Tag Archives: Group Benefits

Now is a GREAT Time to Offer Identity Theft Insurance to Your Employees

identity-theft3According to the Federal Trade Commission, as many as 9 million Americans become victims of identity theft each year. Identity theft occurs when someone obtains personally identifying information, such as your name, credit card number, birth date, Social Security number, home address and bank account numbers, and then illegitimately uses this information. This unauthorized use of your personal information can result in great financial loss as the thief amasses credit card debt and tarnishes your credit rating.

Repairing the damage from identity theft can be a daunting—and financially taxing—task. After losing money to identity theft, you don’t want to spend more on the various fees and charges that accompany re-establishing your name and credit. Some employers offer identity theft insurance as a voluntary benefit that can help protect you in case you become a victim of identity theft.

What Is Identity Theft Insurance?

Identity theft insurance is designed to relieve you of the financial burden of repairing damages after your identity has been stolen. This type of insurance does not reimburse loss from theft such as stolen credit card numbers or forged bank checks, but rather prevents further loss once you have already become a victim of identity theft. Also, aside from some plans which may provide free credit monitoring, identity theft insurance does not work to prevent identity theft. Instead, identity theft coverage helps with expenses as you navigate the identity recovery process, which is useful whether or not you actually lost money to an identity thief.

What Does Identity Theft Insurance Cover?

Identity theft insurance assists you with the potentially costly and complicated process of recovering from identity theft, and most plans will cover basic expenses incurred during your identity recovery. Eligible expenses may include the following:

  • Postage and certified mailing costs
  • Phone bills
  • Photocopying charges
  • Notary and filing fees
  • Legal fees and attorney fees
  • Fees for reapplying for loans, grants or other credit lines that were denied due to identity theft
  • Lost wages due to time away from work to meet with police, confer with attorneys or engage in other recovery-related activities
  • Cost of obtaining credit bureau reports

In addition, the insurance may cover fees for a fraud specialist who can support and guide you through the recovery process, and some plans may provide their own experts to assist you.

How Does Identity Theft Insurance Work?

As a voluntary benefit offered to your employees,  premiums for identity theft insurance will likely be paid through a payroll deferral. Because the insurance is offered through you the employer, employees are likely getting a group discount on the premium.

After making a claim, the insurance company will reimburse the insured for expenses that are specified in the plan. For some plans, there may be a deductible, which is the amount you would have to pay before the insurance would start paying anything.

In addition, the coverage amount is usually limited between $10,000 and $1 million. Your insurance may have a limit for each occurrence, a limit per policy period, or both.

Having identity theft insurance can contribute to your peace of mind and give you necessary assistance should you ever become a victim of identity theft.

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors. Dana is ACA certified and has helped clients develop the best strategies for their operations within the new healthcare legislation.

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Small Business Health Care Tax Credit Applications Due by 12/23/13

On Nov. 27, 2013, HHS delayed online enrollment for FF-SHOPs until November 2014.  This means that small employers can enroll directly in SHOP coverage through agents, brokers or insurers. If you plan to claim the Small Business Health Care Tax Credit, you’ll need to get an official eligibility determination from the SHOP Marketplace, which means submitting a SHOP application.  If you’re eligible, you’ll claim the tax credit when you submit your federal income tax returns for 2014. For SHOP coverage to begin on Jan. 1, 2014, HHS intends to extend the enrollment deadline to Dec. 23, 2013.

Here’s how to figure out if the company will qualify for a small business health care tax credit:

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To get started, you’ll need to complete a small business SHOP application and read the Frequently Asked Questions about SHOP.

To be eligible, you must:

•  Cover at least 50 percent of the cost of single (not family) health care coverage for each of your employees.

•  You must also have fewer than 25 full-time equivalent employees (FTEs). You are probably wondering: what IS an FTE. Basically, two half-time workers (less than 30 hr/ wk) count as one FTE. That means 20 half-time employees are equivalent to 10 FTEs, which makes the number of FTEs 10, not 20.

•  Those employees must have average wages of less than $50,000 (as adjusted for inflation beginning in 2014) per year.

**Remember, you will have to purchase insurance through the SHOP Marketplace to be eligible for the credit for tax years 2014 and beyond.

How do you claim the credit?

You must use Form 8941, Credit for Small Employer Health Insurance Premiums, to calculate the credit. For detailed information on filling out this form, see the Instructions for Form 8941.

Your tax adviser / Certified Public Accountant (CPA) should be able to assist you with the preparation when the company is submitting the federal tax returns.

If you are a small business, include the amount as part of the general business credit on your income tax return.

 Also, the amount of the credit you receive works on a sliding scale. The smaller the business or charity, the bigger the credit. So if you have more than 10 FTEs or if the average wage is more than $25,000 (as adjusted for inflation beginning in 2014), the amount of the credit you receive will be less.

You will need an agent or broker to help you with your application to the SHOP. Please let us know how we can assist you.

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors. Dana is ACA certified and has helped clients develop the best strategies for their operations within the new healthcare legislation.

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Higher Health Care Costs for Metabolic Syndrome Risk

metabolic syndromeMetabolic syndrome is not one specific syndrome, but a group of related syndromes which can have a negative effect on your overall health.  Generally, the phrase “metabolic syndrome” includes the conditions:

  • High blood pressure
  • High blood sugar levels
  • Bad cholesterol
  • Excess body fat around the waist (a waist circumference greater than 35” for women and 40” for men)
  • High levels of triglycerides

The presence of one or several of these conditions can greatly increase your risk for diabetes, heart disease, and stroke.

Higher Healthcare Cost

A person with metabolic syndrome will in most cases need to see the doctor more frequently and will likely need more prescriptions and medical assistance than those without the syndrome, costing insurance companies more. Because of the risks associated with metabolic syndrome, people that display some of these symptoms often pay more for insurance in anticipation of them needing more medical care than a healthy person.

The Actual Cost

Studies have shown that people suffering from only one condition of metabolic syndrome pay almost twice as much as those not dealing with this condition. Even suffering from just one facet of metabolic syndrome (such as high blood pressure) renders a person five times more likely to develop diabetes. These increased risks and costs make health care even more difficult – and expensive – to maintain for those that may need it most.

How to Afford it if you Can’t Afford it?

The best way for people with metabolic syndrome to lower the cost of health care is to attack the root of the problem and focus on changing their habits and lifestyle. Most, if not all, of the conditions associated with metabolic syndrome can be made more manageable with increased physical activity and diet change. Some specific lifestyle changes that can decrease your risk for high healthcare costs (and further health problems) include losing weight, exercising, quitting smoking, and increasing fiber intake.

Reducing Employer Healthcare Costs

Employers interested in lowering the cost of their corporate health insurance program can be proactive in creating employee wellness programs geared towards helping employees lose weight and quit smoking. Such programs have a number of benefits:

  • Losing as little as five to ten percent of your body weight can greatly decrease your risk of diabetes, heart disease and stroke. Excess fat can also cause high blood pressure because the heart must work harder and under more pressure to transfer blood to the whole body. This pressure can ultimately prove fatal.
  • Weight loss can be achieved by simply lowering calorie-intake and exercising more. Doctors recommend getting your heart rate above-average for at least 30 minutes a day to stay healthy. Whether it’s a bike ride, aerobic activity, swimming, or just a quick walk; any increase in activity will strengthen your heart and reduce fat over time.
  • In addition to all of the other side-effects of smoking, using tobacco products has been proven to raise blood pressure and increase the risk of heart disease (more so in women than men). Quitting smoking is therefore a crucial step in combating metabolic syndrome risks and inherently combating higher healthcare costs.

A good corporate wellness program will give employees the tools they need to address the underlying lifestyle issues that contribute to poor health and, in many cases, metabolic syndrome. When employees make healthy lifestyle choices, not only does the cost of providing them with healthcare decrease, their productivity also increases, making employee wellness an investment with strong ROI.

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors. Dana is ACA certified and has helped clients develop the best strategies for their operations within the new healthcare legislation.

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Is Your Office Gross?

Office GermsThe typical employee’s desk has more bacteria per square inch than an office toilet seat. If that’s not disturbing enough, desks, phones and other private surfaces are also prime habitats for the viruses and bacteria that cause colds, the flu, strep throat, pneumonia and other illnesses.

Germs are bacteria, viruses, fungi and parasites. Not all will cause disease, but many are bad news in the workplace, as some can live from 2 to 72 hours or more on hard surfaces. Germs are then spread in a few of ways:

  • Infectious droplets from coughs or sneezes move through the air and land on nearby surfaces or are inhaled by others.
  • Physical contact is made with infected droplets on a hard surface (e.g., a desk) and is transferred by touching the mouth, eyes or nose prior to hand washing.

Germ Hot Spots

  • Telephones
  • Keyboard and mouse
  • Desktops
  • Doorknobs, elevator buttons and light switches
  • Vending machine buttons
  • Fax, printer and copy machines
  • Water fountain handles and water cooler spigots
  • Microwave door handles
  • Bathroom door handles and faucets
  • Chair armrests
  • Pens and other shared office items
  • Escalator and elevator handrails

Tidy vs. Clean

Even if you keep your desk tidy, it may not be “clean.” Unlike toilets, which tend to be cleaned regularly; keyboards, phone receivers and desks rarely receive a wipe-down. Consider this: crumbs and coffee spills are capable of supporting mini eco-systems. Without a cleaning, even a small area on your desk or phone can sustain millions of bacteria that could potentially cause illness.

Getting Rid of Germs

The good news: heightened awareness and hygiene efforts can go a long way in helping keep your office safer. Keep the following points in mind and share them with your co-workers:

  • Germ-busting at the office is a team effort! It only takes one person to infect healthy co-workers.
  • Regular cleaning of personal workspaces (desk, phone, keyboard, etc.) kills bacteria, stopping the spread of germs.
  • Frequent cleaning of shared workspaces (door handles, coffee pots, light switches, faucets, office equipment, etc.) is essential in maintaining sanitary safety. Disinfection is the goal, so be sure to use a true disinfectant, not simply an antibacterial product. Daily disinfection reduces bacteria levels by 99 percent, drastically lowering the risk of illness.
  • Be considerate of others and cough or sneeze into tissues, your sleeve or the crook of your arm. Wash your hands often and sanitize using alcohol-based disposable hand wipes or gel. Consider having these on-hand at your desk and in any common areas, including kitchens and restrooms.

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors. Dana is ACA certified and has helped clients develop the best strategies for their operations within the new healthcare legislation.

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Workplace Wellness Programs – Are They For You?

wellnessOne of the many provisions buried in the Affordable Care Act is the ability for employers to set up workplace wellness programs that incentivize employees to take better care of themselves. A healthier workforce doesn’t just reduce insurance premiums. It’s also a workforce that is more productive when it’s at work and that takes fewer days off when ill.

There are two different types of workplace wellness programs. A participatory wellness program is a program that provides a reward to employees that perform an action. Some examples of participatory programs include when a company provides access to a fitness center for anyone who chooses to use it, provides a bonus for taking a diagnostic test or incentivizes employees to attend health-related educational programs.

A workplace wellness plan can also be structured as a health-contingent program. These programs are more specifically based on employees’ individual health issues and can also come in two types:

  1. Activity-Based Health-Contingent Programs
  2. Outcome-Based Health-Contingent Programs

If a company chooses to implement a health-contingent program, it can offer a reward equivalent to up to 30 percent of an employee’s cost of health coverage. A program that is tied to stopping smoking can have a reward of up to 50 percent of a worker’s insurance coverage cost.

Activity-Based Workplace Wellness

An activity-based program is a program that focuses on getting an employee to take a certain activity towards improving their health. While a participatory program might include company support towards the cost of a gym membership, an activity-based program would require that worker to go to the gym on a predefined basis to earn the reward. Another example would be a reward tied to successfully completing a dieting program or committing to walk a certain number of times per week for a certain number of minutes per session.

Outcome-Based Workplace Wellness

Outcome-based programs focus on what a worker achieves rather than on what he does. An outcome-based plan starts with measuring a worker’s health. It can then set a goal for the measured standard. These programs can be tied to lowering cholesterol, lowering blood pressure or to reducing body-mass index. In these programs, the result is more important than the inputs that go into achieving it.

Calculating Rewards

Whether a company chooses an activity- or an outcome-based program, the rewards are calculated the same way. Rewards are based on the total cost of coverage, spanning both the employer’s and the employee’s payment .For instance, if an employee’s coverage costs $4,800 per year and the employer offers a 30 percent rebate, the employee would receive a bonus of $1,440. She would receive the bonus regardless of whether she pays $1,200, $2,400 or more of her total healthcare cost.

Alternate Routes to Rewards

Workplace wellness programs must comply with other federal laws, including the Americans with Disabilities Act. This means that they must have an alternate path for employees to earn a reward if they are unable to comply with the initial terms of a reward. For instance, an employee in a wheelchair won’t be able to participate in a program that incentivizes walking, so some other type of incentive must be put in place for them.

The rules underlying both activity- and outcome-based workplace wellness programs are complicated. Adding in the additional risks of legal exposure that come with creating incentives that are meaningful but also available to every employee makes the process even more challenging. However, the benefits to be reaped from a healthier workforce are also well worth it in the long run.

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors. Dana is ACA certified and has helped clients develop the best strategies for their operations within the new healthcare legislation.

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Transition Policies for Cancelled Healthcare Plans?

cancelled-greeceThe Affordable Care Act (ACA) includes key reforms that create new coverage standards for health insurance policies, beginning in 2014. For example, effective for 2014 plan years, the ACA imposes new modified community rating standards and requires individual and small group policies to cover a comprehensive set of benefits.

Over the last few months, millions of Americans have received notices informing them that that their health insurance plans are being canceled because they do not comply with the ACA’s reforms. President Obama has received criticism that these cancelations go against his assurances that if consumers have a plan that they like, they can keep it. Both Republican and Democrat members of Congress have been advocating changes to the ACA to resolve the cancelation issue.

Responding to pressure from consumers and Congress, on Nov. 14, 2013, President Obama announced a new transition policy for 2014. Under the new policy, individuals and small businesses whose coverage has been canceled (or would be canceled) because it does not meet the ACA’s standards may be able to re-enroll or stay on their coverage for an additional year.

However, this one-year reprieve may not be available to all consumers. Because the insurance market is primarily regulated at the state level, state governors or insurance commissioners will have to allow for the transition relief. Also, health insurance issuers are not required to follow the transition relief and renew plans, and have expressed concern that the change could disrupt the new risk pool under the federal and state Health Insurance Marketplaces.

Transition Relief Policy

The Department of Health and Human Services (HHS) outlined the transition policy in a letter to state insurance commissioners.

For 2014, health insurance issuers may choose to continue coverage that would otherwise be terminated or canceled due to the ACA’s reforms, and affected individuals and small business may choose to re-enroll in the coverage.

Under this transitional policy, health insurance coverage in the individual or small group market that is renewed for a policy year starting between Jan. 1, 2014, and Oct. 1, 2014 (and associated group health plans of small businesses), will not be considered to be out of compliance with specified ACA reforms if certain conditions are met.

According to HHS, it will consider the impact of the transition relief in assessing whether to extend it beyond the specified timeframe.

The transitional relief is not available to grandfathered plans because these plans are not subject to most of the ACA’s market reforms. According to President Obama, the transition relief is an extension of the grandfathered plan rules to additional health insurance policies.

Specified ACA Reforms

The specified ACA reforms subject to the transition relief are the following reforms that are scheduled to take effect for plan years starting on or after Jan. 1, 2014:

  • Modified community rating standards;
  • Guaranteed availability and renewability of coverage;
  • Prohibition of pre-existing condition exclusions or other discrimination based on health status, except with respect to group coverage;
  • Nondiscrimination in health care;
  • Coverage for clinical trial participants; and
  • Coverage of the essential health benefits package.

Requirements for Transition Relief

The transition relief only applies with respect to individuals and small businesses with coverage that was in effect on Oct. 1, 2013. It does not apply with respect to individuals and small businesses that obtain new coverage after Oct. 1, 2013. All new plans must comply with the full set of ACA reforms.

Also, the health insurance issuer must send a notice to all individuals and small businesses that received a cancelation or termination notice with respect to the coverage (or to all individuals and small businesses that would otherwise receive a cancelation or termination notice with respect to the coverage).

Notice Requirements

The notice to individuals and small businesses must provide the following information:

  • Any changes in the options that are available to them;
  • Which of the specified ACA reforms would not be reflected in any coverage that continues;
  • Their potential right to enroll in a qualified health plan offered through a Marketplace and possibly qualify for financial assistance;
  • How to access such coverage through a Marketplace; and
  • Their right to enroll in health insurance coverage outside of a Marketplace that complies with the specified market reforms.

Where individuals or small businesses have already received a cancelation or termination notice, the issuer must send this notice as soon as reasonably possible.

Where individuals or small business would otherwise receive a cancelation or termination notice, the issuer must send this notice by the time that it would otherwise send the cancelation or termination notice.

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors. Dana is ACA certified and has helped clients develop the best strategies for their operations within the new healthcare legislation.

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The Unintended Consequences of the Affordable Care Act

For better or for worse, the Affordable Care Act is upon us. As more and more of its details get released and as businesses like yours start to make adjustments to deal with its requirements, some unintended consequences are arising. Here are some of the problems that businesses are dealing with or will soon have to deal with.

Avoiding Applicable Large Employer Status

Not every business is subject to the Affordable Care Act and its provisions. As written for 2014, it only applies to companies with an average of 50 full-time equivalent employees. Furthermore, it defines full-time as an employee that works an average of 30 hours per week. This is leading to two consequences as businesses attempt to skirt its requirements:

  1. Companies are cutting full-time employee hours back, turning them into part-time employees that aren’t counted towards the Affordable Care Act’s 50 employee threshold.
  2. Part-time workers are having their hours cut back to ensure that they stay under the 30 hour limit.

It’s not clear yet what the long term consequences are of these cut backs, but this certainly stands out as a trend to watch in the coming year.

Potential Premium Increases Due to Adverse Selection

The nature of the individual insurance provisions and mandates of the Affordable Care Act create an incentive for healthy people to stay uninsured. First, the penalty for being uninsured is in many cases much less than the cost of insurance. Second, the requirement that exchange plans accept anyone at any time means that an uninsured person would only need to sign up at the instant that they need care. This process leads to the phenomenon of adverse selection, which refers to when only people that are bad risks choose to be insured. Since insurers will have a higher proportion of claims to premiums from their private business, they may have to compensate for the additional expenditures by raising premiums on their employer clients who pay all of the time.

Changes in Family and Spousal Coverage

As a result of the costs of complying with the Affordable Care Act, many companies are dropping coverage for spouses. While this, in and of itself, was an unintended consequence, it brings up a second set of challenges. If you employ one of the newly-uninsured spouses, you could find them coming to you, asking to be added to your workplace plan, if you offer one. This could generate more expense for you as an employer to pay the cost of their coverage.

Cancellation of State Small Business Insurance Assistance

Some states offer special plans that help their citizens or small businesses either defray the cost of health insurance or provide a basic level of insurance. If these programs aren’t compatible with the Affordable Care Act’s provisions, they can be cancelled. One example of this is Tennessee’s CoverTN plan, whose $25,000 annual benefit cap made it a perfect adjunct for businesses that offer low-cost, high deductible plans. It will be cancelled effective January 1, 2014.

Given that insurance from the Affordable Care Act exchanges hasn’t come into effect yet and that the mandates that apply to individuals and employers also aren’t fully operational, the true impacts of the bill remain to be seen. As of now, many unintended consequences for business have already been identified but if history is any indicator, more may be coming down the line as the law’s implementation grows.

 

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors. Dana is ACA certified and has helped clients develop the best strategies for their operations within the new healthcare legislation.

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Reinsurance Fees—Possible Exemption for Certain Self-insured Plans

The Affordable Care Act (ACA) creates a transitional reinsurance program to help stabilize premiums in the individual market for the first three years of Exchange operation (2014-2016) when individuals with higher-cost medical needs gain insurance coverage. The program imposes a fee on health insurance issuers and self-funded group health plans.

On Oct. 24, 2013, the Department of Health and Human Services (HHS) released an advance copy of a final rule  under the ACA. In the final rule’s preamble, HHS states that it intends to issue a proposed rule that would make the following changes to the reinsurance program:

  • Exempt certain self-insured, self-administered plans from the reinsurance fees for 2015 and 2016; and
  • Modify the collection deadlines for the fees to reduce the upfront burden to plans and issuers.

Reinsurance Fees

Contributions to the reinsurance program are required for health plans (fully insured and self-insured) that provide major medical coverage. Certain types of plans are exempt from the requirement to pay reinsurance fees, such as health flexible spending accounts (FSAs), health reimbursement arrangements (HRAs) that are integrated with major medical coverage, health savings accounts (HSAs) and coverage that consists solely of excepted benefits under HIPAA (for example, limited-scope dental and vision plans).

For insured health plans, the issuer of the health insurance policy is required to pay the reinsurance fees. For self-insured health plans, the plan sponsor is liable for paying the reinsurance fees, although a third-party administrator (TPA) or administrative-services only (ASO) contractor may be used to make the fee payment at the plan’s direction.

The reinsurance program’s fees are based on a national contribution rate. The reinsurance fee mainly consists of amounts collected to cover reinsurance payments and administrative costs, but it also includes funds that must be deposited into the general fund of the U.S. Treasury.

For 2014, the national contribution rate is $5.25 per month ($63 per year). The national contribution rates for 2015 and 2016 have not been established yet. The reinsurance fee is calculated by multiplying the number of covered lives (employees and their dependents) during the benefit year for all of the entity’s plans and coverage that must pay contributions, by the national contribution rate for the benefit year.

HHS has indicated that issuers and plan sponsors will be required to submit an annual enrollment count to HHS no later than Nov. 15 of 2014, 2015 and 2016 based on enrollment data from the first nine months of the year. Within 30 days of this submission or by Dec. 15, whichever is later, HHS will notify each issuer or plan sponsor of the amount of its required reinsurance contribution. The issuer or plan sponsor would be required to remit this amount to HHS within 30 days after the date of HHS’ notification.

Possible Changes

In the preamble to the final rule, HHS states that it intends to propose in future rulemaking to exempt certain self-insured, self-administered plans from the requirement to make reinsurance contributions for the 2015 and 2016 benefit years. At this point, it is not clear which self-insured plans will be covered by the proposed exemption. However, it appears that self-insured plans will be required to pay the reinsurance fees for the 2014 benefit year.

HHS also intends to issue a proposed rule that would change the collection method for the reinsurance fees. Under the revised collection method, the fees would be collected in two installments to reduce the upfront burden to plans and issuers. The fee for reinsurance payments and administrative expenses would be collected at the beginning of the year and the fee for payments to the U.S. Treasury would be collected at the end of the year. Under this payment schedule, a larger payment would be due in January 2015 and a smaller one would be due in December 2015 for the 2014 reinsurance fee.

These changes will not become effective until HHS issues additional guidance.

More Information

Contact your Texas Associates Insurors representative for more information on the ACA’s reinsurance fees.

 

 

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors. Dana is ACA certified and has helped clients develop the best strategies for their operations within the new healthcare legislation.

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Small Employer Tax Credit Changes for 2014

The small employer tax credit was created in 2010 upon the passage of the Affordable Care Act. Next year, a few key aspects of the tax credit will change.

For 2014 and later taxable years, the maximum credit increases to 50 percent of premiums paid for taxable small employers and 35 percent of premiums paid for tax-exempt small employers. But those credit percentages are based on the average premium in the small group market in the rating area where employees sign up, instead of the specific premium chosen by employees.

Also beginning in 2014, the health care tax credit is only available to an employer for two consecutive taxable years, and cannot start before the 2014 taxable year. Finally, the new rules require employers to obtain group coverage through an Exchange to claim the credit.

Please contact Texas Associates Insurors for more information on the small employer tax credit.

 

 

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors.

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New ACA Guidance on HRA’s, FSA’s, and Cafeteria Plans

On Sept. 13, the Internal Revenue Service (IRS) and the Department of Labor (DOL) issued guidance on how certain Affordable Care Act (ACA) rules apply to health reimbursement arrangements (HRAs), health flexible spending accounts (FSAs) and cafeteria plans.

Under the new guidance, a group health plan, including an HRA, used to purchase coverage on the individual market cannot be integrated with that individual market coverage for purposes of the ACA’s annual dollar limit or preventive services requirements. This means that an HRA will need to be integrated with another group health plan to satisfy these rules.

Health FSAs must be offered through a cafeteria plan to be exempt from the annual limit prohibition. Also, health FSAs must qualify as “excepted benefits” to meet the preventive services requirements.

Finally, beginning in 2014, premiums for individual coverage through an Exchange cannot be reimbursed or paid for under a cafeteria plan.

For cafeteria plans that do not operate on a calendar-year plan year (as of Sept. 13, 2013), this restriction will apply beginning with the 2014 plan year. However, individuals may not claim a premium tax credit for any month in which they are covered by an individual plan purchased through an Exchange as a benefit under a cafeteria plan.

The guidance applies for plan years beginning on or after Jan. 1, 2014, but can be applied for all prior periods. For additional information, please consult the following resources:

 

Dana Rostro is the Director of Employee Benefits Sales and Operations at Texas Associates Insurors.

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