This document provides a summary of a webcast about the status of health care reform and the Affordable Care Act (ACA) for employers during 2017. It discusses the failed American Health Care Act (AHCA) which would have repealed many ACA provisions. Options for the future include other legislative actions or administrative changes. States may also take actions around Medicaid expansion or Section 1332 waivers. Employers are considering various plan design options given ongoing uncertainty. Key observations from 2016 reporting include error correction guidance and a smoother reporting process this year.

1. Affordable Care Act (ACA):
status of health care reform
Employer update during
2017 season of change
April 12, 2017
Watch the webcast replay

2. Page 2 The Affordable Care Act (ACA) – employer update during 2017 season of change
Disclaimer
► This presentation is provided solely for the purpose of enhancing knowledge on tax matters. It does
not provide tax advice to any taxpayer because it does not take into account any specific taxpayer’s
facts and circumstances.
► These slides are for educational purposes only and are not intended, and should not be relied upon,
as accounting advice.
► Ernst & Young LLP does not bear any responsibility whatsoever for the content, accuracy or security
of any websites that are linked (by way of hyperlink or otherwise) within these materials.
► The views expressed by the presenters are not necessarily those of Ernst & Young LLP.
► This presentation is © 2017 Ernst & Young LLP. All Rights Reserved.
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality
services we deliver help build trust and confidence in the capital markets and in economies the world
over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders.
In so doing, we play a critical role in building a better working world for our people, for our clients and
for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms, of Ernst &
Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK
company limited by guarantee, does not provide services to clients. For more information about our
organization, please visit ey.com.
Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US.

3. Page 3 The Affordable Care Act (ACA) – employer update during 2017 season of change
Today’s moderator
Leigh Messina
Partner
National Director
ACA Compliance & Reporting
Client Services Leader
Ernst & Young LLP
Dallas, TX

4. Page 4 The Affordable Care Act (ACA) – employer update during 2017 season of change
How to get RCH credits
For those with CPP or FPC designations
► RCH credit certificates will be emailed to qualified
participants within two weeks of this event
► Be sure you provided the correct email address when you
registered for this event
► You must respond “yes” to the RCH polling question that
will appear toward the end of this presentation
► You must also respond to all other polling questions during
this webcast

5. Page 5 The Affordable Care Act (ACA) – employer update during 2017 season of change
Today’s presenters
Alan Ellenby
Executive Director
ACA Technical
Advisory Leader
Ernst & Young LLP
Chicago, IL
Heather Meade
Principal
Washington Council
Ernst & Young
Ernst & Young LLP
Washington, D.C.
Juliette Meunier
Partner
People Advisory
Services – ACA
Ernst & Young LLP
Los Angeles, CA
Helen Morrison
Principal
National Tax
Compensation
and Benefits
Ernst & Young LLP
Washington, D.C.

6. Page 6 The Affordable Care Act (ACA) – employer update during 2017 season of change
► American Health Care Act – what happened?
► What’s next?
► Will states take action?
► What are the implications for employers?
► How are employers approaching the current
environment?
► What are some of the key observations as
tax year 2016 reporting deadlines draw to
a close?
Today’s agenda

7. Page 7 The Affordable Care Act (ACA) – employer update during 2017 season of change
Will significant changes be made?
Polling results from March 7, 2017 webcast, The Affordable Care
Act: employer update and key considerations during 2017
In your view, how likely is it that significant changes will be made to the
employer mandate requirements of the ACA in 2017?
Very likely
34%
Somewhat
likely
51%
Not likely
12%
No chance
3%

8. Page 8 The Affordable Care Act (ACA) – employer update during 2017 season of change
Polling question
In your view, how likely is it that significant changes
will be made to the employer mandate requirements
of the ACA in 2017?
A. Very likely
B. Somewhat likely
C. Not likely
D. No chance

9. Page 9 The Affordable Care Act (ACA) – employer update during 2017 season of change
American Health Care Act (AHCA) –
what happened?

10. Page 10 The Affordable Care Act (ACA) – employer update during 2017 season of change
AHCA: timeline
► March 6: House Ways & Means (W&M) and Energy &
Commerce (E&C) Committees introduce the AHCA
► March 8 to 9: W&M and E&C mark-up the legislation
► March 16: House Budget Committee reports blended
reconciliation legislation
► March 24: House Rules Committee reports out the
legislation
► March 24: Manager’s Amendment to the legislation
► March 24: House leadership concludes there is
insufficient support and cancels the vote on the legislation

11. Page 11 The Affordable Care Act (ACA) – employer update during 2017 season of change
AHCA: summary of key provisions
► Eliminates individual and employer mandate
penalties retroactively to 2016
► Repeals ACA taxes and fees
► “Cadillac Tax” on higher cost plans delayed to
2026
► Restructures and limits ACA tax credits beginning
in 2020
► Maintains ACA tax credits through 2019
► Converts Medicaid to a per-capita and optional
block grant funding beginning in 2020
► Eliminates Medicaid expansion effective 2020
► Expands health savings accounts (HSAs) and
flexible spending arrangements (FSAs)
► Does not eliminate employer reporting
► Modified reporting may be developed

12. Page 12 The Affordable Care Act (ACA) – employer update during 2017 season of change
AHCA: Congressional Budget Office (CBO)
estimate
► CBO cost and coverage estimate
► Uninsured individuals increase by 24m by 2026
► Budget reduced by $337b over 2017 to 2026 budget window
(Manager’s Amendment reduced budget by $150b, but no
increase in coverage)
► Approximately $883b in tax cuts and lost revenue

13. Page 13 The Affordable Care Act (ACA) – employer update during 2017 season of change
What’s next?

14. Page 14 The Affordable Care Act (ACA) – employer update during 2017 season of change
Public opinion
19%
6%
75%
Do what they can to make law
fail in order to replace later
Don't know or chose not to
answer
Do what they can to make the
law work
Moving forward, what should President Trump and his administration
do with the current health care law?
Source: Kaiser Family Foundation Health Tracking Poll (conducted March 28-April 3, 2017)

15. Page 15 The Affordable Care Act (ACA) – employer update during 2017 season of change
Legislative and administrative options
► Repeal and replace reconciliation options
► Regular order smaller health care legislation
► Association health plans; stop loss coverage; wellness plans
► Administrative action only
► Executive orders
► Notice and comment rulemaking; other published guidance
► Enforcement delays

16. Page 16 The Affordable Care Act (ACA) – employer update during 2017 season of change
ACA
repeal
and
replace
Senate politics
and procedure
Effect on state
budgets
Coverage numbers Market
stability
Reconciliation
rules
Satisfy
Republican
Freedom
Caucus and
moderate
Republicans
Many pieces must come together

17. Page 17 The Affordable Care Act (ACA) – employer update during 2017 season of change
Where are we now?
► Enforcement of the individual mandate
► Coverage availability
Individual concerns
► Availability of cost-sharing subsidies
► Health and Human Services (HHS) market stabilization regulations
Insurer market stabilization
► Enforcement of the employer mandate
► Continuation of reporting obligations
Employer uncertainty

18. Page 18 The Affordable Care Act (ACA) – employer update during 2017 season of change
Polling question
What changes would you most like to see relative to the
current requirements for employer-provided health coverage
or the related information reporting?
A. Eliminate requirements associated with minimum essential coverage
B. Remove the Cadillac Tax without taxing employees on employer
provided coverage
C. Eliminate the 95% coverage requirement of the employer mandate
D. Simplify reporting, but leverage the data and reporting systems we
have already created to comply with current law
E. Don’t know, does not apply

19. Page 19 The Affordable Care Act (ACA) – employer update during 2017 season of change
Will states take action?

20. Page 20 The Affordable Care Act (ACA) – employer update during 2017 season of change
Will states take action?
► ACA Section 1332 waivers
► State premium stabilization funds
► Medicaid expansion
► Emerging trends

21. Page 21 The Affordable Care Act (ACA) – employer update during 2017 season of change
What are the implications for employers?

22. Page 22 The Affordable Care Act (ACA) – employer update during 2017 season of change
Status of employer shared responsibility
► Looking forward
► Will HHS or IRS take administrative
action not to enforce based upon
previously issued Executive Order?
► Looking back – IRS activity
► Action on employer shared
responsibility to date
► Updates to frequently asked
questions
► Good-faith provisions

23. Page 23 The Affordable Care Act (ACA) – employer update during 2017 season of change
► The FFM has generated the most activity to date – issuing 470,000
notices in June 2016
► No published guidance indicates specifically what documentation the
FFM Appeal Center requires for appeals
Update on the marketplaces
First year, only four
states provided
notices.
Federally facilitated
marketplace (FFM)
began providing
notices.
Only three states
have provided notices
to date.
None yet from FFM.
2015 2016 2017

24. Page 24 The Affordable Care Act (ACA) – employer update during 2017 season of change
How are employers approaching current
environment?

25. Page 25 The Affordable Care Act (ACA) – employer update during 2017 season of change
Employers’ responses to ambiguity
If no immediate changes to the law
► Managing costs within health plans
► Reviewing for Government Sponsored Coverage
► Use of data/analytics for more informed decisions
Assessing level of risk of audit
and penalty assessment
Filing IRS forms, but not
focusing on details such as
breaks in service, leaves of
absence, scheduled vs. actual
hours
Understanding and accepting
certain risks with misclassified
contingent workforce
Continuing to strengthen
contingent workforce
controls
Documenting controls for
ASC 450 audit preparation
Focusing on accuracy of
data being gathered and
reported on IRS forms
Highrisktolerance
Lowrisktolerance

26. Page 26 The Affordable Care Act (ACA) – employer update during 2017 season of change
Employers’ responses to ambiguity
Planning for potential scenarios – significant provisions
► Contingent worker considerations
► Plan design changes around full-time employees
► Full-time employee tracking administration
Employer
mandate penalties
at $0
► Employee education as employee enrollment increases or employees
become uninsured
► Potential plan design considerations for affordable coverage
Cutback in Medicaid
eligibility
► Employee education for loss of benefits or increased taxes
► Potential gross-ups or other compensation
► Valuation of employer-provided benefits
Cadillac Tax or cap
on health care
exclusion
► Continue to ensure eligible population is offered coverage in a timely
manner
► Document processes to support future employer reporting
responsibilities
Age-based tax
credits
► Employee education to ensure they are aware of new penalties for
enrolling after a lapse in coverage
Premium charged if
no prior coverage

27. Page 27 The Affordable Care Act (ACA) – employer update during 2017 season of change
Polling results from previous webcast
In light of potential changes to ACA and the timeframe for your
company’s 2018 health care benefit program design process, which
statement most accurately describes your current process?
We are attempting to evaluate
the implications of “repeal and
replace” but there are too many
variables, so 2018 health benefit
planning will likely ignore
possibilities
15%
We are attempting to evaluate
implications of “repeal and
replace” and expect that we will
alter our 2018 health benefit
plan design as a result
15%
We are waiting to evaluate the
implications until there is more
clarity around “repeal and replace”
70%

28. Page 28 The Affordable Care Act (ACA) – employer update during 2017 season of change
What plan design alternatives are employers
considering?
Excluding certain
groups – seasonal, per
diems, scheduled
part-time, interns
Exploring options to
add or replace current
plans with
high-deductible plans
and HSAs
Most large employers
are not considering
dropping healthcare
and offering cash
benefits
A few employers
considering changing
benefit levels to
minimize Cadillac Tax
Removing lookback
measurements from
plans and
administration
Some considering
removing those on
leave of absence as
eligible
Assessing alternative
payment models with
health care providers
Managing the costs of
specialty drugs through
PBM (Pharmacy
Benefits Manager)
Considering private
exchanges, especially
for Medicare-eligible
retirees

29. Page 29 The Affordable Care Act (ACA) – employer update during 2017 season of change
Polling question
In light of potential changes to ACA, which plan
design alternative would be most feasible or
beneficial for your company?
A. Excluding certain groups (i.e., seasonal, per diems, scheduled
part-time)
B. Assessing alternative payment models with health care providers
C. Considering private exchanges, especially for Medicare-eligible
retirees
D. Removing lookback measurements from plans and administration
E. Don’t know, does not apply

30. Page 30 The Affordable Care Act (ACA) – employer update during 2017 season of change
Key observations as tax year 2016 reporting
deadlines draw to a close

31. Page 31 The Affordable Care Act (ACA) – employer update during 2017 season of change
Error correction
► IRS provides process instructions
► Limited information on what must
be corrected
► What needs to be corrected
under good faith?
► Which errors are
inconsequential?
► Limited guidance available
Taxpayer Identification Number
(TIN) solicitation
► ACA-specific TIN solicitation rules
proposed July 2016
► Rules for reasonable cause
defense to accuracy penalties
► TIN mismatch error vs. Notice
972CG
Considerations following 2016 reporting
season

32. Page 32 The Affordable Care Act (ACA) – employer update during 2017 season of change
Current 2017 experiences
IRS transmission
Affordable Care Act
Information Returns
(AIR) system
observations
► Process has been smoother;
issues on the IRS side have
been minimal
► AIR system enforcing business
rules more aggressively,
consistently
► As expected, TIN and name
matching error is again most
common

33. Page 33 The Affordable Care Act (ACA) – employer update during 2017 season of change
Polling question
Will you require an RCH certificate for today’s webcast?
Those with CPP or FPC professional designations
check “yes” to this question. All others check “no.”
A. Yes
B. No

34. Page 34 The Affordable Care Act (ACA) – employer update during 2017 season of change
One-minute recap

35. Page 35 The Affordable Care Act (ACA) – employer update during 2017 season of change
Affordable Care Act
See more of our thought leadership
Insights for companies on their ACA journey
Affordable Care Act: IRS compliance and reporting

36. Page 36 The Affordable Care Act (ACA) – employer update during 2017 season of change
Learn more about US tax reform
► Visit us at ey.com/taxreform to get up-to-date insights on US tax reform proposals and
how they impact your business
► Replay information for today’s webcast will be available at the link below:
The Affordable Care Act (ACA) – employer update during 2017 season of change
► Replay information for previous tax reform webcasts is available at the links below:
The Affordable Care Act: employer update and key considerations during 2017
An update following the March 6, 2017 introduction of the American Healthcare Act
US tax reform and ACA: what happens next?
Exploring the reconciliation and legislative process
US tax reform: what does it mean for me?
Understanding the impact of tax reform on individuals
US tax reform: a border adjusted cash flow tax?
Exploring and understanding the proposed shift to a consumption-based tax
US tax reform: impact on state and local taxes and other indirect tax considerations
Understanding the effects of the House Blueprint through modeling and scenario planning
Additional webcasts on 2017 US tax reform and healthcare reform measures will be scheduled as
the situation warrants
► Follow us on twitter at @EY_Tax, @EY_USTaxPolicy and #taxreform

37. ► Thank you for
participating