In December 13, 2016, President Obama signed the 21st Century Cures Act (H.R. 34). In part, this law re-establishes the ability of small employers, those not subject to the Affordable Care Act’s employer shared responsibility provisions, to provide their employees a stand-alone health reimbursement arrangement (HRA), known as a “qualified small employer HRA”.

1. December 14, 2016 – HRB 124 Page 1
Subject: 1) Qualified Small Employer HRAs and 2) Year-end Reminders
Date: December 14, 2016
QUALIFIED SMALL EMPLOYER HEALTH REIMBURSEMENT ARRANGEMENTS (HRA)
On December 13, 2016, President Obama signed the 21st Century Cures Act (H.R. 34). In part, this
law re-establishes the ability of small employers, those not subject to the Affordable Care Act’s
employer shared responsibility provisions, to provide their employees a stand-alone health
reimbursement arrangement (HRA), known as a “qualified small employer HRA”. In order to establish
the qualified HRA, the employer must provide no other health coverage. The HRA can be used to
reimburse health insurance premium for individual coverage purchased either through or outside the
marketplace. As is true for all HRAs, the plan can only be funded with employer dollars. Following is
a summary of the criteria for these qualified HRA plan designs.
For purposes of sponsoring a qualified HRA, an eligible small employer is one who:
1. Employs fewer than 50 employees on business days during the preceding calendar year (i.e.,
employers exempt from the ACA’s employer shared responsibility requirements); and
2. Does not offer group health insurance to its employees.
An eligible employee is defined as any employee of the eligible small employer. However, certain
employees need not be offered coverage under a qualified HRA including:
 Employees who have not completed 90 days of service;
 Employees who have not attained age 25;
 Part-time or seasonal employees;
 Employees covered by a collective bargaining agreement where health benefits have been the
subject of good faith bargaining; and
 Employees who are nonresident aliens with no U.S. source of income.
A qualified HRA is an arrangement that:
1. Is funded solely by the eligible small employer; no salary reduction contributions can be made
under this arrangement; and
2. Provides, following the employee’s proof of coverage, for the payment or reimbursement for
medical care expenses, as defined in IRC Section 213(d)), including premium for health
coverage through the individual market, incurred by the eligible employee or his/her family
members.
The annual amount of payments and reimbursements is capped at $4,950 for employee-only, or
$10,000 for arrangements that provide for payments or reimbursements for the employee’s family
members. Both of these limits are subject to inflationary adjustments.

2. CBIZ Health Reform Bulletin
December 14, 2016 – HRB 124 Page 2
The HRA must be made available on uniform basis. However, certain variations of payments or
reimbursements based on family size or age are permitted. In addition, the amount of available
reimbursements are adjusted on a pro-rated basis for employees who enter the HRA mid-year.
Impact of other laws
A qualified small employer HRA would be exempt from the market provisions of the Affordable Care
Act. However, it is important to note that a qualified small employer HRA would still be considered a
“group health plan” for purposes of the ACA’s Cadillac tax, scheduled to take effect in 2020; though,
it is very probable that the Cadillac tax will be modified or repealed between now and then.
A qualified small employer HRA would not be subject to COBRA continuation of health coverage
requirements.
Coordination with ACA subsidies
Any ACA premium tax credit available to an eligible employee would be reduced by 1/12th of the
employee’s permitted benefit under the HRA for any month in which the employee is covered by the
HRA. Further, a qualified HRA would be treated as affordable coverage for a month if the excess of
the amount that would be paid by the employee as premium for self-only coverage under the second
lowest silver plan offered in the relevant individual insurance market, over 1/12th of the employee’s
permitted benefit under the HRA does not exceed 1/12th of 9.5% of the employee’s household income.
Reporting and disclosure obligations
The law establishes some reporting and disclosure obligations for a qualified HRA:
1. Form W-2 reporting. An employee’s total permitted benefits received under a qualified HRA
must be reported on the Form W-2. The form will be amended to include a box in which to
report the amount.
2. Written notice to employees. Employers establishing a qualified HRA are required to provide
a written notice to eligible employees about the availability of the program. This notice is to
be provided annually no later than 90 days prior to the beginning of the program year. The
notice must include the following type of information:
 A statement of the amount of the eligible employee’s permitted benefit under the
arrangement for the year;
 A statement that the eligible employee should provide the information relating to
his/her permitted benefit amount to any marketplace in which the employee applies
for advance payment of the premium assistance tax credit; and
 A statement that if the employee is not covered under minimum essential coverage for
any month, then the employee may be subject to the ACA’s individual shared
responsibility penalty for such month, and that reimbursements under the
arrangement may be includible in gross income.
Effective date. This law allows for the establishment of qualified HRAs beginning after December 31,
2016.
In addition, the law grants relief for HRAs in existence prior to this law’s enactment that would have
otherwise been violative of the market provisions of the ACA.

3. CBIZ Health Reform Bulletin
December 14, 2016 – HRB 124 Page 3
YEAR-END REMINDERS
 EMPLOYER SHARED RESPONSIBILITY PROVISIONS
 Applicability. For purposes of the ACA’s employer shared responsibility requirement as well as
the reporting and disclosure requirements, applicable large employer (ALE) status is
determined each calendar year, based on the average size of the employer’s workforce during
the prior year. Thus, if you averaged at least 50 full-time employees, including full-time
equivalent employees, during 2015, you are most likely an ALE for 2016 and are subject to
the reporting and disclosure requirements due in early 2017.
 Affordability Standard. For purposes of determining affordability, coverage under an employer-
sponsored plan is deemed affordable if the employee’s required contribution to the plan does
not exceed 9.66% (indexed for 2016; 9.69 % in 2017) of the employee’s household income
for the taxable year, based on the cost of single coverage in the employer’s least expensive
plan.
 Increase in Excise Tax Penalties. The chart below reflects the amount of penalties for purposes
of calculating the ‘no coverage’ excise tax (IRC § 4980H(a)), and the ‘inadequate or
unaffordable’ excise tax (IRC § 4980H(b)) for 2016 and 2017, as well as the proposed
amounts for 2018. These are the excise taxes that could apply if an applicable large employer
is found not to have offered health coverage to a full-time employee.
‘NO COVERAGE’ EXCISE TAX
IRC § 4980H(a)
‘INADEQUATE OR UNAFFORDABLE’ EXCISE TAX
IRC § 4980H(b)
2016 $2,160 2016 $3,240
2017 $2,260 2017 $3,390
2018 (proposed) $2,320 2018 (proposed) $3,480
 Reporting and Disclosure Obligations
The Forms 1094 and 1095 are used to satisfy the IRC Section 6055 and 6056 reporting
requirements. The Form 1094-B and 1095 B-series is used for reporting minimum essential
coverage (MEC) by insurers and sponsors of self-funded plans. The Form 1094-C and 1095-C
series is used for reporting employer provided coverage by an applicable large employer
subject to the ACA’s shared responsibility requirement.
Deadlines
 The Forms 1094 and 1095 must be filed with the IRS by February 28, 2017 (by March
31, 2017 if filing electronically)
 The Form 1095 must be furnished to individuals listed in Forms 1094 and 1095 by
March 2, 2017.
 Other ACA-related Fees
 Patient-Centered Outcomes Research Institute (PCORI) Fees. For policy and plan years ending
between Oct. 1, 2016, and Oct. 1, 2017, the PCORI fee will be $2.26 multiplied by number of
covered lives under policy or plan. The PCORI fees are paid annually via IRS Form 720
(generally due July 31st of each year).

4. CBIZ Health Reform Bulletin
December 14, 2016 – HRB 124 Page 4
 Suspended ACA fees include:
 Cadillac tax (suspended until 2020);
 Health insurance provider fee suspended in 2017; and
 Excise tax on medical devices suspended for sales made from January 1, 2016, through
December, 31, 2017.
 ACA Cost-Share Restrictions
The chart below reflects the 2017 inflationary adjustments applicable to out-of-pocket (OOP)
limits including deductibles, co-insurance and co-payments in ACA plans. These cost-share
restrictions apply to insured plans offered via the marketplace, and insured and self-funded
plans offered outside marketplace. These amounts differ from the OOP limits applicable to
high deductible health plans used in conjunction with a health savings account (HSA).
2017 Inflationary Adjustments
2017 2016
ACA PLANS - OUT-OF-POCKET LIMITS
Note: For 2018, the proposed OOP limits are $7,350 for
self-only; $14,700 for family
Self-only Family Self-only Family
$7,150 $14,300 $6,850 $13,700
HEALTH SAVINGS ACCOUNTS Individual Family Individual Family
HDHP Annual Deductible $1,300 $2,600 $1,300 $2,600
HDHP Annual Out-of-Pocket Limit $6,550 $13,100 $6,550 $13,100
Contribution Limit $3,400 $6,750 $3,350 $6,750
ACA-required Reporting Reminders
Form To Whom Due Date
Form W-2. ACA-required reporting includes:
 Aggregate cost of health coverage (Box 12, using Code DD).
Note, employers filing <250 Form W-2s per year remain exempt from
reporting the aggregate cost of health coverage on the Form W-2 until
future IRS guidance is issued.
 Additional Medicare tax withholding on earnings exceeding
$200,000 per calendar year (Box 6)
Internal Revenue Service
(IRS)
http://www.irs.gov/
Form W-2 Instructions
(2016)
January 31, 2017
Form 720 for purposes of Patient Centered Outcome
Research (PCOR) fee
IRS July 31st of each
year
ACA Transitional Reinsurance Program Annual Enrollment
Contributions Submission Form
If making one payment of the fee, the 2016 form must be filed by
November 15, 2016; full fee due by January 17, 2017. If opting
to make two payments, Form must be filed by November 15,
2016; the first part of two payments due by January 17, 2017;
the second payment due by November 15, 2017.
Centers for Medicare &
Medicaid Services (CMS)
via www.pay.gov
November 15,
2016
Note: 2016 is the last
year of this filing
obligation and
payment of fee

5. CBIZ Health Reform Bulletin
December 14, 2016 – HRB 124 Page 5
Additional ACA-Related Disclosure Reminders
Note: This is not an exhaustive list of ACA-required disclosures. For a more descriptive list of notice
obligations relating to the ACA and other welfare benefit plans, ask your CBIZ representative for a Chart of
Notice Obligations.
Form To Whom Due Date
Summary of Benefits and
Coverage (SBC)
 Summary of Benefits and
Coverage Template for use
before April 1, 2017
(pdf or word)
 Summary of Benefits and
Coverage Template for use on
or after April 1, 2017 (pdf
or word)
 Uniform Glossary of Coverage
and Medical Terms for use
before April 1, 2017
 Uniform Glossary of Coverage
and Medical Terms for use on
or after April 1, 2017
Note: The model SBC and Uniform
Glossary above are the English
versions. These model documents
are also available in Chinese, Navajo,
Spanish and Tagalog from
CCIIO’s website
All plan participants From Plan Sponsor to Plan Participants:
1. Upon application
2. By the first day of coverage
3. Within 90 days of enrollment by
special enrollees
4. Upon contract renewal
5. Upon request
Advanced 60-day Notice of
Material Change in Benefits
All plan participants No later than 60 days prior to any
material change in any terms of plan
affecting Summary of Benefits and
Coverage (SBC) content not reflected in
the most recently-provided SBC (other
than in connection with renewal or
reissuance of coverage)
Notice of Marketplace Options
 Model notice for use by
employers who offer coverage to
some or all employees:
 English (pdf or word)
 Spanish (pdf or word)
 Model notice for employers who
do not offer health coverage:
 English (pdf or word)
 Spanish (pdf or word)
All new hires including full-
time and part-time
employees, without regard
to eligibility status for the
health plan
Within 14 days of date of hire

6. CBIZ Health Reform Bulletin
December 14, 2016 – HRB 124 Page 6
Increased Penalties for Certain Compliance Violations
Prior Penalty Amount New Penalty Amount
FAILURE TO PROVIDE SUMMARY OF
BENEFITS AND COVERAGE
Up to $1,000 per failure Up to $1,087 per failure
FAILURE TO FILE A CORRECT
INFORMATION RETURN
(Examples: Forms 1094/1095
and W-2)
$250 for each return
(total penalty cap of $3M
per calendar year)
$260 per return (total penalty cap of
$3,193,000 per calendar year)
FAILURE TO PROVIDE CORRECT PAYEE
STATEMENT
(Examples: Forms 1094/1095
and W-2)
$250 for each return
(total penalty cap of $3M
per calendar year)
$260 per statement (total penalty cap of
$3,193,000 per calendar year)
About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits
& Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on
monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Kansas
City office.
The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these
comments directed to specific situations. The information contained herein is provided as general guidance and may be
affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for
accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations.
This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in
connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could
affect the information contained herein.