The recent Republican election victories appear to ensure that the Affordable Care Act’s (ACA) days are numbered. But with nearly a fifth of the U.S. economy, and the health care coverage for some tens of millions of U.S. citizens, at stake, the law will not simply be repealed. Something will be enacted to take its place. And some popular features of the law (e.g., protection for those with pre-existing conditions) are likely to survive.

Our previous posts have attempted to outline the alternatives and to handicap their odds. Last week we looked that the Trump/Pence transition plan, “Healthcare Reform to Make America Great Again.” This week we turn our attention to particulars of the program offered by House Speaker Paul Ryan entitled A Better Way. In the next two weeks, we will look at legislative proposals offered by Representative Tom Price (R-Georgia), who is President-elect Trump’s nominee to head the Department of Health and Human Services, and by Senator Orrin Hatch (R-Utah). In future posts, we will speculate on the process by which the various policy prescriptions might become law—including whether the repeal of the ACA will be done quickly (we expect it will), whether there will be a transition period (we expect that the answer is “yes”), and if so how long (anywhere from two to four years).

Unlike the Trump/Pence plan, which consists of a series of high-level bullet points, the Ryan plan is a fairly detailed policy proposal. Hence, while not in actual legislative form, it provides a good sense of some of the likely features of the ACA’s replacement.

Continue Reading The Future of the ACA Week 4: The Ryan Plan, “A Better Way”

Employer-sponsored group health plans and health insurance issuers (or carriers) are subject to information reporting requirements under the Affordable Care Act (ACA), including the obligation to report taxpayer identification numbers (TINs) of covered employees and their spouses and dependents. But how should employers and carriers respond when notified that a TIN is either missing or incorrect? The regulators have on more than one occasion provided an answer, most recently in a proposed regulation issued July 29, 2016 and published in the Federal Register on August 2, 2016. This post endeavors to explain how employers and carriers ought to handle missing or incorrect TINs under these proposed rules.

Continue Reading ACA Reporting on Forms 1094-C and 1095-C, AIRTN500 Error Messages, and Incorrect and Missing Taxpayer Identification Numbers (TINs)—What’s an Employer to Do?

As the ACA audit era approaches, many employers are wondering: what will happen?  What sorts of documentation will the IRS request?  What industries will be targeted?  And what can employers do to prepare?  In this post, I discuss what employers might expect based on my experience with audits under the Massachusetts Fair Share law, and provide some tips for audit preparation and troubleshooting.

Continue Reading As Affordable Care Act Enforcement Looms, Some Lessons Learned From Massachusetts

My colleague Patricia Moran, wrote a Law360 article entitled In The ACA Age, Employee Handbooks Can Help — Or Hurt as a follow up to her latest post, Have You Reviewed your Employee Handbook for Affordable Care Act Compliance? In the article, Moran urges employers to review their health and welfare benefit documentation for ACA compliance. Given the anticipated increase in IRS audits, she notes that an employee handbook can be great tool to ensure compliance with the ERISA and the ACA. In addition to outlining the value of an ACA compliant handbook, Moran also examines common noncompliance issues.

In Q&A format, recently issued Notice 2015-87 addresses a number of pressing issues that have arisen under the Affordable Care Act (ACA), including that law’s employer shared responsibility rules, information reporting requirements, and insurance market reforms, among others. Q&A 15 of the notice addresses, and proposes changes in, the rules governing breaks-in-service involving staffing firms that place contract and temporary workers with educational organizations. This post explains the proposed changes and examines their impact on staffing firms that provide employees to educational organizations.

Continue Reading Staffing Firms, Educational Organizations, and Breaks-in-Service under the Affordable Care Act Employer Shared Responsibility Rules: Proposed Changes under Notice 2015-87

On February 5, 2016, the Departments of the Treasury, Labor, and Health and Human Services (the Departments) issued guidance addressing the application of market reforms and other provisions of the Affordable Care Act (ACA) to student health coverage, and providing temporary transition relief from enforcement by the Departments for non-compliant employers.

Continue Reading Subsidizing Student Health Insurance With Stipends – New Agency Guidance and Relief

When it comes to mergers and acquisitions involving at least one applicable large employer (ALE), the substantive rules governing employer shared responsibility (under Internal Revenue Code § 4980H) and the corresponding reporting rules (under Internal Revenue Code § 6056) share at least one thing in common: we don’t yet know how they work. This leaves parties to corporate deals with some challenging questions: How should acquired employees be treated? Does the form of the transaction matter? Do “successor employer” rules of the sort found in the COBRA final regulations apply? Are the parties free to apportion exposure? What presumptions might be invoked if the matter of Affordable Care Act (ACA) compliance is not addressed? What exactly was Tom Brady’s role in “deflate gate”?

A recent program sponsored by the American Bar Association Center for Continuing Legal Education on the subject of the ACA reporting rules included a discussion of the reporting aspects of mergers and acquisitions in which Treasury Department and IRS representatives participated. Because the official position of the government may only be enunciated in formal written guidance, the opinions voiced by the government representatives were not binding. They were, rather, their own informal views. The program nevertheless provided some useful hints as to how mergers and acquisitions would be treated for ACA purposes.

Background—what we do know

That the ACA’s employer shared responsibility rules will play a role in mergers and acquisitions is clear from the statute. Code § 4980H(c)(2)(C)(iii) provides that, for purposes of determining whether an employer is an ALE, any reference to an employer includes a reference to any predecessor of the employer. In addition, in the case of an asset deal, a purchaser may become responsible for certain of the seller’s tax, benefits and employment liabilities under the successor employer doctrine, this despite that the asset purchase agreement expressly excludes these liabilities by its terms. Continue Reading The Affordable Care Act’s Reporting Requirements for Carriers and Employers (Part 7 of 24): Mergers and Acquisitions

As we reported last week, the IRS recently issued draft 2015 Instructions for Forms 1094-C and 1095-C. These instructions are of interest to applicable large employers who must report their compliance with the Affordable Care Act’s (ACA) rules governing employer shared responsibility. At the same time, the IRS also issued draft 2015 Instructions for Forms 1094-B and 1095-B (“Draft 2015 Instructions”). Forms 1094-B and 1095-B are used to report certain information to the IRS and to taxpayers about individuals who are covered by minimum essential coverage and therefore are not liable for the individual shared responsibility payment. The Draft 2015 Instructions contain an unpleasant clarification on the subject of Health Reimbursement Arrangements, saying essentially that an employer that maintains an insured group plan and a self-funded Health Reimbursement Arrangement (HRA) must separately report the HRA coverage.

Continue Reading The Affordable Care Act’s Reporting Requirements for Carriers and Employers (Part 5 of 24): Reporting of Health Reimbursement Arrangements under Code § 6055 (Spoiler Alert: You Are Not Going to Like This One)

The IRS recently issued draft 2015 Instructions for Forms 1094-C and 1095-C (“2015 Instructions”). These are the forms that employers with 50 or more full-time employees (including full-time equivalent employees) in the previous year—i.e., Applicable Large Employers (“ALEs”)—use to report their compliance with the Affordable Care Act’s (“ACA”) rules governing employer shared responsibility. Where an ALE consists of more than one commonly controlled entity, reporting is required at the level of the controlled group member (or “ALE Member”). The employer shared responsibility rules are codified in § 4980H of the Internal Revenue Code (“Code”), and the corresponding reporting requirements are set out in Code § 6056.

The draft 2015 Instructions do not deviate radically from the 2014 Instructions. They do, however, contain some important clarifications. This post examines the highlights.  (For a comprehensive treatment of the ACA reporting-related requirements please see Information Reporting Under the Affordable Care Act: I.R.C. §6055 and §6056.)

Continue Reading The Affordable Care Act’s Reporting Requirements for Carriers and Employers (Part 4 of 24): Highlights from the Draft 2015 Instructions for Forms 1094-C and 1095-C

Alden Bianchi, Chair of Mintz Levin’s Employee Benefits & Executive Compensation Practice, will provide a weekly installment on the complex reporting obligations outlined by the Affordable Care Act for health insurance carriers and employers. In this 24-week series, Alden will explain key requirements as he counts down to the January 2016 ACA reporting deadlines. This is the third installment of the series.

The purpose of IRS Form 1095-C is to furnish information to the IRS about an applicable large employer’s compliance with the Affordable Care Act’s (ACA) employer shared responsibility rules. The form also solicits information that the IRS will use to track both compliance by employees and their dependents with the Act’s individual mandate and their eligibility for premium tax subsidies. Much of the required data is provided in responses to lines 14, 15 and 16 (Part II) of the form. An understanding of what is reported in these three lines and how they interact, therefore, is essential to an understanding of Internal Revenue Code § 6056, which Form 1095-C supports.

Continue Reading The Affordable Care Act’s Reporting Requirements for Carriers and Employers: The Basics (Part 3 of 24)