Affordable Care Act Rollback Impact on PEO Industry
Professional Employer Organizations Affordable Care Act and Insurance Market Update
ROCK HILL, SC (Feb. 14, 2018) – Professional employer organizations face significant changes to 2018 Affordable Care Act reporting and compliance following Executive Order (EO) 13813, the Executive Order Promoting Healthcare Choice and Competition Across the United States.
President Trump’s EO 13813 permits the purchase of health insurance across state lines and allows employers in particular situations to form associations to purchase health benefits on a merged basis. Secretary of Labor, Alexander Acosta, is charged with expanding the Department of Labor's (DOL) requirements for “commonality of interest” previously defined under the Employee Retirement Income Security Act (ERISA) to allow the formation of additional associations. Early January 2018 a Notice of Proposed Rulemaking was released, and the effect will be watched closely during the coming months.
The risks of association health plans are potentially similar to PEO plans in that there is potential for a recurring decline and regrowth of members who participate in aggregated large-group association health plans. This could lead to a low-cost PEO master health care plan available for the typical employer similar to the association healthcare plan. However, possible additional fees for PEO services could be a competitive disadvantage if businesses are looking for only employee benefits. Developments in accessibility and rate of the association health plans will be monitored within the year.
Several insurers including Anthem and Health Care Services Corporation (HCSC) are beginning to seek opportunities away from traditional distribution channels. In addition, Blue Cross Blue Shield’s plan will likely be the most significant development in the marketplace for master policies offered by PEOs.
IRS Notice 2018-06 extends the deadline for the 2017 ACA information-reporting requirement for insurers, self-insuring employers, PEOs, and other providers of minimum essential coverage under section 6055 and 6056. PEOs now have until March 2nd, 2018 to provide Forms 1095-C to individuals and if filing electronically, PEOs are encouraged to use a full-service ACA reporting system with internal audit systems to ensure error free ACA reporting. Software solutions such as ACAwise.com provide full-service ACA reporting tools to ensure that PEOs are maintaining their compliance with the IRS.
In summary, continued political developments are likely to continue making exchange plans less attractive to employers and enhance the ability for businesses to select plans through aggregated buying. New Blue Cross Blue Shield options will increase PEO options and cost competitiveness allowing them to offer associations customized service packages including access to complete policy health plans creating a new revenue stream. Executive Order 13814, spurring healthcare choices and competition across state lines, will likely encourage lower costs and national consistency in health care plans.
About the ACAwise:
Subsidiary of SPAN Enterprises, founded in 2016, ACAwise, leads the market in full-service ACA reporting and compliance softwares solutions for Applicable Large Employers (ALEs), and Third Party Administrators (TPAs). For more information about ACAwise, visit https://www.acawise.com/
About the SPAN Enterprises:
Parent company of ACAwise, founded in 2009, SPAN Enterprises, continues to lead the market in software solutions and mobile applications specific to IRS tax e-filing. The products produced by SPAN Enterprises offer tax e-filing solutions for various information returns including 1099, W-2, 94x, ACA, 990 and extension forms at TaxBandits.com, Heavy Vehicle Use Tax Form 2290 for transportation professionals at ExpressTruckTax.com, IRS tax extension application forms at ExpressExtension.com, and full-service ACA reporting and compliance at ACAwise.com. SPAN Enterprises has been named on the Inc 5000, Charlotte Fast 50, and SmartCEO Future 50. For more information about SPAN Enterprises, visit its website at http://www.spanenterprises.com/