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Life Health > Health Insurance

Shan Fowler: The Day of the 1095-Cs

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For Shan Fowler, the big health benefits story of the spring is the creation of the first major, mandatory wave of Form 1095-C coverage notices. 

Fowler, senior director of product strategy at Benefitfocus Inc. (Nasdaq:BNFT), sees employers, insurers, technology vendors, and even the Internal Revenue Service (IRS) struggling to make the Patient Protection and Affordable Care Act (PPACA) notice program happen.

The notice program is one of the largest the IRS has launched since the Form W-2 came out in 1944. Workers are supposed to use the notices to document whether or not they have the kind of minimum essential coverage that can get them out of paying the PPACA penalty imposed on the uninsured and underinsured.

“It’s new for everyone,” Fowler said in a recent interview. “We’re all in this together.”

Benefitfocus sells information technology and support services for employers, insurers and exchanges. Its employer solutions unit offers to help employers put their PPACA compliance, including 1095-C reporting, on autopilot.

See also: Joe Ellis: Middle market benefits supply looks fine

Getting the 1095-Cs printed adds expense but has not been any more difficult than getting W-2′s printed, Fowler said. What has been difficult, he said, is educating the applicable large employers (ALEs) now subject to the 1095-C requirements about who exactly does what. 

The IRS has already pushed back the first mandatory 1095-C reporting deadline for ALEs twice, and public exchanges began sending out a similar type of notice, the 1095-A, last year. At this point, “by and large, the employers understand that they have reporting to do,” Fowler said.

But, in some cases, employers that know insurers will have to send out 1095-B coverage notices assume, mistakenly, that insurers will create 1095-Cs for their group plans, Fowler said.

“I think it will definitely evolve over the next couple of years,” Fowler said. “It’s a really big deal. It’s a really big problem to solve.”

For Benefitfocus, another major challenge is knowing what the health insurance market will look like in 2017.

Insurers are completing their filings for calendar-year 2017 plans now. Some insurers, including UnitedHealth Group Inc. (NYSE:UNH), have warned that they might make major cuts in 2017 individual health plan menus.

Benefitfocus will not know what the individual market will look in 2017 until this summer, when the filings start to show up online, Fowler said.

But Fowler said he thinks the PPACA individual market subsidies will continue to help support the supply of individual coverage, in spite of the underwriting problems some carriers have experienced.

Thanks to the infusion of subsidy money, “there’s definitely an incentive to be in that marketplace,” Fowler said. 

See also:

Private exchange picture still blurry

View from PPACA World: Jeff Smedsrud


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