What happens on Oct. 2?
Originally posted September 18, 2013 on https://ebn.benefitnews.com
Will you be ready for the day after the Affordable Care Act’s public exchanges go live?
At 2 p.m. ET on Oct. 2, EBN and EBA will offer a web seminar on issues relating to ACA implementation and what they mean for employers – whether or not they plan having their workers participate in ACA marketplaces. Hosted by SourceMedia’s Employee Benefit News Group Editorial Director David Albertson, the webinar will include speakers such as Rodger Bayne, president of the Benefit Indemnity Corporation.
Topics of the hour-long, real-time seminar are set to include updates on the functionality of state and federal exchanges, the mandate that employers educate on health care marketplaces, the union push for qualified health plans and enrollment in individual and small business exchanges. The web event is designed for businesses of all sizes, as well as the brokers, advisers and third parties who consult and assist them.
Americans at large remain demonstrably confused over ACA and its applications; wise plan sponsors will use benefits communication to stay ahead of the curve on employee inquiries. Any further delays of ACA mandates will also be discussed.
HHS delays SHOP Web enrollment launch
Originally posted September 26, 2013 by Allison Bell on https://www.lifehealthpro.com
The U.S. Department of Health Human Services (HHS) is pushing the launch of the federal small-group public exchange Web enrollment system back to November.
The delay in the Small Business Health Options Program (SHOP) online enrollment system start affects only the states in which HHS will be running federally facilitated exchanges (FFEs).
States that are running their own state-based exchanges can still get their Web-based SHOP enrollment systems going Oct. 1, the official launch date for the new Patient Protection and Affordable Care Act (PPACA) public health insurance exchange system.
The delay will also have no direct effect on the FFE individual exchange program.
Reuters is reporting that Obama administration officials told it that small employers in FFE states will still be able to enroll in SHOP plans Oct. 1 by filling out paper forms or calling an FFE call center.
John Greene, a vice president at the National Association of Health Underwriters, said his group has learned that agents and brokers will be able to sell SHOP plans Oct. 1.
“It won’t be an electronic train,” Greene said. “It will be a little horse and buggy. But they can still get it done.”
Having the ability to start the SHOP enrollment process before the federal exchange Web enrollment system could help brokers get an edge over that system in the SHOP market.
The initial exchange enrollment rules call for employers to make payments by Dec. 15 to have coverage take effect Jan. 1.
The SHOP will be open to employers with 50 or fewer full-time employees. Some small employers that sign up for coverage through the SHOP and have relatively modestly paid employees can qualify for temporary small-group health insurance tax credits. The Congressional Budget Office has predicted that the SHOP program will be much smaller than the individual exchange program and may attract employers with only a few million employees.
The initial exchange enrollment rules call for employers to make payments by Dec. 15 to have coverage take effect Jan. 1.
The SHOP will be open to employers with 50 or fewer full-time employees. Some small employers that sign up for coverage through the SHOP and have relatively modestly paid employees can qualify for temporary small-group health insurance tax credits.
HHS is saying that it will open a call center aimed specifically at small employers Oct. 1. Employers can call the center at (800) 706-7893 from 9 a.m. to 7 p.m. EST.
HHS also is working with the Small Business Administration to organize SHOP webinars.
About 40,000 agents and brokers have been trained to sell SHOP coverage, HHS says.
HHS releases federal exchange rates
Originally posted by Allison Bell on September 25, 2013 on https://www.benefitspro.com
With the public exchanges under the Patient Protection and Affordable Care Act preparing to open their phone lines and their Web enrollment sites Tuesday, the Obama administration is getting closer to revealing what federal exchange plans might actually cost.
A health policy office at the U.S. Department of Health and Human Services on Wednesday released a report showing what the average starting price for individual bronze, silver, gold and catastrophic exchange coverage will be for a 27-year-old in each state in which HHS will be running a "federally facilitated exchange."
The report also shows what the starting price for each level of individual coverage will be in the biggest city in each FFE state; what a 27-year-old individual coverage buyer with an annual income of $25,000 and access to exchange tax credits would pay for the lowest-cost coverage out of pocket; and what a family of four with an annual income of $50,000 would payout-of-pocket if it did or did not have access to the tax credits.
In Texas, for example, the average cost of the cheapest bronze coverage available to a 27-year-old would be $139 per month. The average cost of the cheapest gold coverage available would be $225 per month.
In Houston, the state's largest city, bronze coverage for the 27-year-old would start at $138 per month.
A look at medically underwritten 2013 rates available from eHealthInsurance.com for a 27-year-old who lives in Houston suggests that typical carriers there would now charge that consumer about $100 to $300 for coverage per month, with a majority charging $100 to $200 per month.
The family of four might have to pay $727 per month for silver coverage if it had no tax credits. Tax credits could cut the monthly cost of the coverage to $282.
Vermont posted preliminary exchange rates in April, and State Refor(u)m has posted a map showing that 27 states and the District of Columbia had at least posted preliminary rates for their state-based or federally facilitated exchanges as of Monday.
HHS — the parent of the Centers for Medicare & Medicaid Services, the agency running the exchanges — has repeatedly postponed the release date for FFE rate information without explaining why.
Some states have used state public records laws to justify releasing FFE exchange plan information on their own.
Other states, including Texas, have treated the FFE plan rates as confidential information.
HHS officials said the cost of the "second lowest cost silver plan" in the District of Columbia and 47 states is 16 percent lower than what HHS had expected, based on Congressional Budget Office projections.
HHS Secretary Kathleen Sebelius said in a statement that high prices have shut many consumers out of the health insurance market in the past.
"We excited to see that rates in the marketplace are even lower than originally projected," Sebelius said.
What You Need to Know about the Small Business Health Care Tax Credit
Originally posted on https://www.irs.gov
How will the credit make a difference for you?
For tax years 2010 through 2013, the maximum credit is 35 percent of premiums paid for small business employers and 25 percent of premiums paid for small tax-exempt employers such as charities.
For tax years beginning in 2014 or later, there will be changes to the credit:
- The maximum credit will increase to 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers.
- To be eligible for the credit, a small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace.
- The credit will be available to eligible employers for two consecutive taxable years.
Here’s what this means for you. If you pay $50,000 a year toward workers’ health care premiums — and if you qualify for a 15 percent credit, you save... $7,500. If you save $7,500 a year from tax year 2010 through 2013, that’s total savings of $30,000. If, in 2014, you qualify for a slightly larger credit, say 20 percent, your savings go from $7,500 a year to $10,000 a year.
Even if you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments is more than the total credit, eligible small businesses can still claim a business expense deduction for the premiums in excess of the credit. That’s both a credit and a deduction for employee premium payments.
There is good news for small tax-exempt employers too. The credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.
And finally, if you can benefit from the credit this year but forgot to claim it on your tax return, there’s still time to file an amended return.
Click here if you want more examples of how the credit applies in different circumstances.
Can you claim the credit?
Now that you know how the credit can make a difference for your business, let’s determine if you can claim it.
To be eligible, you must cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees. You must also have fewer than 25 full-time equivalent employees (FTEs). Those employees must have average wages of less than $50,000 (as adjusted for inflation beginning in 2014) per year. Remember, you will have to purchase insurance through the SHOP Marketplace to be eligible for the credit for tax years 2014 and beyond.
Let us break it down for you even more.
You are probably wondering: what IS an FTE. Basically, two half-time workers count as one FTE. That means 20 half-time employees are equivalent to 10 FTEs, which makes the number of FTEs 10, not 20.
Now let’s talk about average annual wages. Say you pay total wages of $200,000 and have 10 FTEs. To figure average annual wages you divide $200,000 by 10 — the number of FTEs — and the result is your average annual wage. The average annual wage would be $20,000.
Also, the amount of the credit you receive works on a sliding scale. The smaller the business or charity, the bigger the credit. So if you have more than 10 FTEs or if the average wage is more than $25,000 (as adjusted for inflation beginning in 2014), the amount of the credit you receive will be less.
How do you claim the credit?
You must use Form 8941, Credit for Small Employer Health Insurance Premiums, to calculate the credit. For detailed information on filling out this form, see the Instructions for Form 8941.
If you are a small business, include the amount as part of the general business credit on your income tax return.
If you are a tax-exempt organization, include the amount on line 44f of theForm 990-T, Exempt Organization Business Income Tax Return. You must file the Form 990-T in order to claim the credit, even if you don't ordinarily do so.
Don’t forget... if you are a small business employer, you may be able to carry the credit back or forward. And if you are a tax-exempt employer, you may be eligible for a refundable credit.
IRS struggles to combine PPACA reports
Originally posted September 6, 2013 by Allison Bell on https://www.benefitspro.com
The Internal Revenue Service is still trying to figure out how to combine two new Patient Protection and Affordable Care Act reporting programs.
One of the new programs requires a carrier to tell the IRS and consumers whether it’s providing minimum essential coverage.
The other requires a large employer to tell the IRS whether it’s meeting the “shared responsibility” requirements -- the employer mandate -- by offering full-time workers affordable coverage with a minimum value. An employer that violates the mandate rules could have to pay a penalty of $2,000 per affected worker.
The IRS will publish the PPACA Section 6055 MEC reporting requirement and PPACA Section 6056 shared responsibility reporting requirement draft regulations in the Federal Register on Monday.
It’s been suggested before that the IRS combine the two programs. But doing so would be complicated, because the programs apply to different entities and will generate different types of information, IRS officials said.
In some cases, the IRS may let large employers use information reported on Form W-2 and information reported to meet the Section 6055 MEC reporting requirements to meet the Section 6056 shared responsibility requirements, officials said.
The IRS is considering letting employers meet the Section 6056 shared responsibility reporting requirements by using a code on the W-2.
Also in the draft, officials:
- Declined to let employers with fiscal years other than the ordinary calendar year to base Section 6055 or Section 6056 reporting on the fiscal year. Consumers need the coverage information early in the calendar year, officials said.
- Declined to create a safe harbor from penalties for coverage issuers or employers that violate reporting rules because other parties cause problems. Another provision already offers issuers and employers relief for any errors that are corrected in a timely manner, officials said.
- Said that the insurer that insures a group health plan, not the group plan sponsor, is responsible for meeting the Section 6055 MEC reporting requirements for the group plan members.
9 items to tackle ahead of the Oct. 1 deadline
Originally posted September 6, 2013 by Dan Cook on https://www.benefitspro.com
Enrolling employees for the 2014 company health plan will put plan managers to a test like they’ve never seen before. Those that haven’t already immersed themselves in the details are going to be working some very late nights in the next couple of weeks.
John Haslinger, vice president for strategic advisory services at ADP, helped BenefitsPro.com compile a list of the essentials that must be executed in order to comply with the law and avoid sanctions.
Haslinger strongly advises that companies take these requirements seriously. He said the government’s decision to delay the corporate plan sanctions piece of the PPACA until 2015 doesn’t let anyone off the hook as far as meeting all the other requirements by Jan. 1. And many items must be completed by Oct. 1.
Here, then, are nine items you need to check off your 2014 checklist to stay out of the PPACA’s woodshed.
1. Notice of coverage or exchange notification: It’s up to employers to notify every employee, covered by a company health plan or not, of the health care options available to them through the insurance exchanges created by the Patient Protection and Affordable Care Act. This notification must be in an employee’s hands no later than Oct. 1. Employers hired after Oct. 1 have to be notified within 14 days.
Suggestion: If you haven’t started this process, hire a third-party administrator with knowledge of the process to do it for you.
2. The Transitional Reinsurance Fee: This is the $63-per-covered-employee fee that plan sponsors and insurers must pay. The money goes to fund insurance for high-risk individuals. Employers and insurers have to report their enrollment numbers to the feds by Nov. 15. You’ll get an invoice back in a month, if all goes as planned, and the bill will come due a month later.
Suggestion: Set aside a good chunk of dough now to cover the cost.
3. Essential health benefits: This section of the PPACA requires non-grandfathered health plans to cover 10 essential health benefits as follows:
(1) ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services including behavioral health treatment; (6) prescription drugs; (7) rehabilitative and habilitative services and devices; (8) laboratory services;(9) preventive and wellness services and chronic disease management; and (10) pediatric services, including oral and vision care.
For newly hired full-time employees who come on board after Jan. 1, coverage must be made available no longer than 90 days after hire.
Suggestion: State EHBs may vary, so make sure you know the requirements where you live.
4. Defining and counting your eligible full-time employees: The PPACA has redefined full-time employees for purposes of healthcare coverage. Now, employers must offer coverage to anyone who works an average of 30 hours a week. Calculating the 30 hours can be tricky, so you need to know the details. For instance, hours an employee is paid to work aren’t the only ones you count. You need to include the hours you pay someone not to work, such as vacation time, and hours of unpaid leave, such as jury duty. Having a good fix on who your eligible employees will be come Jan. 1 is critical to meeting the requirements of the law. To provide good data to the feds when they ask for it in 2015, employers will have to start tracking hours beginning this Oct. 1.
Suggestion: If you have put this exercise off because of the delay for sanctions until 2015, start counting now. You’ll need data from 10/1/13. Just because you don’t face sanctions doesn’t mean it isn’t essential to have a handle on this number.
5. 90-day waiting period: Under the PPACA, a group health plan or health insurance issuer offering group health insurance coverage must offer health coverage to new employees within 90 days of their hiring. No more “we’ll get you covered if you survive six months here.”
Suggestion: You might want to test potential hires out as contractors to make sure they’re a fit before you’re committed to coverage after 90 days.
6. Preventive services must be offered without cost-sharing: This requires group health plans to cover recommended preventive services without charging a deductible or co-pay/coinsurance. Grandfathered plans are generally excluded from complying with this provision. Among these services are immunization, well-woman visits, screening for gestational diabetes, screening for sexually transmitted diseases, well baby visits, and others.
Suggestion: If your benefits package includes a wellness program, you’ve got more assignments to complete before Oct.1. The idea behind these new rules is that all employees, regardless of their physical condition, should be able to meet the incentives built into wellness programs. Among the requirements:
7. Reasonable accommodations: Some employees, for various reasons, cannot meet the requirements established by wellness programs, so there must be options available for them built into the system.
8. The program must be designed to promote health or prevent disease: Wellness program goals must be tied to direct health benefits. Also, the goals established must not be “overly burdensome.”
9. Rewards must be available to all similarly situated employees: Again, because employees present a range of medical conditions, including some that may thwart them from achieving a reward, the conditions present in a given workplace have to be considered when designing the incentives and goals. Notice must be given to these employees of the options available to them.
Suggestion: Have a wellness program professional review your program to make sure that it is fair to all, truly promotes better health and includes incentives that any employee making a reasonable effort can hope to enjoy.
DOL Says No Fine for Failing to Provide Exchange Notices in 2013
Originally posted by Stephen Miller on September 13, 2013 on https://www.shrm.org
U.S. employers were again surprised by another unexpected suspension of a provision of the Patient Protection and Affordable Care Act (PPACA or ACA) when, on Sept. 11, 2013, the Department of Labor (DOL) announced there will be no penalty imposed on employers that fail to distribute to workers a notice about available coverage under state- and federal-government-run health insurance exchanges (collectively referred to by the government as the "health insurance marketplace"), scheduled to launch in October 2013.
Fair Labor Standards Act (FLSA) Section 18B, added to the labor statute by the PPACA, requires employers that are subject to the FLSA to provide all their employees by Oct. 1 of each year (the traditional start of the annual open enrollment season for employee health plans), and all new employees at the time of hiring, a written notice informing them of the following:
- The existence of the government-run health care exchanges/the marketplace, including a description of the services provided and the manner in which employees may contact an exchange to request assistance.
- If the employer plan’s share of the total allowed costs of benefits provided under the plan is less than 60 percent of such costs, workers may be eligible for a premium tax credit under Section 36B of the Internal Revenue Code if they purchase a qualified health plan through an exchange.
- Employees who purchase a qualified health plan through an exchange may lose their employer’s contribution to any health benefits plan the organization offers. All or a portion of this contribution may be excluded from income for federal income tax purposes.
According to the PPACA and subsequent guidance, the notice must be provided to each employee, regardless of plan-enrollment status or part-time or full-time status. Employers are not required to provide a separate notice to dependents or retirees, but an employer's obligation to provide notice may extend to its independent contractors and leased workers, depending on the nature of their relationship with the employer as determined under the FLSA's "economic reality" test.
The PPACA has a $100-a-day penalty for noncompliance with its provisions (unless otherwise specified in the statute), and it had generally been assumed this penalty would apply to employers that fail to distribute the exchange notice, possibly with additional penalties for failure to comply with a provision of the FLSA. However, the penalty provision had not been made explicit in any previous guidance, nor had the regulators described how the penalty would be implemented and enforced.
Then, on Sept. 11, 2013, the DOL posted on its website a new FAQ on Notice of Coverage Options, which states:
Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act’s new Health Insurance Marketplace?
A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by Oct. 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.
DOL Encourages Compliance
Keith R. McMurdy, a partner at law firm Fox Rothschild LLP, commented in a posting on his firm’s Employee Benefits Legal Blog that Section 18B of the FLSA clearly states that any employer subject to the FLSA “shall provide” written notice to current and future employees and that the DOL’s Technical Release No. 2013-02, issued in May 2013, states that Section 18B of the FLSA generally provides that an applicable employer “must provide” each employee with a notice. McMurdy wrote:
My experience with the federal laws and the enforcement of said laws by federal agencies is that when things say “shall” and “must,” there are penalties when you don’t do them. So when the DOL now takes the position that it is not a “shall” or “must” scenario, but rather only a “should” and “even if you don’t we won’t punish you” proposition, I get suspicious. But I also think this confirms what I have said since the beginning about PPACA compliance for employers. It is all about your risk tolerance.” …
So, if you don’t want to send the Oct. 1, 2013 Notice, apparently the DOL “FAQ” says you have no penalties and thus no risk. Me? My risk tolerance is a little lower than that and my experience with regulatory agencies is such that I don’t trust informal “FAQs” posted on the web as much as I trust the clear language of the statutes and prior technical releases. Words like “shall” and “must” usually mean that if I don’t do it I get burned. So I am still recommending that employers comply with the notice requirement. Why? I can almost guarantee that if you send the notice, you won’t face a penalty for not sending it. But if you don’t send one, well, I still say all bets are off.
Christine P. Roberts, a benefits attorney at law firm Mullen & Henzell LLP,commented on her “E is for ERISA” blog, “This information, at this late date, is more confusing than it is helpful to employers who have already invested significant resources in preparing to deliver the Notice of Exchange.” She added this cautionary note:
“Particularly for employers with pre-existing group health plans, the Notice of Exchange potentially could be viewed by the DOL as within the scope of the employer’s required disclosures to participants and thus within the scope of an ERISA audit, or separate penalties could be imposed through amendment to the FLSA or the ACA.”
Model Notices
The DOL’s Sept. 11 FAQ reiterated that the department has two model notices to help employers comply with the Oct. 1 exchange/marketplace notice deadline (which they are strongly encouraged to meet):
- Model Notice for employers who offer a health plan to some or all employees.
- Model Notice for employers who do not offer a health plan.
Employers may use one of these models, as applicable, or a modified version. The model notices are also available in Spanish and MS Word format at www.dol.gov/ebsa/healthreform.
Employees say companies have yet to communicate benefit changes
Originally posted August 27, 2013 by Andrea Davis on https://ebn.benefitnews.com
The October 1 deadline for employers to notify employees of their health coverage options is looming yet the majority of employees say their company has yet to communicate any changes, according to a survey released this morning by Aflac.
Sixty-nine percent of employees surveyed say their employer hasn’t communicated changes coming to their benefits package due to health care reform, despite the October 1 deadline.
In a separate Aflac survey, meanwhile, only 9% of companies indicate they are very prepared to implement required changes to their business based on the health care reform law at this time. Some employers (41%) believe more gaps in coverage will be created and 69% believe costs to employees will increase as a result of health care reform.
“At the heart of this issue is the fact that many workers will be blindsided this open enrollment season because we know they already struggle with understanding their insurance policies today, and in covering the high out-of-pocket costs from gaps in their current coverage,” says Michael Zuna, Aflac’s executive vice president and chief marketing officer.
Other statistics from the open enrollment survey of employees include:
- 74% of workers sometimes or never understand everything that is covered by their insurance policy today.
- 37% of workers think it will be more difficult to understand everything in their health care policy with the changes dictated by health care reform.
- 28% of employees are confused, worried or simply unsure about the change their employer is making to their health care coverage or benefits options due to health care reform.
- 60% of workers have not begun to educate themselves about coming changes to their benefits package due to health care reform.
Proposed rules would ease employers' health plan reporting burden
Originally posted September 6, 2013 by Jerry Geisel on https://www.businessinsurance.com
Newly proposed Internal Revenue Service and Treasury Department health care reform regulations would ease the amount of employee plan coverage information employers would have to report to federal regulators.
Under the proposed rules, released Thursday, employers would not be required to report cost information related to family coverage.
In addition, employers would have to report how much of the premium employees will have to pay for single coverage only.
Limiting that reporting requirement to single coverage is appropriate, the IRS and the Treasury Department said because a health care reform law affordability test applies only to single coverage — not family coverage.
Under that test, if the premium paid by employees for single coverage exceeds 9.5% of household income, the employee is eligible for a federal premium subsidy to purchase coverage in a public insurance exchange. If the employee uses the subsidy, the employer may be liable for a $3,000 penalty.
No penalty is assessed regardless of how much the employer charges for family coverage, making the need to collect such information unnecessary, regulators said.
“Because only the lowest-cost option of self-only coverage offered under any of the enrollment categories for which the employee is eligible is relevant to the determination of whether coverage is affordable — and thus to the administration of the premium tax credit and employer shared responsibility provisions — that is the only cost information proposed to be requested,” according to the proposed regulation, which is scheduled to be published in the Sept. 9 Federal Register.
While regulators have reduced the amount of information to be reported, “it is only limited relief. There still will be a massive amount of work to meet the reporting requirements,” said Rich Stover, a principal with Buck Consultants L.L.C. in Secaucus, N.J.
The proposed rules, though, could pose problems in other areas. For example, employers would be required to report tax identification numbers of employees' dependents.
Employers do not always have such information for every dependent, said Amy Bergner, managing director of human resources in Washington for PricewaterhouseCoopers L.L.P.
White House proposes new employer mandate rules
Originally posted September 6, 2013 by Ricardo Alonso-Zaldivar on https://www.benefitspro.com
WASHINGTON (AP) — The Obama administration on Thursday released new proposals for carrying out a major requirement of the federal health care law that was postponed earlier this summer.
At issue is how to gather information that would allow the government to enforce a requirement that companies with 50 or more workers provide affordable health insurance to their full-time employees. Companies that don't comply would risk fines.
The mandate was supposed to take effect Jan. 1, but in July the White House unexpectedly announced a one-year delay until 2015. Officials said more time was needed to work out information reporting requirements so they would not be too burdensome for businesses. Delaying the mandate also defused a potential political problem for Democrats in next year's congressional elections.
The new proposal from the Treasury Department seeks comment on options to reduce or streamline reporting by employers, insurers and health plan administrators. In some instances, the administration is proposing to eliminate duplicative reports and in other cases, it's asking for less detail.
Business groups said it will take time to sort through the technicalities but praised the administration's effort to find common ground.
"Retailers are not interested in being overly burdened by bureaucratic red tape or time-wasting, duplicative reporting requirements," Neil Trautwein, the top health policy official for the National Retail Federation, said in a statement.
The information reported by employers and insurers is also critical in enforcing the law's central requirement that virtually all Americans carry health insurance starting Jan. 1. That so-called individual mandate has not been delayed and remains in full force.
The Treasury Department said it will be soliciting feedback on its proposals through early November, and will use the comments to develop final rules.
Although the one-year delay of the employer coverage requirement remains in effect, the administration says it hopes employers will voluntarily begin reporting information next year to smooth the transition in 2015.