It’s PCORI Filing Time Again!

IRS ACA Patient Centered Outcomes Research Institute (PCORI) Fees Due July 31st.

For 2018, the annual fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI), paid by employers that sponsor self-insured health plans and by commercial group health insurance providers, will go up by about 10 cents per employee or dependent enrolled in the health plan. The fees are due by July 31. The chart below shows the fees to be paid in 2018, which rose slightly from the fees owed in 2017.

The chart below shows the fees to be paid in 2018, which rose slightly from the fees owed in 2017:

Jan. 1, 2017, through Sept. 30, 2017 $2.26 (up from $2.17) per Covered Life (including spouse & children)
Oct. 1, 2017, through Dec. 31, 2017 (including calendar year plans) $2.39 (up from $2.26) per Covered Life (including spouse & children)

For self-funded plans, the self-insured employer is responsible for submitting the fee and accompanying paperwork to the IRS. PCORI fees are reported on IRS Form 720, Quarterly Federal Excise Tax Return. On page two of Form 720, under Part II, the employer needs to designate the average number of covered lives under its applicable self-insured plan. Although the fee is paid annually, employers should indicate on the Payment Voucher (720-V)—located at the end of Form 720—that the tax period for the fee is the second quarter of the year. Failure to properly designate ‘2nd Quarter’ on the voucher will result in the IRS’s software generating a tardy filing notice.

The PCORI fee will not be assessed for plan years ending after Sept. 30, 2019, which means that for a calendar-year plan, the last year for assessment is the 2018 calendar year.

ATTENTION DIVERSIFIED GROUP CLIENTS:

Clients who have elected to have Diversified Group assist with PCORI fee calculation can expect an email by June 25th that will include a copy of the completed Form 720 along with the PCORI calculation worksheet with supporting documentation. Clients will need to file Form 720 with payment by July 31, 2018.

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Commonsense Reporting Bill Introduced

dg-commonsense-reportingIn October, a bipartisan group of senators introduced a bill that would ease the ACA reporting mandates for employer-sponsored health plans. The bill would roll back the reporting requirements of Section 6056 and replace them with a voluntary reporting system. The bill would also allow payers to transmit employee notices electronically rather than having to send paper statements by mail.

While self-funded health plans must now comply with Sections 6055 and 6056, it is not yet clear how the bill would affect Section 6055 requirements. Senators Rob Portman of Ohio and Mark Warner of Virginia, sponsors of the bill, say their proposal would give the government a more effective way of applying premium tax credits to consumers who purchase insurance through an Exchange, something the administration has been trying to accomplish.

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The New Year’s Resolution You Should Keep: Managing Your Healthcare Costs

The article below was published on January 3, 2018 by DigitalDealer, written by Contributing Writer Steve Kelly.

Photo Source: DigitalDealer

We came across this article written by Steve Kelly, co-founder and CEO of ELAP Services. It discusses one common theme that all of us at Diversified Group hear more and more from not only our auto dealer clients, but from a growing number of our clients – the fact that amidst increasing healthcare costs, employers are seeking out better, less expensive ways to offer healthcare to their employees. Making the switch from a traditional health insurance plan to self-insurance creates the opportunity to achieve the savings they are looking for. We have been proud to partner with ELAP Services for many years and can attest to the results discussed in his article, which can be read below.

January is the month of new beginnings, and of course, New Year’s resolutions. But beyond setting a personal goal this year, what if you decided to use your energy to set your dealership up for success instead? What if your New Year’s resolution was to finally find a better, less expensive way to offer healthcare to your employees?

Each year auto dealers around the country feel the squeeze of rising healthcare costs. Insurance premiums for family coverage have increased by 55 percent since 2007, and while these costs are felt by the individuals and families on the plan, the employer who sponsors the health plan often carries the financial burden. Meanwhile, the total operating profit for the average dealership decreased 43.5 percent from 2016 to 2017, proving that healthcare costs and profits are out of sync, and healthcare costs have a substantial impact on dealers trying to run profitable businesses.

Becoming fed-up with the increasing costs year over year, more businesses are looking for viable, cost-saving alternatives to PPOs and are increasingly turning to self-funded or self-insured plans. Self-insurance is when an employer takes the money it would pay an insurance company and instead pays healthcare providers directly for medical claims.

According to the Employee Benefit Research Institute, the number of businesses offering self-insured health plans has increased by nearly 37 percent from 1996 to 2015. This huge increase proves that employers are trying to find the right, less expensive healthcare solution for their business. But, if you are considering self-insurance to forgo the hassles and costs of a PPO, you are missing the key component to assisting with risks of self-insurance. Self-insurers can really only maximize their health plans when paired with the reference-based pricing method.

The reference-based pricing method is the assessment and payment of medical claims based on the provider’s actual cost to deliver the service or by utilizing Medicare cost data as a benchmark. This means that rather than paying a discount off of an unknown price, an employer knows the true cost and pays a fair price for the service. Reference-based pricing helps remove the curtain of PPO “discounts,” leaving you with a fair and reasonable price to pay for a medical service.

Quite frankly, changing from a traditional healthcare plan to self-insurance with reference-based pricing could be a total game changer for your dealership. Self-insurers who use reference-based pricing benefit from significant cost savings in comparison to their PPO discounts. With the help of a partner, employers pay their healthcare bills going line by line through the expenses and with an understanding of the actual cost it takes to provide a medical service, like they would any other business cost—and in the way healthcare was meant to be paid for. On average, with the right strategic partner, you can expect to save up to 30 percent off your total healthcare spend in the first year.

So, this year, rather than throwing in the towel a few weeks in, like we often do for New Year’s resolutions, resolve to empower yourself by learning the facts and evaluating if your current healthcare plan is truly offering you the value it promises. Identifying a better, less expensive way to offer healthcare to your employees will allow you to do something novel like put the savings back into running your dealership.

About the Author

Steve Kelly is the co-founder and CEO of ELAP Services, a leading healthcare solution for self-funded employers across the U.S. He is a recognized expert and frequently called-upon speaker in the insurance, employee benefits and risk management industry, bringing more than three decades of experience solving his clients’ complex healthcare challenges.

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SPBA Releases Industry Update & 2018 Forecast for TPAs & Self-Funding

The article below was published on October 17, 2017 by PRWEB, written by Chevy Chase, MD.

The Society of Professional Benefit Administrators (SPBA) has released its State of the TPA Industry & Forecast for 2018. Developed annually for the last 37 years, this report shares current happenings in health benefits and self-funding along with projections for the future.

dgb-spba-blogIn preparing for the year ahead, the Society of Professional Benefit Administrators (SPBA) has released its State of the TPA Industry & Forecast for 2018.

Fred Hunt, SPBA’s active past president, has been writing this report annually for the past 37 years with the intent to shed light on what is happening with third party administrators (TPAs) and the self-funded industry.

As with years past, the 2018 Forecast shares a candid perspective on current issues affecting the health benefits landscape as well as projections for the future. In it, Hunt describes the state of the TPA industry as “very good” amid the uncertainty in health care regulation the U.S. is facing and the ever-changing compliance requirements.

Some of his main projections include:

  • TPA growth – TPAs are positioned for a growth expansion as employers will continue to move to self-funding for the ability to design and fully customize health plans that fit their specific work populations.
  • State-level health care – With solutions for health care being debated, there will be more interest in exploring a state-centric approach as the 2018 Congressional and 2020 Presidential elections draw closer. Education will become key as careful consideration must be taken to address the many complications that would arise for the large number of companies with multi-state operations and plan participants.
  • Increase in “well-being” services – Employees will be looking for more benefits that enhance their well-being – things like wellness solutions (whole health and niche), student loan assistance, pension management, work-schedule management, etc. They will also rely on employers for help in overseeing these solutions.

“Fred has become such a trusted source for these forecasts based on his many years of experience in the self-funded industry and the fact that he stays so well-connected to regulators, policymakers and TPAs,” explained Anne Lennan, SPBA president. “He has a unique vantage point as he sees what is happening with health benefits from so many different angles.”

In sharing the 2018 Forecast, SPBA also includes background on the history of self-funding, why these health plans have become so widely adopted among companies of all sizes and formats and how ERISA serves as the main source of regulation. It also provides definitions of TPAs, including comprehensive service, specialty, minimal, ASOs and TPAs-of-convenience.

“Year after year, these forecasts provide a helpful, insightful look at the big picture for TPAs and self-funding,” Lennan said. “SPBA is happy to make them available to the public.”

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