The Catholic University of America

 

Summary of Federal Laws

CUA Compliance Partners

Controller
 Benefits Manager
 
 

Related Policy

Student Medical Insurance

Tax

Miscellaneous Tax Issues


Patient Protection and Affordable Care Act
 Public Law 111-148

This law amends the Public Health Service Act, as well as the Internal Revenue Code and ERISA.

Under Section 6041 of the IRC, persons engaged in a trade or business who make payments of at least $600 per year to another person must file an information return (Form 1099) with the IRS and provide a copy to the payee.

Under the Patient Protection and Affordable Care Act the information reporting requirements are expanded beginning with payments made after Dec. 31, 2011. Payments to corporations will no longer be automatically exempt from reporting requirements. Second, the types of payments that trigger reporting are expanded to include amounts paid in consideration of property and other gross proceeds.

The list of payments prior to Jan. 1, 2012 includes *rent, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable gains, profits and income.*

For payments made after Dec. 31, 2011, the following are examples of payments included in the reporting requirement: *payments for merchandise such as office equipment, food, bottled water, and other items, possibly including travel, telephone and Internet service.*

See IRS Notice 2010-51 for a summary and request for comments on the new reporting requirements,
which includes a requirement that businesses, including non-profit and tax exempt organizations annually report to the IRS payments they made to suppliers of goods and services during the previous year totaling more than $600.

A copy of the report must also go to the vendor. The university would have to obtain the TIN from the vendor to include it on the report. Credit card payments are exempt.

New Employer Reporting Responsibilities Effective Jan. 1, 2016 for Calendar year 2015


 Reporting Requirement under Code Section 6055

  • An employer is required to report under this Section if they sponsor a self-insured group health plan-If an employer sponsors a fully-insured group health plan, the insurer is responsible for the reporting.

 

  • Employers/Insureres must submit an Annual Information Return (Form 1095-C) and Transmittal Form (Form 1094-C) by February 28 (or March 31 if filing electronically). This return has information on "minimum essential coverage"  provided to an individual during a calendar year.
     
  • Under 1095-C employers must provide the following on the Annual Information Return:

1. the name, address, and Employer Identification Number (EIN) of the employer
2. the name, address, and Taxpayer Identification Number (TIN) of each responsible individual (the primary insured individual, usually the employee and not a spouse or dependent)
3. the name and TIN of each individual enrolled in coverage (e.g. spouse, dependent child)
4. the calendar months during which each such individual was enrolled in coverage and entitled to receive benefits (for at least one day).

 

  • An employer must also provide an individual statement each year (due by January 31) to each responsible individual to include:

1. the phone number for the employer’s designated contact person
2. the information required on the Annual Information Form
3. An employer may truncate the TIN on the statement

  • Penatlies for failure to file a correct return or furnish a correct statement may be up to $100 per return/statement, with a maximum penalty of $1.5 million.

Reporting requirements under Code Section 6056
 

  • All Applicable Large Employers (ALE) are required to report certain information both to the IRS and to their full-time employees (an employee who works 30 hours or more a week, or 130 hours or more a month).
     
  • Reporting is required regardless of whether the ALE member offers or does not offer Minimum Essential Coverage to its full time employees.
     
  • General Reporting Method- ALE is required to provide the following information each calendar year for each full-time employee to the IRS:

1. the name, address, and EIN of the ALE
2. the name and telephone number of ALE’s contact person
3. the calendar year for which the information is being reported
4. whether the ALE offered the full-time employee and his/her dependent children the opportunity to enroll in ALE’s Minimum Essential Coverage (MEC) for each calendar month
5. the calendar months during the calendar year that coverage was offered
6. the full-time employee’s share of the lowest cost monthly premium for self-only coverage providing minimum value offered to that full-time employee under the ALE’s MEC, for each calendar month
7. the number of full-time employees for each calendar month during the calendar year and
8. the total number of employees, full-time and part-time, for each calendar month.

 

  • ALE will use indicator codes to report benefits offered to employee and employee’s spouse and children to include:

1. whether ALE made an offer of coverage to the employee
2. whether an offer is a qualifying offer
3. whether the MEC offered provides minimum value
4. whether spouses and dependents are eligible to enroll in MEC
5. whether an employee was employed on any day during a month
6. whether an employee was a full time employee during a month
7. whether employee was in a limited non-assessment period for that month
See Forms 1094-C/1095-C

 

  • ALE is required to provide all full-time employees with a written employee statement which includes the information listed above. This can be done by issuing the full-time employee a copy of the 1095-C form submitted to the IRS.
     
  • Alternative Methods of Reporting: The following methods are allowed for reporting employees that were offered MEC for all 12 months in the calendar year:
     
  • Certification of Qualifying Offer Method: For any full-time employee who received a qualifying offer of coverage the employer shall report:

1. the name, address, and TIN of the employee
2. an indicator code confirming that a qualifying offer was made for all 12 months
-In lieu of providing the employee with a copy of form 1095-C, the employee can provide their employee with a statement with the following information:
1. the name, address, and EIN of the employer
2. a statement indicating that for all 12 months of the calendar year the employee, their spouse and dependents received a qualifying offer

  • 98% Offer Method: Employers may use this alternative reporting method if they can certify that for all 12 months of the calendar year they offered coverage to at least 98% of their employees (full and part-time).

-Under this method the following is NOT required to be reported:
1. whether employee is full or part-time
2. the total number of full-time employees

 

March 5, 2014 IRS Fact Sheet on Final Regulations Implementing Information Reporting for Employers and Insurers Under Affordable Care Act

Shared Responsiblity for Employers Regarding Health Coverage, Final Rule, 79 Fed. Reg. 8544,Feb. 12, 2014.

The regulations take effect on January 1, 2015, but are only partially applicable in 2015. They clarify the definition of "full-time employee" and provide safe harbors intended to make it easier for employers to determine whether the coverage they offer is affordable to employees. See the Treasury Department Fact Sheet for a short summary.

A Littler publication dated 2-24-14 by Ilyse Schuman notes the following of interest to IHEs:

Student employees: Hours of service do not include work performed by students in positions subsidized through the federal work study program or a substantially similar state or local program. However, hours of service for student interns who receive or are entitled to compensation from the employer would be included in the calculation to determine full-time employee status.

Adjunct faculty:
The final regulations provide that, until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, consistent with the request for a "bright line" approach suggested in a number of the comments, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method.

Delayed Implementation: For each calendar month during 2015 and any calendar months during the 2015 plan year that fall in 2016, employers with 100 or more full-time employees (including full-time equivalent employees) will not be subject to a penalty for failing to provide minimum essential coverage under Section 4980H(a) if the employer offers coverage to at least 70% (instead of 95%) of its full-time employees (and their dependents). Beginning in 2016, such an employer must offer coverage to at least 95% of its full-time employees (and their dependents) to avoid paying the penalty under Section 4980H(a).
 

See also the Gallagher Benefit Services Feb. 2014 article titled The Administration Again Delays the Employer Shared Responsiblity Mandate:

Volunteers: Hours contributed by bona fide volunteers for a government or tax-exempt entity, such as volunteer firefighters and emergency responders, will not cause them to be considered full-time employees.
Educational employees: Teachers and other educational employees will not be treated as part-time for the year simply because their school is closed or operating on a limited schedule during the summer.
Seasonal employees: Those in positions for which the customary annual employment is six months or less generally will not be considered full-time employees.
Student work-study programs: Service performed by students under federal or state-sponsored work-study programs will not be counted in determining whether they are full-time employees.
Adjunct faculty: The final regulations provide as a general rule that, until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, to accommodate the need for predictability and ease of administration and consistent with the request for a “bright line” approach suggested in a number of the comments, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method for this purpose.

  • Student employees: Hours of service do not include work performed by students in positions subsidized through the federal work study program or a substantially similar state or local program. However, hours of service for student interns who receive or are entitled to compensation from the employer would be included in the calculation to determine full-time employee status.
  • Adjunct faculty: The final regulations provide that, until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, consistent with the request for a "bright line" approach suggested in a number of the comments, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method.
- See more at: http://www.littler.com/publication-press/publication/irs-final-rule-partially-delays-aca-employer-shared-responsibility-r-0#sthash.rcOR8KKG.dpuf
  • Student employees: Hours of service do not include work performed by students in positions subsidized through the federal work study program or a substantially similar state or local program. However, hours of service for student interns who receive or are entitled to compensation from the employer would be included in the calculation to determine full-time employee status.
  • Adjunct faculty: The final regulations provide that, until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, consistent with the request for a "bright line" approach suggested in a number of the comments, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method.
- See more at: http://www.littler.com/publication-press/publication/irs-final-rule-partially-delays-aca-employer-shared-responsibility-r-0#sthash.rcOR8KKG.dpuf
  • Student employees: Hours of service do not include work performed by students in positions subsidized through the federal work study program or a substantially similar state or local program. However, hours of service for student interns who receive or are entitled to compensation from the employer would be included in the calculation to determine full-time employee status.
  • Adjunct faculty: The final regulations provide that, until further guidance is issued, employers of adjunct faculty are to use a method of crediting hours of service for those employees that is reasonable in the circumstances and consistent with the employer responsibility provisions. However, consistent with the request for a "bright line" approach suggested in a number of the comments, the final regulations expressly allow crediting an adjunct faculty member with 2 ¼ hours of service per week for each hour of teaching or classroom time as a reasonable method.
- See more at: http://www.littler.com/publication-press/publication/irs-final-rule-partially-delays-aca-employer-shared-responsibility-r-0#sthash.rcOR8KKG.dpuf

Final Rule on Additional Medicare Tax, 78 Fed. Reg. 71468, Nov. 29, 2103

This is a 0.9% Medicare surtax, and the rules set forth the process for employers who are required to withhold the tax on individual earners making over $200,000 in a given calendar year. If the employer fails to deduct, the employer can be liable until the employee pays the tax. The tax went into effect Jan. 1, 2013.


Final Rule on Medicaid and Children's Health Insurance Program: Essential Health Benefits in Alternative Benefit Plans, Eligiblity Notices, Fair Hearings and Appeal Processes and Premiums and Cost Sharing; Exchange: Eligiblity and Enrollment, to be published in July 15, 2103 Federal Register. All 606 pages.See page 356 for the statement that a simple attestation from an applicant that he or she qualifies will suffice for an applicant applying to an exchange.

For the cases and regulations affecting/contesting the contraceptive mandate please see the Religious Issues page.

Incentives for Non-Discriminatory Wellness Programs in Group Health Programs, Final Rule, 78 Fed. Reg. 33157, June 3, 2013. Effective August 2, 2013, these final regulations increase the maximum permissible reward under a health-contingent wellness program offered in connection with a group health plan (and any related health insurance coverage) from 20 percent to 30 percent of the cost of coverage. The final regulations further increase the maximum permissible reward to 50 percent for wellness programs designed to prevent or reduce tobacco use. These regulations also include other clarifications regarding the reasonable design of health-contingent wellness programs and the reasonable alternatives they must offer in order to avoid prohibited discrimination.

Student Health Insurance, PPACA, Health Insurance Market Rules, Final Rule, 78 Fed. Reg. 13406, Feb. 27, 2013. Section 147.145 of the final rule provides that non-grandfathered student health insurance coverage is not subject to the single risk pool requirement of Sec. 1312(c) of the Affordable Care Act (ACA), or to the guaranteed availability or guaranteed renewability requirements of Secs. 2702 and 2703 of the ACA. As a result, the final rule permits separate risk pooling and experience rating for student coverage based on the eligible campus population of students and their dependents. The final rule is effective April 29, 2013.

  

National Federation of Independent Business et al v. Sebelius et al., June 28, 2012 U.S. Supreme Court

With Chief Justice Roberts as swing vote, Supreme Court found the Patient Protection and Affordable Care Act Constitutional. As summarized on the SCOTUS blog: "The Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional. There were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. That is all that matters. Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn't comply with the new requirements, rather than all of their funding."



Student Health Insurance Final Rule, 77 Fed. Reg. 16453, March 21, 2012
This rule brings all except for self funded student health plans under the purview of the PPACA by defining student health insurance as a type of individual health coverage.  The contraceptive mandate is made applicable to student health insurance plans as well, through this action. The amendment applies to plans effective for policy years beginning after July 1, 2012, with non-profit religious institutions of higher edcation qualifying for a one year transition plan until the plan year beginning after August 1, 2013. The rule becomes effective April 20, 2012. There is a phase in for restrictions on annual dollar limits, with no annual dollar limits for policy years beginning on or after Jan. 1, 2014. If the student health insurance plan is not a grandfathered plan, then effective with the upcoming policy year, religious institutions of higher education will be required to maintain on file a self certification as to the qualfication for the exemption and sending a *requisite notice* to students enrolled in the plan. This notice presumably means the notice that the institution the plan qualifies for a safe harbor, and may have to direct the student as to where to find contraceptive coverage. As with much of the mandate and related abortion coverage (see below on health exchanges) the rules are anything but clear. 

 

 

Resources

October 21, 2016, FAQ Document on Affordable Care Act Implementation*

The Department will not assert that a premium reduction arrangment for Student Health Insurance fails to satisfy the ACA requirements. 

Tax Treatment of Health Benefits with Respect to Children Under Age 27 (IRS publication)

Form W-2 Reporting of Employer Sponsored Health Coverage

Affordable Care Act Tax Provisions for Large Employers: IRS page with summary, reporting and payment and provisions.

Another IRS Summary page, wtih comprehensive list

NACUANOTES: Volume 12, No. 5--Applying the Affordable Care Act's Employer Mandate Rules in the College and University Setting May 2, 2014

NACUANOTES: Health Care Reform and Its Effect on Student Health Plans; May 13, 2011

NACUANOTES: Health Care Reform and College and University Health Care Plans; October 26, 2010

 

 

links checked 12-14-17