A new year brings new employment laws and regulations for employers, and 2018 is no exception for California. A variety of measures were passed on both the State and local levels that will take effect on January 1.
In an effort to make health coverage more affordable and accessible, the Affordable Care Act (ACA) implemented parameters to the premium rating methodologies used by insurers in the individual and small group markets. Insurers in these markets can vary premium based on age so long as the insurers adhere to the proper age band rating procedure. This procedure has remained unchanged since 2014, but pursuant to a rule issued by the Department of Health and Human Services (HHS), the rating methodology will change come 2018.
Open Enrollment for individual health plans is underway, but the political climate has created much confusion and angst for consumers. Below is a list of tips, considerations, and truths for this open enrollment period, which runs from November 1, 2017 through December 15, 2017, and through January 31, 2018 in California. You can also download our guide to buying insurance.
On November 2, the Internal Revenue Service (IRS) issued revised FAQs on the employer shared responsibility provisions under the Affordable Care Act (ACA). Question sets 55-58 now detail the procedure the IRS will use to begin issuing proposed penalty assessments to employers that failed to comply with these provisions in 2015. Though the IRS was previously silent on the details of penalty assessments, this new information serves as a reminder to employers that compliance enforcement is a priority for the IRS.
The Patient Protection and Affordable Care Act (ACA) remains intact after several failed attempts by Congressional Republicans to repeal and replace the law. However, executive action taken throughout the month of October will result in substantive changes to various components of the ACA.
In California yesterday, Governor Brown signed into law two bills, SB 63 and AB 168, that will significantly impact California employers come January 1, 2018:
An opt-out arrangement offered as part of a group health plan can provide significant advantages to employers. Through such an arrangement, employees who have alternative sources of coverage are incentivized to forego participation in the employer plan. In exchange for the waiver, the employee receives a (taxable) payment. However, recent developments - both regulatory and judicial - may undermine the effectiveness of opt-out arrangements in certain circumstances.
The PCORI Fee Applies to Health Insurance Issuers and Self-funded Health Plans
Under the Affordable Care Act, health insurance issuers and self-funded health plans are required to pay an annual Patient-Centered Outcomes Research Institute Fee (PCORI), set to expire in 2019. Because health insurance issuers are subject to this fee, the sponsor of a fully-insured health plan does not need to take any action. However, sponsors of self-funded health plans (including level-funded arrangements) are obligated to comply. Payment of the PCORI fee must be submitted to the IRS by July 31 of the year following the last day of the plan year. This year, payment is due no later than Monday, July 31, 2017
On November 18, the IRS issued a release that provides employers with an unexpected extension of time to comply with 2016 ACA reporting requirements. Although this deadline extension is not nearly as generous as the extension provided for 2015 reporting, it will undoubtedly be a welcome relief to employers.