American Fidelity Assurance Company's goal is to be our customers' primary resource for managing challenges and changes resulting from the Patient Protection and Affordable Care Act (ACA) and rising health care costs. This website is a resource to help our customer groups focus on the steps you need to take today, find the answers you need, and plan for additional changes. We look forward to helping you during the months and years ahead.
On Friday December 22, 2017, the IRS announced an extension of the due dates to provide Forms 1095-B and 1095-C to individuals for the 2017 tax year. IRS Notice 2018-06 extends the due date for the forms from January 31, 2018 to March 2, 2018. Large employers (50 or more full-time employees, including equivalents) and self-insured employers (of any size) now have an additional 30 days to furnish employees or covered individuals with information statements regarding 2017 health coverage.
While the extension of the deadline to furnish forms provides busy employers with a bit of breathing room at year’s end, employers must remain diligent. The notice does not extend the due dates for filing 2017 information returns with the IRS using Form 1094. Large employers and health coverage providers (including self-insured small employers) must still file Form 1094-C or Form 1094-B together with copies of all individual Form 1095 statements by the original deadline. For paper filing (permitted for fewer than 250 individual statements), the due date remains February 28, 2018. The deadline for electronic filing (mandatory for 250 or more individual statements) remains April 2, 2018. A 30-day extension to this deadline may be requested by filing IRS Form 8809 as soon as the need for more time is known, but no later than the filing deadline.
In recognition of the ongoing challenges involved in developing procedures and systems to accurately collect and report this information, the IRS also extended to 2017 the availability of good faith relief from penalties for reporting incorrect or incomplete information. This relief may apply where reporting entities can show that they made good faith efforts to comply with the reporting requirements, including for missing/inaccurate taxpayer identification numbers and dates of birth. No good faith relief is available for failure to file an information return or furnish a statement by the due dates (as extended). Filers must still show reasonable efforts to prepare for the reporting. More information on the good faith standard is available in IRS Notice 2018-06.
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The Internal Revenue Service (IRS) recently released the final forms and instructions large employers (50 or more full-time employees, including equivalents, during the prior calendar year) must use to meet their 2017 Employer Mandate reporting obligations under the Patient Protection and Affordable Care Act (ACA). Employers may now view final versions of the following:
While the final forms and instructions are virtually identical to the draft versions released earlier this year, employers should take note of the following:
ACA information reporting deadlines are quickly approaching, and it can take considerable time and internal resources to gather the data and information needed to complete the Form 1095 employee statements and Form 1094 employer returns. This means that employers need to prepare now to file information returns on time – by mailing Form 1095 employee statements on or before January 31, 2018 and filing Form 1094, together with copies of all Forms 1095, by either February 28, 2018 (paper filings) or April 2, 2018 (electronic) – and should start work ASAP to gather the necessary data.
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After several days of speculation and negotiation, Senate Republicans successfully passed a tax reform bill in the early hours of Saturday morning in a 51-49 vote. The bill includes language authorizing the repeal of the Individual Mandate, the requirement that individuals obtain health insurance or pay a tax.
The Congressional Budget Office has estimated that the repeal of the Individual Mandate will save $338 billion over 10 years, and result in 13 million more uninsured Americans in that time.
The Tax Cuts and Jobs Act was passed in the House of Representatives in mid-November, though the House and Senate versions have significant differences (including the repeal of the Individual Mandate, which was not present in the House bill, despite rumors it might be included).
The bill must now either return to the House to be passed as-is, or the House and Senate will go to conference to reconcile the differences between the House version and its Senate counterpart. Some reports have indicated that congressional leadership intends to present a reconciled bill to President Trump before Christmas.
Senator Susan Collins (R-ME) has indicated that her vote in favor of this tax bill came after Senate Majority Leader Mitch McConnell (R-KY) assured her he would support two bills providing funding to stabilize markets and reduce premiums. It remains to be seen if or when those bills will be presented for a floor vote.
As always, American Fidelity is committed to providing our customers with up-to-date information on changes to the law. In the meantime, remember that the ACA is still the law. Employers should continue current compliance efforts while watching and waiting for new developments.
For more information about this and other regulatory developments, visit our website at HCReducation.com.
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A number of employers and individuals are asking whether they still need to comply with the Patient Protection and Affordable Care Act (ACA)’s Employer and Individual Mandates and associated information reporting requirements.
The answer is YES – the ACA remains the law and both employers and individuals must comply or face potential penalties. The IRS’s Office of Chief Counsel recently released four information letters emphasizing the need for continued compliance with the Employer and Individual Mandates.
IRS Letters 2017-0010 and 2017-0013 address questions about the employer requirements of the ACA. For large employers (averaging 50 or more full-time employees including equivalents during the previous calendar year), a penalty may apply for failure to offer adequate, affordable health coverage to 95% of full-time employees and their dependent children. The new IRS letters emphasize that there is no waiver of the ACA’s Employer Mandate for large employers, even if compliance causes financial or religious burdens. The letters state unequivocally that the President’s executive order directing federal agencies to minimize the law’s "unwarranted economic and regulatory burdens" did not change the law itself. The ACA remains in force unless changed by Congress.
IRS Letters 2017-0011 and 2017-0017 address questions about the Individual Mandate requirements of the ACA. The letters explain that all individuals must either cover themselves and their dependents, qualify for an exemption, or face a penalty at tax time. Individuals who do not maintain minimum essential coverage and who do not qualify for a coverage exemption must make a shared responsibility payment when filing their federal income tax returns. Like the employer shared responsibility letters, the letters to individuals emphasize the point that the executive order directing the agencies to minimize the ACA’s burdens does not change the Individual Mandate. Individual taxpayers and their families are still required to follow the ACA.
During an informal, nonbinding discussion in early August, IRS representatives indicated that there is not likely to be an extension of 2017 information reporting deadlines, nor is there likely to be a renewal of last year’s relaxed "good faith effort" enforcement of the information reporting rules. Because penalties of up to $260 per return may apply for late, inaccurate, or missing information, employers should take steps to ensure the accuracy of the data reported. ACA Information Reporting Deadlines Quickly Approaching
ACA information reporting deadlines are quickly approaching, and it can take considerable time and internal resources to gather the data and information needed to complete the Form 1095 employee statements and Form 1094 employer returns. This means that employers need to prepare now to file information returns on time – by mailing Form 1095 employee statements on or before January 31, 2018 and filing Form 1094, together with copies of all Forms 1095, by either February 28, 2018 (paper filings) or April 2, 2018 (electronic) – and should start work ASAP to gather the necessary data.
As always, American Fidelity is committed to providing our customers with up-to-date information on changes to the law. In the meantime, remember that the ACA is still the law. Employers should continue current compliance efforts while watching and waiting for new developments.
Need assistance planning for 2017 and beyond? Contact your American Fidelity representative or email HCR@americanfidelity.com.
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Shortly after midnight last night, three Republican senators delivered crucial “no” votes to, at least temporarily, end GOP hopes of passing a bill to repeal the Patient Protection and Affordable Care Act (ACA). The bill sought to eliminate the ACA’s individual mandate, partially repeal the employer mandate, defund Planned Parenthood for one year, and eliminate the medical device tax.
The late-night vote ended a week of frenzied activity on the Senate floor. Here is a brief recap of the week’s events:
Senators Lisa Murkowski and Susan Collins were the only Republicans to vote against Tuesday’s motion to proceed with debate, a vote which ended in a tie, broken by Vice President Mike Pence. After voting to open debate on health care reform, the Senate then voted on three bills designed to repeal or replace the ACA. The first, a modified version of the Better Care Reconciliation Act of 2017 (BCRA) introduced earlier this month, was soundly defeated when nine GOP senators joined their Democratic colleagues in voting no. The second, a resurrection of a 2015 bill to repeal the ACA and replace it after a two-year delay, failed with seven Republican “no” votes. Senators McCain, Murkowski, and Collins voted against the third bill late Thursday evening, ending nearly a week of debate and voting on health care.
Senate Majority Leader Mitch McConnell has indicated that it is now time for Republicans to move on from health care to focus on other policy priorities such as tax reform. While further repeal efforts may yet emerge from Congress, the week’s events signal poor chances of an ACA repeal in the near term.
As always, American Fidelity is committed to providing our customers with up-to-date information on changes to the law. In the meantime, remember that the ACA is still the law. Employers should continue current compliance efforts while watching and waiting for new developments.
Need assistance planning for 2017 and beyond? Contact your American Fidelity representative or email HCR@americanfidelity.com.
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Senate Republicans voted today to open debate on a bill aimed at rolling back the Patient Protection and Affordable Care Act (ACA).
In recent days, Senators had indicated they didn’t know whether they would be asked to consider the House’s repeal-and-replace bill, a version of the Senate bill which was introduced last month and amended, or a resurrected 2015 repeal-only bill. It remains unclear what the contents of the final bill will be after the Senate's allotted 20 hours of debate.
The vote – the motion to proceed – is a procedural one, allowing the Senate to take up debate and hold a vote-a-rama, a frenetic session in which senators can call for a vote on an endless series of amendments.
Senate opposition to the previously proposed legislation had made it questionable whether even the motion to proceed would pass. Senator Susan Collins, of Maine, had indicated she would not vote to open debate if the debate was over the Senate’s Better Care Reconciliation Act of 2017 (BCRA), and others had indicated a reluctance to move forward without a clear picture of the leadership’s intentions. Collins and Alaska Senator Lisa Murkowski both voted no, along with all 46 Democrats and 2 Independents, leaving it to Vice President Mike Pence to cast the tie-breaking vote.
American Fidelity is committed to providing our customers with up-to-date information on changes to the law. In the meantime, remember that the ACA is still the law. Employers should continue current compliance efforts while watching and waiting for new developments.
Need assistance planning for 2017 and beyond? Contact your American Fidelity representative or email HCR@americanfidelity.com.
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Senate Republicans have released an updated draft of the Better Care Reconciliation Act of 2017 (BCRA), the health care repeal-and-replace bill originally released three weeks ago. Like the American Health Care Act (AHCA) passed by the House of Representatives, this bill would roll back many provisions of the Patient Protection and Affordable Care Act (ACA).
(For a complete overview of the AHCA and the BCRA, please see our whitepaper.)
In addition to repealing many of the same ACA provisions as the original BCRA, this draft would permit insurers to offer lower-premium catastrophic plans in addition to more robust options. These plans would have reduced premiums, but would offer a lower level of coverage than required under current law.
Other additions to the bill, aimed largely at convincing conservative senators to sign on, include a provision which would allow qualified individuals to use Health Savings Account funds to pay insurance premiums, add an additional $70 billion for state stability funds, and provide $45 billion for opioid addiction treatment.
The previously-released draft of the BCRA would have repealed a number of taxes; the updated version would leave some of those taxes intact. While this would help alleviate revenue concerns associated with the previous version of the bill, it may not fully sway some legislators as the taxes were the source of significant Republican objection to the ACA. Those taxes include the tax on net investment income, tax on the income of certain health insurance executives, and the additional Medicare Health Insurance tax.
Sens. Susan Collins and Rand Paul have both offered public objections to the BCRA – the changes are not likely to change their positions, and the GOP leadership cannot pass the bill if there are any other defectors. It remains to be seen whether Senate Majority Leader Mitch McConnell can raise enough support to pass the bill.
American Fidelity is committed to providing our customers with up-to-date information on changes to the law. In the meantime, remember that the ACA is still the law. Employers should continue current compliance efforts while watching and waiting for new developments.
Need assistance planning for 2017 and beyond? Contact your American Fidelity representative or email HCR@americanfidelity.com.
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The Senate’s recently-released Better Care Reconciliation Act of 2017 received a score yesterday from the non-partisan Congressional Budget Office (CBO). The CBO reports that the bill would reduce the federal deficit by $321 billion over the next decade. This marks a significant increase over the $119 billion reduction afforded by the American Health Care Act passed in the House of Representatives in May.
The bill is estimated to reduce federal spending by more than a trillion dollars, and would reduce revenue by $701 billion. The most significant savings are, as with the House bill, the result of reductions in Medicaid expenditures, as well as reductions in the subsidies available for individual insurance.
The CBO report also estimates the impact of the bill on health insurance coverage; in 2018, 15 million more people would be uninsured than under current law. This number is expected to rise to 22 million by 2026. This number is slightly better than the score for the House bill, which put the 2026 estimate at 23 million more uninsured individuals.
For an overview of both the House and Senate versions of the GOP health care bills, please view our whitepaper.
American Fidelity is committed to providing our customers with up-to-date information on changes to the law. In the meantime, remember that the Patient Protection and Affordable Care Act (ACA) is still the law. Employers should continue current compliance efforts while watching and waiting for new developments.
Need assistance planning for 2017 and beyond? Contact your American Fidelity representative or email HCR@americanfidelity.com.
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Ending weeks of speculation, and amid rumors of a vote before the July 4 congressional recess, Senate Republicans have released the text of their health care repeal-and-replace effort. The bill rolls back or eliminates significant portions of the Patient Protection and Affordable Care Act (ACA), including a repeal of the penalties associated with the Employer Mandate and Individual Mandate retroactive to January 1, 2016.
The bill bears some resemblance to its House predecessor, keeping many of its broad strokes while tweaking its details. It keeps, for example some of the same waivers for states, but excludes the waiver for community rating found in the House bill. It also seeks to phase out the ACA’s Medicaid expansion, but on a three-year timetable beginning in 2020, instead of an immediate stop that year. States would have the option to receive Medicaid funds on either a per capita basis or via a block grant. The Senate bill’s funding would grow more slowly than the House’s, meaning a smaller allotment.
In addition to the similarities to the House bill, the Senate effort offers a number of modifications and outright departures:
The bill also repeals the ACA’s tax provisions, including the taxes the ACA imposed on medical devices and the health insurance tax.
Questions remain about whether all of the bill’s provisions will pass muster under the watchful eye of the Senate Parliamentarian – the GOP’s actions remain limited by the rules of budget reconciliation, which would enable them to pass their bill with only 50 votes (plus the vote of Vice President Mike Pence to break a tie, if necessary).
For a more in-depth look at both versions of the Republicans’ repeal-and-replace efforts, download our whitepaper.
American Fidelity is committed to providing our customers with up-to-date information on changes to the law. In the meantime, remember that the ACA is still the law. Employers should continue current compliance efforts while watching and waiting for new developments.
Need assistance planning for 2017 and beyond? Contact your American Fidelity representative or email HCR@americanfidelity.com.
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When the American Health Care Act (AHCA) was passed by the House of Representatives at the beginning of May, the bill’s final form had not yet been scored by the Congressional Budget Office (CBO). The CBO announced their score yesterday, and their analysis has given the Senate the information they need to move ahead with their own version of the bill.
Under Senate rules, the bill is required to reduce the deficit by $2 billion over the next 10 years - $1 billion by each of two Senate committees. The CBO score, which anticipates savings of $119 billion over the next decade, paves the way for the Senate to attempt passing the bill through the budget reconciliation process. This number is lower than previous estimates for earlier versions of the bill, which anticipated a $151 billion in the federal deficit.
The CBO report also included an estimate of coverage under the new legislation. The report released yesterday estimates 23 million fewer individuals will be covered by 2026 under the AHCA than are covered under the Patient Protection and Affordable Care Act (ACA). Scores of previous versions of the bill predicted 24 million fewer individuals would be covered in 2026.
This slight improvement in the number of uninsured people is unlikely to alleviate pressure on moderate Republicans who opposed the bill’s previous iterations because of the rising number of uninsured individuals.
The CBO report addresses the type of coverage likely to be available under the AHCA. In states that adopt waivers of existing ACA provisions, more people may have access to coverage that is cheaper, but less robust. Additionally, people with pre-existing health conditions could face higher premiums if they reside in a state that elects to waive current restrictions on pricing based on health status under the AHCA (if enacted).
Senate Republicans have signaled an intent to introduce completely new legislation when the bill arrives in their chamber. They have assembled a group of 13 senators who represent both the party’s conservative and moderate wings tasked with developing a bill amenable across the GOP spectrum.
American Fidelity is committed to providing our customers with up-to-date information on changes to the law. In the meantime, remember that the ACA is still the law. Employers should continue current compliance efforts while watching and waiting for new developments.
Need assistance planning for 2017 and beyond? Contact your American Fidelity representative or email HCR@americanfidelity.com.
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Six weeks after their first attempt to hold a vote on the American Health Care Act (AHCA), Congressional Republicans passed the bill in a 217 to 213 vote yesterday, moving forward with their campaign promises to repeal and replace the Patient Protection and Affordable Care Act (ACA).
The passage comes after weeks of negotiation and the inclusion of the critical Meadows-MacArthur Amendment. Designed to appeal to conservative members of the party, the amendment allows states to apply for waivers to opt out of certain ACA requirements. States with waivers could:
The AHCA was also amended by Rep. Fred Upton (MI) to include $8 billion in additional funds to help cover costs for individuals with pre-existing conditions in states that receive a waiver.
A detailed summary of all key provisions of the AHCA is available in our AHCA white paper.
The AHCA’s ultimate prospects are still far from clear. There are questions as to whether Republicans can continue to use the “fast-track” budget reconciliation process to move the bill through the Senate with only a simple majority, or whether the changes introduced by the Meadows-MacArthur Amendment would require a 60 vote supermajority under Senate rules.
American Fidelity is committed to providing our customers with up-to-date information on changes to the law. In the meantime, remember that the ACA is still the law. Employers should continue current compliance efforts while watching and waiting for new developments.
Need assistance planning for 2017 and beyond? Contact your American Fidelity representative or email HCR@americanfidelity.com.
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Neither American Fidelity Assurance Company nor American Fidelity Administrative Services provides tax or legal advice and, given the complexity of these laws, we always recommend working with your legal counsel on how the laws impact your specific situation.
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