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Tag: Affordable Care Act

Employer Administrative Responsibilities

The health care reform legislation imposes several administrative responsibilities upon employers, which are tied to information reporting and streamlining electronic transactions around group health insurance. These responsibilities are multi-faceted and help in the administration of many health reform laws. Some of the rules impact employers differently based on how their group plans are funded or insured.

Employers should become familiar with each:

Large Employer Reporting
Minimum Essential Coverage Reporting
Health Plan Identifier (HPID)
Form W-2 Reporting
Notice of Coverage Options

Large Employer Reporting

Starting with health coverage offered in 2015, employers with 50 or more full-time employees and/or full-time equivalents must provide the Internal Revenue Service (IRS) and their employees information about the coverage offered during any given calendar year. The 2015 reporting is first due in early 2016 in tandem with other tax-filing documentation. The information will confirm the employer’s compliance with the “employer mandate,” including:

Whether the employer offered all full-time employees and their dependents the opportunity to enroll in “minimum essential coverage” (MEC), and
Each full-time employee’s required contribution to the cost of the lowest cost plan that provides “minimum value.”
The IRS reporting forms will identify the specific data required to be reported. Examples of data required to be reported include:

Employer contact and tax information, including a contact person’s name and phone number

Certification that full-time employees (FTE) and dependents were offered an opportunity to enroll in MEC, by calendar month

Number of FTEs for each month, and months for which MEC was available for each FTE

Each FTE’s share of lowest cost monthly premium for self-only coverage of minimum value standards, by calendar month

Name address and Social Security Number (SSN)/Tax Identification Number (TIN) for each FTE, and each month of coverage

Read the full article here.

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Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

ACA Tax Warnings Issued Days Before Coverage Deadline

With days left to sign up, the Obama administration began to spotlight the penalty some Americans could pay for failing to get health insurance under Obamacare this year.

Typically, the administration focuses on the benefits of coverage without resorting to more serious, pocketbook messaging.

But the latest email blasts to customers with HealthCare.gov accounts warn users to “get covered or risk paying a fee.”

The hit will come in two forms, the notice says: paying out of pocket for regular and unexpected medical expanses, and the tax penalty nonexempt people must pay under the Affordable Care Act’s individual mandate.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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‘Wellness or Else’ : Coming Soon to a Workplace Near You

U.S. companies are increasingly penalizing workers who decline to join “wellness” programs, embracing an element of President Barack Obama’s healthcare law that has raised questions about fairness in the workplace.

Beginning in 2014, the law known as Obamacare raised the financial incentives that employers are allowed to offer workers for participating in workplace wellness programs and achieving results. The incentives, which big business lobbied for, can be either rewards or penalties – up to 30 percent of health insurance premiums, deductibles, and other costs, and even more if the programs target smoking.

Among the two-thirds of large companies using such incentives to encourage participation, almost a quarter are imposing financial penalties on those who opt-out, according to a survey by the National Business Group on Health and benefits consultant Towers Watson (For graphic see link.reuters.com/byr73w)

For some companies, however, just signing up for a wellness program isn’t enough. They’re linking financial incentives to specific goals such as losing weight, reducing cholesterol, or keeping blood glucose under control. The number of businesses imposing such outcomes-based wellness plans is expected to double this year to 46 percent, the survey found.

“Wellness-or-else is the trend,” said workplace consultant Jon Robison of Salveo Partners.

Incentives typically take the form of cash payments or reductions in employee deductibles. Penalties include higher premiums and lower company contributions for out-of-pocket health costs.

Financial incentives, many companies say, are critical to encouraging workers to participate in wellness programs, which executives believe will save money in the long run.

“Employers are carrying a major burden of healthcare in this country and are trying to do the right thing,” said Stephanie Pronk, a vice president at benefits consultant Aon Hewitt. “They need to improve employees’ health so they can lead productive lives at home and at work, but also to control their healthcare costs.”

But there is almost no evidence that workplace wellness programs significantly reduce those costs. That’s why the financial penalties are so important to companies, critics and researchers say. They boost corporate profits by levying fines that outweigh any savings from wellness programs.

“There seems little question that you can make wellness programs save money with high enough penalties that essentially shift more healthcare costs to workers,” said health policy expert Larry Levitt of the Kaiser Family Foundation.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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Wellness Plans: Targeting Incentives Is Inconsistent With The ACA

On January 29, 2015, the U.S. Senate Committee on Health, Education, Labor & Pensions held a hearing on employer wellness plans. While bipartisan sentiment may be difficult to find in Washington, it is clear that both Republican and Democrat Senators view wellness plans favorably, recognize the crucial role that wellness plans play in lowering health care costs, and are concerned with the Equal Employment Opportunity Commission’s litigation challenging wellness plans, especially in the absence of an articulated policy by the EEOC.

The issue is fairly straightforward. Under the Affordable Care Act (“ACA”), and its implementing regulations issued by the Departments of Labor, Treasury and Health and Human Services, employers may offer financial incentives to employees up to 30% of their health care premiums for participating in and/or reaching certain health outcomes in a wellness plan (and up to 50% for smoking cessation programs). Read more here. Under the Americans With Disabilities Act (“ADA”), medical examinations and/inquiries (including biometric screening) are not permitted unless such inquiries are either job related and consistent with business necessity or voluntary.

Late last year, the EEOC filed litigation against Honeywell International seeking a preliminary injunction to stop it from implementing its wellness plan, which required employees to undergo biometric testing. Employees who chose not to participate forfeited a contribution to a health savings account of up to $1,500, were assessed a $500 surcharge, and were potentially subjected to a $1,000 nicotine surcharge. Ultimately, the EEOC’s theory was that Honeywell’s incentives offered through its wellness program made participation non-voluntary under the ADA even if the incentives complied with the ACA and its implementing regulations. The EEOC lost the first round of motions in the case (here is our post on that litigation). Given the seemingly inconsistent position between the ACA, regulations issued by three Cabinet-level agencies, and the EEOC’s litigation position, some employers have limited their wellness programs and related incentives, or have even chosen not to offer them.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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Beware Obamacare When Filing Taxes This Year

The Affordable Care Act seems less and less affordable and hardly easy to administer. When you add taxes, it can be like lemon juice in a paper cut. Yet some people can avoid some of the tax hits or minimize their impact.

One of the biggest tax hits for individuals is the net investment income tax. It’s a new 3.8% tax to help pay for Obamacare, there’s a new 3.8% tax. Actually, it applied in 2013 too, but you may not have noticed. It’s an add-on to other taxes you pay. A 20% long-term capital gain becomes 23.8%. The 3.8% rate applies to the lesser of your net investment income or the amount by which your modified adjusted gross income exceeds a threshold based on your filing status. For single or head of household, it’s $200,000. For married filing jointly it’s $250,000.

If you owe it, you must file Form 8960. If you had too little tax withheld or did not pay sufficient estimated taxes, you may have to pay an estimated tax penalty. The IRS website has details here. You can also check out the IRS’s questions and answers on the Net Investment Income Tax. If you want even more, see IRS Tax Topic 559.

Can you avoid it? It’s hard to do if you have investment income and meet the income tests. There is still some ambiguity in the application, and still some kinds of income that escape–or arguably escape–the 3.8% tax. Besides, it will be a while before the IRS is geared up to fully interpret this new law.

Another tax hit is the heath insurance penalty. There’s a ‘mandate’ requiring most Americans to carry insurance: If you don’t you may face a penalty. For 2014, the penalty is the higher of $95 per adult and $47.50 per child, or 1 percent of taxable household income. In 2015, the penalty goes up to the higher of $325 per adult and $162.50 per child, or 2 percent of household income.

Read the full article here.

Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.

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