Coverage and Workforce Reporting Under the ACA

Beginning on January 1, 2014, employers with 50 or more full-time employees must file coverage and workforce reports with the IRS. These reports will contain details about the employer’s health care coverage and workforce. The report will give the IRS sufficient information to apply tax penalties to employers who do not provide Affordable Care Act mandated “minimum essential coverage” to full time employees.

The first report is due in 2015. The employer must certify whether the plan offers “minimum essential coverage” to full time employees. Any entity filing a return reporting minimum essential coverage must furnish a written statement to each individual listed on the return showing the information reported to the IRS for that individual. Failure to file this report is subject to a penalty.

This report will identify the employer and their employees/covered dependents. The report must include information necessary to identify who should have been covered and when. It will also have to identify the nature of the coverage and how much it cost.

Additional information will have to be filed if the employer is claiming to provide “minimum essential coverage” including details about any waiting period, when the coverage was available, and plan types and costs will also need to be disclosed.

Not Yet Implemented

The Affordable Care Act (ACA) contained mandates with indefinite implementation dates and procedures. You may not have to comply with those requirements right now, but you will at some point. Knowing more will help you decide just how much time and effort you want to spend getting ready for their eventual implementation.

Automatic Enrollment

      • The Affordable Care Act will require employers with 200 or more full-time employees to automatically enroll new full-time employees in one of their health benefit plans. However, this requirement will not take effect until the Department of Labor issues regulations. Enrollment may be subject to any waiting period authorized by law. Employers will need to provide adequate notice and opportunity for an employee to opt out of any coverage in which they were automatically enrolled at the time of initial enrollment.
      • Additional information about Automatic Enrollment under the ACA will be provided after the regulations are issued in the future.

Transparency Disclosures – Quality Reporting

      • The Affordable Care Act requires non-grandfathered health care plans to disclose certain information to their associated exchanges and the Department of Health and Human Services. The submitted data will be used to provide insights into the health care landscape. Some of this information will be made available to the public in an attempt to create better informed health care consumers. Information provided to consumers must be in plain language that can be readily used and understood by the target audience.
      • This requirement was scheduled to take effect for non-grandfathered health plans outside of exchanges six months after the date of enactment of the ACA. Exchange plans are supposed to provide the same information starting in 2014. No draft rules or guidance on these requirements have been published to date.
      • The data disclosure covers basic financial information regarding policies and practices. It will also be necessary to provide data on enrollment and claims. Data on rating practices will have to be submitted as well. Information on cost-sharing and payments with respect to out-of-network coverage will have to be included in the reports as well.

Lifetime Limits

The Affordable Care Act prohibits the imposition of lifetime limits on “essential health benefits”. Individuals who have exhausted their health plan lifetime limits prior to the passage of the ACA have to be given notice they can re-enroll in the health plan.
Glocal Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Clients are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the clients’ business activities.