ACA Affordability Percentage for 2020

On July 23, 2019, the Internal Revenue Service (IRS) issued Revenue Procedure 2019-29 which indexes the contribution percentages for 2020 for purposes of determining affordability of an employer’s plan under the Affordable Care Act (ACA). For plan years beginning on or after January 1, 2020, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed 9.78 percent of the employee’s household income for the year for purposes of the employer shared responsibility rules. This is a decrease from the 2019 affordability threshold percentage of 9.86%. The 2020 decrease in the affordability percentage for employer shared responsibility purposes means that employers will have to charge employees a slightly lower price for their health benefits to meet the “affordability” test.

Since an employer would not know an employee’s household income, IRS Notice 2015-87 confirmed that ALEs using an affordability safe harbor may rely on the adjusted affordability contribution percentages if they use one of three affordability safe harbor methods. The three safe harbors to measure affordability are Form W-2 wages from that employer, the employee’s Rate of Pay or the Federal Poverty Line (FPL) for a single individual. The affordability test applies only to the portion of the annual premiums for self-only coverage and does not include any additional cost for family coverage. Also, if an employer offers multiple health coverage options, the affordability test applies to the lowest-cost option that also satisfies the minimum value requirement.

Below is an example of how the percentage change impacts an employer’s monthly affordable amount using the three safe harbor tests. The example assumes an employee earns $11/hour.

*Based on Jan. 2018 FPL of $12,140 for 2019 and Jan. 2019 FPL of $12,490 for 2020

Under the ACA, employees (and their family members) who are eligible for coverage under an affordable employer-sponsored plan are generally not eligible for the premium tax credit from the Exchange. This is significant because the ACA’s employer shared responsibility penalty for applicable large employers (ALEs) is triggered when a full-time employee receives a premium tax credit for coverage under an Exchange.


Diversified Group Named One of Connecticut’s Healthiest Employers of 2018

This announcement from the Hartford Business Journal was published on December 3, 2018.

Meet CT’s healthiest workplaces

Hartford Business Journal’s first-ever Healthiest Employers Awards recognize organizations dedicated to employee health and safety in addition to their efforts to implement wellness programs.


The awards program was done in partnership with the Healthiest Employers Group, which determined the finalists and winners using a scoring methodology managed by Springbuk, a privately held technology and data research firm.

Companies that participated in the awards program had to complete an hour-long online assessment. Companies were then ranked based on their performance on the following six measures: culture and leadership commitment; foundational components; strategic planning; communication and marketing; programming and interventions; and reporting and analytics.


1st Place | Antea Group

2nd Place | FM Global

3rd Place | Gallagher

4th Place | Diversified Group

5th Place | Safelite AutoGlass

Screen Shot 2018-12-04 at 10.00.10 AM.png

Photo Source: Hartford Business Journal

Diversified Group

4th Place | Category: 0-150 CT employees

Industry: Employee benefits

CT Headquarters: Marlborough

CT Employees: 64

When Diversified Group (DG) started its fitness program back in 1985, it basically consisted of a boot camp-style fitness contest.

But over the years, commitment to health and wellness among employees has intensified to where DG now has a wellness department staffed by six certified health coaches, personal trainers and registered dietitians. The wellness team is responsible for spearheading the company’s wellness program.

DG has also maintained a modest fitness facility on its grounds, and within the last five years, certified instructors have been stopping by on a weekly basis for cycling, strength and yoga classes.

DG also hosts regular meditation workshops giving workers access to guided meditation sessions to decompress and recharge.


Benefits Communication Growing in Importance and Difficulty

This article was published on February 25, 2016 by the International Foundation of Employee Benefits, written by Neil Mrkvicka.

Half of all organizations responding to the Benefits Communication Survey say the number of participant questions they receive regarding benefits has increased in the past two years. Adding to the frustration, organizations identify their top challenge with benefits communication as participants not opening/reading materials. Despite challenges, benefits communication remains a high priority for most respondents.


A total of 341 organizations of a variety of sizes, industries/jurisdictions and regions across the United States and Canada participated in the survey. Key findings include:

What Is the Current State of Benefits Communication?

ben com survey 1Nearly two in five surveyed organizations (38%) have budgets specifically devoted to benefits communication, and one-quarter of these organizations (25%) likely will increase their budgets next year. A few organizations shared the size of their benefits communications budgets, which ranged from 3% to 10% of the total benefits budget.

Organizations are more likely to handle benefits communication in-house than to outsource, and more than one-third (35%) have staff specifically dedicated to benefits communications. Organizations are more likely to outsource via consultants, administrators and vendors (31%) compared with attorneys (6%). Large organizations are more likely than small organizations to have budgets and staff specifically dedicated to benefits communication.

The most common benefits communication topics are:

  • Retirement benefits education (74%)
  • Health care benefits literacy (74%)
  • Wellness and mental health (72%)

The most frequently used benefits communications channels include:

  • Printed mail to homes (89%)
  • E-mail (73%)
  • Print distributed on site (69%)
  • Internal websites (66%)
  • External websites (58%)
  • Videos (29%)
  • Social media (23%)
  • Texts (10%)
  • Robocalls (9%)
  • Games (7%)

Two-thirds of all organizations (67%) reach out to retirees with benefits communication, 53% engage spouses/dependents and 52% personalize communication materials. The most common benefits communications strategies organizations use are simplifying complicated content (85%), year-round communication (73%), reaching out to retirees with benefits communication (67%), leveraging word of mouth (63%), engaging spouses/dependents (53%) and personalizing communication materials (52%). Less than half of all organizations customize communication benefits to multiple generations (49.6%), measure the effectiveness of communications (43%), communicate by life stage (41%) or communicate in multiple languages (31%).

What Are the Goals and Challenges?

ben com survey 2Survey findings reveal that 65% of organizations regard benefits communication as a high priority (28% very high and 36% somewhat high). However, the amount of time spent on various benefits communication efforts doesn’t always match up with organizations’ priorities. For example, 89% of organizations report helping participants understand and use their benefits as a top goal, but only 70% say that effort occupies most of their time. Fifty-two percent cite getting individuals to understand the value of benefits as a top goal, but 48% say it takes most of their time. Helping participants make smarter personal health and/or finance decisions is the third most cited goal (49%), with 30% saying it occupies most of their time. Data show how reactively responding to participant questions (57%) seems to be stealing time from organizations’ more proactive benefits communication goals.

ben com survey 3Each of the top challenges with benefits communication is centered on participants: Participants do not open/read materials (80%), don’t understand materials (49%) and do not perceive value in their benefits (31%). (Each is cited far more frequently than internal challenges such as benefits staff time, resources or expertise.) Large organizations are more likely to say participants not opening/reading communication materials is a top challenge. U.S. organizations are far more likely to view complying with mandated benefits communication as a top goal, challenge and consumer of time, compared with Canadian organizations.

ben com survey 4Few organizations believe their participants have a very high (3%) or somewhat high (16%) level of benefits understanding. Half (49%) say the number of participant questions regarding benefits has increased in the past two years, compared with just 7% reporting a decrease in questions. U.S. organizations are more likely to say the number of participant benefit questions has increased in the last two years compared with those from Canada. Some of the most common benefits topics about which organizations receive participant questions are the Affordable Care Act, health reimbursement arrangements and health savings accounts, plan design changes, accessing retirement funds and health care eligibility, coverage and costs.

The International Foundation deployed Benefits Communication Survey in December 2015 to member organizations across the U.S. and Canada. For a more in-depth analysis and data on which communication approaches are working the best check out the full results here.

Brooks Goodison Comments on State Interference with Self-Insurance in Self Insurer Magazine

The May, 2016 issue of The Self-Insurer magazine, Outside the Beltway article discusses how various states – and agencies within states – are challenging self-insured plans through claims tax schemes, limits on stop-loss insurance, demands for propriety data and other burdens.

self-insurer-magazine-may-2016Brooks Goodison, President of Diversified Group, contributed insight, citing specific examples of state burdens on self-insured plans.

Below you will find an excerpt from the article that features Brooks’ comments as quoted in the The Self-Insurer article, “Seemingly Every Day We Wake Up to New Challenges from the States,” as well as a link to view the entire article written by Dave Kirby.

In the comedy movie “Groundhog Day,” Bill Murray’s character wakes up each morning to the very same events as the day before in a seemingly unending succession of identical days into the future.

Some in the self-insurance industry may have a similar feeling as a succession of state encroachments on self-insured employee health plans continue to arise. Various states – and agencies within states – are engaged in challenges to self-insured plans in the form of claims tax schemes, limits on stop-loss insurance, demands for proprietary data and other burdens.

These challenges appear to ignore the reality that ERISA preemption of state interference with self-insured health plans has been upheld at the highest level, the U.S. Supreme Court. Despite that, states continue to pester the self-insurance industry, often with the tacit if not outright support of the National Association of Insurance Commissioners (NAIC).

“It’s usually a question of money,” says SIIA Vice President of State Government Relations Adam Brackemyre. “Most states’ budgets are very tight, many trying to work out of projected deficits. Any revenue they can find short of general public tax increases is coveted by legislators.”

The cost of states’ interference with self-insurance is a burden shared by employers and TPAs alike. Naturally, taxes on health claims revert to employers but there are also in-state demands by various agencies that accrue financial and administrative costs, according to Brooks Goodison, president of Diversified Group TPA in Marlborough, CT.

Goodison cited specific examples of state burdens on self-insured plans:

We have to pass on costs of collecting fees such as the New York and Massachusetts Public Goods Surcharge or fees for childhood immunization in Connecticut, New Hampshire and Maine. And we have administrative costs that provide no value to our clients,” Goodison said.

“In some states we may have three or even four different agencies demanding data from us for various purposes such as studies of outcomes-based payment plans, penetration of childhood immunization, incentive-based payment systems or taxes on claims,” Goodison said. “For any of these purposes we are required by law to report data that’s not ours to give. But states find it convenient to come to TPAs to gather aggregate data rather than take the trouble to contact individual employers.”

Click to read the entire article as seen in the May issue of The Self-Insurer magazine.

ACA: Fiction or Fact

With so much information flying around on the Affordable Care Act, it can be a challenge to determine what is correct. In an effort to clear up ACA confusion, here are a few facts that you may have seen misstated.

Fiction: The out-of-pocket limits applicable to qualified high deductible health plans are the same as limits imposed on health plans.
Fact: Actually, the limits applicable to qualified high deductible health plans (HSA compatible plans) are slightly lower than the ACA limits. This can be very important since using ACA limits can disqualify enrollees in a qualified high deductible plan from contributing to a health savings account.

Fiction: Large employers that do not offer health benefits or that qualify for 2015 transitional relief do not have to file the 2015 Form 1095-C/1094-C.
Fact: All employers that averaged 50 or more full-time employees plus full-time equivalents during the calendar year 2014 must file these forms.

Fiction: The Cadillac Tax only applies to large employers that are subject to ACA employer shared responsibility.
Fact: The Cadillac Tax applies to all employers that offer health plans.

Fiction: U.S. expatriate plans are completely exempt from ACA rules.
Fact: While qualifying plans are exempt from certain market reform rules and hours worked overseas do not accrue toward shared responsibility full-time employee calculations, the Cadillac Tax is scheduled to apply to these plans.


30,000 Could Lose Coverage or Subsidies as Exchange Addresses Income, Immigration Discrepencies

Article is from Arielle Levin Becker, as seen in the CT Mirror


As many as 30,000 customers of the state’s health insurance exchange could lose their coverage or see a drop in the subsidies used to discount their premiums next month because they did not submit information needed to verify their eligibility, acting exchange CEO Jim Wadleigh said.

Those changes, which will take effect Dec. 1, could affect more than 10 percent of the Connecticut residents who signed up for private insurance or Medicaid through the exchange, Access Health CT. They’re the result of the exchange’s implementing a process to adjust or cut off coverage of people who failed to address discrepancies related to the income or citizenship information they provided when applying for coverage.

The federal government recently began using a similar process for the exchanges it runs, and Wadleigh said federal officials had been pushing Access Health to move forward with the process.

Verifying the income and immigration or citizenship status of people who get coverage under Obamacare has been a controversial issue nationally. Critics of the health law have warned that failing to have processes in place early on to cut off those whose information couldn’t be verified made the exchanges vulnerable to fraud and could waste taxpayer dollars.

But immigration advocates and other groups have raised concerns about efforts to terminate coverage for people with lingering application discrepancies, saying they could hurt people who were trying to provide documentation but had not been able to because of language barriers or other problems. Continue reading

News on the New Proposed Healthcare Tax/Assessment in Connecticut (SB21)

Article is from theCT mirror | April 29, 2014 | by: Arielle Levin Becker

Business groups question Malloy health reform funding plan

Gov. Dannel P. Malloy’s proposal to hire nine workers to help develop a state-level health reform initiative isn’t, in itself, especially controversial.

But the way the governor wants to pay for it — by imposing a new fee on health insurance policies — has drawn opposition from business groups. One has warned that the state could face a lawsuit if the measure passes.

At issue is how the state would come up with $3.2 million for expenses and new staff to work on a project, known as the state innovation model, or SIM. The project is aimed at improving the quality of health care by changing the way private insurers and public programs like Medicaid pay for it, creating a system that rewards keeping patients healthy rather than doing more tests or procedures.

Instead of using state tax dollars to fund the project’s development, Malloy proposed raising the money by charging a fee to health insurance companies and health plans, based on membership.

Click to Read Entire Article on