How Your Business is Impacted by New ACA Reporting Requirements
by Tobias Kennedy
There are a few new reporting requirements the Affordable Care Act (ACA) has created, but with the overwhelming amount of disparate information on the topic, many employers still have more questions than answers.
They want to know which are necessary for them, when the reporting is to be done and whether or not there are fees involved.
“Companies need to be sure their team understands what is required to satisfy these new ACA regulations,” says Tobias Kennedy, executive vice president, Montage Insurance Solutions.
Smart Business spoke with Kennedy about a few of the key points of the ACA from a reporting standpoint.
What do employers need to understand about the 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 can be assured their carrier handles automatically. However, companies who are self-funded and have a health reimbursement arrangement (HRA) are responsible for this fee.
If your company is self-funded and has an HRA, or if you are unsure if this applies to you, ask your broker or work with a CPA to ask 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 is the reinsurance fee being handled under the ACA?
A reinsurance fee is also calculated off of the number of covered lives, but it is a substantially higher amount. The fee for 2014 is $63 per year per covered life with 2015 and 2016 fees not announced yet, other than to say they ‘will decrease.’ The calculation for the number of covered lives is due by Nov. 15 and is submitted to the Department of Health and Human Services (HHS).
Similar to the PCOR fees, fully insured groups will have this done for them by their carriers, whereas self-funded companies will need to take action. Also, similar to the PCOR fees, there are a few different safe harbors and companies will want to work with their consultants to correctly apply whichever they deem most suitable.
Within 30 days of submitting the count to HHS, 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 about Forms 6055 and 6056?
Forms 6055 and 6056 are simply reporting measures and do not levy fees. The first time this comes into play is in 2016 for the 2015, so companies have a little more time on this than the PCOR/reinsurance fees.
The 6055 is where insurance carriers and self-funded companies report all of the people they cover, and it deals with the individual mandate. Basically, it is a resource for the government to double-check that people who claim to have an insurance policy — and thus to have satisfied the individual mandate — are indeed covered.
The 6056 is a report where companies list out all of the employees they offer coverage to, which helps the government with the 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, this helps the exchange track people that might be applying for subsidies but who are actually ineligible because of their employer’s offering.
Remember if you need any additional help or have any questions about ACA reporting requirements, don’t hesitate to contact your health care reform experts.