Large employers-<50- ACA reporting data?

In an article published this week, The National Law Review clearly and starkly describes how employers must ensure accuracy and completeness of ACA reporting data in order to avoid billions of dollars in fines. There will be no “good faith” efforts considered for the 2016 reporting year. The message is clear: Penalties and fines will be levied on organizations that fail to carefully attend to the detailed steps, and those fines will be significant.

This no-nonsense checklist explains ten important factors employers should consider in preparation for 2016 ACA reporting (filed in 2017). We recommend that employers with over 50 full-time employees should take the time to read the entire article and prepare their organization in order to mitigate risk.  We have consultants who can provide this level of service for all our clients.

  1. Understand The Big Data Environment. The IRS is using big data analytics to find contradictions within data across multiple forms – contradictions that will lead to audits and fines.
    “…the government projects employer mandate penalties of $228 billion. Thus, there is clear anticipation that revenue will be generated and violations will be ascertained through the information reporting filings.”
  2. Ensure Proper Worker Classifications. This covers more than just identifying full-time versus part-time. For the 2016 reporting year the eligibility threshold has gone from 70% to 95%, placing an additional burden on employers. Relationships with staffing firms and other alternative arrangements further complicate the process of properly classifying employees.
  3. Monitor changes in the applicable guidance. The IRS released draft forms and instructions for filing that included a number of significant changes to codes, some of which could lead to penalties for the employer. There are also proposed regulations regarding how coverage opt-outs should be handled when determining affordability, and how to handle reporting on employees potentially covered by multiple plans offering minimum essential coverage. Familiarity with these changes is vital, but because these are still draft guidelines and proposed regulations, employers will need to be vigilant in staying up-to-date on the information.
  4. Ensure Accurate Names and Social Security Numbers. The article outlines a number of steps that employers should take to ensure that the employee and dependent data is captured accurately and completely. However, it’s not enough to just take the steps outlined – employers will need to systematically track and record steps taken, responses received, and changes made to employee data.
  5. Corrected Returns. The author notes that while employers may be getting ready for 2017 filings, many are still addressing the corrections process for the 2015 forms: “Correcting errors is part of the good faith effort to file accurate and complete information returns.” For those who may have struggled with the 2015 reporting process, showing “good faith” means continuing to try to provide as much accurate information as possible.
  6. Record Retention. An extensive list of employee documentation is outlined in the article, and it’s recommended that employers gather all of this data to provide proof for audits or other issues. Employers should also have a documented process in place for gathering, tracking, and recording the data.
  7. Marketplace Notice and IRS Penalty Notice. For Marketplace Notices issued regarding employees who received a subsidy, “It is especially important for large employers to check records to determine if this employee was offered qualifying coverage, that the employee was properly classified and then to determine if it is necessary to challenge…because this could be a trigger for later receipt of an IRS penalty notice.” The article goes on to explain that employers should prepare to clarify their position and should have an approach for reviewing and responding to subsidy notices.
  8. Corporate Transactions. In terms of mergers and acquisitions, not only should the acquiring organization be aware of the method of reporting used by the organization being acquired, it’s also important to review that reporting to determine if there was inaccurate or incomplete information. Potential penalties could even be factored into purchase prices. “A best practice is to perform a 1095-C and 1094-C audit during the due diligence process.”
  9. Fiduciary Responsibility and Governance. Since health and welfare plans are subject to ERISA, care should be taken to ensure that they are in compliance. Employers are urged to enact enhanced fiduciary governance procedures.
  10. Establish an ACA Information Reporting Team. As the author notes, “ACA compliance has many facets, and information reporting is a complex requirement.” Data collection and integrity, quality control, data privacy, and accuracy auditing are all items that this team should handle to determine the cause of the errors and address them. Without this level of attentiveness, fines are an inescapable outcome.

What to do?

Partnering with an ACA expert ( we have the names for you) will relieve this pressure on your organization providing turnkey support including:

  • An ACA-certified partner who will manage your program and provide regular communication
  • Meticulous data collection, analysis and tracking
  • Proactive monitoring and alerts regarding updates and changes in the guidelines
  • Remediation to ensure your organization achieves ACA compliance success
  •  
  • CALL NOW-
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  • ERIC WALTERS
  • Insurance Services- Life, Health, Retirement,Travel and employee benefits
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  •                            TEL:(480)-657-8595/FAX:(888)-739-0796/Cell:602-616-1660
  •                        Email: EWinsurance@gmail.com/WEB-www.ewconsultant.biz/
  • ACACBlog-www.azhealthinsuranceblog.com

 

 

 

FSA 2017 Contributions- inflation adjustments!

On Tuesday, Oct. 26, 2016, the Internal Revenue Service (IRS) announced 2017 inflation adjustments for several tax provisions, including flexible spending accounts (FSA) and transportation services.

New limits are provided for plan years beginning on or after Jan. 1, 2017. Employers should ensure their FSA plan document accurately reflects their plans allowable annual election. 

Contribution Limits for FSAs
For 2016 For 2017 Change
Healthcare FSA(full and limited purpose) $2,550 $2,600* +$50
Dependent Care FSA $5,000 $5,000* No change
Transportation (parking and transit) $255/month $255/month No change

 

*This is the maximum annual election allowed by the IRS. An employer may choose to limit their plan to an amount less than the IRS maximum.

CALL NOW-

  •  
  • ERIC WALTERS
  • Insurance Services- Life, Health, Retirement,Travel and employee benefits
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  •                                   SCOTTSDALE AZ 85260
  •                            TEL:(480)-657-8595/FAX:(888)-739-0796
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Remember the Individual Mandate? Obamacare health insurance?

The Individual Mandate and the Affordable Care Act

What is the Obamacare Individual Mandate?

Under the Affordable Care Act’s Individual Mandate, most Americans are required to have health insurance, or pay a tax penalty if they don’t. This Obamacare rule is called the “Individual Mandate” or “Individual Shared Responsibility Fee” and started in 2014.

Coverage can include job-based health insurance, individual health insurance, or insurance through a government program such as Medicaid or Medicare.

Is there a penalty for not having health insurance?

Yes. The penalty for not having “minimum essential coverage” is either a flat fee or a percentage of household income, whichever is greater.

As the chart shows below, the penalty increases each year.

**************************************************************************

Year: Pay the Greater of: Flat Fee        OR                           Percentage of Income

2016

        $695 per adult,$347.50                       OR                 2.5% of family income

per child, up to $2,085                                                minus federal tax filing

per family.                                                                    threshold

2017                                                    OR                   Adjusted Annually

Adjusted Annually

and

beyond.

**************************************************************************

Individual Mandate Tax Penalty – Example

Beth is single and earns an annual income of $40,000/year. Beth went uninsured in 2015. At tax time, Beth is required to pay an Individual Shared Responsibility Fee.

Beth will pay either 2% of income (minus the federal tax filing threshold) or $325, whichever is greater.

Beth’s annual income ($40,000) minus the federal tax filing threshold ($10,150) is $29,850. Two percent (2%) of $29,850 is $597.

Since this amount is greater than $325, Beth will pay a $597 tax penalty.

How can I avoid the tax penalty?

You may not have to pay the Individual Mandate tax penalty if you are uninsured, and:

Are required to pay more than 8% of your household income for the lowest cost bronze plan.
Are not a U.S. citizen, a U.S. national, or a resident alien lawfully present in the U.S.
Had one gap in coverage for less than three consecutive months during the year.
Won’t file a tax return because your income is below the tax filing threshold. In 2013, the tax filing threshold was $10,000 for individuals and $20,000 for a couple.
Are unable to qualify for Medicaid because your state has chosen not to expand the program.
Participate in a health care sharing ministry or are a member of a recognized religious sect with objections to health insurance.
Are a member of a federally recognized Indian tribe.
Are incarcerated.
Qualify for a hardship exemption

I can help you:- CALL NOW-

ERIC WALTERS
Insurance Services- Life, Health, Retirement, employee benefits and Travel.
SCOTTSDALE AZ 85260
TEL:(480)-657-8595/FAX:(888)-739-0796/Cell:602-616-1660
Email: EWinsurance@gmail.com/ WEB:www.ewconsultant.biz

The Health Insurance Marketplace- know your rights!

NEW ENROLLMENT PERIOD

Enrolling in a Marketplace QHP ( Qualified Health Plan)?

Understand your rights when enrolling in a Marketplace QHP, including how to get easy-to-understand information about what the plan covers, out-of-pocket costs, drug coverage, and more by reviewing The Health Insurance Marketplace: Know Your Rights.

Being informed is a consumer’s best protection against fraud when enrolling in coverage through the Health Insurance Marketplace. Help yourself by reviewing and sharing the Protect Yourself from Fraud resource.

We can help you avoid unnecessary delays in completing enrollment by using the Marketplace Application Checklist to help you gather the information needed to apply for or renew coverage.

Spotlight on Eligibility and Enrollment

1)-  Medicare PDM Update: Sending Notices to Consumers

 

The Marketplace has begun mailing paper notices to the household points of contact of consumers who may be enrolled in a Marketplace plan with APTC and also enrolled in Medicare coverage that qualifies as minimum essential coverage (MEC). The notices include instructions on what to do to resolve this dual enrollment.

 

 

We can help consumers determined eligible for MEC Medicare, and who are consequently not eligible for a Marketplace plan with APTC (Advanced Payment Tax Credit) or income-based cost-sharing reductions.

2)- Married victims of domestic violence or spousal abandonment who are applying for coverage separately from their spouse and filing taxes separately may be determined eligible for financial assistance paying for their Marketplace plan.

3)- We can assist a consumer who is currently enrolled in health coverage through the Marketplace, but who needs to decide if an offer of employer-sponsored coverage is a better deal.

We can help. Contact me:  Eric Walters ( Cell- 602-616-1660)

  • Insurance Services- Life, Health, Employee benefits ,Retirement ,Income Protection, Dental, Vision, etc and Travel insurance
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2015 Tax return?-Tax Credit as well?

 

If you used premium tax credits in 2015, you must file a 2015 tax return and reconcile your health insurance tax credit on your return. See what that means and how to do it.

You have just one week left until the April 18th deadline to file your 2015 federal income taxes. Don’t wait!

 

Get more help : here!

 

.Further information ( at no cost or obligation to you) –  ERIC WALTERS Cell:602-616-1660

-ERIC WALTERS Insurance Services

Health insurance including ACA plans for individuals and families and

·         Employee Benefits for employer groups of all sizes

·         PLUS income protection, Dental, Vision, Life Pensions and Annuity, etc.

 Office :(480)-657-8595/FAX:(888)-739-0796

Email: EWinsurance@gmail.com/WEB-www.ewconsultant.biz

Form 1095??

In response to inquiries about how and when covered individuals will obtain Form 1095, the following information provides clarification of filing deadlines and resources available to aid plan sponsors (employers).

The IRS extended the deadlines for 6055 and 6056 reporting requirements. Plan sponsors of self-funded health benefit plans, and large employers (50 or more employees and their equivalents), must provide a statement (Form 1095) to full-time employees by March 31, 2016. Paper Forms 1094 and 1095 must be filed with the IRS by May 31, 2016, or electronically filed by June 30, 2016.

Plan sponsor of a self-funded health benefit plan, can review articles regarding the 6055 and 6056 reporting on this blog.

Further assistance regarding form 1095 can be found on the IRS.gov site:

Employers should consult a professional benefit adviser or legal counsel regarding how the law may impact their business and specific self-funded benefit plan.

For further information:-  ERIC WALTERS

Insurance Services-Individuals/families, Employee Benefits, Life, Health & Annuity

 Scottsdale,AZ 85260

TeL: (480)-657-8595/FAX: (888)-739-0796/CELL: (602)-616-16

Email: ewinsurance@gmail.com-/-http://WWW.ewconsultant.biz

WEB:www.ewconsultant.biz

IRS delays ACA employer’s reporting deadlines!

The Internal Revenue System says employers can do a trial run of their electronic form filing for reporting requirements under the Affordable Care Act, giving apprehensive employers and their benefit advisers a way to test for readiness in advance of the reporting deadlines.

Earlier , the IRS opened up its Affordable Care Act Assurance Testing system which allows employers to see if their reporting software is correctly filling out the 2014 Forms 1094 and 1095. In November, the testing system was to have been cued up with the 2015 reporting forms.
Starting in 2016, applicable large employers must report whether an individual is covered by minimum essential coverage and that an offer of minimum essential coverage that provides minimum value was made to each full-time employee.

Applicable large employers, generally meaning employers with 50 or more full-time employees (including full-time equivalent employees) in the preceding calendar year, use Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to report the information required.

Any employers filing 250 or more forms must do so electronically. The deadline for electronic filing is March 31, 2016.

The IRS submission requirements for using the ACA Assurance Testing system advise software developers to “read the instructions carefully prior to preparing the submission.”
“Code definitions for Offer of Coverage Codes and Safe Harbor Codes are defined in the instructions and are not provided in the narrative but must be included within your submission where appropriate,” the IRS cautions.

Employer tracking

A flurry of ACA reporting solutions have entered the market over the last two years, some free-standing while others are to be integrated with existing HR, payroll or benefit systems.

For 2015, employers who file will have protection even if their filing is incorrect or incomplete, as long as they show they made good faith efforts to comply with the ACA reporting requirements- a “good-faith effort” is defined as an employer simply attempting to complete the forms.

The good-faith effort for 2015 tax year will disappear in 2016, however, and penalties will apply for incorrect information in subsequent years.

The Internal Revenue Service on Monday extended the deadline for 2015 Affordable Care Act information reporting, giving employers subject to the requirements some highly-sought after relief.

In Notice 2016-4, issued by the IRS on Dec. 28, the agency extended the deadlines for both furnishing to individuals reporting forms and filing them with the IRS.

Starting in 2016, applicable large employers must report whether an individual is covered by minimum essential coverage and that an offer of minimum essential coverage that provides minimum value was made to each full-time employee.
Employers have been seeking relief from the requirements, with many saying they’re still not prepared for the task at hand.

Following consultation with stakeholders, the IRS and the Department of the Treasury “have determined that some employers, insurers, and other providers of minimum essential coverage need additional time to adapt and implement systems and procedures to gather, analyze, and report this information,” the agency said in its notice.

For furnishing employees with the 2015 Form 1095-B (Health Coverage) and Form 1095-C (Employer Provided Health Insurance Offer and Coverage), the IRS has extended the deadline from Feb. 1, 2016, to March 31, 2016.

For filing with the IRS the 2015 Form 1094-B (Transmittal of Health Coverage Information Returns), Form 1095-B, Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) and Form 1095-C, the agency has extended the deadline from Feb. 29, 2016, to May 31, 2016 if not filing electronically, and from March 31, 2016, to June 30, 2016 if filing electronically.
Any employer filing 250 or more forms must do so electronically.

The notice also provides guidance to those who might not receive a Form 1095-B or Form 1095-C by the time they file their 2015 tax returns.
“Notwithstanding the extensions provided in this notice, employers and other coverage providers are encouraged to furnish statements and file the information returns as soon as they are ready,”the IRS says
*********************************************************************.

Further information ( at no cost or obligation to you) - ERIC WALTERS Cell:602-616-1660
-ERIC WALTERS Insurance Services

Health insurance including ACA plans for individuals and families and
• Employee Benefits for employer groups of all sizes
• PLUS income protection, Dental, Vision, Life Pensions and Annuity, etc.
Office :(480)-657-8595/FAX:(888)-739-0796
Email: EWinsurance@gmail.com                    WEB-www.ewconsultant.biz

Make the most of 2015-Get health insurance for Feb 1st 2016 start!!

2015 is almost over, but there’s still time to end your year on a high note — enroll today (through January 15th 2016 ) for health coverage starting February 1.2016

California Poppy

Open Enrollment ends 1/31/2016!!

Check out your Tax Credit here on this site ( use the Health Insurance Marketplace Calculator) and then go to the insurance page ( or you can do it all there)-at my web site- Eric’s insurance web site to get your quotes and enroll.

Any questions?- Need any help or assistance- please call me any time!-602-616-1660!!
OR
Log in to HealthCare.gov to join the over 8.2 million who’ve enrolled in 2016 coverage BUT don’t forget our NAME and NPN- 8594684 when they ask if anyone is assisting you!!

Just select your state, and you’re on your way to submitting your application for 2016!

+++++++++++++++++++++

 Further information ( at no cost or obligation to you) – ERIC WALTERS Cell:602-616-1660

-ERIC WALTERS Insurance Services

Health insurance including ACA plans for individuals and families and • Employee Benefits for employer groups of all sizes • PLUS income protection, Dental, Vision, Life Pensions and Annuity, etc.

Office :(480)-657-8595/FAX:(888)-739-0796
Email: EWinsurance@gmail.com/
WEB-www.ewconsultant.biz

E & O. E

 

IRS changes reporting deadlines for 2016

The IRS says employers can do a trial run of their electronic form filing for reporting requirements under the Affordable Care Act, giving apprehensive  employers and their benefit advisers a way to test for readiness in advance of the reporting deadlines.

Earlier , the IRS opened up its Affordable Care Act Assurance Testing system which allows employers to see if their reporting software is correctly filling out the 2014 Forms 1094 and 1095. In November, the testing system was to have been cued up with the 2015 reporting forms.

Starting in 2016, applicable large employers must report whether an individual is covered by minimum essential coverage and that an offer of minimum essential coverage that provides minimum value was made to each full-time employee.

Applicable large employers, generally meaning employers with 50 or more full-time employees (including full-time equivalent employees) in the preceding calendar year, use Form 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, to report the information required.

Any employers filing 250 or more forms must do so electronically. The deadline for electronic filing is March 31, 2016.

The IRS submission requirements for using the ACA Assurance Testing system advise software developers - “Code definitions for Offer of Coverage Codes and Safe Harbor Codes are defined in the instructions and are not provided in the narrative but must be included within your submission where appropriate.”

Employer tracking

A flurry of ACA reporting solutions have entered the market over the last two years, some free-standing while others are to be integrated with existing HR, payroll or benefit systems.

For 2015, employers who file will have protection even if their filing is incorrect or incomplete, as long as they show they made good faith efforts to comply with the ACA reporting requirements- a “good-faith effort” is defined as an employer simply attempting to complete the forms.

The good-faith effort for 2015 tax year will disappear in 2016, however, and penalties will apply for incorrect information in subsequent years.

The IRSe on Monday extended the deadline for 2015 Affordable Care Act information reporting, giving employers subject to the requirements some highly-sought after relief.

In Notice 2016-4, issued by the IRS on Dec. 28, the agency extended the deadlines for both furnishing to individuals reporting forms and filing them with the IRS.

Starting in 2016, applicable large employers must report whether an individual is covered by minimum essential coverage and that an offer of minimum essential coverage that provides minimum value was made to each full-time employee.

Employers have been seeking relief from the requirements, with many saying they’re still not prepared for the task at hand.

Following consultation with stakeholders, the IRS and the Department of the Treasury “have determined that some employers, insurers, and other providers of minimum essential coverage need additional time to adapt and implement systems and procedures to gather, analyze, and report this information,” the agency said in its notice.

For furnishing employees with the 2015 Form 1095-B (Health Coverage) and Form 1095-C (Employer Provided Health Insurance Offer and Coverage), the IRS has extended the deadline from Feb. 1, 2016, to March 31, 2016.

For filing with the IRS the 2015 Form 1094-B (Transmittal of Health Coverage Information Returns), Form 1095-B, Form 1094-C (Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns) and Form 1095-C, the agency has extended the deadline from Feb. 29, 2016, to May 31, 2016 if not filing electronically, and from March 31, 2016, to June 30, 2016 if filing electronically.

Any employer filing 250 or more forms must do so electronically.

The notice also provides guidance to those who might not receive a Form 1095-B or Form 1095-C by the time they file their 2015 tax returns.

“Notwithstanding the extensions provided in this notice, employers and other coverage providers are encouraged to furnish statements and file the information returns as soon as they are ready,” the IRS says

.Further information ( at no cost or obligation to you) -

ERIC WALTERS Cell:602-616-1660      -ERIC WALTERS Insurance Services

Health insurance including ACA plans for individuals and families and
·         Employee Benefits for employer groups of all sizes
·         PLUS income protection, Dental, Vision, Life Pensions and Annuity, etc.

 Office :(480)-657-8595/FAX:(888)-739-0796

Email: EWinsurance@gmail.com/WEB-www.ewconsultant.biz

This document is designed to provide a high-level overview of aspects of the Patient Protection and Affordable Care Act (PPACA), as modified by the Health Care and Education Reconciliation Act.
It is not comprehensive and does not constitute legal or tax advice for healthcare reform implementation,any of their employee/employer obligations or requirements and/or any other aspect of their provisions. Please consult a professional benefit adviser or legal counsel regarding how the law may impact your specific benefit , obligation and/or requirement.

 

Cadillac Tax delayed!

President Obama has signed a bill suspending the Affordable Care Act’s Cadillac Tax, a 40 percent excise tax on certain high-cost, employer-sponsored health coverage, for two years.

The ACA had imposed the excise tax on the cost of coverage of an employer-sponsored plan exceeding $10,200 for single coverage and $27,500 for family coverage, effective for plan years on or after Jan. 1, 2018. The new law suspends the tax for 2018 and 2019 and makes it tax deductible.

Full details and information at no cost to you and without any obligation: ERIC WALTERS

 ERIC WALTERS Insurance Services

   Health insurance including ACA plans for individuals and families and Employee Benefits for employer groups of all sizes PLUS income protection, Dental, Vision, Life Pensions and Annuity.

Call:(480)-657-8595/FAX:(888)-739-0796/

            Cell:602-616-1660

            Email: EWinsurance@gmail.com/WEB-www.ewconsultant.biz

 

Health plan enrollment period -extended!!

CMS announced that the Open Enrollment period for health plans to start 1st Jan, 2016 has been extended to 11.59pm, 17th December, 2015.

The full Open Enrollment Period ends 1/31/2016 BUT if you enroll after the 15th of each month, then the health insurance plan instead of starting the 1st of the next month will start  the first of the month  AFTER next!!- e.g. -enroll by the 15th Dec- now extended through the 17th December, 2015 and the plan coverage will start the 1/11/2016!!

BUT if you enroll after the 17th Dec, 2015 the plan will start 2/1/2016!!

Enroll before the 15th Jan, 2016 and the plan will start - 2/1/2016,

Enroll after the 15th Jan, 2016 and the plan will start-  3/1/2016

To find out if you have a Tax Credit, cost sharing payments, etc go to our web site, www.ewconsultant.biz, and the programs will show you exactly what to do.

Any problems, call me at Cell: 602-616-1660  or email me at:- ewinsurance@gmail.com

Eric Walters

Eric Walters Insurance Services

Cell: 602-616-1660/Email: ewinsurance@gmail.com/WEB- www.ewconsultant.biz.

 

 

Small groups to stay at 50?

The PACE Act repeals the mandated small-group expansion from groups of up to 50 employees to groups of up to 100 employees that was to go in to effect on January 1, 2016.

The Act gives states the flexibility to determine the size of their small-group market instead of being forced into the national standard.  There had been concern that the combination of the new compliance requirements and the regulations for the new group size would cause dramatic changes to the insurance policies of medium-sized employers.

The combined legislation was signed into law by President Obama! .Az has maintained small group size of up to 50 employees!

Employers- what’s your Tax Credit-here

ANY QUESTIONS?

Ask Eric:-  Cell:602-616-1660

  •    ERIC WALTERS Insurance Services

·         Health insurance including ACA plans for individuals and families and Employee Benefits for                employer groups of all sizes

           PLUS income protection, Dental, Vision, Life,  Pensions and Annuity, etc.

TEL:(480)-657-8595/FAX:(888)-739-0796/

 

 

 

 

 

ACA coverage- Affordable or Exempt?

Understanding Affordability Exemptions for Individual and Employer-Sponsored Health Coverage

Under the Affordable Care Act ( Obamacare) employer-sponsored coverage must cost no more than 9.5% of household income, after the employer’s contribution, to be considered affordable.

If the cheapest coverage, both inside and outside the workplace would cost more than 8% of household income for self-only coverage that person is exempt from the requirement to get health insurance.

The 9.5% rule applies to anyone with access to an employer-sponsored plan, the 8% rule applies to all Americans who would otherwise be required to have coverage. 

The 9.56% applies to self-only coverage and not the cost of a whole family plan. The 8% rule applies to self-only coverage of one person or for two or more family members on average. All rules apply to the cheapest plan offered by an employer.

Affordability of Employer-Sponsored Coverage and the Marketplace

If employer sponsored coverage is affordable (less than 9.56% of household income) then the employee can’t get cost assistance ( Tax Credit and payment assistance) and through the Health Insurance Marketplace. If the employer offers health coverage to that person’s family, then all qualifying family members will not be eligible for cost assistance either.

NOTE:

You and your employer will need to fill out forms ( IRS Form -8965) ( See below also for further details) for both the affordability exemption and if workplace coverage is unaffordable.

The limit was clarified as technically 9.56% of household income. (AKA “more than 9.5%”). This was clarified on July 24, 2014 by Internal Revenue Service (IRS) Revenue Procedures (2014-46, 2014-37, and 2014-41). Original rules still say 9.5%.

How the 8% Affordability Exemption Works

If coverage costs more than 8% of Modified Adjusted Gross Income MAGI for self-only coverage for an employee, or for a family member, they are exempt from the per month fee for not having coverage. There is also an exemption if two or more family members’ aggregate cost of self-only employer-sponsored coverage is more than 8% of household income. These grant hardship exemptions, which can qualify you for a catastrophic plan- ask us for more details!

Find out If You Qualify for an Affordability Exemption

The best way to find out if you qualify for an affordability exemption is by filling out the worksheet on page 10 of the IRS Form-8965-Exemptions worksheet. It is possible for one family member to qualify for an exemption, but not the other one.

Affordability Exemption Vs. Affordable Workplace Coverage

Employer sponsored coverage costing more than 9.5% of MAGI for employee-only should not be confused with an affordability exemption from the fee for not having insurance.

The affordability exemption requires the lowest-priced coverage available to you or a household member would cost more than 8% of your household MAGI for self only coverage.

Thus it is possible for an employee or family member to be exempt from the fee, but not be eligible for marketplace subsidies. This is sometimes called “the family affordability glitch“.

We can help! Call- Eric now!

Eric Walters Insurance Services,

Scottsdale Az 85260

CELL: 602-616-1660

Office Phone- 480-657-8595

Fax: 888-739-0796

WEB: www.ewconsultant.biz

 

 

 

 

 

Control Healthcare costs with Self-Funded CDHP!

Today’s small to mid-size employers and employees are challenged by rising healthcare costs to find effective ways to afford, maintain and manage their healthcare spend.
According to a study of small businesses, cost is a significant concern – with rising healthcare costs and the cost of insurance benefits as the top two critical issues facing their companies.

Offering customizable healthcare plans such as a self-funded consumer-driven health plan (CDHP) with stop-loss insurance paired with a health savings account (HSA) or health reimbursement arrangement (HRA) can help employers control their healthcare spend while providing an appealing benefits package to attract and retain employees, and allow employees to control and get the most out of their healthcare dollars.

Increasing Costs Leading to CDHP Popularity

According to a Kaiser Family Foundation study in 2014:-

The average annual premiums for employer-sponsored health insurance were $6,025 for single coverage and $16,834 for family coverage.
Average premiums for high-deductible health plans (HDHP) with a savings option were lower than the overall average for all plan types for both single and family coverage, at $5,299 and $15,401, respectively.

As employers search for ways to afford healthcare costs and maintain benefits, providing employees with the ability to make informed healthcare choices and the transparency of healthcare spend from a self-funded plan can prove to be an affordable plan option.

And, it is one that is gaining popularity – with employers of all sizes adding CDHPs in 2014. In addition, CDHP enrollment increased from 18 percent to 23 percent for all covered employees, making it the largest one-year increase in high-deductible CDHP enrollment.

What Is a CDHP?

A CDHP, also known as a consumer-directed or consumer-driven health plan, is a health plan with a typically lower monthly premium, higher medical deductible and higher medical out-of-pocket limit than most traditional PPO plans.
CDHP plans aren’t new, they’ve been in the marketplace for 10 years. But they’re just as relevant now in the post-ACA world as they were when they were first rolled out.

Since CDHPs don’t allow copays for services such as physician office visits; lab/X-ray services; or outpatient prescription drugs before the deductible is met, employees are responsible for covering minor or routine healthcare expenses.
Once they meet their annual individual or family deductible, the plan begins paying a portion of medical benefits and prescription drug costs. When they meet their individual or family out-of-pocket maximum, the CDHP will pay 100 percent of covered benefits.

According to a recent study, adults in a CDHP were more likely than those in a traditional plan to exhibit a number of cost-conscious behaviors. The CDHP encourages them to take control of their healthcare, making them proactive in their healthcare decisions regarding care and cost.

The same study showed that those in a CDHP were more likely than those in a traditional health plan to:

  • Say that they had checked whether the plan would cover care;
  • Ask for a generic drug instead of a brand name;
  • Talk to their doctors about prescription options and costs;
  • Check the price of a service before getting care;
  • Ask a doctor to recommend less costly prescriptions;
  • Talk to their doctors about other treatment options and costs;
  • Develop a budget to manage health care expenses.

CDHPs are commonly offered with an HSA or HRA, which allows employees to use pre-tax dollars to pay for eligible out-of-pocket healthcare costs. HSAs and HRAs are designed to work with the CDHP to keep premiums low.

What Is an HSA?

The most popular account to pair with a CDHP is an HSA.
In order to have an HSA, the employer must select a qualified high-deductible health plan (HDHP), which is a plan governed by the Internal Revenue Service (IRS). As of January 1, 2015, the HDHP must have at least a $1,300 deductible for individual coverage and $2,600 deductible for family coverage. Once the HDHP is in place, the employee can select an HSA. The HSA works much like a savings account with tax savings to pay qualified medical expenses or even to save for retirement, as defined by the IRS.

Sometimes funded by the employer, and always funded and owned by the employee, HSAs provide contributing employers with tax benefits by reducing their payroll tax liability; while employees benefit from tax-exempt contributions, earnings from interest, and investments and distributions for qualified medical expenses. For 2015, a total of $3,350 per calendar year for individuals and $6,650 for a family can be contributed.
When an employee leaves the company or the plan, funds are portable and can be used for their future qualified medical expenses.

The average cost of coverage in a CDHP paired with a tax- advantaged health savings account is 18% less than coverage in a PPO and 20% less than in an HMO.  Since the HSA Is primarily funded by the employee, they are invested in making more informed decisions toward benefits usage and controlling their healthcare spend, leading to savings.

What Is an HRA?

HRAs are an IRS-approved arrangement in which employers set up and reimburse an employee for qualifying medical expenses, including doctor appointments and prescriptions.
Entirely funded and owned by the employer, HRAs must be integrated with a health benefit plan and provide benefits for eligible health expenses only. An HRA can be used with any plan, including a qualified HDHP, unlike the HSA that must be paired with a qualified HDHP.
Employees are typically either provided with a debit card for the HRA or are reimbursed after providing documentation of expenses.
An HRA has tax benefits for the employee as their employer’s contributions are not added to their gross income and they are not taxed on their HRA reimbursements. If an employee terminates employment, any unspent funds are retained by the employer’s plan.

What Is Self-Funding?

A self-funded health plan with stop-loss insurance is a plan In which an employer or other group sponsor is financially responsible for employee claims up to a certain dollar amount.
The employer’s stop-loss insurance policy then covers the remaining costs, providing protection for the employer. There are two ways stop-loss insurance protects employers from large, unexpected or catastrophic claims:

  • Aggregate stop-loss insurance reimburses employers for covered claims over a certain amount for the entire group.
  • Specific stop-loss insurance reimburses employers for covered claims over a certain amount for an individual.

Since self-funded claim dollars are not subject to state health insurance premium taxes, employers can get direct savings. Additionally, if an employer has lower than expected claim costs throughout the plan year, there may be an opportunity to receive a refund.

A self-funded plan allows employers to be rated based on their own risk profile versus being rated on a block of  business, which can provide overall plan cost savings. With a wide range of flexible plan choices, including higher deductibles with lower premiums, and different coinsurance choices, self-funded plans can be customized to meet an employer’s needs and budget.

They also have the advantage of claim utilization reports, which include important information such as a summary of where claim dollars are being spent, or claim payments by type of service. These reports provide
detailed information on how their plan is running, help identify how their claim dollars are being used, where there are potential cost-savings changes; and provide insight to forecast future plan design changes to better meet the needs of their employees.
While a self-funded health plan may not always be a good fit , small to mid-size employers should consider them as an option to help meet their unique needs and budget as they seek to provide affordable benefits for your employees.

How They Work Together to Provide Affordability

Bringing a self-funded CDHP and stop-loss insurance together and pairing it with an HSA or HRA can offer overall affordability to both employers and employees.
A win-win strategy for employers and employees who are a good fit for a self-funded CDHP with stop-loss insurance paired with an HSA or HRA, the plan provides many advantages, including:

Employers:

  • Cost and tax savings from empowering and encouraging their employees to make informed healthcare choices
  • Lower premiums than traditional PPO plans as a result of rates being based on their own risk profile
  • Flexibility to design a plan with a higher deductible and ability to help offset deductible costs when paired with an HSA or HRA
  • Transparency of healthcare spend with utilization reports

Employees

  • Tax and cost savings from the use of pretax dollars with an HSA or HRA,
  • Savings through their educated choices, such as selecting in-network doctors, requesting generics or developing a budget to manage their healthcare expenses
  • Potential for savings with lower premiums than traditional PPO plans.
  • Overall satisfaction with a full benefit Plan

Further details and Quotes ( with no obligation) from:

Eric Walters
ERIC WALTERS Insurance Services

Health insurance including ACA plans for individuals and families and
Employee Benefits for employer groups of all sizes  PLUS income protection, Dental, Vision, Life ,Pensions , Annuity,etc.

SCOTTSDALE AZ 85260
Call:(480)-657-8595/FAX:(888)-739-0796/Cell:602-616-1660
Email: EWinsurance@gmail.com/WEB-www.ewconsultant.biz

 

 

Small Business & The SHOP marketplace!

Small Businesses Need to Know About the SHOP Marketplace

The Small Business Health Options Program (SHOP) Marketplace is a key provision of the Affordable Care Act (ACA).

Here is a list of questions and answers to help small business leaders understand some basics of the SHOP Marketplace and how they will impact benefits available to employees.

Question 1: What is the SHOP Marketplace?

The SHOP Marketplace is a web portal facilitated by state or federal governments where small businesses can shop for and buy private health insurance for their employees.

Employers with up to 100 employees are eligible to purchase coverage through the SHOP Marketplace; however states may choose to keep the limit to up to 50 employees for the first two years (2014-2015). AZ is currently 50 employees and will remain so.

The federal SHOP and almost all states are currently using 50 as the limit for small employers in the SHOP.

 Question 2: What types of benefits are offered through the SHOP?

The SHOP Marketplace will offer major medical insurance and supplemental dental insurance options, with four levels of coverage with both HMO and PPO type plans. The levels vary depending on the proportion of medical expenses the insurance plan is expected to cover (actuarial value).

This includes:

1)- Bronze: 60 percent actuarial value

2)- Silver: 70 percent actuarial value

3)- Gold: 80 percent actuarial value

4)- Platinum: 90 percent actuarial value

The SHOP also provides an online experience for employees for plan selection and enrollment, with additional telephone and in-person consumer assistance if needed.

Question 3: How will the SHOP Marketplace work in my state?

The structure of each SHOP Marketplace will depend on your state’s governance decisions. The law requires each state to establish a Health Insurance Marketplace (also called an exchange) that provides a market for individuals and small employers to buy major medical insurance by January 1, 2014.

For states that do not establish a marketplace, the U.S. Department of Health and Human Services (HHS) will operate a Federally-Facilitated Marketplace (FFM).

The SHOP Marketplace will offer two coverage models: (1) Employer Choice and (2) Employee Choice.  Employer Choice (available in 2014) allows employers to choose a health plan to offer employees. Employee Choice (delayed in most states until 2015 and 2016) offers the employer the option to choose a coverage value, so employees can shop for the best plan and carrier for them.

For information by state visit: statereforum.org/where-states-stand-on-exchanges

 Question 4: How will small businesses be impacted by the Marketplace?

One very important responsibility of small businesses will be employee communication. Not only will employees be looking to you to understand important health care reform changes, the law required all employers who are subject to the

Fair Labor Standards Act to notify employees of the Health Insurance Marketplace and potential eligibility for premium credits by October 1, 2013. As well as to notify new employees upon hire.

 Question 5: How will the SHOP Marketplace affect health care costs for my business?

The SHOP Marketplace is expected to offer competitive benefits options to small businesses. Additionally,small businesses participating in a SHOP may be eligible for a tax credit of up to 50 percent of their premium payments if they have 25 or fewer full-time equivalent employees* whose average annual wages are less than $50,000. Tax-exempt organizations are eligible for a tax credit up to 35%.

The SHOP may also provide an administrative platform for small businesses to provide health care coverage, enabling open enrollment online and allowing employees to select and enroll in health care coverage. This takes away some of the administrative burden from the small businesses and makes it easier for employees. Administrative options, along with tax credits in the SHOP Marketplace may help your business to provide cost-effective workplace benefits.

A qualifying employer must have 25 or fewer full-time equivalent (FTE) workers. Employers with more than 24 workers may be eligible if they still have fewer than 24 FTEs. For example, if a firm has 40 employees who work part-time, the firm may count 20 as FTEs and, therefore, the firm would qualify in this group.

Note: The PPACA says that employers with 25 or fewer FTEs may qualify for the credit; the credit amount is phased down to zero for an employer with 25 FTEs. The IRS website, as of Sept. 20, 2013, says that employers with fewer than 25 FTEs are eligible for the credit. For more information, see www.irs.gov.

Question 6: How will the SHOP Marketplace affect my employees?

Most business owners recognize that health insurance plays an important role in retention and recruitment, but at the present time, less than half of small businesses are able to offer these benefits at competitive rates.

The SHOP Marketplace will give your business the opportunity to offer competitive benefits options to your workforce.

Overall benefits can play a significant role in keeping employees satisfied with their job and increase their likelihood to believe their company is a great place to work. Like no other benefits or perk, health benefits help workers to feel secure about their financial future and their ability to handle unexpected illness or injury.

The SHOP Marketplace may help your business to offer robust benefits in order to stay competitive and keep top talent.40 percent of employees say they do not truly understand their employer’s contribution to their insurance benefits.

59 percent of workers believe they’d be at least somewhat likely to accept a job with a more robust benefits package, but lower compensation.

Question 7: How do supplemental/voluntary insurance policies fit into SHOP Marketplace options?

Supplemental insurance policies, like the ones offered by Aflac, are a way to offer a broader benefits package to your workforce without adding to your benefits costs.

Unlike major medical insurance, these policies pay cash benefits directly to the policyholder, unless otherwise assigned, if they get sick or injured. This helps provide an extra layer of financial protection for your employees without adding to your overall cost of benefits.

.More detailed benefit information from Eric Walters:-Cell: 602-616-1660

For more information …New guidance is expected from the U.S. Department of Health and Human Services (HHS) that may impact your business, your benefits offerings and your workforce. To learn more about health care reform and coverage available in your state, visit healthcare.gov , http://cciio.cms.gov and irs.gov.

Sources

1 Kaiser Family Foundation (2010). Explaining Health Care Reform: Questions About Health Insurance Exchanges, accessed on October 3, 2012, from www.kff.org

.2 Kaiser Family Foundation (2012), Implementation Timeline, accessed on August 23, 2012, from healthreform.kff.org/timeline.aspx

.3 2013 Aflac WorkForces Report, a study conducted by Research Now on behalf of Aflac, January 7 – 24, 2013.

4 The Internal Revenue Service (2012) Small Business Health Care Tax Credit for Small Employers, accessed October 3, 2012, from http://www.irs.gov/uac/Small-Business-Health-Care-Tax-Credit-for-Small-Employers

5 Aflac 2011 Year in Review. Employees who are offered voluntary benefits by their employer are 12% more likely to say their current benefits package meets their family’s needs extremely or very well.

For further detailed information about SHOP benefits and or Supplemental /Voluntary benefits call Eric Walters- CELL 602-616-1660

Eric Walters Insurance Services,

Office 480-657-8595

FAX: 888-739-0796

Email: ewinsurance@gmail.com

WEB insurance Site: www.ewconsultant.biz

This material is intended to provide general information about an evolving topic and does not constitute legal, tax or accounting advice regarding any specific situation. Eric Walters and/or azhealthinsuranceblog,com/ewconsultant.biz cannot anticipate all the facts that a particular employer or individual will have to consider in their benefits decision-making process.

We strongly encourage readers to discuss their HCR situations with their advisors to determine the actions they need to take or to visit healthcare.gov (which may also be contacted at 1-800-318-2596) for additional information.1932 Wynnton Road Columbus, GA 31999