2016 Affordable Care Act (ACA) Large Group Updates: What You Need to Know

Western Region Brokers

Arizona Small Business PlansThe beginning of 2016 continues to prove that the health insurance marketplace is in a constant state of change. And in this rapidly evolving environment, Health Net continues to be flexible and proactive – We understand the industry, anticipate market needs, and provide solutions that transform how we do business and help you increase sales.


Keeping our business partners informed of industry updates is part of our proactive approach, and there have already been some key Affordable Care Act (ACA) changes in 2016 that we’d like to share with you.


Cadillac Tax

As part of ACA, the excise tax, commonly known as the “Cadillac Tax,” was set to begin January 1, 2018. However, as part of the “Consolidated Appropriations Act, 2016” passed on December 18, 2015, Congress delayed implementation of the excise tax until the 2020 tax year.

Initial analysis shows that the Appropriations Act did not change existing IRS guidance, and we expect that the IRS will continue its rulemaking. We will provide more information about the excise tax as it becomes available.


Minimum Essential Coverage (MEC) Reporting

Health plan companies like Health Net are required to report Minimum Essential Coverage (MEC) data to the IRS for individuals – including covered dependents beginning in 2016. This requirement is Section 6055 of ACA.


Update from the IRS

IRS Notice 2016-4, released December 28, 2015, provides additional time for health plans to comply with MEC filing requirements for tax year 2015. Health plans must provide Form 1095-B: Health Coverage to individuals by March 31, 2016, and file Form 1094-B with the IRS by June 30, 2016. Health plans are not required to report for individuals enrolled in government programs, including plans obtained on the Exchange (Marketplace plans), state health plans, Medicare and Medicaid (Medi-Cal in California).

Health Net will provide a Form 1095-B to subscribers and file the information with the IRS for the following:

  • Individual and Family Plan: off-exchange
  • Small Business Group: fully insured, off-exchange and SHOP
  • Large Group: fully insured


More Information about MEC

  • Consumers can use the statement as supporting documentation for tax purposes.
  • Consumers can file their taxes prior to receiving the Form 1095-B and are not required to refile once they receive the statement.
  • Health Net will continue to ask subscribers for their and their dependents’ Social Security Numbers (SSN) or Tax Identification Numbers (TIN) at time of enrollment. If we don’t receive the SSN/TIN at enrollment, Health Net will send two annual solicitations for any subscriber or dependent for whom we do not have a number. We began these solicitations in October 2015.
  • Please encourage your employer group clients to provide Health Net with SSNs/TINs for their employees and any covered dependents.
  • You can also reassure them that it is safe to give Health Net this information. It’s also to their benefit. With the SSN/TIN, the IRS can match coverage reported on the individual’s tax filing with the coverage information Health Net will report to the IRS.


Click here to review the IRS 2016 filing extensions for reporting.


For more information regarding these updates, visit our Health Care Reform Guide on www.healthnet.com/broker:

Minimum Essential Coverage Reporting 

Employer Shared Responsibility and Reporting 


You may also visit these websites for more information on our referenced regulations:

ACA section 6055 <https://www.law.cornell.edu/uscode/text/26/6055>
IRS Notice 2016-4 <https://www.irs.gov/pub/irs-drop/n-16-04.pdf>

We remain committed to the health and success of your business. Join us as we continue to define our place in the future of health care. As always, if you have any questions or would like more information, please call me or contact your local sales consultant.


Larry Tallman
Chief Sales Officer, Western Region
Large Group and Major Accounts
(818) 676-6543

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Larry Tallman