Fall.  With it comes cooler temperatures’, falling leaves, warm seasonal scents like turkey and pumpkin pie, and Open Enrollment.  It goes without saying; employees who understand the effectiveness of their benefits are much more pleased with those packages, happier with their employers, and more engaged in their work. So, as your company gears up for a new year of navigating Open Enrollment, here are a few points to keep in mind to make the process smoother for both employees and your benefits department. Bonus: it will lighten the load for both parties alike during an already stress-induced season.

Communicate Open Enrollment Using a Variety of Mediums

Advertise 2018 benefit changes to employees by using a variety of mediums. The more reminders and explanation of benefits staff members have using more than one mode of media, the more likely employees will go into Open Enrollment with more knowledge of your company’s benefit options and when they need to have these options completed for the new year.

  • Consider explainer videos to simplify the amount of emails and paperwork individuals need to review come Open Enrollment time. These videos can increase the bottom line as well, eliminating the high cost of print material.
  • Opt for placards placed throughout your high-traffic areas. Communicate benefit options and remind employees of Open Enrollment dates for the new year by posting in such areas as the lobby, break room and bathroom stalls.
  • Choose SMS texting. Today, over 97% of individuals use text. Ninety-eight percent of those that use text open messages within the first three minutes of receiving them; 6-8 times higher than the engagement rate for email. Delivering a concise message to employees’ mobile devices creates more touch points along the Open Enrollment journey. The key, however, is making it quick so as to entice your employees to take action.
  • Promote apps and in-app tools. Push notifications and apps like Remind 101 can help drive employee engagement during Open Enrollment season simply by providing short messages reminding them to enroll. Notifications like these can also be tailored to unique employee groups based on location, job level, eligibility status and more.

Utilize Mobile Apps and Web Portals for Open Enrollment

Now that your company has communication down pat for Open Enrollment, simplify the arduous task employees have of enrolling for the coming year by going paperless. Utilize web portals through benefit brokers and companies like ADP to eliminate the hassle of employees having to fill out paperwork both at renewal, and at the time of hire.  With nearly three quarters of individuals in the United States checking their phone once an hour and 90% percent of this time is spent using one app or another as a main source of communication, mobile apps can make benefits engagement much easier due to the anywhere/anytime accessibility they offer.

The personal perks for employees are great too! Staff members with a major lifestyle event can make benefit adjustments quickly with the ease of mobile apps.  Employees recognize this valuable and time-saving trend and enjoy having this information at their fingertips.

Open Enrollment season can be a stressful time but hopefully these tips will help for a smoother transition into the next year for your business. Simple things like using explainer videos, placing reminders in high traffic areas and utilizing mobile apps and text messaging can save time and stress in the long run for your employees and benefit department.

Congress approved the Health Insurance Portability and Accountability Act (HIPAA) to guard the privacy of personal medical information, and to give individuals the right to keep their health insurance coverage for pre-existing conditions in place even if they change jobs. The law has done this, providing important safeguards for patients. But it has also increased the red tape involved in medical care.

History

Congress passed HIPAA in August 1996, and the U.S. Department of Health and Human Services finalized standards for the electronic exchange, privacy and security of health information in 2002. The rules apply to health plans, health care clearinghouses, and to any health care provider, such as a doctor, who transmits health information in electronic form.

Significance

Congress intended HIPAA to protect individually identifiable health information. Any entity, including a physician’s office, a hospital or other health care facility, or an insurer, that deals with personal health information must follow strict rules about how to handle that information to avoid disclosing it to someone not authorized to see it. For example, Health and Human Services allows physicians and insurance companies to exchange individually identifiable health information to pay a health claim, but would not allow them to release it publicly. Penalties for violating the regulations include civil fines of up to $50,000 per violation, according to Health and Human Services.

Minimum Necessary

According to Health and Human Services, the privacy rule also requires physicians, hospitals, insurers, and other health care entities to use and disclose only the minimum amount of information needed to complete the transaction or fulfill the request. As a practical matter, for example, that means a physician should not send a patient’s entire medical file to an insurer if just one page from the record will suffice to answer the insurer’s query.

Portability

In addition to protecting patients’ privacy, HIPAA also limits the ability of a new employer plan to exclude coverage for pre-existing conditions. This means a person who has health insurance coverage can change jobs — and therefore health plans — without worrying that a condition they already have, such as diabetes or asthma, would not be covered under the new health plan. This was not always the case, according to the U.S. Department of Labor. “In the past, some employers’ group health plans limited, or even denied, coverage if a new employee had such a condition before enrolling in the plan. Under HIPAA, that is not allowed,” the Department of Labor says. HIPAA also prohibits discrimination against employees and their family members based on health histories, previous claims, and genetic information, according to the Department of Labor.

Pros of HIPAA

HIPAA, for the first time, allowed patients the legal right to see, copy, and correct their personal medical information. It also prevented employers from accessing and using personal health information to make employment decisions. And, it enabled patients with pre-existing conditions to change jobs without worrying that their conditions would not be covered under a new employer’s health plan.

Cons of HIPAA

However, HIPAA’s effects have not all been positive. The regulations increased the paperwork burden for doctors considerably, according to the American Medical Association. HIPAA has spawned a mini-industry of companies and consultants who help medical professionals comply with the law’s lengthy provisions. In addition, some professionals who deal with medical paperwork have become overcautious about releasing protected information. For example, some physician’s offices now refuse to mail test results, saying patients need to pick them up in person. And some hospitals require physicians to submit written requests on their own letterhead for information on a patient’s condition, when the law allows this information to be provided by phone.

Originally Published By Livestrong.com

Insurance has become the method by which most Americans have their health-care costs paid. By paying a regular monthly bill for health insurance, the cost of expected health care events is spread out into even payments and the cost of major unexpected medical incidents is absorbed by insurance. Lack of health insurance can have a profound negative effect on personal finances.

Bankruptcy

Lack of health insurance can come about due to lack of income to pay for it, or when a breadwinner is between jobs that would otherwise provide health insurance as an employment benefit. If a major illness or accident occurs during the time a person is uninsured, it can lead swiftly to bankruptcy, reports the Oregon Public Broadcasting News. Under-insurance, that is, health insurance which is not sufficient to cover the costs of a major health incident, can also lead to bankruptcy. A study published by the American Journal of Medicine in August 2009, reported that well over 60 percent of U.S. bankruptcies filed. in 2007 were due to inability to pay medical costs. Most of these debtors had medical debts over $5,000, which represented a significant portion of their household annual income; three-quarters had health insurance insufficient to cover their bills, and one-quarter had no insurance.

Reduction in Income

Lack of health insurance can lead to a breadwinner's death, further causing the most severe reduction on household income. According to a Harvard Medical School study reported by Reuters news, about 45,000 people in the United States die each year due to lack of health insurance. Thus, people who could otherwise serve as breadwinners or care-givers are removed from being able to do so. The Urban Institute points out that people lacking health insurance create the significant economic impact of reduced personal earnings, because poorer health means less productive work years and more time off work due to illness or injuries during those working years.

Penalties

Beginning January 1, 2014, most people will be required to maintain health insurance, and individuals who do not obtain health insurance will have to pay a penalty under the federal Patient Protection and Affordable Care Act of 2010. The insurance requirement penalty provision exempts people with income below the poverty level, as well as those in jail, members of registered Indian tribes, those whose religious tenets preclude health insurance, and individuals for whom essential health insurance coverage cost for one month would exceed 8 percent of their household gross income for the year. People who do not meet one of these exemptions, but who decline to purchase health insurance, may be penalized up to $95 in 2014, $350 in 2015, $750 in 2016, and $750 plus a cost of living increase for subsequent years. According to SmartMoney, the penalty provision is likely to have the strongest impact on the personal finances of younger, unmarried consumers. Although the statute exempts the poorest people from its provisions, the penalty for failure to have health insurance will negatively impact the personal finances of those to whom it applies.

By Cindy Hill
Originally Published By LiveStrong.com

Most health insurance plans cover emergency treatment, hospital stays and medical exams. If you are injured in an accident, your health insurance plan might not pay for all the incurred medical expenses. Supplemental accident insurance coverage pays cash benefits for illnesses or injuries caused by an accident, including fractures and physical therapy. The coverage is designed to help alleviate the burden of unexpected costs. Depending on how the policy is paid, the payouts may be classified as taxable income.

How it Works

Accident insurance coverage generally covers death or injuries caused by accidents on or off the job. There are a variety of coverage options available. Some employers offer the accidental coverage as a voluntary supplemental plan. You can also purchase private accident insurance to protect yourself if the coverage is not offered through your employer.

Self-Paid Plans

According to the IRS, if you paid the premiums on an accident or health insurance policy, the benefits are not taxable. Payouts from an insurance policy taken out through the employer are not taxed if you paid the premiums with after-tax dollars. If you pay the premiums of an accident insurance plan through a cafeteria plan, the premium was not included as taxable income and is considered paid by the employer and therefore the benefits are taxable.

Employer-Paid Plans

Accidental insurance payouts are taxable if the employer paid for the insurance plan. If you paid for an accidental insurance plan through the employer using pre-tax dollars, your benefits are taxable income. Any benefits received from your employer while injured are considered salary or wages and taxable as ordinary income. Additional taxable disability benefits include income from a welfare fund, state sickness or disability fund and association of employers or employees.

Withholding and Reporting

Report any taxable insurance payouts as wages, salaries, tips, etc., on your taxes. If you are suffering a long-term disability and receive taxable benefits, avoid a hefty tax bill by submitting a Form W-4S, Request for Federal Income Tax Withholding From Sick Pay, to the insurance company.

By Jeannine Mancini, Originally Published By LiveStrong

A fixed indemnity health plan pays a specific amount of cash for certain health-related events (for example, $40 per office visit or $100 per hospital day). The amount paid is neither related to the medical expense incurred, nor coordinated with other health coverage. Further, a fixed indemnity health plan is considered an “excepted benefit.”

Under HIPAA, fixed dollar indemnity policies are excepted benefits if they are offered as “independent, non-coordinated benefits.” Under the Patient Protection and Affordable Care Act (ACA), excepted benefits are not subject to the ACA’s health insurance requirements or prohibitions (for example, annual and lifetime dollar limits, out-of-pocket limits, requiring individual and small-group policies to cover ten essential health benefits, etc.). This means that excepted benefit policies can exclude preexisting conditions, can have dollar limits, and do not legally have to guarantee renewal when the coverage is cancelled.

Further, under the ACA, excepted benefits are not minimum essential coverage so a large employer cannot comply with its employer shared responsibility obligations by offering only fixed indemnity coverage to its full-time employees.

Some examples of fixed indemnity health plans are AFLAC or similar coverage, or cancer insurance policies.

Recently, the IRS released a Memorandum on the tax treatment of benefits paid by fixed indemnity health plans that addresses two questions:

  1. Are payments to an employee under an employer-provided fixed indemnity health plan excludible from the employee’s income under Internal Revenue Code §105?
  2. Are payments to an employee under an employer-provided fixed indemnity health plan excludible from the employee’s income under Internal Revenue Code §105 if the payments are made by salary reduction through a §125 cafeteria plan?

 

By Danielle Capilla, Originally Published By United Benefit Advisors

Our Firm is making a big push to provide compliance assessments for our clients and using them as a marketing tool with prospects. Since the U.S. Department of Labor (DOL) began its Health Benefits Security Project in October 2012, there has been increased scrutiny. While none of our clients have been audited yet, we expect it is only a matter of time and we want to make sure they are prepared.

We knew most fully-insured groups did not have a Summary Plan Description (SPD) for their health and welfare plans, but we have been surprised by some of the other things that were missing. Here are the top five compliance surprises we found.

  1. COBRA Initial Notice. The initial notice is a core piece of compliance with the Consolidated Omnibus Budget and Reconciliation Act (COBRA) and we have been very surprised by how many clients are not distributing this notice. Our clients using a third-party administrator (TPA), or self-administering COBRA, are doing a good job of sending out the required letters after qualifying events. However, we have found that many clients are not distributing the required COBRA initial notice to new enrollees. The DOL has recently updated the COBRA model notices with expiration dates of December 31, 2019. We are trying to get our clients to update their notices and, if they haven’t consistently distributed the initial notice to all participants, to send it out to everyone now and document how it was sent and to whom.
  2. Prescription Drug Plan Reporting to CMS. To comply with the Medicare Prescription Drug Improvement and Modernization Act, passed in 2003, employer groups offering prescription benefits to Medicare-eligible individuals need to take two actions each year. The first is an annual report on the Centers for Medicare & Medicaid Services (CMS) website regarding whether the prescription drug plan offered by the group is creditable or non-creditable. The second is distributing a notice annually to Medicare-eligible plan members prior to the October 15 beginning of Medicare open enrollment, disclosing whether the prescription coverage is creditable or non-creditable. We have found that the vast majority (but not 100 percent) of our clients are complying with the second requirement by annually distributing notices to employees. Many clients are not complying with the first requirement and do not go to the CMS website annually to update their information. The annual notice on the CMS website must be made within:
  • 60 days after the beginning of the plan year,
  • 30 days after the termination of the prescription drug plan, or
  • 30 days after any change in the creditability status of the prescription drug plan.
  1. ACA Notice of Exchange Rights. The Patient Protection and Affordable Care Act (ACA) required that, starting in September 2013, all employers subject to the Fair Labor Standards Act (FLSA) distribute written notices to all employees regarding the state exchanges, eligibility for coverage through the employer, and whether the coverage was qualifying coverage. This notice was to be given to all employees at that time and to all new hires within 14 days of their date of hire. We have found many groups have not included this notice in the information they routinely give to new hires. The DOL has acknowledged that there are no penalties for not distributing the notice, but since it is so easy to comply, why take the chance in case of an audit?
  2. USERRA Notices. The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects the job rights of individuals who voluntarily or involuntarily leave employment for military service or service in the National Disaster Medical System. USERRA also prohibits employers from discriminating against past and present members of the uniformed services. Employers are required to provide a notice of the rights, benefits and obligations under USERRA. Many employers meet the obligation by posting the DOL’s “Your Rights Under USERRA” poster, or including text in their employee handbook. However, even though USERRA has been around since 1994, we are finding many employers are not providing this information.
  3. Section 79. Internal Revenue Code Section 79 provides regulations for the taxation of employer-provided life insurance. This code has been around since 1964, and while there have been some changes, the basics have been in place for many years. Despite the length of time it has been in place, we have found a number of groups that are not calculating the imputed income. In essence, if an employer provides more than $50,000 in life insurance, then the employee should be paying tax on the excess coverage based on the IRS’s age rated table 2-2. With many employers outsourcing their payroll or using software programs for payroll, calculating the imputed income usually only takes a couple of mouse clicks. However, we have been surprised by how many employers are not complying with this part of the Internal Revenue Code, and are therefore putting their employees’ beneficiaries at risk.

There have been other surprises through this process, but these are a few of the more striking examples. The feedback we received from our compliance assessments has been overwhelmingly positive. Groups don’t always like to change their processes, but they do appreciate knowing what needs to be done.

 

By Bob Bentley, Originally Published By United Benefit Advisors

Last fall, President Barack Obama signed the Protecting Affordable Coverage for Employees Act (PACE), which preserved the historical definition of small employer to mean an employer that employs 1 to 50 employees. Prior to this newly signed legislation, the Patient Protection and Affordable Care Act (ACA) was set to expand the definition of a small employer to include companies with 51 to 100 employees (mid-size segment) beginning January 1, 2016.

If not for PACE, the mid-size segment would have become subject to the ACA provisions that impact small employers. Included in these provisions is a mandate that requires coverage for essential health benefits (not to be confused with minimum essential coverage, which the ACA requires of applicable large employers) and a requirement that small group plans provide coverage levels that equate to specific actuarial values. The original intent of expanding the definition of small group plans was to lower premium costs and to increase mandated benefits to a larger portion of the population.

The lower cost theory was based on the premise that broadening the risk pool of covered individuals within the small group market would spread the costs over a larger population, thereby reducing premiums to all. However, after further scrutiny and comments, there was concern that the expanded definition would actually increase premium costs to the mid-size segment because they would now be subject to community rating insurance standards. This shift to small group plans might also encourage mid-size groups to leave the fully-insured market by self-insuring – a move that could actually negate the intended benefits of the expanded definition.

Another issue with the ACA’s expanded definition of small group plans was that it would have resulted in a double standard for the mid-size segment. Not only would they be subject to the small group coverage requirements, but they would also be subject to the large employer mandate because they would meet the ACA’s definition of an applicable large employer.

Note: Although this bill preserves the traditional definition of a small employer, it does allow states to expand the definition to include organizations with 51 to 100 employees, if so desired.

By Vicki Randall
Originally published by www.ubabenefits.com

Employer-sponsored health insurance is greatly affected by geographic region, industry, and employer size. While some cost trends have been fairly consistent since the Patient Protection and Affordable Care Act (ACA) was put in place, United Benefit Advisors (UBA) finds several surprises in their 2016 Health Plan Survey.

Based on responses from more than 11,000 employers, UBA announces the top five best and worst states for group health care costs.

Watch this short video and contact us for more information about the Survey!

Many employee benefit limits are automatically adjusted each year for inflation (this is often referred to as an “indexed” limit). UBA offers a quick reference chart showing the 2017 cost of living adjustments for health and Section 125 plans, qualified plans, Social Security/Medicare withholding, compensation amounts and more. This at-a-glance resource is a valuable desk tool for employers and HR practitioners.

Here’s a snapshot of a section of the 2017 health plan limits; be sure to request the complete chart from a UBA Partner.

2017 health plan limits

Originally published by www.ubabenefits.com

 

In a few weeks, a second season of shared responsibility reporting will begin. For some of you, last year’s inaugural year of reporting may have felt eerily similar to Lewis Carroll’s famous book. You know the one. It included a little girl falling down a dark hole, a rabbit frantically checking his watch and a lot of other crazy characters. Now that you have the benefit of one year of reporting under your belt, let’s look at the reporting forms and try to make them less confusing by breaking them down.

Background

The Patient Protection and Affordable Care Act (PPACA), commonly called the Affordable Care Act (ACA), included various mandates to ensure all citizens have affordable coverage for health care expenses. There is a mandate at the individual level and then other mandates at the employer level.

  • Individual Shared Responsibility Mandate: This mandate requires all citizens to have minimum essential coverage (MEC). If they do not, they must qualify for an exception or they will be subject to a penalty. Individuals use the 1095 forms, or a similar statement, to document that they have the required coverage.
  • Employer Shared Responsibility Mandates: These mandates apply to group health plans. One requirement is that all plans that provide MEC must report who is covered by their plan. There are also requirements which only apply to employers that are considered to be an applicable large employer (ALE), which is defined as any employer that employed, on average, at least 50 full-time employees. These requirements mandate that all ALEs must provide MEC to their full-time employees and this MEC needs to be affordable. If they do not provide MEC, they could be subject to a penalty (sometimes referred to as the “A” penalty). If the MEC they provide does not meet the definition of affordable, then the ALE could be subject to a different penalty (sometimes referred to as the “B” penalty).

In general, the objective of 1094/1095 reporting is (1) to verify those individuals who had the required MEC; and, (2) to make sure ALEs are offering affordable MEC to their full-time employees. If this isn’t happening, 1094/1095 reporting provides the information necessary for the IRS to know whether a penalty to the individual, or to the ALE, is in order.

1095-B vs. 1095-C, “I don’t understand the difference!”

1095-B

Form 1095-B provides evidence that an individual had MEC. It provides reporting strictly for the individual shared responsibility mandate. It will not trigger any employer shared responsibility penalties. It is used to provide documentation for an individual to preclude them from an individual penalty. The 1095-B is required of employer group health plans in two situations:

Situation 1: the plan is fully-insured. It is the insurance carrier’s responsibility to file the 1094/1095-B with the IRS.

Situation 2: the plan is self-insured and you are not an ALE. It is the employer’s responsibility to file with the IRS.

In these situations, a Form 1095-B is to be generated for all covered individuals regardless of employment status.

When is a Form 1095-B required

1095-C

Form 1095-C provides evidence that an ALE offered, or did not offer, affordable MEC to all full-time employees. In other words, it documents whether an ALE met the employer shared responsibility requirements. For self-insured ALEs, Form 1095-C also provides documentation that an individual had MEC, thereby meeting the individual shared responsibility requirement.

Because, in some situations, this form reports on both the employer and the individual shared responsibility mandates, it can feel nonsensical at times. To make sense, a short history lesson may be helpful.

History of Form 1095-C

When the proposed reporting regulations were first released for comment, the 1095-B was to be used for individual shared responsibility reporting and the 1095-C was to be used exclusively for employer shared responsibility reporting. As such, the 1095-C was only a two-part form with Part I being employer identification information and Part II being information on the offer of coverage that was made to full-time employees.

If the reporting forms had remained as initially proposed, self-insured ALEs would have been required to make two filings (the 1094/1095-B filing and 1094/1095-C filing). Why? Because they have a responsibility to report everyone that has MEC through their plan and they also have a responsibility to report on the offers of coverage they made to full-time employees.

Debate over this double filing requirement ensued and ultimately resulted in change. This change eliminated the double filing requirement for self-insured ALEs by revising the 1095-C. The resulting form still has Parts I and II referenced above, but it now also has Part III where employers can report the individual coverage information that was originally proposed to be reported on the 1095-B.

All ALEs are required to file Form 1095-C. However, which parts of the Form 1095-C you complete will be determined according to three situations as follows:

Situation 1 – Fully-insured Health Plan: You will complete Parts I and II for all individuals that were full-time employees at some point during the year. Part III information will be reported by your insurance company on Form 1095-B.

Situation 2 – Self-insured Health Plan: You will complete Parts I, II and III for all individuals that were full-time employees at some point during the year, as well as for individuals that have MEC through your plan.

Situation 3 – No Health Plan: If you are an ALE with no health plan, you will complete Parts I and II for all individuals that were full-time employees at some point during the year.

Which parts of Form 1095-C does an ALE need to complete

Let’s recap the 1095-C:

  • The 1095-C is required of all ALEs.
  • The 1095-C is a three-part form.
    Part I captures employer identification information.

    Part II is the area used to report what offers of coverage were made and whether or not those offers were affordable. This part addresses the employer shared responsibility mandates and determines whether or not employers are at risk for an employer penalty.

    Part III, which only gets completed if you have a self-insured plan, is the area used to report who had MEC through your plan. This part addresses the individual shared responsibility mandate and determines whether or not an individual is at risk for an individual penalty.

Final Thoughts

Keep in mind, if you have a self-insured plan, a Form 1095-C is required for all full-time employees, as well as anyone who had coverage through your plan, so there may be situations where you are required to produce a 1095-C for individuals that do not meet the ACA full-time employee definition that identifies those employees for whom you have an employer shared responsibility requirement. In these situations, Part II can cause concern, or an initial fear, that a penalty could be assessed because these individuals may not meet the affordability requirement. Remember, these individuals do not meet the full-time definition, therefore, they cannot trigger an employer shared responsibility penalty.

That’s 1095-B and 1095-C in a nutshell, albeit a very large nutshell. Although there are still a lot of crazy characters associated with ACA reporting, perhaps this has shed some light on the dark hole you may feel like you fell into and, hopefully, you can parlay it into a smoother reporting process in the new year. Happy reporting!

Resources

Employers that did not fulfill all of their obligations under the employer shared responsibility provision (play or pay) in regard to the 2015 plan year might owe a penalty to the IRS. In addition, employers will be notified if an employee who either was not offered coverage, or who was not offered affordable, minimum value, or minimum essential coverage, goes to the Exchange and gets a subsidy or “advance premium tax credit.” To understand this “Employer Notice Program” the appeals process, and how affordability must be documented, request UBA’s newest ACA Advisor, “IRS reporting Now What?”

UBA has created a template letter that employers may use to draft written communication to employees regarding what to expect in relation to IRS Forms 1095-B and 1095-C, and what employees should do with a form or forms they receive. The template is meant to be adjustable for each employer, and further information could be added if it is pertinent to the employer or its workforce. Employers can now request this template tool from a local UBA Partner.

Originally published by www.ubabenefits.com

 

I have joined the class that Ron invited me to regarding HR and FMLA, etc. Thank you for your ongoing support and assistance; it is a pleasure doing business with you.”

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