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HSA vs FSA

HSA vs FSA

HSA vs FSA

With High Deductible Health Plans (HDHP) funding trending in the recent decade, there are helpful tax-advantaged savings tools that can help employees out. But just how many employees understand the difference between an HSA(Health Savings Account) vs an FSA(Flex Savings Account)?

Facts:  Only 11% could correctly identify all HSA attributes which may explain why 33% of employees enrolled in an HDHP have not opened up an HSA according to the JAMA Network website published in July 2020.

Below is a simplified chart comparing HSAs vs FSAs.

It pays to fund an HSA

Some people who are eligible for HSAs don’t participate or don’t max out their contributions, because they don’t fully understand how these plans work. But if you pass up the opportunity to capitalize on an HSA.

Currently, you can contribute up to $3,500 per year to an HSA as an individual, and up to $7,000 for a family. If you’re 55 or older, you can put in an extra $1,000 on top of whichever limit applies to you. Also, know this: Sometimes employers fund HSAs on their employees’ behalf, so see if that’s a benefit you’re entitled to. Though the sum your employer puts in will count toward your annual limit, it’s effectively free money to help you tackle the potentially monstrous cost that is healthcare, both now and in the future.

If you still are unsure which savings plan best suits your small business, contact your licensed insurance broker for advice. To download this entire document as a PDF, click here: Open Enrollment eBook

Is your HSA compliant?  Which pre-tax qualified HSAFSAHRA spending card is right for you? Please contact our team at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.  Stay tuned for updates as more information gets released.  Sign up  for the latest news updates.

This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

 

 

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2021 Open Enrollment Checklist

2021 Open Enrollment Checklist

2021 Open Enrollment Checklist

To download this entire document as a PDF, click here: Open Enrollment eBook

This Compliance Overview is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice.  Readers should contact legal counsel for legal advice. 

In preparation for open enrollment, Employers should review their plan documents in light of changes for the plan year beginning Jan 1, 2021. Below is an Employer 2 Open Enrollment Checklist including some administrative items to prepare for in 2020. 

Health plan sponsors should also confirm that their open enrollment materials contain certain required participant notices, when applicable—for example, the summary of benefits and coverage (SBC). There are also some participant notices that must be provided annually or upon initial enrollment. To minimize costs and streamline administration, employers should consider including these notices in their open enrollment materials.

PLAN DESIGN CHANGES

 

Out-of-pocket Maximum

Effective for plan years beginning on or after Jan. 1, 2014, non-grandfathered health plans are subject to limits on cost-sharing for essential health benefits (EHB). The ACA’s out-of-pocket maximum applies to all non-grandfathered group health plans, including self-insured health plans and insured plans.

  • $8,550 for self-only coverage and $17,100 for family coverage  out-of-pocket maximum.
  •  $7,000 for self-only coverage and $14,000 for family coverage HSA Maximum. For 2021 plan years, the out-of-pocket maximum limit for HDHPs is $7,000 for self-only coverage and $14,000 for family coverage. 

Preventive Care Benefits 

The ACA requires non-grandfathered health plans to cover certain preventive health services without imposing cost-sharing requirements (that is, deductibles, copayments or coinsurance) for the services. Health plans are required to adjust their first-dollar coverage of preventive care services based on the latest preventive care recommendations. If you have a non-grandfathered plan, you should confirm that your plan covers the latest recommended preventive care services without imposing any cost-sharing.  

More information on the recommended preventive care services is available through the U.S. Preventive Services Task Force and www.HealthCare.gov.

Health FSA Contributions

The ACA imposes a dollar limit on employees’ salary reduction contributions to a health flexible spending account (FSA) offered under a cafeteria plan. An employer may impose its own dollar limit on employees’ salary reduction contributions to a health FSA, as long as the employer’s limit does not exceed the ACA’s maximum limit in effect for the plan year. 

The ACA set the health FSA contribution limit at $2,500. For years after 2013, the dollar limit is indexed for cost-of-living adjustments. For 2021 plan years, the health FSA limit is $2,750. 

  • Communicate the health FSA limit to employees as part of the open enrollment process.

HDHP and HSA Limits for 2021

If you offer an HDHP to your employees that is compatible with an HSA, you should confirm that the HDHP’s minimum deductible and out-of-pocket maximum comply with the 2020 limits. The IRS limits for HSA contributions and HDHP cost-sharing increase for 2020. The HSA contribution limits will increase effective Jan. 1, 2020, while the HDHP limits will increase effective for plan years beginning on or after Jan. 1, 2020.

  • Check whether your HDHP’s cost-sharing limits need to be adjusted for the 2020 limits.
  • If you communicate the HSA contribution limits to employees as part of the enrollment process, these enrollment materials should be updated to reflect the increased limits that apply for 2020.

The following table contains the HDHP and HSA limits for 2020 as compared to 2019. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.

Type of Limit 2020 2021 Change
HSA Contribution Limit Self-only $3,500 $3,600 Up $50
Family $7,100 $7,200 Up $100
HSA Catch-up Contributions (not subject to adjustment for inflation) Age 55 or older $1,000 $1,000 No change
HDHP Minimum Deductible Self-only $1,400 $1,400 No change
Family $2,800 $2,800 No change
HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums) Self-only $6,900 $7,000 Up $100
Family $13,800 $14,000 Up $200

 

ACA EMPLOYER MANDATE AND OTHER REQUIREMENTS 

 

Applicable Large Employer Status (ALE)

Under the ACA’s employer penalty rules, applicable large employers (ALEs) that do not offer health coverage to their full-time employees (and dependent children) that is affordable and provides minimum value will be subject to penalties if any full-time employee receives a government subsidy for health coverage through an Exchange.

To qualify as an ALE, an employer must employ, on average, at least 50 full-time employees, including full-time equivalent employees (FTEs), on business days during the preceding calendar year. All employers that employ at least 50 full-time employees, including FTEs, are subject to the ACA’s pay or play rules.

  • Determine your ALE status for 2021
  • Calculate the number of full-time employees for all 12 calendar months of 2020. A full-time employee is an employee who is employed on average for at least 30 hours of service per week.
  • Calculate the number of FTEs for all 12 calendar months of 2020 by calculating the aggregate number of hours of service (but not more than 120 hours of service for any employee) for all employees who were not full-time employees for that month and dividing the total hours of service by 120.
  • Add the number of full-time employees and FTEs (including fractions) calculated above for all 12 calendar months of 2020.
  • Add up the monthly numbers from the preceding step and divide the sum by 12. Disregard fractions.
  • If your result is 50 or more, you are likely an ALE for 2021.

Identify Full-time Employees

All full-time employees must be offered affordable minimum value coverage.  A full-time employee is an employee who was employed on average at least 30 hours of service per week. The final regulations generally treat 130 hours of service in a calendar month as the monthly equivalent of 30 hours of service per week. The IRS has provided two methods for determining full-time employee status—the monthly measurement method and the look-back measurement method.

  • Determine which method you are going to use to determine full-time status
  • Monthly measurement method involves a month-to-month analysis where full-time employees are identified based on their hours of service for each month. This method is not based on averaging hours of service over a prior measurement method. Month-to-month measuring may cause practical difficulties for employers, particularly if there are employees with varying hours or employment schedules, and could result in employees moving in and out of employer coverage on a monthly
  • Look-back measurement method allows an employer to determine full-time status based on average hours worked by an employee in a prior period. This method involves a measurement period for counting/averaging hours of service, an administrative period that allows time for enrollment and disenrollment, and a stability period when coverage may need to be provided, depending on an employee’s average hours of service during the measurement 

Offer of Coverage 

An ALE may be liable for a penalty under the pay or play rules if it does not offer coverage to “substantially all” (95%) full-time employees (and dependents) and any one of its full-time employees receives a premium tax credit or cost-sharing reduction for coverage purchased through an Exchange. Employees who are offered health coverage that is affordable and provides minimum value are generally not eligible for these Exchange subsidies.

  • Offer minimum essential coverage to all full-time employees
  • Ensure that at least one of those plans provides minimum value (60% actuarial value)
  • Ensure that the minimum value plan offered is affordable to all full-time employees by ensuring that the employee contribution for the lowest cost single minimum value plan does not exceed 78% of an employee’s earnings based on the employee’s W-2 wages, the employee’s rate of pay, or the federal poverty level for a single individual.

Reporting of Coverage

The ACA requires ALEs to report information to the IRS and to employees regarding the employer-sponsored health coverage on Form 1095-C. The IRS will use the information that ALEs report to verify employer-sponsored coverage and to administer the employer shared responsibility provisions (Code Section 6056).

In addition, the ACA requires every health insurance issuer, sponsor of a self-insured health plan, a government agency that administers government-sponsored health insurance programs and any other entity that provides minimum essential coverage (MEC) to file an annual return with the IRS and individuals reporting information for each individual who is provided with this coverage (Code Section 6055). 

  • Determine which reporting requirements apply to you and your health plans
  • Determine the information you will need for reporting and coordinate internal and external resources to help compile the required data for the   1094-C and 1095-C
  • Complete the appropriate forms for the 2020 reporting year. Furnish statements to individuals on or before January 31, 2021 has been extended to March 2, 2021 IRS Notice 2020-76., and file returns with the IRS on or before February 28, 2020 (March 31, 2020, if filing electronically).
ACA Requirement Deadline
1095 forms delivered to employees Jan. 31 (extended to March 2)
Paper filing with IRS* Feb. 28
Electronic filing with IRS March 31

Comparative Effectiveness Research Fee (PCORI)

Sponsors of self-funded plans and health insurance issuers of fully insured plans are required to pay a fee each year, by July 31st, to fund comparative effectiveness research. Fees will increase to $2.45 per covered life in 2020 and are next due July 31, 2021.

W-2 Reporting

Healthcare Reform requires employers to report the aggregate cost of employer-sponsored group health plan coverage on their employees’ Forms W-2. This reporting requirement was originally effective for the 2011 tax year. However, the IRS later made reporting optional for 2011 for all employers.

The IRS further delayed the reporting requirement for small employers (those that file fewer than 250 Forms W-2) by making it optional for these employers until further guidance is issued. For the larger employers, the reporting requirement was mandatory for the 2012 Forms W-2 and continues.

ACA DISCLOSURE REQUIREMENTS

Summary of Benefits and Coverage 

The ACA requires health plans and health insurance issuers to provide an SBC to applicants and enrollees to help them understand their coverage and make coverage decisions. Plans and issuers must provide the SBC to participants and beneficiaries who enroll or re-enroll during an open enrollment period. The SBC also must be provided to participants and beneficiaries who enroll other than through an open enrollment period (including those who are newly eligible for coverage and special enrollees).

The SBC template and related materials are available from the Department of Labor (DOL).

  • In connection with a plan’s 2020 open enrollment period, the SBC should be included with the plan’s application materials. If coverage automatically renews for current participants, the SBC must generally be provided no later than 30 days before the beginning of the new plan year.
  • For self-funded plans, the plan administrator is responsible for providing the SBC. For insured plans, both the plan and the issuer are obligated to provide the SBC, although this obligation is satisfied for both parties if either one provides the SBC. Thus, if you have an insured plan, you should confirm that your health insurance issuer will assume responsibility for providing the SBCs.

Grandfathered Plan Notice

If you have a grandfathered plan, make sure to include information about the plan’s grandfathered status in plan materials describing the coverage under the plan, such as SPDs and open enrollment materials. Model language is available from the DOL. 

Notice of Patient Protections

Under the ACA, non-grandfathered group health plans and issuers that require designation of a participating primary care provider must permit each participant, beneficiary and enrollee to designate any available participating primary care provider (including a pediatrician for children). Also, plans and issuers that provide obstetrical/gynecological care and require a designation of a participating primary care provider may not require preauthorization or referral for obstetrical/gynecological care.

If a non-grandfathered plan requires participants to designate a participating primary care provider, the plan or issuer must provide a notice of these patient protections whenever the SPD or similar description of benefits is provided to a participant. If your plan is subject to this notice requirement, you should confirm that it is included in the plan’s open enrollment materials. Model language is available from the DOL.

OTHER NOTICES 

Group health plan sponsors should consider including the following enrollment and annual notices with the plan’s open enrollment materials. 

  • Initial COBRA Notice 

The Consolidated Omnibus Budget Reconciliation Act (COBRA) applies to employers with 20 or more employees that sponsor group health plans.  Plan administrators must provide an initial COBRA notice to new participants and certain dependents within 90 days after plan coverage begins. The initial COBRA notice may be incorporated into the plan’s SPD.  A model initial COBRA notice is available from the DOL.

  • Notice of HIPAA Special Enrollment Rights

At or prior to the time of enrollment, a group health plan must provide each eligible employee with a notice of his or her special enrollment rights under HIPAA.  This notice may be included in the plan’s SPD.   Model language for this disclosure is available on the DOL’s website.

  • Annual CHIPRA Notice

Group health plans covering residents in a state that provides a premium subsidy to low-income children and their families to help pay for employer-sponsored coverage must send an annual  notice about the available assistance to all employees residing in that state. The DOL has provided a model notice.

  • WHCRA Notice

Plans and issuers must provide notice of participants’ rights to mastectomy-related benefits under the Women’s Health and Cancer Rights Act (WHCRA) at the time of enrollment and on an annual basis.  Model language for this disclosure is available on the DOL’s website.

  • NMHPA Notice

Plan administrators must include a statement within the Summary Plan Description (SPD) timeframe describing requirements relating to any hospital length of stay in connection with childbirth for a mother or newborn child under the Newborns’ and Mothers’ Health Protections Act. Model language for this disclosure is available on the DOL’s website.

  • Medicare Part D Notices

Group health plan sponsors must provide a notice of creditable or non-creditable prescription drug coverage to Medicare Part D eligible individuals who are covered by, or who apply for, prescription drug coverage under the health plan. This creditable coverage notice alerts the individuals as to whether or not their prescription drug coverage is at least as good as the Medicare Part D coverage. The notice generally must be provided at various times, including when an individual enrolls in the plan and each year before Oct. 15th (when the Medicare annual open enrollment period begins).  Model notices are available on the Centers for Medicare and Medicaid Services’ website.

  • HIPAA Privacy Notice

The HIPAA Privacy Rule requires covered entities (including group health plans and issuers) to provide a Notice of Privacy Practices (or Privacy Notice) to each individual who is the subject of protected health information (PHI). Health plans are required to send the Privacy Notice at certain times, including to new enrollees at the time of enrollment. Also, at least once every three years, health plans must either redistribute the Privacy Notice or notify participants that the Privacy Notice is available and explain how to obtain a copy.

Self-insured health plans are required to maintain and provide their own Privacy Notices. Special rules, however, apply for fully insured plans. Under these rules, the health insurance issuer, and not the health plan itself, is primarily responsible for the Privacy Notice.

Model Privacy Notices are available through the Department of Health and Human Services

  • Summary Plan Description (SPD)

Plan administrators must provide an SPD to new participants within 90 days after plan coverage begins. Any changes that are made to the plan should be reflected in an updated SPD booklet or described to participants through a summary of material modifications (SMM).

Also, an updated SPD must be furnished every five years if changes are made to SPD information or the plan is amended. Otherwise, a new SPD must be provided every 10 years. 

Summary Annual Report

Plan administrators that are required to file a Form 5500 (> 100 participants in plan) must provide participants with a narrative summary of the information in the Form 5500, called a summary annual report (SAR). The plan administrator generally must provide the SAR within nine months of the close of the plan year. If an extension of time to file the Form 5500 is obtained, the plan administrator must furnish the SAR within two months after the close of the extension period.

Wellness Program Notices 

Group health plans that include wellness programs may be required to provide certain notices regarding the program’s design. As a general rule, these notices should be provided when the wellness program is communicated to employees and before employees provide any health-related information or undergo medical examinations.

  • HIPAA Wellness Program Notice—HIPAA imposes a notice requirement on health-contingent wellness programs that are offered under group health plans. Health-contingent wellness plans require individuals to satisfy standards related to health factors (for example, not smoking) in order to obtain rewards. The notice must disclose the availability of a reasonable alternative standard to qualify for the reward (and, if applicable, the possibility of waiver of the otherwise applicable standard) in all plan materials describing the terms of a health-contingent wellness program. Final regulations provide sample language that can be used to satisfy this requirement.
  • ADA Wellness Program Notice—Employers with 15 or more employees are subject to the Americans with Disabilities Act (ADA). Wellness programs that include health-related questions or medical examinations must comply with the ADA’s requirements, including an employee notice requirement. Employers must give participating employees a notice that tells them what information will be collected as part of the wellness program, with whom it will be shared and for what purpose, the limits on disclosure and the way information will be kept confidential. The Equal Employment Opportunity Commission (EEOC) has provided a sample notice to help employers comply with this ADA requirement.

 

 

 

Contact us at (855) 667-4621 or email us at info@medicalsolutionscorp.com

 Learn more about

 Liability Protection  •  Employee Benefits  •   HR Consulting

(855) 667-4621 or email us at info@medicalsolutionscorp.com

2021 Dollar Limits

2021 Dollar Limits

 

The IRS & SSA announced the 2021 dollar limits for various benefits and compensation levels for retirement plans and IRAs. There are incremental changes but nonetheless worth bookmarking.

 

The contributions and retirement benefits for qualified retirement plans and individuals. Retirement Arrangements (IRAs) are subject to certain limits that are adjusted by the Secretary of the Treasury annually subject to cost-of-living. Highlighted below are the various 2020 and 2021 limits that impact IRA and retirement plans.

 

Compensation Limits

 

 

 

2020

2021

Compensation Limit

285,000 $$290,000

Defined Benefit §415 Limit

$230,000

$230,000

Defined Contribution §415 Limit

$57,000 $57,000

Key Employee Officer

$185,000 $185,000

Highly Compensated Employee

$130,000 $130,000

Governmental. Plan Compensation

Limit

$425,000 $435,000

ESOP §409(o) Limits

$1,150,000

$230,000

$1,165,000

$230,000

 

 

 

Deferral and Catch-up Contribution Limits

 

 

2020

2021

401(k), 403(b), 457(b) Nan Deferral. Limi

$19,500 $19,500

401(k), 403(b), Governmental. 457(b) Catch-up Limi

$6,500

$6,500

SIMPLE Plan Deferral Limi

$13,500 $13,500

Key Employee Officer

$185,000 $185,000

SIMPLE Plan Catch-up Limit

$3,000 $3,000

 


IRA Limits

 

The limit on contributions to a traditional. or Roth IRA will remain unchanged in 2021 at $6,000. The limit that applies to IRA catch-up contributions (contributions for individuals age 50 and older) remains at $1,000.

 

Social Security

 

The Social. Security Administration (SSA) announced an increase in the taxable wage base (TWB) for 2021 to $142,800 (was $137,700 in 2020). Workers pay Social. Security tax on wages up to the TWB and some retirement plans use the TWB when allocating contributions or calculating benefits.

 

HSA Contribution Limits

 

Although not a formal. retirement plan, health savings accounts (HSA) often factor into retirement savings. The IRS announced the following 2021 limits. These apply to individuals under a high-deductible-health-plan (HDHP). The minimum deductibles and maximum out-of-pocket expenses the IRS uses to define HDHPs are outlined below, as well.

 

HSA Contribution Limits

 

Limit Individual Family

 

 

2020

2021

2020

2021

HSA Contribution Limits

$19,500 $19,500 $7,100 $7,200

Minimum Deductible for HDHPs

$6,500

$6,500

$2,800

$2,800

Maximum Out-of-Pocket Expense

$6,500 $6,500 $2,800 $2,800

 

Resource:

 

 

 

 

Is your HSA compliant?  Which pre-tax qualified HSAFSAHRA spending card is right for you? Please contact our team at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.  Stay tuned for updates as more information gets released.  Sign up for the latest news updates.

 

The subject matter in this communication is educational only and not rendering legal, accounting, investment advice, or tax advice. You should consult with appropriate counsel or other professionals on all matters pertaining to legal, tax, investment, or accounting obligations and requirements.

 

 

 

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Gov Signs NJ Health Insurance Tax Effective Jan 2021

Gov Signs NJ Health Insurance Tax Effective Jan 2021

Gov Signs NJ Health Insurance Tax Effective Jan 2021

Gov. Phil Murphy signed a law Friday that imposes a 2.5% tax on health insurance companies that will help pay the premiums for people who rely on the marketplace created by the Affordable Care Act to shop for coverage.

The Department of Banking and Insurance would levy a 2.5% tax on insurance companies based on the amount of money collected in premiums. The proceeds — estimated at about $200 million — would be deposited into the Health Insurance Affordability Fund and used to subsidize the cost of insurance for people who earn no more than four times the federal poverty level. For example, a single person earning a maximum of $50,040 and a family of three earning $86,880 would qualify.

An estimated $77 million of the tax money collected will bolster the state’s existing reinsurance program to cover high-cost claims and lower premium costs in the individual market.

Much like the Health Insurance Tax (HIT) on Insurers under the ACA, it is expected to be passed on to Employers and Consumers. The New Jersey Business and Industry Association testified against the bill while it was making its way through committee, arguing it would “increase costs on businesses and nonprofits, large and small, which have continued to offer health benefit plans during the current COVID-19 pandemic while struggling themselves to remain afloat.”

Prior Actions:

NJ Expands Disability and Leave Benefits COVID-19  –Mar 30, 2020 

NJ to Start State-based Exchange  – Mar 29, 2019

New Jersey Enacts Individual Health Mandate – Jun 12, 2018 

No More Surprises – NJ Surprise Medical Bill Law – Jun 3, 2018

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The information provided on this website is intended for informational purposes only.  Millennium Medical Solutions Corp. does not offer legal or medical guidance.  Those with legal or medical questions should seek appropriate assistance from a licensed professional.  Stay up to date by signing up for Newsletter and Coronavirus Dashboard below.

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PPP Flexibility Act Signed

PPP Flexibility Act Signed

On Friday, June 5, President Trump signed the Paycheck Protection Program (PPP) Flexibility Act, clearing the way for more flexibility and forgiveness of the loans made through the PPP. Originally these loans, which were part of the CARES Act, were provided to help business owners cover payroll costs, rent, and utilities.

The newly enacted legislation states that:

  • Business owners now have 24 weeks to spend funds (up from eight weeks)
  • Business owners only need to spend 60% of the loan on payroll costs (down from 75%)
  • The covered period of the loan now ends December 31 instead of June 30
  • Business owners won’t have to make employer payroll tax payments through the end of 2020
  • The business will not lose any loan forgiveness eligibility if it can show that some employees declined to return to their jobs or the pre-pandemic headcount is no longer required
  • The payback period for new loan applicants has been extended from two years to a minimum of five for those not seeking, or who are ineligible, for forgiveness

 If you’d like to find out more about how you can get better benefits so your employees use them when they need to, we’d like to show you how. Please contact us using form below or info@mecialsolutionscorp.com or 855-667-4621. 

The information provided on this website is intended for informational purposes only.  Millennium Medical Solutions Corp. does not offer legal or medical guidance.  Those with legal or medical questions should seek appropriate assistance from a licensed professional.  Stay up to date by signing up for Newsletter and Coronavirus Dashboard below.

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President Signs $2.3 Trillion Stimulus CARES Act

President Signs $2.3 Trillion Stimulus CARES Act

President Signs $2.3 Trillion Stimulus CARES Act

Visualization of the CARES ActPresident Donald Trump signed a $2 trillion bipartisan stimulus package Friday that is intended to address the threat of economic disaster posed by the coronavirus pandemic.

The largest stimulus in U.S. history stimulus package aimed at resuscitating the economy following several weeks of severe, acute economic downturn.  Senate and House passed the bill unanimously after a week. The following are the healthcare related provisions:

Hospitals

Hospitals will receive the $100 billion in federal assistance they initially requested be in the FFCRA along with a 20 percent bump in Medicare payments for treating COVID-19 patients. Experts expect rural hospitals to be hit especially hard during this pandemic, since they already operate on thin margins with limited staff.

Insurance Companies

Unlike the providers, insurers were not so lucky. Carriers requested an emergency fund to offset losses from the pandemic, including premium subsidies to help fund temporary COBRA coverage, but received nothing.

The bill expands coverage beyond what was in last week’s Families First bill by requiring health insurers to pay for coronavirus testing beyond those that are FDA-approved to include those provided by labs, state-developed tests, and any other tests approved by HHS.

Telehealth Expanded to HSA (Health Savings Accounts)

Accessibility for telehealth is also expanded. High deductible health plans with HSAs may now allow pre-deductible coverage for telehealth and other remote services, as well as allowing the use of HSAs for the purchase of over-the-counter medications without a prescription. In the past, the HSA Deductibel would have to first be met.

OTC items bought with pre-tax funds

After the Affordable Care Act, over-the-counter (OTC) drugs and medicines required a prescription in order to be eligible for reimbursement from an HSA, FSA or HRA. The CARES Act would allow individuals enrolled in these pre-tax accounts to pay for OTC drugs and medicines without a prescription. This action helps to reduce additional strain from an already overwhelmed healthcare system. This is a permanent chang

Surprise Bills

Very limited action was also taken to address surprise medical bills. Under the CARES Act, all health insurance plans would reimburse a COVID-19 test provider at the in-network rate put in place prior to the breakout. If the provider is out of network, the health plan is to fully reimburse the provider based on the provider’s own “cash price” which must be made publically available while the public health emergency is still declared. Providers that do not post their test price publically could be fined up to $300 a day. States like NYS in 2015 and NJ in 2018 have already passed Surprise Medical Bill Laws.

NYS

Will the Empire State see relief with the passage of the CARES Act? Governor Cuomo is not so sure, claiming that the $3.8 billion New York will receive is “a drop in the bucket as to need,” and that a previous House bill would have given his state $17 billion. Cuomo’s budget office predicted on Tuesday that state revenue losses could be as high as $15 billion.

Additionally, NYS Department of Labor received over one million calls from recently unemployed individuals in a single week, while the country as a whole reported 3.3 million jobs lost. The governor had already implemented several executive orders and moratoriums to provide relief for New Yorkers, including a 90-day pause on evictions as well as a halt on both medical debt and student loan debt collection. This week, the governor announced that utility companies will postpone rate increases that were set to go into effect on April 1.

State Funding

The bill also provides $150 billion for state and local governments, as states quickly burn through their own funding. Several states anticipate they will face multibillion-dollar budget shortfalls. New York’s budget office, for example, anticipates state revenue losses could be as high as $15 billion. The massive stimulus package also includes:
  • $200 million to be invested in telemedicine
  • $30 Billion for education funding
  • $25 Billion for public transit
  • $17 Billion for small businesses
  • $10.5 billion for the Pentagon, including $1.5 billion to deploy the National Guard
  • $10 billion Treasury loan for the Postal Service

SMB Relief

The 800-page Act includes many provisions to help small and medium-sized businesses (SMBs). It will provide $350 billion worth of loans to SMBs. Note: 
  • Small business interruption loans

    This is in addition to the Small Business Administration (SBA) Economic Injury Disaster Loan program, which provides loans up to $2 million and is available to SMBs in all 50 states. 

    Small businesses, non-profit organizations, sole proprietorships, and self-employed individuals with 500 or fewer employees per location are eligible for loans up to $10 million. The maximum interest rate is 4%.

    The loan can be used to provide:

    • Payroll
    • Mortgage or rent payments
    • Utility payments
    • Healthcare premiums
    • Other debt obligations

    Any portion of the loan used for payroll and existing debt obligations will be eligible for loan forgiveness for an 8-week period from the beginning of the loan, given they can maintain the equivalent number of full-time employees through June.

    Organizations that have already laid off workers due to the pandemic will still be eligible for the loans and loan forgiveness if they rehire their staff members.

    Portions of the loan used for payroll issued to workers who earn over $100,000 will not be forgiven.

    The stimulus legislation states portions of the loans used for covered expenses will convert to grants, but interest will still have to be paid.

    Loan forgiveness is reduced proportionately to any reduction in workforce or wages compared to the prior year.

    Businesses that receive funding under the “Paycheck Protection Program” are not eligible for the SBA EIDL loans.

  • Any portion of the loan used for payroll and existing debt obligations will be eligible for loan forgiveness for an 8-week period.

  • The Act also provides a refundable payroll tax credit equal to 50% of “qualified wages.

  • Qualified individuals will receive up to $1,200 per person (or $2,400 for married filing jointly) with an additional $500 per child. The benefit decreases by $5 for every $100 in income over $75,000 and will not be paid to single taxpayers who make $99,000 (or $198,000 for married filing jointly).

  • Federal Income Tax Returns normally due on April 15 will not be due until July 15, 2020.

  • The Act extends unemployment benefits from 26 weeks to 39 weeks. The benefit amount is calculated under state law, plus $600 in federal funding per week up to 4 months. It will also waive the one-week waiting period.

  • It also provides unemployment benefits for self-employed workers and contractors.

The legislation is surprisingly vague on exactly how the money will be distributed, although most of those who have been working to shape it assume that HHS Secretary Alex Azar will likely have a major role to play.

The information provided on this website is intended for informational purposes only.  As more details emerge, we will continue to update this article. Millennium Medical Solutions Corp. does not offer legal or medical guidance.  Those with legal or medical questions should seek appropriate assistance from a licensed professional.  Stay up to date by signing up for Newsletter and Coronavirus Dashboard below.

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