For Florida residents hoping to purchase coverage through the new health insurance exchange, the state Office of Insurance Regulation has recently released information that your options will largely depend on where you reside.
As of August 2013, 10 insurance companies have received federal approval to sell Floridians health plans on the federally assisted health exchange, which rolls out Oct. 1. However, Kevin McCarty, Florida’s Insurance Commissioner, has said that not all companies will sell plans in all counties.
More than half of Florida’s counties will have only one or two insurance companies selling plans through the new marketplace and no county will offer plans from all 10 companies, according to the insurance commissioner’s office. The companies that will be actively selling within the Florida Exchange are:
South Floridians will have the most choice, while residents in rural areas have the least. Broward and Miami-Dade counties will sell plans from nine federally approved insurers. In Central Florida, residents of Orange, Osceola and Lake counties will have options from five insurance companies, while Seminole and Volusia will have six. Population density and an insurer’s current presence in an area will determine if the carrier has choose to sell in your area.
Although the Florida insurance commissioner knows which 10 companies have been approved to sell plans in Florida, they would not disclose which companies would sell in each county yet.
A spokesman for Blue Cross Blue Shield made no secret they would be selling plans in all 67 Florida counties, making it the only insurer to do so. Blue Cross Blue Shield will in fact be the sole seller for exchange plans in 21 Florida counties.
Insurers can offer a tiered set of plans, ranging from bronze (a leaner choice) to platinum (with the most benefits). Still forthcoming, however, are details about what the individual plans will offer and what each will cost.
Florida residents should begin now to familiarize themselves with the exchange, explore the varied levels of coverage available and understand the possible tax credits available since open enrollment for the Exchange is scheduled to begin October 1st for a January 1, 2014 effective date.
To qualify for tax credits available under the health-care overhaul, residents must get their insurance on the government exchange (healthcare.gov).
If your company offered either a Health Reimbursement Account (HRA) or Medical Expense Reimbursement Plan (MERP) as part of your employee benefits package in 2012, you must report and pay the PCORI fee for your 2012 plan year no later than July 31, 2013. Please note that the penalty for not filing can be as high as $10,000 per month.
You must use the IRS Form 720 to report and pay the PCORI fee.
If you used a third party administrator to handle the administration of your HRA or MERP plan, they should have provided you with the necessary information to complete Form 720 as they are not permitted to file this with the IRS on your behalf.
Please let us know if you have any questions.
The Obama administration recently kicked off the Health Insurance Marketplace education effort with a new, consumer focused HealthCare.gov website paired with a 24-hours a day consumer call center to help Americans prepare for open enrollment and sign up for private health insurance. The new tools will help Americans understand their choices and select the coverage that best suits their needs when open enrollment for the Exchange begins October 1, with coverage beginning January 1, 2014.
The website will continue to add functionality over the summer months so that, by October, consumers will be able to create accounts, complete an online application, and shop for qualified health plans. For Spanish speaking consumers, CuidadoDeSalud.gov, will also be updated to match HealthCare.gov’s new consumer focus.
Key features of the website include integration of social media, sharable content, and engagement destinations for consumers to get more information. The site will also launch with web chat functionality to support additional consumer inquiries.
Between now and the start of open enrollment, the Marketplace call center will provide educational information and, beginning October 1, 2013, will assist consumers will application completion and plan selection. In addition to English and Spanish, the call center provides assistance in more than 150 languages through an interpretation and translation service. Customer service representatives are available for assistance via a toll-free number at 1-800-318-2596 and hearing impaired callers using TTY/TDD technology can dial 1-855-889-4325 for assistance.
The U.S. Administration announced on July 2, 2013, that it will not require employers to provide health insurance for full time workers under the Health Care Reform Employer Mandate (also known as Pay or Play) until 2015. This move will cause a delay in a key provision of Health Care Reform that was scheduled to go into effect in 2014. The delay represents the administration’s response to widespread complaints about the reporting requirements for employers who are subject to the mandate.
The Affordable Care Act requires all employers with more than 50 full time workers to provide affordable health insurance or face a fine as much as $3000 per employee. The policy has raised concerns that companies would downsize their workforce or cut workers’ hours in order to dodge the new mandate.
The Obama Administration has announced that this provision was delayed so officials could simplify reporting requirements and give employers ample time to adjust their health care coverage.
The postponement does not affect other central provisions of the law, including the individual mandate or the establishment of the health insurance marketplaces, known as Exchanges, which are both still set to go into effect in January 2014.
Formal guidance is expected to be released this week. The Obama Administration has said that once the formal guidance is release they will work with employers to encourage them to voluntarily implement this information in 2014 to allow for a smoother transition into 2015.
Beginning in 2014, large employers (those with 50 or more employees) that do not provide “qualifying” coverage and who have employees who receive a subsidy for Exchange coverage may be subject to certain tax penalties, as high a $3000 per year per employee, under Health Care Reform. We can show you a lower-cost alternative to traditional major medical that will help you avoid these penalties. The cost ranges from $105-$125 per month for employee only coverage and the premium is tax deductible to the employer.
For employers who choose to not offer an ACA compliant plan in 2014, the penalty is an excise tax, therefore not deductible.
This could be the perfect solution for large employers who are looking for an alternative to the high cost of traditional major medical coverage while avoiding the potential penalties of ACA.
Please contact our office if you would like more information about this program and your options as an employer in 2014 with Health Care Reform.
The DOL’s Employee Benefits Security Administration (EBSA) has made available Spanish language versions of model notices to employees of health coverage options. The Affordable Care Act (ACA) requires employers to provide employees with a notice of their health insurance coverage options available through the future health insurance exchanges no later than October 1, 2013. The English version of these model notices were released in May 2013.
Please contact our office for copies of the model notice(s) in English and/or Spanish.
On June 26, 2013, the US Supreme Court declared the Defense of Marriage Act (DOMA) as unconstitutional. DOMA had previously established the federal definition of marriage as a legal union only between one man and one woman. The extinction of DOMA already has HR departments thinking how this will impact the future of the Family and Medical Leave Act (FMLA) as well as other benefits.
How FMLA is Impacted
As we know, the FMLA allows otherwise eligible employees to take leave to care for a family member with a serious health condition. “Family member” includes the employee’s spouse, which, under the FMLA regulations, is defined as:
a husband or wife as defined or recognized under State law for purposes of marriage in the State where the employee resides, including common law marriage in States where it is recognized. 29 C.F.R. 825.102
Initially, this seems to suggest that the DOL would look to state law to define “spouse”…but not so fast. According to a 1998 Department of Labor opinion letter, the DOL acknowledged that the FMLA was bound by DOMA’s definition that “spouse” could only be a person of the opposite sex who is a husband or wife. Thus, the DOL has taken the position that only DOMA’s definitions could be recognized for FMLA leave purposes. As a result, FMLA leave has not been made available to same-sex spouses.
That changes yesterday, at least in part.
What’s Clear about FMLA After the Ruling
In striking down a significant part of DOMA, the Supreme Court cleared the way for each state to decide its own definition of “spouse”. Thus, if an employee is married to a same-sex partner and lives in a state that recognizes same-sex marriage, the employee will be entitled to take FMLA leave to care for his/her spouse who is suffering from a serious health condition, for military caregiver leave, or to take leave for a qualifying exigency when a same-sex spouse is called to active duty in a foreign country while in the military.
What’s Unclear about FMLA After the Ruling
But what about employees who live in a state that does not recognize same-sex marriage? Are they entitled to FMLA leave to care for their spouses?
As an initial matter, the regulations look to the employee’s “place of domicile” (aka state of primary residence) to determine whether a person is a spouse for purposes of FMLA. Therefore, even if the employee formerly lived or was married in a state that recognized the same-sex marriage, he/she is unlikely to be considered a spouse in the “new” state for purposes of FMLA if the state does not recognize the marriage. This is no small issue, since 30+ states currently do not recognize same-sex marriage and some don’t go all the way (e.g. Illinois, which recognizes same-sex unions, not marriages).
Surely, some might argue that the U.S. Constitution requires other states to recognize the marriage; however, this issue is far from settled. Clearly employers need some help from the DOL. It is speculated that the DOL may draft regulations on how employers can administer FMLA in situations where the employee’s spouse is not recognized under state law. This would give life to concepts such as a “State of Celebration” rule, in which a spousal status is determined based on the law of the State where the employee was married and not where they reside. However, without more guidance, it is still too early to tell how the DOL will handle this.
Other Key Benefits Affected by the DOMA Decision
FMLA is not the only federal law impacted by the fall of DOMA. If federal regulations follow through, some of the notable federal laws and benefits impacted may include:
If you currently have an individual health insurance plan, you will be in for a big change when you sign up for your coverage in 2014.
Approximately 50% of the individual health plans that are currently being sold in the marketplace do not meet the standards of Obamacare to be sold in 2014. The reason for this is because the Affordable Care Act (ACA) sets new minimums for the basic coverage every individual health care plan must provide effective on renewals on or after January 1, 2014.
About 15 million Americans (or about 6% of non-elderly adults) currently have coverage in the individual health market. Beginning in the fall of 2013, they will be able to shop for and enroll in health insurance through state-based exchanges (aka SHOP or The Exchange) with coverage taking effect in January. By 2016, it is projected that around 24 million people will get their insurance through the exchanges, while another 12 million will continue to obtain individual coverage outside of the exchange.
Beginning in 2014, nearly all plans, both group and individual, will be required to cover an array of “essential” services regardless of if they are purchased within the exchange or not. These “essential” services will include medication, maternity, and mental health care. Many individual plans do not currently offer these benefits.
What will happen to the plans that do not meet the new minimum standards? They will more than likely disappear and you will not be allowed to renew your existing coverage on the plan you currently have. A handful of existing plans will be grandfathered in, but the qualifying criteria for a grandfathered plan is hard to meet. In order for your existing individual plan to be considered “grandfathered”, (1) you have to have been enrolled on this plan before the ACA was passed in 2010 and (2) the plan has to have maintained fairly steady co-pay, deductible and coverage rates until now.
Many insurers in the individual marketplace have already acknowledged that the majority of their existing individual plans do not meet Obamacare standards for 2014 and they are currently working to ready new product lineups for 2014.
In the future, consumers buying individual plans will be able to choose between four levels of coverage: platinum, gold, silver, and bronze.
Platinum plans will carry the highest premiums but will offer the lowest out of pocket expenses, with enrollees paying no more than 10%, on average. At the other end of the spectrum are the bronze plans, which will have the lowest monthly premiums but will have higher deductibles and copayments totaling up to 40% of the out of pocket costs on average.
Starting also in 2014, all Americans will be required to carry health care coverage or face fines. Those penalties will start at $95 per adult or 1% of the adjusted family income, whichever is greater, and will escalate in later years.
Individuals will annual incomes of up to 400% of the poverty line (or roughly $45,000 for an individual and about $92,000 for a family of four) will get federal subsidies to help defray the premium costs.
Most individual plans sold next year, even the lowest level bronze plans, are likely to charge higher premiums than today’s most “bare-bones” individual insurance plans. Many consumers feel the costs will be offset by having lower out of pocket costs and more comprehensive coverage than their current “bare-bones” plan offers.
In today’s marketplace, with deductibles of $10,000, an individual can buy a policy and then when they get sick, they may go broke because the policy leaves them with such a high level of out of pocket expenses to pay. Many insurance industry experts feel, however, that consumers may now wind up with more coverage–and higher monthly costs– than they want. As a result, some individuals may just choose to simply pay the fine instead of obtaining health insurance coverage they will not use or can not afford.
Myra L. Thompson, RHU, REBC, GBA, President of Administrators Advisory Group, has completed the National Association of Health Underwriters (NAHU) Health Care Reform Certification Course.
Myra is now a certified Patient Protection and Affordable Care Act (PPACA) Professional. This certification helps professionals understand the key technical components of PPACA and ensure they are better prepared to provide education on upcoming health coverage changes, responsibilities and requirements.
Join us in congratulating Myra on a job well done!
One of the ways in which the Affordable Care Act helps bring down costs for small employers is through the tax credit available to eligible small businesses that provide health care insurance to their employees. The credit significantly offsets the cost of providing insurance and with the 2012 corporate tax filing deadline rapidly approaching (March 15th), you don’t want to let this valuable tax break pass you by.
What is the Small Business Health Care Tax Credit?
Currently the maximum tax credit is 35% for small businesses employers and 25% for small tax-exempt employers (i.e. charities and non-profits). This percentage applies to tax years 2010 through 2013. Even better, in 2014 the credit will increase to 50% for eligible small business employers and up to 35% for tax-exempt employers through the new Small Business Health Options Program (SHOP) Marketplace (also known as the Exchange).
The credit can also be carried back or forward to other tax years. Since the amount of the health insurance premium payments are more than the total credit, eligible businesses can still claim a business expense deduction for the premiums in excess of the credit. That equals out to both a credit and a deduction for employee premium payments.
Who Qualifies for the Small Business Health Care Tax Credit?
To qualify for the credit, you must meet the following criteria:
To help determine whether you qualify for the credit, follow this step by step guide from the IRS.
How to Claim the Credit
You must use the IRS Form 8941 to calculate the credit.. Then include the credit amount as part of the general business credit on your income tax return. If you are a tax-exempt organization, include the amount on line 44f of the Form 990-T. You must file the Form 990-T in order to claim the credit even if you do not ordinarily do so. Remember, you may be able to carry the credit back or forward. Be sure to talk to your tax advisor for more assistance.