R&R Insurance Blog

You have the opportunity to earn a premium refund on your level-funded plan but do you know what to do with it once you get it? Or maybe you’ve already received one - did you know that there are compliance rules to follow to disburse any employee share of that refund within 90 days?

In most simple terms, if employees pay a portion of health care premiums, then they are entitled to a prorated share of the premium refund. Additionally, you must distribute the appropriate funds within 90 days of receiving the refund check.

There are some interpretations being expressed in the consulting community that would suggest a very simple option exists such as “give every employee the same amount.” We strongly discourage this as it relies on comments from the U.S. Department of Labor (DOL) that contradict other guidance by the DOL. It clearly is not supported.

An employer can apply the entire refund check amount toward reducing employee contributions. However, this only eliminates the need to calculate the “split” between the employees and the employer. Unless the employer has paid 100% of the premiums, employers will still need to calculate the appropriate share of the refund for each employee prorated according to the amount they contributed.

There are basically three compliance options available to employers. If you are not familiar with the compliance options that are available to you, contact an R&R Benefits Knowledge Broker to learn more.

Last Saturday, the U.S. Senate passed their version of a tax reform bill, the Tax Cuts & Jobs Act. The bill is not yet finalized. While the Senate and the House have passed similar tax reform plans, negotiators from both chambers need to develop agreement on a single piece of legislation that both chambers must approve before it is sent to the President for his signature.

One component of the Senate Bill that is not in the House Bill is regarding the Individual Shared Responsibility Payment (aka “Individual Mandate”) provision of the Affordable Care Act (ACA). If the Senate Bill provision makes its way into the final version of a tax reform bill, the Individual Mandate Tax would be set to zero dollars. However, all other ACA-related taxes would remain intact including the “Employer Mandate” (discussed here later).

While any other legislative actions to repeal/replace/repair the ACA remain to be seen, the Trump Administration has been busy focusing on what it can do via the rule-making agencies, namely, the Treasury (IRS), the Department of Labor (DOL) and the Department of Health and Human Services (HHS). Following is a summary of key updates, changes, and proposed changes:

FAST APPROACHING

• It’s that time of year again. ACA Employer Reporting (IRS Forms 1094-C and 1095-C) is still required. For what it’s worth, none of the discussions involving ACA repeal/replacement/repair mentioned the elimination of reporting. This required reporting will be alive and well for some time.
  
  The Individual statements for 2017 must be furnished by January 31, 2018. IRS returns for 2017 must be filed by February 28, 2018 (April 2, 2018, if filed electronically, since March 31, 2018, is a Sunday). R&R has updated our Employer Reporting Tool for 2017 which will generate the required forms in PDF format (paper filing allowed by IRS for less than 250 forms).

TAXES and PENALTIES

• Check your mailbox. The IRS recently released an outline of the processes and form letters that it will use to enforce assessment of ESRPs (Employer Shared Responsibility Penalties, aka the “employer mandate”). These are penalties that apply to large employers (with 50 or more full-time equivalent employees) to offer a medical plan (to at least 95% of its full-time employees) that is of a “minimum value” and is “affordable.”
  
  The IRS began to issue assessment letters last week informing employers of their liability for 2015 calendar year penalties. These letters will have a response deadline of 30 days from the date the letter was written. Timely response is crucial to maintain your appeal rights. Read more here regarding sample letters and the processes involved.
• No more “Reinsurance Fees.” The ACA’s “Reinsurance Fees” were imposed for 2014, 2015, and 2016 only. The 2nd (last) installment payment for 2016 was to be made by November 15, 2017.
• One more round. The PCORI fees continue to apply but are scheduled to sunset. The PCORI fees will no longer apply beginning with plan years ending on or after October 1, 2019.
• “HIT” Restart. The ACA’s Health Insurance Tax (HIT) is a permanent, annual fee on health insurers that began in 2014. It was suspended for 2017 as part of the 2015 Budget Act but will restart for 2018 collection and payment. The traditional insurance market continues to be further challenged by innovative self-funding and level-funding arrangements which also have the advantage of being exempt from the ACA’s “HIT” (3.5% - 5% of premium).
• Where did they park that Cadillac? Although it has been delayed until 2020, the ACA’s “Cadillac Tax,” if it is ever implemented, would put pressure on employers to reduce benefits to avoid/minimize paying a 40% excise tax. By its design, it is not a question of “if” an employer will be subject to the “Cadillac Tax” but “when.”

PROPOSED RULES

• Simplified…almost. On October 6, 2017, the DOL, HHS and the IRS issued two interim final rules expanding certain exemptions from the ACA’s contraceptive coverage mandate. As a result, objecting employers are no longer required to choose between direct compliance and compliance through the accommodation. A plan sponsor, issuer and plan covered by these exemptions will not be penalized for failing to include contraceptive coverage in the plan’s benefits. Note that fully-insured policies will most likely need to file policy riders as appropriate once the rule is final.
• Going up! On October 27, 2017, the Department of Health and Human Services (HHS) released its Proposed Notice of Benefit and Payment Parameters for 2019. Following are the current and proposed out-of-pocket maximums:
  • For 2017, the out-of-pocket maximum is $7,150 for self-only coverage and $14,300 for family coverage.
  • For 2018, the out-of-pocket maximum is $7,350 for self-only coverage and $14,700 for family coverage.
  • Under the proposed rule, the out-of-pocket maximum would increase for 2019 to $7,900 for self-only coverage and $15,800 for family coverage.
• Who doesn’t want more flexibility? The same proposed rules would allow states more flexibility in their options to select a new EHB-benchmark (Essential Health Benefits) plan on an annual basis beginning in 2019. This would provide more plan design choices for the small group market (less than 50 employees in Wisconsin).
• Off the table for now. The HIPAA certification requirement is delayed indefinitely, pending guidance from HHS as on October 4, 2017, HHS withdrew its proposed rule in order to reexamine the issues and explore options and alternatives to comply with the HIPAA certification requirement. This would apply to all self-funded plans including medical reimbursement HRAs.

DEVELOPING

• Back to the drawing board. The EEOC’s (Equal Employment Opportunity Commission) “final rule” regarding “voluntary” wellness incentives turns out to be not so final after all as it has been challenged by the courts to revisit its position regarding the definition of “voluntary.” The current rules were not “vacated” by the courts so the EEOC guidance should still be complied with. Stay tuned.
• That’s an order!  Several weeks ago, President Donald Trump signed “Presidential Executive Order Promoting Healthcare Choice and Competition Across the United States.” The executive order directs federal agencies to expand access to MEWAs (Multiple Employer Welfare Arrangement), HRAs and short-term, limited-duration insurance. More will follow on this as the agencies’ deadline to draft proposed regulations is December 11, 2017.
• Coming home? Even without a “repair” or “replacement” of the ACA, it is anticipated that there will be a number of states that will apply for Section 1332 State Innovation Waivers. This has been discussed recently for consideration in Wisconsin by the Office of the Commissioner of Insurance.

The disruption and turbulence in the employee benefits market will continue. For now, the Affordable Care Act remains the “law of the land” and requires much in the way of compliance for which we have the knowledge, resources and experience in helping our clients. R&R continues to monitor discussions at the federal and state levels with respect to legislative changes that will impact employee benefits. As always, do not hesitate to contact your R&R Benefits Consultant with any questions or concerns.

On May 4, 2017, members of the U.S. House of Representatives voted along party lines to pass an amended version of the American Health Care Act - proposed legislation to repeal and replace the ACA. The AHCA will now move on to be considered by the Senate.

ACA Provisions Not Impacted

The majority of the ACA would not be affected by the AHCA. The MacArthur amendments specifically maintain most of the ACA’s market reforms. For example, the following key ACA provisions would remain in place:

• Cost-sharing limits on essential health benefits (EHBs) for non-grandfathered plans (currently $7,150 for self-only coverage and $14,300 for family coverage)
• Prohibition on lifetime and annual limits for EHBs
• Requirements to cover pre-existing conditions
• Coverage for adult children up to age 26
• Guaranteed availability and renewability of coverage
• Nondiscrimination rules (on the basis of race, nationality, disability, age or sex)
• Prohibition on health status underwriting

Click here to download the ACA Compliance Bulletin - which provides an overview of the proposed legislation and its potential impact going forward.

 

It has often been said that “the only thing that is constant is change” and certainly the recent political election results translate into more change. In that vein, we at R&R Insurance Services remain “constant” in our dedication to keeping our Benefits Practice clients informed of these changes…to be your knowledgebroker.

Of course, the biggest change we have seen in the world of benefits has been the Patient Protection and Affordable Care Act (aka ACA, aka Obamacare). One of the main platforms of President-Elect Trump has been to “repeal and replace Obamacare.” In this current post-election and pre-inaugural stage, there are many prognostications about what the future may be. So, what about “repeal and replace?” We would like to share some thoughts with you as best we can and at this point in time to address questions you may have:

1. Soon after President-Elect Trump is inaugurated on January 20th, Congress could “repeal” Obamacare through “reconciliation” (only requiring a vote of 51 in the Senate). Among the challenges will be addressing the 19 million+ individuals who would lose coverage through the Exchanges with approximately 85% of them currently receiving federal assistance. Another major issue that will need to be addressed is that Medicaid expansion goes away with repeal in 31 states where enrollment increased by 16 million.
2. “Replacement” cannot be accomplished through the “reconciliation” process unless additional spending cuts are made in the budget. Therefore, “replacement” could most likely occur in a second legislative stage. How long this will take is a question.
3. Through the “reconciliation” process that would “repeal” the ACA, the reduction of funds for Medicaid and Exchange subsidies could be delayed for some time (6 – 18 months?) in order to avoid the problems mentioned above in #1.
4. The Republicans will need to have bipartisan support in the Senate to get to 60 votes. Some Democrats might be motivated to collaborate as the 2018 mid-term election will have 25 Democrat seats up for re-election in the Senate.
5. As for what “replacement” might involve, there are numerous considerations. The Trump platform has consistently promoted expansion of HSA-based coverage and selling of insurance across state lines. Additionally, President-Elect Trump himself stated that he would like to see certain parts of Obamacare retained such as coverage of pre-existing conditions and coverage of adult children to age 26. If there are any individual tax credits that might be introduced for individual medical coverage, we may see, as the “Cadillac Tax” is repealed along with the rest of the ACA, a limitation or cap on the amount that an employer can deduct for health and welfare expense to provide a revenue stream.

We recently hosted a Benefits Client Monthly Compliance Webinar - “How Will the Election Impact Employee Benefits Regulations & a Look Forward to 2017.” If you weren’t able to attend, please note that all of our webinars are recorded and archived at https://www.myknowledgebroker.com/health-care-webinar-archives where they are available 24/7.

In addition, Terry Frett from R&R Insurance discussed the “re-tooling” of the Affordable Care Act on WISN 1130AM Radio shortly after the election.  In addition to ObamaCare Open Enrollment 2017, he shared his thoughts on what repeal could look like in the individual and employer group markets.  

The changes ahead will involve more than the future of the ACA. We can reasonably expect to see regulatory changes from the Department of Labor, the Treasury Department and the Department of Health and Human Services. As we monitor and study these developments, we will keep you informed in a variety of ways –timely Legislative Briefs posted to your MyWave Connect_© client portal, special client alert emails, monthly compliance webinars, account management communications and client consultation.

We look forward to continuing to serve you as your knowledgebroker. If you have any questions, please contact your R&R Benefits Consultant.

By now, the deadline for registering for individual health insurance on healthcare.gov has come and gone. However the Wisconsin Office of the Commissioner of Insurance (OCI) is warning consumers to verify the status of their health insurance. The OCI has received numerous reports of consumers enrolled in incorrect plans. Much of the confusion is coming from a technical problem dealing with the zip code: either the pulled premium rate was for the wrong area or some insurers didn’t even have plans for listed zip code. In the most extreme cases, consumers are left without coverage but may not have been informed.

What to do? Be proactive and verify your coverage:

• Confirm you have received your enrollment materials
• If you have NOT received your enrollment materials within the expected time frame, check the status with your agent or insurance company
• Verify payment has been received by the insurance company
• Review policy documents that deductibles and co-pays match what you were expecting
• See discrepancies? Contact your insurance company immediately

Wisconsin residents, still have questions about your individual health insurance? Contact Donna Wahl.

The first cut of the Wisconsin Health Insurance exchange markets have been announced and it looks like slim pickins! Wisconsin's "big 3" (United Healthcare, Humana and Anthem) are not participating in the small group exchanges.

Also, keep in mind that for Wisconsin’s Exchange, we have 16 different rating regions and carriers can file for just specific ones. Carriers have until 9/15/13 to sign contracts/pull out.

Wisconsin Exchange Carriers for Individual and small group markets.

Any way you look at it - this is slim pickins for Wisconsin businesses. There are other options for avoiding the exchanges and the "taxes". More about self funding your health insurance.

Join our group on LinkedIn: Obamacare: Strategies for Business to Survive. We welcome you to join in the conversation with our LinkedIn group dedicated to discussions for business owners on Obamacare: Strategies for Business To Survive. Read articles, download documents, join the conversation, and add your expertise!

Learn how Voluntary Benefits are impacting small businesses and their ability to attract and retain employees during this time of benefit change.

There's a lot to keep track of over the next six months, so let's get right to the list. Here are 15 Affordable Care Act requirements that will become effective on Jan. 1, 2014:

1. State Health Insurance Exchanges
Each state must establish a health insurance exchange (or HHS will do so) for use by the uninsured and small employers with 100 or fewer employees (states may set the cap at 50 employees). The exchanges will offer fully insured insurance contracts that provide essential health benefits at differing levels of coverage (bronze, silver, gold, and platinum). Employees of small employers who offer health insurance coverage through an exchange may pay their employee premiums for such coverage on a pre-tax basis through the employer’s cafeteria plan.

2. State Health Insurance Exchange Tax Subsidies
Individuals who do not have affordable minimum essential coverage from their employer will be eligible for tax credit subsidies for their health insurance purchase on a state exchange if their income is below 400 percent of federal poverty level. (In 2013 the federal poverty level for a household of 1 in the 48 contiguous states is $11,490, therefore 400% of that would be $45,960.

3. Individual Mandate Tax Penalty
Individuals are required to obtain minimum essential health coverage for themselves and their dependents or pay a monthly penalty tax for each month without coverage. The monthly penalty tax is one-twelfth of the greater of the dollar penalty or gross income penalty amounts. The dollar penalty is an amount per individual of:

• $95 for 2014 (capped at $285 per family
• $325 for 2015 (capped at $975 per family)
• $695 for 2016 (capped at $2085 per family)
  These dollar penalties will be indexed for inflation starting in 2017.

The gross income penalty is a percentage of household income in excess of a specified filing threshold of:

• 1 percent for 2014
• 2 percent for 2015
• 2.5 percent for 2016 and later years
  In no event will the maximum penalty amount exceed the national average premium for bronze-level exchange plans for families of the same size. Minimum essential coverage includes Medicare, Medicaid, CHIP, TRICARE, individual insurance, grandfathered plans, and eligible employer-sponsored plans. Workers compensation and limited-scope dental or vision benefits are not considered minimum essential health coverage.

4. Automatic Enrollment
Employers with more than 200 employees who maintain one or more health plans must automatically enroll new full-time employees in a health plan. The employer must give affected employees notice of this automatic enrollment procedure and an opportunity to opt out. State wage withholding laws are preempted to the extent that they prevent an employer from instituting this automatic enrollment program. The final effective date will be established by DOL regulations.

5. Pre-Existing Condition Exclusion Practices Eliminated
Pre-existing condition exclusions no longer will be allowed in group health plans or individual insurance policies, not even the limited exclusions previously allowed under HIPAA. This also applies to grandfathered plans.

6. Ninety-Day Maximum Waiting Period
Group health plans and health insurance issuers may not impose waiting periods of more than ninety days before coverage becomes effective. This also applies to grandfathered plans.

7. Cost-Sharing Limits
Group health plans, including grandfathered plans, may not impose cost-sharing amounts (i.e., copays or deductibles) that are more than the maximum allowed for high-deductible health plans (currently these limits are $5,000 for an individual and $10,000 for a family coverage). After 2014, these amounts will be adjusted for health insurance premium inflation.

8. Annual or Lifetime Limits
Group health plans, including grandfathered plans, may no longer include more than restricted annual or any lifetime dollar limits on essential health benefits for participants. Limits will possibly exist in and after 2014 for non-essential benefits.

9. Wellness Program Health Plan Discount
The maximum premium discount an employer can offer under its health plan for participation in a wellness program is 30 percent. (It is possible that this could increase this maximum discount to 50 percent in the future.)

10. Coverage for Those in Clinical Trials
Insurers and health plans, unless grandfathered, may not discriminate against an individual for participating in a clinical trial. If a plan covers a qualified individual, it may not deny or impose additional conditions for participation in a clinical trial.

11. Employer Minimum Essential Coverage Reporting
All employers providing minimum essential coverage must file information with the IRS and plan participants.

12. Large Employer Health Information Reporting
Large employers and employers with at least 50 full-time equivalent employees must submit annual health insurance coverage returns to the FTEs and the IRS. The returns must certify whether the employer offers health care insurance to its employees and, if so, describe the details regarding plan participation, applicable waiting periods, coverage availability, the lowest cost premium option under the plan in each enrollment category, and other information.

13. Medicaid Expansion
The U.S. Supreme Court in effect ruled that the requirement for states to offer Medicaid benefits to all persons with incomes at or below 133 percent of the federal poverty level is optional with each state. States that participate in the expansion will receive full reimbursement of their additional Medicaid costs from the federal government until 2017. At that time, reimbursement will gradually decline to 90 percent of extra costs in 2020 and thereafter.

14. Health Insurance Nondiscrimination Requirements
Code Section 105(h) currently taxes the benefits received by highly compensated employees (HCEs) under discriminatory self-funded health plans. PPACA has extended these nondiscrimination rules to insured plans. Employers with discriminatory insured arrangements will need to consider changing them. Grandfathered plans are exempt from this rule. This new requirement was originally intended to be effective for plan years beginning on or after September 23, 2010. The effective date was postponed in 2010 until IRS publishes a notice, which has not yet been issued. The provision may not be effective in 2014 but it most likely will be.

The Affordable Health Care Act (PPACA) requirement that employers issue a formal “Notice of Exchange” previously tagged with a deadline of March 1, 2013 and indefinitely delayed, is now back on track.

Employers, whether offering a health plan or not, are required to furnish this notice to their employees before October 1, 2013.

Providing the Notice

Who Must Receive a Notice?

Employers must provide the Exchange notice to each employee, regardless of plan enrollment status or of part-time

or full-time status. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.

What Is the Deadline for Providing the Notice?

ACA required employers to provide the Exchange notice by March 1, 2013. However, on Jan. 24, 2013, the DOL announced that employers would not be held to the March 1, 2013, deadline and that employers would not have to comply with the Exchange notice requirement until more guidance was issued.

The DOL’s temporary guidance sets a compliance deadline for providing the Exchange notices that matches up with the start of the first open enrollment period under the Exchanges.

Employers must provide the Exchange notice to both new hires and current employees as follows:

• New Hires – Employers must provide the notice to each new employee at the time of hiring beginning Oct. 1, 2013. For 2014, the DOL will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date.
• Current Employees – With respect to employees who are current employees before Oct. 1, 2013, employers are required to provide the notice no later than Oct. 1, 2013.

Employers that decide to inform their employees about the Exchanges earlier than the Oct. 1, 2013, deadline are permitted to use the model notices and rely on the DOL’s temporary guidance.

More about Model Exchange Notices and compliance deadlines…

Helpful Links:

Model Exchange Notice: for employers who do not offer a health plan

Model Exchange Notice: For emplyers who offer a health plan to some or all employees

Do I have to comply with the Fair Labor Standads Act (FLSA)?

 

The IRS, EBSA and HHS developed the new group wellness program standards to implement Section 1201 of the Patient Protection and Affordable Care Act (PPACA). PPACA Section 1201 lets group health plans offer wellness programs, but it prohibits plans from using the programs to discriminate against people with health problems.

The federal agencies -- the Internal Revenue Service (IRS), the Employee Benefits Security Administration (EBSA) and the U.S. Department of Health and Human Services (HHS) -- said today they will compromise by requiring wellness incentive programs to use a "reasonable design."

"These final regulations state that a wellness program is reasonably designed if it has a reasonable chance of improving the health of, or preventing disease in, participating individuals, and is not overly burdensome, is not a subterfuge for discrimination based on a health factor, and is not highly suspect in the method chosen to promote health or prevent disease," agency officials said in a preamble to the final rule, Incentives for Nondiscriminatory Wellness Programs in Group Health Plans (CMS-9979-F) (RIN 0938-AR48).

At R&R, we take wellness to a whole new level. Wellness programs will increase the health and longevity of employees and their families –which means that businesses can have a lot control over their health insurance costs and the productivity of their employees – control that they don’t know they have. At R&R Insurance, we call this program WellCompForLife!

Join the WellCompForLife discussion on LinkedIn!

For more information about WellCompForLife, about self-funding your health insurance plan, health care reform or basic employee benefits questions, contact knowledgebroker Laura Stehno.

It starts off just like any other telemarketer phone call: "We are sending out new Medicare cards and have just a couple simple questions for you. Can you confirm you name, address, and phone number."

You easily reply "yes, that is correct."

The telemarketer starts listing off numbers and asks "please confirm that is your bank routing number."

RED FLAG!

Health insurance scams are increasing every day across the country. Many are preying on the mass confusion over the health care system. And unfortunately Senior Citizens are often the targets: they are home more often to answer the phone and generally have larger retirement savings for scammers access.

Due to the confusion with healthcare, other scams include offering fake health coverage, bare-bones policies being sold as full coverage, and fake Obamacare coverage.

Tips to help avoid falling victim to a scam:

• Don't answer the phone too quickly - check caller ID if possible
• Think about the question they are asking
• Think before you answer the question
• NEVER give out personal or financial information over the phone
• Just hang up the phone

Wisconsin residents with questions on how health care reform will affect you, please contact knowledgebroker Pete Frittitta.