Monthly Archives: September 2014

2015 HSA limits

IRS announces 2015 HSA limits

Maximum contributions to health savings accounts will jump slightly next year, the Internal Revenue Service announced. It will increase $50 for individuals and $100 for families.

The agency said the maximum 2015 HSA contribution will be $3,350 for individuals with self-only coverage, up from $3,300 this year. For those with family coverage, the maximum contribution will be $6,650, up from $6,550.
HSA contribution limits are updated annually to reflect cost-of-living adjustments.
The annual limitation on deductions for an individual with family coverage under a high-deductible health plan will be $6,650 for 2015.
The maximum out-of-pocket employee expense will increase next year to $6,450 for single coverage from $6,350, and to $12,900, from $12,700, for family coverage.
The increases are detailed in Revenue Procedure 2014-30, and take effect in January,2015.

 

Employees in Employer’s Group Plans can change to Marketplace plans.

The IRS has released Notice 2014-55, which expands the cafeteria plan “change in status” rules to allow plans to offer employees an option to revoke their elections for employer-sponsored health coverage to purchase a qualified health plan through a Health Insurance Marketplace . The notice is effective immediately and will appear in IRB 2014-41, to be published Oct. 6, 2014.

A relief to employers that may have been struggling with how to allow employees to change coverage from under the employer’s plan to a Marketplace or other group health plan.

The notice addresses two specific situations in which a plan could allow an employee to revoke a cafeteria plan election (other than a health FSA election): due to enrollment in the Marketplace; and due to a reduction in hours of service.

Revocation Due to Enrollment in the Marketplace

Under current cafeteria plan rules, an employee may not revoke an election for coverage under a group health plan solely to purchase a Marketplace plan. This is not a concern for employees who are eligible for a calendar year cafeteria plan because they may transition to a Marketplace plan during open enrollment with no gap in coverage, as both the employer plan and the Marketplace would have an open enrollment period for coverage effective January 1.

However, an employee covered by a non-calendar year cafeteria plan is unable to synchronize the change – Marketplace coverage only operates on a calendar year open enrollment period. Thus, employees covered by non-calendar year cafeteria plans who wish to enroll in Marketplace coverage would experience a period where there is either dual coverage or no coverage, depending on when they are able to drop the employer-provided coverage.

A similar issue occurs when an employee experiences an event such as a birth or marriage. In these situations, it may be more advantageous for some employees to purchase a Marketplace plan for themselves and their families rather than to add family members to the employer’s group health plan.
Despite the fact that birth and marriage are both special enrollment events for Marketplace coverage, the cafeteria plan rules do not allow an employee to make a mid-year revocation of coverage for employer-sponsored coverage based on a desire to enroll in Marketplace coverage.

For all of these reasons, the IRS Notice permits a cafeteria plan to allow a participating employee to revoke an election in order to obtain coverage through the Marketplace under the following conditions:

1. The employee is seeking to enroll in Marketplace coverage during the Marketplace’s annual open enrollment period or during a special enrollment period; and
2. The employee enrolls, along with any related individuals who cease coverage due to the revocation, in a Marketplace plan effective immediately following the revocation.

An employer may rely on the reasonable representation of an employee who is enrolling in Marketplace coverage that the employee and related individuals have enrolled or intend to enroll in a Marketplace plan that is effective immediately following the revocation (i.e., there is no gap in coverage).

The special enrollment rules for Marketplace coverage include entry due to an individual:

  • • losing other health coverage;
  • • gaining a dependent (or becoming a dependent) through marriage, birth, or adoption;
  • • newly gaining status as a citizen, national or lawfully present individual;
  • • unintentionally or inadvertently failing to enroll due to an error on the part of the Marketplace;
  • • demonstrating to the Marketplace that the plan in which the individual is enrolled substantially violated a material provision of its contract in relation to the enrollee (this would permit an individual to change Marketplace plans);
  • • being determined newly eligible (or experiencing a change in eligibility) for subsidized coverage (regardless of whether the individual is already enrolled in Marketplace coverage);
  • • changing residence such that the individual gains access to new Marketplace options; or
  • • demonstrating that the individual meets other exceptional circumstances as the Marketplace may provide.

 

Revocation Due to Reduction in Hours of Service

Under the ACA’s pay-or-play mandate, an employer may choose to measure an employee’s hours over a period of time (called a measurement period) to determine the employee’s status as either full-time or not full-time for the subsequent stability period, using a 30-hour per week average for full-time status.

If an employee works full-time during the measurement period, the employee must be treated as full-time—and continue to be offered affordable coverage—during the subsequent stability period if an employer is attempting to avoid pay-or-play penalties.

This creates a potential problem when an employee in a stability period changes from a full-time position to a part-time position and wishes to purchase a Marketplace plan. This might happen because the reduction in hours has triggered eligibility for a premium tax credit or perhaps because the individual simply cannot afford the coverage, as a practical matter, on reduced pay. Under existing cafeteria plan rules, a cafeteria plan could not allow the employee to drop coverage mid-year because there hasn’t been a loss of eligibility for coverage in the underlying group health plan.
To fix this issue, the notice provides that a cafeteria plan may allow an employee to revoke prospectively an election of coverage under a group health plan (other than a health FSA) provided the following conditions are met:
1. The employee changes from full-time status to part-time status and is reasonable expected to remain in part-time status; and
2. The employee enrolls, along with any related individuals who cease coverage due to the revocation, in another plan no later than the first day of the second full month following the revocation.

An employer may rely on the reasonable representation of an employee who is changing to part-time status that the employee and related individuals have enrolled or intend to enroll in another plan within the above timeframe.

Employer Action

As with the other cafeteria plan change in status rules, these new permitted election changes are voluntary – an employer is not required to adopt them.
Employers that wish to extend the new permitted election change opportunities to employees will need to amend their cafeteria plans to allow the changes. The amendment must be adopted by the last day of the plan year in which the changes are allowed, and may be effective retroactively to the first day of that plan year; however, any election changes may not have a retroactive effect.
Note that for plan years beginning in 2014, the employer has until the last day of the 2015 plan year to amend the plan. The IRS intends to amend the applicable cafeteria plan regulations in the future to reflect the guidance in the notice.

Also, if an employer chooses to use these change in status rule exceptions, the employer ought to consider other administrative issues and communication issues that can arise – employees need to be apprised of these new options and the options need to be administered consistently with other plan provisions, including any applicable COBRA provisions.

With the upcoming enrollment season, those employers wishing to permit these changes should consider including a discussion of the new options in enrollment materials

 

Affordable Care Act – are you exempt?

The Affordable Care Act calls for each individual to have qualifying health insurance coverage for each month of the year, have an exemption, or make an individual shared responsibility payment when filing their federal income tax return.

Taxpayers may be exempt if they have no affordable coverage options because the minimum amount they must pay for the annual premiums is more than eight percent of your household income, have a gap in coverage for less than three consecutive months, or qualify for an exemption for one of several other reasons, including having a hardship that prevents you from obtaining coverage or belonging to a group explicitly exempt from the requirement.

On www.IRS.gov/ACA, one can find a comprehensive list of the coverage exemptions. The IRS noted that taxpayers can obtain some exemptions only from the health insurance marketplace in the area where they live, others only from the IRS when you file your income tax return, and others from either the marketplace or the IRS.

Additional information about exemptions is available on the Individual Shared Responsibility Provision web page on IRS.gov. The page includes a link to a chart that shows the types of exemptions available and how to claim them. For additional information about how to get exemptions that may be granted by the marketplace, visit HealthCare.gov/exemptions.

ERIC WALTERS,
CELL: 602-616-1660
Eric Walters Insurance Services
14482 N 100th Place,
SCOTTSDALE AZ 85260
TEL:(480)-657-8595/FAX:(888)-397-0796
Email: ewinsurance@gmail.com/Insurance WEB site: www.ewconsultant.biz

 

 

Enrollment opens November,15th 2014

Arizona Health Insurance Marketplace:- Open-11/15/2014 through Feb,15th 2015.

Approved Carriers for 2015- All plans Effective-1/1/2015 (or later)

To date, there are ten insurance companies offering individual/family health insurance plans through Arizona’s federally-run Marketplace. The carriers are:

1. Health Net of Arizona, Inc.
2. Health Net Life Insurance Company
3. Humana Health Plan, Inc.
4. Blue Cross Blue Shield of Arizona, Inc.
5. Health Choice Insurance
6. Aetna
7. Meritus Health Partners
8. Cigna Healthcare
9. University of Arizona Health Plans
10. Meritus Mutual Health Parters.

These carriers are offering 110 different plans throughout the state. The health insurance Marketplace will be available for open enrollment for coverage in 2015 on November 15, 2014 for Effective Date- 1/1/2015!!.

Arizona Health Insurance Exchange- Individual/family Plan Rates

If you have an individual/family health plan and previously enrolled on the Marketplace, it will be automatically renewed as the same plan for 2015 effective- 1/1/2015.

However, you can check your Tax Credit plus premium costs for 2015 on the Marketplace-healthcare.gov.

Premium rates will vary based on carrier, plan, age, region, family size, and tobacco use only.

Arizona Health Insurance Marketplace- Premium Tax Credits

The actual premium amount that Arizona residents will be responsible for will depend on their household income.

The premium tax credits cap the cost of health insurance at 2 to 9.5 percent of the household income for enrollees for households with income up to 400 percent above the federal poverty line (FPL). For information on FPL, etc -see this blog site:

For information on how, or to get help, to apply for individual/family health insurance on the Health Insurance Marketplace- Call Eric Walters -602-616-1660/email:-ewinsurance@gmail.com

More information on the federally run Arizona Health Insurance Marketplace is available at healthcare.gov. Do not forget to include our Broker ID- EWALTERS37 and NPN Number-8594684 when asked for broker contact information!!

To see information on health insurance options for small businesses in Arizona, see SHOP marketplace information on this blog site .

Further information:

Eric Walters – Insurance Services

CELL: 602-616-1660

OFFICE: 480-657-8595

FAX: 888-739-0796

EMAIL: ewinsurance@gmail.com

Eric’s Insurance WEB site: www.ewconsultant.biz

Medicare eligible employees and employer drug plan!

Important Information About Medicare Part D

 

Employers must provide a written disclosure notice to all Medicare-eligible individuals covered under its prescription drug plan prior to Oct. 15 each year and at various times as stated in the regulations, including to a Medicare-eligible individual when he/she joins the plan. Learn more at http://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage.

EMPLOYERS- 10 ACA questions employees want you to answer – now!

If employees haven’t come to you with questions about the Affordable Care Act’s (ACA) affect on them, get ready … they’re coming.

Want to know what they’re going to ask?

In a recent survey to gauge how single-employer plans are being affected by the ACA, the International Foundation of Employee Benefit Plans, a nonprofit research and education organization, asked employers to submit the most common questions their HR and benefits staff have been receiving from employees about the law. More than 600 employers responded to the query.

Here are the top 10 questions :-

1. How do the exchanges work? Am I eligible? Are they free? Could I qualify for a subsidy? How does exchange coverage compare to my current coverage?

2. How does the law affect me? Do I need to do anything?

3. What will this cost me? Why are my costs going up?

4. Is the company planning to drop coverage?

5. How will our benefits change? Are the changes because of health reform?

6. Can my child stay on the plan longer?

7. Do I have to get coverage if I don’t have it now? When will there be an open enrollment opportunity?

8. Will I have an average of 30 hours per week and qualify for benefits in 2015?

9. Are we dropping spousal/dependent coverage?

10. How does the law impact the future of the company?

Source: “2014 Employer-Sponsored Health Care: ACA’s Impact,” by the International Foundation of Employee Benefit Plans.

I can help you answer these questions!

ERIC WALTERS,
CELL: 602-616-1660
Eric Walters Insurance Services
14482 N 100th Place,
SCOTTSDALE AZ 85260
TEL:(480)-657-8595/FAX:(888)-397-0796
Email: ewinsurance@gmail.com/www.ewconsultant.biz