To prepare for open enrollment, group health plan sponsors should be aware of the legal changes affecting the design and administration of their plans for plan years beginning on or after Jan. 1, 2020. Employers should review their plan documents to confirm that they include these required changes.
In addition, any changes to a health plan’s benefits for the 2020 plan year should be communicated to plan participants through an updated summary plan description (SPD) or a summary of material modifications (SMM). Health plan sponsors should also confirm that their open enrollment materials contain certain required participant notices, when applicable—for example, the summary of benefits and coverage (SBC). There are also some participant notices that must be provided annually or upon initial enrollment. Important Notices
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Health officials issued a final rule that expands the usability of health reimbursement arrangements (HRAs).
Effective in 2020, the final rule establishes two new types of HRAs: Individual Coverage HRA: Allows employers to offer an HRA to be used to reimburse the cost of individual market premiums on a tax-preferred basis, subject to certain conditions, as an alternative to traditional group health plan coverage. Excepted Benefits HRA: Allows employers that offer traditional group coverage to provide an HRA of up to $1,800 per year (as adjusted) to reimburse certain qualified medical expenses. President Donald Trump recently signed an executive order aimed at improving price and quality transparency in health care. The order is intended to increase availability of health care price and quality information and protect patients from surprise medical bills.
What’s in the Order? Specifically, the order is aimed at:
Within 120 days, the order directs the Treasury to issue guidance to expand access to high deductible health plans. Additionally, the order directs the Treasury to propose regulations within 180 days to:
On May 28, 2019, the IRS releasedRevenue Procedure 2019-25 to announce the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2020. These limits include:
HSA Contribution Limits for 2020 The IRS limits for HSA contributions increase for 2020. Eligible individuals with self-only HDHP coverage will be able to contribute up to $3,550 for 2020, while eligible individuals with family HDHP coverage will be able to contribute up to $7,100 for 2020. The $1,000 catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older will remain unchanged. HDHP Cost-sharing Limits for 2020 For self-only coverage in 2020, the HDHP minimum deductible will increase to $1,400 and the out-of-pocket maximum will increase to $6,900. For family coverage, these limits will increase to $2,800 and $13,800, respectively. Action Steps Because these limits change for 2020, employers that sponsor these plans may need to make plan design changes for plan years beginning in 2020. Making Emotional Intelligence Work for YouEmotional intelligence (EQ) is the ability to understand and manage your emotions, as well as others’. It’s similar to empathy, but the ability to manage the emotions effectively is key. Many businesses are flocking to high-EQ individuals for their attractive leadership style. Leaders with high EQ are able to communicate their feelings effectively, look at a situation from all perspectives and maintain a positive outlook regardless of the situation. Do We Need EQ Here? Effective managers tend to have higher EQ than others, so you may already have leaders like them on board. They have good people skills, can self-regulate and lead by example. Managers who operate by more authoritarian practices get a much different view of their workplaces than high-EQ leaders. Authoritarian managers are identified by their lack of self-awareness, making them hard to confide in. You want employees to feel comfortable talking to their managers. If your managers have high EQ, they will likely have a better rapport with employees and be able to manage their needs more effectively. Most importantly, fostering high EQ invites more democratic corporate management, which is critical for effectively managing differences in opinion. You don’t have a shouting match when your leaders are able to have a mature discourse. Don’t Forget About PCORI Fees The Affordable Care Act (ACA) imposes a fee on health insurance issuers and self-insured plan sponsors in order to fund comparative effectiveness research. These fees are widely known as Patient-Centered Outcomes Research Institute (PCORI) fees. The PCORI fees were created to help patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. Fees paid by health insurance issuers and sponsors of self-insured health plans fund the institute’s research, in part. The PCORI fees apply for plan years ending on or after Oct. 1, 2012, but do not apply for plan years ending on or after Oct. 1, 2019. For calendar year plans, the fees will be effective for the 2012 through 2018 plan years. Therefore, the 2018 plan year is the last plan year that these fees will be effective, for calendar year plans. Issuers and plan sponsors must pay PCORI fees annually on IRS Form 720 by July 31 of each year. The fee will generally cover plan years that end during the preceding calendar year. For the 2018 plan year, PCORI fees are due by July 31, 2019. How Much Are the PCORI Fees? On Nov. 5, 2018, the IRS published Notice 2018-85, which increased the PCORI fee amount for plan years ending on or after Oct. 1, 2018, and before Oct. 1, 2019 (that is, 2018 for calendar year plans), to $2.45 multiplied by the average number of lives covered under the plan. Who Must Pay the PCORI Fees? The entity responsible for paying the PCORI fees depends on whether the plan is insured or self-insured.
The Department of Labor (DOL) has advised that, because the PCORI fees are imposed on the plan sponsor under the ACA, it is not permissible to pay the fees from plan assets under ERISA, although special circumstances may exist in limited situations. On Jan. 24, 2013, the DOL issued a set of frequently asked questions regarding ACA implementation that include a limited exception allowing multiemployer plans to use plan assets to pay PCORI fees (unless the plan document specifies another source of payment for the fees). What’s Next? PCORI fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return). These fees are due each year by July 31 of the year following the last day of the plan year. This means that, for plan years ending in 2018, the PCORI fees are due by July 31, 2019. Covered employers should have reported and paid PCORI fees for 2017 by July 31, 2018. Recently, the Department of Health and Human Services (HHS) released itsfinal Notice of Benefit and Payment Parameters for 2020. This proposed rule describes benefit and payment parameters under the Affordable Care Act (ACA) that would be applicable for the 2020 benefit year. Standards included in the rule relate to:
Notable Changes for 2020 The out-of-pocket maximum (OOPM) will increase, and the ACA’s affordability exemption threshold will decrease for 2020.
Lowest Unemployment in Decades Job figures continued to rise in April, officially bringing unemployment to its lowest in 50 years—3.6%, according to the Bureau of Labor Statistics (BLS). Primary job gains occurred in the health and business services sectors, with respectable growth in construction as well. With over 150,000 jobs being added each month, on average, employment growth shows no signs of slowing down. However, despite this upward trend, experts caution to expect more modest job creation over the next few months. Growth by the Numbers Unemployment fell across all categories tracked by the BLS. Notably, unemployment rates for women and Hispanics dropped to record lows for the first time since 1953 and 1973, respectively. But not all workers are feeling the economic gains. Long-term unemployment is still high, and the number of part-time workers looking to work full-time remains steady, according to experts. Employer Takeaway The labor market is tightening up, but it’s not tapped out. This means now is the time to attract talent and retain your current workforce. DOL Issues Opinion Letter on Gig Worker ClassificationIn the growing “gig economy,” individuals perform jobs on a one-off or short-term basis, typically through an online application or job marketplace. On April 29, 2019, the Department of Labor (DOL) issued an opinion letteraddressing whether individuals working for a virtual marketplace company (VMC) are employees or independent contractors under the Fair Labor Standards Act (FLSA). According to the DOL, the VMC described in the opinion letter provides a referral service—it does not receive services from the workers itself. As a result, the DOL clarifies that workers who use the VMC to provide services are independent contractors. This opinion letter indicates that the DOL generally classifies gig workers as independent contractors. Opinion letters are specific to the situations presented, but employers can look to them for guidance on the DOL’s interpretation of the law. The interpretation in this opinion letter may not apply to all gig workers if their circumstances are substantially different from the situation addressed in the letter. On March 28, 2019, a federal judgeruled that parts of the Trump administration’s 2018 final rule on association health plans (AHPs) were invalid. The court directed the Department of Labor (DOL) to reconsider how the remaining provisions of the final rule are affected.
In its ruling, the court stated that the final rule was an “end-run” around the ACA and that the DOL exceeded its authority under ERISA. The court specifically struck down two parts of the rule:
DOL’s Newly Proposed Overtime Rule: What’s Included The DOL recently issued a proposed rule that would change the salary thresholds for the “white collar” overtime exemptions under the Fair Labor Standards Act (FLSA). Under the proposal, the minimum salary level for executive, administrative and professional employees would increase from $455 to $679 per week ($35,308 per year). This is significantly lower than the $913 salary level set in the 2016 final rule (which never took effect due to an injunction). The proposal would allow employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid annually or more frequently to satisfy up to 10 percent of the standard salary level. The minimum salary level for highly compensated employees would also increase from $100,000 to $147,414 per year (an increase from the 2016 final rule’s annual threshold of $134,004). What’s next? The proposed rule does not provide for any automatic adjustments to the salary thresholds. Instead, the DOL is asking for public comments on the proposed rule’s language for periodic review to update the salary threshold. Any future update would continue to require notice-and-comment rulemaking. For more information on the proposed rule, see the DOL’s Notice of Proposed Rulemaking: Overtime Update, which includes a fact sheet andfrequently asked questions. DOJ Supports Federal Court Ruling Invalidating the ACA On Dec. 14, 2018, a federal judge ruledin Texas v. Azar that the entire Affordable Care Act (ACA) is invalid due to the elimination of the individual mandate penalty in 2019. In response, on March 25, 2019, the U.S. Department of Justice (DOJ) filed aletter with the 5th Circuit Court of Appeals agreeing with the lower court’s ruling. This means that the DOJ believes the lower court’s ruling should stand, and the ACA should be struck down as unconstitutional. Following the ruling, however, the federal judge issued a stay and partial final judgment in the case. As a result, the ACA will remain in place pending appeal. The Department of Health and Human Services also confirmed that it will continue administering and enforcing all aspects of the ACA. All briefs and responses in this appeal are due by mid-May 2019, and oral arguments will be scheduled shortly thereafter. Following oral arguments, a decision on the appeal will be issued. However, many industry experts anticipate that the Supreme Court will likely take up the case, which means that a final decision will not be made until that time. While these appeals are pending, all existing ACA provisions will continue to be applicable and enforced. Employers and individuals must continue to comply with all other applicable ACA requirements. This ruling does not impact the 2019 Exchange enrollment, the ACA’s employer shared responsibility (pay or play) penalties and related reporting requirements, or any other applicable ACA requirement. The Equal Employment Opportunity Commission (EEOC) has extended the deadline for employers to submit EEO-1 Reports for 2018. The reports are now due by May 31, 2019.
What is the EEO-1 Report? The EEO-1 Report is a federally mandated survey that collects workforce data from employers. The data is categorized by race, ethnicity, sex and job category. The EEOC uses this information to enforce federal prohibitions against employment discrimination and discriminatory pay practices. The EEO-1 Report is an annual survey required under Title VII of the federal Civil Rights Act (Title VII). Under the law, employers with 100 or more employees and certain federal contractors must use the EEO-1 Online Filing System to submit employment data by March 31 every year. The EEOC extended the 2019 deadline because the federal government shutdown delayed the online system’s opening for 2018 reports. The EEOC expects the system to become available for 2018 submissions in early March 2019. What’s Next? Employers should monitor the EEO-1 website for more information about EEO-1 filing requirements and about when the filing system will be open for 2018 Reports. In the meantime, employers filing EEO-1 Reports for the first time should register to receive a company login, password and further instructions from the EEOC. If the preparation or filing of an EEO-1 Report would create undue hardship, an employer may send a written request for an exemption or for special reporting procedures to the EEOC. Employers may also obtain a one-time, 30-day extension of the EEO-1 filing deadline byemailing a request to the EEOC. When it Comes to Employee Engagement, Communication is Key According to a Gallup poll, 70 percent of U.S. workers aren’t engaged at work. This statistic should alarm employers across the country, as low engagement means employees are not committed to their own success in the workplace, let alone the organization’s. Investing in employee engagement might seem unjustifiable for a business that is focused solely on profits, as it might not recognize the benefits of engaged employees. One simple and cost-effective way that you can improve employee engagement at your organization is by improving and expanding your communications strategies. Typical benefits and workplace communications can be bland and difficult to understand, but they don’t have to be. The key messages for each topic in an effective communications plan should be simple, relatable and actionable—and presented in a variety of content formats that you can use to communicate through multiple channels. By implementing a multichannel communication strategy, where you use posters, emails, flyers and videos to communicate company and benefits information, your message will reach more employees. This will help employees feel more informed about your company, which, in turn, will improve their workplace engagement. BLS Data on Worker Access to Family Leave in 2018 Now Available The Bureau of Labor Statistics (BLS) recently released a The Economics Daily (TED) report on civilian access to paid and unpaid family leave in 2018. These statistics provide insight into family leave benefits trends across the country. For this report, family leave included leave to care for family members, maternity and paternity leave. Paid Family Leave Access In March 2018, 16 percent of workers in the private sector and 17 percent of civilian workers had access to paid family leave. In the public sector, 25 percent of state and local government workers had access to this type of leave. Leave access varied by the size of the employer. Unpaid Family Leave Access In March 2018, 89 percent of civilian workers and 88 percent of private sector employees had access to unpaid family leave. Ninety-four percent of state and local government workers had access to this type of leave. As with paid family leave, access to leave varied by employer size. For access to the BLS data, click here. Section 125 of the Internal Revenue Code (the Code) requires that Premium Only or Cafeteria plan documents be updated every five years. This means drafting a new document and giving a copy to every employee eligible for the plan. Section 125 plan documents also need to be restated whenever there is a change in your plan or in the law governing the plan. Now is the perfect time for employers to check on whether they need a 2019 Section 125 Plan Document update. Read on to learn how to find out if your plan document needs a review for the coming year. Still using a 2014 model? - A lot of plan documents were updated in the wake of the Patient Protection and Affordable Care Act (ACA) becoming law (most provisions were in effect by 2014). That means many employers will need a 2019 Section 125 Plan Document review. The 2-year update - Because changes in tax law can be fast and furious, many employers update their plan documents every other year just to be sure their plan is always current and compliant. Changes to your plan -Sometimes a Section 125 Plan Document is updated every year. That’s because, whenever there is a change to a Section 125 Plan, the Plan Document has to be revised to reflect those changes. Not sure? - If you’re not sure whether or not you need a 2019 Section 125 Plan Document review — or worse yet, if you can’t find your Section 125 Plan Document to check it — we can help. 2019 Section 125 Plan Document Update — just $79When you know it’s time to update your Section 125 Plan Document, you’ll want to get it from the most knowledgeable people in the industry and for the best value. Our basic Section 125 Premium Only Plan (POP) Document Package provides everything an employer needs to update or establish a Section 125 Plan for only $79 (electronic delivery only). The IRS and the Department of Labor require employers to establish a formal plan document and summary plan description before they allow their employees to pretax insurance premium. The beginning of a new tax year is historically when most employers start a new Section 125 Premium Only Plan year. There is still plenty of time to update your Section 125 Premium Only Plan by January 1, 2019. Section 125 Premium Only Plans allow employees to pretax or avoid paying income taxes on their portion of employer sponsored health insurance plans and some forms of non-employer-sponsored health insurance premium. January marks the beginning of a new Section 125 plan year for most employers. If your company takes advantage of Section 125 pretax deductions you might want to verify that you actually do have a current Section 125 Plan Document. It’s not unusual for employers to take Section 125 insurance pretax deductions for years without knowing that a formal plan document and summary plan description are required by the IRS and Department of Labor. For the unfortunate employer who goes into a IRS audit without a current Section 125 plan documents the result could be reclassification of all pretax insurance deductions back to taxable income. The IRS then could assess and add interest and penalties on the unpaid taxes. Many more employers have Section 125 Plan Documents that have never been updated. These employers are making administrative decisions based on outdated tax law and could be allowing events that would disallow their plan. If your Section 125 Plan Document hasn’t been updated since 2010 you should seriously consider updating it this January. Also, the Department of Labor requires employers to distribute new summary plan descriptions to employees once every five years. If your Section 125 Plan Document is old, outdated or missing, the New Year would be a good time to update it. How much does it cost to update or replace an old Section 125 plan? Cafeteria Plan Direct has been helping employers amend or replace their Section 125 plan document for just $79 (Basic PDF). Order your 125 POP doc today! Source: Orange County Register
Open enrollment is the specific time period each year when individuals can purchase health insurance for the upcoming year. And this year, it starts Monday, Oct. 15 and ends Jan. 15. During this period, you could buy health insurance without what is known as a “qualifying life event” such as job change, death of a spouse, having a baby, getting married or moving to another state. Linda Greenfeld, executive director of commercial products, at L.A. Care, talked to the Southern California News Group about some of the most common questions and concerns people have during this time. Q: Why is the open enrollment period important? A: This is the time for people to either opt to get health insurance or review the plan they have and make whatever changes they wish to make. This year, people need to be aware that Covered California is changing the terminology from “open enrollment” to “sign-on period” because it’s simpler and easier to understand. This year, the enrollment period has also been cut short by two weeks. So, the deadline is Jan. 15. Q: Are we looking at rate increases again this year? A: Yes. Rates are going to increase this year and the average increase is going to be about 8.7 percent in California. The primary reason for this rate hike is the individual mandate being removed. (President Donald Trump’s tax bill, which was approved by Congress, removed the individual mandate of the Affordable Care Act where individuals would be penalized when they file their federal tax return if they fail to purchase health insurance). Q: Do healthy people need to buy health insurance? A: We recommend that everyone buys health insurance — even young people who think they are invincible. You do that because you want to be covered for the things you don’t expect. Life happens. You could be looking at astronomical medical bills if you have to spend a couple of days at the hospital and are not covered. A gall bladder surgery, for example, could end up costing more than $150,000. Q: How do you pick the health plan that’s right for you and your family? A: Shop-and-compare tools are available through Covered California’s website. You could enter your individual demographic information including income levels and get a display of what plans are available and the federal subsidies for which you will be eligible. Q: Can people opt for short-term plans? A: No. These are now banned in California. In my opinion, these plans were not good anyway because they didn’t even cover essential benefits such as routine physical exams. Q: Do I need to do anything if I’m happy with my current plan? A: Covered California has a passive enrollment period as well. You only need to sign on if your financial status or household income has changed. If not, you don’t need to do anything. For more information, visit coveredca.com. Source Link |
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