The ACA Times


  Show menu
  • Home
  • Articles
  • Get to Know the ACA
  • ACA – Frequently Asked Questions
  • Resources
  • Meet the Editors
  • Trusaic
  • Contact Us
  • Legal
  
  • Home
  • Affordable Care Act
  • Proposed CMS Rule Could Reduce Number of Premium Tax Credits

Articles

Proposed CMS Rule Could Reduce Number of Premium Tax Credits

February 19, 2020 Robert Sheen Affordable Care Act, Premium Tax Credit
Proposed CMS Rule Could Reduce Number of Premium Tax Credits

2 minute read:

The Centers for Medicare and Medicaid (CMS) has proposed a rule that would ensure that the agency doesn’t wrongfully provide health insurance subsidies, or Premium Tax Credits (PTCs) to ineligible individuals.

The rule, known as the Proposed 2021 Payment Notice would update regulatory and financial standards applied to issuers and Exchanges, as well as set parameters for the risk adjustment program, according to an official announcement by CMS.

CMS stated the following regarding the Proposed 2021 Payment Notice:

● Periodic data matching standards would be amended to help ensure premium subsidies are not inappropriately paid to enrollees who are determined to be deceased, or dually eligible for Medicare.

● States would also be required to annually notify CMS of any state-required benefit mandates for which the Affordable Care Act (ACA) requires states to pay certain costs. There has been limited information collected on such mandates, which has created a potential risk where taxpayers and consumers may inappropriately be footing the bill for such mandates.

● Furthermore, CMS solicits public comment on new automatic re-enrollment processes for enrollees whose share of the premium after applying premium subsidies is $0, in order to reduce the risk of incorrect expenditures on subsidies that cannot be recovered through reconciliation.

The last bullet is of particular importance. Essentially, CMS is seeking feedback regarding the decision to end automatic re-enrollment for low-income exchange enrollees who receive $0 premium plans with tax credits, according to a post by Modern Healthcare. “That change would reduce the risk that ineligible enrollees receive federal subsidies,” the CMS said.

Employers should note however that this move to reduce the number of individuals receiving Premium Tax Credits may not impact the way the IRS identifies ACA non-compliance of the Employer Mandate. The rule would impact individuals whose premium subsidy contribution is $0. Individuals who provide hours of service for their employer would pay a higher contribution and therefore would be unaffected by the proposed rule.

As a reminder, the current process for identifying employers that failed to comply with the ACA’s Employer Mandate is when an ACA full-time employees receives a Premium Tax Credit from the state or federal health exchange.

As a reminder to employers in conjunction with the Employer Shared Responsibility Payment (ESRP), the ACA’s Employer Mandate, Applicable Large Employers (ALEs) (organizations with 50 or more full-time employees and full-time equivalent employees) are required to offer Minimum Essential Coverage (MEC) to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets Minimum Value (MV) and is Affordable for the employee or be subject to Internal Revenue Code (IRC) Section 4980H penalties.

Employers should note that the responsibility falls on your shoulders to explain why an employee was not eligible for a Premium Tax Credit. The IRS is issuing Letter 226J penalty assessments for the 2017 tax year to employers identified as having failed to comply with the ACA’s Employer Mandate.

Elect to undergo an ACA Penalty Risk Assessment to learn your potential IRS penalty exposure.

To learn more about ACA compliance in 2021, click here.


We’re committed to helping companies reduce risk, avoid penalties, and achieve 100% ACA compliance. For questions about the ACA contact us here.

Summary
Proposed CMS Rule Could Reduce Number of Premium Tax Credits
Article Name
Proposed CMS Rule Could Reduce Number of Premium Tax Credits
Description
Employers will likely be unaffected by the legislation as employees may still elect to go to the exchange to receive a Premium Tax Credit.
Author
Robert Sheen
Publisher Name
The ACA Times
Publisher Logo
The ACA Times
Short URL of this page: https://acatimes.com/mrq
Robert Sheen

Robert Sheen

Robert Sheen, Esq., is editor-in-chief of The ACA Times. He also is founder, president and CEO of Trusaic.

Robert Sheen is Founder and President of Trusaic, Inc. Robert is a graduate of the University of Southern California, in Business Administration with an emphasis in International Finance. He earned his Juris Doctor from Loyola Law School, Los Angeles, concentrating in Tax Law.

View more by Robert Sheen

Related tags to article

ACA ComplianceACA Employer MandateACA Penalty Risk AssessmentAffordable Care ActApplicable Large EmployersCenters for Medicare and Medicaid (CMS)Health Care CoverageIRC Section 4980H PenaltiesIRSIRS Letter 226JMedicareMinimum Essential Coverage (MEC)Minimum Value (MV)Premium Tax Credits (PTCs)Proposed 2021 Payment Notice
Related Articles Three Essential Pay Equity Practices, According to Iceland Three Essential Pay Equity Practices, According to Iceland
Related Articles DFEH Adds New Guidance for SB 973 Reporting Due on March 31 DFEH Adds New Guidance for SB 973 Reporting Due on March 31
Related Articles Georgia Results May Have Impact on Federal Pay Equity Law Georgia Results May Have Impact on Federal Pay Equity Law
Related Articles Administration Predicts Lower ACA Enrollment by Robert Sheen  •  
Related Articles IRS Eases Rules on Hardship Exemptions by Robert Sheen  •  
Related Articles HHS Awards $36 Million To Health Centers by Robert Sheen  •  
Subscribe
Clean data owns future

Achieve Pay Equity

Popular Posts

  • New Individual Mandate Regulations: What You Need to Know
  • ACA Improvements to Expect from the Biden Administration
  • Employers, Mark These Key 2021 Dates for 2020 ACA Reporting
  • Don’t Forget The New 1095-C Codes Specific to The 2020 Tax Year
  • Minimize Penalties with ACA Best Practices for the Holiday Season
  • The ACA is Central to American Health and Wellbeing
  • PPP Loans Are Now Available, Both First Draw and Second Draw PPP Loans
  • Democrats Gain Senate, Paving the Way for Biden’s ACA Agenda

Trending Topics

  • Regulations
    (91)
  • Legislation
    (47)
  • Editorials
    (19)
  • ACA Compliance
    (126)
  • Tax Filings
    (19)
  • Applicable Large Employer (ALE)
    (13)
  • Penalties
    (18)
  • IRS
    (82)
  • Health Insurance Marketplace
    (28)
  • Polls/Surveys
    (18)
  • Health Care Reform
    (22)
  • Reporting
    (22)
  • IRS 226J/226-J
    (28)

Categories


Brought to you by Trusaic

 

 

 

Twitter Facebook

Downloads

The ACA 101 Toolkit

The Essential Guide to the ACA

Letter 226J Infographic

5 Common ACA Compliance Mistakes

Triangle of Trust

Articles

IRS Affordability Safe Harbors Help Avoid ACA Penalties

Calculating FT and FTE Employees

The ACA Monthly Measurement Method: A Few Examples

The IRS’s 1095 Forms for ACA Explained

Incorrect ITINs Will Cause Havoc With ACA Compliance

Knowledge Center

Get to know the ACA

Get to know Letter 226J

Webinar: The Recipe for Successful ACA Compliance

Trusaic News

Our Story

© 2021 Copyright Trusaic - All Rights reserved.

Close Window

Loading, Please Wait!

This may take a second or two. Loading, Please Wait!