Reminder: Form W-2 Cost of Coverage Reporting
Annually, large employers must report the aggregate cost of group health coverage provided to employees on Form W-2. The coverage must be reported on a calendar-year basis, regardless of the ERISA plan year or policy year. The reporting is intended for informational purposes for employees.
This ACA requirement applies to employers that filed 250 or more Form W-2s in the prior calendar year. Employer aggregation rules do not apply for this purpose. In other words, the number of Form W-2s is calculated separately without consideration of controlled groups. Self-insured plans that are not subject to COBRA (including church plans), multiemployer plans and Indian tribal governments are currently exempt from the Form W-2 reporting requirement.
To assist with the reporting, PPI Clients that had an active, fully-insured medical plan in 2022 and have access to view their PPI invoices online, can download their 2022 Cost of Coverage Report by logging into ppibenefits.com. The PPI report displays medical cost information by month, based on each member's medical plan enrollment.
For further information, view our ACA: Form W-2 Reporting Requirement publication.
Reminder: Upcoming ACA Reporting Deadlines for Forms 1094/1095
Annual ACA reporting deadlines for employers that sponsored group health plans in 2022 are approaching.
Applicable large employers (ALEs) with 50 or more full-time employees (FTEs), including full-time equivalent employees, in the prior year who sponsored group health plans (whether insured or self-insured) must comply with IRC Section 6056 reporting in early 2023. Specifically, ALEs must complete and distribute Form 1095-C to full-time employees by March 2, 2023. The form should detail whether the employee was offered minimum value, affordable coverage during 2022. The forms may be mailed, electronically delivered or delivered by hand (although proof of delivery in some manner is recommended).
Employers who sponsored a self-insured plan during 2022 must comply with Section 6055 reporting in 2023. Self-insured employers with 50 or more FTEs must complete Section III of Form 1095-C detailing which months the employee (and any applicable spouse and dependents) had coverage under the employer’s plan. If the self-insured employer has fewer than 50 FTEs, it must complete and distribute a Form 1095-B with such information. Again, the forms must be delivered to employees by March 2, 2023.
If the self-insured employer has fewer than 50 FTEs, an alternative is available to distributing Form 1095-B to individuals. Such a small employer is permitted to post a clear and conspicuous notice on their website of the availability of the document and the necessary contact information to request it. Any such request must be fulfilled within 30 days. No such alternative is available for Form 1095-C.
Employers must also file the forms with the IRS by February 28, 2023, if filing by paper, and March 31, 2023, if filing electronically. The filing must include the transmittal Form 1094-C (if filing Forms 1095-C) or Form 1094-B (if filing Forms 1095-B).
2022 Instructions for Forms 1094/1095-B »
2022 Instructions for Forms 1094/1095-C »
2022 Form 1094-B »
2022 Form 1095-B »
2022 Form 1094-C »
2022 Form 1095-C »
What should an employer do if they become aware that an employee made a mistake after open enrollment ends?
Reminder: California Minimum Essential Coverage (MEC) Reporting Due March 31, 2023
January 18, 2023
As a reminder, if a self-insured employer employs at least one employee who resides primarily in California, the employer is subject to file copies of federal Forms 1094/1095-C with the California Franchise Tax Board annually. The current 2022 tax year’s filing is due on March 31, 2023. However, no penalty will apply if the filing is done on or before May 31, 2023, according to the state site.
For fully insured plans, the plans’ medical insurers are responsible for filing Form(s) 1095-B on behalf of the employers.
The main objective of this state reporting is for the state to enforce its Individual Mandate requirement by verifying that each resident had health coverage in the prior year. Failure to report can result in a $50 per person penalty.
Affected employers should be aware of these developments.
CA Site »
California Instructions for Filing Federal Forms 1094-C and 1095-C »
California Instructions for Filing Federal Forms 1094-B and 1095-B »
2023 SDI and PFL Maximum Weekly Contribution Amount Announced
January 18, 2023
The California Employment Development Department (EDD) has published the 2023 weekly benefits maximum for the state’s disability insurance (SDI) and paid family leave (PFL) effective January 1, 2023.
The maximum weekly benefit increases from $1,540 to $1,620.
As indicated in our December 8, 2022 article,the 2023 employee contribution rate for SDI and PFL decreased from 1.1% to 0.9%. The taxable wage base from which the contributions are taken increased from $145,600 in 2022 to $153,164 in 2023.
Certain Colorado Employers Required to Register with Colorado Secure Savings Program
January 18, 2023
Starting in 2023, certain employers registered to do business in the state are required to participate in the Colorado Secure Savings Program. Those businesses that have five or more W-2 employees, have been in business for at least two years, and do not offer those employees a qualified retirement benefit must register with the program. The program is a government-sponsored savings program to which employees can make contributions via automatic paycheck deductions, which are then deposited into an IRA.
There are different deadlines by which businesses must register with the program, depending upon the size of the employer (as measured by the number of employees in the business). Employers with 50 or more employees must register by March 15, 2023. Employers with 15 – 49 employees must register by May 15, 2023. Employers with 5 – 14 employees must register by June 30, 2023.
Employers who offer qualified retirement programs to their employees can obtain an exemption from this requirement.
Information about the registration process, including how to obtain an exemption, can be found here:
Colorado Secure Savings – Employer Program Details »
Colorado Secure Savings Program Act »
Colorado Secure Savings Website »
Reminder: January 1, 2023, Important Date for State FAMLI Program
January 18, 2023
As mentioned in our articles on the state’s Family and Medical Leave Insurance (FAMLI) program in the May 26 and September 15, 2022, editions of Compliance Corner, Colorado employers must register with the FAMLI program and begin deducting employees’ shares of FAMLI Program premiums from employee paychecks.
Under the FAMLI Program, eligible employees may receive up to 12 weeks of paid family and medical leave where leave is needed due to birth, adoption, family member care, self-care, exigency leave, or safe leave, as well as up to four additional weeks of paid leave related to pregnancy and childbirth. The paid benefit is funded by premiums collected by employers and submitted to the program.
Employers with employees in the state should consult with counsel if they have not registered by the deadline.
Update: Department of Insurance Amends Code to Clarify Coverage of Infertility Benefits
January 18, 2023
On December 20, 2022, the Illinois Department of Insurance amended the Code to clarify the coverage of infertility benefits for policies amended, delivered, issued or renewed in Illinois. This guidance clarifies that if there is a difference in required infertility benefits under Section 356m of the Code and the applicable Illinois Essential Health Benefits (EHB) Benchmark Plan, whichever source requires the most robust coverage will determine the minimum benefit standard required for that policy.
Additionally, this amendment updates definitions under Section 356m of the Code to further define a gestational surrogate and to clarify the applicability of the Code without regard to any person’s actual or perceived gender identity.
Employers sponsoring health plans issued in Illinois should be aware of these developments and contact their carrier for further information.
The 2023 Illinois Register containing this amendment can be found below. Specifically, Section 2015.20 applies to the clarification of infertility benefits and Section 2015.30 for the updated definition of gestational surrogate and application of the Code to gender identity.
Reminder: NJ Shared Responsibility Reporting Requirement Due March 31, 2023
January 18, 2023
New Law Addresses Prescription Drug Refills During State Disaster Emergency
January 18, 2023
On December 28, 2022, Gov. Hochul signed into law Assembly Bill No. 7469, which amends the insurance law to require policies and contracts that provide prescription drug coverage to include coverage of an immediate additional 30-day supply of a prescription drug during a state disaster emergency.
Specifically, the amendment requires that every policy delivered or issued for delivery in the state that provides coverage for prescription drugs shall include a process that allows an insured, the insured's designee, or the insured's prescribing healthcare provider to immediately obtain an additional 30-day supply of any current prescription of the insured, at the same level of coverage as a normal refill upon the declaration of a state disaster emergency. However, the amendment shall not apply to certain prescription drugs, including schedule II and schedule III-controlled substances, designated by the health commissioner.
Employers that sponsor insured plans that provide prescription drug coverage should be aware of this amendment. The amendment is effective immediately, and applies to all policies and contracts issued, renewed, modified, altered or amended after enactment.
This material was created by PPI Benefit Solutions to provide accurate and reliable information on the subjects covered but should not be regarded as a complete analysis of these subjects. It is not intended to provide specific legal, tax or other professional advice. The service of an appropriate professional should be sought regarding your individual situation. PPI does not offer tax or legal advice. "PPI®" is a service mark of Professional Pensions, Inc., a subsidiary of NFP Corp. (NFP). All rights reserved.