Health Care Reform Updates & Human Resource News Alerts

Health Care Reform News

HR360::Health Care Reform
  • Reminder: Issuer MLR Rebates Due to Plan Sponsors by Sept. 30

    Posted on July 17, 2017
    Print

    Overview of Employer Responsibilities for Handling Rebates

    The Medical Loss Ratio (MLR) rules under Health Care Reform require an issuer to provide rebates if its medical loss ratio (the amount of health insurance premiums spent on health care and activities to improve health care quality) falls short of the applicable standard during a reporting year. Each year's rebates must be provided by issuers to policyholders (typically the employer that sponsors the plan) by September 30 of the following year.

    Employer Distribution
    The MLR rules provide that issuers must pay any rebates owed to persons covered under a group health plan to the policyholder, who is then responsible for distributing the rebate to eligible plan enrollees. In general, there are several ways rebates may be distributed to plan enrollees, including:

    • A rebate check in the mail;
    • A lump-sum reimbursement to the same account that was used to pay the premium if it was paid by credit card or debit card; or
    • A direct reduction in future premiums.

    In addition to the above methods, employers may also apply the rebate in a way that benefits employees. Note that decisions on how to apply or expend the plan's portion of a rebate are subject to the general standards of fiduciary conduct under the federal Employee Retirement Income Security Act (ERISA). For additional details, click here.

    © 2012 - 2013 HR 360, Inc.
  • Alaska Granted Waiver From Individual Market Single Risk Pool

    Posted on July 13, 2017
    Print

    Waiver Allows Implementation of Alaska Reinsurance Program for 2018 and Future Years

    The U.S. Departments of Health and Human Services and Treasury have approved the State of Alaska's application for a waiver from the Affordable Care Act requirement that it consider all enrollees in the individual market to be part of a single risk pool. The waiver allows Alaska to implement the Alaska Reinsurance Program (ARP) for the next five plan years, from January 1, 2018 through December 31, 2022.

    ARP Implementation
    ARP is a state-operated reinsurance program which covers claims in the individual market for individuals with one or more of 33 identified high-cost conditions to help stabilize premiums. As a result of the waiver approval and implementation of the ARP for 2018 and future years, state and federal agencies anticipate that more consumers in Alaska will have coverage and will see lower premiums (which are projected to be 20% lower in 2018 than they would be without the waiver).

    State Innovation Waivers
    Section 1332 of the ACA permits a state to apply for a "State Innovation Waiver" to pursue innovative strategies for providing its residents with access to quality health care, as long as the waiver request meets certain requirements to retain the basic protections of the ACA. The waivers are approved for five-year periods and can be renewed.

    © 2012 - 2013 HR 360, Inc.
  • Reminder: Small Businesses Can Qualify for Health Care Tax Credit

    Posted on July 07, 2017
    Print

    Overview of Eligibility Requirements for Small Employers

    The Small Business Health Care Tax Credit is designed to encourage small businesses and small tax-exempt employers to offer health insurance coverage to their employees. The credit can be worth up to 50% of the amount a small business contributes toward employees' premiums (35% for tax-exempt small employers).

    In general, an employer may be eligible for the credit if it:

    • Had fewer than 25 full-time equivalent employees;
    • Paid an average wage of less than $52,000 a year;
    • Paid at least half of its employees' premium costs; and
    • Paid premiums on behalf of employees enrolled in a qualified health plan offered through the Small Business Health Options Program (SHOP) Marketplace (with limited exceptions).

    A Small Business Health Care Tax Credit Estimator is available from Healthcare.gov, and an IRS Small Business Health Care Tax Credit information page provides additional details on claiming the credit.

    © 2012 - 2013 HR 360, Inc.
  • Reminder: PCORI Fees Due July 31

    Posted on June 30, 2017
    Print

    Affected Employers Must File IRS Form 720

    As a reminder, employers that sponsor certain self-insured health plans are responsible for Patient-Centered Outcomes Research Institute (PCORI) fees. Fees for plan years that ended in 2016 are due July 31, 2017

    How to Pay PCORI Fees
    Employers that sponsor certain self-insured health plans must report and pay the required PCORI fees via IRS Form 720, Quarterly Federal Excise Tax Return. For plan years that ended between January 1, 2016 and September 30, 2016, the fee for an employer sponsoring an applicable self-insured plan is $2.17 multiplied by the average number of lives covered under the plan. For plan years that ended between October 1, 2016 and December 31, 2016, the fee is $2.26 multiplied by the average number of lives covered under the plan.

    © 2012 - 2013 HR 360, Inc.
  • Understanding the Additional Medicare Tax

    Posted on June 23, 2017
    Print

    Employers Must Withhold Tax for High Earners

    The Affordable Care Act's Additional Medicare Tax applies to an individual's wages that exceed a threshold amount based on his or her filing status ($250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately and $200,000 for all other taxpayers). The following are five important things employers need to know about the Additional Medicare Tax:

    1. Employers are required to withhold Additional Medicare Tax (at a rate of 0.9%) on wages or compensation paid to an employee in excess of $200,000 in a calendar year.
    2. An employer has this withholding obligation even though an employee may not be liable for Additional Medicare Tax because, for example, the employee's wages do not exceed the applicable threshold for his or her filing status. Any withheld Additional Medicare Tax will be credited against the total tax liability shown on the individual's income tax return.
    3. Employers are not required to notify an employee when they begin withholding Additional Medicare Tax.
    4. There is no employer match for Additional Medicare Tax.
    5. An employer that does not deduct and withhold Additional Medicare Tax as required is liable for the tax unless the tax that it failed to withhold from the employee's wages is paid by the employee.

    Click here for more information from the IRS.

    © 2012 - 2013 HR 360, Inc.
  • Reminder: Medicare-Eligible Employees May Impact 'Pay or Play' Penalties

    Posted on June 15, 2017
    Print

    Medicare-Eligible Employees Ineligible to Receive Premium Tax Credits

    Under the Affordable Care Act (ACA), Medicare-eligible individuals are ineligible to receive premium tax credits. As a result, employers with Medicare-eligible employees should consider how those employees may impact their potential liability under the ACA's employer shared responsibility provisions (also known as "pay or play").

    Medicare-Eligible Employees and 'Pay or Play'
    As highlighted in an IRS memorandum, because Medicare-eligible individuals are ineligible to receive premium tax credits, applicable large employers (ALEs) that offer coverage to at least 95% of their full-time employees and their dependents will not owe a pay or play penalty for any Medicare-eligible individual. For ALEs that do not offer coverage to at least 95% of their full-time employees and their dependents, however, Medicare-eligible full-time employees could potentially trigger (or increase) the penalty owed.  

    Background
    For 2017, ALEs--generally those with at least 50 full-time employees, including full-time equivalent employees (FTEs), in the preceding calendar year--will be liable for a pay or play penalty only if:

    • The ALE does not offer minimum essential coverage to at least 95% of its full-time employees and their dependents, and at least one full-time employee receives a premium tax credit. Under this scenario, the annual penalty amount is $2,260 per full-time employee, minus up to 30 full-time employees.
    • The ALE offers minimum essential coverage to at least 95% of its full-time employees and their dependents, but at least one full-time employee receives a premium tax credit (either because the employer did not offer coverage to that employee or because the coverage the employer offered to that employee was unaffordable to the employee or did not provide minimum value). Under this scenario, the annual penalty amount is $3,390 per full-time employee that receives a premium tax credit.
    © 2012 - 2013 HR 360, Inc.

    HR News and Alerts

    HR360::Health Care Reform
    • Reminder: Issuer MLR Rebates Due to Plan Sponsors by Sept. 30

      Posted on July 17, 2017
      Print

      Overview of Employer Responsibilities for Handling Rebates

      The Medical Loss Ratio (MLR) rules under Health Care Reform require an issuer to provide rebates if its medical loss ratio (the amount of health insurance premiums spent on health care and activities to improve health care quality) falls short of the applicable standard during a reporting year. Each year's rebates must be provided by issuers to policyholders (typically the employer that sponsors the plan) by September 30 of the following year.

      Employer Distribution
      The MLR rules provide that issuers must pay any rebates owed to persons covered under a group health plan to the policyholder, who is then responsible for distributing the rebate to eligible plan enrollees. In general, there are several ways rebates may be distributed to plan enrollees, including:

      • A rebate check in the mail;
      • A lump-sum reimbursement to the same account that was used to pay the premium if it was paid by credit card or debit card; or
      • A direct reduction in future premiums.

      In addition to the above methods, employers may also apply the rebate in a way that benefits employees. Note that decisions on how to apply or expend the plan's portion of a rebate are subject to the general standards of fiduciary conduct under the federal Employee Retirement Income Security Act (ERISA). For additional details, click here.

      © 2012 - 2013 HR 360, Inc.
    • Alaska Granted Waiver From Individual Market Single Risk Pool

      Posted on July 13, 2017
      Print

      Waiver Allows Implementation of Alaska Reinsurance Program for 2018 and Future Years

      The U.S. Departments of Health and Human Services and Treasury have approved the State of Alaska's application for a waiver from the Affordable Care Act requirement that it consider all enrollees in the individual market to be part of a single risk pool. The waiver allows Alaska to implement the Alaska Reinsurance Program (ARP) for the next five plan years, from January 1, 2018 through December 31, 2022.

      ARP Implementation
      ARP is a state-operated reinsurance program which covers claims in the individual market for individuals with one or more of 33 identified high-cost conditions to help stabilize premiums. As a result of the waiver approval and implementation of the ARP for 2018 and future years, state and federal agencies anticipate that more consumers in Alaska will have coverage and will see lower premiums (which are projected to be 20% lower in 2018 than they would be without the waiver).

      State Innovation Waivers
      Section 1332 of the ACA permits a state to apply for a "State Innovation Waiver" to pursue innovative strategies for providing its residents with access to quality health care, as long as the waiver request meets certain requirements to retain the basic protections of the ACA. The waivers are approved for five-year periods and can be renewed.

      © 2012 - 2013 HR 360, Inc.
    • Reminder: Small Businesses Can Qualify for Health Care Tax Credit

      Posted on July 07, 2017
      Print

      Overview of Eligibility Requirements for Small Employers

      The Small Business Health Care Tax Credit is designed to encourage small businesses and small tax-exempt employers to offer health insurance coverage to their employees. The credit can be worth up to 50% of the amount a small business contributes toward employees' premiums (35% for tax-exempt small employers).

      In general, an employer may be eligible for the credit if it:

      • Had fewer than 25 full-time equivalent employees;
      • Paid an average wage of less than $52,000 a year;
      • Paid at least half of its employees' premium costs; and
      • Paid premiums on behalf of employees enrolled in a qualified health plan offered through the Small Business Health Options Program (SHOP) Marketplace (with limited exceptions).

      A Small Business Health Care Tax Credit Estimator is available from Healthcare.gov, and an IRS Small Business Health Care Tax Credit information page provides additional details on claiming the credit.

      © 2012 - 2013 HR 360, Inc.
    • Reminder: PCORI Fees Due July 31

      Posted on June 30, 2017
      Print

      Affected Employers Must File IRS Form 720

      As a reminder, employers that sponsor certain self-insured health plans are responsible for Patient-Centered Outcomes Research Institute (PCORI) fees. Fees for plan years that ended in 2016 are due July 31, 2017

      How to Pay PCORI Fees
      Employers that sponsor certain self-insured health plans must report and pay the required PCORI fees via IRS Form 720, Quarterly Federal Excise Tax Return. For plan years that ended between January 1, 2016 and September 30, 2016, the fee for an employer sponsoring an applicable self-insured plan is $2.17 multiplied by the average number of lives covered under the plan. For plan years that ended between October 1, 2016 and December 31, 2016, the fee is $2.26 multiplied by the average number of lives covered under the plan.

      © 2012 - 2013 HR 360, Inc.
    • Understanding the Additional Medicare Tax

      Posted on June 23, 2017
      Print

      Employers Must Withhold Tax for High Earners

      The Affordable Care Act's Additional Medicare Tax applies to an individual's wages that exceed a threshold amount based on his or her filing status ($250,000 for married taxpayers who file jointly, $125,000 for married taxpayers who file separately and $200,000 for all other taxpayers). The following are five important things employers need to know about the Additional Medicare Tax:

      1. Employers are required to withhold Additional Medicare Tax (at a rate of 0.9%) on wages or compensation paid to an employee in excess of $200,000 in a calendar year.
      2. An employer has this withholding obligation even though an employee may not be liable for Additional Medicare Tax because, for example, the employee's wages do not exceed the applicable threshold for his or her filing status. Any withheld Additional Medicare Tax will be credited against the total tax liability shown on the individual's income tax return.
      3. Employers are not required to notify an employee when they begin withholding Additional Medicare Tax.
      4. There is no employer match for Additional Medicare Tax.
      5. An employer that does not deduct and withhold Additional Medicare Tax as required is liable for the tax unless the tax that it failed to withhold from the employee's wages is paid by the employee.

      Click here for more information from the IRS.

      © 2012 - 2013 HR 360, Inc.
    • Reminder: Medicare-Eligible Employees May Impact 'Pay or Play' Penalties

      Posted on June 15, 2017
      Print

      Medicare-Eligible Employees Ineligible to Receive Premium Tax Credits

      Under the Affordable Care Act (ACA), Medicare-eligible individuals are ineligible to receive premium tax credits. As a result, employers with Medicare-eligible employees should consider how those employees may impact their potential liability under the ACA's employer shared responsibility provisions (also known as "pay or play").

      Medicare-Eligible Employees and 'Pay or Play'
      As highlighted in an IRS memorandum, because Medicare-eligible individuals are ineligible to receive premium tax credits, applicable large employers (ALEs) that offer coverage to at least 95% of their full-time employees and their dependents will not owe a pay or play penalty for any Medicare-eligible individual. For ALEs that do not offer coverage to at least 95% of their full-time employees and their dependents, however, Medicare-eligible full-time employees could potentially trigger (or increase) the penalty owed.  

      Background
      For 2017, ALEs--generally those with at least 50 full-time employees, including full-time equivalent employees (FTEs), in the preceding calendar year--will be liable for a pay or play penalty only if:

      • The ALE does not offer minimum essential coverage to at least 95% of its full-time employees and their dependents, and at least one full-time employee receives a premium tax credit. Under this scenario, the annual penalty amount is $2,260 per full-time employee, minus up to 30 full-time employees.
      • The ALE offers minimum essential coverage to at least 95% of its full-time employees and their dependents, but at least one full-time employee receives a premium tax credit (either because the employer did not offer coverage to that employee or because the coverage the employer offered to that employee was unaffordable to the employee or did not provide minimum value). Under this scenario, the annual penalty amount is $3,390 per full-time employee that receives a premium tax credit.
      © 2012 - 2013 HR 360, Inc.