March brings a number of important deadlines for employers who sponsor a group health plan for their employees.
- February 28, 2021 is the deadline for large employers and employers with self-funded plans to file certain Affordable Care Act forms with the IRS (Forms 1094-C, 1095-C, and Forms 1095-B), if the employer is filing on paper.
- March 1, 2021 is the deadline for health plans to report small HIPAA breaches occurring in 2020.
- March 2, 2021 is the deadline for employers to file their Medicare Part D creditable coverage information with CMS.
- March 2, 2021 is the deadline for large employers and employers with self-funded health plans to provide certain Affordable Care Act forms (Form 1095-C or Form 1095-B) to individuals.
- March 31, 2021 is the deadline for large employers and employers with self-funded plans to file certain Affordable Care Act forms with the IRS (Forms 1094-C, 1095-C, and Forms 1095-B), if the employer is filing electronically.
Affordable Care Act (ACA) Reporting
Reporting by Applicable Large Employers (ALEs). In general terms, an employer was an ALE in 2020 if it averaged 50 or more full-time equivalent employees during 2019. An ALE must provide a Form 1095-C to any employee who was full-time for any month in 2020. (For these purposes, "full-time" is defined by the ACA!) The forms must be postmarked or provided by March 2, 2021. In addition, an ALE must file a copy of the Forms 1095-C, together with a Form 1094-C, with the IRS. For paper filers, the deadline is February 28, 2021. (Paper filing is permitted only for employers with fewer than 250 Forms 1095-C.) For electronic filers, the deadline is March 31, 2021.
Reporting by Employers Offering a Self-Funded Group Health Plan. Employers with self-funded plans have two compliance options.
Option One. In addition to providing Forms 1095-C to full-time employees as described above, Applicable Large Employers (ALEs) must provide Form 1095-C (or Form 1095-B) to part-time employees and non-employees who were covered by the self-funded plan in 2020. Small employers must provide Form 1095-B to any individual who was covered by the plan (full-time or part-time employees, as well as non-employees) in 2020. The deadline for providing these forms is March 2, 2021. All employers must file copies of those forms, together with the Form 1094-C or 1094-B, with the IRS. For paper filers, the deadline is February 28, 2021. (Paper filing is permitted only for employers with fewer than 250 Forms 1095-C.) For electronic filers, the deadline is March 31, 2021.
Option Two. The employer must post a notice on its website stating that individuals may obtain a Form 1095-B upon request. The notice must include both an email address and a physical address where such requests may be sent, as well as a phone number that individuals can use to contact the employer with questions. The deadline for posting the notice is March 2, 2021. In addition, the employer must furnish a 1095-C or 1095-B to an individual within 30 days of receiving a request. It is important to note that while this option largely allows the employer to avoid a mass mailing, the employer still needs to be able to generate the individual forms. All employers must file copies of those forms, together with the Form 1094-C or 1094-B, with the IRS. For paper filers, the deadline is February 28, 2021. (Paper filing is permitted only for employers with fewer than 250 Forms 1095-C.) For electronic filers, the deadline is March 31, 2021.
Important Note. If the employer is subject to state reporting (see the next section of this alert), Option One is generally preferable. Providing Forms 1095-C or 1095-B will often satisfy the state requirement of notice to individuals.
The federal government eliminated the "individual mandate" and no longer requires individuals to have health insurance coverage. Nevertheless, some states have adopted their own individual mandates. Those states generally require employers to provide notice to the covered individuals who reside in the state, to file a notice with the state, or both. The states that require such notifications are California, the District of Columbia, Massachusetts, New Jersey, Rhode Island, and Vermont. The deadlines vary by state but generally fall in the first quarter of the year.
Medicare Part D
An employer with a group health plan that provides prescription drug coverage to Medicare-eligible individuals must make an annual disclosure to the Centers for Medicare & Medicaid Services (CMS). The disclosure is due 60 days after the beginning of the plan year—March 2, 2021 for calendar-year plans. Employers must complete and submit the annual CMS disclosure on the CMS website.
In order to complete this disclosure, an employer will need to provide the following information: (i) the employer's name, address, federal tax identification number, and phone number; (ii) the name, title, and email address of the person completing the form; (iii) the type of coverage offered; (iv) the total number of prescription drug options available to Medicare-eligible individuals; (v) the creditable coverage status of each prescription drug option; and (vi) the total number of Medicare-eligible individuals covered by each option (less the number of Medicare Part D individuals, if any, being claimed under the Retiree Drug Subsidy Program).
In addition to the above, if a plan's prescription drug coverage is terminated or if there is a change in the plan's creditable coverage status, the employer must update its CMS disclosure within 30 days.
HIPAA Breach Reporting
Employer group health plans are "covered entities" under HIPAA. Under HIPAA, plans must report a "breach" of unsecured protected health information. As relevant here, the plan must report small breaches occurring in 2020 to the U.S. Department of Health and Human Services (HHS) by March 1, 2021. (A "small" breach is one affecting 500 or fewer individuals.) For a self-funded employer group health plan, it is the employer's obligation to ensure that the report is made in a timely manner, though the report may actually be submitted by a business associate, such as the plan's third-party administrator. The report must be submitted electronically on the HHS website.
Reminder: In addition to the above requirements, the plan must notify affected individuals of a HIPAA breach within 60 days of the breach being discovered. If the HIPAA breach is large (affects more than 500 individuals), then in addition to notifying affected individuals, the plan must also notify HHS within 60 days of discovery. Moreover, if the HIPAA breach affects more than 500 individuals within a single state, then in addition to notifying affected individuals and HHS, the breach must be reported to prominent media outlets serving that state within 60 days of discovery.