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24
Jan

Feds to Delay Employer PPACA Notice

Written by dreilly. Posted in Blog, compliance, employee communications, health care reform, PPACA

The Patient Protection and Affordable Care Act (PPACA) requires employers to provide notice to employees about the existence of State-based insurance exchanges.  The purpose of the notice is to provide employees necessary information to understand the availability of new health plan options and to help employees compare those options against costs and benefits available through the employment-based coverage.   PPACA requires employers to provide this notice by March 1, 2013 or, you guessed it, face potential penalties!  So what are employers to provide?

Well, we don’t quite know.  To date, neither the federal government nor the state exchanges have provided guidance regarding the layout or content of the notice.  As with several other areas of reform implementation the reality of delays in the regulatory process trump the stated deadlines.  With no guidance employers have nothing to provide. 

Fortunately, it is expected the federal government will delay the notice requirement, and employers will escape the looming deadline, at least for the time being.  A new date has not yet been issued, but it is widely anticipated the feds will enforce a new deadline in the Fall, closer to the October 1, 2013 kick-off date for open enrollment in the exchanges.   Employers should watch for an announcement soon.

30
Nov

IRS Changes HSA Eligibility

Written by dreilly. Posted in Blog, compliance, education

The IRS has changed the eligibility rules for health savings accounts (HSAs).  Effective January 1, 2013, the minimum health plan deductible rises from $1,200 per person to $1,250 per person, or for families from $2,400 to $2,500. 

This means that to continue contributing to an HSA you must have a health plan with a deductible at least equal to or above the new minimum.   Those who maintain a deductible below the new minimum will no longer be able to contribute to an HSA and will therefore lose the tax advantages associated with future savings. 

Health plans have been notifying plan participants for several months of this pending change.   A variety of notices have been released from a variety of insurance carriers and administrative vendors, much to the confusion of plan participants.  Here are three important clarifications for HSA participants to know.

1)      As an HSA holder you do not lose the value of your account regardless as to whether you change your health plan deductible.  Your HSA balance is separate from your insurance plan and remains yours to save or spend as you wish on future medical expenses.  Remember, you own and control your own savings account. 

2)      The higher deductible requirement applies to new plans or plans that renew on or after January 1, 2013.  It also applies to plans that have deductibles that start over on the calendar year beginning January 1st.  If your deductible starts over on January 1st, then you must select a health plan with a deductible equal to, or higher than, $1,250.  If you do not, then you may no longer contribute to your HSA.  Once again, your balance remains your to save or spend down.

3)      Many participants have plans with deductibles that do not start over on january 1st.  Instead the deductible may start over at a later date in 2013.  For example, consider an employer plan that began on July 1, 2012 that runs through June 30, 2013.  Even with a lower$1,200 deductible, participants in this plan could continue to fund an HSA past the January 1, 2013 date through the end of the plan year up to May 31st.  A mid-year plan need not immediately increase the deductible on January 1st for participants to maintain HSA eligibility through the end of the plan year.   However, in order to maintain the ability to contribute to an HSA after the end of the current plan year, the plan would have to increase the deductible to meet the new minimum requirements.

Also of note, in addition to the deductible changes, the IRS has increased the maximum HSA contributions for calendar year 2013.  Beginning January 1st, eligible single HSA holders may contribute a maximum of $3,250 per year.  This is an increase from $3,100 in 2012.  For families the maximum contribution increases from $6,250 to $6,450.  Those who are over the age of 55 may contribute an additional $1,000.

09
Aug

Summary of Benefits and Coverage

Written by dreilly. Posted in Blog, compliance, employee communications, PPACA

Employers must take action.

September 23, 2012 marks the next important date for health plan sponsors under the rules of the Patient Protection and Affordable Care Act (PPACA).  As of this date insurance companies are required to begin providing members a new notice known as a Summary of Benefits and Coverage (SBC). 

The SBC is a document intended to provide health plan members a brief overview in plain language of what the insurance plan covers along with a uniform glossary of important terms.  PPACA requires this notice to be no longer than four pages, front and back, be drafted in 12 font, and be provided in a culturally linguistic manner. 

Health insurance companies are required to provide the notice to members enrolled in individual plans, but for employer plans the health insurance companies will provide the notice to the plan sponsor.  It is then the responsibility of the plan sponsor to distribute the notice to its plan members pursuant to specific timelines prescribed by the Department of Health and Human Services. 

Generally, the SBC must be distributed during the open enrollment process at renewal and also throughout the plan year for new members.  The first notice must be provided beginning with the policy renewal date (effective date for new policies) on or after September 23, 2012.

Plan sponsors should be on the lookout for a communication from the health insurance company, and a strategy to distribute the notice should be incorporated into the administrative process.   Your broker or consultant should guide you through the process.    

Click here for an example of the notice, here for details and instructions as to how to develop the notice.

13
Sep

IRS W-2 Health Ins.

Written by dreilly. Posted in Blog, compliance, employee communications, health care reform

The Patient Protection and Affordable Care Act (PPACA) requires employers to report the value of employer-sponsored group health insurance on an employee’s annual W2 form.  The amount to be reported in box 12 is considered non-taxable, at least for the time-being.

The law originally required employers to report this information beginning with the tax year 2011, but the IRS has postponedimplementation.  Now, employers that file more than 250 W2 forms, measured by the preceding calendar year, are required to report the health cost beginning with tax year 2012 (reportable January 2013).  Employers that file fewer than 250 W2 forms are required to report the health cost beginning with tax year 2013 (reportable January 2014).

In calculating the total reportable cost, the employer will combine the portions of the annual premium paid by the employer and the employee.  The annual cost of dental or vision coverage is excluded unless such coverage is integrated with the health plan.  Costs associated with contributions to a health savings account (HSA), Archer medical savings account (MSA), or flexible spending account (FSA), are also excluded from the total.

While postponing this reporting requirement gives employers some breathing room, the beginning of tax year 2012 is just around the corner.  Larger employers must have a system in place to begin tracking and recording employee health plan costs by January.  Smaller employers have an additional year.   Time is short.  Are you prepared?

See IRS Notice 2011-28 Interim Guidance on Informational Reporting to Employees of the Cost of Their Group Health Insurance Coverage for more detail.


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Dennis Anderson Construction
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Great Mills Trading Post
'Our experience with Reilly Benefits has been very positive. The courteous and friendly staff has taken care of our every need. Their knowledge and dedication have afforded us the opportunity to thoroughly explain the benefits and importance of insurance coverage to our employees. I would highly recommend this organization to any individual or business for all types of insurance or tax planning.'

Dottie Wyatt, Controller
Atlantic Cycle & Power
'The commitment Reilly Benefits makes to our company to ensure our benefits and claims are handled promptly and correctly goes beyond that of any agency I have seen in my 20 years of working with insurance brokers.'

Karen Siebert, CFO
Great Mills Trading Post

'Our experience with Reilly Benefits has been very positive. The courteous and friendly staff has taken care of our every need. Their knowledge and dedication have afforded us the opportunity to thoroughly explain the benefits and importance of insurance coverage to our employees. I would highly recommend this organization to any individual or business for all types of insurance or tax planning.'

Dottie Wyatt, Controller
Atlantic Cycle & Power

Benchmarks

Reilly Benefits, Inc. works with employers in a wide variety of industries. This allows us to understand the uniqueness of specific benchmarks within certain industries and among different market sizes.

Our ability to help employers compare and contrast a benefit plan to these benchmarks provides our clients an advantage in the ultimate goal to attract and retain quality employees.

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Reilly Benefits, Inc

5419 Deale-Churchton Rd. Churchton, Md. 20733

Professional Employee
Benefits Specialists

Telephone: 1-410-867-0261

Fax: 1-410-867-0262
info@reillybenefits.com

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