Friday, February 1, 2019

New HRA rules could allow businesses to circumvent ACA's employer mandate

Currently it is a violation of the ACA for large employers to allow health reimbursement arrangements to be used to help pay workers’ premiums instead of providing group health insurance. Under the ACA, large employers must offer affordable minimum essential coverage to 95 percent of employees in order to avoid penalties.

“Under current ACA rules there is a blanket prohibition, which a lot of employers in the under-200 employee market were bummed about. They would rather have a defined-contribution approach,” Welle said. 

The Trump administration under Executive Order 13813, issued in October 2017, proposed expanding the defined-contribution approach to employer health insurance coverage as part of an overall plan to repeal and/or replace the ACA and promote competition in U.S. health care. The proposals also included allowing association health plans and limited-duration, limited-benefit health plans. While legislation overturning the ACA seems dead, some rule-making continues.

Under the proposed HRA rules, employers generally would have to contribute a fixed amount into each individual HRA sufficient that any remaining premiums the employee would have to pay wouldn’t exceed a percentage of his or her household income to be considered affordable under the employer mandate, in order to avoid penalties, Welle said.

If finalized, the new rules wouldn’t take effect until Jan. 1, 2020, at the earliest. Welle said he believes that most large employers in the interim would probably continue to offer group health plans because they provide employers with a valuable recruitment incentive. In the latest statistics from Kaiser Family Foundation, roughly 16 million Americans were enrolled in the ACA marketplace or a Basic Health Program.

“But in the future, I see employers in the range of 50 to 200 employees who are burdened by the administrative responsibilities and the cost of administering health plans say this is a way they can do something for their employees but off-load some of the responsibilities. It is still developing and there is nothing to hang their hats on yet, but in 2021 or 2022 I can see the [smaller ones] saying this might be a good solution for us,” Welle said.

Pressly said the employers who right now are most interested in this are those with 50 to 100 workers and those who employ lots of part-time workers, as this could be a solution for providing coverage for them.  

But for larger employers, he said, “it looks really appealing but the way the rules are written if you roll it out for one class of employees, you will have to push it to all employees in that class and the benefits vary wildly from state to state.”

Employers and employees might not fully grasp all the differences between the individual health insurance marketplaces in the states and its limitations, and employer-sponsored group health insurance coverage, Pressly said. Resistance could arise when top executives accustomed to group health plans’ flexibility and coverage for expensive procedures such as in vitro fertilization encounter the limitations of many individual health insurance plans, including differences in what states require them to provide, he said.

In 2017, only 7 percent of the total U.S. population were in non group health insurance and 49 percent received employer-provided insurance. A combined 35 percent were on Medicaid or Medicare; 1 percent were on some other public plan and 9 percent were uninsured, according to the Kaiser.

Pressly said, “This goes hand-in-hand with state insurance markets and you really need to understand what that is, the cost and the coverage that is available to know what the ultimate employee experience is going to look like.”

Excerpt By:By MP McQueen | January 28, 2019 at 10:58 AM 

Thursday, January 10, 2019

Calendar of Health and Welfare Benefit Plan Compliance Tasks** and Dates

Action Item Due Date

Reporting of value of health coverage on Form W-2 January 31, 2019*
(Optional for employers issuing under 250 W-2's)

File ACA information reporting returns with IRS (for paper filing) February 28, 2019*

DOL Form M-1 (for MEWAs) March 1, 2019*
Disclosure of creditable/noncreditable status of prescription drug coverage to CMS March 1, 2019
Provide ACA information reporting returns to individuals March 4, 2019
Last day for flexible spending accounts with 2½ month grace periods March 15, 2019

File ACA information reporting returns with IRS (for electronic filing) April 1, 2019*

Form 990 or Form 8868 if requesting extension May 15, 2019

Summary of Material Modifications for prior year amendments July 29, 2019
Form 720 filing and payment of PCORI fee July 31, 2019*
Form 5500 or file Form 5558 to request an extension July 31, 2019

Form 990 (if on extension) or Form 8868 if requesting additional extension August 15, 2019

Summary Annual Report (if no extension) September 30, 2019

Provide notice of creditable/noncreditable prescription drug coverage to participants October 14, 2019*
Form 5500 filed if on extension October 15, 2019

Form 990 (if additional 3-month extension) November 15, 2019
Summary Annual Report (if on extension) December 15, 2019
Deadline for correcting DCAP discrimination test failures December 31, 2019

**Assumes calendar plan and sponsor tax year. Does not account for weekends, extended due dates other than for Forms 5500 and 990, short plan years, or new plans. The “weekend rule,” which extends due dates falling on weekends to the following Monday, generally applies to filing deadlines and certain other acts under tax rules.

*Date does not vary regardless of plan year

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: