Patient Protection and the Affordable Care Act Overview
The Medical Trust's Compliance History
Healthcare reform began in earnest in March 2009. In one year, it moved from a proposal to passage by the Senate and the House of Representatives, and on March 23, 2010 the Affordable care Act (ACA) was signed into law by President Obama.
In 2009 with the passage of the Denominational Health Plan (DHP), the Medical Trust became the provider of medical benefits for the Episcopal Church. The Medical Trust knew its plans would be impacted by the ACA, and kept abreast of the legislation, which continues to evolve to this day.
Church Health Plans and the ACA
The ACA doesn't directly address church plans. So the Church Alliance, a coalition of 37 church benefit programs including the Church Pension Group (CPG), has representatives meeting with congressional and government leaders regarding how healthcare reform will apply to church plans. The Church Alliance wants to ensure that any legislation considers the interests and unique positions of health benefit plans operated by churches and religious institutions. We'll continue to keep you updated on these efforts.
How The Medical Trust Complies
The Medical Trust's plans are in compliance with all current provision of the ACA. In fact, the Medical Trust had instituted many of these provisions prior to healthcare reform, as they were in the best interests of those we serve.
- No-cost preventive care services. Plan members are provided 100% coverage (no cost-sharing) for preventive services or items for men, women, and children as outlined by the U.S. Preventative Services Task Force.
- No pre-existing condition limitations. Eligible members are not excluded from coverage on the basis of their individual health conditions.
- No retroactive rescission of coverage, except in case of fraud or misrepresentation and other limited circumstances.
- Coverage is not canceled on the basis of individual health status.
- Women's preventive health expansion. This provision requires that women's preventive health services are provided with no cost-sharing, and include a wide variety of services outlined in our Plan Handbooks.
- Coverage of adult children to age 26. The Medical Trust eligibility provisions prior to healthcare reform already included eligible dependents to age 30. We have maintained age 30 as the cut-off, and as required by healthcare reform, eliminated the provisions that eligible dependents age 30 or younger must live at home, be full-time students, be unmarried or have no dependents of their own.
- No annual or lifetime maximums. The Medical Trust health plans have no annual or lifetime maximums.
- Implementation of out-of-pocket maximums. Both medical/behavioral and pharmacy benefits have out-of-pocket maximums. These will run separately for most plans, however, in all instances when totaled together they will result in the plan's overall out-of-pocket maximum being at or below the ACA required levels.
- Summaries of benefits and coverage. The Medical Trust has always provided members with summaries of benefits and coverage, but they were redesigned to comply with the standard universal templates, which make it easy to compare plans.
- Form W-2 Reporting. Employers offering the Medical Trust health plans continue to be exempt from this provision for the 2015 reporting due in 2016. Employers offering health coverage through a source other than the Medical Trust may be required to provide the value of their employee's health coverage on each employee's Form W-2. Employers not providing healthcare coverage to their employees through the Medical Trust should consult with their payroll provider. Reporting for the 2016 plan year in 2017 is still to be determined.
Minimum Essential Coverage (MEC) statements. Beginning in 2016 for the 2015 plan year, the Medical Trust will issue Form 1095-B to participants by March 31, 2016* stating whether they have Minimum Essential Coverage (MEC). A copy of Form 1095-B will also be submitted to the Internal Revenue Service (IRS). We have begun the process of evaluating the data, tax reporting, and communication needs to ensure this reporting is completed in a timely manner. Certain large employers and small employers that sponsor a Health Reimbursement Arrangement (HRA) will also have tax reporting obligations that are outlined in more detail in the Next Steps section below.
- Patient Centered Outcomes Research Institute (PCORI) Fee. This fee will be assessed for a limited period of time (2012 - 2018) to help fund the new Patient Centered Outcomes Research Institute. The fees paid were:
- $1.00 per participant in 2012
- $2.00 per participant in 2013
- $2.08 per participant in 2014
- $2.17 per participant in 2015
The amount of the fee will be adjusted each year through 2018.
The Medical Trust pays this fee for health plans sponsored by the Medical Trust. If you offer other health plans to your employees (e.g., HRAs), you may be required to pay a separate fee for those plans.
- Transitional Reinsurance Program Fee. Sponsors of self-funded health plans, such as the Medical Trust, must pay, from plan assets, a $63 fee per covered individual in 2014, a $44 fee per covered individual in 2015, and $27 fee per covered individual in 2016. The revenue generated by the fee will be used to stabilize premiums in the new Health Insurance Marketplace during the years 2014 through 2016.
Opportunities Realized Through the ACA
The Medical Trust has also been able to maximize some opportunities for our member groups as a result of the ACA. These include:
Early Retiree Reinsurance Program
The Medical Trust applied for and received reimbursements from the Early Retiree Reinsurance Program (ERRP). These totaled over $560,000 for plan year 2010, and over $190,000 for plan year 2011. These reimbursements were used to lower 2012 premium increases. The government funding for this plan is now exhausted.
Small Employer Tax Credit
The Small Employer Health Care Tax Credit was created to encourage small employers to continue to offer healthcare coverage to their employees. The credit was implemented for the 2010 tax year, and is due to continue through the 2016 tax year. Beginning with the 2014 tax year, eligibility and certain other criteria and features of the program were changed. For full information, see Small Employer Health Care Tax Credit.
The ACA imposes new reporting requirements on employers and plan sponsors that will assist the Internal Revenue Service in determining compliance with two ACA mandates:
- The Employer Mandate - the requirement for large employers to offer health coverage to their full-time employees (Forms 1094-C and 1095-C)
- The Individual Mandate - the requirement for individuals to obtain health coverage (Forms 1094-B and 1095-B)
Failure to comply with these mandates may result in the individual and/or employer being subject to additional taxes.
Updates - December, 2016
Extension of IRS Reporting Deadlines
The Internal Revenue Service (IRS), recognizing that many employers and health insurance issuers and sponsors of self-funded group health plans may need additional time to prepare reports under the new ACA requirements, announced an automatic extension of ACA reporting deadlines for the 2016 forms due in 2017.
The reporting deadline has been extended from January 31, 2017 to March 2, 2017; however, CPG plans to comply with the original deadline of January 31.
Delay for Cadillac Tax
Under the ACA, health insurance issuers and sponsors of self-funded group health plans (such as the Medical Trust) will be assessed an excise tax (the Cadillac Tax) on any benefit provided to employees that exceeds a pre-determined threshold. The excise tax was originally scheduled to take effect January 1, 2018, but a law delaying the excise tax until January 1, 2020 was enacted in December 2015. The Medical Trust will communicate any impact this delay will have on the healthcare plan options for 2017 and beyond during Open Enrollment this year.
Health Reimbursement Arrangements
The reporting requirements for small and large employers that sponsor a Health Reimbursement Arrangement (HRA) and participate in a health plan sponsored by the Medical Trust have been updated by the IRS.
- Small employers may also need to prepare separate Forms 1094-B and 1095-B.
- Large employers may also need to complete Part III of Form 1095-C.
What does this mean to my organization or diocese?
If your organization or another organization in your diocese is a “large employer” (as defined below), you or that other organization will be responsible for filing the Employer Mandate tax forms (Forms 1094-C and 1095-C) in early 2017. See More Information about Reporting for details.
If your organization or another organization in your diocese is NOT a large employer (as defined below), you or that other organization are considered a small employer. If you do not sponsor an HRA, you will not be required to take any action as a result of these new reporting requirements.
- Small employers that sponsor an HRA and participate in the health plans sponsored by the Medical Trust may be required to prepare and file separate Form 1094-B and 1095-B for their employees.
The IRS tax forms (Forms 1094-B / 1095-B) required for the Individual Mandate must be provided to employees covered by a healthcare plan for both large and small employers. The Individual Mandate tax forms will be filed by either the Medical Trust or, in the case of fully insured medical plans, the insurance carrier. Therefore, you and organizations within your group that participate in the Medical Trust plans are not responsible for filing the Individual Mandate tax forms.
- Note, however, that small employers that sponsor an HRA may be required to prepare and file separate Forms 1094-B and 1095-B for their employees. If you sponsor an HRA, please review Notice 2015-68 and consult your tax advisor.
To be a large employer under the ACA, an organization must employ at least 50 full-time employees and full-time equivalent employees.1
- An employee is considered full-time if he or she works at least 30 hours per week, or at least 130 hours per month.
- The number of full-time equivalents in a month is determined by adding up the monthly hours of all employees who are not considered full-time employees and dividing that sum by 120.
- There are special rules applicable to seasonal workers.
- Note that the determination of whether you are a large or small employer is generally based on the previous calendar year's employee count.
Also note that when determining whether you are a large or small employer, you must include all employees in your controlled group. See Healthcare Reform FAQs for guidance on how the controlled group rules apply to tax-exempt employers.
If an organization is not a large employer using the definition above it is considered a small employer for the purposes of the ACA mandates and reporting requirements.
To help you determine whether your organization (participating in a Medical Trust plan) is a large employer, we are providing a calculator. To access this calculator, click here. (Please note: the calculator was updated in November, 2015 and does not include changes to the law after that date. It is being updated and the new calculator is expected to be published in May, 2016.)
Large employers will be required to complete the following IRS forms:
|Employer Action||Employer Mandate Forms||Deadline|
|Provide a copy to all employees||
1095-C (except Part III)*
*If you sponsor an HRA, you may also need to complete Part III for participants in your HRA.
|March 2, 2017 (extended from January 31, 2017)|
|File with the IRS||
1095-C (except Part III)*
*If you sponsor an HRA, you may also need to complete Part III for participants in your HRA.
February 28, 2017 if by paper
March 31, 2017 if electronically
Please note: Employers will not need to complete Part III of Form 1095-C because that information will be included in the Form 1095-B that either the Medical Trust or the insurer will prepare. (Form 1095-B is required to comply with the Individual Mandate.) Please note the exception that may apply to employers that sponsor an HRA.
See More Information About Reporting for details regarding the IRS forms, timelines, and resources.
Employers that are not large employers under the ACA definition are not required to file any of these new ACA forms unless they sponsor an HRA.
- Small employers that sponsor an HRA may be required to prepare and file separate Forms 1094-B and 1095-B for their employees. If you sponsor an HRA, please review Notice 2015-68 and consult your tax advisor.
See More Information About Reporting for details regarding reporting for the Individual Mandate.
Please see More Information About Reporting for details regarding the IRS forms, timelines, and resources.
Please note that this update is provided to you for informational purposes only and should not be viewed as investment, tax, legal or other advice. Please consult your own professional advisors for further guidance.
1 You may have heard that a special transition rule applies for 2015 that relieves employers with fewer than 100 full-time employees and full-time equivalents from needing to comply with the Employer Mandate. While that is true, the transition rule does not relieve employers with 50-99 of such employees from the reporting requirements.
Health benefits are offered through plans maintained by Church Pension Group Services Corporation (doing business as The Episcopal Church Medical Trust), 19 East 34th Street, New York, NY 10016.