Matt Hollister No Comments

New employer penalty for employees covered by Medicaid and subsidized health plans

Last month, on August 1st, Governor Charlie Baker signed into law S. 3822<https://malegislature.gov/Bills/190/H3822> “An Act Further Regulating Employer Contributions to Health Care.”  This new law which will take effect in 2018 will apply to all employers with 6 or more employees residing in Massachusetts.  It imposes a penalty of up to $750 for each active employee who is enrolled in either Mass Health or who receives subsidized coverage through the Mass Health Connector.  In addition, it raises the Employer Medical Assistance Contribution (“EMAC”) from it’s current annual maximum fee of $51/worker up to $77/worker.

This change is a temporary increase in fees and penalties to help offset the approximately $300 million budget deficit faced by the state’s Medicaid and Children’s Health Insurance Programs (CHIP).  Together the increased EMAC fee and penalty are expected to generate approximately $200 million, far less than what is needed to fix the shortfall.  Other proposals, including limiting the eligibility rules for MassHealth to restrict people who have coverage available through their employer were considered but not adopted.  As this will not solve the Medicaid budget deficit, we expect that the legislature will look to other areas for cost control in the future.  The additional fee and penalty will apply for two years, ending on December 31st, 2019.

Both the EMAC fee and the penalty are going to follow Mass unemployment insurance contributions, and the assessments are likely to be paid through the Department of Unemployment Assistance.  The EMAC will be based on .51% of wages up to $15,000, while the penalty (only for those workers covered by either Medicaid or a subsidized Health Connector plan) will be assessed 5.00% up to $15,000 in wages.  Based on the wage caps that could result in fees of $77 and $750 per worker, respectvely.

Please let us know if you have any questions.

Sincerely,

Matt Hollister, L.I.A., M.P.H.

Matt Hollister No Comments

HHS Releases HIPAA Cyber-Attack Checklist

Tips for Responding to Cyber-Related Security Incidents

The Department of Health and Human Services (HHS) Office of Civil Rights (OCR) has released a quick-response checklist briefly describing the steps that HIPAA-covered entities (including medical and dental offices) and their business associates should take in response to a cyber-related security incident. Steps include:

  • Executing the entity’s response and mitigation procedures and contingency plans, such as immediately fixing any technical or other problems to stop the incident;
  • Reporting the crime to other law enforcement agencies, which may include state or local law enforcement, the Federal Bureau of Investigation (FBI), and/or the Secret Service;
  • Reporting all cyber-threat indicators to federal and information-sharing and analysis organizations (ISAOs), including the Department of Homeland Security and the HHS Assistant Secretary for Preparedness and Response (any reports should not include protected health information); and
  • Reporting the breach to the OCR as soon as possible, but no later than 60 days after the discovery of a breach affecting 500 or more individuals, and notifying affected individuals and the media unless a law enforcement official has requested a delay in the reporting.

Note: OCR considers all mitigation efforts taken by the entity during any particular breach investigation. Such efforts include the voluntary sharing of breach-related information with law enforcement agencies and other federal and analysis organizations.

Click here to read the entire cyber-attack checklist.

Please visit our HIPAA section for more on the law’s requirements.

Matt Hollister No Comments

In Our Hearts

Vic Koivumaki, my stepfather and a member of the Hollister Insurance team for over 12 years, passed away on May 2nd, 2016.  As a company and as a family are still coping with his loss, which came quicker than expected.  I am happy that after retiring from Harvard University Vic was able to join us in the family business to work part time for as long as he did.  He became a licensed broker early on and enjoyed working with customers as much as he enjoyed his volunteer activities, of which there were many.   Vic never stopped doing the things he loved, even through his illness.  Vic brought to all of his activities his compassion, intelligence and dry Minnesotan-Finnish humor.

He will be missed very much by our family, clients and staff.

Matt Hollister No Comments

On the move

We are happy to announce that Hollister Insurance is moving to a new location effective May 1st.  After a long search and having viewed a dozens of potential sites, Hollister Insurance will be moving to 2352 Main Street in Concord Massachusetts.  Our new location provides us with additional space to fit our growing staff, ample free parking and easier access to many clients.

Our phone number will change but for a period of time we will maintain our current phone number.  The new phone and fax numbers will be announced separately.  The specific move date has not been set but we will make every effort to limit disruption during the move.
We appreciate your business and hope that you are able to come by for a visit!
Sincerely,
Matt Hollister, L.I.A., M.P.H.
Matt Hollister No Comments

April Health Insurance Rates Approved

As we have seen in the last few years, the 2nd quarter small group health rates have been approved by the Massachusetts Division of Insurance after a delay. The insurance carriers still need a day or two to load these rates into their systems, so we expect to have access to them early next week.
The carriers were looking for rate increases that were on average slightly over 10%, some carriers were requesting rate increases as high as 13% and others slightly below 10%. Each group will also be affected by changes in plan design and or changes in their demographic (average age, family size etc.), so the released rates may be higher or lower than average.
Despite the relatively large number of companies with a 4/1 renewal date we expect to have all rates released to customers within a day or two of our receiving them.
Please let us know if you have any questions.
Sincerely,
Matt Hollister, L.I.A., M.P.H.

Matt Hollister No Comments

ACA Reporting Extension

Yesterday the IRS announced an extension in the deadline for the 1095 and 1094 forms.
For Applicable Large Employers (ALEs), who need to provide the 1095-C in 2015, this change extends the deadline two months from February 1st to March 31st, 2016.
In addition, ALEs will have an extra three months to file the 1094-C, or until May 31st (June 30th if filing electronically).
The IRS Bulletin also confirms that penalties will apply if ALEs do not file by the new deadlines and that since these new deadlines are more generous than previous extensions offered, that any ongoing requests for an extension will not be formally granted.
Lastly, there is some guidance for individuals who file their taxes before receiving their 1095 forms.
Sincerely,
Matt Hollister, L.I.A., M.P.H.

Matt Hollister No Comments

Cadillac Plan Tax Amended

Last Friday President Obama signed H.R.2029 – Consolidated Appropriations Act, 2016, which made a couple of key changes to the “Cadillac Plan Tax”, an excise tax on high cost employer-sponsored health plans.
First, the implementation of the tax has been delayed two years from 2018 to 2020. Second, the tax payment will be a deductible business expense – initially the excise tax was not going to be a deductible expense and therefore more costly for employers.
The Cadillac Tax is an excise tax on the cost of “high cost plans” which are plans that have an premium that exceeds a certain threshold. Currently, the amounts for high-cost plans are $10,200 for individual coverage, and $27,500 for family coverage. These amounts are indexed for inflation and will change.
Opponents of the Cadillac Tax seek a repeal of the law that will cause further pressure on employers who already face a high cost of providing health insurance. Included in the “premium” calculation for Cadillac plans are benefits such as Health FSAs, HRAs, Health Savings Accounts, most wellness plans and of course fully insured and self insured health plans.
Matt Hollister, L.I.A., M.P.H.

Matt Hollister No Comments

Bancorp Bank announces sale of HSA business HealthEquity

Effective November 30th, 2015, Bancorp Bank will be transferring HSA custodian responsibility to HealthEquity, Inc. (NASDAQ: HQY). We have recommended Bancorp Bank to a number of companies that have QHDHP with HSAs, and we use Bancorp Bank here at Hollister Insurance. Although we have been happy with Bancorp Bank I feel that HealthEquity will also be a very good partner. We have worked with HealthEquity for FSA and HRA plans in the past and they have proven to have excellent service and leading technology.

Therefore although employers and employees can choose any HSA provider we feel that most people will be comfortable with the change to HealthEquity.

Employees will have received notification and by now perhaps new cards as well. The timing for the change is as follows:

  • 12/1/15 – Final day to use Bill Pay from your HSA and to use Funds Transfer within Bancorp Bank
  • 12/4/15 – Final day to use your Bancorp Bank HSA Debit Card and final day to write checks from Bancorp Bank.
  • 12/5/15 – Account funds will be transferred from Bancorp Bank to HealthEquity and account access within Bancorp Bank will end.

We are happy to answer any questions you have regarding this transition.
Sincerely,
Matt Hollister, L.I.A., M.P.H.

Matt Hollister No Comments

Update on health plans for groups with 51-100 employees

A bill that gives states the authority to set the size requirements for “small group” health plans (H.R. 1624) passed both the House of Representatives and US Senate this week.  If it is signed into law, Massachusetts will be able to keep the definition of small groups for the purposes of health plan rates at 50 and under.  The legislation will be presented to President Obama for his consideration.
Insurance carriers estimate that about 85% of employers who have between 51 and 100 employees when rated as a small group will have higher rates than if they stayed with large group.  Therefore Hollister Insurance, along with others in the brokerage community and industry groups such as the National Association of Health Underwriters have been advocating on behalf of affected employers to find a permanent fix to this issue.
We hope this information is helpful and we will keep you posted as soon as we receive updates on this important legislation.
Sincerely,
Matt Hollister, L.I.A., M.P.H.
Matt Hollister No Comments

Delay of Small Group Expansion Mandate

Governor Charlie Baker Announced last Thursday that the Federal Health Care Reform mandate, which would expand the definition of “small group” up to 100 employees, has been delayed for at least a year. Governor Baker cited “price shock” for employers with between 50 and 100 employees as a reason for Massachusetts to seek a waiver in the new rule.  Governor Baker had originally sought a permanent waiver but was granted a delay of the expansion by federal regulators instead.
According to our sources, insurance carriers will have the option of whether or not to delay the expansion of small group, and some may move ahead with the change regardless of the announcement.  At Hollister Insurance, as we prepare for 2016 renewals, we will be working closely with clients in the development of a renewal strategy that works best given the regulatory environment.
Overall we feel that this is a step in the right direction, although we still support a permanent waiver which would allow Massachusetts state government, along with the MA Division of Insurance with the flexibility in defining the size of a “small group.”
More information on this announcement can be found on Governor Baker’s website.