by admin | Jun 22, 2023 | Compliance
CLAIMS SUBSTANTIATION FOR PAYMENT OR REIMBURSEMENT OF MEDICAL AND DEPENDENT CARE EXPENSES
A memorandum released by the IRS Chief Counsel responds to a request for assistance regarding the reimbursement of medical and dependent care expenses. Addressed is whether reimbursements of medical expenses from a health flexible spending arrangement (FSA) provided in a cafeteria plan should be included in an employee’s gross income if the expenses are not properly substantiated. The conclusion is that if any expenses, including those below a certain threshold, are not substantiated, the reimbursements must be included in the employee’s gross income.
The second issue concerns the method of substantiation for expenses. The document examines different scenarios, such as self-certification, sampling of expenses, not requiring substantiation for small amounts, and not requiring substantiation for charges with favored providers. The conclusion is that if a cafeteria plan does not require proper substantiation, it fails to operate in accordance with the regulations and the benefits must be included in the employee’s gross income.
Read the full description of the scenarios, an analysis of the relevant laws and regulations on income tax withholding and the regulations for cafeteria plans and substantiation of expenses.
2024 LIMITS ANNOUNCED FOR HDHPS, HSAS, AND EXCEPTED BENEFIT HRAS
The Internal Revenue Service (IRS) announced the new limits for high-deductible health plans (HDHPs), health savings accounts (HSAs), and excepted benefit health reimbursement arrangements (EBHRAs).
The new limits for both HDHPs and HSAs will go into effect for calendar year 2024 while the HRA limits will go into effect for plan years beginning in 2024.
PREVENTIVE HEALTH SERVICES COVERAGE AND THE BRAIDWOOD DECISION
On May 15, 2023, the Fifth Circuit Court of Appeals temporarily halted the enforcement of a district court’s ruling in the Braidwood Management Inc. v. Becerra case. The district court had invalidated a portion of the Affordable Care Act (ACA) that required coverage of certain preventive care services without cost-sharing, citing religious beliefs as the reason for the violation. The Justice Department appealed the decision, and while the appeal is ongoing, the Fifth Circuit issued an administrative stay, effectively reinstating the ACA’s requirement for full coverage of preventive care. A final decision from the Fifth Circuit is expected later this year.
The Braidwood decision concluded that the determination of certain preventive care requirements under the ACA violated the Appointments Clause of the United States Constitution. These requirements are typically based on recommendations from entities such as the United States Preventive Services Task Force (USPSTF) and the Health Resources and Services Administration (HRSA). However, the court’s ruling specifically targeted recommendations made by the USPSTF after March 23, 2010.
The Departments of Labor, Health and Human Services, and the Treasury, responsible for enforcing the preventive service coverage requirements, have appealed the court’s decision. The Departments have issued an FAQ clarifying the impact of the Braidwood ruling, stating that it only applies to services recommended by the USPSTF after March 23, 2010, and does not affect guidance related to immunizations recommended by the Advisory Committee on Immunization Practices (ACIP) or comprehensive guidance supported by the HRSA. State laws may still require coverage of USPSTF-recommended services.
Although the Braidwood decision suspends the enforcement of certain preventive care coverage, it is expected that few employers will make significant changes until the outcome of the case is determined through the appeals process.
QUESTION OF THE MONTH
Q: Throughout the pandemic, our company’s group health plan has covered COVID-19 testing and vaccines at no cost to plan participants. Is this still required now that the public health emergency has ended?
A: During the COVID-19 public health emergency (PHE), group health plans had to cover COVID-19 testing and vaccines without cost-sharing or restrictions. Coverage requirements for diagnostic testing no longer apply after the PHE, but plans are encouraged to continue providing coverage at no cost. However, plans may choose not to cover tests or impose cost-sharing. The requirement to cover COVID-19 vaccines as a preventive service remains in effect for non-grandfathered health plans, but coverage for out-of-network providers is no longer mandatory if there is an in-network option. Plans are encouraged to notify participants of any changes to COVID-related coverage, and modifications must be disclosed at least 60 days in advance, except for changes that revert to pre-PHE conditions.
© UBA. All rights reserved.
| This information is general in nature and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors. |
by admin | Jun 12, 2023 | Employee Benefits
As much as employers might prefer that employees’ personal affairs do not interfere with their work, the reality is that problems outside of the workplace can and do impact job performance. Many of these issues go unaddressed due to fear of stigmatization, leading to further declines in employee health and productivity. Anxiety and stress, financial troubles, substance abuse and other personal problems can also lead to increased absenteeism. To help combat these issues, many employers offer a workplace benefit called an Employee Assistance Program (EAP) that is designed to help employees address everyday challenges.
What is an EAP?
An EAP provides voluntary, confidential services to employees who need help managing personal difficulties or life challenges. The idea is to address personal issues before they interfere with work performance. The employee assistance program is one of the top benefits employers offer in America—for a good reason. They are one way that companies support the well-being of their employees. An EAP generally offers confidential assessment, short-term counseling, referrals and follow-up services for employees.
Typically, an EAP grants employees access to a set number of sessions with a therapist, and the employee would not accrue any co-pay, deductible, or other out-of-pocket costs for the service. For example, Nick has been struggling with depression. To sooth his anxiety, he has begun drinking every day. It’s gradually escalated to the point where he is late to work, has frequent absences, and is missing deadlines. He knows he needs to talk with someone who can offer him alcohol abuse resources. He accesses his company-sponsored EAP.
Meredith is a full-time, married employee with two small children and is also caring for her aging mother who suffers from Alzheimer’s. She is constantly stressed due to the heavy burden of her daily life. The schedule has left her exhausted and she misses work each month due to feeling burnt out. She reaches out to her EAP counselor for time management and mental health tips.
Here are some other common services included in EAPs:
One reason behind the popularity of EAPs is that it’s a mutually beneficial program for employers and employees. After all, your employees are the foundation of your company. Healthy and happy employees are more productive and engaged in their jobs which is great for your company’s bottom line!
by admin | Jun 5, 2023 | Employee Benefits, Human Resources
Total rewards packages refer to the compensation and benefits plans that companies offer. This phrase, however, extends beyond mere salary or wages and traditional benefits, like health insurance, to provide both recruits and employees with a rundown of what makes the employer special. Some in Human Resources might regard the total rewards package as the starting line for employee value proposition (EVP).
Here are the different components of a total rewards package:
Compensation
Compensation, which may refer to wages or salary, is the obvious main feature of the total rewards package. People get paid for their work, so they can afford housing, food, and the basic necessities of life. The money you’re paid to work may include the chance for bonuses and other merit-based rewards, in addition to salary or wages.
Basic Benefits
The most well-known benefits include health, vision, and dental insurance. People have come to expect some form of medical insurance for full-time employment in the United States. In fact, most rely on this benefit for their healthcare because private insurance is astronomically expensive without group membership, and the United States does not have a public option.
Retirement Plans
Offering 401(k) or IRA plans have also become the norm. Companies previously rewarded loyalty with pensions that could help people survive after employment ended. However, nowadays, pensions have been replaced by these other retirement plans, which rely on sometimes volatile markets. There are penalties for taking the money out of such accounts before retirement.
Paid Time Off (PTO)
Paid time off is not a given in every job. However, it refers to the time people are allowed to take vacation, recover from illness or injury, and celebrate holidays while still getting paid. This can include vacation days, sick days, and bank holidays.
Nowadays, some companies are getting creative with PTO. They may include shared days off, where the entire organization takes a break and gets paid. Or they might have unlimited PTO, which means people do not have to accrue or earn days based on seniority. Rather, they can take off when they need to without limit. In those cases, however, employers use an honor system to ensure people do not take advantage of the system.
Family Leave
This is key for new parents, those tending to loved ones who are ill or elderly, or those facing a longer-term illness themselves because they can take time off for care. However, family leave does not have to be paid. Approved family leave requires employers to hold the position for the person, but they do not have to be paid during that time off. It depends on whether they company offers pay for family leave. Many do pay for maternity leave for up to three months, and many others are offering paternity leave now, too. Assessing employment law is a necessity in these cases. And job applicants must do their due diligence when vetting potential employers if they think they may need leave at some point.
Learning and Development and Career Paths
Employees are seeking opportunities to learn, grow, and develop in their careers while on the job. Therefore, more employers are trying to offer training, classes, reimbursement for tuition or coursework, mentorship, leadership development, and other opportunities to gain skills necessary for raises and promotions. It will also help the individual and the employer remain relevant as the skills gap becomes more of a problem in the future of work.
Mental Health and Wellness Programs
For decades now, people have looked to their employers for gyms or gym membership. But now everyone is thinking beyond physical health to mental health as well. As a result, access to mental health help, employee assistance programs (EAPs), classes on mindfulness or yoga, apps for stress management, and more are on the table. Many employers are responding with a wealth of benefits related to wellness and well-being.
Free Food
Providing free lunches, snacks, or special occasion treats has been a hallmark of American companies. Many of the tech giants have campuses that provide services from dry cleaning to dental work, and free food in the cafeteria is a given. As employers try to convince people to return to the office in this post-pandemic era, they try to lure them with bagels or pizza or even other more gourmet options.
Work-Life Balance
Flexibility in where and/or when people work is going mainstream. As the gig economy gains steam, people expect to have more flexibility in their scheduling. Offering remote or hybrid work schedules, understanding when someone must pick up their kid from school or go to a doctor’s appointment, and allowing people to execute asynchronous work during off hours are benefits that impact work-life balance.
Ultimately, the total rewards package a company offers is the first sign of its relationship with employees. It tells the story of how talent is valued by an organization. It usually requires more than just money to satisfy recruits and employees.
By Francesca Di Meglio
Originally posted on HR Exchange Network
by admin | May 30, 2023 | Employee Benefits, HSA/HRA
Are you the type of person who loves to save money? You’ll be happy to know that there’s a way to do so with your health care costs. It starts with medical expense accounts which let you set aside money to pay for certain health products and services. One type of medical expense account is a Health Savings Account (HSA).
How Does An HSA Work?
An HSA is a type of personal savings account you can use to pay certain health care costs. An HSA lets you pay for qualified health, dental and vision care costs for yourself, spouse and dependents with tax-free money. The money you contribute comes out of your paycheck – before taxes – and that is how you save to pay for your out-of-pocket health care expenses. Like a regular savings account, your HSA has an interest rate that allows your money to grow while sitting in the account. Your employer also has the option of contributing to your HSA, helping it to grow faster.
If you don’t use all of your HSA funds during the calendar year, you can roll that money over. An HSA is owned by you so you take it with you no matter if you change plans, change jobs or if you decide to retire. You will get a debit card which is linked to your HSA when you set up your account that you use to pay for eligible expenses.
You must be enrolled in a High Deductible Health Plan (HDHP) to open and contribute to an HSA. HDHPs medical plans aim to minimize your health care costs if you don’t use your plan a lot but keep you financially protected in cases of illness or emergency. Similar to a car insurance policy, you pay for your expenses up to the point that you meet your deductible and then the insurance coverage begins. The higher the deductible you choose, the smaller the monthly cost will be. But it also means that when you have health expenses, you are responsible for all of the costs up to your deductible amount. Rather than pay for your health expenses that occur before hitting your deductible out of your pocket, you can pay for those expenses using pre-tax dollars from your HSA account.
Federal law includes strict guidelines for HSAs including HDHP cost sharing and annual limits on contributions. The amount you contribute can be adjusted throughout the year but they do have an annual limit on how much you can contribute per year. This limit is set by the IRS and usually increases each year. Contribution limits for 2023 and 2024 are:
What Are the Benefits of Having an HSA?
- Money goes in tax-free – Your HSA contributions are made on a pre-tax basis and are also tax deductible
- Money comes out tax-free – Eligible healthcare purchases can be made directly from the HSA account
- Earn interest, tax-free – The interest on HSA funds grows on a tax-free basis. Unlike most savings accounts, interest earned on an HSA is not considered taxable income when funds are used for eligible medical expenses.
- Your HSA balance can be invested – Depending on your HSA, you may be eligible to invest your HSA similar to a 401k or IRA – in an interest-bearing account, mutual fund, stocks or bonds.
- Your HSA balance can be carried over – Unlike a Flexible Spending Account (FSA), an HSA is not a use-it-or-lose-it account. You can carry over your balance year after year.
- You can use your HSA to add to your retirement funds – After the age of 65, you can withdraw funds from your HSA for any reason without penalty.
The Bottom Line
HSAs are often referred to as triple tax-advantaged and are one of the best savings and investment tools available under the U.S. tax code. As a person ages, medical expenses tend to increase, particularly when reaching retirement age and beyond. Therefore, starting an HSA early and allowing it to accumulate over a long period, can contribute greatly to securing your financial future.
by admin | May 23, 2023 | Compliance
2024 BENEFIT PARAMETERS FOR MEDICARE PART D CREDITABLE COVERAGE DISCLOSURES ANNOUNCED
The Centers for Medicare and Medicaid Services (CMS) released a Fact Sheet announcing the 2024 benefit parameters for Medicare Part D. These factors are used to determine the actuarial value of defined standard Medicare Part D coverage under CMS guidelines.
Each year, Medicare Part D requires that employers offering prescription drug coverage to Part D eligible individuals (including active or disabled employees, retirees, COBRA participants, and beneficiaries) disclose to those individuals and CMS whether the prescription plan coverage offered is creditable or non-creditable. Creditable coverage meets or exceeds the value of defined standard Medicare Part D coverage.
Insurance carriers and providers of the prescription benefit will typically notify the plan sponsor if their prescription plan is creditable or non-creditable. The 2024 parameters for Medicare Part D are:
The Online Disclosure to CMS Form must be submitted to CMS annually, and upon any change that affects whether the drug coverage is creditable:
- Within 60 days after the beginning date of the plan year
- Within 30 days after the termination of the prescription drug plan
- Within 30 days after any change in the creditable coverage status of the prescription drug plan
QUESTION OF THE MONTH
Q: Where can I find the updated RxDC reporting instructions?
A: The most recent version of the reporting instructions and templates can be found on the Centers for Medicare and Medicaid website.
To receive an email when the instructions are updated, create a Registration for Technical Assistance Portal (REGTAP) account. Select the checkbox “Please send me updates for the Consolidated Appropriations Act / No Surprises Act” in your account settings.
© UBA. All rights reserved.
| This information is general in nature and provided for educational purposes only. It is not intended to provide legal advice. You should not act on this information without consulting legal counsel or other knowledgeable advisors. |
