section 6055 & 6056

2016 Open Enrollment CHECKLIST SNAPSHOT Several Listed Notices are NOT Specifically Required within Open Enrollment 11

» REPORTING REQUIREMENTS REMINDERS

EMPLOYER REPORTING REQUIREMENTS Required to Report? Employers with 50 or more  Full-time Employees IRS Section 6055 : Reporting information required by insurers and small self-funded employers as to which (including Full-time individuals are ENROLLED in Minimum Essential coverage. Equivalent Employees) IRS FORM 1095-B OR Combined Form 1095-C IRS Reporting Begins for Employers with 50-  IRS Section 6056 : Reporting information required by ALL 99 Full-time Employees large employers as to whether full-time employees (those employed for one month or more) were OFFERED coverage in 2015, EVEN and the lowest amount an employee may pay to receive THOUGH Not Subject Minimum Value coverage. to the Employer Coverage Mandate & IRS FORM 1095-C Penalty Exposure until Plan Years on or after January 1, 2016. 13

» TRANSITIONAL REINSURANCE FEE

TRANSITIONAL REINSURANCE FEE HIGHLIGHTED EMPLOYER CONSIDERATIONS 2015: $44 ANNUALLY PER COVERED LIFE Self-Funded Plan Sponsors Applies to Both Fully Insured and Required to Register & Pay Fee Self-Insured Group Health Plans (GHPs) www.Pay.gov Fully Insured Plans: Insurer Responsible for Paying the Fee November 16, 2015 Covered Lives includes Dependents Number of Covered Lives Reported by (Employee, Spouse & Child = 3 Covered Lives) Self-Funded Sponsors (Employers) First Installment Second Installment $33 Per Covered Life Due $11 Per Covered Life Due by No Later than January 15, 2016 November 15, 2016

TRANSITIONAL REINSURANC FEE ACA & ERISA COMPLIANCE IRS REPORTING REQUIREMENTS ACA PENALTY EXPOSURE CADILLAC TAX HIPAA & DOL AUDITS

Supporting Documentation – CSV File Completion of this file this year is not needed unless the Reporting Entity or Contributing Entity is filing on behalf of 4 or more Contributing Entities ACA & ERISA COMPLIANCE IRS REPORTING REQUIREMENTS ACA PENALTY EXPOSURE CADILLAC TAX HIPAA & DOL AUDITS

TRANSITIONAL REINSURANCE FEE Timeline Register on Pay.gov Or Confirm Your Password From Full Contribution Payment Previous Year Amount Due By January 15, 2016 One Payment Contribution Submit Payment By November 16, 2015 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar 1 Apr 1 May 1 Jun 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov Two Part Contribution Two Payment Contribution Two Part Payment Contribution Second Payment Due Submit First Payment First Payment Due By By November 16, 2015 By November 15, 2016 And January 15, 2016 Schedule Second Payment

ESSENTIAL DATES January, February & March 2016  PAY TRANSITIONAL REINSURANCE FEE Payment of ACA Transitional Reinsurance Program fees are due January 15, 2016  PROVIDE EMPLOYEES WITH FORM 1095-C STATEMENTS Deliver coverage information statements to employees using IRS Form 1095-C by February 1, 2016  FILE IRS INFORMATIONAL RETURNS FORMS 1094-C & 1095-C Employers subject to the reporting requirements must file information returns by March 1, 2016 (one day later than the standard deadline because February 28, 2016 is a Sunday) or by March 31, 2016 , if filing electronically