BHCG Monitor: Focus on Health Care Benefits
 
 

April 2016

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BHCG Monitor: Focus on Health Care Benefits - Health Insurance Exchanges

 

Health Care Reform – Notable News

Two-Year Delay for Cadillac Tax

The ACA provision everyone loves to hate – the so-called Cadillac tax – was delayed by two years via a bipartisan funding bill passed by Congress last December. The tax, originally set to go into effect in 2018, imposes a 40 percent levy on high-cost employer-sponsored health plans. Delaying the tax until 2020 easily won support by Congress. Its ultimate fate will now be in the hands of a new Congress and president.

Although considered a win for employers, the delay does not change the fact the tax is still part of the law. None of the current presidential candidates support the tax. However, until it’s repealed altogether, employers need to be ready to comply or pay the price for high-cost plans ($10,200 for individuals, $27,500 for families) come 2020.

More time to explore strategies

Employers have already undertaken strategies to address the Cadillac tax and check health plan cost growth, such as modifying plan designs to promote consumerism and decrease costs. Consumer-driven plans, with their track record of impacting cost trends by increasing employee engagement in their own health and health care decisions, have become overwhelmingly popular with employers.

Most health care advisers see the delay as an opportunity for employers, allowing them to consider newer strategies and spend time educating employees about how to choose the best plan to fit their needs. Employers can now take the time to consider additional actions such as moving to tiered networks that give incentives to employees for selecting higher quality and more cost efficient providers. Decision support solutions, defined contribution approaches and investments in population health are all strategies that employers now have the latitude to explore and implement before the Cadillac tax presumably hits.

Minimum essential coverage (MEC) 2015 reporting deadlines extended

In Notice 2016-A, the Internal Revenue Service (IRS) extended the following 2015 reporting deadlines:

  • Forms 1095-B and 1095-C to be furnished to individuals were extended from February 1, 2016 to March 13, 2016
  • Employer Forms 1094-B, 1095-B, 1094-C and 1095-D were extended from February 29, 2016 to May 31, 2016, if not filing electronically, and from March 31, 2016 to June 30, 2016 if filing electronically

It should be noted the notice also places emphasis on the relief available to late filers. Most expert observers consider this an indication the IRS is willing to give a wide berth to employers that make good faith efforts to comply with reporting obligations.

 

Bibliography

Bianchi, Alden J. Employeee Benefit Adviser. January 7, 2016.

Pace, Zack. "Views." Employee Benefit News. January 20, 2016.

Thomson Reuters. Practical Law. January 2016

Wolfsen, Brad. "Blog." BSwift. 19 2016, January.

 

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