Question: Can an employer reimburse its employees for premiums on a pre-tax basis for purchasing individual market medical coverage?
Answer: No. In IRS Notice 2013-54 & Technical Release 2013-3, the IRS and DOL prohibit the reimbursement of premiums for individual medical policies from health reimbursement arrangements and premium only plans.
Recently, the IRS issued a Frequently Asked Questions (FAQ) list that reiterates earlier guidance disallowing pre-tax employer reimbursements for employee health care premiums. The FAQ also calls attention to the $100 per day, per employee penalty for non-compliance.
Showing posts with label DOL. Show all posts
Showing posts with label DOL. Show all posts
Monday, June 30, 2014
Monday, May 5, 2014
Administration announces proposal to clarify availability of Health Insurance Marketplace coverage to workers eligible for COBRA
On May 2, 2014, the Obama administration announced updates to model notices informing workers of their eligibility to continue health-care coverage through the Consolidated Omnibus Budget Reconciliation Act. The updates make it clear to workers that if they are eligible for COBRA continuation coverage when leaving a job, they may choose to instead purchase coverage through the Health Insurance Marketplace.
“In many cases, workers eligible for COBRA continuation coverage can save significant sums of money by instead purchasing health insurance through the Marketplace,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “COBRA continues to play an important role in helping workers and families maintain coverage after a job loss, and it is important that workers know that in some cases there is a Marketplace option as well.”
“In many cases, workers eligible for COBRA continuation coverage can save significant sums of money by instead purchasing health insurance through the Marketplace,” said Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi. “COBRA continues to play an important role in helping workers and families maintain coverage after a job loss, and it is important that workers know that in some cases there is a Marketplace option as well.”
Monday, September 30, 2013
Animation Explains Changes Coming for Americans Under the Affordable Care Act
2014 is coming--are you ready for Obamacare? Join the YouToons as they walk through the basic changes in the way Americans will get health coverage and what it will cost starting in 2014, when major parts of the Affordable Care Act, also known as "Obamacare," go into effect.
Courtesy: The Henry J. Kaiser Family Foundation.
Friday, September 27, 2013
Explanation of Guidance on HRAs, Health FSA- Clarification?
It appears that the pre-tax reimbursement of individual premiums under a premium only plan (POP) (under Code Section 125) is directly at odds with the prohibition against any annual limit on the dollar amount of essential health benefits under the Affordable Care Act (Act).
On Friday, September 13, the Departments of Labor, Treasury and Health and Human Services provided guidance on the application of certain provisions of the Affordable Care Act (Act) on health reimbursement arrangements (HRAs), certain health flexible spending arrangements (Health FSAs) and employee assistance programs (EAPs). It was clear from the initial reading of the guidance that individual premiums could not reimbursed by HRAs. In a further reading of the guidance, there appears to be more serious consequences.
On Friday, September 13, the Departments of Labor, Treasury and Health and Human Services provided guidance on the application of certain provisions of the Affordable Care Act (Act) on health reimbursement arrangements (HRAs), certain health flexible spending arrangements (Health FSAs) and employee assistance programs (EAPs). It was clear from the initial reading of the guidance that individual premiums could not reimbursed by HRAs. In a further reading of the guidance, there appears to be more serious consequences.
Monday, September 16, 2013
DOL Releases Guidance on HRAs, Health FSAs and Certain Other Employer Healthcare Arrangement Options
On Friday, September 13, 2013, the DOL and the IRS issued guidance on how the annual limit and preventive services rules in the Affordable Care Act (ACA) apply to HRAs.
IRS Notice 2013-54 and DOL Technical Release 2013-03 provided much-awaited answers to questions about what types of HRAs comply with these ACA rules. The guidance also addressed Employee Assistance Programs (EAPs). The Notice and Technical Release mirror each other. The guidance applies to plan years starting on or after January 1, 2014. Additional regulatory guidance will be forthcoming.
IRS Notice 2013-54 and DOL Technical Release 2013-03 provided much-awaited answers to questions about what types of HRAs comply with these ACA rules. The guidance also addressed Employee Assistance Programs (EAPs). The Notice and Technical Release mirror each other. The guidance applies to plan years starting on or after January 1, 2014. Additional regulatory guidance will be forthcoming.
Thursday, September 12, 2013
DOL FAQ on Notice of Coverage Options
Q: Can an employer be fined for failing to provide employees with notice about the Affordable Care Act's new Health Insurance Marketplace?
A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.
http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html
A: No. If your company is covered by the Fair Labor Standards Act, it should provide a written notice to its employees about the Health Insurance Marketplace by October 1, 2013, but there is no fine or penalty under the law for failing to provide the notice.
http://www.dol.gov/ebsa/faqs/faq-noticeofcoverageoptions.html
Thursday, September 5, 2013
COBRA and the ACA: Compatible or Irreconcilable?
Several key provisions of the Affordable Care Act (ACA) have now been delayed. When the ACA has fully achieved lift off, what will become of COBRA?
The simple answer is that COBRA will continue to fly, until and unless another law permanently grounds it. Here are some observations around the interplay between the ACA and COBRA:
- The ACA likes COBRA. Parts of the ACA looked to COBRA concepts as the gold standard for calculations. Case in point is W-2 reporting of health care coverage in IRS Notice 2012-09. More recently, the DOL thought COBRA was important enough to update the Model Election Notice when it released the Exchange Notice. Click here for our article.
- The DOL likes COBRA. Look at this DOL FAQ, which states that the ACA “did not eliminate COBRA or change the COBRA rules.” making it clear that COBRA is not going away. And take a gander at this lengthy 25-year proclamation by the DOL from 2011.
- COBRA fills some ACA gaps. Granted, the Health Insurance Marketplace will provide COBRA qualified beneficiaries with some alternatives for medical coverage. In some cases, the alternatives may be cheaper, but that is not certain. Also, understand that stand-alone dental, vision, prescription drugs are not required to be offered in the marketplace. Neither are flexible benefits like HRAs and Health FSAs. COBRA offers these benefits to the extent that they are employer-sponsored coverage.
- To some extent, the marketplace likes COBRA. To some extent, the Marketplace coordinates with COBRA. For example, take your most common reason for termination of COBRA: premium non-payment. If a qualified beneficiary loses coverage because of non-payment, this person is not entitled to a special enrollment period for Marketplace coverage and must wait until the annual enrollment period. Another thing to consider is when the Marketplace opens in 2014, small employers can obtain Marketplace coverage through the Small Business Health Options Program (SHOP). This coverage would be subject to COBRA because it is employer-sponsored coverage.
This is COBRA’s current status: a valid law. The ACA did not change COBRA, as the DOL has pointed out.
Thursday, August 22, 2013
A Limit on Consumer Costs is Delayed in Health Care Law
New York Times
WASHINGTON - In another setback for President Obama's health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care.
The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014.
The grace period has been outlined on the Labor Department's Web site since February, but was obscured in a maze of legal and bureaucratic language that went largely unnoticed. When asked in recent days about the language - which appeared as an answer to one of 137 "frequently asked questions about Affordable Care Act implementation" - department officials confirmed the policy.
WASHINGTON - In another setback for President Obama's health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care.
The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014.
The grace period has been outlined on the Labor Department's Web site since February, but was obscured in a maze of legal and bureaucratic language that went largely unnoticed. When asked in recent days about the language - which appeared as an answer to one of 137 "frequently asked questions about Affordable Care Act implementation" - department officials confirmed the policy.
Monday, July 8, 2013
U.S. relaxes health law income - Health markets to employ honor system
As reported by the Washington Post:
The Obama administration announced Friday that it would significantly scale back the health law's requirements that new insurance marketplaces verify consumers' income and health insurance status.
Instead, the federal government will rely more heavily on consumers' self-reported information until 2015, when it plans to have stronger verification systems in place.
The delay comes after a Tuesday announcement that the federal government would postpone for one year a requirement that employers with 50 or more full-time workers provide health coverage.
"I think that Health and Human Services is doing the best that it can under the circumstances," said Sara Rosenbaum, a health policy professor at George Washington University.
The verification systems are meant to determine who qualifies for new benefits under the Affordable Care Act. The law includes tax subsidies to purchase health insurance for Americans who earn less than 400 percent of the poverty line, about $45,000 for an individual.
Those earning less than 133 percent of the poverty line - about $15,000 - will qualify for Medicaid coverage in the District and 23 states that have decided to expand the program.
The federal government also needs to know who receives health insurance coverage from an employer. Consumers who receive affordable health insurance from their company under a policy that costs less than 9.5 percent of their income do not qualify for tax credits under the Affordable Care Act.
The Obama administration announced Friday that it would significantly scale back the health law's requirements that new insurance marketplaces verify consumers' income and health insurance status.
Instead, the federal government will rely more heavily on consumers' self-reported information until 2015, when it plans to have stronger verification systems in place.
The delay comes after a Tuesday announcement that the federal government would postpone for one year a requirement that employers with 50 or more full-time workers provide health coverage.
"I think that Health and Human Services is doing the best that it can under the circumstances," said Sara Rosenbaum, a health policy professor at George Washington University.
The verification systems are meant to determine who qualifies for new benefits under the Affordable Care Act. The law includes tax subsidies to purchase health insurance for Americans who earn less than 400 percent of the poverty line, about $45,000 for an individual.
Those earning less than 133 percent of the poverty line - about $15,000 - will qualify for Medicaid coverage in the District and 23 states that have decided to expand the program.
The federal government also needs to know who receives health insurance coverage from an employer. Consumers who receive affordable health insurance from their company under a policy that costs less than 9.5 percent of their income do not qualify for tax credits under the Affordable Care Act.
Thursday, May 30, 2013
Final Rules on Employment Based Wellness Programs Released
On May 23, 2013, the DOL, Treasury and HHS finalized the HIPAA Nondiscriminatory Wellness Programs Regulations that were proposed in November 2012, clarifying what will work and what will not work for 2014 and beyond.
The accompanying news release stated that the “final rules ensure flexibility for employers by increasing the maximum reward that may be offered under appropriately designed wellness programs.”
Wednesday, May 29, 2013
Health Insurance Exchange and Revised COBRA Model Election Notices Released
The Affordable Care Act (ACA) added a section to the Fair Labor Standards Act (FLSA) that said an applicable employer must provide a written notice to each existing employee no later than March 1, 2013, and to new hires beginning on that date. But on January 24, 2013, the Department of Labor (DOL) put out an FAQ that recognized that was an unrealistic deadline.
On May 8, 2013, the DOL provided an update with temporary guidance and templates of the required Exchange Model Notices (For Employers who offer a health plan and Employers who do not offer a health plan) and the Revised Model COBRA Election Notice. Starting on October 1, 2013, the notices have to be given to new employees on the day they are hired. The notices have to be given to existing employees no later than October 1, 2013.
The notices, along with further guidance, can be found at www.dol.gov/ebsa. Please review the attached Health Care Reform Hot Topic for more information on the Model Notices Explanation.
On May 8, 2013, the DOL provided an update with temporary guidance and templates of the required Exchange Model Notices (For Employers who offer a health plan and Employers who do not offer a health plan) and the Revised Model COBRA Election Notice. Starting on October 1, 2013, the notices have to be given to new employees on the day they are hired. The notices have to be given to existing employees no later than October 1, 2013.
The notices, along with further guidance, can be found at www.dol.gov/ebsa. Please review the attached Health Care Reform Hot Topic for more information on the Model Notices Explanation.
Thursday, May 9, 2013
DOL Releases Guidance on Model Exchange Notice & Model COBRA Election Notice
The Department of Labor released Technical Release 2013-02 on May 8, 2013. It provided guidance for the Model Exchange Notice and the Model COBRA Election Notice. A copy of Technical Release 2013-02 follows:
I. Introduction
This Technical Release provides temporary guidance regarding the notice requirement under FLSA section 18B and announces the availability of the Model Notice to Employees of Coverage Options. This Technical Release also provides an updated model election notice for group health plans for purposes of the continuation coverage provisions under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to include additional information regarding health coverage alternatives offered through the Marketplace.
I. Introduction
This Technical Release provides temporary guidance regarding the notice requirement under FLSA section 18B and announces the availability of the Model Notice to Employees of Coverage Options. This Technical Release also provides an updated model election notice for group health plans for purposes of the continuation coverage provisions under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to include additional information regarding health coverage alternatives offered through the Marketplace.
Thursday, April 25, 2013
Departments Issue FAQ on Summary of Benefits & Coverage Changes
On Tuesday, April 23, 2013, HHS, Treasury and the DOL published Part XIV of their FAQs on the Affordable Care Act, focusing on revisions to the Summary of Benefits and Coverage (SBC).
The seven-question FAQs introduce two primary changes, which take effect for plan years starting on or after January 1, 2014:
- A statement indicating whether a plan provides minimum essential coverage (MEC)
- A statement answering whether the plan's share of the total allowed costs of benefits meets applicable minimum value (MV) requirements (i.e., at least 60 percent of allowed charges for covered services, also known as bronze level coverage)
Plans may provide this information by either updating their SBCs or providing it in a cover letter. The departments provided sample language in the FAQs. In addition, the SBC template has been updated as well as the sample completed SBC. The uniform glossary remains unchanged.
In a previous notice, the departments indicated that more wholesale changes would be likely for 2014, including revisions and additions to the coverage examples. However, these FAQs confirm that the MEC and MV statements are the only required changes. Also, much of the transition relief provided in 2013 has been extended to 2014. See Q/A-5 in the FAQs for additional details.
Original article courtesy of Infinisource: http://newsroom.infinisource.com/post/2013/04/25/Departments-Issue-FAQ-on-Summary-of-Benefits-Coverage-Changes.aspx
Friday, April 5, 2013
New fact sheets answer questions about Health Reimbursement Arrangements
An FAQ issued by the Department of Labor on January 24, 2013 stated that stand-alone HRAs used to buy an individual policy is not considered combined employer-sponsored coverage that follows the annual dollar limit requirement. If employees are offered an HRA and employer-sponsored coverage and turn down the employer-sponsored coverage, the stand-alone HRA will violate the law. The FAQ does allow amounts already in a stand-alone HRA before January 1, 2014 to be drawn on after that time if certain standards are met.
Anthem HRA Fact Sheet
Anthem HRA Fact Sheet
Tuesday, March 19, 2013
Most PPACA Provisions for Expatriate Plans Delayed Until 2015
On March 8, 2013, the Departments of Labor, Health and Human Services and Treasury issued a Frequently Asked Question (FAQ) announcing that compliance with most Patient Protection and Affordable Care Act (PPACA) provisions is being delayed for expatriate plans meeting this definition:
Thursday, January 24, 2013
Exchange Notification to Employees Delayed
The deadline for employers to notify employees of the availability of Exchanges has been delayed from March 1, 2013, to late summer or fall of 2013. The Department of Labor is considering providing model, generic language that could be used to satisfy the notice requirement. Future guidance on complying with the notice requirement under the Fair Labor Standards Act (FLSA) section 18B is expected to provide flexibility and adequate time to comply.Department of Labor (DOL) Press Release & FAQ's January 24, 2013
Friday, December 28, 2012
IRS Releases Proposed Regulations on the Employer Mandate
On December 28, 2012, the IRS issued 144 pages of proposed regulations addressing the employer “shared responsibility” mandate (aka Play or Pay mandate) in the Affordable Care Act. In addition, the IRS issued a FAQ summarizing major points of the regulations. Some of the highlights include:
Subscribe to:
Posts (Atom)