Posts Tagged ‘Government’

Reform-Alert-Header-2014

Update to previous alert from July 26, 2013: Federal agencies release proposed rule on 90-day waiting period limitation

On Feb. 20, the Department of Labor (DOL), Internal Revenue Service (IRS) and the Department of Health and Human Services (HHS) jointly released both the final rule and proposed rule on 90-day waiting periods.

The final rule on waiting periods applies to plan years beginning on or after Jan. 1, 2015. For the 2014 plan year, compliance is based on the proposed rule from 2013, which states that group health plans (including grandfathered, non-grandfathered and self-funded plans) and group health insurance coverage issuers cannot apply a waiting period that exceeds 90 days.

The final rule maintains that eligibility conditions that are not based solely on the passage of time are generally acceptable unless designed to avoid compliance with the 90-day waiting period limitation.

  • If a group health plan conditions eligibility for health care on an employee regularly working a specified number of hours per period (or working full time), and it cannot be determined that a newly hired employee is reasonably expected to meet the required number of hours (or work full time), the health plan may take a reasonable period of time to determine whether the employee meets the plan’s eligibility conditions. A time period designed to determine whether such an employee meets the plan’s eligibility conditions is considered compliant with the 90-day waiting period limitation if coverage is made effective no later than 13 months from the employee’s start date plus, if the employee’s start date is not the first day of a calendar month, the time remaining until the first day of the next calendar month.

Health insurance issuers may rely on the eligibility information reported by employers (or other plan sponsors) and will not be considered in violation of the 90-day waiting period limitation if:

  • Issuers require plan sponsors to make a representation regarding the terms of any eligibility conditions or waiting periods imposed by plan sponsors before an individual is eligible to become covered under the terms of the plan (and requires plan sponsors to update this representation with any applicable changes); and
  • Issuers have no specific knowledge of the imposition of a waiting period that would exceed the permitted 90-day period.

All calendar days are counted beginning on the eligibility date, including weekends and holidays. Employee coverage must begin on or before the 91st day of eligibility.

Proposed rule on waiting periods and orientation periods
The proposed rule on orientation periods may be relied on for the 2014 plan year.

The proposed rule, issued in conjunction with the final 90-day waiting period rule, allows for a “reasonable and bona fide” employment-based orientation period of no more than one month.

During this time the employer and employee can evaluate whether the employment situation is satisfactory, and standard orientation and training processes begin.

The Proposed Rule may be relied on throughout 2014 and if a final rule is more restrictive, reasonable time for compliance will be provided.

More information can be found at:

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*Blue Cross Blue Shield of Michigan is not responsible for the content or practices of the destination website.
The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

Reform-Alert-Header-2014

On Feb. 10, the final regulations for the Employer Shared Responsibility provisions (also referred to as the “employer mandate”) under the Affordable Care Act were released by the Internal Revenue Service and Department of the Treasury.

These final regulations provide different types of safe harbors to employers in 2015, depending on the type of employer or plan offered. The triggers for the tax penalties also vary depending on the type and timing of the safe harbor option an employer may qualify for (and chooses to implement).

Key safe harbors for 2015 are outlined below:

Applicable large employers with 50 to 99 full-time equivalent employees may not be subject to the employer mandate requirements until the first day of their 2016 plan year.

An applicable large employer is not subject to tax penalties for any calendar month in 2015 (and for the portion of the 2015 plan year that falls in 2016 if it has a non-calendar plan year) if it meets all three major requirements and certifies that it qualifies for this safe harbor:

  1. An applicable large employer has at least 50 and no more than 99 full-time equivalent employees during 2014 so that it meets the workforce size requirements.
  2. There are no reductions to an employer’s workforce size or overall hours of service between Feb. 9, 2014 and Dec. 31, 2014.
    • However, reductions made due to “bona fide” business reasons are allowed. The regulations provide examples of “bona fide” reasons that include changes in the economic marketplace, sales of business divisions or other similar reasons.
  3. An applicable large employer must maintain the health coverage it previously offered between Feb. 9, 2014 through Dec. 31, 2015 (or on the last day of the 2015 plan year).

An employer will certify its eligibility requirements on designated IRS forms (1095-C for self-funded large employers and 1094-C for fully insured large employers) by Jan. 31, 2016. These forms have not yet been issued by the IRS.

Applicable large employers with calendar or non-calendar plan years and new employers may qualify for this safe harbor.

Percentage threshold to offer coverage is 70 percent for all applicable large employers

For all applicable large employers in 2015, including employers with 50 to 99 full-time equivalent employees that do not qualify for the safe harbor described earlier, the employer will be liable for tax penalties only if:

  1. The applicable large employer does not offer coverage to at least 70 percent of full-time employees and their dependents (unless the employer qualifies for the 2015 safe harbor for dependent coverage described later in this alert), and at least one of the full-time employees receives a premium tax credit to help pay for coverage on a Marketplace (Exchange); or
  2. The applicable large employer offers coverage to at least 70 percent of full-time employees and their dependents (unless the employer qualifies for the 2015 safe harbor for dependent coverage), but at least one full-time employee still receives a premium tax credit to help pay for coverage on a marketplace.
    • This may occur because the employer did not offer coverage to that employee or because the coverage that was offered to that employee was either unaffordable to the employee or did not provide minimum value.

This percentage threshold only applies for 2015. The percentage of employees that must be offered coverage to limit employer mandate liability increases from 70 to 95 percent in 2016.

Change in 2015 tax penalty calculation for employers with 100 or more full-time equivalent employees

An employer with 100 or more full time equivalent employees during 2014 is still subject to the tax penalty in 2015 for not offering health coverage to at least 70 percent (will increase to 95 percent in 2016) of its full-time employees and their dependents. This means a tax penalty will be assessed if the employer (a) does not provide health coverage at all, or (b) the employer does not offer coverage to at least 70 percent of its full-time employees and at least one full-time employee receives a premium tax credit on the Marketplace.

For 2015, this tax penalty calculation is different. The tax penalty will be calculated by subtracting 80 full-time employees (instead of 30):

  • 2015: Annual penalty calculation is $2,000 x (number of full-time employees minus 80)
  • 2016: Annual penalty calculation is $2,000 x (number of full-time employees minus 30)

This safe harbor is only available for each calendar month in 2015 (and for any months that fall in 2016 for a 2015 plan year). For example, a group with a July 1 plan year would be able to use the tax penalty calculation above for July 2015 through June 2016.

Applicable large employers with non-calendar year plans

An applicable large employer may receive relief from tax penalties for any month prior to the first day of the 2015 plan year if it meets the following requirements:

  1. Maintained a non-calendar plan year as of Dec. 27, 2012 and not changed its plan year after this date to begin later.
  2. Meets one of the following three tests:
    1. offers affordable coverage meeting minimum value requirements to its eligible employees (under the terms of the non-calendar plan as of Feb. 9, 2014) by the first day of the 2015 plan year
    2. covered at least 25 percent of all employees on any date between Feb. 10, 2013 through Feb. 9, 2014, or offered coverage to at least 33 percent of all employees during the most recent open enrollment period ending before Feb. 9, 2014
    3. covered at least 33 percent of its full-time employees as of any date between Feb. 10, 2013 through Feb. 9, 2014, or offered coverage to at least 50 percent of full-time employees during the most recent open enrollment period ending before Feb. 9, 2014
  3. Offers coverage to at least at least 70 percent of full-time employees and their dependents (unless the employer qualifies for the 2015 safe harbor for dependent coverage) as of the first day of the 2015 plan year.

Note that the relief does not apply to employees also eligible for or covered under a calendar year plan offered by the applicable large employer.

Dependent coverage safe harbor

Another safe harbor is available for applicable large employers with 2015 plan years where dependent coverage:

  1. Is not offered,
  2. Does not meet minimal essential coverage requirements, or
  3. Is offered to some, but not all, dependents

This applies to employers that take steps during 2015 (or the 2015 plan year) to extend coverage to dependents that were previously not offered coverage during the 2013 and/or 2014 plan years. This is not an option for employers that offered, but then dropped, dependent coverage during the 2013 and/or 2014 plan years.

Under the employer mandate a dependent is a biological and/or adopted child of an employee who has not reached age 26. This excludes foster children and stepchildren (only for the employer mandate). It also excludes an employee’s spouse being considered as a dependent.

Points for clarification

The employer shared responsibility provision does not apply to employers with less than 50 full-time equivalent employees.

Employers affected by the employer mandate are encouraged to seek their own legal counsel as each employer’s situation will be unique to the type of safe harbor that an employer may qualify for.

More information can be found at:

Additional guidance is pending.

 

*Blue Cross Blue Shield of Michigan is not responsible for the content or practices of the destination website.

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

Reform-Alert-Header

On Feb. 10, 2014, the Treasury Department and the Internal Revenue Service released final regulations for the Employer Shared Responsibility provisions (also referred to as the employer mandate) under the Affordable Care Act.
An applicable large employer that, for a calendar month, does not offer its full-time employees health coverage that is affordable and provides minimum value may be subject to the assessable payments (tax penalty) if a full-time employee enrolls for that month in a qualified health plan (QHP) through an Exchange and receives a premium tax credit.
These requirements were originally effective beginning Jan. 1, 2014, but in July 2013, the assessable payments were delayed by one year.
These final regulations issued yesterday provide additional transition relief to employers and clarify or confirm guidance that was been previously issued.
Who does this apply to?
In general, the employer mandate applies to applicable large employers with 50 or more full-time equivalent employees. However, there is a transition period that will phase in this requirement.
Starting on Jan. 1, 2015, the employer mandate will apply to applicable large employers with 100 or more full-time equivalent employees. In 2015, the mandated requirements will not apply to employers with fewer than 100 full-time equivalent employees.
In 2016, the employer shared responsibility provisions will apply to employers with 50 or more full-time equivalent employees.
Is there a phase-in period for the number of employees that must be covered to avoid an assessable payment?
Yes. In 2015, an applicable large employer potentially will be subject to a penalty if it does not cover at least 70 percent of its full-time equivalent employees.
In 2016, applicable large employers will be required to cover at least 95 percent of their full-time employees.
Is there a safe harbor for the requirement that employers offer coverage to employees’ dependents?
Yes. Employers that currently do not offer coverage to dependents (and did not offer coverage to dependents in 2013) are generally permitted to transition to offering such coverage in 2016.
When are these requirements effective?
Generally, the requirements are effective beginning on Jan. 1, 2015. For those applicable large employers with non-calendar plan years that begin after Jan. 1, 2015, the final rule includes a safe harbor that generally will make the mandate effective beginning with the first day of their 2015 plan year.
More information can be found at:
Internal Revenue Service FAQ*
Final regulations*
Treasury Department fact sheet*

*Blue Cross Blue Shield of Michigan is not responsible for the content or practices of the destination website.

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

Reform-Alert-Header

On Nov. 25, 2013, the Department of Health and Human Services (HHS) issued guidance proposing changes to the annual open enrollment period and the qualified health plan (QHP) certification deadlines for the 2015 benefit year.

For the 2015 benefit year, the proposed annual open enrollment period is Nov. 15, 2014 through Jan. 15, 2015:

Enroll by Dec. 15, 2014
For Coverage Effective January 1, 2015

Enroll December 16, 2014 through January 15, 2015
For Coverage Effective February 1, 2015

Qualified individuals already enrolled in a QHP through the Marketplace in 2014 who maintain the same eligibility would have their coverage continue into 2015, but may choose to select new coverage at any time during the annual open enrollment period.

The annual open enrollment period for benefit years on or after 2016 is still Oct. 15 through Dec. 7 of the preceding calendar year, with coverage effective the first day of the following benefit year.

If finalized, the Marketplace is expected to delay 2015 QHP certification dates by at least one month.

HHS is currently seeking comments.

Where can I find more information?

Blue Cross Blue Shield of Michigan will continue to monitor and advise when new information is received. Please visit our Reform Alerts webpage for the latest health care reform updates.

The information in this document is based on preliminary review of the national health care reform legislation and is not intended to impart legal advice. The federal government continues to issue guidance on how the provisions of national health reform should be interpreted and applied. The impact of these reforms on individual situations may vary. This overview is intended as an
educational tool only and does not replace a more rigorous review of the law’s applicability to individual circumstances and attendant legal counsel and should not be relied upon as legal or compliance advice. As required by US Treasury Regulations, we also inform you that any tax information contained in this communication is not intended to be used and cannot be used by any taxpayer to avoid penalties under the Internal Revenue Code.

Health Care Questions

To help finance health care reform initiatives created under the Affordable Care Act, the federal government established new taxes and fees that impact health insurers and customers. The Blues are committed to helping customers understand what the taxes and fees are for and what they will cost.

Regardless of the customer’s renewal or plan date, the Blues will begin billing fully insured customers for five ACA taxes and fees starting with Jan. 1, 2014 invoices.

Self-funded customers are responsible for calculating and sending ACA tax and fee payments to the federal government. However, we will bill self-funded group customers that purchase stop-loss coverage from Blue Cross for the Federal Insurance Premium Tax. The tax will be assessed on the stop-loss coverage only.

Note: Not all federal and state taxes apply to all segments. We will bill customers for the applicable taxes and fees.

Federal-Taxes-and-Fees-Table

State taxes

There are also two state taxes, the Michigan Claims Tax Assessment and the State Insurance Premium Tax. The Michigan Claims Tax Assessment became effective on Jan. 1, 2012. The Blues will continue to bill fully insured and self-funded groups as well as individuals for this assessment.

The State Insurance Premium Tax will become effective on Jan. 1, 2014. The Blues, like many other health plans, are subject to the State Insurance Premium Tax in lieu of the corporate income tax. The State Insurance Premium Tax does not apply to Blue Care Network plans or self-funded customers.

However, we will bill self-funded group customers that purchase stop-loss coverage from Blue Cross for the State Insurance Premium Tax. The tax will be assessed on the stop-loss coverage only for self-funded customers.

Online tax estimator
Your 2014 quotes, renewals and bills will include the amount of federal and state taxes you will need to pay. If you want a detailed breakdown of your taxes and fees, use our taxes and fees estimator tool at bcbsm.com. It now includes the State Insurance Premium Tax and the ACA federal taxes and fees. (The tool previously only estimated the Michigan Claims Tax Assessment.)

The estimator tool breaks down the taxes presented on the quote, renewal or bill and provides estimated amounts for each tax. It’s important to note that the tool provides estimates, not actual amounts of taxes and fees. And, it does not apply to Medicare Advantage individual and group customers.

To access the tool:

  1. Go to bcbsm.com.
  2. Go to Help and click on Calculators and Tools.
  3. Under Health care reform, click on Health Insurance Tax Estimator.

BCBS-Pantone-Blue

Blue Cross Blue Shield of Michigan and Blue Care Network of Michigan are nonprofit corporations and independent licensees of the Blue Cross and Blue Shield Association.

This post was reprinted from a Press Release by Stepheni L. Schlinker, Press Secretary for Accident Fund Holdings, Inc.

LANSING, Mich. – The latest Michigan Future Business Index survey of small and midsize business leaders shows the state’s job providers ‘tapping the breaks’ due to a variety of national economic uncertainties. While business owners say they remain optimistic that Michigan is headed in the right direction, they also say their shrinking bottom lines are causing them to take a second look at earlier hiring and wage increase plans.

“These surveys are very useful to Accident Fund for taking the economic pulse of small and midsize business owners,” Mike Britt, president of Accident Fund Insurance Company of America, which commissions the survey, said. “Small business is the core of our state’s economy, and they’re concerned that the slowed national economy, coupled with a new dose of regulations will temper Michigan’s economic recovery and job growth just as we’re on the mend. Small and midsize businesses are our customers, so their feelings about the economy are as important to us as they are to them.”

Britt added that the survey shows quite a bit of good news. There are signs that business leaders believe Michigan’s recovery continues, albeit at a slower pace, with survey respondents reporting continued growing sales, and more of them revealing plans for new product and service line launches and location openings.

Dissatisfaction with the state’s economy has ticked up one point since June to 57 percent, while satisfaction has dropped two points to 41 percent, though satisfaction with the economy is still 14 points stronger now than it was a year ago.

Additionally, the percentage of businesses with new hires is still 20 points higher than one year ago, but statistically unchanged since June of this year. New hiring remained the strongest in West Michigan and there has been a significant increase in hiring among larger businesses (35%) as well as those in construction, manufacturing and distribution (26%). Also a positive sign, 40 percent of business owners reported in the latest MFBI survey that sales had increased over the previous six months, a two-point increase from the June 2012 survey.

Other positive results from the survey include:
• Six-month business outlook. While optimism has ebbed slightly since June, a majority (52 percent) of respondents still believe the business outlook for the next six months remains good, with 17 percent saying it is “very good.”

• Hiring and layoffs. Twenty-four percent of respondents said they plan to hire more employees in the next six months. While that number is two points lower than it was in June, it’s still nine points higher than in October 2011. The outlook for new hires remains strongest in the Detroit Metro region (26%). Larger businesses and new businesses, especially childcare, are hiring the most new employees (33%).

• Increased wages. The outlook for increased wages continues to improve marginally, as 26 percent of respondents said they plan to increase wages for their employees within the next six months – up two points from 24 percent in June 2012. Employers in West Michigan are most likely to increase wages for workers, with 32 percent indicating they will do so. Additionally, wages are most likely to climb within the financial, insurance and real estate sectors – 32 percent of those employers said they will raise compensation.

“The results of this latest Future Business Index survey are less encouraging than I had hoped,” said Chris Holman, CEO of the Michigan Business Network and publisher of the Greater Lansing Business Monthly. “Michigan is still in a vulnerable position at this infancy stage of recovery. The current concerns over the ‘fiscal cliff’ and the growing anxiety over added health care costs are causing Michigan businesses to recalculate their strategies for capital and human resource investments. We need to see quick action by the President and Congress on these two issues to ease uncertainty and reignite the recovery.”

The Michigan Future Business Index, commissioned by Accident Fund and the Michigan Business Network, is conducted semi-annually by Marketing Resource Group, Inc. (MRG). The survey has been conducted since 2006. A total of 1,015 Michigan business owners, operators, officers and managers were interviewed for the October 2012 survey.

To view a summary of the most recent Michigan Future Business Index, please visit the Accident Fund Insurance Company of America website at http://www.accidentfund.com or the Michigan Business Network website at http://www.michiganbusinessnetwork.com/.

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Accident Fund Insurance Company of America
Founded in 1912 and headquartered in Lansing, Mich., Accident Fund Insurance Company of America is a licensed workers’ compensation insurer in 48 states and the District of Columbia. Accident Fund is rated “A-” (Excellent) by A.M. Best and is a wholly owned subsidiary of Accident Fund Holdings, Inc., the 13th largest workers’ compensation insurer in the United States. For more information, visit Accident Fund’s website at http://www.accidentfund.com.

On October 31, 2012, EPA announced that it will review three regulatory actions pursuant to section 610 of the RFA.

The three actions are:

  • Heavy-Duty Engine and Vehicle Standards and Highway Diesel Fuel Sulfur Control Requirements;
  • NESHAP: Reinforced Plastic Composites Production; and
  • NPDES Permit Regulation and Effluent Limitations Guidelines Standards for Concentrated Animal Feeding Operations (CAFOs).

EPA is soliciting comments on: the continued need for the rules; the complexity of the rules; the extent to which the rules overlap, duplicate, or conflict with other federal, state, or local government rules; and the degree to which the technology, economic conditions or other factors have changed in areas affected by the rules.

Comment submission deadline is December 31, 2012.
•  Notice from the Federal Register
•  Advocacy contact: Sarah Bresolin at 202-205-6790
•  Regulations.gov, the Federal government’s one stop site to comment on Federal regulations

For more information on Regulatory Alerts please see the Office of Advocacy webpage http://www.sba.gov/advocacy/815