Two of G&A Partners' Health Care Reform Specialists review potential strategies heading into 2016 that employers can use to ensure your business remains compliant with the employer provisions and mandate of the Affordable Care Act. Discussion topics will include: > The changes going into effect next year for employers with 50 or more full-time equivalent employees. > The pending IRS reporting requirements employers will need to comply with. > G&A Partners' ACA compliance tools and services.

1. Preparing
for
the
Affordable
Care
Act
in
2016
October
15,
2015
Tony
Nista
–
VP
UnderwriDng
Grace
Jaen
–
Director
of
G&A
Beneficial

2. Agenda
• PPACA
101
• Strategies
and
AlternaDve
Models
• Cadillac
(Excise)
Tax
2018
• IRS
ReporDng
• G&A
PPACA
Compliance
Support
• Summary
• Q&A
2

3. Legal
Disclaimer
What
We
KNOW
“We
know
there
are
known
knowns,
i.e.
things
we
know
we
know.
We
also
know
there
are
known
unknowns,
that
is
to
say
we
know
there
are
things
we
know
we
don’t
know.
But
there
are
also
unknown
unknowns
–
the
ones
we
don’t
know
we
don’t
know.”
Defense
Secretary
Donald
Rumsfeld
3

4. PPACA
101
4

5. PPACA
Key
Provisions
• Applicable
Large
Employer
(ALE)
-­‐
Calculated
at
“Controlled
Group”
Level
Plan
Years
Star,ng
2015
ü 100+
FTE
Equivalents
ü Must
Offer
MEC
to
70%
FTEs
v $2,000
X
All
FTEs
(-­‐
80)
ü Qualifying
(60%
Min
Value)
ü Affordable
(9.56%
Income)
v $3,000
X
FTEs
subsidized
in
a
Public
Healthcare
Exchange
Plan
Years
Star,ng
2016
ü 50+
FTE
Equivalents
ü Must
Offer
MEC
to
95%
FTEs
v $2,000
X
All
FTEs
(-­‐
30)
ü Qualifying
(60%
Min
Value)
ü Affordable
(9.66%
Income)
v $3,000
X
FTEs
subsidized
in
a
Public
Healthcare
Exchange
ALE
Tier
1
Tier
2
Notes:
-­‐
Tier
1
applies
to
FT
EE
&
dependent
children
to
age
26
ONLY
(not
spouses,
not
PT)
-­‐
Tier
2
applies
to
Employee
ONLY
(not
spouse
or
children)
and
cannot
exceed
Tier
1
maximum
penalty
-­‐
FTEs
exclude
Contract
Employees,
Partners,
Tan
Hartley
-­‐
In
determining
ALE
status
exclude
Veterans
receiving
coverage
through
US
Armed
Forces
plans
-­‐
PenalDes
may
be
assessed
on
an
EIN
by
EIN
basis
5

6. PPACA
Cheat
Sheet
6
Key
Provisions
of
Health
Reform
-­‐
PPACA
Cheat
Sheet
Plan
Year
Beginning
2015
2016
2018
Applicable
Large
Employer
(1)
100+
FTE
Equivalents
50+
FTE
Equivalents
Cadillac
Tax
Provision
Tier
1
-­‐
MEC
Offering
70%
of
FTEs/Dep
Children
to
26
95%
of
FTEs/Dep
Children
to
26
40%
Excise
Tax
on
High
Value
Plans
$2,000
penalty
X
All
FTEs
(-­‐
80)
$2,000
penalty
X
All
FTEs
(-­‐
30)
Excess
over
$10,200
Single
Tier
2
-­‐
Qualifying/Affordable
60%
Minimum
Actuarial
Value
60%
Minimum
Actuarial
Value
Excess
over
$27,500
Family
9.56%
of
income
EE
Only
Rate
9.66%
of
income
EE
Only
Rate
Includes
HRA/HSA/FSA
contribuDons
$3,000
X
each
FTE
with
subsidized
$3,000
X
each
FTE
with
subsidized
coverage
in
Public
Health
Exchange
coverage
in
Public
Health
Exchange
PPACA
Sec,on
6055
(not
to
exceed
Tier
1
penalty
maximum)
(not
to
exceed
Tier
1
penalty
maximum)
Repor,ng
of
MEC
Coverage
Spousal
Offering
Not
Required
Not
Required
1094-­‐B
Filed
to
IRS
w/copies
of
1095-­‐B
Out-­‐of-­‐Pocket
Maximum
$6,600
Ind
$6,850
Ind
Who
Files
-­‐
Insurer
or
Plan
Sponsor
$13,200
Fam
$13,700
Fam
Due
Date
-­‐
Last
Day
in
February
if
by
paper
Must
be
Embedded
(2)
Last
Day
in
March
if
electronic
PCORI
Fee
$2
per
Covered
Life
$2
per
Covered
Life
1095-­‐B
Sent
to
Employee
Transi,onal
Reinsurance
Fee
$44
per
Covered
Life
$27
per
Covered
Life
Who
Sends
-­‐
Insurer
or
Plan
Sponsor
Auto
Enroll
200+
TBD
TBD
Due
Date
-­‐
January
31st
(02/01/16)
(1)
For
ALE
status
FTE
excludes
Contract
EEs,
Partners,
Tan
Hartley,
and
Veterans
receiving
medical
coverage
through
a
US
Armed
Forces
program
PPACA
Sec,on
6056
(2)
Embedded
OOP
Max
-­‐
each
family
member
is
responsible
for
meeDng
ONLY
the
individual
OOP
Max
ALE
Repor,ng
for
Shared
Responsibility
1094-­‐C
Filed
to
IRS
w/copies
pf
1095-­‐C
Grandfathered
Plans
(March
23,
2010)
Avoid
the
Following
PPACA
Mandates:
Who
Files
-­‐
Employers
who
are
ALEs
-­‐
Cover
immunizaDons
and
certain
prevenDve
care
without
cost
sharing
Due
Date
-­‐
Last
Day
in
February
if
by
paper
-­‐
Maximum
Out-­‐of-­‐Pocket
Limits
and
DeducDbles/Copays
must
apply
to
OOP
Max
Last
Day
in
March
if
electronic
-­‐
Allow
member
choice
of
parDcipaDng
primary
care
physicians
and
pediatricians
1095-­‐C
Sent
to
Employee
-­‐
Allow
direct
access
(no
referral)
to
OB/GYN
services
Who
Sends
-­‐
Employers
who
are
ALEs
-­‐
Cover
emergency
services
without
pre-­‐authorizaDon
or
increased
cost
share
out
of
network
Due
Date
-­‐
January
31st
(02/01/16)
-­‐
Provide
internal
and
external
review
processes
for
certain
denied
claims
General
Notes
-­‐
Eliminate
discriminaDon
in
favor
of
highly
compensated
individuals
IRS
filings
of
250+
forms
must
be
electronic
-­‐
Prohibit
discriminaDon
based
on
parDcipaDon
in
clinical
trials
Self-­‐Funded
ERs
will
use
only
1094C/1095C
forms
to
report
both
secDons
6055
&
6056
-­‐
EssenDal
health
benefits,
metal
levels
and
deducDble
limits
starDng
2014
(Small
Group
Plans
ONLY)
-­‐
Modified
community
raDng
starDng
2014
(Small
Group
Plans
ONLY)
Form
1095-­‐A
is
sent
to
EEs
who
are
enrolled
in
a
public
health
care
exchange
-­‐
Guaranteed
issue
and
renewal
starDng
2014
(Insured
Plans
ONLY)
PPACA
Cheat
Sheet
10.06.15
v5

7. What
PPACA
Does
NOT
Require
• May
ignore
up
to
30%
of
FTEs
without
triggering
Tier
1
penalty
(30%
will
change
to
5%
in
2016)
• May
measure
and
trigger
Tier
1
penalty
on
an
EIN-­‐by-­‐EIN
basis
• No
obligaDon
to
offer
anything
to
Spouses
• Spouse/Children
offerings
do
NOT
need
to
be
Qualifying
&
Affordable
• May
minimize
“eligible”
FTEs
through
workforce
management
• Even
if
coverage
is
not
“Qualifying
&
Affordable”
no
employer
penalty
if:
Ø Employee
is
eligible
for
Medicare
or
Medicaid
Ø Employee
enrolls
in
any
employer-­‐based
coverage
Ø Employee
doesn’t
want
coverage,
or
gets
it
someplace
other
than
Public
Exchange
• Wellness
surcharges
may
help
reduce
cost,
but
may
trigger
Tier
2
penalty:
Ø Tobacco
surcharges
–
calculated
at
the
“compliant”
rate
Ø General
wellness
–
calculated
at
“non-­‐compliant”
rate
7

8. PPACA
–
ALE
by
Controlled
Group
Level
• Determining
“Applicable
Large
Employer”
(ALE)
Status
Ø Must
be
done
at
“Controlled
Group”
level
Ø Based
on
FT
“Equivalents”
(e.g.
2
PT
x
15
Hpw
=
1
FTEq
at
30
Hpw)
• Example
A
–
Two
Single
Employers
(No
Controlled
Group):
Ø Group
A
-­‐
75
FTEs
–
ALE
for
2016
(no
penalty
2015)
Ø Group
B
-­‐
45
FTEs
–
Not
an
ALE
(no
penalDes
2015
or
2016)
• Example
B
–
Two
Employers
in
a
Controlled
Group:
Ø Group
A
-­‐
75
FTEs
–
ALE
for
2015
Ø Group
B
-­‐
45
FTEs
–
ALE
for
2015
ü (total
75
+
45
=
120
FTEs)
8

9. PPACA
–
Tier
1
Penalty
Assessed
by
EIN
Tier
1
Penalty
Assessment
-­‐
Example
-­‐
Controlled
Group
with
2
EINs
Group
A
FTEs
75
Offer
MEC
to
All
FTEs
in
Group
A
Group
B
FTEs
45
NO
MEC
offer
to
FTEs
in
Group
B
Total
Group
120
Qualifies
as
ALE
for
Plan
Year
2015
ILLUSTRATIVE
SINGLE
EMPLOYER
Assessed
By
Group
EIN
Group
A
Group
B
Coverage
Offer
75
75
0
Total
FTEs
120
75
45
Percentage
63%
100%
0%
Calculate
Penalty
Total
FTEs
120
N/A
45
Less
Allowance
-­‐80
N/A
-­‐30
Net
Penalty
FTEs
40
N/A
15
Penalty
per
FTE
$2,000
N/A
$2,000
Total
Penalty
$80,000
$0
$30,000
Note:
80
FTE
"allowance"
is
prorated
by
EIN
9

10.
Strategies
and
AlternaDve
Models
10

11. What
Is
Your
Strategy?
• Play
or
Pay?
• Plan
eligibility
• Benefit
offerings
• Measurement
and
stability
periods
• Tracking
of
hours
• IRS
ReporDng
• NoDce
and
disclosure
requirements
11

12. Plan
Eligibility
• Available
to
ALL
EEs,
or
Select
Divisions/EINs?
• Employee
+
Children
to
26
only,
or
Family?
• Exclude
Spousal
Coverage
Altogether?
• Exclude/Surcharge
Only
Working
Spouses?
• WaiDng
Period
–
Maximum
Allowed
or
Lower?
• Measurement
Period
Approach?
12

13. Benefit
Offerings
• Standard
Plan
Offerings
(Gold,
Silver,
Bronze)?
• Minimum
Coverage
Offerings
(MEC/MVP
Plans)?
• HDHP,
HSA,
HRA
Plan
Offerings?
• Defined
ContribuDon,
or
Percent
of
Premium?
• Standard
Networks,
or
Limited
Access?
• AlternaDve
ACOs/RelaDve
Based/Concierge?
• IncenDve
Based
(Wellness,
Tobacco
CessaDon)?
13

14. Determining
Employee
Status
• Standard
Measurement
Period
–
Period
an
employer
chooses
(3-­‐12
months)
to
check
and
confirm
whether
or
not
a
Part-­‐
Time
Employee
did
in
fact
work
less
than
an
average
of
30
hours
per
week
during
the
Standard
Measurement
Period.
Can
vary
by
class
of
EE
(union
vs.
non
union,
hrly
vs.
salary,
diff.
states,
etc).
• Stability
Period
–
Period
must
be
at
least
as
long
as
the
Measurement
Period
and
no
less
than
6
months.
Period
in
which
an
employee
retains
the
status
that
was
determined
during
Measurement
Period.
• Administra,ve
Period
-­‐
An
employer
may
take
up
to
90
days
between
the
Measurement
and
Stability
periods
to
determine
eligibility,
known
as
the
AdministraDve
Period;
however,
coverage
must
be
available
no
later
than
the
beginning
of
the
14th
month
aner
date
of
hire.
14

15. Tracking,
Disclosures,
and
IRS
ReporDng
• How
are
you
tracking
employee
Dme
for
benefit
eligibility
purposes?
Have
you
invested
in
the
proper
tools
yet?
Timely
and
accurate
data?
• Are
you
aware
of
the
noDce
and
disclosures
requirements?
How
are
you
handling
the
logisDcs
of
delivery?
• Do
you
understand
the
differences
in
the
6055
and
6056
reporDng?
Where
is
the
data
coming
from?
Are
you
going
to
prepare
manually
or
contract
out
to
a
vendor?
Have
you
started
the
vendor
selecDon
process?
• Do
you
have
the
internal
resources
to
handle
these
tasks
or
will
you
have
to
hire
someone?
15

16. NoDce
and
Disclosure
Rules
• Statement
of
grandfathered
status
• NoDce
of
paDent
protecDons
and
selecDons
of
providers
• Uniform
summary
of
benefits
and
coverage
(SBC)
• 60
day
advance
noDce
of
plan
changes
• Exchange
noDces
• IniDal
/
General
COBRA
noDce
• Annual
Employer
CHIP
NoDce
• Women’s
Health
and
Cancer
Rights
Act
(WHCRA)
• …
and
many
more
16

17. PPACA
Cost
Spectrum
…
drives
strategy
Factor
Low
Medium
High
Do
you
currently
set
eligibility
at
30+
hours
per
week?
Yes
No,
but
not
many
workers
between
30
and
40
hours
No,
and
large
work
force
between
30
and
40
hours
What
types
of
plans
do
you
offer?
Tradi,onal
Average
Limited
or
No
Medical
What
por,on
of
the
cost
of
coverage
do
you
subsidize?
Large
Small
to
moderate,
coupled
with
low-­‐paid
work
force
Small
What
is
your
current
employee
par,cipa,on
rate?
High
Medium
Low
What
is
your
employees'
wage
spectrum?
Mostly
high
wage
earners
Decent
mix
of
high
and
low
wage
earners
Mostly
low
wage
earners
Regular
vs.
Seasonal
Workers
Regular
Decent
mix
of
regular
and
seasonal
workers
Seasonal
Do
you
need
a
plan
to
agract
and
retain
EEs?
Company
Culture
Is
the
greater
need
financial
savings
or
plan
value?
"Play
or
Pay"
impact
on
your
employees?
17

18. Exchanges
• Public
Exchanges
Ø Administered
by
State
or
Federal
Government
Ø Must
include
comprehensive
Medical
and
Rx
coverage
Ø Subsidies
and
Tax
Credits
available
to
those
who
qualify
• Private
Exchanges
Ø Administered
by
Insurers,
ConsulDng
Firms,
ConsorDums
Ø Not
regulated
in
the
same
way
as
Public
Exchanges
Ø Generally
designed
to
“operate”
as
an
exchange
• Small
Business
Health
OpDons
Program
(SHOP)
Ø Designed
for
“qualified”
Small
Employers
Ø Basically
a
Small
Group
Brokerage
enDty
18

19. Private
Health
Care
Exchanges
• Marketplace
for
Healthcare
Plans
• Carrier,
Provider,
Consultant
Driven
• Exempt
From
Public
Marketplace
RegulaDons
• ParDcipants
Do
Not
Receive
“Subsidies”
• Defined
ContribuDon
Approach
• Robust
Enrollment
Engine
• Reduces
“Over-­‐Insured”
Dynamic
• Limits
AnD-­‐SelecDon
Impact
• Reduces
Trend
in
Healthcare
Cost/UDlizaDon
NOTE:
Can
Duplicate
Without
Exchange
Plavorm
19

20. Defined
ContribuDon
Approach
Program
Medical
Op,ons
Premium
Buy-­‐Up
Base
Plan
Deduc,ble
$1,000
$2,000
$3,000
Plan
Out-­‐Of-­‐Pocket
$2,500
$4,000
$6,000
Coinsurance
90%
80%
70%
Example
A
-­‐
Employer
Contributes
80%
of
Plan
Cost
Monthly
Single
Rate
$575.00
$500.00
$425.00
Employer
Contribu,on
($460.00)
($400.00)
($340.00)
Monthly
Employee
Cost
$115.00
$100.00
$85.00
Limited
incen,ve
for
EE
to
choose
Base
Plan
Example
B
-­‐
Employer
Contributes
Flat
$350
to
Plan
Cost
Monthly
Single
Rate
$575.00
$500.00
$425.00
Employer
Contribu,on
($350.00)
($350.00)
($350.00)
Monthly
Employee
Cost
$225.00
$150.00
$75.00
Financial
incen,ve
for
EE
to
"right
size"
coverage
20

21. Accountable
Care
OrganizaDons
(ACOs)
• Established
for
Medicare
Shared
Savings
Program
• Medicare
Physician
Group
PracDce
model
• Three
main
goals:
ü Bewer
overall
care
ü Improved
health
outcomes
ü Lower
per
capita
cost
• Branching
out
to
the
Non-­‐Medicare
market
• Several
physician
groups
and
carrier
offerings
available
• Similar
to
HMO
design
but
more
effecDve
approach
• HMOs
work
on
capitaDon
and
closed
network
• ACOs
work
on
performance
and
open
network
21

22. Minimum
Value
Plans
(MVP)
• Minimum
Actuarial
Value
at
60%
• Generally
a
“Bronze”
Metal
Level
Plan
• Similar
to
Plans
Offered
in
Public
Exchange
• SaDsfies
Employer’s
“Qualifying”
Requirement
• Easy
to
Make
“Affordable”
Due
to
Plan
Price
• Offered
Stand-­‐Alone
or
Alongside
Other
Plans
22

23. Minimum
EssenDal
Coverage
(MEC)
Plans
• NOT
a
Minimum
Value
Plan
(MVP)
• MEC
Covers
PrevenDve
Care/Wellness
Benefits
ONLY
• SaDsfies
Employee’s
Individual
Mandate
• SaDsfies
Employer’s
Tier
1
Requirement
($2,000
Penalty)
• Employer
SDll
Subject
to
Tier
2
PenalDes
($3,000
per
FTE)
• Very
Inexpensive
Plans
to
Operate
and
Subsidize
• Very
Popular
in
the
Self-­‐Insured
Market
• Must
Cover
HospitalizaDon
to
be
ACA
Qualified
Plan
(New)
• Not
Recommended
as
the
ONLY
Plan
OpDon
• May
Present
Risk
of
Public
Opinion?
23

24. Leveraged
Trend
Impact
• Medical/Rx
claims
increase
with
trend
(cost,
uDlizaDon,
innovaDon)
• If
Ded/OOP
Max
remains
constant,
“leveraged”
trend
results
• Increasing
the
Ded/OOP
Max
neutralizes
the
impact
of
leveraged
trend
Passive
OOP
Maximum
2015
2016
Increase
Medical/Rx
Claim
$15,000
$16,500
10.0%
OOP
Max
$4,000
$4,000
0.0%
Plan
Reimbursement
$11,000
$12,500
13.6%
Ac,ve
OOP
Maximum
2015
2016
Increase
Medical/Rx
Claim
$15,000
$16,500
10.0%
OOP
Max
$4,000
$4,500
12.5%
Plan
Reimbursement
$11,000
$12,000
9.1%
24

25. PotenDal
Strategies
for
Employers
• Workforce
Management
(HPW)
• Measurement
Period
Approach
• “Engage”
Medicare/Medicaid
Eligible
EEs
• Offer
Minimum
Qualifying
&
Affordable
Plan
• Offer
Q&A
Plan
Along
With
MEC
Plan
• Ignore
Affordable
($3,000
vs.
Plan
Cost?)
• Offer
Employee/Child
Coverage
ONLY
• Let’s
look
at
each
in
more
detail
25

26. Workforce
Management
• Manage
some
full-­‐Dme
employees
to
part-­‐Dme,
but
could
create
addiDonal
operaDonal
costs
• Employ
the
“measurement
period”
concept
to
seasonal
and
variable
hour
employees
• Engage
Medicaid
and
Medicare
eligible
employees
as
to
their
opDons
-­‐
carefully
26

27. Measurement
Period
Approach
• Adopted
as
“transiDonal
relief”
for
employers
to
use
with
seasonal
and
variable
hour
employees
• Reduces
the
number
of
plan
eligible
FTEs
based
on
hours
worked
over
extended
Dme
(measurement
period)
• Measurement
period
can
be
any
length
of
Dme
chosen
by
employer
(between
3
and
12
months)
• Must
include
a
“stability
period”
equal
to
the
length
of
the
“measurement
period”
(some
risk?)
• Note:
TransiDonal
relief
could
disappear?
27

28. “Engage”
Medicare/Medicaid
Eligible
EEs
• Medicare
and
Medicaid
saDsfy
the
Individual
Mandate
so
that
employees
avoid
penalDes
• Employer
may
“engage”
these
eligible
employees
to
educate
on
opDons
(NOT
“influence”!)
• These
employees
will
not
trigger
Tier
2
penalDes
since
they
are
not
eligible
for
subsidies
in
the
Public
Exchange
• Employer
plan
will
see
some
reduced
costs
as
these
employees
switch
to
Medicare/Medicaid
opDons
• PPACA
includes
provision
for
legal
recourse
for
employees
who
feel
“injured”
by
any
act
of
the
employer
28

29. Offer
Minimum
Qualifying/Affordable
Plan
• Only
one
plan
offering
needs
to
be
qualifying
and
affordable
• Eliminates
worry
on
“Play
or
Pay”
penalDes
(sleep
at
night)
• Can
be
offered
stand-­‐alone
or
alongside
other
plans
• Employer
cost
is
reduced
for
employees
who
enroll
• Keeps
EEs
from
ge{ng
subsidies
in
Public
Exchange
29

30. Offer
MVP
alongside
MEC
Plan
• Offering
Minimum
Value
Plan
avoids
Tier
2
penalDes
• MEC
plan
will
be
“lean”
to
meet
price
points
(40%
AV)
• Employer
cost
will
be
reduced
in
either
plan
• Employee
meets
Individual
Mandate
with
either
plan
• Could
tend
to
cause
anD-­‐selecDon
against
the
MVP
plan
• How
many
EEs
will
buy
the
MEC
plan?
• How
many
EEs
will
sDll
go
to
the
exchange?
• What
will
your
compeDtors
offer?
30

31. Offer
Qualifying
Plan
–
Not
Affordable
• Offer
qualifying
coverage
to
all
or
substanDally
all
FTEs
but
do
not
worry
about
making
it
“affordable”
• Some
employees
for
whom
it
is
unaffordable
will
not
seek
subsidized
exchange
coverage
(i.e.
no
Tier
2
penalty)
• For
those
that
do,
the
cost
of
paying
the
$3,000
penalty
may
be
less
expensive
than
to
subsidize
comprehensive
coverage
• Overall
weigh
the
“hard”
cost
of
operaDonal
change
vs.
the
“son”
cost
of
potenDal
Tier
2
penalDes
31

32. Offer
EE/Child
ONLY
–
No
Spousal
Coverage
• Meets
the
minimum
requirements
of
coverage
offering
• NaDonal
awenDon
due
to
UPS
announcement
• MulDple
opDons
to
consider:
Ø A.
Surcharge
spousal
rates
if
eligible
for
their
own
ER
plan
Ø B.
Exclude
coverage
for
spouses
eligible
for
their
own
ER
plan
Ø C.
Exclude
spousal
coverage
altogether
• Balance
the
strategy
based
on
cost
and
value
• What
do
your
major
compeDtors
do?
32

33.
Cadillac
Tax
33

34. Cadillac
Tax
2018
–
High
Value
Plans
• Generates
$100
Billion
in
Revenue
• IncenDve
to
Employers
to
Control
Cost
• 40%
of
Amount
Exceeding
Annual
Thresholds:
Ø $10,200
Single
/
$27,500
Family
• Includes
HSA,
HRA,
FSA
Annual
ContribuDons
• Limit/Minimize
Employer
Exposure
Via:
ü Targeted
Wellness
Strategies
ü Tobacco
CessaDon
Programs
ü Plan
Design/Rate
Re-­‐AllocaDon
• Excise
Tax
is
“nondeducDble”
• Start
Planning
Now!
34

35. Cadillac
Tax
2018
–
Example
CalculaDon
Excise
Tax
Calcula,on
-­‐
Example
Single
Family
Premium
Cost
$11,000
$28,000
HSA/HRA/FSA
+
$1,000
$2,000
Total
Plan
Value
$12,000
$30,000
Threshold
-­‐
$10,200
$27,500
Taxable
Amount
$1,800
$2,500
Tax
Rate
40%
40%
Employer
Cost
$720
$1,000
Per
Employee
Enrolled
35

36. Cadillac
Tax
2018
–
Long
Term
Impact
v Slow
Incremental
Change
–
Start
Planning
Now!
Thresholds:
$10,200
Single
$27,500
Family
Example
A
10.0%
Annual
Trend
-­‐
Assumes
No
Plan
Strategy
2015
2016
2017
2018
2019
2020
2021
Single
$8,000
$8,800
$9,680
$10,648
$11,713
$12,884
$14,172
Family
$21,000
$23,100
$25,410
$27,951
$30,746
$33,821
$37,203
Exceeds
Exceeds
Exceeds
Exceeds
Example
B
4.8%
Annual
Trend
-­‐
Plan
Strategy
-­‐
Slow
Incremental
Change
2015
2016
2017
2018
2019
2020
2021
Single
$8,000
$8,384
$8,786
$9,208
$9,650
$10,113
$10,599
Family
$21,000
$22,008
$23,064
$24,171
$25,332
$26,548
$27,822
Exceeds
Note:
Assumes
no
change
to
the
Excise
Tax
Provision
as
currently
wrigen
36

37.
IRS
ReporDng
37

38. Code
• 6055
–
Carrier
or
Employer
if
self
insured
• 6056
–
Completed
by
the
Applicable
Large
Employer
(ALE)
38

39. Forms
39
109X
–
Y
Forms

40. Forms
X
Y
IRC
Code
4
–
Summary
Page
A
Forms
–
Marketplace
6055
5-­‐
Individual
Pages
B
Forms
–
Carrier
6055
C
Forms
–
Employer
6056
40
109X
–
Y
Forms

41. 6055
and
6056
Forms
41
Forms
Title
What
is
the
purpose
Who
completes
this
form
When
is
it
due
How
is
it
filed
Who
does
it
go
to
1094-­‐C
Transmiwal
of
Employer
–
Provided
Health
Insurance
Offer
and
Coverage
InformaDon
Returns
Summary
of
1095-­‐C:
Enforce
employer
mandate
Employer
members
of
ALE
Last
day
of
February
if
filed
paper,
last
day
of
March
if
electronically
Electronic
submission
is
required
for
250
employees
or
more,
otherwise
paper
or
electronic
IRS
1095-­‐C
Employer
Provided
Health
Insurance
Offer
and
Coverage
Enforcement
of
employer
mandate.
This
is
used
to
disclose
MEC
coverage
Employer
members
of
ALE
Last
day
of
January
to
employees,
last
day
of
February
to
the
IRS
if
filed
paper;
if
electronic,
last
day
of
March
Electronic
submission
is
required
for
250
employees
or
more,
otherwise
paper
or
electronic
Employees
(covered
or
not)
and
IRS
1094-­‐B
Transmiwal
of
Health
Coverage
and
InformaDon
Returns
Summary
of
1095-­‐C:
To
prove
coverage
for
enforcement
of
individual
penalty
Carrier
or
Self
funded
plan
sponsor
Last
day
of
January
to
employees,
last
day
of
February
to
the
IRS
if
filed
paper;
if
electronic,
last
day
of
March
Electronic
submission
is
required
for
250
employees
or
more,
otherwise
paper
or
electronic
IRS
1095-­‐B
Health
Coverage
This
is
used
to
provide
proof
of
MEC
coverage
Carrier
or
Self
funded
plan
sponsor
Last
day
of
January
Electronic
submission
is
required
for
250
employees
or
more,
otherwise
paper
or
electronic
Covered
employees,
covered
non-­‐
employees,
and
IRS
1095-­‐A
Health
Insurance
Marketplace
statement
This
is
used
to
prove
coverage
on
the
exchange
Exchange
carrier
Last
day
of
January
Electronically
Covered
individuals

42. 6055
and
6056
Forms
42
Forms
Title
What
is
the
purpose
Who
completes
this
form
When
is
it
due
How
is
it
filed
Who
does
it
go
to
1094-­‐C
Transmiwal
of
Employer
–
Provided
Health
Insurance
Offer
and
Coverage
InformaDon
Returns
Summary
of
1095-­‐C:
Enforce
employer
mandate
Employer
members
of
ALE
Last
day
of
February
if
filed
paper,
last
day
of
March
if
electronically
Electronic
submission
is
required
for
250
employees
or
more,
otherwise
paper
or
electronic
IRS
1095-­‐C
Employer
Provided
Health
Insurance
Offer
and
Coverage
Enforcement
of
employer
mandate.
This
is
used
to
disclose
MEC
coverage
Employer
members
of
ALE
Last
day
of
January
to
employees,
last
day
of
February
to
the
IRS
if
filed
paper;
if
electronic,
last
day
of
March
Electronic
submission
is
required
for
250
employees
or
more,
otherwise
paper
or
electronic
Employees
(covered
or
not)
and
IRS
1094-­‐B
Transmiwal
of
Health
Coverage
and
InformaDon
Returns
Summary
of
1095-­‐C:
To
prove
coverage
for
enforcement
of
individual
penalty
Carrier
or
Self
funded
plan
sponsor
Last
day
of
January
to
employees,
last
day
of
February
to
the
IRS
if
filed
paper;
if
electronic,
last
day
of
March
Electronic
submission
is
required
for
250
employees
or
more,
otherwise
paper
or
electronic
IRS
1095-­‐B
Health
Coverage
This
is
used
to
provide
proof
of
MEC
coverage
Carrier
or
Self
funded
plan
sponsor
Last
day
of
January
Electronic
submission
is
required
for
250
employees
or
more,
otherwise
paper
or
electronic
Covered
employees,
covered
non-­‐
employees,
and
IRS
1095-­‐A
Health
Insurance
Marketplace
statement
This
is
used
to
prove
coverage
on
the
exchange
Exchange
carrier
Last
day
of
January
Electronically
Covered
individuals

43. Scenario
-­‐
Jane
• Jane
worked
for
ABC
Company
the
enDre
year.
ABC
Company
was
covered
under
BCBS
for
5
months
and
moved
to
Cigna
for
7
months.
43
• Jane
would
get
a
1095-­‐C
from
ABC
Company.
• Jane
would
get
a
1095-­‐B
from
BCBS.
• Jane
would
get
a
1095-­‐
B
from
Cigna.

44. Scenario
-­‐
Joe
• Joe
worked
for
ABC
Company
(covered
by
Humana)
for
6
months
and
then
went
to
work
for
XYZ
Company
(covered
under
UHC)
for
6
months.
44
• Joe
would
get
a
1095-­‐C
from
ABC
Company.
• Joe
would
get
a
1095-­‐B
from
Humana.
• Joe
would
get
a
1095-­‐C
from
XYZ
Company.
• Joe
would
get
a
1095-­‐B
from
UHC.

45. Bonus
Scenario
-­‐
Joe
• Joe
worked
for
ABC
Company
(covered
by
Humana)
for
6
months
and
then
went
to
work
for
XYZ
Company
(covered
under
UHC)
for
6
months.
XYZ
Company
changes
insurance
companies
mid
year.
45
• Joe
would
get
a
1095-­‐C
from
ABC
Company.
• Joe
would
get
a
1095-­‐B
from
Humana.
• Joe
would
get
a
1095-­‐C
from
XYZ
Company.
• Joe
would
get
a
1095-­‐B
from
UHC.
• Joe
would
get
a
1095-­‐
B
from
new
carrier.

46. PenalDes
46
Penalty
Type
Per
Viola,on
Annual
Maximum
Annual
Max
for
Small
Employers*
Old
New
Old
New
Old
New
General
$100
$250
$1.5
million
$3
million
$500,000
$1
million
Corrected
within
30
days
$30
$50
$250,000
$500,000
$75,000
$175,000
Corrected
aner
30
days
and
before
Aug.
1
$60
$100
$500,000
$1.5
million
$200,000
$500,000
IntenDonal
Disregard
$250+
$500+
None
N/A
*For purposes of the penalty maximum, a small employer is one that has average
annual gross receipts of up to $5 million for the most recent three taxable years

47. 6055
(1094-­‐B
and
1095-­‐B)
47
• Insured
plans:
the
health
insurance
issuer
(not
the
employer)
• Self-­‐insured
group
health
plans:
the
plan
sponsor
• Government-­‐sponsored
programs:
the
execuDve
department
or
agency
of
a
governmental
unit
that
provides
coverage
under
the
government-­‐sponsored
program
Any
person
that
provides
minimum
essen,al
coverage
to
an
individual:
Minimum
EssenDal
Coverage:
• Eligible
employer-­‐sponsored
coverage
(including
insured
and
self-­‐insured
plans,
COBRA
coverage
and
reDree
coverage)
• Individual
health
coverage
(including
Exchange/
Marketplace
plans)
• Government
programs
(including
Medicare
Part
A,
Medicaid,
CHIP
and
TRICARE
coverage)
MEC
does
NOT
include:
• “Supplemental
coverage”
such
as
HRAs,
HSAs,
coverage
at
on-­‐site
medical
clinics
or
Medicare
Part
B

48. Form
1094-­‐B
(Transmiwal
Form)
48
• Employer
name,
EIN,
address
• Contact
person’s
name
and
telephone
number
• Total
number
of
Forms
1095-­‐B
submiwed
with
transmiwal
Required
InformaDon

49. Form
1095-­‐B
(Health
Coverage)
49
Required
Informa,on
Part
I:
Responsible
Individual
• Name,
SSN
(or
DOB),
address
• Policy
origin/SHOP
idenDfier
Part
II:
Employer
Sponsored
Coverage
• Name,
EIN,
address
Part
III:
Issuer
or
Other
Coverage
Provider
• Name,
EIN,
address,
phone
number
Complete one Form 1095-B for each responsible individual

50. Form
1095-­‐B
(Health
Coverage)
50
Covered
Individuals
• Name
of
covered
individual
• SSN
(or
DOB)
• Whether
covered
for
all
12
months
of
the
year
• Months
covered
(if
not
all
12
months)

51. 6056
(Forms
1094-­‐C
and
1095-­‐C)
51
Form No. Form Name Used to:
1094-C Transmittal of
Employer-Provided
Health Insurance
Offer and Coverage
Information Return
• Report summary information for each
employer to the IRS
• Certify eligibility for transition relief
(including medium-sized employer delay)
• Transmit Forms 1095-C to the IRS
1095-C Employer-Provided
Health Insurance
Offer and Coverage
• Report information about each employee
• Satisfy combined 6055 and 6056
reporting requirements for ALEs with
self-funded plans

52. Form
1094-­‐C
Part
1
(Transmiwal
Form)
Part
I:
Applicable
Large
Employer
Member
(ALE
Member)
• Contact
informaDon
for
employer
and
contact
person
• Number
of
Forms
1095-­‐C
submiwed
with
the
transmiwal
52

53. Form
1094-­‐C
Part
II
Part
II:
ALE
Member
Informa,on
• Indicate
authoritaDve
transmiwal
• Total
number
of
Forms
1095-­‐C
filed
by/on
behalf
of
member
• Indicate
member
of
Aggregated
ALE
Group.
If
yes,
complete
Part
IV
(names
and
EINs
of
other
ALE
members)
• CerDfy
eligibility
for
alternaDve
methods
of
reporDng/4980H
transiDon
relief
53

54. Form
1094-­‐C
Part
III
Part
III:
ALE
Member
Informa,on
-­‐
Monthly
• MEC
Offer
Indicator
(Yes/No)
• Full-­‐Dme
Employee
Count
for
ALE
Member
• Total
Employee
Count
for
ALE
Member
• Aggregated
Group
Indicator
• SecDon
4980H
TransiDon
Relief
Indicator
(50-­‐99
Relief
–
Code
A,
100
or
More
Relief
–
Code
B)
54

55. Form
1095-­‐C
Part
I
Employee
Applicable
Large
Employer
Member
(Employer)
• Name
• SSN
• Address
• Name
• EIN
• Address
• Contact
phone
number
Employer will complete one Form 1095-C for each full-time employee*
55

56. Form
1095-­‐C
Part
II
Line
14
Employee
Offer
and
Coverage
• Enter
a
code
indicaDng
informaDon
regarding
offer
of
coverage
Line
14:
Offer
of
Coverage
56

57. Form
1095-­‐C
Part
II
Lines
15
&
16
CODE
EXPLANATION
2A
Employee
not
employed
during
the
month
2B
Employee
not
a
full-­‐Dme
employee
2C
Employee
enrolled
in
offered
coverage
2D
Employee
in
a
4980H(b)
Limited
Non-­‐Assessment
Period
2E
MulDemployer
interim
rule
relief
Line
15–Affordability
of
coverage:
enter
cost
of
employee
share
of
lowest-­‐cost
monthly
premium
for
self-­‐only
minimum
value
coverage
Line
16–SecDon
4980H
safe
harbors:
enter
code
indicaDng
why
penalty
won’t
apply
NOTE: Code 2C should be used for any month in which the
employee enrolled coverage, regardless of whether any
other code could also apply.
CODE
EXPLANATION
2F
4980H
affordability
Form
W-­‐2
safe
harbor
2G
4980H
affordability
federal
poverty
line
safe
harbor
2H
4980H
affordability
rate
of
pay
safe
harbor
2I
Non-­‐calendar
year
transiDon
relief
applies
57

58. Form
1095-­‐C
Part
III
(Combined
ReporDng
for
Self-­‐funded
ALEs)
Covered
Individuals
• Name
of
covered
individual
• SSN
(or
DOB)
• Whether
covered
for
all
12
months
of
the
year
• Months
covered
(if
not
all
12
months)
Employers with self-funded plans will complete one Form 1095-C for each
employee who enrolls in the health coverage (whether full-time or not)
58

59. General
Method
of
ReporDng
• Including
whether
an
offer
of
health
coverage
was
made
• Applies
to
all
ALEs
whether
or
not
they
offered
health
coverage
to
full-­‐Dme
employees
• ALEs
that
do
not
offer
any
coverage
must
report
that
coverage
was
not
offered
All
ALEs
must
report
informaDon
about
health
coverage
offered
to
full-­‐Dme
employees
• Whether
an
offer
of
health
coverage
was
or
was
not
made
to
the
employee
• If
an
offer
was
made,
the
required
informaDon
about
the
offer
For
each
full-­‐Dme
employee,
the
ALE
must
report:
• A
copy
of
Form
1095-­‐C
(or
a
subsDtute
form
with
the
same
informaDon)
• Do
not
have
to
provide
Form
1094-­‐C
Provide
informaDon
to
full-­‐Dme
employees
59

60. The
Qualifying
Offer
Method
Qualifying
Offer
occurs
when
the
ALE:
• Offers
MEC
that
is
affordable
(based
on
FPL)
and
provides
minimum
value
AND
• Offers
MEC
to
the
employee’s
spouse
and
dependents
(if
any)
If
made
for
all
12
months:
• Provide
less
detailed
informaDon
on
IRS
returns
• Provide
simplified
employee
statements
(unless
enrolled
in
self-­‐insured
coverage)
If
not
made
for
all
12
months
• Use
the
general
reporDng
method
• Use
an
indicator
code
for
months
that
a
Qualifying
Offer
was
received
ALE
must
make
a
Qualifying
Offer
for
all
months
of
a
year
in
which
the
employee
was
full-­‐Dme
under
SecDon
4980H
60

61. ReporDng
Using
the
Qualifying
Offer
Method
In
Part
II
of
Form
1095-­‐C:
• Offer
of
coverage:
enter
Code
1A
in
either
the
“All
12
months”
box
(or
all
of
the
monthly
boxes)
to
indicate
that
the
employee
received
a
Qualifying
Offer
for
all
12
months
• Employee
cost:
DO
NOT
enter
a
dollar
amount
for
the
employee
cost
for
any
month
In
Part
II
of
Form
1094-­‐C:
• Cer,fica,ons
of
Eligibility:
Check
box
A,
Qualifying
Offer
Method
61

62. ReporDng
Using
the
Qualifying
Offer
Method
TransiDon
Relief
for
2015
In
Part
II
of
Form
1095-­‐C:
• Offer
of
coverage:
• Enter
Code
1A
for
each
month
in
which
a
Qualifying
Offer
was
received
• Enter
Code
1I
for
each
month
in
which
the
TransiDon
Relief
applies
(i.e.,
each
month
a
Qualifying
Offer
was
not
received)
• Employee
cost:
DO
NOT
enter
a
dollar
amount
for
the
employee
cost
In
Part
II
of
Form
1094-­‐C:
• Cer,fica,ons
of
Eligibility:
Check
box
B,
Qualifying
Offer
Method
TransiDon
Relief
• Applicable
when
a
Qualifying
Offer
is
made
to
at
least
95%
of
full-­‐Dme
employees,
the
ALE
can
report
simplified
data
for
ALL
full-­‐Dme
employees
62

63. The
98%
Offer
Method
• Affordability
based
on
any
pay
or
play
safe
harbor
method
ALE
must
offer
affordable,
minimum
value
coverage
to
at
least
98%
of
employees
and
dependents
reported
on
its
SecDon
6056
return
• Eligible
ALEs
do
not
have
to
specify
their
number
of
full-­‐Dme
employees
or
idenDfy
which
are
full-­‐Dme
on
IRS
returns
• No
simplified
method
for
employee
statements
How
to
Report:
63

64. Final
InstrucDons
and
Forms
• Instruc,ons
for
Forms
1094-­‐C
and
1095-­‐C
(“Applicable
large
employers”
(i.e.,
those
subject
to
the
employer
mandate),
self-­‐insured
plans
complete
the
en,re
Form
1095-­‐C)
• hwp://www.irs.gov/pub/irs-­‐pdf/i109495c.pdf?
elqTrackId=a60d4092f5fd4544bb315fd1ed09b9f8&elq=23705b47fa29429~c29487ad788f039&elqCampaignId=&elqaid=10242&elqat=1
• Form
1094-­‐C
(a
transmigal/cover
sheet)
to
the
IRS
• hwp://www.irs.gov/pub/irs-­‐pdf/f1094c.pdf?
elqTrackId=2057bae1a6b54ac1998eeae3a3069268&elq=23705b47fa29429~c29487ad788f039&elqCampaignId=&elqaid=10242&elqat=1
• Form
1095-­‐C
to
both
the
IRS
and
individuals
(If
its
plan
is
insured,
the
applicable
large
employer
will
only
complete
Parts
I
and
II
of
Form
1095-­‐C)
• hwp://www.irs.gov/pub/irs-­‐pdf/f1095c.pdf?
elqTrackId=71926ae587914509895769dd600c71b9&elq=23705b47fa29429~c29487ad788f039&elqCampaignId=&elqaid=10242&elqat=1
• Instruc,ons
for
Forms
1094-­‐B
and
1095-­‐B
(Insurance
carriers
and
small
employers
with
self-­‐insured
plans
use
these
forms)
• hwp://www.irs.gov/pub/irs-­‐pdf/i109495b.pdf?
elqTrackId=26cda07338d645a59e28e24bc92e9e67&elq=23705b47fa29429~c29487ad788f039&elqCampaignId=&elqaid=10242&elqat=1
• Form
1094-­‐B
(a
transmigal
/cover
sheet)
to
the
IRS
• hwp://www.irs.gov/pub/irs-­‐pdf/f1094b.pdf?
elqTrackId=684851f6a6b54f98905c2a067a23b9c0&elq=23705b47fa29429~c29487ad788f039&elqCampaignId=&elqaid=10242&elqat=1
• Form
1095-­‐B
to
both
the
IRS
and
individuals
• hwp://www.irs.gov/pub/irs-­‐pdf/f1095b.pdf?
elqTrackId=15c9a288d12246eba09e453f151b2b21&elq=23705b47fa29429~c29487ad788f039&elqCampaignId=&elqaid=10242&elqat=1
64

65.
G&A’s
PPACA
Compliance
Support
65

66. PPACA
–
Working
with
G&A
• Tools
and
support
for
determining
affordability,
minimum
value,
measurement/
stability
period
• IRS
ReporDng
(6055/6056)
services
• Time
tracking
reports
to
monitor
part
Dme
employee
hours
to
determine
benefit
eligibility
• Tracking
variable
hour,
change
in
status,
leaves
of
absence,
and
breaks
in
service
• Expert
guidance
66

67. Compliance
Tracking
Tool
67

68. Compliance
Tracking
Tool
68

69. Compliance
Tracking
Tool
69

70. Compliance
Tracking
Tool
70

71. QuesDons
for
You
to
Consider
• What
strategies
will
work
for
your
business?
• The
value
of
benefits
vs.
employer
cost?
• What
will
your
compeDtors
do?
• Do
you
go
at
this
alone
or
outsource?
71

72. Summary
• PPACA
rules
are
constantly
evolving
• What
works
today
may
not
work
tomorrow
• There
is
no
“one
size
fits
all”
approach
• A
comprehensive
strategy
is
more
effecDve
• Examine
all
opportuniDes
available
• Seek
relevant
guidance
(legal,
financial,
operaDonal)
• Avoid
the
pivalls
of
over-­‐reacDon
to
penalDes
• Don’t
let
Health
Reform
“run
your
business”!
72

73. QUESTIONS?
G&A
Partners
info@gnapartners.com
(866)
634-­‐6713
This webinar has been recorded and will be posted on the G&A website by Friday.