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NAHUThis morning, the Internal Revenue Service (IRS) made an announcement that may affect your clients regarding compliance to new Affordable Care Act (ACA) mandated coverage reports (6055 and 6056) for 2015. The IRS announced that it is giving employers additional time to file certain reports. In Notice 2016-4, the IRS stated that it is delaying filing deadlines after determining that “additional time to adapt and implement systems to gather, analyze, and report this information” was needed by employers, insurers, and other providers.

The deadline for employers to electronically file 1094 forms for 2015 was extended by three months from March 31, 2016, to June 30, 2016. The deadline for filing by paper was also extended by three months from February 29, 2016, to May 31, 2016. Additionally, the deadline for providing employees with 1095 forms for 2015 was extended from February 1, 2016, to March 31, 2016.

Click here for today’s IRS announcement or for background about the mandated ACA coverage reports.



I *forgot* to sign up for Health Insurance, now what?

ImageYou’d be amazed at how many phone calls and emails we have been getting about signing up for the exchange after the deadline. Unfortunately….people that have waited are not special. Everyone had an Open Enrollment Period began October 1st and officially ended in the state of NY as of March 31st, that was 6 months….no one can say they didn’t have enough time but still so many people chose to bury their head in the sand. So if you are one of these people that didn’t sign up what does this actually mean to you:

  1. If you had started an enrollment on the New York State of Health Exchange Marketplace (https://nystateofhealth.ny.gov/) you have until April 15th to get your act together and get your application completed.
  2. If you haven’t started an application yet and you are CURRENTLY UNINSURED, then you are out of luck with Exchange and other Private options until the next Open Enrollment which is set to begin on 11/15/14 for an enrollment of January 1st, 2015.  Sorry, no one’s special here.
  3. If you are CURRENTLY INSURED you will be able to take coverage with the Exchange or other private insurance for effective dates after 4/1 as long as you can prove that you have had a Qualifying Life Event.  These are listed below:
    1.  Individual or dependent loses minimum essential coverage due to:
      1. job loss
      2. divorce
      3. death of a spouse
      4. becoming ineligible for Medicaid or Child Health Plus
      5. expiration of COBRA
      6. health plan is decertified
    2. Marriage, birth, adoption, or placement for adoption
    3. Gaining status as a citizen, national, or lawfully present individual
    4. Consumer is newly eligible or ineligible for tax credits and/or cost sharing reductions
    5. Permanent move to an area that has different health plan options
    6. Marketplace staff or contractor enrollment error
    7. Qualified Health Plan violated a provision of its contract
    8. American Indians can enroll or change plans one time per month throughout the year

 

Not considered a Qualifying Life Event:

    1. Voluntarily dropping other health coverage
    2. Being terminated for not paying your premiums
    3. Losing coverage that is not minimum essential coverage, in accordance with HHS guidelines

 

Moral of the story:  Be more proactive next year!!!

 



What’s my penalty?

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A question that comes up time and time again with the Affordable Care Act is:  “How does the Individual Responsibility (aka Mandate) Penalty work?”

To avoid the penalty you must enroll in a marketplace plan OR have private coverage no later than March 31st, 2014. If you do not, below are a breakdown of the penalties you will face.

  • 2014: Greater of $95      per adult and $47.50 per child under age 18 or 1% of household       income
  • 2015: Greater of $325      per adult and $162.50 per child under age 18 or 2%
  • 2016: Greater of $695 per adult and      $347.50 per child under age 18 or 2.5% of taxable gross income capped      at the average bronze-level insurance premium (60% actuarial) rate for the      person’s family.

**The total family penalty is capped at 300% of any annual flat dollar amount for those 18 and over.

**If the penalty applies for less than a full calendar year, the penalty will be 1/12 of the annual amount per month without coverage.

Example:

Let’s look at the O’Brien family of 4 that has 2 children under the age of 18 and the family household income is $100,000 per year.

Just to make the example easier, we are giving everyone names….Meet the O’Brien Family:  Mom – Samantha; Father – Mark; Son – Luke; Daughter – Sarah

Upfront we know that the Max Penalty the O’Brien’s’ can be given is:  $570 (this is figured by a $95 penalty each for Samantha & Mark since they are the only ones over 18 x 300%), now let’s look at the breakdown if they would hit the Max Penalty….

Remember, it is the GREATER of the below up to the Max Penalty:

Flat dollar amount penalty calculation :  $95 (Samantha) + $95 (Mark) + $47.50 (Luke) + $47.50 (Sarah) = $285

Percentage amount penalty calculation:  1% of $100,000 = $1000

Results:  Since the Max Penalty the O’Brien family can be given in this example is $570, this will be the penalty they will be responsible for, since the 1% of household income exceeds this amount.  This amount will be tacked on when Samantha and Mark’s taxes are calculated at the end of the year, so if they were planning on a nice refund this year, that will be deducted from that refund.  Keep in mind that if the O’Brien’s do not pay taxes, as of now, there is no mechanism to collect this penalty.



Exchange Notice Deadline Approaching: October 1, 2013

Important Notice

Pretty much all employers will need to provide their employees with written notice that includes information regarding the Exchange (now called the Health Insurance Marketplace). The deadline to provide the notice is fast approaching; the notice must be provided to each employee not later than October 1, 2013.  Regardless of the size of your company and even if you currently do not offer coverage to your employees you *SHOULD* send this information out.  The reason we say should instead of MUST is because as of last week, this has been another penalty that has been delayed and they haven’t told us when it will come back.  Originally it was speculated a $100 fine for every day you have not complied with the request.  We still encourage everyone to comply now as then when / if the penalty goes into effect you are all in compliance.

Click below to view the English version of the notices that you can provide to your employees:

English notice if you DO offer coverage

English notice if you DO NOT offer coverage



Article Review: ‘Affordable’ Care: $1 Pay Hike Costs Middle-Class Family $9,355 Hike in Premiums
August 9, 2013, 4:26 pm
Filed under: Health Insurance, HR, National Healthcare, Reform

ImageI had a client that sent me this article and then asked if it was true, that if someone makes $1 more that the family would be paying $9,355 more annually.

I know there are a lot of confusing articles out there right now and this was written with a shock factor to get you to read the article, and for my client….it worked!   He read it, and he contacted me to be his “BS Meter” as he put it.

Here is an example to further explain why this article is saying what it is say:

Ok, so let’s say it is a family of 4.

400% of the federal poverty level is around $95,000 for a family of four in 2014.  If they are making $95,000, then with their subsidy aka discount they will get in the Exchange / Marketplace they cannot spend more than 9.5% of $95,000 on healthcare.  Which translates to $9025 annually = $752 per month (just as a barometer, most family coverage in NY starts at around $1200 per month for a very watered down plan).

If the person makes $95,001, then they won’t get that discount and they’d be paying the full premium, so in my example $1200 x 12 = $14,400 annually, which translates into $5375 more annually if you make $1 more.

I’m not sure where they came up with that magic number of $9035 but it’s really not that far off if you start looking at richer benefit plans!



In Response to the New York Times Article Referencing a 50% Decrease in Premiums for New Yorkers

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We have been getting numerous emails with this article being referenced by our clients along with excitement that when they wake up on January 1st, 2014 that their insurance bills will now be cut in half.  I would like to draw your attention to a few items in this article and give you a bit of a reality check.

Point 1:  “Individuals buying health insurance on their own will see their premiums tumble next year in New York State as changes under the federal health care law take effect, Gov. Andrew M. Cuomo announced on Wednesday.”  The first thing that Groups need to look at is the first word….”Individuals”, this is not talking about Group Insurance, this is talking about the Individual Market in New York State that has been extremely expensive in the past.  For example, one carrier that currently has an Individual Plan, the rates are coming in around $2000 per month for an Individual.  Even with a 50% reduction, that is a $1000 premium for an Individual, which is still well over the average rate under Group Coverage in the State of New York.

Point 2:  “Beginning in October, individuals in New York City who now pay $1,000 a month or more for coverage will be able to shop for health insurance for as little as $308 monthly.”  I believe that this is very misleading, this is giving you the lowest price that is going to be in the Exchange aka Marketplace without a Subsidy (tax credit for being under 400% of the Federal Poverty Level).  This price references what is being called “Young Invincible” Plan meaning, that to get this plan, you must be under 30 years old and you are looking at having more of a catastrophic plan which would cover Preventative Care and then you would have a minimum of a $6000 Deductible before anything else would be covered.  Currently, New York does not offer any plans with this type of watered down coverage.

Point 3:  “With federal subsidies, the cost will be even lower. (than $308 monthly)”.  This will be ONLY if you as an Individual qualify for a Subsidy.  This means that as a single person, to get ANY type of price break in the Exchange / Marketplace you must make under 400% of the Federal Poverty Level, which translates into making under $45,960 annually.  If you do not make under that, then the plans you can get in the Exchange / Marketplace are going to be the exact same costs that you can get outside the Exchange / Marketplace

Things we are excited about in this article:

1.  That for Individuals that have struggled with the high cost of health insurance will get to see some relief.

2.  Department of Financial Services say they have approved 17 insurers to sell individual coverage through the New York exchange, including eight that are just entering the state’s commercial market.  Currently there are only a handful, so more choices will be better for everyone!  Keep in mind some of these may just be Medicare networks that only the lower income individuals will qualify to be a part of.

What else to keep in mind:

1.  Be looking for “Borough-centric” plans, meaning that carriers are going to come out with plans that limit the network dramatically in order to get the cost down.  A great example of this has been with Aetna’s NYC Community Plan, these plans have typically been under $400 a month in premium but they are an HMO plan where you must get a referral and they only have doctors in the 5 Boroughs.  The smaller NYC Community Network they are utilizing is about 40% of the size of the normal Aetna Network.  So be looking for these type of plans to be coming out In and Out of the Exchange / Marketplace.

2.  Brokers will be allowed to sell inside and outside of the exchange and there will be no difference in cost.  Be weary of signing up through a Navigator because as it stands right now, they are going to be glorified Enrollers that since they are not licensed, they cannot advise on Insurance, they can only present to you the plans and have you draw your own conclusions.  Also, 6 months down the road if you have a question about the benefits you bought or you are having a claims issue, you cannot go back to the Navigator, you’ll be dealing with the carrier directly and not have someone as your advocate as you would if you had got your plan through a Licensed Broker that is more qualified to help assist you with your needs.

3.  Be on the look out as groups to be getting hit with more taxes on your group plans, this is going to help to pay for the cost reduction for the Individual Plans.



Employer Penalties Delay
July 8, 2013, 3:12 pm
Filed under: Health Insurance, National Healthcare, Reform

Washington DC

The Treasury Department announced on July 2, 2013 that the Obama Administration will provide an additional year before the mandatory employer and insurer reporting requirements under the Affordable Care Act begin. This delay is intended to allow the Administration to look into ways to simplify the new reporting requirements and to provide time to adapt health coverage and reporting systems while employers move towards making health coverage affordable and accessible for their employees.

The Administration has promised formal guidance on this transition in the very near future. We also expect proposed rules this summer implementing information reporting. Once those rules are published, the Administration will encourage employers, insurers and other reporting entities to voluntarily implement this information reporting in 2014. Since this transition relief will make it difficult to determine which employers owe employer penalties, the Administration is extending this transition
relief to the employer penalties – the penalties will not apply until 2015.

The transition relief does not affect the opening of the Exchange, scheduled for October 1, nor the individual mandate.