Is Your ACA Health Plan Ready for 2017?

Affordable Care Act compliance, along with benefits cost management and employee wellness programs, are emerging as the top issues affecting small business health plans.

As 2017 approaches, small businesses should reevaluate their employee health insurance needs and what they need to do to comply with new health insurance laws.

Although businesses with fewer than 50 full-time equivalent employees do not have to provide health insurance for their employees, they must comply with the ACA’s reporting requirements. All businesses with employees must:

 

  • Withhold and report an additional 0.9 percent on employee wages or compensation that exceed $200,000.
  • Report the value of health insurance coverage you provided to each employee on his or her Form W-2.
  • File an annual return reporting certain information for each employee covered under a self-insured health plan.

In an effort to help small businesses comply with the Affordable Care Act, a new study by HUB International explored ACA compliance, along with benefits cost management and employee wellness, by surveying over 400 senior-level human resources and finance executives at companies with 50 to 1,000 employees.

“HR leaders are operating in an era of unprecedented disruption brought on by ACA, rising health care costs and the increasing demands of a multi-generational workforce,” wrote the authors of the HUB International report titled, “Employee Benefits Barometer: SMB Perspectives and Priorities in an Era of Disruption.”

Era of Disruption

The survey found nearly two in three business owners employing between 50 and 99 people are concerned about remaining in compliance with the ACA regulations. Other findings included:

 

  • 69 percent of employers plan to change their benefit plan structure and/or operations to avoid ACA reporting fines and penalties.
  • 61 percent expect IRS fines for ACA reporting to be negligible to their bottom line in 2016.
  • 60 percent believe ACA reporting is primarily an HR issue.
  • 64 percent have optimized design and operations strategies to eliminate the fines/penalties, but will struggle to stay in business.
  • 54 percent say ACA reporting is primarily a finance issue.

 

As this survey shows, employers perceive themselves to be on top of ACA reporting issues, but nearly two-thirds say that their businesses will struggle to stay afloat despite efforts to optimize plan designs and operations—an indication that employers are exhausted by ACA compliance, the authors of the HUB International report wrote.

“Due to the potential audit implications of ACA reporting, organizations need to be able to defend and manage the decisions they made and reported on,” the authors noted.

In the survey, employers did not rate ACA reporting as their top concern, but because the survey took place prior to completing year-one reporting deadlines, “it may be an indication that employers don’t know where they are most vulnerable,” the authors wrote.

“Most responders ranked cost management and health and performance issues as bigger priorities over ACA reporting,” the authors wrote. “This may be an indication that employers have under-estimated the complexity of ACA reporting.

“Just over half of HR leaders (57 percent) cited accuracy in calculating and reporting the affordability of benefits as their top concern for ACA compliance. While 55 percent of mid-sized and 56 percent of the largest middle market companies ranked this as their top concern, it was especially an issue among the smallest players (66 percent). Close behind, at 53 percent, were concerns over how employee subsidy eligibility and employer liability are tracked and reported.”

Wellness and Productivity Are Top Priorities

Meanwhile, the survey also found that employee wellness and productivity are top priorities, and two-thirds of respondents are seeing a return on investments in their programs, specifically in improved employee productivity and morale. When asked to identify their top benefits priorities, HR respondents ranked improving employee wellness and productivity (83 percent) and managing benefit costs (76 percent) as top priorities.

The report found that employers who are implementing wellness programs are reporting improvements in employee productivity and morale.

“Middle market employers are starting to put more effort in longer term benefits initiatives that support the connection between healthy employees and business performance,” the authors wrote. “These programs are the cornerstone of a long-term benefit strategy that supports a healthier and more engaged workforce.

“There’s a reason health and performance initiatives have gained traction among middle market benefits decision-makers. These strategies are delivering a return on investment, according to 66 percent of respondents. How has it been evidenced? More than a third of respondents cite improved productivity (35 percent) and morale (34 percent). This is especially true among the larger firms, at 40 percent and 38 percent respectively.”

Employers are reaping the benefits of their cost-cutting initiatives, but there appears to be many missed opportunities to deploy proven cost management strategies, the authors wrote.

“Are their efforts paying off? Sixty-five percent agree that they are doing all they can to contain rising benefit costs,” the authors wrote. “Seventy percent note that their strategies are successfully reining in costs. In fact, a significant percentage of the HR respondents indicated they have revamped their plan designs to reduce costs. Leading that change, 51 percent have implemented voluntary benefits for the first time as part of their cost savings strategy.”

For more information on complying with the Affordable Care Act, controlling your costs or adding voluntary benefits to your organization’s offerings, please contact us.

The Auto Insurance Coverage You Need and Why

Like cars, auto insurance policies have different parts with different functions. In this article, we’ll discuss the three types of coverage that most states require owners of registered vehicles to carry—bodily injury liability, property damage liability and uninsured motorists coverage.

Continue reading “The Auto Insurance Coverage You Need and Why”

Credit Insurance: Should You Buy It?

Credit protection

You call your credit card issuer, and the customer service representative tells you about a “special offer” for a “payment protection plan.” What do these plans cover, and do you need one?

“Payment protection plan” is another name for credit insurance. Continue reading “Credit Insurance: Should You Buy It?”

Why People Don’t Like Thinking about Life Insurance…

…And why they should think about it anyway.

It’s not that buying life insurance is difficult. In fact, it’s actually quite easy, especially when you have an experienced broker to guide you through the process. The challenging part comes in actually deciding to buy life insurance.

Buying life insurance means facing one’s mortality. And many people don’t like to think about their eventual deaths. But the fact is that everyone will die at some point. Continue reading “Why People Don’t Like Thinking about Life Insurance…”

ACA Provisions: Eliminations, Delays, & Extensions

Affordable Care Act

Delays, shifting deadlines, and even the elimination of certain provisions of the Affordable Care Act (ACA) are providing employers and group health plans additional time to comply with certain key requirements that have not yet taken effect. For 2016, the following eliminations, delays, and extensions apply.

 

Please Note: This information is for general reference purposes only and is not all-inclusive. Requirements and compliance deadlines are subject to change. Additionally, your company or group health plan may be exempt from certain requirements described below. Employers with questions are advised to contact a knowledgeable employment law attorney or benefits advisor to obtain specific guidance.

 

ELIMINATIONS

 

ELIMINATED: Automatic Enrollment Provisions

 

Provisions of the ACA which generally would have required an employer with more than 200 full-time employees to automatically enroll new full-time employees in one of the employer’s health plans, and to continue the enrollment of current employees, were repealed on November 2, 2015.

 

ELIMINATED: Annual Deductible Limits

 

The ACA’s annual limitation on deductibles for non-grandfathered plans in the small group market has been eliminated, effective retroactively to 2010. However, the annual limitation on out-of- pocket expenses for non-grandfathered group plans was not eliminated and remains in effect.

 

DELAYS

 

DELAYED UNTIL 2020: Cadillac Tax

Implementation of the so-called “Cadillac tax,” an excise tax on high-cost employer-sponsored health coverage, has been delayed until taxable years beginning after December 31, 2019.

 

 

DELAYED UNTIL FURTHER NOTICE:

Nondiscrimination Rules for Fully-Insured Plans

Non-grandfathered fully-insured group health plans are not required to comply with certain rules prohibiting discrimination in favor of highly compensated individuals that are currently applicable to self-insured plans, until after regulations or other administrative guidance is issued. However, health benefits offered as part of a cafeteria plan (a plan which meets specific requirements to allow employees to receive certain benefits on a pre-tax basis) generally remain subject to the nondiscrimination requirements of Internal Revenue Code section 125.

 

DELAYED UNTIL FURTHER NOTICE:

Form W-2 Reporting for Small Employers

The IRS has granted employers filing fewer than 250 Forms W-2 for the preceding calendar year transition relief from reporting the cost of coverage under an employer-sponsored group health plan on each employee’s Form W-2 until the agency publishes additional guidance.

 

 

 

EXTENSIONS

 

EXTENSION: 2015 Information Reporting Deadlines

 

The IRS extended the ACA information reporting due dates for calendar year 2015 returns and statements (that are filed and furnished in 2016) as follows:

 

  • The deadline for furnishing the 2015 Forms 1095-B and 1095-C to employees/responsible individuals was extended from February 1, 2016, to March 31, 2016; and

 

  • The deadline for filing the 2015 Forms 1094-B, 1095-B, 1094-C, and 1095-C with the IRS was extended from February 29, 2016, to May 31, 2016 (if not filing electronically) and from March 31, 2016, to June 30, 2016 (if filing electronically).

 

These extensions have no effect on the deadlines for future years. As a reminder, the deadlines apply to all applicable large employers (ALEs)—generally those with 50 or more full-time employees, including full-time equivalents—as well as to small self-insured employers that are not considered ALEs.

 

EXTENSION: 2015 Information Reporting Corrections

 

As a result of the information reporting deadline extensions, the deadlines for employers to correct errors and receive reduced penalties for incorrect or incomplete information reported on 2015 returns or statements have also been extended, as follows:

 

  • ALEs must correct statements furnished to employees by October 1, 2016 and must correct both paper and electronic returns filed with the IRS by November 1, 2016.

 

  • Small self-insured employers that are not considered ALEs must correct statements furnished to individuals by April 30, 2016, paper returns filed with the IRS by June 30, 2016, and

 

  • Returns filed with the IRS electronically by July 30, 2016.

 

Note: In general, the IRS will not impose penalties for 2015 returns and statements filed and furnished in 2016 on reporting entities that can show that they have made good faith efforts to comply.

 

EXTENSION: Transitional Policy for Existing Small Business Coverage

 

A previously extended transitional policy which allows health insurance issuers, at their option, to continue small business group coverage that would otherwise be terminated or cancelled has been extended further—to policy years beginning on or before October 1, 2017, provided that all policies end by December 31, 2017. Health insurance issuers that renew coverage under the extended policy are required to provide standard notices to affected small businesses for each policy year.

 

Policies subject to the transitional relief will not be considered to be out of compliance with some of the ACA’s key provisions, including:

 

  • The requirement to cover essential health benefits;
  • The requirement that any variations in premiums be limited with regard to a particular plan or coverage to age and tobacco use, family size, and geography; and
  • The requirements regarding guaranteed availability and renewability of coverage for employers.

 

 

 

EXTENSION: “Pay or Play” Transition Relief for 2015 Non-Calendar Year Plans

Under previously granted transition relief, compliance with the “pay or play” requirements was delayed until 2015 for applicable large employers (ALEs) with 50 to 99 full-time employees (including full-time equivalents) that certified that they met certain eligibility criteria. For ALEs with non-calendar year health plans, this transition relief (as well as the transition relief regarding offers of coverage to dependents) extends to any calendar month during the 2015 plan year that falls in 2016.

 

 

Note: The information and materials herein are provided for general information purposes only and have been taken from sources believed to be reliable, but there is no guarantee as to its accuracy.

Old Life Insurance Policies Could Have Value

You found Great-Grandpa’s life insurance policy in an old trunk? Don’t throw it out!

Unlike many types of insurance, most life insurance policies don’t have claim-filing deadlines. You can file a claim many years after the insured has died and the insurer should pay the policy’s face value, as long as the policy was in force (paid up and not expired) at the time of death. Continue reading “Old Life Insurance Policies Could Have Value”

Marijuana and Your Insurance

In some states, policy on marijuana has turned a full 180 from the “reefer madness” scares of the 1950s and 1960s. But have your insurance coverages kept up? Now 23 states, plus the District of Columbia and Guam, allow the medical use of marijuana. Four states, plus the District of Columbia, allow recreational use by adults. Continue reading “Marijuana and Your Insurance”

Who Needs Life Insurance?

You might wonder whether to buy life insurance or not. Do you need death coverage, or is it just an additional expense?

You might think you don’t need life insurance if you do not have children. But that is not always the case. If someone depends on you financially, then you definitely need life insurance. Continue reading “Who Needs Life Insurance?”

529 Savings Plans: Great Benefit at a Low Cost

For years you’ve been encouraging your employees to save for retirement. But what about other savings programs? The growing popularity of 529 College Savings Plans provides employers the chance to offer employees a valuable benefit at virtually no cost.

 

529 College Savings Plans are education savings plans designed to help families set aside funds for future college costs. Named after section 529 of the tax code, these plans are generally sponsored by individual states. Continue reading “529 Savings Plans: Great Benefit at a Low Cost”