1. Health

ACA Round-Up: Bipartisan Proposal To Revamp Employer Reporting Requirements And More

Throughout a summer of intensely partisan efforts to repeal and replace parts of the Affordable Care Act, there have been flickers of bipartisanship, including a sustained effort by Senators Alexander (R-TN) and Murray (D-WA) and the Senate Health, Education, Labor, and Pensions Committee to find bipartisan consensus for a short-term market stabilization package. On October 3, 2017, another bipartisan effort emerged from another quarter. Senators Portman (R-OH) and Warner (D-VA) introduced a bill that is surprising in that it emerged out of nowhere (at least as far as I am aware) and addresses a problem that obviously needs a solution.

That problem is employer reporting under the ACA. The ACA imposes both an individual and an employer responsibility requirement. Individuals are required to have minimum essential coverage or pay a penalty, unless they qualify for an exemption. Large employers are required to provide minimum essential coverage to all full-time employees or pay a penalty if 1) they fail to do so and 2) at least one employee receives premium tax credits through the marketplace. Alternatively, large employers that offer minimum essential coverage but fail to offer full-time employees coverage that is affordable and has an actuarial value of 60 percent also face penalties for each full-time employee that receives premium tax credits.

To ensure compliance with the employer responsibility requirement and to assist verification of compliance with the individual responsibility requirement, the ACA requires large self-insured employers and insurers who cover employee benefit plans to file reporting forms annually with the Internal Revenue Service, and to annually provide full-time employees with statements regarding their coverage. These reports can also be used to verify whether individuals who apply for premium tax credits are in fact ineligible for affordable minimum-value coverage, which would disqualify them from assistance.

(The IRS has recently released the forms used for this reporting: the final 2017 1095-B insurer reporting and 1095-C large employer reporting forms, as well as the 1095-A reporting forms used by marketplaces to report individual coverage.)

These reporting requirements are quite burdensome for employers. They also are not very helpful for verifying advance premium tax credit (APTC) eligibility, as they are not filed until after the end of a year in which an employee received APTC.

Republican ACA repeal proposals considered through the 2017 budget reconciliation process would have repealed the employer responsibility penalty, but, presumably because of the Byrd Rule which limits the scope of budget reconciliation legislation, would not have repealed the reporting requirements. That can only be done through bipartisan legislation—hence the Portman/Warner proposal.

The bill would first require the Internal Revenue Service, in coordination with other federal agencies, to establish, effective January 1, 2019 a voluntary reporting program; this would permit an employer to, not later than 45 days before the start of their annual open enrollment period, voluntarily report to the IRS

whether it is offering minimum essential coverage to its full-time employees (or to part-time employees, dependents, and spouses);
whether the coverage meets ACA minimum value and affordability requirements;
whether the employer reasonably expects to be liable for the employer responsibility penalty;
the months for which coverage is available; and
any waiting periods that apply to coverage.

The IRS would share the information gained through these reports with the exchanges and federal data hub, which could use it for determining eligibility for ATPC and cost-sharing reduction payments. The exchanges could follow up with employers if they needed additional information. Employers would provide updates to the data hub if the coverage they offered changed. Exchanges would also notify employers if any of their employees enrolled in coverage or dropped coverage during a year.

Employers that filed these prospective returns would be deemed to have met the reporting requirements of the ACA if they furnish each employee whose name has been provided by the exchange as having exchange coverage with a statement as to the coverage the employer had offered, and file a copy of that statement with the IRS. Employers could contract with third-party contractors to handle their filings.

The bill would give the IRS and HHS access to the National Directory of New Hires for purposes of premium tax credit and employer responsibility verification, and would give employees access to their employer’s taxpayer identification numbers.

The bill would allow employers to use names and birthdates of employee dependents for identification rather than taxpayer identification numbers. It would also allow employers and insurers to deliver statements electronically to employees who have previously consented to electronic delivery of information unless the consent was revoked.

House Commerce Committee Considers Abolishing IPAB, Cutting Prevention Fund

The House Energy and Commerce Committee is considering a number of pieces of health care legislation primarily affecting the CHIP and Medicare programs. A couple of these also relate to specific Affordable Care Act programs. One would repeal the still-unformed Independent Payment Advisory Board, which is designated by the ACA to make recommendation for cutting Medicare expenditures if projected expenditures for a future year exceed a specified threshold, an event that has not yet occurred. Another bill, which would fund the expired CHIP program for five years, would reduce to one month (or the period provided by state law) the current three-month grace period provided under the Affordable Care Act for enrollees who receive premium tax credits to catch up on late premium payments. It would also cut funding for the ACA’s Prevention and Public Health Fund by $6.35 billion over 10 years (a 57 percent cut).

Dayton Protests Cuts To Minnesota Basic Health Program

Finally, on October 3, 2017, Governor Mark Dayton of Minnesota released a letter to Donald Wright, Acting HHS Secretary, and Seema Verma, CMS Administrator, protesting the decision of HHS to cut Minnesota’s Basic Health Program funding by $369 million in granting its ACA 1332 waiver. The letter argues, as does an attached letter from the Governor’s general counsel, that nothing in the ACA prohibits Minnesota from receiving its full complement of Basic Health Program funding and that HHS should exercise its discretion to ensure that it does.

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