IRS has issued Revenue Procedure 2015-30, which provides the 2016 cost-of-living contribution and coverage adjustments for HSAs, as required under Code Section 223(g). The family annual contribution limits and the annual out-of-pocket limits have all been increased for 2016.
Annual HSA Contribution Amounts
2015 2016 Coverage Levels
$3,350 $3,350 Individual
$6,650 $6,750 Family
$1,000 $1,000 Catch-up
Annual Maximum Out-Of-Pocket Limits for HDHP
2015 2016 Coverage Levels
$6,450 $6,550 Individual
$12,900 $13,100 Family
Annual Minimum Deductible Amount Limits for HDHP
2015 2016 Coverage Levels
$1,300 $1,300 Individual
$2,600 $2,600 Family
For a copy of Revenue Procedure 2015-30, please click here.
If you have any comments or questions regarding any of above information, please do not hesitate to call me (708) 717-9638 or e-mail me at larry@larrygrudzien.com
New Venue! Oakland University, Oakland Center 2200 N. Squirrel Rd., Rochester
Featuring Keynote Speaker:
Henry J. Kaiser Family Foundation Senior Policy Analyst, Health Care Marketplace Project, Matthew Rae
Just Added:
Department of Health and Human Services Director, Nick Lyon will discuss Massive Department Merger, 2nd Medicaid Expansion Waiver/Healthy Michigan and much more!
Speak directly to Health Care Reform experts!
Register today, space is limited.
Tickets are $100 for Association Members and $125 for non-members.
Register online by clicking here or contact Natasha at 888.277.6464.
https://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.png00michbusinesshttps://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.pngmichbusiness2015-05-27 16:00:552015-10-08 00:00:00Save the Date! Health Care Reform Conference – Don’t Miss This Event!
The Michigan Business & Professional Association (MBPA) has assembled a valuable tool to assist your business should the Department of Labor (DOL) send you an investigatory letter informing you that they will be auditing your employee health plan. The DOL has the authority to conduct an investigation of your employee benefits plan to ensure that it conforms to the Employee Retirement Income Security Act (ERISA), and can focus on areas from reporting, to fiduciary obligations, to disclosure requirements. Recently, the DOL’s Employee Benefits Security Administration (EBSA) has expanded its scope to include the enforcement of the Patient Protection and Affordable Care Act (PPACA) also known as Health Care Reform to ensure compliance.
As a member of the MBPA, this audit guide & checklist will inform you of the various audits the DOL can investigate a business for such as I-9 audit, ERISA audit, and Wages & Hour Audit. This checklist is also available to assist independent agents who counsel their business clients. Click here to access the DOL Audit Guide and Checklist.
https://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.png00michbusinesshttps://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.pngmichbusiness2015-05-01 16:00:552015-10-08 00:00:00NEW! Department of Labor Audit Guide & Checklist Available
I have created two checklists to assist in completing Forms 1094-C and 1095-C. One checklist is for fully insured medical plans and the other is for self-insured medical plans. These checklists provide guidance on both what information has to be collected and how such information is applied in completing the forms. There are detailed instructions regarding how the various codes are to used and where they have to be entered on the forms.
I hope you find the checklists helpful. If you cannot download the checklists, please send me an email, and I will send you copies.
If you have any comments or questions regarding any of the above information, please do not hesitate to call me at (708) 717-9638 or e-mail me at larry@larrygrudzien.com.
https://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.png00michbusinesshttps://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.pngmichbusiness2015-05-01 16:00:452015-10-08 00:00:00Checklists for Completing Reporting Under Code Section 6056 Available
Help us collect important customer surveys for medical loss ratio
The deadline is June 19 for group customers to submit their completed surveys to Blue Cross Blue Shield of Michigan and Blue Care Network.
We’ll begin mailing our annual medical loss ratio surveys on May 18 to approximately 5,000 fully insured customers in the small and middle group markets. In the surveys, we’re asking group customers to tell us the average number of employees they had in the 2014 calendar year. This count must include all active (non-retiree) employees, including their part-time and seasonal workers.
How you can help
To support our efforts, we’re asking you to reach out to your customers to make sure they return their surveys by June 19. We’re encouraging groups to complete the survey online at bcbsm.com/rbtsurvey. Or they can fill out a form, and fax, email or mail it to us.
More information about the medical loss ratio
The Affordable Care Act requires health insurance carriers to report their medical loss ratio each year. There are significant federal penalties for insurers and employers that do not comply with the law, including a penalty of $100 per responsible entity each day per violation for each individual.
We’ve developed a frequently asked questions document to help you answer questions you may have regarding the medical loss ratio provision of the ACA.
For questions about the survey, email acadatacollection@bcbsm.com.
An employer-sponsored HRA will not be able to avoid the annual limit requirements by being integrated with individual market coverage or with an employer plan that provides coverage through individual policies. The Agencies apply this rule to any group health plan used to purchase coverage on the individual market, not just to HRAs.The group health plan is not integrated with the individual market coverage for purposes of the annual dollar limit prohibition. For example, an employer payment plan that reimburses employees for an employee’s substantiated individual insurance policy premiums is required to, but cannot, comply with the annual dollar limit prohibition because it is considered to impose an annual limit up to the cost of the individual market coverage purchased through the arrangement and it cannot be integrated with any individual health insurance policy purchased under the arrangement, as provided in Notice 2013-54 and EBSA Technical Release 2013-03, Q&A-1. This rule was effective for plan years beginning on or after January 1, 2014.
These arrangements fail to satisfy the market reforms and may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) under Internal Revenue Code (“Code”) Section 4980D.
On February 18, 2015, the IRS released Notice 2015-17 which provides transition relief from the assessment of excise tax under Code Section 4980D for failure to satisfy market reforms in certain circumstances. The transition relief applies to employer healthcare arrangements that constitute:
(1) employer payment plans, as described in Notice 2013-54, if the plan is sponsored by an employer that is not an Applicable Large Employer (ALE) under Code Sections 4980H(c)(2) and Sections 54.4980H-1(a)(4) and -2;
(2) S corporation healthcare arrangements for 2-percent shareholder-employees;
(3) Medicare premium reimbursement arrangements; and
(4) TRICARE-related health reimbursement arrangements (HRAs).
The following is an explanation of this transitional relief.
(1) Employer Payment Plans: This Notice provides limited transition relief for coverage sponsored by an employer that is not an applicable large employer (“ALE”). For this purpose, an ALE generally is, with respect to a calendar year, an employer that employed an average of at least 50 full-time employees (including full-time equivalent employees) on business days during the preceding calendar year. The reason that the IRS is providing this relief is that the SHOP Marketplace will address many of the concerns of small employers and it is still transitioning and the transition by eligible employers to SHOP Marketplace coverage or other alternatives will take time to implement. This Notice provides that the excise tax under Code Section 4980D will not be asserted for any failure to satisfy the market reforms by employer payment plans that pay, or reimburse employees for individual health policy premiums or Medicare part B or Part D premiums:
(a) for 2014 for employers that are not ALEs for 2014, and
(b) for January 1 through June 30, 2015 for employers that are not ALEs for 2015.
After June 30, 2015, such employers may be liable for the Code Section 4980D excise tax.
Employers eligible for this relief that have employer payment plans are not required to file IRS Form 8928 (regarding failures to satisfy requirements for group health plans for the market reforms) solely as a result of having such arrangements for the period for which the employer is eligible for the relief. This relief does not extend to stand-alone HRAs or other arrangements to reimburse employees for medical expenses other than insurance premiums.
(2) Treatment of S corporation healthcare arrangements for 2-percent shareholder-employees): Until guidance is released, an S corporation can continue to pay for or reimburse premiums for individual health insurance coverage covering a 2-percent shareholder. Such payment or reimbursement is included in income but the 2-percent shareholder-employee may deduct the amount of the premiums under the Internal Revenue Code. Until such guidance is released, S corporations will not subject to the excise tax.
(3) Integration of Medicare premium reimbursement arrangement and TRICARE-related HRA with a group health plan: If an employer offers to reimburse Medicare premiums for its active employees, it creates an employer payment plan because Medicare is not considered employer group coverage. An employer payment plan that pays for or reimburses Medicare Part B or Part D premiums is integrated with another group health plan offered by the employer for purposes of the annual dollar limit prohibition and the preventive services requirements if:
(a) 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;
(b) the employee participating in the employer payment plan is actually enrolled in Medicare Parts A and B;
(c) the employer payment plan is available only to employees who are enrolled in Medicare Part A and Part B or Part D; and
(d) the employer payment plan is limited to reimbursement of Medicare Part B or Part D premiums and excepted benefits, including Medigap premiums.
Note that 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. An employer payment plan that has fewer than two participants who are current employees (for example, a retiree-only plan) on the first day of the plan year is not subject to the market reforms and, therefore, integration is not necessary to satisfy the market reforms.
The same type of rules also apply to reimburse of TRICARE premiums.
(4) Increases in employee compensation to assist with payments of individual market coverage: If an employer increases an employee’s compensation, but does not condition the payment of the additional compensation on the purchase of health coverage (or otherwise endorse a particular policy, form, or issuer of health insurance), this arrangement is not an employer payment plan. Since this generally will not constitute a group health plan, it is not subject to the market reforms.
(5) Treatment of an employer payment plan as taxable: Any arrangement under which an employer provides reimbursements or payments that are dedicated to providing medical care, such as cash reimbursements for the purchase of an individual market policy, is itself a group health plan and is subject to the market reform provisions of the Affordable Care Act applicable to group health plans without regard to whether the employer treats the money as pre-tax or post-tax to the employee. Such employer health care arrangements cannot be integrated with individual market policies to satisfy the market reforms and, therefore, will fail to satisfy PHS Act §§ 2711 (annual limit prohibition) and 2713 (requirement to provide cost-free preventive services) among other provisions.
If you have any comments or questions regarding any of the above information, please do not hesitate to call me at (708) 717-9638 or e-mail me at larry@larrygrudzien.com
https://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.png00michbusinesshttps://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.pngmichbusiness2015-05-01 16:00:352015-10-08 00:00:00Notice 2015-17: Employer Sponsored HRA Rules
Question: In applying one of the affordability safe harbors for 2015, is the figure 9.56% applied instead of 9.5%?
Answer: No. Beginning in 2015, the IRS increased the percentage of an employee’s household income-from 9.5% to 9 .56% – that may be charged for the employee’s required contribution and still be considered “affordable” for purposes of the application of the subsection (b) penalty, as provided in Revenue Procedure 2014-37. A large employer assessing the affordability of self-only coverage in 2015 may require an employee to pay up to 9 .56% of household income for coverage, as provided in Code Section 36B(c)(2)(C)(i)(II) and Treasury. Regulation Section 1.36B-2(c)(3)(v)(A)(1) .
But, please be aware that employers that take advantage of one of the affordability safe harbors must continue to use the 9.5% standard specified in Treasury Regulations Section 54.4980H-5(e), as that percentage has not been updated. But the increase in the affordability percentage may give some cushion to employers who have priced the employee cost of coverage for 2015 using the 9.5% standard.
If you need more information regarding the above, please do not hesitate to call me at (708) 717-9638 or e-mail me at larry@larrygrudzien.com
Larry Grudzien, Attorney-At-Law
https://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.png00michbusinesshttps://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.pngmichbusiness2015-05-01 16:00:302015-10-08 00:00:00Health Reform Questions – Applying the Affordability Safe Harbors in 2015
Blue Cross makes downward adjustment to small employer rates for remainder of 2015 and projects favorable rates into 2016.
Small group customers of Blue Cross Blue Shield of Michigan will benefit from a downward rate adjustment to be filed by Blue Cross with state regulators this week.
Rates for employers renewing coverage in the third and fourth quarters of 2015 will be, on average, 3.3 percent lower for Blue Cross customers, and less than 1 percent higher (0.8 percent) for Blue Care Network customers, pending state regulatory approval. In addition, 2016 rate changes look extremely favorable, with Blue Cross annual rate changes projected 2.2 percent lower and BCN projected at 4.8 lower than the previous year.
Eligible consumers have from March 15 through April 30 to enroll in coverage
The Centers for Medicare & Medicaid Services (CMS) announced today a special enrollment period (SEP) for individuals and families who did not have health coverage in 2014 and are subject to the fee or “shared responsibility payment” when they file their 2014 taxes in states which use the Federally-facilitated Marketplaces (FFM). This special enrollment period will allow those individuals and families who were unaware or didn’t understand the implications of this new requirement to enroll in 2015 health insurance coverage through the FFM.
For those who were unaware or didn’t understand the implications of the fee for not enrolling in coverage, CMS will provide consumers with an opportunity to purchase health insurance coverage from March 15 to April 30. If consumers do not purchase coverage for 2015 during this special enrollment period, they may have to pay a fee when they file their 2015 income taxes.
Those eligible for this special enrollment period live in states with a Federally-facilitated Marketplace and:
• Currently are not enrolled in coverage through the FFM for 2015,
• Attest that when they filed their 2014 tax return they paid the fee for not having health coverage in 2014, and
• Attest that they first became aware of, or understood the implications of, the Shared Responsibility Payment after the end of open enrollment (February 15, 2015) in connection with preparing their 2014 taxes.
The special enrollment period announced today will begin on March 15, 2015 and end at 11:59 pm E.S.T. on April 30, 2015. If a consumer enrolls in coverage before the 15th of the month, coverage will be effective on the first day of the following month.
This year’s tax season is the first time individuals and families will be asked to provide basic information regarding their health coverage on their tax returns. Individuals who could not afford coverage or met other conditions may be eligible to receive an exemption for 2014. To help consumers who did not have insurance last year determine if they qualify for an exemption, CMS also launched a health coverage tax exemption tool today on HealthCare.gov and CuidadodeSalud.gov.
“We recognize that this is the first tax filing season where consumers may have to pay a fee or claim an exemption for not having health insurance coverage,” said CMS Administrator Marilyn Tavenner. “Our priority is to make sure consumers understand the new requirement to enroll in health coverage and to provide those who were not aware or did not understand the requirement with an opportunity to enroll in affordable coverage this year.”
Most taxpayers, about three quarters, will only need to check a box when they file their taxes to indicate that they had health coverage in 2014 through their employer, Medicare, Medicaid, veterans care or other qualified health coverage that qualifies as “minimum essential coverage.” The remaining taxpayers – about one-quarter – will take different steps. It is expected that 10 to 20 percent of taxpayers who were uninsured for all or part of 2014 will qualify for an exemption from the requirement to have coverage. A much smaller fraction of taxpayers, an estimated 2 to 4 percent, will pay a fee because they made a choice to not obtain coverage and are not eligible for an exemption.
Americans who do not qualify for an exemption and went without health coverage in 2014 will have to pay a fee – $95 per adult or 1 percent of their income, whichever is greater – when they file their taxes this year. The fee increases to $325 per adult or 2% of income for 2015. Individuals taking advantage of this special enrollment period will still owe a fee for the months they were uninsured and did not receive an exemption in 2014 and 2015. This special enrollment period is designed to allow such individuals the opportunity to get covered for the remainder of the year and avoid additional fees for 2015.
The Administration is committed to providing the information and tools tax filers need to understand the new requirements. Part of this outreach effort involves coordinating efforts with nonprofit organizations and tax preparers who provide resources to consumers and offer on the ground support. If consumers have questions about their taxes, need to download forms, or want to learn more about the fee for not having insurance, they can find information and resources at www.HealthCare.gov/Taxes or www.IRS.gov. Consumers can also call the Marketplace Call Center at 1-800-318-2596. Consumers who need assistance filing their taxes can visit IRS.gov/VITA or IRS.gov/freefile
Consumers seeking to take advantage of the special enrollment period can find out if they are eligible by visiting https://www.healthcare.gov/get-coverage Consumers can find local help at: Localhelp.healthcare.gov or call the Federally-facilitated Marketplace Call Center at 1-800-318-2596. TTY users should call 1-855-889-4325. Assistance is available in 150 languages. The call is free.
https://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.png00michbusinesshttps://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.pngmichbusiness2015-03-27 16:00:552015-10-08 00:00:00CMS Announces Special Enrollment Period for Tax Season
This piece, which addresses the approaches states could consider in the event the Supreme Court eliminates federal marketplace subsidies for certain states, was prepared by Claudine Swartz and Angelique Hrycko of Day Health Strategies and Tom Dehner and Juan Montanez of Health Management Associates (HMA). It was originally published in HMA’s Weekly Roundup on March 4th. DHS and HMA have collaborated on numerous marketplace planning and implementation projects.
All eyes are on the Supreme Court today as oral arguments in the King v. Burwell case begin. At issue is an IRS rule that authorizes financial subsidies to purchase health insurance offered through the federal marketplace. Unlike the first Affordable Care Act (ACA) challenge that was decided by the Court, which affected the entire country, King v. Burwell is expected to only affect a subset of states. While the case does not involve the 13 states that operate their own exchange, it certainly involves the 20 states that do not operate their own state marketplace and rely on the federal marketplace technology. This leaves us with a gray area, where 14 states have some type of a partnership with the federal marketplace, and 3 states have an established exchange but use the federal marketplace technology to operate it.
Predictions on a court ruling are in full swing. When it comes to the Supreme Court, we endorse the approach of Casey Stengel, who said “I never make predictions, especially about the future.” In fact, the Supreme Court surprised nearly every analyst in 2012 when it used Congress’s taxing authority to uphold the individual mandate, rather than the Commerce Clause. Moreover, while the case appears to simply be about whether federal subsidies are permissible outside of state-established exchanges, there is always the potential for a more complex or nuanced decision, particularly when the political and practical effects of the decision are as sweeping as they are in King v. Burwell.
Leaving predictions aside, it is clear that the potential disruption that could be caused by a lack of subsidized coverage in states using the federal marketplace is significant. A decision to disallow subsidies via the federal marketplace will disrupt coverage for millions of individuals who are currently receiving subsidies (estimates have ranged from 7-13 million), and may negatively influence the operation of state markets for other individual purchasers as well.
Impacted States Should Consider Key Coverage Levers
While the King v. Burwell outcome is uncertain, impacted states may begin contingency planning. States can use various levers to protect coverage for individuals that rely on premium subsidies through the federal marketplace. These levers (click image below to enlarge) resemble a calculator full of numbers from the federal code: Sections 1332, 1331, 1115, and 1906.
Lever #1: State Innovation Waivers
State Innovation Waivers have a few different names – Section 1332 Waivers, 2017 Waivers, and the Wyden Waiver – but they all reference the same flexibility: starting in 2017, states have the ability to create an alternative reform framework that results in ACA-comparable coverage levels at no higher cost. States may waive the obligation to operate a health insurance exchange, offer qualified health plans, ensure essential health benefits, provide cost sharing and premium tax credits, and enforce an individual and employer mandate. With federal approval, states could no longer be required to use an exchange – federal or state – to facilitate coverage, while still accessing subsidy funding. The Supreme Court could even look to State Innovation Waivers as a vehicle for states to maintain coverage for individuals that potentially lose subsidies via the federal marketplace. While the waiver submission and approval process is unknown today, this option conceivably provides states the ability to establish a framework to resolve all coverage gaps that may result from a Supreme Court decision, and address a wide range of other issues as well.
Lever #2: The Basic Health Program
While not as far reaching, states can also utilize the Basic Health Program (BHP) – Section 1331 – to provide coverage for individuals with incomes 133-200 percent of the federal poverty level who are accessing subsidies via the federal marketplace. The BHP allows states to offer a coverage program for these individuals principally to minimize churn between Medicaid and exchange coverage. In order to fund a state-based BHP, a state receives 95 percent of the total premium subsidies that would otherwise be spent if coverage were accessed via an exchange.
The BHP is not likely a coverage solution for all individuals receiving subsidies via the federal marketplace, because it does not address those with incomes above 200 percent of the federal poverty level. However, the approach prioritizes the lower-income group of those who could lose access to tax credits, a group that greatly benefits from subsidized coverage and desperately needs it. To date, Minnesota is the only state that has utilized the Basic Health Program, but it could be a tool used more widely in the future.
Lever #3: Section 1115 Waivers
The first two levers are new state tools authorized by the ACA. In contrast, a Section 1115 Waiver has long been used to provide states flexibility within their Medicaid programs and enable ongoing federal funding for state-specific approaches to Medicaid coverage, benefits or delivery systems. This includes using the Section 1115 Waiver is to expand coverage for those ineligible for traditional Medicaid, as was the case when Massachusetts used the Section 1115 Waiver to achieve near universal coverage. Already, states have used Section 1115 Waivers to secure ACA flexibility, with numerous states requesting that Medicaid eligible individuals secure private coverage via a marketplace. In the wake of a Supreme Court decision, states will look to their Section 1115 Waiver authority to examine options to address a new coverage landscape.
Lever #4: Health Insurance Premium Payment Program
In addition to Section 1115 waivers, the Health Insurance Premium Payment Program (HIPP) – Section 1906 – is a well-utilized coverage tool. Here, states may provide financial assistance to income-eligible individuals that select employer sponsored health insurance; in 2011, 24 states had HIPP Programs. This option allows Medicaid funding to be used for employer premiums, deductibles, and co-payments as long as employer coverage is deemed cost effective. While HIPP does not provide states with a complete coverage solution if federal marketplace subsidies are disallowed, it represents one approach that could serve as a piece of an overall solution.
Potential Lever #5: Expanding Family Coverage via CHIP Reauthorization
Last, we turn to a more speculative lever. Federal funding for the Children’s Health Insurance Program (CHIP) expires in 2015. Alongside the reauthorization and funding debate will come the policy suggestion that it may be more efficient and cost effective to cover eligible children through the same health insurance plan as their parents. While we don’t know how, or whether, Congress will address this issue, the door is open for an innovative family coverage policy – particularly if the reauthorization debate is taking place in the context of a changed coverage landscape due to King v. Burwell.
Looking Ahead
Each lever described above varies in its reach and complexity. Some can be deployed in combination for a wider impact. In some instances, the levers are well-known and understood, while others represent new terrain.
If you have questions about the options mentioned here, or want more information about the possible ramifications of the Supreme Court decision, please contact Angelique Hrycko (angelique@dayhealthstrategies.com) at DHS or Tom Dehner (tdehner@healthmanagement.com) at HMA.
https://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.png00michbusinesshttps://mb-wp-uploads.s3.us-east-1.amazonaws.com/2024/04/MichBusiness-logo.pngmichbusiness2015-03-27 16:00:452015-10-08 00:00:00Responding to King v. Burwell: What Policy Levers Can States “Pull” to Maintain Coverage if the Supreme Court Sides with King?
