2018 ACA compliance: What employers should be watching
The ACA as a whole still stands, but myriad revisions and tweaks are keeping HR managers on their toes.
Human Resource managers at this time last year were anxiously watching Washington D.C., where the struggle over “repeal and replace” grabbed headlines and saw dramatic swings as the future of the Affordable Care Act (ACA) hung in the balance.
Managers may have loved or hated the ACA in principle, but the prospect of being forced to start from scratch with a whole new set of rules was a daunting prospect for everyone.
For better or worse, a complete repeal of the ACA was thwarted, at least for a while. With that development, employers were able to move ahead as planned with compliance on regulations already in place.
As a coda, Congress did manage some changes to the ACA with the passage of the tax bill, which zeroed out the penalties for the individual mandate provision of the reform law. Individuals no longer would be penalized with a tax if they did not buy insurance on the ACA Exchanges. Employers, on the other hand, still have a mandate to provide insurance for their employees—or face a fine.
Enforcement: a tale of two cities
The “story of the year,” according to James Slotnick, AVP of government relations at Sun Life Financial, is that employers are beginning to receive enforcement notices from the IRS.The enforcement is for compliance in 2015, when ACA reporting began for businesses.
“I think there was some hope in the HR and the employer community that under the Trump Administration, even if the ACA wasn’t repealed, that perhaps the IRS would take more of a non-enforcement view,” he said. “But here we are—anecdotally, people say that 30,000 notices applying the employer mandate penalty have been sent out [so far this year.]”
“It’s quite a juxtaposition,” Slotnick adds. “On one side, you’re seeing enforcement of the employer mandate, while at the same time we see the unwinding of the individual mandate.”
Although the employer mandate remains in place for now, the story may yet take another turn—but probably not this year. “There is a continued conversation around zeroing down the employer mandate part of the ACA, but there are challenges to that,” said Chatrane Birbal, director of congressional affairs for the Society for Human Resource Management. “I think that Congress is hesitant to move any bill that is controversial in 2018, given that it’s a midterm election year.”
Smaller tweaks to the ACA
Birbal adds that Congress is still considering some bipartisan bills that may make smaller modifications to the ACA. “They’re looking at technical changes,” she said.
One such bill is the Commonsense Reporting Act (H.R. 3919 and S. 1908), which is designed to ease some of the regulatory burden on employers. For example, it would help reduce cases where new workers get an individual ACA subsidy after being placed on an employer plan. That would reduce costs for both employers and employees. The bill would also allow some reporting to be done electronically, rather than through old-fashioned snail mail.
Birbal notes that current IRS enforcement efforts have had a high error rate—meaning that employers and employees are being burdened unnecessarily. “That’s critical; employees were impacted, and employers probably spent a lot of time reviewing records,” she notes. The Common Sense Reporting act could reduce that regulatory burden, she added.
Changes to HSAs in the pipeline?
Talk of expanding Health Savings Accounts (HSAs) was part of last year’s health care debate, and the discussion continues, experts say. Some of the ideas include allowing benefits such as telehealth and second opinions on medical diagnoses to be covered by HSAs. Other ideas include allowing dependents to remain on HSAs up to 26 years of age, (as is allowed with other types of plans), or allowing HSA coverage of wellness benefits.
“Today more than 20 million Americans today are covered by a high deductible health plan, which are coupled with HSAs,” Birbal said. “As health care costs continue to rise, these modifications to HSAs would greatly benefit those individuals who could use some more flexibility and could increase consumerism with HSA accounts.”
The coming year
Birbal added that even if no legislation passes, HR managers should stay aware of changes to ACA regulations, which could happen even as the law remains in place. In one case, regulations on wellness plans were supposed to be updated, but problems filling regulatory boards have delayed those updates. “HR managers should keep an eye on changes to those regulations, if they currently offer wellness benefits,” she said.
For his part, Slotnick is watching for possible rule changes to the Associated Health Plan model, which allows companies to band together to offer health plans. “The Office of Management and Budget is reviewing proposed rules, and there does seem to be a sense that this is a priority for the Trump Administration,” he said.