DOL Issues Final Rules Expanding Association Health Plans: New Opportunities for Small Employers to Reduce Costs?

The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued a final rule under Title I of the Employee Retirement Income Security Act (ERISA) that creates new opportunities for groups of employers to band together and be treated as a single “employer” sponsor of a group health plan. The final rule adopts a new regulation at 29 CFR 2510.3-5. This post summarizes the major provisions of the rule.

The general purpose of the rule is to clarify which persons may act as an “employer” within the meaning of ERISA section 3(5) in sponsoring a multiple employer “employee welfare benefit plan” and “group health plan,” as those terms are defined in Title I of ERISA. The essence of the final rule is to set forth the criteria for a “bona fide group or association” of employers that may establish a group health plan that is an employee welfare benefit plan under ERISA. The rule sets forth 8 broad criteria that must be satisfied.

 1) The final rule establishes a general legal standard that requires that a group or association of employers have at least one substantial business purpose unrelated to offering and providing health coverage or other employee benefits to its employer members and their employees, even if the primary purpose of the group or association is to offer such coverage to its members.

Although the final rule does not define the term “substantial business purpose,” the rule contains an explicit safe harbor under which a substantial business purpose is considered to exist in cases where the group or association would be a viable entity even in the absence of sponsoring an employee benefit plan. The final rule also states that a business purposes is not required to be a for-profit purpose. For example, a bona fide group or association could offer other services to its members, such as convening conferences or offering classes or educational materials on business issues of interest to the association members.

2) Each employer member of the group or association participating in the group health plan (the “Association Health Plan” or “AHP”) must be a person acting directly as an employer of at least one employee who is a participant covered under the plan.

3) A group must have “a formal organizational structure with a governing body” as well as “by-laws or other similar indications of formality” appropriate for the legal form in which the group operates in order to qualify as bona fide.

4) The functions and activities of the group must be controlled by its employer members, and the group’s employer members that participate in the AHP must control the plan. Basically – act like an employer sponsored group health plan, not like an insurance company.

5) The group must have a commonality of interest. Employer members of a group will be treated as having a commonality of interest if they satisfy one of the following:

  • the employers are in the same trade, industry, line of business or profession; or
  • each employer has a principal place of business in the same region that does not exceed the boundaries of a single State or a metropolitan area (even if the metropolitan area includes more than one State)

6) The group cannot offer coverage under the AHP to anyone other than employees, former employees and beneficiaries of the members of the group. Again, act like an employer sponsored group health plan, not like an insurance company.

 7) The health coverage must satisfy certain nondiscrimination requirements under ERISA. For example, an AHP:

  • cannot condition employer membership in the group or association on any health factor of any individual who is or may become eligible to participate in plan;
  • must comply with the HIPAA nondiscrimination rules prohibiting discrimination in eligibility for benefits based on an individual health factor;
  • must comply with the HIPAA nondiscrimination rules prohibiting discrimination in premiums or contributions required by any participant or beneficiary for coverage under the plan based on an individual health factor; and
  • may not treat the employees of different employer members of the group or association as distinct groups of similarly-situated individuals based on a health factor of one or more individuals.

8) The group cannot be a health insurer.

 The final rule also describes the types of working owners without common law employees (i.e. partners in a partnership) who can qualify as employer members and also be treated as employees for purposes of being covered by the bona fide employer group or association’s health plan.

Implications of the final rule will take some time to play out. The administration has stated that its intention behind the final rule is to allow “small employers – many of whom are facing much higher premiums and fewer coverage options as a result of Obamacare – a greater ability to join together and gain many of the regulatory advantages enjoyed by large employers.” The Congressional Budget Office estimated that 400,000 previously uninsured people will gain coverage under AHPs and that millions of people will switch their coverage to more affordable and more flexible AHP plans and save thousands of dollars in premiums.

For our part, we are evaluating the potential to assist smaller employers to save costs and improve the benefits in their health plans by establishing groups and associations to provide AHPs, and we will update our clients as those opportunities mature.

More from EBSA on Association Health Plans:

Final Rule

Fact Sheet

Frequently Asked Questions

News Release

IRS Announces 2019 HSA Contribution Limits, HDHP Minimum Deductibles and HDHP Maximum Out-of-Pocket Amounts

The IRS has announced 2019 HSA and HDHP limits as follows:

Annual HSA contribution limitation. For calendar year 2019, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,500 (up from $3,450 in 2018), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $7,000 (up from $6,900 in 2018).

High deductible health plans. For calendar year 2019, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage (unchanged from 2018), and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,750 for self-only coverage or $13,500 for family coverage (up from $6,650 and $13,300 in 2018).

Rev. Proc. 2018-30

IRS Announces 2018 Inflation Adjusted Amounts for Health Savings Accounts (HSAs)

The IRS has announced 2018 HSA limits as follows:

Annual contribution limitation. For calendar year 2018, the annual limitation on deductions for HSA contributions under § 223(b)(2)(A) for an individual with self-only coverage under a high deductible health plan is $3,450 (up from $3,400 in 2017), and the annual limitation on deductions for HSA contributions under § 223(b)(2)(B) for an individual with family coverage under a high deductible health plan is $6,850 (up from $6,750 in 2017).

High deductible health plan. For calendar year 2018, a “high deductible health plan” is defined under § 223(c)(2)(A) as a health plan with an annual deductible that is not less than $1,350 for self-only coverage or $2,700 for family coverage (up from $1,300 and $2,600 in 2017), and the
annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,650 for self-only coverage or $13,300 for family coverage (up from $6,550 and $13,100 in 2017).

Rev. Proc. 2017-37

Rev. Proc. 2018-18 (revising the previously-published annual limitation on deductions under Code § 223(b)(2)(B) for 2018 for an individual with family coverage under a high deductible health plan from $6,900 to $6,850)

Be Careful Before Denying COBRA to Employee Terminated for Gross Misconduct

The Ninth Circuit Court of Appeals has rendered a decision in Mayes v. WinCo Holdings that reminds employers to be very cautious about denying COBRA coverage based on the gross misconduct exception.

Facts
Defendant grocery store fired the plaintiff, who supervised employees on the night-shift freight crew, for taking a stale cake from the store bakery to share with fellow employees and telling a loss prevention investigator that management had given her permission to do so. The employer deemed these actions theft and dishonesty, and determined that the plaintiff’s behavior rose to the level of gross misconduct under the store’s personnel policies. Therefore, the employer fired the employee and did not offer COBRA coverage to her or her dependents. Plaintiff sued asserting gender discrimination claims under Title VII, a claim under COBRA, and wage claims.

The Law
Under COBRA, an employer does not have to offer COBRA coverage to an employee and their covered dependents if the employee is terminated for “gross misconduct.” Unfortunately, the COBRA statute does not define “gross misconduct,” and court decisions do not provide clear guidance on what that term means.

The Case
The trial court in this case initially ruled in favor of the employer, finding that theft and dishonesty can constitute gross misconduct under COBRA, regardless of the amount involved. The Ninth Circuit reversed, finding that there was sufficient evidence of the employer’s discrimination to allow the discrimination case to go to trial, and reasoning that if the employer fired the plaintiff for discriminatory reasons then that could not constitute termination for gross misconduct. Therefore, if the termination was discriminatory the employee and her dependents would be entitled to COBRA benefits and the employee could prevail on her COBRA claims.

Lessons for Employers
An employer terminating someone for violating company policy (such as theft), may be reluctant to offer them COBRA coverage, particularly where the employer’s plan is self-insured and, therefore, the employer sees the potential for large medical claims. However, denying COBRA coverage based on the gross misconduct exception is risky for a number of reasons.

First, if the employer is ultimately found to have denied COBRA incorrectly it is exposed to penalties for failing to offer coverage, and the employee and their dependents can get COBRA coverage retroactive all the way back to the initial termination of coverage. That scenario could happen in the Mayes case.

Second, if a terminated employee foresees having large medical claims, they will have a bigger incentive to sue to secure coverage. If they do file suit for COBRA coverage, they will invariably include other claims attacking the termination decision. Therefore, denying COBRA coverage increases the likelihood of a costly lawsuit challenging the termination decision.

Third, defending a case that includes a COBRA claim is also more difficult than a straight wrongful termination claim. It is easier for a judge to grant an employer summary judgment on a wrongful termination claim, which only affects the employee plaintiff, than it is to uphold a denial of COBRA, which directly affects the employee and her children, who are innocent bystanders. In most cases, therefore, an employer is better off defending a wrongful termination suit alone, and not also defending a claim that the employer failed to offer COBRA coverage.

For these reasons, in most cases discretion is the better part of valor and employers should not invoke the gross misconduct exception.

Some employers may be concerned that offering COBRA coverage after terminating someone for gross misconduct may undermine their defense of the termination decision (on the theory that offering COBRA means the termination must not have been for gross misconduct). This can be mitigated by including a self-serving cover letter on the COBRA offer indicating that while the reasons for termination most likely amount to gross misconduct, the employer is voluntarily choosing to offer the employee and their dependents COBRA coverage.

Qualified Employer Health Reimbursement Arrangements Permitted for Small Employers

The House and the Senate recently passed, and President Obama has signed, the “21st Century Cures Act”, which includes a provision exempting small employer health reimbursement arrangements (HRAs) from the Affordable Care Act’s (ACA’s) group plan rules, and from the excise tax imposed under Code Section 4980D for failure to comply with those rules. See our prior posts on the Section 4980D excise tax herehere and here. 

Background

HRAs typically provide reimbursement for medical expenses (which can include premiums for insurance coverage). HRA reimbursements are exclude-able from the employee’s income, and unused amounts roll over from one year to the next. HRAs generally are considered to be group health plans for purposes of the tax Code and ERISA.

The ACA market reforms, which generally apply to group health plans, include provisions that a group health plan (including HRAs) (1) may not establish an annual limit on the dollar amount of benefits for any individual; and (2) must provide certain preventive services without imposing any cost-sharing requirements for these services. Code Section 4980D imposes an excise tax on any failure of a group health plan to meet these requirements.

The IRS has previously distinguished between employer-funded HRAs that are “integrated” with other coverage as part of a group health plan (and which therefore can meet the annual limit rules) and so called “stand-alone” HRAs. A “stand alone” HRA  almost certainly does not meet the ACA group coverage mandates. 

The New Law

The 21st Century Cures Act provides relief from the Section 4980D excise tax effective for tax years after December 31, 2016 for small employers that sponsor a qualified small employer HRAIn addition, previous transition relief for small employers, i.e. those that are not an Applicable Large Employer (ALE) under the ACA, is extended through December 31, 2016.

Therefore, for plan years beginning on or before December 31, 2016, HRAs maintained by small employers with fewer than 50 employees will not incur the Section. 4980D excise tax even if the plans are not qualified small employer HRAs. For tax years after December 31, 2016, small employer HRAs will need to satisfy the requirements of a qualified small employer HRA.

Qualified Small Employer HRA

A qualified small employer HRA must meet all of the following requirements:

(1)  Be maintained by an employer that is not an ALE (i.e., it employs fewer than 50 employees), and does not offer a group health plan to any of its employees

(2)  Be provided on the same terms to all eligible employees. For this purpose, small employers may exclude employees who are under age 25, employees have not completed 90 days of service, part-time or seasonal employees, collective bargaining unit employees, and certain nonresident aliens.

(3)  Be funded solely by an eligible employer. No employee salary reduction contributions may be made under the HRA. 

(4)  Provide for the payment of, or reimbursement of, an eligible employee for expenses for medical care (which can include premiums) incurred by the eligible employee or the eligible employee’s family members.

(5)  The amount of payments and reimbursements do not exceed $4,950 ($10,000 if the HRA also provides for payments or reimbursements for family members of the employee). These amounts will be adjusted for cost of living increases in the future. An HRA can vary the reimbursement to a particular individual based on variations in the price of an insurance policy in the relevant individual health insurance market with respect to: (i) age or (ii) the number of family members covered by the HRA, without violating this requirement that the HRA be provided on the same terms to each eligible employee.

Coordination With Other Rules

If an employee covered by a qualified HRA does not maintain “minimum essential coverage” within the meaning of Code Section 5000A(f), they will be subject to the individual mandate tax penalty under existing law. Under the new law, their HRA reimbursements will also be taxable income to them. 

In addition, for any month that an employee is provided affordable individual health insurance coverage under a qualified HRA, he is not eligible for a premium assistance tax credit under Code Section 36B. 

Employer Reporting Requirements

For years beginning after December 31, 2016, an employer funding a qualified HRA must, not later than 90 days before the beginning of the year, provide a written notice to each eligible employee that includes:

(1) The amount of the employee’s permitted benefit under the HRA for the year; 

(2) A statement that the eligible employee should provide the amount of the employee’s permitted benefit under the HRA to any health insurance exchange to which the employee applies for advance payment of the premium assistance tax credit; and

(3) A statement that if the employee is not covered under minimum essential coverage for any month, the employee may be subject to the individual mandate tax penalty for such month, and reimbursements under the HRA may be include-able in gross income. 

For calendar years that begin after December 31, 2016, employers also have to report contributions to a qualified HRA on their employees’ W-2s. 

More… text of the 21st Century Cures Act.

Welfare Benefits Strategies For Small to Mid-Size Employers After The ACA

Lovitt & Touche’s Chris Helin has a great article out detailing two innovative approaches to dealing with the challenges posed to small and mid-sized businesses resulting from the continued rise in rates and coverage mandates under the Affordable Care Act (ACA).

Retention Accounting

Chris explains that “[w]hen you receive a quote from a carrier under a retention accounting contract instead of a fully insured contract, you are given the chance to share in the savings in a good claims year.” These contracts used to be available only to employers with more than 5000 people on their medical plan. They may now be an option even if you have as few as 100 employees on your plan.

Private Marketplace

The second approach is one on which Lovitt & Touche has taken a lead: the Private Marketplace. Not to be confused with the public exchanges, a private marketplace can be custom designed to deliver all of your welfare benefits, including medical, dental, vision, life, and disability. A private marketplace offers several innovations that employers may find attractive, including: (1) you can offer many more than just two or three plan designs within each insurance option; and (2) you can also use a defined contribution strategy and provide a specific dollar amount for each employee to spend.

Even if the ACA is repealed or significantly altered in 2017, these trends will likely continue, and they may be worth a look.

For more information read Chris’s article Here.

 

Arizona’s New Paid Sick Time Law Goes Into Effect July 1, 2017

Arizona voters recently approved Proposition 206, which will increase the minimum wage to $10 per hour, effective as of January 1, 2017, and provides all Arizona employees (other than employees of the federal or state government) paid sick time (PST) as of July 1, 2017.

This post summarizes the key issues that employers will need to address before July 1, 2017.   We will be providing more information and will assist clients in drafting a compliant policy in the coming months, as we expect clarification on the notice requirements in rules that will be issued by the Industrial Commission of Arizona (ICA).

Employers will likely want to create a new PST policy, which they provide to employees before 7/1/2017, and which explains the employees’ rights to PST under the new Arizona statute.

Coordination with Other Policies

In most cases, employers will want to make their PST policy separate from any existing Paid Time Off (PTO) policy, even though the two policies will refer to each other. In addition, existing PTO policies may need to be refined to ensure they work as smoothly as possible with the new PST requirements.

Your PST policy will need to coordinate with your FMLA leave policies, as the two types of leave may overlap in some instances, but they are not synonymous. Employers should also consider coordinating their PST policy with any self funded short term disability policy, to ensure that they do not have to pay out twice for the same leave (once under the STD policy and once under the PST policy)

PTO Accrual

  • If you are an employer of fewer than 15 employees, employees must be allowed to accrue and use up to 24 hours of PST per year and if you are an employer of 15 employees or more, employees must be allowed to accrue and use up to 40 hours of PST per year (the time is accrued 1 hour for every 30 hours worked)
  • FLSA Exempt employees are presumed to work 40 hours per week; unless they actually work less than 40 hours per week in which case they can accrue PST based on actual hours worked.
  • Time taken for PST can also reduce available PTO (if your PTO policy so provides).

Employees can take PST for Four Broad Reasons:

  • Their own mental or physical illness, injury or health condition, need for diagnosis, treatment or care, or for preventive care
  • Care of a family member with the above
  • Absences necessary due to certain domestic violence, sexual violence, abuse or stalking
  • Certain business closures due to public health emergencies.

Optional Policy Provisions 

In adopting a PST policy, employers will need to consider the following (we anticipate providing a checklist in the Spring of next year to help clients draft their policy to incorporate these choices):

  • Define a PST year:  Your policy will need to define when the PST year begins.  We generally recommend January 1, unless your company uses a different month for the beginning of the work year or your welfare benefits plan year.
  • Define the increments in which the employee can use the accrued PST:  may be used in the smaller of either an hourly increment or the smallest increment that your payroll system uses to account for absences or use of other time.
  • Termination of Employment:  Will you pay employees out for accrued PST upon separation of employment?  Most employers will not pay it out.
  • Carryover of PST or payout unused accrued PST at the end of the year? Employers have the option to pay out unused PST at the end of each year, or to carry it over.
    • We recommend that most employers not payout the unused PST and instead allow the time to carryover each year.   The employee will continue to accrue additional PST (up to 24 or 40 additional hours). However, the impact of this is limited because:
      • employees cannot use more than 24/40 hours of PST per year, regardless of how much PST they carry over and end up accruing in the new year, and
      • employers do not have to pay out PST upon termination of employment. The carry over therefore simply allows the employee to have the availability to use PST hours that were accrued and unused during the prior year – i.e. to use PST immediately in the subsequent year, as needed. The financial impact can be limited for most employers if their PTO policy is properly drafted to ensure this time is also deducted from an employee’s PTO bank.
  • Delay Availability of PST for New Hires (after 7/1/2017)? Newly hired employees will accrue PST once they commence employment, however employers may require that they wait until 90 calendar days after they commence employment before they can use any accrued PST.
  • Who in your organization will keep record of the PST? : Employers must keep records for 4 years.
  • Will you allow employees to borrow PST?:  Most employers will not allow borrowing of PST. However, many will revise the PTO policies to allow borrowing of PTO, if it is used for PST reasons (thereby increasing the likelihood that you will in fact reduce the amount of PTO available by each hour of PST taken).
  • What Procedures will you Adopt for Requiring Notice before an Employee Takes PST (both foreseeable and non-foreseeable)? (and how will you coordinate that with your current policy for requesting PTO)?
    • If you require notice of the need to use PST, even where the need is not foreseeable, your policy must include the procedures for the employee to provided notice.
  • What circumstances will you require proof of the need for PST (other than a request)?
    • You may request “reasonable documentation” that earned PST is used for a proper purpose only where an employee seeks to use three or more consecutive work days of PST.
    • “Reasonable documentation” is defined as “documentation signed by a health care professional indicating that the earned paid sick time is necessary.”
    • Where three or more consecutive PST days are used in cases of domestic violence, sexual violence, abuse, or stalking, the statute provides alternative forms of reasonable documentation that may be requested, such as a police report, a protective order, or a signed statement from the employee or other individual (a list of which appears in the statute) affirming that the employee was a victim of such acts.
    • If you currently require a doctor’s note for any single-day absence you will need to change that practice.

In addition to adopting a policy, and posting a required notice (a model of which the ICA will provide), employee pay statements must include or have enclosed a report of PST to include the following:

  • the amount of PST available;
  • the amount of PST taken to date; and
  • the dollar amount of PST paid year to date

We recommend clients wait until March/April of 2017 before drafting their PST policy and updating their PTO policies, because expected ICA rules will likely provide some guidance on the new law that may impact your policy choices.  We anticipate providing clients a checklist in the Spring to select the features they would like in a PST, and to draft policies based on those choices. We expect we will be able to provide that service for a low flat fee. Look for details in the Spring.

OSHA Issues Final Rules for Handling ACA Retaliation Claims

The Department of Labor’s Occupational Safety and Health Administration has published a final rule establishing procedures, time frames and burdens of proof for handling whistleblower complaints under the Affordable Care Act (ACA).

The ACA amended Section 18C of the Fair Labor Standards Act to protect employees from retaliation for receiving federal financial assistance when they purchase health insurance through an Exchange. It also protects employees from retaliation for raising concerns regarding conduct that they believe violates the consumer protections and health insurance reforms found in Title I of the ACA.

This rule establishes procedures and time frames for hearings before Department of Labor administrative law judges in ACA retaliation cases; review of those decisions by the Department of Labor Administrative Review Board; and judicial review of final decisions. Significant provisions in the final rule, and implications for employers include:

  • As with other retaliation claims, the complainant need not prove that the initial complaint, which they allege triggered the retaliation, pertained to an actual violation of law. They only need to show that they had a good faith belief that they were complaining about a violation of law.
  • To establish a prima facie case of retaliation for receiving a subsidy or premium assistance through an Exchange, an employee merely needs to show that an adverse action took place shortly after the protected activity.
  • This will be a very easy burden to meet where the employer has knowledge that the employee was receiving a subsidy or  premium assistance. For example:
    • an employee might ask the employer about the coverage available through his employment, for the purpose of applying for a subsidy through the Exchange.
    • in addition, under the ACA, when an exchange provides a premium subsidy it is supposed to notify the employer. This will provide the employer specific notice that the employee has requested or is receiving a subsidy.
    • the employer’s knowledge of the above could prove fatal to the employer’s defense of a retaliation claim, unless the employer scrupulously segregates such knowledge from those making employment decisions.
  • Once a claimant establishes a prima facie case, the burden shifts to the employer to establish by clear and convincing evidence that it would have taken the adverse action even if the protected activity had not occurred. This is a very high standard.

More…

The Final Rule

OSHA’s Affordable Care Act fact sheet provides more information regarding who is covered under the ACA’s whistleblower protections, protected activity, types of retaliation, and the process for filing a complaint.

IRS Information Letters Provide Further Guidance on “Employer Payment Plans”

The IRS has released a series of information letters providing further guidance on the application of ACA group health plan market reforms to various types of employer health care arrangements. These information letters provide further definition to when the IRS will consider an arrangement to be an impermissible “employer payment plan” that does not satisfy the ACA market reforms. As previously discussed here and here and here, adopting an impermissible employer payment plan exposes employers to excise taxes under Code § 4980D ($100 per day per affected individual).

I. Opt-Out Arrangements. In Letter 2016-0023 the IRS indicated that if an employer pays additional taxable compensation to employees who forgo coverage under the employer’s group health plan (opt-out payments), due to having other coverage, the employer will not trigger the 4980D excise tax, as long as the amount of additional taxable compensation is unrelated to the cost of the employee’s other coverage.

II. Small Plans Exception. In Letter 2016-0005 the IRS allowed reimbursement of individual policy premiums provided that there is only one “active” employee in the plan. This is because the ACA market reform rules do not apply to a group health plan if the plan has less than 2 participants who are active employees.

III. Relief For S Corporations. Letter 2016-0021 explains that S Corporations may continue to pay for or reimburse premiums for their “2% shareholders-employees” without being subject to Code 4980D excise taxes, until further guidance is issued (this position was previously stated in Notice 2015-17).  This relief does not, however, apply to S corporation employees who are not 2% owners.

IV. Beware of Promoters Promising They Can Structure a Plan to Allow Reimbursement of Individual Policy Premiums. In Letter 2016-0019  the Treasury explains that it has been made aware of a number of what it describes as “schemes”, whereby promoters are marketing products that they are claiming will allow employers to reimburse individual health policy premiums without violating the ACA market reforms. Treasury is looking at the information and warns that it disagrees with the promoters’ claims that their product does not impose an annual limit on essential health benefits. Consequently, their product fails to meet the market reforms.

IRS Publishes Affordable Care Act Estimator Tools

The IRS Taxpayer Advocate Service has posted several useful tools for individuals and employers to help determine how the ACA may affect them and to estimate ACA related credits and payments.

The Employer Shared Responsibility Provision Estimator helps employers understand how the Employer Mandate works and how the penalties for not complying with the Employer Mandate may apply.  Employers can use the estimator to determine:

  • The number of their full-time employees, including full-time equivalent employees
  • Whether they might be an Applicable Large Employer (ALE)
  • If they are an ALE, an estimate of the maximum amount of the potential liability for the employer shared responsibility payment that could apply to them, based on the number of full-time employees that they report, if they fail to offer coverage to their full-time employees

Caution: this tool is only designed for use in 2016 and forward (it is not designed to estimate 2015 penalties). Moreover, the tool can only provide an estimate of the maximum amount of potential liability for the employer shared responsibility payment.