Tag Archives: aca

PCORI Fee Due for Many Health Insurance Arrangements by July 31, 2015

Under the Patient Protection and Affordable Care Act “PPACA,” certain types of health insurance arrangements are required to pay the Comparative Effectiveness Research Fee, which is also known as the PCORI fee because the monies are used to help fund the Patient-Centered Outcomes Research Institute. The types of arrangements subject to the fee are:

  • Fully insured medical plans
  • Self-insured medical plans
  • Health Reimbursement Accounts (HRAs)
  • Plans sponsored by private, government, nonprofit and church employers
  • Individuals on a temporary US visa who reside in the US
  • Retiree-only plans
  • Certain Flexible Spending Accounts (FSAs), if the employer contribution is greater than $500 and it is more than the employee contribution

The fee is reported and remitted to the IRS via Form 720 and is due by July 31st of the year following the last day of the plan year.

The fee is based on the average number of covered lives during the plan year. Covered lives include the covered employees of the plan sponsor and all other covered dependents. The IRS has prescribed various methods for determining the average number of lives.

The amount of the fee is $2 per covered life for policy years ending on or after Oct. 1, 2013, and before Oct. 1, 2014; and $2.08 per covered life for plan years beginning on or after Oct. 1, 2014 and ending before Oct. 1, 2015.

In fully insured arrangements, the insurance companies are required to pay the fee and submit Form 720. Self-insured plan sponsors are required to both pay the fee and submit Form 720. Unlike other aspects of the Act, the PCORI fee requirement is applicable to all affected plans, regardless of employer size.

Please contact Mark Flanagan of Aronson’s compensation and benefits practice at 301.231.6257 to further discuss the payment of these fees and the filing of Form 720.

How to Get Your ACA Tax Credit When You’re a Tax-exempt Organization

Zemanta Related Posts ThumbnailUnder the Affordable Care Act (ACA), a small employer can claim a portion of insurance premiums paid as a tax credit. But what do you do if you are a tax-exempt organization? Don’t worry! You can still claim the credit if your organization is eligible. Eligible tax-exempt organizations can claim up to 35% of premiums paid. The credit is available for eligible employers for two consecutive tax years.

An eligible tax-exempt organization would file a Form 990-T and fill in line 44F, Credit for Small Employer Health Insurance Premiums, and attach a Form 8941, Credit for Small Employer Health Insurance Premiums.

The tax-exempt organization can file a Form 990-T in order to request the credit even if there is no unrelated business income to report. Just follow the instructions located here and look for details for Line 44F.

According to the IRS, “to be eligible for the credit, an eligible small employer generally must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace.”

To be eligible, you must meet three requirements:

  1. You paid premiums for employee health insurance coverage under a qualifying arrangement. This would generally be one that requires you to pay a uniform percentage of not less than 50% (with some exceptions for different tiers of coverage or list billing arrangements).
  2. You had fewer than 25 full-time employees for the year.
  3. You paid *average* annual wages per employee of less than $51,000.

The IRS has worksheets to help calculate this in the instructions for Form 8941.

For more information on business matters affecting nonprofit organizations, contact Aronson’s Nonprofit & Association Industry Services Group or Carol Barnard at 301.231.6200.

Back-up Withholding and Form 1099

Why Your 1099 Filing Could Trigger an IRS Notice

cautionDoes your business solicit the services of independent contractors, freelancers, or other non-employee workers? If so, the IRS may have its sights on you. While much of the economy has been focused on the healthcare-related effects of the Affordable Care Act (ACA), there were several supplemental programs and provisions that were bundled with the ACA that have been largely overlooked.

One such provision is the expansion of Form 1099 reporting. Previously, under the ACA, corporations, partnerships, and sole-proprietorships were required to prepare Form 1099 for any vendor from whom they purchased more than $600 of goods or services. After much criticism, this provision was later repealed; however, this hasn’t deterred the IRS from closely scrutinizing and examining Form 1099.

Over the last year, there has been an increase of IRS notices related to

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Affordable Care Act (ACA) Notices Due October 1, 2013

aca noticesThe Affordable Care Act added a new section 18B to the Fair Labor Standards Act “FLSA.” This new section requires every employer that is subject to the FLSA to provide written notice of the new health insurance exchanges (aka health insurance marketplaces) as a coverage option to all current employees by October 1, 2013. Subsequent new hires must be provided the notice within 14 days of being hired. Generally speaking, businesses that are covered by the FLSA must have at least two employees and have annual sales or business revenue in excess of $500,000. Hospitals, schools and government agencies also are included. All included employers must provide the notice regardless of size. All employees, regardless of part-time or full-time status, are required to receive the notice.

The marketplaces are a new health coverage option for employees who are or are not offered coverage from their employer. The marketplaces will operate in some form in every state. The notices are required to include information about

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