Posted on December 6, 2013
The Congressional Budget Office (CBO) recently released a report outlining 103 potential options to reduce federal spending or increase tax revenue. The report, Options for Reducing the Deficit: 2014 to 2023, contains 16 health-related provisions, several of which concern the Affordable Care Act (ACA), that may aid in reducing the deficit. These options include:
Posted on December 3, 2013
A report released this morning by the Treasury Inspector General for Tax Administration (TIGTA) found that the Internal Revenue Service (IRS) should “strengthen systems development controls” for the issuance of tax credits under the Affordable Care Act (ACA). Subsidies to help qualifying Americans purchase health insurance will be issued and monitored by the IRS. In the report, Affordable Care Act: Improvements Are Needed to Strengthen Systems Development Controls for the Premium Tax Credit Project, TIGTA stated that the agency needs to improve the software and update the systems used to detect fraud and ensure security of consumer information.
Posted on November 29, 2013
The Internal Revenue Service (IRS) published two final rules concerning the implementation of the Affordable Care Act (ACA). The first rule outlines the health insurance provider fees firms in the insurance industry are expected to provide annually, beginning in 2014. These fees are anticipated to raise nearly $60 billion in revenue over the next several years, most of which will be used as subsidies for qualifying individuals to purchase insurance through health insurance marketplaces. The fee applies to insurance companies with annual revenues exceeding $25 million. Nonprofit insurers receiving more than 80% of their funds from the government, self-insured corporations, and government entities are all excluded from the fee.
The second rule addresses the Additional Medicare Tax provision of the ACA, which requires an additional hospital insurance tax on individuals with incomes above the specified threshold. The rule concerns the implementation and integration of the Additional Medicare Tax, specifically highlighting certain wages and compensation to which the tax does not apply, filing a tax return, and employer processes for adjusting payments and filing claims under the Additional Medicare Tax.
Posted on October 29, 2013
The Center for Consumer Information and Insurance Oversight (CCIIO), within the Centers for Medicare and Medicaid Services (CMS), published an FAQ concerning the open enrollment period for individuals purchasing qualified health plans (QHPs) under the Affordable Care Act (ACA). The guidance states that individuals will be able to enroll in QHPs throughout the entire enrollment period, which lasts through March 31st, and not be subject to the individual shared responsibility payment. According to the ACA, individuals would have to enroll in a plan by the 15th of each month in order for their QHP coverage to be effective at the start of the following month. Individuals that enrolled in plans after the 15th would not be covered for another two months. The issue pertains to individuals that would enroll in QHPs between February 16th and February 28th of 2014. These individuals would not be covered until April 1st, and would therefore be subject to the minimum essential coverage penalty under the ACA (the minimum essential coverage provision states that an individual must pay a penalty if he or she does not have coverage for more than three consecutive months in a year). This guidance removes that snafu in the law and states that CCIIO will provide additional guidance on the issue in 2014.
Posted on October 16, 2013
This Implementation Brief examines a Notice of Proposed Rulemaking (NPRM) issued by the Internal Revenue Service (IRS) on August 26, 2013 concerning the tax credit available to small employers that offer health insurance coverage to their employees…
Posted on September 27, 2013
A report issued this week by the Treasury Inspector General for Tax Administration (TIGTA) said the Internal Revenue Service (IRS) could improve their accounting of costs associated with implementing the Affordable Care Act (ACA). The IRS used the Health Insurance Reform Implementation Fund for ACA spending during fiscal years 2010-2012. Now, the agency’s costs associated with implementing the ACA will be directly from the IRS operating budget. As a result, TIGTA recommended that IRS take steps to address potential errors in direct labor costs associated with ACA implementation, document direct labor costs, and update the methodology used to report ACA costs.
Posted on September 16, 2013
Labor union officials have recently been in conversations with the White House on the application of subsidies to multi-employer, or Taft-Hatley, plans. On Friday, the administration released a letter on the issue to Senator Orrin Hatct (R-UT), who wrote to the White House in opposition to the labor union request. The letter said that multi-employer plans are not subsidy eligible. The administration cited that multi-employer plans already receive special tax considerations by being employer-sponsored, and there is no legal means by which the administration can also offer subsidies to those on multi-employer plans.
Posted on August 27, 2013
A final rule released by the Internal Revenue Service (IRS) explains the individual shared responsibility payment for not obtaining basic insurance coverage, or minimum essential coverage, under the Affordable Care Act (ACA). By 2014, most Americans are expected to possess minimum essential coverage or face a tax penalty under Section 5000A of the Internal Revenue Code. Individuals without minimum essential coverage will pay an annual fine of $95 in 2014, $325 or 2% of their income in 2015, and $695 or 2.5% of their income in 2016 and beyond. Since many Americans will be exempt from this provision for a multitude of reasons (hardship, unaffordability, religious beliefs, etc.), the Congressional Budget Office (CBO) estimates that only 2% of Americans will face the penalty.
In addition to the final rule, the IRS released a fact sheet that highlights several of the key points addressed in the rule. The fact sheet discusses how the rule clarifies hardship exemptions and partial month coverage (i.e. an individual has maintained minimum essential coverage as long as he or she has coverage for at least one day of the month). Specific coverage categories to which minimum essential coverage provisions apply are enumerated, and the processes for obtaining an exemption are also described.
Posted on August 23, 2013
In a new proposed rule released today, the Internal Revenue Service (IRS) outlined stipulations for small businesses to receive tax credits under the Affordable Care Act (ACA). The rule states that small businesses will only be eligible for a tax credit if they have 25 or fewer full-time employees receiving health insurance through the small business health options program (SHOP) Exchanges. Under the ACA, SHOP Exchanges comprise the small group market in which small businesses are able to enroll their employees to receive health benefits coverage.
Posted on August 19, 2013
On August 15th, the Internal Revenue Service (IRS) launched a website explaining the various tax components of the Affordable Care Act (ACA). The homepage of the website is divided into three sections, each tailored to a specific entity impacted by the ACA tax provisions. Some of the featured topics on the website include: premium tax credits on the individual market, new responsibilities for employers, and tax provisions for insurers, tax-exempt organizations, and other businesses. IRS also published a list of other ACA resources to assist individuals on issues not addressed on the website.