PPACA....IT'S TIME.....REPORTING HEALTH COVERAGE COST ON W-2

The provision that required employers to report the cost of Medical, Dental and Vision coverage was supposed to go in effect for reporting year 2011.  However, that was delayed and the IRS has issued guidance for reporting these amounts (2012-9) for 2012 W-2's.

In a nutshell, the IRS stated that all employers who have issued more than 250 W-2's will be required to show the value of the employer sponsored medical, dental and vision coverage on their employees 2012 W-2's.  The cost of coverage does not include contributions made to a Health Savings Account (HSA), Medical Savings Account (MSA) or Health Reimbursement Arrangements.

In calculating the cost of coverage to be reported, the IRS indicated that this amount would be the same amount used to calculate the COBRA cost, not including the 2% administration fee, if any.

Those employers who file less that 250 W-2's are exempt from this provision at least through 2012.

The big question is why does the IRS want this information?  They state it's for informational purposes only.  Two thoughts:  This could be a way for the Fed to determine if their is coverage in place in regards to the "no coverage penalty" or a way for the Fed to tax those "Cadillac Plans" in 2018.

PPACA-HHS DEFINES "ESSENTIAL HEALTH BENEFITS"

In December the Department of Health and Human Services outlined proposed policies defining what exactly are "Essential Health Benefits" to be included in health plans.  All insurance policies must cover these services in order to be certified and offered in the exchanges.  Below are a list of those services:

Ambulatory Patient Services
Emergency Services
Hospitalization
Maternity and Newborn Care
Mental Health and Substance Abuse Disorders
Prescription Drugs
Rehabilitative and Habilitative Services
Lab Services
Preventive and Wellness Services, Including Chronic Disease Management
Pediatric Services, Including Oral and Vision Care

Each state would need to select a "Benchmark Plan" which could include at least all of the services above.  Could be from the largest plan in the state, largest state plan, largest federal plan, largest hmo plan offered in state.  This is the HHS's way of saying we are flexible.  If the state does not elect their own, the default benchmark plan will be the small group plan with the largest enrollment in the state. 

This "benchmark plan" is not to be confused with "Minimal Essential Coverage" which if you have more than 50 employees, could determine whether your health plan could set you up (or help you avoid) a big penalty from the fed. More to come later on that...........

So basically this means that all health plans would need to include an array of services in each of those ten areas identified in order to be offered through the state exchanges. 

MERRY CHRISTMAS!!!!!!!!!!!!!!!

I would like to take a moment this Holiday Season and wish you and your family a Very Merry Christmas and prosperous 2012.  Although most of us are happy to see 2011 come to an end, as it has been a trying year for many, I hope you will join me in counting the many blessing God has bestowed upon us.

My Holiday prayer is for success and health, happiness and prosperity for you and your loved ones.

All the best to you and your families.

                                                                          

Ben

Brooks Benefit Services, LLC

PPACA-ANOTHER PROVISION OF HEALTH REFORM DELAYED

Under the Affordable Care Act (PPACA), a provision requiring health care insurers and employer-sponsored health plans to furnish a standardized Summary of Benefit and Coverage (SBC) by March, 2012, has been delayed.  This provision has been put on hold because final rules and regulations have yet to be released by the Fed.  Therefore, the Department of Labor determined that carriers and employer-sponored health plans will not be required to issue SBC's until after the final rules and regulations are released.

SUPREME COURT TO HEAR HEALTH CARE LAW CASE

The US Supreme Court announced that it will hear over 5 hours of oral argument regarding the legality of certain provisions under the health care law (PPACA).  In particular below is the allotted times for each argument to be heard:

• 90 Minutes-Whether the entire health care law should be terminated if the "Individual Mandate" is ruled unconstitutional. 
• 120 Minutes-Did Congress have the power under Article 1 of the Constitution to enact the Affordable Care Act? (Article 1 regulates interstate commerce and other laws under Congressional Authority they are able to pass)
• 60 Minutes-determine if the Supreme Court should rule on whether the individual Mandate Penalty constitutes a tax.  This would thereby trigger a federal statute called the anti-injunction act.  They may not be able to rule on this as there hasn't been any tax levied since this provision doesn't go into effect until 2014 (This is required under the anti-injunction act)
• 60 Minutes-Determining the Constitutionality of Congress allowing the Federal Government to allow states to gain funding based on their participation in the Laws Health Care Reforms.

 Arguments are slated to be heard sometime in mid-March with decisions possibly by the end of June prior to the summer break. 

THANK YOU, VETERANS!!!!

 

WE WOULD LIKE TO THANK ALL THOSE PEOPLE WHO SERVED AND SACRIFICED SO THAT WE MAY BE FREE.  GOD BLESS YOU, YOUR FAMILIES AND THE UNITED STATES OF AMERICA.

BROOKS BENEFIT SERVICES

EHHHH......WHAT'S UP DOC?

It seems employers are just getting tired of paying for unhealthy lifestyles.  Many companies are instituting wellness programs where if you sign-on and get your blood pressure checked and do some smoking cessation classes or a walk here and there, you get rewards.  Maybe you get $25 or $50 for participation or an umbrella or a beach blanket.  A pat on the back could be just the right kind of encouragement to get employees engaged in a healthier lifestyle.

There is a second school of thought however, and it is shared by companies such as Walmart, and Veridian Credit Union which are going the route of the "stick" versus the "carrot".  These companies are charging employees higher premiums for unhealthy lifestyles.  For those that can't get their obesity or cholesterol in check or stopping the smoking habit, they will pay.  Employers are getting tired of making the healthier employees pay for the bad habits or lack of attention to health issues of the unhealthy employees.

The Cleveland Clinic has decided to cut smoking at their medical centers, refused to hire smokers, implemented a comprehensive wellness plan, gym and weight loss classes.   In addition they reduced premiums to those employees who maintained or improved their health.

It seems as though trying to be "nice" regarding having employees become serious about their health isn't working for some employers.  Under health reform (PPACA), employers will be allowed to have a premium differential of 30% in 2012 and could go as high as 50% in 2014 for healthy versus unhealthy employees.  This means that for some unhealthy employees,  that choose to remain that way, health care could get a lot more expensive for them.