Compliance – ACA & Other

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.

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.

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.

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.

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.

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.