With the open enrollment period for the Exchange beginning October 1, 2013, many questions are beginning to surface regarding how premium subsidies will work as individuals start to evaluate all of their options available to them.
Q1: It sounds like individuals who choose to buy health insurance on the Exchange will have to pay the full monthly premium for the coverage they choose and subsidies will be paid through tax credit that are received annual as a tax refund. How can a low income person who is living paycheck to paycheck afford this?
A: When consumers apply for a plan on the Exchange (aka marketplace), you will be asked to provide income information to determine if you are eligible for a premium tax credit (aka subsidy). A subsidy will be available to people with incomes up to 400% of the federal poverty level ($45,960 for an individual in 2013 or $94,200 for a family of four).
If you qualify for the subsidy, consumers can opt to receive their tax credits in advance, and the exchange will send the money directly to the insurer every month. This subsidy will reduce the amount you owe up front on your medical premium. You can also choose, instead, to receive your credit when you file your taxes the following year.
It is important to estimate your income as accurately as possible and to contact the Exchange during the year if you find out that you are making more or less than expected. When completing your 2014 taxes, your estimate will be reconciles with what you actually earned. If you have received more than you were due, you could have to repay those amounts.
Q2: What happens if I do not pay my premium in a timely manner after I have purchased insurance on the Exchange? If I am terminated from the policy, will I be able to have it re-instated?
A:Consumers who are receiving premium tax credit for coverage on the Exchange will have a 90 day grace period to catch up on late premiums. Other consumers who do not receive a subsidy may get more or less time, depending on the Exchange rules. Once the grace period has passed, consumers will generally have to wait until the next annual open enrollment period in the fall to re-enroll in coverage. Please note though, if an individual goes uninsured for more than 3 months, they could be assess a penalty for not having insurance coverage of up to $95, or 1% of income in 2014, whichever is greater.
Please contact our office for assistance with evalutating your options and obtaining coverage through the Exchange.
Imagine you are home on a weeknight and suffer a burn while cooking dinner. You are unsure if the burn is severe enough to seek care at your local Urgent Care or Emergency Room, but want some advice on it.
Did you know that most insurance companies offer a 24/7/365 nurse hotline as an added benefit with your medical insurance coverage? With just one free call, you can speak with a team of registered nurses who can offer you advice on if you should seek additional medical care or provide you with at home remedies to try. Most carriers even have access to an audio library where you can listen to a variety of pre-recorded information about various illnesses/conditions.
Please contact our office for more information on if your insurance carrier offers this service.
The Internal Revenue Service (IRS) launched a new website aimed at clarifying many of the tax provision of the Patient Protection and Affordable Care Act (PPACA). The site (www.irs.gov/aca) aims to provide a tool to more clearly explain responsibilities and potential benefits to individuals, employers, and other organizations including insurers and others affects by the law’s tax changes.
Please contact our office for more information on how you can prepare for the many changes coming with Health Care Reform in 2014.
Employers must provide a creditable or non-creditable coverage notice at least once a year to all Medicare eligible individuals who are covered under, or who apply for, the group’s prescription drug plan. This notice must be provided to both active employees and retirees who are eligible for Medicare Part D.
The Medicare Modernization Act mandates that all employers offering prescription drug coverage disclose to all Medicare eligible individuals with prescription drug coverage under the plan whether the coverage is “creditable”. This information is essential to the Medicare eligible’s decision whether to enroll in a Medicare Part D prescription drug plan.
Employers are required by the Centers for Medicare and Medicaid Services (CMS) to provide creditable coverage at least once a year and at the following times:
This notice does not need to be a separate mailing and can be included with other plan information materials either printed or electronic. Employers are required to provide this notice and to provide CMS with your plan’s creditable or non-creditable coverage status annually via online form within 60 days of the beginning of each plan year.
Please contact our office for assistance in determining if your prescription drug plan is considered creditable or non-creditable coverage or if you need a copy of the model notice for employees.
Beginning January 1, 2014, all individuals and employees of small businesses will have access to purchase health coverage through the Health Insurance Marketplace (aka the Exchange or SHOP). Open enrollment for the Marketplace begins October 1, 2013.
Section 1512 of the Affordable Care Act requires all employers to provide the Exchange notice to all employees (regardless of full or part time status or plan enrollment status) no later than October 1, 2013. The notice must also be supplied to all new hires within 14 days of their hire date. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan if they are not employees.
The purpose of the notice is to:
1) inform employees of the existence of the Marketplace (aka Exchange) and how they can contact the Marketplace for assistance
2) inform employees if their current plans meets minimum value standards for the purpose of determining if they will be eligible for a premium tax subsidy in the Marketplace
3) inform employees if they purchase coverage through the Marketplace they will lose the employer contribution to any health plans offered by the employer.
This notice can be provided to employees via paper or electronically. If you decide to post is on your company intranet, you must distribute a notice to all employees directing them where the notice can be located.
Even if you do not currently provide health coverage to employees, you are still required to distribute the Marketplace notice explaining this.
Please contact our office if you need a copy of the English or Spanish versions of the Exchange notice.
You may have heard a lot about how the Affordable Care Act (ACA) is going to change health insurance in the next year, but does it all apply to you? If you get your insurance from your employer, there may be a chance that you may be enrolled in a “grandfathered plan” and some of these changes may not affect you – yet.
Some health plans were allowed to be exempt from some of the ACA’s rules and protections in the interest of a smooth transition and to allow employers and individuals to keep their current policies in force without having to make substantial changes. Almost half of all Americans who get insurance through their jobs are enrolled in such plans, however that number is expected to continue to decline every year.
Consumers should know the status of their plans since that may determine whether they are eligible for certain protections and benefits created by ACA. For example, an employee at a large company may wonder why his employer provided coverage does not included the free preventative services that he has heard about on the news. In order to understand this, you must understand the status of your current medical plan and how grandfathering works.
What is a grandfathered plan?
Most health insurance plans that existed on March 23, 2013 are eligible for grandfathered status and therefore do not have to meet all of the requirements of the health care law. But if an insurer or employer makes significant changes to a plan’s benefits or how much members pay through premiums, copays, or deductibles, then the plan loses that status.
Both individual and group plans can be grandfathered. If you get coverage through an employer and they currently offer employees a grandfathered plan as part of their benefits package, you can enroll in this plan even if you were not enrolled on March 23, 2010.
What Rules Does a Grandfathered Plan Have to Follow?
A grandfathered plan has to follow some of the same rules other plans so under the ACA. For example, the plans can not impose lifetime limits on how much health care coverage an individual can receive, and they must offer dependent coverage for young adults until age 26.
There are many rules, however, that grandfather plans do not have to follow. For example, they are not required to provide preventative care without cost-sharing. In addition, they do not have to offer a package of “essential health benefits” that individual and small group plans must offer beginning 2014. Grandfathered individual plans can still impose annual dollar limits (such as capping key benefits at $750,000 in a given year) and they can deny coverage for children under age 19 if they have pre-existing conditions.
How Many People Are Enrolled in Grandfathered Plans?
In 2013, 36% of those who get coverage through their employer are enrolled in a grandfathered health plan. This number is down from 48% in 2012 and 56% in 2011, according to the Kaiser Family Foundation Employer Health Benefits Survey. Most plans are expected to lose grandfather status over time though.
How Do I Find Out If I’m Enrolled in a Grandfathered Plan?
If you want to know more about your coverage, it is best ask your insurance company or your employer’s human resource department about the status of your plan. If your employer is currently offering a grandfather plan, they are required to release a notice to you annually if they are offering benefits through a grandfathered medical plan.
Please contact our office for more information regarding if your current plan is considered “grandfathered” or for more information on ACA.
The health insurance Marketplace created by the Affordable Care Act (ACA) will open on October 1st. Most small employers (those with 50 or fewer full-time employees) are not required to offer health insurance coverage under ACA. Businesses with more than 50 full time employees have gotten a one year reprieve from the “pay or play” penalties. But all companies, regardless of size, are required to notify their employees about the Obamacare Marketplaces by October 1st.
The state and federal insurance exchanges are websites on which individuals and small businesses can shop for health plans. Though the deadline is less than a month away, many small businesses may not realize they have to notify employees of the existence of the Marketplace (aka Exchange). Many small business owners are unaware of this requirement or are under the misconception that it does not apply to them because they are too small to be governed by the health care reform law’s mandate. It is not clear how the requirement will be enforced yet, but penalties for businesses that do not comply could reach $100 per worker per day.
Some employers assume that because they are a small business who does not offer health insurance currently that the requirement does not apply to them. The Exchange notification requirement applies to any business regulated under the Fair Labor Standards Act (FLSA), which covers all companies with at least one employee and $500,000 in annual revenue.
The U.S. Department of Labor has posted information about the notification requirement on its website and has provided model notices (in both English & Spanish) to be used by both employers who offer insurance and those who do not offer insurance.
The one to three page model notices can be downloaded, filled out, and printed, either for distribution in the workplace or for mailing to employees’ homes. Employees who are hired after October 1st must be provided the notice within 14 days of their date of hire with the company. Employees must be provided the notice, regardless of their enrollment status in the group’s medical plan. The safest route is to distribute the notice via U.S. mail or follow the instructions for distributing it electronically. Currently there is no requirement that states the employer must obtain signatures from employees confirming their receipt of the notice.
Please contact our office for more information on how to ensure you business is compliant with ACA requirements in 2014.
If you employed more than 100 people in the preceding calendar year, you are required to complete and submit your EEOC Report 1 (Survey) by September 30th. You should have received a reminder letter via mail from the EEOC in August also with the link to file the report online.
Please contact our office for information about the EEOC Report 1 or for the link to the EEOC’s web based filing system.
The U.S Department of Treasury and the Internal Revenue Service (IRS) ruled on August 29, 2013 that same sex couples who are legally married in jurisdictions that recognize their same sex marriage, will be treated as married for federal tax purposes. The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or not.
Under the ruling, same-sex couples will be treated as married for all federal tax purposes, including income as well as gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking deductions, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.
Any same-sex marriage legally entered into in one of the 50 states, the District of Columbia, a U.S. territory or a foreign country will be covered by the ruling. However, the ruling does not apply to registered domestic partnerships, civil unions or similar formal relationships recognized under state law.
The topic this month focuses on bringing clarity to some of the myths that are surrounding Health Care Reform currently including:
Please contact our office directly if you have any questions about Health Care Reform and how it will affect your business.