Author: IXS Health

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Medicare

In Case You Missed It: Special Enrollment is Extended to August 15, 2021

In Case You Missed It: Special Enrollment is Extended to August 15, 2021

The new special enrollment period (SEP) will now run until August 15, 2021!

As you may be aware, the Biden administration previously created a special enrollment period (SEP) on HealthCare.gov in response to the COVID-19 pandemic. This SEP allows individuals to sign up for coverage (or change plans) without a typical qualifying event.

Previously, it was announced that the SEP would run from February 15, 2021 until May 15, 2021. However, a more recent announcement by the Department of Health and Human Services (HHS) indicates that the SEP will now run until August 15, 2021. If you reside in one of the 36 states which utilize HealthCare.gov, you will now have access to this SEP for three additional months. On the other hand, states which operate on their own Health Insurance Marketplace can optionally choose to offer a similar SEP.

 

What else is in the American Rescue Plan Act of 2021 (ARPA)?

This extended SEP comes in response to recent changes authorized under the American Rescue Plan Act of 2021 (ARPA). The ARPA creates numerous changes to the availability of subsidized coverage available on the Health Insurance Marketplaces, namely:

  • More individuals can qualify for advanced premium tax credits (APTCs). The ARPA temporarily removes the requirement that household earnings must be within 400% of the Federal Poverty Level (FPL) to qualify for an APTC.

  • The ARPA temporarily caps the amount that an individual or family will have to pay for the benchmark plan (i.e., the second-lowest cost silver plan) at 8.5% of their household income. This is down from 9.83%.

  • The ARPA temporarily gives an additional boost in APTCs to those with household earnings less than 400% of the FPL. According to the HHS announcement, these savings will decrease premiums by an average of $50 per person per month and $85 per policy per month.

  • The ARPA temporarily creates a new APTC for anyone who collects unemployment benefits for one or more weeks during the 2021 year. The benchmark plan will cost $0 for these individuals.

 

HealthCare.gov released a statement that they will be ready to begin processing the above-mentioned changes as of April 1, 2021 with the exception of the new APTC that applies to those who have or will collect unemployment benefits this year—APTC may not be available until July.

The full American Rescue Plan Act can be found here.

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Medicare

How PPEs Can Be Reimbursed Under FSAs, HRAs & HSAs

How PPEs Can Be Reimbursed Under FSAs, HRAs & HSAs

Good news! Personal Protective Equipment is now an Eligible Expense for FSAs, HRAs, and HSAs.

The Internal Revenue Service (IRS) recently published Announcement 2021-7 which indicates Personal Protective Equipment (PPE), such as masks, hand sanitizer, and sanitizing wipes, may be reimbursed under a Flexible Spending Account (FSA), Health Reimbursement Arrangement (HRA), or a Health Savings Account (HSA). These expenses are eligible for reimbursement if the primary reason for the purchase is to prevent the spread of COVID-19.

Does this announcement apply retroactively?

The change applies to any period beginning on or after January 1, 2020. Since it was not entirely clear when a PPE expense could be reimbursed to prevent the spread of COVID-19, this announcement (presumably) applies retroactively. And while some FSA, HRA, and/or HSA plans may have previously been reimbursing PPE expenses under an interpretation that it was an eligible expense, the announcement now provides assurance that PPE expenses incurred to prevent the spread of COVID-19 can be eligible expenses so long as the plan allows.

How Reimbursement Works

To allow for PPE expenses to be reimbursable, some FSA and/or HSA plan documents may need to be amended. This will depend on the current language maintained within the plan document.

Plan years which ended in 2020: should have an amendment prepared by December 31, 2021, if applicable.

Plan years which end in 2021: should have an amendment prepared by December 21, 2022, if applicable.

HSAs do not require an amendment since they are not considered group health plans, and HSAs are not subject to the plan document requirements of the Employee Retirement Income Security Act of 1974 (ERISA).

Shop FSA Eligible Products Here

One More Thing

It should also be noted that some medical providers have been adding a small fee to their normal service charges because of the additional costs they are incurring to obtain PPE for their staff and patients. While not addressed in the most recent announcement or elsewhere, an IRS official has informally commented that it seems reasonable that these types of fees should qualify for reimbursement as an incidental part of the provider’s charge for medical services.

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Individual and Family

Medicare and Group Health Plans

More employees than ever before are working beyond age 65, and this is the age when most people in America quality for Medicare. Employers and plan administrators need to understand their options and/or requirements when an employee is eligible for both a group health plan and Medicare. Before we get to that, let’s start with some basics.

The Medicare Alphabet

Medicare is comprised of four different parts, each of which is identified by a letter.

  1. Part A covers hospitalization and inpatient care. Most people can enroll in Part A without having to pay any premium.
  2. Part B covers office visits and outpatient care. Most people must pay a premium to enroll in Part B. In 2021, the premium starts at $148.50/month and increases for higher income earners.Parts A and B are referred to as Original Medicare, and the benefits are administered by the Centers for Medicare and Medicaid Services (CMS), a federal government agency.
  3. Part C is more commonly called the Medicare Advantage program. Under the Medicare Advantage program, private insurance companies administer Part A and B benefits, and often provide more benefits than Original Medicare. There may be an additional premium charged by the private insurance company, although some plans have no additional premium.
  4. Part D covers prescription drugs. Part D plans are also administered by private insurance companies. In addition, several Medicare Advantage plans include Part D coverage.

Although technically not a “part” of Medicare, there is one other plan to point out. Medicare Supplement plans, also known as Medigap plans, are available to people enrolled in Original Medicare. These plans cover some of the deductibles and out-of-pocket costs associated with Parts A and B.

Qualifying for Medicare

Most people qualify for Medicare on the first day of the month that they turn age 65. For example, if your birthday was on May 15th, your eligibility for Medicare will start on May 1st.

Some people qualify for Medicare under age 65 because of a disability. These people are eligible for Medicare on the first day of the 25th month of receiving Social Security Disability Income benefits. People under age 65 with end-stage renal disease (ESRD) or amyotropic lateral sclerosis (ALS) can qualify for Medicare earlier.

Coordination of Benefits

Employers and plan administrators should be prepared to answer questions from employees as they enroll or consider enrolling in Medicare while still working or having coverage through a spouse who is still working. The federal government has a set of rules in place, referred to as Medicare Secondary Payer rules (MSP rules), that determines which health plan is primary and secondary when an employee is enrolled in both a group health plan and Medicare. This is primarily based on the size of the employer, and when determining the size, employers should include full-time and part-time employees in the count.

  • Employers with fewer than20 full-time and/or part-time employees for each working day in each of 20 or more calendar weeks in the current or preceding year.
    • Medicare will be the primary payer of coverage. The group health plan will be the secondary payer of coverage.
  • Employers with 20 or morefull-time and/or part-time employees for each working day in each of 20 or more calendar weeks in the current or preceding year.
    • The group health plan will be the primary coverage for those people who qualify for Medicare based on turning age 65. Medicare will be the secondary payer of coverage.
  • Employers with 100 or more full-time and/or part-time employees on 50 percent or more of its business days during the previous calendar year.
    • The group health plan will be the primary coverage for those people who qualify for Medicare due to a disability. Medicare will be the secondary payer of coverage. Note: Special rules apply to individuals who qualify for Medicare based on a diagnosis of ESRD.
  • Employers offering coverage to former employees, such as retirees.
    • Medicare will be the primary payer of coverage regardless of the employer’s size. The group health plan will be the secondary payer of coverage.

Options for Employers and Plan Administrators

Some employers or plan administrators may be interested in providing an alternative benefit to employees who are eligible for Medicare. This alternative benefit generally involves a financial incentive to disenroll in the group health plan and pursue coverage exclusively through Medicare. This could create savings to the employer, coverage under Medicare may be better than the group health plan, or it could be a combination of both.

The MSP rules that were discussed above also dictate when a financial incentive which may encourage disenrollment from the group health plan can be offered. These MSP rules are in place to protect the solvency of the Medicare Program.

  • When Medicare would be the primary coverage regardless of enrollment in the group health plan (usually, this will be employers with fewer than 20 employees), the employer may establish a Health Reimbursement Arrangement (HRA) which provides tax-free reimbursements to employees under the following circumstances:
    • The employee is offered a group major medical plan with minimum value; and
    • The employee is actually enrolled in Medicare Parts A & B; and
    • Premium reimbursements are only available to those employees enrolled in Parts A, B and/or D; and
    • Reimbursements are limited to Part B and D premiums, Medicare Supplement premiums, and excepted benefits (e.g. dental/vision).
  • When Medicare would be the secondary payer of coverage if the employee were enrolled in both the group health plan and Medicare, the employer cannot offer any incentive (financial, or otherwise) that would encourage disenrollment from the group health plan. Penalties of up to $5,000 for each violation may apply.  In addition, the Internal Revenue Service (IRS) may impose a penalty of up to 25% of the employer’s group health plan expenses for the relevant year.  It would not be advisable to pay or reimburse employees for Medicare premiums (with pre-tax or after-tax dollars) in situations where Medicare would be the secondary payer of coverage if the employee enrolled in the group health plan.
  • Employers offering retiree coverage may establish an HRA that reimburses Medicare premiums and/or medical expenses without having to offer a traditional group health plan. These HRAs allow employers to fix their contributions and expenses while at the same time providing a generous benefit to retirees.

Medicare and COBRA

Medicare entitlement of the employee is listed as a COBRA qualifying event, however, it is rarely a qualifying event. In situations where it is a qualifying event, it is only a qualifying event for the spouse or children that are covered under the group health plan.

For Medicare entitlement of the employee to be a qualifying event, the terms of the group health plan must specify that the employee is no longer eligible for coverage under the group health plan once entitled to Medicare. This is prohibited in most instances by the MSP rules, and thus, Medicare entitlement of the employee is rarely a COBRA qualifying event. This is best illustrated by an example.

John works for XYZ Company which has 200 employees and is subject to COBRA and the MSP rules. John is enrolled in the group health plan offered by XYZ Company, and he also has elected to cover his spouse Jill under the plan. John just turned age 65 and has become eligible for Medicare, but Jill is only 62 years old and is not yet eligible for Medicare. John has decided to enroll in Medicare, and consequently, Jill will be losing coverage under the group health plan.

Does XYZ Company have to offer COBRA to Jill? No.

John voluntarily dropped coverage under the group health plan. XYZ Company did not, and is prohibited from, changing John’s eligibility for coverage under the group health plan because he enrolled in Medicare. John could have continued coverage under the group health plan even while enrolled in Medicare. As a result, John’s Medicare entitlement does not trigger a COBRA qualifying event for Jill.

Medicare Part D Notification and Reporting

As previously mentioned, Part D is the prescription drug program available to those individuals who are enrolled in Medicare Parts A and/or B.  Upon becoming eligible for Medicare, each person has the option to sign up for a Part D plan.  If a person delays enrollment in Part D, they will be charged a late enrollment penalty equal to 1% of the “national base beneficiary premium” multiplied by the number of months not enrolled in a Part D plan.  However, if a person delays enrollment in Part D and is enrolled in a plan from their employer which includes prescription drug coverage, they will most likely have that penalty waived if they sign up for Part D later.

The Medicare rules provide that employers or plan administrators must do two things:

  1. Provide any Medicare eligible individuals with a notice annually prior to October 15th.  The notice indicates whether the drug coverage you offer is at least as good as the standard Part D plan option, referred to as the creditable coverage notice.  There is a non-creditable coverage notice if the drug coverage isn’t at least as good as the standard Part D plan option.  The notice should also be provided at other times, such as when a person first joins the plan or if creditable coverage status changes.  The best practice is to give this notice to all eligible employees since you may not be aware if they and/or their dependents are eligible for Medicare.
  2. You must report information about your drug coverage and its creditable or non-creditable status to CMS within 60 days of the start of each plan year.  You must also report to CMS within 30 days after termination of a plan with prescription drug coverage or a change in the plan’s creditable coverage status.

Model notices and access to the online site to complete the reporting can be found HERE.

Summary

Employers and plan administrators should educate themselves about the interaction between Medicare and group health plans. It’s important for compliance reasons, but it’s also important to help employees understand what does (or doesn’t) change upon becoming eligible or enrolled in Medicare.

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Employee Benefits

What Do Employees Want in Their Health Benefits Package?

Employee benefits in the last few years have evolved into a true attraction, retention, and engagement tool—as an employer, they can be instrumental in shaping the way that employees perceive you.

As the scope of employee benefits becomes broader, it can be hard to know if they are truly effective. In this handy guide, we’ve eliminated the guesswork by letting you know what employees really want in their health benefits package.

Price Transparency and Affordability

75% of patients look at price transparency prior to accessing care

TransUnion Healthcare Patient Survey, August 2019

With healthcare costs in the U.S. continuing to increase every year, the importance of understanding and receiving accurate estimates becomes clearer.

Clear information on out-of-pocket expenses impact on consumers’ decisions to use a healthcare provider. Increasingly, they want to know what care they’re getting, how much it costs, and why they need it.

Personalization

18% of employees want more personalized health care plans and benefits

AHIP Survey “The Value of Employer Provided Coverage”, February 2018

Consumers regularly receive personalized shopping and media recommendations, and they now expect the same kind of personalization in their health care experience. In a survey by AHIP, when asked what their health insurance coverage could be better at (apart from cost), 18% of employees said they would like to have more personalized and patient-centered coverage.

To give more personalized coverage, it’s important for you to understand your employees’ needs, and for your employees to have a good understanding of the kinds of benefits available to them. For example, educating your employees about HSAs or FSAs might give them a chance to save, and provide them with more personalized health care and benefits options. Another way of adding value to your employees’ benefits plan is through adding voluntary coverage, which includes benefits options that would otherwise be unavailable to them, or would be more expensive to get outside of a group plan. This includes things like legal services, worksite benefits, disability insurance, and life insurance. Different voluntary coverage options work for different people, so it’s important to provide these options in the first place!

To learn more about voluntary coverage, contact your health insurance broker.

Simplicity

25% of employees want easier-to-understand employer-sponsored plans

AHIP Survey “The Value of Employer Provided Coverage”, February 2018

Many employees want simple, clearly explained plan information so they can understand their benefits and make informed choices about how to use their plan.

Often, this can be done by providing straightforward and easy-to-understand resources (like this guide!), to help take the guesswork out of employee benefits plans. Some brokers also use technology-enabled benefits platforms to make plan enrollment easier for employees.

Comprehensive Coverage

39% of Americans who receive health care through their workplace cite comprehensive coverage as the main factor driving their satisfaction in their current health plan

AHIP Survey “The Value of Employer Provided Coverage”, February 2018

Previously, benefits emerged to address core health and retirement needs. In recent years, there has been a broader notion of what employee benefits are. Employee benefits are being challenged to do more—to better address employee wants and needs. One way to supplement and enhance your employees’ benefits package is again through adding voluntary coverage.

Voluntary coverage includes products that help create a more meaningful value for your employees’ benefits plan, at no cost to you.

Technology

26% of people on employer-sponsored plans want more online tools and apps to provide information about their health insurance options

Willis Towers Watson 2019/2020 Benefit Trends Global Insights, October 2019

Technology is increasingly being used as a tool to support employee benefit choices and help make informed decisions.

Through technology-enabled benefits platforms, employees are better equipped to make decisions and be in control of their health care. These benefits platforms help facilitate enrollment, and prevent any errors that may lead to employees being enrolled in the wrong coverage. Through a technology-enabled benefits platform, employers are also able to provide a simple solution to address both health plan guidance, and provide more options.

Mindfulness and Mental Health

43% of employers include enhancing mental health services in their top benefit priorities over the next 6 months

Willis Towers Watson 2020 COVID-19 Benefits Survey, May 2020

Despite facing rapidly changing business priorities due to COVID-19, a survey by Willis Towers Watson showed employers taking steps to support employees by making benefits enhancements, most notably by prioritizing mental health services and stress/resilience management.

As hospital visit volumes remain stagnant for the time being, new research also validates that alternative healthcare settings for mental health services—such as telehealth services—are growing in popularity. Plans that offer enhanced telehealth access let employees see their doctors anytime, anywhere—all from the comfort of their own home.

As a small business, offering group health insurance is one of the biggest advantages you have for attracting talent and improving employee production and retention—especially in challenging times.
Categories
Employee Benefits

5 Reasons To Offer Employee Benefits

Offering group health insurance is one of the biggest advantages you have for attracting talent and improving employee production and retention—especially in challenging times.

Here are the five biggest reasons you should offer employee benefits.

1. It’s what employees value

Health insurance is the top valued benefit by employees, according to a survey conducted by the American Institute of CPAs (AICPA) in 2018.

2. It gives you a competitive advantage in hiring

If employees are choosing between two jobs, they are more likely to join a company that offers health benefits with lower pay, than one that doesn’t but with higher pay.

Per the survey conducted by The Harris Poll, among the existing and potential workforce, when asked to choose between two jobs offers—one that included a base salary and benefits (healthcare insurance, two weeks paid vacation, and a 401(k) plan) and another that offered a base salary plus an additional 30% more salary, but no further benefits—these adults were four times as likely to choose the offer with benefits (80% vs. 20%).

2018 AICPA study “How well do Americans understand workplace benefits?”

3. It minimizes sick days

Illness-related lost productivity costs US employers $530 Billion a year.

4. It’s a good tax move

Premium contributions are pre-tax, and companies with more than 50 full-time employees have to pay a tax penalty for not providing health benefits.

5. It helps with retention

Employees are more likely to stay at their current job if they have great benefits.

56% of survey respondents say that health insurance impacts their choice to stay at their current job – “How much of an impact, if any, does the health insurance your job provides you have on your choice to stay at your current job?”

2018 AHIP survey “The Value of Employer-Provided Coverage”

As an employer, you’re in a position to help employees get great coverage that gives them access to care on their terms. Shop around and evaluate your options to ensure you’re providing the best plans for your staff.

Categories
Individual and Family

Introducing a New Individual Carrier Option in Illinois

Introducing Bright Health, a brand new carrier in Illinois offering a carefully curated network of doctors, clinics and hospitals to provide the best healthcare at the best possible price.

About Bright Health

Bright Health began offering consumer-focused health insurance plans in Minnesota in 2017, after raising over $80M in venture capital. They are currently in 13 states, with plans to expand to more, driven by deals with integrated health systems in metropolitan areas.

Bright Health’s model is anchored in exclusive Care Partnerships with leading health systems in each state, using three technology components: an intuitive user interface, a data analytics component, and a platform that works with electronic medical records and telemedicine companies. These allow Bright Health to suppress costs while improving patient outcomes and care coordination.

What makes Bright Health stand out?

No referrals, just open access. No Primary Care Physician selection required.

Bright Health’s Network is an HMO-PPO hybrid. Like an HMO, you are restricted to Bright Health’s Care Partners:

  • NorthShore University Health System
  • DuPage Medical Group
  • AMITA Health
  • Edward-Elmhurst Health
  • Sinai Health System

But like a PPO, you do not need referrals to see specialists. (Contact us to find out if your specialist is part of the Bright Health Care Network!)

Coverage for a fraction of the cost.

Bright Health offers individual and family plans with lower premiums, including several options with a $0 Deductible, and HSA-compatible plans.

Pediatric Dental & Vision on all plans

All plans include pediatric dental and vision coverage for members under 19.

Mindfulness and Mental Health

Sometimes, you just need someone to talk to. Bright Health offers plans with low cost-sharing for mental health services, including behavioral health treatments.

Enhanced Telehealth

See your doctor anytime, anywhere with enhanced telehealth access – all from the comfort of your own home.

If you are tired of having to get referrals and want open access for a fraction of the cost, Bright Health is for you.

Save money on premiums while retaining access to the best hospital systems in Illinois.

Individual & family open enrollment period ends on December 15.

Have a doctor you love and trust? To find out if your specialist is part of Bright Health’s Care Partners in 2021, give us a call at (855) 563-6993.

Categories
Employee Benefits

7 Practical Ways to Save Money on Group Health Insurance

There is one thing everyone can agree on when it comes to health insurance:
it’s expensive.

And as a business owner, it’s easy to feel conflicted about offering it and determining the quality of coverage. On one hand, offering health benefits can be a big line item cost. On the other, you care about your staff’s health and want them to have protection in case of a medical emergency.

With a little savviness, you can make sure your employees are protected without breaking the bank.

Save Big on Group Health Insurance Costs

Cut costs without compromise.

Start Saving Today

1. See what plans are available in your area.

To find the right health insurer, it’s necessary to shop around and see what plans are available in your area—usually through an insurance broker.

You may find that you can save money by offering new health plan options. Generally, HMOs (health maintenance organizations) and EPOs (exclusive provider organizations) are cheaper than PPOs (preferred provider organizations).

Of course, not all PPO plans are the same. You can have a large network (which is much more expensive), or a narrow network (which is cheaper, but provides less coverage). Making a choice between the two networks can be difficult—but not always. In Illinois, Blue Cross Blue Shield offers a hybrid plan called the Blue Options Plan, which gives you the ability to take advantage of the large PPO network with costs similar to a narrow network plan.

It is worth considering changing to a new health plan type upon assessing the kind of access to care that your employees need. If you need help in finding the best plan, you can also contact a consultant from IXSolutions who can help show you all the plan options available.

2. Educate your employees on the different health insurance options, how to pick a plan, and how to properly use their plans

Education can lead to better healthcare spending, such as visiting a walk-in clinic or urgent care, instead of the ER. A walk-in clinic or urgent care is usually a good option to consider for non-life threatening symptoms, such as a sore throat, a headache, rashes, or allergies. The ER is best equipped to see people with unexpected and intense symptoms or injuries, such as chest pain, difficulty breathing, or severe bleeding. As many as one in four ER visits can be handled at an urgent care center. Knowing where to go can save you time and money.

3. Give your employees a chance to save with HSAs or FSAs

HSAs (Health Savings Account) and FSAs (Flexible Spending Account) are pre-tax accounts you can use to pay for healthcare related expenses. With HSAs and FSAs, you can pay for things like co-pays, medical bills, and vision expenses. Both HSA and FSA accounts offer tax benefits and have annual contribution limits. The key differences between them lie in their allowed usage.

If employees opted for a non-HSA eligible health plan (typically lower deductible plans), they can set aside money to pay for health care through a Flexible Spending Account (FSA), where they can put in money pre-tax from their paycheck, and decide what health care bills to pay from their account throughout the year. FSAs also work like a line of credit to cover eligible health care expenses early in the year, as long as you’re on track to make your contribution by the year’s end. However, FSA funds expire by the end of every year, so remind your staff to use their FSA dollars before they expire!

If employees chose an HSA eligible high-deductible health plan, they are eligible for an HSA. An HSA works like a savings account, where the money saved can be rolled year after year. Some HSA plans also give the option of investing funds, which earn profits tax-free.

HSA holders can also contribute to a type of FSA called a Limited Purpose FSA (LPFSA), which work like regular FSAs, but funds can only be used for vision and dental expenses.

4. Look for virtual care solutions (chances are, your carrier offers them!)

Many health plans now include virtual care solutions like telemedicine/telehealth options that are low-cost or even offered at no additional cost to you, and let you talk to a doctor by phone or video instead of visiting a clinic in person.

For routine medical issues such as colds, rashes, UTIs, and pink eye, telemedicine is a great way to get treatment from a medical professional while saving time and money.

5. Consider level-funded plans to save up to 35% in premiums

Level-funded plans give you the opportunity to save money on premiums and a chance to receive a return of premium following a good claims year.

How it works: you pay a fixed monthly premium based on estimated claims for the year. If your employees don’t meet their expected claim amount, the unused funds go back in your pocket. If your employees do exceed the claim amount, you continue to pay the same fixed monthly premium amount thanks to stop-loss insurance.

Level-funded plans are medically underwritten so it’s a great option for healthy groups. Savings can exceed to over 30%.

6. Add voluntary coverage at no cost

Another way to add value to your employees’ benefits plan is through adding voluntary coverage (this includes legal services, worksite benefits, disability insurance, and life insurance), which would otherwise be unavailable or more expensive outside of a group plan.

Offering these is at no cost to you, but adds more products to create better value for your employee benefits plan.

Save Big on Group Health Insurance Costs

Cut costs without compromise.

Start Saving Today

7. Promote good health and wellness

The last practical way to save money? When everyone in the company stays healthy.

By promoting good health and wellness, both employers and employees win. Wellness programs encompass everything from quitting smoking to losing weight to staying active to managing stress. You can even incentivize employee participation—just figure out what works best for your business!

Categories
Medicare

7 Health Reimbursement Arrangements (HRAs) to Offer Your Employees

7 Health Reimbursement Arrangements (HRAs) to Offer Your Employees

There are seven different HRAs you can offer your employees. We've provided a breakdown of each one.

Health Reimbursements Arrangements (HRAs) are employer-funded plans that provide tax-free reimbursements to employees for out-of-pocket medical expenses and, in some instances, tax-free reimbursements for insurance plans that employees obtain on their own. There are even different HRAs you can offer your employees. We’ve provided a breakdown of each one.

 

1. Integrated HRAs

Integrated HRAs can be offered by employers of any size. Its primary purpose is to cover some of the out-of-pocket expenses of a group health plan. It is most commonly paired with higher deductible group health plans and used as a cost savings strategy, but that is not a requirement.

  • The Integrated HRA can only be made available to employees and their dependents who are covered by a traditional group health plan.

  • The Integrated HRA and group health plan do not have to be offered by the same employer (although they are most commonly offered by the same employer). For example, an employer can offer an Integrated HRA to employees who are covered by a group health plan as a dependent through their spouse’s employer.

  • If the group health plan provides minimum value (e.g., Bronze-like plan or better), the Integrated HRA may reimburse any medical expense allowed under Internal Revenue Code §213(d), such as deductibles, copays, coinsurance, dental, vision and over-the-counter drug expenses.

  • If the group health plan does not provide minimum value (e.g., a limited benefit group health plan), the Integrated HRA may only reimburse out-of-pocket expenses associated with the group health plan, such as deductibles, copays, and coinsurance.

 

2. Qualified Small Employer HRAs (QSEHRAs)

Qualified Small Employer HRAs (QSEHRAs) can only be offered by employers with fewer than 50 employees. Its primary purpose is to reimburse insurance premiums for coverage that employees obtain outside of their employer. QSEHRAs are commonly provided by employers who are offering benefits to employees for the first time, or by employers who may find it difficult to provide a traditional group health plan to employees.

  • Employees must be enrolled in minimum essential coverage to be eligible for reimbursements (e.g., individual major medical coverage, Medicare, spouse’s group health plan).

  • The maximum annual reimbursement limit is $5,300 for employees with self-only coverage and $10,700 for employees with family coverage (adjusted for inflation).

  • The QSEHRA may reimburse any medical expense allowed under Internal Revenue Code §213(d), such as premiums, deductibles, copays, coinsurance, dental, vision and over-the-counter drug expenses.

  • Employees cannot waive coverage under the QSEHRA.

  • The QSEHRA will reduce or eliminate subsidies for individual plans sold on the Health Insurance

    Marketplace.

  • The employer cannot offer any type of group health plan to employees when offering a QSEHRA (e.g., health, dental, vision, Health FSA).

 

3. Individual Coverage HRAs (ICHRAs)

Individual Coverage HRAs (ICHRAs) can be offered by employers of any size. Its primary purpose is to reimburse individual major medical and Medicare premiums. ICHRAs are commonly provided by employers who are offering benefits to employees for the first time, by employers who may find it difficult to provide a traditional group health plan to employees, by employers who want to provide a specific class of employees access to a unique benefit, or by employers located in an area of the country where the individual major medical market is very competitive.

  • Employees must be covered by an individual major medical plan or Medicare to be eligible for reimbursement under the ICHRA. Coverage under a short-term medical plan or a spouse’s group health plan would NOT qualify.

  • The ICHRA may reimburse any medical expense allowed under Internal Revenue Code §213(d), such as premiums, deductibles, copays, coinsurance, dental, vision and over-the-counter drug expenses.

  • The employer cannot offer the same employee the choice between a group health plan and an ICHRA.

  • The employer may offer one class of employees a group health plan and another class of employees an ICHRA; however, at least 10-20 employees must be offered the ICHRA (depending on the employer’s size) when using the following classes: full-time vs. part-time, salaried vs. non-salaried, or offices with employees who work in different geographic locations within the same state.

  • The employer may offer non-medical group health plans to employees covered by the ICHRA (e.g., dental, vision, Health FSA).

  • Enrollment in an ICHRA eliminates subsidy eligibility on the Health Insurance Marketplace. Employees may waive coverage under the ICHRA and possibly qualify for a subsidy.

 

4. Medicare Primary HRAs

Medicare Primary HRAs may only be offered by employers who have fewer than 20 employees. Its primary purpose is to provide cost savings by reimbursing Medicare premiums as an alternative to enrolling in the group health plan.

  • The employer must offer Medicare-eligible employees the ability to enroll in a group health plan with minimum value (e.g., Bronze-like plan or better), and Medicare must be the primary payer of coverage if the employee were enrolled in the group health plan.

  • Eligible employees for the Medicare Primary HRA must be enrolled in Medicare Parts A and B. Employees who do not have Medicare Parts A and B cannot participate in the Medicare Primary HRA.

  • Reimbursements are limited to Medicare Part B or D premiums, Medicare Supplement premiums, and dental and vision expenses.

 

5. Retiree HRAs

Retiree HRAs may be offered by employers of any size. Its primary purpose is to reimburse retirees for Medicare premiums. Retiree HRAs can be a more affordable benefits strategy compared to allowing retirees to remain enrolled in a traditional group health plan offered by the employer.

  • The only eligible participants on the Retiree HRA can be former employees (i.e., retirees).

  • The Retiree HRA may reimburse any medical expense allowed under Internal Revenue Code §213(d), including any Medicare premium, deductibles, copays, coinsurance, dental, vision and over-the-counter medication expenses.

 

6. Excepted Benefit HRAs (EBHRAs)

Excepted Benefit HRAs (EBHRAs) may be offered by employers of any size. Its primary purpose is to provide a tax-free benefit to employees who waive coverage under the employer’s group health plan.

  • The employer must offer a group health plan to employees enrolled in the EBHRA; however, employees do not need to be enrolled in the group health plan.

  • The annual maximum reimbursement limit is $1,800 (adjusted for inflation).

  • Reimbursements are limited to COBRA premiums, short-term medical premiums, dental expenses, vision expenses, and out-of-pocket expenses for any coverage that is obtained outside of the employer (e.g., copays, deductibles, and coinsurance).

 

7. Dental/Vision HRAs

Dental/Vision HRAs may be offered by employers of any size. Its primary purpose is to provide an alternative to traditional group dental and vision plans. It allows employees to select a dental or vision insurance plan of their choice.

  • Reimbursements are limited to dental and vision out-of-pocket expenses, including premiums for individual dental and vision insurance plans as well as copays, deductibles, and coinsurance specific to dental and vision expenses.

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ACA Reporting 2020 Updates

ACA Reporting 2020 Updates

The Internal Revenue Service (IRS) recently issued Notice 2020-76 with information pertaining to the upcoming reporting required by the Affordable Care Act (ACA).

The following information was included in the notice:

  • The deadline for furnishing a copy of Form 1095-B or 1095-C to applicable employees and individuals has been extended from January 31, 2021 to March 2, 2021. Due to this automatic extension, no further extensions will be considered by the IRS.
  • No extensions have been provided for submitting the reporting forms to the IRS. If filing manually, forms must be submitted to the IRS by March 1, 2021 (because February 28th falls on a Sunday). If filing electronically, forms must be submitted by March 31, 2021. Entities submitting 250 or more  forms must submit electronically. A 30-day extension may be requested by submitting Form 8809 prior to the normal due date.
  • Good faith error reporting penalty relief will apply once again to the 2020 reporting year. This means employers will not be penalized if they report information that is incorrect or inaccurate and provided they made good faith efforts to comply with the reporting requirements.
  • For 2020, the IRS will not assess penalties against reporting entities who fail to automatically furnish a copy of Form 1095-B to individuals so long as they furnish a copy to individuals within 30 days of their request and they prominently post information on their website which indicates how a copy of Form 1095-B can be requested. The primary purpose of Form 1095-B was to enforce the Individual Mandate, but there is no longer a federal penalty for failing to be enrolled in minimum essential coverage.

The IRS previously released draft versions of the ACA reporting forms for the 2020 reporting year, but  they have not yet released draft instructions. The 2020 reporting instructions are supposed to include  some new details, such as how to report offers of coverage under an Individual Coverage Health Reimbursement Arrangement (ICHRA).

 

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Employer Mandate 2020 and 2021 Updates

Employer Mandate 2020 and 2021 Updates

The Internal Revenue Service (IRS) has issued draft reporting forms for the purpose of filing information necessary to enforce the Employer Mandate. The 2020 draft version of the applicable forms can be found below (with finalized versions expected to be released later this year):

Draft version of Form 1095-C
Draft version of Form 1094-C

In general, applicable large employers (i.e. 50 or more full-time equivalent employees) must complete one Form 1095-C for anyone who was a full-time employee in 2020. Additionally, one Form 1094-C must be completed on behalf of the employer. The due date to submit these forms is February 28, 2021 if filing manually and March 31, 2021 if filing electronically. Employers filing 250 or more forms must complete the reporting electronically.

The IRS also recently updated it’s Q&A guidance pertaining to penalty amounts for non-compliance with the Employer Mandate. The penalty amounts for 2020 and 2021 are shown below:

  • 2020 “failure to offer” penalty: $2,570
  • 2020 “not affordable/no minimum value” penalty: $3,860
  • 2021 “failure to offer” penalty: $2,700
  • 2021 “not affordable/no minimum value” penalty: $4,060

The “failure to offer” penalty applies when an applicable large employer does not offer minimum essential coverage to at least 95% of its full-time workforce. The penalty applies if one or more full-time employees receives an advanced premium tax credit on the Health Insurance Marketplace. The formula to calculate the “failure to offer” penalty for the 2020 year is as follows: (Total # of full-time employees – 30) x $2,570

The “not affordable/no minimum value” penalty applies when minimum essential coverage is offered to at least 95% of an employer’s full-time workforce, but the coverage is unaffordable and/or does not provide minimum value to some or all employees. This penalty applies to employees who opt-out of the employer’s coverage and receive an advanced premium tax credit on the Health Insurance Marketplace. The formula to calculate the “not affordable/no minimum value” penalty for the 2020 year is as follows: Total # of full-time employees who receive an advanced premium tax credit x $3,860

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