News

Issue 2017-02

Apr 26, 2017

Trump, GOP Still Aiming to Pass Health Care Bill

Patrick Flemming, CCO

This Saturday, April 29, 2017, will mark the 100th day of Donald Trump’s presidency, an important milestone by which the successes of a President are measured. Based on President Trump’s pledges, we in the healthcare and employee benefits industry expected to see significant changes related to the repeal and replacement of the Affordable Care Act (“ACA”). However, the bill to effectuate such changes, the American Health Care Act (H.R. 1628), has since failed to garner enough support from Republican members to pass in the House of Representatives. House Republicans are reportedly making a last-minute charge to pass the measure before the 100-day mark, having received backing from the House Freedom Caucus—the group whose earlier holdout led House Speaker Paul Ryan to pull the bill from consideration in late March. That being said, the Tuesday Group, an informal caucus of moderate Republican members are still on the fence, and the House has indicated that their top priority this week is passing a spending measure to avoid a government shutdown.

While it is unlikely the American Health Care Act will pass the House before this weekend, it may be reconsidered in the near future. At the moment, House members are voicing their support for a proposal from Rep. Tom MacArthur (R-NJ) that, according to the Wall Street Journal, “would allow states to waive some insurance requirements established by the 2010 health law . . . if the states could argue that it would enable them to lower the cost of premiums or insure more people.” The proposal would also free insurers from covering certain essential health benefits; and while insurers would still be required to cover individuals with preexisting conditions, the insurers would be permitted to charge those individuals higher premiums. Some variation of other key provisions in H.R. 1628, such as the following, would likely still be included:

  • Zeroing out the penalties associated with the ACA’s individual and employer mandates;
  • Increasing the ratio of premiums that may be charged to older persons versus younger persons;
  • Rolling back Medicaid expansion;
  • Modifying the premium tax credits model to be based on age instead of income;
  • Imposing penalties on individuals who do not remain continuously covered;
  • Further delaying the “Cadillac Tax” beyond 2020; and
  • Expanding contributions to both flexible spending accounts and health savings accounts.

The American Health Care Act is not the only proposed legislation that would increase permitted contributions to health savings accounts. Indeed, the Health Savings Account Expansion Act (H.R. 247) and the Health Savings Act of 2017 (H.R. 35), both introduced in January, would increase contribution limits, among other things. For example the Health Savings Account Expansion Act would increase contribution limits for single and joint filers to $9,000 and $18,000 per year, respectively; permit over-the-counter purchases; repeal increased penalties on ineligible withdrawals; permit HSA funds to pay premiums and direct primary care expenses; and eliminate the requirement that HSAs be tied to a high deductible health plan.

While the American Health Care Act and the health savings account expansion bills would revise or eliminate certain provisions of the ACA, the ACA still remains the law of the land— despite the efforts of House Republicans and President Trump during his first 100 days in office. Therefore, all mandates, requirements (such as employer reporting requirements), and penalties associated with the ACA remain in effect at this time. Accordingly, we encourage employers to remain committed to the practices and procedures they have in place and continue to adhere to any and all provisions of the ACA until those provisions have been officially revised or eliminated. We will continue to monitor the rapidly-evolving healthcare landscape and keep you apprised of any changes in relevant regulations and laws.

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The Compliance Corner is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that neither the authors nor FBMC are rendering legal, accounting, or other professional advice and assume no liability in connection with its use. No portion of this article may be reprinted or used without written permission from FBMC. Copyright 2017, FBMC.

Issue 2017-01

Feb. 9, 2017

From the Editor

Trish Neely, CCO

2017 is poised to be an interesting year for employers, consultants, brokers, insurers.

Although I become a retiree this month, my interest in employee benefits will continue and I intend to watch the proceedings with much interest. Patrick Fleming, whom many of you met at our recent Conference, is assuming my duties and will continue providing you with regulatory content, interpretations and guidelines to assure your plans remain compliant. It has been my pleasure to work directly with many of you through the years and I wish you all the best.

We won’t repeat what you have doubtless read and heard in the news. Suffice it to say the January Executive Order will cause the new Secretaries of the governing agencies (DOL, IRS, and DHHS) to look immediately at what they can change without Congressional Action. You have heard the term “reconciliation” which only requires a simple majority to pass, however keep in mind, it only applies to mandatory spending provisions and not the full Act. It is likely to be a repeat of the 2015 reconciliation bill which included:

  • Repeal of premium tax credit/subsidies
  • Elimination of penalties for individual and employer mandates
  • Repeal of Medicaid expansion
  • Repeal of Cadillac Tax
  • Reduction of HSA excise tax from 20% to 10%
  • Repeal of Health FSA cap

To recover from the revenue hit from Reconciliation (or repealing the Act) a likely result is a cap on the employee exclusion for employer provided health care (and the cap on the matching savings employers realize). This has been discussed and debated for years and keeps emerging as a revenue fix. Keeping some of the Act’s provisions such as lifetime caps, age rating, prohibition of pre-existing conditions will be challenging and will result in adverse selection without some type of control or mandate in place to encourage young and healthy enrollees. Ryan, Cassidy/Collins, Paul all have alternatives to PPACA – a common theme is retaining certain provision, giving HSAs a boost, less dependence on employer based coverage and a cap on employee exclusion for employer provided healthcare.

Nothing to date has caused the need for a change with your current plan documents; we will keep you informed as events unfurl. In the meantime we recommend holding the course and acting as if PPACA is still the law of the land until you hear otherwise.

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The Compliance Corner is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that neither the authors nor FBMC are rendering legal, accounting, or other professional advice and assume no liability in connection with its use. No portion of this article may be reprinted or used without written permission from FBMC. Copyright 2017, FBMC.

Issue 2016-03

2017 Cost Of Living Adjustments

General benefit increases are based on increases in the cost of living, as measured by the Consumer Price Index.
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2017 Indexing Adjustments for PPACA Mandates

The IRS issued indexing adjustments to determine when coverage is affordable and when an individual is exempt from the shared responsibility penalty. These amounts determine the employer and employee shared responsibility penalties.
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The Compliance Corner is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that neither the authors nor FBMC are rendering legal, accounting, or other professional advice and assume no liability in connection with its use. No portion of this article may be reprinted or used without written permission from FBMC. Copyright 2016, FBMC.

Issue 2016-02

DOL Increases Penalties for Violations Projects $140M in Penalty Payments

Congress enacted legislation in 2015 to adjust civil monetary penalties for a wide range of compliance violations under the jurisdiction of the Department of Labor. Some penalties have not been adjusted in decades. Thus, in 2016, initial catch-up adjustments are effective on the first of August; thereafter adjustments will be made by January 15th of each year.
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Filing 2016 Forms 1094 & 1095

If you are an Applicable Large Employer (ALE), draft 2016 Forms 1094 and 1095; and draft Instructions for the “C” Forms have recently been filed. The Forms show few changes from 2015; however the 2016 instructions include some additional examples and clarifications. A few highlights follow.
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The Compliance Corner is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that neither the authors nor FBMC are rendering legal, accounting, or other professional advice and assume no liability in connection with its use. No portion of this article may be reprinted or used without written permission from FBMC. Copyright 2016, FBMC.

Issue 2016-01

Welcome to FBMC’s Compliance Corner

Trish Neely, Editor

This is our 26th year of distributing the Quarterly Review newsletter and Benefits Alerts. We are merging the two under the name Compliance Corner. This issue will end our quarterly communications; going forward the Compliance Corner will provide relevant and timely information as events occur rather than waiting for the end of a given quarter. In that regard, Compliance Corner will be more like our current Benefits Alerts. If there are topics you would like for us to cover or questions you would like answered in the Compliance Corner, please contact me via email.

Forms 1094 and 1095 May Still Be Filed

June 30, 2016 was the deadline to electronically file Forms 1094 & 1095; May 31, 2016 was the deadline for paper returns. But if you have not filed yet you may still do so. It is important to note this is not an extension and whether you will be penalized for a late filing is based in part on your good faith efforts to file.
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HSA/HDHP Cost of Living Adjustments

IRS Revenue Procedure 2016-28 was issued in April to announce a cost of living adjustment to Health Savings Accounts; the single change was an increase to the annual contribution limit for self-only coverage. This revenue procedure is effective for calendar year 2017.
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EEOC Wellness Regulations Require Quick Adoption

The EEOC has issued final regulations on the impact of the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) on wellness programs. These regulations include changes and clarifications to the proposed regulations issued last year. The ADA notice requirements and the ADA and GINA restrictions on incentives are effective with the first plan year beginning on or after January 1, 2017.
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FAQs for Implementing Various Market Reform Provisions

Another round of Frequently Asked Questions (FAQs) was issued jointly by the Agencies* in April to address multiple topics, including: cost sharing, contraceptives, coverage rescissions and more. These FAQs answer questions from stakeholders to help people better understand the following laws: Patient Protection and Affordable Care Act (PPACA), Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), and the Women’s Health and Cancer Rights Act of 1998 (WHCRA).
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The Compliance Corner is intended to provide accurate and authoritative information on the subject matter covered. It is distributed with the understanding that neither the authors nor FBMC are rendering legal, accounting, or other professional advice and assume no liability in connection with its use. No portion of this article may be reprinted or used without written permission from FBMC. Copyright 2016, FBMC.
FBMC 40th Anniversary Logo

FBMC celebrates 40 years of employee benefits with redesigned look, new website

Tallahassee, Fla. – FBMC Benefits Management, Inc. (FBMC), an employee benefits manager headquartered in Tallahassee, is proud to announce 40 years of excellence in providing and managing employee benefits. From the establishment of HMOs in the early 1970s to the passage of the Affordable Care Act (ACA) in 2010, the healthcare landscape has changed dramatically over the past 40 years, and FBMC has proven to be a stable presence in the employee-benefits industry throughout that time.

Indexing Adjustments for PPACA Mandates

Trish Neely, CCO

The IRS recently announced 2017 indexing adjustments to determine when coverage is affordable and when an individual is exempt from the shared responsibility penalty. These amounts determine the employer and employee shared responsibility penalties.