by ckistler | Dec 17, 2020 | Medicare
Comparing Medicare health and prescription drug plans can be complicated. Keep in mind these 4 things to make your plan choice easier with the Medicare Plan Finder.
- Total cost for care. It’s important to think about your total out-of-pocket costs, including deductibles, copayments, coinsurance, maximums, and drug costs, that you’ll pay with a Medicare health or drug plan. When you compare plans with Medicare Plan Finder, we’ll explain these costs and help you find plans with the lowest costs. We’ll also automatically show you plans with the lowest drug and premium costs first.
- Provider choice. Some plan types have a network of providers you’ll have to use if you want to pay less. Medicare Plan Finder lets you filter your results by plan type, and explains how each plan type lets you choose providers. If you have a particular doctor or pharmacy that you prefer to go to, see if that plan has a network. If it does, check that your provider is in the plan’s network. You might also want to make sure that your plan’s network has providers to choose from that are convenient to you.
- Benefits. Many Medicare Advantage Plans include prescription drug, vision, hearing, and dental coverage. Maybe you travel a lot, or spend part of the year in a different state. If you do, see if your plan will cover you when you travel. When you use Medicare Plan Finder, you can view, filter, and compare these benefits.
- “Overall Star Rating.” Medicare Plan Finder features a star rating system for Medicare health and drug plans. The “Overall Star Rating” gives an overall rating of the plan’s quality and performance for the types of services each plan offers. A plan can get a rating between 1 and 5 stars. A 5-star rating is considered excellent. If a Medicare Advantage Plan, Medicare drug plan or Medicare Cost Plan with a 5-star rating is available in your area, you can use the 5-star Special Enrollment Period (once a year) to switch from your current Medicare plan to a Medicare plan with the 5-star rating.
Visit the Medicare Plan Finder to start comparing 2021 Medicare health and drug plans now.
Originally posted on Medicare.gov
by admin | Jul 16, 2019 | ACA, Medicare
The Centers for Medicare and Medicaid Services (CMS) published its final rule and fact sheet for benefit payment and parameters for 2020. Although the final rule primarily affects the individual market and the Exchanges, the final rule addresses the following topics that may impact employer-sponsored group health plans:
- The 2020 maximum annual limitation on cost sharing is $8,150 for self-only coverage and $16,300 for other-than-self-only coverage.
- For fully insured plans, any indication of a reduction in the generosity of a benefit for individuals that is not based on clinically indicated, reasonable medical management practices is potentially discriminatory.
- Amounts paid toward cost sharing using direct support by drug manufacturers (for example, coupons) to insured patients to reduce or eliminate immediate out-of-pocket costs for specific prescription brand drugs that have a generic equivalent are not required to be counted toward the annual limitation on cost sharing.
- Federally Facilitated Small Business Health Options Programs (FF-SHOPs) may operate a toll-free hotline rather than a more robust call center.
The final rule is effective on June 24, 2019. The final rule generally applies to plan years beginning on or after January 1, 2020.
By Karen Hsu
Originally posted by ubabenefits.com
by admin | Jun 25, 2019 | Benefit Management, Benefit Plan Tips, Tricks and Traps
Question: Our company offers group medical and dental plans for all employees. We also have an executive-only medical plan that covers out-of-pocket expenses that the regular group plan does not pay. Does COBRA apply to the executive-only plan? Do we have to include it in our summary plan description (SPD)?
Answer: The coverage continuation requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) pertain to group health plans sponsored by employers with 20 or more workers (except certain church plans). This is referred to as federal COBRA, which is enforced and regulated by the Internal Revenue Service (IRS) and the Department of Labor (DOL).
Any employer-sponsored plan or program providing health benefits (medical, dental, vision, etc.) is a group health plan under COBRA. Briefly, if the employee’s access to the program or benefits is based on the person’s current or past relationship with an employer, it is a group plan. An executive-only medical plan is a group health plan – and subject to COBRA – since eligibility for the plan is connected to employment. (Reference: 26 CFR § 54.4980B-2 )
Next, the Employee Retirement Income Security Act (ERISA) imposes numerous reporting and disclosure requirements on employee benefits plans, including rules for plan documents and summary plan descriptions (SPDs). Plans sponsored by governmental employers and certain church plans are exempt from ERISA, but plans sponsored by private-sector employers must comply with ERISA’s plan document and SPD rules. There is an exception, however, for an executive plan that meets the following conditions:
- The plan primarily provides welfare (e.g., health) benefits for a select group of management or highly-compensated employees; and
- No part of the plan is funded through employee contributions or a trust.
The most common example is an executive-only medical insurance plan for which the employer pays 100 percent of premiums. In that case, an SPD is not required and Form 5500 reporting does not apply. A plan document is required but it does not have to be made available to employees. The plan document does have to be provided to the Department of Labor (DOL) if requested. (Reference: 29 CFR § 2520.104-24)
By Kathleen A. Berger
Originally posted on thinkhr.com
by admin | Nov 7, 2018 | ACA, Compliance, Human Resources, IRS
On November 5, 2018, the Internal Revenue Service (IRS) released Notice 2018-85 to announce that the health plan Patient-Centered Outcomes Research Institute (PCORI) fee for plan years ending between October 1, 2018 and September 30, 2019 will be $2.45 per plan participant. This is an increase from the prior year’s fee of $2.39 due to an inflation adjustment.
Background
The Affordable Care Act created the PCORI to study clinical effectiveness and health outcomes. To finance the nonprofit institute’s work, a small annual fee — commonly called the PCORI fee — is charged on group health plans.
The fee is an annual amount multiplied by the number of plan participants. The dollar amount of the fee is based on the ending date of the plan year. For instance:
- For plan year ending between October 1, 2017 and September 30, 2018: $2.39.
- For plan year ending between October 1, 2018 and September 30, 2019: $2.45.
Insurers are responsible for calculating and paying the fee for insured plans. For self-funded health plans, however, the employer sponsor is responsible for calculating and paying the fee. Payment is due by filing Form 720 by July 31 following the end of the calendar year in which the health plan year ends. For example, if the group health plan year ends December 31, 2018, Form 720 must be filed along with payment no later than July 31, 2019.
Certain types of health plans are exempt from the fee, such as:
- Stand-alone dental and/or vision plans;
- Employee assistance, disease management, and wellness programs that do not provide significant medical care benefits;
- Stop-loss insurance policies; and
- Health savings accounts (HSAs).
HRAs and QSEHRAs
A traditional health reimbursement arrangement (HRA) is exempt from the PCORI fee, provided that it is integrated with another self-funded health plan sponsored by the same employer. In that case, the employer pays the PCORI fee with respect to its self-funded plan, but does not pay again just for the HRA component. If, however, the HRA is integrated with a group insurance health plan, the insurer will pay the PCORI fee with respect to the insured coverage and the employer pays the fee for the HRA component.
A qualified small employer health reimbursement arrangement (QSEHRA) works a little differently. A QSEHRA is a special type of tax-preferred arrangement that can only be offered by small employers (generally those with fewer than 50 employees) that do not offer any other health plan to their workers. Since the QSEHRA is not integrated with another plan, the PCORI fee applies to the QSEHRA. Small employers that sponsor a QSEHRA are responsible for reporting and paying the PCORI fee.
PCORI Nears its End
The PCORI program will sunset in 2019. The last payment will apply to plan years that end by September 30, 2019 and that payment will be due in July 2020. There will not be any PCORI fee for plan years that end on October 1, 2019 or later.
Resources
The IRS provides the following guidance to help plan sponsors calculate, report, and pay the PCORI fee:
Originally posted on thinkhr.com
by admin | Oct 30, 2018 | Benefit Management, Employee Benefits, Flexible Spending Accounts, Group Benefit Plans
Trying to decide which of the many employer-sponsored benefits out there to offer employees can leave an employer feeling lost in a confusing bowl of alphabet soup—HSA? FSA? DCAP? HRA? What does it mean if a benefit is “limited” or “post-deductible”? Which one is use-it-or-lose-it? Which one has a rollover? What are the limits on each benefit?—and so on.
While there are many details to cover for each of these benefit options, perhaps the first and most important question to answer is: which of these benefits is going to best suit the needs of both my business and my employees? In this article, we will cover the basic pros and cons of Flexible Spending Arrangements (FSA), Health Savings Accounts (HSA), and Health Reimbursement Arrangements (HRA) to help you better answer that question.
Flexible Spending Arrangements (FSA)
An FSA is an employer-sponsored and employer-owned benefit that allows employee participants to be reimbursed for certain expenses with amounts deducted from their salaries pre-tax. An FSA can include both the Health FSA that reimburses uncovered medical expenses and the Dependent Care FSA that reimburses for dependent expenses like day care and child care.
Pros:
- Benefits can be funded entirely from employee salary reductions (ER contributions are an option)
- Participants have access to full annual elections on day 1 of the benefit (Health FSA only)
- Participants save on taxes by reducing their taxable income; employers save also by paying less in payroll taxes like FICA and FUTA
- An FSA allows participants to “give themselves a raise” by reducing the taxes on healthcare expenses they would have had anyway
Cons:
- Employers risk losing money should an employee quit or leave the program prior to fully funding their FSA election
- Employees risk losing money should their healthcare expenses total less than their election (the infamous use-it-or-lose-it—though there are ways to mitigate this problem, such as the $500 rollover option)
- FSA elections are irrevocable after open enrollment; only a qualifying change of status event permits a change of election mid-year
- Only so much can be elected for an FSA. For 2018, Health FSAs are capped at $2,650, and Dependent Care Accounts are generally capped at $5,000
- FSA plans are almost always offered under a cafeteria plan; as such, they are subject to several non-discrimination rules and tests
Health Savings Accounts (HSA)
An HSA is an employee-owned account that allows participants to set aside funds to pay for the same expenses that are eligible under a Health FSA. Also like an FSA, these accounts can be offered under a cafeteria plan so that participants may fund their accounts through pre-tax salary reductions.
Pros:
- HSAs are “triple-tax advantaged”—the contributions are tax free, the funds are not taxed if paid for eligible expenses, and any gains on the funds (interest, dividends) are also tax-free
- HSAs are portable, employee-owned, interest-bearing bank accounts; the account remains with the employees even if they leave the company
- Certain HSAs allow participants to invest a portion of the balance into mutual funds; any earnings on these investments are non-taxable
- Upon reaching retirement, participants can use any remaining HSA funds to pay for any expense without a tax penalty (though normal taxes are required for non-qualified expenses); also, retirees can use the funds tax-free to pay premiums on any supplemental Medicare coverage. This feature allows HSAs to operate as a secondary retirement fund
- There is no use-it-or-lose-it with HSAs; all funds employees contribute stay in their accounts and remain theirs in perpetuity. Also, participants may alter their deduction amounts at any time
- Like FSAs, employers can either allow the HSA to be entirely employee-funded, or they may choose to also make contributions to their employees’ HSA accounts
- Even though they are often offered under a cafeteria plan, HSAs do not carry the same non-discrimination requirements as an FSA. Moreover, there is less administrative burden for the employer as the employees carry the liability for their own accounts
Cons:
- To open and contribute to an HSA, an employee must be covered by a qualifying high deductible health plan; moreover, they cannot be covered by any other health coverage (a spouse’s health insurance, an FSA (unless limited), or otherwise)
- Participants are limited to reimburse only what they have contributed—there is no “front-loading” like with an FSA
- Participant contributions to an HSA also have an annual limit. For 2018, that limit is $3,450 for an employee with single coverage and $6,900 for an employee with family coverage (participants over 55 can add an additional $1,000; also, remember there is no total account limit)
- Participation in an HSA precludes participation in any other benefit that provides health coverage. This means employees with an HSA cannot participate in either an FSA or an HRA. Employers can work around this by offering a special limited FSA or HRA that only reimburses dental and vision benefits, meets certain deductible requirements, or both
- HSAs are treated as bank accounts for legal purposes, so they are subject to many of the same laws that govern bank accounts, like the Patriot Act. Participants are often required to verify their identity to open an HSA, an administrative burden that does not apply to either an FSA or an HRA
Health Reimbursement Arrangements (HRA)
An HRA is an employer-owned and employer-sponsored account that, unlike FSAs and HSAs, is completely funded with employer monies. Employers can think of these accounts as their own supplemental health plans that they create for their employees
Pros:
- HRAs are extremely flexible in terms of design and function; employers can essentially create the benefit to reimburse the specific expenses at the specific time and under the specific conditions that the employers want
- HRAs can be an excellent way to “soften the blow” of an increase in major medical insurance costs—employers can use an HRA to mitigate an increase in premiums, deductibles, or other out-of-pocket expenses
- HRAs can be simpler to administer than an FSA or even an HSA, provided that the plan design is simple and efficient: there are no payroll deductions to track, usually less reimbursements to process, and no individual participant elections to manage
- Small employers may qualify for a special type of HRA, a Qualified Small Employer HRA (or QSEHRA), that even allows participants to be reimbursed for their insurance premiums (special regulations apply)
- Funds can remain with the employer if someone terminates employment and have not submitted for reimbursement
Cons:
- HRAs are entirely employer funded. No employee funds or salary reductions may be used to help pay for the benefit. Some employers may not have the funding to operate such a benefit
- HRAs are subject to the Affordable Care Act. As such, they must be “integrated” with major medical coverage if they provide any sort of health expense reimbursement and are also subject to several regulations
- HRAs are also subject to many of the same non-discrimination requirements as the Health FSA
- HRAs often go under-utilized; employers may pay an amount of administrative costs that is disproportionate to how much employees actually use the benefit
- Employers can often get “stuck in the weeds” with an overly complicated HRA plan design. Such designs create frustration on the part of the participants, the benefits administrator, and the employer
For help in determining which flexible benefit is right for your business, contact us!
by Blake London
Originally posted on ubabenefits.com
