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ER Individual Pay Reminder 9-30-2015

Important Reminder for Employers who help pay employees individual health insurance premiums

The Affordable Care Act specifically prohibits you from paying insurance premiums for your employees’ individual health plans.  It makes no difference whether paid with pre or post tax dollars. The fine is stiff:  $100 per employee per day.  See IRS Notice 2013-54 & FAQ 4.16.15; DOL Notice 2013-13 & FAQ 11.6.14. The IRS provided “Transition Relief” to all small employers who had these types of payment arrangements from January 1, 2015 -June 30, 2015.  The relief has now ended.

What can you do now to comply with this provision of ACA?

  1. Provide group health insurance.  Premiums are a tax deductible business expense and non includable as taxable wages to your employees.
  2. Grossing up taxable wages is generally allowed.  This is an expensive solution for both you and your staff due to the extra taxes due.  This solution cannot be tied to the health plan and employees do not have to use the wage increase for insurance premiums.

 

Employer Medicare Reimbursements 9-30-2015

Can I reimburse my employees for their Medicare Premiums?

The quick answer is Yes ~ BUT ONLY IF you have two or more employees on Medicare, PLUS a Group Insurance plan for your employees.  See the details and four conditions below.  Call me if you want to review.  Be very careful ~ Transition Relief has ended.  The IRS penalties are stiff under the Affordable Care Act.  ~ Carolyn

Medicare Premium Reimbursement Arrangements for Employers

An arrangement under which an employer reimburses (or pays directly) some or all of Medicare Part B or Part D premiums for employees constitutes an employer payment plan, and if such an arrangement covers two or more active employees, is a group health plan subject to the market reforms.

Small Employer Transition Relief Extends to Medicare Premiums

An excise tax will not be asserted for any failure to satisfy the ACA's market reforms by employer payment plans sponsored by small employers that pay, or reimburse employees for Medicare Part B or Part D premiums:

  1. For 2014, for employers that qualify as small employers for 2014; and
  2. For January 1 through June 30, 2015, for employers that qualify as small employers for 2015.

After June 30, 2015, such employers may be liable for the excise tax. Eligible employers are not required to file IRS Form 8928 (regarding failures to satisfy requirements for group health plans, including the ACA's market reforms) solely as a result of having these employer payment plans for the time periods above.

Medicare Premium Reimbursement Arrangements May Be Integrated With Other Group Health Plan Coverage to Satisfy the ACA's Requirements

An employer payment plan may not be integrated with Medicare coverage to satisfy the market reforms because Medicare coverage is not a group health plan. However, an employer payment plan that pays for or reimburses Medicare Part B or Part D premiums may be integrated with another group health plan offered by the employer to satisfy the annual dollar limit prohibition and preventive services requirements if:

  1. The employer offers a group health plan (other than the employer payment plan) to the employee that does not consist solely of excepted benefits and offers coverage providing minimum value;
  2. The employee participating in the employer payment plan is actually enrolled in Medicare Parts A and B;
  3. The employer payment plan is available only to employees who are enrolled in Medicare Part A and Part B or Part D; and
  4. The employer payment plan is limited to reimbursement of Medicare Part B or Part D premiums and excepted benefits, including Medigap premiums.

Note: To the extent such an arrangement is available to active employees, it may be subject to restrictions under other laws such as the Medicare secondary payer provisions.

Medicare Premium Reimbursements & Federal Nondiscrimination Laws

According to an informal discussion letter from the U.S. Equal Employment Opportunity Commission (EEOC), giving eligible employees a choice between remaining on employer-provided group health insurance or receiving employer-provided payment of Medicare Part B premiums generally would not constitute an impermissible adverse action against older workers under the Age Discrimination in Employment Act (ADEA) if it creates an advantageous option available only to them.

Whether a specific plan provides advantageous options, or imposes an adverse action, is dependent on the facts and circumstances. (Note: Under the specific facts addressed in the letter, employees were also required to provide written acknowledgement that they had reviewed both options and had voluntarily chosen to withdraw from employer-provided group health insurance.)

If the Medicare Part B reimbursement plan were to create an adverse action for older workers, it would be lawful only if it met an ADEA exemption or defense. A further discussion of exemptions and defenses is available in the letter. The letter is not a formal opinion and does not address Medicare or federal tax issues.

 

Individual Reporting Requirements 8-26-2015

Q. What happens if I did not file a 2014 federal tax return to reconcile my advance payment of the premium tax credit, or APTC. What do I need to do?
A. To keep their APTC and/or cost-sharing subsidy (CSR) for 2016, if you received APTC in 2014 you are required to file a 2014 federal tax return with Form 8962, Premium Tax Credit. If you don’t do this, you lose your subsidy and will have to pay the full cost of their monthly health insurance premiums for the 2016 plan year. Also, the IRS may contact you to pay back some or all of their 2014 APTC.

What you need to do if you received APTC in 2014:
• Electronically file your 2014 tax return with Form 8962 as soon as possible, even if you don’t normally have to file. To avoid a gap in APTC, you should file by the end of August.
• Use the Form 1095-A that you received from the Marketplace to complete Form 8962.
• If one nees a copy of Form 1095-A, they can log into their HealthCare.gov or state Marketplace account or call their Marketplace call center. (For FFM/HealthCare.gov number is 1-800-318-2596. For list of state marketplace contact numbers, see http://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/The-Health-Insurance-Marketplace.)

Q. Where can I go if I need help filing their tax returns?
A. For more information on filing a 2014 tax return with Form 8962, you may visit IRS.gov/aca , call the IRS at 1-800-829-0922 or can contact your tax advisor.

Q. What happens if you received advance payments of the Premium Tax Credit in 2014 and don’t file a 2014 tax return or Form 8962?
A. You will not be eligible for advance payments of the premium tax credit (APTC) or cost-sharing reductions (CSRs) to help pay for their Marketplace health insurance coverage in 2016. This means you will be responsible for the full cost of the monthly premiums and all covered services. In addition, the IRS may contact you to pay back some or all of the APTC received for the 2014 plan year.

Q. How do I update and make changes to income, household or coverage to the Marketplace?
A. Keep in mind that once you  have Marketplace health insurance, federal rules require you to report changes to your income, household, address and health coverage eligibility to the Federal Marketplace as soon as possible. These updates may change the coverage or savings you are eligible for in the Marketplace. To update your income, family and other information, go to https://www.healthcare.gov/reporting-changes or call the Federal Marketplace 1-800-318-2596

New IRS reporting requirements for Applicable Large Employers (ALE) under the Affordable Care Act (ACA) 6.22.15

If you are an “Applicable Large Employer” with over 50 full time employees (including full time equivalents) you will be required to complete certain new IRS forms in early 2016 to be distributed to each employee by January 31st and submitted to the IRS by February 29, 2016, or March 31, 2016, if filing electronically.

Form 1095-C must be distributed to each employee and 1094C is submitted to the IRS. The IRS released drafts of the two required forms on June 16th so you have an idea of what will be required.

Here is the IRS link for instructions: http://www.irs.gov/instructions/i109495c/ar01.html#d0e221

See below for a couple of excepts from the IRS instruction guide:

Purpose of Form

Employers with 50 or more full-time employees (including full-time equivalent employees) use Forms 1094-C and 1095-C to report the information required under sections 6055 and 6056 about offers of health coverage and enrollment in health coverage for their employees. Form 1094-C must be used to report to the IRS summary information for each employer and to transmit Forms 1095-C to the IRS. Form 1095-C is used to report information about each employee. In addition, Forms 1094-C and 1095-C are used in determining whether an employer owes a payment under the employer shared responsibility provisions under section 4980H. Form 1095-C is also used in determining the eligibility of employees for the premium tax credit. Employers that offer employer-sponsored self-insured coverage also use Form 1095-C to report information to the IRS and to employees about individuals who have minimum essential coverage under the employer plan and therefore are not liable for the individual shared responsibility payment for the months that they are covered under the plan.

Who Must File

An employer subject to the employer shared responsibility provisions under section 4980H must file one or more Forms 1094-C (including a Form 1094-C designated as the Authoritative Transmittal, whether or not filing multiple Forms 1094-C), and must file a Form 1095-C (or a substitute form) for each employee who was a full-time employee of the employer for any month of the calendar year. Generally, the employer is required to furnish a copy of the Form 1095-C to the employee.

Hope this info helps you prepare for this new IRS requirement under the Affordable Care Act.

Update on Newest Change for Business Group Renewals 7.7.14

After more than four years of working on Healthcare Reform, one might expect the chaos to have settled down a bit. Unfortunately, the ambiguities of ACA (Affordable Care Act) and the Obama Administration’s shifting deadlines have extended and exacerbated the upheaval.

Some of this upheaval has resulted in good news for many of you. One of the shifting deadlines allowed you to keep your current pre-ACA group health insurance plan through 2014 and gave us all a chance to “let the dust settle” a little before being forced into the new ACA plans. (If you remember, everyone was going to have to go onto the new plans at renewal in 2014.)

Now, the newest shift in deadlines has just occurred and will allow many groups to keep your same current pre-ACA plan for yet another year ~ until your 2015 renewal!

Of course, upon receiving your upcoming renewal we will check your renewal against the new ACA plans to see what will be best and then make recommendations to you based upon the results.

I just wanted to give you a head’s up on what will be coming your way on this upcoming renewal so you will know ahead of time what to expect.

Thank you for letting Pope Insurance service your employee benefits plans. As always, it is our pleasure to take care of you and your employees.

Health Care Reform Update for Employers 6.3.14

One time Opportunity for Current Federal COBRA Enrollees to Move to New ACA Plan

The Department of Health and Human Services has provided a one-time-only Special Enrollment Period available until July 1, 2014, for individuals currently enrolled in a COBRA plan. This allows COBRA enrollees to move to a consumer market ACA plan and drop their COBRA coverage.

If you have any Florida employees who might benefit from this, have them contact me for help. This is a very small window of opportunity and may save them quite a bit of premium. If they are eligible for a subsidy, I will be able to help them with that, also.

Health Care Reform Update for Employers 5.27.14

Important News You Can Use:

On May 16, 2014, the Internal Revenue Service (IRS) issued a FAQ clarifying that it is illegal for an employer to pay for individual health coverage for employees inside or outside of the Marketplace with pre-tax dollars despite those who claim there are loopholes available that make such offerings permissible.

The IRS FAQ specifically clarifies that an employer who offers such an arrangement will be subject to an excise tax of $100 per day or $36,500 per year per employee.

A webinar last week by the law firm of Alston & Bird, LLT, put on at the request of our national professional association NAHU, scared me enough that I want to let all of you know that even if an employer raises the taxable wages of an employee to cover the cost of an individual plan with after tax dollars, the employer should not implicitly or explicitly indicate that the wage increase is attached to the health plan in any way, shape, or form. IRS is very serious about this.

So, please be aware of communications you may receive indicating you can avoid providing group coverage and save premium costs by sending your employees to purchase an individual plan and pay for their premiums on a pre-tax arrangement: health reimbursement account, medical reimbursement account, or some such thing. IRS is very explicit that this not allowed, and the fines are quite hefty.

~ Carolyn

For detailed information see: IRS Notice 2013-54 and the IRS May 16th FAQ. DOL has issued a notice in substantially identical form to Notice 2013-54, DOL Technical Release 2013-0, and HHS will shortly issue guidance to reflect that it concurs with Notice 2013-54. On Jan. 24, 2013, DOL and HHS issued FAQs that addressed the application of the Affordable Care Act to HRAs.

Health Care Reform Update 2.7.14

You are still required by law to have insurance this year.

You can only purchase ACA compliant health plans until March 31.

You do NOT have to go through the Federal Marketplace to purchase health insurance.

Read More:

Well, what a rocky start to our new health care system thus far!!
The marketplace website did not work properly; the employer mandate has been postponed for one year; some small groups will be allowed to keep their plans for another year and some will not….and, today there is discussion of postponing the individual mandate for THREE years!!! In addition, because the back end of the Marketplace, which processes premiums and subsidies, is still in the process of being built, some clients we enrolled in the Federal Marketplace in January are having difficulty paying their premiums! I could go on... but, I won’t!

These many problems yield great public confusion. The public is extremely confused about the law and how it is actually being implemented.

What should you do with this confusion? First, call us ~ we will be happy to advise you. And, here is some info for you to use: If you work and have group insurance provided through your employer, you can most likely rely on your employer to keep your plan compliant. If you purchase your own insurance, the current law is still in place and you are required to have a compliant Affordable Care Act plan with the 10 minimum essential benefits this year. So, as of today, you are still required by law to have insurance this year.

You can only purchase ACA compliant health plans until March 31st. Otherwise, you must wait until next open enrollment (October to December) to purchase a plan for January 1, 2015 unless you have a qualifying event or special exception during the year. The penalty for not having insurance this year is $95 per adult; half for each child; or, 1 % of your income ~ whichever is greater.

You do NOT have to go through the Federal Marketplace to purchase health insurance. You may go directly to the insurance company as you always have done. The Marketplace is for those who qualify for a subsidy. I am certified to help you both on and off of the marketplace.

Call us for help with your questions. This is all very confusing and we are daily helping people find the best value for the premium dollar ~~~ Carolyn

Health Care Reform Update 8.12.13

By now, we all know that most everyone must comply with the new PPACA law beginning January 1, 2014. Although the tax penalties have been delayed until January 1, 2015 for groups with 50+ employees, these large groups are still expected to comply with the law in 2014.

WHAT TO EXPECT FOR INDIVIDUALS AND GROUPS:

If you have a Grandfathered Plan, a plan purchased prior to March 23, 2010, and you have made very minor or no changes to it, you may keep your plan as it is and it will not be subject to many of the requirements under the new law.

If your plan began after March 23, 2010, you must comply with, and are subject to, the new requirements under the PPACA law on your renewal date in 2014 beginning with January renewals. You must purchase a PPACA compliant plan or be penalized.

IMPORTANT NEW FEDERAL REQUIREMENT FOR EMPLOYERS:

By October 1, 2013, you will be required to distribute a notice to your employees called New Health Insurance Marketplace Coverage Options and Your Health Coverage. This notice must be given to all of your employees (including part time). The purpose of this notice is to let all of your employees know about the Federally Facilitated Exchange, called "The Health Insurance Marketplace".

Health Care Reform Update 8.12.13 ~~ from Carolyn L. Pope

Health Care Reform Update 6.21.13

The new Federal Exchange Marketplace, which will be operating in Florida effective January 1, 2014, is still on target to open for business 10.1.13 for effective dates of 1.1.14. The open enrollment period this first year will be from October 1, 2013 to March 31, 2014. Thereafter, it will be from October 1st to December 7th of each year for an effective date of January 1st.

Remember, groups with less than 50 full time equivalent employees are NOT subject to the tax penalties associated with larger (50+) employer groups. And, although there are many required group insurance changes for you and your employees, most of those changes whether you are a large or small group, will not take place until your 2014 renewal.

Due to the great confusion surrounding how the exchanges will actually work, some insurance carriers will be offering groups who renew the first six months of next year (2014) an opportunity to renew early at the end of this year (2013). This will carry you through for almost 12 months, and into 2014 before the law would really affect you. This will give time for the proverbial dust to settle.

Lots more to come! Rules are still being written and open for public comment. We just had a 253 page set of rules on the Exchanges published in the Federal Registry on Tuesday and open to public comment for 30 days.

I am still steadily attending seminars, webinars, reading professional journals, taking professional courses and certifications and am ready for what is to come for all size groups!

Health Care Reform Update 6.21.13 ~~ from Carolyn L Pope

Health Care Reform Update 4.2.13

By now you are beginning to hear a lot more about the new Health Care Reform changes and the Federal Exchange Marketplace effective this coming January, 2014.

What should I do? Since the required group insurance changes will not take place until your 2014 renewal date you can relax for now. As a small group (defined as under 50 employees) the actions required by you in order to comply will be minimal, and, you do not have much to be concerned about right this minute. Be assured, I will help you with comply with the new law.

What are the penalties? Please understand that only groups with 50+ employees are subject to "Pay or Play" along with tax penalties (non-deductible) and the more stringent compliance issues. This is more good news for our small employers.

A couple of mandatory changes coming with your 2014 renewal:

  • Waiting periods for new employees can be no longer than 90 days.
  • Only employees working 30+ hours weekly will be eligible. (Up from 25 hours now)

Although the Federal Exchange will be available for small group insurance January 1, 2014, we will be able to continue current group coverage outside of the exchange. I will prepare and review both scenarios to find your best option once the information is available so you will be knowledgeable to make the best decision for you and your employees.

New H.S.A and F.S.A Changes under Health Care Reform

You need to know:

Beginning in 2011, HSAs and FSAs may no longer be used to purchase over-the-counter (OTC) medications, such as non-prescription pain relievers, cold medicines, antacids and allergy medications. Over-the-counter medications prescribed by a physician will still be reimbursable on a tax-favored basis by these plans.

This new rule does not apply to reimbursements for the cost of insulin, which will continue to be permitted, even if purchased without a prescription.

Increased Tax Penalty for HSA for non-qualified usage:

If you use your tax-qualified account to purchase OTC medicines or other drugs purchased without a prescription after 1/1/11, or for other nonqualified withdrawals, those nonqualified expenses will be includable in your gross income and subject to an additional tax of 20%. This penalty increased from 10% to 20%.

Health Care Reform Update 4.2.13 ~~ from Carolyn L Pope

For Group Insurance Plans

This is a brief description of changes effective 9/23/10. Most of these changes will occur with your next renewal:

  1. Preventive benefits with no cost sharing. This means preventive benefits will be covered at 100% with no deductible or co-pay. If your plan is grandfathered, which means it is exactly the same plan as before Health Care Reform was enacted on March 23, 2010, the new preventive benefit provisions will not apply until 2014.
  2. Plan Maximums for Essential Benefits will be Unlimited. However, Essential Benefits are yet to be determined.
  3. Dependents may now be covered up to Age 26 even if not full-time students or if they are married. Of course, in Florida we cover to Age 30 and we are still waiting to see how the various insurance companies handle the requirements for dependents between Age 26 and Age 30. Most insurance companies enacted this benefit early in June of this year.
  4. Children under age 19 will be covered for pre-existing health conditions. Again, this is not new for us in Florida.

NEW - Small Business Tax Credit - Do You Qualify?

In general, the credit is available to small employers paying at least half the cost of single coverage for their employees.

- How to Qualify? Generally, the tax credit is available to employers with fewer than 25 full-time equivalent (FTE) employees paying wages averaging less than $50,000 per employee per year.

However, since the eligibility formula is based in part on the number of FTEs, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers.

- How much is the Credit? The maximum credit is 35 percent of premiums paid in 2010 by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit increases to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations.

Do you qualify for the Maximum Credit? The maximum credit goes to smaller employers - those with 10 or fewer FTEs - paying annual average wages of $25,000 or less. How to claim the credit: Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt employers, the IRS will provide further information on how to claim the credit. Your CPA will guide you in claiming your tax credit.

Link for More Information on Frequently Asked Questions:
Small Business Health Care Tax Credit: Frequently Asked Questions can be found at: http://www.irs.gov/newsroom/article/0,,id=220839,00.html

        

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