IRS CONFIRMS ACA MANDATE PENALTIES STILL EFFECTIVE

OVERVIEW

The Internal Revenue Service (IRS) Office of Chief Counsel has recently issued several information letters regarding the Affordable Care Act’s (ACA) individual and employer mandate penalties. These letters clarify that:

  • Employer shared responsibility penalties continue to apply for applicable large employers (ALEs) that fail to offer acceptable health coverage to their full-time employees (and dependents); and
  • Individual mandate penalties continue to apply for individuals that do not obtain acceptable health coverage (if they do not qualify for an exemption).

These letters were issued in response to confusion over President Donald Trump’s executive order directing federal agencies to provide relief from the burdens of the ACA.

ACTION STEPS

These information letters clarify that the ACA’s individual and employer mandate penalties still apply. Individuals and ALEs must continue to comply with these ACA requirements, including paying any penalties that may be owed.

Background

The ACA’s employer shared responsibility rules require ALEs to offer affordable, minimum value health coverage to their full-time employees or pay a penalty. These rules, also known as the “employer mandate” or “pay or play” rules, only apply to ALEs, which are employers with, on average, at least 50 full-time employees, including full-time equivalent employees (FTEs), during the preceding calendar year. An ALE may be subject to a penalty only if one or more full-time employees obtain an Exchange subsidy (either because the ALE does not offer health coverage, or offers coverage that is unaffordable or does not provide minimum value).

The ACA’s individual mandate, which took effect in 2014, requires most individuals to obtain acceptable health insurance coverage for themselves and their family members or pay a penalty. The individual mandate is enforced each year on individual federal tax returns. Individuals filing a tax return for the previous tax year will indicate, by checking a box on their individual tax return, which members of their family (including themselves) had health insurance coverage for the year (or qualified for an exemption from the individual mandate). Based on this information, the IRS will then assess a penalty for each nonexempt family member who doesn’t have coverage.

On Jan. 20, 2017, President Trump signed an executive order intended to “to minimize the unwarranted economic and regulatory burdens” of the ACA until the law can be repealed and eventually replaced. The executive order broadly directs the Department of Health and Human Services and other federal agencies to waive, delay or grant exemptions from ACA requirements that may impose a financial burden. However, the executive order does not include specific guidance regarding any particular ACA requirement or provision, and does not change any existing regulations.

IRS Information Letters

Office of Chief Counsel issued a series of information letters clarifying that the ACA’s individual and employer mandate penalties continue to apply.

  • Letter numbers 2017-0010 and 2017-0013 address the employer shared responsibility rules.
  • Letter number 2017-0017 addresses the individual mandate.
According to these letters, the executive order does not change the law. The ACA’s provisions are still effective until changed by Congress, and taxpayers are still required to follow the law, including paying any applicable penalties.

More Information

For additional information on the ACA Executive Order and the current tax filing season, please visit www.irs.gov/tax-professionals/aca-information-center-for-tax-professionals.

Click Here to Download the Full Article: IRS Confirms ACA Mandate Penalties Still Effective 8-3-17-1

Snapchat “Snap Map” Safety

What is Snap Map?

Introduced in a June 2017 update, Snap Map allows users to share their exact location with friends within the Snapchat app. Snap Map gathers location data using a smartphone’s GPS sensor and displays the time of day an individual is at a specific location and his or her speed of travel. This information is shown on a map that can be accessed when a user first opens Snapchat and pinches the screen to zoom out.

While Snapchat users can choose to share their location with selected friends, any posts users share on Snapchat’s “Our Story” feature will appear on the global map regardless of their privacy or location settings.

Concerns

Broadcasting one’s personal location might seem harmless, but there are potentially dangerous implications for your organization. Consider that many employees might use this feature in a way that compromises your business and take steps to mitigate this risk.

Inventory Protection

Employees shouldn’t use social media to post when they’re leaving for vacation, as this could leave their home vulnerable to robbery. The same risks are at play if employees use Snap Map to advertise their absence from work. Malicious individuals could seize the opportunity to steal or otherwise damage company property because they know it is unattended.

Company Perception

Employees who post on social media during business hours have tremendous control over your company’s reputation. Their thoughts and opinions are projected through the lens of the company, since they are on company—not personal—time. Even if employees do not mention your organization, their physical locations will be broadcast, offering that information anyway. Likewise, anywhere employees travel will be broadcast when they post, which could be compromising if they go to places that could make the company look bad.

Setting Expectations

Employees should be reminded of your company’s social media policy. Clearly lay out your organization’s expectations in the policy and communicate the potential dangers of this new social media feature.

User Tip

Share the following tip with employees or consider including it in your company’s social media policy.

  • Edit location settings. Click the gear icon in the Snapchat app. From there, scroll down to the “See My Location” tab and turn on “Ghost Mode.” This will prevent others from seeing your location.
Did You Know?
Snapchat is one of the top five social media platforms among young people, with approximately 150 million daily active users. While Snapchat is designed to be a fun photo, video and text messaging app, a number of features—particularly the Snap Map function—pose serious safety concerns.

For more information on how to protect your business on social media, contact Clark & Associates of Nevada, Inc. today.

Click Here for the full article on Snapchat Safety

Hiring Youth Workers

Youth Workers

Hiring youth workers—many times to fill seasonal positions—can be an integral component to your organization’s hiring plan. Early work experience can also be a great opportunity for teenagers to learn important skills.

To promote positive and safe work experiences, the U.S. Department of Labor (DOL) has a series of regulations relating to the employment of minors. These provisions are designed to protect young workers by restricting the types of jobs that they perform and the number of hours they work. It is important to follow all federal, state and local laws regarding the employment of minors to ensure that your business remains compliant and protects its reputation.

Listed below are some age-specific workforce regulations, as presented by the DOL’s YouthRules! initiative.

Rules for Workers Under 14 Years of Age

In general, youth workers who are under the age of 14 are limited on what type of jobs they can do. Workers who are under 14 years of age are only permitted to do the following jobs:

  • Deliver newspapers to customers
  • Babysit on a casual basis
  • Work as an actor or actress in movies, TV, radio or theater
  • Work as a homeworker gathering evergreens or making evergreen wreaths
  • Work for a business owned entirely by their parents as long as it is not in mining, manufacturing or any of the 17 hazardous occupations

There are different rules in place for minors in this age group who work in agriculture. States also have specific rules for youth workers under 14 years old, and employers must follow both.

Rules for Workers 14 to 15 Years of Age

Similar to workers under 14 years of age, youth workers who are 14 to 15 years old are limited on what types of jobs they can do and what hours they can work.

Job Restrictions

In general, youth workers within this age range are only permitted to do certain jobs, which include the following:

  • Work an approved retail position
  • Work an intellectual or creative position, such as computer programming, teaching, tutoring, singing, acting or playing an instrument
  • Run errands or complete delivery work by foot, bicycle and public transportation
  • Complete cleanup and yard work that does not include using power-driven mowers, cutters, trimmers, edgers or similar equipment
  • Work in connection with cars and trucks, such as dispensing gasoline or oil and washing or hand polishing
  • Work in a kitchen or the food serviceindustry reheating food, washing dishes, cleaning equipment or doing some limited cooking
  • Clean vegetables and fruits, wrap, seal, label, weigh pricing and stock items as long as these tasks are performed in areas separate from a freezer or meat cooler
  • Load or unload objects for use at a worksite including rakes, hand-held clippers and shovels

Additionally, 14- and 15-year-olds who meet certain requirements can perform limited tasks in sawmills and woodshops, and 15-year-olds who meet certain requirements can perform lifeguard duties at traditional swimming pools and water amusement parks.

If an occupation is not specifically permitted, it is prohibited for youth between the ages of 14 and 15.

Working Hour Restrictions

Workers who are 14 to 15 years old are also limited in what hours they can work. Generally, all work must be performed outside of school hours. In general, youth in this age range may not work the following:

  • More than three hours on a school day, including Friday
  • More than 18 hours per week when school is in session
  • More than eight hours per day when school is not in session
  • More than 40 hours per week when school is not in session
  • Before 7 a.m. or after 7 p.m. on any day, except from June 1 through Labor Day, when nighttime work hours are extended to 9 p.m.

A “school day” or “school week” for youth workers who are home schooled, attend private school or no school, is any day or week when the public school where they live while employed is in session. There are some exceptions to the hours standards for 14- and 15-year-olds if they have graduated from high school, are excused from compulsory school attendance, or are enrolled in an approved work experience, career exploration program or work-study program. Click here for more information on hours restrictions for youth workers in this age group.

Wage Requirements

In most cases, 14- and 15-year-olds must be paid the federal minimum wage, $7.25 per hour. Minimum wage eligibility varies depending on the type of job and location. Additionally, workers who are younger than 20 and eligible for the minimum wage may be paid as little as $4.25 per hour for the first 90 consecutive calendar days of their employment.

There are different rules for 14- and 15-year-olds working in agriculture and states also have rules, and employers must follow both.

Rules for Workers 16 to 17 Years of Age

Although there are no federal rules limiting the hours 16- and 17-year-olds may work, there are restrictions on the types of jobs they can do.

Job Restrictions

Workers who are 16 to 17 years old may work any job that has not been declared hazardous by the Secretary of Labor. Visit the YouthRules! webpage on workplace hazards for more information on banned occupations for workers under 18 years of age.

Wage Requirements

In most cases, 16- and 17-year olds must be paid the federal minimum wage, $7.25 per hour. Minimum wage eligibility varies depending on the type of job and location. Additionally, workers who are younger than 20 and eligible for the minimum wage may be paid as little as $4.25 per hour for the first 90 consecutive calendar days of their employment.

There are different rules for 16- and 17-year-olds working in agriculture and states also have rules, and employers must follow both.

Rules for Workers 18 Years of Age and Older

Once a youth worker turns 18, most youth work rules no longer apply. There are no limits to the number of hours or types of jobs an 18-year-old can work.

Wage Requirements

In most cases, 18-year-olds must be paid the federal minimum wage, $7.25 per hour. Minimum wage eligibility varies depending on the type of job and location. Additionally, workers who are younger than 20 and eligible for the minimum wage may be paid as little as $4.25 per hour for the first 90 consecutive calendar days of their employment. States also have rules, and employers must follow both.

Summary

Federal and state rules regarding young workers strike a balance between ensuring sufficient time for educational opportunities and allowing appropriate work experiences. Complying with these rules ensures that your organization is providing a safe work environment for teen workers to obtain appropriate early work experience.

 

Source: YouthRules! and the DOL

Click Here to Download the Article: Youth Workers

LIVE WELL WORK WELL – Surviving the Heat

SURVIVING THE SUMMER HEAT

Summer heat can be more than uncomfortable—it can be a threat to your health, especially for older adults and children. Whatever your age, do not let the summer heat get the best of you.

Heat Exhaustion

Heat exhaustion occurs when a person cannot sweat enough to cool the body, usually the result of not drinking enough fluids during hot weather. It generally develops when a person is playing, working, or exercising outside in extreme heat. Here are some symptoms:

  • Dizziness, weakness, nausea, headache and vomiting
  • Blurry vision
  • Body temperature rising to 101°F
  • Sweaty skin
  • Feeling hot and thirsty
  • Difficulty speaking

A person suffering from heat exhaustion must move to a cool place and drink plenty of water.

Heat Stroke

Heat stroke is the result of untreated heat exhaustion. Here are some symptoms:

  • Sweating
  • Unawareness of heat and thirst
  • Body temperature rising rapidly to above 101°F
  • Confusion or delirium
  • Loss of consciousness or seizure

Heat stroke is a serious medical emergency that must be treated quickly by a trained professional. Until help arrives, cool the person down by placing ice on the neck, armpits and groin. If the person is awake and able to swallow, give him or her fluids.

Tips for Staying Cool

Below are some tips for staying safe in the heat:

  • Drink plenty of waterIn hot weather, drink enough to quench your thirst. The average adult needs eight 8-ounce glasses of water a day—more during heat spells.
  • Dress for the weatherWhen outside, wear lightweight clothing made of natural fabrics and a well-ventilated hat.
  • Stay inside if possibleDo errands and outside chores early or late in the day.
  • Eat lightReplace heavy or hot meals with lighter, refreshing foods.
  • Think cool! Take a cool shower or apply a cold compress to your pulse points. Try spending time indoors at an air-conditioned mall or movie theater.

Click Here to download Surviving the Summer Heat

Electronic Distribution of ERISA Disclosures

Click Here to download the full document: Electronic Distribution of ERISA Disclosures

Department of Labor (DOL) regulations contain a safe harbor under which employee plans may use electronic means to distribute certain documents and other information required under the Employee Retirement Income Security Act of 1974 (ERISA). For example, summary plan descriptions (SPDs), summaries of material modifications (SMMs), summary annual reports (SARs), COBRA notices, qualified domestic relations orders (QDROs) and qualified medical child support orders (QMCSOs) can all be distributed electronically if certain conditions are met.

The Affordable Care Act (ACA) created additional disclosure requirements for group health plans and employers, such as the summary of benefits and coverage (SBC) and a notice about the ACA’s health insurance Exchanges (Exchange Notice). The SBC and the Exchange Notice may be distributed electronically if certain requirements are met.
This Compliance Overview provides general information regarding electronic disclosure requirements for ERISA plans.

What type of disclosures can a plan administrator send electronically?

The DOL’s safe harbor regulations allow plan administrators to electronically send disclosures required under Title I of ERISA. These disclosures include:

SPDs and SMMs QDRO and QMCSO notices
COBRA notices SARs

Also, employers that satisfy the DOL’s safe harbor requirements may distribute the Exchange Notice electronically. As described in more detail below, a different set of rules applies for electronic distribution of the SBC to participants and beneficiaries. In general, these rules make it fairly simple for the SBC to be provided electronically to participants and beneficiaries in connection with their online enrollment or online request for an SBC.

The requirements for sending documents electronically do not change any standards regarding who is entitled to a disclosure, the content of the disclosure or the timing of the disclosure.

DOL safe harbor for electronic disclosure

May plan administrators electronically distribute ERISA disclosures to all recipients?

The regulations contain guidelines for providing disclosures to: (1) employees with work-related computer access; and (2) other plan participants and beneficiaries who consent to receive disclosures electronically.

Employees with Work-related Computer Access

ERISA disclosures may be delivered electronically to employees that:

  • Have the ability to effectively access documents furnished in electronic form at any location where the employees are reasonably expected to perform their duties; and
  • Are expected to have access to the employer’s electronic information system as an integral part of those duties.

Merely providing employees with access to a computer in a common area (for example, a computer kiosk) is not a permissible means to electronically furnish ERISA-required documents.

Beneficiaries and Other Plan Participants Who Consent to Receive Disclosures Electronically

A plan administrator must obtain written consent prior to electronically delivering ERISA disclosures to beneficiaries and other plan participants who do not have work-related access to a computer. The consent may be received in either electronic or paper form.

Prior to consenting, an individual must be given a clear and conspicuous statement that explains:

  • The types of documents to which the consent will apply;
  • That consent can be withdrawn at any time without charge;
  • The procedures for withdrawing consent and for updating the address used for receipt of electronically furnished documents;
  • The right to request and obtain a paper version of an electronically furnished document, including whether the paper version will be provided free of charge; and
  • Hardware or software needed to access and retain the documents delivered electronically.

Where the electronic distribution is made through the internet, the individual must affirmatively consent in a manner that reasonably demonstrates his or her ability to access information in the electronic form that would be used.

If the plan administrator changes its hardware or software requirements, it must provide a new notice and obtain new consent.

What General Disclosure requirements apply to all electronic disclosures?

Plan administrators are required to use measures reasonably calculated to ensure actual receipt of the material by plan participants and beneficiaries. The regulations provide some guidance on what measures are reasonably calculated to ensure actual receipt when electronic delivery is used.

Notice

A notice must be sent either electronically or in paper form to each plan participant or beneficiary at the time the document is provided electronically.

The notice must: ·     Indicate the significance of the document when it is not otherwise reasonably evident as transmitted; and

·     Explain the participant’s right to request a paper copy.

Confirmation of Receipt

The plan administrator must make use of electronic mail features such as return-receipt or notice that the email was not delivered. The plan must also conduct periodic reviews to confirm receipt of the transmitted information.

Confidentiality

When personal information pertaining to an individual’s benefits or accounts is transmitted electronically, steps must be taken to protect the confidentiality of the information.

Style, Format and Content Requirements

Documents delivered electronically must continue to be furnished in a manner consistent with the applicable style, format and content requirements contained within ERISA. For example, summary plan descriptions provided electronically must contain all the disclosures otherwise required by ERISA’s disclosure requirements. The DOL has indicated that the appearance of paper and electronic versions need not be identical.

Paper Copy

Plan participants and beneficiaries are entitled to receive a paper copy of any ERISA disclosure provided electronically. Where a plan participant or beneficiary requests a paper copy of a document originally provided electronically, the general rules governing whether a plan administrator may or may not charge for paper copies apply.

Can benefit and claim determinations be provided electronically?

Yes. The regulations provide that benefit and claims determinations related to a specific individual may be communicated electronically to that individual. However, where the information contained within the communication is confidential in nature or protected health information subject to the HIPAA Privacy Rules, the plan administrator must take appropriate and necessary steps to ensure that the information remains confidential.

What forms of electronic disclosure are permissible?

The regulations do not require the use of any specific form of electronic media. Examples of permissible forms of electronic disclosure include delivery of documents by email, attachment to an email, or posting documents on a company website.

May a plan administrator electronically deliver ERISA notices by placing the information on a company website?

Under the guidelines contained within the regulations, merely placing an SPD on a company website available to employees will not by itself satisfy ERISA’s disclosure requirements. The plan administrator must also send a notice, either electronically or in paper form, that notifies the employee that the SPD is available on the website.

A plan administrator that intends to distribute SPDs, SMMs and SARs electronically might do the following:

  • Post SPDs, SMMs and SARs on a company website available to all employees;
  • Obtain consent to electronically deliver SPDs, SMMs and SARs from employees and COBRA participants who do not have regular work-related computer access. For example, employees working for a manufacturer in the plant may agree to access the website from their home computers;
  • Send an email notice to all employees who have work-related computer access or who have provided consent each time an SPD, SMM or SAR is posted on the website, using email features such as return receipt and notice of non-delivery;
  • Continue to provide in paper form copies of SPDs, SMMs and SARs to employees who do not have regular work-related computer access and who have not provided consent; and
  • Continue to provide in paper form copies of SPDs, SMMs and SARs upon request free of charge.

Note: The plan administrator is generally not required to distribute SPDs, SMMs or SARs to each beneficiary under the plan. Therefore, the plan administrator is not required to obtain consent from each beneficiary under the plan (for example, spouses and dependent children).

May a plan administrator electronically deliver COBRA notices by placing the information on a company website or sending them via email?

Yes, the rules allow plan administrators to provide COBRA notices electronically.

However, because COBRA notices must be provided via first-class mail to the home address where a spouse or dependent is also covered under the plan, the plan administrator must obtain consent from the spouse or dependent before delivering COBRA notices electronically. Therefore, providing COBRA notices electronically may not be as practical as electronically delivering SPDs, SMMs or SARs.

Do special rules apply to the SBC?

The SBC must be provided by a group health plan or issuer to participants and beneficiaries in connection with enrollment and renewal and upon request. It may be provided in either paper or electronic form (such as by email or an internet posting). The requirements for electronic delivery of the SBC generally depend on whether the SBC is provided in connection with an online enrollment or under other circumstances.

Also, the uniform glossary is a separate document that is a companion to the SBC. The SBC must include an internet address for obtaining the uniform glossary, a contact phone number to obtain a paper copy of the uniform glossary and a disclosure that paper copies are available.

Online Enrollment

On June 16, 2015, the DOL and the Departments of Health and Human Services and the Treasury (Departments) published new final regulations on the SBC. These final regulations adopt a safe harbor for the electronic delivery of the SBC in connection with online enrollment. The Departments first adopted this safe harbor in 2012 through a series of Frequently Asked Questions (FAQs) on ACA implementation.

Under this safe harbor, the SBC may be provided electronically to participants and beneficiaries in connection with their online enrollment or online renewal of coverage under the plan. SBCs also may be provided electronically to participants and beneficiaries who request an SBC online. In either case, the individual must have the option to receive a paper copy upon request.

Other Circumstances

If the online enrollment safe harbor does not apply, the final regulations contain two rules for electronic distribution of the SBC. These rules may apply, for example, if a plan does not have an online enrollment system or if the plan allows paper or telephone enrollment in addition to online enrollment.

Individuals Covered under the Plan

The SBC may be delivered electronically to participants and beneficiaries who are already covered under the group health plan if the DOL’s safe harbor for electronic disclosure is satisfied.

Eligible Individuals Not Enrolled

For participants and beneficiaries who are eligible but not enrolled for coverage, the SBC may be provided electronically if:

  • The format is readily accessible;
  • The SBC is provided in paper form, free of charge, upon request; and
  • If the electronic form is an internet posting, the plan or issuer timely notifies the individual in paper form (such as a postcard) or email that the documents are available on the internet, provides the internet address and notifies the individual that the documents are available in paper form upon request.

In the 2012 FAQs, the Departments provided, as an example, the following language to meet the requirement to provide a postcard or an email to inform employees of the SBC’s availability. Plans have flexibility with this language and may choose to tailor it in many ways.

Clark & Associates provides these services at no extra charge to our valued clients, saving employers valuable time and money.

Please call us at 775-828-7420 or contact us if you have any questions pertaining to ERISA docs or compliance.

 

House Passes Changes to Overtime Rules

Click Here to download the full article: House Passes Change to Overtime Rules

OVERVIEW
On May 2, 2017, the House of Representatives passed the Working Families Flexibility Act (also known as H.R. 1180). If approved, H.R. 1180 would authorize private employers to offer compensatory time instead of overtime pay for nonexempt employees who work more than 40 hours per week. H.R. 1180 still needs approval from the Senate and the executive branch before it becomes law.
Compensatory time off is already a common practice for many federal and state employers, but it is not currently allowed by the Fair Labor Standards Act (FLSA) for private employers. H.R. 1180 would amend the FLSA to allow this practice, if certain conditions are met.
ACTION STEPS
Because H.R. 1180 is not yet law, no action steps are currently required of any employers.
This Compliance Bulletin is provided for informational purposes only, to assist employers in understanding the changes H.R. 1180 would bring to current overtime compensation practices in the private sector.

Compensatory Time Off
Currently, the FLSA requires employers in the private sector to pay overtime wages to nonexempt employees for all hours of overtime worked. If approved, H.R. 1180 would amend the FLSA to allow private sector employers to provide either overtime pay or compensatory time off to nonexempt employees who work overtime hours.
H.R. 1180 is proposing that compensatory time off be calculated at the rate of 1.5 hours of compensatory time off for every hour of overtime work. As it stands, H.R. 1180 would expire within five years of its enactment. In addition, the bill would limit the amount of compensatory time off eligible employees may receive to 160 hours.
H.R. 1180 would only apply to private sector employers, meaning that if it were to be adopted, it would not affect current compensatory time off requirements for public sector employees.
Voluntary Agreement and Usage
Under H.R. 1180, both employers and employees would have to agree to compensatory time off instead of overtime wages. In unionized environments, compensatory time off would have to be allowed by any applicable collective bargaining agreement. The agreement would need to be preserved in writing and take place before any compensatory time off begins to accrue.
Finally, the language of H.R. 1180 would prohibit employers from coercing or forcing employees to agree to receive or use compensatory time off instead of overtime wages. This means that employers would not be allowed to directly or indirectly intimidate, threaten or coerce (or attempt to intimidate, threaten or coerce) employees to agree to receive or use any accrued compensatory time off.
Eligibility
Under H.R. 1180, employees would be eligible to receive compensatory time off after 1,000 hours of continuous employment during the previous 12 months.
Payment for Unused Compensatory Time
H.R. 1180 would require employers to allow employees to use any earned compensatory time off within a reasonable period, as long as this does not unduly disrupt the employer’s operations.
However, employers would be required to provide monetary compensation to their employees for any compensatory time off that is not used by the end of the calendar year, although employers would be able to determine a different 12-month period as long as it remains consistent.
Unused compensatory time would need to be paid at a rate that would at least be equal to the employee’s regular wage rate. The employee’s regular rate would be the higher of:
The regular wage rate at the time the overtime work was performed; or
The regular wage rate at the time the unused compensatory time off must be paid.
Payment for unused compensatory time off would be required within a month of the end of the 12-month period.
More Information
We will continue to monitor the progress of this bill through the legislative process and update you as more information becomes available. In the meantime, contact Clark & Associates of Nevada, Inc. for more information regarding the FLSA and overtime wage payment requirements at 775-828-7420 or email us with your questions or concerns.

 

Specialty Drug Benefits Overview

Specialty drugs (or specialty pharmaceuticals) are the most expensive prescriptions you can buy—around $1,000 or more per month. Unfortunately, they are also the only option for many people who have complex, and otherwise untreatable, conditions.

What are Specialty Drugs?

Specialty drugs are expensive prescription medications that are used to treat chronic, complex conditions. Individuals suffering through cancer, multiple sclerosis or rheumatoid arthritis might be prescribed a specialty drug.

Special handling—like refrigeration and supervised injections—is often required for these medications, contributing to the high costs. Patients who need a specialty drug are usually monitored before and after it is administered to check for side effects and treatment progress.

 

 

Are Specialty Drugs Covered?

Whether a specialty drug is covered depends on your benefits plan. A

specialty drug could be covered under medical or prescription drug insurance. How the drug is administered often determines which benefit covers the medication. For instance, self-injections at home might place it under prescription drug insurance, whereas supervised injections in a clinic might place it under medical insurance.

What Do I Pay?

Specialty drug costs are steadily rising and projected to reach around $400 billion by 2020, according to UnitedHealth Group. In 2016, the United States spent about $121 billion on specialty drugs. Similarly, specialty drug spending is predicted to surpass traditional pharmacy spending by 2018, according to the National Business Group on Health (NBGH).

Specialty drug costs are steadily rising and projected to reach around $400 billion by 2020.

Due to the high costs of these prescriptions, many benefit plans include a separate tier for specialty drugs. The tier specifies how much an individual must pay for the specialty medication. For instance, the specialty drug tier would differ from what you pay for normal prescriptions. Your plan will determine if you pay a flat copay or a percentage of the specialty drug costs.

Where Can I Find Help?

Your doctor is the first person you should speak with regarding lower specialty drug costs. It is possible there are more affordable alternatives to your prescription or there is an option that would treat multiple conditions.

If you have any questions about your specialty prescriptions being covered under your benefits plan, please speak with HR or call us at 775-828-7420 to review your options.

Click Here for the Full Article: Specialty Drug Benefits Overview

IRS Announces HSA/HDHP Limits for 2018

OVERVIEW

On May 5, 2017, the Internal Revenue Service (IRS) released Revenue Procedure 2017-37 to announce the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2018. These limits include:

  • The maximum HSA contribution limit;
  • The minimum deductible amount for HDHPs; and
  • The maximum out-of-pocket expense limit for HDHPs.

These limits vary based on whether an individual has self-only or family coverage under an HDHP.

The IRS limits for HSA contributions and HDHP cost-sharing will all increase for 2018. The HSA contribution limits will increase effective Jan. 1, 2018, while the HDHP limits will increase effective for plan years beginning on or after Jan. 1, 2018.

ACTION STEPS

Because the cost-sharing limits for HDHPs (minimum deductible and maximum out-of-pocket) will change for 2018, employers that sponsor these plans may need to make plan design changes for plan years beginning in 2018. Also, if an employer communicates the HSA contribution limits to employees as part of the enrollment process, these enrollment materials should be updated to reflect the increased limits that apply for 2018.

HSA/HDHP Limits

The following chart shows the HSA/HDHP limits for 2018 as compared to 2017. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.

Type of Limit 2017 2018 Change
HSA Contribution Limit Self-only $3,400 $3,450 Up $50
Family $6,750 $6,900 Up $150
HSA Catch-up Contributions (not subject to adjustment for inflation) Age 55 or older $1,000 $1,000 No change
HDHP Minimum Deductible Self-only $1,300 $1,350 Up $50
Family $2,600 $2,700 Up $100
HDHP Maximum Out-of-pocket Expense Limit (deductibles, copayments and other amounts, but not premiums) Self-only $6,550 $6,650 Up $100
Family $13,100 $13,300 Up $200

Download the Full Article Here: IRS Announces HSA-HDHP Limits for 2018-1

HOUSE REPUBLICANS PASS AMENDED AHCA

OVERVIEW

On May 4, 2017, members of the U.S. House of Representatives voted 217-213 to pass the American Health Care Act (AHCA), after it had been amended several times. The AHCA is the proposed legislation to repeal and replace the Affordable Care Act (ACA).

The AHCA needed 216 votes to pass in the House. Ultimately, it passed on a party-line vote, with 217 Republicans and no Democrats voting in favor of the legislation. The AHCA will only need a simple majority vote in the Senate to pass.

If it passes both the House and the Senate, the AHCA would then go to President Donald Trump to be signed into law.

IMPACT ON EMPLOYERS

The AHCA will now move on to be considered by the Senate. It is likely that the Senate will make changes to the proposed legislation before taking a vote. The AHCA would only need a simple majority vote in the Senate to pass.

However, unless the AHCA is passed by the Senate and signed by President Trump, the ACA will remain intact.

Legislative Process

The AHCA is budget reconciliation legislation, so it cannot fully repeal the ACA. Instead it is limited to addressing ACA provisions that directly relate to budgetary issues—specifically, federal spending and taxation. A full repeal of the ACA must be introduced as a separate bill that would require 60 votes in the Senate to pass.

Since the AHCA was introduced, it has been amended several times. To address concerns raised by both Democrats and fellow Republicans, the House Republican leadership released amendments to the legislation on March 20, 2017, followed by a second set of amendments on March 23, 2017. On March 23, 2017, House leadership withdrew the AHCA before taking a vote. After the withdrawal, Republicans made additional amendments (the MacArthur amendments) to the AHCA, followed by a separate corrective amendment. A new House vote was scheduled for May 4, 2017, which resulted in a 217 to 213 vote to pass the AHCA.

The AHCA will now move on to be considered by the Senate. It is likely that the Senate will make changes to the proposed legislation before taking a vote. The AHCA would only need a simple majority vote in the Senate to pass. However, unless the AHCA is passed by the Senate and signed by President Trump, the ACA will remain intact.

ACA Provisions Not Impacted

The majority of the ACA would not be affected by the AHCA. The MacArthur amendments specifically maintain most of the ACA’s market reforms. For example, the following key ACA provisions would remain in place:

  • Cost-sharing limits on essential health benefits (EHBs) for non-grandfathered plans (currently $7,150 for self-only coverage and $14,300 for family coverage)
  • Prohibition on lifetime and annual limits for EHBs
  • Requirements to cover pre-existing conditions
  • Coverage for adult children up to age 26
  • Guaranteed availability and renewability of coverage
  • Nondiscrimination rules (on the basis of race, nationality, disability, age or sex)
  • Prohibition on health status underwriting

Age rating restrictions would also continue to apply, with the age ratio limit being revised to 5:1 (instead of 3:1), and states would be allowed to set their own limits. The MacArthur amendments also reinstate EHBs as the federal standard, eliminating a prior controversial amendment to the AHCA, although states may obtain waivers from these rules.

Repealing the Employer and Individual Mandates

The ACA imposes both an employer and individual mandate. The AHCA would reduce the penalties imposed under these provisions to zero beginning in 2016, effectively repealing both mandates (although they would technically still exist).

However, beginning with open enrollment for 2019, the AHCA would allow issuers to add a 30 percent late-enrollment surcharge to the premium cost for any applicants that had a lapse in coverage for greater than 63 days during the previous 12 months. The late-enrollment surcharge would be discontinued after 12 months.

Replacing Health Insurance Subsidies with Tax Credits

The ACA currently offers federal subsidies in the form of premium tax credits and cost-sharing reductions to certain low-income individuals who purchase coverage through the Exchanges. The AHCA would repeal both of these subsidies, effective in 2020, and replace them with a portable, monthly tax credit for all individuals that could be used to purchase individual health insurance coverage.

The AHCA would also repeal the ACA’s small business tax credit beginning in 2020. In addition, under the AHCA, between 2018 and 2020, the small business tax credit generally would not be available with respect to a qualified health plan that provides coverage relating to elective abortions.

State Waivers

The MacArthur amendments include an option for states to obtain limited waivers from certain federal standards, in an effort to lower premiums and expand the number of insured. Under this option, states could apply for waivers from the ACA’s EHB requirement and community rating rules, except that states could not allow rating based on:

  • Gender;
  • Age (except for reductions in the 5:1 ratio already included by the AHCA); or
  • Health status (unless the state established a high-risk pool or is participating in a federal high-risk pool).

To receive the waiver, states would need to attest that the purpose of the waiver is to reduce premium costs, increase the number of individuals with health coverage or advance another benefit to the public interest in the state (including guaranteed coverage for individuals with pre-existing condition exclusions).

State Stability Fund

The last set of corrective amendments to the AHCA establishes a Patient and State Stability Fund for 2018 through 2023. This fund is intended to provide an additional $8 billion to states that have applied for, and been granted, a waiver from community rating, as specified by the MacArthur amendments.

The funds would be required to be used in “providing assistance to reduce premiums or other out-of-pocket costs” of individuals who may be subject to an increase in their monthly premium rates because they:

  • Reside in a state with an approved waiver;
  • Have a pre-existing condition;
  • Are also uninsured because they have not maintained continuous coverage; and
  • Purchase health care in the individual market.

Enhancements to Health Savings Accounts (HSAs)

HSAs are tax-advantaged savings accounts tied to a high deductible health plan (HDHP), which can be used to pay for certain medical expenses. To incentivize use of HSAs, the AHCA would:

  • Increase the maximum HSA contribution limit: The HSA contribution limit for 2017 is $3,400 for self-only coverage and $6,750 for family coverage. Beginning in 2018, the AHCA would allow HSA contributions up to the maximum out-of-pocket limits allowed by law (at least $6,550 for self-only coverage and $13,100 for family coverage).
  • Allow both spouses to make catch-up contributions to the same HSA: The AHCA would allow both spouses of a married couple to make catch-up contributions to one HSA, beginning in 2018, if both spouses are eligible for catch-up contributions and either has family coverage.
  • Address expenses incurred prior to establishment of an HSA: Under the AHCA, starting in 2018, if an HSA is established within 60 days after an individual’s HDHP coverage begins, the HSA funds would be able to be used to pay for expenses incurred starting on the date the HDHP coverage began.

Relief from ACA Tax Changes

The AHCA would provide relief from many of the ACA’s tax provisions. The amendments made to the AHCA accelerated this relief by one year for most provisions, moving the effective dates for repeal up to 2017. The affected tax provisions include the following:

  • Cadillac tax: The ACA imposes a 40 percent excise tax on high cost employer-sponsored health coverage, effective in 2020. The AHCA would change the effective date of the tax, so that it would apply only for taxable periods beginning after Dec. 31, 2025.
  • Restrictions on using HSAs for over-the-counter (OTC) medications: The ACA prohibits taxpayers from using certain tax-advantaged HSAs to help pay for OTC medications. The AHCA would allow these accounts to be used for OTC purchases, beginning in 2017.
  • Increased tax on withdrawals from HSAs: Distributions from an HSA (or Archer MSA) that are not used for qualified medical expenses are includible in income and are generally subject to an additional tax. The ACA increased the tax rate on distributions that are not used for qualified medical expenses to 20 percent. The AHCA would lower the rate to pre-ACA percentages, beginning with distributions in 2017.
  • Health flexible spending account (FSA) limit: The ACA limits the amount an individual may contribute to a health FSA to $2,500 (as adjusted each year). The AHCA would repeal the limitation on health FSA contributions for taxable years beginning in 2017.
  • Additional Medicare tax: The ACA increased the Medicare tax rate for high-income individuals, requiring an additional 0.9 percent of wages, compensation and self-employment income over certain thresholds to be withheld. The AHCA would repeal this additional Medicare tax beginning in 2023.
  • Deduction limitation for Medicare Part D subsidy: The ACA eliminated the ability for employers receiving the retiree drug subsidy to take a tax deduction on the value of this subsidy. Effective in 2017, the AHCA would repeal this ACA change and reinstate the business-expense deduction for retiree prescription drug costs without reduction by the amount of any federal subsidy.

Beginning after Dec. 31, 2016, the AHCA would also repeal the medical devices excise tax, the health insurance providers fee and the fee on certain brand pharmaceutical manufacturers. The 10 percent sales tax on indoor tanning services would be repealed effective June 30, 2017, to reflect the quarterly nature of this collected tax. Finally, the AHCA would also reduce the medical expense deduction income threshold to 5.8 percent (lower than the pre-ACA level of 7.5 percent), beginning in 2017.

Modernize Medicaid

The AHCA would repeal the ACA’s Medicaid expansion, and make certain other changes aimed at modernizing and strengthening the Medicaid program. The amendments to the AHCA made a number of modifications to the proposed Medicaid changes. For example, the AHCA would provide enhanced federal payments to states that already expanded their Medicaid programs, and then transition Medicaid’s financing to a “per capita allotment” model starting in 2020, where per-enrollee limits would be imposed on federal payments to states. It would also allow states the option to implement a work requirement for nondisabled, nonelderly, nonpregnant adults as a condition for receiving Medicaid coverage.

The AHCA would also modernize Medicaid’s data and reporting systems, repeal the ACA’s disproportionate share hospital (DSH) cuts and make changes to the process for eligibility determinations.

Click Here to Download: Republicans Pass Amended AHCA 5-4-17

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MARKET STABILIZATION PROPOSED RULE ISSUED

OVERVIEW

On Feb. 15, 2017, the Department of Health and Human Services (HHS) issued a market stabilization proposed rule under the Affordable Care Act (ACA). The proposed rule includes new reforms intended to stabilize the individual and small group health insurance markets for the 2018 plan year.

Specifically, the rule proposes a variety of policy and operational changes to existing standards to stabilize the Exchanges, including changes to the annual open enrollment period and special enrollment periods.

ACTION STEPS

The proposed rule does not directly impact plans in the large group market. Instead, the proposed rule aims to stabilize the individual and small group health insurance markets in light of pending changes that may be made to the ACA.

If finalized, the changes made under the rule are proposed to be effective for the 2018 plan year.

Overview of the Proposed Rule

The market stabilization proposed rule for 2018 includes new reforms that are aimed at stabilizing the individual and small group health insurance markets. Specifically, this proposed rule would make changes to:

  • Special enrollment periods;
  • The annual open enrollment period;
  • Guaranteed availability;
  • Network adequacy rules;
  • Essential community providers; and
  • Actuarial value requirements.

The proposed rule also announces upcoming changes to the qualified health plan (QHP) certification timeline.

Open Enrollment Period for 2018

The rule proposes to shorten the upcoming annual open enrollment period for the individual market (for the 2018 plan year). Under a previous final rule, HHS established an open enrollment period for the 2018 plan year that runs from Nov. 1, 2017, through Jan. 31, 2018. However, that final rule sets a shortened open enrollment period for the 2019 and later plan years.

Under the proposed rule, this shortened open enrollment period would apply beginning with the 2018 plan year. Therefore, for the 2018 plan year, the open enrollment period would run from Nov. 1, 2017, through Dec. 15, 2017. This proposed change is intended to align the Exchanges with the employer-sponsored insurance market and Medicare, and help lower prices by reducing adverse selection.

Special Enrollment Period Pre-enrollment Verification

The proposed rule would expand pre-enrollment verification of eligibility to individuals who newly enroll through special enrollment periods (SEPs) in Exchanges using the federal platform. Previously, HHS allowed individuals to self-attest eligibility for most SEPs—and to enroll in coverage without further verification of eligibility—in an effort to minimize barriers for individuals to obtain coverage. However, this practice led to abuses of SEPs, allowing individuals to enroll in coverage that they would not otherwise qualify for.

To curb these abuses, the proposed rule would require HHS to conduct pre-enrollment verification of eligibility for all categories of SEPs for all new consumers in all Exchanges using the www.HealthCare.gov platform. According to HHS, this proposed change would help make sure that SEPs are available to all who are eligible for them, but will require individuals to submit supporting documentation—a common practice in the employer health insurance market. This is intended to help place downward pressure on premiums, curb abuses and encourage year-round enrollment.

Guaranteed Availability

The rule also proposes to address potential abuses of the ACA’s “guaranteed availability” rules, which require insurers to offer coverage to any eligible consumer who applies for coverage. HHS has previously interpreted this requirement to mean that an insurer cannot refuse enrollment to an individual even in cases where the individual has failed to pay outstanding premiums for any prior coverage. According to HHS, issuers have complained that some individuals are taking advantage of this provision by, for example, declining to make premium payments for coverage at the end of a benefit year, and then enrolling in new coverage for the next year, thereby avoiding having to pay outstanding premiums for the previous year’s coverage.

The proposed rule would attempt to curb these abuses by allowing an issuer to collect premiums for prior unpaid coverage before enrolling a patient in the next year’s plan with the same issuer. This is intended to incentivize patients to avoid coverage lapses.

Determining the Level of Coverage

The ACA requires QHPs offered through an Exchange to meet certain levels of actuarial value, referred to as “metal levels.” HHS regulations have allowed for a “de minimis” variation in the actuarial valuations used in determining the level of coverage of a plan to account for differences in actuarial estimates.

The proposed rule would make adjustments to the “de minimis” range used for determining the level of coverage, allowing a variation of -4/+2 percentage points (rather than +/- 2 percentage points) for all non-grandfathered individual and small group market plans that are required to comply with actuarial value. As a result, the proposed rule would provide greater flexibility to issuers in the actuarial value de minimis range to provide patients with more coverage options.

Network Adequacy

The proposed rule would provide greater flexibility to states in the review of QHPs. Under the proposed rule, HHS would defer to the states’ reviews in states with the authority and means to assess issuer network adequacy. According to HHS, states are best positioned to ensure their residents have access to high quality care networks.

Qualified Health Plan Certification Calendar

Finally, the proposed rule announces HHS’ intention to release a revised proposed timeline for the QHP certification and rate review process for the 2018 plan year. The revised timeline would provide issuers with more time to implement proposed changes that are finalized prior to the 2018 coverage year. Therefore, the revised timeline would give issuers flexibility to incorporate benefit changes and maximize the number of coverage options available to patients.

 

Source: U.S. Department of Health and Human Services,
Centers for Medicare & Medicaid Services

Click Here for the full article: Market Stabilization Proposed Rule Issued 2-20-17-1