Based on the benefits you offer to your employees, there are several compliance obligations that need to be addressed.
The November and December months are a busy time of the year for employee benefits since a significant number of plans renew on or around January 1st. While several employers are deciding which plans they want to offer to their employees during this time of the year, compliance obligations should also be top of mind. Below are some helpful reminders.
Plan Documents. Employers should make sure they have appropriate plan documents in place. This includes the Summary of Benefits and Coverage (SBC) required under the Affordable Care Act (ACA) for health insurance plans and some Health Reimbursement Arrangements (HRAs). Additionally, when employees can pay for benefits with pre-tax dollars, a Cafeteria Plan document must be adopted. Lastly, all benefits subject to the Employee Retirement Income Security Act of 1974 (ERISA) must have a summary plan description (SPD) with customized and detailed information disclosed.
Non-Discrimination Testing. Some benefit plans require non-discrimination testing to be conducted. The non-discrimination testing is necessary to ensure highly compensated and/or key employees are not eligible for or receiving benefits more favorably than other employees. Non-discrimination testing applies to Cafeteria Plans, self-insured medical plans, Health Reimbursement Arrangements (HRAs), Health Flexible Spending Accounts (Health FSAs), Dependent Care Flexible Spending Accounts (DC FSAs) and group term life insurance.
Medicare Part D Reporting. Employers must report information to the Centers for Medicaid and Medicare Services (CMS) within 60 days of the start of each plan year. The reporting lets CMS know the creditable coverage status of prescription drug plans, including those embedded with a health insurance plan. Medicare-eligible employees are subject to a penalty if they delay enrollment in Part D unless they have creditable drug coverage elsewhere. The reporting form can be accessed and submitted by clicking here, and it only takes about ten minutes to complete.
COBRA General (Initial) Notice. A COBRA General Notice must be provided to new plan participants within 90 days of enrolling in coverage. This includes an employee who elects a new or different benefit that is subject to COBRA, as well as new dependents who will now be covered under a plan that is subject to COBRA. As a best practice, employers should provide the COBRA General Notice to every eligible employee.
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New HRA rules proposed for 2020 can help employees covered by an individual health plan.
Learn what this means for your business and your employees.
The Department of Labor (DoL), Department of Treasury (DoT) and the Department of Health and Human Services (HHS) have jointly proposed new rules that would impact Health Reimbursement Arrangements (HRAs) effective January 1, 2020.
The proposed rules, which are open for public comment until December 28, 2018, would make a significant change to the HRA integration requirements. Current regulations require HRA participants to also be covered by a traditional group health plan with limited exceptions. The proposed rules do not eliminate the integration requirement, but the rules would allow integration to also be available for employees covered by an individual health plan.
If the proposed rules are finalized, this would allow employers of all sizes to establish an HRA which reimburses individual health insurance premiums.
Some employers may shift from offering a traditional group health plan to offering an HRA which reimburses individual health insurance premiums, and the proposed rules make it clear that an employer cannot offer the same class of employees the choice between a traditional group health plan and an HRA which reimburses individual health insurance plans. However, an employer could offer a traditional group health plan to one class of employees (e.g. full-time employees) and an HRA which reimburses individual health insurance premiums to another class of employees (e.g. part-time employees).
Employers would be free to establish the maximum reimbursement limits under the HRA, but variances for employees could only be based on an employee’s age and/or family size. Variances would be allowed for these two factors because they have a significant impact on the cost of an individual health insurance plan.
A question that remains, and a question that is expected to be addressed with future guidance, is how an employer who is subject to the Employer Mandate (generally, those with 50 or more employees) can establish this type of HRA and avoid the risk of penalties. The Employer Mandate requires a health plan to be offered that is both affordable and has minimum value to avoid the risk of penalties. The proposed rules indicate that a future safe harbor rule will be issued and will tell employers how they can structure this type of HRA so that it can meet the affordability and minimum value requirements.
In addition to the above information, the proposed rules would also create a new limited, excepted benefit HRA. This HRA would be capped with an annual reimbursement limit of $1,800 with carryover of unused funds permitted. The HRA could reimburse expenses for things like out-of-pocket dental and vision care, or premiums for short-term medical plans and COBRA. This type of HRA could be offered by employers who also offer a traditional group health plan.
This is all big news as indicated in a DoL press release. Preliminary estimates from the Treasury Department suggest that 800,000 employers are expected to offer HRAs which reimburse individual health insurance premiums for more than 10 million employees. We may be in for a significant shift in the way employee benefits are delivered.
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Let’s face it — many of your employees can’t afford an attorney on their own and you’re always looking for new benefits to offer. Adding a legal plan to your benefits program will help you attract and retain employees. And because it’s a voluntary benefit, offering a legal plan has no direct cost to your business.
If an employee knows they will need legal representation in the next year, then a legal service plan is an obvious perk. And even if they don’t have the need now, legal issues occur every day. When you get married, have a baby, buy a home, or loose a loved one, legal documents will be required. Having access to a legal service plan helps your employees overcome the intimidation of an unexpected legal crisis by being given the option to contact a lawyer.
One of the main reasons people never use an attorney is the expense. MetLaw, a group legal plan available through MetLife, covers all your personal and financial legal expenses for less than $1 a day.
What sets MetLaw apart from other legal plans?
Unlimited use – there’s no max to the number of times you can use it. If necessary, you could literally contact an attorney every day for the life of the policy. MetLaw offers convenient access to a large network of experienced attorneys.
No deductibles – less than $1 a day and it’s yours. There are no additional fees associated with owning (or using) a legal service plan. That’s right. No matter how many times you use a network attorney over the course of the year for covered legal matters, all you pay is your monthly premium.
No claim forms – when you contact a network attorney, there’s no paperwork involved. Not even online submissions. To use your legal service plan, simply call the number on your card and explain your need. For example, say “loan closing” and your network attorney will handle it from there.
Affordable coverage for everyday legal matters – including traffic ticket defense and will preparation. If you get a speeding ticket in another state, say 6 hours away, an attorney will show up on your behalf, so you don’t have to.
Your spouse, dependents and other relatives are also all covered on your legal plan for your single base monthly fee. That means if your son or daughter gets a speeding ticket in another state, an attorney will show up on their behalf too.
You can offer MetLaw through your business with as few as 2 employees enrolled. Outside of IXSolutions, this product is only available to businesses with over 200 employees.
2019 Open Enrollment Periods are officially underway
For individuals and businesses nationwide, there's a few things you should know this season.
Last week, the 2019 open enrollment period (OEP) season officially kicked off for Medicare beneficiaries. From October 15 to December 7, Medicare beneficiaries can make changes or enroll in any Part D or Medicare Advantage plan that is available in their service area. Below is a summary of OEPs for other market segments:
Individual Market
Runs from November 1 to December 15.
Allows for enrollment or changes in on-Exchange and off-Exchange plans.
Changes and enrollments are effective as of January 1, 2019.
Small Group Market
Runs from November 15 to December 15.
Health insurance carriers must waive participation and contribution requirements.
Enrollments are effective as of January 1, 2019.
Some health insurance carriers may extend the length of the enrollment period and/or make other effective dates available.
Large Group Market
No mandatory required OEP.
Many large employers renew their health plans and benefits on January 1, and as a result have an OEP that occurs during the fourth quarter.
With so many OEPs occurring during the fourth quarter, the health insurance industry has become much more seasonal over recent years. It’s expected to be a very busy time in the industry. Employers and individuals should plan accordingly and allow for enough time to make informed decisions on coverage for 2019.
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Each year, the Centers for Medicare and Medicaid Services (CMS) adjusts the premiums and out-of-pocket expenses for Medicare beneficiaries. Below is a summary of the 2019 costs.
Premiums
Most people don’t have to pay a premium for Part A, however, those that do will generally have to pay $437 per month (up from $422).
Most people will have to pay a premium for Part B. The standard Part B premium is $135.50 per month (up from $134), however, high income earners may have to pay as much as $460.50 per month.
Deductibles and Out-of-Pocket Expenses
The Part A deductible is $1,364 (up from $1,340). Part A covers hospitalizations and inpatient care. After the deductible, there are additional out-of-pocket costs:
Days 1-60 hospitalized: $0 daily copay (same as 2018)
Days 61-90 hospitalized: $341 daily copay (up from $335)
Days 91 and beyond hospitalized: $682 daily copay (up from $670)
Days 21-100 in a skilled nursing facility: $170.50 daily copay (up from $167.50)
The Part B deductible is $185 (up from $183), and then expenses covered by Part B are generally paid by Medicare at 80%. Part B covers office visits and outpatient expenses.
For additional information on Medicare premiums and expenses, please visit the Medicare website.
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Anyone who is eligible for Medicare but delays enrollment in a Part D plan is subject to a late enrollment penalty unless they have creditable coverage elsewhere. The late enrollment penalty is 1% of the base beneficiary premium for every full month a Medicare-eligible person is without creditable coverage and forgoes enrollment in Part D. The base beneficiary premium for 2019 is $33.19 according to the Centers for Medicare and Medicaid Services (CMS). The notice provided to Medicare-eligible employees helps them understand if they may be subject to a late enrollment penalty if they delay enrollment in Part D.
One of two notices must be provided to Medicare-eligible employees. A creditable coverage notice should be provided when the drug benefit is at least as good as the standard Medicare Part D plan. A noncreditable coverage notice should be provided when the drug benefit isn’t as good as the standard Part D plan. Most prescription drug benefits included under a group health plan are creditable, but CMS has provided a Simplified Determination document to help employers figure out the creditable coverage status in the event that’s unknown.
The notice must be distributed prior to October 15 (meaning it must be distributed by October 14) which is when the Medicare Advantage and Part D annual enrollment period begins. The annual enrollment period will run through December 7. The notice must also be distributed at other times, such as when creditable coverage status changes or when a Medicare-eligible employee first joins the plan.
Additionally, the notice should be provided to any covered dependents who are eligible for Medicare, including those who become eligible for Medicare due to a disability. COBRA beneficiaries and covered retirees who are eligible for Medicare should also be provided a notice. As a best practice, employers may want to provide this notice to everyone covered under their group health plan.
Model Part D notices have been provided by CMS and are available in English and Spanish.
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Employers are getting more creative when it comes to offering Consumer Driven Accounts
While we continue to hear about the rapid growth of Health Savings Accounts (HSAs), there is one feature about Health Flexible Spending Accounts (Health FSAs) that keeps some employees enrolled in this type of consumer-driven account (CDA) – the uniform coverage requirement of Health FSAs.
Health FSAs require the employer to make the entire annual election available to employees at the start of the plan year. This is referred to as uniform coverage. HSAs, on the other hand, don’t have a uniform coverage requirement. Only the funds that have been contributed to date are available for the employee to use with an HSA.
This is an area where some employers are becoming more creative with their HSA. Employers wishing to increase their HSA enrollment and/or offer an enhanced benefit package are advancing funds to their employee’s HSAs. This concept is simple, it gives the appearance of uniform coverage, and can be very appealing to employees.
Let’s assume an employee wanted to put $2,400 into their HSA and the employer had 24 pay periods. Using a traditional funding mechanism, the employee would have $100 withheld from each paycheck and put into their HSA. The HSA balance would accumulate over time and at the end of the year the employee would have $2,400 in their account (assuming there were no withdrawals).
With advancing, the employer would contribute $2,400 to the employee’s HSA at the start of the year. The employee would still have $100 withheld from each paycheck, but the withholding would be retained by the employer. The employee pays back the advanced contribution under this method.
It should be noted there are some risks to the employer. Most notably would be an employee who received an advanced contribution and terminated their employment prior to paying the employer back. Employers can generally recoup any outstanding amounts owed on an employee’s final paycheck, but if the outstanding balance exceeds the amount of the final paycheck, the employer will be on the hook for that amount of the advancement.
One way to reduce the above-mentioned risk is to limit the amount of the advancement. For example, an employer may only allow for advancements of up to $1,000. And for most employers, even if there are losses attributed to the advancements, these losses are offset by payroll tax savings.
HSA contributions avoid Medicare and Social Security taxes that employees must pay and employers are required to match. When taking into account HSA contributions made by all employees, the payroll taxes avoided are likely to exceed any potential losses from the advancements.
Advancing HSA contributions aren’t for everyone, but it’s certainly something employers should at least evaluate and consider.
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When it comes to choosing your companies health benefits—choose your consultant wisely.
Employee benefits are one of the largest cost’s employers in the United States encounter. Deciding which benefit options will serve your business best now and in the future isn’t the smallest decision.
From carriers to contributions to plan choices — there’s a lot to consider. Depending on whether you work with a PEO, private brokerage or go direct to the insurance carrier — that decision is guided by their advice.
Which solution will you leverage for your employee benefit needs?
The first step is knowing all your options. As a small to mid-sized business owner, there are three main options:
The decision ultimately depends on your organizational structure. Maybe cost is your only concern, or perhaps a more personal experience is what you’re looking for. Whatever your priority is when it comes to choosing your company’s health insurance benefits, there are pros and cons of each option.
1. Going direct to an insurance carrier
An insurance carrier like UnitedHealthcare and Blue Cross Blue Shield controls the underwriting, claims and pricing of the insurance policies they offer.
If you currently go direct to an insurance carrier for your employee benefits, you probably have never worked with a private brokerage before.
For employers with less than 50 employees, group health coverage insurance costs the same no matter where you shop. Why? Because the rates are based on your age, geographic location and other qualifying conditions under the Affordable Care Act a.k.a Obamacare.
One condition is when you purchase your benefits with an insurance carrier — you’re on your own when it comes to managing employee benefits for your business.
That means services typically performed by a brokerage are completely in your hands. These services include:
Communicating with the insurance carrier on your behalf
Providing post-sale support throughout the year
Adding or removing employees from your plan
Assisting with open enrollment
Employee maintenance including an explanation of benefits to your new hires
Compliance support
Not to mention when you go direct to a specific carrier, you are subject to that carrier’s plan offering. A broker will typically shop benefit options from multiple carriers and help you narrow down plans to find the best fit for your company.
Another interesting fact: there’s no service fee for going through a broker. Working with a broker means having a personal assistant for your employee health insurance benefits (without paying a penny extra).
Insurance carriers simply can’t provide the one on one assistance that brokers do. That’s why carriers appoint thousands of brokers to sell their products at no additional cost to you. So if the cost is the same, and brokers will do the work for you, why not get the added support?
2. Hiring a Professional Employer Organization (PEO)
Professional Employer Organizations (PEOs) can charge anywhere from 3% to 15% of your employees Gross Payroll in exchange for their services. The cost of a PEO may seem like a solution for your business today—but it’s not a long-term solution. Depending on the size of your company this fee could add up quickly.
When you decide to hire a PEO, you enter a “co-employment” relationship between your company and the PEO itself.
What does co-employment mean?
When you enter a co-employement relationship with a PEO, the PEO literally hires your employees along with the employees of other companies like yours to form one large group. This is beneficial for small groups looking to utilize large group benefits that would otherwise not be available to companies of that size. basically one company (the PEO) owns all these separate companies.
The more employees you have, the less you’ll end up paying for benefits like workers compensation and retirement plans. But when it comes to health insurance a lower price tag may only apply during your first year with the PEO. When your employees are hired by a PEO along with other small businesses’ employees, you enter a contractual agreement stating that the PEO:
Reserves a right of direction and control of the employees with respect to certain matters
Shares or allocates employment responsibilities with the client in a matter consistent with the client maintaining its responsibility for its product or service
Remits wages and withholdings of the client’s workers
Issues Form W-2s for the compensation paid under its Employer Identification Number
Reports, collects and deposits employment taxes with local, state and federal authorities
So when your employees complete their annual tax return, the name of your company will not appear on their W2. For example, if Insperity was your PEO, Insperity would be the employer name on your employees W2.
Day to day activities are still your control such as who gets hired and who gets fired. But overall PEOs come with their fair share of limitations, such as a lack of transparency.
With a PEO, your benefits, payroll and taxes are bundled, so the breakdown and transparency of what you are paying is hard to come by.
Your broker can provide you an exact cost breakdown of your benefits, from employer contributions to individual employee payments.
And because so many of these services are bundled, it’s not easy to leave your PEO. Think about your internet provider at home. You have an all-in-one solution that bundles internet, cable and maybe even your phone. It takes a lot of time to unbundle. When you leave your PEO, you have to find a replacement for your payroll administration, Human Resource services and taxes.
Health insurance plans available through a PEO are based on the number of employees the PEO you choose is employing. PEOs often work with a single carrier and offer two to four different plan options.
3. Working with a private brokerage
A good insurance broker will shop the market each year to find the best plans for your business.
A PEO will not shop for coverage outside of what they offer because their main goal is to drive membership for their PEO plan.
In addition, your PEO may not be able to answer specific benefit related questions. PEOs typically provide online support only for you and your employees. When working with a broker you get a designated account representative to answer your questions and your employees questions.
Brokers Educate
Most insurance brokers will host in person enrollment meetings to better educate your employees. Lack of employee education on healthcare options can lead to a lower utilization of benefits. And after you’ve spent your money to make these benefits available, you want to make sure your employees are using them.
Insurance brokers save you money on premiums by teaching your employees to visit quick care facilities instead of going to the ER and to take advantage of the benefits that are built into their health plans like annual physical exams and mental health service. Don’t assume they know!
Your employees may be better off physically and financially with their group benefit versus shopping in the individual market. By educating them, you’re increasing their appreciation too.
Keeping up with Compliance
A big part of owning a business is knowing the rules and regulations that apply to you and following them. With the rules constantly changing, it’s hard to keep track of what rules are still being enforced. You’ve probably avoided compliance in the past because you simply don’t have time to sort through boring legal documents. But this could be an expensive mistake.
In fact, the consequences for not complying can end up costing your business thousands of dollars.
For example: One provision under the ERISA law requires employers to provide a Summary Plan Description also known as plan SPDs to participants (your employees) within 30 days of their request. If you fail to do so you could be issued a fine of $110/day.
Most private brokerages should be able to help you with these issues (or consider switching to a new one if he/she is not able to help). It’s not worth the risk.
Service Service Service
Brokers work with you, around your schedule to come up with the best health insurance benefits solution for your business. At IXSolutions we believe every business, no matter the size or yearly revenue, should have access to affordable health and ancillary insurance benefits.
We handle your employee benefits administration process, offer more choices and save you money. How? Through our service focused culture and one stop shop employee benefits platform.
With our platform, your employees can enroll into a health insurance plan with the click of a button, so you can go back to doing what you do best — managing your business.
Summary of our services:
All-in-one employee benefits platform
Hassle-free HR & benefits administration
Assigned support team available year-round
Affordable health insurance options
Dental, vision, life, disability & temporary health
Online enrollment for every plan
HSAs, HRAs and FSAs
Private Brokerages vs. PEOs – Pros and Cons
When deciding between private brokerages and Professional Employer Organization to assist with your company’s employee health insurance benefits, it’s essential to consider the advantages and disadvantages of each option. Now that we have a basic understanding of the types of insurance consultants let’s take a closer look at the pros and cons of using Private Brokerages and PEOs.
Private Brokerages offer a tailored approach that is hard to beat. They provide personalized, expert advice tailored to your business’s unique needs. This enables you to craft a benefits package that aligns seamlessly with your organizational objectives. Private brokers also collaborate with multiple insurance carriers, granting you access to many benefit plans. This diversity empowers you to find cost-effective, comprehensive solutions that suit your requirements.
What’s more, they excel at negotiating favorable terms with insurance carriers, potentially reducing your company’s expenses. While insurance brokers may charge fees or commissions for their services, these costs are usually outweighed by the substantial benefits they bring.
PEOs, on the other hand, offer a streamlined HR approach that can significantly reduce administrative burdens for businesses. They can handle various HR functions, including benefits administration, payroll, and compliance, providing you with more time to focus on core business activities.
Additionally, PEOs often grant access to group insurance plans, leveraging the collective purchasing power of multiple businesses to secure potentially better rates and benefits. They excel in staying up-to-date with complex employment laws and regulations, ensuring your company remains compliant. However, partnering with a PEO may entail relinquishing some control over certain HR functions and benefits decisions. Additionally, they may offer a standardized approach to benefits, which may not fully align with your company’s unique requirements.
How to Choose the Right Solution for Your Business
Choosing the right benefits solution for your business requires careful consideration. Here are some tips to help you make an informed decision:
Assess Your Needs
Start by evaluating your company’s specific needs, including the size of your workforce, budget constraints, and the level of control you want over benefits administration.
Compare Costs
Compare the total health insurance costs of using a private brokerage, PEO, or going directly to an insurance carrier specially for small business owners. Consider not only the fees but also the potential to save money and the added value.
Review Services
Understand the range of services offered by each option. Are you looking for assistance beyond benefits, such as HR services? Ensure the chosen solution aligns with your broader HR goals.
Ask for References
You can request references and case studies from both private brokerages and PEOs. Speak with other businesses that have used their services to gauge satisfaction.
Consider Long-Term Goals
Consider your company’s long-term growth, business operations and how your chosen benefits solution can adapt to changing needs.
Consult with Experts
Seek advice from financial advisors, legal experts, or HR consultants who can provide objective insights into which option best suits your business.
Case Studies
Case Study 1: TechSolutions Inc.’s Journey with a Private Brokerage
TechSolutions Inc., a mid-sized technology firm, faced challenges in effectively managing its expanding employee benefits program. The HR team was overwhelmed with administrative tasks, and employees were becoming increasingly dissatisfied with their benefit options.
TechSolutions Inc. partnered with a private brokerage known for its expertise in tailoring benefits packages. The brokerage comprehensively analyzed TechSolutions’ needs, negotiated competitive rates with insurance carriers, and provided ongoing support. By leveraging private brokerage expertise, TechSolutions Inc. identified cost-effective benefit options that significantly reduced their overall benefit expenditure. Additionally, employee satisfaction soared as they were presented with a broader range of tailored benefits, fostering higher morale and improved retention rates.
Case Study 2: WidgetCrafters’ Transformation with a PEO
WidgetCrafters, a small manufacturing business, struggled to keep up with changing employment laws and compliance issues. The company’s owner felt overwhelmed and wanted to find a way to streamline HR processes.
WidgetCrafters decided to partner with a reputable Professional Employer Organization (PEO) known for its HR expertise. The PEO took over various HR functions, including benefits administration, handle payroll, and compliance. With a PEO handling these critical aspects, WidgetCrafters had the opportunity to redirect their resources and focus on refining manufacturing processes and expanding their business, ultimately strengthening their core operations.
Conclusion
Employee benefits are a significant cost for businesses, and making the right choice in terms of health insurance benefit options and advisory services is vital for the success and sustainability of any organization. The decision whether to go for a direct insurance company, a private brokerage, or a PEO should not be made in haste. The ideal solution depends on the specific circumstances and priorities of each business. For many, a private brokerage offers the flexibility, expertise, and customization necessary to effectively tailor benefits packages and control costs. However, a Professional Employer Organization can provide valuable support for companies seeking a streamlined approach to HR management and compliance.
Ultimately, the best solution for most businesses will hinge on their size, budget, company culture, HR capabilities, and long-term goals. By carefully evaluating these factors and considering this guide, businesses can make an informed decision that aligns with their specific needs and greatly enhances the well-being of their workforce and the success of their organization.
Why Cost Sharing Reduction subsidies may be restored and what you need to know for the 2018 reporting year.
The fate of the Affordable Care Act (ACA) is being challenged once again. Last week, oral arguments began in a lawsuit which says the ACA is now illegal. Twenty states have joined the lawsuit which stems from the Individual Mandate tax penalty being zeroed out next year. Technically, the requirement to have health insurance still exists under the ACA, but there will no longer be a penalty for being uninsured. These states say this fact makes the ACA unconstitutional.
In 2012, the U.S. Supreme Court heard a case which challenged the legality of the Individual Mandate. At the time, the lawsuit alleged that requiring a person to buy something (health insurance) exceeded the power of Congress. The lawsuit further alleged that Congress only has the power to regulate commerce, but it cannot force someone to engage in it. In the end, the Supreme Court ruled that the Individual Mandate was legal because there was a tax penalty associated with it, and Congress has the power to impose taxes.
The twenty states who filed suit are using the previous Supreme Court ruling as their primary argument to take down the ACA. They argue that there can’t be a requirement to purchase health insurance without a tax penalty. Furthermore, they argue that the entire ACA must be suspended or terminated because the Individual Mandate is so critical to other parts of the law.
It’s unclear how long this lawsuit will take or what the final ruling will be, however, this lawsuit will likely be making headlines for the foreseeable future.
2018 ACA Reporting Requirements
The Internal Revenue Service (IRS) has released draft versions of the forms and instructions for the 2018 reporting year. The reporting, which is required under the Affordable Care Act (ACA), helps the IRS enforce the Individual Mandate, Employer Mandate and verify subsidy eligibility for individuals who obtain coverage through the Health Insurance Marketplace.
In general, employers with 50 or more employees must complete Forms 1094-C and 1095-C. Smaller employers with self-insured plans and insurance carriers providing fully-insured coverage must complete Forms 1094-B and 1095-B. The forms must be submitted to the IRS by February 28, 2019 if filing manually and by March 31, 2019 if filing electronically. However, copies of the forms must be provided to employees and covered individuals by January 31, 2019.
Copies of the draft forms and instructions have been provided below. Final versions are expected to be released later this year.
A court has ruled that the federal government violated its obligations under the Affordable Care Act (ACA) when it discontinued making payments to insurance carriers for cost-sharing reduction (CSR) subsidies. CSR subsidies are available to eligible individuals with household incomes up to 250% of the Federal Poverty Level (FPL). These subsidies help reduce out-of-pocket costs for eligible individuals who obtain coverage through the Health Insurance Marketplace, and they are paid to insurance carriers.
The Trump administration discontinued making CSR subsidy payments after October of 2017 because Congress never appropriate funds for this purpose. However, last year, a different court refused to require the federal government to make CSR subsidy payments, and the case was later dismissed. As a result, there continues to be uncertainty about if or when the CSR subsidy payments will be restored.
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Learn the difference between these two types of employment.
Seasonal Employees & Seasonal Workers: There’s a Difference!
The Employer Mandate regulations refer to seasonal employees and seasonal workers, and yes, there is a difference. Let’s break this down as simply as possible by starting with a few refresher points.
ALEs are employers with an average of 50 or more employees in the preceding calendar year.
Full-time employees are those who provide 30 hours of service per week, or 130 hours of service per month.
Seasonal Employee
A seasonal employee is an employee who is hired into a position for which the “customary” annual employment is six months or less. The reference to the term customary means the seasonal employees normally work around the same time each calendar year, such as during summer months or the holiday season.
An ALE does not have to offer coverage to seasonal employees even if they are expected to work full-time hours during their seasonal employment. However, seasonal employees should be placed in an initial measurement period where the ALE tracks the hours of service provided and the duration of employment. If it turns out some of these employees were full-time and non-seasonal (for example, they continued to be employed beyond six months), then health insurance should be offered to these employees during the stability period that follows the initial measurement period, or the ALE risks penalties.
For more information on measurement periods and stability periods, click here.
Seasonal Worker
A seasonal worker is an employee who was employed for no more than four months (or 120 days) during the previous calendar year. The reference to a seasonal worker matters when determining ALE status. An employer will not be considered an ALE if they average 50 or more employees because of employing seasonal workers.
Think of a retail company who has 40 employees on staff during the months of January through October. Then during the holiday season, they hire seasonal help and have 200 employees on staff for November and December. This company would have an average of 66.67 employees, but they wouldn’t be considered an ALE due to the seasonal worker exception.
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