Compliance Newsletter

September 2017 Edition

The Patient Protection and Affordable Care Act (ACA) was signed into law on March 23, 2010, bringing many changes for employers and health plans. The law continues to evolve as regulations are released. This monthly alert brings you information on the major provisions and regulations coming from Washington, connects you to valuable tools in understanding and complying with the law, and keeps you informed of Michigan legislation enacted in response to ACA.

44NORTH REMINDER

ACA Coverage Reporting Deadline

Employers will need to be prepared to furnish employees with a Form 1095-C months earlier in 2018 to meet the January 31, 2018 deadline. While it may seem early to start thinking about 2018 filings, having less time to report in 2018 means employers should be taking steps now to determine how they will be meeting this requirement. Failure to file and furnish correct information on Form 1095-C could result in a $500 per form penalty for employers. Failure to file complete and accurate Forms 1094-C by the form deadline (April 2, 2018, for electronic filing) will result in penalties equal to $250 per form, not to exceed $3 million per year. While deadlines were extended and fees waived this year, there is no indication the same will be given in 2018.

Employers who would like 44North to distribute the notices and file on their behalf, our deadline for sign up is Wednesday, November 1, 2017. Please contact your 44North Account Coordinator or Benefit Consultant for more information on our reporting services.

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PAY OR PLAY

IRS Releases the 2018 Affordability Rate

The Internal Revenue Service released its Revenue Procedure 2017-36 which sets the affordability percentage at 9.56 percent for 2018, down from the 2017 rate of 9.69 percent. Under the Patient Protection and Affordable Care Act (ACA), an applicable large employer may be liable for a penalty if a full-time employee's share of premium for the lowest cost self-only option offered by the employer is not affordable (for 2018, if it's more than 9.56 percent of the employee's household income) and the employee gets a premium tax credit for Marketplace coverage.

Because the 2018 affordability rate is lower than the 2017 affordability rate, applicable large employers may need to reduce their employees' share of premium contributions to maintain affordable coverage. Employers should double check their anticipated 2018 premiums now to prevent the need for mid-year changes.

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MEDICAL LOSS RATIO

Distribution of MLR Rebates

Insurers with medical loss ratios (MLRs) that were below the prescribed levels on their blocks of business must issue rebates to policyholders. Since 2015, insurers must pay rebates to policyholders by September 30 following the reporting year. For example, insurers must pay rebates by September 30, 2017, for the 2016 reporting year. Before 2015, the deadline to pay rebates was August 1.

The rules for calculating and distributing these rebates are largely the same each year. The guidance provided by the regulatory agencies about the way employers should distribute rebates has been fairly general, so employers have some discretion on calculating and distributing the employees' share.

MLR Considerations for Private Plans

MLR Considerations for Government and Church Plans

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COMPLIANCE RECAP

July 2017

August was a quiet month in the employee benefits world.

IRS Issues Draft Forms 1094 and 1095

The IRS issued draft Forms 1094-B, 1095-B, 1094-C, and 1095-C for the 2017 tax year. Coverage providers use Forms 1094-B and 1095-B to report health plan enrollment. Applicable large employers use Forms 1094-C and 1095-C to report information related to their employer shared responsibility provisions under the ACA.

There are no changes to the face of draft Forms 1094-B, 1095-B, or 1095-C. The IRS made one substantive change to draft Form 1094-C. The IRS removed the line 22 box "Section 4980H Transition Relief" which was applicable to the 2015 plan year only.

CMS Issues Projected Part D Premiums for 2018

The Centers for Medicare and Medicaid Services (CMS) projects that the average basic premium for a Medicare Part D prescription drug plan will be $33.50 per month for 2018 .

Court Remands Wellness Regulations to EEOC for Reconsideration

On August 22, 2017, the United States District Court for the District of Columbia held that the U.S. Equal Employment Opportunity Commission (EEOC) failed to provide a reasoned explanation for its decision to adopt 30 percent incentive levels for employer-sponsored wellness programs under both the Americans with Disabilities Act (ADA) rules and Genetic Information Nondiscrimination Act (GINA) rules.

The court declined to vacate the EEOC's rules because of the significant disruptive effect it would have. However, the court remanded the rules to the EEOC for reconsideration.

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HR CORNER

Preparing for Flu Season

It's fall, which also means it is time to start preparing for flu season. Employers need to prepare their employees for influenza, and that includes encouraging flu shots, examining sick leave policies, initiating and communicating basic flu prevention strategies, and ensuring cleanliness in the workplace.

According to the Occupational Safety and Health Administration (OSHA), employers should:

Promote vaccination.
Encourage sick workers to stay home.
Promote hand hygiene and cough etiquette.
Keep the workplace clean.
Address travel concerns.

OSHA does not require flu shots for employees, however, the agency advises employers to encourage their employees to get the shot, in order to maintain productivity and attendance in the workplace. Employers may consider hosting a flu vaccination clinic in the workplace. Under the Patient Protection and Affordable Care Act, preventive services, including flu shots, are covered at no cost to workers enrolled in employer-provided health plans.

OSHA advises employers to develop flexible leave policies that encourage workers to stay home, without penalty, if they are sick. Employers should also communicate other related policies with staff, including administrative leave transfer between employees, pay policy for sick leave, childcare options, and what to do when ill during travel.

The Centers for Disease Control and Prevention has information and tools available to help employers prepare for the flu season. They can be found on their website.

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Office Closure

All 44North offices will be closed Monday, October 2nd, for staff development. For emergency assistance, please call 855-306-1099 and a service representative will be happy to assist.

The information in this newsletter is based on 44North's review of the employee benefit related legislation and is not intended to impart legal advice. Interpretations of the reform legislation vary, and efforts will be made to present and update accurate information. This overview is intended as an educational tool only and does not replace a more rigorous review of the law's applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. Analysis is ongoing and additional guidance is also anticipated from the Department of Health and Human Services.

Questions or comments? Please email us at [email protected] .