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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, 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 - https://smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

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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!

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Wednesday, August 12, 2015

2016 Health Savings Account (HSA) Guidelines


Earlier this summer (2016) the IRS released its annual guidance affecting Health Savings Accounts (HSA), and associated qualified high deductible health plans (QHDHP).  Interestingly, for the first time since rules were relaxed to allow contribution amounts to be higher than a percentage of the deductible (remember those days?), the IRS chose to keep the maximum HSA contribution limit for individual coverage static; but increased the HSA family coverage limit.  Despite keeping the maximum allowable HSA contribution amount unchanged for those having individual only coverage, the IRS did, however, increase the maximum out of pocket limit associated with the required/accompanying QHDHP for individuals (in addition to families).
Here's an overview of the changes affecting both HSAs and QHDHP's, starting in 2016...

Health Savings Account (HSA) contribution limits:

  • Individual Coverage: $3,350 (no change from 2015)
  • Family Coverage: $6,750 (an increase of $100 from 2015)
  • As a reminder, so called family coverage is defined as an individual plus one or more dependents.
Qualified High Deductible Health Plan (QHDHP) out of pocket limits:
  • Individual Coverage*
    • Deductible must be at least $1,300 and no greater than $2,600 annually.
    • Out of Pocket limit (deductible plus additional requirements such as post deductible copays and coinsurance) may not exceed $6,550 annually (which is a $100 increase from 2015).
  • Family Coverage
    • Deductible must be at least $2,600 annually
    • Out of Pocket limit (deductible plus additional requirements such as post deductible copays and coinsurance) may not exceed $13,100 annually (which is a $200 increase from 2015).
* IMPORTANT: Recent guidance issued by the trilogy of ACA compliance and enforcement -Departments of Labor/Treasury/Health & Human Services – affects QHDHPs (both inforce and newly established) starting in 2016.  The guidance indicates that the annually published ACA out of pocket maximums affect so called “aggregate” or "non-embedded" family deductibles that are part of many QHDHP’s.  (Note: QHDHP’s that utilize embedded family deductibles and grandfathered plans would not be impacted by the change.)  

This means that QHDHPs having a non-embedded or aggregate deductible for family coverage will be required to limit the deductible exposure facing any one family member to the ACA individual maximum out of pocket limit for 2016, which is $6,850.


For more information on this guidance and the impact on affected plans, go to -https://www.smstevensandassociates.com/ResourceLibrary/tabid/192/Default.aspx

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Wednesday, July 15, 2015

ACA 2016 Maximum Out of Pocket Limits and CDH Plans


Recent guidance issued by the trilogy of Affordable Care Act (ACA) compliance and enforcement -Departments of Labor/Treasury/Health & Human Services – could have a major impact on many of the Consumer Driven Health Plans (CDHPs) currently in force, starting in 2016.  In short, the recently published guidance (released in the form of an FAQ) indicates that the annually published ACA out of pocket maximums affect so called “aggregate” family deductibles that are a part of many CDHP’s.  CDHP’s that utilize embedded family deductibles and grandfathered plans would not be impacted by the change.  Here’s what all of this means…

Wednesday, July 8, 2015

Supreme Court Rulings Affecting Employee Benefits


The Supreme Court of the United States (SCOTUS) recently issued separate rulings affecting the health insurance and employee benefits sectors.  The "King v. Burwell" decision assures that health insurance subsidies will continue to be provided to eligible individuals in all states, even those that don't have a "state based health insurance exchange".  And the "Obergefell v. Hodges" ruling held that state laws (in 14 states) banning same sex marriages were unconstitutional.  While the former ruling affecting ACA subsidies will primarily assure continuation of previously implemented aspects of the law, and prevent what could have been serious disruption, chaos, and premium rate impact; the later ruling will require examination of, and changes to many policies and procedures.  Here's a brief overview of the more pertinent areas deserving attention...