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... an Employee Benefits, Health Care/Insurance/Funding, Consumer Driven Healthcare -  Trusted Advisor - helping organizations of all types and size reduce human capital related costs, improve morale, and maximize organizational objectives relative to wellness and health care. 

Monday, December 19, 2016

21st Century Cures Act Becomes Law!

On Tuesday, December 13th, 2016, the President signed into law the - "21st Century Cures Act" - which includes a provision that will be very good news to many stakeholders, in particular, employers that have fewer than 50 full time/full-time equivalent employees.  Now law, the Act addresses a variety of issues including expanded treatment for mental health; resources to fight the so called "opioid epidemic"; hastening the time required for FDA approval of new drugs/devices; and additional funding to accelerate cancer research. Over $6 billion has been earmarked to fund the ambitious law, which received bi-partisan support in both the House and Senate.

Back in 2002, the IRS created Health Reimbursement Arrangements (HRA's), essentially building off a more popular and widely utilized tax preferred instrument known as a flexible spending account or FSA.  HRAs offer plan participants flexibility that FSAs did not, most notably the ability to carry over unused dollar allocations to subsequent benefit years.  The "21st Century Cures Act" has once again performed an "Adam and Eve like" creation by building off the HRA to create a new tax preferred spending arrangement called a Qualified Small Employer Health Reimbursement Arrangement, or QSE HRA.  Here's how the QSE HRA works, and more importantly, who is eligible to implement/offer the new tax preferred spending arrangement.


  1. Employers that do not meet the Affordable Care Act's (ACA) definition of an "applicable large employer", generally under 50 full-time and full-time equivalent employees (FTEs). (Note: employers who averaged less than 50 FTE's in 2016 or the entire prior calendar year would meet this test); and
  2. Eligible employers that do not currently offer group health insurance coverage to their employees.  Employers that offer coverage to a certain class or segment of their employed population would not meet this test, unless they terminated all inforce group health plans.
IMPORTANT: Employers seeking to implement a QSE HRA must provide written notice of availability to eligible employees 90 days prior to the beginning of the year the QSE HRA is offered. Employers are allowed transition relief of this requirement if notice is provided within 90 days of the Act's effective date.


QSE HRAs are established to reimburse eligible employees' medical expenses including:
  1. Premiums for individual health insurance coverage.
  2. Premiums for Medicare supplement or Medigap insurance
  3. Expenses heretofore allowed to be reimbursed under FSAs and Health Savings Accounts (HSAs), listed in IRS code section 213(d). Examples include health insurance plan related copays, deductibles, and coinsurance, and expenses related to services such as acupuncture, chiropractic care, dentures, corrective vision, etc.
  4. The maximum allowable QSE HRA amounts, which must be 100% employer funded, are $4,960 for individual only coverage; and $10,000 for individual plus dependent(s) coverage. Amounts can be prorated by employers based on employee hire dates.  Presumably the amounts would increase from year to year, similar to the increases announced by the IRS for annual HSA contribution limits.

There are a variety of compliance related considerations employers need to be aware of and address upon plan implementation, including:
  • Development of a plan document which outlines the parameters of the QSE HRA plan (Note: HRAs and QSE HRAs are ERISA governed plans, and must follow the same rules as a health insurance plan.)
  • Development/distribution of a summary plan description (SPD)
  • Distribution of the required "90 day" notice
  • Determining affordability relative to the ACA's individual mandate
  • Reporting QSE HRA amounts on employees' form W-2
  • Completion/Submission of the ACA's 1095-B data to plan participants and the IRS, along with transmission of 1094-B data to the IRS.


Monday, November 21, 2016

IRS Announces Delay to ACA Form Filing Deadline

Last Friday (11/18/2016) the IRS announced extended deadlines for the delivery of forms 1095-B & C to INDIVIDUALS.  IRS forms 1095-B and 1095-C must now be provided to affected individuals no later than March 2, 2017 (originally 1/31/2017).

Please note this extension does NOT apply to the deadlines for filing forms 1095-C, along with 1094-C, 1094-B, and 1095-B with the IRS.  The deadline to file these forms with the IRS remains February 28, 2017 (or March 31, 2017 if filing electronically).

Also of importance in the IRS release was the extension of transition relief with respect to penalties “if good faith efforts are made to comply with information reporting requirements”.
As a reminder, employers with fewer than 50 employees (full and part-time) are not required to file any of the above referenced forms, if their plan is fully insured.


Wednesday, October 12, 2016

Medicare Part D Notices

Each year, Medicare Part D requires group health plan sponsors to disclose to individuals who are eligible for Medicare Part D AND to the Centers for Medicare and Medicaid Services (CMS) whether their health plan’s prescription drug coverage is creditable. Plan sponsors must provide the annual disclosure notice to Medicare-eligible individuals before Oct. 15, 2016—the start date of the annual enrollment period for Medicare Part D. 

Employers should confirm whether their health plans’ prescription drug coverage is creditable or non-creditable and prepare to send their Medicare Part D disclosure notices by Oct. 14, 2016. CMS also requires notices to be provided to "Medicare eligible plan participants" at other times during the year, such as:

  • Prior to an affected individual's initial enrollment period for Part D
  • Prior to the effective date of coverage for any Medicare-eligible individual who joins the plan
  • Whenever prescription drug coverage ends or changes, which results in a change in the status of the coverage
  • Upon an affected individual's request

Model notices (in English and Spanish), and additional guidance on this compliance matter can be found at


Thursday, March 3, 2016

ACA 2016 Compliance Update

By one count (source: The Galen Institute); there have been seventy (70) significant changes, delays, modifications, and partial repeals of the Affordable Care Act (ACA)/Obamacare to date.  (For those keeping score at home, 43 have come from the White House; 24 from Congress; and 3 from the Supreme Court.) The challenges for stakeholders lie not only in developing sound, effective compliance strategies, but in keeping up with the various “fits and starts” of the law.  In addition, various penalties, fees, taxes, limits, and safe harbors are indexed for inflation, and thus, subject to change on an annual basis.  Listed below are some of the more relevant and timely announcements which impact ACA compliance in 2016 and beyond:

Wednesday, January 20, 2016

Short Term/Temporary Health Ins.- Buyer Beware!

Short Term Major Medical (STMM) coverage, sometimes referred to as Temporary Major Medical, can be an ideal solution to a specific, health insurance related challenge.  However, changes brought upon by the Affordable Care Act (ACA) have significantly altered the rules, restrictions, and considerations relative to the purchase and reliance upon STMM coverage.  Here is an analysis of STMM in the interest of arming interested buyers with the information they need to make an informed decision…

Thursday, October 8, 2015

President Signs Important ACA Modification Bill!

Yesterday (October 7, 2015) the President signed the Protecting Affordable Coverage for Employees, or PACE Act, giving states the flexibility to define "small employer group", for purposes of the Affordable Care Act (ACA).  The PACE Act also redefines the definition of small employer to 1 - 50 employees.  This is an extremely important tweak to the ACA, especially for employer groups that employ between 50 - 100 full and part-time employees.  Had the PACE Act not been signed into law, the ACA was set to change the definition of small employer group from the current, 1 - 50 employees, to 1 - 100 employees, as affected plans renewed on and after January 1, 2016.  

For more information on the impact of this law, click -


Wednesday, August 26, 2015

Long Term Care's Silver Tsunami

Recently I read an article in a trade publication that addressed the so called "silver tsunami", related to long term care.  While the word "tsunami" certainly got my attention, some of the statistics mentioned in the piece had me downright concerned. As an employee benefits consultant/broker, health insurance is almost always at the top of the list in terms of importance and cost, followed by dental, life insurance, disability income, vision, and tax preferred spending accounts (e.g., health savings accounts, flexible spending accounts, health reimbursement arrangements).  However, with 10,000 Americans turning 65, each and every day, and the propensity to need some form of assisted care in the future as we age, LONG TERM CARE INSURANCE (LTCI) deserves a "seat at the table".  Here are some important considerations relative to long term care, which includes facility care at various levels, and potentially care received in the comfort of one's own home...

Based on insurance company – Northwestern Mutual Life Insurance Company’s 2014 Long Term Care Study:
  • Currently 1 in 3 Americans provides or is expected to provide care for a loved one.
  • The largest share of caregivers is in their peak earning years of age (45-64).
  • 47% of working caregivers reduce or deplete personal savings to cover expenses related to care giving.
  • 80% of primary and 50% of secondary caregivers reduced retirement plan contributions to cover long term care related expenses.
  • 75% of Americans agree that as people live longer, the need for long term care is greater.
  • By the year 2020, it is estimated that 25% of the workforce will be 55 years of age or older.
And finally…
  • Someone turning 65 years of age today has a nearly 70% chance of needing some form of long term care services/support in their remaining lifetime.
There are a number of quality insurance companies offering long term care insurance protection in the form of both individual and group policies. And, there are a several factors to take into consideration when evaluating long term care insurance.  Some of these factors include:
  1. The maximum benefit period (usually expressed in a number of years, or in some cases, for life).
  2. The per day or per month benefit amount.
  3. The total amount of benefits available or the lifetime maximum benefit (generally determined by multiplying the per day benefit amount (no. 2.above) by 365, then multiplying this figure by the number of years associated with the maximum benefit period (no. 1. above).
  4. The length of time before benefits are payable (referred to as the benefit waiting period).
  5. Whether or not the policy provides coverage for care provided in and out of a nursing home, assisted living facility, and/or the person’s home.
  6. Whether or not the policy only provides benefits for licensed care givers.  Some policies provide benefits to care givers that are not necessarily licensed providers, but rather, friends, neighbors, and relatives.
  7. Inflation protection.
  8. Partial or full return of premium in the event benefits are never triggered.
  9. Whether or not the policy can continue with limited benefits if the policy owner decides to stop paying premiums (generally referred to as a non-forfeiture option).
  10. Whether the policy pays benefits based on an expense incurred, indemnity, or disability model.
  11. Whether the policy is considered qualified or non-qualified.  (Note: in order to be eligible for tax deductability of premiums, the policy must be qualified.).
And unlike other forms of insurance that have clearly defined benefit “triggers” (e.g., death, accident, fire, theft), LTCI benefits are usually triggered by a physician’s certification of either or both of the following:
  1. Inability to perform a specific number of “activities of daily living”, or ADL’s, which may include bathing, continence, dressing, eating, toileting, and transferring; or
  2. Cognitive impairment (e.g., dementia, Alzheimer’s disease).
Finally, the federal government encourages the purchase of LTCI by allowing tax deductability of a portion, and in certain instances, all of the premiums paid for coverage.  For example, in 2015, an individual between the ages of 60 - 70 can deduct up to $3,800 if such premiums and other allowable medical expenses exceed 10% of adjusted gross income (AGI).  Tax deductability of LTCI premiums paid for group/employer provided coverage depend on the structure of the organization (i.e., partnership, S corporation, C corporation).  And, like many other insurance benefits provided by employers, LTCI benefits received are tax free to covered employees and dependents!