Get Benico’s 2015 Compliance Survival Kit

December 12th, 2014 § 0 comments § permalink

Get Benico’s 2015 Compliance Survival Kit, which includes the following:

  • The Benico Health & Welfare Plan Compliance Guide
  • Health and Welfare Compliance Checklist (which directly relates to the Guide)
  • Health Care Reform – Employer Action Items for 2014 and Considerations for 2015
  • Health Care Reform Compliance Timeline – Quick Reference Guide
  • Welfare Plan Compliance Calendar

The 2015 Compliance Survival kit is authored by the employment law / employee benefit practice of Proskauer Rose, LLP, of counsel to the Benefit Advisors Network of which Benico is a member.

Get the Kit

California Repeals 60-Day Limit on Waiting Periods

September 9th, 2014 § 0 comments § permalink

On August 15, 2014, California passed Senate Bill 1034, which repealed an insurance law (Assembly Bill 1083) that prohibited insurance companies from including waiting periods in excess of 60 days in their group health insurance contracts. The new law, effective January 1, 2015, prohibits California insurance companies from applying any “waiting or affiliation period” under a group or individual health benefit plan.

So where does that leave California employers, who are permitted under federal law (the ACA) to have a one-month orientation period and up to a 90-day waiting period? They’ll be able to continue applying ACA-compliant orientation periods and waiting periods, as the law prohibits carriers—but not employers—from imposing a waiting period. Therefore, the new California law aligns with the ACA and allows insurance carriers in California to administer enrollment in accordance the employer’s ACA-compliant orientation period and/or waiting period. It does, however, prohibit carriers from imposing a separate affiliation or waiting period in addition to any imposed by the employer. An affiliation period is the equivalent of a waiting period for coverage obtained in the individual (non-group) market.

The new law is intended to eliminate confusion between the state and federal rules governing health care enrollment waiting periods. Employers operating in multiple states will be able to have consistent waiting periods for employees in different states, if desired, which will make it easier to determine when a new hire or otherwise newly eligible employee must be enrolled in a health care plan.

Until the existing 60-day waiting period law is repealed effective January 1, 2015, employers with California health care plans that renew in 2014 should be able to apply a waiting period in accordance with the ACA (e.g., up to 90 days) as long as the carrier’s insurance contract does not impose a separate waiting period in addition to the employer’s waiting period.

Read more here

IRS Releases Revised Form 720 for filing one’s PCORI fees

June 4th, 2014 § 0 comments § permalink

On Tuesday, June 3rd, the IRS issued a revised Form 720 and instructions for filing the PCORI fees by July 31, 2014. Filers will enter covered-lives counts and applicable rates ($1 for plan years ending before Oct. 1, 2013; $2 for plan years ending on or after Oct. 1, 2013) in Part II of Form 720 (line 133) to calculate the amount owed.

Instructions include a table for use by filers with plans or policies subject to both the $1 and $2 applicable rates. Though Form 720 is generally used for quarterly excise taxes, PCORI filers remit that fee annually – by July 31 – and complete only line 133 (unless also submitting excise taxes).

Under the Affordable Care Act, the PCORI fee applies to each plan or policy year that ends after Sept. 30, 2012, and before Oct. 1, 2019.

Link to a copy of Form 720:

http://www.irs.gov/pub/irs-pdf/f720.pdf

Link to instructions to Form 720:

http://www.irs.gov/instructions/i720/ch01.html

The CMS exchange enrollment analysis

May 22nd, 2014 § 0 comments § permalink

On May 1, 2014, CMS released the most detailed exchange enrollment analysis to date. The analysis includes data from October 1, 2013- April 19, 2014.

Key takeaways:

  • 8,019,763 people selected marketplace plans from October 1, 2013 through April 19, 2014.
  • Nearly 2.6 million signed up via state-based exchanges, and there were over 5.4 million plan selections via the federally facilitated and partnership marketplaces.
  • About 3.8 million people were procrastinators and enrolled from March 2-April 19.
  • Of the more than 8 million:
  • 54% female, 46 % male
  • 63% Caucasian, 17% African-American, 11% Latino, and 8% Asian
  • 34% < 35 years old;
  • 28% are between 18 and 34 years of age;
  • 65% selected a Silver plan;
  • 20% went with a Bronze plan; and
  • 85% were eligible for a premium tax credit

Being a red state or a blue state didn’t really matter. More than a third of the sign-ups came from three states with large numbers of uninsured residents.  California had 1.4 million of its citizens sign up, whereas Florida and Texas brought in 980,000 and 730,000 enrollees respectively. The next closest states were New York and North Carolina, which each signed up more than 350,000 residents.

The states that enrolled the smallest % of their uninsured populations were Iowa, South Dakota, and Massachusetts.

The current state of health care reform (@ May 1, 2014)

May 13th, 2014 § 0 comments § permalink

John Garven PPACA speech (May 1, 2014)

I was privileged to be asked to speak at the 43rd Annual Mini-Institute for the Central Illinois Society of Financial Service Professionals on May 1st in Bloomington, Illinois on the subject of “Health Care Reform – Challenges and Opportunities”. Basically the speech provided a retrospective (what’s occurred to date), perspective (what’s currently in play), and prospective (what things may look like in the near and longer terms) around the Patient Protection & Affordable Care Act (PPACA).  Since it was geared to financial advisors, the takeaways address the sorts of things that advisors should be speaking with their clients about as it relates to the law and its impact on their lives and businesses.

2013 “early renewals” in the small employer group market and end of 2014 compliance and cost management strategies

March 3rd, 2014 § 0 comments § permalink

At the end of 2013 many companies and organizations with less than 50 employees did something called an “early renewal” with their group health insurance plans as a means of kicking the can down the road, many until December 1, 2014, to defer their compliance with Health Care Reform for up to 11 months.  The principal reason for doing such in most cases was to avoid a significant rate increase at the end of 2013 with the thought of “Let’s buy some time”.

QUESTION – If your company is one of these companies that bought some time by doing an early renewal, what is your strategy at the end of 2014 for reasonably managing costs of complying then?

Did you know that there are viable group health insurance financing options available in the market to help you avoid the Health Care Reform “cost conundrum” later this year when your company’s / organization’s group plan renews?   Self-insurance either with an insurance company or third party administrator (TPA) providing plan administration and purchasing catastrophic insurance coverage called “stop loss insurance” will, no doubt, be a solution for many small employers wrestling with this issue this year.

Self-insured medical plans are exempt from some of the more onerous provisions of Health Care Reform, such as the Health Insurance Tax (HIT) and Modified Community Rating.  Avoiding these two aspects of Health Care Reform alone can result in saving tens and even potentially hundreds of thousands of dollars of expense.

Benico, Ltd. provides private companies, public sector employers, and not-for-profit organizations of all sizes with strategic advice around the design, risk management, communication, and enrollment of their health and welfare plans and with compliance around the laws and regulations relating to the same.  To discuss your company’s situation, please contact Benico’s principal, John Garven, at 847-669-4800, ext. 202.

 

2014 health care reform update

March 3rd, 2014 § 0 comments § permalink

The purpose of this blog post is to provider our readers with some perspective about where things currently stand and where they are headed this year with regard to the timing and types of guidance around the Affordable Care Act (“ACA”, aka “ObamaCare”) that we should expect to receive from the federal agencies having jurisdiction (principally HHS, DOL, and the IRS).

First, we believe everyone will agree that February was a VERY BUSY MONTH with regard to ACA guidance.  To this point, the final regulations around the employer mandate were released on Monday, February 10th.  Following are our thoughts about this development:

1)    Generally speaking, we are sure the fact of the delay for compliance with the employer mandate until 2016 for businesses / organizations having less than 100 but more than 50 full-time equivalent employees (FTEs) will at least come as welcome news in the short term.

2)    Perhaps even as significant as the 1st point, though, is the transitional relief afforded businesses / organizations having 100 or more FTEs under Section 4980H(a) of the law.  Specifically, larger employers next year will NOT be subject the $2,000-per-employee “no coverage” penalty if they, in fact, offer compliant, “qualified” coverage to at least 70% of their full-time employees. This is a change from the proposed rule, under which employers would have had to offer coverage to at least 95% of their full-time employees right away.  

3)    It should be kept in mind that next year under the 70% standard and, in 2016 and thereafter under the 95% standard for all “applicable large employers” (businesses / organizations with 50 or more FTEs), employers may still be subject to an “affordability” penalty of $3,000 for any otherwise eligible employee who obtains government-subsidized coverage through the public exchange.

4)    It should also be kept in mind by businesses / organizations that the “no coverage” and “affordability” penalties are excise taxes, meaning that they’re NOT deductible business expenses for tax purposes.  

5)    There is some helpful guidance in the final regulations around seasonal employees who may be excluded entirely if they work less than 6 months as well as for educational employees.

Second, we anticipate that the rest of 1Q2014 will prove to be a very important period in terms of guidance and developments, including the final stretch before the end of the Marketplace open enrollment period on March 31st.  It was recently reported that there are 56 active items of ACA guidance currently in the works between the IRS, DOL, and HHS.  43 of the 56 items are expected to be released during 2014, and several of them are frankly needed very soon.  In addition, the continued Congressional negotiations on the debt ceiling and the federal budget could have ACA implications.

Finally, just a note that our firm offers the following “on-demand” Health Care Reform (HCR) resources:

  • Inform on Reform© is an HCR compliance resource provided exclusively by the Smart Partner® member firms of the Benefit Advisors Network and its Compliance Director, Peter Marathas, a Partner in the Employee Benefits, Executive Compensation & ERISA Litigation Practice Center of Proskauer Rose, LLP. You may access this particular resource by logging in at www.benefitadvisorsoffice.com/HCReform.
  • Visit http://benico.com/health-care-reform-updates/ for the latest HCR updates.  This particular feed is constantly being updated through a professional outsourced service that Benico contracts with.

 

If you are not a client yet but would like access to Inform on Reform© please email a note requesting such to info@benico.com.  If you make such a request, we will also email you our 2014 Health Care Reform Compliance Checklist which provides the reader with virtually everything that the he / she needs to know with regard to important dates and actionable steps needing to be taken during 2014.

In closing, our continued challenge is education.  Most Americans (62% according to a recent Kaiser Health News poll) do not realize that most significant ACA provisions have taken effect.  2013 was in many ways a year of survival.  2014 will be a year of strategy.  To this end, our firm stands ready to engage with our clients to deliver real-world and practicable solutions that fit their strategy around compliance and cost management.

HHS Releases 2014 Federal Poverty Level Guidelines

January 23rd, 2014 § 0 comments § permalink

HHS has released 2014 federal poverty guidelines. Updated annually for inflation, the 2014 guidelines will set the income thresholds for subsidy eligibility on exchanges for 2015. The threshold (in the 48 contiguous states and DC) for one person will be $11,670, an $180 increase over the 2013 level. An employee’s receipt of exchange subsidies could trigger an employer shared responsibility penalty starting in 2015. IRS proposed rules include an employer affordability safe harbor based on the federal poverty level.

2014 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES AND THE DISTRICT OF COLUMBIA

Persons in family/household   Poverty guideline

1 ………………………………………………… $11,670

2 ………………………………………………….. 15,730

3 ………………………………………………….. 19,790

4 ………………………………………………….. 23,850

5 ………………………………………………….. 27,910

6 ………………………………………………….. 31,970

7 ………………………………………………….. 36,030

8 ………………………………………………….. 40,090

For families/households with more than 8 persons, add $4,060 for each additional person.

2014 POVERTY GUIDELINES FOR ALASKA

Persons in family/household           Poverty guideline

1 …………………………………………………. $14,580

2 …………………………………………………… 19,660

3 …………………………………………………… 24,740

4 …………………………………………………… 29,820

5 …………………………………………………… 34,900

6 …………………………………………………… 39,980

7 …………………………………………………… 45,060

8 …………………………………………………… 50,140

For families/households with more than 8 persons, add $5,080 for each additional person.

2014 POVERTY GUIDELINES FOR HAWAII

Persons in family/household     Poverty guideline

1 …………………………………………………. $13,420

2 …………………………………………………… 18,090

3 …………………………………………………… 22,760

4 …………………………………………………… 27,430

5 …………………………………………………… 32,100

6 …………………………………………………… 36,770

7 …………………………………………………… 41,440

8 …………………………………………………… 46,110

For families/households with more than 8 persons, add $4,670 for each additional person

Clink on the link to the federal register:

http://www.gpo.gov/fdsys/pkg/FR-2014-01-22/pdf/2014-01303.pdf

Five things you need to know about individual medical plans in 2014

January 22nd, 2014 § 0 comments § permalink

  1. The open enrollment period is expected to end on March 31, 2014.  Anyone can sign up for an individual medical plan during this time period. There is speculation that the open enrollment period will be extended because of the problems with the initial roll-out of the exchanges, but for now it is still scheduled to end on March 31, 2014.
  2. Applications and premium payments for coverage, whether purchased on the exchange or off, must be received by the 15th of the month to receive an effective date of the 1st of the following month.  For example, an application must be submitted and the initial premium must be paid by January 15th to receive a February 1st effective date.  The application submission dates and premium due dates may be different for off-exchange health plans.
  3. After the open enrollment period ends on March 31st, individuals must experience a qualifying event to be eligible to enroll in a medical plan or make a plan change mid-year. Individuals will have 60 days from the date of the qualifying event to sign up for coverage or make a plan change.  See the list of qualifying events below.
  4. As long as an individual submits an application by March 31st they will be exempt from the health care law’s individual mandate penalties provided they maintain coverage throughout the rest of the year.  This statement holds true even if the individual receives an effective date that would cause them to be without coverage for more than 3 consecutive months.  Individuals that are without coverage for 3 or more consecutive months out of the year for other reasons will be subject to the Individual Mandate penalties unless they qualify for an exemption.
  5. The next open enrollment period will occur from Nov. 15, 2014 to Jan. 15, 2015.  It was originally scheduled to occur between Oct. 15, 2014 and Dec. 7, 2014, but has since changed.  During this time period anyone may sign up for coverage or make a plan change without a qualifying event.

 

List of Qualifying Events – Special Enrollment Periods for Individual Medical Plans

 If an individual experiences a qualifying event he/she will have 60 days from the date of the qualifying event to apply for an individual medical plan or make a change to their existing coverage. The following list outlines the qualifying events that have been identified by the Affordable Care Act (ACA).

  1.  Involuntary loss of minimum essential coverage, for example, because of a job loss (voluntarily terminating coverage or policies that are canceled for non-premium payment are not qualifying events);
  2. Change of family structure (i.e. marriage, divorce, death, newborn);
  3. Gaining citizenship or permanent resident status;
  4. Becoming newly eligible for a premium or cost sharing subsidy (generally results from mid-year income changes);
  5. Becoming ineligible for a premium or cost sharing subsidy (generally results from mid-year income changes);
  6. Change of residential address that results in new medical plan options available;
  7. Did not enroll during the open enrollment period because of a mistake, misrepresentation or inaction of an officer, employee or agent of the Health Insurance Marketplace;
  8. The insurance company substantially violated a material provision of its health insurance contract;
  9. The individual is a member of an American Indian Tribe (can enroll or make a plan change one time per month); or
  10. The individual can demonstrate to the Health Insurance Marketplace that he/she has other extenuating circumstances that qualify him/her for special enrollment.

Departments Release New FAQ Guidance on ACA and MHPAEA Implementation Issues

January 20th, 2014 § 0 comments § permalink

On January 9, 2014, the Departments of Treasury, Labor, and Health and Human Services (collectively, the “Departments”) published the eighteenth installment of a series of answers toFrequently Asked Questions (FAQ) regarding implementation of the Affordable Care Act (ACA) and the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).

The FAQ provides guidance on a number of issues, including new recommendations made by the U.S. Preventive Services Task Force and how they affect the ACA’s preventive care requirement, limits on participant cost-sharing (i.e., out-of-pocket limits), expatriate health plans, wellness programs, fixed-indemnity insurance, and guidance on the ACA’s impact on the MHPAEA.

The FAQ generally confirms previous Department guidance on the issues addressed and does not significantly change the application of these rules and mandates to employer-sponsored group health plans.

Am I able to contribute to an HSA if I am over age 65 but not entitled or enrolled in Medicare?

January 14th, 2014 § 0 comments § permalink

“Am I able to contribute to an HSA if I am over age 65 but not entitled or enrolled in Medicare?”.  A little known fact is that the answer to this question is a qualified “yes”.

Elaborating further, if you do a Google search using the following as the search terms – “May I have an HSA when I am 65 years old?” you will see on the first page of the search results the following – http://bit.ly/1bmaf9E, and the first Google link – “Medicare and HSA Tip Sheet – SelectAccount” – presents as its very last question the following – “Can I contribute to my HSA if over Age 65 but not entitled or enrolled in Medicare?”.  The answer is as follows:  

“Yes, so long as he or she is not entitled or enrolled in Medicare Part A, B, C, or D, or any other Medicare benefits. Consider this example: Jean is age 66, and will retire at age 68. She has decided to delay receiving Social Security benefits until she retires. Because Jean is over age 65, she could apply for Medicare Part A. But she will not be entitled to Medicare unless she applies for it. She will be eligible for HSA contributions until she applies for Medicare or begins receiving Social Security benefits, so long as she meets the other requirements for being an HSA eligible individual (e.g., she has HDHP coverage and no other impermissible coverage, and she cannot be claimed as anyone else’s tax dependent).”

I recently spoke about this particular subject with a representative for a major national HSA custodian, and the representative acknowledged the fact that anyone who’s 65 or older may continue making HSA contributions provided they’re not yet enrolled in Medicare.  And, in the case of this particular custodian, there isn’t any kind of affidavit or document required for anyone who’s 65 or older who wishes to continue making HSA contributions.  Their eligibility for making contributions is really between them and the IRS.

Individual Major Medical Policies Generally Cannot Be Offered On A Pre-Tax Basis As Of January 1, 2014

January 14th, 2014 § 0 comments § permalink

In the past, some small employers chose to allow employees to pay for individual medical policies under a cafeteria plan.  Such plans would reimburse the employee for the cost of coverage after the employee would prove to the employer that he or she paid an individual premium.  In some instances, the employer would accept and pay direct premium bills from the insurance carriers on behalf of individual employees.  Some even opined that employers would be able to reimburse, on a pretax basis, employee premiums incurred as a result of purchasing an individual health policy offered in the Exchange.  As of January 1, 2014, all of these practices are prohibited and could subject the employer to excise taxes or other penalties under the Affordable Care Act (“ACA” or “Health Care Reform”).

ACA regulations explicitly state that individual policies, marketed through an Exchange, cannot be offered as a qualified benefit under a cafeteria plan. Additional guidance further indicates that, beginning in 2014, cafeteria plans generally may not be used to pay premiums for individual health insurance policies that provide major medical coverage.  This includes pre-tax reimbursement arrangements under cafeteria plans as well as other arrangements funded through HRAs or direct employer payments.

The reasoning behind this guidance is that these types of arrangements are considered group health plans in and of themselves.  By their very nature, they impose dollar limits up to the cost of the individual coverage purchased through them and they cannot be integrated with individual health insurance coverage.  As a result, these arrangements violate the ACA’s prohibition against annual dollar limits, as well as the requirement to provide first-dollar coverage for preventive services.

It is important to note that these regulations only apply to the pre-tax reimbursement of individual medical policies.  Cafeteria plans can still be used to reimburse individual coverage that is limited to excepted benefits such as limited scope dental or vision coverage, or if the arrangement is offered only to retirees, or if the benefits are funded on an after-tax basis.  Of course, such arrangements can also still be used to reimburse employee’s other qualified medical expenses so long as such an arrangement is integrated with an underlying medical plan.  If your group employs such an arrangement, it still must be aware that other laws such as ERISA, COBRA, etc. may be applicable. 

The Affordable Care Act and Rising Health Insurance Premiums

December 9th, 2013 § 0 comments § permalink

Benefit Advisors Network (BAN) Compliance Director, Peter Marathas, discusses the Affordable Care Act and rising health insurance premiums. BAN Smart Partner, Benico, Ltd., can help companies address the concerns mentioned in this short, informative video.

Office Tip: Metal Credit Cards

November 19th, 2013 § 0 comments § permalink

A discovery was made by an office member diligently destroying unwanted credit cards, after closing the related accounts. Abruptly and definitively the workhorse shredder, which had weathered more than three years of incessant demands, was toast and gave up the ghost.

The Discovery

It soon became apparent that, buried in the stack of plastic, there was plastic that wasn’t plastic at all. Some of the higher-end credit cards, you may already know, are actually made of metal. Hard metal. Unrelenting metal. Metal that does not mate well with a typical, even industrial, shredder.

Many minutes, confused looks and calls to “shredder support” later, it was time to move on and replace the $350 piece of equipment.

Your shredder manufacturer likely does not take these types of cards into account when claiming to easily destroy your cards, and the cards themselves make no mention of the danger.

Our Advice

If you can’t easily cut your credit card with a cheap pair of off-brand scissors, it may not be worth the risk of attempting to feed those cards into your shredder. It may cost you.

Some credit card companies will offer to send you an envelope to return the cards to them for safe disposal. However you choose to dispose of them. be sure you are aware of the risks.

shredder

The underside of an unfortunate shredder.

DOL Says No Penalties for Failing to Provide Marketplace (Exchange) Notice

September 14th, 2013 § 0 comments § permalink

PPACA (aka “ObamaCare”) requires employers to provide employees with a written notice about the new health insurance marketplaces (exchanges) in which enrollment is set to commence October 1st.

On September 11th the Department of Labor (DOL) issued an “FAQ on Notice of Coverage Options”, clarifying there is no fine or penalty under the law for failing to provide the notice. However, that does not mean that noncompliance is a good option, or that the noncompliant employer may not be subject to other penalties or civil damages. To this point, employees in plans subject to ERISA will likely be granted the right in the future to recover damages sustained as a result of the employer failing to provide information as directed under the law’s notice requirement. ERISA also provides for recovery of legal fees and other related damages. Furthermore, in the future compliance with notice requirements could become a focus of routine DOL audits.

Aside from possible ERISA-related concerns, there are several other reasons why employers may still want to provide the notice. The notice can help employers answer employee questions about:

  • What the Marketplace is;
  • Whether the employer will still provide a plan once the Marketplace is operational;
  • How Marketplace plans are different from the employer’s plan; and
  • Whether the employer’s plan is intended to be affordable and provide minimum value.

In many cases, employer-sponsored coverage may be a better option for employees than Marketplace coverage. For example, premium contributions for employer-sponsored coverage through payroll will often be less expensive for the employee than the premiums for Marketplace coverage because of the employer’s level of subsidy. Additionally, the employee portion of the premium for employer-sponsored coverage is typically excluded from taxable income and is therefore tax-free. This is not the case at all with Marketplace plans.

Despite the lack of penalty, in the FAQ posting the DOL indicated that employers should provide the marketplace notices to employees and reiterated the content that should be included. The FAQ also provides links to the model notices issued by the DOL earlier in the year.

More Information

Please visit the DOL website or contact Benico, Ltd. at 847-669-4800 for more information on the Marketplace Notice requirement.

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