2018 ACA Law Updates, What to Expect

By: Robert Pusateri, Capstone Brokerage Benefits Consultant, January 31, 2018

The information herein should not be construed as legal or tax advice in any way. Regulations, guidance and legal opinions continue to change.

Everyone still must have health insurance in 2018. The penalties are very similar to the 2017 Individual Mandate penalties. The penalty is 2.5% of your total household gross income, or $695 per adult and $347.50 per child, up to a maximum of $2,085. There will be no penalties for not having insurance in 2019.

The individual market has changed dramatically over the last few months. Most carriers have dropped the National coverage PPO plans and reduced benefits while increasing rates. There are only a couple carriers on the NV Exchange and benefits are very limited on plan designs that are being offered to potential subscribers. The age banded system also modified. Children are being rated differently from ages 15-25. The individual rates had a 36.8% increase on average for plans in 2018.

Here are some interesting facts:

• 63% of employer’s say that employee’s satisfaction with benefits is important for a company’s success

• On average, 40% of employees do not understand their benefit coverage

• 46% of employers are outsourcing reporting and other regulatory requirements

• 44% of employers have outsourced 1095 forms

• 65% of those employers are concerned about their data accuracy

• 80% of companies now outsource at least one HR activity

• 86% of midsized to large groups say having 24/7 access to benefit information is very important to them.

• However, only 66% of midsized groups and 72% of large groups offer online access

ACA reporting is still mandated for all Large Groups with 50+ Full-time Equivalents(FTE). These forms include the 1095-C form and the 1094-C form. The IRS deadline for providing 1095-C forms to employees is March 2, 2018. The deadline for employer’s paper filing 1095-C forms is February 28, 2018. The deadline for Electronic Filing is April 2, 2018. Large employers that file 250+ information returns during the calendar year must file the returns electronically.

Steps for Employers who will Report Electronically under the AIR System

For employers who plan to file electronically without a third-party transmitter:

• Register at e-services. https://www.irs.gov/Tax-Professionals/e-services—Online-Tools-for-Tax-Professionals.

• After completing registration, you will receive an email from the IRS, and several days later you should receive a letter in the mail. When you get this letter, log in to e-services again and confirm your registration. You must log back into the e-Services web site within 28 days of your registration to enter your confirmation code you receive in the mail.

• You must have at least two responsible officials, and both (or all) of them must be registered on e-service or they can’t sign at the end of the TCC application in Step 2.

Apply for a TCC, Transmitter Control Code. You can only do this after completing the e-services registration process.

IRS Forms

◦ 1095 B – Health Coverage- (Carriers Provide) The health insurance carrier will send these to subscribers directly showing coverage dates

◦ 1094 B – Transmittal Form to IRS – (Carriers Provide) The health insurance carrier will receive this form to track how we all have coverage in 2017

◦ 1095 C – Employer Provided from to Employees-these forms are to make sure Large Employers are offering minimum value and affordable coverage to all full-time employees

◦ 1094 C – Transmittal Form to IRS-This form is submitted to the IRS from the employer

Accurate and timely responses to the IRS are critical to reduce or eliminate penalties and avoid future issues. For more information about these changes reach out to a knowledgeable Insurance professional, we are happy to assist anyone needing more information.