Understanding Healthcare Reform

Created by our Compliance experts, this valuable toolkit for IRS Sections 6055 and 6056 reporting requirements will help reporting employers comply with the requirements and avoid penalties.

One of the pillars of the Patient Protection and Affordable Care Act (ACA) is the Employer Shared Responsibility Mandate (Employer Mandate). Central to the ability of the government to administer the Employer Mandate is the gathering of information.

IRS Code Section 6055 enacted by the ACA requires employers providing minimum essential coverage to report certain information to the IRS about the coverage provided and to whom it is provided.

IRS Code Section 6056 enacted by the ACA requires applicable large employers to report information regarding the coverage offered to their employees. Both Sections 6055 and 6056 also require statements to be furnished to the individuals that are mentioned in the reports to the IRS. Although the penalty for the individual mandate was reduced to $0 on January 1, 2019, employers are still required to report to the IRS and provide statements to employees.

Compliance experts at Gallagher have created this valuable toolkit filled with practical and useful information to help you comply with these important requirements.

• Article: IRS Final Regulations on Employer and Issuer 6055 and 6056 Reporting Requirements
• Employer FAQs: Reporting Requirements Under Sections 6055 and 6056
• Article: Understanding the Essentials: Sections 6055 and 6056 Final Forms
• Action Item Checklist: IRS Reporting for Applicable Large Employers with Fully-Insured Plans
• Action Item Checklist: IRS Reporting for Applicable Large Employers with Self-Insured Plans
• Article: Availability and Use of Simplified Section 6056 Reporting and Furnishing Methods
• Article: Employer Considerations under Simplified Section 6056 Reporting
• Article: Logistics of Filing and Providing Forms 1094-B, 1095-B, 1094-C, and 1095-C, Including Extensions and Waivers
• Article: Procedures for Correcting Errors in Forms 1095-B, 1094-C, and 1095-C
• Reporting Examples on Form 1095-C
• Article: Reporting Offers of Coverage to COBRA Qualified Beneficiaries and Non-Employees using Form 1095-C

Determining who is a full-time employee for purposes of the Employer Mandate isn't as simple and straightforward as it seems. An employer must be mindful of temporary, seasonal and variable hour employees, among others. The final regulations for the Employer Mandate provide a framework by which employers can count the hours and determine the full-time status of their employees. This complex set of regulations dictates how employers must count hours.

To assist our clients through the complicated maze of regulations that they face, we've developed the Counting Hours Toolkit, which includes articles deconstructing the counting hours regulations, employer FAQs and a series of considerations for employers as they approach this issue.

• Employer Considerations When Implementing Counting Hours Rules
• Determining Full-Time Employee Status for Purposes of the Employer Shared Responsibility Provisions under the ACA
• Article — What Counts as an Hour of Service?
• Article — Handling Changes in Employment Status When First Position Is Subject to the Look-Back Method
• Article — Handling Changes in Employment Status When First Position Is Subject to the Monthly Measurement Method
• Sample Employee Communications Explaining Eligibility for Health Benefits Using Measurement, Administrative, and Stability Periods
• Employer FAQs: Counting Hours
• Webinar: Counting Hours Under the Final Rules

An audit of health and welfare plans by the Department of Labor (DOL) can be a challenging experience. This challenge can be amplified when you've been working to keep your health and welfare plans up to date with the requirements of the existing laws, as well as with the requirements from the Patient Protection and Affordable Care Act. The breadth of requirements creates many opportunities for errors.

The first step to successfully navigating an audit is knowing what to expect and being prepared. Gallagher has prepared this toolkit to provide you with an understanding of what a DOL audit looks like — from the initial DOL audit letter to self-compliance tools to sample response letters.

The toolkit begins with Gallagher's articles on what to expect during an audit, employer considerations and tips. We provide links to two self-compliance tools from the DOL, which, in addition to being useful checklists, give an understanding of the DOL's focus during an audit. Finally, we provide valuable sample DOL audit letters and responses.

• Article: DOL Audit Process: What to Expect
• Article: DOL Audit Employer Considerations
• Article: Top Ten Tips for Working with the EBSA
• Article: Warning Signs of Potential Noncompliance with MHPAEA
• DOL Self-Compliance Tool for Health Care-Related Provisions
• DOL Self-Compliance Tool for the Mental Health Parity and Equity Addiction Act

Sample DOL audit letters:

• Sample DOL Audit Letter 1
• Sample DOL Audit Letter 2
• Sample DOL Audit Letter 3
• Sample DOL Audit Letter 4

Sample audit responses:

• Sample Audit Response 1
• Sample Audit Response 2
• Sample Audit Response 3
• Sample Audit Response 4
• Sample Audit Response 5

The Patient Protection and Affordable Care Act requires applicable large employers (ALEs) to offer affordable, minimum value coverage to substantially all full-time employees, or to pay penalties. The IRS has been assessing penalties, referred to as Employer Shared Responsibility Payments (ESRPs), on ALEs that failed to offer coverage in accordance with the ESR mandate. To assist employers in understanding the process associated with receiving an ESRP letter (via Letter 226J) and the possible courses of action that they may take, we have developed an Employer Shared Responsibility Payment Toolkit. The toolkit includes an article, employer FAQs, a flowchart that provides fundamental information needed to understand and respond to an ESRP letter, as well as, matrices to assist employers in understanding the codes and the transitional relief that was available in 2015 Form 1095-C filings — all of which is essential for employers to evaluate and properly respond to a penalty assessment letter from the IRS.

• Whitepaper: Employer Shared Responsibility Mandate
• Article: Employer Shared Responsibility Payment: Employer Considerations
• FAQs: Employer Shared Responsibility Payment
• Flowchart: Employer Shared Responsibility Payment: Timeline and IRS Resources
• Matrix: Employer Shared Responsibility Payment: Reporting 4980H Transitional Relief on 2015 Forms 1094-C and 1095-C
• Matrix: Employer Shared Responsibility Payment: Form 1095-C Abbreviated Code Summary
• Tools You Can Use: Transitional Relief Flowcharts

One thing has been clear since the Patient Protection and Affordable Care Act (ACA) was signed into law: there are lots of moving parts and keeping track of them can be difficult for an employer. One of the more difficult aspects of compliance with the healthcare law will be keeping tabs on the fees brought forth by the ACA. Gallagher has developed this toolkit to help our clients gain a better understanding of, and be better prepared for those fees. This toolkit covers the Patient-Centered Outcome Research Institute Fee (PCORI Fee).

The SECURE Act extended the PCORI Fee until September 30, 2029. For more information, please see our December 20, 2019 compliance alert.

• Article: PCORI Fee
• Article: Form 720 Revised to Accommodate the Payment of the PCORI Fee
• IRS Examines Some PCORI Fee Payments
• PCORI Fee Timetable
• PCORI Fee Worksheet
• PCORI Fee for HRAs Worksheet
• FAQs on PPACA Fees

The Patient Protection and Affordable Care Act requires that insurance companies spend at least 80% of premiums collected on medical care and quality improvement activities in the small group and individual markets (85% in the large group market). Rebates are provided to consumers by insurers that do not meet this standard — the 80/20 rule. Insurers that fail to meet the standard must send a notice of the failure to their customers explaining the purpose of the rule, the amount by which the insurance company missed the goal, and the percentage of the premium being returned.

The following links will provide a comprehensive overview of the MLR requirements, assist you with better understanding the MLR requirements, and link you to notices developed by the federal government.

• Article: Medical Loss Ratio
• Gallagher FAQs: Medical Loss Ratio
• IRS FAQs: Medical Loss Ratio
• Model Notices

The Patient Protection and Affordable Care Act (ACA) includes various mandates and disclosures. One of the required disclosures is the requirement to provide participants and beneficiaries a Summary of Benefits and Coverage (SBC).

To help navigate through the numerous nuances of the SBC requirements, Gallagher has developed this toolkit, composed of a variety of tools and resources to help you understand, prepare and comply. The SBC Disclosure Toolkit has incorporated all guidance issued by the federal government through September 2024.

Note: County Data for Culturally and Linguistically Appropriate Services (CLAS County Data) was updated in 2023 to include four additional non-English taglines and translated SBCs. These taglines and translated SBCs must be used by plans for plan years beginning on or after January 1, 2025. Updated SBC templates haven't been made available, but sample taglines are available. We'll update the resources once updated SBCs are released.

• Article: Summary of Benefits and Coverage and Uniform Glossary Requirements
• SBC Coverage Example Calculator
• SBC FAQs for Employers
• SBC Electronic Distribution Matrix
• County Data for Providing Culturally and Linguistically Appropriate Notices
• Agency Instructions for Completing the SBC — Plan Years beginning on or after January 1, 2021

The Patient Protection and Affordable Care Act (ACA) requires plans to provide cost transparency to participants and enrollees. The Departments of Health and Human Services, Labor and Treasury (the Departments) released final transparency in coverage regulations for group medical plans and health insurance issuers on October 29, 2020. The intent of the final transparency in coverage regulations is to provide a consumer with access to information on the cost of health care services before the consumer receives health care services, rather than after care is received.

In addition to the final transparency in coverage regulations, the Consolidated Appropriations Act, 2021 (CAA) enacted additional transparency requirements. The CAA transparency requirements include a new ban on certain "gag" clauses, new identification card requirements, advanced explanation of benefit requirements, reporting requirements and special rules for continuing care patients.

The transparency in coverage regulations and the CAA transparency requirements are covered in this Toolkit.

If you're searching for information on surprise billing protections, see the Surprise Billing Toolkit.

Below are resources discussing the requirements under the ACA and CAA:

• CAA timeline: Transparency Compliance Deadlines
• Technical Bulletin: New Transparency Requirements for Group Health Plans
• Chart: Transparency Plan Requirements and Action Items
• Chart: RxDC Report Tracker with Instructions and Examples
• FAQs: Transparency FAQs
• Article: Plan Sponsor Transparency Questions for Insurers and TPAs
• Article: Health Plan Transparency Notices and Disclosures
• DIRECTIONS article: DOL Issues ACA FAQ Part 49 on Transparency
• DIRECTIONS article: New Prescription Drug Reporting Requirements
• Article: Prescription Drug Reporting Summary
• Article: RxDc Registration and Submission Guide
• Article: Prescription Drug Data Collection (RxDC) Files P2 and D1 Explanations
• Article: Gag Clause Prohibition and Annual Attestation
• Article: Gag Clause Attestation Resources and Tips
• Article: Air Ambulance Reporting Deadline Looms with No Final Rule

The intent of this analysis is to provide general information regarding the provisions of current federal laws and regulation. It does not necessarily fully address all your organization's specific issues. It should not be construed as, nor is it intended to provide, legal advice. Your organization's general counsel or an attorney who specializes in this practice area should address questions regarding specific issues.

Healthcare reform amended the Internal Revenue Code to require that employers report the aggregate cost of "applicable employer-sponsored coverage" on employee W-2s. As a result of this requirement, many employers have been:

• Wondering if their plans are subject to the healthcare reform W-2 reporting requirement
• Puzzled about how to correctly calculate the value of the benefits provided
• Confused about the types of benefits to be included on employees' W-2s

In an effort to help you navigate the W-2 requirements, Gallagher has developed multiple tools to help you understand, comply with, and communicate these changes to your employees.

• Article: What Employers Need to Know About W-2 Reporting
• FAQs on W-2 Reporting
• W-2 Reporting: Comparison of Amounts Reportable in Code DD, Box 12 and Box 1
• Quick Reference Tool
• Checklist for W-2 Reporting
• Sample Employee Communication

Employer-sponsored wellness programs come in all shapes and sizes. In general, these programs attempt to address body, mind and pocketbook — helping employers reduce benefit costs and lost work time, while increasing employees' productivity and satisfaction. Prior to the passage of the ACA, HIPAA prohibited group health plans from discriminating against plan participants in terms of eligibility, benefits, or premiums based on a health factor.

An exception was permitted for wellness programs that would allow a limited amount of rewards, or penalties, in return for adherence to a wellness program. In general, while the ACA adopted many aspects of the HIPAA Rule related to wellness programs, there were a number of significant changes introduced by the final HIPAA (as amended by the ACA) regulations issued in June 2013. In addition, the EEOC issued final regulations under the ADA and GINA in May 2016. This toolkit helps employers understand how HIPAA, the ACA, ADA and GINA impact employer-sponsored wellness programs.

• Navigate Wellness Regulations: How ADA, GINA and HIPAA/ACA May Impact Your Journey
• Article: Final Wellness Regulations Under HIPAA, ACA, ADA and GINA
• Wellness Program Incentives
• Guide for Designing a Compliant Wellness Program
• FAQs on Wellness Programs
• Technical Bulletin — 2016 Issue 5 — EEOC Issues Final Wellness Rules under ADA and GINA
• Wellness Programs under Final HIPAA/ACA, ADA, and GINA Regulations