It’s Official: Affordable Care Act Employer Mandate to be Enforced

From ChamberChoice

Recently it was communicated that there were Internal Revenue Service (IRS) indications of intent to begin enforcement of the Affordable Care Act’s (ACA) “employer mandate.” However, as of Nov. 2, 2017, it’s official. On that date, the IRS issued its proposed assessment letter (Letter 226J) it will use when notifying employers of their potential liability for an employer shared responsibility payment (ESRP). The assessment letter relates to any potential liability for 2015.

Background
Under the ACA’s employer mandate, an Applicable Large Employer (ALE) is required to offer its full-time employees and dependents minimum essential coverage. That coverage must also provide minimum value and be affordable for the full-time employee. If the employer does not meet this responsibility, and a full-time employee receives a premium tax credit for health insurance coverage purchased on the Marketplace, then the employer may be assessed a penalty. Employers have an obligation to report offers of coverage using Forms 1095-C and 1094-C. The IRS uses information from these forms, in conjunction with information from an employee’s tax return, in determining whether an employer has an ESRP liability.

What Employers Need to Know
The employer mandate was effective as of Jan. 1, 2015. However, prior to that date, there were notices and guidelines issued by the regulatory agencies providing delays, clarifications and “transitional relief.” Needless to say, there was considerable confusion for many employers. Below are some issues an employer should consider when it comes to an IRS penalty assessment letter.

• An employer has 30 days to respond. Advise any mail-room employees to be on the lookout for any correspondence from the Department of Treasury, Internal Revenue Service and ensure it is delivered to the appropriate person. Discussions should be held with any affiliated companies or subsidiaries as to how the correspondence will be handled.

• Gather copies of 2015 Forms 1095-C and 1094-C. Initial assessment letters relate to 2015. In order to properly respond, an employer will need to review and compare information in the letter against what the employer filed. Employers should be aware of, and have documentation to support, any application of transition relief (such as non-calendar year plans) or safe harbors. Documentation can include payroll records, waiver forms, enrollment information, variable hour employee designations, and measurement/stability period information. Remember, the assessments may not be correct.

• Assessments are on a month-by-month basis. The responsibility payments are calculated monthly and based on whether the employer failed to offer minimum coverage or the coverage was not affordable. The IRS will include a summary table (Form 14765) with the assessment letter. The summary will list the employees who received a premium tax credit triggering the penalty as well as a monthly break-down of the penalty.

• Response form. Included with the assessment letter will be a response form (Form 14764) an employer uses to respond to the IRS. The form provides an opportunity for the employer to agree or disagree with the assessment. If disagreeing, an employer must also provide a statement, in addition to the response form, outlining its reasons. An employer can also provide additional information supporting its disagreement. However, it is of the utmost importance that the employer respond within the time frame provided by the IRS. Failure to respond results in an automatic penalty assessment.

Conclusion
The IRS has started to enforce the ACA’s employer mandate and is issuing notices to employers who may owe a penalty for 2015. Employers should read the notice carefully as it contains detailed instructions on how to respond and make any required payment. The assessment may not be correct due to multiple reasons, such as an employee receiving an unqualified premium tax credit. An employer disagreeing with the assessment should have documentation supporting its offers of coverage and affordability as well as its reporting information.

Coalition, Local Chambers Urge House Approval of Important Workers’ Compensation Reform Measure

From PA Chamber of Business & Industry

The PA Chamber recently sent two communications to lawmakers urging support for S.B. 936, which would establish a prescription drug formulary for injured workers in the Commonwealth.

group memo was sent to House lawmakers from a broad coalition including hospitals, pharmacists, addiction treatment professionals, healthcare providers, local governments, school districts and other business advocacy groups, among others. The memo explained that a prescription drug formulary would help streamline medication prescriptions, which would help patients avoid overuse; while also helping to ensure the quality of outside entities tasked with evaluating treatment decisions. This reform is especially critical in light of the state’s prescription drug and opioid abuse epidemic – it would offer a legislative remedy to help mitigate the crisis as it relates to injured workers.

letter signed by the PA Chamber and the leaders of dozens of local chambers of commerce statewide was also sent to the General Assembly in recent weeks. It stresses in part that S.B. 936 (and H.B. 18, similar legislation introduced in the House) is critically important, particularly in light of a recent study which ranked Pennsylvania third among 25 states for opioid abuse among injured workers, at a level 78 percent higher than the median state. The letter also noted that other states with formularies have experienced success in reducing the number of opioid-dependent WC patients – specifically mentioning Ohio, which was able to cut the number of opioid-dependent patients in half just three years after adopting its formulary in 2011.

“Formularies are standard in regular and publicly-funded health insurance to help ensure appropriate patient care, address over-prescribing of medication and premature or inappropriate prescribing of opioids,” the chambers of commerce letter stated. “Both of these reforms would improve outcomes for injured workers and continue the critical work of lawmakers and the Wolf Administration to combat the prescription drug and opioid epidemic.”

Senate Bill 936 awaits consideration in the House Labor and Industry Committee.

The Columbia Montour Chamber has taken an official position of being in favor of this legislation, and was one of the many chambers of commerce included in the aforementioned group memo sent to House lawmakers.  

Wolf Administration Invites Pennsylvania’s Environmental Stewards to Apply for 2018 Governor’s Awards for Environmental Excellence

From PA Dept. of Environmental Protection

The Wolf Administration invites all Pennsylvanians who’ve recently worked on successful environmental projects to apply for the state’s top environmental recognition: the 2018 Governor’s Awards for Environmental Excellence, honoring individuals and organizations whose dedicated efforts have improved air, land, and water quality in Pennsylvania.

“The commonwealth would be a different place if not for the great work of many Pennsylvanians who tackle the full range of environmental challenges, from local creek cleanups to citywide sustainability,” said Department of Environmental Protection (DEP) Secretary Patrick McDonnell. “It’s a pleasure to shine a light on their work with the Governor’s Awards for Environmental Excellence.”

DEP oversees the application and award selection process. Projects are evaluated on the basis of seven criteria: degree of environmental protection, climate change, sustainability, partnership, economic impact, innovation, and environmental education and outreach. A project doesn’t have to meet all criteria to merit an award.

The award is open to all individuals, whether a project leader or participant, and to all schools, nonprofit organizations, businesses, farms, and government agencies. Past winners may submit applications for new projects, but projects that have previously received a Governor’s Award for Environmental Excellence are not eligible.

Applications are now being accepted online. The deadline for submission is Monday, Jan. 8, 2018, at 5 p.m. Eligible projects must have been completed before November 1, 2017. Submission guidelines may be found at the application page.

Last year, 21 organizations received awards. Their projects collectively saved 8 million kWh/year; reduced annual greenhouse gas emissions by 14,608 metric tons; captured 3.2 million gallons of stormwater runoff; saved over $105 million in operation, maintenance, and energy use expenses; conserved 3 million gallons of water; engaged 8,500 students in environmental issues; recycled 68,000 plastic bags; properly disposed of 5,287 tires; and treated 450.5 million gallons of stream water that had been laced with acid mine drainage.
The Governor’s Awards for Environmental Excellence have been presented since 1996.

Montour Address Updates Now a Waiting Game

Montour County Commissioners at a recent meeting

Updated addresses for Montour County were sent to companies that provide GIS mapping services in August. However, some County residents are experiencing difficulty in receiving deliveries using their new addresses. The Montour County Commissioners say the companies are updating their databases on varying schedules.

The County GIS office provided the new addresses to companies in August, with follow up in early November. According to Commissioner Ken Holdren, one company that provides GIS mapping to many in-car systems responded that updates would be made in early December, but are still pending. Mapquest updates could take 6-9 months, and Google provided no timeline for when updates would take effect. Residents and businesses are reminded that the Postal Service will recognize old addresses for one year from the date of notification.

Montour County Treasurer Jesse Kline also advises residents that when making online purchases with a credit card, they should use the same mailing address as the billing address associated with the card whenever appropriate.

PA Chamber Successfully Fights Back Against More than $1 Billion in Proposed Tax Increases as 2017-18 Budget Finalized; Continues to Oppose Additional Taxes on the Natural Gas Industry

From Gene Barr, President, PA Chamber of Business & Industry

As we approach the end of the year, the 2017-18 budget has finally been completed. In late October, the governor signed into law a revenue package to balance the $32 billion spending plan that had gone into effect in July. After months of a protracted back and forth, lawmakers came to an agreement on a revenue deal that relies largely on borrowing against the state’s Tobacco Settlement Fund; one-time fund transfers; expanded gaming; a fireworks tax and requiring online vendors to remit sales tax. Noticeably absent from the deal was a slew of proposed tax increases that could have significantly impacted the Commonwealth’s business climate.

Throughout this year’s budget process, the PA Chamber has been strongly advocating against punitive taxes that single out specific industries and hurt the Commonwealth’s overall competitiveness. This year, thanks to the help of our local chamber partners, the PA Chamber successfully fought back against more than $1 billion in proposed taxes that would have negatively impacted the Commonwealth’s business community and hard working families. Given the financial difficulties the state has found itself in over the past few years, the proposed taxes elected officials were considering were constantly evolving. Over the course of the elongated nine month budget negotiation process, the PA Chamber pushed back against numerous proposals – including: instituting combined reporting; a commercial storage tax; a hotel tax; a technology tax; and an increase to the insurance premiums tax. We also stood up against multiple attempts to enact higher energy taxes on Pennsylvania residents and businesses – including a proposed new tax on natural gas users; and increased taxes on energy and phone bills. And, we again spoke out against and eventually defeated efforts to increase the minimum wage to $12 an hour – a short-sighted move that especially hurts small businesses and makes it harder for low-wage workers to get their foot in the door.

Yet, despite the fact that a revenue package has been signed into law, there continue to be calls by some lawmakers to place an additional punitive tax on the Commonwealth’s natural gas industry. We have repeatedly warned lawmakers against this misguided policy because it will negatively impact the state’s overall business climate – further slowing Pennsylvania’s already stagnant economy.

There is a slew of misinformation regarding how Pennsylvania taxes the industry and if the industry is paying its “fair share.” Tax proponents often use the argument that Pennsylvania is the only state without a severance tax. However, Pennsylvania is also the only state to impose an impact tax on the industry. Since it was enacted, the impact tax has brought in more than $1 billion with revenues distributed to every single county in the Commonwealth to help fund critical local projects. Also, it’s important to note that the Commonwealth’s overall tax climate is more burdensome that other states with shale drilling. In fact, Pennsylvania’s Corporate Net Income Tax has the highest effective rate in the country. To say that the Commonwealth is letting drillers off the hook because we haven’t placed yet another punitive tax on this industry is comparing apples to oranges – especially since some drilling states don’t even impose a Corporate Net Income Tax.

Another fallacy is that the industry has to stay in Pennsylvania because the gas is here. But capital is fluid and companies will move capital if they are not able to be profitable in a certain location. For those that believe this will happen, all you have to do is look at the drilling counts – which have already seen a decline. Additionally, Pennsylvania’s burdensome regulatory and permitting climate place additional hardships on natural gas related companies that want to come and invest in the Commonwealth. The last thing we should be doing is singling this industry out by adding another punitive tax that will serve to make the Commonwealth even less competitive than other states in the Shale play.

As we repeatedly told lawmakers throughout the budget process, we cannot expect our economy to prosper if we continue to look to short-term solutions and target specific industries to solve our budgetary problems. Instead, we need to embrace tax policies that focus on our long-term economic future and entice new investment. By creating a competitive business climate, more job creators will be enticed to stay and locate in the Commonwealth – which will then generate more revenue for the state.