Category: ACA Reporting

24 Jan 2017

President Trump Issues Executive Order on the Affordable Care Act

President Trump moved swiftly after taking office on Friday, issuing an Executive Order intended to minimize the economic and regulatory burdens of the Affordable Care Act (“ACA”).  The order is somewhat symbolic and has no immediate effect on employers, many of whom are in the process of complying with the ACA’s onerous reporting requirements (Forms 1094 and 1095), which are not rescinded by the order.

The order directs HHS and the heads of other departments and agencies (e.g., U.S. Department of Labor, Treasury Department) to exercise all available authority and discretion to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.  It should be noted that employers are not among those explicitly listed as requiring protection from regulatory burdens.

The order is broadly drafted and does not specify which provisions of the law should be targeted.  However, to the extent that following the order would require revision of regulations issued through notice-and-comment rulemaking, the agencies will need to comply with the Administrative Procedures Act (“APA”).

Under the APA, agencies cannot rescind existing regulations until they engage in a new notice-and-comment rulemaking process (including required public comment period and delayed effective dates) and observe other procedural requirements.  In practical terms, the APA makes it difficult for an incoming President to overturn final regulations implemented by a predecessor.  Regulations that haven’t taken effect can be suspended while they are reviewed to determine if they conform to the new administration’s agenda, or if modification or revocation is necessary.  To that end, the President’s chief of staff has instructed federal agencies to cease issuing new regulations and withdraw rules that have been sent to the Office of the Federal Register until they can be reviewed by the new agency heads.

The order is somewhat symbolic given the constraints imposed by the APA, yet is has some substantive effect.  The directive gives HHS wide latitude when granting hardship exemptions from the individual mandate (it does not, however, waive the requirement for individuals to maintain minimum essential coverage).  The order also signals to states that the federal government may be more receptive to granting Medicaid waivers, which afford states additional flexibility in designing and administering their programs.  Another section of the order instructs the agency heads to work with states to encourage the sale of insurance across state lines, to the maximum extent permitted by law.  Current law (the McCarran-Ferguson Act), protects insurance companies from interstate competition by permitting states to regulate health plans sold in their state, creating a patchwork of state insurance laws across the U.S.

From an employer perspective, employers with 50 or more full-time equivalent employees and sponsors of self-insured health plans are preparing to comply with the ACA’s reporting requirements (Forms 1094 & 1095) over the next couple of months.  They may be tempted to view the order as a sign that the Internal Revenue Service will not enforce the employer mandate or ACA reporting.  However, until further regulatory guidance is released, the final regulations implementing the employer mandate and its reporting requirements remain in effect and are subject to enforcement by the IRS.  The IRS recently indicated in FAQ guidance that it intends to begin notifying employers of their potential liability for an employer shared responsibility payment for the 2015 calendar year “in early 2017.”

Once President Trump’s appointments to the regulatory agencies are seated we’ll likely see new regulations proposed to ease the ACA’s economic and administrative burdens, although the process will take some time.  Also, now that President Trump has taken initial action on the ACA, it may ease the pressure on Congress to attempt an immediate repeal or find a replacement.

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About The Authors.  This alert was prepared for ECI, Inc. by Marathas Barrow Weatherhead Lent LLP, a national law firm with recognized experts on the Affordable Care Act.  Contact Peter Marathas or Stacy Barrow at pmarathas@marbarlaw.com or sbarrow@marbarlaw.com.

The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the agency, our lawyers or our clients.  This is not legal advice.  No client-lawyer relationship between you and our lawyers is or may be created by your use of this information.  Rather, the content is intended as a general overview of the subject matter covered.  This agency and Marathas Barrow Weatherhead Lent LLP are not obligated to provide updates on the information presented herein.  Those reading this alert are encouraged to seek direct counsel on legal questions.

© 2017 Marathas Barrow Weatherhead Lent LLP.  All Rights Reserved.

25 Feb 2016

IS THERE AN EASY PART OF ACA REPORTING?

Reporting the 1094-C is by far the easiest part of ACA reporting. The data you need for the 1094-C is employer-level data, which is information that all employers are tracking, even if it’s in an Excel spreadsheet.  It is fairly easy for a payroll solution to track total number of employees on a month-to-month basis. This is especially true if there is an HR component tied to payroll to pick up employees who are considered part of that total employee count who are not receiving a paycheck (e.g. employees out on unpaid FLMA). Full-time employee count on a month-to-month basis can be a little trickier, particularly when employers are utilizing a look back measurement period. This data point is still fairly easy to come up with, or track from a payroll and time & attendance perspective. The hardest part of the 1094-C is line 22, but the answers to line 22 are really answers that need to be figured out by a broker advisor, or at the employer level, not by a technology solution.

If you still have questions about ACA reporting, look for our next blog post on this page, or tune into one of our previously recorded webinars http://www.ecipay.com/Webcasts.