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R&R Insurance Blog


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Important Legislative Update | Right to Try Law

Posted by Terry Frett, CEBS, ChHC, CLU, CPCU, REBC, RHU

iStock-637820234On May 30th President Trump signed into law the “Right to Try” legislation.  This new law gives terminally ill patients the right to use experimental medications that have not yet been approved by the Food and Drug Administration. 

New pharmaceuticals brought to market must complete three phases of clinical trials that often take years to complete.  The first phase of trials requires a company to prove the drug is safe for humans and that the drug itself will not poison the patient.  Phase 1 trials are often conducted on as few as 30 patients.  The later clinical trials that supersede Phase 1, determine whether the drug is effective at treating the condition for which it is intended without problematic side effects.

The new “Right to Try” law allows a physician to administer a medication that has only cleared Phase 1 clinical trials.  These medications would still be considered experimental and not covered by health insurance.  Both the drug manufacturer and physician would be exempt from liability as a result of the trial medication’s failure to perform.

This legislation was developed for individuals that are suffering from terminal conditions such as amyotrophic lateral scleroses (ALS) for which there are promising treatments in the midst of the approval process. 

For more information, contact a KnowledgeBroker in our Employee Benefits Practice.

To learn more about the moving parts that make up pharmacy and what you can do as a plan sponsor to address the cost, attend R&R's upcoming Prescription Drug Seminar.

Spending Resolution Affects ACA Taxes

Posted by Terry Frett, CEBS, ChHC, CLU, CPCU, REBC, RHU

Gavel with cash.jpgOn Monday January 22, 2018, Congress passed HR195 to extend funding for the government through February 8, 2018.  President Trump signed the legislation into law Monday night.  Although this new law was crafted to continue funding the government, it did contain 3 specific items impacting employer sponsored health insurance plans:

  • Health Insurance Tax
    • Presently, insured health plans include a premium tax that adds over 2% to the premium rate. This tax is part of the Affordable Care Act.  With the passage of HR195, the Health Insurance Tax will be suspended for 2019.
  • Cadillac Tax
    • The Affordable Care Act contained what is often referred to as the “Cadillac Tax”. The tax was originally scheduled to be implemented in 2018.  It would result in a 40% excise tax for health insurance plans with annual costs in excess of $10,200 for single coverage and $27,500 for family coverage.  The tax would be paid by the plan sponsor.  This tax was delayed to 2020 and now, as a result of HR195, it is delayed until 2022.
  • Medical Device Tax
    • Manufacturers of medical devices were set to be subjected to a 2.3% tax on their products. Again, this tax was part of the Affordable Care Act.  The passage of HR195 delays the start of this tax for 2 more years.

The new tax law (signed on December 22, 2017) eliminated the individual health insurance mandate penalty starting in 2019.  The employer mandate for Applicable Large Employers (generally companies with 50 or more full-time equivalent employees) and the 1095 reporting continues unchanged.

Employers should be aware of the evolving applicability of existing ACA taxes and fees so that they know how the ACA affects their bottom lines. R&R Insurance Services will continue to keep you informed of changes.

Read here for a more comprehensive list of these current updates. If you have any questions, feel free to contact a Knowledge Broker at 800.566.7007.

Topics: Compliance, ACA

IRS Employer Shared Responsibility Payment Notices

Posted by Terry Frett, CEBS, ChHC, CLU, CPCU, REBC, RHU

bank-written in cracked stone.jpgThe Affordable Care Act (ACA) employer mandate applies to employers who fall into the Applicable Large Employer (ALE) classification outlined in the law.  An applicable large employer is any company or organization that has an average of at least 50 full-time employees or full-time equivalents. For the purposes of the Affordable Care Act, a full-time employee is someone who works at least 30 hours a week.

If an employer is classified as an Applicable Large Employer, they must either offer a group health plan to their full-time employees that is of a “minimum value” and is “affordable” or potentially pay a fine known as a ‘’shared responsibility payment’’.  In 2016, the federal government Health Insurance Marketplace for individual health insurance sent out notices to certain employers that had an employee attest to the government marketplace (Healthcare.gov) that they were neither enrolled in employer sponsored coverage or eligible for employer coverage that is affordable and meets the minimum value standard.  At that time employers who received an individual notice had 90 days to respond and provide an appeal.  No fines were imposed since this first step involved data collection.

More recently, the IRS began sending Employer Shared Responsibility Payment Notices known as the 226J letter, to specific employers outlining the payment they owe for their full-time employee or employees that received an individual premium tax credit for the purchase of a private individual health plan on the Marketplace.  If you receive such a notice and do not agree with the IRS findings you must act immediately as outlined by the IRS in their publication entitled “Your Appeal Rights and How To Prepare a Protest If You Don’t Agree”.

Generally, only Applicable Large Employers (ALEs) who had full-time employees enrolled into a private individual health plan through the Marketplace that qualified for a premium tax credit should receive a notice for payment.  If you do receive a 226J letter from the IRS, our agency can assist you with an initial review.  However, if a formal appeal must be filed we will recommend you work with your legal counsel or with a law firm we can recommend.
Hopefully, your firm will not receive this Holiday Greeting from the IRS.  However, if you do, take immediate action since the timeline to respond to your defense is limited.