Affordable Care Act – IRS and Treasury Oversee 2015 Employer Reporting

Affordable Care Act employer reporting requirements are effective January 1, 2015.  Penalties may be assessed up to $100 per incorrect return to the IRS, or for incorrect information reported to an individual, employee or equivalent, that is eligible for group health coverage. However, penalties may be reduced if they are corrected. Employers have until August of each reporting year to make corrections.

Those impacted employers must report the cost of care in any group plans they managed.  The U.S. Department of Treasury and the Internal Revenue Service (IRS) oversee and administer employer reporting requirements.   The final rulemaking as of March 2014 details in 26 U.S. Code § 6055 – “Reporting of health insurance coverage” requires health insurance issuers, certain employers, and others report certain data.

“Every person who provides minimum essential coverage to an individual during a calendar year shall, at such time as the Secretary may prescribe, make a return described provide minimum essential coverage to individuals must report to the IRS information…” about the type and period of coverage and furnish the information in statements to covered individuals.

§ 6055 provides reporting requirements for large employers who employ at least 50 full-time or full-time equivalent employees. Section 6056 requires those employers to report information about health care coverage. This is provided for in 26 U.S. Code § 4980H – “Shared responsibility for employers regarding health coverage.”  Additionally, large employers must supply related statements to employees that they may use in determining which months of the year they are able to claim on individual returns for a premium tax credit as specified in 26 U.S. Code § 36B – “Refundable credit for coverage under a qualified health plan.”

If employers provide assistance in paying for any out of pocket costs, The Accountable Care Organization and other value based care structures, as well as ICD-10 may play a role in recalculation of total employer costs, since out of pocket costs may change in value based care or revised definitions of diagnosis or inpatient procedure codes provided for by ICD-10.

Michael F. Arrigo

Michael Arrigo brings four decades of experience in the software, financial services, and healthcare industries. In 2000, Mr. Arrigo founded No World Borders, a healthcare data, regulations, and economics firm with clients in the pharmaceutical, medical device, hospital, surgical center, physician group, diagnostic imaging, genetic testing, health IT, and health insurance markets. His expertise spans the federal health programs Medicare and Medicaid and private insurance. He advises Medicare Advantage Organizations who provide health insurance under Part C of the Medicare Act. Mr. Arrigo serves as an expert witness regarding medical coding and medical billing, fraud damages, as well as electronic health record software for the U.S. Department of Justice. He has valued well over $1 billion in medical billings in personal injury liens, medical malpractice, insurance fraud cases. The U.S. Court of Appeals considered Mr. Arrigo's opinion regarding loss amounts, vacating, and remanding sentencing in a fraud case. Mr. Arrigo provides expertise in the Medicare Secondary Payer Act, Medicare LCDs, anti-trust litigation, medical intellectual property and trade secrets, HIPAA privacy, health care electronic claim data Standards, physician compensation, Anti-Kickback Statute, Stark law, the Affordable Care Act, False Claims Act, and the ARRA HITECH Act. Arrigo advises investors on merger and acquisition (M&A) diligence in the healthcare industry on transactions cumulatively valued at over $1 billion. Mr. Arrigo spent over ten years in Silicon Valley software firms in roles from Product Manager to CEO. He was product manager for a leading-edge database technology joint venture that became commercialized as Microsoft SQL Server, Vice President of Marketing for a software company when it grew from under $2 million in revenue to a $50 million acquisition by a company now merged into Cincom Systems, hired by private equity investors to serve as Vice President of Marketing for a secure email software company until its acquisition and multi $million investor exit by a company now merged into Axway Software SA (Euronext: AXW.PA), and CEO of one of the first cloud-based billing software companies, licensing its technology to Citrix Systems (NASDAQ: CTXS). Later, before entering the healthcare industry, he joined Fortune 500 company Fidelity National Financial (NYSE: FNF) as a Vice President, overseeing eCommerce solutions for the mortgage banking industry. While serving as a Vice President at Fortune 500 company First American Financial (NYSE: FAF), he oversaw eCommerce and regulatory compliance technology initiatives for top ten mortgage banks and led the Sarbanes Oxley Act Section 302 internal controls IT audit for the company, supporting Section 404 of the Sarbanes Oxley Act. Mr. Arrigo earned his Bachelor of Science in Business Administration from the University of Southern California. Before that, he studied computer science, statistics, and economics at the University of California, Irvine. His post-graduate studies include biomedical ethics at Harvard Medical School, biomedical informatics at Stanford Medical School, blockchain and crypto economics at the Massachusetts Institute of Technology, and training as a Certified Professional Medical Auditor (CPMA). Mr. Arrigo is qualified to serve as a director due to his experience in healthcare data, regulations, and economics, his leadership roles in software and financial services public companies, and his healthcare M&A diligence and public company regulatory experience. Mr. Arrigo is quoted in The Wall Street Journal, Fortune Magazine, Kaiser Health News, Consumer Affairs, National Public Radio (NPR), NBC News Houston, USA Today / Milwaukee Journal Sentinel, Medical Economics, Capitol ForumThe Daily Beast, the Lund Report, Inside Higher Ed, New England Psychologist, and other press and media outlets. He authored a peer-reviewed article regarding clinical documentation quality to support accurate medical coding, billing, and good patient care, published by Healthcare Financial Management Association (HFMA) and is published in Healthcare IT News.

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