ACA Update: Supreme Court’s Recent Affordable Care Act Decision

Overview:

The Supreme Court’s recent decision in the case of King v. Burwell, released Thursday June 25, 2015, was the most recent test of the Affordable Care Act (ACA) in the nation’s highest court. The 6-3 opinion in favor of the law as currently structured upholds tax credits for individuals in both state run and federally facilitated healthcare exchanges. From a practical standpoint for employers, this decision means that the regulations, record keeping and reporting requirements under ACA will continue to be implemented on the timeline currently in place for the foreseeable future.

Impact on Businesses:

While the Supreme Court’s decision does not change any current law, it does mean that any businesses who have been delaying making plans for Affordable Care Act Information Reporting (AIR) must now analyze their exposure to AIR reporting.

AIR reporting often involves complex data compilation and coordination of activities across a business’ HR, Payroll, benefits, legal and / or tax functions. The AIR reporting, to both the IRS and employees, will generally be composed of forms 1094-C and 1095-C. These forms will include information such as:

  • Information about the employer and possibly its ownership structure
  • Information about the insurance coverage provider
  • Personal information about persons covered by the plan (including dependent information)
  • Monthly analysis of each person covered by the plan with specific information regarding insurance offerings, employment status, etc.
  • Coverage pricing information

The AIR reporting is required to be completed on a timeline similar to current W-2 reporting due dates. Forms will be distributed to employees by the end of February and filed with the IRS by the end of March.

AIR reporting for Applicable Large Employers (ALE’s) with 100 Full Time Equivalent employees (FTE’s) covering calendar year 2015 is required to be completed in the early spring of 2016.

ALE’s with between 50 and 99 FTE’s will be required to report for calendar year 2016 in early 2017; however the IRS encourages ALE’s with fewer than 100 employees to elect to report for calendar year 2016.

Recommendations:

We recommend that employers with 50 or more employees take a proactive approach to ACA AIR compliance. Contacting benefits providers to determine what AIR requirements may be applicable for each year, and coordinating with payroll/HR/benefits providers to determine responsibility for AIR filing are relatively simple steps which should help employers analyze their exposure to ACA AIR record keeping and reporting requirements.

Eaton_2013For any more information, please contact in-house expert, James Eaton, at 410.307.2248 or jeaton@KatzAbosch.com.

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