Tax Briefing

2016 Affordable Care Act Update Special Report

September 16, 2016 HIGHLIGHTS IRS Releases Draft Reporting Forms Excise Tax Relief Contraceptive Religious Accommodation Still Unsettled Reimbursement Plan Transition Relief Expatriate Plan Clarification Health Care Exchanges

INSIDE IRS Releases Draft Forms for Large Employer and Coverage Provider Reporting.................................................. 2 Applicable Large Employer Definition ................................................ 3 Excise Tax Relief...................................... 3 Expatriate Health Coverage................. 3 Market Reforms...................................... 3 Exchanges................................................ 4

The Affordable Care Act in 2016: Reporting Changes, Excise Tax Relief, and Other Developments Developments have continued at a good clip over the past year for the Affordable Care Act (ACA). The IRS is proposing reporting form changes for 2016. Congress has provided some welcome excise tax relief, narrowed the definition of “employee” for purposes of determining applicable large employer status, and clarified the status of expatriate health plans. In the regulatory field, the government is still searching for the right balance with respect to the religious employer accommodation for providing contraceptive coverage. Market reform transition relief largely expired last year, but transition relief is still available under some circumstances. Marketplace exchange rules have been tightened somewhat to reduce the availability of special enrollment periods.

New Draft Forms for Employers and Coverage Providers Applicable large employer members (ALEMs) and health coverage providers now have at least one year of Affordable Care Act (ACA) reporting under their belts, and have hopefully recovered enough to start thinking about next year’s filing season. Recently, the IRS released draft forms and instructions for 2016 reporting. COMMENT: Note that draft forms are

provided by the IRS as a courtesy and subject to change. Do not rely upon these forms before final versions are released. Forms 1094-B and 1095-B (Code Sec. 6055): Used by anyone that provides “minimum essential coverage” (i.e., medical coverage) to an individual during a calendar year, to support enforcement of the individual mandate. Code Sec. 6055 is generally applicable to entities such as insurance carriers, but self-insured employers may also be responsible for filing Code Sec. 6055 reports.

Forms 1094-C and 1095-C (Code Sec. 6056): Used by ALEMs to report whether and what kind of coverage was provided to employees. Even if an ALEM does not offer coverage to any, or only some, of its fulltime employees, it must file returns with the IRS and furnish statements to each of its full-time employees to report information specifying that coverage was or was not offered. This information is used to determine (1) whether an employee is eligible for a tax credit if they purchased their coverage on the Exchange, and (2) whether the ALEM is subject to a penalty under the employer shared responsibility provisions. Some employers may be subject to reporting under both Code Sec. 6055 and Code Sec. 6056. Those employers will report the information required by both sections on a single combined “C” series form. COMMENT: The format for this informa-

tion reporting is similar to other information reporting that many employers are already familiar with, such as Forms W-2 and Form W-3. Each employee or covered individual is furnished with a form (Form 1095-B or C) and then a copy of each of those forms, along with a transmittal form (Form 1094-B or C), is filed with the IRS.

Affordable Care Act Update 2

DRAFT OF DRAFT ASAS OF July 7, 2016 DO NOT July 7,FILE2016 DRAFT AS OF DRAFT AS OF July 7, 2016 FILE DOJuly NOT 2016 DO NOT7, FILE

DRAFT FORM 1094-C Employers and health insurance carriers were able to take advantage of a small exForm 1094-C (2016) ALE Member III forms tension to furnish Part and file in 2016Information—Monthly for the 2015 plan year. No such exten- (a) Minimum Essential Coverage (b) Section 4980H Full-Time (c) Total Employee Count Offer Indicator Employee Count for ALE Member for ALE Member sion currently exists for the 2016 plan Yes No year. 2016 Forms 1095-B and 1095C must be furnished individuals 23 to All 12 Months by DRAFT FORM 1095-C January 31, 2017. 2016 Forms 1094-C and 1095-C are required to be filed by Jan February 28, 2017,24or March 31, 2017, Employer-Provided Health Insurance Offer and Coverage 1095-C Employer-Provided Health Insurance Offer and Coverage Form 1095-C 2016 if filing electronically. ▶ Do not attach to your tax return. Keep for your records. Department of the Treasury

120217 Page 2

Form 1094-C (2016)

ALE Member Information—Monthly

Part III

(a) Minimum Essential Coverage Offer Indicator Yes

23

Internal Revenue Service

Part I

25

Feb

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Mar

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Apr

(d) Aggregated Group Indicator

600117

VOID

▶ ▶ Do not attach to your tax return. Keep for your records.

OMB No. 1545-2251

CORRECTED

▶ ▶ Information about Form 1095-C and its separate instructions is at www.irs.gov/form1095c

May Employee

28 Part I

Applicable Large Employer Member (Employer)

Social security and number (SSN) 7 Name ofinstructions employer 8 Employer identification number (EIN) Information about Form 21095-C its separate is at www.irs.gov/form1095c

▶ 1 Name of employee

Employee

(e) Section 4980H Transition Relief Indicator

(d) Aggregated Group Indicator

Jan

Form Department of the Treasury Internal Revenue Service

Feb

(c) Total Employee Count for ALE Member

All 12 Months

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(b) Section 4980H Full-Time Employee Count for ALE Member

No

VOID

CORRECTED

Applicable Large Employer Member (Employe 10 Contact telephone number

While the updates are fairly minor, there1 Name are of employee 2 Social security number (SSN) 7 Name of employer some changes reporting entities ought to be 9 Street address (including room or suite no.) 3 Street address (including apartment no.) Mar 26 aware of. Changes to Form 1094-C Changes to Form 1095-C June 329Street address (including apartment no.)

9 Street address (including room or suite no.)

5 State or province

4 City or town

6 Country and ZIP or foreign postal code 11 City or town

July

30

Employee Offer of Coverage

Part II

All 12 Months

Aug 1431Offer of Coverage (enter required code) 15 Employee Required Sept 32 Contribution (see $ instructions)

Jan

13 Country and ZIP or foreign postal code

Plan Start Month (Enter 2-digit number):

Feb

Mar

Apr

May

June

July

Aug

Sept

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DO NOT FILE

5 State or province

4 City or town

12 State or province

6 Country and ZIP or foreign postal code 11 City or town

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$

$

$

$

$

$

$

12 State or province

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8 Empl

10 Conta

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In Part III, column (b), “Section ThePlan language “Do not attach to your Start Month (Enter 2-digit number): Febbefore Mar Apr May June KeepJuly 4980H” was inserted “Full-Time tax return. for yourAugrecords”Septwas Oct 14 Offer of Part I, lines 2 and 3, and Part IV,Coverage col- (enter Employee Count for ALE Member” to inserted under the title of the form to required code) 15 Employee umns (b) and (c)28were updated remind filers that the Code Sec. 4980H clarify that recipients should not submit May to reflect Required Contribution (see the rule that a taxpayer identification definition of “full-time employee” apForm$ 1095-C$with their return;$ $ $ $ $ $ $ $ $ instructions) number (TIN) may be entered in 16 place plies for purposes of this column, not The “Plan Start Month” box will remain Section 4980H June 29 Harbor and of a social security number (SSN); Safe any other definition that an ALEM may optional; Other Relief (enter code, if applicable) Form 1095-B, line 9 is now reserved— use for other purposes; Code 1I for line 14 (“Qualifying Offer Part III Covered Individuals provided self-insured coverage, check the box and enter the information for each individual enrolled in coverage, on the 2015 form, was used to If Employer Line 22, box B is designated “Reserved”. Transition Relief 2015”) is no longer including ap- the emp July 30 this line (c) DOB (If SSN (e) Months of Coverage (d) Covered (a) Name of covered individual(s) (b) SSN or other TIN or other TIN is report the SHOP identifier, if applicable; plicable andFeb has been reserved’ all 12 months Jan Mar Apr May June July Aug Se not available) The instructions to the form’s heading to COMMENT: Line 22, Box B was preCode 2I for line 16 (“Non-calendar year 17 31 to read Aug Part II was revised “Information viously the “Qualifying Offer Method transition relief applies to this employabout Certain Employer-Sponsored Transition Relief ”, which is not appliee”) is no longer applicable and has been 18 be Coverage” to clarify that Part II will cable for 2016. Several forms of transireserved; Sept 32 blank for some individuals with employtion relief were available to employers for New codes 1J (“Minimum essential 19 iner-sponsored coverage and reassures 2015, but only limited transition relief coverage providing minimum value ofOct to take it 33 do not need dividuals that they continues to apply in 2016, and they apfered to you; minimum essential cover20 upon themselves to fill out that section ply only for certain ALE Members and age conditionally offered to your spouse; or return the form to the employer. only for certain calendar months in 2016 and minimum essential coverage NOT Nov 34 (for example, for employers with nonoffered to your dependent(s)”) and 1K 21 Form 1094-B, the transmittal form for calendar year plans). (“Minimum essential coverage providing Form 1095-B, is unchanged. minimum value offered to you; minimum Dec 35 22 essential coverage conditionally offered to For Privacy Act and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 60705M 560116 560116 your spouse; and minimum essential covDRAFT FORM 1095-B 560116 VOID erage offered to your dependent(s)”) have Health Coverage 560116 1095-B VOID Health Coverage 1095-B 2016 CORRECTED VOID been added for line 14. Do not attach to your tax return. Keep for your records.VOID Health Coverage 1095-B 2016 CORRECTED Health Coverage 1095-B Part I Responsible Individual Information about Form 1095-B and its separate instructions is at www.irs.gov/form1095b. Health Coverage 1095-B 2016 CORRECTED 2016 CORRECTED Part I Responsible Individual 2016 Part I Responsible Individual COMMENT: In 2015, codes 1J and 1K Part I Responsible Individual did not exist. All offers to an employee’s Part II Information about Certain Employer-Sponsored Coverage (see instructions) spouse were reported the same, whether Enter letter identifying Origin of the Health Coverage (see instructions for codes): . . . or not the offer was conditional. A condiPart II Information about Certain Employer-Sponsored Coverage (see instructions) Part II Information about Certain Employer-Sponsored Coverage (see instructions) Part II Information about Certain Employer-Sponsored Coverage (see instructions) tional offer is an offer of coverage that is Part III Issuer or Other Coverage Provider (see instructions) subject to one or more reasonable, objective Part III Issuer or Other (see instructions) Part III Coverage Issuer or Provider Other Coverage Provider (see instructions) conditions (for example, an offer to cover Part III Issuer or Other Coverage Provider (see instructions) Part IV Covered Individuals (Enter the information for each covered individual.) an employee’s spouse only if the spouse is not eligible for coverage under Medicare or Part IV Covered Individuals (Enter the information for each covered individual.) PartIndividuals IV Part IV Covered (Enter the information for each covered individual.) Covered (Enter Individuals the information for each covered individual.) a group health plan sponsored by another Apr 271095-B Changes to Form

16 Section 4980H Safe andOct Employee Offer Coverage 33 Harborof Other Relief (enter

Part II

code, if applicable) All 12 Months Jan

Part III Covered Individuals

If Nov Employer provided self-insured coverage, check the box and enter the information for each individual enrolled in coverage, including the employee.

34

(a) Name of covered individual(s)

(b) SSN or other TIN

Dec

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(c) DOB (If SSN or other TIN is not available)

(d) Covered all 12 months

(e) Months of Coverage

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Form 1094-C (2016)

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For Privacy Act and Paperwork Reduction Act Notice, see separate instructions.

Cat. No. 60705M

DRAFT AS OF DRAFT AS DRAFT AS OF OF DRAFT AS OF June 22,22, 2016 June June 22, 2016 June 22, 2016 2016 DO NOTFILE FILE DO NOT

OMB No. 1545-2252

Form

Form

Department of the Treasury Internal Revenue Service

Do not attach to your tax return. Keep for your records. ▶ Information about Form 1095-B and ▶ its separate instructions is at www.irs.gov/form1095b.

Form 1095-C (2016)

OMB No. 1545-2252

560116

▶

OMB No. 1545-2252 OMB No. 1545-2252

Form Department of the Treasury OMB No. 1545-2252 VOID Form Internal Revenue Service ▶ Do ▶ not attach to your tax return. Keep for your records. Form Department of the Treasury 3 Date of birth (If SSN or other TIN is not available) 1 Name of responsible individual 2 Social security number (SSN or other TIN) ▶ not▶1095-B attach to your tax return. Keep for your records. Department of theService Treasury Internal Revenue ▶ Information aboutDo Form and its separate instructions is at www.irs.gov/form1095b. Do not attach to your tax return. Keep for your records. Department of the Treasury CORRECTED Internal Revenue Service ▶ Information about Form 1095-B and its separate instructions is at www.irs.gov/form1095b. Internal Revenue Service ▶ Information about Form 1095-B and its separate instructions is at www.irs.gov/form1095b.

1

1 1

Name of responsible individual

4 Street address (including apartment no.)

5

Part I Responsible Individual Name of responsible individual 1 individual Name of responsible individual Name of responsible

6

City or town

5

4 Street address (including apartment no.) 5 City5orCity town 4letter Street address (including apartment no.) or town identifying Origin of the Health Coverage (see instructions for codes): 8 Enter 4 Street address (including apartment no.) 5 City or town

.

.

.

6

▶

State or province 66 State or province 6

7

State or province

Employer name 10 Employer name Employer name 12 Street address (including room or suite no.)

13

16

Name

19 Street address (including room or suite no.)

Name Name

19 Street address (including room or suite no.)

16

Name

Part IV

14

City or town

9

7

Country and ZIP or foreign postal code

andpostal ZIP or foreign Country7and Country ZIP or foreign code 7

postal code Country and ZIP or foreign postal code

11

▶

State or province

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20

14

City or town

13

State or province

14

17

City or town

17

23

21

11and Employer identification Country ZIP or foreign postal code 15

18

State or province

11 Employer identification number (EIN) number (EIN)

Employer identification number (EIN)

Country and ZIP or foreign postal code

Contact telephone number

22

Country and ZIP or foreign postal code

22 Country ZIP or foreign postal code number17 (EIN) 18and Contact telephone number Employer identification number (EIN) Employer identification number (EIN) 18 Contact telephone number

all 12 months

Jan

Feb

Feb

Mar

Mar

Apr

Feb

Mar

18

Contact telephone number

22 Country and ZIP or foreign postal code (e) Months of coverage

21 State or province 22 Country and ZIP or foreign postal code (e) Months of coverage22 Country and ZIP or foreign postal code

Apr

May

(c) DOB (If SSN or other (d) Covered is not available) months (c)TIN DOB (If SSN other all (d)12Covered (b) SSN ororother TIN (c) DOB (If SSN or other (d) Covered TIN is not available) all 12 months TIN is not available) all 12 months Jan Feb Mar Apr

Jan

24

15

State or province

Employer identification number (EIN)

Covered Individuals (Enter the information for each covered individual.)

Jan

23

15 Country and (EIN) ZIP or foreign postal code Employer identification number

21 or province 17 State Employer identification

City or town

TIN is not available)

Employer identification number (EIN)

11

City or14 townState 14 State 15 Country and ZIP or foreign postal code 17 or Employer identification number (EIN) or 18 Contact number province 15province Country andtelephone ZIP or foreign postal code

19 Street address (including room or suite individual(s) no.) (a) Name of covered (b) SSN or 20 otherCity TIN or town (c) DOB (If SSN or other (d) Covered21 State or province 19 Street address (including room or suite no.) 20 all City or town 19 Street address (including room or suite no.) 20 TIN City or(c)town TIN(IfisSSN not or available) 12 months21 State or province (a) Name of covered individual(s) (b) SSN or other DOB other (d) Covered

(a) Name of covered individual(s) (b) SSN or other TIN (a) Name of covered individual(s) (b) SSN or other TIN (a) Name of covered individual(s)

Reserved

11

13

12 Street (including room or suite no.) 16 Name 12 Street address (including roomaddress or suite no.) 13 City or town Part IIIroomIssuer Other Coverage Provider (see 12 Street address (including or suiteor no.) 13 instructions) City or town

23 23

3 Date of birth (If SSN or other TIN is not available)

Country and ZIP or foreign postal code

State or province

DODO NOTNOT FILEFILE

12 Street10address (including Employer name room or suite no.)

16 16

7

3 Date of birth (If SSN or other TIN is not available) is not available)

22 Social security number (SSN or(SSN other or TIN) Date of birth (If SSN other(If TIN is not 3 Date oforbirth SSN oravailable) other TIN Social security number other3 TIN)

City or town 9 Reserved

9 Reserved 9 Reserved 10 Employer name ▶ 88 Enter letter identifying Origin of the Health Coverage (see instructions for codes): . . . 9 Reserved ▶ 8 Enter letter identifying Origin of the Health Coverage (see instructions for codes): . . . Part IIOrigin ▶ instructions) Information about Certain Employer-Sponsored Coverage of the Health Coverage (see instructions for codes): . . . (see 8 Enter letter identifying

10 10

2 Social security number (SSN or other TIN)

State or province

2 Social security number (SSN or other TIN)

4 Street address (including apartment no.)

Apr

Jun

May

Jul

Jun

Aug

Jul

Sep

Aug Oct

(e) Months of coverage (e) Months of coverage

May

May Jan

Jun

Jun Feb

Jul

Jul Mar

Aug Aug Apr

Sep

Nov

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(e) Months of coverage Sep Oct Nov Dec Sep May OctJun NovJul Dec Aug

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Tax Briefing 24 24

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© 2016 CCH Incorporated and its affiliates. All rights reserved.

September 16, 2016 3 employer). A conditional offer generally would impact a spouse’s eligibility for the premium tax credit under section 36B only if all conditions to the offer are satisfied (that is, the spouse was actually offered the coverage and eligible for it). To help employees and spouses who have received a conditional offer determine their eligibility for the premium tax credit, ALEMs should be prepared to provide, upon request, a list of any and all conditions applicable to the spousal offer of coverage.

APPLICABLE LARGE EMPLOYER DEFINITION Only applicable large employers are subject to the employer shared responsibility provisions of ACA. Under recent legislation, individuals who have medical coverage under the TRICARE program or the Veteran’s Administration are not considered “employees” in determining whether an employer meets the 50-employee threshold to be an applicable large employer (Code Sec. 4980H(c)(2)(F)).

EXCISE TAX RELIEF Congress has provided temporary relief regarding three ACA excise taxes: The start date for the 40 percent excise tax on high-cost employer-sponsored health coverage under Code Sec. 4980I (the “Cadillac plan tax”) is postponed from tax years beginning after December 31, 2017, to tax years beginning after December 31, 2019. In addition, when the tax does go into effect, the cost of the tax may be taken as a deduction. For 2017 only, there is a one year moratorium on the annual fee on health coverage providers imposed by Act Sec. 9010 of the ACA. The fee will resume after December 31, 2017. This moratorium does not affect the filing requirement and payment of these fees for 2016.  Form 8963 (Rev. February 2016) must be filed by April 18, 2016.

The excise tax on sales of medical devices has been suspended for a two year period, for sales on or after January 1, 2016, through 2017.

EXPATRIATE HEALTH COVERAGE Expatriate Health Coverage Clarification Act of 2014 (Div. M, P.L. 113-235) provides that the ACA generally does not apply to: (1) expatriate health plans; (2) employers with respect to expatriate health plans but solely in their capacity as plan sponsors of these plans; and (3) expatriate health insurance issuers with respect to coverage offered by such issuers under expatriate health plans. The ACA continues to apply to expatriate health plans with respect to the employer shared responsibility rules of Code Sec. 4980H, the reporting requirements of Code Secs. 6055 and 6056, and the excise tax provisions of Code Sec. 4980I. Expatriate health plans can satisfy individual shared responsibility requirements either as an eligible employer sponsored plan or as a plan in the individual market depending on the arrangement. COMMENT: Until further guidance, ex-

patriate health plans do not have to comply with the market reforms as long as they continue to comply with the pre-Affordable Care Act group plan rules. For purposes of this relief, an “expatriate health plan” is an insured group health plan with respect to which enrollment is limited to primary insureds who reside outside of their home country for at least six months of the plan year and any covered dependents, and its associated group health insurance coverage (Notice 2015-43). The Expatriate Health Coverage Clarification Act specifically excludes expatriate health plans issued or renewed on or after July 1, 2015, from the ACA Section 9010 fee. The IRS has provided a special rule for expatriate health plans for the 2016 fee year. The rule provides one procedure for covered entities that file Supplemental Health Care Exhibits for 2016 in which they report direct

premiums written for expatriate health plans and include some or all of those direct premiums on their Form 8963, Report of Health Insurance Provider Information. A different procedure applies to a non-SHCE filer. Both procedures require the covered entity to attach to its 2016 Form 8963 a statement relating to premiums written for expatriate health plans that include various certifications (Notice 2016-14).

MARKET REFORMS The market reforms are a technical set of coverage rules embodied in a massive set of regulations under Code Sec. 9815. These rules apply to most employer plans. Since their general application in 2014, they have proven to be relatively uncontroversial as ACA provisions go. A small portion regarding contraceptives, plus an implication for reimbursement plans from different small portions regarding cost sharing, have provided the most interest.

Religious Accommodation for Contraceptives Still Unsettled Under the ACA market reforms, coverage without any cost sharing must be provided for a long list of preventive health services including contraceptives. The government allows religious non-profit employers and small for-profit employers with religious objections to avoid this mandate under a religious accommodation safe harbor. Under the accommodation, the employer does not have to contract, arrange, pay, or provide a referral for contraceptive services. However, the accommodation ensures that women enrolled in the employer’s health plan receive full coverage for contraceptive services through the same issuers or third-party administrators that provide or administer the rest of their health coverage. An employer can invoke the accommodation by self-certifying its eligibility using a particular form (EBSA Form 700) which it then provides to its health insurance issuer or third-party administrator. Alternatively, the employer can self-certify by providing certain information to the Department of

Tax Briefing

Affordable Care Act Update 4 Health and Human Services without use of a particular form. The U.S. Supreme Court, in Zubik v. Burwell, 136 S. Ct. 1557 (2016), considered claims that, even with the accommodation, employers’ rights under the Religious Freedom Restoration Act were being violated by having to notify the government. Without deciding the issue, the Court noted that the government and the religious objectors agreed that it would be possible to fashion an accommodation that would not require notice from the objecting employers. Accordingly, the Court gave the government the chance to fashion such an accommodation. As a result, the government is asking for input from interested parties on whether it is feasible for issuers to implement the accommodation without written notification, whether the issuer should be required to offer women the opportunity to enroll in contraceptive-only insurance policies, and whether the affected women should be required to take affirmative steps to enroll in those contraceptive-only policies rather than being automatically eligible for payments. The government is also asking for comments on alternative processes for self-insured plans.

Reimbursement Plan Transition Relief The IRS has taken the position that an arrangement under which an employer pays the premiums for current employees’ individual health coverage or reimburses them for such coverage violates the ACA market reforms that limit cost sharing. As a result, such a plan can cost an employer a $100 per day per affected employee in penalties. Under transition relief for 2014 and the first half of 2015 for small employers, the IRS agreed not to assert the excise tax solely for violation of this rule. This transition relief generally expired after June 30, 2015, but it continues to be available until further notice for payment or reimbursement arrangements for S corporation 2-percent plus shareholders. In addition, this relief has been extended to

Tax Briefing

colleges that employ students if the reimbursement arrangement is offered in connection with other student health coverage (insured or self-insured) for a plan year or policy year beginning before January 1, 2017 (Notice 2016-17).

Health Reimbursement Arrangements (HRAs) Unlike premium reimbursement plans which are all but banned for arrangements that include more than one current employee reimbursement accounts aimed at co-pays and deductibles for employer health coverage are permissible under the market reforms. However, there are a lot of details that plans have to get right for that to work. An HRA is allowed under the market reforms only if it is integrated with primary health coverage offered by an employer (whether the individual’s employer or spouse’s). An HRA is integrated with such coverage only if under the terms of the HRA, the HRA is available only to employees who are covered by primary group health plan coverage provided by the employer and that coverage meets the annual dollar limit prohibition. An HRA available to reimburse the medical expenses of an employee’s spouse and/ or dependents (a family HRA) may not be integrated with self-only coverage under the employer’s other group health plan. However, an HRA would be integrated if eligibility for coverage automatically applied only to individuals covered under the employer’s other group health plan, so that eligibility for expense reimbursement would expand automatically if the employee changed coverage from employee-only coverage to coverage including a spouse and/or dependents (and vice versa, for example, if the employee changed coverage from family coverage to employeeonly coverage). The IRS has provided transition relief for this rule allowing employers to continue using an HRA that is available for the expenses of family members not enrolled in the employer’s other group health plan

for plan years beginning before January 1, 2016. Furthermore, the IRS will not treat an HRA and group health plan that otherwise would be integrated based on the terms of the plan as of December 16, 2015, as failing to be integrated with an employer’s other group health plan for plan years beginning before January 1, 2017, solely because the HRA covers expenses of one or more of an employee’s family members even if those family members are not also enrolled in the employer’s other group health plan (Notice 2015-87).

EXCHANGES Employer-sponsored health care has remained stronger than expected under the ACA, but problems have developed in the individual marketplace exchanges where individuals go for subsidized coverage. Enrollment is less than expected especially among healthy individuals, which makes it hard for insurers to make money. One specific complaint is that individuals have used special enrollment periods to buy coverage only when they find out they are sick. In response, Health Insurance Marketplace CEO Kevin Counihan announced before the close of open enrollment for 2016 that the special enrollment period rules were being tightened to clarify eligibility rules, increase enforcement, and eliminate a number of special enrollment periods including the one for tax season. COMMENT. Despite these changes, several

major health insurers have announced they are pulling out from certain exchanges especially in less populated states. Insurers that specialize in low-cost basic Medicaid coverage are apparently doing reasonably well as they expand into the exchange environment, but their customers are limited to narrow provider networks. COMPLIANCE TIP: Please check out the

Health Care Reform topic on the Intelliconnect menu for newly added tools to assist in health care planning and compliance.

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