- How Hiring Holiday Help Impacts ‘Pay or Play’ Compliance
Employers that hire seasonal workers this holiday season are reminded that there is an exception when measuring workforce size to determine whether they are an applicable large employer (ALE) subject […]
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by Gregg Kennerly | Published Tuesday, December 5, 2017
The federal Occupational Safety and Health Administration (OSHA) has finalized December 15, 2017 as the date by which certain employers are required to electronically submit data from their 2016 Forms 300A to OSHA.
Who Must Comply?
By December 15, 2017, the following establishments—if currently required to comply with OSHA’s recordkeeping requirements—are required to electronically submit data from their 2016 Forms 300A to OSHA:
- Establishments with 250 or more employees; and
- Establishments in certain designated industries with 20-249 employees.
However, according to OSHA, establishments in California, Maryland, Minnesota, South Carolina, Utah, Washington, and Wyoming are not yet required to submit data. Establishments located in these and other OSHA “State Plan” states should check with their states for the latest requirements.
Where Do I Submit the Data?
Covered establishments must submit the required data through OSHA’s online Injury Tracking Application.
Have more questions? Contact Us!
by Gregg Kennerly | Published
The IRS has announced that it will begin mailing employers letters informing them of their potential liability for a “pay or play” penalty for the 2015 calendar year in late 2017. However, before any penalty is assessed and notice and demand for payment is made, employers will have an opportunity to respond to the agency.
What Will the Letter Contain?
The IRS plans to issue Letter 226J to applicable large employers (ALEs)—generally those with at least 50 full-time employees, including full-time equivalent employees, on average during the prior year—if it determines that, for at least one month in the year, one or more of the ALE’s full-time employees was enrolled in a qualified health plan for which a premium tax credit was allowed (and the ALE did not qualify for an affordability safe harbor or other relief for the employee). Letter 226J will include, among other things:
- A penalty payment summary table, itemizing the proposed payment by month;
- An “employee premium tax credit list” which lists, by month, the ALE’s employees who for at least one month in the year were full-time employees allowed a premium tax credit and for whom the ALE did not qualify for an affordability safe harbor or other relief;
- A description of the actions the ALE should take if it agrees or disagrees with the proposed penalty payment; and
- A response form.
The response to Letter 226J will be due by the response date shown on the letter, which generally will be 30 days from the date of Letter 226J. Letter 226J will also contain the name and contact information of a specific IRS employee that the ALE should contact if the ALE has questions about the letter.
How Does an ALE Make a Pay or Play Penalty Payment?
If, after correspondence between the ALE and the IRS, the IRS determines that an ALE is liable for a penalty payment, the IRS will assess the payment and issue a notice and demand for payment, Notice CP 220J. That notice will instruct the ALE on how to make a payment, if any. Notably, an ALE will not be required to include a payment on any tax return that it files or make a payment before notice and demand for payment.
by Gregg Kennerly | Published Tuesday, November 7, 2017
Advanced Benefit Strategies of Virginia is pleased to welcome Carol Watson to our staff as a Senior Account Executive. Carol joins ABS after a long and successful 29-year career with Optima Health in Virginia Beach. She was the Account Executive for Southeast Virginia with overall responsibility for servicing and renewing Optima employer plans in the 2 to 50 employees market. Carol will bring her talent and experience to our client service team. In her free time, Carol enjoys spending time with her grandchildren, camping, and helping veterans navigate the complicated VA medical system. Carol is an important addition to our staff, and she looks forward to working with our clients statewide.
by Gregg Kennerly | Published Thursday, August 31, 2017
The IRS has released the 2017 monthly national average premium for a bronze-level health plan offered through the Health Insurance Marketplace, which is used to determine the maximum individual mandate penalty.
According to the new IRS guidance, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through the Health Insurance Marketplace in 2017 is:
- $272 per individual (up from $223); and
- $1,360 for a family with five or more members (up from $1,115).
The guidance is effective for taxable years ending after December 31, 2016.
Calculating the Payment
The Affordable Care Act’s “individual mandate” provision requires every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a penalty payment when filing his or her federal income tax return.
The annual penalty amount is either a percentage of an individual’s household income in excess of the tax return filing threshold or a flat dollar amount, whichever is greater. The maximum penalty amount is capped at the cost of the national average premium for a bronze level health plan available through the Marketplace. At this time, the 2017 inflation adjustment for the flat dollar amount penalty has not been announced.
Visit our section on the Individual Mandate (Individual Shared Responsibility) for more information on the individual mandate.
by Gregg Kennerly | Published
A recently released IRS letter reaffirms the agency’s view that funds from a health flexible spending arrangement (health FSA) may notbe used to reimburse health insurance premium payments or Medicare premium expenses.
Certain Premiums May be Deducted
The IRS letter points out that health insurance premium payments, including those for Medicare, may qualify for purposes of the itemized deduction for medical expenses. However, only premiums for which the taxpayer is not claiming a separate credit or deduction can be included as part of a medical expenses deduction. Additional restrictions apply to this deduction. For more information, please see IRS Publication 502, Medical and Dental Expenses.
Click here to read the IRS letter in its entirety.
For additional information on health FSAs, visit our HSAs, FSAs, and Other Tax-Favored Accounts section.
by Gregg Kennerly | Published
An updated model notice for employers to provide information on eligibility for premium assistance under Medicaid or the Children’s Health Insurance Program (CHIP) is now available for download from the U.S. Department of Labor (DOL).
Annual Notice Requirement
The employer CHIP notice must be provided annually before the start of each plan year to inform each employee (regardless of enrollment status) of potential opportunities for premium assistance in the state in which the employee resides. This may or may not be the same as the state in which the employer or its principal place of business is located.
An employer can choose to provide the notice on its own or concurrently with the furnishing of:
- Materials notifying the employee of health plan eligibility;
- Materials provided to the employee in connection with an open season or election process conducted under the plan; or
- The summary plan description (SPD).
The updated model notice includes information on how employees can contact their state for additional information and how to apply for premium assistance, with information current as of August 10, 2017.
Our section on CHIPRA (the Children’s Health Insurance Program Reauthorization Act) contains additional information on employer responsibilities related to the state Children’s Health Insurance Program.
by Gregg Kennerly | Published Wednesday, August 16, 2017
Employers may be confused with all of the bluster and proposals to “repeal and replace” or perhaps “amend” the Affordable Care Act. What parts of this complex law do employers and their employees still need to comply with?
In offering important relief to individuals, the Internal Revenue Service has relaxed enforcement of the individual mandate and did not require taxpayers to report whether they had health insurance coverage on their 2016 tax returns.
However, the IRS has not relaxed enforcement of the employer mandate. This has been confirmed in a release from the Department of Labor. Although the IRS has acknowledged glitches in the ACA reporting system, the IRS has confirmed that an applicable large employer is still subject to an employer shared responsibility payment if it fails to offer coverage to 95% of its full-time employees or has a full-time employee who obtains coverage on the insurance marketplace and receives premium assistance or a tax credit, and the employer’s coverage is not affordable or did not provide minimum value.
Large employers should continue to offer minimum essential coverage to their full-time employees to avoid penalties and to track offers of coverage in order to comply with reporting requirements on IRS Forms 1094 and 1095.
Although the individual mandate has been “non-enforced”, It’s business as usual on the compliance front for employers- especially those subject to the employer mandate and shared-responsibility payments for non-compliance.
by Gregg Kennerly | Published Wednesday, August 9, 2017
The Medical Loss Ratio (MLR) rules under Health Care Reform require an issuer to provide rebates if its medical loss ratio (the amount of health insurance premiums spent on health care and activities to improve health care quality) falls short of the applicable standard during a reporting year. Each year’s rebates must be provided by issuers to policyholders (typically the employer that sponsors the plan) by September 30 of the following year.
The MLR rules provide that issuers must pay any rebates owed to persons covered under a group health plan to the policyholder, who is then responsible for distributing the rebate to eligible plan enrollees.
In general, there are several ways rebates may be distributed to plan enrollees, including:
- A rebate check in the mail;
- A lump-sum reimbursement to the same account that was used to pay the premium if it was paid by credit card or debit card; or
- A direct reduction in future premiums.
In addition to the above methods, employers may also apply the rebate in a way that benefits employees.
Check out our section on Medical Loss Ratio (MLR) Rebates & Employer Responsibilities to learn more.
by Gregg Kennerly | Published Wednesday, July 19, 2017
The Senate Republican effort to pass the ACA “repeal and replace” bill appears to have reached a dead-end. When two more Republican Senators voiced their opposition to the “Better Care Reconciliation Act” (BCRA) last night, the effort was effectively a failure.
In the end, the bill couldn’t bridge the gap between moderate and conservative GOP senators. There wasn’t any provision for both making the conservatives happy with full repeal, and moderates happy with less impact on Medicaid.
Although Senate leadership hints that the next round will be to attempt repeal separately from “replace” legislation. This will likely fail as well. So that leaves us with the ACA in effect and a whole basket of questions and unknowns about the rest of 2017 on into 2018. Will the Trump administration enforce the employer mandate? How about the individual mandate?
Will Trump administration DOL employees enforce compliance through audits and fines? Or, will they slack off of enforcement as the administration directed earlier? There are no easy answers and employers will need to pay attention to communications and notices from their advisors for guidance.
Markets and the economy in general don’t like uncertainty… but that is what we have. Employers, employees, individuals and insurance carriers all have a huge stake in the outcome. The battle over the ACA is one of the more unique battles in the history of recent politics. On the one hand, it is doomed to failure with adverse impact on millions within a very short time- FACT. On the other hand, it’s so political that a compromise in the “common sense” course of thought can’t be reached. Unfortunately, everyone is likely to be a loser in the status quo unless our elected officials can drop the political labels and pass a bill that creates financially sustainable, affordable health care for all Americans.
by Gregg Kennerly | Published Monday, July 10, 2017
The federal Occupational Safety and Health Administration (OSHA) has announced that it is not accepting electronic submissions of information from 2016 Forms 300A at this time. As a result, OSHA has proposed extending the July 1, 2017 date by which certain employers are required to electronically submit these forms pursuant to its recent “Electronic Recordkeeping Rule” to December 1, 2017.
‘Electronic Recordkeeping Rule’ Explained
The Electronic Recordkeeping Rule, generally effective as of January 1, 2017, requires certain employers to electronically submit injury and illness data to OSHA that they are already required to record on their OSHA Forms 300A. Under the rule, the following entities were required to make these submissions by July 1, 2017:
- Establishments with 250 or more employees in industries covered by OSHA’s recordkeeping requirements.
- Establishments with 20-249 employees in certain high-risk industries.
Click here to read OSHA’s announcement.
To read more about OSHA’s record keeping requirements, please visit our Safety & Wellness section.