Compliance – ACA & Other

2020 EMPLOYEE BENEFITS UPDATE

As we head into a new year, there will be some noticeable changes in employee benefits that you and your clients should be made aware of. The following list encompasses a few of the items you may expect to change:

Required Reporting
Effective January 1, 2020, Medicare Secondary Payer reporting will now include prescription drug coverage. Right now, this is an optional procedure. It is handled by insurance carriers and third-party administrators. Employers should be aware that they may get requests for information from those carriers and third-party administrators. A more detailed explanation can be found here.

PCORI Fee Elimination
The PCORI fee will be eliminated for plan years ending before October 1, 2019. If an employer’s plan year ends between October 1, 2018 and December 31, 2018, then the last PCORI fee for that plan should have been paid by July of 2019. This would generally include plans that have plan years beginning November 1, December 1, or January 1. All other plans will make their last PCORI fee payment by the end of July 2020.

Out-of-Pocket Maximum Increase
In 2020, out-of-pocket maximums will increase to $8,150 for self-only coverage and $16,300 for family coverage. This represents an increase of about 3.20% from last year. HHS requires that the individual out-of-pocket maximum be embedded for each individual within the family OOPM. You can refer to the 2020 Benefit and Payment Parameters found here.

Health Insurance Tax
The Health Insurance Tax (HIT) which has been on a moratorium for 2019, will make a return in 2020 unless Congress acts on pending legislation to delay or repeal. This would result in increased premiums ranging from 2.7% to 4% according to actuarial experts.

Employer Mandate Affordability
The affordability percentage used in the safe harbors will be reduced to 9.78% in 2020. Employers should review their contribution levels to make sure they are within the new percentage requirement.

Individual Mandates in the States
Effective January 1, 2020, California and Vermont will have an individual mandate that will require employer reporting to be completed in 2021. New Jersey, which already has an individual mandate in place, will have to complete the employer reporting in 2020.

Self-Funded Plans
Employers that self-fund may have different benefits that cannot be subject to annual and lifetime limits. Self-insured employers should reevaluate which state plan they use as their benchmark for purposes of determining which benefits cannot be subject to annual and lifetime limits.

2020 Employer Mandate Penalties
As they do each year, the Department of Health and Human Services (HHS) calculates the health insurance premium growth rate. That rate is then used to adjust the amount of the ACA employer mandate penalties. Although not finalized, the 2020 employer mandate penalties could be $2,570 for the (a) penalty and $3,860 for the (b) penalty.

There is a lot of pending legislation that Congress could still take up before the recess. Issues pertaining to a Cadillac Tax repeal, transparency in prescription drug prices (H.R.3), redefining a full-time employee, surprise billing, and employer reporting can all be potentially addressed in the coming weeks.

 

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

Preventive Care Benefits Expanded

A new IRS notice expands the list of preventive care benefits that may be covered. Expansion provides coverage without a deductible for some chronic conditions.

“This notice expands the list of preventive care benefits permitted to be provided by a high deductible health plan (HDHP) under section 223(c)(2) of the Internal Revenue Code (Code) without a deductible, or with a deductible below the applicable minimum deductible (self-only or family) for an HDHP.”

Carriers / Plan Sponsors can now use a lower than the minimum deductible for the preventive care benefits, but still need a minimum deductible for the other services. The new change doesn’t affect what is generally considered “free preventive” but instead simply allows carriers / plan sponsors — if they wish — to start offering CDHPs which cover these additional items, while not endangering their ability to be combined with an HSA.

Thus, employees could still contribute to an HSA now that these services are considered to be preventive. These services would not need to be “free”; for non-HDHP group plans, it will not make a difference to the participant, but for someone in an HDHP plan who wants to contribute to an HSA, it’s a big deal.

The following treatments have now been classified as preventive care for the chronic conditions indicated.

  • Angiostatin converting enzyme (ACE) inhibitors (for congestive heart failure, diabetes, and coronary artery disease);
  • Anti-resorptive therapy (for osteoporosis and osteopenia)
  • Beta-blockers (for congestive heart failure and coronary artery disease)
  • Blood pressure monitors (for hypertension)
  • Inhaled corticosteroids (for asthma)
  • Insulin and other glucose-lowering agents (for diabetes)
  • Retinopathy screening (for diabetes)
  • Peak flow meter (for diabetes)
  • Glucometer (for diabetes)
  • Hemoglobin A1c testing (for diabetes)
  • International normalized ratio testing (for liver disease and bleeding disorders)
  • Low-density lipoprotein (LDL) testing (for heart disease)
  • Selective serotonin reuptake inhibitors (SSRIs) (for depression)
  • Statins (for heart disease and diabetes)

The change is effective July 17, 2019.

 

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

Silver-loading

Silver-loading refers to health insurers loading premium increases on the popular silver-level exchange plans to make up for the loss of Cost Sharing Reduction (CSR) payments. Loading premium surcharges onto silver plans boosted the size of the premium tax credits available to people with incomes below 400% of the federal poverty level. – The Trump Administration in an effort to end silver-loading has proposed changes to the current regulations.

Employee Benefit Advisor’s blog tends to focus on Human Resource and Benefit group related issues, like our monthly HR & Benefit Advisory publication. However, we believe silver-loading is an issue of interest to all in our field.

 

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

2020 Cost Sharing Limits

Out-of-pocket expenses may not exceed $8,150 for self-only coverage or $16,300 for family coverage in 2020. – Ouch!

Employers will need creative solutions to help employees afford these limits. Hint: EBA can help.

 

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

AHPs are out – For Now

A federal judge has ruled that two parts of the Department of Labor (DOL) rule expanding employers’ ability to join in Association Health Plans (AHPs) violate ERISA. The DOL AHP rule was formed to allow employers to band together to create health plans based on industry or geography.

The federal court opinion stated that the rule was an “end-run” around the Affordable Care Act, and that the DOL exceeded its authority when it defined “employer” in the rule to include associations of dissimilar employers. The court also struck down a part of the DOL rule that expanded memberships in AHPs to working owners without employees.

The plans at issue allow groups of small businesses and sole proprietors to band together to offer lower-cost coverage that doesn’t have to include all the benefits required by “Obamacare.” The plans also can be offered across state lines. The Judge ruled against AHPs because they go against established definitions of what constitutes an employer under federal law that governs workplace health and pension benefits. In particular, a decision that sole proprietors can be counted both as employers and employees.

The judge ruled treating sole proprietors like major employers “creates absurd results.” For example, said the judge, consider a hypothetical association of 51 sole business owners with no employees. Under the administration’s rule, they would in effect be counted as having 51 employees. Not only that, each of the 51 working owners would also be counted as an “employer” although they have “zero” people working for them. And the association also would count as an employer, for a total of 52 employers.

The Trump administration disagrees with the judge’s ruling on association health plans and is “considering all available options,” including an appeal.

EBA’s opinion is that anything that can help sole proprietors and small companies lower their health care cost is good thing. The judge made a bad ruling.

 

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

2019 ACA deadline dates for 2018 reporting

February 1, 2019
Employers start receiving 2018 tax year exchange notices
 

February 28, 2019
Deadline to file 1094-C/1095-C schedules if paper filing
 

March 4, 2019 (Previously January 31,2019)
IRS deadline to furnish 1095-C schedules for 2018 employees
 

April 1, 2019
Deadline to file 1094-C/1095-C schedules if electronic filing
 

April 15, 2019
Individual tax returns for 2018 are due
 

July 31, 2019
Form 720 (PCORI) for 2018 due from self-insured plans (includes self-insured employers)
 

August 1, 2019
Late filing deadline for annual IRS information filing for ACA
 

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

IRS Guidelines – Indexed for 2019

FICA
Social Security Tax is 6.2% on income up to $132,900 up from $ 128,400
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) $6,750 / $13,500

Health Savings Accounts
Individual / Family $3,500 /  $7,000
Catch-up Contribution $1,000

ACA Plan Limits

Out-of-Pocket Limits Individua; / Family $7,900 / $15,800

Flexible Spending Accounts
Health Care Flexible Spending Account Maximums $2,700
Dependent Care Spending Account Maximum $5,000

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

Parking (monthly) $265
Mass Transit Passes (monthly) $265

Compensation
Compensation Limit $280,000
Highly Compensated Employee Salary Amount $125,000
Annual Compensation for Key Employee $180,000
Defined Benefit Plan Limit $225,000
Defined Contribution Plan Limit $56,000

Retirement Plans
401(k) $19,000
401(k) Catch-up $6,000
403(b) $19,000
457(b)(2) and 124(c)(1) $19,000
457(b) Catch-up $6,000

IRA Limit $6,000/$7,000 for age 50+
Simple IRA Limit $13,000/$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.

Cologuard vs Colonoscopy

Concerned about being at risk for colon cancer? Don’t like the idea of a colonoscopy? You may want to consider learning more about Cologuard, an at-home testing kit that screens you for colon cancer.

 What it is.
Cologuard is a noninvasive, prescription-only test. It’s designed for adults 50 years or older who are at average risk for colon cancer.

What it’s not.                 
Cologuard is not a replacement for diagnostic or surveillance colonoscopy in high risk individuals. If you have a medical history that includes colon cancer, polyps, or related cancers, it isn’t right for you.

How to tell if it’s for you.
The first step is to discuss the Cologuard testing kit with your healthcare provider. Once your healthcare provider approves the prescription, your kit can be ordered. It will be delivered right to your door.

How effective is it?
In 10,000 testing cases, Cologuard screenings discovered 92% of colon cancers and 42% of high-risk pre-cancers. Since both false positives and false negatives occur, Cologuard encourages positive-results patients to follow-up with a diagnostic colonoscopy. Negative-results patients are encouraged to participate in additional screenings at intervals.

 Will your insurance cover it?
Preventative Care / Screenings are covered at no cost under the Affordable Care Act. Cologuard is covered by most insurers with no co-pay or deductible for eligible patients (ages 50-75; at average risk for colon cancer; without symptoms). Cologuard is covered by Medicare and Medicare.

If your insurance provider doesn’t cover it or only covers part of the costs, Cologuard’s appeal department will assist you in creating an appeal letter to send to your insurance company.

The Cologuard screening is FDA-approved and has been in use since 2014.

 

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

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.

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