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IRS will NOT accept 1040 without ACA Health Coverage Reporting

Employee Benefit Advisors recommends companies inform employees of the following. – The original announcement came out in October 2017, however EBA thought it would be a good reminder to post at this time.

Reminder: The new tax law does not actually repeal the individual mandate. It eliminates the penalty (penalty is zero) starting in 2019, not 2017 or 2018. However, the penalty can be reinstated with an update to the tax law.   The requirement for companies with 50+ FTEs to offer health insurance remains.

 

The IRS has stated that it will not accept Forms 1040 for the 2017 tax year if the taxpayer does not report on the ACA’s health coverage reporting requirements. This is the first year that the IRS has put in place system changes to its Form 1040 review process that would reject tax returns during processing in instances where the taxpayer does not provide this information.

Background. The ACA’s individual mandate requires most individuals to obtain minimum essential health insurance coverage for themselves and any dependents or pay a penalty. Form 1040 instructs taxpayers to report whether they (and every dependent listed on their return) had health insurance coverage, were eligible for an exemption from the ACA’s coverage requirement, or will make an individual shared responsibility payment.

For prior tax seasons, the IRS had delayed processing of tax returns that did not answer the health care coverage questions, but it did not prevent the return from ultimately being processed.

Guidance. For 2017 tax returns, the IRS has stated it will not accept the electronic tax return until the taxpayer indicates whether they (and all of their dependents) met the ACA requirements or are paying the penalty. In addition, returns filed on paper that do not address the ACA reporting requirements may be suspended pending the receipt of additional information, and refunds may be delayed.

In response to the IRS’s revised review process for Forms 1040, to avoid refund and processing delays when filing 2017 tax returns, taxpayers should indicate whether they (and everyone listed as dependents on their tax return) had health insurance coverage, qualified for an exemption or made a shared responsibility payment.

The IRS guidance is available at: https://www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals

 

Content is provided for information purposes by The Wagner Law Group and may not be relied upon as specific legal advice.

IRS Guidelines – Indexed for 2018

FICA
Social Security Tax is 6.2% on income up to $128,400 up from $ 127,200
Medicare Tax unlimited 1.45% to Unlimited

High Deductible Health Plans
Minimum Annual Deductible (Individual/Family) $1,3500 / $2,700
Maximum Out-of-Pocket Limit (Individual/Family) $6,650 / $13,300

Health Savings Accounts
Individual / Family $3,450 / $6,900
Catch-up Contribution $1,000

Flexible Spending Accounts
Health Care Flexible Spending Account Maximums $2,650
Dependent Care Spending Account Maximum $5,000

Mileage & Transportation
Standard Mileage Rates
54.5 cents per mile for business miles driven
18 cents per mile for medical or moving purposes
14 cents per mile driven in service of charitable organizations

Parking (monthly) $260
Mass Transit Passes (monthly) $260

Compensation
Compensation Limit $275,000
Highly Compensated Employee Salary Amount $120,000
Annual Compensation for Key Employee $175,000
Defined Benefit Plan Limit $220,000
Defined Contribution Plan Limit $55,000

Retirement Plans
401(k) $18,500
401(k) Catch-up $6,000
403(b) $18,500
457(b)(2) and 124(c)(1) $18,500
457(b) Catch-up $6,000
IRA Limit $5,500/$6,500 for age 50+
Simple IRA Limit $12,500/$3,000 Catch-Up

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Obamacare Driving New Wave of Hospital Bankruptcies

Health-care bankruptcy filings have more than tripled this year according to Bloomberg, and an index of Chapter 11 filings has reached record highs (industry companies with more than $1 million of assets). It’s expected that for 2018 the trend will increase; hospitals and other medical companies are likely to restructure their debt or file for bankruptcy.

How is Obamacre contributing to the hospital failures?  Obamacare’s architects were so certain their legislation would completely eliminate uninsured citizens in the U.S., they decided to offset the costs of the “Affordable Care Act” by eliminating subsidy payments to hospitals that had previously been used to cover losses from treating uninsured patients. Regulatory changes, technological advances and the rise of urgent-care centers have created a “perfect storm” for health-care companies.

Content source, ZeroHedge by Tyler Durden.

Pharmacogenetics

Pharmacogenetics allows prescribers and pharmacists to understand how medications react differently in the body based on an individual’s metabolism. Best Practice PBMs are able to apply the results of a fast and easy-to-administer pharmacogenetics test to enhance member safety, improve treatment outcomes and prevent wasteful drug spending.

The science of pharmacogenetics utilizes precision medicine, which evaluates and considers a patient’s metabolism, environment and lifestyle, to develop effective, individualized treatment plans. Pharmacists work with members and their prescribers to coordinate changes in drug therapies, as indicated by testing. This ensures that members receive the most clinically appropriate and effective medications. By proactively identifying which drug therapies will not work, or are likely to cause severe adverse reactions, clients and their members can avoid unnecessary risks and expenses.

Pharmacogenetic testing can have a measurable positive impact for members who live with chronic health challenges such as diabetes or high cholesterol. Pharmacists can help them move quickly onto the most appropriate drug therapy and improve their health with fewer side effects and less risk, based on their unique metabolism.

There are no doctor’s visits required to administer the test. Members can collect and submit the sample from home using a simple cheek swab. The markers identified by pharmacogenetic testing do not change over a member’s lifetime, so repeat tests are not required.

Pharmacogenetics enables a personalized approach to care aimed at reducing costs, improving treatment efficacy and preventing adverse drug reactions.

Please contact me if you would like to learn more.

 

Employee Benefit Advisory provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

PBM – Looking for transparency?

Are you contracting with a large PBM because they offer great discount? You might want to rethink your strategy and look to smaller PBMs with complete transparency. Perhaps it’s time to consider a pharmacy benefits administrator that offers the following:

  • A straight forward pricing model with no hidden revenue generators such as spread pricing. Look for invoice of the exact amount that reflects retail contracts. No spread should be retained for brands or generics.
  • Minimum retail guarantees, not maximums or estimates. If better rates are negotiated during the contract term, the PBM should pass through those discounts.
  • Mail order prescription charges based on the actual acquisition cost.  The amount billed should match the invoice cost, plus a fixed dispensing fee. Is your BPM willing to provide mail order purchasing invoices to validate their actual acquisition cost?
  • “Generic” and “Brand” defined exactly as Medispan does– no change in definitions.
  • No financial interest in any pharmaceutical manufacturer. BPM should pass through 100% of rebates received associated with a client’s brand utilization.
  • Fulfilled promises.  Annual reconciliation occurs and the BPM will make up any loss where the guarantee is not met by paying clients back for each dollar over the amount that was guaranteed.

Who is Employee Benefit Advisors describing? Contact us and make a referral on your behalf.

 

Employee Benefit Advisory provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Knock Out Blow? – Trump Ends Cost-Sharing Reduction Subsidies

The White House confirmed Thursday that it will stop making federal payments for cost-sharing reductions, payments to health insurers. The Department of Health and Human Services confirmed that the cutoff would be immediate. This action could throw the Marketplace into immediate turmoil as insurers start to evaluate their options for 2018.

Many, certainly democrats, have been calling for a bi-partisan solution to the health care problems in America. However, let’s not forget, it was the democrats that ramrodded the misnamed Affordable Health Care Act through the legislative process, behind closed doors, with absolutely no input from republicans.

Employee Benefit Advisors has blogged several times about legal challenges to the ACA, specifically pin pointing, the Obama administration saying they did not receive, but needed, an appropriation to make these payments to insurance companies. Obama used executive orders to put into place key finance regulations behind the ACA. Problem is, what can be done by executive order can be undone by executive order.

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Trump’s Executive Order – What it is & What happens next

President Trump signed an executive order in an attempt to improve access, increase choices and lower costs for healthcare.

What Is in the EO?

The EO directs the secretary of Labor to consider proposing regulations or revising guidance to expand Association Health Plans. The intent of this directive is to allow employers in the same line of business anywhere in the country to join together to offer healthcare coverage to their employees. It could potentially allow employers to form AHPs through existing organizations, or create new ones for the express purpose of offering group insurance. This could lead to the sale of insurance across state lines through AHPs; however, more action will need to be taken by the Department of Labor before this option can be available.

The EO directs the secretaries of HHS, Treasury and Labor to consider proposing regulations or revising guidance to expand short-term limited duration insurance (STLDI). This directive would allow the agencies to revisit the rule enacted by the Obama Administration that limited the length of STLDI plans to three months.

The EO directs the secretaries of HHS, Treasury, and Labor to consider proposing regulations or revising guidance to expand Health Reimbursement Arrangements. The intent of this directive is to allow employers to contribute more to their employees’ HRAs. HRAs are employer-funded accounts that reimburse employees for healthcare expenses, including deductibles and copayments. The IRS does not count funds contributed to an HRA as taxable income. The intent of this directive is to expand HRAs, which could provide employees with more flexibility in how their healthcare is financed.

What Happens Next?

The EO directs the secretary of Labor to act within 60 days to consider proposing regulations or revising guidance on AHPs. It also directs the secretaries of Treasury, Labor and HHS to act within 60 days to consider proposing regulations or revising guidance on STLDIs, and for the agencies to act within 120 days to consider changes to HRAs.

Within 180 days, the secretary of HHS, in consultation with the secretaries of Treasury, Labor and the Federal Trade Commission, must report to the president on state and federal laws, regulations and policies that limit healthcare competition and choice, as well as on actions that federal and state governments could take to increase competition and choice and reduce consolidation in healthcare markets.

The EO does not direct the agencies to adopt specific regulations; therefore, in order for any policies to change, the agencies will have to go through the traditional rule-making procedures of providing a proposed rule for public comment before being able to enact any final rules.

What about Open Enrollment for 2018?

At this time, nothing in the EO will affect open enrollment for 2018 unless regulatory action is taken by the agencies. Until any such regulations are enacted, the ACA and all of its regulations, penalties and enforcement remain.

 

Content provided by a statement from the National Association oh Health Underwriters of which Employee Benefit Advisors is a member.

What is Reference Based Pricing?

With RBP plans are designed to negotiate treatments with high-quality providers at reduced costs and can work in different ways, depending on the insurance carrier or TPA. – Sound like a PPO or HMO? Not quite.

RBP can have no network restriction, a network and use a network within a network. Call it Creative Networking where certain services may require the use of select networks, a Network within a Network.

All reimbursements are based on a fixed amount for a particular procedure, such as dialysis and hospital stays – two biggies, which certain providers will accept as payment in full. Reimbursement is based on a reasonable fee or multiple of Medicare. Under this type of arrangement, reimbursement rates range between 120% and 180% of Medicare.

RBP product could offer you 72-77% savings over traditional PPO plans. (A national survey found less than 1% of providers do not accept this type of health benefit plan.)

 

 

Discover the referenced based pricing solution that offers a significant improvement in savings without compromising quality care. Save on claims costs without provider and facility restrictions.

 

Employee Benefit Advisory provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Power of THE Pen – Trump holds the key to Repeal!

Many have forgotten that our Congress (Senate and State Representatives) and public employees are not fully subject to Obamacare. President Trump can change that with a stroke of THE Pen.

Congress was initially subject to the ACA. However, after a meeting with Senate Democrats in March 2013, Obama exempted Congress from section 1312(d)(3)(D). That section would have required Congress and their staff to buy insurance through an Obamacare exchange and does not authorize an employer contribution toward their premium. Congress and their staff would lose their taxpayer-funded, gold-plated health care rather than go into Obamacare and pay their own way.

The Office of Personnel Management (OPM), under the instruction of President Obama, ruled “the DC Health Link Small Business Market administered by the DC Benefit Exchange Authority, is the appropriate SHOP from which Members of Congress and staff purchase health insurance in order to receive a government contribution (subsidy). The Congress employees thousands, not the required 50 or fewer required to be eligible for the DC (or any) Exchange.

Federal Employees Health Benefits Program: Members of Congress and Congressional Staff, 78 Fed. Reg. 60653- 01 (Oct. 2, 2013). https://www.gpo.gov/fdsys/pkg/FR-2013-10-02/pdf/2013-23565.pdf

President Trump has the power to end this abuse by directing OPM to rescind the rule and issue a new one that conforms to the statutory requirement the congress and their staff pay their own premiums in the individual Obamacare Exchange.

Employee Benefit Advisory provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services.

Why are costs for prescriptions so much higher in the United States?

Specialty pharmacy will be 50% of a health plan’s drug spend by 2018. By 2020 pharmacy will be 50% of total healthcare spend. Pharmacy is the most utilized and least understood of healthcare costs.

Why are costs for prescriptions so much higher in the United States than other countries? The easy answer is that Americans are paying a disproportionate share of the research cost for prescription drugs. The why is a little more complicated. It’s compulsory pricing, a law countries have on the books that states if the government can’t reach an agreement with drug companies over a price the government is willing to pay, the government can say the drug companies are not making their products available in the country, and can license a different company to make and sell the drug. Either drug companies negotiate a deal in with low profit, to cover manufacturing, or they lose their intellectual property rights.

So why not import drugs from other countries to bring more competition into the US market to lower costs? Safety. Large volumes of ‘unapproved’ drugs that enter the US pose a threat to the security of our nation’s drug supply. The potential of being flooded with unsafe and counterfeit drugs could kill thousands of Americans.

Proper security requires careful monitoring and control. Companies must put anti-counterfeiting and anti-tampering markings on every drug they make around the world. Although that currently works well in some countries, in others it’s problematic. We increase the threat of terrorism, ‘friendly’ or not, with each additional country we import prescription drugs.

 

Employee Benefit Advisors provides employee benefits, tax-advantaged healthcare, compliance guidance for ACA and Health & Welfare DOL Audits, and PEO Advisory & Consulting Services. We can customize a wellness plan for your budget and culture.

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