In our Q4 Insurance Brief we discuss the following topics:

  • Medicare Part D Notice Reminder

  • IRS Forms 1094 and 1095

  • Letter 5699

  • Cigna - Express Scripts Merger

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Medicare Part D Notice Reminder

The Disclosure Notice requirement applies to Part D eligible individuals who are active or retired employees, as well as those who are covered as spouses or dependents under active or retiree coverage.

If your plan data does not include dependent data in the detail necessary to identify eligible dependents who may be Medicare Beneficiaries, you may choose to provide the notice to all eligible employees to assure proper notice to all Medicare Beneficiaries. Notice to the employee will constitute notice to dependents unless you have a separate address for a non-resident spouse/dependent.

Plan Sponsors must also provide a Medicare Part-D notice: a. Prior to an individual’s Initial Enrollment Period for Part-D; b. Prior to the effective date of coverage for any Medicare eligible individual that joins the Plan; c. Whenever the entity no longer offers prescription drug coverage or changes the coverage offered so that it is no longer creditable or becomes creditable; and, d. Upon the request by the individual.

“Prior to” means that the individual must have received the Disclosure Notice within the past twelve months. So, plans that issue the Part-D notice at time of policy renewals do not need to provide another notice.

The notices have not changed since April 2013. Therefore, if the status of your plans is the same you can use last year’s notice. The notices are provided in English and Spanish at http://www.cms.gov/Medicare/Prescription-Drug-Coverage/ CreditableCoverage/Model-Notice-Letters.html

You can also contact your Brown & Brown Account Team to request a copy be emailed to you.

Delivery. Plan Sponsors may mail the notice as a stand-alone mailing or choose to incorporate the notice into other documents or disclosures, so long as there is prominent first-page, 14-point reference to the incorporated notice language.

Plan Sponsors may also deliver the notice electronically to plan participants who have the ability to access the Plan Sponsor’s electronic information system on a daily basis as a part of their work duties. Plan Sponsors should inform participants that they are to share the electronic notice with all family members who are covered under the group health plan.

Disclosure to CMS Form. Don’t forget that you must also disclose to CMS whether your plans’ coverage is creditable or non-creditable. This is done online at https:// www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/ CCDisclosureForm.html

This disclosure must be made within 60 days following the start of the plan year, within 30 days after termination of a prescription drug plan, and within 30 days after any change in the plan’s creditable coverage status.

IRS Forms 1094 and 1095

Section 6055 - Forms 1094-B and 1095-B and their Instructions. Section 6056 - Forms 1094-C and 1095-C and their Instructions. Background: The “B Forms” (1094-B and 1095-B) are filed by providers of health coverage (insurers for fully-insured and employers for self-insured), and the “C Forms” (1094-C and 1095-C) are filed by applicable large employers (ALEs). There are only a few changes from the 2017 forms and instructions, with the highlights below.

Key Provisions: The 1095-B and 1095-C Forms. These forms now include separate fields for each covered individual’s first name, middle initial and last name. Previously there was a single field for the full name. Deadlines: As of now forms filed in 2019 reporting 2018 coverage on 1095-B and 1095C must be provided to employees by January 31, 2019. Forms 1094-B, 1095-B, 1094-C and 1095-C must be submitted to the IRS by February 28, 2019, or March 31, 2019, if filing electronically (250+ forms).

Penalties: An employer can be penalized $270 per return for failing to file a correct information return (the Forms 1094-C and 1095-C filed with the IRS). Similarly, an employer can be penalized $270 per statement for failing to provide a correct payee statement (the Form 1095-C that must be furnished to certain employees). Each penalty is capped separately. This amount has risen to $3,275,000. These penalties can be increased if there is intentional disregard for the filing requirements. If the same Form 1095-C that is furnished to an employee with incorrect information is provided to the IRS at the later deadline with the same incorrect information, that Form 1095-C with incorrect information could trigger a penalty of $540.

What’s Next: Please contact your Brown & Brown Account Team if you have any questions.

Letter 5699

Background. The ACA’s employer mandate requires Applicable Large Employers (ALEs) to identify and offer affordable health insurance coverage to all full-time employees (i.e., those working 30 hours or more per week). ALEs are employers with 50 or more fulltime or full-time equivalent employees that were required to offer Minimum Essential Coverage to at least 95% of their full-time workforce and their dependents for the year in question.

The ACA’s employer mandate also requires ALEs to file information returns (i.e., Forms 1094-C) with the IRS and to provide statements to their full-time employees (i.e., Forms 1095-C) relating to whether the employees (and their dependents) were offered health insurance from the employer, and if so, to provide certain details about that health insurance coverage.

In general, ALEs were required to offer health insurance coverage to their full-time employees beginning in 2015 and begin filing the Forms with the IRS in 2016.

Letter 5699. The IRS is now sending Letter 5699 to employers it believes were ALEs that may have failed to submit the required Forms. In particular, Letter 5699 requests that the employer confirm the name and Employer Identification Number it used when filing the Forms along with the date such filing was made. Letter 5699 also reminds employers that there are penalties for failing to file the Forms.

Responding to Letter 5699. Employers must respond to Letter 5699 within 30 days of receipt. ALEs that have not filed the Forms for the 2016 reporting year can provide them to the IRS with their response to Letter 5699. Alternatively, ALEs that have not filed the Forms can commit to filing them within 90 days of the date of the letter. In either case, the ALE must also explain the reason for the late filing.

Employers that receive Letter 5699 may also respond by either: (i) claiming that they were not an ALE for the year in question; or (ii) explaining why they did not file the Forms and any actions they plan to take to remedy the failure.

Employer Takeaway. Employers that receive IRS Letter 5699 should carefully review the Forms that they filed (if any) for the year indicated in the letter. Employers that have specific questions or require specific advice regarding the best response to Letter 5699 should engage qualified counsel for assistance.

Cigna - Express Scripts Merger

The combined company would be named Cigna and would be based in Bloomfield, CT., where Cigna has its headquarters. Last month shareholders of both companies voted to go ahead with the deal.

The decision by federal antitrust officials to allow Cigna to buy Express Scripts signals an acceptance of so-called vertical mergers in which companies, although in the same broad line of business, do not directly compete. The nation’s big health insurers, including Aetna and Cigna, had previously tried to combine with other insurers, only to have those deals blocked over concerns about the possible impact on consumers.

In approving the Cigna-Express Scripts deal, federal officials emphasized that they did not believe the merger would decrease competition in the pharmacy business.

Next Steps: Cigna and Express Scripts said they had already received approval from 16 state insurance departments and were working with regulators in the other states to get the necessary approval. The companies continue to expect the deal to close by the end of the year, subject to satisfaction of all closing conditions. If you have any further questions, please do not hesitate to contact your dedicated Brown & Brown Account Team.