On March 23rd 2017 Speaker of the House, Paul Ryan, decided to pull the AHCA bill from the House floor before a vote was taken. The Republican’s simply did not have the votes in place to pass the bill in the house, even with a pretty sizeable majority on the floor. The failure to pass this act may not be as terrible as some would have you believe.
The substance of the bill was lacking at best and it would not have offered to do much more than leave a lot of people without access to healthcare. Any real opportunity to lower healthcare costs were not truly addressed in the bill so it could have easily turned into a mess somehow worse than the one we’re already dealing with. So, the ACA is here to stay for now and for the “foreseeable future,” according to Speaker Ryan. The GOP is moving on to another issue, tax reform, and will probably not take up the healthcare reform fight again for a while.
In light of that, here is what you need to know.
Employer Reporting and Tracking is Staying
This issue was not explicitly addressed in the proposed AHCA bill. It was assumed that if the individual mandate was struck down, the reporting would follow because there would really be no point in tracking enrollment otherwise. Now however, the individual mandate and employer reporting remain in place. Employers should prepare to file 1095 forms (where applicable) in 2018 for the 2017 plan year. This has been the largest burden, outside of insurance costs, for employers in recent years. Our projection is that we have at least one more year of reporting if not many more.
Start to plan now for reporting and put any systems and processes in place as early as possible. Many employers have relied on their payroll vendor to file 1095’s and this has not gone well on average. Now is the time to look at an integrated benefits administration system to assist and more accurately report on 1095’s with the integration of payroll data.
Age Banding Will Remain
A major problem with the ACA, at least in the small employer market, was the advent of geographic rating systems. Now, employer group’s health is a non-factor and employees are rated strictly on their age and geographic region (with an exception for smoking in some areas). This will continue as well. Many employers saw increase of over 100% and the average increase to move into this market was easily at a 50% increase. This new “normal” is here to stay and prices will continue to increase, although at a slower rate than before the ACA was installed.
In order to overcome this dramatic increase in cost many carriers have started to offer level funded solutions which are a form of self-insurance aimed at small businesses. If you have less than 100 employees and have not explored these types of plans then you should start now. They offer significant savings in many instances and allow for the possibility of money back if your plan runs well. Many top carriers offer these plans and they provide great coverage for the appropriate business. Make sure you’re working with a knowledgeable broker if you explore these options. They do come with lower costs but also have increased compliance and tax regulation. Make sure you know exactly what filings you will need to make in addition if setting up a level funded plan.
Increased Regulation of ERISA and Other Areas
The ACA caused an increase in regulation of existing ERISA regulations such as WRAP documents and 5500 filings. We expect this to continue in light of the continuation of the ACA. Businesses should be prepared with the appropriate documents and procedures in place for reporting these items.
Equinox has continued to stay on the forefront of ACA issues and guide our clients through the turbulent installation and rollout of the ACA. Many businesses we meet with still run the risk of non-compliance as they took a wait and see approach to the election of President Trump. Now, these businesses are best off coming into compliance to avoid the risk of not doing so. Fines and penalties associated with non-compliance run too high to risk exposure.
If you feel you’re not up to par with compliance or have been unhappy with how you have been handing employer reporting and documentation so far, please let us know.