Monthly Archives: December 2014

Smaller employers-50-99 employees!!

 

With the latest delay, announced in February of this year, employers with between 50 and 99 employees have until January 2016 to offer health insurance or pay a fine, and employers with more than 100 employees must offer insurance or pay a fine of $2,000 per worker by January 2015 PLUS other penalties.

 

For further details, call:-

Eric Walters

CELL: 602-616-1660

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

Office Phone: 480-657-8595

FAX: 888-739-0796

This post is not tax or legal advice.

 

 

 

No Individual ACA Reimbursement!

Employer Reimbursement of Individual Premiums Prohibited – November 7, 2014

All employer arrangements that reimburse employees for individual premiums violate the ACA’s market reforms, regardless of whether the employer treats the money as pre-tax or post-tax for the employee.

Due to the rising costs of health coverage, employers have shown interest in helping employees pay for individual health insurance policies instead of offering an employer-sponsored plan. In response, on Nov. 6, 2014, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (Departments) issued FAQ guidance clarifying that these arrangements do not comply with the ACA’s market reforms and may subject employers to penalties.

Although it was widely believed that these penalties would apply only to pre-tax arrangements, the FAQs clarify that after-tax reimbursements and cash compensation for individual premiums also do not comply with the ACA’s market reforms and may trigger the excise tax penalties.
This guidance essentially prohibits all employer arrangements that reimburse employees for individual premiums, whether employers treat the money as pre-tax or post-tax for employees.

Cash Reimbursements

According to the new FAQs, an employer arrangement that provides cash reimbursement for an individual market policy is considered to be part of a plan, fund or other arrangement established or maintained for the purpose of providing medical care to employees, without regard to whether the employer treats the money as pre-tax or post-tax for the employee.
Therefore, the arrangement is group health plan coverage subject to the ACA’s market reform provisions.

The Departments stressed that these employer health care arrangements cannot be integrated with individual market policies to satisfy the ACA’s market reforms. As a result, these plans will violate the ACA’s market reforms, which can trigger penalties, including excise taxes under Code Section 49800.

Employees with High Claims Risk

The FAQs also clarify that an employer cannot offer a choice between enrollment in the standard group health plan or cash only to employees with a high claims risk. This practice constitutes unlawful discrimination based on one or more health factors, in violation of federal nondiscrimination laws.
Although employers are permitted to have more favorable rules for eligibility or reduced premiums or contributions based on an adverse health factor (sometimes referred to as benign discrimination), the Departments assert that offering cash-or-coverage arrangements only to employees with a high claims risk is not permissible benign discrimination.

Accordingly, these arrangements will violate the nondiscrimination provisions, regardless of whether:
• The employer treats the cash as pre-tax or post-tax for the employee;
• The employer is involved in purchasing or selecting any individual market product; or
• The employee obtains any individual health insurance.
The Departments also noted that the choice between taxable cash and a tax-favored qualified benefit (the election of coverage under the group health plan) is required to be a Code Section

125 cafeteria plan. Offering this choice to high-risk employees could result in discrimination in favor of highly compensated individuals, in violation of the cafeteria plan nondiscrimination rules.

Code Section 105 Reimbursement Plans

The Departments also noted that certain vendors are marketing products to employers claiming that, instead of providing a group health insurance plan, employers can establish a Code Section 105 reimbursement plan that works with health insurance brokers or agents to help employees select individual insurance policies allowing eligible employees to access subsidies for Exchange coverage.

The FAQs assert that these arrangements are problematic for several reasons. First, these arrangements are, themselves, group health plans. Therefore, employees participating in the arrangements are ineligible for Exchange subsidies. The mere fact that the employer is not involved with an employee’s individual selection or purchase of an individual health insurance policy does not prevent the arrangement from being a group health plan.

Second, as explained in previous guidance, these arrangements are subject to the ACA’s market reform provisions, including the annual limit prohibition and preventive care coverage requirement. As noted before, these employer health care arrangements cannot be integrated with individual market policies to satisfy the market reforms and, therefore, can trigger penalties, including excise taxes

 

For further information:      ERIC WALTERS

CELL: 602-616-1660

Office Phone: 480-657-8595

FAX: 1-888-739-0796

WEB insurance site:  www.ewconsultant.biz

NOTE: This post is not legal or tax advice

 

 

ACA- Exemptions

If you don’t have minimum essential coverage, you may qualify for an exemption from the individual mandate penalty (also called the individual shared responsibility fee) if:

  • • You had one gap in coverage for less than 3 consecutive months during the year
  • • The lowest-priced coverage available to you would cost more than 8% of your household income
  • • You don’t have to file a tax return because your income is too low ($10,150 for individuals in 2014 and $20,300 for a family)
  • • You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
  • • You’re a member of a recognized health care sharing ministry
  • • You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
  • • You’re incarcerated (either detained or jailed), and not being held pending disposition of charges
  • • You’re not lawfully present in the U.S.
  • • You qualify for a hardship exemption (described below)

Individual Mandate Hardship Exemptions

According to healthcare.gov, if any of the following circumstances apply to you, you may qualify for a “hardship” exemption from the individual mandate penalty:

  • • You were homeless
  • • You were evicted in the past 6 months or were facing eviction or foreclosure
  • • You received a shut-off notice from a utility company
  • • You recently experienced domestic violence
  • • You recently experienced the death of a close family member
  • • You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property
  • • You filed for bankruptcy in the last 6 months
  • • You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt
  • • You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
  • • You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don’t have the pay the penalty for the child.
  • • As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace
  • • You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act
  • • Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable
  • • You experienced another hardship in obtaining health insurance

Contact: Eric Walters

Cell: 602-616-1660

Office Phone: 480-657-8595

FAX: 888-739-0796

WEB: www.ewconsultant.biz