Monday, January 15, 2018

Maryland House votes to override Hogan's veto of paid sick leave bill

Democratic lawmakers in Maryland's House of Delegates voted overwhelmingly Thursday to override Gov. Larry Hogan’s veto of the paid sick leave law passed last year.

The House voted 88-52 to override the veto of the Maryland Healthy Working Families Act. Before the bill can become law, the Senate must also override the veto with a three-fifths majority vote. That vote is expected to take place Friday.

The Maryland Healthy Working Families Act was a top priority for Democrats last year. The law requires employers with 15 or more employees to provide up to five days of paid sick leave. Businesses with fewer than 15 employees have to provide five unpaid sick days. A coalition of groups including the National Federal for Independent Businesses and the Maryland Chamber of Commerce opposed the bill.

"We’re sorry to see that the House did not understand the damage HB1 will do to employers and their employees, especially in small businesses," Christine Ross, CEO of the Chamber said in a statement. "We hope to see that understanding from the Senate."

Hogan, a Republican, vetoed the legislation last May. He has described the law as "confusing, unwieldy, unfair and deeply flawed" and said it would destroy Maryland's economy, hurt small businesses and result in the loss of thousands of jobs.

A spokeswoman for Hogan's office called the House's vote a "political exercise" and said, "many legislators have already acknowledged that this bill is deeply flawed and needs to be fixed."

"Fortunately, there is plenty of time to pass the governor’s compromise legislation, including the incentives for small businesses, and create a paid leave policy that provides needed benefits to workers while protecting our job creators," Shareese Churchill, Hogan's press secretary, said in a statement. "Marylanders are more interested in good policy than partisan politics and there is still time to get this right."

Hogan proposed his own paid sick leave law last year, but the legislature never voted on it. He has proposed another one, but if the General Assembly overrides his veto it is unlikely those bill would be considered either.

The vote to override the veto sets the stage for what is shaping up to be a contentious 90 days as Hogan and Democratic lawmakers face off ahead of the gubernatorial election later this year.

During the debate before the vote, Republicans argued that the bill hurts small businesses and is "deeply flawed." Some women from the Republican caucus said the bill would put women who are victims of sexual violence in a position of "revictimizing" themselves because they have to explain to employers why they are taking sick leave.

Del. Dereck Davis, chairman of the Economic Matters Committee, said over the last three years there have been 30 amendments to the bill at the behest of business advocates.

"It's time to fold it guys," Davis said on the House floor. "There have been countless hours of debate. We have met with stakeholders and read hours of testimony...Democracy has to run its course. HB1, time to get it done."

Del. Cheryl Glenn, a Democrat from Baltimore City, said she was a victim of sexual violence at the hands of her ex-husband. She implored her colleagues to support the bill because providing paid sick leave would give women the ability to stay home at work without having to make a tough decision between staying home or going to work and risk being followed by the abuser.

"As a survivor and a victim, it's a very, very tough situation to be in, especially if you are working and trying to take care of your family every day," Glenn said. "Let's give victims an opportunity to take leave here."

The 32BJ SEIU union and the Maryland Working Families Party have been pushing for the law for the past several years. They and other left-leaning organization rallied Thursday morning in front of the State House to support paid sick leave.

"Marylanders are sending the message loud and clear: they need paid sick leave, so they don’t have to decide between their health and financial ruin,” 32BJ SEIU Vice President Jaime Contreras said in a statement. “An overwhelming majority of voters on both sides of the aisle expect leaders to put their health and well-being over politics.” 

Contreras and Maryland Working Families Executive Director Charly Carter both celebrated the House's vote as an important step in helping families across the state

"Today, the Maryland General Assembly voted to put Maryland’s working families first," Carter said in a statement. "We commend their choice to stand up to our out-of-touch governor, and to tear down barriers to employment for all Marylanders."

The union and Maryland Working Families are using social media, print media, an online petition and brochures to target senators "who are on the fence" in Baltimore City, Baltimore County and Prince George's County.

The Chamber of Commerce is also mobilizing its members to call senators, urging them to sustain the veto. One Democratic senator has to flip in order to sustain the veto.

By Holden Wilen  –  Reporter, Baltimore Business Journal
Jan 11, 2018, 11:44am EST Updated Jan 11, 2018, 1:27pm

Thursday, January 4, 2018

IRS Extends Reporting Due Dates for 1095 Forms Sent to Individuals By ALE's

On Dec. 22, 2017, the Internal Revenue Service (IRS) announced extended deadlines for 2017 Minimum Essential Coverage (Section 6055) and (Applicable) Large Employer (ALE) Shared Responsibility (Section 6056) reporting due to individuals in early 2018. The extended deadlines are as follows:

2017 Forms Sent to Individuals
Original Deadline
Extended Deadline
Form 1095-B
Form 1095-C

Employers and insurers are encouraged to provide the forms to individuals as soon as possible, but no later than March 2, 2018. Individuals who file their 2017 federal income tax returns before receiving their 1095-B and 1095-C forms will not be required to amend their income tax returns once they receive their forms. They should keep their forms, once received, with their tax records.

It is important to note the IRS has not extended the due date for filing 2017 Forms 1094-B, 1095-B, 1094-C, or 1095-C with the IRS. The deadline remains February 28, 2018, for those with 250 or fewer forms filing by paper, or April 2, 2018, if filing electronically.

The IRS also extended its transition relief with respect to penalties if good faith efforts are made to comply with information reporting requirements.

From Cigna Healthplan January 4, 2018

Wednesday, December 20, 2017

Tax Reform Bill Includes Repeal of Individual Mandate Beginning in 2019

December 20, 2017 from Cigna 

Tax Reform Bill Includes Repeal of Individual Mandate Beginning in 2019

On Dec. 20, Congress passed the Tax Cuts and Jobs Act, which makes significant changes to individual and corporate provisions of the U.S. tax code, including a reduction in the corporate tax rate to 21%, down from 35%, beginning in 2018. The bill includes permanent effective repeal of the Affordable Care Act (ACA) individual mandate, requiring individuals to purchase and maintain health coverage, by zeroing out the penalty beginning in 2019. For 2018, most individuals are still required to maintain coverage or pay a penalty when they file their 2018 federal income tax return.

The bill was negotiated by a conference committee comprised of representatives from both the Senate and House after each chamber passed their own versions of tax reform. The final bill was passed 51-48 by the Senate and 224-201 by the House before being sent to the President. President Trump is expected to sign the bill into law soon.

The bill also changes how certain tax thresholds will be indexed for inflation. Affected provisions, including the ACA “Cadillac” Tax (scheduled to take effect in 2020), will now be indexed to the Chained Consumer Price Index (CPI) instead of the regular CPI (the previous metric). That change makes it likely that more employer-sponsored plans would trigger the Cadillac tax sooner. 

Friday, December 15, 2017

Carefirst Response to the Opioid Addiction Crisis

From Carefirst, December 15, 2017

CareFirst’s Response to the Addiction Crisis

Addiction is a national health epidemic affecting millions every day.
In 2016, approximately 204,000 CareFirst members received at least one opioid prescription. In the same time frame, nearly 18,000 CareFirst members had a diagnosis for substance use disorder. However, because diagnoses are based on insurance claims, these figures may only represent a fraction of the total impact of opioid use or those living with a substance use disorder.

CareFirst is committed to meeting our members’ needs through identification, prevention and treatment. Our comprehensive approach to combat the opioid crisis includes:
• Restricting unnecessary or excessive opioid prescription use through formulary design
• Monitoring members and prescribers for drug safety, potential fraud, waste and abuse
• Connecting members with high-touch care coordination and essential treatment
• Reducing financial barriers through a cost-share waiver

On December 13, CareFirst held a press event at Baltimore’s City Hall to highlight our efforts to address substance use disorders and the opioid addiction crisis across the region. Baltimore Mayor Catherine Pugh and other elected officials were in attendance.

Thursday, December 7, 2017

House and Senate Tax Reform Comparison Chart

House and Senate Tax Reform Proposal Comparison

Employer-Provided Retirement Plans

H.R. 1, Tax Cuts and Jobs ActSenate Proposal, Tax Cuts and Jobs Act
Defined Contribution Retirement Plans
Preserves the current tax treatment of employer-provided plans
Defined Contribution Retirement Plan Loans
Changes repayment time frame on retirement plan loans from 60 days after separation of employment to end of the federal taxable year. Effective for plan years after 2017.
Changes repayment options for 457 and 403(b) plans to allow rollovers or loan repayment to take place by the end of the federal taxable year. Effective for tax years after 2017.
Defined Benefit Pension Plan Non-Discrimination Clarity
Provides relief for defined benefit pension plans that are soft-frozen. Allows cross-testing of participants in order to not violate non-discrimination testing limits. Effective upon date of enactment.
Proposal does not contain this provision.
457 Retirement Plan Changes
 Bill does not contain this provision.
Sets deferral and catch-up contribution limits at the same levels as 401(k) and 403(b) plans. Also repeals former allowable contributions to 457 plans for up to five years after separation of employment. Effective for tax years after 2017.
In-Service Distributions for Defined Contribution Plans
Would allow all defined benefit plans as well as state and local government defined contribution plans to make in-service distributions beginning at age 59½. Effective for plan years after 2017.Proposal does not contain this provision.
Defined Benefit Retirement Plan Contributions After Hardship Withdrawal
IRS would be required within one year of the date of enactment to change its guidance to allow employees taking hardship distributions to continue making contributions to the plan. Effective for plan years after 2017.Proposal does not contain this provision.
Defined Benefit Retirement Plan Hardship Withdrawals
Employers who choose to allow hardship distributions could also include employer contributions as part of the amount eligible for withdrawal. Effective for plan years after 2017.Proposal does not contain this provision.

Executive Compensation
H.R. 1, Tax Cuts and Jobs ActSenate Proposal, Tax Cuts and Jobs Act
Removes the exemption of certain forms of compensation for highly compensated employees. Commissions, performance-based remuneration, stock options, payments to a tax-qualified retirement plan and amounts that are excludable from the executive’s gross income will be taxable.  Expands the scope of covered individuals to include an organization’s CEO, CFO and three highest-paid employees.  Effective for tax years after 2017.Modifies the definition of what is included as compensation for highly compensated employees to include commission- and performance-based compensation. Expands the scope of covered individuals to include an organization’s CEO, CFO and three highest-paid employees. Applies provision to any compensation arrangement entered into after November 3, 2017.
Excise Tax on Highly Compensated Employees at Non-Profits
Creates a 20 percent excise tax for non-profits (including 501(c)(3), 501(c)(6)) on the compensation of the five highest-paid employees who earn more than $1 million. Effective for tax years after 2017.
Employer-Provided Benefits
H.R. 1, Tax Cuts and Jobs ActSenate Proposal, Tax Cuts and Jobs Act
Education Assistance (Section 127)
Eliminates the tax exclusion that allows employers to provide up to $5,250 of education assistance per year tax-free to their employees at the undergraduate, graduate or certificate level. Benefit would be taxable to both the employer and the employee. Effective for tax years after 2017.Proposal does not contain this provision.
Tuition Reduction (Section 117)
Eliminates the tax exclusion for educational assistance for employees, their spouse or dependents at educational institutions. Benefit would be taxable to both the employer and the employee. Effective for tax years after 2017.Proposal does not contain this provision.
Dependent Care Accounts
Eliminates the tax treatment of dependent care flexible spending accounts of up to $5,000 per year under Section 129. Effective after 2022.Proposal does not contain this provision.
Moving Expenses
Eliminates the tax exclusion and the deduction related to moving expenses. Value of the benefit will be included as taxable income and the deduction will be eliminated for individual taxpayers. Effective for tax years after 2017.Suspends the tax exclusion and the deduction related to moving expenses until 2025. Value of the benefit will be included as taxable income, and the deduction will be eliminated for individual taxpayers. 
Biking Benefit
Bill does not contain this provision. Eliminates the tax exclusion on the benefit. Value of the benefit will be included as taxable income. Exclusion will be sunset in December 2025. 
Adoption Assistance
Eliminates the tax exclusion on the benefit. Value of the benefit will be included as taxable income for individual taxpayers. Effective for tax years after 2017.Proposal does not contain this provision. 
Achievement Awards 
Eliminates the tax exclusion on the benefit. Value of the benefit will be included as taxable income for individual taxpayers. Effective for tax years after 2017.Proposal does not contain this provision. 
Child Care Facilities
Repeals the tax credit equal to 25 percent of qualified expenses for employee child care and 10 percent of qualified expenses for child care resource and referral services. Effective for tax years after 2017. Proposal does not contain this provision. 
Fringe Benefits
(Transportation, Meals, Gyms)
Taxes tax-exempt entities on the values of providing their employees with transportation fringe benefits, on-premises gyms and other athletic facilities by treating the funds used to pay for such benefits as unrelated business taxable income, thus subjecting the values of those employee benefits to a tax equal to the corporate tax rate. Value of the benefit will be included as taxable income. Effective for tax years after 2017.Proposal does not contain this provision. 
Medical Savings Accounts (MSAs)
Repeals the tax exclusion for contributions to Archer MSAs. Existing Archer MSA balances, however, could continue to be rolled over on a tax-free basis to an HSA. Effective for tax years after 2017.Proposal does not contain this provision. 
Other Related Provisions
H.R. 1, Tax Cuts and Jobs ActSenate Proposal, Tax Cuts and Jobs Act
Work Opportunity Tax Credit
Repeals the 40 percent tax credit for employers who hired individuals from certain targeted groups. Effective for tax years after 2017.Proposal does not contain this provision.
FICA Tip Credit Tax
Modifies the calculation that affects the amount employers pay on taxable wages of their tipped employees. Creates a new reporting requirement. Effective for tax years after 2017.Proposal does not contain this provision.
Intermediate Sanctions on Non-Profits
Bill does not contain this provision.Applies intermediate sanctions rules to 501(c)(5) and 501(c)(6) organizations, levying a 10 percent tax on the organization for willful violations. Eliminates the safe harbor for non-profits that exercise due diligence in determining compensation. Effective for tax years after 2017.
Repeal of the Individual Mandate Penalty Under the Affordable Care Act
Bill does not contain this provision.Reduces the individual mandate penalty to zero. Effective for tax years after 2018.
Family and Medical Leave Act (FMLA) Credit for Employers
Bill does not contain this provision.Provides an employer a credit of 12.5 percent of the wages paid to a qualified employee utilizing FMLA. Effective for tax years after 2017.
*Proposals as of November 25, 2017.  Posted from SHRM.

Friday, October 13, 2017

Executive Action on Health Care

October 13, 2017

On Oct. 12, 2017, President Trump signed an Executive Order (EO) directing various departments to consider easing some health insurance rules related to small businesses, short-term health insurance policies and Health Reimbursement Accounts (HRAs). Through the EO, the Administration aims to provide Americans with more affordable choices and allow greater control over their health care decisions. This EO, along with the Oct. 12 White House announcement that it will stop making Cost-Sharing Reduction (CSR) payments and Interim Final Rules issued by the tri-agencies (Departments of Health and Human Services [HHS], Treasury, and Labor) last week on contraceptive coverage, are part of the Administration’s ongoing efforts to modify or eliminate certain parts of the Affordable Care Act (ACA).
The EO provides guidance to various agencies, but does not make any immediate changes. Any details about potential changes will only be available once new or updated rules and guidance are released in response to the EO.

Executive Order
Association health plans
Under the EO, the Administration is directing the Department of Labor to consider proposing regulations or revising guidance to expand access to Association Health Plans (AHPs) that will allow small businesses to purchase insurance collectively across state lines. The Administration believes a “broader consumer-friendly interpretation” of ERISA could allow for AHP expansions. By joining an AHP, small employers within the same line of business could purchase plans collectively that would follow large group ACA mandates. Such health plans would not fall under small group market rules. 
AHPs, as currently defined, cannot exclude any employee from participating, cannot determine premium prices based on health status, and must follow community rating rules. AHPs must also comply with other ACA patient protections, such as offering coverage to dependent children up to the age of 26, prohibiting annual or lifetime limits, and having zero cost-share for preventive services. These limitations could change as a result of the EO.

Short-term health plans
The tri-agencies are being asked to consider updating rules on short-term limited duration insurance to allow plans to last as long as 12 months and be renewable. These policies are not required to follow several of the ACA mandates, including covering Essential Health Benefits (EHBs), prohibiting annual limits, offering coverage for pre-existing conditions or ensuring Medical Loss Ratios (MLRs) are met. Currently, these policies can only be sold for periods of three months or less and cannot be renewed after a total of three months.

Health Reimbursement Accounts (HRAs)
The tri-agencies are also directed to consider ways to expand the flexibility of HRAs. The Administration specifically focused on three HRA rules it wants the agencies to consider modifying: making employer HRA contributions tax deductible, allowing HRA funds to be used for premium reimbursement, and allowing HRAs to be used in conjunction with non-group coverage.

Cost-Sharing Reduction (CSR) payments discontinued
Also on Oct. 12, 2017, the White House announced it would discontinue CSR payments to insurers immediately. The ACA requires insurers to reduce cost-sharing for eligible, low-income individuals enrolled in silver plans through their local Marketplaces. This financial assistance is in addition to the Advance Premium Tax Credit. The Administration said because Congress has not appropriated funds for the CSRs, “the government cannot lawfully make the [CSR] payment.” This decision primarily affects insurers who will no longer be reimbursed for the CSRs but are required by law to offer them to eligible customers. As a result, customers who have reduced cost-sharing through the Marketplace should not see an immediate impact.

Expanded exemption for covering contraceptive services
Interim final rules (IFRs) issued Oct. 6, 2017 expanded the current exemption for employers to not cover contraceptive services under their sponsored group health plans. Effective immediately, employers may exclude coverage for contraceptive services based on moral or religious objections. This is in addition to the exemptions already outlined under the ACA for “closely-held” for-profit corporations, religious non-profit organizations and religious employers (e.g., churches).

In addition, employers with religious or moral objections are no longer required to submit a self-certification of their objections to their insurance carrier or file a notice with the HHS – a process that enabled cost-sharing responsibility to be passed to the plan’s issuer or third-party administrator (TPA). Because this accommodation is now optional, it is possible that costs for contraceptive services may not be covered, passing the full financial responsibility of contraceptive services to the customer. Employers who choose to exercise the accommodation process will pass responsibility for covering contraceptive services to the carrier or TPA, alleviating the financial responsibility from their employees and their dependents. 

Excerpt from Cigna Healthcare Informed on Reform

Wednesday, August 30, 2017

Carefirst Receives Approval for Individual Medical Plan Rate Increases

The Maryland Insurance Administration released the approved rates for CareFirst Consumer Direct medical plans on Tuesday August 29, 2017. The approved increase for the BlueChoice HMO is 34.5% and the approved increase for the BlueCross PPO plans is 49.9%. This comes on the heels of an approximate 25% rate increase last year. The new rates will go into effect beginning 1-1-18.  Expect plan changes as well.

Companies who moved to individual plans due to high cost in the group market, it may be time to move back.