Monday, December 3, 2018

IRS Extends 2018 Reporting Due Dates for 1095 Forms Sent to Individuals

December 3, 2018

On Nov. 29, 2018, the Internal Revenue Service (IRS) announced extended deadlines for 2018 Minimum Essential Coverage (Section 6055) and Large Employer Shared Responsibility (Section 6056) reporting due to individuals in early 2019. The extended deadlines are as follows:

2018 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 4, 2019. Individuals who file their 2018 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 2018 Forms 1094-B, 1095-B, 1094-C, or 1095-C with the IRS. The deadline remains February 28, 2019, for those with 250 or fewer forms filing by paper, or April 1, 2019, 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.  Read the IRS notice on reporting extensions

Excerpt from Cigna Health Plan

Note: Employers with less than Full Time Equivalent employees and fully-insured, the carrier will take care of this filing.

Thursday, November 8, 2018

Medicare Eligible Beware: COBRA Is Dangerous When Electing Part B


Advocates have seen an increase in the number of Medicare beneficiaries who have delayed enrolling in Medicare Part B, thinking, erroneously, that because they are paying for and receiving continued health coverage under COBRA, they do not have to enroll in Medicare Part B. COBRA-qualified beneficiaries who have delayed enrollment in Medicare Part B do not qualify for a special enrollment period (SEP) to enroll in Part B after their COBRA coverage ends. (They may, however, qualify for a SEP to enroll in Part D at that time if the drug coverage they had under COBRA constitutes creditable coverage.) Only individuals who delay enrolling in Part B because they are covered under an employee group health plan (EGHP) by reason of "current" employment may take advantage of the SEP rules. Individuals on COBRA do not meet the definition of having current employment status.


Medicare Part B – The consequences of delayed Part B enrollment can be severe.  Generally, the beneficiary who does not enroll during his or her initial enrollment period and who is not entitled to a SEP must wait to enroll in the next general enrollment period (January – March), with benefits starting on July 1 of that year. Further, there is a 10% late enrollment penalty added to the standard monthly premium for every 12 months of delayed enrollment in Part B. The penalty has no durational limit.

Under Part D, the penalty is 1% of the national base beneficiary premium in a given year times the number of full, uncovered months of eligibility without other creditable drug coverage. A Part D eligible individual must pay the late penalty if there is a continuous period of 63 days or longer at any time after the end of the individual's initial enrollment period during which the individual meets all of the following conditions: (1) The individual was eligible to enroll in a Part D plan; (2) The individual was not covered under any creditable prescription drug coverage; and (3) The individual was not enrolled in a Part D plan.

from Center of Medicare Advocacy

Monday, October 15, 2018

Maryland law allows small employer income tax credit for paid sick leave

Recently enacted legislation (SB 134, Chapter 571) provides an income tax credit to certain employers with less than 15 employees which provide paid sick and safe leave to their employees. The legislation is effective July 1, 2018.
As we previously reported, effective February 11, 2018, employers of 15 or more employees are required to provide paid sick and safe leave to their employees. Employers with less than 15 employees must at least provide unpaidsick and safe leave to their employees.
Small employers offering paid sick leave may take state income tax credit
Effective July 1, 2018, certain employers of less than 15 employees that provide paid sick and safe leave to their employees may apply for a refundable credit against Maryland state income tax. In order for the employer to be eligible for the tax credit, the employer must have provided paid sick and safe leave to a qualified employee who earns 250% or less of the annual federal poverty guidelines for a single-person household (According to the bill's analysis, in 2018, 250% of the annual federal poverty guidelines for a single-person household is $30,350.)
The credit is equal to the lesser of $500 for each qualified employee or the total amount of qualified employer benefits accrued by qualified employees. A business must apply for and receive a tax certificate from the Maryland Department of Commerce to claim the credit. The Department will within 45 days approve or deny all applications that qualify for the credit on a first-come, first-served basis. The Department may issue tax certificates not exceeding $5 million annually.
SB 134 takes effect July 1, 2018, and applies to tax year 2018 and beyond.
Excerpt from Earnst and Young Article dated 7-27-2018

Thursday, September 20, 2018

Maryland Individual Health Insurance Plans Poised for First Rate Reduction

Maryland individuals who purchase health insurance through the state's five-year-old Affordable Care Act exchange are poised to see the first decrease in their premium costs in 2019.

Following federal approval of a program that aims to stabilize the ACA-born insurance market, Kaiser Permanente and CareFirst BlueCross BlueShield are seeking price decreases for their individual market plans. The drop follows four consecutive years of double-digit percentage hikes. Consumer advocacy groups present at a public hearing on Monday lauded insurance officials' efforts around lowering prices, and said the decreases will be a welcome relief for residents who do not qualify for employer-based coverage and must purchase plans through the state's exchange.

The effort was initiated by a piece of bipartisan legislation passed in the Maryland General Assembly earlier this year. Maryland will put hundreds of millions of dollars behind a reinsurance program, which will allow the state's lone two carriers in the individual market to see major cost savings and stave off the need to again increase premium prices in 2019.

The Maryland Insurance Administration said during the hearing it is still finalizing details with the insurers, and plans to release the final 2019 rates later this week. Pending any major adjustments, the rates will look close to this:

CareFirst's individual HMO members will see about a 22.3 percent premium decrease, and a $104 monthly price decrease compared to 2018 rates.

Kaiser's individual HMO members will see about a 6.3 percent premium decrease, about a $23 per month swing from 2018.

CareFirst's individual PPO members — they are generally the sickest and most costly members in the market overall — will see about a 17.7 percent premium increase, which would result in an average price increase of about $121 per month compared to last year's rates.

Prior to the approval of Maryland's reinsurance plan, requested 2019 rates ranged between 18 percent to more than 90 percent increases. Now, insurers are seeking an average 13.9 decrease overall.

Peter Berry, chief actuary at CareFirst, the state's dominant health insurer, said he's scanned through the company's rate trends for the past 20 years. If the decrease is cleared, he said it would mark this first time in that period that some CareFirst members would see a year-over-year decrease in premiums.

"For the first time since I’ve been looking at health insurance since 1985, I’m speechless in a very good way," said Beth Sammis, president of advocacy group Consumer Health First. "This is a good day for consumers."

Sammis said next, industry officials need to put their efforts behind making sure that Maryland individual consumers understand their new options, and actually purchase these plans for the coming year.

Insurance Commissioner Al Redmer said part of the goal of the reinsurance program is to lure consumers who have opted to go without insurance the last few years due to unaffordability back to the market. The more people who pay into in a given insurance risk pool, the greater the price stability for everyone in the pool.

In an excerpt by Morgan Eichensehr  – Reporter, Baltimore Business Journal
Sep 17, 2018, 2:53pm

Monday, August 27, 2018

Medicare Part D Creditable Coverage Certificates to Employees

It is that time of the year again when the annual Notice of Creditable Coverage as required under Medicare Part D must be distributed by Employers.

The notice informs participants if the prescription drug coverage offered under the Employer's group health plan is considered "creditable" or "non-creditable" coverage.

Employers who sponsor a health plan that includes prescription drug benefits must provide the annual notice to all Medicare-eligible participants. The notice will explain whether or not the prescription drug benefits offered under the group health plan are at least as good as the benefits offered under the Medicare Part D plan.

The Notice of Credible Coverage must be provided:
  • At least once a year before October 15th (the start of the annual Medicare Part D enrollment period which is from October 15th through December 7th for 2019).
  • Whenever a Medicare-eligible employee, spouse or dependent enrolls in the employer's health plan (including Medicare eligible COBRA individuals and their dependents; Medicare eligible disabled individuals covered under the group health plan's prescription drug plan and any retirees and their dependents).
  • Whenever there is a change in the creditable or non-creditable status of the employer's health plan prescription drug coverage.
  • Whenever an individual requests the notice.
CMS (The Centers for Medicare and Medicaid Services) has posted forms and instructions for providing this notice. Forms are available in English and Spanish.

To access more information on this subject, please click on the link below:

To access the notices, please click on the link below:

Important Note for Employers!
Employers must provide a disclosure to CMS on an annual basis, via an online form, reporting whether their prescription drug coverage is creditable or non-creditable. CMS requires that the disclosure be provided within:
  • 60 days after the beginning date of the Plan Year for which the entity is providing the Disclosure to CMS Form;
  • 30 days after the termination of the prescription drug plan; and
  • 30 days after any change in the creditable coverage status of the prescription drug plan.
Information regarding the Employer's Disclosure to CMS can be found by clicking on the link below:

Wednesday, August 22, 2018

House Passes Bill Enhancing HSA's

H.R. 6311, renamed the Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act and passed 242-176, would allow the ACA's premium tax credit for low and moderate earners to be applied when buying lower-premium, "catastrophic" copper plans; let people over age 30 buy copper plans; and allow copper and bronze-level individual and small-group market plans to qualify for HSA contributions. The bill also would make these modifications to tax-advantaged accounts:
  • Raise HSA contributions to $6,650 for individuals and $13,300 for families, which is the combined annual limit on out-of-pocket and deductible expenses under an HSA-qualified insurance plan in 2018. Currently, for 2018, HSA contribution limits are $3,450 for individuals and $6,900 for those covered under family medical plans.
  • Permit HSAs to pay for qualified medical expenses as of the start of HDHP coverage if the accounts are opened within 60 days after coverage under a HDHP begins.
  • Allow working seniors participating in Medicare Part A and covered by a qualifying HDHP to contribute to an HSA.
  • Permit spouses over the age of 55 to make an annual catch-up contribution (an extra $1,000) to an HSA that's linked to a health plan providing family coverage. Currently, only the account holder can make an annual catch-up contribution.
  • At an employer's discretion, allow employees with an FSA or a health reimbursement arrangement (HRA) who enroll in a qualifying high-deductible health plan with an HSA to transfer balances from their FSA or HRA to the HSA. Transfers would be capped at $2,650 for individuals and $5,300 for families.
  • Permit health FSA balances to be carried over to the following plan year. This rollover could not exceed three times the annual FSA contribution limit.

Excerpt from SHRM Article Dated 7-27-18 by Stephen Miller, CEBS

Friday, July 13, 2018

Congress Eliminates the Insurer Tax for 2019 but Maryland Adds It Back

Lawmakers pass bill to generate $380 million with a 2019 tax on insurers

In April 2018, Gov. Hogan also signed SB387/HB1782 which will implement a 2.75 percent tax on insurers in the state in 2019. The fee will apply to insurers in all markets (ie, not just the individual market), including Medicaid managed care insurers, and will be used, in part, to provide the state’s portion of the funding for the reinsurance program. The ACA implemented a similar fee at the federal level, although there was a moratorium on the fee in 2017. The fee does apply in 2018, but in January 2018, Congress imposed another moratorium on collection of the fee for 2019. So the idea behind SB387 is to recoup the money that insurers would have otherwise paid if Congress hadn’t suspended the provider fee for 2019.
The measure is expected to generate $380 million ($365 million, according to the state’s draft 1332 waiver) for the Maryland Health Benefit Exchange fund. The money will be used to lower premiums, but it’s only a temporary fix, described as “a Band-Aid” by Senator Thomas Middleton, who sponsored the legislation.
Using the money generated from the insurer fee, the exchange will establish and oversee a “health care access program” that will be “designed to mitigate the impact of high-risk individuals on rates for health benefit plans in the individual market in the state, both inside and outside the exchange.” The money will be used to provide reinsurance and additional premium subsidies, contingent on approval of a 1332 waiver from the federal government.
SB387/HB1782 also limits short-term plans to no more than three months in duration, and prevents them from being renewed at the end of the policy term. The federal government has proposed regulatory reforms that would return to the definition of short-term plans that was used before 2017 (ie, a plan that lasts no more than 364 days). But states can implement more restrictive rules. State-based restrictions on short-term plans will be especially important starting in 2019, when there will no longer be a federal individual mandate penalty for people who rely on short-term insurance.
SB387/HB1782 also places restrictions on association health plans (which the Trump Administration is working to expand), clarifying that association health plans sold in the state will be subject to state regulations.


Tuesday, June 19, 2018

Trump Administration releases final rule on Association Health plans

This afternoon the Trump Administration released a final rule regarding Association Health Plans as well as a fact sheet on the new rule. The rule was in response to an executive order issued by President Trump on October 12 directing federal agencies to expand the availability of AHPs, short-term limited duration insurance policies and Health Reimbursement Arrangements. The proposal calls for a revision to ERISA in order to redefine "employer" to allow more groups to qualify as associations and treating health coverage sponsored by an employer association as a single group health plan that would not be subject to the ACA's essential health benefits.
The final rule does not differ much from the proposed rule that came out in January, and the Congressional Budget Office now estimates that 4 million Americans, including 400,000 who otherwise would lack insurance, will join an AHP by 2023.
The goal of the rule is to provide small-business owners, employees of small businesses and family members of working owners/employees more coverage options, more affordable pricing, enhanced ability to self-insure, less regulatory burden and complexity, and reduced administrative costs.
The rule does this by eliminating the requirement that an association exist for a bona fide purpose other than offering health coverage. To qualify under the rule, employers would need to be either in the same trade, industry, line of business or profession, or have a principal place of business within a region that does not exceed the boundaries of the same state or the same metropolitan area. Therefore, AHPs could cross state lines if the metropolitan area includes more than one state. These plans would be subject to state regulation of insurance and plans across multiple states could be subject to varying rules. The Department of Labor has committed to continuing to partner with states to protect consumers and enforce state regulations.
Under the final rule, self-employed individuals, sole proprietors and common-law employees would be permitted to join an AHP. These individuals would be treated as an employee of the trade or business for purposes of being covered by the AHP. The proposal includes non-discrimination protections to avoid potential of adverse selection. It would require that the association not restrict membership based on any health factor, as defined in the HIPAA/ACA health nondiscrimination rules. These include health status, medical condition (including both physical and mental illnesses), claims experience, receipt of healthcare, medical history, genetic information, evidence of insurability, and disability.
The final rule has staggered dates for implementation:
· All associations (new or existing) may establish a fully insured AHP on September 1, 2018.
· Existing associations that sponsored an AHP on or before the date the final rule was published may establish a self-funded AHP on January 1, 2019.
· All other associations (new or existing) may establish a self-funded AHP on April 1, 2019.

From NAHU(National Association of Health Underwriters)

Wednesday, May 30, 2018

ACA’s Affordability Threshold Rises in 2019

Applicable Large Employers (ALE) should not overlook the Affordable Care Act's (ACA's) annual inflation-adjusted shift in cost-sharing limits for group health plan coverage, as they could face steep penalties for failing to provide affordable coverage under the ACA's shared-responsibility provisions.

On May 21, the IRS announced in Revenue Procedure 2018-34 the 2019 shared-responsibility affordability percentage. Based on the ACA's affordability standard as adjusted for inflation, health coverage will satisfy the requirement to be affordable if the lowest-cost self-only coverage option available to employees does not exceed 9.86 percent of an employee's household income, up from 9.56 percent in 2018.

For 2019 calendar-year plans using the federal poverty level (FPL) safe harbor to determine affordability, an employee's premium payment can't exceed $99.75 per month, up from $96.08 per month in 2018.

An Annual Adjustment

The affordability standard is the highest percentage of household income an employee can be required to pay for monthly plan premiums, based on the least-expensive employer-sponsored plan offered that meets the ACA's minimum essential coverage requirements.

Employers should consider the affordability standard in developing their 2019 health care plan cost-sharing strategies, since pricing at least one plan option below the threshold will avoid triggering employer-shared responsibility penalties under Section 4980H(b), which the ACA added to the tax code, said Ryan Moulder, a Los Angeles-based partner at Health Care Attorneys PC and general counsel at Accord Systems LLC, an ACA compliance software firm.

"An employer is in control as to whether the plan it is offering meets the affordability threshold," Moulder explained. "The significant increase [for 2019] compared to 2018 provides an employer that is toeing the line of the affordability threshold an opportunity to increase the price of its health insurance while continuing to provide affordable coverage."

Excerpt from SHRM article dated May 30, 2018 by Stephen Miller, CEBS

Tuesday, May 22, 2018

What to do if the IRS sends an ACA non-compliance notice in error

The Internal Revenue Service is beginning to send out Employer Shared Responsibility Payment notices to employers that it believes failed to comply with the ACA coverage requirements in 2015 calendar year.

Some employers receiving these notices actually complied with the ACA requirements in 2015, but the IRS received inaccurate or incomplete information and has thus incorrectly identified these employers as failing to satisfy the ACA coverage requirements.

If an employer receives an ESRP notice, the employer must dispute the IRS penalty within 30 days of the date of the notice.

We have seen employers receiving very large fines for periods in which they actually complied with the ACA coverage requirements. Accordingly, all employers that were subject to the ACA coverage requirements in 2015 should review their 2015 ACA filings (on Form 1094-C) to determine who at the company will receive the ESRP notice from the IRS; and make sure the contact address is correct. For reference, see Part 1; Lines 1 thru 8 of Form 1094-C).

If any of the contact information on the Form 1094-C is inaccurate or if the contact person is no longer employed by the company, the employer should consider updating its contact information with the IRS.

Bret Busacker
Busacker is a partner at Holland & Hart LLP.

Wednesday, May 16, 2018

HSA Contribution Limits Stay at $6900 After All

The IRS on April 26 announced relief for taxpayers with family coverage under a high-deductible health plan (HDHP) and who contribute to a health savings account (HSA).
For 2018, taxpayers with family coverage under an HDHP may treat $6,900 as the maximum deductible HSA contribution, up from $6,750 in 2017. The relief follows a confusing series of IRS actions:
  • In May 2017, the IRS announced in Revenue Procedure 2017-37 that the 2018 family-coverage contribution limit for HSAs would be $6,900.
  • Now, in Revenue Procedure 2018-27, the IRS has granted relief for affected taxpayers by allowing the originally announced $6,900 family-coverage HSA contribution cap to remain in effect for 2018. The IRS cited “numerous unanticipated administrative and financial burdens” in response to the $50 reduction.
For 2018, the HSA contribution limit for account holders with self-only coverage through an HDHP will be $3,450, as announced in May 2017 and not adjusted since. 
-From SHRM Article Dated 4-27-18 by Stephen Miller 

Wednesday, March 14, 2018

Maryland Sick and Safe Leave Law-FAQ and Model Policy Notice Guidance

Maryland Healthy Working Families Act Additional Guidance:
Model Policies and Updated FAQs

On February 11, 2018, the Maryland Healthy Working Families Act went into effect.

To date, the Office of Small Business Regulatory Assistance has received more than 2,000 emails from employers and employees with specific questions about complying with the law. The most common of these questions have been compiled into a Frequently Asked Questions (FAQs) document, available at

As employers delve deeper into implementation, new questions are being asked. Today’s revised FAQ provides answers to these questions, as well as revisions to the previous FAQ document.

In addition to the updated FAQs, the department has provided an updated employee notice poster for your place of business, and model policies for your employee handbook or other employee benefits documents. These resources are also available on the paid leave website.

Today's documents will assist employers with compliance as well as facilitating a discussion with employees regarding their rights under the law. Responses are preliminary and subject to change. Please note that the department cannot provide legal advice regarding specific employer leave policies or employee exemptions under the law. These documents are for informational purposes and are intended to provide general guidance to employers and employees about the requirements of the law.

The Department of Labor continues to encourage stakeholders to provide input on these documents. Final guidance documents will be released based on your continued feedback, as well as changes to the law during the General Assembly session.

Governor Larry Hogan issued Executive Order 01.01.2018.04 creating the Office of Small Business Regulatory Assistance to assist small businesses in complying with the Maryland Healthy Working Families Act. Questions can be sent to this office at

Friday, March 9, 2018

Transition Relief for Non-Qualifying HSA's

As you know, the state of Maryland passed legislation adding Male Sterilization as part of preventive care.  In doing so it disqualified ALL HSA participants in funding their HSA's for 2018.  Scrambling to get this corrected the Maryland Insurance Administration contacted the IRS for determination and relief.  Finally the IRS has offered transition relief until 2020.  Therefore, you are free to fund your HSA's for 2018.  Please see below and highlighted area at the end:

Notice of Transition Relief Regarding the Application of Section 223 to Certain Health Plans Providing Benefits for Male Sterilization or Male Contraceptives

Notice 2018-12

This notice clarifies that a health plan providing benefits for male sterilization or male contraceptives without a deductible, or with a deductible below the minimum deductible for a high deductible health plan (HDHP) under section 223(c)(2)(A) of the Internal Revenue Code (Code), is not an HDHP under current guidance interpreting the requirements of section 223(c)(2) of the Code. This notice further provides transition relief for periods before 2020 during which coverage has been provided for male sterilization or male contraceptives without a deductible, or with a deductible below the minimum deductible for an HDHP.
Section 223 of the Code permits eligible individuals to deduct contributions to Health Savings Accounts (HSAs).[1] Among the requirements for an individual to qualify as an eligible individual under section 223(c)(1) is that the individual be covered under an HDHP and have no disqualifying health coverage. As defined in section 223(c)(2), an HDHP is a health plan that satisfies certain requirements, including requirements with respect to minimum deductibles and maximum out-of-pocket expenses.
Generally, under section 223(c)(2)(A), an HDHP may not provide benefits for any year until the minimum deductible for that year is satisfied. However, section 223(c)(2)(C) provides that “[a] plan shall not fail to be treated as a high deductible health plan by reason of failing to have a deductible for preventive care (within the meaning of section 1871 of the Social Security Act, except as otherwise provided by the Secretary).”[2] Therefore, an HDHP may provide preventive care benefits as defined for purposes of section 223 without a deductible, or with a deductible below the minimum annual deductible otherwise required by section 223(c)(2)(A) of the Code. To be a preventive care benefit as defined for purposes of section 223, the benefit must either be described as preventive care for purposes of the SSA or be determined to be preventive care in guidance issued by the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS).
Notice 2004-23 (2004-15 I.R.B. 725) and Q&As 26 and 27 of Notice 2004-50 (2004-33 I.R.B. 196) provide guidance issued by the Treasury Department and the IRS regarding preventive care benefits that an HDHP may provide without satisfying the minimum deductible requirement of section 223(c)(2)(A). Notice 2004-23 clarifies that preventive care generally does not include any service or benefit intended to treat an existing illness, injury, or condition.
Notice 2004-23 also explains that state law requirements do not determine whether health care constitutes preventive care under section 223(c)(2)(C). State insurance laws often require health insurance policies and similar arrangements subject to state regulation to provide certain health care benefits without regard to a deductible or on terms no less favorable than other care provided by the health insurance policy or arrangement. However, the determination whether a health care benefit that is required by state law to be provided by an HDHP without regard to a deductible is “preventive” for purposes of the exception for preventive care under section 223(c)(2)(C) is based on the standards set forth in guidance issued by the Treasury Department and the IRS, rather than on how that care is characterized by state law.
Notice 2004-23 further indicates that the Treasury Department and the IRS are considering the appropriate standard for determining preventive care under section 223(c)(2)(C) and, in particular, whether any benefit or service should be added to the list of preventive care benefits and services set forth in Notice 2004-23 or other guidance.
Notice 2004-50, Q&A 27, provides that drugs or medications are preventive care when taken by a person who has developed risk factors for a disease that has not manifested itself or become clinically apparent, or to prevent the reoccurrence of a disease from which a person has recovered.
Section 1001 of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010) (Affordable Care Act), added section 2713 to the Public Health Service Act (PHS Act) requiring non-grandfathered group health plans and health insurance issuers offering group and individual health insurance coverage to provide benefits for certain preventive health services without imposing cost-sharing requirements.[3] The Affordable Care Act also added section 715(a)(1) to the Employee Retirement Income Security Act of 1974 (ERISA) and section 9815(a)(1) to the Code to incorporate the provisions of part A of title XXVII of the PHS Act, including section 2713 of the PHS Act, into ERISA and the Code. Guidance under section 2713 of the PHS Act is published jointly by the Treasury Department and the Departments of Labor and Health and Human Services.
Under section 2713(a)(1) of the PHS Act, evidence-based items or services constitute preventive health services if they have in effect a rating of A or B in the current recommendations of the United States Preventive Services Task Force (USPSTF) with respect to the individual involved. Also, preventive health services under section 2713(a)(4) of the PHS Act include, “with respect to women, such additional preventive care and screenings not described in paragraph (1) [concerning the USPSTF A or B rated recommendations] as provided for in comprehensive guidelines supported by the Health Resources and Services Administration” (HRSA). HRSA guidelines generally provide for coverage of all Food and Drug Administration approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity. The guidelines, however, do not provide for coverage of benefits or services relating to a man’s reproductive capacity, such as vasectomies and condoms. (78 FR 8456 (Feb. 6, 2013) at 8458 n. 3.)
Notice 2013-57 (2013-40 I.R.B. 293) provides that any item that is a preventive service under section 2713 of the PHS Act will also be treated as preventive care under section 223(c)(2)(C) of the Code.
The Treasury Department and the IRS are aware that several states have recently adopted laws that require certain health insurance policies and arrangements to provide benefits for male sterilization or male contraceptives without cost sharing.[4] Some individuals in those states are participants or beneficiaries in insured health plans or other arrangements subject to the state’s insurance laws. Certain stakeholders have asked the Treasury Department and the IRS whether benefits for male sterilization or male contraceptives constitute preventive care for purposes of section 223(c)(2)(C).
Under section 223(c)(2)(C), “preventive care” means (1) preventive care within the meaning of section 1871 of the SSA, and (2) preventive care as otherwise provided for by the Treasury Department and the IRS. Benefits for male sterilization or male contraceptives are not preventive care under the SSA, and no applicable guidance issued by the Treasury Department and the IRS provides for the treatment of these benefits as preventive care within the meaning of section 223(c)(2)(C). Accordingly, under current guidance, a health plan that provides benefits for male sterilization or male contraceptives before satisfying the minimum deductible for an HDHP under section 223(c)(2)(A) does not constitute an HDHP, regardless of whether the coverage of such benefits is required by state law. An individual who is not covered by an HDHP with respect to a month is not an eligible individual under section 223(c)(1) and, consequently, may not deduct contributions to an HSA for that month. Similarly, HSA contributions made by an employer on behalf of the individual are not excludible from income and wages.
The Treasury Department and the IRS are aware that certain states require benefits for male sterilization or male contraceptives to be provided without a deductible, and that individuals have enrolled in health insurance policies and other arrangements that otherwise would qualify as HDHPs with the understanding that coverage for male sterilization or male contraceptives without a deductible did not disqualify the policies or arrangements from being HDHPs. The Treasury Department and IRS also understand that certain states may wish to change their laws that require benefits for male sterilization or male contraceptives to be provided without a deductible in response to this notice, but may be unable to do so in 2018 because of limitations on their legislative calendars or for other reasons. Until these states are able to change their laws, residents of these states may be unable to purchase health insurance coverage that qualifies as an HDHP and would be unable to deduct contributions to an HSA.
Accordingly, this notice provides transition relief for periods before 2020 (including periods before the issuance of this notice), to individuals who are, have been, or become participants in or beneficiaries of a health insurance policy or arrangement that provides benefits for male sterilization or male contraceptives without a deductible, or with a deductible below the minimum deductible for an HDHP. For these periods, an individual will not be treated as failing to qualify as an eligible individual under section 223(c)(1) merely because the individual is covered by a health insurance policy or arrangement that fails to qualify as an HDHP under section 223(c)(2) solely because it provides (or provided) coverage for male sterilization or male contraceptives without a deductible, or with a deductible below the minimum deductible for an HDHP.

The Treasury Department and the IRS continue to consider ways to expand the use and flexibility of HSAs and HDHPs consistent with the provisions of section 223. Accordingly, the Treasury Department and the IRS request comments on the appropriate standards for preventive care under section 223(c)(2)(C) (in particular, the appropriate standards for differentiating between benefits and services that would be considered preventive care and those that would not be considered preventive care) and other issues related to the provision of preventive care under an HDHP.

Comments should include a reference to Notice 2018-12. Send submissions to CC:PA:LPD:PR (Notice 2018-12), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, 54 Washington, DC 20044. Submissions may be hand delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR 

Monday, February 12, 2018

Efforts to Delay Maryland Paid Sick Leave Law Fail

Attempts to delay the Maryland Sick and Safe Leave Lay failed.  Efforts were being made to delay the law until July to give employers more time to prepare.  However those efforts failed in the General Assembly.  Many Democrats were not in favor of this delay as they believe it would give Republicans more time to have the law amended.  

The Maryland Department of Labor, Licensing and Regulation on Friday issued a draft sample employee notice poster to be displayed in workplaces across the state. The agency said it is also developing sample policies that will be available on its website at  A copy of the poster can be found here.  

Monday, February 5, 2018

Maryland Sick and Safe Leave Law Compliance Update

From: Maryland Healthy Working Families Act (House Bill 1) - Enforcement and Implementation, February 5, 2018

Maryland Employers and Employees:

Governor Larry Hogan understands the business community has many questions regarding the Maryland Healthy Working Families Act, so he established the Office of Small Business Regulatory Assistance (OSBRA) within the Department of Labor, Licensing and Regulation to assist small businesses in complying with the law, as well as an email address where employers may direct specific questions: 

To assist employers with compliance, the department is developing draft guidance documents and model policies, including an extensive Q&A document based on questions received through, and will continue to provide answers to specific questions upon request. These documents will be emailed to stakeholders and published to DLLR’s paid leave website at 

Before promulgating official guidance documents, the department encourages stakeholder input to be certain that the draft guidance documents address all concerns. Comments on these draft guidance documents and specific implementation questions should be directed to Following a public comment period, the department will finalize the policies based on stakeholder input and include any amendments to the Maryland Healthy Working Families Act from this General Assembly session.

The General Assembly is in session until April 9, 2018, and there are several bills that could affect this legislation. Although HB1 goes into effect on February 11, 2018, bills have been introduced that would substantially impact the law.

February 11, 2018 Effective Day: What you need to know

Emergency legislation to delay implementation of this law until July 1, 2018, is moving in the Maryland Senate. On Friday, February 2, it passed the Senate Finance Committee and will next be considered by the full Senate. After that, it would go to the House of Delegates for consideration. If this bill should pass before February 11, 2018, the Department of Labor will notify employers. However, in the event implementation is not delayed, employers should be prepared to begin tracking sick and safe leave accrual on February 11, 2018.

Tuesday, January 30, 2018

Maryland Sick Leave Law Compliance

More stress is being placed on the business community in Maryland through passage of the new Sick Leave Law.  It seems that the general feeling is that lawmakers are in a big push to extend the effective date of the law to allow employers more time to comply.  Below is a link to the Maryland Chamber of Commerce regarding guideline on implementation of the law.  There are notices required to be given to employees and a Model Notice is being developed but not available yet.  Please take a look below at guidance on the law.



Wednesday, January 17, 2018

MD Contraceptive Equity Act and its Impact on 2018 High Deductible Health Plans (HSA)

In 2016, Maryland passed the Contraceptive Equity Act, which requires health care insurers to:

• Provide coverage for a single dispensing of up to a six-month supply for covered, FDA-    approved, prescription contraceptives and devices (after a two-month trial). 
• Provide coverage for over-the-counter emergency contraceptives without a prescription
• Expand access to male sterilization benefits with no out-of-pocket costs. 

The IRS requires that high deductible health plans (HDHP) not cover benefits until the deductible for that year is satisfied. As you know, under current IRS rules for HDHPs, only preventive care benefits can be provided without a deductible. Preventive care includes a variety of screenings and services for adults and children. Food and Drug Administration-approved contraceptive methods, sterilization procedures, and patient education and counseling, as prescribed by a health care provider for women with reproductive capacity also must be covered without a copayment or coinsurance before the deductible is met. Male sterilization is not included in the IRS’ list of preventive services. 

The new Maryland law, effective January 1, 2018, creates a conflict with the IRS rules regarding the treatment of male sterilization as a preventive service. This new law impacts HSA plans sold in Maryland. Members who fund HSA's may be subject to tax penalties when they file their 2018 taxes – regardless of whether they use the covered benefit (male sterilization) or not. Subscribers and members with Grandfathered plans are not impacted. 

The Maryland Insurance Administration is aware of this issue and has asked the IRS for clarification as to whether or not they consider male sterilization to be a preventive benefit for the purposes of IRS regulatory guidance. In the meantime, members who fund an HSA with these plans may be subject to tax penalties if the IRS does not recognize male sterilization as a preventive care benefit. Members can continue to use their previously-funded HSA account to pay for health care services and should consult with a tax professional if they have further questions. 

Excerpt from Carefirst Blue Cross Bliue Shield of Maryland, 12-5-2017

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