By Christy Abend
Requirements around the Affordable Care Act (ACA) are seemingly
ever-changing and keeping up to date can be a challenge. So far, 2023
has stayed true to this form. In the first half of the year, we have
seen big changes to penalties, small business filing regulations, and
a ruling, that if it stands, could lead to millions of people having
to pay more for certain preventive care. With so much happening, it
can be easy to miss something. Catch up below on what has happened in
the last six months with ACA in our 2023 mid-year check-in.
On March 30, 2023, U.S. District Judge Reed O’Connor ruled
that preventive care recommendations made by the U.S. Preventive
Services Task Force (USPSTF) no longer needed to be
covered nationwide by private health insurers at zero cost to patients.
This ruling applied specifically to preventive services
recommended by the USPSTF with an “A” or “B” rating that were made
after the Affordable Care Act (ACA) was enacted in 2010.
Some examples of the affected preventive screenings are:
A full list of the “A” and “B” rated USPSTF recommendations
is available here.
The Department of Health and Human Services (HHS) has
appealed this ruling.
On May 15th, a federal appeals court
put this ruling on hold, and on June 12th, an agreement was made
between the Biden administration and the businesses and
individuals who sued to remove the preventive care mandate for a broad
stay nationwide. This will temporarily keep the requirement for this
preventive care to be covered throughout the appeal process.
This means that, for now, and certainly if
this deal is made, no-cost coverage for the preventive
services qualified above is still required under law.
The Department of Health and Human Services (HHS) has filed
a notice of appeal and, at the end of this process, Judge O’Connor’s
ruling could potentially be overturned in the future or maintained.
With this in mind, making significant benefit plan and pricing changes
may be premature until this is resolved.
While organizations were in the midst of filing returns this
year, the IRS made a change that could have a big impact on how
smaller businesses file information returns in 2024.
On February 23, 2023, a final rule (TD 9972) was passed,
expanding the requirement to file certain information returns
electronically, including Affordable Care Act (ACA) returns. In an
effort to modernize its return-filing process and work towards the
elimination of paper filing, the IRS is lowering the 250-return
threshold for mandatory electronic reporting to 10 for returns due in
2024 or later years. Thankfully, the electronic-filing threshold for
returns required to be filed in 2023 remains at 250. But beginning in
the 2024 reporting season, if an employer has more than 10 forms to
file, they must be filed to the IRS electronically.
Additionally, this rule will require employers to aggregate
the number of different returns they file when determining whether
the 10-return threshold is reached. Whereas the previous 250-return
threshold applied separately to each type of information return, the
new rule aggregates your returns across forms, including information
returns (ie. Forms W-2, 1099 and 1095), income tax returns, employment
tax returns, and excise tax returns. If your aggregated number of
forms equals more than 10, you will have to file electronically.
So, starting in 2024, it appears that only the smallest of
small businesses may have the option to file on paper.
To learn more about this new rule, read our blog “Big Changes to ACA
Electronic Filing Rules for Small Businesses”.
The world of ACA is certainly a fluid one. Since its
inception in March 2010, regulations have evolved, and penalties
have steadily risen year over year. In March 2023, the IRS
announced that 4980H employer mandate penalties for non-compliant
applicable large employers (ALEs) for 2024 are rising again. Here’s a recap:
These new penalty amounts will be effective beginning with
the 2024 tax year.
The rising costs of noncompliance should serve as a further
incentive for employers to examine their group health plan offerings
to help ensure broad enough coverage to full-time employees with at
least one self-only option that is affordable and provides minimum
With so much happening in the ACA space during the first
half of 2023, we are on guard for additional developments as the
year goes on. With states implementing their own ACA regulations
in addition to the federal regulations, meeting requirements is
getting more challenging, the IRS is getting more strict, and the
chance of penalties is getting more real. To learn more about the
above changes, help stay on top of new ACA developments, and ask
your burning ACA questions, view our on-demand webinar,
Understanding the Affordable Care Act - How to Better Navigate ACA
Regulatory Pitfalls and Increased Penalties.