How Your Business is Impacted by New ACA Reporting Requirements

By Tobias Kennedy | Posted: August 17, 2017

The Affordable Care Act (ACA) has created a few new reporting requirements, and many employers have questions. They want to know what reporting they need to do, when it has to be done and whether fees are involved.

“Companies need to be sure their team understands what is required to satisfy these new ACA regulations,” says Tobias Kennedy, executive vice president at Montage Insurance Solutions.
Smart Business spoke with Kennedy so he could clear up the overwhelming amount of disparate information on ACA reporting and its related fees.

What are Patient Centered Outcomes Research Institute fees?

Patient Centered Outcomes Research Institute fees are also known as PCOR, PICORI, PCORI or CERF fees. This is a relatively small fee that fully insured companies don’t need to worry about — their carrier handles it automatically. But companies who are self-funded and companies who have a Health Reimbursement Account (HRA) are responsible for it themselves.

If your company is self-funded, has an HRA or is unsure, ask your broker, other consultant or CPA about the second quarter Form 720, which is due by July 31.
Depending on the plan anniversary, the fee is either $1 per year per covered life or $2 per year per covered life with most companies using a ‘snapshot average’ method of calculating the figure of lives covered in the fee — although there are a few different safe harbors.

How does the reinsurance fee work?
The reinsurance fee is also calculated off of the number of covered lives but at a substantially higher amount.

The fee for 2014 was $63 per year per covered life and can be paid in two installments. The first installment of $52.50 was already due by Jan. 15, 2015, and the second installment of $10.50 per covered life will be due no later than Nov. 15, 2015.

The 2015 fee will be $44 and can be paid at once, of course, or you also can pay it in two installments of $33 and $11 respectively.
The proposed amount for 2016 is $27 per member per year.

The calculation for the number of covered lives has to be submitted to the Department of Health and Human Services. Similar to the PCOR fees, fully insured groups will have this done for them by their carriers, whereas self-funded companies need to take action.

Also, similar to the PCOR fees, there are a few different safe harbors. Companies will want to work with their consultants to correctly apply for the one they deem most suitable.
Within 30 days of submitting the count to the department, companies will be notified of the amount they owe, and that payment will be due back within 30 days of the company’s receipt of notice.

What do employers need to know about Forms 6055 and 6056?

Forms 6055 and 6056 are also new reporting measures. The first time this comes into play is in 2016 for the 2015 health plan year, so companies have a little more time on this.
Form 6055 is to be used by insurance carriers and self-funded companies to report all of the people they cover. It deals with the individual mandate. Basically, it is a resource for the government to double check that people who claim to have satisfied the individual mandate are indeed covered.

Form 6056 is a report where companies list the employees that are offered coverage to help the government track subsidies. This is required by all applicable large employers — fully insured or self-funded — because subsidies are only available to people not otherwise offered affordable coverage. Form 6056 also helps to track those who might be applying for subsidies but who are actually ineligible because of their employer’s offering.

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