Employees of small employers (less than 50 employees) pay more each year for health care coverage due to higher premiums, co-pays, and deductibles. Small employers also pay more each year as health care costs rise.

As the healthcare Exchanges take effect next year, new options will be available to small employers and their employees. One option for employees is trying to qualify for the Exchange subsidies.

In 2014, individuals who buy an individual health care policy from the Exchange may be eligible for the following subsidies.

1. The premium tax credit helps pay the portion of premium owed by the individual. This subsidy is available to individuals whose income is 100% to 400% of the federal poverty level.
2. The cost sharing subsidy helps pay out-of-pocket costs, such as co-pays, deductibles and co-insurance. This subsidy is available to individuals whose income is 100% to 250% of the federal poverty level.

Assuming an employee meets the income requirements, an employee may qualify for these individual subsidies in two situations.

1. The employee is not offered a group health plan by the small employer.
2. The employee is offered a group health plan that is not affordable or does not offer minimum value. To be affordable, an employee's portion of the premium must be less than 9.5% of her/his W-2 wages (for self-only health coverage). To offer minimum value, the employer must pay at least 60% of the premium.

Employees with lower income jobs may find that buying individual coverage makes more financial sense for them if they can qualify for the Exchange subsidies. But employees should remember that they will not qualify for the Exchange subsidies if their employer offers a group health plan that is affordable and offers minimum value.

Deciding which options make the most financial sense for employees and small employers will (hopefully) become clearer as more details become available during 2013.

Disclaimer: The information above is general in nature and does not constitute legal or tax advice on the issues discussed. Please consult a lawyer or tax professional to discuss your company's specific circumstances.   

Norma Shirk

Manager/Owner

Corporate Compliance Risk Advisor, LLC

norma.shirk@complianceriskadvisor.com

Health Care Reform: New Guidance on "Pay or Play," Annual Limit Rules, and More  

A final rule outlines acceptable methods for plans to determine minimum value, including a Minimum Value Calculator (now available for informal external testing) for use by employer-sponsored group health plans that are not in the individual or small group market.

As an alternative to using the calculator, an employer-sponsored plan will be able to use a number of safe harbor checklists (not yet available) to determine whether the plan provides minimum value without the need to perform any calculations.

Guidance on Integrated vs. Stand-Alone HRAs for Compliance with Annual Limit Rules 

• Non-grandfathered plans in the small group market must comply with the annual limitation on deductibles, which may not exceed $2,000 (for self-only coverage) or $4,000 (for non-self-only coverage) for plan years beginning in calendar year 2014. Contributions to flexible spending arrangements (FSAs) are not taken into account when determining the deductible maximum.

Guidance on Coverage of Preventive Services

A new set of FAQs addresses a number of issues related to the requirement that non-grandfathered group plans cover recommended preventive services without cost-sharing, including clarification regarding coverage of over-the-counter recommended items and services and preventive services for women.

Guaranteed Availability of Coverage and Limits on Premium Variations
A final rule has been issued regarding the requirements related to guaranteed availability of coverage and fair premiums for issuers offering non-grandfathered health insurance coverage in the individual or small group market.

• For plan years beginning on or after January 1, 2014, issuers are required to accept every individual and employer in the state that applies for coverage, subject to certain exceptions.
• In addition, issuers will be allowed to vary premiums only based on age (within a 3:1 ratio for adults), tobacco use (within a 1.5:1 ratio for adults and subject to wellness program requirements in the small group market), family size, and geography.

Visit our section on Health Care Reform for more information regarding these updates and to stay on top of changes.

Source:  HR360.com  

New FMLA Poster and Final Rules on Military Family Leave Amendments 

A new poster reflecting changes to the federal Family and Medical Leave Act (FMLA) related to military family leave is now available and must be posted no later than March 8th. Employers with 50 or more employees are generally required to display the FMLA poster where both employees and applicants can see it.

Military Family Leave Provisions
The FMLA includes two special military family leave entitlements for eligible employees:

• Military caregiver leave allows an eligible employee who is the spouse, son, daughter, parent, or next of kin of a covered servicemember with a serious injury or illness to take up to 26 workweeks of FMLA leave during a single 12-month period to care for the servicemember.
• Under the qualifying exigency leave provisions, an eligible employee whose spouse, son, daughter, or parent is a military member on covered active duty is allowed to take up to 12 workweeks of leave to address certain special issues (called "qualifying exigencies") arising out of the military member's active duty or call to active duty in support of a contingency operation. Qualifying exigencies include activities such as attending military sponsored functions, making appropriate financial and legal arrangements, and arranging for alternative childcare. 

Final Rules Implement Changes to FMLA
The new FMLA poster accompanies final rules which implement previous amendments to the military family leave provisions. Highlights of the final rules include:

• Expansion of the definition of a covered servicemember to include certain veterans. The final rules expand the 26-workweek military caregiver leave provision to include leave to care for covered veterans who are undergoing medical treatment, recuperation, or therapy for a serious injury or illness incurred or aggravated in the line of duty on active duty and that manifested before or after the veteran left active duty.
• Inclusion of pre-existing injuries or illnesses aggravated in the line of duty on active duty. The final rules expand military caregiver leave to cover current servicemembers with serious injuries or illnesses that existed before the servicemember's active duty but were aggravated by service in the line of duty.
• Expansion of qualifying exigency leave for employees with family members in the Regular Armed Forces. The final rules expand the qualifying exigency leave entitlement to employees whose spouse, son, daughter, or parent serves in the Regular Armed Forces, and incorporates the statutory requirement that the military member, whether in the Regular Armed Forces or the Reserve components, must be deployed to a foreign country.
• Certain changes to the categories of qualifying exigency leave, including a new qualifying exigency category that allows an eligible employee to take FMLA leave for certain activities related to the care of the military member's parent who is incapable of self-care where those activities arise from the military member's deployment or impending deployment.

The final rules also implement amendments clarifying the application of the FMLA to airline flight crew employees.

Additional information regarding these changes, including a military leave guide, fact sheets, and FAQs, is available from the U.S. Department of Labor. You can learn more about the Family and Medical Leave Act in our section on the FMLA.

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