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August Newsletter

Health Care Reform

ACA Repeal and Replace Bills Defeated

Senate GOP hopes of passing legislation for repealing and replacing the Affordable Care Act (ACA) were dashed July 28 when Senator John McCain cast a “no” vote on a last-ditch effort to repeal the ACA.

In the days leading up to the final vote, the Senate failed to pass a revised version of their Better Care Reconciliation Act, which would have repealed and replaced the ACA.  They also lacked the votes to pass a partial repeal of the current legislation.  For now, efforts to repeal the ACA have been put on hold as Congress entered its month-long recess on Aug. 3.

The Senate Health Committee announced they will begin holding bipartisan hearing the first week of September which will discuss stabilizing and strengthening the ACA’s insurance exchanges.  The goal of the hearings is to develop a bipartisan, short-term proposal by mid-September.

Individual Market

Administration Mulls Ending Ending CSR Payments

The Trump administration has been considering ending the payments to insurance carriers that allow them to make coverage more affordable for lower-income individuals purchasing plans through the ACA’s exchanges.  The cost-sharing reduction (CSR) subsidies offset the money insurance carriers lose by providing lower copays and deductibles.

Without the subsidies, some insurers would likely have to decide between raising premiums or exiting the exchanges entirely.  Last year, CSR payments cost the federal government $7 billion.  The next CSR payments are due in the coming weeks and the administration is reportedly consulting with lawyers about how payments could be ended and any possible legal liabilities.

Wellness

Relax With Healthy Summertime Sweets

Even though summer is in full swing, it doesn’t mean it’s time to be lax about your dental care. Eating healthy snacks that still satisfy your sweet tooth isn’t as hard as you think with these helpful ideas from Delta Dental.  

·         Strawberries: Filled with vitamin C, strawberries aid in the production of collagen which helps reduce plaque and remove surface stains.  Collagen helps maintain the strength of your gums, which are important for a healthy smile. Don’t forget, however, that strawberries are acidic and you’ll need to drink plenty of water after eating them.

·         Apples: With their high water content, apples are a great way to stimulate saliva production and keep the bacteria in your mouth in check.  This low-acid, fibrous fruit also scrubs the surface of your teeth – one reason why they’re called “dental detergents”.

·         Watermelons: This water-rich fruit helps keep you hydrated during those hot summer months.  In addition, the water helps remove particles of food in your mouth and stuck in your teeth, washes away bacteria, and helps promote saliva production. Watermelon also includes vitamin C to help kill bacteria and strengthen gums.

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July Newsletter

Health Care Reform

Senate Drafts Health Care Bill

The U.S. Senate released June 23 a discussion draft of the GOP’s health care bill, the Better Care Reconciliation Act, which would repeal and replace most of the Affordable Care Act (ACA).  Senators on both sides of the aisle have expressed concerns about the bill and the potential loss of coverage for millions of Americans.  

Senators returned this week from their July 4 recess and say they will continue to hammer out a possible compromise on the health care bill.  Per the initial discussion draft, the amended law would potentially:

· Attempt to stabilize insurance markets.

· Remove current healthcare mandates requiring health care purchase by individuals.

· Assist with health insurance affordability.

· Preserve access to care for individuals with preexisting conditions, and allow children to stay on their parents’ health insurance through age 26.

· Reinforce Medicaid by granting flexibility to states.

Recent comments by McConnell suggest that if members cannot come to an agreement on legislation, he will work with Democrats to fix the ACA exchanges that will have one or no options next year.

Congress Drafts Provision Ending Individual Mandate

As Congress debates its next move for repealing and replacing the ACA, the House Committee on Appropriations has drafted a provision that would stop the Internal Revenue Service from enforcing the individual mandate.  The mandate requires most Americans to have health coverage or face a penalty.

The provision draft is separate from the GOP’s efforts and would be written into the annual spending bill for the U.S. Treasury and the IRS.  In addition, the IRS would be prohibited from enforcing the ACA requirement that employers and insurance companies report the name and Social Security number of those provided health coverage, which is used to administer the individual mandate and other requirements.  At this time, however, the individual mandate and all subsequent reporting requirements remain in place.

The provision, for the fiscal year that begins Oct. 1, is included in an appropriations bill that was approved June 29 by the Subcommittee on Financial Services and General Government.  

The IRS has already relaxed some ACA individual reporting requirements.  On his first day in office, President Trump authorized agencies to use their discretion, “to the maximum extent permitted by law”, to waive or grant exceptions from any fee, tax, or penalty imposed by the ACA.  As a result, the IRS announced it would accept tax returns from individuals who did not provide the requested information about whether they had coverage.  The agency had planned to reject returns without the information.

Reminder:  PCORI Fees Due July 31

The ACA requires health insurance issuers and sponsors of self-insured health plans, including Health Reimbursement Arrangements (HRA), to pay Patient-Centered Outcomes Research Institute (PCORI) fees. PCORI fees are due July 31, 2017, for plan years ending in 2016.  

Employers or plan sponsors will pay the fee on applicable self-insured plans, including Health Reimbursement Arrangements (HRA).  Health insurance issuers (insurance carriers) will pay the fee on fully insured plans.

The fees are reported and paid annually using IRS Form 720, Quarterly Federal Excise Tax Return.  The IRS provided instructions for filing Form 720, which include information on reporting and paying the PCORI fees.  More information on the methods to determine the average number of lives covered under applicable self-insured health plans for the plan year can be found here.  A Q&A on the PCORI fees can be found here.

Basics of Preventive Services

It’s easy to forget about the routine preventive services covered by your health insurance plan but using these services can help you stay healthier and they’re often covered at 100 percent.  There can be plan exceptions, however, so it’s important to check your Certificate of Coverage for information about your specific plan so you don’t incur any unexpected costs.

Preventive services are key to warding off certain illnesses and health conditions, as well as detecting health problems at early stages and possibly making them easier to treat.  Routine services testing for blood pressure, diabetes and cholesterol, along with mammograms, colonoscopies, and well-woman visits are examples of preventive care.

Please keep in mind that if you receive services during your wellness exam that are not considered preventive care services, you may be responsible for a different share of the cost.  For example, if your physician determines you have a medical issue and require additional tests after diagnosis, it is no longer considered preventive.

Learn more about preventive care services by visiting the CDC’s website here.

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Affordability Contribution Percentages Lowered

The Internal Revenue Service (IRS) issued Revenue Procedure 2017-36 to index the contribution percentages in 2018 for purposes of determining the affordability of an employer’s plan under the Affordable Care Act (ACA).

 For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

·         9.56 percent (9.69 percent in 2017) of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility; and

·         8.05 percent (8.16 percent in 2017) of the employee’s household income for the year, for purposes of an exemption from the individual mandate.

These updated affordability percentages are effective for taxable years and plan years beginning after Dec. 31, 2017.  This is the first time the percentages have been lowered since the implementation of the ACA rules.  

Starting in 2015, the ACA’s employer shared responsibility or “pay or play” rules require applicable large employers (ALEs) to offer affordable, minimum value health coverage to their full-time employees (and dependents) or pay a penalty. ALEs are employers that have, on average, at least 50 full-time employees (including full-time equivalents) during the preceding calendar year.

The affordability of health coverage is a key point in determining whether an ALE will be subject to a penalty. The employer shared responsibility rules generally determine affordability of employer-sponsored coverage by reference to the rules for determining premium tax credit eligibility.  The affordability test applies only to the portion of the annual premiums for self-only coverage, and does not include any additional cost for family coverage. Also, if an employer offers multiple health coverage options, the affordability test applies to the lowest-cost option that also satisfies the minimum value requirement.

Because an employer generally will not know an employee’s household income, the IRS created three affordability safe harbors that measure affordability based on Form W-2 wages from that employer, the employee’s rate of pay or the federal poverty line (FPL) for a single individual.  These affordability safe harbors are all optional. An employer may use one or more of the safe harbors for all its employees or for any reasonable category of employees, provided it does so on a uniform and consistent basis for all employees in a category.

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Funding Healthcare- FSA FAQ’s

Flexible Spending Account Benefits

Flexible spending accounts (FSA) provide you with an important tax advantage that can help you pay health care and dependent care expenses on a pretax basis. By anticipating your family’s health care and dependent care costs for the next plan year, you can lower your taxable income. The 2017 limit for individuals is $2,600.

Essentially, the Internal Revenue Service (IRS) set up FSAs as a means to provide a tax break to employees and their employers. As an employee, you agree to set aside a portion of your pretax salary in an account, and that money is deducted from your paycheck over the course of the year. The amount you contribute to the FSA is not subject to social security (FICA), federal, state or local income taxes – effectively adjusting your annual taxable salary. The taxes you pay each paycheck and collectively each plan year can be reduced significantly, depending on your tax bracket. As a result of the personal tax savings you incur, your spendable income will increase.

The Health Care Reimbursement FSA

The health care reimbursement FSA lets you pay for certain IRS-approved medical care expenses not covered by your insurance plan with pretax dollars. For example, cash that you now spend on deductibles, copayments or other out-of-pocket medical expenses can instead be placed in the health care reimbursement FSA pretax.

Health FSAs employ a “use-it-or-lose-it” model. If you do not use the funds that you contribute to your FSA within the end of the year, you will have to forfeit those funds. However, employers also have the option of allowing employees to carry over up to $500 of unused funds from one year to the next. In addition, any amount that is carried over does not count toward the maximum contribution limit.

Eligible Expenses

Eligible health care expenses for the health care reimbursement FSA include more than just your deductible and copayments. You can also reimburse items such as prescription drugs, dental expenses, eye glasses and contacts, certain medical equipment and many more items.

Over-the-counter drugs used to be eligible expenses, but a law effective Jan. 1, 2011, only allows claims for over-the-counter medication or drug expenses (other than insulin) to be reimbursed if the patient has a prescription. This new rule does not apply to items for medical care that are not considered medication or drugs. Equipment such as crutches, supplies such as bandages and diagnostic devices such as blood sugar test kits still qualify for reimbursement without a prescription.

The Dependent Care FSA

The Dependent Care FSA lets you use pretax dollars toward qualified dependent care. The annual maximum amount you may contribute is $5,000 (or $2,500 if married and filing separately) per calendar year.

If you elect to contribute to the dependent care FSA, you may be reimbursed for:

•     The cost of child or adult dependent care

•     The cost for an individual to provide care either in or out of your house

•     Nursery schools and preschools (excluding kindergarten)

Eligible Expenses

In order for dependent care services to be eligible, they must be for the care of a tax-dependent child under age 13 who lives with you, or a tax-dependent parent, spouse or child who lives with you and is incapable of caring for himself or herself. The care must be needed so that you and your spouse (if applicable) can go to work. Care must be given during normal working hours (instances such as Saturday night babysitting does not qualify) and cannot be provided by another of your dependents.

Is An FSA Program Right For You?

Flexible spending accounts are beneficial for anyone who has out-of-pocket medical, dental, vision, hearing or dependent care expenses beyond what his or her insurance plan covers.

It’s easy to determine if an FSA will save you money. At enrollment time, you will need to determine your annual election amount. Estimate the expenses that you know will occur during the year. These include out-of-pocket expenses for yourself and anyone claimed as a dependent on your taxes. If you had $100 or more in recurring or predictable expenses, the accounts can help you stretch your dollars.

How Do The Accounts Work?

If you decide to enroll in one or both of the accounts, your contributions are taken out of each paycheck – before taxes – in equal installments throughout the plan year. These dollars are then placed into your FSA. When you have an eligible health care or dependent care expense, you must submit a claim form along with an itemized receipt to be reimbursed from your account.

The health care reimbursement FSA will reimburse you for the full amount of your annual election (less any reimbursement already received), at any time during the plan year, regardless of the amount actually in your account. The dependent care FSA will only reimburse you for the amount that is in your account at the time you make a claim.

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Q&A: Health Coverage For Domestic Partners

What are domestic partnerships and civil unions?

A domestic partnership or civil union generally refers to two adults, unrelated by blood and neither of whom is married, who are in a committed relationship and assume responsibility for each other’s financial and emotional needs. Although not recognized under federal law, some states have established definitions for “registered domestic partnerships,” “domestic partnerships,” and “civil unions” to extend specific rights and responsibilities under various state laws. There also are several municipalities and local jurisdictions that extend rights to unmarried couples that meet the criteria developed by the jurisdiction. Further, many employers have voluntarily adopted broad definitions of domestic partners to extend eligibility under their group health plans.

Must employers that offer group health coverage to spouses also cover domestic partners?

Employers may choose to extend eligibility to domestic partners, but it is not required unless mandated by a state’s insurance law. Most states have no requirements while others, such as New Jersey, merely require group health carriers to offer the employer the option of including domestic partners as dependents. California, on the other hand, has the strictest requirement: any group policy that covers spouses must extend eligibility to “registered domestic partners (RDPs).” The California Family Code defines RDPs and the California Secretary of State provides a registration system. Employers that purchase group health insurance receive specific information from the carrier about any applicable state insurance laws. Self-funded (uninsured) plans are not affected since they are exempt from state insurance mandates. Note: Public-sector employers, such as cities, counties, and public schools and universities, and private-sector employers that contract with public agencies, may be subject to additional requirements under local laws. Specific information typically is provided to the parties by the government agency.

Is special tax reporting required for domestic partner health coverage?

Yes, in most cases. Although group health coverage provided to the employee, spouse, and children under age 27 (and some older children) is tax-free, the value of any employer-paid coverage for a domestic partner is taxable. The employer must report the fair market value of the coverage, minus any after-tax contributions paid by the employee, as imputed income on the employee’s Form W-2 for federal and state/local tax purposes. There are two exceptions:

- Federal: Coverage is tax-free if the domestic partner meets the following conditions under § 152 of theInternal Revenue Code:      • Shares the same principal residence as the employee;      • Receives more than half of his or her support from the employee;      • Is a citizen, national, or legal resident of the United States, or resident of          Canada or Mexico; and      • Is not a qualifying child of a taxpayer.

- State/Local: The majority of state and local tax laws conform to federal law, so taxes do not apply if the domestic partner is the employee’s tax dependent under § 152. (Non- conforming states, however, may impose state and/or local taxes.) Alternatively, several states specifically exempt certain categories of domestic partners from state or local taxes, even though federal taxes apply. For instance, California does not tax the value of employer-paid coverage for registered domestic partners (RDPs) as defined by state law.

Employers that offer health coverage to domestic partners should refer to their payroll vendor for specific information about the state and local tax withholding and reporting rules in the locations where their employees live and work.

Can employees pay for domestic partner health coverage on a pretax basis?

Cafeteria plans allow employees to make pretax contributions for group health coverage, but only for employees and their tax dependents (i.e., spouse, children, and § 152 dependents). Most domestic partners do not meet the financial dependency criteria to qualify under § 152, so contributions for their coverage would have to be made on an after-tax basis. IRS regulations permit an accommodation, however, for the employer’s convenience in administering payroll. That is, the cafeteria plan may allow pretax contributions for the domestic partner’s health coverage, provided that the full market value of the coverage is reported as the employee’s imputed income. For instance, assume the market value of the partner’s coverage is $200, the employee contributes $50 on a pretax basis, and the employer contributes the remaining $150. In that case, the employee’s taxable income is reduced by $50, but $200 of imputed income is reported on the employee’s W-2.

Can employees make midyear enrollment changes to add or drop their domestic partner?

Special enrollment rules under the Health Insurance Portability and Accountability Act (HIPAA) allow employees to add coverage midyear for a new spouse, but not for a domestic partner (since no marriage has occurred). On the other hand, the HIPAA rule for a midyear enrollment in the event a dependent losing his or her coverage under another plan does apply to domestic partners (if eligible for the employer’s plan).

Cafeteria plans may allow midyear changes in accordance with IRS regulations for permitted election changes. Although not required, employers that extend health plan eligibility to domestic partners also often provide for midyear enrollment changes under their cafeteria plans. 

Beware of discrepancies between the group health insurance policy and the cafeteria plan document. Carriers are required to include the mandatory HIPAA special enrollment rules in group policies, but they often omit the optional cafeteria plan provisions. Always check all documents and policies before allowing an employee to make a midyear change. Self-funded employers should ensure that any stop-loss insurance protection applies with respect to all persons who are eligible under the group plan.

Are domestic partners eligible for other health-related benefits, such as FSAs, HRAs, or HSAs?

In most cases, no. Reimbursements from health flexible spending accounts (FSAs), health reimbursement arrangements (HRAs), and health savings accounts (HSAs) are limited to eligible health care expenses for the employee and his or her tax dependents. Domestic partners are not tax dependents, unless the domestic partner qualifies under § 152, which usually is not the case.

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Low-cost Workplace Wellness Strategies

It’s a new year and many companies are re-examining their wellness strategies for employees.  Workplace wellness programs may not only increase employee morale but, if run effectively, can also reap a positive return on investment for employers.

We’ve included below some ideas for implementing positive changes to your wellness program for little or no cost.

Nutrition

Provide healthy eating reminders to employees using posters, emails and intranet posts.

Offer healthier food options in the vending machines and in the cafeteria, as well as at meetings, conferences and catered events.

Ensure that on-site cafeterias follow healthy cooking practices and set nutritional standards that align with the Dietary Guidelines for Americans.

Provide cookbooks and cooking classes for employees and their families.

Offer locally grown fruits and vegetables at the workplace.

Physical Activity and Weight Management

Allow access to on- and off-site gyms and recreational activities before, during and after work. Encourage and support participation in after-work recreational leagues.

Provide incentives or reduced insurance costs for participation in physical activity or weight management or maintenance activities.

Map out on-site trails or nearby walking routes and destinations. Host walk-and-talk meetings when it is nice outside.

Provide bicycle racks in safe, convenient and accessible locations. Sponsor a “bike to work” day and reward employees who participate.

Create activities that have strong social support systems like buddy or team physical activity goals or programs that involve co-workers and their families.

Set up programs to encourage physical activity, such as pedometer walking challenges.

Offer flexible work hours and breaks to allow for physical activity during the day.

Post motivational signs at elevators and escalators to encourage stair usage.

Encourage employees to map out their own biking or walking route to and from work.

Provide or support physical activity events on-site or in the community.

General Health Education

Have a wellness plan in place that addresses the purpose, nature, duration, resources required and expected results of a workplace wellness program.

Promote and encourage employee participation in the physical activity, nutrition and weight management programs.

Provide health education articles, handouts or fliers to employees.

Create a committee that meets at least once a month to oversee your wellness program.

Offer regular health education presentations on various physical activity, nutrition and wellness-related topics.

Ask health associations, health care providers or public health agencies to offer free on-site education classes.

Host a health fair as a kick-off event or as a celebration for completion of a wellness campaign.

Conduct preventive wellness screenings for blood pressure, body mass index, blood cholesterol and blood sugar.

Provide confidential health risk assessments.

Offer on-site weight management or maintenance programs for employees.

Add counseling for weight management or maintenance, nutrition, and physical activity as a benefit in health insurance contracts.

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Healthcare Reform

Trump Signs Executive Order On ACA

On Jan. 20, President Donald Trump signed an executive order addressing the Affordable Care Act (ACA), as his first act as president. The order states that it is intended to “to minimize the unwarranted economic and regulatory burdens” of the ACA until the law can be repealed and eventually replaced.  The executive order broadly directs the Department of Health and Human Services (HHS) and other federal agencies to waive, delay or grant exemptions from ACA requirements that may impose a financial burden.

An executive order is a broad policy directive that is used to establish how laws will be enforced by the administration. It does not include specific guidance regarding any particular ACA requirement or provision, and does not change any existing regulations.  As a result, the executive order’s specific impact will remain largely unclear until the new administration is fully in place and can begin implementing these changes.

No ACA provisions or requirements have been eliminated or delayed at this time as a result of President Trump’s actions. Therefore, employers should continue to prepare for upcoming requirements and deadlines to ensure full compliance.

Sections 6055 & 6056 Reporting Deadlines Approaching

The filing deadlines for Sections 6055 and 6056 reporting are only weeks away.  Under Sections 6055 and 6056, certain employers – including self-insured group health plan sponsors and applicable large employers – are required to provide information to the Internal Revenue Service about the health plan coverage they offer or do not offer to employees.

In late November, the IRS issued Notice 2016-70 which extended the due date for employers to furnish individuals with the 2016 Form 1095-B, Health Coverage, and the 2016 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from Jan. 31 to March 2.  

The deadline for employers to file with the IRS the 2016 Forms 1094-B, 1095-B, 1094-C, and 1095-C is Feb. 28 (if not filing electronically) or March 31 (if filing electronically).  

Notice 2016-70 also extends transition relief from penalties for providing incorrect or incomplete information to reporting entities that can show that they have made good-faith efforts to comply with the Sections 6055 and 6056 reporting requirements for 2016 (both for furnishing to individuals and for filing with the IRS).

The IRS does not anticipate extending this transition relief – either with respect to the due dates or good-faith relief from penalties – to reporting for 2017.

Federal Judge Blocks Aetna-Humana Merger

A federal judge on Jan. 23 blocked the proposed merger of Aetna and Humana on antitrust grounds, citing that the merger would unlawfully threaten competition.

The two insurance carriers announced their planned merger in July 2015.  After the ruling, Aetna announced they were reviewing the opinion and considering an appeal.  

The Obama administration challenged the Aetna-Humana merger, as well as the proposed acquisition of health insurer Cigna by Anthem.  As of publication, a ruling has not been issued on the Anthem-Cigna merger.

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January Newsletter

Health Care Reform

Final 2018 Notice of Benefit & Payment Parameters Released

The Department of Health and Human Services (HHS) released its final Notice of Benefit and Payment Parameters for 2018. This rule describes benefit and payment parameters under the ACA, applicable for the 2018 benefit year. Among the issues addressed in the notice are annual limitations on cost-sharing and the individual mandate’s affordability exemption.

Annual Limitations On Cost-sharing

Effective for plan years beginning on or after Jan. 1, 2014, the ACA requires non-grandfathered plans to comply with an overall annual limit – or an out-of-pocket maximum – on essential health benefits (EHB). The ACA requires the out-of-pocket maximum to be updated annually based on the percent increase in average premiums per person for health insurance coverage.

For 2017, the out-of-pocket maximum is $7,150 for self-only coverage and $14,300 for family coverage. Under the final rule, the out-of-pocket maximum increases for 2018 to $7,350 for self-only coverage and $14,700 for family coverage.

Individual Mandate’s Affordability Exemption

Under the ACA, individuals who lack access to affordable minimum essential coverage (MEC) are exempt from the individual mandate penalty. For purposes of this exemption, coverage is considered affordable for an employee if the required contribution for the lowest-cost, self-only coverage does not exceed 8 percent of household income.

For 2017, the required contribution percentage is 8.16 percent of household income.  Under the final rule, the required contribution percentage decreases in 2018. The final rule provides that, for 2018, an individual is exempt from the individual mandate penalty if he or she must pay more than 8.05 percent of his or her household income for MEC.  

View the complete final Notice of Benefit and Payment Parameters for 2018 here.

 Reminder:  Reinsurance Fees Due Jan. 17

The due date for the first payment of reinsurance fees is Jan. 17.  The ACA imposes a fee on health insurance issuers or carriers and self-insured group health plans in order to fund a transitional reinsurance program for the first three years of health insurance exchange operation (2014-2016 calendar years). The program is intended to help stabilize premiums for coverage in the individual market when individuals with higher-cost medical needs gain coverage.

Reinsurance contributions are only required for plans that provide major medical coverage and affects “contributing entities”.  A contributing entity is described as a health insurance issuer or a self-insured group health plan sponsor.  As described below, certain types of coverage are excluded from paying fees to the reinsurance program.

·         Fully-insured Group Health Plans: For insured health plans, the issuer of the health insurance policy is required to pay reinsurance fees.  Issuers will likely shift the cost of the fees to sponsors through premium increases.

·         Self-insured Group Health Plans: For self-insured plans, the plan sponsor is liable for paying reinsurance fees, although a third-party administrator (TPA) or administrative-services-only (ASO) contractor may pay the fee at the plan’s direction. For a plan maintained by a single employer, the employer is the plan sponsor. The Department of Labor (DOL) has advised that paying reinsurance fees constitutes a permissible expense of the plan under ERISA because the payment is required by the plan under the ACA.

·         Exception for Self-insured, Self-administered Plans: For 2015 and 2016, the term “contributing entity” excludes self-insured group health plans that do not use a TPA for the core administrative functions of claims processing or adjudication (including management of appeals) or plan enrollment.

For the 2016 benefit year, the annual contribution rate is $27 per enrollee per year, or $2.25 per month. Key deadlines are as follows:

·         No later than Jan. 17, 2017:  Remit first contribution amount of $21.60 per covered life.

·         No later than Nov. 15, 2017:  Remit second contribution amount of $5.40 per covered life.

·         Optional Combined Collection:  Contributing entities may elect to make a combined collection (first and second installment) and the deadline to submit the contribution is Jan. 17, 2017.

Individual Market

Open Enrollment Period Winds Down

Only weeks remain until the 2017 open enrollment period for individuals and families ends.  To receive health insurance this year, enrollees must apply by Jan. 31 or potentially face fines for a lack of coverage. Those signing up for coverage by Jan. 15 will have an effective date of Feb. 1.  Individuals signing up between Jan. 16 and Jan. 31 will have coverage starting March 1.

Wellness

Tips For Winter Weather Safety

January is prime time for winter weather and preparedness is key.  Help your family stay safe during a winter storm with tips from the American Red Cross.  One recommendation is having a supply kit on hand that includes such items as:

·         Water – at least a 3-day supply; one gallon per person per day

·         Food – at least a 3-day supply of non-perishable, easy-to-prepare food

·         Flashlight

·         Battery-powered or hand-crank radio (NOAA Weather Radio, if possible)

·         Extra batteries

·         First aid kit

·         Medications (7-day supply) and medical items (hearing aids with extra batteries, glasses, contact lenses, syringes, etc.)

·         Baby supplies (bottles, formula, baby food, diapers)

·         Pet supplies (collar, leash, ID, food, carrier, bowl)

·         Sand, rock salt or non-clumping kitty litter to make walkways and steps less slippery

·         Warm coats, gloves or mittens, hats, boots and extra blankets and warm clothing for all household members

For a complete list of suggested supplies and how to remain safe during a winter storm, click here.

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Are You Ready For Flu Season?

Most people experience several bouts of influenza throughout their lifetime. According to the Centers for Disease Control and Prevention (CDC), even otherwise healthy people can get sick enough to require hospitalization from the flu.

The flu is an infection of the respiratory tract that is caused by the influenza virus. It is spread mainly through airborne transmission, when an infected person sneezes, coughs or speaks. A person can infect others one day before having flu symptoms and up to five days after becoming ill.

Flu Symptoms

Influenza is most often associated with the sudden onset of fever, headache, fatigue, muscle aches, congestion, cough and sore throat. Most people recover within a few days to less than two weeks. Occasionally, complications such as pneumonia, bronchitis or other infections can occur.

Prevention

The flu vaccine is your best chance of preventing the illness. Currently, the CDC recommends that anyone over six months of age receive an annual flu shot. Nasal sprays and egg-free vaccines are also available. While there are many different types of flu virus, the shot protects you against the viruses that experts believe will be most common that year.

Doctors highly recommend that those at high risk for flu complications – young children, pregnant women, people with certain chronic conditions (asthma, diabetes, etc.) and those 65 years or older – should get the vaccine each year.

Other tips for preventing the flu include the following:

•     Avoid close contact with people who are sick and stay away from others when you feel under the weather.

•     Cover your mouth and nose when coughing or sneezing. To avoid contaminating your hands, cough or sneeze into the inside of your elbow.

•     Wash your hands often using soap and warm water to protect against germs.

•     Avoid touching your eyes, nose and mouth.

•     Clean and disinfect surfaces that may be contaminated with germs (counter tops, shared phones at work, etc.).

•     Get plenty of sleep, stay physically active and drink plenty of water to keep your immune system strong.

•     Manage your stress and eat a nutritious diet rich in healthy grains, fruits, vegetables and fiber.

If You Get Sick

If you get the flu, stay home from work or school for at least 24 hours after your fever goes away to avoid spreading the illness to others. To ease your symptoms try the following strategies:

•     Stay hydrated and get plenty of rest.

•     Try gargling saltwater made from dissolving ¼ to ½ teaspoon of salt in an 8-ounce glass of warm water to relieve a sore throat.

•     Drink warm liquids, such as tea and chicken noodle soup, and add moisture to the air with a vaporizer or humidifier to help ease congestion.

The flu is usually manageable with rest and over-the-counter medicine. If your symptoms are severe, though, your doctor can prescribe antiviral drugs to help shorten your sick time. Avoid asking your doctor for antibiotics, however, since they only fight bacteria and will be of no use against the flu virus.

Be sure to seek immediate medical attention if you display any of these warning signs:

•     Difficulty breathing or shortness of breath

•     Pain or pressure in chest or abdomen

•     Sudden dizziness

•     Confusion

•     Severe or persistent vomiting

•     Flu-like symptoms that improve but then return with a fever and worse cough

This blog is for informational purposes only and is not intended as medical advice. For further information, please consult a medical professional.

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Health FSA Limit Increases for 2017

The Internal Revenue Service (IRS) announced the dollar limit for flexible spending accounts (FSA) will increase slightly next year.  The amount will increase by $50 to $2,600 for taxable years beginning in 2017.

The ACA imposes a dollar limit on employees’ salary reduction contributions to FSAs offered under cafeteria plans. This dollar limit is indexed for cost-of-living adjustments and may be increased each year.  It also includes annual inflation numbers for 2017 for a number of other tax provisions.

Employers should ensure that their health FSA will not allow employees to make pre-tax contributions in excess of $2,600 next year.  An employer may continue to impose its own health FSA limit, as long as it does not exceed the ACA’s maximum limit for the plan year. This means that an employer may continue to use the 2016 maximum limit ($2,550) for its 2017 plan year.

Per Employee Limit

The health FSA limit applies on an employee-by-employee basis. Each employee may only elect up to $2,600 in salary reductions in 2017, regardless of whether he or she also has family members who benefit from the funds in that FSA. However, each family member who is eligible to participate in his or her own health FSA will have a separate limit. For example, a husband and wife who have their own health FSAs can both make salary reductions of up to $2,600 per year, subject to any lower employer limits.

If an employee participates in multiple cafeteria plans that are maintained by employers under common control, the employee’s total health FSA salary reduction contributions under all of the cafeteria plans are limited to $2,600. However, if an individual has health FSAs through two or more unrelated employers, he or she can make salary reductions of up to $2,600 under each employer's health FSA.

Salary Reduction Contributions

The ACA imposes the $2,600 limit on health FSA salary reduction contributions. Non-elective employer contributions to health FSAs (for example, matching contributions or flex credits) generally do not count toward the ACA’s dollar limit. However, if employees are allowed to elect to receive the employer contributions in cash or as a taxable benefit, then the contributions will be treated as salary reductions and will count toward the ACA’s dollar limit.

In addition, the limit does not impact contributions under other employer-provided coverage. For example, employee salary reduction contributions to an FSA for dependent care assistance or adoption care assistance are not affected by the health FSA limit. The limit also does not apply to salary reduction contributions to a cafeteria plan that are used to pay for an employee’s share of health coverage premiums, to contributions to a health savings account (HSA) or to amounts made available by an employer under a health reimbursement arrangement (HRA).

Grace Period/Carry-over Feature

A cafeteria plan may include a grace period of up to two months and 15 days immediately following the end of a plan year. If a plan includes a grace period, an employee may use amounts remaining from the previous plan year, including any amounts remaining in a health FSA, to pay for expenses incurred for certain qualified benefits during the grace period. If a health FSA is subject to a grace period, unused salary reduction contributions that are carried over into the grace period do not count against the $2,600 limit applicable to the following plan year.

Also, if a health FSA does not include a grace period, it may allow participants to carry over up to $500 of unused funds into the next plan year. This is an exception to the “use-it-or-lose-it” rule that generally prohibits any contributions or benefits under a health FSA from being used in a following plan year or period of coverage. A health FSA carryover does not affect the limit on salary reduction contributions. This means the plan may allow the individual to elect up to $2,600 in salary reductions in addition to the $500 that may be carried over.

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Draft Forms for 2016 ACA Reporting Released

You made it through the first round of Affordable Care Act (ACA) reporting. Now are you ready for the revised forms for Internal Revenue Code Sections 6055 and 6056?

The Internal Revenue Service (IRS) released the 2016 draft forms with a few revisions.  Draft instructions for the 2016 forms have not yet been released.

- Forms 1094-B and 1095-B (released on June 22, 2016) are to be used by entities reporting under Section 6055, including self-insured plan sponsors that are not applicable large employers (ALEs).

- Forms 1094-C and 1095-C (released on July 7, 2016) are to be used by ALEs to report under Section 6056, as well as for combined Section 6055 and 6056 reporting by ALEs who sponsor self-insured plans.

Keep in mind that these 2016 forms are draft versions only, and should not be filed with the IRS or relied upon for filing. The IRS may make changes prior to releasing final 2016 versions.

Forms generally must be filed with the IRS no later than Feb. 28 (March 31, if filed electronically) of the year following the calendar year to which the return relates. The individual statements generally are due on or before Jan. 31 of the year immediately following the calendar year to which the statements relate. However, the deadlines for filing and furnishing forms for 2015 were extended several months.

2016 Draft Forms

The 2016 draft forms are largely unchanged from the 2015 versions. However, the following minor changes were included in the 2016 draft versions. This is just a general overview of the larger revisions; the 2016 drafts forms also include several minor changes and clarifications.

Additional “Offer of Coverage” Codes

The Form 1095-C includes “Offer of Coverage” codes (Code Series 1), which specify the type of coverage, if any, offered by the employer to an employee, the employee’s spouse and the employee’s dependent(s). The IRS previously stated that they intended to include additional codes in 2016 and beyond, which an employer would use, if applicable, to indicate that the employer’s offer of coverage to an employee’s spouse is a conditional offer (for example, an offer of coverage that is available to a spouse only if the spouse certifies that he or she does not have access to health coverage from another employer).

As a result, the 2016 draft Form 1095-C includes the following two additional “Offer of Coverage” codes:

- Code 1J can be used if: (1) minimum essential coverage providing minimum value was offered to the employee; (2) minimum essential coverage was conditionally offered to the employee’s spouse; and (3) minimum essential coverage was not offered to the employee’s dependent(s).

- Code 1K can be used if: (1) minimum essential coverage providing minimum value was offered to the employee; (2) minimum essential coverage was conditionally offered to the employee’s spouse; and (3) minimum essential coverage was offered to the employee’s dependent(s).

Plan Start Month

The 2015 Form 1095-C included a “Plan Start Month” box, which was optional for 2015, but was expected to be required for 2016 and beyond. However, the 2016 draft Form 1095-C provides that the “Plan Start Month” box will remain optional on the 2016 Form 1095-C. As a result, for 2016, ALEs can choose to:

- Add this field and provide plan year information;

- Add this field and enter “00”; or

- Leave this new field out (thus using the 2015 format).

To provide plan year information in the “Plan Start Month” box, employers should enter the two-digit number (01 through 12) indicating the calendar month during which the plan year begins of the health plan in which the employee is offered coverage (or would be offered coverage, if the employee were eligible to participate in the plan). For example, an employer would enter “01” for a calendar-year plan.

If more than one plan year could apply (for instance, if the employer changes the plan year during the year), enter the earliest applicable month. If no coverage is offered to the employee, enter “00”.

Reserved Fields Relating to 2015 Transition Relief

For reporting under Section 6056, a transition relief rule was available in 2015 under the Qualifying Offer Method (an alternative method of reporting). An ALE that was eligible for this transition relief was required to:

- Certify by checking Box B on Line 22 of Form 1094-C that the employer is eligible for, and is using, the Qualifying Offer Method Transition Relief for 2015; and

- Use the “Offer of Coverage” Code 1A on Line 14 of Form 1095-C for each employee for any months in which the employer was eligible for the transition relief.

However, the Qualifying Offer Method Transition Relief rule was only available for 2015 offers of coverage. As a result, the 2016 draft Form 1094-C reserved Box B, making it unavailable for employers in 2016. In addition, the 2016 draft Form 1095-C reserved Code 1I for 2016.

This blog is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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Medicare Part D Notices Are Due by Oct. 14, 2016

OVERVIEW

Each year, Medicare Part D requires group health plan sponsors to disclose to individuals who are eligible for Medicare Part D and to the Centers for Medicare and Medicaid Services (CMS) whether the health plan’s prescription drug coverage is creditable. Plan sponsors must provide the annual disclosure notice to Medicare-eligible individuals before Oct. 15, 2016—the start date of the annual enrollment period for Medicare Part D. CMS has provided model disclosure notices for employers to use.

This notice is important because Medicare beneficiaries who are not covered by creditable prescription drug coverage and who choose not to enroll in Medicare Part D when first eligible will likely pay higher premiums if they enroll at a later date. Thus, although there are no specific penalties associated with this notice requirement, failing to provide the notice may trigger adverse employee relations issues.

ACTION STEPS

Employers should confirm whether their health plans’ prescription drug coverage is creditable or non-creditable and prepare to send their Medicare Part D disclosure notices by Oct. 14, 2016. To make the process easier, employers who send out open enrollment packets prior to Oct. 15 often include the Medicare Part D notices in these packets.

Creditable Coverage

A group health plan’s prescription drug coverage is considered creditable if its actuarial value equals or exceeds the actuarial value of standard Medicare Part D prescription drug coverage. In general, this actuarial determination measures whether the expected amount of paid claims under the group health plan’s prescription drug coverage is at least as much as the expected amount of paid claims under the Medicare Part D prescription drug benefit.

For plans that have multiple benefit options (for example, PPO, HDHP and HMO), the creditable coverage test must be applied separately for each benefit option.

Model Notices

CMS has provided two model notices for employers to use:

A Model Creditable Coverage Disclosure Notice for when the health plan’s prescription drug coverage is creditable; and

A Model Non-creditable Coverage Disclosure Notice for when the health plan’s prescription drug coverage is not creditable.

These model notices are also available in Spanish on CMS’ website.

Employers are not required to use the model notices from CMS. However, if the model language is not used, a plan sponsor’s notices must include certain information, including a disclosure about whether the plan’s coverage is creditable and explanations of the meaning of creditable coverage and why creditable coverage is important.

Notice Recipients

The creditable coverage disclosure notice must be provided to Medicare Part D eligible individuals who are covered by, or who apply for, the health plan’s prescription drug coverage. An individual is eligible for Medicare Part D if he or she:

Is entitled to Medicare Part A or is enrolled in Medicare Part B; and

Lives in the service area of a Medicare Part D plan.

In general, an individual becomes entitled to Medicare Part A when he or she actually has Part A coverage, and not simply when he or she is first eligible. Medicare Part D eligible individuals may include active employees, disabled employees, COBRA participants and retirees, as well as their covered spouses and dependents.  

As a practical matter, group health plan sponsors often provide the creditable coverage disclosure notices to all plan participants.

Timing of Notices

At a minimum, creditable coverage disclosure notices must be provided at the following times:

1- Prior  to the Medicare Part D annual coordinated election period—beginning Oct. 15  through Dec. 7 of each year

2- Prior  to an individual’s initial enrollment period for Part D

3- Prior  to the effective date of coverage for any Medicare-eligible individual who  joins the plan

4- Whenever  prescription drug coverage ends or changes so that it is no longer creditable  or becomes creditable

5- Upon  a beneficiary’s request

If the creditable coverage disclosure notice is provided to all plan participants annually, before Oct. 15 of each year, items (1) and (2) above will be satisfied. “Prior to,” as used above, means the individual must have been provided with the notice within the past 12 months. In addition to providing the notice each year before Oct. 15, plan sponsors should consider including the notice in plan enrollment materials provided to new hires.

Method of Delivering Notices

Plan sponsors have flexibility in how they must provide their creditable coverage disclosure notices. The disclosure notices can be provided separately, or if certain conditions are met, they can be provided with other plan participant materials, like for example, annual open enrollment materials. The notices can also be sent electronically in some instances.

As a general rule, a single disclosure notice may be provided to the covered Medicare beneficiary and all of his or her Medicare Part D eligible dependents covered under the same plan. However, if it is known that any spouse or dependent who is eligible for Medicare Part D lives at a different address than where the participant materials were mailed, a separate notice must be provided to the Medicare-eligible spouse or dependent residing at a different address.

Electronic Delivery

Creditable coverage disclosure notices may be sent electronically under certain circumstances. CMS has issued guidance indicating that health plan sponsors may use the electronic disclosure standards under Department of Labor (DOL) regulations in order to send the creditable coverage disclosure notices electronically. According to CMS, these regulations allow a plan sponsor to provide a creditable coverage disclosure notice electronically to plan participants who have the ability to access electronic documents at their regular place of work, if they have access to the sponsor's electronic information system on a daily basis as part of their work duties.

The DOL’s regulations for electronic delivery require that:

The plan administrator use appropriate and reasonable means to ensure that the system for furnishing documents results in actual receipt of transmitted information;

Notice is provided to each recipient, at the time the electronic document is furnished, of the significance of the document; and

A paper version of the document is available on request.

Also, if a plan sponsor uses electronic delivery, the sponsor must inform the plan participant that the participant is responsible for providing a copy of the electronic disclosure to their Medicare-eligible dependents covered under the group health plan.

In addition, the guidance from CMS indicates that a plan sponsor may provide a disclosure notice electronically to retirees if the Medicare-eligible individual has indicated to the sponsor that he or she has adequate access to electronic information. According to CMS, before individuals agree to receive their information via electronic means, they must be informed of their right to obtain a paper version, how to withdraw their consent and update address information, and any hardware or software requirement to access and retain the creditable coverage disclosure notice.

If the individual consents to an electronic transfer of the notice, a valid email address must be provided to the plan sponsor and the consent from the individual must be submitted electronically to the plan sponsor. According to CMS, this ensures the individual’s ability to access the information as well as ensures that the system for furnishing these documents results in actual receipt. In addition to having the disclosure notice sent to the individual’s email address, the notice (except for personalized notices) must be posted on the plan sponsor’s website, if applicable, with a link on the sponsor’s home page to the disclosure notice.

Disclosure to CMS

Plan sponsors are also required to disclose to CMS whether their prescription drug coverage is creditable. The disclosure must be made to CMS on an annual basis, or upon any change that affects whether the coverage is creditable. At a minimum, the CMS creditable coverage disclosure notice must be provided at the following times:

Within 60 days after the beginning date of the plan year for which the entity is providing the form;

Within 30 days after the termination of the prescription drug plan; and  

Within 30 days after any change in the creditable coverage status of the prescription drug plan.

Plan sponsors are required to provide the disclosure notice to CMS through completion of the disclosure form on the CMS Creditable Coverage Disclosure web page. This is the sole method for compliance with the CMS disclosure requirement, unless a specific exception applies.

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Getting Your Zzzs

As employees struggle to balance work, family and social obligations, one thing that is often neglected is sleep. The Centers for Disease Control and Prevention recommends that adults get seven to eight hours of sleep on average; however, most Americans fail to meet this recommendation.

According to a study from Virgin Pulse, 76 percent of employees reported feeling tired most days of the week. Fatigue and exhaustion can be a serious problem for your business. Fatigued employees are less likely to be productive and focused on the job. This lack of focus can lead to more mistakes, procrastination and a negative work environment.

Increased Health Care Costs

Fatigue can also lead to increased medical costs. Exhausted employees are more likely to miss work and incur medical costs for conditions related to high blood pressure, cholesterol and stress. In addition, fatigued employees are more likely to have an accident at work, which can lead to more workers’ compensation claims.

Individuals with undiagnosed or poorly managed sleep disorders can also take a toll on your company’s bottom line. A study from Harvard Medical School found that one employee with insomnia results in 11 lost days of productivity each year – costing the U.S. economy $63.2 billion a year. Other common sleep disorders include sleep apnea and restless leg syndrome, both of which can interfere with employees’ ability to go to work well-rested.

A Better Night’s Sleep

Below are four strategies to help employees get a better night’s sleep.

Allowing flexible scheduling: Flexible scheduling requires     employees to be available within core hours during the day, but allows     them to vary their start and end times. This allows employees to better manage their work, family and personal obligations, and find more time for sleep in their daily routines.

Allowing telecommuting: Allowing employees to work remotely can be a great way to promote a healthier sleep cycle. If your company is located in a city, this may be especially valuable, as employees will likely have longer and more stressful commutes. Instead of spending 30 minutes in the car, employees can spend this extra time sleeping so     they are refreshed when they begin their day.

Hiring temporary help during high workloads: High workloads can stress out employees and make them feel like they should stay later at the office. While output may increase, employees are much more likely to make costly mistakes when they are overworked and tired. If workloads are high, consider hiring temporary employees to alleviate stress and make workloads more manageable.

Offering screening and education: Consider offering screening for     sleep disorders at your health fair or as part of your workplace wellness program. In addition, consider providing educational articles about the importance of sleep and how employees can improve their sleep. By identifying those who may be at risk of having a sleeping disorder and     providing education, you can help reduce employee fatigue.

In Summary

The strategies above may not be conducive to every office. When evaluating these options, it is important to evaluate your workplace environment and the needs of your employees. Consider surveying employees about their current workloads and sleep habits to see what strategies may resonate most with your employees. Ask employees to rank or provide input on how valuable they would find telecommuting and flexible scheduling. Monitoring these programs will be key to ensuring they produce a healthy return on investment.

This blog is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for appropriate advice. 

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Obtaining Health Insurance After A Job Loss

A sense of distress may be the first feeling that you experience after a job loss. You may worry about making ends meet, finding a new job and remaining insured. While all of these fears are perfectly normal, you should take proactive steps to alleviate these issues.

Specifically, there are many things you can do to obtain new health coverage or maintain your current health insurance. This will protect you and your family if you get sick, need medication or have to visit the doctor while unemployed.

Though it is perfectly natural to worry about finding adequate insurance after a job loss, there are many options available. For example:

Obtaining coverage from your spouse or domestic partner’s employer. If your spouse or domestic partner’s insurance plan is open to family members, you may be able to join now that you no longer have insurance through your employer. Under the Health Insurance Portability and Accountability Act (HIPAA), you have 30 days from the time that your former employer stops paying for your insurance to enroll in your spouse or domestic partner’s plan. This rule stands even if your loss of coverage doesn’t occur during an open enrollment period.

Obtaining Individual Health Coverage.  Under the Affordable Care Act (ACA), you can enroll in an individual policy during a special enrollment period if you lose your job-based coverage outside of the normal open enrollment period. You may be eligible for subsidies for reduced premiums, and you could possibly qualify for lower out-of-pocket costs. To obtain the right coverage for you and your family, ask the following questions when shopping around:

o   What will my deductible and out-of-pocket maximum be?

o   What are the copayment amounts and out-of-pocket expenses?

o   What specific benefits are covered under the plan?

o   What prescription drugs are covered under the plan?

o   Will I have to change my health care providers, or use providers that are only in certain networks?

Continuing your current coverage through COBRA. The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives you the right to remain on the health plan that you had with your former employer (COBRA might not always apply if your employer had fewer than 20 employees, or if your employer went out of business). If you are eligible for COBRA benefits, you will receive notice from your former employer, and can enroll within 60 days after receiving the notice.

o   COBRA generally guarantees coverage for 18 months but may be longer depending on your circumstances.

o   Each family member can make a different COBRA election, even if your entire family was once covered under your employer’s health plan. Or, your child(ren) may elect COBRA on your plan and you may find coverage elsewhere.

o   You are responsible for paying the full COBRA premiums, which includes the amount you used to pay while employed, the amount paid by your former employer, and an administrative fee.

Determining if you or any of your family members are eligible for Medicaid, The Children’s Health Insurance Program (CHIP), other state programs or VA coverage.

Medicaid is available for low-income individuals and children, parents with dependent children, permanently disabled individuals or those over 65. Eligibility varies from state to state.

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FAQs: PCORI Fees

The Affordable Care Act requires health insurance issuers and sponsors of self-insured health plans to pay Patient-Centered Outcomes Research Institute Trust Fund (PCORI) fees. 

The following contains frequently asked questions on the PCORI fee.

Q1. What is the PCORI fee?

The Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute (PCORI). The institute will assist (through research, patients, clinicians, purchasers and policymakers) in making informed health decisions by advancing the quality and relevance of evidence-based medicine. The institute will compile and distribute comparative clinical effectiveness research findings.

Q2. When did the PCORI fee go into effect?

The PCORI fee applies to specified health insurance policies (including HRA and FSA plans) with policy years ending after Sept. 30, 2012, and before Oct. 1, 2019, and applicable self-insured health plans with plan years ending after Sept. 30, 2012, and before Oct. 1, 2019.

Q3. How much is the PCORI fee?

The amount of the PCORI fee is equal to the average number of lives covered during the policy year or plan year, multiplied by the applicable dollar amount for the year. The applicable dollar amounts are as follows:

• $1 for policy and plan years ending after Sept. 30, 2012, and before Oct. 1, 2013.

• $2 for policy and plan years ending after Sept. 30, 2013, and before Oct. 1, 2014.

• $2.08 for policy and plan years ending after Sept. 30, 2014, and before Oct. 1, 2015.

• $2.17 for policy and plan years ending after Sept. 30, 2015, and before Oct. 1, 2016.

For policy and plan years ending after Sept. 30, 2016, and before Oct. 1, 2019, the applicable dollar amount is further adjusted to reflect inflation in National Health Expenditures, as determined by the Secretary of Health and Human Services.

Q4. My plan is subject to the PCORI fee, do I need to pay the fee on July 31st?

If your plan year ended on or before Dec. 31, 2015, you are required to pay the PCORI fee.

Q5. When is my PCORI fee due?

The fees are reported and paid annually, due by July 31 of each year, using IRS Form 720, Quarterly Federal Excise Tax Return.

Q6. How does an issuer of a specified health insurance policy or a plan sponsor of an applicable self-insured health plan determine the average number of lives covered under the policy or plan in order to calculate the PCORI fee for the year?

The PCORI fee is imposed on an issuer of a specified health insurance policy and a plan sponsor of an applicable self-insured health plan based on the average number of lives covered under the policy for the policy year or under the plan for the plan year. The PCORI fee final regulations were published on Dec. 6, 2012.

• The final regulations require plan sponsors of applicable health plans to use one of three alternative methods —the actual count method, the snapshot method or the Form 5500 method—to determine the average number of lives covered under the applicable self-insured health plan for a plan year.

The final regulations explain the available methods in detail.

Q7. Which individuals are taken into account for determining the lives covered under a specified health insurance policy or applicable self-insured health plan?

Generally, all individuals who are covered during the policy year or plan year must be counted when computing the average number of lives covered for that year. Thus, for example, an applicable self-insured health plan must count an employee and his dependent child as two separate covered lives, unless the plan is a health reimbursement arrangement (HRA) or flexible spending arrangement (FSA).

Q8. If an employer provides COBRA coverage or otherwise provides coverage to its retirees or other former employees, do covered individuals (and their beneficiaries) count as “lives covered” for the purpose of calculating the PCORI fee?

Yes. These covered individuals and their beneficiaries must be taken into account when calculating the average number of lives covered.

Q9. Who is responsible for reporting and paying the PCORI fee?

Issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans are responsible for reporting and paying the PCORI fee.

Q10. What form will be used to report and pay the PCORI fee?

Issuers of specified health insurance policies and plan sponsors of applicable self-insured health plans will file Form 720, Quarterly Federal Excise Tax Return, annually to report and pay the PCORI fee. Form 720 was revised to provide for the reporting and payment of the PCORI fee. The Form 720 will be due on July 31 of the year following the last day of the policy year or plan year. Electronic filing is available, but is not required. Payment will be due at the time that the Form 720 is due. Deposits are not required for the PCORI fee.

• Issuers and plan sponsors who are required to pay the PCORI fee but are not required to report any other liabilities on a Form 720 will be required to file a Form 720 only once a year. They will not be required to file a Form 720 for the other quarters of the year.

• Issuers and plan sponsors who are required to pay the PCORI fee as well as other liabilities on a Form 720 will use their Form 720 for the second quarter to report and pay the

PCORI fee that is due July 31. Only one Form 720 should be filed for each quarter.

Q11. What exceptions to the PCORI fee apply?

The PCORI fee does not apply to exempt government programs, including Medicare, Medicaid, Children’s Health Insurance Program (CHIP) and any program established by federal law for providing medical care (other than through insurance policies) to members of the Armed Forces, veterans and members of Indian tribes (as defined in Section 4(d) of the Indian Health Care Improvement Act).

Also, health insurance policies and self-insured plans that provide only excepted benefits (such as plans that offer benefits limited to vision or dental benefits and most FSAs), are not subject to the PCORI fee. Further, health insurance policies or self-insured plans that are limited to employee assistance programs, disease management programs or wellness programs are not subject to the PCORI fee if these programs do not provide significant benefits in the nature of medical care or treatment.

The PCORI fee applies only to policies and plans that cover individuals residing in the United States. Thus, the PCORI fee does not apply to policies and plans that are designed specifically to cover employees who are working and residing outside the United States.

Q12. Are health insurance policies or self-insured health plans for tax-exempt organizations or governmental entities subject to the PCORI fee?

Yes. Unless the health insurance policy or self-insured health plan is an exempt government program described above, the policy or plan is a specified health insurance policy or applicable self-insured health plan subject to the PCORI fee, and, accordingly, the health insurance issuer or plan sponsor is responsible for the PCORI fee.

Q13. When does the PCORI fee expire?

The PCORI fee is effective for policy and plan years ending after Sept. 30, 2012, and before Oct. 1, 2019.

Q14. Does the PCORI fee apply to an applicable self-insured health plan that has a short plan year?

Yes, the PCORI fee applies to a short plan year of an applicable self-insured health plan. A short plan year is a plan year that spans fewer than 12 months, which may occur for a number of reasons. For example, a newly established applicable self-insured health plan that operates using a calendar year has a short plan year as its first year if it was established and began operating beginning on a day other than Jan. 1.

Similarly, a plan that operates with a fiscal plan year experiences a short plan year when its plan year is changed to a calendar year plan year.

Q15. What is the PCORI fee for the short plan year?

The PCORI fee for the short plan year of an applicable self-insured health plan is equal to the average number of lives covered during that plan year multiplied by the applicable dollar amount for that plan year. Thus, for example, the PCORI fee for an applicable self-insured health plan that has a short plan year that starts on April 1, 2013, and ends on Dec. 31, 2013, is equal to the average number of lives covered for April through Dec. 31, 2013, multiplied by $2 (the applicable dollar amount for plan years ending on or after Oct. 1, 2013, but before Oct. 1, 2014).

Q16. What is the PCORI fee due date for the short plan year?

The PCORI fee is due by July 31 of the year following the last day of the plan year (including a short plan year).

Q17. Can a plan sponsor or policy issuer that overpaid the PCORI fee due July 31 reduce the PCORI fee due the following July 31 for the amount of the prior year’s overpayment?

No. Plan sponsors and policy issuers cannot reduce the PCORI fee due July 31 for any overpayment from a prior year. If a plan sponsor or policy issuer overpaid the PCORI fee reported on a previously filed Form 720, it should file Form 720X, Amended Quarterly Federal Excise Tax Return, for an overpayment of a previously filed PCORI liability. Form 720X is available on www.IRS.gov.

Q18. How should corrections to a previously filed Form 720 be made (for example, one that determined a fee using an incorrect applicable dollar amount)?

A plan sponsor or policy issuer should make corrections to a previously filed Form 720 by filing a Form 720X, Amended Quarterly Federal Excise Tax Return, including adjustments that result in an overpayment. Form 720X may be filed anytime within the applicable limitation period. Form 720X is available on www.IRS.gov.

Q19. I’m still confused as to if our plans are subject to the PCORI fee. Are there any other resources available?

We’re here to help! Contact your BenefitsTexas representative today.

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Wellness Rules Finalized Under ADA and GINA

On May 16, 2016, the Equal Employment Opportunity Commission (EEOC) issued final rules that describe how the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) apply to employer-sponsored wellness programs.

The final ADA rule provides guidance on the extent to which employers may offer incentives to employees to participate in wellness programs that ask them to answer disability-related questions or to undergo medical examinations.

 The final GINA rule clarifies that an employer may offer a limited incentive to an employee whose spouse provides information about his or her current or past health status as part of the employer’s wellness program.

  The final rules provide much needed guidance for employers on how to structure employee wellness programs without violating the ADA and GINA. Most importantly, the final ADA rule provides guidance on the extent to which employers may offer incentives to employees to participate in wellness programs that ask them to answer disability-related questions or undergo medical examinations.

  The final ADA rule does not apply to wellness programs that do not obtain medical information but simply require employees to engage in an activity (such as walking a certain amount every week) in order to earn an incentive. However, employers must provide reasonable accommodations to allow employees with disabilities to earn the incentive.

  Also, the final GINA rule clarifies that an employer may offer a limited incentive for an employee's spouse to provide information about the spouse's current or past health status as part of a voluntary wellness program.

The provisions of the final rules related to the incentive limits and the ADA notice requirement will apply only prospectively to employer-sponsored wellness programs as of the first day of the first plan year that begins on or after Jan. 1, 2017, for the health plan used to determine the level of inducement. According to the EEOC, other wellness program provisions (such as the reasonable design and confidentiality requirements) are clarifications of existing obligations.

  Incentives

The final ADA rule provides that incentives offered to an employee who answers disability-related questions or undergoes medical examinations as part of a wellness program are limited to the following:

When the wellness program is available only to employees who are enrolled in a specific group health plan, the incentive may not exceed 30 percent of the total cost for self-only coverage of the health plan in which the employee is enrolled.

 When an employer offers only one group health plan, and does not require employees to be enrolled in the health plan in order to participate in the wellness program, the incentive may not exceed 30 percent of the total cost for self-only coverage under the health plan.

 When an employer offers more than one group health plan, and does not require employees to be enrolled in a health plan in order to participate in the wellness program, the incentive may not exceed 30 percent of the total cost of the lowest cost self-only coverage under a major medical group health plan offered by the employer.

 When an employer does not offer a group health plan, and offers a wellness program that is open to employees, the incentive may not exceed 30 percent of the total cost to a 40-year-old nonsmoker purchasing self-only coverage under the second lowest cost Silver Plan available on the state or federal Exchange in the location that the employer identifies as its principal place of business.

  In addition, the final GINA rule provides that the value of the maximum incentive attributable to a spouse's participation may not exceed 30 percent of the total cost of self-only coverage, which is the same incentive allowed for the employee. Employers may offer children the opportunity to participate in wellness programs, but may not offer inducements in exchange for current or past health status information about children. Inducements in exchange for genetic information about spouses and children (such as a spouse's or child's family medical history) are also prohibited.

  Voluntary Programs

In order for participation to be considered voluntary under the ADA, an employer:

May not require participation;

 May not deny access to health insurance or benefits to an employee who does not participate;

 May not retaliate against, interfere with, coerce, intimidate or threaten any employee who does not participate or who fails to achieve certain health outcomes;

 Must provide a notice that explains the medical information that will be obtained, how it will be used, who will receive it and the restrictions on disclosure; and

 Must comply with the incentive limits described in the final rule.

  Program Design

The ADA and GINA rules seek to ensure that wellness programs actually promote good health and are not just used to collect or sell sensitive medical information about employees and family members or to impermissibly shift health insurance costs to them. Both rules require wellness programs to be reasonably designed to promote health and prevent disease.

  Confidentiality

Both rules state that information from wellness programs may be disclosed to employers only in aggregate terms.

The ADA rule requires that employers give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential.

 GINA includes statutory notice and consent provisions for health and genetic services provided to employees and their family members.

  Both rules prohibit employers from requiring employees or their family members to agree to the sale, exchange, transfer, or other disclosure of their health information in order to participate in a wellness program or to receive an incentive.

  This blog is not intended to be exhaustive and should not be construed as legal advice.  Contact legal counsel for legal advice.

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Keeping Employees Healthy

Most wellness efforts stress the importance of helping your employees get into shape, eat right, exercise and stop smoking. But, it is equally important to support and encourage employees who already lead a healthy lifestyle.

You can take several steps to implement policies and promote behaviors that encourage and support already-healthy employees.  Below are a few ideas:

Create an environment that promotes physical activity during the workday.

Recommend that employees take three minutes out of every hour to stand up and stretch. Research shows that even individuals who regularly exercise cannot completely counteract the negative health effects of sitting for several hours every day.

Consider offering discounted memberships to local health clubs.

Designate a "fitness champion" who will partner with your HR administrator to create a company wide fitness challenge.

Encourage employees to fit in some exercise during their lunch break, whether it’s on-site, at a local gym or outside.

Provide pedometers to employees and encourage them to reach a certain number of steps each day or week. You could also start an informal competition for who can log the most steps in a designated amount of time.

 Offer healthy food in the workplace to support health-conscious employees.

Provide healthy food options during meetings and work-sponsored events. Even if a less-healthy food such as pizza is more popular, consider at least offering salad or vegetable options as well.

Compile a list for your employees of local restaurants and delivery places that offer healthy choices. Keep the menus in the break room.

Make modifications and upgrades to your employees’ workstations to create a more ergonomic environment.

Conduct workstation assessments to learn more about each employee’s working environment. Then, take steps to improve their workstations to fit their individual needs.

Give employees the option of using an exercise ball instead of (or in addition to) a regular desk chair.

If you have a larger budget, or already need to replace or add workstations, consider installing standing desks and similar options that allow and encourage a less sedentary workday.

Not sure where to start? Contact BenefitsTexas and we will help you put a plan together to meet your needs.