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FEDERAL JAN 1st SMALL GROUP ANNUAL OPEN ENROLLMENT WAIVER

FEDERAL JAN 1st SMALL GROUP ANNUAL OPEN ENROLLMENT WAIVER

A little-known requirement but most important under Affordable Care Act (ACA) is for Health Insurers must waive their minimum employer-contribution and employee-participation rules once a year. ACA requires a one-month Special Open Enrollment Window for January 1st coverage.

The special open enrollment period occurs November 15th through December 15th of each year, allowing eligible small group employers to enroll for coverage effective January 1st of the following year.

Background

The ACA has a section in it called the “guaranteed issuance of coverage in the individual and group market.” It stipulates that “each health insurer that offers health insurance coverage in the individual or group market in the state must accept every employer and individual in the state that applies for such coverage.” The section also states that this guaranteed issuance of coverage can only be offered during (special) open enrollment periods, and that plans can only be offered to applicants that live in, work in, or reside in the plans’ service area(s).

Participation and Contribution Requirements

In many states (including California and Nevada), carriers can decline to issue group health coverage if fewer than 70% of employees elect to enroll in coverage. Some carriers may have even tighter participation requirements.

Generally speaking, employees with other coverage (Medicare, other group coverage, individual coverage through the Exchange, etc.) are removed from the participation requirement calculation – though it varies by insurance carrier.

Furthermore, employer contribution rules require employers to contribute a certain percentage of premium costs for all employees in order to attain group health coverage. Some businesses struggle to meet these contribution requirements for a variety of financial reasons.

Problem Solved: Special Open Enrollment Period

Many employers want to offer coverage to their employees, but are denied because they struggle to meet participation and/or contribution requirements. Employers cannot force employees to enroll in coverage unless the employer pays for 100% of the employees’ premiums, which many employers cannot afford. Even with moderate to generous employer contributions, many employers still find young and lower-income employees waiving coverage. This was even more evident in 2019 with the ACA’s federal Individual Mandate non-compliance penalty reduced to $0.00.

The U.S. Department of Health & Human Services provides final guidance on this in regulation 147.104(b)(1): “In the case of health insurance coverage offered in the small group market, a health insurance issuer may limit the availability of coverage to an annual enrollment period that begins November 15 and extends through December 15 of each year in the case of a plan sponsor that is unable to comply with a material plan provision relating to employer contribution or group participation rules.”

If your employer groups are struggling with participation and/or contribution, the Special Open Enrollment Window is the time to enroll them in coverage.

For more help with the Special Open Enrollment Window contact us at info@medicalsolutionscorp.com or (855)667-4621.

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Cadillac Tax Out Health Insurance Tax (HIT) Back In

Cadillac Tax Out Health Insurance Tax (HIT) Back In

Last week the House voted the unpopular Obamacare Cadillac Tax to be permanently repealed 419-6. However, much like a bad cold, the Health Insurance Tax (the HIT) is back for 2020. Website Stop The Hit calculates $5,000 as the average tax for a 10 man small business for example.

Who’s affected?

No one escapes the $16 billion HIT. The return of the Health Insurance Tax (HIT) means higher costs and fewer jobs for hardworking Americans. Absent immediate Congressional action to delay the HIT, small businesses and families will face $500 on average in higher premiums for 2020. To make matters worse, the increased cost burden on small businesses from the HIT could result in the U.S. workforce being reduced by 152,000 to 286,000 jobs over a decade. Te HIT is projected to increase premiums for seniors by $241.

How much for 2020?

For Small business, this translates to an estimated 2.5%-3% added surcharge. For States like NYS where there is already approx. 16% added surcharge to high premiums, this becomes daunting.  It is no surprise the unpopular HIT was suspended. In 2017, payers escaped making $13.9 billion in payments due to the moratorium, according to a 2018 analysis by Oliver Wyman, commissioned by UnitedHealth Group.  This may have saved consumers billions on their insurance coverage.“The taxes on health insurance are non-deductible for federal tax purposes for health insurers,” the report explained.

In some states, such as Vermont, the price of insurance would have more than quadrupled. The payer trade group published a fact sheet on this. “Allowing a tax to resume in 2020 valued at an annual level of $16 billion, would saddle individual market consumers, small businesses, state Medicaid programs, and Medicare Advantage enrollees with higher health care costs,

Can this be repealed?

Relief from the health insurance tax would result in real savings to the American people. We strongly urge Congress to provide an additional two-year suspension of the health insurance tax by passing H.R. 1398.

Learn more about how we are successfully helping navigate SMB for 20+ years. If you have any questions or would like additional information, please contact us at 855-667-4621 or info@medicalsolutionscorp.com.

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Texas Court Strikes Down ACA

Texas Court Strikes Down ACA

Texas Court Strikes Down ACA

A Texas federal judge ruled late Friday that the health coverage of some 20 million Americans in limbo by ruling Obamacare as unconstitutional.  The entire Affordable Care Act must be scrapped because Congress repealed the individual  mandate penalty for failing to obtain insurance coverage last December as part of the Tax Cuts and Jobs Act.

Why it matters: The ruling, which will appealed, would be particularly perilous for states like New York that have fully embraced its provisions and receive billions in federal funding tied to it.

3 things that wont change for Employers:

1) There is no change to the law. A statement from White House that pending the appeal process, the law remains in place. ACA reporting requirements remain and penalties are unchanged.

2) Texas ruling expected  to be overturned. The ruling will be appealed, ultimately to the Supreme Court if it gets that far and may take years to appeal. The Supreme Court has consistently upheld the constitutionality of the ACA twice in previous court challenges, and experts (including those who are both for and against the law) widely expect the Court to do the same in this case.

3) ACA is actually becoming more embraced overall. More states are choosing to expand Medicaid, some are creating their own individual mandates, and employer mandate penalties are being enforced by the IRS. Any change to the law that would take away affordable healthcare coverage from those who currently receive it could be a major political challenge for the governing party.

For  ALE (applicable large employers) who are preparing for 2018 Forms 1095 and 1094 reporting, the Texas ruling has no immediate impact. The Employer Mandate is in full effect and the IRS continues to assess potential penalties for non-compliance. We’ll keep our current clients informed of any changes of substance.

If you would like to know more about MMS Corp and Health Care Reform for your company, contact us today.

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IRS Extends ACA Reporting Deadline for Forms 1095 to Individuals

IRS Extends ACA Reporting Deadline for Forms 1095 to Individuals

Breaking:  IRS released Notice extending the due dates for the 2018 inf2018 1095-B Extensionormation reporting requirements for employers to furnish information on returns and statements regarding minimum essential coverage provided to individuals.

Specifically, the notice extends the due date for furnishing the following to individuals: the 2018 Form 1095-B, Health Coverage, and the 2018 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from January 31, 2019 to March 4, 2019.

Lastly, IRS extends the good-faith relief in Notice 2016-70 that applied to filings in 2015 to 2016 and 2017 and now to 2018. This relief applies to missing and inaccurate taxpayer identification numbers and dates of birth, as well as other information required on the return or statement.
To show good faith efforts to qualify for this relief, filers must meet applicable deadlines. However, IRS recognizes that late filers may still be able avoid penalties by showing reasonable cause for missing the due dates.

Contact Us Now   Sign up for compliance alerts.  Learn how our Agency is helping businesses thrive in today’s economy. Please contact us at info@medicalsolutionscorp.com or (855)667-4621. 

The information provided herein is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any federal tax penalties. Entities or persons distributing this information are not authorized to give tax or legal advice. Individuals are encouraged to seek specific advice from their personal tax or legal counsel.

NYS Pushes Back Association Plans and Short Term Medical

NYS Pushes Back Association Plans and Short Term Medical

NYS Pushes Back Association Plans and Short Term Medical

NYS is pushing back on Association Health  Plans (AHP) In reaction to President Trump’s Executive Order of Association Health Plans expansion.  The President expanded the role of association plans earlier this week rule to makes it easier for small businesses and trade groups to band together to purchase health coverage outside of Obamacare’s insurance markets.

These regulations provide an additional basis for a group or association of employers to be treated as an “employer.  New York’s top insurance official said the Trump administration’s final rule making it easier to form association health plans will not hamper the state’s ability to continue regulating the health insurance industry.  Other states like Massachusettes have have also pushed back over Association Plans. “Yesterday’s announcement by the Trump Administration to dramatically expand the footprint of Association Health Plans will invite fraud, mismanagement, and deception – and, as we’ve made clear, will do nothing to help ease the real health care challenges facing Americans,” Healey and Underwood said in a joint statement. “We believe the rule, as proposed, is unlawful and would lead to fewer critical consumer health protections.”

One program getting attention are inpexpesivive but limited short-term health insurance plans.  According to yesterdays NYS DFS annoncment, however, New York regardless of federal actions will prohibit these plans as consumer protection.  Current federal rules only permit short-term plans — which are exempted from certain health benefits coverage requirements, such as chronic pre-existing conditions — to last up to three months, but the Trump administration wants to expand that up to 364 days. “Such ‘limited health’ plans, whether limited to less than three months or one year, are not short-term at all, but rather an end-run around requirements applicable to individual or group hospital, surgical or medical expense coverage and are prohibited under New York State law,” DFS wrote in a circular letter to insurers.

Summary of Trump’s Association Health Plans Expansion

 Purpose of Association. Employers may band together in an association for the purpose of obtaining health coverage.  However, the association also “must have at least one substantial business purpose unrelated to offering and  providing health coverage or other employee benefits to its employer members and their employees.”  The DOL clarifies in its safe harbor that a “substantial business purpose is considered to exist if the group or association would be a  viable entity in the absence of sponsoring an employee benefit plan.” 

 Commonality of Interest. Employers in the association can either (1) be from the same trade, industry, line of business, or profession; or (2) all have a principal place of business in a State (or portion of a State, such as a city or  county) or in the same metropolitan area (even if the metropolitan area spans more than one State, like New York, Washington, D.C., or Kansas City

 Structure and Control. There must be a formal organizational structure with a governing body and by-laws or similar formalities, to control the association, including the establishment and maintenance of the group health plan.   The  control can be direct or indirect through the regular election of directors, officers, or other similar representatives; however control must be present both  in form and in substance. Ultimately, the functions and activities of the group or association are controlled by its employer members, and the group’s or association’s employer members that participate in the group health plan  control the plan, by determining contributions, plan designs, and benefits. 

Eligibility. Only employees and former employees of association members (and  their eligible family members) may participate in the association health plan.  In other words, it cannot be an insurance exchange for any interested party. 

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We will closely monitor this as awell as all Health Care Reform developments. Sign up for our premium newsletter below.  Learn how our Agency is helping buinsesses thrive in today’s economy.  Check out PEO Case Studies here and learn how they can apply to you. Please contact us at info@medicalsolutionscorp.com or (855) 667-4621. 

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