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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. 

Thursday, April 6, 2017

Health Insurance Mandate(s) Still in Effect!

The Affordable Care Act's (ACA) “health insurance mandates” are still in effect, and have most definitely not been abolished.   Had the Republican party’s – The American Health Care Act (AHCA) – passed, it would have, among other things, retroactively eliminated both the Individual and Employer mandates.  As such, it did not go to a vote, and thus we still have the ACA, and its associated fees, taxes, mandates, regulations, etc.

The ACA requires taxpayers to show that they have minimum essential coverage, which includes but is not limited to Medicare, Medicaid, TRICARE, CHIP, and private health insurance obtained through an employer or the individual market. And, the individual mandate fee still applies to individuals who do not qualify for an exemption (e.g. certain hardships, some life events, health coverage or financial status, and membership in some groups). 

For both 2016 and 2017, the individual mandate penalty, if triggered, is calculated two (2) different ways, and affected individuals pay the HIGHER of :
A.      Percentage of income
·         2.5% of household income
·         Maximum: Total yearly premium for the national average price of a Bronze plan sold through the Marketplace; or
B.      Per person
·         $695 per adult
·         $347.50 per child under 18
·         Maximum: $2,085
The federal government (in this case, the IRS) has “relaxed” some of the enforcement of the individual mandate, and associated penalties.  Specifically, in February of this year (2017) the IRS stated that, starting this tax season, it will no longer systematically reject returns on which the taxpayer doesn’t indicate their coverage status. However, the agency may still follow up with questions directed to filers.

So unless and until there is a change in regulations, policy, and/or law, the individual mandate is the law of the land, and affected individuals are encouraged to comply.


Monday, February 27, 2017

ACA's Replacement...A Sneak Peek

Until recently (late February, 2017), talk of "repealing/reforming/replacing" the Affordable Care Act (ACA), aka Obamacare, has been largely speculative.  We now have our first look at draft legislation that aims to replace major aspects of the ACA.  It is important to note that what is being considered is not a wholesale repeal of the ACA, but rather a line item repeal/replace.  While I have been itching to publish my "2 cents" about where I think health care reform is headed, I forced myself to wait for actual legislation to do so (despite presenting my thoughts at presentations/lectures over the last several weeks). From what I've read, there are replacement aspects which link to each of the articulated repeals. So here are the highlights of what the draft legislation (emphasis on draft) includes:

  • The "REPEALs" - elimination of key aspects of the ACA including:
    1. The employer mandate (including fees, taxes, and associated reporting)
    2. The individual mandate (and the associated subsidies)
    3. Taxes/Fees (e.g., health insurance sector tax, Cadillac tax, comparative effectiveness research fee, tanning bed tax, medical device tax)
    4. Medicaid expansion and associated funding (largely impacting the states that expanded Medicaid)
    5. Medicare benefit enhancements (e.g. eliminating the Part D/Prescription Drug benefit's "donut hole", reducing benefit over payments)
    6. Mandatory/Minimum essential benefits

  • The "REPLACEMENTs" - provisions replacing those that are repealed, include:
    • The primary revenue generating sources included in the draft legislation, which would presumably fund the "high risk" pools, and offset new tax credits are:
      • A cap on the tax exemption for employer provided coverage attached to the 90th percentile of current premium costs.  Covered employees would be taxed on premium amounts in excess of this threshold.
      •  Individuals that allow coverage to lapse and subsequently re-enroll would be subject to a 30% , one-year premium tax.
    • Refundable premium tax credits to encourage the purchase of health insurance by individuals - $2,000/year for those under age 30; $2,500/year for those 30-40; $3,000 for those 40-50; $3,500 for those 50-60; and $4,000/year for those 60+ years old.
    • $100 billion to fund so called - "state innovation grants" - to address high risk insurance applicants.
    • Converting Medicaid funding to a capped, federal contribution model.
    • By modifying community rating, the current form of pre-existing condition ban, minimum/essential benefits, and standardized/metallic plans, insurance companies who have left markets would (hopefully) be encouraged to re-enter, and would be able to offer more flexible and affordable coverage options to applicants.
    • Expanding Health Savings Accounts (HSAs) to allow for higher contribution limits, and "cleaning up" some of the onerous restrictions.
Several of the insurance reforms included in the ACA would likely remain, including:

  • Coverage for pre-existing conditions
  • Guaranteed issuance of coverage (presumably under certain conditions)
  • Coverage available to dependent children on parents' coverage to age 26
  • Nondiscrimination of coverage (and premiums) on the basis of race, gender, disability
  • Caps on in-PPO network/out of pocket plan limitations (i.e., deductible/copay/coinsurance)
  • Continued ban on lifetime and (certain) annual benefit limitations
Importantly, some of the changes would take effect shortly (if not immediately) after potential passage of the law; while others would take effect in 2020.  The ACA replacement legislation is expected to be formally introduced to Congress in March, 2017.

As I write this blog post (February 27, 2017) the President is hosting a "listening session" with several health insurance leaders including the heads of Cigna, Aetna, United Healthcare, Humana, several Blue Cross Blue Shield plans and others).


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…