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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.

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USCIS Releases New Form I-9 and Form I-9 Instructions

U.S. Citizenship and Immigration Services (USCIS) has released a new version of and instructions for Form I9Employment Eligibility VerificationBy September 18, 2017, employers must use only the new version.

Compliance Dates for New Form I9
The new Form I9 features a revision date of July 17, 2017 (07/17/17 N). While employers may continue using a Form I9 with a revision date of November 14, 2016 (11/14/16 N) through September 17, 2017, as of September 18, 2017, employers must use only the new version.

Changes to Form I9
The following revisions have been made to the List of Acceptable Documents section of the new Form I9:

  • The Consular Report of Birth Abroad (Form FS-240) has been added to List C. Employers completing Form I9 on a computer are now able to select Form FS-240 from the drop-down menus available in List C of Section 2 and Section 3.
  • All the certifications of report of birth issued by the U.S. Department of State (Form FS-545, Form DS-1350, and Form FS-240) are now combined into selection C#2 in List C.
  • All List C documents have been renumbered except the Social Security card. For example, the employment authorization document issued by the U.S. Department of Homeland Security on List C has changed from List C #8 to List C #7.

Changes to Form I9 Instructions
The following revisions have been made to the new Form I9 instructions:

  • The phrase “the end of” has been removed from the phrase “the first day of employment.”
  • The name of the Office of Special Counsel for Immigration-Related Unfair Employment Practices has been changed to its new name, Immigrant and Employee Rights Section.

The new Form I9 and instructions can be downloaded here.

For more information on complying with the employment eligibility verification requirements, please visit our HR360 client section on Form I9.

 

Sincerely,

 

Matt Hollister

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Employer’s Guide to Tax-Exempt Fringe Benefits

We are pleased to present the attached Tax Treatment of Common Fringe Benefits Chart, which summarizes whether certain types of fringe benefits are exempt from federal income, FICA, and unemployment taxes. Fringe benefits discussed include:

  • Accident and health benefits
  • Transportation benefits
  • Group-term life insurance coverage
  • Moving expense reimbursements

Click on the image below to view and download the chart.

 

 

Please contact me if you have any questions about this report.

Regards,

Matt Hollister
President

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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.

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Health Care Reform Updates

The Patient Centered Outcomes Research Institute (PCORI) fees, which are part of the Affordable Care Act (ACA) are due July 31.   If you have a fully-insured health plan your insurance carriers will file the fee automatically.  However, for self funded plans, including employer-sponsored Health Reimbursement Arrangements (HRAs), employers are responsible for making the payment and filing the IRS form 720.  Fees for plan years that ended in 2016 are due July 31, 2017.

How to Pay PCORI Fees:

Hollister will prepare the Form 720 for employers who ask.  However, some employers will do it on their own or obtain it through their CPAs.  For plan years ending 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 (including dependents). For plan years ending between October 1, 2016 and December 31, 2016, the fee is $2.26 multiplied by the average number of lives covered under the plan.

For additional information, please contact us or visit our HR support site (HR360).

 

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

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New HR Support

We are pleased to announce our new partnership with HR360, an online HR library with online tools such as a handbook builder, total compensation statement, HR training videos and up to date forms.  Hollister Insurance offers this service free of charge to our clients.  We are pleased to add this on-line resource in addition to our live HR and compliance assistance that we provide to many clients.   You can find out more about HR360 by clicking Here, or by calling us at 978-451-0980.

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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.

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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.
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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.

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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.