In the latest round of delays under the Affordable Care Act (ACA), the Employee Benefits Security Administration recently announced that the deadline for health plans to provide enrollment information to the transitional reinsurance program has been extended to December 5, 2014.
This enrollment information determines the total fees self-funded health plans and health insurance companies will pay beginning in 2015 into the transitional reinsurance program established under section 1341 of the ACA. The program is designed to reinsure coverage in the individual market, where insurers can no longer underwrite based upon preexisting conditions, charging higher premiums for known medical risks. This three-year program is designed to help stabilize premiums in the individual market by collecting contributions from all health insurance issuers and self-funded group health plans that provide major medical coverage.
The initial reinsurance fee, which is due on January 15, 2015, will be $63.00 per covered life. Payers also have the option of splitting the payment date, with the initial payment reduced to $52.50 per covered life, and with a second installment of $10.50 per covered life due on November 15, 2015.
All payments will be made through Pay.gov, a government website that processes electronic payments to federal government agencies, where the insurer, health plan, or a third party administrator or other contractor acting on behalf of the plan must enter the annual enrollment count by no later than December 5, 2014, and schedule payment.
While we are on the subject, employer health plan sponsors should take note of the coming ACA-related deadlines:
- December 5, 2014. Provide enrollment data at Pay.gov for 2015 reinsurance fee and schedule payment.
- January 1, 2015. Employer mandate “shared responsibility” provisions take effect for employers with 100 or more full-time employees (including full-time equivalents).
- January 15, 2015. Pay first installment of transitional reinsurance fee.
- June 30, 2015.Pay Patient-Centered Outcomes Research Institute (PCORI) fee on Form 720 for second quarter.
- November 15, 2015. Pay second installment of transitional reinsurance fee.
- Open Enrollment 2015. Issue updated Summary of Benefits and Coverage (SBC) for 2016 coverage
- February 1, 2016. Report coverage to employees on Form 1095-C (self-funded coverage) and/or Form 1095-B (insured coverage), along with W-2 reporting value of coverage.
- February 29, 2016. Transmit coverage information to the Internal Revenue Service (IRS) on Form 1094-C and/or Form 1094-B (extend to March 31, 2016 if filing electronically). Note: employers with 50 through 99 full-time employees and full-time equivalents must file Form 1094-C for 2015 transition relief if they are relying on that to avoid the employer mandate in 2015.
And a few reminders of ongoing obligations and other recent changes that employers should keep on their radar screens:
- Notice of Exchanges. All employers should continue to issue such notices to all new hires and be sure to update the notices if coverage changes.
- COBRA Notices. Employers subject to the Consolidated Omnibus Budget Reconciliation Act (COBRA) should update their COBRA election notices for the new model language issued in 2014 alerting COBRA-qualified beneficiaries to the availability of insurance through the Marketplace exchanges at the official Health Insurance Marketplace website, HealthCare.gov.
- Cafeteria Plans. Employers should consider adding the two latest mid-year election change events to their cafeteria plans, which would permit an employee to add or drop coverage in the employer’s plan. If the cafeteria plan permits, employees who reduce their hours below 30 per week may make a mid-year election change to obtain minimum essential coverage elsewhere (such as on an exchange) in anticipation of a future loss of coverage, even though the employee is currently in a stability period and does not lose coverage. Similarly, if an employee is eligible for special enrollment rights on an exchange and wishes to drop employer-sponsored coverage and immediately purchase exchange coverage, a cafeteria plan can permit a mid-year election change.
- Flexible Spending Account Increases. The annual cap of $2,500 on employee contributions to health flexible spending accounts is indexed for inflation, so that the 2015 limit is increased to $2,550. Companies that wish to permit their employees to contribute up to the annual limit to their health flexible spending arrangements in future years should amend their plan documents to link the annual cap to the indexed amount as announced each year by the IRS, thereby avoiding the need for recurring annual plan amendments.