by admin | Dec 12, 2017 | ACA, Benefit Management, Compliance, Group Benefit Plans, IRS
Beginning in 2015, to comply with the Patient Protection and Affordable Care Act (ACA), “large” employers must offer their full-time employees health coverage, or pay one of two employer shared responsibility / play-or-pay penalties. The Internal Revenue Service (IRS) determines the penalty each calendar year after employees have filed their federal tax returns.
In November 2017, the IRS indicated on its “Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act” webpage that, in late 2017, it plans to issue Letter 226J to inform large employers of their potential liability for an employer shared responsibility payment for the 2015 calendar year.
The IRS’ determination of an employer’s liability and potential payment is based on information reported to the IRS on Forms 1094-C and 1095-C and information about the employer’s full-time employees that were received the premium tax credit.
The IRS will issue Letter 226J if it determines that, for at least one month in the year, one or more of a large employer’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the employer did not qualify for an affordability safe harbor or other relief for the employee).
Letter 226J will include:
- A brief explanation of Section 4980H, the employer shared responsibility regulations
- An employer shared responsibility payment summary table that includes a monthly itemization of the proposed payment and whether the liability falls under Section 4980H(a) (the “A” or “No Offer” Penalty) or Section 4980H(b) (the “B” or “Inadequate Coverage” Penalty) or neither section
- A payment summary table explanation
- An employer shared responsibility response form (Form 14764 “ESRP Response”)
- An employee premium tax credit list (Form 14765 “Employee Premium Tax Credit (PTC) List”) which lists, by month, the employer’s assessable full-time employees and the indicator codes, if any, the employer reported on lines 14 and 16 of each assessable full-time employee’s Form 1095-C
- Actions the employer should take if it agrees or disagrees with Letter 226J’s proposed employer shared responsibility payment
- Actions the IRS will take if the employer does not timely respond to Letter 226J
- The date by which the employer should respond to Letter 226J, which will generally be 30 days from the date of the letter
- The name and contact information of the IRS employee to contact with questions about the letter
If an employer responds to Letter 226J, then the IRS will acknowledge the response with Letter 227 to describe further actions that the employer can take.
After receiving Letter 227, if the employer disagrees with the proposed or revised shared employer responsibility payment, the employer may request a pre-assessment conference with the IRS Office of Appeals. The employer must request the conference by the response date listed within Letter 227, which will be generally 30 days from the date of the letter.
If the employer does not respond to either Letter 226J or Letter 227, then the IRS will assess the proposed employer shared responsibility payment amount and issue a notice and demand for payment on Notice CP 220J.
Notice CP 220J will include a summary of the employer shared responsibility payment, payments made, credits applied, and the balance due, if any. If a balance is due, Notice CP 220J will instruct an employer how to make payment. For payment options, such as an installment agreement, employers should refer to Publication 594 “The IRS Collection Process.”
Employers are not required to make payment before receiving a notice and demand for payment.
The ACA prohibits employers from making an adverse employment action against an employee because the employee received a tax credit or subsidy. To avoid allegations of retaliation, as a best practice, employers who receive a Letter 226J should separate their employer shared responsibility penalty assessment correspondence from their human resources department and employees who have authority to make employment actions.
By Danielle Capilla
Originally Published By United Benefit Advisors
by admin | Nov 1, 2017 | ACA, Compliance
Two tri-agency (Internal Revenue Service, Employee Benefits Security Administration, and Centers for Medicare and Medicaid Services) Interim Final Rules were released and became effective on October 6, 2017, and will be published on October 31, 2017, allowing a greater number of employers to opt out of providing contraception to employees at no cost through their employer-sponsored health plan. The expanded exemption encompasses all non-governmental plan sponsors that object based on sincerely held religious beliefs, and institutions of higher education in their arrangement of student health plans. The exemption also now encompasses employers who object to providing contraception coverage on the basis of sincerely held moral objections and institutions of higher education in their arrangement of student health plans. Furthermore, if an issuer of health coverage (an insurance company) had sincere religious beliefs or moral objections, it would be exempt from having to sell coverage that provides contraception. The exemptions apply to both non-profit and for-profit entities.
The currently-in-place accommodation is also maintained as an optional process for exempt employers, and will provide contraceptive availability for persons covered by the plans of entities that use it (a legitimate program purpose). These rules leave in place the government’s discretion to continue to require contraceptive and sterilization coverage where no such objection exists. These interim final rules also maintain the existence of an accommodation process, but consistent with expansion of the exemption, the process is optional for eligible organizations. Effectively this removes a prior requirement that an employer be a “closely held for-profit” employer to utilize the exemption.
Employers that object to providing contraception on the basis of sincerely held religious beliefs or moral objections, who were previously required to offer contraceptive coverage at no cost, and that wish to remove the benefit from their medical plan are still subject (as applicable) to ERISA, its plan document and SPD requirements, notice requirements, and disclosure requirements relating to a reduction in covered services or benefits. These employers would be obligated to update their plan documents, SBCs, and other reference materials accordingly, and provide notice as required.
Employers are also now permitted to offer group or individual health coverage, separate from the current group health plans, that omits contraception coverage for employees who object to coverage or payment for contraceptive services, if that employee has sincerely held religious beliefs relating to contraception. All other requirements regarding coverage offered to employees would remain in place. Practically speaking, employers should be cautious in issuing individual policies until further guidance is issued, due to other regulations and prohibitions that exist.
By Danielle Capilla
Originally Published By United Benefit Advisors
by admin | Sep 29, 2017 | ACA, Compliance, IRS
In spite of the recent efforts by Congress to change or repeal the ACA, its provisions are still in effect. The IRS has issued continuing guidance on the affordability rate for coverage, the employer shared responsibility provisions and reporting, and the individual mandate provision.
IRS Released the 2018 Affordability Rate
The Internal Revenue Service released its Revenue Procedure 2017-36, which sets the affordability percentage at 9.56 percent for 2018. Under the Patient Protection and Affordable Care Act (ACA), an applicable large employer may be liable for a penalty if a full-time employee’s share of premium for the lowest cost self-only option offered by the employer is not affordable (for 2018, if it’s more than 9.56 percent of the employee’s household income) and the employee gets a premium tax credit for Marketplace coverage.
Because the 2018 affordability rate is lower than the 2017 affordability rate, applicable large employers may need to reduce their employees’ share of premium contributions to maintain affordable coverage. Employers should double check their anticipated 2018 premiums now to prevent the need for mid-year changes.
IRS Releases Information Letters
The IRS issued Information Letters 2017-0010, 2017-0011, 2017-0013, and 2017-0017 on the ACA’s employer shared responsibility provisions and individual mandate.
IRS Information Letters 2017-0010 and 2017-0013 explain that the ACA’s employer shared responsibility provisions continue to apply. The letters state, “The [President’s January 20, 2017] Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe.” Further, the letters indicate that there are no waivers from potential penalties for failing to offer health coverage to full-time employees and their dependents.
IRS Information Letters 2017-0011 and 2017-0017 address the continued application of the ACA’s individual shared responsibility provisions. Letter 2017-0017 states, “The Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law, including the requirement to have minimum essential coverage for each month, qualify for a coverage exemption for the month, or make a shared responsibility payment.”
IRS Issues Draft Forms 1094/1095
The IRS issued draft Forms 1094-B, 1095-B, 1094-C, and 1095-C for the 2017 tax year. Coverage providers use Forms 1094-B and 1095-B to report health plan enrollment. Applicable large employers use Forms 1094-C and 1095-C to report information related to their employer shared responsibility provisions under the ACA.
There are no changes to the face of draft Forms 1094-B, 1095-B, or 1095-C. The IRS made one substantive change to draft Form 1094-C. The IRS removed the line 22 box “Section 4980H Transition Relief” which was applicable to the 2015 plan year only.
By Danielle Capilla
Originally Published By United Benefit Advisors
by admin | Sep 6, 2017 | Compliance, HIPAA, Human Resources
When it comes to Employee Assistance Programs, confidentiality is a concern for both employers and employees. As an employer, it is helpful to understand the terms and processes your EAP uses to keep information confidential and ensure that your employees and your workplace are safe.
The Health Insurance Portability and Accountability Act (HIPAA) rules apply to EAPs and their affiliate providers. All information that is obtained during an EAP session is maintained in confidential files. The information remains confidential except in the following circumstances:
- An employee/client provides written permission/consent for the release of specific information. This can be done using a Consent to Inform or Release of Information form.
- The life or safety of the client or others is seriously threatened.
- Child abuse has occurred.
- EAP records are the subject of a court order (subpoena).
- Other disclosures required by applicable law.
Depending on the situation, an employee may use EAP services through a self-referral, guided-referral or mandated-referral
Voluntary or self-referrals are the most common. When an employee seeks EAP services voluntarily, all of the employee’s information, including whether he or she contacted the EAP or not, is confidential and cannot be released without written permission.
Guided referrals are an opportunity for the employer to encourage the employee to use EAP services when the employer senses there is a problem that needs to be addressed. This may occur when the employer identifies an employee who may be having personal or work-related difficulties but it is not to the point of mandating that the employee use an EAP. In the case of guided referrals, information disclosed by the employee is still kept confidential.
Mandatory or formal referrals usually occur when substance abuse or other behaviors are impacting productivity or safety. An employer’s policy may allow for putting the employee on a performance improvement plan and may even include a “last chance” agreement that states what an employee must do in order to keep their job. In these cases, employees are mandated by the employer to contact the EAP and a Release of Information is signed so the EAP can exchange information with the employer about employee attendance, compliance and recommendations.
In some cases, it may be advised to send the employee for a Fitness for Duty Evaluation or similar assessment to determine the employee’s ability to physically or mentally perform essential job duties, or assess for a potential threat of violence. These evaluations are performed by specially trained professionals and will come with an additional cost. If the employee has provided written consent, limited information may be released to the employer regarding the results of these evaluations.
By Kathryn Schneider
Originally Published By United Benefit Advisors
by admin | Aug 24, 2017 | Benefit Management, COBRA, Compliance
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) allows qualified beneficiaries who lose health benefits due to a qualifying event to continue group health benefits. The COBRA payment process is subject to various rules in terms of grace periods, notification, premium payment methods, and treatment of insignificant shortfalls.
Grace Periods
The initial premium payment is due 45 days after the qualified beneficiary elects COBRA. Premium payments must be made on time; otherwise, a plan may terminate COBRA coverage. Generally, subsequent premium payments are due on the first day of the month. However, under the COBRA grace period rules, premiums will still be considered timely if made within 30 days after the due date. The statutory grace period is a minimum 30-day period, but plans may allow qualified beneficiaries a longer grace period.
A COBRA premium payment is made when it is sent to the plan. Thus, if the qualified beneficiary mails a check, then the payment is made on the date the check was mailed. The plan administrators should look at the postmark date on the envelope to determine whether the payment was made on time. Qualified beneficiaries may use certified mail as evidence that the payment was made on time.
The 30-day grace period applies to subsequent premium payments and not to the initial premium payment. After the initial payment is made, the first 30-day grace period runs from the payment due date and not from the last day of the 45-day initial payment period.
If a COBRA payment has not been paid on its due date and a follow-up billing statement is sent with a new due date, then the plan risks establishing a new 30-day grace period that would begin from the new due date.
Notification
The plan administrator must notify the qualified beneficiary of the COBRA premium payment obligations in terms of how much to pay and when payments are due; however, the plan does not have to renotify the qualified beneficiary to make timely payments. Even though plans are not required to send billing statements each month, many plans send reminder statements to the qualified beneficiaries.
While the only requirement for plan administrators is to send an election notice detailing the plan’s premium deadlines, there are three circumstances under which written notices about COBRA premiums are necessary. First, if the COBRA premium changes, the plan administrator must notify the qualified beneficiary of the change. Second, if the qualified beneficiary made an insignificant shortfall premium payment, the plan administrator must provide notice of the insignificant shortfall unless the plan administrator chooses to ignore it. Last, if a plan administrator terminates a qualified beneficiary’s COBRA coverage for nonpayment or late payment, the plan administrator must provide a termination notice to the qualified beneficiary.
The plan administrator is not required to inform the qualified beneficiary when the premium payment is late. Thus, if a plan administrator does not receive a premium payment by the end of the grace period, then COBRA coverage may be terminated. The plan administrator is not required to send a notice of termination in that case because the COBRA coverage was not in effect. On the other hand, if the qualified beneficiary makes the initial COBRA premium payment and coverage is lost for failure to pay within the 30-day grace period, then the plan administrator must provide a notice of termination due to early termination of COBRA coverage.
By Danielle Capilla
Originally Published By United Benefit Advisors
by admin | Aug 15, 2017 | Compliance, Health & Wellness
Where to Start?
First, expand the usual scope of wellness activity to well-BEING. Include initiatives that support more than just physical fitness, such as career growth, social needs, financial health, and community involvement. By doing this you increase your chances of seeing a return on investment (ROI) and a return on value (ROV). Qualitative results of a successful program are just as valuable as seeing a financial impact of a healthier population.
Source: Katherine Baicker, David Cutler, and Zirui Song, “Workplace Wellness Programs Can Generate Savings,” Health Affairs, February 2010, 29(2): pp 304-311
To create a corporate culture of well-being and ensure the success of your program, there are a few important steps.
- Leadership Support: Programs with leadership support have the highest level of participation. Gain leadership support by having them participate in the programs, give recognition to involved employees, support employee communication, allow use of on-site space, approve of employees spending time on coordinating and facilitating initiatives, and define the budget. Even though you do not need a budget to be successful.
- Create a Committee or Designate a Champion: Do not take this on by yourself. Create a well-being committee, or identify a champion, to share the responsibility and necessary actions of coordinating a program.
- Strategic Plan: Create a three-year strategic plan with a mission statement, budget, realistic goals, and measurement tools. Creating a plan like this takes some work and coordination, but the benefits are significant. You can create a successful well-being program with little to no budget, but you need to know what your realistic goals are and have a plan to make them a reality.
- Tools and Resources: Gather and take advantage of available resources. Tools and resources from your broker and/or carrier can help make managing a program much easier. Additionally, an employee survey will help you focus your efforts and accommodate your employees’ immediate needs.
How to Remain Compliant?
As always, remaining compliant can be an unplanned burden on employers. Whether you have a wellness or well-being program, each has their own compliance considerations and requirements to be aware of. However, don’t let that stop your organization from taking action.
There are two types of programs – Group Health Plans (GHP) and Non-Group Health Plans (Non-GHP). The wellness regulations vary depending on the type of employer and whether the program is considered a GHP or Non-GHP.
Employers looking to avoid some of the compliance burden should design their well-being program to be a Non-GHP. Generally, a well-being program is Non-GHP if it is offered to all employees regardless of their enrollment in the employer’s health plan and does not provide or pay for “medical care.” For example, employees receive $100 for attending a class on nutrition. Here are some other tips to keep your well-being program Non-GHP:
- Financial: Do not pay for medical services (e.g., flu shots, biometric screenings, etc.) or provide medical care. Financial incentives or rewards must be taxed. Do not provide premium discounts or surcharges.
- Voluntary Participation: Include all employees, but do not mandate participation. Make activities easily accessible to those with disabilities or provide a reasonable alternative. Make the program participatory (i.e., educational, seminars, newsletters) rather than health-contingent (i.e., require participants to get BMI below 30 or keep cholesterol below 200). Do not penalize individuals for not participating.
- Health Information: Do not collect genetic data, including family medical history. Any medical records, or information obtained, must be kept confidential. Avoid Health Risk Assessments (i.e. health surveys) that provide advice and analysis with personalized coaching or ask questions about genetics/family medical history.
By Hope DeRocha
Originally Posted By www.ubabenefits.com
