Tag: health care law

Client Alert: IRS Releases Early Drafts of ACA Employer Reporting Forms & Instructions

IRS Releases Early Drafts of ACA Employer Reporting Forms & Instructions (1094-B, 1094-C, 1095-B, and 1095-C)

The Internal Revenue Service (“IRS”) has released early drafts of the instructions and health insurance coverage reporting forms required to be filed under the Affordable Care Act.

As provided in previous Client Alerts, information reporting requirements are applicable under two Internal Revenue Code (“Code”) sections as follows:

  • Section 6055 for insurers, self-insuring employers, and certain other providers of minimum essential coverage; and
  • Section 6056 for applicable large employers.

By way of background, the IRS requires applicable large employers and sponsors of self-insured health plans to report on the health coverage offered and/or provided to individuals beginning calendar year 2015. Although the reporting requirements extend to other entities that provide “minimum essential coverage” (such as health insurance issuers), this Client Alert focuses on the requirements imposed on employers.

Employers who are deemed applicable large employers, as well as employers of any size who offer self-funded health coverage, must carefully review and study these instructions, which set forth numerous details, definitions and indicator codes that must be used to complete the requisite forms. The instructions address the “when, where and how” to file, extensions and waivers that may be available, how to file corrected returns, and potential relief from penalties imposed for incorrect or incomplete filing.

The IRS utilizes information from these returns to determine which individuals were offered minimum essential coverage, whether individuals were eligible for premium tax credits in the Marketplace, as well as to determine any penalties to be imposed on employers under Pay or Play (Code section 4890H; Shared Responsibility for Employers Regarding Health Coverage, 26 CFR Parts 1, 54, and 301, 79 Fed. Reg. 8543 (Feb. 12, 2014)). Due to the impact of proper reporting, a clear understanding of these forms and instructions are essential.

Code section 6056 applies to applicable large employers (generally employers with at least 50 full-time employees, including full-time equivalent employees). Information with respect to each full-time employee (whether or not offered coverage) must be reported on Form 1095-C. Transmittal Form 1094-C must accompany the Forms 1095-C; all the Forms 1095-C together with the Transmittal Form 1094-C constitute the Code section 6056 information return that is required to be filed with the IRS. For applicable large employers who self-insure, there is a separate box to complete which incorporates the information required under Code section 6055.

Code section 6055 applies to employers of any size who self-insure. Non-applicable large employers with self-funded plans must report their information on Form 1095-B, as well as on Transmittal Form 1094-B. All of the Forms 1095-B together with the Transmittal Form 1094-B constitute the Code section 6055 information return that is required to be filed with the IRS. Again, if the employer who self-insures is also an applicable large employer, the employer will instead use Forms 1095-C and 1094-C, which include a section for self-insured plans.

Employers subject to these requirements must report in early 2019 for the entire 2018 calendar year.

Additionally, employers must provide informational statements to the individuals for whom they are reporting. Form 1095-C or Form 1095-B (as applicable) may be used as this informational statement.

The links to the Draft Instructions are below:

2018 Drafts for Applicable Large Employers (Code Section 6056):

2018 Drafts for Employers who Self-Fund (Code Section 6055):

These draft instructions and forms reflect only minor changes, such as a few formatting modifications and the reflection of indexed penalty amounts for reporting failures. Additionally, the draft instructions for Forms 1094-B and 1095-B also now state that health insurance issuers and carriers are encouraged (but not required) to report coverage in catastrophic health plans enrolled in through the Marketplace for months in 2018.

The remainder of the provisions remain intact.

There is no current indication of filing deadline relief, so it is essential to ensure your reporting and collection of data procedures are intact.

If you should have questions regarding employer reporting requirements or other ACA mandates, the Employee Benefits team at Fraser Trebilcock can assist.

Client Alert: Small Employers Have New Option for Benefit Offerings: Qualified Small Employer Health Reimbursement Arrangements

Employee Benefits and Healthcare LawSmall Employers Have New Option for Benefit Offerings: Qualified Small Employer Health Reimbursement Arrangements

In today’s market, small employers have increasingly difficultly offering competitive benefit structures given the elevated financial and administrative cost associated with maintaining comprehensive employer-sponsored group health plan coverage. And, pursuant to guidance issued under the Patient Protection and Affordable Care Act (“PPACA”), employers have been generally unable to pay for the cost of an employee’s health insurance on the individual market without incurring substantial compliance burdens and/or penalties. Certain small employers now have a welcomed new option available to help their employees pay for the cost of health insurance and other medical expenses: a qualified small employer health reimbursement arrangement (“QSEHRA”).

The 21st Century Cures Act amended section 9831 of the Internal Revenue Code (the “Code”) and provides that certain eligible small employers can establish a QSEHRA under which individual health insurance premiums and other Code section 213(d) qualified expenses can be reimbursed from. Unlike other forms of health reimbursement arrangements, a QSEHRA is not considered a “group health plan” for most purposes under the Code, ERISA, and the Public Health Service Act (“PHSA”). As such, a QSEHRA is exempt from numerous cumbersome legal requirements (including the PPACA’s PHSA mandates and COBRA). Thus, small employers that meet the requirements set forth in amended Code section 9831 and IRS guidance (Notice 2017-67) have a new opportunity to make their benefit offerings competitive.

IRS Notice 2017-67 (the “Notice”) provides comprehensive guidance related to compliance and administrative issues associated with QSEHRAs. The Notice is lengthy and comprehensive, and thus requires detailed review by any employer contemplating establishing a QSEHRA. However, a snapshot of highlights from the Notice for employers to keep in mind include:

  • What Employers Can Sponsor a QSEHRA? In order to adopt a QSEHRA, the employer cannot (1) be deemed an applicable large employer (i.e., generally an employer with 50 or more full-time employees (including full-time equivalents) in the preceding calendar year) under the employer shared responsibility mandate; and (2) offer a group health plan as defined in Code section 5000(b) (e.g., medical, dental, vision, health FSA, etc.) to its employees.
  • What Employees Must Be Provided Coverage? The QSEHRA must be provided on the same terms to all eligible employees. Uniformity is determined on the basis of the amount made available for reimbursement and not the amount actually reimbursed. The term “eligible employee” generally means any employee of the employer. However, the QSEHRA may be designed to exclude certain classes of employees including (1) employees who have not completed 90 days of service with the employers; (2) employees who have not attained age 25 before the beginning of the plan year; (3) certain part-time and seasonal employees; (4) certain non-participating employees covered by a collective bargaining agreement; and (5) nonresident aliens who do not receive earned income from the employer from sources within the United States. Employees cannot waive participation in the QSEHRA.
  • What Expenses Can Be Reimbursed? Guidance indicates that a QSEHRA can reimburse employees for Code section 213(d) medical care expenses (including major medical insurance premiums) incurred by the employee or an eligible family member. However, prior to providing reimbursement, the employee must substantiate the incurred expense (using a methodology similar to that used to substantiate health FSA expenses). Expenses reimbursed elsewhere do not qualify for reimbursement. Additionally, the QSEHRA may only reimburse expenses after the employee provides periodic proof that he or she maintains minimum essential coverage.
  • What is the Maximum Benefit That Can Be Provided? The maximum amount available to an employee under a QSEHRA is subject to an annual statutory dollar limit (adjusted annually for inflation). The limit for self-only coverage in 2018 is $5,050. The limit for family coverage is $10,250 for 2018.
  • How Does the QSEHRA Need to be Funded? The QSEHRA must be funded solely by an eligible employer (no salary reduction contributions are permitted).
  • What Notice and Reporting Obligations Are Associated with a QSEHRA? Written notice, which includes certain statutory language, to each eligible employee must be furnished by the employer at least 90 days before the beginning of each plan year (and on or prior to the first day the employee becomes eligible for an employee who is not eligible to participate at the beginning of the plan year). Additionally, the total amount of the employee’s permitted QSEHRA benefit must be reported on Form W-2. And, employers that sponsor a QSEHRA must file a Form 720 annually and pay PCORI fees under Code section 4376.

Small employers that are considering establishing a QSEHRA for their employees should carefully review IRS Notice 2017-67 and Code section 9831 to ensure appropriate legal compliance. The requirements contained in the guidance are numerous and comprehensive. Additionally, employers should keep in mind that QSEHRAs are still subject to the general welfare benefit plan requirements of ERISA and the HIPAA administrative simplification rules (unless an exception exists). Moreover, benefits under a QSEHRA are taken into account for purposes of the Cadillac Tax provisions under Code section 49801. Thus, employers are encouraged to consult with their legal counsel in conjunction with establishing and administering a QSEHRA. Proper administration is imperative and small errors can have large penalties.

Copies of the Notice and Code section 9831 can be found at the following:

Elizabeth H. Latchana, Attorney Fraser TrebilcockElizabeth H. Latchana specializes in employee health and welfare benefits. Recognized for her outstanding legal work, in both 2018 and 2015, Beth was selected as “Lawyer of the Year” in Lansing for Employee Benefits (ERISA) Law by Best Lawyers, and in 2017 as one of the Top 30 “Women in the Law” by Michigan Lawyers Weekly. Contact her for more information on this reminder or other matters at 517.377.0826 or elatchana@fraserlawfirm.com.

Should You Consider Long-Term Care Insurance?

Alzheimers (800x800)It is very difficult to predict whether you or a loved one will one day need long-term care insurance. A diagnosis like Alzheimer’s disease or another dementia can drastically change your life and your financial plans. With an estimated five million Americans currently diagnosed with the disease, and a new diagnosis every 66 seconds, Fraser Trebilcock attorney Melisa M. W. Mysliwiec says it’s important to plan ahead.

“We don’t know if we’re going to get Alzheimer’s or anything like that. I think the best thing is to have your team of advisers. 30’s, 40’s, 50’s, is a good time to meet with an attorney, get estate planning documents put in place so there’s someone to act on your behalf if you become unable to,” Melisa said in an interview with WILX News 10’s Ann Emmerich.  Other important advisors to have on your team include a financial planner, accountant, and insurance agent.

These critical estate planning documents include: durable powers of attorney and patient advocate designations. You’ll also want to closely review assets and your financial plans with a financial planner when considering an investment in long-term care insurance. Long-term care insurance isn’t for everyone and a financial planner can assist in making that determination.  This is especially important, Melisa says, because even if you decide to buy long-term care insurance, the plan you choose will affect how much the insurance covers.

“There’s a big difference between getting a hundred dollars for help with care at home, versus paying privately in a nursing home which might be $250 or $270 dollars a day. So you really want to look at how much you can get per day and then there’s usually a cap on how many years it will pay out, too,” she said.

On average, people with Alzheimer’s live ten years with the disease, or longer, according to the Alzheimer’s Association. This means that families are left to pay for additional medical and living expenses for prolonged periods of time. So not only does the disease progressively devastate the health of the patient, it also takes a financial toll on families.

To read more about long-term health insurance, and hear one woman’s personal struggle with paying for her husband’s care after he was diagnosed with Alzheimer’s disease, read News 10’s full story here.

It’s important to note that even if you have long-term care insurance, you may ultimately have to rely on Medicaid. Recent rule changes could affect how much you receive from Medicaid without any penalties. Melisa explains why your caretaker agreement should be Medicaid-compliant, even before you decide to apply for Medicaid, in this blog.

If you have more questions about putting together a plan in case you or a loved one are diagnosed with Alzheimer’s disease, attorneys Melisa Mysliwiec and Paula M. Manderfield will be presenting on Alzheimer’s Legal and Financial Planning on Wednesday, March 8 at MSU Federal Credit Union’s East Lansing Branch, from 6-7:30 p.m. Advance registration is requested.

Client Alert: Soaring Compliance Burdens for Wellness Programs Continue to Emerge: New Final Regulations under the ADA and GINA Issued

stethoscope heartThe desire to offer a wellness program to employees may seem like a no-brainer.  Why wouldn’t employers encourage their employees to adopt healthy lifestyles and thereby hopefully reduce the future medical claims and health insurance premiums of employer-sponsored medical plans?  Continue reading Client Alert: Soaring Compliance Burdens for Wellness Programs Continue to Emerge: New Final Regulations under the ADA and GINA Issued

The Force Awakens: Better Health, Better Care, Better Value in America

Doc HandsThe Force is with you, Jedi health care workers! This infamous Star Wars theme headlined an annual health care presentation, sponsored by the McLaren Greater Lansing Healthcare Foundation’s Business Partners in Health Committee. Continue reading The Force Awakens: Better Health, Better Care, Better Value in America

Fraser Trebilcock Attorney Visits Lawmakers in Washington, Addresses Pending Legislation Including Health Care Reform

Fraser Trebilcock Health Care Law Department Chair Jonathan Raven spent two days in Washington, DC this week to advocate for adequate federal funding and appropriate regulatory burden so that urban and rural hospitals, physicians, nurses and their colleagues can continue to provide badly needed medical care and public health services to underserved populations in our home communities.

Mr. Raven is a volunteer member of the American Hospital Association Committee on Governance, which meets throughout the year across the country and allows hospital trustees to assist in development of Capitol Hill advocacy priorities for our nation’s hospitals.   Mr. Raven is also a Board Member Emeritus

Continue reading Fraser Trebilcock Attorney Visits Lawmakers in Washington, Addresses Pending Legislation Including Health Care Reform

Do Your Employees Have the Right Stuff?

Using Competency Models in Strategic Human Resource Management
By: Michael P. James, J.D., M.B.A.

Human Resource Management Professionals:

Have you been asked to complete a skill or competency analysis for employees in your organization? Are you in charge of evaluating or designing a talent/knowledge-based compensation system? Would you like to create training and certification programs to ensure that employees possess the skills required for the positions they hold in your company? These responsibilities can be overwhelming, yet they are also critical to the success of your organization. Where should you start?

Continue reading Do Your Employees Have the Right Stuff?