Proposed Changes to Form 5500 Include Elimination of Filing Exemption for Small Group Health Plans

HR-recordsThe U.S. Department of Labor and other federal agencies have released two proposed rules revising the Form 5500 and Form 5500-SF Annual Returns/Reports that are required to be filed by certain employee benefit plans.

Among other changes, the proposed rules would:

  • Introduce basic reporting requirements for all group health plans that have fewer than 100 participants and are covered by Title I of the Employee Retirement Income Security Act (ERISA)–most of which are currently exempt from reporting requirements;
  • Create a new schedule (Schedule J), by which applicable group health plans would satisfy certain ERISA reporting requirements added by the Affordable Care Act (ACA); and
  • Revise the Schedule C reporting requirements to more closely track the information that plan service providers are required to disclose to plan fiduciaries.

The target for implementing the proposed revisions is the Plan Year 2019 Form 5500 Series Annual Returns/Reports, though some form changes may be made earlier or later.

You may review our Benefits Notices Calendar for additional notice and disclosure requirements that apply to group health plans under federal law.

Apps and Wearables Double

mobile-deviceAccording to studies by Accenture, the number of U.S. consumers using wearables or mobile apps to manage their health has doubled in just the past 2 years. One interesting fact is that while the vast majority of users are willing to share the data collected with their doctors, and many with their health plans, fewer than a third want the information shared with their employer.

How Can We Engage Millennials?

millennialsIf you’re asking why the number of young adults enrolling in health plans post-ACA is falling, consider economics. Not only have many young people remained on their parent’s plan to age 26, but student debt and a slow, economic recovery have also taken a toll. This is especially troubling when you consider that people age 18 to 34 will represent half of our workforce by 2020 and 75% by 2025.

While economics is involved, we must know where to find young people before we can move them to act, so taking time to learn their likes, dislikes and habits is a must. And no habit is more popular among young adults than media. Individuals age 18 to 36 spend nearly 18 hours a day using smart phones to engage in social media, music, videos and gaming. They’re accustomed to shopping online for virtually everything and they expect quick answers with comparative pricing.

Keeping things simple is critical, as shown by a 2015 National Bureau of Economic Research study that revealed that offering just one health plan will produce better results than offering many options.

Millennials love sight and sound, so short, light or funny educational videos that simplify benefits or wellness may go a long way. Lasting relationships will develop if education and communication are ongoing. The time to get serious is now, because they are here and chances are most will expect to manage their health and healthcare the same way they do everything else – with technology.

Applicable Dollar Amount for Calculating PCORI Fee Adjusted for Inflation

The IRS has issued guidance which increases the applicable dollar amount used to determine the Patient-Centered Outcomes Research Institute (PCORI) fee. For plan years ending on or after October 1, 2015 and before October 1, 2016, the fee is $2.17 (multiplied by the average number of lives covered under the plan).

Background
PCORI fees are imposed on plan sponsors of applicable self-insured health plans for each plan year ending on or after October 1, 2012 and before October 1, 2019. The fees support research to evaluate and compare health outcomes and the clinical effectiveness of certain medical treatments, services, procedures, and drugs.

For plan years ending on or after October 1, 2014 and before October 1, 2015, the fee for an employer sponsoring an applicable self-insured plan is $2.08 multiplied by the average number of lives covered under the plan. Details on how to determine the average number of lives covered under a plan, as well as various examples, are included in final regulations.

Fee Increase
Pursuant to IRS Notice 2015-60, for plan years ending on or after October 1, 2015 and before October 1, 2016, the fee is $2.17 (multiplied by the average number of lives covered under the plan).

For plan years ending on or after October 1, 2016 and before October 1, 2019, the fee will be further adjusted to reflect inflation in National Health Expenditures (which will be published in future IRS guidance).

Our PCORI Fees for Self-Insured Plans section features additional information on calculating and paying the fee.

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Reminder: PCORI Fees Due by July 31 for Employers Sponsoring HRAs and Other Self-Insured Plans

health-care-reform-road-sign-1Fees to fund the Patient-Centered Outcomes Research Institute (PCORI) are due July 31 from employers that sponsor certain self-insured health plans, including health reimbursement arrangements (HRAs) that are not treated as excepted benefits. The fee, which is required under Health Care Reform, applies to plan years ending on or after October 1, 2012, and before October 1, 2019.

Calculating the Fee
For plan years ending on or after October 1, 2014 and before October 1, 2015, the fee for an employer sponsoring an applicable self-insured plan is $2.08 (two dollars for plan years ending on or after October 1, 2013 and before October 1, 2014) multiplied by the average number of lives covered under the plan. Fee increases are based on increases in the projected per capita amount of National Health Expenditures.

Details on how to determine the average number of lives covered under a plan, as well as various examples, are included in the final regulations.

Reporting and Payment Deadline

Plan sponsors of applicable self-insured health plans are required to report and pay the fee no later than July 31 of the calendar year immediately following the last day of the plan year to which the fee applies. Fees are reported and paid using IRS Form 720, Quarterly Federal Excise Tax Return. The final regulations do not permit or include rules for third-party reporting or payment of the PCORI fee.

Special Alert: Deadline Delayed to Submit ACA Reinsurance Program Enrollment Counts

Employers Subject to ACA Transitional Reinsurance Program Now Have Until December 5, 2014 to Submit Annual Enrollment Counts

balance-scaleThe U.S. Centers for Medicare & Medicaid Services (CMS) has announced that the deadline for employers sponsoring certain self-insured plans (“contributing entities”) to submit their 2014 enrollment counts for transitional reinsurance program contributions has been extended until 11:59 p.m. on December 5, 2014. (The previous deadline was November 15, 2014.)

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Get Ready for ACA Reporting Requirements

affordable-care-actStarting in 2015, the Affordable Care Act requires that employers report information about the health care coverage they offer to employees. While the first filings are not due until March 1st of 2016 (March 31st if filed electronically, it’s never too early to begin working to ensure compliance.

  • Internal Revenue Code Section 6055 applies to employers with self-funded or self-insured plans and to the insurer offering an insured plan. Employers and insurers must provide a list of covered individuals with identifying information and the months coverage was provided.
  • Internal Revenue Code Section 6056 applies to “applicable large employers” (those with over 50 full-time equivalents) (FTEs) and requires a listing of all full-time employees and coverage offered to each, by month – including the cost of single (employee only) coverage.

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Self-Funded Plans Win Fee Exemption

piggy-bank-cashThanks to fine-tuning of the Affordable Care Act by the Department of Health and Human Services (HHS), some self-insured employers have caught a break. Soon to be published rule modifications will exempt large, self-insured, self-administered health plans from paying reinsurance fees in 2015 and 2016. All employers will be required to pay the first-year fee for the program, beginning this year. Continue reading