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As the Affordable Care Act’s Employer Mandate moves into its sixth year of operation, federal agencies have proposed a rule to promote better health care cost transparency.
The proposed rule sets forth “requirements for group health plans and health insurance issuers in the individual and group markets to disclose cost-sharing information upon request, to a participant, beneficiary, or enrollee.” The information would include estimated cost-sharing liability, amounts remaining on deductibles or out-of-pocket maximums, and negotiated rates for both in-network and out-of-network providers.
The personalized cost information will need to be easily accessible and offer comparisons in cost per plan.
The rule would take effect in the 2021 tax year. Regulators are currently seeking comments. Comments must be submitted by January 14, 2020. Comments can be submitted by clicking here.
If employers are going to make available the costs for health coverage to individuals, they first have to obtain it. Under the proposed rule, insurers will need to devise a method for transmitting the health insurance information to various employers. Employers that administer a self-funded plan will need to make available the cost-sharing data themselves.
According to data from the Kaiser Family Foundation (KFF ) employers are responsible for providing almost 50% of all American’s health insurance. The call for health care data transparency will require employers to have their plan information organized and on hand.
This proposed rule would reinforce the need for employers to offer affordable, quality health plan options to their workforce. This addition would complement the requirements of the ACA’s Employer Mandate.
Under the ACA’s Employer Mandate, Applicable Large Employers (ALEs) (organizations with 50 or more full-time employees and full-time equivalent employees) are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.
Whether or not the rule is enacted will not affect the requirements of the Employer Mandate and employers will still need to offer ACA compliant health care options to their full-time workforce. Employers should maintain quality data for their health care information the same way for their ACA compliance.
The IRS is currently issuing expensive ACA penalty assessments to employers identified as having failed to comply with the ACA’s Employer Mandate. The tax agency is issuing Letter 226 Penalty Assessments for the 2017 tax year and is expected to start the 2018 tax year sometime in early 2020.
Employers should review their ACA filings before submitting them to the IRS by the mandated deadlines to assess their ACA compliance stance. An ACA Penalty Risk Assessment can provide your organization with complete visibility into your ACA status.
If you’ve already received Letter 226J penalty notice, learn how to respond here.
Contact us by December 20 to ensure all your ACA reporting responsibilities can be met on time and with accuracy.
