Affordable Care Act questions? We’ve got answers

employee benefits, ACA

Overwhelmed by Health Care Reform?

President Trump hit the ground running his first week in office and one of the hot topics currently being debated is his signing of the Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal, stating his intent to repeal the Affordable Care Act (ACA) and give States more flexibility and control in the healthcare market. This order gives agencies the ability to waive, defer, exempt and delay provisions under the ACA which impose fiscal burdens.

Here at Brown & Brown, we want to assure you that our dedicated Benefit Advisors closely monitor developments that affect the way our customers do business and are readily able to assist you and your employees with any questions you may have regarding the impact of ACA changes. We work directly with Benefits and ACA Legal teams to create road maps for our clients to remain compliant with all the changing regulations.

At this time, there is much speculation on the potential changes this executive order could bring, but until events progress, employer responsibility and reporting remain the same.

Employers should continue to follow all ACA requirements, including the 2016 completion and submission of 2016 Forms 1094-C/1095-C, as the March 2 deadline is approaching. This includes providing accurate Forms 1095-C to full-time employees, and filing complete and accurate Forms 1094-C and 1095-C with the IRS.

Should you have questions regarding these requirements, please contact us. Our highly skilled insurance professionals are dedicated to help you navigate policy changes and our practice is to stay in continuous contact with our clients concerning legislative updates, benefits communications, cost management, and more.

We will continue to provide updates as further details regarding the ACA changes emerge.

Additional employer Health Care Reform FAQs:

1. Can large employers discontinue preparing for 2016 pay or play reporting (due in the first quarter of 2017) because of the election?
No! Large employers should continue to take steps to fulfill the ACA pay or play reporting for 2016 which is due in the first quarter of 2017. There have been no changes to these reporting requirements. Employers should assume that all Health Care Reform requirements, including pay or play reporting, apply until the formal announcement of any changes. (Note: On Friday November 18th the IRS released Notice 2016 -70. This notice extends the due date for furnishing to individuals the 2016 Form 1095-B, Health Coverage, and the 2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from January 31, 2017, to March 2, 2017. This notice also provides for transitional good-faith relief from the penalties imposed by sections 6721 and 6722 of the Internal Revenue Code relating to the 2016 information reporting requirements under sections 6055 and 6056.)

2. Can the new President and Congress repeal Health Care Reform?
The answer is that it is possible but unlikely. First, to repeal Health Care Reform requires a filibuster-proof majority in the Senate. This means that at least 60 Senators must not oppose the repeal of Health Care Reform which will not occur unless some Democrats cross the aisle and join the Republicans. Further, President Trump has indicated that there are parts of Health Care Reform which he supports. For example, he would not be in favor of removing the ban on pre-existing condition exclusions, nor will he seek to eliminate the requirement that children be allowed to stay on their parents’ health plans until they reach age 26.

3. What types of changes will President Trump propose?
President Trump has already identified several Health Care Reform changes which he supports, including the following:
• Eliminating the individual mandate penalty which compels most Americans to enroll in minimum essential health coverage or pay a penalty.
• Allowing health insurance to be purchased across state lines. In other words, if an insurance policy is approved by regulators in one state, it could be sold in any state rather than requiring approval in each state where the policy is sold.
• Providing a full tax deduction for the purchase of individual insurance policies in the same manner as is permitted by employers buying group policies for their workers.
• Making HSAs more attractive in terms of expanding the tax-free treatment and allowing the transfer of the HSA to the individual’s estate upon his or her death.
• Promoting more price transparency from health care providers.
• Providing more control to the states to structure the delivery of health care. For example, providing block grants to the states for Medicaid to provide more flexibility in designing the Medicaid program for individuals in that particular state.
• Permitting patients to purchase drugs from foreign countries in an effort to drive down prescription costs.

4. What other Health Care Reform changes might be considered?
• No doubt, there will be consideration of repealing the employer mandate, also known as the pay or play penalty. If there is not sufficient support for the elimination of the mandate, a fallback idea may be to make it less onerous for large employers, such as simplifying the reporting and/or modifying the definition of full-time employee from 30 hours per week to 40 hours per week.
• Another provision in the Health Care Reform for which there appears to be bipartisan support is to modify or eliminate is the Cadillac Tax which is currently set to take effect in 2020. One of the challenges with the elimination of the Cadillac Tax will be to find a replacement revenue source.
• There also appears to be interest in modifying the rules for HRAs and FSAs to make them more attractive to individuals and employers

5. Can President Trump modify Health Care Reform without Congressional approval?
There are actions the Trump administration can take on its own to lessen the impact of Health Care Reform. For example, President Trump could direct his administration to not enforce previously enacted regulations to implement the requirements of Health Care Reform. Similarly, there are regulations in the pipeline now which are in the process of being finalized. For example, there are new proposed Form 5500 regulations which would require employers to make certain annual ACA-related compliance representations. Also, there are regulations being developed concerning the Cadillac Tax and the effect of opt-out arrangements on affordability under Health Care Reform. The Trump administration could order that these regulation projects not proceed. In addition, there is pending litigation involving Health Care Reform. For example, currently, there is an appeal of a case as to whether insurers have the right to cost-sharing subsidies under the Health Care Reform. There also continues to be litigation concerning the contraceptive coverage mandate under the ACA. The Trump administration could decide not to defend these cases as well as new court cases which are filed challenging various aspects of Health Care Reform. Such a posture would weaken Health Care Reform.

Some info sourced from BB Resource Center
The information provided in this legislative update for our clients and colleagues is for general guidance only 
and is not intended to be, and does not constitute, tax or legal advice. We recommend that you consult with your tax and legal advisors 
for the interpretation or application of any laws for your particular circumstances and situation.