For most health insurance brokers, your busy season has just wrapped up with the last of your 12/1 and 1/1 renewals. If you’re looking for a reason to reach out to those clients or add some extra value to your relationship, look no further than the two recent ACA delays.
As you know, in late 2015, the Cadillac tax was pushed back to 2020, and the employer reporting requirements were delayed a few months to give employers some much-needed relief. Both of these are areas that your clients need your guidance and support—learn more in this blog.
The Cadillac tax is an ACA provision that taxes high cost health plans. Once enacted, any amount over certain thresholds will be taxed 40% under the provision. In late 2015, Congress delayed the provision until 2020.
We discussed in a recent blog why employers shouldn’t ignore the Cadillac tax, because there is no way to know what the future holds, and many large employers could still use those extra years to plan ahead. For brokers, this represents an unexpected but welcome reason to reach out to clients off-renewal. Consider these ideas:
- If your client is unconcerned about the tax, or assumes it will be delayed again or repealed, discuss why it should still be part of your benefits planning strategy. There is no way to know if it will be delayed further, modified or repealed, and it’s risky to wait until close to the deadline for the government to act.
- Suggest scheduling a three-year or even five-year benefits planning session. This is a good idea anyway, and possibly something you already do with your largest clients, and is a good way to plan ahead for the possibility of the tax being implemented. You can make plans to phase into a lower cost plan to avoid the tax, or even make two alternate plans in the event the tax is repealed. Regardless, it’s better to have a strategy and a plan.
- Now that there is more time before the tax will potentially be implemented, there is more time to make gradual changes. Wellness can make a significant impact on a health plan. When overall employee health goes up, health care costs tend to go down. This is a great time to discuss wellness, preventive care and employee education around these topics, to help clients naturally drive down costs.
Employer Reporting Requirements
As we discussed in our last blog, the ACA Employer Reporting Requirements dictate that applicable employers provide the IRS with information about the health coverage offered to employees, and also provide that same information to their employees. In late 2015, the IRS slightly delayed the deadlines for providing that information. Here are the new deadlines:
- March 31, 2016: Notices of health coverage sent to plan participants
- May 31, 2016: Employer filing due to the IRS (if filing a paper form)
- June 30, 2016: Employer filing due to the IRS (if filing electronically)
These reporting requirements are expected to pose a challenge for many employers, particularly since they are new and will require new workflows and an initial learning curve. Brokers should take this opportunity to educate and support clients:
- Emphasize that the deadlines were only pushed back a couple months, so your affected clients should still be working on complying.
- Remind clients that failure to comply with these reporting requirements could result in a significant fine from the IRS.
- Help employers develop processes to identify and gather the necessary information—or consider managing it for them. Offering such a service could become a point of differentiation for top brokers in the market.
The Affordable Care Act has been around for six years, but it still offers brokers significant opportunity to provide additional service and support for their clients. To read more about how to guide your clients through the latest ACA changes, read the ebook, Support Clients Throughout ACA Delays.