Recent federal policy changes will impact compliance for Self-Funded Plans, Group Health Plans, and all Applicable Large Employers (ALEs).
ALEs are those employers offering group health plans that have 50+ Full Time Equivalents (FTEs). Click here to review how to calculate FTEs.
Following are new or revised policies the employer’s group health plan will need to be aware and take steps to prepare to remain in compliance with the changing regulations.
Good Faith Compliance no longer exists!
Since the beginning of the 1094/1095 reporting requirement, Good Faith Compliance was accepted. This meant that coding errors or simple mistakes were allowed, and the plan sponsor was not penalized. This is going away! Effective with the upcoming ACA 2022 reporting period the 1094 and 1095 information must be accurate.
The penalty for errors on the forms equals a total of $560 per incident. The $560 penalty includes $280 for the 1095B or C form that was provided to the employee plus the $280 for the 1094B or C form that was provided to the IRS.
Click here to review the IRS Notice 2020-76 - Translation Relief - Section C on Page 8 to see the information regarding this part of the regulation.
2023 ACA Affordability Percentage has decreased!
The new ACA Affordability Percentage for 2023 is lowered from 9.61% to 9.12%. The effective date is for Plan Years beginning January 1, 2023.
Click here to review the IRS Notice 2022-59 - Section III on Page 2, Adjusted Applicable Dollar Amount.
Distribution date of 1095B/C to employees is automatically extended.
Deadlines for reporting and filing ACA reporting for the 2022 calendar year.
- February 28, 2023 – Filing paper ACA Forms with the IRS
- March 2, 2023 – Furnish the 1095-B/1095-C forms to employees
- March 31, 2023 – 1094 Transmittals and 1095-B/1095-C Forms must be e-filed with the IRS
IRS eliminating the ‘Family Glitch’ in the ACA guidelines.
Effective January 1, 2023, employer plan affordability for ‘family members’ will be based on the required cost for the entire family to participate in the employer-sponsored plan. Affordability for the employee will still be based on the employee’s cost for single (employee-only) coverage. In order to determine if the family coverage premium is ‘affordable’, the entire employee’s household income is used.
Keep in mind the following, especially for Applicable Large Employers (ALE’s with 50+ FTEs).
- ALE’s full-time employees must be offered affordable and minimum value coverage in order to prevent penalties.
- ALE’s must provide coverage for dependents but do not have to pay premium towards dependent coverage.
- ALE’s do not have provide coverage for spouses.
- ALE’s will not be penalized if the family coverage premium is not considered affordable.
- Family members (spouses and tax-dependents) that are not covered under the employer’s group health plan can participate in the Health Exchange.
Click here to review Amwins Connect’s detailed Compliance Update released October 17, 2022.
Expanded exchange subsidy eligibility through December 31, 2025.
The Inflation Reduction Act (IRA) was finalized as a bill on August 16, 2022.
Among other issues, this bill extended the enhanced marketplace subsidies, originally adopted under the American Rescue Plan Act (ARPA) and set to expire at the end of 2022. This extension is in place until December 31, 2025.
By extending this policy through the end of 2025, the Act will ensure that middle-income people who purchase their own health insurance do not pay more than 8.5% of their income towards premiums. This will also help ensure that lower-income people can enroll in free or nearly-free silver plans with limited out-of-pocket premiums. The different levels will remain unindexed meaning the percentages that consumers owe will not increase annually.