Compliance – ACA & Other

CMS warning Hospitals on price transparency failure

(Read EBA’s Health Care Transparency December 8, 2020 blog for background.)

Centers for Medicare & Medicaid Services has started issuing warning letters to hospitals not in compliance with the hospital price disclosure rule.

The purpose of the rule, effective Jan 1., is to make hospital pricing information readily available to patients to compare costs and make more informed healthcare decisions. Hospitals are required to post machine-readable file with the negotiated rates for all items and services and display the prices of 300 shoppable services in a consumer-friendly format.

Hospitals have 90 days to respond. If still not in compliance, it may receive a second warning letter or it may be sent a request for a corrective action plan, CMS said.

What happens if a hospital is noncompliant? CMS may request a corrective action plan, or assess a penalty of up to $300 per day, and possibly publicize the penalty on a CMS website.

 

Employee Benefit Advisors provides, employee benefits, Healthcare Consumption Audits, 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.

COBRA and The American Rescue Plan Act

The American Rescue Plan Act of 2021 (“ARPA”) includes major changes to COBRA administration in 2021.image of a cobra snake

The Act creates an opportunity for free COBRA coverage during a six-month period from April through September 2021 for employees (and their family members) who experience a loss of group health coverage due to involuntary termination or reduced hours of employment.

The following will begin effective on 4/1/2021. – Employee Benefit Advisors would like to thank Diversified Administration in Hollywood Florida for providing the outline of the ARPA.

100% subsidies for COBRA Qualified Beneficiaries where the qualifying event was an involuntary termination of employment or reduction in hours, beginning 4/1/2021 (if signed this month) through September 2021 (6 months)
• The 100% subsidy is based on a COBRA premium that includes the 2% administrative fee that health plans are permitted to charge for COBRA. The assistance eligible individual does not pay the COBRA premium, but rather the premium initially is “advanced” by the employer, plan, or insurer and then reimbursed by the government through a refundable tax credit (against Medicare hospital insurance (HI) taxes).
• The subsidy will begin for coverage periods beginning on April 1, 2021 and ending on September 30, 2021. The subsidy would end sooner if the qualified beneficiary’s maximum COBRA coverage period ends or if the individual is eligible for another group health plan or Medicare.

Anyone in the COBRA-Election-Window, extending all the way back to last March (3/1/2020), or anyone who terminated COBRA early will have a special enrollment period for 60 days from the date that they receive a new required COBRA notice to make a new election for COBRA. Their COBRA will begin 4/1 and will be free for up to 6 months
• The COBRA Participant can have a GAP in coverage from their event date through 4/1 (This is entirely new to COBRA)
• If someone’s 18 months of COBRA expires before September, they do not get extra time on COBRA, their COBRA expiration date(s) are not extended in any way.

Anyone on COBRA, in the Election-Window or terminated COBRA early who is still within their COBRA Maximum Coverage Period (usually 18 months) can change plans (to a lower plan) 4/1/2021 in the special enrollment window.
• This is Optional and an employer can choose whether or not to offer this option to COBRA Qualified Beneficiaries.

Employers will have to review and audit all terminated employees back to March 1 of last year and determine if any former employees’ terminations were voluntary or involuntary.
• We have this reporting ability already, so some employers are already sending this info. However, many employers use the generic “Termination of Employment” option, all those will need to be reviewed by HR
• If your company uses file feeds, those must be updated accordingly to send the specifics on each termination of employment event.
• If your company uses our online COBRA event tools, the options to select Voluntary/Involuntary Terminations has always been an option, we will remove the option to submit Termination of Employment from the web-portals before 3/31/2021.

Employers are required to send notices to everyone terminated since last March
• The Act tasks the Department of Labor (DOL) and Internal Revenue Service (IRS) with issuing regulations and guidance regarding the application and administration of the COBRA subsidy provisions of the Act.
• In addition, the Act requires the DOL to produce model COBRA election notices within 30 days of enactment and a model COBRA premium subsidy expiration notice within 45 days of enactment.
• Employers will have to wait for these model notices to send, to ensure compliant notices are sent.
• Diversified Administration (my go to COBRA Administrator) will handle the generation and distribution of the notices for all COBRA clients once model notices are released.

Employers also have a second notice requirement at the end of the person’s subsidy period, to advise them of such.
• Diversified Administration will handle the generation and distribution of the notices for all COBRA clients.

Employers will have to pay up front for COBRA participants coverages and then get the money back through payroll tax credits/refunds
• Premium initially is “advanced” by the employer, plan, or insurer and then reimbursed by the government through a refundable tax credit (against Medicare hospital insurance (HI) taxes).
• For self-insured plans, the COBRA premium is covered by the employer and reimbursed through a payroll tax credit.
• For fully insured plans, the tax credit is claimable by the insurer and/or employer.
• This mechanism as described in the legislation is complex, and we’re awaiting the DOL/IRS guidance on the specifics of the credits.

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.

Can employers require employees to have the COVID-19 vaccine before returning to work?

Yes, employers can require mandatory vaccinations, as a matter of prior health crises and common law. There will be some industries where it is going to be a mandate, like healthcare.

There are however possible exceptions; medical conditions, bona fide religious objection.

Two important questions.

  1. How can employers enforce this rule?
  2. What are alternatives to an employer mandate to get employees on board?

EBA has the answers to these questions and more.

Employers will need to have an administration process in place including privacy issues will play. Where can employers turn for guidance to formulating and implementing a plan? Contact Employee Benefit Advisors, we work with top HR Consultants like Ivelices Thomas, HR & Beyond.

 

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.

Health Care Transparency

New transparency requirements on group health plans and health insurers in the individual and group markets were issued by the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments).

The final rule requires plans and issuers to disclose:

  • Price and cost-sharing information for a list of 500 services must be available via the internet for plan years beginning Jan. 1, 2023. All items and services are required to be available for plan years beginning Jan. 1, 2024.
  • In-network provider-negotiated rates and historical out-of-network allowed amounts on their website for plan years beginning Jan. 1, 2022.

The final rule also allows insurers that share savings with consumers—resulting from consumers shopping for lower-cost, higher-value services—to take credit for those “shared savings” payments in their medical loss ratio calculations.

 

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.

What is Creditable Medicare Part D Coverage?

Medicare Part D notices are due before October 15,2020. But what does that mean and how do you know if your coverage is creditable?

If you have any type of group health plan the notice is sent to advise plan participants as to whether their prescription drug coverage is “creditable.”

What is Medicare D Creditable Coverage? – The Medicare Modernization Act made it a requirement that entities that offered plans which included prescription drug coverage had to disclose to all Medicare-eligible individuals whether that prescription drug coverage was “creditable.”

Defining Creditable – For the purposes of this requirement, “creditable” means that the coverage is expected to pay as much as the standard Medicare prescription drug coverage. Among the 2020 parameters for what is considered “standard” under Medicare D are:

  • Deductible: $435.00
  • Initial coverage limit: $4,020
  • Out-of-pocket threshold: $6,350

Determination of Creditable Coverage
The prescription drug plan is deemed to be creditable if it:

  • Provides coverage for brand and generic prescriptions
  • Provides reasonable access to retail providers and mail order coverage
  • Is designed to pay on average at least 60% of participants’ prescription drug expenses

The plan must also satisfy one of the following criteria:

  1. The prescription drug coverage has no annual benefit maximum benefit or a maximum annual benefit payable by the plan of at least $25,000
  2. The prescription drug coverage has an actuarial expectation that the amount payable by the plan will be at least $2,000 annually per Medicare-eligible individual
  3. For entities that have integrated health coverage, the integrated health plan has no more than a $250 deductible per year, has no annual benefit maximum, or a maximum annual benefit payable by the plan of at least $25,000 and has no less than a $1,000,000 lifetime combined benefit maximum.

Notification
The creditable or non-creditable coverage notice must be provided to Medicare Part D eligible individuals who are covered or who apply for the plan’s prescription drug coverage. This includes active, retired, disabled, and COBRA beneficiaries and dependents. The notice must be furnished no later than October 14. The Part D Annual Election Period runs from October 15 through December 7 of 2020.

It is often difficult to determine which participants are Medicare D eligible, so the prudent solution is to send the notification to ALL plan participants prior to October 14. Click here for a guide that  provides a calculator methodology for determining creditable coverage.

There is also a necessary notification requirement for entities to complete the Online Disclosure to CMS Form to report the creditable coverage status of their prescription drug plan. The disclosure should be completed annually no later than 60 days from the beginning of a plan year, within 30 days after the termination of a prescription drug plan, or within 30 days after any change in creditable coverage status.

Penalties
While there are no formal penalties attached to non-conformance of the requirement, the Medicare-eligible individual may incur a late enrollment penalty if notification as to non-creditable coverage exists and that individual then attempts to enroll in a Medicare Part D plan.

 

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

OSHA Recommends that Employers Encourage Workers to Wear Face Coverings at Work

As businesses open and employees return to work, large numbers of employees of workers will be required to wear faces masks in the workplace.

The Occupational Safety and Health Administration (OSHA) has published a series of answers to frequently asked questions (FAQs) regarding the use of masks in the workplace to help employers provide a safer work environment. The guidance outlines the differences between cloth face coverings, surgical masks and respirators.

Guidance includes:

  • Cloth face coverings are not considered personal protective equipment and employers are not required to provide them. (Employee Benefit Advisors believes this is an extremely important as it could provide the employer a layer of liability protection.)
  • OSHA generally recommends that employers encourage workers to wear face coverings at work.
  • Cloth face coverings are not a substitute for social distancing measures.
  • OSHA suggests following CDC recommendations, and always washing or discarding cloth face coverings that are visibly soiled; and
  • Employers must not use surgical masks or cloth face coverings when respirators are needed.

Click here for more information.

 

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

Small & Midsize Employers – two new refundable payroll tax credits

IR-2020-57, March 20, 2020

The U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.

The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.

Key Takeaways

Paid Sick Leave for Workers

  • For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.

Complete Coverage

Employers receive 100% reimbursement for paid leave pursuant to the Act.

  • Health insurance costs are also included in the credit.
  • Employers face no payroll tax liability.
  • Self-employed individuals receive an equivalent credit.

Fast Funds

Reimbursement will be quick and easy to obtain.

  • An immediate dollar-for-dollar tax offset against payroll taxes will be provided
  • Where a refund is owed, the IRS will send the refund as quickly as possible.

Small Business Protection

  • Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.

Easing Compliance

  • Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

 

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 2020

FICA
Social Security Tax is 6.2% on income up to $137,700
Medicare Tax unlimited 1.45% to Unlimited

High Deductible Health Plans
Minimum Annual Deductible (Individual/Family) $1,400 / $2,800
Maximum Out-of-Pocket Limit (Individual/Family) $6,900 / $13,800

Health Savings Accounts
Individual / Family $3,550 /  $7,100
Catch-up Contribution $1,000

ACA Plan Limits
Out-of-Pocket Limits Individual / Family $8,150 / $16,300

Flexible Spending Accounts
Health Care Flexible Spending Account Maximums $2,750
Dependent Care Spending Account Maximum $5,000
The dependent care FSA maximum is set by statute and is not subject to inflation-related adjustments.

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

Parking (monthly) $270
Mass Transit Passes (monthly) $270

Compensation
Compensation Limit $285,000
Highly Compensated Employee Salary Amount $130,000
Annual Compensation for Key Employee $185,000
Defined Benefit Plan Limit $230,000
Defined Contribution Plan Limit $57,000

Retirement Plans
401(k) $19,500
401(k) Catch-up $6,500
403(b) $19,500
457(b)(2) and 124(c)(1) $19,500
457(b) Catch-up $6,500

IRA Limit $6,000/$7,000 for age 50+
Simple IRA Limit $13,500/$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.

Proposed Transparency in Coverage Rule vs. American Hospital Association

A proposed rule would require plans and issuers to disclose cost-sharing estimates to participants, as well as post in-network provider-negotiated rates and historical out-of-network allowed amounts on their websites. The rule would apply to group health plans and insurers in the individual and group markets and sponsors of self-insured group health plans. They would not apply to grandfathered plans. The Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued the rule.

The American Hospital Association and other hospital groups have filed a lawsuit in the U.S. District Court in Washington that claims the Centers for Medicare and Medicaid Services rule violates the First Amendment by provoking compelled speech and goes beyond the intended meaning of “standard charges” transparency in the Affordable Care Act.

 

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

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.

Back to top

Submit your Feedback

      Sending...
x