Employers
A date is finally set for the Supreme Court of the United States (SCOTUS) to once again rule on the constitutionality of the Affordable Care Act (ACA). Oral arguments are expected to be heard on November 10, 2020, just one week after the presidential election.
Technology has influenced employee behavior and changed expectations. They are no longer comparing good and services, but instead experiences. As a result, they are demanding innovation, engagement, and personalization across every aspect of thier lives, including healthcare.
The Internal Revenue Service (IRS) recently issued Rev. Proc. 2020-36 which includes details on the minimum required contribution percentage in determining whether employer-sponsored health coverage is affordable. In 2021, employer-sponsored health coverage will be considered affordable if an employee has to pay no more than 9.83% (an increase of 0.05% from 2020) of their income for such coverage.
Do you remember the days when employers could change from a $500 deductible plan to a $5,000 deductible plan and save 40-50% on insurance premiums? Then those same employers would offer a Health Reimbursement Arrangement (HRA) to cover most or all the deductible increase for employees who have chronic conditions or who experience unexpected medical events. The net result provided employers with significant savings while providing employees with substantially similar benefits. Those days still exist.
Small businesses often times find it hard to provide quality health insurance coverage to employees, especially during these unique times. Let’s face the reality! Health insurance usually comes with a high price tag, and small businesses may not be able to meet the contribution or participation requirements to provide a traditional group health plan to employees.
Premium Reimbursement Arrangements (PRAs) can generally be described as tax-free programs which are offered by employers to reimburse employees for health insurance coverage they obtain on their own. Below is a summary of the most common PRAs.
The Affordable Care Act (ACA) created a research institute known as the Patient-Centered Outcomes Research Institute (PCORI). The goal of PCORI is to help patients and those who care for them make better-informed decisions about healthcare choices. PCORI is funded in part by fees which are charged to health plans. The following information is designed to help employers understand their upcoming payment obligations.
The Internal Revenue Service (IRS) recently proposed rules that would expand the definition of medical expenses allowed under Section 213(d) of the Internal Revenue Code (“Code”). This part of the Code is what helps guide the types expenses that can be reimbursed through a Health Reimbursement Arrangement (HRA), Flexible Spending Account (FSA) or Health Savings Account (HSA).
Health Savings Account News
You may have previously heard that the 2019 federal tax filing deadline was extended until July 15, 2020. In the event you were unaware, contributions to Health Savings Accounts (HSAs) for the prior year can be made up until the tax filing deadline. The tax filing extension is impactful to HSAs for two reasons:
The Employer Mandate requires employers with 50 or more employees to offer “minimum essential coverage” to at least 95% of its full-time employees. Failure to do so can result in a penalty of $2,570 for each full-time with a break on the first 30 employees. Most employers assume minimum essential coverage must come in the form of a traditional group health insurance plan, but that is not the case.
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