Key ACA Impacts this Open Enrollment for Businesses with 2-49 Employees

Key ACA Impacts this Open Enrollment for
Businesses with 2-49 Employees
Key topics to consider for small businesses this Open Enrollment:
1
Ensuring your health plan offering is compliant
2
Exchange notifications for employees
3
How “Pay or Play” impacts your business
Ensuring your small business is offering a compliant health plan
Health Care Reform requires that small business health plans include specific benefits and
cost-sharing values. Excellus BlueCross BlueShield has and will continue to offer fully
compliant small business plans. To learn more about our plan options, contact your broker or
visit ExcellusBCBS.com.
Notifying employees about Health Insurance Exchanges
Last year, employers were required to send a notice to all employees informing them of the Health
Insurance Exchanges. This year, such a notice is required for new hires. Any employer that is
subject to the Fair Labor Standards Act (FLSA) needs to provide the notice. The notice needs to be
provided by employers who offer health insurance, and those who do not offer health insurance. For
more detailed information, see the enclosed Employer’s Guide To Health Care Reform.
How “Pay or Play” (Employer Responsibility) impacts your business
As a reminder, an employer with less than 50 eligible employees is considered a “small
employer.” To verify if you are subject to the Employer Mandate, which requires employers
with 50 or more full-time equivalent (FTE) employees to offer coverage or pay a penalty,
calculate the number of full-time equivalent employees. The guide will show you the steps you
can take to determine FTE employees.
For information on these topics and more, you can use the enclosed guide and
Health Care Reform Checklist for Businesses with 2-49 Employees.
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
A nonprofit independent licensee of the Blue Cross Blue Shield Association
Employer’s Guide To Health Care Reform
National strength. Local focus. Individual care.
SM
As part of our commitment to being the trusted advisors you have come
to count on for information pertaining to Health Care Reform, we have
updated our Resource Guide to include the information you need to stay
ahead of changes that impact you and your business. This Resource Guide
continues to cover many Frequently Asked Questions (FAQs), including the
options you have, information you will need, and questions to consider along
the way to ensure you and your company are protected.
Table of Contents
HCR for Small Group Employers
Learn what’s new for Small Group Employers in 2015 Page 1
HCR for Large Group Employers
Learn about HCR large group employer mandate and what’s new in 2015 Page 2
Employer Penalties
Page 5
Information about the penalties certain employers face if they do not
provide health insurance coverage to employees
Reporting and Notifications
Page 8
Learn about coverage reporting “6056” for large groups, and
“6055” for small groups, including the information reported, and
how and when to file reports
Future Considerations
Page 10
Learn about future changes that will impact your business
Background & Common Terms
Health Care Reform is now health care - Key components of Page 11
HCR reform such as preventive services and essential health benefits
Taxes & Fees - Review the taxes and fees that insurance companies Page 12
and employers may have to pay under Health Care Reform
Common Terms - Commonly used words to help you understand Page 13
HCR terminology
Health Care Reform Checklist for Small Businesses
Page 14
Health Care Reform Checklist for Large Businesses
Page 17
2015 HCR for Small Group Employers
There are no additional Heath Care Reform regulation changes for Small Group
employers in 2015.
As a reminder, an employer with less than 50 eligible employees is considered a “small employer.”
To verify if you are subject to the Employer Mandate, which requires employers with 50 or more full-time
equivalent employees to offer coverage or pay a penalty, calculate the number of full-time equivalent
employees as described on page 3. If you have 50 or more full-time equivalent employees based on the
calculation, you need to offer affordable, minimum coverage in order to avoid penalties.
To help you prepare for upcoming HCR changes, see the 2015 HCR Checklist for Small Group Employers
on page 14.
Please contact your account consultant for coverage options for those employees who are not eligible for
employer coverage.
1
2015 HCR Update For Large Group Employers
HCR Employer Mandate
Health Care Reform’s Employer Mandate requires employers with 50 or more full-time equivalent employees to
pay a penalty if they don’t provide minimum value, affordable health insurance to their full- time employees and
dependent children. Under Health Care Reform, “full time” is defined as an employee who works on average 30
hours or more per week. Those who do not offer coverage must pay a penalty of $2,000 per full-time employee
(not including the first 30 employees). If the employer has never offered health insurance to their employees in
the past, they will be required to offer insurance or pay the penalty.
50-99 Employees
Penalties apply upon renewal in 2016
100+ Employees
Penalties apply upon renewal in 2015
Until 2016, $2,000 per employee if
coverage is not offered to at least 70% of
full-time employees
If an employer of 50 or more full-time equivalent employees does not offer affordable health coverage that provides a minimum level of benefits, they may be subject to a $3,000 penalty for each employee who does not take
the employer-sponsored plan and instead applies for coverage on the New York State of Health Exchange and
receives financial assistance for purchasing that coverage.
Financial assistance is only available if:
n Minimum value, affordable coverage is not being offered to them through their employer
n They are not qualified for OR currently receiving Medicaid or Medicare, OR
n Affordable coverage is not available through their spouse’s employer.
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Employers will not be assessed a penalty if they offer minimum essential coverage to all but 5% or 5 full-time
employees, whichever is greater.
What “50+ employees” means under Health Care Reform
The graphic below illustrates how you can calculate the employer’s company size.
Company Size Calculator
Complete the form below to calculate the employer’s company size.
=
÷ 120 +
Total number of monthly
hours worked by parttime employees (those
working less than 30
hours per week)
Total is 50 or more = Large Employer
Total is less than 50 = Small Employer
Number of employees
working more than
30 hours per week
What is “Affordable” coverage?
n Affordability refers to the amount an employee has to pay for the insurance plan if they were to
buy coverage for themselves only.
n If an employee has to pay more than 9.5% of their annual household income for the company’s
health insurance, the coverage is not considered affordable.
In general, there are three ways employers can determine affordability. Employers can use any or all of
these methods:
1. The employee’s share of self-only coverage does not exceed wages reported on Box 1 of IRS Form W-2
2. The employee’s share of self-only coverage does not exceed 9.5% of the employee’s rate of pay
multiplied by 130 hours
3. The employee’s share of self-only coverage does not exceed 9.5% of the Federal poverty line (FPL)
for one person.
Insurance would not be considered “affordable” if:
Employee annual earnings: Insurance plan: More
than $30,000
$238 per month
$50,000
$396 per month
IMPORTANT NOTE: When an employer offers multiple plans to choose from, the affordability test applies to the
lowest-cost plan option available to the employee.
Minimum Value Requirements
If an employer has coverage for their employees today, it is important to ensure that coverage meets the
minimum amount of benefits. Minimum Value (MV) is the amount the Health Plan expects to pay versus the
amount that the member would pay for things like deductibles and coinsurance. The employer’s plan must
have an MV of at least 60%, which means the plan covers at least 60% of the total allowed cost of
benefits that are expected to be incurred under the plan.
3
“Look-Back” to count variable hour employees
Employers may have workers who are not hired as full-time, but who work a variable number of hours throughout a month. An employer may not offer coverage to these employees. But if an employee worked an average of
30 hours or more per week, they should have been offered coverage just like a full-time employee.
There is a safeguard in place for employers who aren’t sure if their employees should be offered coverage.
The “look back” process helps determine if variable hour employees averaged 30 hours or more per week:
Choose measurement period: Select a time period of 3-12 months to measure the actual
number of hours the employee worked
10/15/2015
Measurement Period
Look back 12 months
10/14/2016
1/1/2016
Administrative Period
Figure out
average house
12/31/2017
Offer Coverage
To employees who averaged
30+ hours/week
Calculate employee hours: Employers have up to 90 days after the measurement period to
determine the employees who averaged more than 30 hours per week
Determine mandatory insurance requirements: If an employee averaged 30 hours per week
or more, they must be offered health insurance coverage for 6 months, or the length of the
measurement period.
Please contact your account consultant for coverage options for those employees who are not eligible for
employer coverage.
4
Employer Penalties
WHAT IS THE PENALTY?
The penalty for not offering coverage is $2,000 a year for each full-time employee. The first 30 full-time
employees are not counted. This means that if an employer has 100 employees, the penalty of $2,000 would
apply to 70 employees (totaling $140,000 in penalties)
The penalty for offering coverage that an employee cannot afford (meaning it does not meet the minimum
affordability guidelines) or that does not provide minimum value is $3,000 for each employee that receives
assistance for New York State of Health coverage.
Penalties are determined on a monthly basis and calculated based on the number of months coverage was not
offered or did not meet the minimum requirements. For example, if an employer offers the necessary coverage for
five months out of the year, the penalty would only apply to the seven months when the employer did not offer
coverage.
Penalty Triggers
Employers will learn that they owe a penalty if at least one of their full-time employees purchases insurance from
the New York State of Health and is eligible for help paying their monthly premiums (a “premium tax credit”).
The premium tax credit is available for individuals who fall below certain income thresholds. Once this occurs, the
employer will receive notification and have an opportunity to respond to the Internal Revenue Service (IRS) before
they have to pay the penalty.
If an employee declines employer-sponsored coverage and enrolls in a health plan on the New York State of
Health, the employer would only be charged a penalty if that employee becomes eligible for help paying for the
New York State of Health insurance. Therefore, as long as the employer offers affordable coverage that meets
the guidelines, the employee would not be able to receive a premium tax credit on the New York State of Health ,
and therefore the employer would not pay a penalty.
5
Companies Under Common Law Ownership
A company is considered a large employer when any one company under common ownership exceeds 50 fulltime equivalent employees. For example, if there are 50 or more total full-time equivalent employees within any
one common law company, that company may be subject to the Employer Mandate and pay a penalty. If there
are 50 or more total full-time equivalent employees within all companies under a common owner combined, each
company would be subject to the Employer Mandate, although each of those companies would be assessed a
penalty on its own.
For example, if the John Smith Corporation owns Employer A and Employer B, and the number of employees
under the John Smith Corporation totals 75, each organization will be subject to the employer responsibility
provision. If Employer A offers health insurance coverage that meets federal requirements, but Employer B does
not, only Employer B will be subject to the penalty. When calculating the penalty, the reduction of the first 30
full-time equivalent employees will be divided among all companies under common ownership that do not offer
health insurance coverage, based on their total number of employees.
Corporation X
132 employees
Corporation X owns A Co. and B Co.
A Co.
100 employees
B Co.
32 employees
All employer members must offer coverage or pay a penalty if 100+ total employees
B Co. is not exempt because they are part of Corporation X
ANSWERS TO COMMON QUESTIONS
Do employers have to offer insurance to part-time or contract (1099) employees? No. Employers
who have to provide insurance due to the Employer Mandate are only required to offer insurance to their fulltime employees and their dependent children, not spouses, part-time, seasonal or contract (1099) employees.
However, the employer must keep track of an employee’s hours worked and if they work 30 or more hours per
week, the employer will be required to offer them coverage on a go forward basis or pay a penalty. This is called
the Employer Look Back Process (see above).
Do employers pay a penalty if the employee starts a new job and is not eligible for coverage until 90 days after they are hired? The employer will not have to pay a penalty as long as they offer
minimum affordable coverage after the 90-day waiting period. In addition, the employee will not have to pay a
penalty as long as they maintain insurance for the rest of the year.
Does affordability also apply to prescription drug coverage or just medical coverage?
The affordability guidelines apply to the combined medical and prescription drug coverage, regardless of whether
the employer has one or more insurance companies or managed care organizations offering those plans.
6
How does an employer calculate affordability with full-time employees who work variable
hours? For hourly employees, the 9.5% contribution is based on the actual hours worked. For example,
an employer can look at the actual number of hours worked within a month and determine the employee’s
income versus the employee’s premium contribution to determine if the contribution is less than 9.5% of the
employee’s income. There are a few methods for determining hours if the employee is not paid hourly: 1)
they can count actual hours worked, 2) they can consider the employee to have worked eight hours for each
day they work at least one hour, or 3) they can consider the employee to have worked 40 hours per week for
each week worked.
What if I offer coverage to part-time employees that isn’t “affordable?” Penalties are only
applied to full-time employees. You will not have to pay a penalty for coverage offered to part-time
employees.
7
Reporting and Notifications
Coverage Reporting – “6055” and “6056” reports
n Large Employer Coverage Reporting (“Section 6056 Returns”)
Employers with 50+ FTEs must file returns to the IRS beginning in 2016 for calendar year 2015. These returns
provide information to the IRS to show whether the employer is or is not providing coverage to employees and
that coverage meets minimum value and affordability levels. These returns will show if employers are compliant
with the Employer Mandate.
In addition to the returns, employers must also send a statement to each employee. These statements are similar
to W-2 forms. They give employees information they will need when they file their taxes, only these statements
are used to determine if they were eligible for a premium tax credit.
Who’s Responsible for Filing: Large employers with 50+ FTEs using the Employer Mandate company size
calculation (see page 3)
Information Reported
n Name, address, and employer
identification number (EIN)
n Name and phone number of the
employer’s contact person
How are reports filed?
Returns:
Form 1095-C
Transmittal Forms:
Form 1094-C
n Calendar year of information
being reporting
Filing Due Dates
If filing electronically*:
March 31st of the year following the
coverage year
If filing by paper:
February 28th of the year following the
coverage year
The first returns are due March 31st,
2016
n Certification of whether or not
full-time employees and dependents
were offered coverage
If filing electronically*:
March 31st, 2016
n Number of full-time employees each
month of the year
If filing by paper:
February 28th, 2016
n For each full-time employee, months
in which coverage was available
*Employers that file more than 250 forms
must file electronically
n For each full-time employee,
employee contribution to the
premium of the lowest cost minimum
value plan (self-only) each month
n Name, address, and taxpayer
identification number (“TIN”) for each
full-time employee who was covered,
and which months they were covered
under the employer’s plan
Statements to Employees
n Name, address, and EIN of
the employer
n All information filed on the return
that applies to the employee
8
Copy of Form 1095-C
Electronic Statements can
be used
Statements to employees are due
January 31st of the calendar year
following the year included in the return.
The first statements are due to employees
January 31st, 2016.
Minimum Essential Coverage Reporting (“Section 6055 Returns”)
Insurance providers, including self-funded groups, must file returns to the IRS beginning in 2016 for calendar year
2015. These returns provide information to the IRS to verify if and when individuals were enrolled in minimum
essential coverage. Self-funded plan sponsors can use a combined form to file both coverage reporting returns.
In addition to the returns, employers must also send a statement to each employee. These statements are similar
to W-2 forms. They give employees information they will need when they file their taxes - only these statements
are used to determine if they will have to pay the Individual Mandate penalty for not having health insurance.
Who’s Responsible For Filing: Self-funded plan sponsors, health insurance companies
What Information Is Reported?
n Name, address, Employer
Identification Number (EIN)
n Name address, tax identification
number (“TIN”) (or date of birth if
TIN unavailable) of the subscriber/
beneficiary
n Employer must make “reasonable”
attempts to collect TINs:
n
Initial request upon enrollment
n
Two consecutive annual requests
n Name and TIN (or date of birth if TIN
How Are They Filed?
Returns:
Form 1095-C (combined
form for self-funded plan
sponsors)
Form 1095-B (form for health
insurance plans)
Transmittal Forms:
Form 1094-C (combined
form for self-funded plan
sponsors)
Form 1094-B (form for health
insurance plans)
unavailable) of each individual covered
under the subscriber’s policy
When Are They Due?
If filing electronically*:
March 31st of the year following the
coverage year
If filing by paper:
February 28th of the year following the
coverage year
The first returns are due March 31st,
2016
If filing electronically*:
March 31st, 2016
If filing by paper:
February 28th, 2016
*Employers that file more than 250 forms
must file electronically
n Months in which each individual was
covered for at least one day
n Any other information required by
the IRS
Statements to Employees
n Contact phone number of entity filing
the return
n Policy number
n All information filed on the return
that applies to the employee
Copy of Form 1095-C or
1095-C Electronic Statements
can be used
Statements to employees are due
January 31st of the calendar year
following the year included in the return.
The first statements are due to employees
January 31st, 2016.
Notifying your employees
Notification about the NY State of Health marketplace must be sent to all new hires.
Want to see an example notice? Go to: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf
Health Plan Identifier (HPID)
A Health Plan Identifier (HPID) is a 10-digit ID that will be used to identify a health plan in HIPAA standard transactions. The HPID was created to eliminate the need for multiple identifiers and streamline HIPAA standard transactions, such as enrollment and eligibility transactions.
“Controlling health plans” are required to obtain and use a HPID. A “controlling health plan” is one that controls
its business activities, actions and policies. Self-funded plans are considered health plans and are required to use
HPIDs. If you self-fund you are likely considered a “controlling health plan.”
9
“Subhealth plans” may, but are not required to, obtain a HPID. A “subhealth plan” is a plan whose activities,
actions or policies are directed by a controlling health plan.
As your TPA, Excellus BCBS is not permitted to obtain the HPID on your behalf. Here’s what you should do:
HPID Timeline
November 5, 2014
November 5, 2015
November 7, 2016
Deadline to apply for a HPID if your annual receipts are more
than $5 million. Go here for instructions on how to get your
HPID: http://www.cms.gov/Regulations-and-Guidance/
HIPAA-Administrative-Simplification/Affordable-Care
-Act/Health-Plan-Identifier.html
Deadline to apply
for a HPID if your
annual receipts are
less than $5 million.
Begin using your
HPID in all HIPAA
transactions.
ANSWERS TO COMMON QUESTIONS
I have a fully insured plan. Do I need an HPID? No. Only controlling health plans will need an HPID.
It looks like a lot of the same information is included in the two coverage reports. Can they be
combined? If you self-fund, you are responsible for filing both reports. They can be filed together using Form
1095-C. If you offer a fully insured plan, Excellus BCBS is responsible for filing Section 6055 reports.
Is there a penalty if I don’t file coverage reports? Yes. The penalty is $100 per incorrect or missing
return, up to $1,500,000 a year.
My plan renews in April. Do I file coverage reports for the plan year or calendar year?
The returns should account for coverage during the calendar year. The information filed on the return is broken
down by calendar month.
Do I need to file reports for employees who are covered by a multi-employer plan?
The administrator of the multi-employer plan can file the returns for participating employees. Keep in mind that
you will be liable for any penalties if incomplete or incorrect returns are filed.
Future Considerations
10
2014
If you self-fund, obtain a Health Plan Identifier by November 5th
(Nov. 5th, 2015 for (see above for more info )
2015
Employer Responsibility penalties for groups 100+
Coverage Reporting for groups 50+
2016
Groups of 51-100 shift to community rating
Employer Responsibility penalties begin for groups 50-99
2017
States can choose to open the exchange to large groups
2018
Cadillac Tax for plans with higher premiums
TBD
Non-discrimination rules about highly paid employee
Background & Definitions
Health Care Reform is now health care
n Provisions implemented between 2010 and 2014 are now a part of everyday health care
n Preventive Services
n Essential Health Benefits
Prescription Drugs
Rehabilitative &
Habilative Services
& Devices
Laboratory
Services
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Ambulatory
Patient Services
Emergency
Service
Essential
Health
Benefits
Hospital Visits
Mental Health &
Substance Use
Disorder Services
Maternity &
Newborn Care
Preventative & Wellness
Services; Chronic Disease
Management
Pediatric Services;
Dental & Vision
n Community Rated products fall into one of four metal levels
PLATINUMGOLD SILVER BRONZE
Plan Pays:90%
80%
70%
60%
Members Pays:10%
20%
30%
40%
n Dependents covered up to age 26
n Individuals and small businesses can buy health insurance on NY State of Health
11
Taxes & Fees
For
Individuals
For Employers
For Health Insurance Companies
Health Care Reform introduced a number of taxes and fees that affect the cost of premiums. How these taxes and
fees impact your business is based on factors like how many employees you have and what coverage you offer.
Amount
What it pays
Excise tax
$8 billion (2014) - $14.3 billion (2018)
Helps fund premium tax credits for
individuals and families
Transitional
Reinsurance Fee
$5.25 per person enrolled per month
Helps stabilize the health insurance industry
during the first years of Health Care Reform
Risk Adjustment Fee
$1 per person enrolled
per year (estimated)
Helps stabilize individual, family and small
business health insurance markets during the
first year of Health Care Reform
Exchange User Fee
Exact amount to be determined
Allows the Health Plan to offer their
products on the Exchange
PCORI Fee
Calculated as the average number of lives
covered during the plan year multiplied
by the applicable dollar amount for the
year: $1 (2012-2013), $2 (2013-2014)
and $2+ inflation after 2014
Helps fund research to improve health
care decisions and delivery
Cadillac Tax
Exact amount to
be determined
Tax on employers who offer high cost
health insurance beginning in 2018
Transitional
Reinsurance Fee (for
self-funded plans)
$5.25 per person enrolled per month
Helps stabilize the health insurance industry
during the first years of Health Care Reform
PCORI Fee
(for Self-Funded,
HRA and HSA Plans
only)
Calculated as the average number of lives
covered during the plan year multiplied
by the applicable dollar amount for the
year: $1 (2012-2013), $2 (2013-2014)
and $2+ inflation after 2014
Helps fund research to improve health
care decisions and delivery
Medicare Surcharge
0.9% gross income
Supports the Medicare program and only
applies to those earning more than $200,000
(single) and $250,000 (married)
Not all fees are permanent:
12
n Reinsurance Fee will end after 2016
n PCORI Fee will end after 2019
Common Terms
Affordable Coverage: Coverage is considered affordable if an employee pays no more than 9.5% of their
income toward the premium for self-only coverage.
Controlling Health Plan: A controlling health plan is a health plan that controls its own business activities,
actions, or policies, OR is controlled by a business that is not a health plan.
Employer Mandate/Employer Responsibility: Beginning in 2015, employers with 100 or more full-time
equivalent employees are required to offer minimum essential health benefit packages or pay a penalty. The
mandate applies to employers with 50-99 employees in 2016.
Full Time Employee: Under Health Care Reform, “full time” is defined as anyone working an average of 30 or
more hours per week.
Health Plan Identifier (HPID): The Health Plan Identifier is a ten-digit sequence that identifies a health plan,
including most self-funded health plans, in electronic HIPAA transactions. The purpose of the HPID is to streamline
electronic transactions.
Minimum Value: A product has “Minimum Value” if the health plan pays, on average, at least 60% of
covered benefits.
Section 6055 Returns: Section 6055 returns provide information to the IRS to verify if and when individuals
were enrolled in minimum essential coverage. These returns are filed by health plans and self-funded plan
sponsors.
Section 6056 Returns: Section 6056 returns provide information to the IRS to show whether an employer is or
is not providing coverage to employees and that coverage meets minimum value and affordability requirements.
These returns are filed by employers with 50 or more full-time employees.
13
14
Open enrollment begins on
the Small Business Health
Options (SHOP) exchange
Coverage is effective
beginning 1/1/15
Determine if you qualify for
the Small Business Tax Credit
• 25 or fewer employees
Starting in 2014, however, the credit will only be available
to employers who purchase coverage through the SHOP
exchange.
2.Talk to your tax advisor to see if you qualify for the tax
credit and how much you can claim.
If yes, go to Step 2.
• After 2014, coverage is offered through the SHOP
exchange
• Pay at least 50% of the cost of self-only coverage
• Offer health insurance to employees
• Average annual wages are less than $50,000 per FTE
1.Do you meet the requirements for the Small Business
Tax Credit?
Talk to your account consultant or broker about your options
for the 2015 plan year.
2. Want to offer coverage to more employees?
Talk to your account consultant about affordable
plan options.
1. Contact us for more information on coverage
available for individuals not eligible under your plan.
Prepare Your Company
The Small Business Tax Credit is available today to small
employers who meet the requirements set by the IRS.
Small businesses are not required to participate on the SHOP
and can continue to purchase or renew health insurance
directly through Excellus BlueCross BlueShield or through
their broker.
Small employers can join the SHOP any time during the year.
Remember, federal financial assistance is available to
individuals who qualify based on household income.
Help employees who aren’t eligible for your health insurance
plan to enroll on the NY State of Health.
Details
Date Completed
This guide will be updated frequently as more
information becomes available. Please contact your
account consultant for the most current version
or visit: ExcellusBCBS.com/HealthReform
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
4/1/15 for the 2014
tax year
This tax credit ends
in 2016
Requirement
New York State of Health
open enrollment for
individuals
Small Business Tax Credit
Beginning 11/2/14
11/15/2014 to
2/15/2015
NY State of Health
Date(s)
Most requirements of the health care reform law are already effective, but other aspects will still be phased in over the
next few years. This checklist can help you prepare for changes this year and in 2015. As always, you should consult
your tax advisor and legal counsel to determine the best approach for your business.
Health Care Reform Checklist for Businesses with 2-49 Employees
15
Requirement
Begin reviewing data to
determine if you have 50 or
more full-time equivalent
employees under Health Care
Reform
1/31/15 for the
2014 tax year
Reporting
Report the cost of health
insurance on employees’
W-2 forms
No discrimination in favor
of highly compensated
employees
The penalty for non-compliance is $200 per W-2 form,
capped at $3 million.
We anticipate that all employers will be required to report
this information in 2015 for the 2014 tax year.
Employers who filed more than 250 W-2 forms in 2013 are
required to report the cost of employer-sponsored health
insurance coverage in Box 12 of W-2 forms. Reported costs
should include those paid by the employer and contributions
from the employee.
Employers that don’t comply with this rule will be subject
to a penalty of $100/day.
Employers are required to offer the same level of tax-free
coverage to all classes of employees. If any employer
offers additional benefits only to highly compensated
employees, those benefits will be taxed.
2. Add the # of full-time equivalent (FTE) employees. This
is calculated on a monthly basis for all employees not
considered full-time. Take all hours paid per employee
(including paid vacation, illness, and holiday time) and
then divide the number by 120.
plus
1. Include the # of full-time employees, which means anyone
who worked an average of 30 hours or more per week.
Using the formula provided by the IRS, determine the size of
your group.
Details
2. Follow up with your payroll company to verify
compliance.
1. For more details on required and optional reporting, see
the IRS W-2 form instructions.
See our fact sheet for more information.
In the meantime, you can continue to monitor the IRS for
new rules and regulations
We’ll keep you informed when we have more
information about when and how you need to comply.
Ask your broker or account consultant for our Large
Business Checklist.
3. If you have 50 or more FTEs, you may be subject to
additional coverage and reporting requirements.
2. Determine the size of your group on an annual basis
using the entire calendar year for the calculation.
1. Consult with your legal counsel for situations
specific to your business.
Prepare Your Company
Date Completed
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
TBD – delayed until
further notice
Non-Discrimination Compliance
Coming Soon
Now and ongoing
Employer Responsibility (“Pay or Play”)
Date(s)
This guide will be updated frequently as more information becomes available. Please contact your account consultant for the most current
version or visit: ExcellusBCBS.com/HealthReform
16
File by 4/1/15 for the 2014 tax year
No
Yes
No
Yes
Yes
Yes
Mandatory?
Create Your Action Plan
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
Determine if you qualify for the Small Business
Tax Credit
Small Business Tax Credit
Report the cost of health insurance on
employees’ W-2 forms
Anticipated compliance date for all employers is
1/31/16
Open enrollment
Open enrollment begins on the Small Business
Health Options (SHOP) exchange
TBD pending further guidance
Upon hire
Reporting
Effective Date
Begin reviewing data in 2014 to determine your
group size.
Notify new employees about the NY State
of Health
NY State of Health
No discrimination in favor of highly compensated
employees
Non-discrimination Compliance
Determine if you have 50 or more full-time
equivalent employees under Health Care Reform
Employer Responsibility (“Pay or Play”)
Action
Your Action Plan At A Glance
This guide will be updated frequently as more information becomes available. Please contact your account consultant for the most current
version or visit: ExcellusBCBS.com/HealthReform
17
Coverage is effective
beginning 1/1/15
Review Grandfathered
Plans Annually
Keep in mind that grandfathered plans are not exempt from
some of Health Care Reform’s new mandates.
You can continue to offer your grandfathered plan as long
as you don’t make significant changes to benefits and
cost-sharing.
Remember, federal financial assistance is available to
individuals who qualify based on household income.
Help employees who aren’t eligible for your health insurance
plan to enroll on the NY State of Health.
Details
2. If you want to discontinue your grandfathered plan, talk
to your account consultant about how to adjust your plan
to comply with Health Care Reform.
1. Do you offer a grandfathered plan? If yes, review your
plan each year. Fill out a recertification form if you want
to maintain grandfathered status.
2. Want to offer coverage to more employees?
Talk to your account consultant about affordable
plan options.
1. Contact us for more information on coverage
available for individuals not eligible under your plan.
Prepare Your Company
2014 Now and
ongoing
2. Add the # of full-time equivalent (FTE) employees. This
is calculated on a monthly basis for all employees not
considered full-time. Take all hours paid per employee
(including paid vacation, illness, and holiday time) and
then divide the number by 120
plus
1. Include the # of full-time employees, which means anyone
who worked an average of 30 hours or more per week.
Using the formula provided by the IRS, determine the size of
your group.
2. Determine the size of your group on an annual basis
using the entire calendar year for the calculation.
1. Consult with your legal counsel for situations
specific to your business.
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
Begin reviewing data to
determine if you have 50 or
more full-time equivalent
employees under Health
Care Reform
Date Completed
This guide will be updated frequently as more
information becomes available. Please contact your
account consultant for the most current version
or visit: ExcellusBCBS.com/HealthReform
For employers with fewer than 50 FTEs, the shared responsibility provisions do not apply. For 2015 for employers with 50-99 FTEs, you received transitional relief until 2016.
Employer Responsibility (“Pay or Play”)
Upon renewal
in 2015
Requirement
New York Health
Benefit Exchange begins
open enrollment for
individuals
Grandfathered Plans
11/15/2014 to
2/15/2015
NY State of Health
Date(s)
Most requirements of the health care reform law are already effective, but other aspects will still be phased in over the
next few years. This checklist can help you prepare for changes this year and in 2015. As always, you should consult
your tax advisor and legal counsel to determine the best approach for your business.
Health Care Reform Checklist for Businesses with 50+ Employees
18
Requirement
If employees
• were not offered coverage due to part-time, seasonal or
variable hour status
Employer Look-Back Period
Determine if any part-time,
seasonal, or variable hour
employees worked an
average of 30+ hours per
week and therefore worked
full-time and should have
been offered coverage
Effective 1/1/15
4. The employee must be offered coverage for at least six
continuous months or the same period of time as the
measurement period (i.e. six months for this example).
3. For the identified employees, you have an administrative
period of up to 90 days to then enroll or decline coverage.
2. Determine any employees who were not offered coverage
due to status but were actually full-time.
Date Completed
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
Then coverage must be offered for that same period of time
going forward
• worked at least 30 hours per week on average for the
period of time chosen
and
$2,000 for each FTE employee. The first 30 employees are
not counted.
1. Define a measurement period of three to twelve months
(i.e. April 1st-October 1st) in 2014. You can define when
the measurement period begins.
2. If coverage is not offered, you may be subject to
a penalty.
If you do not provide health insurance to 95% of your
full-time employees and their dependents (not spouses), you
may be subject to the following penalty tax:
As of your renewal in 2016
1. At least six months before your renewal date, determine
the current employees that work, on average, more than
30 hours per week.
Prepare Your Company
Full-time is defined as those who work, on average, 30 or
more hours per week.
If you have 50 or more
full-time equivalent
employees, you must
offer health insurance to
full-time employees and
their dependents (but not
spouses) or pay a penalty
Details
Upon renewal in
2015 if you have
100+ employees
under Health Care
Reform; Upon
renewal in 2016
if you have 50+
employees
Employer Responsibility (“Pay or Play”) continued
Date(s)
This guide will be updated frequently as more information becomes available. Please contact your account consultant for the most current
version or visit: ExcellusBCBS.com/HealthReform
19
Requirement
If you have 50 or more
full-time equivalent
employees, offer coverage
that meets minimum value
or you may have to pay
a penalty
Upon renewal in
2015 if you have
100+ employees
under Health Care
Reform;
4. If you have a plan that is below 60%, determine a course
of action (change plans, offer a different plan, etc.)
3. Speak with your account consultant or broker to
understand if your specific plan is above or below the
threshold.
Upon renewal in 2016 if you have 50+ employees
HHS released a Minimum Value calculator to determine the
value of each plan.
To access the minimum value calculator, visit cciio.cms.gov/
resources/files/mv-calculator-final-2-20-2013.xlsm
1. Visit the CCIIO website to understand how to determine
the minimum value of your plan.
7. OR choose to pay the penalty for that employee.
6. If yes, determine next steps to make coverage more
affordable (i.e. decrease premium contribution amount or
increase salary).
Provide health insurance coverage that covers at least 60%
of the cost of health care services.
3. 9.5% of the Federal Poverty Level for one person.
2. 9.5% of an employee’s rate of pay times 130 hours; or
1. 9.5% of an employee’s W-2 wages;
5. Do you have employees paying greater than 9.5% of their
income for health insurance?
4. Calculate the % of income each employee paid as
premium contribution.
You must provide coverage where the employee’s premium
contribution for the lowest single plan you offer is no more
than any of the three following factors:
(you only need to choose one option as your measure)
3. Determine each employee’s premium contribution.
2. Determine each employee’s average annual income.
1. Determine your full-time employees who are offered
coverage.
Prepare Your Company
$3,000 for each FTE employee that goes to the exchange and
is approved for a tax credit to purchase coverage.
If you do not provide affordable health insurance to your
full-time employees, you may be subject to the following
penalty tax:
As of 1/1/2015:
Details
Date Completed
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
Upon renewal in
2016 if you have
50+ employees
Upon renewal in
2016 if you have
50+ employees
If you have 50 or more
full-time equivalent
employees, offer health
insurance coverage that
meets affordability
guidelines or you may
have to pay a penalty
Upon renewal in
2015 if you have
100+ employees
under Health Care
Reform;
Employer Responsibility (“Pay or Play”) continued
Date(s)
This guide will be updated frequently as more information becomes available. Please contact your account consultant for the most current
version or visit: ExcellusBCBS.com/HealthReform
20
Report health insurance
coverage to the IRS and
notify employees
(Section 6055 and Section
6056 reports)
IRS returns for 2015
calendar year:
3/31/16 if filed
electronically
• Which months employees and dependents were covered.
In addition, employers must send a statement to all fulltime employees with the same information by January 31st
of each year.
• Employee contribution to the premium of the lowest cost
plan that meets minimum value
4. Continue to monitor the IRS website for additional
guidance about Form 1095-C.
3. Send statements to employees.
2. Fill out Form 1095-C and submit to IRS.
• Certification of whether or not full-time employees and
dependents were offered coverage
• Number of full-time employees
1. Begin to evaluate how to obtain the information required
in the report.
Beginning in 2015, employers with 50+ FTEs are required to
report health care coverage information to the IRS, including:
All health plans are required to start using the HPID in transactions by November 7, 2016
3. For more information and instructions on how to obtain
your HPID: http://www.cms.gov/Regulations-and-Guidance/HIPAA-Administrative-Simplification/Affordable-Care-Act/Health-Plan-Identifier.html
2. Begin using the HPID in HIPAA standard transactions by
11/7/2016.
Self-funded plans are considered controlling health plans and
must obtain an HPID. “Large” health plans have until November 5, 2014 to obtain an HPID.
“Small” health plans, defined as those with $5 million or less
in annual receipts, have until November 5, 2015 to obtain
their HPID.
1. Obtain an HPID by filling out an online application
through the Health Information Oversight System (HIOS):
https://portal.cms.gov
Prepare Your Company
“Controlling health plans” are required to obtain a 10-digit
Health Plan Identifier (HPID) for use in HIPAA standard
transactions.
Details
Date Completed
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
Reports for the
2014 calendar year
are optional.
Employee statements for 2015
calendar year:
1/31/16
2/28/16 if filed by
paper
If you self-fund, obtain
Health Plan Identifier (HPID)
for use in electronic HIPAA
transactions
Requirement
11/5/2014
Reporting
Date(s)
This guide will be updated frequently as more information becomes available. Please contact your account consultant for the most current
version or visit: ExcellusBCBS.com/HealthReform
21
Requirement
If you have 200 or more
employees, automatically
enroll new full-time
employees in your
health plan
No discrimination in favor
of highly compensated
employees
This rule, already in effect for all self-funded plans, has
been delayed until further notice for fully-insured plans.
Employers that don’t comply with this rule will be subject
to a penalty of $100/day.
Employers are required to offer the same level of tax-free
coverage to all classes of employees. If any employer
offers additional benefits only to highly compensated
employees, those benefits will be taxed.
3. Provide notice and opportunity for employees to opt out
of coverage
2. Continue current employees’ coverage
1. Automatically enroll new hires in a health insurance plan,
subject to any waiting periods
Employers, if subject to FLSA oversight, with more than 200
employees are directed to have a process in place to:
Original effective date was 2014, but it is now deferred until
after the release of regulations.
Details
In the meantime, you can continue to monitor the IRS for
new rules and regulations.
2. If you offer a fully-insured health plan, we’ll keep you
informed when we have more information about when
and how you need to comply.
1. If you self-fund, these rules are already in effect.
1. Begin to determine what changes you need to make to
accommodate auto enrollment
Prepare Your Company
Date Completed
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
TBD – delayed until
further notice for
fully-insured plans
Non-Discrimination Compliance
TBD – Delayed until
further guidance
from DOL
Automatic Enrollment and Renewal
Coming Soon
Date(s)
This guide will be updated frequently as more information becomes available. Please contact your account consultant for the most current
version or visit: ExcellusBCBS.com/HealthReform
22
Effective Date
TBD pending further guidance
Penalties are assessed for your plan year
beginning in 2015
Penalties are assessed for your plan year
beginning in 2015
Penalties are assessed for your plan year
beginning in 2015
If you have 50 or more full-time equivalent
employees, offer coverage to full-time employees
or pay a penalty
If you have 50 or more full-time equivalent
employees, offer coverage that meets affordability
guidelines or you may have to pay a penalty
If you have 50 or more full-time equivalent
employees, offer coverage that meets minimum
value or you may have to pay a penalty
TBD pending further guidance
Yes
Yes
(grandfathered
plans only)
Yes
Yes
Yes
Yes
Yes
Yes
Mandatory?
Create Your Action Plan
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
No discrimination in favor of highly compensated
employees
Non-discrimination Compliance
Review Grandfathered Plans Annually
Upon renewal each year
Based on your measurement period, begin
reviewing data for the 2015 plan year
Determine if any part-time, seasonal, or variable
hour employees worked an average of 30+ hours
per week
Grandfathered Plans
Begin reviewing data in 2014 to determine your
group size
Determine if you have 50 or more full-time
equivalent employees under Health Care Reform
Employer Responsibility (“Pay or Play”)
If you have 200 or more employees, automatically
enroll new full-time employees in your health plan
Automatic Enrollment and Renewal
Action
Your Action Plan At A Glance
This guide will be updated frequently as more information becomes available. Please contact your account consultant for the most current
version or visit: ExcellusBCBS.com/HealthReform
23
TBD pending further guidance
Report to the IRS that you meet minimum
essential coverage requirements
Yes
Yes
Yes
Mandatory?
Create Your Action Plan
Updated September 2014
This information is to help you prepare. You should consult your tax advisor and legal counsel to determine how your company must comply with the legislation.
Anticipated compliance date for all employers is
1/31/15
No later than 10/1/13
Effective Date
Report the cost of health insurance on employees’
W-2 forms
Reporting
Notify new employees about the NY State of
Health
NY State of Health
Action
This guide will be updated frequently as more information becomes available. Please contact your account consultant for the most current
version or visit: ExcellusBCBS.com/HealthReform
B-4529 /7617-13M
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