Posts Tagged ‘Health Care Reform’

Are You On Top of the Affordable Care Act Requirements?

Wednesday, October 30th, 2013

Employee AbsenteeismImplementation of the Affordable Care Act occurs in stages, with many of the reforms and requirements taking effect in 2013 and 2014.  There is a lot of information out there but it can be difficult to filter through it all.  Here are some great resources to help you make sure you are on top of the requirements that affect your business specifically.

Employers with fewer than 25 employees:

http://www.sba.gov/content/employers-with-fewer-25-employees

Employers with 50 or fewer employees:

https://www.healthcare.gov/what-do-small-businesses-need-to-know/

Employers with 50 or more employees:

http://www.sba.gov/content/employers-with-50-or-more-employees

What if I am self employed?

http://www.sba.gov/content/self-employed

Glossary of key Health Care Reform terms:

https://www.healthcare.gov/glossary/

 

Legal Disclaimer:  This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

Federal Law Alert – Health Care Reform FAQ

Friday, May 10th, 2013

Please take note of the following Federal Law Alert, courtesy of HR Support Center:

Question: We have over 50 employees. Is it true that we may face health care reform penalties even if we do offer health insurance coverage in 2014?

Answer: Yes, an organization with 50 or more employees may still face Health Care Reform penalties from the Federal Government if it does not offer “minimum essential coverage” at an “affordable rate”.

So what is “minimum essential coverage”? And what is an “affordable rate”? “Minimum essential coverage” refers exclusively to the health insurance plan design, not how much the employer contributes to the plan. In order to offer minimum essential coverage under the federal law, the health insurance carrier must pay for at least 60% of treatment costs, commonly referred to as a health plan with a 60% actuarial minimum value. In the coming months, you will probably hear this level of plan referred to as a “bronze level” plan. On the other hand, “affordable” coverage has everything to do with how much the employer contributes to the plan. It is a common misconception that a large company is required to contribute a specific percentage to each employee’s health insurance plan (such as 50%, 60% or 75%). Rather, the federal law requires that the organization contributes enough so that the employee’s portion of the premium for employee-only health insurance coverage for the “bronze level or richer” plan is no more 9.5% of the employee’s total household income. Since employers generally do not know an employee’s total household income, there is a safe harbor in place for 2014 stating that employees have access to “affordable coverage” as long as the employee’s portion of the premium for single coverage for the “bronze level or richer” plan is equal to or less than 9.5% of the employee’s reported W-2 wages.

If you have questions regarding penalty amounts and calculations, please reach out to your Human Resources Professional, Accounting Professional or Health Insurance Broker.

This information is provided courtesy of your HR Pros.  If you have questions about how to access your HR Support Center account, please contact your Client Account Manager.

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

Webinar Series 2013

Tuesday, April 9th, 2013

CBIZ Webinar SeriesProgramming With Your Business Growth in Mind

Welcome to our CBIZ Employee Services (ES) webinars for 2013!

Experts representing many of our ES services – from benefits, wellness, human capital services, retirement plan services and property and casualty insurance – will share information and insights on timely and important topics during one or more of the programs listed here. Whether you’re in need a refresher or just an overview of a new topic, sign up today!

TO REGISTER for upcoming 2013 webinars, click here.

April

Emerging Trends in Onsite Health Clinics

Fri., April 12 – 10:30 to 11:30 a.m. Central Time

This webinar will look at the current trend of onsite health care as a potential total rewards strategy for employers, including new models for developing onsite clinics, patient-centered medical homes, options for reaching employees located in geographically remote areas and ancillary-clinic services that can optimize an employer’s return on investment. Larger employers especially may find this program of interest, but even smaller employers may benefit from several strategies discussed.

Presenter:  Polly Thomas, Director, CBIZ Onsite Clinic Consulting

Who Should Attend:  HR Executives, COOs, CFOs, and Occupational Health and Safety Directors – especially at companies with 400 or more employees (or two or more smaller companies interested in partnering to implement these solutions)

Credit:  This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

State of the Property and Casualty Insurance Market

Tues., April 30 – 10:30 to 11:30 a.m. Central Time

While property and casualty clients are experiencing rate increases across many industries, this webinar will look at expectations for 2013 and beyond, what this means for all companies as they budget for upcoming renewals, alternatives to the commercial insurance market, and strategies that may mitigate risk.

Presenter:  Tony Consoli, President, CBIZ Insurance Services/Mid-Atlantic Region, Damian Caracciolo, VP, CBIZ Risk and Consulting Services, and Practice Leader, CBIZ Executive and Protection Practice

Who Should Attend:  Chief Financial Officers, General Counsels, Treasurers, Risk Managers, and anyone involved in budgeting for the risk management process or insurance procurement

Credit:  This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

MAY

Health Care Reform Update: Shared Responsibility in Focus

Tues., May 21 – 10:30 a.m. to Noon Central Time

The so-called centerpiece of the Affordable Care Act – concerning exchanges and individual and employer shared responsibility – takes effect in about half a year. Are you ready?

Presenters:  Karen McLeese, Esq., VP of Regulatory Affairs, CBIZ Benefits & Insurance Services, Inc.; Bill Smith, Esq., Managing Director, CBIZ National Tax Office

Who Should Attend:  HR Execs, COOs and CFOs

Credit: This program has been approved for 1.5 General recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

JUNE

Wellness for Small and Medium-Sized Employers

Tues., June 18 – 10:30 to 11:30 a.m. Central Time

Small and mid-sized employers struggling with increasing health care expenses and productivity- related costs can benefit from this webinar, which focuses on turning wellness costs into an investment that enhances the value of an organization’s workforce. The session will include a look at affordable, cost-effective actions that small and mid-sized employers can implement.

Presenter:  Gina Payne, CBIZ National Director of Wellness

Who Should Attend:  HR Managers, Benefits Managers, Executive and Financial Officers of organizations with 500 or fewer employees

Credit: This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute

JULY

Data Security and Privacy Liability

Tues., July 16 – 10:30 to 11:30 a.m. Central Time

This webinar will give you an overview of the risks associated with network security, as well as the privacy liability that companies face in the digital age – and what to do to protect your organization.

Presenter:  Damian Caracciolo, VP, CBIZ Risk and Consulting Services/Practice Leader, CBIZ Executive and Protection Practice

Who Should Attend:  Chief Technology, Chief Information and Chief Financial Officers; Risk Managers, HR Executives and other corporate leaders filling these roles

Credit: This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

AUGUST

Closing the Fiduciary Gap

Tues., Aug. 20 – 10:30 to 11:30 a.m. Central Time

This webinar will focus on strategies to lower retirement plan liability and improve plan participant outcomes. We will identify six primary risk areas involving fiduciaries, look at best practices and discuss new fee-disclosure regulations.

Presenters:  Eric M. Endress, CFA, AIF®, CBIZ Senior Investment Analyst; Jennifer Kennedy Ontko, QKA, QPA, CBIZ Senior Retirement Plan Consultant; Kevin J. Kocsis, AIF®, CBIZ Investment Analyst; Alexandra LoPresti, CBIZ Investment  Analyst; Bradley J. Sieniawski, CBIZ Investment Analyst

Who Should Attend:  Finance and HR Executives; anyone else who makes decisions on behalf of an ERISA-regulated retirement plan

Credit: This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

SEPTEMBER

Health Care Reform Update: The State of Shared Responsibility

Tues., Sept. 17 – 10:30 a.m. to Noon Central Time

As we approach the cusp of the Affordable Care Act’s shared responsibility requirement for individuals and employers, are you ready for new reporting Code Section 6056 and more?  Join us to explore the status of the law.

Presenters:  Karen McLeese, Esq., VP of Regulatory Affairs, CBIZ Benefits & Insurance Services, Inc. ; Bill Smith, Esq., Managing Director, CBIZ National Tax Office

Who Should Attend:  HR Execs, COOs and CFOs

Credit:  This program has been approved for 1.5 General recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

OCTOBER

Delivering Benefit Solutions, Not Renewals: A Look at Hybrid Funding, Self-Insured Plans and Captives

Tues., Oct . 15 – 10:30 to 11:30 a.m. Central Time

This webinar will take a look at several alternatives to traditional group health insurance plans. Learn about reducing the financial volatility of self-insured plans through captives, reducing benefit plan costs through hybrid funding, and more. Depending on the plan, groups both smaller (25 to 99 employees) and larger (100+ employees) may discover opportunities that can benefit their circumstance. Be sure to sign up to learn more.

Presenters:  Ed Belt, President, CBIZ Primarily Care; Courtney Claflin, CBIZ National Captive Insurance Practice Leader

Who Should Attend:  HR Executives and C-level Executives, especially CFOs

Credit:  This program has been approved for 1 General recertification credit hour toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

NOVEMBER

Are Your Benefit Plan Ps and Qs in Order? Participant Notices and More…

Tues., Nov. 19 – 10:30 a.m. to Noon Central Time

This webinar reviews the myriad of calendar year, plan year, and other notices and disclosures applicable to welfare benefit plans. Join us for a look at the ever-changing world of welfare benefit compliance.

Presenter:  Karen McLeese, Esq., VP of Regulatory Affairs, CBIZ Benefits & Insurance Services, Inc.

Who Should Attend:  HR Directors or anyone responsible for HR compliance, COOs and CFOs

Credit:  This program has been approved for 1.5 General recertification credit hours toward PHR, SPHR and GPHR recertification through the HR Certification Institute.

TO REGISTER for upcoming 2013 webinars, click here.

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

All information listed on these pages, including dates, times, presenters and other webinar details, is subject to change without notice.

Individual Minimum Essential Coverage and Affordability Standard

Wednesday, February 27th, 2013

Essential CoverageFebruary 6, 2013

The centerpiece of the ACA is health coverage expansion. One of the ways that this is to be achieved is through a mandate that virtually all people residing in this country maintain a minimum level of coverage or pay a tax. The Agencies have recently issued two sets of proposed regulations and one final regulation targeted at explaining how this coverage mandate will be accomplished.

INDIVIDUAL SHARED RESPONSIBILITY REQUIREMENT – MINIMUM ESSENTIAL COVERAGE
On January 30, 2013, the IRS issued proposed regulations and questions and answers relating to the Individual Shared Responsibility provision. Below is an overview of this guidance.

Who are the individuals required to maintain Minimum Essential Coverage?
As mentioned above, beginning in 2014, all individuals residing in the U.S. must maintain a minimum level of coverage, or risk a shared responsibility payment. A taxpayer would also be responsible for maintaining coverage for a child or other individual claimed as a dependent on the taxpayer’s federal tax return. Spouses who file their taxes jointly are likewise generally responsible for maintaining this minimum level of coverage.

Following are the potential penalties for failure to maintain a minimum essential coverage:

Potential Penalties

Who is exempt from maintaining minimum essential coverage?
The regulations provide for 9 categories of individuals exempt from the requirement to maintain minimum essential coverage; they are:

  1. A member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits.
  2. A member of a recognized health care sharing ministry.
  3. A member of a federally recognized Indian tribe.
  4. An individual whose household income falls below the minimum threshold for filing a tax return.
  5. An individual who experiences a short gap in coverage of less than three consecutive months during the year.
  6. An individual who incurs a hardship, as certified by an Exchange, which makes him/her unable to obtain coverage.
  7. An individual who cannot afford coverage because the premium cost exceeds 8% of the his/her household income.
  8. An individual who is incarcerated (jail, prison, or similar penal institution or correctional facility)
  9. An individual who is not a U.S. Citizen, a U. S. national, nor an alien lawfully present in the U.S.

For other individuals seeking an exemption, the HHS issued proposed regulations relating to the process to be used by Exchanges in conducting eligibility determinations and granting exemptions from the shared responsibility payment.
In an effort to facilitate the maintenance of minimum essential coverage, certain individuals whose income falls between 100 and 400% of the federal poverty level will be entitled to government assistance unless the individual is exempt.

What is Minimum Essential Coverage?
Minimum essential coverage generally includes coverage under:

Employer-sponsored group health plans, whether insured or self-funded, and grandfathered plans, as well as COBRA coverage (if actually elected) and retiree coverage. It also includes group health coverage sponsored by non-profit and for-profit entities, and governmental entities, including local governments.

It should be noted that HIPAA-excepted coverage alone will not qualify as minimum essential coverage; HIPAA-excepted coverage includes:

  • Limited-scope dental benefits, vision benefits, or long term care benefits provided under a separate policy or contract, and are otherwise not an integral part of a group health plan.
  • Other types of limited benefit plans, such as accident-only plans, disability income coverage, liability insurance, workers’ compensation, credit-only insurance, and coverage for on-site medical clinics.
  • Non-coordinated benefits providing specified disease or illness coverage, hospital indemnity insurance, or fixed dollar indemnity insurance that meets certain criteria.
  • Supplemental benefits, such as Medicare supplemental coverage (Medigap or MedSupp).

Government-sponsored plans such as Medicare, Medicaid, Children’s Health Insurance Program (CHIP), TRICARE, and various Veteran’s health programs.

Individual health policies, including a qualified health plan offered by an Exchange.

Other similar types of comprehensive health coverage recognized by HHS as minimum essential coverage.

When does the individual mandate become effective?
The individual shared responsibility provision becomes applicable on January 1, 2014.

EMPLOYER SHARED RESPONSIBILITY REQUIREMENT – DETERMINING AFFORDABLE COVERAGE
Beginning January 1, 2014, a large employer employing 50 or more employees must offer adequate coverage at an affordable rate to its employees, or risk being subject to an excise tax (see CBIZ Health Reform Bulletin, Shared Responsibility Guidance, 1/9/13).

On January 30, 2013, the IRS issued final regulations specifically relating to defining the “affordability” standard. These regulations affirm that affordability is based on the cost of single coverage in the employer’s least expensive plan. While large employers must offer coverage to their full-time employees (those working 30 or more hours per week) and their dependents (children under age 26), the affordability, according to these regulations, is based only on single coverage. This should come as welcome news to employers.

CONCLUSION
While much of this guidance relating to the obligation to maintain a minimum level of coverage would not unduly impact employers, employers will be interested to know the types of plans that qualify as minimum essential coverage. Employers will also likely be pleased to know, at least for now, affordability is based on the cost of single coverage.

About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.

The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation. The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein. As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

Sub-Regulatory Guidance and FAQs Issued

Tuesday, February 26th, 2013

Health Care Reform GuidanceJanuary 25, 2013

As has been true since the enactment of the Affordable Care Act (ACA), the governing agencies are using their authority to issue sub-regulatory guidance, often in the form of questions and answers, to provide guidance on how the government believes regulations will be issued. To this end, FAQs About Affordable Act Implementation Part XI have just been issued. Of particular note are:

Notice of Exchange
The law requires employers to issue a Notice to employees explaining:

  • The existence of the Exchange
  • If the employer’s health plan provides less than minimum value, the individual may be entitled to government assistance for purchasing coverage through the Exchange
  • If the employee chooses to purchase coverage through the Exchange, he/she may lose any employer contribution toward employee coverage.

This Notice was to be provided to employees by March 1, 2013. The Department of Labor has stated that the requirement to issue the Notice is delayed until future regulations are issued. It is expected that these regulations will be issued in late summer or early fall – closer to the time that Exchanges will be open for business.

Stand-Alone Health Reimbursement Arrangements
One of the provisions of the Affordable Care Act is that a health plan can impose no lifetime, and eventually, no annual limits on essential health benefits. A question has risen as to the applicability of the no limit requirement on Health Reimbursement Arrangements (HRAs) (see HRB 39 – Relief for Stand-Alone Health Reimbursement Arrangements). The Department of Labor has indicated that it expects to issue guidance clarifying the types of HRAs that will be considered integrated, and therefore not subject to the no-limit provision. Specifically, the Department expects to issue guidance stating that an HRA used to fund individual policies, including employer sponsored individual policies purchased with HRA dollars will not qualify as an integrated plan. What this means is that these types of HRAs would be subject to the no lifetime or annual limit requirement. Further, the Department states that it expects to issue guidance stating that, to be integrated, the HRA participant must be enrolled in the related comprehensive health plan in order for the HRA to be exempt from the no lifetime and annual limit requirement.

Finally the guidance clarifies that amounts credited in a standalone HRA prior to January 1, 2014, can continue to be used to reimburse medical expenses. In a nutshell, what this guidance suggests is that only integrated HRAs, i.e., an HRA that is used in conjunction with a comprehensive health plan and only covers participants enrolled in the comprehensive health plan will be viable in 2014 and beyond. Other types of HRAs would have to comply with the no annual or lifetime limit requirements applicable to other comprehensive health plans.

Patient-Centered Outcomes Research Fee
As a reminder, the Affordable Care Act imposes a per-covered-life Patient-Centered Outcomes Research fee (PCOR) to fund the Patient-Centered Outcomes Research Trust Fund. This fee commences for plan years ending after September 30, 2012 and continues through plan years ending before October 1, 2019 (see CBIZ Health Reform Bulletin 60, Patient-Centered Outcomes Research Fee) and CBIZ Health Reform Bulletin 49, Fees on Health Insurance Policies & Self-Insured Plans: Patient-Centered Outcome Research Trust Fund). Generally, the government has indicated that this fee cannot be paid from plan assets. The newly issued guidance addresses the specific issue of multi-employer and limited other circumstances in which the plan trustees have no existence other than for the specific purpose of providing benefits In these very limited circumstances, the Department of Labor has indicated that the PCOR fee can be paid from plan assets. But again, in all other instances, the PCOR cannot be paid from plan assets.

Fixed Indemnity Plans
The Department of Labor has issued several FAQs relating to fixed indemnity plans. Generally, a fixed indemnity plan in its purest sense is one that reimburses a fixed amount upon the occurrence of an event, such as a hospitalization, without regard and in no way tied to actual receipt of care. These types of plans generally are not subject to ACA nor are they subject to HIPAA. The Department of Labor indicates in these FAQS that the marketplace is attempting to circumvent this rule by calling plans fixed indemnity plans when in fact reimbursement is made or is otherwise tied to actual receipt of care. In effect, the Department has indicated that it will double down its efforts with state insurance departments to make certain that the intent of the Affordable Care Act is not thwarted through these types of arrangements. This is just another example of how the government is trying to stay ahead of creative methods of trying to circumvent the law.

About the Author: Karen R. McLeese is Vice President of Employee Benefit Regulatory Affairs for CBIZ Benefits & Insurance Services, Inc., a division of CBIZ, Inc. She serves as in-house counsel, with particular emphasis on monitoring and interpreting state and federal employee benefits law. Ms. McLeese is based in the CBIZ Leawood, Kansas office.

The information contained herein is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. The information contained herein is provided as general guidance and may be affected by changes in law or regulation.  The information contained herein is not intended to replace or substitute for accounting or other professional advice. Attorneys or tax advisors must be consulted for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.  As required by U.S. Treasury rules, we inform you that, unless expressly stated otherwise, any U.S. federal tax advice contained herein is not intended or written to be used, and cannot be used, by any person for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Service.

W-2 Reporting of Employer Paid Insurance

Sunday, October 28th, 2012

W-2 ReportingThe Affordable Care Act requires many employers to report the cost of coverage under an employer-sponsored group health plan on employees’ 2012 W-2s.  If you need an earning code for this, please contact your Client Account Manager before processing your final payroll dated in 2012.

All employers that provide “applicable employer-sponsored coverage” under a group health plan are subject to the reporting requirement, except as provided in the transition relief described below.  This includes federal, state and local government entities (except with respect to plans maintained primarily for members of the military and their families), churches and other religious organizations, and employers that are not subject to the COBRA continuation coverage requirements, but does not include federally recognized Indian tribal governments or, until further guidance, any tribally chartered corporation wholly owned by a federally recognized Indian tribal government.  Those not required in 2012 may choose to voluntarily comply this year and could be required in future years but the IRS will give at least six months of advance notice of any changes to the transition relief.

In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee whether or not it was pre-tax.  In the case of a health FSA, the amount reported should not include the amount of any salary reduction contributions.

The cost of these health care benefits will be reported in Box 12 of the Form W-2, with Code DD.  It is listed for informational purposes only, and is not taxable.

The transition relief applies to the following:

  1. Employers who filed fewer than 250 Forms W-2 for the previous calendar year (employers who filed fewer than 250 W-2s for 2011 tax year) will not be required to report the cost of coverage on the 2012 W-2s.
  2. Multi-employer plans.
  3. Health Reimbursement Arrangements.
  4. Dental and vision plans that are not integrated into another group health plan or that give participants the choice of declining the coverage or electing it and paying an additional premium.
  5. Self-insured plans of employers not subject to COBRA continuation coverage or similar requirements.
  6. Employee assistance programs, on-site medical clinics, or wellness programs for which the employer does not charge a premium under COBRA continuation coverage or similar requirements; and
  7. Employers furnishing W-2s to employees who terminate before the end of a calendar year and request their W-2 before the end of that year.

Employers are not required to create a W-2 for the sole purpose of reporting health coverage.

Click Here for more detailed information on this topic.

 Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

Free Workshops on Health Care Reform Legislation and Qualified Plan Regulations

Wednesday, September 19th, 2012

Right ChoiceSmall business owners are facing immediate challenges in Health Care Reform and new Qualified Plan Regulations.  If you are a business owner, these complimentary financial workshops are not to be missed!  Come and learn how to navigate a minefield of rules and regulations that can affect your business.

Health Care Reform Legislation

 What does it mean to my company and employees?  When will it impact my business?  What can I do about it?

Gary Helm, Director of Employee Benefits with Bearance Management Group — a leader in property and casualty, surety bonds and employee benefits insurance — will provide strategic insight and counsel into Heath Care Reform and your business.

  • What do the new laws mean to your employees and their coverage?
  • How to prepare for open enrollment and the implementation of requirements scheduled to take effect for your next plan year.
  • Put in place a mechanism to track the value of employer-provided coverage so you can report it on W-2s.
  • Experience a Health Care Reform Benefit Cost Analysis.
  • Determine whether pooling with other employers may benefit your organization.

Successful Qualified Plan Design Amidst New Regulations

Juhl Stoesz, Associate Counsel, and Jason Bolstad, Consultant, at TSC, Inc — the largest independent retirement plan administration firm in the Upper Midwest — will guide you through the myriad of new regulations in retirement plan compliance and fiduciary responsibilities.

  • What are the issues being addressed by the disclosure initiatives?
  • Who is impacted by the disclosure initiatives & what do the disclosure initiatives require?
  • What is the regulatory framework?
  • When do the requirements need to be met & what are the timing requirements for the disclosures?
  • Plan design to maximize benefits for key employees.
  • Assisting you in providing to your employees the wherewithal to retire.

Tuesday, October 2:  10:00 – 11:30 a.m. at Rush Creek Golf Club

Thursday, October 4:  4:00 – 5:30 p.m. at Golden Valley Country Club

Tuesday, October 9:  4:00 – 5:30 p.m. at The St. Paul Grille

Registration:  Space is limited so register today!  Contact Amanda J. Johnson at 952-258-5260 or ajohnson@minneapolis.nef.com

Sponsored by:  Payroll Control Systems, Bearence Management Group, StoneCreek Financial and TSC.

Marketing Sponsor:  Marketing Mavericks

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

Securities products offered through New England Securities Corp (NES), (member FINRA/SIPC). Stone Creek Financial is not affiliated with NES. NES nor StoneCreek Financial provide tax or legal guidance. Please contact your tax advisor or attorney for such guidance. 301 Carlson Parkway, Suite 300 Minnetonka, MN 55305. Payroll Control Systems, Bearence Management Group and TSC, Inc. are not affiliated with StoneCreek Financial and are solely responsible for the information provided.

HR Education and Training Webinar – Benefits

Thursday, August 16th, 2012

Date:    Friday, September 7, 2012
Time:   11:00 a.m. – 12:00 p.m. CST
Cost:    $115

Register for this webinar

While certain benefits and related requirements may exist, employers may also leverage various benefit options in an effort to recruit and retain the best qualified workforce.

During this 60-minute webinar, you’ll learn about basic requirements as well as best practices.

Focus areas include:

• Health Care Reform
• Required Benefits
• Optional Benefits
• Benefits Continuation
• HIPAA Provisions

The webinar is designed and led by the trusted HR Pros of the HR Support Center.

Benefits of attending this webinar include:

• Copy of the presentation slides
• Handouts for additional reference
• Live questions and answers session

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

Health Care Reform Overview

Thursday, August 2nd, 2012

Health Care ReformHealth care reform legislation has added a number of new taxes and made various other changes which will help finance the reform. The legislation also made several health care related changes which benefit certain taxpayers:

  • A credit to offset part of the costs of health insurance for low to middle income individuals and families.
  • A credit to offset the costs to small businesses which provide health insurance for their employees.

Here is a list of some of the tax related items from the health care reform legislation that were upheld as a result of the Court’s decision:

Provisions Already in Effect

  • Small Business Tax Credit: Small businesses, defined as businesses with 25 or fewer employees and average annual wages of $50,000 or less, are eligible for a credit of up to 50% of nonelective contributions the business makes on behalf of their employees for insurance premiums.
  • Tax on Health Savings Account (HSA) Distributions: Additional tax on distributions from an HSA or an Archer Medical Savings Account (MSA) that are not used for qualified medical expenses is increased to 20% of the disbursed amount.
  • SIMPLE Cafeteria Plans for Small Business: An eligible small employer is provided with a safe harbor from the nondiscrimination requirements for cafeteria plans as well as from the nondiscrimination requirements for specified qualified benefits offered under a cafeteria plan.
  • Adult Dependent Insurance Coverage: If dependent coverage is provided, plans must allow coverage for children up to age 26 regardless of student or marital status.  Employers may exclude the cost of dependent coverage for children under age 27 from an employee’s taxable income.
  • Restrictions on Use of HSA and FSA Funds: Over the counter medications are no longer 213D qualified medical expenses.  This change makes these medications ineligible for FSA, HRA and H.S.A. reimbursement.  Prescribed drugs and insulin are still considered to be 213D qualified eligible expenses.
  • Information Reporting: If your company filed 250 or more W-2s in 2011, then you must report the health insurance premium for each participating employee on 2012 W-2’s.  Companies with fewer than 250 employees will need to comply with this requirement beginning with 2013 W-2 reporting. Premiums for standalone vision and dental plans, Group Term Life, Group Short Term Disability and Group Long Term Disability are not included.  Although the premium for health contributions is reported on the W-2 form, they are not taxable.
  • Preexisting Conditions: Plans may not impose any preexisting condition exclusion for children under age 19.
  • No Lifetime Limits on coverage of ‘Essential Benefits’: (as defined by the Department of Health and Human Services). May only impose restricted annual limits on the dollar value of ‘Essential Benefits’.
  • Preventive Health Services: (as defined by the Department of Health and Human Services) must be covered and no cost sharing requirements may be imposed for these services.
  • Medical Loss Ratio – 80/20 Rule: requires health insurance companies (depending on their size) to spend at least 80 percent of premium dollars on health insurance claims and clinical activities for improved healthcare quality. Insurance companies that do not meet the 80/20 Medical Loss Ratio (MLR) standard must provide their policyholders a rebate for the difference no later than August 1, 2012. (Additional clarification provided below.)

Effective in 2013

  • Additional Hospital Insurance Tax on High-Income Taxpayers: Starting in 2013, high-income individuals will pay an additional 0.9 percentage points on earned income over $200,000 ($250,000 if married). Currently, the Medicare payroll tax is 2.9% on all wages — with the worker and employer each paying 1.45%.
  • Medicare Tax on Investment Income: Imposes a tax on individuals equal to 3.8% of the lesser of the individual’s net investment income for the year or the amount the individual’s modified AGI exceeds a threshold amount.
  • Medical Care Itemized Deduction Threshold: Threshold for the itemized deduction for unreimbursed medical expenses is increased from 7.5% of adjusted gross income (AGI) to 10% of AGI for regular income tax purposes. (Effective 2013 generally, 2017 for certain taxpayers).
  • Health Flexible Spending Arrangements: Beginning with 2013 plan years, the maximum for Flex Spending Account (FSA) pretax salary deferral is $2500.  Be sure to amend your FSA plan at renewal time accordingly.

Effective in 2014

  • Premium-Assistance Credit: Refundable tax credits that eligible taxpayers can use to help cover the cost of health insurance premiums for individuals and families who purchase health insurance through a state health benefit exchange.
  • Reporting Requirements: Requires insurers (including employers who self-insure) that provide minimum essential coverage to any individual during a calendar year to report certain health insurance coverage information to both the covered individual and to the IRS.
  • Cafeteria Plans: A qualified health plan offered through a health insurance exchange is a qualified benefit under a cafeteria plan of a qualified employer.
  • Employer Responsibility: An “applicable large employer” that does not offer coverage for all its full-time employees; offers minimum essential coverage that is unaffordable; or offers minimum essential coverage that consists of a plan under which the plan’s share of the total allowed cost of benefits is less than 60%; is required to pay a penalty if any full-time employee is certified to the employer as having purchased health insurance through a state exchange with respect to which a tax credit or cost-sharing reduction is allowed or paid to the employee.If a large employer does not offer qualified affordable coverage then an employee can go to the exchange.  If the employee gets a subsidy then the employer must pay a $250 a month tax penalty (not deductible) for each employee receiving coverage through the exchange that gets a subsidy not to exceed the aggregate penalty for not offering coverage.

    Any large group employer not offering coverage and having at least 1 employee obtaining coverage through an exchange with a subsidy must pay a $166 per month tax penalty (not deductible) to the government (this equates to a $2,000 Annual penalty).

    In 2014, small employers of fewer than 50 employees have no penalties.  If they offer coverage that is affordable and qualified (no more than 9.5% of pay for employee coverage and at least a bronze level coverage) then the employee is not eligible to buy coverage through the exchange.

Additional Details You Should Know About:

Medical Loss Ratio (MLR) Rebate Distribution
If you receive a MLR distribution, you will be required to develop a plan to distribute the rebates that your insurance carrier declares.  As of today, HealthPartners is the only local carrier to announce they will be issuing an MLR rebate and only to a very small subset of their clients.  HealthPartners has already contacted those affected.

For future reference, if you receive an MLR rebate, the method of allocating the rebate has been provided in Health and Human Services interim regulations, and directs insurers to distribute the entire rebate to the group policyholder.  The group policyholder is required to use the portion of the rebates attributable to the amount of premiums paid by the subscribers for the benefit of the subscribers, insuring that enrollees in such plans receive the benefit of the rebates.

Three methods of distribution are allowed:

  1. to reduce the subscribers portion of the annual premium for the subsequent policy year for all subscribers covered under the group health policy in the subsequent year; or
  2. to reduce subscribers portion of the annual premium for subsequent policy year for only those subscribers covered by the group health policy in the year for which the rebate was based; or
  3. to provide a cash refund only to subscribers that were covered by the group health policy on which the rebate is based.

All three options are acceptable.  The most administratively simple process is to issue a premium reduction in the subsequent year for those participating in the plan in the subsequent year.

If you are currently covered by HealthPartners, an MLR rebate may be announced in the near future.  Otherwise, it is unlikely this provision will apply to you this year.

Summary of Benefits (SBC’s)/Uniform Glossary (UG)
Watch for the Summary of Benefits and Coverage (SBC) and Uniform Glossary that your insurance carrier has developed, and include those new documents in Open Enrollment packets for 2013. These new documents must be provided to employees at least 30 days prior to renewal (or as early as reasonably possible) for plans renewing after 9/23/12.  SBC’s will also be required for HRA’s and Flexible Spending Accounts.

Patient Centered Outcomes Research
Determine if your plan is subject to a “PCOR” fee (Patient Centered Outcomes Research) also known as “CER” (Comparative Effectiveness Research).

This fee applies to insured plans (fee paid by the insurer) and self-insured plans (fee paid by the plan sponsor). Self-insured plans include HRAs.  For plan/policy years ending on or after October 1, 2012 and before October 1, 2013, the fee is $1, multiplied by the average number of covered lives (including dependents). The fee is increased to $2 for plan years ending on or after October 1, 2013 and may be further increased on or after October 1, 2014. Your TPA will have additional information.

Health Insurance Exchange
Prepare to notify employees of the availability of Health Insurance Exchanges by March of 2013.  (While this notification will be required, at this time we are waiting for additional guidance regarding the availability of the health exchange in Minnesota, since Minnesota has not passed a specific Exchange bill yet.)

Links to More Information
PPACA timeline for implementation
Impact to Individuals
Impact to Small Companies
Impact to Large Companies

Article Contributors:

Gary Helm
Bearence Management Group
651.379.7906 Direct
Email Gary

John Cleveland
The Cleveland Company, Inc.
952.885.2701 Direct
Email John

PCS Tax and Support Departments

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.

W2 Reporting of Employer Paid Insurance

Monday, January 30th, 2012

W2 Reporting of Employer Paid InsuranceReporting the employer paid insurance on employee W-2s is voluntary for all employers for 2011 and small employers for 2012.  However, employers with more than 250 W-2s for tax year 2012 will be required to report the employer paid insurance amounts on all employees’ W-2s, due to the Affordable Care Act.

In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee whether or not it was pre-tax.  In the case of a health FSA, the amount reported should not include the amount of any salary reduction contributions.

The cost of these health care benefits will be reported in Box 12 of the Form W-2, with Code DD.  It is listed for informational purposes only, and is not taxable.

For W-2s filed for the 2011 calendar year, employers are not required to report the value of health benefits provided, although they may do so voluntarily. For years after 2011, employers generally are required to report the value of health benefits provided on the Form W-2. Transition relief is available for certain employers and with respect to certain types of coverage.  Reporting for these employers is not required until future guidance is provided. The transition relief applies to the following:

  1. Employers filing fewer than 250 Forms W-2 for the previous calendar year (for example, employers filing fewer than 250 2011 W-2s) will not be required to report the cost of coverage on the 2012 Forms W-2
  2. Multi-employer plans
  3. Health Reimbursement Arrangements
  4. Dental and vision plans that are not integrated into another group health plan
  5. Self-insured plans of employers not subject to COBRA continuation coverage or similar requirements
  6. Employers furnishing Forms W-2 to employees who terminate before the end of a calendar year and request a Form W-2 before the end of that year

Employers are not required to create a W-2 for the sole purpose of reporting health coverage.  Click Here for more detailed information on this topic.

Legal Disclaimer: This article is intended for informational purposes only and by no means should replace or substitute other legal documents (governmental or non-governmental) reflecting similar content or advice. If you have any questions concerning your situation or the information provided, please consult with an attorney, CPA or HR Professional.