ACA Tag

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On Dec. 11, 2020, the Departments of Labor (DOL), Health and Human Services (HHS) and Treasury (Departments) announced a final rule that provides greater flexibility for grandfathered plans under the Affordable Care Act (ACA).

A grandfathered plan is a group health plan or health insurance coverage that was in existence on March 23, 2010 (the date the ACA was passed), that has not made certain prohibited changes to lose its grandfather status. Grandfathered plans are exempt from certain ACA requirements.

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The Affordable Care Act (ACA) imposes a fee on health insurance issuers and self-insured plan sponsors in order to fund comparative effectiveness research.

These fees are widely known as Patient-Centered Outcomes Research Institute (PCORI) fees, and were originally scheduled to expire for plan or policy years ending on or after Oct. 1, 2019. However, a federal spending bill enacted at the end of 2019 extended the PCORI fees for an additional 10 years.

Legal Update HeaderThe Affordable Care Act (ACA) imposes a dollar limit on employees’ salary reduction contributions to health flexible spending accounts (FSAs) offered under cafeteria plans. This dollar limit is indexed for cost-of-living adjustments and may be increased each year.

On Oct. 27, 2020, the IRS released Revenue Procedure 2020-45 (Rev. Proc. 20-45), which announced that the health FSA dollar limit on employee salary reduction contributions will remain at $2,750 for taxable years beginning in 2021. It also includes annual inflation-adjusted numbers for 2021 for a number of other tax provisions. Employers should ensure that their health FSAs will not allow employees to make pre-tax contributions in excess of $2,750 for the 2021 plan year, and communicate the 2021 limit to their employees as part of the open enrollment process.

The Affordable Care Act (ACA) has made a number of significant changes to group health plans since the law was enacted in 2010. Since that time, a number of changes have been made to various ACA requirements that employers and plan sponsors should be aware of. It is important for employers to periodically review their benefit plans in order to maintain compliance with these various requirements.

Changes to some ACA requirements take effect in 2021 for employers sponsoring group health plans, such as increased dollar limits. To prepare for 2021, employers should review these upcoming requirements and develop a compliance strategy. This ACA Overview provides an ACA compliance checklist for 2021. Please contact Reseco Group for assistance or if you have questions about changes that were required in previous years.

On Oct. 2, 2020, The Internal Revenue Service (IRS) Issued Notice 2020-76 To:

  • Extend the due date for furnishing forms under Sections 6055 and 6056 for 2020 from Feb. 1, 2021, to March 2, 2021; and
  • Provide a final extension of good-faith transition relief from penalties related to 2020 information reporting under Sections 6055 and 6056; and
  • Provide additional penalty relief related to furnishing 2020 forms to individuals under Section 6055. Under this relief, employers will only have to provide Form 1095-B to covered individuals upon request.

The Internal Revenue Service (IRS) Released Final 2020 Forms And Instructions For Reporting Under Internal Revenue Code (Code) Sections 6055 And 6056.

  • 2020 Form 1094-B and Form 1095-B (and related instructions) will be used by providers of minimum essential coverage (MEC), including self-insured plan sponsors that are not ALEs, to report under Section 6055.
  • 2020 Form 1094-C and Form 1095-C (and related instructions) will be used by applicable large employers (ALEs) to report under Section 6056, as well as for combined Section 6055 and 6056 reporting by ALEs who sponsor self-insured plans.

The Internal Revenue Service (IRS) Released Draft 2020 Instructions Related To Forms For Reporting Under Internal Revenue Code (Code) Sections 6055 And 6056. Draft Forms For This Reporting Were Released In July 2020.

  • 2020 draft Forms 1094-Band 1095-B and related draft instructions will be used by providers of minimum essential coverage (MEC), including self-insured plan sponsors that are not ALEs, to report under Section 6055.
  • 2020 draft Forms 1094-Cand 1095-C and related draft instructions will be used by applicable large employers (ALEs) to report under Section 6056, as well as for combined Section 6055 and 6056 reporting by ALEs who sponsor self-insured plans.