New Figure Marks Decrease from 2019

Under the employer shared responsibility (“pay or play”) provisions of the Affordable Care Act, applicable large employers-generally those who have 50 or more full-time employees (including full-time equivalent employees)-may be subject to a penalty if they do not offer affordable coverage that provides minimum value to their full-time employees and their dependents.

For plan years beginning in 2020, the Internal Revenue Service has announced that coverage will generally be considered affordable if the employee’s required contribution for the lowest-cost self-only health plan offered is 9.78% or less of his or her household income for the taxable year. For plan years beginning in 2019, the applicable percentage is 9.86%.

Given that employers are unlikely to know an employee’s household income, they may use a number of safe harbors to determine affordability, including reliance on Form W-2 wages.

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Change to Take Effect for 2020 Plan Years

A new final rule lets all employers offer health reimbursement arrangements (HRAs) to pay for employees’ individual health insurance policy premiums, if certain conditions are met. Currently, many employers are prohibited from offering such HRAs. The rule was released by the U.S. Departments of Labor, Health and Human Services, and the Treasury on June 13; it takes effect for plan years beginning on or after Jan. 1, 2020.

In general, the final rule permits an HRA to reimburse premiums for individual health insurance policies only if:

• Individuals verify their enrollment in individual health insurance coverage;
• The HRA is offered on the same terms to all employees within a class (with limited exceptions);
• The employer does not offer the same employee both a traditional group health plan and the HRA;
• Participants can opt out of the HRA annually; and
• Employers provide eligible participants with a written notice describing the HRA’s terms and its interaction with the premium tax credit.

The final rule also allows employers to offer “Excepted Benefit HRAs” in conjunction with traditional group health plans, if certain conditions are met.

For more information, see Questions and Answers prepared by the Department of Health and Human Services.

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The IRS has announced the 2020 inflation-adjusted amounts for Health Savings Accounts (HSAs) as determined under the Internal Revenue Code.

Annual Contribution Limitation
For calendar year 2020, the annual limitation on deductions for an individual with self-only coverage under a high deductible health plan is $3,550 (up from $3,500 for 2019). The annual limitation on deductions for an individual with family coverage under a high deductible health plan is $7,100 (up from $7,000 for 2019).

High Deductible Health Plan Amounts
For calendar year 2020, a “high deductible health plan” is defined as a health plan with an annual deductible that is not less than $1,400 for self-only coverage or $2,800 for family coverage, and annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) that do not exceed $6,900 for self-only coverage or $13,800for family coverage.

Click here to read the IRS announcement.

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HHS Issues Key Rule for 2020

A new rule from the U.S. Department of Health and Human Services (HHS) addresses, among other things, the requirement under the Affordable Care Act that non-grandfathered group health plans limit annual out-of-pocket cost-sharing for coverage of essential health benefits under the plan. Under the rule, these out-of-pocket expenses may not exceed $8,150 for self-only coverage or $16,300 for family coverage in 2020.

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Policies Renewed Under Extended Non-Enforcement Policy Must Comply by January 1, 2021

A previously extended non-enforcement policy which allows health insurance issuers, at their option, to continue group coverage that would otherwise be terminated or cancelled has been further extended to policy years beginning on or before October 1, 2020, provided that all policies come into compliance by January 1, 2021. Health insurance issuers that renew coverage under the extended non-enforcement policy are required to provide standard notices to affected small businesses for each policy year.

Coverage subject to the non-enforcement policy will not be considered to be out of compliance with key Affordable Care Act provisions, including:

• The requirement to cover a core package of items and services known as essential health benefits;
• The requirement that any variations in premiums be limited with regard to a particular plan or coverage to age, tobacco use, family size, and geography;
• The requirements regarding guaranteed availability and renewability of coverage; and
• The requirements relating to coverage for individuals participating in approved clinical trials.

Click here to review the extended non-enforcement policy.

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DOL Rule Called ‘End-Run’ Around Affordable Care Act

A federal judge has ruled that two parts of the Department of Labor (DOL) rule expanding employers’ ability to join in association health plans (AHPs) violate ERISA. AHPs are group health plans sponsored by a group of employers. In June 2018, the DOL issued a rule allowing AHPs to offer coverage to some or all employers in a state, city, county, or multistate metro area, or to businesses in a common trade, industry, line of business, or profession in any area, including nationwide.

The March 28 federal court opinion stated that the rule was an “end-run” around the Affordable Care Act, and that the DOL exceeded its authority when it defined “employer” in the rule to include associations of disparate employers. The court also struck down a part of the DOL rule that expanded memberships in AHPs to working owners without employees.

The court directed the DOL to reconsider how the remaining provisions of the June 2018 rule are affected by the opinion. Further legal and regulatory developments are expected.

 

 

 

Health Care Reform Updates provided by:

Team Nash
2005 E 2700 St, Suite 140, Salt Lake City, UT 84109
385-234-6754

Please Note: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional advisor. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a ‘covered opinion’ or other written tax advice and should not be relied upon for any purpose other than its intended purpose.

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With virtually full employment, employers of every size need the best interactive tools and a step-by-step process to recruit and hire top talent.

To register for this important webinar, simply click on the link below.

How to Recruit and Hire the Best Talent–For Companies of Every Size
Date: Thurday, April 11th at 1:00 ET
Presented by: Lillian Shapiro and John Breslin

Register here for How to Recruit and Hire the Best Talent

This webinar will include:

• How to develop a winning compensation package (it’s not always about the salary)
• How to attract millennials
• Interactive tools that simplify and effectively support the recruitment process

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Proposal Subject to Change

The U.S. Department of Labor (DOL) is proposing to change the minimum salary that administrative, computer, executive, professional, and “highly compensated” employees must receive in order to be exempt from overtime pay under federal law. Under the proposal:

• The minimum salary required for an administrative, computer, executive, or professional employee to be exempt would increase from $455 to $679 per week.
• The total annual compensation required for “highly compensated employees” to be exempt would increase from $100,000 per year (including at least $455 per week) to $147,414 per year (including at least $679 per week).
• Employers would be able to count certain bonus and incentive payments (including commissions) toward a portion of the salary level.

Though this proposal is still subject to change, the DOL currently anticipates changes to the salary levels to become effective in January 2020.

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Team Nash Insurance has partnered with Think HR to help you reduce workplace risks and improve employee engagement. Check out this quick video to find out more or contact us!

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Disclosures Due Within 60 Days of Beginning of Plan Year

Employers that offer prescription drug coverage to Medicare-eligible individuals via a calendar-year plan generally must complete an online disclosure to the Centers for Medicare and Medicaid Services (CMS) by March 1. This disclosure must report whether the coverage offered is “creditable,” meaning it is expected to pay, on average, as much as the standard Medicare prescription drug coverage. Employers that offer creditable coverage via a non-calendar-year plan must also comply with the disclosure requirement within 60 days of the beginning of the plan year.

Click here to complete an online disclosure. For more information on the disclosure requirement, click here.

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