IRS Releases Adjusted PCOR Fee

The Patient-Centered Outcomes Research Trust Fund fee is a fee on issuers of health insurance policies and plan sponsors of self-insured health plans that helps to fund the Patient-Centered Outcomes Research Institute (PCORI), which was established by the Affordable Care Act (ACA). The institute assists, through research, patients, clinicians, purchasers and policy-makers, in making health decisions by advancing the quality of evidence-based medicine. The institute compiles and distributes comparative clinical effectiveness research findings. Under the ACA, all medical plans are responsible for paying the Patient-Centered Outcomes Research fee to the IRS, based on the number of plan participants. If the plan is fully-insured, the insurance carrier pays the fee on behalf of the policyholder. If the plan is self-insured, the employer/plan sponsor must file the Form 720 for the second quarter and pay the fee to the IRS directly.

The IRS recently published its PCOR fee for policy and plan years ending:  January through September 2018 the applicable dollar amount is $2.39, which is multiplied by the number of covered lives determined for the appropriate period. For policy and plan years ending October through December 2018, the applicable dollar amount is $2.45.

All self-insured medical plans, including health FSAs and HRAs must pay the fee unless they are considered an excepted-benefit:

  • A health FSA is an excepted-benefit as long as the employer does not contribute more than $500/year to the accounts and offers another medical plan with non-excepted benefits.
  • An HRA is an excepted-benefit if it only reimburses for excepted-benefits (e.g., limited-scope dental and vision expenses or long-term care coverage) and is not integrated with the group medical plan.

The PCORI fee is calculated off the average number of lives covered during the policy year. That means that all parties enrolled will have to be accounted for such as dependents, spouses, retirees, and COBRA beneficiaries. For HRA and health FSA plans, just count each participating employee as a covered life.

Payment of the PCOR fee for the calendar 2018 plan year — the last year the fee applies — will be due by July 31, 2019 (payments may extend into 2020 for non-calendar-year plans).

Clients who have elected to have Diversified Group assist with the PCOR fee calculation can expect an email in June 2019, which will include a copy of the completed Form 720 and a PCOR calculation worksheet with supporting documentation. Clients will need to file the Form 720 by July 31, 2019.

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MassHealth Reinstates HIRD Reporting for Employer Sponsored Health Plans

The Health Insurance Responsibility Disclosure (HIRD) form is a new state reporting requirement in Massachusetts beginning in 2018. This form differs from the original HIRD form that was passed into law in 2006 and repealed in 2014. The 2018 form is administered by MassHealth and the Department of Revenue (DOR) through the MassTaxConnect (MTC) web portal. The HIRD form is intended to assist MassHealth in identifying its members with access to employer sponsored health insurance who may be eligible for the MassHealth Premium Assistance Program. The HIRD form is required annually beginning in 2018. The reporting period opens on November 1 and must be completed by November 30 of the filing year. 

Any employers with six or more employees in Massachusetts in any month during the past 12 months preceding the due date of the form (November 30th of the reporting year) are required to annually submit a HIRD form. An individual is considered to be an employee if they were included on the employer’s quarterly wage report to the Department of Unemployment Assistance (DUA) during the past 12 months. This includes all employment categories, full-time and part-time.

The HIRD form is reported through MassTaxConnect (MTC) web portal (https://mtc.dor.state.ma.us/mtc/_/#1). The MTC is where employer-taxpayers register to file returns, forms and make tax payments. To file your HIRD form, login to your MTC withholding account and select the “file health insurance responsibility disclosure” hyperlink. If you do not have a MTC account or you forgot your password or username, follow the prompts on the site or call the DOR at 614-466-3940.

INFORMATION REQUIRED FOR HIRD REPORTING

The HIRD Form will collect information about the employer’s insurance offerings, including:

  • Plan Information – plan year, renewal date.
  • Summary of benefits for all available health plans – information regarding in and out of network deductibles and out-of-pocket maximums can be found on the plan’s summary of benefits and coverage.
  • Eligibility criteria for insurance offerings – minimum probationary periods and hours worked per week to be eligible for coverage.  Employment based categories, such as full-time, part-time, hourly, salaried.
  • Total monthly premiums of all available health plans
  • Employer and employee shares of monthly premiums – information on employer and employee monthly contributions toward the cost of medical. Employer cost of coverage is your COBRA rate less 2% and less the employee contribution.

Due to the nature of the filing online, employers with employees in Massachusetts will need to complete this reporting themselves. However, Diversified Group may be able to assist you in the gathering of the required information. Please contact us by November 15th  if you need assistance with accumulating data.

Mass.gov has compiled a list of frequently asked questions regarding the HIRD form here.

Maine is Reinstituting the Per Member Per Month Assessment to Fund the Maine Guaranteed Access Reinsurance Program

Section 1332 of the Affordable Care Act (ACA) permits a state to apply for a State Innovation Waiver to pursue innovative strategies for providing their residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA. Recently several states have applied for waivers and have been approved. Among these is the State of Maine, which sought to reestablish the Maine Guaranteed Access Reinsurance Association – MGARA (originally established in 2012 but later suspended in light of the ACA’s transitional reinsurance program which expired in 2016). Maine’s Section 1332 waiver to reestablish MGARA was approved by the Department of Health and Human Services earlier this year. MGARA is a state instituted reinsurance program that automatically cedes high-risk enrollees with one of eight conditions (including various types of cancer, congestive heart failure, HIV and rheumatoid arthritis) and voluntary cedes other high-risk enrollees to the pool in an attempt to help stabilize individual medical premiums by about 9 percent each year beginning in 2019. The program is slated to initially run from January, 2019 through December, 2023. The Governor’s Office pushed to get the program up and running by January, 2019 in an attempt to substantially lower premiums in the individual market.

One of the funding sources supporting MGARA’s operations is a quarterly assessment due from each insured and self-insured plan that writes or otherwise provides medical insurance in Maine (other than federal or state government plans) beginning in 2019 at $4.00 per month for each covered person enrolled under each such policy or plan. Only federal and state employees are exempt from the assessment. The 2019 Quarterly Assessment will apply to policies and plans initiated or renewed on or after January 1, 2019, with the first assessment due on May 15, 2019, and 45 days from the end of each calendar quarter thereafter. Self-funded plans using a Third Party Administrator (TPA) will be assessed and reported through their TPA similar to other state assessments.

Diversified Group will collect and report the MGARA on behalf of our self-insured clients who have members residing in Maine.

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IRS Reverses HSA Family Contribution Limits – Again!

In March, due to the new inflation-adjustment calculations required under the Tax Cuts and Jobs Bill Act, the IRS announced in revenue ruling 2018-27 that the previously released (in May 2017) $6,900 family contribution limit would be reduced to $6,850. Since excess contributions are subject to a 6% excise tax, many employers and individuals who front-loaded their HSA contributions in January were now looking at a penalty for overfunding their HSA for 2018, as well as income tax due on the excess. The IRS received enough complaints from stakeholders asserting that implementing the $50 reduction to the limitation would impose numerous unanticipated administrative and financial burdens that they have actually reversed their decision and will go back to the $6,900 family contribution limit for 2018. The revised inflation-adjustment calculation established under the Tax bill has been put on hold until 2019.

Compliance Issues Keep Coming

ComplianceAll the talk about repeal and replace seems to have lulled many plan sponsors into a false sense of security, thinking that ACA regulations weren’t going to be enforced. Unfortunately, the IRS is preparing to begin penalizing non-compliant plans, which is why we continue to encourage our clients to keep their eye on the ball even though it is easier to follow the media frenzy coming from Capitol Hill.

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4 ways employers can prepare for healthcare changes

The article below was published on June 23, 2017 by Employee Benefit News, written by Mark Johnson.

The new healthcare bill, revealed by U.S. Senate Republicans Thursday, could bring significant changes to organizations and their employees. Granted, there’s a long way to go before any Obamacare replacement legislation is signed. But health insurance is a complex component of running any business, and it’s important that employers start preparing for what might come.

Here are four actions items employers should be addressing now.

1. Create a roadmap. A compliance calendar is a helpful tool in identifying major deadlines. Employers are legally obligated to share health insurance and benefits updates with their employees by certain dates. Employees must be given reasonable notice — typically 30 days prior — of a major change in policy. There will likely be a set date for compliance and specific instructions around notice requirements that accompany the new legislation.

One step to compliance is adhering to benefit notice requirements. Benefit notices (i.e., HIPAA, COBRA, Summary Plan Descriptions, Special Health Care Notices, Health Care Reform, Form 5500 and others) vary by the size of the organization. Other steps can be more involved, such as required changes to plan design (e.g., copays, deductibles and coinsurance), types of services covered and annual and lifetime maximums, among others. Create a compliance calendar that reflects old and new healthcare benefit requirements so you can stay on track.

Senate Majority Leader Mitch McConnell (R-Ky.)
Image Source: benefitnews.com

2. Rally the troops. Managing healthcare compliance spans several departments. Assemble key external and internal stakeholders by department, including HR, finance, payroll and IT.

Update the team on potential changes as healthcare legislation makes its way through Congress so they can prepare and be ready to execute should a new bill be signed. HR is responsible for communicating changes to employees and providing them with information on their plan and benefits. Finance needs to evaluate how changes in the plan will affect the company’s bottom line. Payroll must be aware of how much of an employee’s check to allocate to health insurance each month. In addition, payroll and Human Resources Information Systems (HRIS) are used to track and monitor changes in employee population, which helps employers determine benefit notice and compliance requirements. All departments need to be informed of the modified health insurance plan as soon as possible and on the same page.

3. Get connected. It’s essential to verify information as it’s released, via newsletters, seminars, healthcare carriers, payroll vendors and consultants. These resources can help employers navigate the evolving healthcare landscape. Knowledge of changes will empower an organization to handle them effectively.

4. Evaluate partnerships. There’s no better time for employers to examine their current partners, from an insurance consultant or broker to the accounting firm and legal counsel. An employer’s insurance consultant should be a trusted adviser in working on budgeting and benchmarking the company plan, administering benefits, evaluating plan performance and reporting outcomes. Finding an insurance solution that meets a company’s business goals, as well as its employee’s needs, can be accomplished with a knowledgeable, experienced insurance partner.

Staying ahead of healthcare changes is essential for organizations to have a smooth transition to an updated healthcare plan. Strategic planning, communication among departments and establishing the right partnerships are key. Employers must be proactive in addressing healthcare changes so they are ready when the time comes.

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10 compliance issues for 2018 health and benefit planning

The article below was published on June 18, 2017 by Employee Benefit News, written by Brian M. Kalish.

Compliance

Image Source: benefitnews.com

Introduction
Despite the uncertain future of the Affordable Care Act and pending replacement legislation, clients should continue finalizing their 2018 health and benefit offerings, contribution strategies, vendor terms, plan operations and employee communications, according to Mercer. The company hosted a recent webinar to share the top 10 issues for 2018.

“As employers begin to strategize for their 2018 benefit programs, it is important not to lose sight of new and ongoing compliance obligations and prepare to make any changes that may be necessary in employee benefit plan design and administration,” says Katharine Marshall, principal at Mercer. “Despite what may – or may not – come of ACA repeal and replace legislation, there are a number of compliance concerns that employers can count on sticking around – like HIPAA privacy and security requirements, mental health parity requirements and ERISA fiduciary duties, just to name a few.”

Employers and their advisers, Marshall adds, should keep these issues in focus because the consequences of sidelining them can be costly.

Employed shared responsibility strategy and reporting
Even with plans to dramatically alter or eliminate the Affordable Care Act pending in Congress, most of the legislative body’s reconciliation rules do not allow for the repeal of the employer shared responsibility, says Katharine Marshall, principal at Mercer.

While the minimum value requirement remains unchanged for 2018, affordability has decreased and an employer cannot charge a full time employee more than 9.56% of household income, down slightly from 9.69% in 2017.

It is critical for employers to document their offers of coverage and “most importantly,” waivers of that coverage, Marshall says. “As you head to 2018, correct any mistakes in prior year filings,” she adds.

Cadillac Tax
Employers should review their risk of exposure for when the tax is scheduled to begin in 2020. Although the American Health Care Act as it stands now delays the implementation of the tax until 2026, the fate of that bill is uncertain, Marshall says.

The best way to do that is to review an employer’s risk of exposure by identifying plans and benefits that could be a factor, such as flexible spending accounts, health reimbursement arrangements and health savings accounts, she says. An employer should also focus on pre-65 retiree plans and high-cost plans due to geographic location and claims history.

Preventive services
For employers to comply with this requirement they need to stay abreast of updates to what must be covered.

Changes are made on a rolling basis. For Jan. 1, 2018, preventive services now include screening for depression in adults, low dose aspirin for certain at-risk adults ages 50-59, syphilis screening for asymptomatic non-pregnant adults, among others, Marshall says. Continue reading