R&R Insurance Blog

The Internal Revenue Service released final guidance for small employers eligible to claim the new small business health care tax credit for the 2010 tax year. This includes a one-page form and instructions small employers will use to claim the credit for the 2010 tax year.

New Form 8941, Credit for Small Employer Health Insurance Premiums, and newly revised Form 990-T are now available on IRS.gov. The IRS also posted on its website the instructions to Form 8941 and Notice 2010-82 , both of which are designed to help small employers correctly figure and claim the credit.

More information about the credit, including a step-by-step guide to claiming the credit and answers to frequently asked questions, is available on the Affordable Care Act page on IRS.gov.

A recent survey by the National Business Group on Health reveals that large U.S. employers predict their health care benefits costs will rise an average of 8.9 percent in 2011 (up from 7 percent in 2010).

Top strategies employers plan to use to control costs include:

• Raising employee contributions (63 percent)
• Raising out-of-pocket maximums (46 percent)
• Raising in-network deductibles (44 percent)
• Raising out-of-network deductibles (40 percent)
• Raising copay/coinsurance for specialist care (21 percent)
• Raising copay/coinsurance for primary care (6 percent)

One of the most common cost-controlling tactics cited by employers was offering a consumer-directed health plan (CDHP). In 2011, 61 percent of employers plan to offer a CDHP, while 20 percent will offer it as their only plan option (up from 10 percent in 2010).

Other survey trends include:
In 2011, 5 percent of employers will drop retiree health benefits, while 60 percent are considering doing so. Many employers will offer premium discounts for completing health risk assessments (41 percent) or participating in tobacco cessation programs (22 percent).

A quarter of respondents will raise their copay/coinsurance for retail pharmacy prescription drugs, and 21 percent will do the same for mail order pharmacy benefits.

Claims against employers are on the rise and business owners should explore employment liability if coverage is not already in place. Wrongful termination, discrimination and harassment claims filed against employers increased 23% between 2007 and 2008, and retaliation claims are up 30%.

Employment liability insurance is a product that continues to evolve as the economy changes. Within the last year, new plan designs for employment Liability insurance have included crisis management coverage, workplace violence coverage and network security.

There is often confusion over the similarities between the policy for Pension and Welfare Fund Fiduciary Responsibility Insurance and the Employee Benefits Liability (EBL) endorsement for the Commercial General Liability Coverage portion. Although some coverage duplication exists in the area of administrative errors and omissions, the thrust of the two forms is different.

The EBL endorsement was designed primarily to provide coverage for administrative errors and omissions for a large variety of benefit plans. The Fiduciary policy form was designed to cover ERISA (Employee Retirement Income Security Act) exposures of fiduciaries for specifically designated plans to the extent that they are caused by a “wrongful act”. Fiduciary Liability vs. Employee Benefits Liability Tip Sheet.

Handout from webinar on May 5th.

Employers have begun to analyze how the recently passed health care reform legislation affects the benefits they provide to their employees. While the scope of the legislation is broad, the implementation timeframe for different aspects of the rules is spread over a number of years. Some provisions of the law go into effect this year while others are not effective until as late as 2018. Employers need to understand what to focus on now, and develop a plan for dealing with additional changes coming over the next few years.

With this in mind, we are pleased to announce, in conjunction with our network partner Assurex Global, a webinar specifically designed to allow you to gain a greater understanding of the overall components that make up this new legislation.

This session will focus on the areas of the health care reform rules with the most direct impact on employer sponsored benefit plans. Particular attention will be paid to areas employers must address in 2010 and 2011. Participants will be able to submit questions to the presenter during the session and we plan to make a Q&A available to participants that will cover additional topics and questions that we are not able to address during the webinar. The session will cover these issues and more:

• What must employer health plans change in the next 12 months including; children covered to age 26, lifetime and annual maximum limits, changes to pre-existing limitations for children and more.
• What is a grandfathered plan and what changes apply to them?
• What should employer start to think about now regarding major changes that go into effect in 2014?
• Changes to FSA, HSA, and HRA reimbursement rules
• New W-2 reporting and employer notice and when they are effective
  Employer full-time employee coverage requirement and penalties for not providing qualifying coverage
• State run insurance exchanges for small employers and individuals

Our presenter for this webinar will be Bob Radecki. Bob is currently a Principal at the HR Consulting firm of W.J. Flynn and Associates, and has more than 25 years experience in the HR and employee benefits industry helping employers deal with difficult benefit and compliance matters. Previously, Bob founded and served as President of A.E. Roberts Company, a nationally recognized compliance consulting and training firm. He has served as the principal HIPAA consultant to a number of health insurance companies, and is recognized as a leading expert on a variety of benefit compliance issues including COBRA, FMLA, Health Reform and more. Bob has been the featured speaker at numerous industry events and conferences, and has published a number of articles concerning various compliance issues.

The recently enacted federal health reform legislation contains provisions for health insurance expense tax credits for small businesses. A qualifying employer must have less than the “equivalent” of 25 full-time workers. Employer eligibility rules, how to calculate the full-time equivalent workforce, amount of credit, how the credit is calculated, how to claim the credit and other important concerns were covered in this 60 minute Webinar hosted by Peter Frittitta, Vice President, Benefits Practice at R&R Insurance Services.

Key elements from the webinar:

• Presentation Slides (PDF)
• Quick & Easy Example #1: LMNOP Company: 18 Employees: 12 FT, 6 PT, 1 owner
• Quick & Easy Example #2: XYZ Company: 31 Employees: 11 FT; 20 PT; 2 owners
• 3 Simple Steps Qualification Form - IRS Small Business Tax Credit Guide

On Sunday, March 21st, with a vote of 219 to 212, the U.S. House of Representatives passed HR 3590, the health care reform bill that was passed by the U.S. Senate on December 24th, 2009. President Obama signed the bill into law on Tuesday, March 23rd. On March 24th, the President also signed and Executive Order that restricts funding for abortions in the health care bill.

The House also passed (220 to 211) a "Reconciliation Bill" (HR 4872) on March 21st with “fixes’ or changes to the original Senate Bill. After debate which was limited to 20 hours, the Senate passed the Reconciliation Bill by a vote of 56 to 43. However, the Bill then had to go back to the House for another vote as the Senate Parliamentarian had found two minor provisions that violated Congressional Budget rules which were removed from the bill. The final Reconciliation Bill was approved by a House vote of 220 to 207. The President signed this final piece of legislation on Tuesday, March 30th.

Needless to say, it has been difficult enough to keep track of the legislative process and much more difficult to actually know and understand what it contains and means. We know that there are many more questions than there are answers at this point. One simple and common question that we have received from many of you is: "So what happens next?" In an effort to help answer that question, we have made two documents available to you. One is a simplified timeline of the Senate Bill that describes the major milestones that will impact you as an individual and as an employer. The other document is a detailed timeline that also encompasses facets of the Reconciliation “fixes” to the Senate Bill with, of course, much more detail on the Senate Bill.

The new health insurance laws are both comprehensive and complex. There will be much more information to follow in the coming weeks and months that will come from interpretation of this massive legislation. We anticipate much more confusion to ensue as both the Reform Bill and the Reconciliation Bill contain numerous contradictions that need to be dealt with. Also, lobbyists for the insurance industry, labor unions, hospitals and medical professionals, the pharmaceutical industry, and other special interest groups have turned their attention and focus to influence the interpretations and the writing of the Federal "governing rules" which will dictate insurance coverage, requirements for employers and the insurance exchanges created under the law.

Bottom line...we know it will be difficult to filter out the confusion which will come from many directions but we will do our best. We also know that underlying medical costs will continue to increase, compounded by new added-tax costs. That coupled with a slow economic recovery means that your business has never been more challenged. Contact any one of our R&R Benefits knowledge brokers to understand more about how this affects you and how we can be of assistance.

Watch for announcements regarding upcoming seminars/webinars on health reform updates. Also, stay on top of the new health reform laws and what they mean to you by visiting our dedicated web page: www.myknowledgebroker.com/beinformed. There you will find all of the important pieces of legislation, summary documents, news and other articles for you to view or download.