IRS Extends ACA Reporting Deadlines

IRS-ACAThe IRS issued a two-month extension for employers and issuers to report on offers of health coverage and coverage provided. The deadlines for reporting to the IRS by paper have been extended to May 31 or June 30 for electronic submissions. Greatland Corp. advises employers to continue with preparations as if the deadlines had not been pushed back. Bob Nault, Greatland’s CEO said that waiting until the last minute can lead to failure to file 1095 forms for the 2015 tax year, which could bring penalties of up to $1 million on small businesses. Maximum penalties to payers for failure to file correct information returns, including furnishing an incorrect name/TIN to IRS are $3 million/year ($1 million for small businesses).

Janice Kreuger, ACA subject matter expert for Greatland said, “We are hearing from a lot of businesses that think the IRS will not enforce fines for the 2015 reporting year. This is simply not the case. The IRS will not fine employers and insurers for mistakes. However, they still need to file and file on time, even with the extended deadlines.

The IRS imposes the following fines for returns filed beginning January 1, 2016:

  • $50 per information return if you file correctly within 30 days of the due date.
  • $100 per information return if you file correctly more than 30 days after the due date, but by August 1.
  • $250 per information return if you file after August 1 or you do not file required information returns.
  • $500 for a return for intentional disregard with no maximum penalty.

IRS Fines Threaten HRAs

The Council for Affordable Health Coverage and 25 allied organizations urged Congress to take up the Small Business Healthcare Relief Act (H.R. 2911/S. 1697) in the remaining days of the congressional session. The bill would allow employers to offer health reimbursement arrangements (HRAs) without being subject to outrageous IRS fines. Joel White, president of the Council said, “We are in a race to the finish to save Americans’ health benefits.”

Many small business employers have reimbursed employees for individually purchased health coverage and related medical expenses through HRAs. But since July 1, the IRS has deemed these arrangements impermissible, fining employers that provide HRAs $100 per day, per employee. The ACA fine is one-eighteenth that sum for larger businesses that provide no coverage at all. White said, “With penalties that could amount to $36,500 per employee, or $500,000 total, employers will be forced to draw back their helping hands.”

ACA tax penalties to rise in 2015, 2016

People who opt out of health insurance coverage as required under the Affordable Care Act will face average fines of either $325 or 2% of income in 2015 and about $1,100 in 2016. The Internal Revenue Service will collect the penalties, which for 2014 are set at either $95 per person or 1% percent of household income above the tax-filing threshold. About 26 million people qualify for one of the many exemptions, but they might not be aware exemptions exist, tax experts say. Star Tribune (Minneapolis-St. Paul, Minn.)/The Associated Press (12/29)

DMHC Fines Kaiser Over Access to Mental Health Services

The California Department of Managed Health Care (DMHC) issued a $4 million fine against Kaiser for not providing enough access to mental health services. DMHC Director Brent Barnhart, said, “The Department’s actions are a result of both the seriousness of the deficiencies and the failure of Kaiser to promptly correct them.” DMHC says that Kaiser does not do the following:
• Make sure that quality assurance systems accurately track, measure, and monitor the accessibility and availability of providers.
• Monitor its provider network to ensure that appointments are offered within regulatory timeframes.
• Provide effective action to improve care where deficiencies are identified.
• Provide accurate and understandable mental health education materials, including information about  the availability and optimal use of the plan’s mental health care services.

The plan’s mental health educational materials, including frequently-asked-question  sheets, Website postings, and new patient presentations included inaccurate information that could dissuade an enrollee from pursuing medically necessary care. The DMHC also found examples of member materials that, while consistent with the law, did not convey coverage in language understandable to the average member.

The DMHC will conduct a follow-up survey in October to make sure that Kaiser has corrected the deficiencies and is complying with the law. The full survey report can be found here:

Last Updated 05/27/2020

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