Saxon Financial Services qualified as a Top Financial Advisor by Cambridge
Jamie Charlton, an independent financial advisor with Saxon Financial Services, has qualified for Cambridge Signature Club 2016.
This qualification was announced by his independent broker-dealer, Cambridge Investment Research, Inc. (Cambridge), one of the largest privately owned independent broker-dealers in the U.S.
Qualification for Cambridge Signature Club honors a financial advisor’s independent business accomplishments in delivering some of the highest levels of client service while reflecting Cambridge’s core values of integrity, commitment, flexibility, and kindness. Distinction as a member of Cambridge Signature Club 2016 includes a special invitation to Amelia Island, Florida, May 4 - May 7, 2016.
“Qualifying for Signature Club is an honor and we are pleased to present Jamie Charlton with this recognition,” said President Amy Webber. “Cambridge Signature Club will bring together similar qualifying advisors in Amelia Island for celebration, educational events, and networking opportunities. These events mean so much to all of us because they give us an opportunity to gather together and share our passion for serving clients.”
The conference will focus on renewing a commitment to excellence in serving clients, unwavering dedication to independence, and the ability to deliver objective advice to clients. In addition to celebrating this achievement with industry speakers and information sessions, Signature Club members will engage in various networking lunches and dinners. Cambridge’s senior executives will serve as hosts for Signature Club.
“We at Saxon Financial Services want to thank our clients for choosing us as their financial professional. We sincerely appreciate their trust in Saxon and their confidence that we will provide them with unbiased recommendations and impartial guidance based on their needs and goals. I appreciate being named to Cambridge’s Signature Club, especially as a reflection of our shared values and dedication to serving clients, and I enjoy the opportunities to share experiences with my peers who are also independent financial professionals,” expressed Charlton.
12 ways to make your workplace better for your health
If health is on your resolution list for 2016, don't forget to include your workspace in the plans. Working from home or sitting in an office cubicle can cause stress, keep you sedentary and add to unhealthy habits you're trying to break.
Health.com offers 12 things you can do to make your workplace better for your health and wellbeing.
Remind yourself to sit less:
People who work at desks should stand or walk around for at least two hours a day to avoid health risks related to too much sitting, according to a 2015 British study. "Moving around throughout your workday is really important," says Robert Graham, MD, director of integrative health and wellness for Northwell Health System, in Great Neck, NY. "Not only is it good for you physically, but studies show that it can increase productivity and more likely to focus on the task at hand."
Computer programs like Move for iOS or Big Stretch Reminder for Windows can remind you to take breaks at regular intervals; some even provide suggestions for stretches and exercises you can do at your workspace. Can't install software on your work machine? Download an app to your smartphone, or use the free website RegularBreaks.com.
Clear the air:
It's not unusual for office environments to trigger what's known as occupational allergies—sensitivities to chemicals in carpet, office furniture, or paint, for example, that can trigger problems like headaches and rashes. And even if you don't have physical symptoms, it's possible that stuffy air in your workplace could be hampering your brainpower: In a 2015 Harvard University study, offices with increased ventilation and lower levels of air pollutants were linked to better employee performance.
You may not be able to change furnishings or ventilation system at your job, but perhaps you can let in some fresh air by keeping windows open while you work. If that's not an option, consider getting an air purifier with a HEPA filter for your desk.
Try a standing desk:
If your workplace allows it, switching to a standing desk can help you sit less and move more during the day. But being on your feet all day can also lead to aches and pains, so look for a setup that allows you to adjust the height or your work station and use a chair when needed.
You can even make a DIY standing desk if you don't have the space or resources for a real one; just be sure to keep your computer monitor at eye level, and your arms bent at 90 degrees to reach the keyboard, to avoid neck and arm pain.
Paint your walls green:
Shades of green have been linked to enhanced creative thinking, says Sally Augustin, PhD, an environmental psychologist and principal at Design With Science. "And most of us have to be creative at work, whether we're coming up with a new advertising slogan or figuring out how to analyze data on a spreadsheet in a different way," she says. To get the most out of your walls, choose a hue that's quiet and calming—like a sage or sea-foam green. "Colors that aren't very saturated but relatively bright put us in the right sort of relaxed mental state to be doing knowledge work."
Can't paint your space? Wallpapering your cube with a green backdrop or adding green elements to your desk may also be helpful, Augustin says. And whatever you do, she adds, avoid red; it's been shown to negatively affect analytical performance.
Add a plant:
Bringing nature into your office can be a great way to inspire creativity and a feeling of wellness, says Augustin. "Plants are great from a psychological perspective," she says. "You don't want to pack too many into a small space, but it can be great to have a small plant on your desktop, or something a little larger in the corner of your office."
Opt for green, leafy plants, rather than cacti—whose spikes can create the opposite of a relaxed feeling—or flowers with a strong scent, which can be distracting or irritating. Some plants, like the sansevieria, may even improve air quality in your office.
Display (a few) personal items:
Decorating your desk can help you feel comfortable, which can reduce workplace stress and dissatisfaction, Augustin says. But to avoid a cluttered feeling, which can actually cause more stress, stick with just a few items.
"Pick out three or four things that are significant to you—like a family photo or an award you're particularly proud of—and make sure those are in your view," she says. "But remember that the more stuff you add to your desk, the more your brain has to constantly scan and keep track of. Working in a crowded space can be mentally exhausting, even if you don't realize it."
Use aromatherapy:
The smell of citrus can lift your spirits and improve thinking and memory, says Augustin. "I like to keep an aromatherapy dispenser on my desk that makes my work area smell like lemon," she says.
Skip candles and air fresheners that use artificial scents (and release potentially irritating chemicals), and opt for an essential oil diffuser that delivers a subtle, natural aroma. Keep in mind, though, that any scent may cause irritation or allergic reactions. If breathing in a scent all day bothers you, try sucking on lemon candies while you work, instead.
Stop eating at your desk:
"One of the most important things you can do during the work day is to not eat at your desk," says Dr. Graham. "Have a dedicated area where you can go to get out of your own environment and have lunch, preferably with other people, so you can truly get that break during the day."
Sitting down to lunch away from your desk won't just keep crumbs out of your keyboard; it can also help reset your brain for an afternoon of productivity. Plus, it can stop you from eating mindlessly while you work or surf the Internet. "We are not great at multi-tasking," says Dr. Graham. "If you're eating while distracted, you are much more likely to overeat."
Pay attention to posture:
Sitting all day isn't the healthiest thing for you, but slouching all day is even worse. "Posture is very important, both to health and to workplace performance," says Dr. Graham. "Sitting up tall gives you a sense of accomplishment, while slouching and slumping make you feel tired and lazy." On top of that, hunching over a computer is a leading cause of back pain.
Invest in (or ask your boss to provide you with) an ergonomic desk chair that supports correct posture. You can also try a gadget like the Lumo Lift, a tiny sensor that pins to your shirt and vibrates when it senses you slouching forward.
Squeeze in mini workouts:
Even if you can't fit in a full workout over your lunch break, you can still do some simple stretches and strength moves right in your office. Keeping small workout props, like hand weights or resistance bands, within eyesight can encourage you to take exercise breaks throughout the day. "And even if you don't have equipment, you can do things like chair yoga or standing push-ups, using nothing but your office furniture," says Dr. Graham.
Sitting on an exercise ball can also help engage your core muscles while you work, but make sure you don't slouch forward while you're using it. To keep this trick from backfiring, swap out your desk chair for just 10 to 20 minutes at a time and pay close attention to your form.
Take your pet to work:
Allowing people to bring their dogs to work reduced job stress and boosted employee satisfaction in a 2012 study from Virginia Commonwealth University. And it wasn't just dog owners who benefited from the pet-friendly policy; other employees who came into contact with the animals reported less stress, as well.
"Of course, it is important to have policies in place to ensure only friendly, clean and well-behaved pets are present in the workplace," the study authors said in a university news release; it's also important to take into consideration coworkers who may be allergic to pets.
Adjust your lighting:
Getting natural light during the day is ideal, so your best bet is to sit near a window if possible. In fact, people with windows in their offices get better sleep and are more physically active than those without, according to a 2013 study from Northwestern University. "Being exposed to daylight helps keep your stress levels and your circadian rhythm in check," Augustin says.
If windows aren't an option, consider the temperature of your office lighting. "Cooler, bluish light is generally good for analytical thinking, while warmer bulbs are better for socializing and interaction with other people," says Augustin. Having a desk lamp you can turn on and off, rather than just one overhead light, can also help reduce eyestrain.
ACA compliance: What does the future hold?
Original post by Alden Bianchi, eba.benefitnews.com
The Affordable Care Act’s reporting requirements are challenging in thace extreme. Carriers and employers, and their vendors, service providers and strategic partners, have scrambled up a steep learning curve. And in a few short months — a few more than originally anticipated as a result of Notice 2016-4 — compliance will begin in earnest.
Here are some predictions about how we expect compliance to unfold:
1) MEC reporting will work as advertised — for the most part. For purposes of the reporting of minimum essential coverage (MEC) under Code 6055 on Forms 1094-B and 1095-B, carriers are largely relying on home-grown software. MEC reporting in the case of fully-insured plans has its challenges, principally relating to data collection. But the regulatory regime is not all that complex.
As a consequence, there is no reason to anticipate that these systems will not work, i.e., that the inputs and outputs will match the requirements of the law and applicable regulations even if the particulars of the “black box” vary from carrier-to-carrier. Expect a good deal of finger pointing over the timely collection of correct information, however, particularly as it relates to social security numbers. One hopes that the extensions of time provided by Notice 2016-4 will go a long way toward alleviating this problem.
2) Software solutions for applicable large employers may work and will converge. Where applicable large employers are concerned, the level of reporting complexity rises exponentially. (Just compare the Forms 1094-B and 1095-B to the Forms 1094-C and 1095-C to see why.) There are currently a good number of expert systems available to employers to assist with their reporting obligations. As best we can tell, vendors have generally been diligent in their efforts to beta test their products. But none of these products has yet been tested live and in real time with real data.
The software solutions for reporting by applicable large employers under Code 6056 have for the most part been developed by third parties, including payroll companies, brokers, venture-funded and other start-ups, industry-focused organizations, and interested tinkerers, among others.
In contrast to MEC reporting, these products are not at all uniform. Some favor particular compliance approaches. For example, it is not uncommon for vendors to strongly urge or require customers to use the Federal Poverty Line affordability safe harbor. This simplifies the reporting on Form 1095-C, Part II, Line 15, but at a cost to employers.
Others lack full functionality relating to transition rules. This will change as vendors gain experience and the industry consolidates. In time, these software products will converge such that the inputs and outputs will align seamlessly with all of the requirements of the law and applicable regulations.
3) For employers, the first year will be chaos. The run-up even to the now delayed reporting deadline will involve a good deal of frantic, last-minute effort. Employers have been asked to respond to detailed data requests from their vendors to provide information from disparate sources, e.g., payroll, HRIS, and the employer’s group health plan, among others.
Complicating matters is that some vendor requests ask for information that is not necessary to complete the reporting process. The biggest challenges will arise in cases where the data collection and collating cannot be automated. For companies of sufficient size, this could mean that timely compliance is out of the question, which will require a “Plan B” (i.e., late filing accompanied by a request for an abatement of penalties).
4) Also for employers, there will be some unwelcome surprises. The reporting process inevitably involves a detailed examination by a third party vendor of the approach that the applicable large employer adopted to comply with the ACA employer shared responsibility rules. This examination can reveal compliance problems and lapses.
For example, a vendor and employer might differ on the classification of a cohort of employees as variable hour by an employer that has adopted the look-back measurement method. If that cohort is sufficiently large, the employer could be facing penalties under Code 4980H(a).
Visualizing Health Policy: Recent trends in employer-sponsored health insurance premiums
Original post kff.org
This Visualizing Health Policy infographic charts recent trends in employer-sponsored health insurance premiums.
Between 1999 and 2015, premiums increased by 203 percent, outpacing both inflation and workers’ earnings. However, growth of premiums for family coverage slowed toward the end of that time period, from an average of 11 percent a year between 1999 and 2005, to 5 percent between 2005 and 2015.
In recent years, deductibles rose faster than both premiums and wages, with the average premium for single and family coverage increasing 4 percent between 2014 and 2015. There is considerable variation in the premiums at different firms; 8 percent of covered workers are enrolled in a family plan worth more than $24,000 and 4 percent are in plans worth less than $10,000 annually.
Over half of large employers conducted an analysis to determine whether they offered a plan which would be subject to the excise tax on high cost health plans slated to take effect in 2018.
Visualizing Health Policy is a monthly infographic series produced in partnership with the Journal of the American Medical Association (JAMA). The full-size infographic is freely available on JAMA’s website and is published in the print edition of the journal.
Is a wearable health tracker worth the investment?
Wearable health trackers are the buzz in the new year. From the Biggest Loser giving contestants the Garmin VivoFit to FitBit's response to the Apple watch, there's plenty of options to choose from for your employees.
But is adding a wearable health tracker to your wellness plan a good idea?
Jen Arnold, MS, RD/LDN, shared her thoughts on not only using the device, but also the advantages and disadvantages for employers in the article, "13 Ways to Decide if Wearables are Worth the Investment."
Below are the bullet points she makes in the article:
Advantages of an activity tracker:
The “Cool” Factor: Your employees will appreciate the gift even if you are just subsidizing the cost or if they are getting the cheapest version.
Automatic Feedback: Wearable devices have the ability to give employees real time feedback so they can do something about. You can look at your device, see if you are under performing on activity for the day and start moving.
Fun Challenges: The dashboard gives employees options to set up their own challenges or you can run a company wide one. This is a fun way to get a positive reaction and interest from employees.
Scalabilty: Many employers have employees scattered all over their state, the US or even globally. Having employees connected through their fitness tracker eliminates the need to be in person, which isn’t possible for many employers.
Revival of a Tired Wellness Program: Let’s face it, it’s easy to run out of fun ideas and your wellness program can get a bit boring. Adding free or subsidized activity trackers can liven up your program and get employees excited again.
Create a “fit” group identity for tracker wearers. Hey, you have a Fitbit just like me. That’s a great reason to strike up a conversation a fellow employee who you don’t know. Working on a similar goal gets people talking about their device and the many steps they are taking towards better health. It’s always wonderful to hear employees talking about their fitness in an excited way instead of the dreaded tone of guilt.
Despite these advantages, there are some drawbacks of purchasing activity trackers to consider:
Cost: Although fitness trackers are cheap when compared to the cost of health insurance for your employees, it can kill a wellness budget in a hot second. Fitbit in particular requires the employer to subsidize a percentage of the device and if you have a lot of employees, the cost may be difficult to justify to your CEO. Also, the dashboard is around $7,000 per year (or is at the time of this post) and you really need the dashboard to get employees involved.
Abandonment rate: A recent survey found that after about six months of use, one-third of U.S. consumers don’t use their wearable devices. That’s about how long I lasted with mine.
It’s not the magic bullet: Although an activity tracker may help your employees get up and moving more, it won’t magically make your employees healthy and lower health care costs. You still have to incorporate other resources into your wellness program.
Not everyone will want one: As cool as you think an activity tracker is, 100% of your employees will not want one. This could actually be an advantage if you are trying to watch your budget.
Privacy concerns: Some people are skeptics by nature and you’ll need to ensure employees who has access to their data and what you are doing with it.
Addiction: I’m using this heavy word a bit lightly here but if you’ve owned an activity tracker, you’ll know what I’m talking about. It’s the reason why you walk circles around your house while the rest of the family is sleeping or you get pissed if you went on a run without your tracker. Tracking means competing with someone (even if it’s yourself) and that’s only sustainable for so long.
Motivation: You are going to reach the employees ready to make a change about their health while the ones that aren’t ready will pass on the opportunity. That’s fine not to dwell on those that aren’t motivated but chances are they would have joined you in a less expensive exercise challenge.
Here’s the million dollar question….does it increase exercise? Truth is, we don’t really know. There is minimal research around these devices but one small study in older women found that they may increase exercise more than a pedometer (at least during the 16 week study). We are working with an employer group that is starting a fitness tracker challenge now so I’ll let you know the results.
Bottom line: unless you have a well built wellness strategy that includes other resources for your employees, then fitness trackers are probably not worth the investment UNLESS you have extra money to spend and one or more of the advantages above applies to your worksite.
IRS pinpoints ACA affordability percentage for safe harbor
Original post by Helen Karakoudas, shrm.org
The IRS has announced that the inflation-adjusted percentage used to determine what is “affordable” health coverage for individuals will also apply to the safe harbor for employers.
Under a safe harbor set forth in the Affordable Care Act’s (ACA’s) employer shared-responsibility provisions (also known as “pay or play”), health coverage has been deemed to satisfy the requirement to be affordable if the lowest-cost self-only coverage option available to employees does not exceed 9.5 percent of any one of the following:
- The employee’s W-2 wages.
- The employee’s rate of pay.
- The federal poverty level.
The three-pronged affordability safe harbor is used so that employers have penalty protection for what they declare as “affordable” on Line 16 of IRS Form 1095-C. The safe harbor concept is the standardized way IRS regulations address the fact that employers would not know their employees’ household incomes.
For 2015, the IRS increased the applicable threshold percentage for purposes of “household income” from 9.5 percent to 9.56 percent to account for increases in health insurance premiums and income growth, with a further increase to 9.66 percent announced for 2016. But the IRS did so with regard to the affordability percentage that marketplace exchanges can use to test compliance with the ACA individual mandate. The IRS did not explicitly increase the percentage for use in the employer safe harbor test above the statutory 9.5 percent. That led many benefit attorneys to advise their clients to continue using a contribution percentage of 9.5 percent to measure their plan’s affordability.
While the controversy over the affordability percentage has divided employee benefits attorneys and confused business owners and HR professionals, new guidance clarifying the issue was released on Dec. 16.
According to IRS Notice 2015-87:
Treasury and IRS intend to amend the regulations under § 4980H to reflect that the applicable percentage in the affordability safe harbors should be adjusted … so that employers may rely upon the 9.56 percent for plan years beginning in 2015 and 9.66 percent for plan years beginning in 2016.
Legal Significance for ACA Safe Harbors
The phrases “intend to amend” and “should be adjusted” are key. Before this guidance, there was no official connection between Section 4980H—the ACA regulations in the Internal Revenue Code that detail the employer shared responsibility requirements—and any percentage other than 9.5 percent, which remained the only rate given in ACA regulations for affordability testing.
Though official word about the syncing of the safe-harbor percentage with the marketplace percentage came bundled with end-of-year housekeeping items, hints about a clearing of the fog came this fall:
- In a September webinar of the ACA Information Returns (AIR), the monthly group call for software developers learning about the new IRS processing engine specific to the 1095 series of forms, attendees were told that hard coding for the 9.5 percent affordability percentage for employer returns was being undone and revised for specifications that could be changed from year to year. Further references to this reformatting were also made in the October and November calls.
- On page 11 of the instructions for IRS Forms 1095-C and 1094-C, which also came out in September, there was this paragraph: “References to 9.5 percent in the affordability safe harbors and alternative reporting methods may be subject to change if future IRS guidance provides that the percentage is indexed in the same manner as that percentage is indexed for purposes of applying the affordability thresholds under Internal Revenue Code section 36B (the premium tax credit). In general this should not affect reporting for 2015, but taxpayers may visit IRS.gov for any related updates.”
“Admittedly, the door was open to possible updates. But one would have thought that, by Dec. 16, nothing would change the result for 2015,” said Paul Hamburger, co-chair of the employee benefits and executive compensation practice center for Proskauer Rose in Washington, D.C.
“Now, the [Dec. 16] guidance allows employers, essentially, to [use the inflation-adjusted percentage] for 2015 in measuring affordability even though the instructions and forms are based on 9.5 percent,” he added. “However, with vendors already having programmed their systems with unadjusted numbers, I’m not sure how it will all play out. For example, if an IRS form was completed on the basis of unaffordability at 9.5 percent but it would have been affordable at 9.56 percent, will the IRS review cause a penalty to potentially be imposed, only to be negotiated away once the numbers are put forward? We will see,” Hamburger said.
Premium contribution strategies for 2016 were the concern of Ken Mason of Spencer Fane in Kansas City, Mo. “The recent guidance comes too late to affect ACA-compliance efforts for 2015,” Mason said. “Given the usual open enrollment periods of October or November for calendar-year plans, it’s probably also too late for most calendar-year plans to take advantage of the 9.66 percent figure when setting premiums designed to fall within the ACA safe harbors for 2016.”
The ‘Christmas Present’ Rule
Hamburger also widened the lens for perspective on this news: “Over the years, it seems that year-end IRS guidance with brand-new rules is part of the year-end tradition,” he remarked. “I remember a pension-related notice that came out at the end of 1987 where the IRS issued a somewhat lenient optional tax-related rule and we colloquially referred to it as the ‘Christmas present’ rule. Since then, the IRS seems to always remember the employee benefits community at this time of year.”
17 New Year's Resolutions you have a shot at keeping in 2016
Creating New Year's resolutions offers a chance to improve yourself. Whether it's losing weight, saving money or quitting smoking, baby steps can help you succeed.
Leigh Weingus, an editor with EliteDaily.com, offers 17 resolutions that won't have you frustrated after week one and could help you reach your larger goals for the year ahead.
Do yoga once a week.
Whether it’s a 30-minute YouTube video or an hour-long class at your local studio, getting your downward dog on isn’t too much to ask when it comes to taking care of your mind, body and soul.
Wake up 15 minutes earlier.
It’s 15 minutes, not two hours. And it can make a huge difference in your morning routine.
Pack your lunch twice a week.
We know the salad joint near your office is healthy and delicious, but it’s costing you ten bucks every day. Making your salad at home twice a week isn’t much work, and it’s a lot less expensive.
Hold a plank for one minute, three days a week.
Plank pose does wonders for your core, back and overall strength. It’s tough, but it’s three minutes in your entire week. You’ve got this!
Skip one restaurant outing a week.
If you’re in the habit of dining out four nights a week, cut it down to three. You’ll save yourself calories and money.
Download a meditation app.
So meditating for two hours a day wasn’t realistic, but downloading a free meditation app is. A lot of the apps out there have options for meditating for a few minutes at a time — and you can handle that.
Escort electronics out of your bedroom an hour before bedtime.
Bring a book in instead. Trust us, you’ll sleep a lot better.
Get a latte twice a week instead of every day.
That thing is costing you like $4.25, right? Brewing your coffee at home most days will leave a nice chunk of change in your pocket by the end of the year.
Take a 20-minute walk every day.
It’s not running a marathon, and it’ll get you moving and make you happier. Maybe it means watching one less episode of “Friends” on Netflix every night, Rachel and Joey will understand.
Pick five things that scare you and do all of them.
The saying “do one thing every day that scares you” is pretty overwhelming. Try picking five things that scare you and set out to accomplish them throughout the year, whether it’s trying out a dating app or going skydiving.
Carve out a “power hour” every week.
You know those nagging tasks that never seem to get done, like cleaning out your junk drawer or sweeping the floor? Carve out an hour every week to tackle them. You’ll get a lot done and won’t have to worry about them for the rest of the week.
Dedicate two hours every week to YOU.
And no, scrolling through your Instagram feed doesn’t count. Spend two hours every week doing something you truly love, whether it’s painting, reading a book or going for a long run. No technology allowed.
Finish something you started in 2015.
Maybe you half-started a blog in 2015 but never got around to finishing it. You have a head start, so make sure it actually gets done this year.
Make a phone call every week to someone you love.
Connections with others make us happy, and it can be hard to keep in touch with your best friend who lives across the country or your grandma who has a hard time hearing. So every week, make a call to someone you love. It’ll make you (and the person you’re calling) super happy.
Just eliminate one “bad” thing.
Don’t swear off sugar, salt and alcohol. It’ll be so damn hard you’ll give up immediately. Instead, pick one thing.
If you’ve noticed you have a bad habit of eating a bag of chips every day after work, just give that up. You may be surprised by what a difference it makes.
Start wearing sunscreen.
We know, a tan is nice. But skin cancer and wrinkles are not. Wear sunscreen this year!
Incorporate a little more water into your day.
You don’t need to start downing 16 glasses a day. Maybe just start drinking a cup of tea or a glass of water when you wake up. Hydrate, people.
Here’s to a happy and healthy 2016.
IRS releases final rule on premium tax credits, notice addressing employer coverage
Original post by Timothy Jost, healthaffairs.org
Implementing Health Reform. On December 16, 2015, the Internal Revenue Service (IRS) released a final regulation containing a number of premium tax credit eligibility provisions. Several of these concern the question of when an employer-sponsored health benefit plan offers affordable coverage that meets the minimum value requirement, but the rule also addresses other miscellaneous issues.
At the same time the IRS released a long and complicated notice addressing various issues that have arisen under the Affordable Care Act (ACA) with respect to employer-sponsored coverage, focusing particularly on account-based employee benefits such as section 125 cafeteria plans and health reimbursement arrangements.
Premium Tax Credit Final Rule
The rule finalizes a minimum value rule proposed over two years ago in May of 2013. The IRS had also recently proposed additional regulatory provisions relating to minimum value, while Department of Health and Human Services regulations address other issues related to minimum value. Parts of the earlier proposed rules are finalized in this rule, and other parts remain to be finalized later.
Premium Tax Credit Eligibility
The final rule begins by cleaning up one premium tax credit eligibility issue that has nothing to do with minimum value of employer-sponsored coverage. Eligibility for premium tax credits is based on household income, including the income of children or other members of the family who are required to file tax returns. Under certain circumstances parents are allowed to include their children’s income in their tax returns.
The regulatory language clarifies that when a parent does this, the household’s income includes the child’s gross income included on the parent’s return. The amount included for determining tax credit eligibility, however, is the child’s modified adjusted gross income (MAGI), which is not necessarily the amount reported as gross income on the tax return. MAGI would also include, for example, the child’s tax exempt interest and nontaxable Social Security income. The final rule clarifies how this is to be handled.
The rule next clarifies how wellness incentives are handled for determining the affordability of coverage for purposes of premium tax credit eligibility. Premium tax credits are not normally available to individuals who are offered health insurance coverage by their employer. Employees may, however, be eligible for premium tax credits if the employer coverage does not provide “minimum value” (MV) or if the employer coverage is “unaffordable.” Generally, a minimum value plan must have an actuarial value of at least 60 percent and cover substantial hospital and physician services. To be “affordable” a plan must cost no more than 9.56 percent (for 2015) of an employee’s MAGI. An employer that offers a health plan that fails to provide MV or that is unaffordable may also be assessed a penalty if one or more of its employees turns to the exchange for premium tax credits.
Under the ACA, employers can offer wellness incentives that reduce the cost of the employee contribution or cost-sharing for program participants. The question arises, therefore, whether affordability and minimum value should be determined with or without the application of wellness incentive premium and cost-sharing reductions. The final regulations provide that affordability and minimum value should be determined by assuming that employees fail to qualify for the wellness incentive premium or cost-sharing reductions with one exception — if the wellness incentive relates to tobacco use affordability will be determined based on the assumption that the employee qualifies for the incentive and is thus not subject to the tobacco use surcharge.
Extension Of The ‘Family Glitch’
The final regulation proceeds, however, to extend the “family glitch.” One of the most criticized IRS rules implementing the ACA provides that if an employer offers an employee affordable sole-employee coverage, the employee’s entire family is ineligible for premium tax credits even though employer-sponsored family coverage is unaffordable.
Under the minimum value final rule, if an employee uses tobacco and does not join a tobacco cessation program, and thus coverage is in fact unaffordable with the tobacco surcharge or does not offer minimum value, not only the employee, but also the employee’s entire family, is ineligible for premium tax credits as long as coverage would have been affordable or offer minimum value had the employee complied with the smoking cessation program. This is true even if no one else in the family smokes.
Health Reimbursement Arrangements
The final regulation next addresses the effect of health reimbursement arrangements (HRAs) on affordability. Amounts newly made available to an employee through an HRA that is integrated with ACA-compliant employer-sponsored health coverage when the employee may use the HRA to pay premiums are counted toward an employee’s required contribution to determine affordability. Amounts newly made available to an employee through an HRA that is integrated into with eligible employer-sponsored coverage that an employee may only use to reduce cost-sharing is counted toward determining minimum value. If HRA contributions may be used either to cover premiums or reduce cost-sharing, they are considered for determining affordability and not minimum value.
HRA contributions, however, are only taken into account if the HRA and the primary employer-sponsored coverage are offered by the same employer. They are also taken into account for determining affordability or minimum value if the amount of the annual contribution is determinable within a reasonable time before an employee must decide whether or not to enroll.
Cafeteria Plans
The final rule also provides that employer contributions to flex arrangements under section 125 cafeteria plans are considered for determining affordability and minimum value if 1) the employer contribution cannot be taken as a taxable benefit, 2) it may be used to pay for minimum essential employer coverage, and 3) it may only be used to pay for medical care, as opposed to other benefits like dependent care that can be paid for under a section 125 plan. The guidance also released on December 16 discusses HRAs and 125 plans in much greater detail, and is examined below.
Continuation Coverage Eligibility And Tax Credits
The rules next address the effect on eligibility of former employees and retirees for continuation coverage under federal or state law, such as Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage, on eligibility for premium tax credits. The rule provides that eligibility for continuation coverage does not disqualify former employees or retirees, or their dependents, from premium tax credit eligibility unless the individual actually enrolls in the coverage. If continuation coverage is offered to current employees because of a reduction in hours, however, it will disqualify the employee from premium tax credits if it is affordable and offers minimum value. Of course, continuation coverage offered current part-time employees will often not be affordable.
Tax Credits And Coverage For Partial Months
The final rule concludes by addressing premium tax credit issues that arise when an individual is enrolled in coverage for a partial month. When a child is born, adopted, or placed with a family for adoption or foster care, or placed by court order, that child can be covered as of the date of birth, adoption, placement, or the order. The rule clarifies that when this happens, the child is treated as enrolled from the first day of the month for purposes of determining premium tax credit eligibility, even though the child is enrolled during the middle of the month. The adjusted monthly premium is determined as if all members of the coverage family were enrolled as of the first of the month in this situation.
The rule next addresses how premium tax credits are calculated where there is a partial months of coverage, which can occur when a child joins the plan mid-month by birth, adoption, placement or court order or when coverage is terminated mid-month, for example by a death. In this situation, the premium tax credit covers the lesser of the actual amount of the pro-rated premium charged for the month (taking into account any premium refunds) or the excess of the benchmark plan premium for a full month of coverage over the full amount that the eligible household would be required to contribute for coverage given its income level.
Thus if a taxpayer has a $500 premium and would normally be entitled to a premium tax credit of $300 based on a $450 benchmark premium and a $150 contribution amount, and the taxpayer dies mid-month and is refunded $250, the taxpayer would be entitled to a $250 premium tax credit based on his or her actual expenditure, but if the taxpayer is refunded $150, the taxpayer would be entitled to a $300 tax credit based on the benchmark plan cost.
The final rule provides that if family members live in different states the benchmark plan premium is determined by summing the benchmark premiums for the different states as they apply to the family members in each state. The rule updates the table of percentages, which determines how much individuals must contribute of their own income toward the cost of premiums to be eligible for premium tax credits given their income. And, finally, the rule analyzes how qualified health plan premiums and benchmark plan premiums should be allocated for determining premium tax credit eligibility when either the premiums of a plan in which an individual is enrolled or a state’s benchmark plan covers services that are not essential health benefits and thus not eligible for premium tax credit payments.
IRS Notice 2015-87
The notice (IRS Notice 2015-87) addresses a range of issues relating to the ACA and employer coverage, elaborating on some issues addressed by the final rule. Many of the questions it raises elaborate on IRS Notice 2013-54, issued in 2013. The notice states that a number of these issues will be addressed by future rulemaking and requests comments. It clarifies existing requirements as to some issues and allows plans a grace period before employers must come into compliance. The notice also, however, allows employees to claim the benefit of some of the requirements even though employers have not yet come into compliance.
Health Reimbursement Arrangements
The notice begins by addressing a series of issues raised by health reimbursement arrangements (HRAs). It first clarifies that an HRA that covers only former employees or retirees is not required to be integrated with an employee-sponsored plan that meets ACA requirements. A former employee covered by such an HRA, however, is ineligible for premium tax credits as long as funds remain available in the HRA.
If an HRA covers current employees, a former employee who is no longer covered by the group health coverage that must be integrated with an HRA for the HRA to comply with ACA requirements may not use funds remaining in his or her HRA to purchase individual coverage. Amounts credited to an HRA prior to January 1, 2013, or during 2013 under terms in effect prior to January 1, 2013, may, however, be used for medical expenses under the terms then in effect even though those terms do not comply with ACA requirements that went into effect in 2014.
The notice provides that HRAs available to cover medical expenses of an employee’s spouse or children (family HRAs) may not be integrated with employee-only coverage but must be integrated with coverage in which the dependents are enrolled to comply with ACA requirements. Recognizing that many employer plans do not conform to this requirement, the IRS is allowing plans a grace period to come into compliance with this requirement.
Under earlier guidance, the IRS had made it clear that HRAs could not be used to purchase individual health insurance coverage. This guidance clarifies that HRAs can be used to pay the premiums for excepted benefit coverage, such as dental or vision plans. The notice further clarifies that section 125 cafeteria plans cannot be used to purchase individual coverage, even if the 125 plan is funded fully by employee contributions.
The Notice explains at great length and in detail how HRAs and flex contributions to a section 125 cafeteria plan are treated for determining affordability and minimum value of employer-sponsored coverage. This issue is also addressed by the rule and discussed above. The notice offers several examples of how these rules are applied.
Flex Plans And Opt-Out Payments
One of the requirements of the rule and notice is that employer contributions to flex plans will only be considered for determining affordability or minimum value of employer coverage if the flex plan can only be used for health spending. Solely for purposes of determining affordability for application of the employer mandate (which imposes a penalty of employers who do not offer affordable, minimum value coverage if their employees receive premium tax credits) and for employer reporting requirements, contributions to flex accounts that can be used for non-health as well as health purposes will be considered to reduce employee contributions for plan years beginning before January 1, 2017 for arrangements adopted on or before December 16, 2015. However, they will not be considered for determining affordability of employer coverage for an employee either for determining liability under the individual responsibility provision or eligibility for premium tax credits.
If an employer offers an employee payments that are available only to an employee if the employee declines health insurance coverage (an opt-out payment), the IRS will consider the opt-out payment as an additional charge for the coverage for determining its affordability for application of the employer mandate penalty. The employee has the option of receiving additional salary for foregoing coverage, and thus is being charged the amount of the additional salary if he or she accepts coverage.
The IRS intends to issue a rule on this issue, and might treat opt-out payments differently if they are subject to additional requirements, such as proof of coverage under a spouse’s plan. The IRS will offer a transitional period for plan years beginning before January 1, 2017 based on arrangements established on or before December 16, 2015, for purposes of the employer mandate penalty and employer reporting, but individual taxpayers may consider opt-out payments as increasing the cost of coverage for application of the individual mandate or premium tax credit eligibility requirements.
Complex issues are presented by the McNamara-O’Hara Service Contract Act and the Davis-Bacon and related acts, which require federal contractors to pay prevailing wages and fringe benefits or cash out fringe benefits for workers. Until these issues are resolved employers may for purposes of the employer mandate and reporting requirements consider cash payments in lieu of fringe benefits as increasing the affordability of coverage, although employees are not required to consider the payments as making coverage more affordable for purposes of the individual mandate affordability exemption or premium tax credit eligibility. Recognizing that the disconnect between employer reporting requirements and employee premium tax credit eligibility requirements during transitional periods for this and other requirements may cause difficulties for employees in establishing tax credit eligibility, the notice urges employers to work with employees to provide necessary information.
Affordability Under The Employer Mandate
For purposes of the employer mandate affordability requirement and related regulatory requirements, including affordability safe harbors, affordability of coverage is defined as costing no more than 9.5 percent of household income (or for safe harbors, 9.5 percent of W-2 or hourly wages or the poverty level). The 9.5 standard is adjusted annually and is set at 9.56 percent for 2015 and 9.66 percent for 2016. The notice makes clear that this adjustment applies to all provisions that use the 9.5 percent standard.
The notice also provides the inflation updates for the statutory penalties under the employer mandate. The $2,000 per full-time employee penalty that applies when an employer fails to offer minimum essential coverage and an employee receives premium tax credit will increase to $2,080 for 2015 and $2,160 for 2016; while the $3,000 penalty that applies on a per-employee basis for employees who receive premium tax credits when coverage does not meet affordability or minimum value standards will increase to $3,120 for 2015 and $3,240 for 2016.
The notice provides a complex analysis of when “hours of service” that would count for crediting hours for Department of Labor regulations do or do not count as “hours of service” for calculating whether an employee is a full-time employee for purposes of the employer mandate. This analysis is beyond the scope of this post.
Service Breaks
A number of ACA rules that apply to full-time employees assume that employees are continuously employed without long breaks in service. Special rules apply for employees of educational institutions who routinely have long breaks in service between school years. Under IRS rules, employees of educational institutions cannot be treated as having terminated employment and then been rehired unless they have a break in service of at least 26 consecutive weeks.
Some educational institutions have been attempting to get around this rule by claiming that their employees are actually employed by staffing agencies with which they contract, and thus, for example, terminated at the end of the school year and rehired in the fall. The IRS is considering a rule that would provide that the educational institution exception would also apply to employees who provide services primarily to educational institutions and are not offered a meaningful opportunity to provide service during the entire year. An individual who worked in a school cafeteria nominally employed by a staffing agency rather than the school, for example, would be protected by the break in service exception unless the staffing agency offered employment in another position throughout the summer.
The notice clarifies that AmeriCorps members are not employees for purposes of the employer mandate, but that individuals offered TRICARE coverage by virtue of their employment are offered minimum essential coverage. The notice discusses how employer aggregation rules apply to government employers. It requires each separate government employer entity to have an employer identification number. The notice also discusses special rules that apply to health savings accounts contributions for individuals eligible for VA coverage and the application of COBRA continuation coverage to flexible spending account carryovers, both topics beyond the scope of this post.
Finally, the notice reiterates that the IRS will not impose penalties on employers that provide incorrect or incomplete 1094-C and 1095-C reports to employees in 2016 for 2015 coverage if they can demonstrate good faith efforts to comply with requirements. Employers who fail to file reports on a timely basis will also be provided relief from penalties if they can show reasonable cause for their failing to do so.
IRS extends due dates for ACA information reporting
Original post by Stephen Miller, shrm.org
Employers subject to the Affordable Care Act’s 2015 information reporting requirements now have extra time to give forms to employees and to file them with the government.
In Notice 2016-4, issued by the IRS on Dec. 28, the agency extended these reporting deadlines:
| Previous IRS Due Date | New IRS Due Date |
| Forms 1095-B and 1095-C were due to employees by Feb. 1, 2016 | March 31, 2016 |
| Forms 1094-B, 1095-B, 1094-C and 1095-C were required to be filed with the IRS if filing on paper by Feb. 29, 2016 | May 31, 2016 |
| Forms 1094-B, 1095-B, 1094-C and 1095-C were required to be filed with the IRS if filing electronically by March 31, 2016 | June 30, 2016 |
| Source: ADP, based on IRS Notice 2016-4. | |
• For furnishing employees with the 2015 Form 1095-B (Health Coverage) and Form 1095-C (Employer-Provided Health Insurance Offer and Coverage), the deadline has been extended from Feb. 1, 2016, to March 31, 2016.
• For filing with the IRS the 2015 Form 1094-B (Transmittal of Health Coverage Information Returns), Form 1095-B, Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) and Form 1095-C, the deadline has been extended from Feb. 29, 2016, to May 31, 2016 if not filing electronically, and from March 31, 2016, to June 30, 2016 if filing electronically.
Any employer filing 250 or more information returns during the calendar year must file the returns electronically. For employers with fewer than 250 returns, electronic filing is voluntary.
“Earlier guidance would have been preferred, but the last-minute relief will still be helpful for employers that have been working to understand the complexities of compiling all the information needed and completing the forms, or gathering the information needed to work with their reporting vendors,” said Ann Marie Breheny, a senior legislative adviser at Towers Watson in Arlington, Va.
The notice also provides guidance to employees who might not receive a Form 1095-B or Form 1095-C by the time they file their 2015 tax returns.
Employers Sought Extension
Employer groups had been seeking filing extensions. Because instructions for filing the reporting forms were released late in the year, “employers have been struggling with logistical issues” related to reporting, said Chatrane Birbal, the Society for Human Resource Management’s senior advisor for government relations.
The IRS deadline extension “is appreciated and will provide employers relief,” she said. “The ACA reporting forms require specific information on each employee’s insurance coverage—and their spouse’s and dependents’, if applicable—such as employer identification number, taxpayer identification number, addresses, employee’s full-time status and length of full-time status, proof of minimal essential coverage offered, coverage dates, and employees’ share of coverage premium costs. Collecting required information to ensure accurate reporting is an administrative burden for employers.”
While HR professionals have the relevant data requested, she noted, “this information is not contained in a central repository. Most employers will have to use multiple sources to obtain the data necessary to complete the reporting forms, including their benefits carrier or broker, HR information system, payroll company, time-off tracking software and other sources.”
The administrative burden and penalties related to missed deadlines and incorrect filing “will inevitably add to the employer’s cost of providing benefits to employees,” she noted.
Similarly, the American Benefits Council, in a Dec. 24 letter to IRS Commissioner John Koskinen, wrote that employers “have expressed significant concerns about their ability to furnish accurate Forms 1095-C and Forms 1095-B to employees by the Feb. 1, 2016 deadline.”
“The data that needs to be reported—particularly on the Form 1095-C—relates to information that many employers did not previously maintain in a format that facilitated reporting,” said Kathryn Wilber, senior counsel for health policy at the council. “As a result, employers’ attempts to establish systems that can accommodate the reporting requirements have generated logistical complications and we continue to hear about new difficulties from employers on a regular basis.”.
Earlier Filing Encouraged
The IRS said it is still prepared to accept filings of the information returns on Forms 1094-B, 1095-B, 1094-C and 1095-C beginning in January 2016. “Following consultation with stakeholders, however, the Department of the Treasury and the [IRS] have determined that some employers, insurers, and other providers of minimum essential coverage need additional time to adapt and implement systems and procedures to gather, analyze and report this information,” the IRS said in its notice. “Notwithstanding the extensions provided in this notice, employers and other coverage providers are encouraged to furnish statements and file the information returns as soon as they are ready.”
Employers that don’t comply with these extended due dates will be subject to penalties under ACA section 6722 or 6721 for failure to timely furnish and file, the IRS said. The agency added that even if employers or other coverage providers miss the extended due dates, they are still encouraged to furnish and file, “and the service will take such furnishing and filing into consideration when determining whether to abate penalties for reasonable cause.”
“The IRS said it will take a good-faith enforcement approach to this first year of reporting,” said Breheny. “As the deadlines approach, there have been many questions from reporting entities about these complex requirements and the systems involved, so this is a welcome development.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Health apps widely embraced, but sustained engagement a challenge
Original post ebn.benefitnews.com
Employers using health apps as part of their wellness programs may want to pay attention to what is being called the most in-depth analysis to date of health-related app use in the United States.
A new online national survey of Americans’ health app use shows both positive and negative aspects of their adoption. The survey results, published in the Journal of Medical Internet Research mHealth and uHealth, and analyzed by researchers at NYU Langone Medical Center, show that 65% of respondents indicated that apps improved their health, and a majority had strong faith in the accuracy and effectiveness of the apps.
In addition, 58% of the 1,604 adult smartphone users surveyed had downloaded one of the estimated 40,000 available health-related mobile apps, while 42% had downloaded five or more.
About 65% of respondents reported using health apps on a daily basis. According to the survey, the most popular apps were those used to track physical activity (53%), food consumption (48%), weight loss (47%), and exercise instruction (34%).
However, at the same time, 46% of those surveyed admitted to having downloaded an app they no longer used. Respondents also cited cost, disinterest over time, and privacy concerns as barriers to wider and more effective use of the apps.
The most common reasons for people not downloading apps were lack of interest, cost, high volume of information that needed to be entered on a daily basis, and concern about apps collecting their personal data. When it comes to cost, 41% said they would never pay anything for a health app, 20% would pay only up to $1.99, while 23% said they pay at most between $2 and $5.99.
“Our study suggests that while many Americans have embraced health apps along with their smartphones, there are challenges to keeping users engaged, and many Americans who might benefit are not using them at all,” says lead investigator and clinical psychologist Paul Krebs, an assistant professor at NYU Langone. “There is still much more to be learned about how we can broaden the appeal and make best use of the wide variety of health apps now available — not just for fitness and nutrition, but for other purposes, such as monitoring sleep and scheduling medical appointments.”
Further, Krebs argues that far more must be done to test and validate the health benefits of apps and that app developers also need to address consumer concerns about privacy, keeping purchase costs low, and reducing the burden of data entry.
The average age of respondents was 40, and a majority had annual incomes of less than $50,000. Overall, those most likely in the survey to use health apps were younger, more educated, of higher income, of Hispanic ethnicity, or obese (with a body mass index of 30 or more).
Greg Slabodkin writes for Health Data Management, a SourceMedia publication.