Posted April 30, 2014 by Megan DiMartino
AP Benefit Advisors is pleased to announce a complimentary ACA compliance and benefits administration resource library designed for employers with over 100 participating employees. This library offers access to extensive PPACA compliance and benefits administration resources, including live and on-demand benefits webinars, monthly benefits newsletters, compliance white papers and briefs, a pay-or-play calculator, and an up-to-date group benefits and compliance blog. AP Benefit Advisors is renowned for its thorough understanding of PPACA and the changing implications for employers, and leverages the latest in tools, technology and services to ensure optimum coverages while controlling costs.
Webinars offered in this complimentary program include:
- Final Regulations: Wellness Reform
- Fiduciary Liability Post-PPACA
- Industry Panel Discussion: FMLA/ADA/Worker’s Compensation
- Impact of Private Exchanges – Federal, State and Pre-Obamacare Exchanges
- Are You Ready for PPACA in 2014?
- COBRA and Retiree Health Risk
- Are You Ready for Open Enrollment 2014?
- PPACA/Obamacare: Federal Delay Does Not Remove Compliance Issues
- Post-DOMA Webinar: Outcomes and Questions
- PPACA Provisions that take effect on January 1, 2014
- Final Regulations HIPAA HITECH and ACA
Posted April 24, 2014 by Megan DiMartino
IRS Rev. Proc 2014-30 – increases the Health Savings Account (HSA) maximum annual contribution for 2015 by $50 for individuals and $100 for families.
The corresponding HDHP plan (per IRC 223(c)(2)(A)) must be a health plan with an annual deductible that is not less than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,450 for self-only coverage or $12,900 for family coverage.
- Note: HDHPs with HSA cannot have an OOP Max (Out Of Pocket Maximum) greater than $6,450/individual and $12,900/family, however, non HDHP-HSA plans can have a 2015 OOP Max of $6,600/individual and $13,200/family since PPACA-compliant-plans are no longer directly indexed to HDHP-HSA plans, but are separately indexed from now on*.
Also, the maximum annual contributions an eligible individual may make to his/her HSA went up by $50 for 2015: $3,350 for individuals and $6,650 for families.
- Our 2015 HSA limit chart is here
- Our Revised Finding the Best Approach – from HSA to FSA is here
- AP Benefit Advisors’ HSA limit chart for 2009-2014 is here
- View the IRS Revenue Procedure here.
Footnote: In 2014, the HDHP-HSA OOP Max limit matched the PPACA OOP Max limit applicable to all non-Grandfathered group health plans. However, that is no longer the case for plan years beginning on/after 1/1/2015. HHS announced that 2015’s PPACA OOP Max will be $6,600 for self-only coverage and $13,200 for family coverage.
This change happened because the PPACA limits are indexed to the “premium adjustment percentage” (the percentage (if any) by which the average per capita premium for health insurance coverage in the United States for the preceding calendar year exceeds such average per capita premium for 2013. Whereas the HDHP-HSA limits are subject to a different a COLA (Cost-Of-Living Adjustment) based on the Consumer Price Index for All-Urban Consumers (CPI-U).
Therefore, a non-Grandfathered HDHP-HSA will need to comply with the lower of the two applicable out-of-pocket limits. For 2015, this means that a non-grandfathered HDHP’s out-of-pocket maximums cannot exceed $6,450/$12,900 based on the lower IRC § 223 HDHP limits. A non-grandfathered group health plan that is not an HDHP will be subject only to the higher $6,600/$13,200 PPACA out-of-pocket maximum limits. Grandfathered non-HDHP group health plans are not required to impose an out-of-pocket maximum of any amount.
For more on how this could affect your business, contact us.
Posted April 21, 2014 by Megan DiMartino
by Laura Pedulli, clinicalinnovation.com
Language in the last minute SGR patch, Protecting Access to Medicare Act of 2014, mandated that ICD-10 be delayed for at least a year but did not specify an exact timeline.
Calling themselves the Coalition for ICD-10, the American Health Information Management Association (AHIMA) and several other organizations are urging the Department of Health and Human Services to officially declare Oct. 1, 2015 the start date for ICD-10 so healthcare organizations can properly prepare.
In a letter to Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner, the coalition argued for the quickest transition possible to the new coding system. Specifically, they wrote that ICD-10 is critical for collecting information needed to implement healthcare delivery innovations such as patient-centered medical homes and value-based purchasing.
“ICD-10 will enable better patient care through better understanding of the value of new procedures, improved disease management and an improved ability to study and understand patient outcomes, yielding benefits to patients far beyond cost savings,” according to the letter.
“While the transition to ICD-10 remains inevitable, it is extraordinarily difficult for organizations to make the proper preparations and investments without knowing the implementation date,” said AHIMA CEO Lynne Thomas Gordon, MBA in a statement. “The announcement of the new implementation date will give the industry the clarity necessary to prepare in the most cost-effective, prudent and strategic way.”
In addition to AHIMA, the signatories for the letter included the Advanced Medical Technology Association, America’s Health Insurance Plans, American Medical Informatics Association, BlueCross Blue Shield Association, College of Healthcare Information Management Executives, Health IT Now Coalition, Medical Device Manufacturers Association and 3M Health Information Systems.
Posted April 16, 2014 by Megan DiMartino
Join AP Benefit Advisors Senior Counsel, Patrick Haynes, as he reviews some interesting changes to The Affordable Care Act and how they may affect employers. There is the potential for a new addition to the existing PPACA suite of offerings on the government exchanges (i.e. Platinum, Gold, Silver and Bronze). These potentially new “Copper” plans may have higher deductibles in order to be more “affordable”. This is a significant reversal as policies with these higher deductibles were cancelled by insurers after the ACA.
Another interesting development is that the maximum deductible limits for 2014 and 2015 have now been removed for the majority of employer groups (even small groups). This means, that plans can be a bit more creative with their structure so long as they hit all the PPACA requirements and still stay under the 2014 and 2015 Out-of-Pocket maximums. Attorney Haynes will also discuss “MEC” or “Skinny” plans. Descriptions of these have appeared in The Wall Street Journal, SHRM Publications and Kaiser Family Foundation News Briefs among others. Recently, several large employers have begun offering these less expensive, no-frills plans, that are expected to cut costs for employers and employees. who don’t incur substantial medical bills. Topics include:
- Who is sponsoring the bills and is The White House in favor of them?
- Are the insurance companies in favor of these potential “Copper” plans ?
- Do “MEC” and “Skinny” plans satisfy the ACA’s requirements?
- Do “MEC” and “Skinny” plans satisfy coverage under the individual mandate?
- What are the differences in the penalties when “MEC” and “Skinny” plans are offered?
- How much can an employer save offering “MEC” and “Skinny” plans?
Webinar Date: Wed, Apr 30, 2014 12:00 PM – 12:30 PM EDT
Space is limited – register here: https://www1.gotomeeting.com/register/370432065
Posted April 10, 2014 by PHaynes
A. IRS Provides Guidance on Correcting Health Care FSA Reimbursement Mistakes. The IRS has released a Chief Counsel Advice (CCA) memorandum that provides guidance on correcting HCFSA payments for expenses that are not properly substantiated or are later determined to be ineligible for reimbursement (improper payments). Issues addressed include whether the correction procedures for improper debit card payments in the in the 2007 proposed cafeteria plan regulations may be applied to other improper health FSA payments, whether the steps in the debit card correction procedures can be applied in a different order, and how to report improper payments that have not been corrected after the correction procedures have been exhausted. Here are highlights:
- Broader Application of Debit Card Correction Procedures. The debit card correction procedures require 5 steps for improper debit card payments: (1) deactivate the card, (2) demand repayment, (3) withhold the payment from compensation (to the extent allowed by law), (4) apply a claims substitution or offset, and (5) treat the payment as any other business indebtedness (such as, take the same steps the employer would take to collect an equivalent business debt). According to the CCA, steps 2–5 of the procedures can also be used to correct other improper health FSA payments. So, while the Employer (as Plan Sponsor) is responsible for complying with the legal requirements for HCFSAs, a TPA (Third Party Administrator) can apply the correction procedures on the Employer’s behalf. Most Employers already follow a similar version of these correction procedures.
- Order of Correction Steps. Steps 2–4 of the correction procedures can be taken in any order, so long as the order is consistently applied for all participants. In contrast, step 5 may only be applied after the employer has pursued all correction methods in the other steps. The CCA cautions that treating an improper payment as uncollectible “should be the exception, rather than a routine process,” and that repeatedly including such payments in participants’ income suggests that the plan lacks proper substantiation procedures or may be cashing out unused HCFSA amounts. The CCA also states that steps 2–4 should be taken during the plan year in which the improper payment was made, and that any repayments will be available for reimbursing other expenses incurred during the plan year, or for carryover if permitted under the plan (subject to the limits of the IRS carryover rules). In cases where steps 2–4 were not applied during the year of the improper payment, the employer should proceed to step 5.
- Reporting Improper Payments. When step 5 is applied, the employer must first request payment consistent with its collection procedures for other business debts. If the payment is not recovered, the employer may forgive the indebtedness, in which case the payment should be reported as wages on Form W-2 for the year in which the indebtedness is forgiven. The reported amount is subject to withholding for income tax, FICA, and FUTA. Note: According to previous informal comments of IRS officials in the debit card context, Form W-2 should be used for this purpose even if the employee no longer works for the employer.
B. IRS Explains How to Preserve HSA Eligibility for Individuals With Health Care FSA Carryovers. The IRS has released a Chief Counsel Advice (CCA) memorandum that answers key questions about how Health Care FSA carryovers affect HSA eligibility. As background, HSA-eligible individuals must have qualifying high-deductible health plan (HDHP) coverage and no non-HDHP coverage other than permitted insurance, permitted coverage, coverage providing only certain types of preventive care, or coverage with a deductible that equals or exceeds the statutory minimum annual HDHP deductible (collectively, HSA-compatible coverage). When the IRS changed the “use-it-or-lose-it” rule for cafeteria plans to allow HCFSAs to offer carryovers of up to $500, questions arose about the impact of HCFSA carryovers on HSA eligibility, including what actions could be taken to preserve HSA eligibility for individuals with carryovers and how claims submitted during a general-purpose HCFSA’s run-out period should be administered if unused amounts from that plan could be carried over to an HSA-compatible HCFSA (e.g., a limited-purpose HCFSA). The CCA addresses all of those topics.
- Effect of General-Purpose HCFSA Carryovers. According to the CCA, general-purpose HCFSA coverage resulting solely from a carryover of unused amounts makes an individual ineligible to contribute to an HSA. The ineligibility lasts for the entire year into which the unused amounts are carried—it does not end when the amounts are exhausted.
- Options for Preserving HSA Eligibility. If the cafeteria plan so provides, an individual who participates in a general-purpose HCFSA can avoid the adverse effect of a carryover on HSA eligibility by declining (waiving) the carryover prior to the beginning of the next year, or by electing to participate in an HSA-compatible HCFSA and electing to have any unused general-purpose amounts carried over to the HSA-compatible-HCFSA. Alternatively, a cafeteria plan that offers both a general-purpose HCFSA and an HSA-compatible-HCFSA can provide that individuals who elect HDHP coverage for the next year will be automatically enrolled in the HSA-compatible-HCFSA, with any unused general-purpose amounts automatically carried over to that HSA-compatible-HCFSA.
- Administration During Run-Out Period. Unused amounts from a general-purpose HCFSA that could be carried over to an HSA-compatible-HCFSA may be used during the general-purpose HCFSA’s run-out period to reimburse expenses covered by the general-purpose HCFSA that were incurred during the previous plan year. During that period, expenses covered by the HSA-compatible-HCFSA must also be timely reimbursed, but reimbursements may be limited to the participant’s elected coverage amount for the new plan year (i.e., without counting the carryover). Reimbursement of any HSA-compatible claims in excess of the elected amount can be delayed until the end of the run-out period, when the amount of any carryover can be determined.
Notes: While CCAs do not bind the IRS, they are issued and shared with the public to promote more uniform tax administration on issues as they apply in general. This particular memo provides much needed guidance on the options available to employers who want to offer HCFSA carryover while helping employees keep/preserve their HSA eligibility for a subsequent plan year.
Posted April 10, 2014 by PHaynes
If you want to see 10 pages of health reform in a 1 page timeline (well, 1 page for Employers and 1 page for Employees) then please visit our website (www.apbenefitadvisors.com/news). But, if you are looking for details specific to just a certain year or plan, then you can’t do better than this implementation timeline from The Kaiser Family Foundation.
Also, we’ve had several requests for a condensed version of the Employer Mandate rules and examples. That is included here too.
AP Benefit Advisors’ Timelines & Employer Mandate Details
- Employer Timeline, Version 13 (a decade of health reform on 1 page)
- Employer Mandate details and examples
- Employee Timeline, Version 4 (specifically designed for an employee/plan participant to review)
- Kaiser Family Foundation Implementation Timeline
Posted April 9, 2014 by PHaynes
President Obama signed HR 4302 (Public Law 113-93) into law “Protecting Access to Medicare Act of 2014”.
Most employer-sponsored plans would see that headline and ask, “what does this mean to my and my plan?” Here are the two key highlights that most of you will be interested in.
- President Obama signs into law ICD-10 delay, SGR patch. This week, President Barack Obama signed into law the Protecting Access to Medicare Act of 2014 (HR 4302). Amongst other things, this law delays ICD-10 implementation until Oct. 1, 2015. ICD-10 consists of over 140,000 diagnosis codes, and each code consists of three to seven digits, which means that the new codes will require more time and effort to assign. Many laboratories – which heavily rely on physicians to furnish the diagnosis codes necessary to bill for the testing they perform – are struggling with ICD-10 implementation issues and undoubtedly will welcome the reprieve. Note: Remember, ICD-9 was first rolled out in the 1970s and was used primarily in the hospital inpatient setting for indexing purposes. It was not used for billing purposes until much later. However, as early as 1990 the National Committee on Vital and Health Statistics (NCVHS) has been reporting to HHS (the Department of Health and Human Services) that there were problems with ICD-9-CM’s ability to keep pace with medical science. Consider surgical procedures from the 1970s that have their own ICD-9 code now are labeled with a sub-code of “other” because they were done laparoscopically or with a laser. Simply put, ICD-10 has been on the horizon for 5 years and is designed to enhance efficiency, accuracy and more. HHS’ 2004 cost/benefit analysis concluded that the costs were outweighed by the benefits that would be derived, and they estimated saved dollars in the following categories:
- More accurate payment for new procedures
- Fewer rejected claims
- Fewer fraudulent claims
- Better understanding of new procedures
- Improved disease management
- Sec. 213. Elimination of limitation on deductibles for employer-sponsored health plans. One piece of PPACA that was originally scheduled for the first plan year on/after 1/1/2014 was that deductibles could be no higher than $2,000 for self-only coverage and $4,000 for other coverages. Initially that requirement didn’t apply to Grandfathered plans. Changes, over the years made it so that it did not apply to self-funded plans. When large employers (that were fully insured) complained, they made that provision not apply to large-employer plans too (generally 100-lives plus). With this latest amendment, this provision no longer applies to small groups either. Since the requirement has been stricken as if it was included in the original PPACA bill/law, it basically takes effect for plans on 1/1/2014. While this may not offer much relief to plans that have already set their 2014 deductible limits, it will offer other employers options. This also means that 2015’s proposed “maximum deductibles” (of $2,050/single and $4,100/family) are now moot too.
Links: Read the full bill here.
Posted April 4, 2014 by Megan DiMartino
Excerpted from shrm.org
The U.S. Treasury and the IRS issued two final rules that define the information-reporting procedures for insurers and self-insured employers that take effect in 2015. The rules were published in the Federal Register on March 10, 2014.
Although 96 percent of organizations are not subject to ACA reporting requirements or the employer mandate to provide health care coverage because they have fewer than 50 full-time equivalent employees, in 2015 requirements begin to phase in for the remaining 4 percent of businesses that are required to offer quality, affordable coverage to workers or pay a penalty.
The final regulations sought to streamline reporting requirements for employers, particularly those that offer highly affordable coverage to their full-time employees. Specifically, the regulations instruct providers of minimum essential health coverage that are subject to the information-reporting requirements of Section 6055 of the Internal Revenue Code, enacted by the ACA, along with certain revisions to increase consistency with previous guidance issued under Section 6056.
“Employers that self-insure will have a streamlined way to report under both the ACA’s employer and insurer reporting provisions,” according to the Treasury. “Responding to widespread requests, the final rules provide for a single, consolidated form that employers will use to report to the IRS and employees under both sections 6055 and 6056, thereby simplifying the process and avoiding duplicative reporting. The combined form will have two sections: the top half includes the information needed for section 6056 reporting, while the bottom half includes the information needed for section 6055.”
But some trade groups contend that the regulations are still overly complex and burdensome. “Complying with the ACA reporting requirements will be an extremely daunting task for businesses of all sizes,” said Christine Pollack, vice president of government affairs at the Retail Industry Leaders Association (RILA). “Despite the extensive policy recommendations the retail industry has provided to the administration, the final rules appear to do little to streamline or lessen the administrative burdens of these requirements.” RILA had submitted a comment letter last November to the federal agencies outlining its concerns.
As set out under the final regulations:
- Organizations that are large enough to be subject to the employer coverage mandate and that self-insure will complete both parts of the combined form for information reporting.
- Employers that are subject to the coverage mandate but do not self-insure will complete only the top section of the combined form (reporting for Section 6056). Insurers and other health coverage providers will report under just Section 6055, using a separate form for that purpose. Insurers do not have to report on enrollees in the ACA’s public health insurance exchange, since the exchange will already be providing information on individuals’ coverage there.
For businesses that provide a “qualifying offer” to any of their full-time employees, the final rule provides a simplified alternative to reporting monthly employee-specific information on those workers:
- A qualifying offer is an offer of minimum-value coverage that provides employee-only coverage at a cost to the individual of no more than about $1,100 in 2015 (9.5 percent of the federal poverty level), combined with an offer of coverage for the employee’s family.
- For employees who receive qualifying offers for all 12 months of the year, companies will need to report just their names, addresses and taxpayer identification numbers (TINs) and the fact that they received a full-year qualifying offer. Employers will also give the workers a copy of the simplified report or a standard statement indicating that they received a full-year qualifying offer.
- For employees who receive a qualifying offer for less than all 12 months, for each of those months, employers will be able to simplify reporting to the IRS and to workers by simply entering a code indicating that the qualifying offer was made.
- To phase in the simplified option, the government will allow organizations certifying that they have made a qualifying offer to at least 95 percent of their full-time employees (plus an offer to their families) to use an even simpler alternative reporting method for 2015. Those employers may use the simplified, streamlined reporting method for their entire workforce, including for any employees who do not receive a qualifying offer for the full year. They will provide employees with standard statements relating to their possible eligibility for premium tax credits.
The final regulations also give employers the option to avoid identifying in the report which of their workers are full time and instead just to include those employees who may be full time. To take advantage of this option, a company must certify that it offered affordable minimum-value coverage to at least 98 percent of the employees on whom it is reporting.
For more information, contact us.