Defined Contribution Approach to Benefit Planning

Size: px
Start display at page:

Download "Defined Contribution Approach to Benefit Planning"

Transcription

1 Defined Contribution Approach to Benefit Planning 1 Sue Sieger, ACFCI, CAS Senior Compliance Consultant Employee Benefits Corporation The material provided in this webinar is by Employee Benefits Corporation and is for general information purposes only. The information does not constitute legal advice and may not be relied upon by anyone as such. Nor may the information be disseminated in any form. 2 1

2 2

3 3

4 Our Agenda Defined Contribution Plan in General Section 125, FSA, HRA, HSA Review Cafeteria plan, HRA and HSA eligibility rules Cafeteria Plan Design Strategies HRA Plan Design Strategies How FSA, HRA and HSA can be used together to stretch any size benefit budget 8 4

5 Defined Contribution Plan Defined 9 Defined Contribution Plan in General Defined Benefits Employer determines the range of services the plan will cover (i.e. group health plan) Employer selects a plan that will provide specific services for a desired price Options are generally limited to one plan Unsustainable due to healthcare inflation 10 5

6 Defined Contribution Plan in General Defined Contribution Approach Employer determines how much will be spent on benefits up front Employer contribution is fixed and may be based upon lowest cost option with the employee option to buyup Employer typically provides options that employees can choose from (spend employer contribution) Benefits chosen in excess of employer contribution often purchased through payroll deduction 11 Defined Contribution Plans in General EMPLOYER ADVANTAGES Allows employers to fix the amount of their financial contribution obligation Create more engaged consumers by paying a fixed amount or limiting employer contributions to specific choices Allow employers more control and predictability over costs 12 6

7 Defined Contribution Plans in General EMPLOYEE ADVANTAGES Employees have the ability to use the employer contributions for a variety of benefit options Employees become more in tune with the cost of care and will ultimately become better consumers and stewards of healthcare dollars Better use of employee benefit dollars could lead to expanded benefit packages or additional compensation 13 Defined Contribution Plans in General EXAMPLES OF DEFINED CONTRIBUTION PLANS Retirement Plans Health Plans Private Exchanges Active Employees Retiree Health Cafeteria Plans that include Employer contributions Flexible Spending Accounts (FSA) Employer sponsored Insurance and Voluntary Products Consumer Directed Healthcare Health Reimbursement Arrangements (HRA) Health Savings Account (HSA) 14 7

8 COST SAVINGS SOLUTIONS REMAIN KEY Health Care Reform does not address one of the main problems with health care Rising Cost. Engaging Consumers will lead to a change in behavior which will lead to a reduction in cost. Flexible Spending Arrangements (FSA) Health Reimbursement Arrangements (HRA) Health Savings Accounts (HSA) 15 Section 125, FSA, HRA and HSA Review 16 8

9 Key Definitions Glossary of Acronyms Acronym Definition FSA Flexible Spending Account HRA Health Reimbursement Arrangement HDHP High Deductible Health Plan HSA Health Savings Account DOL Department of Labor IRS Internal Revenue Service HIPAA Health Insurance Portability and Accountability Act of 1996 ACA Affordable Care Act SBC Summary of Benefits and Coverage HHS Health and Human Services ERISA Employee Retirement Income Security Act SPD Summary Plan Description Section 125 Rules in General Cafeteria plans are primarily governed by Code 125 and Proposed Treasury Regulation through * Pre tax salary reductions Pretax Insurance Premiums or Premium Only Plans (POP) Health Flexible Spending Arrangements (Health FSAs) have some additional requirements under Code sections 105 and 106 Dependent Care Assistance Plans (DCAPs) have requirements under Code Section 129 Pretax contributions can be made to a Health Savings Account (HSA) under these plans. Additional requirements are outlined under Code Section 223 *These Proposed Treasury Regulations will be finalized???? 18 9

10 Section 125 Qualified Plan Options Pre tax Premium Options Group Health Group or Voluntary Dental Group or Voluntary Vision Group Term Life ($50,000 Employee limit for pre tax) Accidental Death & Dismemberment Group or Voluntary Short/Long Term Disability* Ancillary Lines (i.e. Cancer, Accident, Critical Illness, Specified Health Event, Intensive Care, etc.) *Taxed on benefit if premiums are pre tax. 19 ERISA plan or Voluntary Plan? REMINDER A health or welfare plan is subject to ERISA if it is established or maintained by the employer Requires the employer to be involved with the benefit to more than a minimal degree 20 10

11 ERISA plan or Voluntary Plan? ERISA Safe Harbor for Voluntary Benefits No contributions from the employer or employee organization (e.g., union) Participation in the program must be completely voluntary The sole function of the employer is to allow the insurer to advertise the plan, collect premiums through payroll and remit them to the insurer (no endorsement of the program) The employer may not receive any form of cash, incentives or other compensation associated with the program 21 ERISA Plan Requirements Key Compliance if employer is subject to ERISA Requires each group health and welfare benefit plan, regardless of size, are required to have a written plan document in place and to distribute a summary plan description (SPD) to participants No written document doesn t necessarily mean you don t have a plan you just have a plan that is out of compliance of this aspect SPD distribution Within 120 days for new plans Within 90 days for new participants Every 5 years if material changes Within 30 days of written request 22 11

12 ERISA Plan Requirements Key Compliance if employer is subject to ERISA Record Retention: Must keep plan records for 6 years from last Form 5500 filing (which may mean 7 8 years conservatively) IRS Form 5500 filing requirement and Summary Annual Report (SAR) for large plans Small plan exception Over 100 participants on the 1 st day of the plan year triggers filing requirement 23 Types of FSAs General Health FSAs Health FSAs permit reimbursement of medical care expenses permitted under IRS guidelines. Internal Revenue Code 213(d) expenses (health, dental, and vision) may be eligible for reimbursement. Limited Health FSAs Health Savings Account (HSA) compatible Limited Health FSAs permit reimbursement of only dental, vision and preventive care expenses permitted under IRS guidelines

13 Types of FSAs Post HSA Deductible Health FSAs Health Savings Account (HSA) compatible Post HSA Deductible Health FSAs permit reimbursement of only dental, vision and preventive care expenses permitted under IRS guidelines until the participant can certify that he/she has met the required minimum HDHP deductible*. Once minimum HDHP deductible is satisfied the FSA can reimburse general medical expenses. *2015 and 2016: $1300 Single and $2600 Family 25 Types of FSAs Dependent Care FSA Code 129 dependent care plan rules Reimbursement for work related expenses for custodial care of qualifying individuals under the age of 13 unless the individual is unable for self care Individual Premium Account ( FSA Like ) Tax free reimbursement of eligible insurance premium expenses, except medical insurance Cannot integrate Individual Premium Accounts with individual policies IRS Notice and IRS Notice

14 What is an HRA? Health Reimbursement Arrangements (HRA) Internal Revenue Code Section % Employer funded Medical Expense Reimbursement. No Employee contributions allowed HRA participation is contingent on participation in employer sponsored medical plan (IRS Notice ) IRS Notice and Revenue Ruling Subject to COBRA: May permit (not required) carryovers of unused amounts and/or spend down of unused balances at termination or retirement in lieu of COBRA. Internal Revenue Code 213(d) expenses (health, dental, and vision) may be eligible for reimbursement. HRA may be limited to certain expenses or certain categories of expenses. 27 Types of HRAs Limited HRAs Health Savings Account (HSA) compatible Limited HRAs permit reimbursement of only dental, vision and preventive care expenses permitted under IRS guidelines. Post HSA Deductible HRAs Health Savings Account (HSA) compatible Post HSA Deductible HRAs permit reimbursement of only dental, vision and preventive care expenses permitted under IRS guidelines until the participant can certify that he/she has met the required minimum HSA deductible. Health Savings Account (HSA) compatible HRAs permit reimbursement for general medical expenses only after at least the required minimum HSA deductible has been satisfied. Accomplished through plan design and 2016 Min. HDHP Deductible $1300 Single and $2600 Family 28 14

15 What is a HSA? Health Savings Account (HSA) Internal Revenue Code Section 223 IRA type accounts that individuals, covered by a qualified high deductible health plans (HDHP), established after January 1, 2004 to pay for qualified medical expenses. Eligible Individuals cannot be covered by another plan that is not a qualified HDHP, including flexible spending arrangements, MSA, and HRA plans. (Exception: Coverage for accident, disability, dental, vision, and long term care, or for specified diseases are permissible.) No first dollar coverage (i.e. RX drug plans with co pays) permitted for anything other than preventive care. preventive care includes items such as annual physicals and wellness type tests and visits. No Drug Card. Individually owned HSA accounts are required to rollover unused balances from year to year and may earn interest tax free. 29 Cafeteria plan, HRA and HSA Eligibility Rules 30 15

16 Who is Eligible to Participate? Individuals Eligible to Participate in a Cafeteria Plan and Health Reimbursement Arrangement (HRA): Current and former common law employees; Spouses and dependents may have coverage under the eligible employee Cafeteria plan cannot be established primarily for former employees. Retirees cannot use qualified retirement plan distributions to pay for medical coverage on a pre tax basis through a cafeteria plan. Rev. Rul Retiree Only HRA plans Former employees or employees no longer eligible can spend down accumulated HRA funds in lieu of COBRA Controlled group member employees 31 Who is Not Eligible to Participate? Individuals who are Not Eligible to Participate in a Cafeteria Plan and HRA. Self employed individuals as defined in Code 401(c); Prop. Treas. Reg (g)(2)(i). Sole proprietors, partners in a partnership and more than 2% shareholders of an S Corporation (including their family members of lineal ascent and descent) Note: Unlike the more than 2% Subchapter S owner rules, the family members of sole proprietors and partners can participate in a cafeteria plan maintained by the partnership or sole proprietorship 32 16

17 Who is Eligible to Participate? Treasury FAQ 1/24/13 Compliance of Health Reimbursement Arrangements with Public Health Service Act (PHS Act) section The preamble distinguished between HRAs that are integrated with other coverage as part of a group health plan and HRAs that are not so integrated ( stand alone HRAs). The preamble stated that [w]hen HRAs are integrated with other coverage as part of a group health plan and the other coverage alone would comply with the requirements of PHS Act section 2711, the fact that benefits under the HRA by itself are limited does not violate PHS Act section 2711 because the combined benefit satisfies the requirements. (75 FR 37188, at ). An HRA is not considered integrated with primary health coverage offered by the employer unless, under the terms of the HRA, the HRA is available only to employees who are covered by primary group health plan coverage provided by the employer and meeting the requirements of PHS Act section (no annual or lifetime limits) 33 Who is Eligible to Participate? Individuals who are Eligible to Participate in a Health Savings Account (HSA) HSA eligibility is determined on a monthly basis. Must be covered under a qualified High Deductible Health Plan (HDHP) and not entitled to (enrolled in) Medicare Eligible Individuals cannot be covered by another plan that is not a qualified HDHP, including regular health flexible spending account (limited health FSA is OK), MSA, and HRA that reimburses prior to satisfaction of the minimum HDHP deductible. (Exceptions: Coverage for accident, disability, dental, vision, preventive care and long term care, or for specified diseases are permissible.) An eligible individual is any taxpayer including sole proprietors, partners, members of LLC, and S Corp shareholders and family

18 Cafeteria Plan Design Strategies 35 Cafeteria Plan Design Strategies Offer additional pay to everyone if no health benefits available to anyone (IRS Notice ) Taxable as wages No Spousal medical coverage Cash in lieu of health insurance Must be in your cafeteria plan Employer contributions to cafeteria plan Elective Contributions Non Elective Contributions Cashable Contributions 36 18

19 Market Reform Violations under ACA Reimbursement of Individual Insurance Premiums DOL Technical Release and IRS Notice (collectively, the Agency Guidance ) Cannot reimburse individual health insurance premiums (primary source of medical coverage) through a cafeteria plan or HRA on a pretax basis No insurance premiums can be reimbursed through a Health care FSA (never could) Can reimburse individual non medical (e.g. dental, vision, accident, cancer, etc.) insurance through a separate section 125 account (e.g., individual billed premium account) 37 Market Reform Violations under ACA Reimbursement of Individual Insurance Premiums The agency guidance created a new term Employer Payment Plan Any pretax arrangement that facilitates the direct or indirect payment of individual health insurance premiums HRA plans, cafeteria plans through salary reduction or reimbursement and any other arrangements Many employers had used these accounts in lieu of offering group health insurance coverage 38 19

20 Market Reform Violations under ACA Reimbursement of Individual Insurance Premiums Notice Small employer transition relief Small employer (less than 50 employees) transition relief until June 30, 2015 An employer that continues to reimburse or pay for their employees individual medical insurance premiums is subject to the excise tax penalty for doing so after June 30, The tax penalty is $100 per day (or higher) per employee that fails to comply. Providing after tax cash (additional taxable compensation) only to those purchasing individual medical plans creates an employer payment plan and is in violation of ACA market reforms. 39 Cafeteria Plan Design Strategies Employer contributions Elective Contributions Employer sets an employer contribution level Some employers provide flexibility in their plan design to allow employees an opportunity to choose which benefits the employer s contribution is used for (e.g., to insurance options, Health Care and/or Dependent Care FSA). The amount of the employer elective contribution that the employee allocates to the Health Care FSA is not included in the employee s pre tax election maximum. If a mid year event occurs, the employer s contribution and any pre tax amount elected by the employee are subject to the permitted election change rules

21 Cafeteria Plan Design Strategies Employer contributions Elective Contributions (cont.) The amount of the employer elective contribution that the employee allocates to the Dependent Care FSA, Health Savings Account or IND account is included in any maximum that applies to the account. If a mid year event occurs, the employer s contribution and any pre tax amount elected by the employee are subject to the permitted election change rules. 41 Cafeteria Plan Design Strategies Elective Contribution Example ABC Company has a cafeteria plan that offers employer sponsored medical insurance, dental insurance, Health Care FSA, Dependent Care FSA, Health Savings Accounts. ABC Company provides an employer contribution of $100 per month that can be used towards any of the benefit options in the cafeteria plan. Employees can choose how they want to use the $100 per month. Must be used for options in the plan and any remaining amount is forfeited. Employer contribution is in addition to up to $2,550 of employee s pretax election for Health Care FSA ($2,550 + $1,200=$3,750) 42 21

22 Cafeteria Plan Design Strategies Employer contributions Non Elective Contributions Employer sets an employer contribution level Some employers choose to make specific contributions to the reimbursement accounts (e.g., Health Care FSA, Dependent Care FSA, etc.). If the employer contribution can only be applied to a specific account (e.g., only to the Health Care FSA), the contribution is a non elective employer contribution and the following rules apply to these employer contributions: When the employer contribution can only go to the Health Care FSA, the employer s contribution is not included in the employee s pre tax election maximum. 43 Cafeteria Plan Design Strategies Employer contributions Non Elective Contributions (cont.) If a mid year event occurs, the employer s contribution does not change unless the employee gains or loses eligibility for the contribution (e.g., the employer only contributes if the employee is not enrolled in the health insurance and the employee enrolls in the health plan mid year or drops the health insurance mid year). Any pre tax amount elected by the employee is subject to the permitted election change rules. If Non elective contribution go towards the Dependent Care FSA, Health Savings Account or IND account, the employer s contribution is included in any maximum that applies to the account. The employer s contribution only changes if the employee gains or loses eligibility for the contribution

23 Cafeteria Plan Design Strategies Non Elective Contribution Example 1 ABC Company has a cafeteria plan that offers employer sponsored medical insurance, dental insurance, Health Care FSA, Dependent Care FSA, Health Savings Accounts. ABC Company provides an employer contribution of $100 per month* that must be used towards the Health Care FSA. Employer contribution is in addition to up to $2,550 of employee s pretax election for Health Care FSA. (Potential: $2,550 + $1,200=$3,750) Employee cannot choose how to use the $100/mo. *Caution may cause Health FSA to be non excepted Health FSA. 45 Cafeteria Plan Design Strategies Review: Non excepted Health FSA Many of the ACA provisions only apply to a Health FSA if it is a non excepted benefit Must refer to the HIPAA regulations Most Health FSAs are Excepted Benefits Meet two conditions to be excepted benefits: Maximum Benefit Condition Availability Condition 46 23

24 Cafeteria Plan Design Strategies ACA Review: Non excepted Health FSA (cont.) Maximum Benefit Condition Health Care FSA annual election cannot exceed two times the employee s salary reduction for the plan year, or if greater, the amount of the employee s salary reduction election for the Health Care FSA, plus $500 Means, if employer contributes more than $500, employee must match or exceed Availability Condition Participants with Health Care FSA coverage must also have other group health plan coverage available during the plan year from the employer Means, employer must offer a group medical plan to the employee when the employee elects the health FSA 47 Cafeteria Plan Design Strategies Non Elective Contribution Example 2 ABC Company has a cafeteria plan that offers employer sponsored medical insurance, dental insurance, voluntary cancer, accident, short term disability and Health Care FSA, Dependent Care FSA, Health Savings Accounts. ABC Company provides an employer contribution of $25 per month* that can only be used towards the cancer voluntary insurance products. Employee cannot choose how to use the $25/mo. *Caution may cause voluntary plan to be an ERISA benefit

25 ERISA plan or Voluntary Plan? REMINDER A health or welfare plan is subject to ERISA if it is established or maintained by the employer Requires the employer to be involved with the benefit to more than a minimal degree Note: If employer contributions are used to pay for individual voluntary products, it may cause voluntary benefits to be employer sponsored and subject to ERISA. 49 Cafeteria Plan Design Strategies Employer contributions Cashable Credits The employer may even provide a flex credit contribution that can be used for any benefits elected and allow additional unused dollars to be taken as taxable cash if the employee does not elect to spend all of the employer contributions on qualified benefits. These contributions are treated as cashable employer contributions (treated as if employee made the contribution) and the following rules apply: The amount of the employer cashable contribution the employee allocates to the Health Care FSA is included in the employee s pre tax election maximum. If a mid year event occurs, the employer s cashable contribution and any pre tax amount elected by the employee are subject to the permitted election change rules

26 Cafeteria Plan Design Strategies Employer contributions Cashable Credits (cont.) The amount of the employer cashable credits that the employee allocates to the Dependent Care FSA, Health Savings Account or IND account is included in any maximum that applies to the account. If a mid year event occurs, the employer s cashable credits and any pre tax amount elected by the employee are subject to the permitted election change rules. 51 Cafeteria Plan Design Strategies Cashable Credits Example ABC Company has a cafeteria plan that offers employer sponsored medical insurance, dental insurance, Health Care FSA, Dependent Care FSA, Health Savings Accounts. ABC Company provides a cashable credit of $100 per month that can be used for options in the plan or taken as taxable compensation. If Employee elects to use cashable credits for the Health Care FSA, then the cashable credit is treated as employee dollars not an employer contribution and is part of up to $2,550 of employee s pretax election for Health Care FSA. Employees can choose tax free benefit or taxable cash

27 Cafeteria Plan Design Strategies Cashable Credits Example (cont.) ABC Company may opt to require proof of other employer sponsored medical insurance before releasing the cashable credits as an alternative. ABC Company may require that employee use the dollars on core benefits first (Health, RX, Dental) before releasing the cashable credits. ABC Company may provide a cash amount that is less than the $100 per month (i.e. $50 per month) in consideration of the payroll taxes that the employer and employee will pay on the cashable amount and as an incentive to use the employer contributions (cashable credits) towards benefits. 53 Cafeteria Plan Design Strategies ACA ACA and Employer Contributions Flex Credits and/or Cash in lieu of health insurance Final Regulations 11/26/14: Minimum Essential Coverage and Other Rules Regarding the Shared Responsibility Payment for Individuals Treasury Department guidance: /pdf/ pdf Applicable Large Employers (ALE) (those with 50 or more employees) that provide flex credits in their Section 125 cafeteria plan and/or pay cash to employees that waive the employer s health plan. Keep in mind that Employer Shared Responsibility penalties are only applicable in 2015 for employers with over 100 Full time Employees

28 Cafeteria Plan Design Strategies ACA ACA and Employer Contributions (cont.) To count the flex credit for affordability purposes, three conditions must be met: 1. The employee does not have the option to take the flex credit as a taxable benefit (i.e. cash); 2. The flex credit may be used to purchase MEC; and 3. The flex credit may only be used to pay for benefits providing medical care under Internal Revenue Code 213. Prior to this guidance, assumption was that the entire flex credit could be counted as an employer contribution for affordability purposes. Now, employers may need to designate a portion of the total flex credit amount that may only be spent on benefits providing medical care (i.e.. medical, dental, vision and health FSA) to be able to count the flex credit in the affordability calculation. 55 Cafeteria Plan Design Strategies ACA ACA and Employer Contributions (cont.) A cash opt out option (cash in lieu of benefits) must be added to the monthly premium for single coverage to determine whether that coverage is affordable. For example: Company A requires employees to pay $100 per mo. for single coverage. If the employee declines Company As health insurance and can prove they are enrolled in other group coverage, Company A will pay the employee an additional $150 per mo. as taxable wages less applicable payroll taxes. For purposes of affordability The monthly cost for single coverage would be $250 not $100. The employee must forgo the $150 per mo. in additional wages and pay a $100 per mo. in premium contributions to be enrolled in the coverage

29 Cafeteria Plan Design Strategies ACA ACA and Employer Contributions (cont.) Potential Issue ALE Employer with over 100 FTE (2015) and over 50 FTE (2016) Potential penalty of up to $3,000 for each full time employee that was offered unaffordable coverage in The fact that the plan is unaffordable does not automatically cause a penalty. The penalty applies only if that employee chooses not to enroll in the employer sponsored group medical plan and purchases subsidized coverage on the Health Insurance Marketplace ( Exchange ). 57 Cafeteria Plan Design Strategies ACA ACA and Employer Contributions (cont.) Options? Leave the cash in lieu of benefits language in tact and measure affordability accordingly. Amend the flex credit language so only medical care benefits can be purchased but leave the cash in lieu of benefits language as is. Flex credit would count towards the cost of single health coverage and the plan could be affordable for more of your fulltime employees. The cash out amount that could be received needs to be added to the employee s share of single coverage premium for purposes of the affordability calculation

30 Cafeteria Plan Design Strategies ACA ACA and Employer Contributions (cont.) Options? (cont.) Amend the flex credit language so only medical care benefits can be purchased and amend your cash in lieu of benefits language to only pay cash to employees that waive family or limited family health coverage and provide proof that they are enrolled in another employer s group medical plan. This means that none of the employees paid the cash could cause a penalty since they are not enrolled in the Exchange. Flex credits would count toward the cost of single health plan coverage. You would still need to add the cash payment to the cost of enrolling in the lowest cost single plan. 59 Cafeteria Plan Design Strategies ACA ACA and Employer Contributions (cont.) Options? (cont.) Amend the flex credit language so only medical care benefits can be purchased and amend your cash in lieu of benefits language to decrease the amount of cash paid that when it is added to the employee portion of the lowest cost single plan, that cost still is affordable. Only pay cash to employees that provide proof that they are enrolled in another employer s group medical plan. This means that none of the employees paid the cash could cause a penalty since they are not enrolled in subsidized coverage in the Exchange. To measure affordability you would add the cash payment to the cost of enrolling in the lowest cost single plan

31 Cafeteria Plan Design Strategies ACA ACA and Employer Contributions (cont.) Options? (cont.) Amend the flex credit language so only medical care benefits can be purchased and remove the cash in lieu of benefits language. To measure affordability you only take into account the employee share of premium for single coverage. 61 Cafeteria Plan Design Strategies ACA ACA Market Reforms for Health FSAs For employers that do not offer a group medical plan or for those not eligible for a group medical plan through their employer, Health FSA is not an option. Possible to be eligible for employer sponsored group medical and decline coverage and still be eligible to participate in Health FSA because you meet eligibility criteria for the employer sponsored group medical

32 Cafeteria Plan Design Strategies ACA IRS Notice Elimination of Stand Alone Health FSAs Application of the Market Reforms to Certain Health FSAs Question 7: How do the market reforms apply to a health FSA that does not qualify as excepted benefits? Answer 7: The market reforms do not apply to a group health plans that are excepted benefits. Health FSAs are group health plans but will be considered to provide only excepted benefits if the employer also makes available group health plan coverage that is not limited to excepted benefits and the health FSA is structured so that the maximum benefit payable to any participant cannot exceed two times the participant s salary reduction election for the health FSA for the year (or, if greater, cannot exceed $500 plus the amount of the participant s salary reduction election). If an employer provides a health FSA that does not qualify as excepted benefits, the health FSA generally is subject to the market reforms, including the preventive services requirements. Because a health FSA that is not excepted benefits is not integrated with a group health plan, it will fail to meet the preventive services requirements. 63 Cafeteria Plan Design Strategies ACA Elimination of Stand Alone Health FSA Examples of Health FSAs that are ok Health FSA integrated with employer s major medical plan. Health FSA that provides an employer contribution that is less than $500 per plan year. Health FSA that provides an employer contribution only to those employees who participate in the employer sponsored medical plan. Health FSA that provides an employer contribution that is a matching contribution. Health FSA that provides an employer contribution that can be cashed out if not used on cafeteria plan benefits. Health FSA that is limited to dental and vision expenses

33 Cafeteria Plan Design Strategies ACA Elimination of Stand Alone Health FSA (cont.) Examples of Health FSAs that are not ok Health FSA available to all employees, even those who are not eligible for the employer sponsored medical plan Check your eligibility definitions in your cafeteria plans Effective with the plan that renewed in 2014 Health FSA for Section 213(d) general expenses is offered when employer does not sponsor a medical plan Health FSA that provides an employer contribution that is greater than $500 per plan year that causes the health FSA to be a non excepted health FSA. 65 HRA Design Strategies 66 33

34 HRA Plan Design Strategies Elimination of Annual and Lifetime Coverage Limits HRAs that can have a limit HRA integrated with employer s major medical plan HRA that reimburses only dental or vision expenses HRA that only covers retirees or former employees (either annual funding or spend down account)* Examples of HRAs that cannot have a limit Non Integrated HRA that reimburses all Section 213(d) expenses for active employees Non Integrated HRA that reimburses individual insurance premiums for active employees IRS Notice no reimbursement for individual medical policies. HRAs integrated with medical plan must have an annual opt out. 67 HRA Plan Design Strategies HRA with High Deductible Health Plan First dollar reimbursement or should employee pay some out of pocket? What expenses are eligible? Deductible only, Coinsurance only, etc. HRA in correlation with Cafeteria Plan First dollar reimbursement or should employee pay some out of pocket? What expenses are eligible? Deductible only, Coinsurance only, etc. Which plan pays first? HRA in correlation with Cafeteria Plan (FSA) that includes an HSA Limited Health HRA Post Minimum HDHP Deductible HRA 68 34

35 HRA Plan Design Strategies Offer employee only reimbursement. Offer same flat dollar per Employee to cover an aggregate of expenses for Employees and/or any eligible tax dependents. Offer separate schedule of reimbursement in correlation with different tiers of insurance coverage. For example: $500 x 1 = $500 Single $500 x 2 = $1000 Limited Family $500 x 3= $1500 Family Retiree Only HRA. 69 HRA Plan Design Strategies HRA funds available up front vs. Pro rata each month Ordering Rules: HRA or FSA first by design Possible to Reimburse full annual contribution up front but not required. No Uniform Coverage Rule requirement* Promise to Pay vs. Trust Account Use or Lose by design, but not required. Carryover permitted but not required. Monetary Wellness Incentives added to HRA balance for those that complete Health Risk Appraisals or other Wellness Program activities *Different than Health Care FSA 70 35

36 Maximum Out of Pocket (MOOP) Limits and Early Health Plan Renewal Impact on Plan Design 71 How does ACA MOOP Affect Health Plan Design? ACA has Cost Sharing provision that applies to covered in network Essential Health Benefits Non grandfathered health plan cannot impose individual and family MOOP greater than amounts set by Health & Human Services (HHS) when plan renews each year Are different amounts than HDHP MOOP amounts set by IRS Cost Sharing Limit applies to each individual covered by the plan with family aggregate (embedded MOOP) 2015 ACA MOOP = $6,600/individual, $13,200/aggregate 2015 ACA HDHP=$6,450/individual, $12,900/aggregate 2016 ACA MOOP = $6,850/individual, $13,700/aggregate 2016 ACA HDHP=$6,550/individual, $13,100/aggregate 72 36

37 When does the HRA Need to be Amended for MOOP or Early Renewal? HRA generally mirrors health plan design What is the benefit year (not renewal date) of the health plan? i.e., is the deductible counted on a calendar year even though the health plan renews 7/1? HRA plan year should match benefit year of health plan e.g., HRA plan year should be calendar year if health plan deductible is calendar year IRS allows retroactive amendment of HRA Technically, since HRA is subject to SBC requirements, HRA should be amended 60 days prior the change in benefits (e.g., amend HRA in October for January change so SBC can be distributed by November 1) 73 When does the HRA Need to be Amended for MOOP? HRA generally needs to be amended anytime the health plan design changes or the employer decides to fund the HRA differently HRA can be amended at renewal or mid year Example: XYZ Corp. has calendar year $2,500 single deductible, $5,000 family aggregate with 9/1 renewal Current HRA design is first $1,250 single, $2,500 family paid by employee, HRA pays remainder of deductible. Beth incurs $1,750 in deductible expense prior to 9/1 Health Plan is renewing 9/1 with $3,000 single, $6,000 family deductible HRA needs to be amended to reflect new deductible amounts and how employer will fund reimbursement of deductible 74 37

38 How FSA, HRA and HSA can be used together 75 Advanced Plan Design Techniques Stacking of tax advantaged plans to gain greatest tax benefits for both employee and employer FSA and HRA HSA compatible HRA HSA compatible HRA, HSA, Limited Health FSA Limited Health FSA and HSA Limited HRA and HSA Limited HRA + HSA + Limited Health FSA HSA compatible HRA + Post HSA Deductible FSA Post HSA Deductible HRA + HSA + Limited Health FSA 76 38

39 Advanced Plan Design Techniques FSA and HRA: Health Care FSA with HRA that self insures part of the health plan deductible Example: Employer s HDHP deductible is $2,500/single, 2 x $2,500 ($5,000) per family. Deductible is embedded. Insurance pays 100% after deductible is satisfied. HRA design: Single plan: First $500*employee responsibility, remaining $2,000 paid 100% by HRA Family plan: First $500*( up to 2 x $500 per family) employee responsibility, remaining $2,000 x 2 ($4,000) paid 100% by HRA *The $500 share of the deductible per person that is the employee responsibility is eligible under the Health Care FSA. Remember: No double dipping. Can t take expense reimbursed by HRA and run through FSA a second time. 77 Advanced Plan Design Techniques HSA Compatible HRAs Example: Employer s HDHP deductible is $2,600/single, $5,200/family aggregate; 100% thereafter HRA design: Single plan: first $1,300* employee responsibility, remaining $1,300 paid 100% by HRA Family plan: first $2,600* employee responsibility, remaining $2,600 paid 100% by HRA Employee is eligible to fund Health Savings Account *2015 and 2016 minimum HDHP deductible. Family minimum deductible is aggregate for family. This might be met by one person depending upon family circumstances

40 Advanced Plan Design Techniques HSA Compatible HRAs + HSA + Limited Health FSA Example: Employer s HDHP deductible is $2,600/single, $5,200/family aggregate; 100% thereafter HRA design: Single plan: first $1,300* employee, remaining $1,300 HRA Family plan: first $2,600*employee, remaining $2,600 HRA *2015 and 2016 minimum HDHP deductible. Family minimum deductible is aggregate for family. This might be met by one person depending upon family circumstances. Employee can fund HSA ($3,350 S and $6,650 F) 2015 Employee can also elect to participate in Limited Health FSA for predictable dental and vision expenses up to $2,550/plan year Advanced Plan Design Techniques Limited Health Care FSA with HSA Example: Employer sponsors a qualified HDHP and Employee enrolls in Single Coverage Employee funds a Health Savings Account up to $3,350 Single 2015 Employee can enroll in a Limited Health Care FSA up to $2,550 for 2015 for dental and vision expenses Why Enroll in FSA and HSA? Greater tax advantage for someone that uses all HSA dollars on medical care and has predictable dental and vision expenses (Potential: $3,350 +$2,550=$5,900) Preserve HSA balance for future expenses while using the Limited FSA for predictable current expenses No requirement that you fund or exhaust HSA funds before you use the Limited Health Care FSA 80 40

41 Advanced Plan Design Techniques Limited HRA and HSA Example: Employer s Limited HRA only reimburses Dental and Vision Expenses Limited HRA design: Single plan: $500 for any combination dental and vision expenses. First dollar coverage. Family plan: $1,000 for any combination dental and vision expenses. First dollar coverage. Employee is eligible to fund Health Savings Account 81 Advanced Plan Design Techniques Limited HRA + HSA + Limited Health FSA Example: Employer s Limited HRA only reimburses Dental and Vision Expenses Limited HRA design: Single plan: $500 for any combination dental and vision expenses. First dollar coverage. Family plan: $1,000 for any combination dental and vision expenses. First dollar coverage. Employee is eligible to fund Health Savings Account Employee is eligible to participate in Limited Health FSA up to $2,550/plan year (2015) no double dipping 82 41

42 Advanced Plan Design Techniques HSA Compatible HRAs + Post HSA Deductible Health FSA Example: Employer s HDHP deductible is $2,600/single, $5,200/family aggregate; 80/20 coinsurance thereafter HRA design: Single plan: first $1,300* employee responsibility, remaining $1,300 paid 100% by HRA Family plan: first $2,600* employee responsibility, remaining $2,600 paid 100% by HRA *2015 and 2016 minimum HDHP deductible. Employee could elect up to $2,550 in a Post HSA Deductible Health FSA (2015) FSA Reimbursement would be restricted to dental, vision and preventive care until employee certifies that they have met the minimum HDHP deductible. After that they can claim any general expenses not paid by the HRA (coinsurance and copays). 83 Advanced Plan Design Techniques Post HSA Deductible HRA + HSA + Limited Health FSA Example: Employer s HDHP deductible is $2,600/single, $5,200/family aggregate; 80/20 coinsurance thereafter HRA design: Single plan: first $1,300* employee responsibility, remaining $1,300 paid 100% by HRA Family plan: first $2,600* employee responsibility, remaining $2,600 paid 100% by HRA *2015 and 2016 minimum HDHP deductible. Employee is eligible to fund Health Savings Account Employee is eligible to participate in Limited Health FSA up to $2,550/plan year (2015) 84 42

43 Summary Defined Contribution in General Section 125, FSA, HRA, HSA Review Who can participate in FSA, HRA and HSA varies Affordable Care Act impact on plan design for FSA, HRA and HSA Cafeteria Plan Design Strategies HRA Plan Design Strategies How FSA, HRA and HSA can be used together to stretch any size benefit budget 85 Questions? Thank you for attending!! Any questions can also be addressed by e mail or phone: Compliance Department Visit our online blog:

Eligibility. Sue Sieger, ACFCI, CAS. Senior Compliance Consultant Employee Benefits Corporation sue.sieger@ebcflex.com.

Eligibility. Sue Sieger, ACFCI, CAS. Senior Compliance Consultant Employee Benefits Corporation sue.sieger@ebcflex.com. Eligibility 1 Sue Sieger, ACFCI, CAS Senior Compliance Consultant Employee Benefits Corporation sue.sieger@ebcflex.com The material provided in this webinar is by Employee Benefits Corporation and is for

More information

Advanced Cafeteria Plans. 2016 Employee Benefits Corporation. Copyright 2015 Employee Benefits Corporation

Advanced Cafeteria Plans. 2016 Employee Benefits Corporation. Copyright 2015 Employee Benefits Corporation Advanced Cafeteria Plans 2016 Employee Benefits Corporation 2 1 Erin Freiberg, JD Compliance Attorney Employee Benefits Corporation The material provided in this webinar is by Employee Benefits Corporation

More information

Health FSA-HRA-HSA Comparison Chart

Health FSA-HRA-HSA Comparison Chart Revised December 2014 Health FSA-HRA-HSA Comparison Chart Health Flexible Spending Internal Revenue Code source Section 125 (cafeteria plans) applies to an arrangement where employees have a choice among

More information

IRS Notice 2015-87: A Grab Bag of ACA, HRA and FSA Guidance

IRS Notice 2015-87: A Grab Bag of ACA, HRA and FSA Guidance IRS Notice 2015-87: A Grab Bag of ACA, HRA and FSA Guidance CALLAN CARTER Please note: This article was updated on March 8, 2016 In a welcome set of Questions and Answers, IRS Notice 2015-87 (the Notice

More information

Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements

Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements Notice 2013-54 I. PURPOSE AND OVERVIEW This notice

More information

U.S. Department of Labor TECHNICAL RELEASE 2013-03 DATE: SEPTEMBER 13, 2013 SUBJECT: I. PURPOSE AND OVERVIEW

U.S. Department of Labor TECHNICAL RELEASE 2013-03 DATE: SEPTEMBER 13, 2013 SUBJECT: I. PURPOSE AND OVERVIEW U.S. Department of Labor Employee Benefits Security Administration Washington, D.C. 20210 TECHNICAL RELEASE 2013-03 DATE: SEPTEMBER 13, 2013 SUBJECT: APPLICATION OF MARKET REFORM AND OTHER PROVISIONS OF

More information

Health Reimbursement Arrangements

Health Reimbursement Arrangements Health Reimbursement Arrangements Health Reimbursement Arrangements (HRAs) are plans designed to help employers and employees lower health care costs. Allowed under sections 105 and 106 of the Internal

More information

Notice 2015-87 I. PURPOSE AND OVERVIEW

Notice 2015-87 I. PURPOSE AND OVERVIEW Further Guidance on the Application of the Group Health Plan Market Reform Provisions of the Affordable Care Act to Employer-Provided Health Coverage and on Certain Other Affordable Care Act Provisions

More information

Legislative Brief: HEALTH SAVINGS ACCOUNT (HSA) ELIGIBILITY

Legislative Brief: HEALTH SAVINGS ACCOUNT (HSA) ELIGIBILITY EmPowerHR Legislative Brief: HEALTH SAVINGS ACCOUNT (HSA) ELIGIBILITY Many employers offer high deductible health plans (HDHPs) to control premium costs, and pair this coverage with health savings accounts

More information

HRA used to purchase health policy in the individual market. HRA used to purchase individual health policy through a public or private exchange

HRA used to purchase health policy in the individual market. HRA used to purchase individual health policy through a public or private exchange October 18, 2013 Authors: Kathryn B. Amin, Jon W. Breyfogle, Christine L. Keller, William F. Sweetnam and Brigen L. Winters If you have questions, please contact your regular Groom attorney or any of the

More information

Health Care Reform Update: What's Coming in 2014 for HRAs and Cafeteria Plans. WEBCAST Q&As. Thursday, October 24, 2013

Health Care Reform Update: What's Coming in 2014 for HRAs and Cafeteria Plans. WEBCAST Q&As. Thursday, October 24, 2013 Health Care Reform Update: What's Coming in 2014 for HRAs and Cafeteria Plans WEBCAST Q&As Thursday, October 24, 2013 HRAs Q: Is a medical expense reimbursement plan (employer contribution only) under

More information

SUMMARY OF GUIDE CONTENTS... 1 HIGHLIGHTS OF TAX-ADVANTAGED PLANS... 2 EMPLOYEE SALARY REDUCTION PLANS... 5

SUMMARY OF GUIDE CONTENTS... 1 HIGHLIGHTS OF TAX-ADVANTAGED PLANS... 2 EMPLOYEE SALARY REDUCTION PLANS... 5 This Guide is for informational and educational purposes only. It does not constitute legal advice or a comprehensive guide to issues to be considered by employers in establishing tax-advantaged benefits

More information

Health Care Reform New Restrictions on Tax-Favored Health Coverage for HRAs, FSAs, Premium Payment or Reimbursement Plans, and Cafeteria Plans

Health Care Reform New Restrictions on Tax-Favored Health Coverage for HRAs, FSAs, Premium Payment or Reimbursement Plans, and Cafeteria Plans Caring For Those Who Serve 1901 Chestnut Avenue Glenview, Illinois 60025-1604 1-800-851-2201 www.gbophb.org November 21, 2013 [updated July 29, 2015] Health Care Reform New Restrictions on Tax-Favored

More information

IRS NOTICE 2015-87: ADDITIONAL GUIDANCE ON HRAS, ACA REPORTING, HEALTH FSA CARRYOVERS AND MORE

IRS NOTICE 2015-87: ADDITIONAL GUIDANCE ON HRAS, ACA REPORTING, HEALTH FSA CARRYOVERS AND MORE Attorneys at Law Friday, January 29, 2016 IRS NOTICE 2015-87: ADDITIONAL GUIDANCE ON HRAS, ACA REPORTING, HEALTH FSA CARRYOVERS AND MORE By: Gabriel S. Marinaro, Esq. In December of 2015, the IRS issued

More information

Office Hours. ACA Potluck: IRS Provides Full Serving of New ACA Guidance. Recording

Office Hours. ACA Potluck: IRS Provides Full Serving of New ACA Guidance. Recording Recording Office Hours ACA Potluck: IRS Provides Full Serving of New ACA Guidance Guest Host Brian Gilmore, ABD Lead Benefits Counsel, VP Elizabeth Loh, Director, Trucker Huss, APC MARCH 24, 2016 ACA Potluck:

More information

Health Savings Accounts

Health Savings Accounts Health Savings Accounts I. What Are HSAs and Who Can Have Them? What is an HSA? An HSA is a tax-exempt trust or custodial account established exclusively for the purpose of paying qualified medical expenses

More information

HCR Bulletin. Guidance Issued on PPACA Market Reform Application to HRAs, FSAs, Individual Policy Premium Arrangements and EAPs.

HCR Bulletin. Guidance Issued on PPACA Market Reform Application to HRAs, FSAs, Individual Policy Premium Arrangements and EAPs. HCR Bulletin Guidance Issued on PPACA Market Reform Application to HRAs, FSAs, Individual Policy Premium Arrangements and EAPs Summary Employers will generally be prevented from using individual accounts,

More information

CONSUMER-DIRECTED MODEL COMPARISON HSAs, VEBA Plan, and HRAs

CONSUMER-DIRECTED MODEL COMPARISON HSAs, VEBA Plan, and HRAs FEATURE Market segment(s) Health Savings Accounts (HSAs) For new sales & transfers from MSA s. Sold as part of Blue Cross Options Blue Plan CONSUMER-DIRECTED MODEL COMPARISON HSAs, VEBA Plan, and HRAs

More information

Frequently Asked Questions as of 01/07/2015 Healthcare FSA Administration with Carryover Provision

Frequently Asked Questions as of 01/07/2015 Healthcare FSA Administration with Carryover Provision Frequently Asked Questions as of 01/07/2015 Healthcare FSA Administration with Carryover Provision On October 31, 2013, the U.S. Treasury Department and the IRS issued Notice 2013-71, which gives employers

More information

CLIENT INFORMATION FORM

CLIENT INFORMATION FORM CLIENT INFORMATION FORM Company Profile Legal Name of Organization: Mailing Address: City: State: Zip: Executive Officer (signer): Title: Email Address: Telephone: Business Activity: Employer Fed Tax ID#:

More information

Cafeteria Plan Basics. 2016 Employee Benefits Corporation. Copyright 2015 Employee Benefits Corporation

Cafeteria Plan Basics. 2016 Employee Benefits Corporation. Copyright 2015 Employee Benefits Corporation Cafeteria Plan Basics 2016 Employee Benefits Corporation 2 1 Jessica Theisen Compliance Advisor, FCS Employee Benefits Corporation The material provided in this webinar is by Employee Benefits Corporation

More information

Employee Benefits Update Including PPACA

Employee Benefits Update Including PPACA Employee Benefits Update Including PPACA Christine Burke Worthen, Esq. Assistant General Counsel Eastern Maine Healthcare Systems Brewer, Maine Recap: PPACA Provisions Already in Effect (2011 Plan Year)

More information

Guidance on the Application of Code 4980D to Certain Types of Health Coverage Reimbursement Arrangements

Guidance on the Application of Code 4980D to Certain Types of Health Coverage Reimbursement Arrangements Guidance on the Application of Code 4980D to Certain Types of Health Coverage Reimbursement Arrangements Notice 2015-17 I. PURPOSE AND OVERVIEW This notice reiterates the conclusion in previous guidance

More information

Rose & Kiernan, Inc. December, 2015. IRS Notice 2015-87

Rose & Kiernan, Inc. December, 2015. IRS Notice 2015-87 BENEFITS ALERT Rose & Kiernan, Inc. December, 2015 IRS Notice 2015-87 The Departments of Treasury (IRS), Labor (DOL) and Health and Human Services (HHS) jointly issued a notice on December 16 th to clarify

More information

Health Care Reform How it Will Affect Employers and their Group Health Plans. Benecon Comments and Observations

Health Care Reform How it Will Affect Employers and their Group Health Plans. Benecon Comments and Observations Health Care Reform How it Will Affect Employers and their Group Health Plans This Health Care Reform Summary applies to all employers (including government and church plans) that provide health coverage

More information

An Overview of Health Savings Accounts (HSAs) 1

An Overview of Health Savings Accounts (HSAs) 1 An Overview of s (HSAs) 1 With Comparison to s, Arrangements (HRAs) and s (FSAs) Overview 2 A tax-exempt trust or custodial account established for the purpose of paying qualified medical expenses in conjunction

More information

Health Savings Account HSA Summary

Health Savings Account HSA Summary Health Savings Account HSA Summary Effective January 1, 2016 TABLE OF CONTENTS INTRODUCTION... 3 WHO IS ELIGIBLE... 3 IRS REQUIREMENTS... 3 WHEN IS ELIGIBILITY DETERMINED?... 3 DO MY SPOUSE & I ESTABLISH

More information

Frequently Asked Questions

Frequently Asked Questions Frequently Asked Questions What is a Health Savings Account (HSA)? A Health Savings Account (HSA) is an alternative to traditional health insurance; it is a savings product that offers a different way

More information

I don t have health insurance, can I get an HSA? Unfortunately, you cannot establish and contribute to an HSA unless you have coverage under a HDHP.

I don t have health insurance, can I get an HSA? Unfortunately, you cannot establish and contribute to an HSA unless you have coverage under a HDHP. FREQUENTLY ASKED QUESTIONS (Information obtained from US Treasury HSA website) HSA Basics What is a Health Savings Account ( HSA )? A Health Savings Account is an alternative to traditional health insurance;

More information

D. HRAs Must Be Funded Exclusively by Employer and Not With Salary Reductions or Otherwise Under a Cafeteria Plan

D. HRAs Must Be Funded Exclusively by Employer and Not With Salary Reductions or Otherwise Under a Cafeteria Plan Consumer-Driven Health Care Indirect Cash-Outs Disguised as Post-Death Payments to Participant s Beneficiary (or Estate) Also Are Not Allowed. Suppose Company A maintains an arrangement that reimburses

More information

Plan Comparison Chart

Plan Comparison Chart To help you understand the differences between FSAs, HRAs, and HSAs, please review the chart below. It will assist in deciding which account would complement the health plans your organization offers.

More information

HEALTH SAVINGS ACCOUNT Q&A

HEALTH SAVINGS ACCOUNT Q&A HEALTH SAVINGS ACCOUNT Q&A HSA BASICS What is a health savings account or HSA? A health savings account (HSA) is a tax sheltered savings account, which is only offered to people who are covered under a

More information

Health care reform at-a-glance. August 2014

Health care reform at-a-glance. August 2014 Health care reform at-a-glance August 2014 Employer mandate Shared responsibility payment for failing to offer coverage to at least 95%* of all fulltime employees (FTE) and children if any FTE gets subsidy

More information

FREQUENTLY ASKED QUESTIONS HEALTH SAVINGS ACCOUNTS

FREQUENTLY ASKED QUESTIONS HEALTH SAVINGS ACCOUNTS FREQUENTLY ASKED QUESTIONS HEALTH SAVINGS ACCOUNTS What is an HSA? A health savings account (HSA) is a tax-favored savings account created for the purpose of paying medical expenses. Tax-deductible Contributions

More information

ACA REPORTING WEBINAR QUESTIONS AND ANSWERS

ACA REPORTING WEBINAR QUESTIONS AND ANSWERS ACA REPORTING WEBINAR QUESTIONS AND ANSWERS The following questions on ACA reporting requirements to the IRS were collected at a series of webinars offered by ThinkHR. Introduction The Affordable Care

More information

PayFlex Health Savings Account (HSA) Frequently Asked Questions

PayFlex Health Savings Account (HSA) Frequently Asked Questions OVERVIEW AND ELIGIBILITY REQUIREMENTS What is a Health Savings Account? A Health Savings Account ( HSA ) is a tax-advantaged healthcare account created for the purpose of saving and paying for qualified

More information

Health savings account Q&As

Health savings account Q&As Health savings account Q&As What are HSAs and who can have them? 1. What is a Health Savings Account (HSA) and how does it work? An HSA is a tax-advantaged account established to pay for qualified medical

More information

Reimbursement Vehicles and the ACA: Impacts for Employers

Reimbursement Vehicles and the ACA: Impacts for Employers FACT SHEET Reimbursement Vehicles and the ACA: Impacts for Employers The Internal Revenue Service ( IRS ) has issued guidance on the application of certain provisions of the Affordable Care Act ( ACA )

More information

Health Savings Accounts & High Deductible Health Plans

Health Savings Accounts & High Deductible Health Plans Health Savings Accounts & High Deductible Health Plans Definitions Consumer Driven Health Plan ( CDHP ) A health insurance plan designed to give you more control over your health care spending. CDHPs incorporate

More information

Healthcare Reform Provisions Unique to Small Employers/Financial and Other Benefits Concerns for All Employers (updated May 2, 2014)

Healthcare Reform Provisions Unique to Small Employers/Financial and Other Benefits Concerns for All Employers (updated May 2, 2014) /Financial and Other Benefits Concerns for All Employers (updated May 2, 2014) Lisa L. Carlson, J.D., Area Senior Vice President, Compliance Counsel Gallagher Benefit Services, Inc. While most healthcare

More information

Health Savings Accounts

Health Savings Accounts Raymond James & Associates, Inc. Anne Bedinger, WMS Vice President, Investments 2255 Glades Road, Suite 120-A Boca Raton, FL 33431 561-981-3661 800-327-1055 Anne.Bedinger@RaymondJames.com www.annebedinger.com

More information

Flexible Benefits Employer Guide

Flexible Benefits Employer Guide Flexible Benefits Employer Guide Save thousands on FICA contributions every year! A Flexible Benefits Plan through Discovery Benefits will: - Increase employee retention and satisfaction - Save matching

More information

Health Care Reform Impacts Grandfathered Employer-Sponsored Group Health Plans: Now What?

Health Care Reform Impacts Grandfathered Employer-Sponsored Group Health Plans: Now What? April 2010 EMPLOYEE BENEFITS & EXECUTIVE COMPENSATION UPDATE Health Care Reform Impacts Grandfathered Employer-Sponsored Group Health Plans: Now What? This bulletin discusses certain provisions of The

More information

INTRODUCTION. Penalties waived until 6/30/15? Description of Payment/Reimbursement Arrangement: Employer with 50 or more FTEs

INTRODUCTION. Penalties waived until 6/30/15? Description of Payment/Reimbursement Arrangement: Employer with 50 or more FTEs The purpose of this publication is to present highly focused information on the healthcare reimbursement aspects of the Affordable Care Act (ACA) based on the information available as of the date of this

More information

Health Care Reform: What to Expect in 2013 2014. Employee Benefits Series. Health Care Reform 2015 COMPLIANCE CHECKLIST

Health Care Reform: What to Expect in 2013 2014. Employee Benefits Series. Health Care Reform 2015 COMPLIANCE CHECKLIST Health Care Reform: What to Expect in 2013 2014 Employee Benefits Series Health Care Reform 2015 COMPLIANCE CHECKLIST This checklist is designed to help employers who sponsor group health plans review

More information

Reimbursement Arrangements for Individual Insurance Plans

Reimbursement Arrangements for Individual Insurance Plans Reimbursement Arrangements for Individual Insurance Plans By Employee Benefits Corporation s Compliance Department compliance@ebcflex.com Date April 24, 2014 2014 Employee Benefits Corporation 2014 Employee

More information

This notice provides basic information about a type of employer-provided health

This notice provides basic information about a type of employer-provided health Part III - Administrative, Procedural, and Miscellaneous Health Reimbursement Arrangements Notice 2002-45 PURPOSE This notice provides basic information about a type of employer-provided health reimbursement

More information

Voluntary Benefits Webinar Q&A the following questions were asked

Voluntary Benefits Webinar Q&A the following questions were asked Voluntary Benefits Webinar Q&A the following questions were asked during the two webinar sessions in November 2014 Q: We offer a group dental plan (employer and employee share premium cost). Will these

More information

Health Savings Accounts

Health Savings Accounts HSAs Health Savings Accounts 2014 and 2015 Limits Questions & Answers What is a Health Savings Account (HSA)? An HSA is a tax-exempt trust or custodial account established for the purpose of paying medical

More information

The health insurance marketplaces, or exchanges, created

The health insurance marketplaces, or exchanges, created Employee Benefits Report 2121 N Glenville Drive Richardson, TX 75082 866.881.2255 www.mgmbenefits.com Health Insurance November 2013 Volume 11 Number 11 Private Exchanges: An Option Worth Exploring An

More information

Important Effective Dates for Employers and Health Plans

Important Effective Dates for Employers and Health Plans Brought to you by Krempa Associates, Inc. Important Effective Dates for Employers and Health Plans On March 23, 2010, President Obama signed the health care reform bill, or Affordable Care Act (ACA), into

More information

Health Care Reform: Health Plans Overview. Presented by: Brian Lenzo, Preferred Benefits Services

Health Care Reform: Health Plans Overview. Presented by: Brian Lenzo, Preferred Benefits Services Health Care Reform: Health Plans Overview Presented by: Brian Lenzo, Preferred Benefits Services Agenda What is the legal status of the law? Which plans must comply? Grandfathered plans Reforms currently

More information

American employers need prompt action on these six significant challenges. We urge Congress and the administration to address them now.

American employers need prompt action on these six significant challenges. We urge Congress and the administration to address them now. In June 2014, the Board of Directors of the American Benefits Council (the Council) approved a long-term public policy strategic plan, A 2020 Vision: Flexibility and the Future of Employee Benefits. It

More information

IRS Provides Guidance on HRAs, FSAs, Pay-or-Play and Other Issues

IRS Provides Guidance on HRAs, FSAs, Pay-or-Play and Other Issues January 20, 2016 LEGAL ALERT INFORM on REFORM IRS Provides Guidance on HRAs, FSAs, Pay-or-Play and Other Issues On December 16, 2015, the IRS released Notice 2015-87, which contains guidance on a broad

More information

Health care reform at-a-glance. December 2013

Health care reform at-a-glance. December 2013 December 2013 Employer mandate Play or pay penalty for failing to offer coverage to at least 95% of all full-time employees (FTE) and children if any FTE gets subsidy in exchange $2,000 (indexed) times

More information

Kitsap Bank Health Savings Account Guide. A tax-smart way for you to manage growing healthcare costs.

Kitsap Bank Health Savings Account Guide. A tax-smart way for you to manage growing healthcare costs. Kitsap Bank Health Savings Account Guide A tax-smart way for you to manage growing healthcare costs. At Kitsap Bank, we believe that helping you prepare for the rising cost of health care is key to helping

More information

2016 Health Savings Plan and Health Savings Account Questions

2016 Health Savings Plan and Health Savings Account Questions 2016 Health Savings Plan and Health Savings Account Questions Health Savings Plan (HSP) What is the Health Savings Plan? The HSP is a High Deductible Health Plan (HDHP) with coverage that starts after

More information

Your Benefits Solutions Partner. 2015 Health Savings Account Reference Guide. Plan Services Provided By

Your Benefits Solutions Partner. 2015 Health Savings Account Reference Guide. Plan Services Provided By EBAS Employee Benefits Administration Services, LLC Your Benefits Solutions Partner 2015 Health Savings Account Reference Guide Plan Services Provided By Employee Benefits Administration Services, LLC

More information

Orange High Deductible Health Plan (HDHP) with Health Savings Account (HSA) HDHP Basics

Orange High Deductible Health Plan (HDHP) with Health Savings Account (HSA) HDHP Basics Orange High Deductible Health Plan (HDHP) with Health Savings Account (HSA) FAQ (Frequently Asked Questions): The following questions and answers will help you better understand Hope College s New High

More information

Health Savings Accounts: Common Questions and Their Answers

Health Savings Accounts: Common Questions and Their Answers Health Savings Accounts: Common Questions and Their Answers I. General HSAs II. Qualified High-Deductible Health Plan HDHPs III. Contributions to an HSA Distributions BlueAccount I. General HSAs I.1 What

More information

COBRA and the Affordable Care Act

COBRA and the Affordable Care Act BAGNALL 1345 East Chandler Boulevard Building 1, Suite 103 Phoenix, Arizona 85048 (480) 893-6510 http://www.bagnall.us COBRA and the Affordable Care Act The Consolidated Omnibus Budget Reconciliation Act

More information

Health Care Reform Update. Spring 2014

Health Care Reform Update. Spring 2014 Health Care Reform Update Spring 2014 Quincy Quinlan Texas Association of Counties 512 478 8753 quincyq@county.org http://www.county.org Today s Agenda Timeline Fees/Taxes Individual Mandate Marketplace

More information

Health Law Update: Health Savings Account Provisions in the Medicare Prescription Drug Improvement and Modernization Act of 2003

Health Law Update: Health Savings Account Provisions in the Medicare Prescription Drug Improvement and Modernization Act of 2003 Health Law Update: Health Savings Account Provisions in the Medicare Prescription Drug Improvement and Modernization Act of 2003 This Update summarizes the provisions of the Medicare Prescription Drug,

More information

ACA Impact on Health FSAs and HRAs Q&A the following questions were

ACA Impact on Health FSAs and HRAs Q&A the following questions were ACA Impact on Health FSAs and HRAs Q&A the following questions were asked during the two webinar sessions in (January, 2015) Do SBCs need to be provided to retirees who have a Retiree Only HRA? Yes Is

More information

Comparison of Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs)

Comparison of Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) Account Overview Tax-exempt trust or custodial account created to pay for the qualified medical expenses of the account holder and his/her spouse or dependents. A cafeteria plan authorized under Section

More information

Health Savings Option with a Health Savings Account (HSA)

Health Savings Option with a Health Savings Account (HSA) Health Savings Option with a Health Savings Account (HSA) The Health Savings Option is a high deductible health insurance plan administered by United Medical Resources (UMR), a United Healthcare Company,

More information

Sandy Wood, CEBS (Certified Employee Benefit Specialist) Healthcare Consultant sandy@thebenefitsacademy.com 206-669-3345

Sandy Wood, CEBS (Certified Employee Benefit Specialist) Healthcare Consultant sandy@thebenefitsacademy.com 206-669-3345 1 Sandy Wood, CEBS (Certified Employee Benefit Specialist) Healthcare Consultant sandy@thebenefitsacademy.com 206-669-3345 2 Terms you need to know Required Notices 2014 Plan Requirements The Grandfathered

More information

IRS Issues Guidance on Mandatory Form W-2 Informational Reporting of Employer-Sponsored Health Coverage

IRS Issues Guidance on Mandatory Form W-2 Informational Reporting of Employer-Sponsored Health Coverage IRS Issues Guidance on Mandatory Form W-2 Informational Reporting of Employer-Sponsored Health Coverage By Seth Perretta, Joel Wood and Matthew Fornataro of Crowell & Moring LLP On March 29, 2011, the

More information

INFINISOURCE COMPARISON OF HEALTH FSAS/HRAS/HSAs

INFINISOURCE COMPARISON OF HEALTH FSAS/HRAS/HSAs INFINISOURCE COMPARISON OF HEALTH FSAS/HRAS/HSAs Plan Design or Internal Revenue Code High Deductible Health Plan ( HDHP ) requirements None. None. HDHP must be established on the first day of the month

More information

Important Effective Dates for Employers and Health Plans

Important Effective Dates for Employers and Health Plans Brought to you by Hipskind Seyfarth Risk Solutions Important Effective Dates for Employers and Health Plans On March 23, 2010, President Obama signed the health care reform bill, or Affordable Care Act

More information

The following ECFA guide discusses some important aspects of the law and penalties that will be in effect on or before 06/30/2105.

The following ECFA guide discusses some important aspects of the law and penalties that will be in effect on or before 06/30/2105. Dear reader, Since we are aware that many of our clients are non-profits, charitable organizations, mission agencies and similar groups operating both in the USA and overseas, we feel the need to make

More information

CLICK HERE TO ADD TITLE

CLICK HERE TO ADD TITLE CLICK HERE TO ADD TITLE HEALTH CARE REFORM & ITS EFFECTS ON YOUR BUSINESS Presented by Jenny Arthur, SPHR AGENDA Background/History The Past: Previously Implemented HCR Provisions The Present: Current/Pending

More information

COBRA Basics Q&A the following questions were asked during the two

COBRA Basics Q&A the following questions were asked during the two COBRA Basics Q&A the following questions were asked during the two COBRA Basics webinar sessions in January 2014 Q: Is COBRA triggered by an insurance qualifying event for a current employee who is not

More information

Flexible Spending Accounts

Flexible Spending Accounts Flexible Spending Accounts POLICY GUIDE Flexible spending accounts are arrangements that allow employees to pay for qualified health care or dependent care expenses on a pre-tax basis. Employers may offer

More information

Account Based Health Plan with Health Savings Account Guide

Account Based Health Plan with Health Savings Account Guide Account Based Health Plan with Health Savings Account Guide Lead the way Page 1 2016 ABHP with HSA Guide You re in control with an Account-Based Health Plan Philips believes an Account Based Health Plan

More information

Health Care Reform Update

Health Care Reform Update Beginning in 2018, the Patient Protection and Affordable Care Act imposes an excise tax on high-cost health plans. In addition to being a way to raise revenue for the government, the reason for this provision

More information

ABC Company 123 Main Street Anywhere, USA 12345 www.sampleabccompany.com 800.123.4567

ABC Company 123 Main Street Anywhere, USA 12345 www.sampleabccompany.com 800.123.4567 WHAT HEALTH CARE REFORM MEANS FOR YOUR BUSINESS Your promotional imprint here and/or back cover. ABC Company 123 Main Street Anywhere, USA 12345 www.sampleabccompany.com 800.123.4567 The Patient Protection

More information

Health Reform Updates: Planning for 2013/2014 Compliance Discussion with Colorado AHU June 4, 2013

Health Reform Updates: Planning for 2013/2014 Compliance Discussion with Colorado AHU June 4, 2013 Health Reform Updates: Planning for 2013/2014 Compliance Discussion with Colorado AHU June 4, 2013 Shelly Winson for Benefits Compliance Link Team Karli Dunkelberger VP Business Development 949-702-3412

More information

Important Effective Dates for Employers and Health Plans

Important Effective Dates for Employers and Health Plans Brought to you by Sullivan Benefits Important Effective Dates for Employers and Health Plans On March 23, 2010, President Obama signed the health care reform bill, or Affordable Care Act (ACA), into law.

More information

FREQUENTLY ASKED QUESTIONS QUALIFIED HIGH DEDUCTIBLE HEALTH PLAN WITH A HEALTH SAVINGS ACCOUNT

FREQUENTLY ASKED QUESTIONS QUALIFIED HIGH DEDUCTIBLE HEALTH PLAN WITH A HEALTH SAVINGS ACCOUNT FREQUENTLY ASKED QUESTIONS QUALIFIED HIGH DEDUCTIBLE HEALTH PLAN WITH A HEALTH SAVINGS ACCOUNT Qualified High Deductible Health Plans (QHDHP) What is a QHDHP? A QHDHP is a medical plan regulated by the

More information

Health Care Reform Where Are We Now? Preparing for 2015

Health Care Reform Where Are We Now? Preparing for 2015 Tuesday, July 1, 2014 2 3 p.m. Central time Health Care Reform Where Are We Now? Preparing for 2015 David Hunt, CHBC Senior Managing Consultant BKD, LLP dhunt@bkd.com Philip Floyd, CFP, CFS Senior Managing

More information

Legislative Brief: 2015 COMPLIANCE CHECKLIST. Laurus Strategies

Legislative Brief: 2015 COMPLIANCE CHECKLIST. Laurus Strategies Laurus Strategies Legislative Brief: 2015 COMPLIANCE CHECKLIST The Affordable Care Act (ACA) has made a number of significant changes to group health plans since the law was enacted over four years ago.

More information

Answers about. Health Care REFORM. for your business

Answers about. Health Care REFORM. for your business Answers about Health Care REFORM for your business Since the time of its enactment in 2010, the health care reform law has remained controversial at least in part due to a constitutional challenge to the

More information

Old National Health Savings Account

Old National Health Savings Account Old National Health Savings Account Overview What is a Health Savings Account? A Health Savings Account (HSA) is an account that can be funded with your tax-exempt dollars, by an employer, or both, to

More information

W-2 Reporting Bulletin

W-2 Reporting Bulletin The Affordable Care Act requires employers to report the cost of coverage under an employersponsored group health plan on the employees Form W-2. [If you provide additional benefits under any other employer-sponsored

More information

Individual Medical Coverage, HRAs, and Private Exchanges: Avoiding Regulatory Pitfalls in the Post-ACA World

Individual Medical Coverage, HRAs, and Private Exchanges: Avoiding Regulatory Pitfalls in the Post-ACA World Individual Medical Coverage, HRAs, and Private Exchanges: Avoiding Regulatory Pitfalls in the Post-ACA World John Hickman, Esq. Ashley Gillihan, Esq. Atlanta Office One Atlantic Center 1201 West Peachtree

More information

INDIVIDUAL RESPONSIBILITY

INDIVIDUAL RESPONSIBILITY Health Care Reform (HCR), Affordable Care Act (ACA), Mandates, Regulations, Health Insurance Marketplace, Health Insurance Exchanges, Penalties What does all this mean to you in 2014? There are many health

More information

Health Care Reform: 2015 Refresher of the Affordable Care Act (ACA)

Health Care Reform: 2015 Refresher of the Affordable Care Act (ACA) Health Care Reform: 2015 Refresher of the Affordable Care Act (ACA) Brought to you by Aon Presented by: Ryan Comstock & Shawna Brown This information is provided for informational purposes only and is

More information

Health Savings Account (HSA) Contribution Rules

Health Savings Account (HSA) Contribution Rules Provided by BB&T Insurance Services, Inc., McGriff, Seibels & Williams, Inc., BB&T Insurance Services of California, Inc., and Precept Insurance Solutions, LLC Health Savings Account (HSA) Contribution

More information

What Group Plan Sponsors Need To Know About ERISA

What Group Plan Sponsors Need To Know About ERISA What Group Plan Sponsors Need To Know About ERISA The Employee Retirement Income Security Act (ERISA) was signed in 1974. The U.S. Department of Labor (DOL) is the agency responsible for administering

More information

IRS Clarifies a Number of Health Care Reform Compliance Issues

IRS Clarifies a Number of Health Care Reform Compliance Issues HEALTH CARE REFORM JANUARY 19, 2016 P R I O R I T Y Alert IRS Clarifies a Number of Health Care Reform Compliance Issues By Tripp W. VanderWal; vanderwalt@millerjohnson.com; 616.831.1796 It s as clear

More information

IRS Issues New Proposed Cafeteria Plan Regulations

IRS Issues New Proposed Cafeteria Plan Regulations IRS Issues New Proposed Cafeteria Plan Regulations On August 6, 2007, the Internal Revenue Service (IRS) published new proposed regulations on cafeteria plans ( proposed regulations for a copy visit http://edocket.access.gpo.gov/2007/pdf/e7-14827.pdf).

More information

The cost and administrative burden of providing health care benefits. Defined Contribution Health Plans: HRAs and HSAs

The cost and administrative burden of providing health care benefits. Defined Contribution Health Plans: HRAs and HSAs VOLUME 30, NUMBER 3 JOURNAL of PENSION PLANNING & COMPLIANCE JPPC Editor-in-Chief: Bruce J. McNeil Defined Contribution Health Plans: HRAs and HSAs BRIAN L. SHIKER Brian L. Shiker is an associate in the

More information

Health Care Reform (HCR)

Health Care Reform (HCR) Health Care Reform Effects on the Wood County Employee Health Benefits Plan For Plan Year 2013 Employee Health Benefits Committee October 18, 2012 1 Health Care Reform (HCR) Affordable Care Act (ACA) The

More information

2015 Relief for Reimbursing Employees for Health Insurance Information is current as of May 29, 2015

2015 Relief for Reimbursing Employees for Health Insurance Information is current as of May 29, 2015 1 Q: I understand there is an exception for one employee/participant. If I'm the employee, can a 105 be used to reimburse for my spouse or dependents as well? A: Yes. Pursuant to 105, a plan can reimburse

More information

COBRA Basics With an ACA Twist

COBRA Basics With an ACA Twist COBRA Basics With an ACA Twist June 25, 2015 Introduction Lynn McGuire BUTZEL LONG, P.C. 301 E. Liberty, Suite 500 Ann Arbor, MI 48130 (734) 213-3261 mcguire@butzel.com Tom Shaevsky BUTZEL LONG, P.C. 41000

More information

The Affordable Care Act: What Public Employers Need to be Doing Now

The Affordable Care Act: What Public Employers Need to be Doing Now The Affordable Care Act: What Public Employers Need to be Doing Now April 30, 2014 J. Richard Johnson IPMA-HR Webinar Copyright 2014 by The Segal Group, Inc. All rights reserved. 1 ACA Update Discussion

More information

HDHP FAQs. General Questions

HDHP FAQs. General Questions HDHP FAQs HDHP = High Deductible Health Plan PPO = Preferred Provider Plan, the regular or traditional healthcare plan HSA = Health Savings Account HRA = Health Reimbursement Account FSA = Flexible Spending

More information

COMMENTS CONCERNING REVENUE RULING 2002-41, 2002-28 IRB 75 AND NOTICE 2002-45, 2002-28 IRB 93

COMMENTS CONCERNING REVENUE RULING 2002-41, 2002-28 IRB 75 AND NOTICE 2002-45, 2002-28 IRB 93 COMMENTS CONCERNING REVENUE RULING 2002-41, 2002-28 IRB 75 AND NOTICE 2002-45, 2002-28 IRB 93 The following comments are the views of the individual members of the Committee on Employee Benefits of the

More information