Pub. 3 2013-2014 Issue 2

26 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S  play or pay – continued sured plans is paid by the health insurance carrier. The fee for self-insured health plans is paid by the plan sponsor (typically employers). The fee is $1 for each covered life for plan years end- ing on or after October 1, 2012, and before October 1, 2013; $2 for each covered life for plan years ending on or after October 1, 2013, and before October 1, 2014; and an increased amount each year thereafter through plan years ending before October 1, 2019. Covered lives include employees, spouses and dependents. Implications: The tax-deductible fee must be reported on IRS Form 720, Quarterly Federal Excise Tax Return, and paid no later than July 31, 2013, for plan years ending during the last quarter of 2012. • Transitional Reinsurance Fee Beginning in 2014 and continuing through 2016, this fee will be assessed on self-insured and fully insured health plans to fund reinsurance payments to health insurance issuers that cover high-risk individuals in the individual market. Like the PCORI fee, the transitional reinsurance fee for fully insured plans is paid by the health insurance carrier, and the fee for self-insured health plans is paid by the plan sponsor (typically employers). The amount of the transitional reinsurance fee for 2014 will be $63 per covered life, with the amount decreasing thereafter through 2016. Implications: Plan sponsors and insurers are required to report their enrollment counts by November 15 of each year (2014, 2015 and 2016) to the U.S. Department of Health and Human Services (HHS). HHS will provide a notice of fee liability by December 15, and the plan sponsor or insurer will have 30 days to remit the transitional reinsurance fee to HHS. While a self-insured employer can delegate to its third-party claims ad- ministrator (TPA) the responsibility to pay the fee, the employer is liable to pay the fee if the TPA does not. The fee is tax-deductible as an ordinary and necessary business expense. Action Steps Employers actively preparing for the play or pay rule and information reporting provisions may want to pause, as the IRS has indicated proposed rules reflecting transitional relief are expected to be published this summer. This transition relief will provide additional time for dialogue with stakeholders in an effort to simplify the reporting requirements consistent with the effective implementation of the law. While the transition relief through 2014 applies to the information reporting and play or pay provisions, it does not change the effective date of other ACA provisions, so employers will now have time to focus on other pressing compliance issues. n This information was written by qualified, experienced BKD pro - fessionals, but applying specific information to your situation requires careful consideration of facts and circumstances. Con- sult your BKD advisor before acting on any matter covered here. Article reprinted with permission from BKD, LLP, bkd.com. All rights reserved. America’s Premier Community Banking School To see where The GSBC Experience will take your career, visit www.GSBColorado.org . July 13-25, 2014 | University of Colorado | Boulder, CO