Monthly Archives: April 2017

Small Business HRA & Special Enrollment Periods.

Special Enrollment Periods and the Small Business HRA

The 21st Century Cures Act reintroduced the stand-alone Health
Reimbursement Arrangement
 (HRA) for small businesses, making it possible for them to offer health benefits they may not have been able to afford otherwise. But implementing this new type of plan, known as the Small Business HRA, can be difficult for businesses whose employees don’t have health coverage.

Because the open enrollment period ended January 31, 2017, businesses that want to start offering the Small Business HRA must consider whether making a change outside an open enrollment period would negatively impact their employees.

Transitioning from a Group Health Policy

If your company is transitioning from group health insurance to the Small Business HRA, your path is simpler. First, you have to cancel your group health. This will trigger a special enrollment period, during which your employees can enroll in individual coverage and immediately begin using the Small Business HRA.

You must also comply with the notice requirements of the 21st Century Cues Act:-(The Small Business HRA allows companies with fewer than 50 employees to reimburse individual health insurance premiums and qualified medical expenses for their employees, as well as their employees’ spouses and dependents. Alongside the benefits of a Small Business HRA come a few responsibilities, howeverincluding a requirement that companies offering the benefit provide a 90-day notice to their employees every year.)
This approach allows all employees to begin taking advantage of the Small Business HRA immediately.

If You Don’t Have a Current Policy

Fewer than half of small businesses offer group health insurance to their employees. If your business doesn’t offer a group health policy, it’s more difficult for the Small Business HRA to deliver immediate value to your employees.

Currently, implementing a Small Business HRA midyear doesn’t qualify employees for a special enrollment period. That means only employees with existing minimal essential coverage, whether through their own individual policy or a spouse’s plan, will be able to access Small Business HRA funds prior to open enrollment.

Employees currently without coverage will need to wait until the next open enrollment period, or another qualifying life event, to buy a policy and begin taking advantage of the Small Business HRA.

Additionally, the individual market doesn’t include new hires among the conditions that trigger a special enrollment period, which means employees hired midyear aren’t permitted to participate in the Small Business HRA until the next open enrollment period.

However, if the new hire is losing group health insurance through their previous employer, they will qualify for a special enrollment period. This means they will be able to enroll in new individual health insurance and begin accessing HRA funds.

Overall, if you’re adopting the Small Business HRA after offering no health benefits, only employees enrolled in prior coverage will immediately benefit from the HRA.

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Many factors go into a company’s decision to implement the Small Business HRA. If you’re thinking about making the change outside of an open enrollment period, it’s important to consider how doing so will affect your employees and whether they can take advantage of the benefits right away. In some cases, waiting until all employees are eligible to enroll in coverage under the Small Business HRA may be the better choice.

 Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

WEB: www.ewconsultant.biz

 

 

 

Can I Still Make Changes to My Individual Health Insurance Plan?

Can I Still Make Changes to My Individual Health Insurance Plan?

We’ve passed the enrollment deadline for coverage beginning January 1, but that doesn’t mean you can’t still choose or change your plan. Open enrollment for individual health insurance on the ACA Marketplace began on November 1, 2016, and continues through January 31, 2017. Signing up in January means your coverage won’t begin until March 1, but that policy will be guaranteed for the remainder of the calendar year.

If you’ve already enrolled in an individual health insurance plan, but are realizing it’s not quite what you expected, you can still switch plans. The final open enrollment deadline also includes making changes to your selection. When doing so, be sure to research whether your doctors and prescriptions are covered. You can do this by clicking on each plan and looking at the formulary and network options.

What Happens If I Miss the Deadline?

If you miss the January 31, 2017, deadline, you won’t be able to sign up for individual health insurance until the next open enrollment unless you qualify for a special enrollment period.

What Is a Special Enrollment Period?

A special enrollment period is a time frame during which a person is allowed to sign up for individual health insurance outside of the designated open enrollment period. To be eligible for special enrollment, you must go through a qualifying life event, such as losing your existing health coverage (such as through being laid off, being fired, or quitting your job), moving, getting married (or divorced), having a baby, or adopting a child.

How Do I Know Which Individual Health Insurance Plan Is Best?

Individual health insurance is not a one-size-fits-all item. Which plan is best for you and your family is dependent upon your unique needs, budget, and health risk.

For example, high-deductible health plans (HDHPs) are often best suited for young people who rarely see the doctor and do not require many prescriptions, as all expenses are paid out of pocket until you’ve met the deductible. These plans typically save you money on monthly premiums and are sometimes referred to as “catastrophic only.”

Health Maintenance Organizations (HMOs) are usually more affordable plans (with fewer out-of-pocket expenses), but frequently come with narrow networks and restrictive formularies. If you are looking for a baseline insurance plan and do not mind switching doctors, this may be a good fit for you.

By contrast, people who would like to keep their doctors, are taking multiple prescriptions, or are managing a chronic health issue may want to choose a Preferred Provider Organization (PPO) or Point of Service (POS) plan. These plans have higher monthly premiums, but generally come with larger networks and formularies than HMOs.

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If you still haven’t made a decision about your 2017 individual health insurance, there is still time. In addition, if you would like to change your plan, you may still do so.

 

 

 

Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

WEB: www.ewconsultant.biz

Tax Time- How to report Small Business Health Insurance.

How to Report Small Business Health Insurance at Tax Time

The Affordable Care Act (ACA) has added some additional paperwork to the tax-filing process. Employers offering small business health insurance are required to provide forms to both employees and the Internal Revenue Service (IRS). Here is an overview of forms required from employers, as well as which forms employees can expect to receive.

For Small Employers: The Small Business Health Insurance Forms You Need

Employers with fewer than 50 full-time-equivalent (FTE) employees are not required to offer small business health insurance. However, if you provide self-funded (or self-insured) coverage, you must fill out Form 1095-B for each employee. It is similar in both content and purpose to Form 1095-C.

You will need to file a copy of these forms with the IRS, as well as Form 1094-C, following the same deadlines as large employers (February 28 or March 31, respectively).

For Large Employers: The Forms You Need

Applicable large employers are required to provide Form 1095-C to employees by March 2, 2017. This form details which members of each employee’s family were included in the group policy for 2016, in which months they were covered, and how much the policy cost them.

These forms (one for each employee) will also need to be filed with the IRS, in addition to Form 1094-C, which provides an overview of the company’s health coverage. If you are filing by mail, this must be completed by February 28. If filing electronically, your deadline is March 31.

For Employees: The Forms You Need at Tax Time

If you purchased health coverage through the ACA Marketplace, you will receive Form 1095-A from your insurance Marketplace. If you received a premium tax credit, you will need to fill out and file Form 8962 when you complete your taxes. It is important to note that premium tax credits prevent you from using Form 1040-EZ. You will need to use the traditional 1040 or 1040-A.

If you have small business health insurance through your employer, you will receive a 1095-B from them by March 2. If your employer has more than 50 FTEs, you will receive a 1095-C.

If this all seems a bit overwhelming, don’t worry—you will not have to fill out the 1095 forms yourself. The 1095s are completed by whoever provides your insurance coverage. If you had more than one type of coverage in 2016, you will receive a 1095 from each employer or insurance company.

Many people like to file their taxes in early February so they receive their returns earlier. The good news is that you do not need to wait to file your taxes until you’ve received these forms—unless you are receiving a subsidy. In that case, you need to wait until you’ve received Form 1095-A from the Marketplace.

Conclusion

While all these forms can seem overwhelming at first, they aren’t overly complicated—but they are time-consuming for employers required to submit them. If you are confused or need assistance, be sure to consult with an accountant, who should be able to get things straightened out for you.

Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

ACA Blog: www.azhealthinsuranceblog.com

WEB: www.ewconsultant.biz

 

 

HRA’s and HSA’s-better together

Better Together: The Benefits of HSAs and HRAs

HSA and HRA. The two acronyms may be almost identical, but they stand for two very different types of plans. With an HSA, the employee owns the account. Money contributed to the HSA is tax-free, and withdrawals must be spent on qualified medical expenses. Since HSAs are owned by the employee, they are also portable. This means they move with the employee from job to job.

Read more: Health Savings Account Overview

In an HRA, the account is owned by the company, and the funds stay with the company if the employee decides to leave. In December 2016, Congress passed legislation that created an HRA specifically for small businesses. The Small Business HRA allows businesses with fewer than 50 employees to reimburse employees for individual health insurance premiums and eligible medical expenses also tax-free. With the Small Business HRA, businesses must offer reimbursements on the same terms to every employee, but they can vary these amounts based on family status.

When businesses offer an HSA in combination with an HRA, they give employees more choices and more control over their own health benefits. The combo appeals to businesses, too, as it allows them to control costs by fixing them through an HSA contribution and setting up an HRA in place of other small business health insurance options.

 How to Make Your HSA “HRA Qualified”

To have both an HSA and an HRA, the HRA must be adjusted to be compatible with HSA regulations. There are many ways to make this work, but two of the simplest are:

  1. Limited purpose HRA: Reduce the scope of what the Small Business HRA can reimburse.

  2. Post-deductible HRA: Reduce the scope of what the Small Business HRA can reimburse, until the HSA deductible has been met. Then reinstate the full list of medical expenses eligible for reimbursement through the HRA.

The expenses which can be reimbursed through the HRA before the HSA deductible has been met are the following: health insurance premiums, preventive services, dental and vision expenses, and long-term care premiums.

Conclusion

Businesses that offer an HRA can give their employees more flexibility, greater freedom of choice, and additional retirement benefits by adding an HSA to their employee benefits program. Once you understand the mechanics of HRAs and HSAs, it’s easy to see why using them together appeals to businesses and employees alike.

Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

WEB: www.ewconsultant.biz

 

 

Health Savings Accounts -hi deductible plans?

Health savings accounts (HSAs) have become a popular option for people who wish to have comprehensive individual health insurance while building up tax-free savings they can roll over from year to year. According to research firm Devenir, more than 16 million people had an HSA in 2015.

An HSA allows individuals to use tax-free funds to pay for medical expenses, doctors’ visits, prescriptions, and other qualified health expenses. In many cases, employers also contribute matching dollars.

Before you can contribute to your HSA, however, you must first be enrolled in a high-deductible health plan (HDHP). As the name indicates, HDHPs have a higher deductible than traditional insurance plans.

When Is an HDHP HSA Qualified?

Just because you have an HDHP, however, does not mean it qualifies for an HSA. In 2016, for example, just 19 percent of the HDHPs available on the federal exchange were HSA eligible.

High deductibles are not the only requirement for an HDHP to be HSA eligible. As defined by the IRS, HSA qualified HDHPs have:

  • A higher deductible than typical individual health insurance plans.
  • A maximum limit on the annual deductible and medical expense costs, including copays and other items.
  • No insurance coverage until the deductible is met, except for the following expenses:
    • Health insurance premiums
    • Wellness and preventive care (e.g., checkups, mammograms, smoking cessation, weight loss)
    • Expenses resulting from accidents
    • Dental expenses
    • Vision expenses

The IRS publishes minimum deductible and maximum medical expense limits annually. The chart below lists the annual HSA contribution limits and the HDHP minimum required deductibles for 2016 and 2017.

Contributions and out-of-pocket limits for HSAs and HDHPs
For 2016 For 2017
HSA contribution limit (employer + employee) Self only: $3,350Family: $6,750 Self only: $3,400Family: $6,750
HSA catch-up contributions (age 55 or older)* $1,000 $1,000
HDHP minimum deductibles Self only: $1,300Family: $2,600 Self only: $1,300Family: $2,600
HDHP maximum out-of-pocket amounts
(deductibles, copayments, and other amounts besides premiums)
Self only: $6,550Family: $13,100 Self only: $6,550Family: $13,100

* Catch-up contributions can be made at any time in the year the participant turns 55.

How to Tell If Your Plan Is HSA Eligible

If you’re new to HDHPs and HSAs, sorting through the various requirements can feel a bit like trying to read a bowl of alphabet soup.

If you’re overwhelmed, keep in mind that insurance carriers will label their plans as HSA eligible.

Other HSA Requirements

In addition to having an HSA-qualified insurance policy, there are several other requirements to contribute to your HSA in a given year:

  • You must be covered under an HDHP.
  • You must have no other health coverage, with the exception of several types of ancillary coverage.
  • You must not be enrolled in Medicare.
  • You cannot be claimed as a dependent on someone else’s tax return.

Conclusion

HSAs are an increasingly popular choice for people looking to manage the rising cost of individual health insurance. Because HSAs offer triple tax advantages, more and more people are likely to participate in the future.

Eric Walters – Insurance Services.

Scottsdale, Arizona

Cell: 602-616-660

Email: eric@ericwaltersinsuranceservices.com

ACA Blog: www.azhealthinsuranceblog.com

WEB: www.ewconsultant.biz