Compliance – ACA & Other

New Rules for Short-Term Health Plans may help employees in transition

The new rule will allow individuals to purchase short-term, limited-duration health insurance coverage for a period of less than 12 months, and renew coverage for up to 36 months. Under current law, the maximum coverage period is less than 3 months, and cannot be renewed.

Short-term, limited-duration health insurance is:
• Not required to comply with the Affordable Care Act’s ban on pre-existing condition exclusions and lifetime and annual dollar limits.
• Not required to comply with the Affordable Care Act’s essential health benefits requirement, which requires individual health insurance policies to cover, among other things, hospitalizations, emergency services, and maternity care.

The short-term health plans are typically much less expensive than fully-insured plans found on the marketplace or coverage provided through an employer’s COBRA continuation option. An employee with pre-existing conditions may not be interested, however health employees may find the short-term policies much less expensive and opt for the coverage.

 

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

COBRA Check

Who is administering your COBRA? If it’s an insurance carrier they may not be administering all aspects of the eligible benefits. Read and make notes, better yet verify your COBRA plan is being properly administered. The fines for failing to do so can be staggering.

COBRA provides former employees, spouses, and dependent children the right to temporary continuation of health coverage at group rates. But you knew that. And most likely you know it covers dental and vision. However, did you know it covers EAP, GAP (group, not individual), Telemedicine, FSA and HRA plans?

The tricky administration comes FSA, the rules are based the 12-month plan year, which might not be the calendar year. If an employee has funds remaining in their FSA account at the end of the plan year they may not be able to use it in the next plan year. i.e. If the FSA is a December 1 to November 30 and an employee terminates on June 5, 2018, if they elected COBRA, that participation would end on November 30, 2018.

HRA accounts can also cause issues. HRA dollars must be available to COBRA participants. Employer’s may not like paying medical bills of former employees, it drives up their utilization rate.
Remember, COBRA was set up to protect employees, not employers.

Thanks to Susan Luskin, Diversified Administration www.div125.com, for her excellent CE class “If we have an Individual Mandate, why do we still need COBRA?” The above is a small, but important, part of her class.

 

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

Association Health Plans – An update from the DOL

The DOL issued a new rule that allows employers to join together to offer group health insurance coverage. The rule allows association health plans to be formed based on industry or geography, such as by state, city, county, or multi-state metropolitan area.

The association health plans will be subject to the large group coverage nondiscrimination rules. These rules prohibit discrimination based on a health factor or within groups of similarly situated individuals. The rules however do provide plans to impose different eligibility provisions and costs based on employment-based classifications, full-time versus part-time.

These insurance plans would not be subject to requirements under the Affordable Care Act (ACA) which included mandatory coverage for a set of 10 essential health benefits, such as maternity and newborn care, prescription drug costs and mental health treatment. However, they are expected to be considerably less expensive than Obamacare plans. The warning from health providers, insurers and medical groups is the plans could drive up premiums by siphoning off healthy consumers who want cheaper coverage, leaving behind a sicker patient pool with higher medical costs in Obamacare plans.

States and the Federal government would share regulatory oversight of the plans, with states retaining their current authority.

Click here for more information from the DOL.

 

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

IRS ANNOUNCES REVISED 2018 HSA CONTRIBUTIONS LIMITS

Update: Posted on April 27, 2018 

The Internal Revenue Service (IRS) has re-established $6,900 as the 2018 health savings account (HSA) contribution limit for individuals with family coverage under a high deductible health plan (HDHP).

 

Original Post on March 7, 2018

The IRS has announced the limits for HSAs have been revised for 2018. The adjustments are the result of changes made in the Tax Reform bill.

What changed? 

The annual HSA limit for family contribution went down from $6,900 to $6,850 and it is retroactively effective back to January 1st, 2018. The annual single limit of $3,450 remains unchanged.

 

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

“Cadillac Tax” and Health Insurance Industry Fee Delayed in Spending Bill

A major victory in the continuing resolution that is keeping the federal government funded. The package included an additional two-year delay of the Cadillac Tax on employer-sponsored health insurance plans until 2022 and a moratorium in 2019 of the Health Insurance Tax on all plans.

Previously suspended for 2016 and 2017, the 2.3% excise tax on U.S. medical device revenues also restarted on Jan. 1, but will now remain suspended for two years through the end of 2019.

 

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

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) $1,350 / $2,700
Maximum Out-of-Pocket Limit (Individual/Family) $6,650 / $13,300

Health Savings Accounts
Individual / Family $3,450 / $6,900 IRS announced change to $6,850 March 5, 2018
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.

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.

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.

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