Brooker Insurance Agency's
Health Benefits Newsletter
Greetings!
The Brooker Insurance Agency - Health Benefits Newsletter is dedicated to providing you with up-to-the-minute information on the latest changes brought on by implementation of the Patient Protection Affordable Care Act (PPACA), and the short and long-term impact these changes will have on your business. *
At Brooker Insurance Agency, we are committed to providing you with the information and resources you need to navigate the ever-changing landscape of health care reform. **
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Determining "Affordable" Coverage Under the PPACA
Understanding the 9.5% Rule
On May 3, 2013 the Department of the Treasury and the Internal Revenue Service (IRS) issued an update to the proposed regulations regarding the determination of "affordability" of employer-sponsored plans for purposes of eligibility for premium tax credits. Beginning in 2014, individuals who purchase coverage under a qualified health plan through a Health Insurance Exchange may qualify for a premium tax credit. Under the updated proposed regulation, if an employer fails to offer an "affordable" health plan option that provides "minimum value" to its qualified full time employees, that employer may be subjected to a penalty for each full time employee that enrolls in the exchange and receives a premium tax credit. Employer sponsored coverage is "affordable" only if any employee's required contribution for self-only coverage does not exceed 9.5% of the employee's combined household income. A medical plan is deemed unaffordable when an employee declines the employer's offered plan, enrolls in the exchange, and receives a federal subsidy. In these situations the employers will be charged a penalty fee of $250 per month for each of these employees.
The proposed rules also provide guidance on how HRAs, HSAs and wellness program incentives are counted in calculating the affordability of employer-sponsored coverage.The regulation also allows for a safe harbor for employers who finalize their wellness plan before final rules are published Those employers will have until January 1, 2015 to be compliant. To discuss how the 9.5% Rule may affect your company, please contact Jamie Debenham at (440) 238-5454. |
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New Suite of Federal Taxes
and Fees To Be Assessed
Assessed on Health Plan Sponsors in 2014
A new suite of taxes and fees will be assessed on health plan sponsors in 2014 based on stipulations outlined in the Patient Protection Affordable Care Act (PPACA).
The first fee, implemented in 2012, is the Patient-Centered Outcomes Research Institute (or PCORI) fee. Currently $0.16 for each covered member and each dependent, this fee will increase to $0.18 for each in 2014. Beginning in January 2014, the following federal fees will be imposed:
1. Reinsurance fee -- approximately $5.25 per member per month. Will be assessed across all medical lines of business for all fully insured plans and self funded groups; excluded coverage includes stop loss, dental, vision and Medicare Supplement.
2. Market Share fee -- between 2% and 3% of the monthly premium. Will be assessed on all fully insured lines of business, including dental and vision, with the exception of Medical Supplement Policies. Stop loss applicability is to be determined.
For additional information about these fees and how they will impact your company's benefit plan, please contact Jamie Debenham at (440) 238-5454.
Source: Medical Mutual of Ohio, Broker Communications Special Update, March 7, 2013, "Healthcare Reform: New Suite of Federal Taxes and Fees".
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What You Need t o Know About the
Small Business Health Care Tax Credit
If you are a small employer with fewer than 25 equivalent employees, pay an average wage of less than $50,000 a year, and pay at least half of employee health insurance premiums, then you qualify for the small business health care tax credit.
For tax years 2010 through 2013, the maximum credit is 35% for small business employers and 25% for small tax-exempt employers such as charities. Beginning January 1, 2014, and enhanced version of the credit will be effective. In general, the tax rate will increase to 50% and 35% respectively.
If you are a small business employer who did not owe tax during the year, you can carry the credit back or forward to other tax years. Also, since the amount of the health insurance premium payments are more than the total credit, eligible small businesses cans till claim a business expense deduction for the premiums in excess of the credit. That's both a credit and a deduction for employee benefit premiums payments.
There is good news for small tax-exempt employers too. The credit is refundable, so even if you have no taxable income, you may be eligible to receive the credit as a refund so long as it does not exceed your income tax withholding and Medicare tax liability.
And finally, if you can benefit from the credit this year but forgot to claim it on your tax return, there is still time to file and amended return.
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New SBC
(Summary of Benefits and Coverage) Template Available
In the last Health Benefits Newsletter, we noted the requirement that beginning with plan years and open enrollment periods beginning on or after September 23, 2012, a group health plan (including the plan administrator), and a health insurance issuer offering group health insurance coverage, must provide a written SBC without charge to a participant or beneficiary with respect to each benefit package offered by the plan or issuer for which the participant or beneficiary is eligible. An updated SBC Template, and a sample completed SBC, are now available and authorized for use with respect to group health plans with coverage beginning on or after January 1, 2014 and before January 1, 2015. The only change to the SBC template and sample completed SBC is the addition of statements of whether the plan or coverage provides "minimum essential coverage" and whether the plan meets the "minimum value" requirements (that is, the plan's share of the total allowed costs of benefits provided under the plan is not less than 60% of such costs). According to FAQs issued with the updated SBC template, to the extent a plan is unable to modify the SBC template provided with respect to coverage beginning on or after January 1, 2014 and before January 1, 2015, no enforcement action will be taken against a plan for using the previously authorized SBC template, provided that the SBC is furnished with a cover letter or similar disclosure stating whether the plan does or does not provide "minimum essential coverage" and "minimum value". For additional information about content and timing requirements of the SBC, go to Department of Labor FAQs. |
For More Information......
Health Care Reform Resources (links)
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Brooker Insurance Agency 
The Brooker Building, 10749 Pearl Road
Strongsville, Ohio 44136
Phone: (440) 238-5454
Toll Free: (800) 722-0055
Jamie Debenham
Vice President, Employee Benefits
Cheryl Bruyere
Commercial Sales Account Executive
cbruyere@brooker-ins.com
Karen Potoczak
Health Benefits Manager
kpotoc@brooker-ins.com
* The content in this newsletter is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisors.
** Content provided through PrimePay/HR360. PrimePay is a nationally recognized industry leader servicing the payroll industry and specializes in the optimization of payroll processes, HR and work force needs, and insurance and benefit management. For more information about PrimePay, please click Here . HR 360 is the leading publisher of Human Resources intelligence for businesses large and small. HR360's online library is a repository of actionable information and guidance that enables employers to manage and maintain their staffs while complying with ever-changing employment laws, rules and regulations. For more information about HR360, please click Here .
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Model Exchange Notices are Now Available
Must be distributed to Employees by October 1, 2013
Following a delay in the original effective date, employers will need to comply with the new requirement to provide each employee a written notice with information about a health Insurance Exchange (also known as a Marketplace) beginning this fall.
Employers are required to provide the written notice to each current employee not later than October 1, 2013, and to each new employee at the time of hiring beginning October 1, 2013. There is one model notice for employers who offer a health plan to some or all employees, and another model notice for employers who do not offer a health plan.
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What you need to know aboutSmall Business Health Options Program (SHOP)
Beginning in 2014, Exchanges (also known as Health Insurance Marketplaces) are required to operate a SHOP as an option for qualified small employers to purchase employee health coverage. The federal government will operate the program in states that do not elect to establish a state-run Exchange.
For plan years beginning in calendar year 2014, federally-facilitated SHOPs will only provide employers the option to make available to qualified employees a single QHP. State based SHOPs would have the flexibility to permit employers to offer their qualified employees a choice of QHPs at a single level of coverage.
The full functionality of the SHOP has been delayed until January 1, 2015. Under the proposed rule, the requirement for all SHOPs to provide employers with the option to offer employees a choice of any QHP at a single metal level has been delayed until plan years beginning on or after January 1, 2015.
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Brooker Insurance Agency
Employee Benefits Division
We provide the highest quality professional services to our clients.
Our highly trained and experienced professionals are well versed in the complex and ever changing area of group and individual health care benefits. You can expect expert guidance, excellent communication and dedicated support with personal service.
Our goal is to make the process of offering employee benefits less stressful on your human resources department. We partner with you throughout the year to help administer and service your benefits program - from start-up through renewals, and everything in between. Call us today to discuss your company's current benefits plan. |
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Is Early Renewal of Health Insurance Coverage an Option for Your Group?
While the stated purpose of health care reform is to lower health care expenditures, there are a number of cost and fees associated with its implementation. Many of these costs and fees are scheduled to be imposed in 2014.
To help mitigate the impact of these fees and operational costs on employers, some insurance carriers are permitting employers to renew their coverage early, in late 2013, as opposed to waiting until their 2014 policy anniversary dates.
Employers, including small employers, should contact their health insurance agent or broker to determine if this is an option for their company. Early renewal will not be appropriate for every group, and your insurance agent or broker can help you assess whether it is the right choice for your group.
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