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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

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.
Matt Hollister No Comments

Update on ACA employer reporting requirements

We have received several questions about the Affordable Care Act (ACA) reporting requirements and prepared this primer to give some basic information on the reporting rules.  Our main message is don’t worry about this now, because as we get closer to the end of the year we will be providing more detailed information and talking with employers individually to let them know what needs to be done in 2016.

What is the ACA reporting?  In general it is the IRS’s way to find out directly from employers and insurers that the ACA rules are being followed.  Since the ACA rules are different for large groups (those subject to Employer Shared Responsibility) and small groups, the reporting requirements are also different.  Most small groups (those that have fully insured health plans) won’t have to do any reporting because the insurance carriers will take care of it.  However, large groups and employers with self funded health plans will have to provide information both to their employees and to the IRS.

As we stated, the requirement starts in early 2016 for most people.  However, employers may voluntarily report in 2015 on health coverage they provided in 2014.  Most health insurance carriers will issue the required reports in 2016 and annually thereafter.

There are three reports that will be filed, depending on the source of insurance and size of company, the 1095-A, 1095-B and 1095-C.  We have created the following explanation for your information and planning:

1095-A: By January 31, 2015, Marketplaces (such as the Massachusetts Health Care Connector) will issue Minimum Essential Coverage (MEC) Forms 1095-A to individuals covered through a qualified health plan in the Marketplace in 2014. These forms will list all members covered under the plan and the calendar months in which they had coverage.

1095-B: By January 31, 2016, insurance carriers and small self-insured employers will be required to issue Form 1095-B MEC forms directly to members covered through small employers. The forms will list all members covered under the plan and the calendar months in which they had coverage. Insurers and small self-insured employers will also send MEC information directly to the IRS.

1095-C: By January 31, 2016, large employers, whether fully insured or self-insured, will have to provide information to their employees on whether the plan met 60% minimum value (MV) and was affordable (i.e. single only coverage is not more than 9.5% of employee’s income). Large employers will also be required send the same information to the IRS on form 1094-C.

Matt Hollister No Comments

Certificate of Creditable Coverage rules change for 2015

Up until now, HIPAA rules have required that Certificates of Creditable Coverage (also known as HIPAA Certificates) be automatically sent out to members when their coverage ends. This rule was in place to protect people who changed jobs so that they could show continuity of coverage and avoid pre-existing conditions limits. However, since the Affordable Care Act (ACA) has eliminated pre-existing condition limits, the ACA final regulations amend the HIPAA requirement that health plans send these certificates to terminating members.

However, there are situations where these certificates will still be needed, such as when someone looses coverage due to a qualifying event and needs to move on to his or her spouse’s plan outside of their open enrollment. Members who need a certificate as proof that they lost coverage will need to call their health plan’s member services to request one.  It generally takes about two weeks for certificates to be printed and mailed, depending on the carrier.