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. 



Tuesday, August 22, 2017

Evergreen Receivership Conference Call

August 22, 2017

Today we spent an hour with the Maryland Insurance Administration, Attorney for the Maryland Attorney Generals Office, Insurance Commissioner Al Redmer and spokespeople for the receivers of Evergreen Health.

Since insurance companies can't go bankrupt, they go into receivership.  The receivers will run the company with one main goal in mind, to protect the consumer.  There are not going to be any renewals with Evergreen or new business written.

Many of your employees have received letter indicating that HMO's are not covered under the Guarantee Fund.  This is correct.  However they are protected under court order and Maryland Statute.

Claims that were being processed before the Receivers took over (Around 8-1) are put on the back-burner and paid at the discretion of the Receivers. Some may never be paid.   Claims after 8-1 are given priority and paid first.  According to the Court Order, page 7, section 13, providers are not allowed to balance bill you, try to seek payment from you for claims submitted beyond your normal co-pay and/or refuse to see you.  Those that are, are violating the court order.  

Also, here are a list of FAQ's regarding the Receivership of Evergreen.

We have been in touch with each and every Evergreen client and are planning a strategy to best work with this situation that makes sense for your firm.  

As always, please feel free to contact me at 410-239-5009.



Tuesday, July 18, 2017

Senate to take up bill to repeal Obamacare without replacement plan

WASHINGTON — Senate Majority Leader Mitch McConnell announced late Monday that the Senate will give up on its bill to replace Obamacare and vote instead on legislation to repeal the law within two years.
McConnell made the decision after it became clear he could not win enough support from his own GOP senators to pass the latest version of a replacement bill.
Two Republican senators announced Monday night that they would vote against the revised Senate bill to repeal and replace Obamacare, leaving leaders without enough support to bring the bill to the floor.
McConnell responded that he will push the Senate to pass a bill that would repeal the Affordable Care Act – with a two-year delay – as a substitute.
"Regretfully, it is now apparent that the effort to repeal and immediately replace the failure of Obamacare will not be succesful," the Kentucky Republican said in a statement. "So, in the coming days, the Senate will vote to take up the House bill with the first amendment in order being what a majority of the Senate has already supported in 2015 and that was vetoed by then-President Obama: a repeal of Obamacare with a two-year delay to provide for a stable transition period to a patient-centered health care system that gives Americans access to quality, affordable care." 
Contributing: Erin Kelly, USA TODAY

Thursday, June 22, 2017

Maryland Looking At High Premium Increases On Exchange As Cigna Drops Out

The Baltimore Sun  (6/21, Cohn) reports Cigna Health and Life Insurance Co. has decided to not sell plan on the exchange next year as CareFirst BCBS is proposing an average increase of 52 percent for its plans sold on the exchange. The other two remaining insureres on the Maryland exchange, Kaiser Foundation Health Plan and Evergreen Health, are seeking increases of about 25 percent and 65 percent respectively. The requested rate increases were made at a hearing held by the Maryland Insurance Administration.

These increases are being sought by insurance companies through the State of Maryland for Individual Medical Plans both on and off of the exchange.

Friday, May 5, 2017

Who Gets Hurt and Who Gets Helped if Obamacare is Repealed

The legislation, titled the American Health Care Act, now moves to the Senate, where it will likely change a lot when or if it lands on President Trump's desk. But it's already possible to identify who will get helped and who will get hurt by the bill.

The legislation calls for providing refundable tax credits based on a person's age and income. It allows states to waive some protections for those with pre-existing conditions, while letting insurers charge higher rates to older consumers and levy a 30% surcharge on the premiums of those who let their coverage lapse.

The bill also eliminates the enhanced federal match for Medicaid expansion starting in 2020 and curtails federal support for the entire Medicaid program, which covers about one in five Americans. And it lifts the taxes that Obamacare had imposed on the wealthy, insurers and companies.

Republican lawmakers and supporters say the bill will lower premiums and deductibles and give consumers more control over their health care. But an array of opponents, including many consumer and patient advocacy groups, say this bill could leave millions facing higher health care bills and less coverage.

Here's whom the American Health Care Act would likely help:

Younger Americans could get cheaper plans
Obamacare was designed so that younger policyholders would help subsidize older ones. That would change under the Republican bill because it would allow insurers to charge older folks more.  This means that younger Americans would likely see their annual premiums go down. Enrollees ages 20 to 29 would save about $700 to $4,000 a year, on average, according to a study by the Milliman actuarial firm on behalf of the AARP Public Policy Institute.  Those under age 30 would also get a refundable tax credit of up to $2,000 to offset the cost of their premiums, as long as their income doesn't exceed $215,000 for an individual.

The GOP tax credits would also likely be more generous than Obamacare's subsidies for these folks. For example, a 27-year-old making $40,000 a year would receive $2,000 under the GOP plan, but only gets a $103 subsidy from Obamacare, on average, a Kaiser analysis found.

Also, the bill keeps the Obamacare provision that lets young adults up to age 26 stay on their parents' insurance plan.

The healthy could buy less expensive policies in some states
Obamacare requires insurers to provide an array of health care benefits, including maternity, mental health, prescription drugs and substance abuse. This comprehensive coverage, however, jacks up premiums and provides services that some consumers find unnecessary -- think, a couple in their late 50s who aren't having any more kids likely don't need maternity coverage.
The bill would allow states to waive this federal mandate, which would allow insurers to offer skinnier plans that offer fewer benefits with lower premiums.

Middle class and higher-income Americans could get tax breaks and perks
The Republicans would enable people higher on the income scale to claim the tax credit to help pay their premiums. Under Obamacare, an enrollee who makes more than $47,500 is no longer eligible for a premium subsidy. The GOP plan would let a policyholder making up to $75,000 claim the full tax credit. The benefit would phase out slowly until the enrollee hits $215,000 in income.

The legislation also would eliminate two taxes that Obamacare levied on the wealthy to help pay for the law. Under the Affordable Care Act, single taxpayers with incomes above $200,000 and couples making more than $250,000 annually have to pay an additional 0.9% Medicare payroll tax on the amount they earn above these thresholds. These taxpayers may also be hit with a tax surcharge of 3.8% on investment income above those thresholds.

And the bill would allow folks to contribute more to Health Savings Accounts, which are primarily used by better-off Americans who can afford to sock money away for health care expenses.

Here's whom the American Health Care Act would likely hurt:

Lower-income folks could be left uninsured
Obamacare contains many provisions to help poor and lower-income Americans.
Primarily, it expanded Medicaid to cover adults who earn up to $16,400 a year. The American Health Care Act would end the enhanced federal Medicaid funding for new enrollees starting in 2020. And it would curtail federal support for the entire program by sending a fixed amount of money per enrollee or by providing a block grant. States would likely have to either reduce eligibility, curtail benefits or cut provider payments.  All this could hurt not only poor adults, but also low-income children, women, senior citizens and the disabled.  Also, Obamacare provides those with incomes just under $30,000 with generous subsidies to lower their deductibles and out-of-pocket costs in individual market policies. The legislation would eliminate the subsidies.  Finally, the premium tax credits the legislation would provide would not go as far Obamacare's subsidies for lower-income consumers

Folks making $20,000 a year would take the biggest hit at any age under the GOP plan, a Kaiser study found. A 27-year-old earning this amount would only get $2,000, instead of $3,225 under Obamacare, on average. Meanwhile, a 40-year-old would get $3,000 versus nearly $4,150. However, the biggest loser would be a 60-year-old, who would receive only $4,000, instead of nearly $9,900 under Obamacare.

In its review of an early version of the bill, the non-partisan Congressional Budget Office estimated that 24 million fewer people would have coverage by 2026 as compared to current law. The majority of those would have qualified for Medicaid under Obamacare.
Major health insurance lobbying groups are concerned about the bill's impact on all these folks, many of whom are their customers.

"The American Health Care Act needs important improvements to better protect low- and moderate-income families who rely on Medicaid or buy their own coverage," Marilyn Tavenner, CEO of America's Health Insurance Plans, said after the bill passed the House Thursday.

Older Americans could have to pay more
Enrollees in their 50s and early 60s benefited from Obamacare because insurers could only charge them three times more than younger policyholders. The bill would widen that band to five-to-one. That would mean that adults ages 60 to 64 would see their annual premiums soar 22% to nearly $18,000, according to the Milliman study for the AARP. Those in their 50s would be hit with a 13% increase and pay an annual premium of $12,800.  Also, the GOP bill doesn't provide them with as generous tax credits as Obamacare. A 60-year-old making $40,000 would get only $4,000 from the Republican plan, instead of an average subsidy of $6,750 from the Affordable Care Act, according the Kaiser study.  States could also receive waivers to allow insurers to charge older Americans even more than five times the premiums of the young.

Those with pre-existing conditions could be charged more and get less coverage
States could allow insurers to charge higher premiums to those with pre-existing conditions who let their coverage lapse. These states would have to set up high-risk pools or other programs to help lower the costs of insuring these folks, but many experts say the $138 billion set aside through 2026 for that funding would not be enough.

Consumers with health issues may also find that their policies don't cover all of their needs. That's because states could allow insurers to offer skimpier plans. It's likely many carriers would take them up on that offer since few would want to sell policies that attract the sickest and costliest patients.

CNNMoney (New York)

First published May 4, 2017: 9:10 PM ET

Tuesday, April 25, 2017

Comparative Effectiveness Research Fee in 2017

Information about the Comparative Effectiveness Research Fee in 2017

The Affordable Care Act imposes an annual fee called the Comparative Effectiveness Research Fee (CERF) on insurers and plan sponsors of self-insured coverage to help fund the Patient-Centered Outcomes Research Institute. This information includes a brief review of CERF to help answer your questions and prepare you for this year’s payment.

2017 CERF Payment Details
The fee is based on the average covered lives for the applicable 12-month policy or plan year, and is paid using IRS Form 720 by July 31 each year for the plan year that ended in the preceding calendar year. It’s important to remember that employers must use their ERISA plan year if it is different from the renewal date. The fees for 2017 are:

Plan Year Start DateFee Per Average Covered Life
Feb. 1, 2015–Oct. 1, 2015
Nov. 1, 2015–Jan. 1, 2016

Who Is Responsible for Paying?
  • The Insurance Carrier pays the fee for insured plans (including guaranteed cost, shared returns, and minimum premium plans), and it is built into premiums.
    • Health Reimbursement Accounts (HRAs) and certain Flexible Spending Accounts (FSAs) are considered self-funded group health plans. The Insurance Carrier will pay the fee for the underlying medical policy only; clients are responsible for the HRA/FSA related fee.
  • Self-funded plans (including level funding and graded preferred plans) must calculate and pay their own fee.

Monday, March 27, 2017

GOP Fails To Get Enough Support For American Health Care Act

Friday GOP House leaders were unable to get the support needed to move the American Health Care Act forward.  Seeing the "writing on the wall", President Trump withdrew the AHCA and is now focused on Tax Reform.  "Obamacare will remain the law of the land", said Speaker of the House Paul Ryan.  With that said, employers with over 50 employees should continue as usual, complying with the rules, regulations and reporting required under the Affordable Care Act.  Hopefully lawmakers can make changes to the ACA helping business owners by removing fines, penalties and burdensome reporting required each year under the current Health Care Law.

Thursday, March 9, 2017

Legislative Update: ACA Repeal, Replace Advances Through House

Early this morning the House Ways and Means Committee approved the American Health Care Act—to replace tax elements of the Affordable Care Act (ACA)—by a vote of 23-16.
House Republican leadership introduced the legislation March 6. The American Health Care Act was created under the budget reconciliation process and requirements and is limited in its scope to amend only the tax provisions of the ACA. It does not amend the insurance and the underlying coverage requirements of the ACA. Using this process allows supporters of the American Health Care Act to pass changes to the ACA in the Senate with a simple majority of 51 votes instead of the 60 votes needed to override an expected Democratic filibuster. 
In introducing the legislation, House Speaker Paul Ryan outlined three steps Congress and the Trump Administration will now take to replace the ACA:
  1. Pass the American Health Care Act.
  2. Make additional changes to the rules that govern the ACA through the regulatory process.
  3. Work with Democrats to pass legislation to address the insurance elements of the ACA that need reform, which will require support of Senate Democrats in order to avert a filibuster. 
The Ways and Means and Energy and Commerce Committees began work on the bill this week and the legislation will likely change as it works its way through the legislative process.  The House Budget Committee is expected during the week of March 13 to package the Ways and Means language with provisions from the Energy and Commerce Committee, which is yet to vote on the bill. If passed by the Committees, the legislation could be considered by the full House as early as the week of March 20.
Key issues of interest to the HR profession and the workplace: 
  • Reduces employer mandate penalty. Under current law, certain employers are required to provide health insurance or pay a penalty. This bill would reduce the penalty to zero for failure to provide minimum essential coverage. The employer mandate will remain and would have to be repealed through future legislation. The effective date would apply beginning after December 31, 2015, providing retroactive relief to those impacted by the penalty in 2016.
  • Reduces individual mandate penalty. Under current law, most individuals are required to purchase health insurance or pay a penalty. This bill would reduce the penalty to zero for failure to maintain minimum essential coverage. The individual mandate will remain and would have to be repealed through future legislation. The effective date would apply beginning after December 31, 2015, providing retroactive relief to those impacted by the penalty in 2016.  
  • Creates a continuous coverage requirement surcharge. This bill creates a new continuous coverage requirement surcharge. To avoid a 30 percent premium surcharge, individuals must prove that they did not have a gap in creditable coverage beyond 63 continuous days during the 12 months preceding coverage. Individuals aging out of dependent coverage must prove that they enrolled during the first open enrollment period after which dependent coverage ceased. The penalty does not vary by health status but would be greater for older individuals since premiums may vary with age. The penalty lasts for the remainder of the plan year for special enrollments during 2018, and for the 12-month period beginning with the first day of the plan year for 2019 and succeeding years.
  • Delays excise tax on high-value health care plans. The ACA imposed a 40 percent excise tax on high cost employer-sponsored health coverage to benefits exceeding certain thresholds ($10,200 for individual coverage and $27,500 for family coverage). Under current law, the tax is scheduled to go into effect in 2020. This bill changes the effective date of the tax for taxable periods beginning after Dec. 31, 2024.
  • Repeals the health insurance tax. The ACA imposed an annual fee on certain health insurers. The proposal repeals this health insurance tax beginning after Dec. 31, 2017.
  • Repeals increase of tax on HSAs. The ACA increased the percentage of the tax on distributions that are not used for qualified medical expenses to 20 percent. This bill lowers the rate to pre-ACA percentages. This change is effective for distributions after Dec. 31, 2017.
  • Repeals the limit on contributions to FSAs. The ACA limits the amount an employer or individual may contribute to a health Flexible Spending Account (FSA) to $2,500, indexed for cost-of-living adjustments. This bill repeals the limitation on health FSA contributions for taxable years beginning after Dec. 31, 2017.
As noted above, the bill does not repeal the ACA insurance reforms, including the following health plan requirements:
    • Coverage of pre-existing conditions;
    • Guarantee availability and renewability of coverage;
    • Coverage of adult children up to age 26;
    • Cap out-of-pocket expenditures;
    • Prohibitions against health status underwriting, lifetime and annual limits, and discrimination on the basis of race, nationality, disability, age, or sex.
Since the legislation does not eliminate the employer mandate, employer reporting requirements under the ACA would not change.
-SHRM-By Chatrane Birbal, March 9, 2017

Friday, March 3, 2017

House Bill 691 another Maryland Money Grab

A bill is being submitted regarding the annual filing fees for corporations in Maryland.  Currently at $300 or less.  The bill is proposing a sliding scale fee based on tangible personal property owned by the business capping at $4,000.  Here is a link to House Bill 691.   House Bill 691   For some companies the actual fee would be going down but for a great majority, those fees will be going up.

Wednesday, February 22, 2017

IRS will continue to accept 'silent' individual tax returns


Becoming the first agency to take action in response to President Trump’s executive order directing federal agencies “minimize...the economic and regulatory burdens of the Act”, the IRS has told tax preparers that it will not automatically reject individual returns that do not state whether or not the filer had health coverage.

Although at first blush, accepting such “silent” returns would appear to be a loosening of the enforcement of the ACA’s individual mandate, this is not actually a change in policy, as the agency accepted and processed over 4 million silent returns last year.

The information, coming in an email correspondence rather than a formal rule or release, stated that the IRS would “continue to allow electronic and paper returns to be accepted for processing in instances where a taxpayer doesn’t indicate their coverage status.” The email went on to confirm that this did not impact taxpayers’ responsibility to obtain health insurance or to pay a penalty, even reiterating that the ACA is “still in force” and that “taxpayers remain required to follow the law and pay what they may owe‎.” Therefore, although these silent returns won’t be automatically rejected, they may eventually lead to questions, audits, or eventual penalties.

Ultimately, experts seem to agree that the decision to continue to accept returns with no health coverage information will not have much of an impact on the ACA’s individual mandate requirements, but rather, is the IRS confirming that they will continue to do what they’ve previously done.

Wednesday, January 18, 2017

21st Century Cures Act Allows Small Employers To Use HRA's To Fund Individual Medical Plans

The 21st Century Cures Act, in part, has removed barriers for qualified small employers (under 50 employees) wishing to allow employees to purchase Individual health plans and help pay the premiums on a pre-tax basis.  Previously, this practice was dis-allowed with stiff penalties for those that did.  

In an excerpt from a SHRM post dated December 13, 2016 by Stephen Miller:

President Barack Obama on Dec. 13 signed into law the 21st Century Cures Act, which will let small businesses use health reimbursement arrangements (HRAs) to fund employees who purchase individual health plans on the open market.
The bipartisan bill, which Congress passed Dec. 7, focuses primarily on speeding up drug approvals and making innovative treatments more accessible. But it also includes provisions that affect employer-provided health benefits, specifically using HRAs to pay for nongroup plan premiums and ensuring that a health plan's mental health care benefits are equivalent to its physical health care benefits.
HRA Roadblock Removed
The legislation allows small employers with fewer than 50 full-time employees or equivalents that don't sponsor a group health plan to fund employee HRAs to pay for qualified out-of-pocket medical expenses and for nongroup plan health insurance premiums, including for plans purchased on public health care exchanges under the Affordable Care Act (ACA).
Federal agencies' rules, in particular IRS Notice 2013-54 and DOL Technical Release 2013-03, have frustrated many small employers by preventing them from using so-called "stand-alone HRAs" to reimburse employees who buy nongroup health insurance coverage.
"Many employers were upset when the Obama administration shut down the ability for employers to just provide money on a pretax basis for employees to purchase their own health insurance on the open market—a trend that many saw as the wave of the future," said Brian Pinheiro, chair of the employee benefits group at law firm Ballard Spahr in Philadelphia.
The 21st Century Cures Act, which incorporates key elements of the proposed Small Business Healthcare Relief Act, creates a new type of HRA—the qualified small employer health reimbursement arrangement (QSEHRA). The legislation specifies that:
  • The maximum reimbursement for health expenses that small employers can provide through employee QSEHRAs is $4,950 for single coverage and $10,000 for family coverage, to be adjusted annually for inflation.
  • Small employers that choose to provide QSEHRAs must offer them to all full-time employees except those who have not yet completed 90 days of service, are under 25 years of age, or who are covered by a collective bargaining agreement for accident and health benefits. Part-time and seasonal workers may also be excluded.
  • Generally, an employer must make the same QSEHRA contributions for all eligible employees. However, amounts may vary based on the price of an insurance policy in the relevant individual health insurance market, which in turn can be based on the age of the employee and eligible family members, or the number of family members covered.