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Last fall, President Barack Obama signed the Protecting Affordable Coverage for Employees Act (PACE), which preserved the historical definition of small employer to mean an employer that employs 1 to 50 employees. Prior to this newly signed legislation, the Patient Protection and Affordable Care Act (ACA) was set to expand the definition of a small employer to include companies with 51 to 100 employees (mid-size segment) beginning January 1, 2016.

If not for PACE, the mid-size segment would have become subject to the ACA provisions that impact small employers. Included in these provisions is a mandate that requires coverage for essential health benefits (not to be confused with minimum essential coverage, which the ACA requires of applicable large employers) and a requirement that small group plans provide coverage levels that equate to specific actuarial values. The original intent of expanding the definition of small group plans was to lower premium costs and to increase mandated benefits to a larger portion of the population.

The lower cost theory was based on the premise that broadening the risk pool of covered individuals within the small group market would spread the costs over a larger population, thereby reducing premiums to all. However, after further scrutiny and comments, there was concern that the expanded definition would actually increase premium costs to the mid-size segment because they would now be subject to community rating insurance standards. This shift to small group plans might also encourage mid-size groups to leave the fully-insured market by self-insuring – a move that could actually negate the intended benefits of the expanded definition.

Another issue with the ACA’s expanded definition of small group plans was that it would have resulted in a double standard for the mid-size segment. Not only would they be subject to the small group coverage requirements, but they would also be subject to the large employer mandate because they would meet the ACA’s definition of an applicable large employer.

Note: Although this bill preserves the traditional definition of a small employer, it does allow states to expand the definition to include organizations with 51 to 100 employees, if so desired.

By Vicki Randall
Originally published by www.ubabenefits.com

On December 20, 2016, federal officials released FAQs About Affordable Care Act Implementation Part 35 (FAQ #35) in an ongoing series of informal guidance regarding the Affordable Care Act (ACA). This FAQ addresses several topics:

  • Special enrollment rules.
  • Preventive services.
  • Qualified small employer health reimbursement arrangements.

A summary of the key points from FAQ #35 follows.

Special Enrollment Rules

Group health plans are subject to rules under the Health Insurance Portability and Accountability Act (HIPAA) requiring plans to offer a special enrollment (mid-year enrollment) opportunity for persons who are not enrolled when first eligible but then experience certain events. Examples of qualifying events include acquiring a new dependent through marriage, birth or adoption (including placement for adoption) of a child, or losing coverage under another plan. The requirements are referred to as the HIPAA special enrollment rules.

One of the events triggering a special enrollment opportunity is the involuntary loss of other coverage, such as losing coverage under the spouse’s plan, unless the loss is for cause or due to failure to pay premiums.

UPDATE: FAQ #35 confirms that persons are entitled to a special enrollment if they are otherwise eligible for the group plan, had other coverage (including individual insurance obtained inside or outside of a Marketplace) when the group plan coverage was previously offered, and now have lost eligibility for that other coverage. Further, the special enrollment rule applies whether or not the individual is eligible for other individual market coverage, though or outside of a Marketplace.

Coverage of Preventive Services

The Affordable Care Act (ACA) requires that nongrandfathered health plans provide 100 percent coverage without deductibles or co-pays for certain preventive services. Some exceptions are allowed regarding services received outside the network when they are available from in-network providers and for brand-name drugs when equivalent generics are available (unless the physician determines a medical necessity). See the following current lists of required preventive services:

For women’s health services, the current list of required preventive services includes prescribed contraceptives (including sterilization procedures, and patient education and counseling). At this time, there are 18 FDA-approved contraceptive methods and the plan must cover at least one item in each method at 100 percent. Plans also must have an “exceptions process” to ensure 100 percent coverage of any item within the method based on medical necessity as determined by the physician.

The preventive services requirements are developed based on recommendations from the U.S. Preventive Services Task Force (USPSTF), the Centers for Disease Control (CDC), the Health Resources and Services Administration (HRSA), and others, and are subject to change from time to time.

UPDATE: FAQ #35 explains that updated HRSA recommendations for women’s preventive services will apply for plan years beginning on or after December 20, 2017 (e.g., January 1, 2018 for calendar-year plans). Plans may adopt the new guidelines earlier if they choose. The updated guidelines address several women’s health services, including breast cancer screening, cervical cancer screening, gestational diabetes, breastfeeding services and supplies, and well-woman preventive visits.

The new guidelines also will require plans to cover all 18 of the FDA-approved contraceptive methods. Plans may continue to impose cost-sharing requirements on branded drugs for which generic equivalents are available. Note that the ACA provides certain exceptions regarding contraceptives with respect to plans sponsored by religious employers and nonprofit religious-affiliated employers; those exceptions will continue.

See the HRSA’s Women’s Preventive Services Guidelines for more information.

Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs)

Section 18001 of the recently-enacted 21st Century Cures Act creates an opportunity for small employers to offer a new type of health reimbursement arrangement for their employees’ healthcare expenses, including individual insurance premiums.

Employers of all sizes currently are prohibited from making or offering any form of payment to employees for individual health insurance, whether through premium reimbursement or direct payment. Employers also are prohibited from providing cash or compensation to employees if the money is conditioned on the purchase of individual health insurance. (Some exceptions apply; e.g., retiree-only plans, dental/vision insurance.) Violations can result in excise taxes of $100 per day per affected employee.

The new law does not repeal the existing prohibition, but rather it provides an exception for a new type of tax-free benefit called a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). Small employers meeting certain conditions may begin offering QSEHRAs in 2017. Our December 9, 2016 blog post, New Law Allows Small Employers to Pay Premiums for Individual Policies, summarized the requirements for small employers to offer QSEHRAs.

Separately, the 21st Century Cures Act offers small employers certain relief from excise taxes for violating the existing prohibition against employer payment of individual health insurance. The relief applies retroactively and continues through the 2016 plan year (whether or not the employer offers QSEHRAs in 2017), but certain conditions must be met. FAQ #35 clarifies the conditions for tax relief, as follows:

  • The relief applies only to plan years beginning on or before December 31, 2016;
  • The relief applies only to employers that employed on average fewer than 50 full-time and full-time-equivalent employees. In other words, for the relevant period, the employer must not have been an applicable large employer (ALE) as defined under the ACA; and
  • The relief is limited to employer arrangements that pay or reimburse only individual health insurance premiums (or Medicare Part B or D premiums, in some cases). The relief does not extend to stand-alone health reimbursement arrangements that pay or reimburse medical expenses other than individual health insurance premiums.

Lastly, note that an employer arrangement that qualifies for relief from excise taxes generally will be considered minimum essential coverage and preclude covered persons from qualifying for premium tax credits (subsidies) at a Marketplace (Exchange).

More Information

Employers and their advisors are encouraged to review the complete FAQ #35 to ensure their group health plans continue to comply with the ACA’s requirements. The special enrollment rule merely confirms existing HIPAA requirements. For preventive services, the update regarding women’s health services applies for plan years beginning on or after December 20, 2017 (e.g., January 1, 2018 for calendar-year plans). Lastly, small employers may want to consider the new option for QSEHRAs starting in 2017.

Originally published by www.thinkhr.com

Under the Patient Protection and Affordable Care Act (ACA), all public Exchanges are required to notify employers when an employee is receiving a subsidy (tax credits and cost-sharing reductions) for individual health insurance purchased through an Exchange. According to the final rules published in August 2013, employers have the right, but are not required, to engage in an appeal process through the IRS if they feel an employee should not be receiving a subsidy because the employer offers minimum value, affordable coverage.

Some states began sending notices from public Exchanges indicating that one or more employees are currently receiving a subsidy in 2015, but the U.S. Department of Health and Human Services (HHS) announced that all federally-facilitated Exchanges will begin sending notices in 2016. Just because the employer receives a notice, it does not mean the employer will actually owe a penalty payment under Section 4980H.

Dan Bond, Principal, Compliancedashboard, offers this important commentary: “I think it’s important for employers to remember that just because they may receive one of these notices from the IRS telling them that one of their employees is receiving a subsidy on the exchange, it does not necessarily mean the employer has exposure to a penalty. There are various reasons that someone might have received a subsidy so the employer can use this notice to determine exactly why and whether or not they have any exposure. In fact, small employers will also receive these notices and they are not even subject to the employer shared responsibility mandate so they will not be subject to penalties, regardless.”

subsidy appeal chart

Appeal Form and Process
So long as the requirements in the final rules are met, each state Exchange is allowed to set up its own process and procedures. Information about how to file an appeal is usually included in the notice, but it may be necessary to check with the applicable Exchange to find out exactly how to handle the appeals process, the particulars of which are managed by each Exchange separately.

The form currently used by federally-facilitated Exchanges, as well as by eight states, may be found on Healthcare.gov (approximately half of the states are currently using this form and process). The forms and processes for all other states may be found by visiting a state’s Exchange site. The process generally involves filing a paper appeal, providing documentation, and in some cases participating in a hearing.

The employer does not have to appeal to avoid a penalty under Section 4980H, and penalties will not apply until after the employer reporting (via Forms 1094-C and 1095-C) is reconciled. There is some speculation that it may be more beneficial to appeal with the Exchange rather than waiting to appeal later with the IRS. This is a fairly new process, so the best approach for employers may remain somewhat unclear until the first year of employer reporting is completed.

Filing an appeal as soon as possible may help avoid hassles with the IRS and prevent the individual from receiving a subsidy for which they are ineligible. At the same time, although the appeals process does not appear to be a difficult one, it is possible that everything could be cleared up more quickly by simply communicating directly with the employee that they may be receiving the subsidy in error.

Originally published by www.ubabenefits.com


Under the Patient Protection and Affordable Care Act (ACA), individuals are required to have health insurance while applicable large employers (ALEs) are required to offer health benefits to their full-time employees. In order for the Internal Revenue Service (IRS) to verify that (1) individuals have the required minimum essential coverage, (2) individuals who request premium tax credits are entitled to them, and (3) ALEs are meeting their shared responsibility (play or pay) obligations, employers with 50 or more full-time or full-time equivalent employees and insurers will be required to report on the health coverage they offer. Final instructions for the 1094-B and 1095-B and the 1094-C and 1095-C forms were released in September 2016, as were the final forms for 1094-B, 1095-B, 1094-C, and 1095-C. The reporting requirements are in Sections 6055 and 6056 of the ACA.

Reporting was first due in 2016, based on coverage in 2015. Reporting in 2017 will be based on coverage in 2016. All reporting will be for the calendar year, even for non-calendar year plans.

On November 18, 2016, the IRS issued Notice 2016-70, delaying the reporting deadlines in 2017 for the 1095-B and 1095-C forms to individuals. There is no delay for the 1094-C and 1094-B forms, or for forms due to the IRS.

Original Deadlines Delayed Deadlines
The 1094-C, 1095-C, 1094-B, and 1085-B forms were originally due to the IRS by February 28, if filing on paper, or March 31, if filing electronically
Deadline to the IRS for all forms remains the same.
The 1095-C form was due to employees by January 31 of the year following the year to which the Form 1095-C relates.
The 1095-C form is now due to employees by March 2, 2017.
The 1095-B form was due to the individual identified as the “responsible individual” on the form by January 31.
The 1095-B form is now due to the individual identified as the “responsible individual” on the form by March 2, 2017.


For information on the extension process as well as the impact on individual taxpayers, view UBA’s ACA Advisor, “IRS Delay in 6055 and 6056 Reporting for 2017”.

For comprehensive highlights and detailed explanations of all forms and instructions for 6055/6056 reporting, including the 2016 updates and sample situations, request UBA’s 16-page ACA Advisor, “IRS Rleeases 2016 Forms and Instructions for 6055/6056 Reporting”.

Originally published by www.ubabenefits.com


The Patient Protection and Affordable Care Act (ACA) imposes a penalty on “large” employers that either do not offer “minimum essential” (basic medical) coverage, or who offer coverage that is not affordable (the employee’s cost for single coverage is greater than 9.5 percent of income) or it does not provide minimum value (the plan is not designed to pay at least 60 percent of claims costs). A large employer is one that employed at least 50 full-time or full-time equivalent employees during the prior calendar year. To discourage employers from breaking into small entities to avoid the penalty, the ACA provides that, for purposes of the employee threshold, the controlled group and affiliated service group aggregation rules will apply to health plans. Essentially, this means that the employees of a business with common owners or that perform services for each other may need to be combined when determining if the employer is “large.”

The aggregation rules are very complicated and may require a large amount of information to do an accurate analysis. This article does not address all of the possible considerations or all of the intricacies of the rules, and assumes that the regulations that apply to retirement plans will also apply to health plans. We strongly encourage employers with complex arrangements to consult with their attorney or accountant.

Controlled Group

When one business owns a significant part of another business, there may be a “controlled group.” There are four types of controlled groups – parent-subsidiary, brother-sister, combined, and life insurance.

Ownership includes:

  • Stock ownership in a corporation
  • Capital interest or profits in a partnership
  • Membership interest in an LLC
  • A sole proprietorship
  • Actuarial interest in a trust or estate
  • A controlling interest in a tax-exempt organization (80 percent of the trustees or directors are also trustees, directors, agents or employees of the other organization or the other organization has the power to remove a trustee or director)
  • A government entity, including a school, if there is common management or supervision or one entity sets the budget or provides 80 percent of the funding for the other.

Affiliated Service Groups

If the company regularly performs certain types of personal services or management functions with or for related entities, it may be part of an “affiliated service group” even if there is not common ownership.

An affiliated service group is basically a group of businesses working together to provide services to each other or jointly to customers, and can be one of three types:

  • A-Organization (A-Org), which consists of a First Service Organization (FSO) and at least one A-Org
  • B-Organization (B-Org) which consists of an FSO and at least one B-Org
  • Management groups

Only entities that provide personal services are subject to the affiliated service group rules. Attribution rules similar to those that apply to controlled groups apply to affiliated service groups.

For detailed information on the four types of controlled groups, three types of affiliated service groups and other related aggregation rules, request UBA’s ACA Advisor, “Controlled Groups and Affiliated Service Groups: How They Apply to the ACA”

Originally published by www.ubabenefits.com

By Jennifer Kupper

In-house Counsel & Compliance Officer for iaCONSULTING
a UBA Partner Firm

HealthInsuranceIn the earlier days of the Patient Protection and Affordable Care Act (ACA), a common question among employers and benefit advisors was whether there would still be a need for COBRA, the Federal Consolidated Omnibus Budget Reconciliation Act of 1985. Many people speculated that COBRA would be a thing of the past. This was a logical step for those in the insurance industry. When an employee was faced with the option of paying full cost for continued employer coverage or possibly qualifying for heavily subsidized care on the Marketplace, it seemed to be a “no brainer.” Six years after the passage of the ACA, which was signed into law on March 23, 2010, and three years after the initial launch of the Marketplace in October 2013, COBRA is still a law with which to be reckoned. In a series of articles, I will address COBRA in general and also delve into other related issues, such as mini-COBRA, COBRA and account-based plans, and the interaction of COBRA and Medicare.

First, let us begin with the legal framework and general rule of COBRA, note the exceptions, and perform the basic analysis to see which employers and group health plans are subject to COBRA.

What is COBRA?

COBRA is a federal law which amended the Employee Retirement Income Security Act (ERISA), the Internal Revenue Code (Code), and the Public Health Service Act (PHSA). The provisions found in ERISA and the Code apply to private-sector employers sponsoring group health plans; the PHSA provisions apply to group health plans sponsored by state and local governments. COBRA regulations have been issued by the Internal Revenue Service (IRS) and the Department of Labor (DOL).

The general rule is that COBRA applies to group health plans sponsored by employers with 20 or more employees on more than 50 percent of its typical business days in the previous calendar year. This rule must be broken into its elements, applying the exceptions, and determining whether an employer is subject to COBRA. After that determination is made, it must be determined what plans must be available for continuing coverage and what individuals are entitled to an election of coverage.

Who is an employer?

Most employers are subject to COBRA. An “employer” is a “person for whom services are performed.” Employers include those with common ownership or part of a controlled group pursuant to Code sections 414(b), (c), (m), or (o). Successors of employers, whether by merger, acquisition, consolidation, or reorganization, are also employers. Many times, COBRA issues, and benefits issues in general, are overlooked when companies are merged or acquired.

What group health plans are subject to COBRA? Does not being covered by COBRA relieve employers of the obligation to offer continuation coverage?

The general rule is that group health plans are subject to COBRA. A group health plan is any arrangement that provides medical care, within the meaning of Code section 213 and is maintained by an employer or employee organization.

The first requirement is that the arrangement must provide medical care. This includes medical, dental, vision, and prescription benefits. It does not include life, disability, or long-term care insurance or amounts contributed by an employer to a medical or health savings account (Archer MSA or HSA).

The second prong is that the arrangement must be maintained or established by the employer. This includes multiemployer plans, an employee benefit plan that is maintained pursuant to one or more collective bargaining agreements and to which more than one employer is required to contribute. More than just insurance plans are subject to COBRA. The arrangement may be provided through insurance, by a health maintenance organization (HMO), out of the employer’s assets, or through any other means.

Examples of group health plans subject to COBRA include:

  • Plans provided by an HMO
  • Self-insured medical reimbursement plans
  • Health reimbursement arrangements (HRAs)
  • Health flexible spending accounts (health FSAs)
  • Wellness programs to the extent they provide medical care
  • Treatment programs or health clinics
  • Employee assistance programs (EAPs)

However, there are several group health plan exceptions to COBRA, and the plans excepted by the general rule may still be obligated under another law to provide some sort of continuation coverage.

Exception #1. COBRA does not apply to plans sponsored by the federal government or the Indian tribal governments, within the meaning of Code section 414(d). Although COBRA does not apply to federal governmental plans, the PHSA, amended by COBRA and overseen by the Department of Health and Human Services (HHS), generally requires that state or local government group health plans to provide parallel continuation coverage. Additionally, the Federal Employees Health Benefits Amendments Act of 1988 requires a similar continuation of coverage for federal employees and their family members covered under the Federal Employees Health Benefit Program.

Exception # 2. COBRA does not apply to certain plans sponsored by churches, or church-related organizations, within the meaning of Code section 414(e).

Exception #3. COBRA does not apply to small-employer plans. Generally, a small-employer plan is a group health plan maintained by an employer that normally employed fewer than 20 employees on at least 50 percent of its typical business days during the preceding calendar year.

For multiemployer plans, all contributing employers must have employed fewer than 20 employees on at least 50 percent of its typical business days during the preceding calendar year. The determination of whether a multiemployer plan is a small-employer plan on any particular date depends on the contributing employers on that date and the size workforce of those employers during the preceding calendar year. The regulations clarify:

“If a plan that is otherwise subject to COBRA ceases to be a small-employer plan because of the addition during a calendar year of an employer that did not normally employ fewer than 20 employees on a typical business day during the preceding calendar year, the plan ceases to be excepted from COBRA immediately upon the addition of the new employer. In contrast, if the plan ceases to be a small-employer plan by reason of an increase during a calendar year in the workforce of an employer contributing to the plan, the plan ceases to be excepted from COBRA on the January 1 immediately following the calendar year in which the employer’s workforce increased.”

Who are employees and what employees count toward the threshold?

All common law employees of the employer are taken into account when determining if an employer is subject to COBRA. Therefore, self-employed individuals, independent contractors and their employees and independent contractors, and directors of corporations are not counted.

The threshold number of employees is 20, counting both full-time and part-time common law employees.

Each part-time employee counts as a fraction of a full-time employee, with the fraction equal to the number of hours that the part-time employee worked divided by the hours an employee must work to be considered full time.

Next Step: The who, when, and how long for COBRA coverage

Now that we know generally who is subject to COBRA from an employer standpoint and what group health plans must be offered, the next step is to determine – from an individual’s standpoint – who is eligible for COBRA coverage, when that person is entitled to coverage, and how long the continuation coverage lasts.
For an in-depth look at qualifying events that trigger COBRA, the ACA impact on COBRA, measurement and look-back issues, health FSA carryovers, and reporting on the coverage offered, request UBA’s ACA Advisor, “COBRA and the Affordable Care Act”.

Read more here …

By Danielle Capilla
Chief Compliance Officer at United Benefit Advisors

CafeteriaCafeteria plans, or plans governed by IRS Code Section 125, allow employees to pay for expenses such as health insurance with pre-tax dollars. Employees are given a choice between a taxable benefit (cash) and specified pre-tax qualified benefits, for example, health insurance. Employees are given the opportunity to select the benefits they want, just like an individual standing in the cafeteria line at lunch.

Only certain benefits can be offered through a cafeteria plan:

  1. Coverage under an accident or health plan (which can include traditional health insurance, health maintenance organizations (HMOs), self-insured medical reimbursement plans, dental, vision, and more)
  2. Dependent care assistance benefits or DCAPs
  3. Group term life insurance
  4. Paid time off, which allows employees the opportunity to buy or sell paid time off days
  5. 401(k) contributions
  6. Adoption assistance benefits
  7. Health savings accounts or HSAs under IRS Code Section 223

Some employers want to offer other benefits through a cafeteria plan, but this is prohibited. Benefits that you cannot offer through a cafeteria plan include scholarships, group term life insurance for non-employees, transportation and other fringe benefits, long-term care, and health reimbursement arrangements (unless very specific rules are met by providing one in conjunction with a high deductible health plan). Benefits that defer compensation are also prohibited under cafeteria plan rules.

Cafeteria plans as a whole are not subject to ERISA, but all or some of the underlying benefits or components under the plan can be. The Patient Protection and Affordable Care Act (ACA) has also affected aspects of cafeteria plan administration.

Employees are allowed to choose the benefits they want by making elections. Only the employee can make elections, but they can make choices that cover other individuals such as spouses or dependents. Employees must be considered eligible by the plan to make elections. Elections, with an exception for new hires, must be prospective. Cafeteria plan selections are considered irrevocable and cannot be changed during the plan year, unless a permitted change in status occurs. There is an exception for mandatory two-year elections relating to dental or vision plans that meet certain requirements. Participants may only make election changes based on IRS provided changes in status, or certain triggering events as contained in the Health Insurance Portability and Accountability Act (HIPAA).

For all the best practices regarding participant contributions, including when participants are unable to pay their required contribution, request UBA’s new ACA Advisor, “Cafeteria Plans: Participant Contributions.

To benchmark your health plan against others in your industry, region, and group size, be sure to pre-order the 2015 Health Plan Survey Executive Summary to get the most up to date information on premiums, employee/employer contributions, plan design trends and more.

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Investigate how your employer is going to address the Cadillac Tax issue!

A quick and easy to follow video which highlights the financial implications of the new excise tax and what you should be aware of now. This video (from a blog post on www.accountingaccidentally.com) has been written from the accounting view and not the insurance view, and as such gives you a few more things to think about. This “Cadillac” excise tax is eventually going to affect us all and the more aware and informed we are – the more prepared we will be.



If you would like to view the blog post directly, please click here.

By Danielle Capilla
Chief Compliance Officer at United Benefit Advisors

IRSUnder the Patient Protection and Affordable Care Act (ACA), individuals are required to have health insurance while applicable large employers (ALEs) are required to offer health benefits to their full-time employees. In order for the Internal Revenue Service (IRS) to verify that (1) individuals have the required minimum essential coverage, (2) individuals who request premium tax credits are entitled to them, and (3) ALEs are meeting their shared responsibility (play or pay) obligations, employers with 50 or more full-time or full-time equivalent employees and insurers will be required to report on the health coverage they offer. Reporting will first be due early in 2016, based on coverage in 2015. All reporting will be for the calendar year, even for non-calendar year plans. Mid-size employers (those with 50 to 99 employees) will report in 2016, despite being in a period of transition relief in regard to having to offer coverage. The reporting requirements are in Sections 6055 and 6056 of the ACA. Draft instructions for both the 1094-B and 1095-B and the 1094-C and 1095-C were released in August 2015.

Draft 2015 Instructions

Following the June release of the draft forms, the IRS has issued draft 2015 instructions, which include a variety of changes from the 2014 instructions. For the 1094-C and 1095-C forms, the following important clarifications were provided: (1) who must file, (2) information on extensions and waivers, (3) how to correct returns, (4) an example and further information on the 98% offer method, (5) information on the new plan start month box, (6) multiemployer plan reporting, (7) offers of COBRA coverage, (8) reporting on employee premiums, and (9) break in service information. For the 1094-B and 1095-B forms there were fewer updates, with information regarding penalties for not reporting and how to file for an extension.

There is no target date for the final versions of either the forms or instructions, however it is generally anticipated they will be released in the fall of 2015.

Who Must File

The draft instructions clarify that all ALEs (employers with 50 or more employees) must file one more 1094-C forms (including the designated authoritative transmittal) and a 1095-C for each employee who was a full-time employee for any month of the year.

Extensions and Waivers

The draft instructions provide information on requesting extensions and waivers. Automatic 30-day extensions will be given to entities filing Form 8809, and no signature or explanation is needed. Form 8809 must be filed by the due date of returns in order to be granted the 30-day extension. Waivers may be requested with Form 8508, and are due at least 45 days before the due date of the information returns.

Corrections to Forms 1094-C and 1095-C

The draft instructions provided detailed instructions on correcting returns. Separate instructions are given for correcting authoritative 1094-C and 1095-C forms. Steps are given for a variety of mistakes, including incorrect full time employee counts, premium amounts, and covered individual information.

Extensions to Furnish Statements to Employees

Employers may request an extension of time to furnish statements to recipients by mailing a letter to the IRS with information including the reason for the delay. If the request is granted, the maximum extension that will be given is 30 days.


The draft instructions incorporate the new penalties for failing to file information returns, which are now $250 for each return that an employer fails to file. The IRS again noted that, for 2015 reporting, penalties will not be imposed for filing incorrect or incomplete information so long as the employer can show it made a good faith effort to comply with the requirements. The “grace period” does not apply to employers who fail to file or who file late.

98 Percent Offer Method

The draft instructions provided clarification of the 98 percent offer method. This method requires employers to certify that they offered affordable health coverage providing minimum value to at least 98 percent of their employees. The instructions clarify how to report on an employee in a limited non-assessment period. The instructions make clear that an individual in a limited non-assessment period does not count against the employer’s 98 percent calculation.

Plan Start Month Box

The draft instructions provide information on the new “plan start month” box, which is optional for 2015. This box is intended to provide the IRS with information used to calculate an individual’s eligibility for premium tax credits, which is based on the employer plan’s affordability, calculated by plan year.

Multiemployer (Union) Plan Relief

The 2014 instructions had told ALEs not to enter a code in Part II, Line 14 of Form 1095-C for coverage that is not actually offered, as the information must reflect the coverage offered to the employee. In 2015 ALEs with multiemployer plans are instructed to enter code 1H on line 14 for any month in which an employer enters code 2E on line 16. Code 2E indicates an employer is required to contribute to a multiemployer plan on behalf of the employee for that month, and is eligible for multiemployer interim relief. This is intended to assist with reporting challenges for multiemployer plans.

COBRA Coverage

The draft instructions provide information on how to handle offers of COBRA coverage. If COBRA is offered to a former employee upon termination, it is only reported as an offer of coverage if the employee enrolls in coverage. If the former employee does not enroll (even if his or her spouse or dependents enroll), employers should use code 1H (no offer of coverage) for any month in which the COBRA offer applies. If an employee is offered COBRA (due to loss of eligibility), that coverage is reported in the same way and with the same code as an offer of coverage to any other active employee.

Line 15 Calculations

The draft instructions clarify how to calculate employee contributions: by dividing the total employee share of the premium for the plan year by the number of months in the plan year to determine the monthly premium.

Break in Service

The draft instructions note that in certain circumstances an employee may have a break in service (which may be due to termination) during which he or she does not earn hours of service, but upon beginning service, is treated as a continuing employee rather than a new hire. The instructions clarify that the individual should only be treated as an employee during the break in service for reporting purposes if the individual remained an employee (was not terminated). An employee on unpaid leave would be treated as an employee for reporting purposes.

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By Danielle Capilla
Chief Compliance Officer at United Benefit Advisors

preventiveFederal agencies released final regulations on the preventive services mandate of the Patient Protection and Affordable Care Act (ACA) that requires non-grandfathered group health plans to provide coverage without cost-sharing for specific preventive services, which for women include contraceptive services.

After pushback from religious employers, interim final regulations, objections from certain employers with religious objections and the subsequent Supreme Court decision in Burwell v. Hobby Lobby, proposed regulations, further final regulations, additional interim final regulations, and another set of proposed regulations, the 2015 Final Rules (applicable for plan years beginning on or after September 14, 2015) provide the following:

  • Formalizes prior guidance requiring a plan to cover out-of-network services without cost sharing if the plan does not have an in-network provider who can provide a required preventive service.
  • Provides for midyear plan changes if a recommended preventive service is downgraded (by task force or advisory body) to a “D” rating or is subject to a safety recall or other significant safety concern.
  • Provides contraceptive coverage accommodations for eligible organizations.

For all the details related to out of network coverage, additional preventive service coverage, timing requirements, contraception, accommodations and important healthcare.gov links, download UBA’s free PPACA Advisor: “Preventive Services Final Rules”.

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I have joined the class that Ron invited me to regarding HR and FMLA, etc. Thank you for your ongoing support and assistance; it is a pleasure doing business with you.”

- Preschool Director