UBA’s October and November Employer Webinars offer can’t-miss insight.
The United States Supreme Court has granted certiorari to review the Sixth Circuit’s decision in Quality Stores, which held that severance payments in connection with a reduction in force (RIF) are exempt from Social Security (FICA) taxes. United State…
By Linda Rowings
Chief Compliance Officer
United Benefit Advisors
The health marketplaces are starting to accept applications, and with that, interest in the premium subsidy process is increasing.
A person is eligible for a premium subsidy if the person meets all of these requirements:
When a person applies for marketplace coverage he will be screened for possible eligibility for the premium subsidy (or Medicaid). If the person may be eligible for a subsidy he will complete an application that includes information about income and access to affordable, minimum value coverage through an employer. The marketplace will contact the employer to verify that the employee’s information is accurate. Employers will be encouraged, but not required, to respond to these verification requests.
The premium subsidy amount is based on the cost of coverage in the marketplace, not the cost of employer-provided coverage. The subsidy decreases as the person’s income increases, using the following table. (A sliding scale, rounded to the nearest one-hundredth of one percent, applies between the minimum and maximum percentage.)
| Household income as apercent of FPL | Applicable Percentage | |
| Minimum | Maximum | |
| Up to 133 percent | 2.0 | 2.0 |
| 133 to 150 percent | 3.0 | 4.0 |
| 150 to 200 percent | 4.0 | 6.3 |
| 200 to 250 percent | 6.3 | 8.05 |
| 250 to 300 percent | 8.05 | 9.5 |
| 300 to 400 percent | 9.5 | 9.5 |
The applicable percentage is multiplied by the person’s household income to determine his required share of premiums for the second least expensive silver plan in the marketplace.
The premium subsidy actually is a tax credit that is available in advance. Each month, the government will pay the premium subsidy directly to the insurer. The person will pay his or her share directly to the insurer.
Everyone who receives a premium subsidy must file a federal income tax return. The tax return will be used to true-up the amount of subsidy the person received and the amount they were entitled to. If the subsidy was too large the person will have to pay extra tax (to a maximum). If it was too small, the person will get a refund. The maximum amount an individual who received too great a subsidy would repay is:
Recipients will be encouraged to notify the marketplace of mid-year changes in income and number of dependents that might impact the amount of subsidy the person is eligible for.
UBA has prepared a FAQ to address these questions and more. Request a copy of the Frequently Asked Questions about the Health Marketplace now.
The IRS has issued the long-awaited rules on required reporting of minimum essential coverage (under Code Section 6055) and affordable, minimum value coverage (under Code Section 6056). These rules will first apply to the 2015 calendar year, wit…
By Mick Constantinou, Advisor, Employee Benefits
Connelly, Carlisle, Fields, & Nichols, A UBA Partner Firm
A recent UBA blog outlined some compelling reasons why some employers are proceeding with the 10/1 exchange notices despite the postponement of the penalty. For those who are doing that, we’ve uncovered some glaring issues with the questions in the model Exchange Notices recently released by the Department of Labor.
In preparation for a recent seminar on health care reform, my colleague, benefit advisor Justin Treece contacted the DOL to clarify these issues.
Part A (page one) of the notice is essentially a Q&A/marketing piece about the exchanges. Part B (pages two and three) of the version for employers that currently offer group health insurance requires the employer to provide information about the health coverage offered to employees.
What happened to questions #1 and #2?
The Part B section of the notice begins with question #3 (Employer Name) and not #1. In its current version, there is no question #1 or #2 anywhere on the form. So the mystery begins.
When Justin contacted the DOL to be sure we were downloading the correct version, the DOL representative’s response was, “Well, that’s weird.”
The DOL representative did confirm that this was the right form and that employers should proceed and ignore the incorrect numbering.
The form instructions state, “This information is numbered to correspond to the Marketplace application.” Upon review of the current draft of the Exchange Application, Appendix A on page 9 and 10 of the 12-page application provides the tie to the Exchange Notice. Question #1 is “Employee name” and Question #2 is “Employee Social Security number” on both pages. The remaining questions 3 – 16 match the Exchange Notice. Mystery solved.
Can you explain the check box on Part B? Should I check the box?
On the same Part B page, the employer is advised as follows about a check box:
“If checked, this coverage meets the minimum value standard, and the cost of this coverage to you is intended to be affordable, based on employee wages.”
Considering that Minimum Value Plans have not been released for employer small groups, and many employers have non-calendar year renewals, how would it be possible for a small group employer to check this box as part of the October 1, 2013 notice?
When asked the question by Justin, the DOL representative did not quite understand. Justin clarified, stating that generally speaking, all employers with a current group health insurance plan do not currently have a Minimum Value Plan.
When the DOL representative asked Justin if he wanted to change the form, Justin indicated that while this would be the most logical action, Justin doubted he had the authority to make such a change. The DOL representative confirmed Justin’s doubt and suggested that Justin speak to Health and Human Services (HHS) or local politician.
So what should employers do?
While it is not completely clear on how employers should be completing Part B of the Exchange Notice, one benefits attorney has suggested that if it is the employer’s intention to offer Minimum Value Plans and make them affordable at their 2014 renewal, the employer should check the box to indicate this. It has also been recommended to leave questions 13-16 blank since they are optional and could potentially add confusion to the employer/employee communication regarding the exchanges. UBA has an expanded FAQ that provides additional detail on the notices and filling out the form.
A federal lawmaker is asking the Equal Employment Opportunity Commission to investigate employer wellness programs that seek intimate health information from employees, and to issue guidelines preventing employers from using such programs to discrimina…
With many employers forced to move employees to part-time schedules, send employees to exchanges, drop spouse/family coverage—or coverage altogether, and/or increase employee costs, employers can’t necessarily rely on their health benefits to attract and retain employees. With everyone trying to thread the needle on minimizing penalties, maximizing tax benefits, controlling health costs, and helping employees qualify for subsidies, let’s face it: the health plan may not be your hallmark anymore. So polices like flextime, corporate and social responsibility charters and voluntary benefits may become the cornerstones of your recruitment and retention strategy. UBA took a preliminary look at voluntary benefit trends in its Ancillary Products Survey, which indicates vast differences in voluntary benefits offered by employer size, region and industry.
Employees these days are more diverse than ever and because of this, each employee has their own unique needs. Ancillary benefits provide employers with the ability to meet these needs on a variety of levels. The first step in crafting a benefits package with voluntary or ancillary choices is knowing what others in your industry or area are offering. With comprehensive benchmarking data you can best identify cost-effective solutions that employees truly want. Auto and home insurance is a main staple in the Northeast for example. In larger companies, group term life is a must-have. Short term disability is critical in the manufacturing industry. Long term disability is most common in the retail industry and much less common in the construction/mining industry. While 2.7% of employers overall offer identity theft insurance, nearly 30% of larger employers include this in their package. Comprehensive data for your size, region and industry are the key to smart decisions.
To help employers develop a cost-conscious, yet effective voluntary benefits strategy, United Benefit Advisors (UBA), in conjunction with the Principal Financial Group® is hosting a free webinar, “Maximize Your Employee Benefit Dollars with Voluntary Benefits,” on Sept. 26 at 2 p.m. EDT. To receive the $149 discount for this webinar enter the code “UBAP” when registering. To register, visit: https://webinars.ubabenefits.com/tabid/1932/Default.aspx?wid=108. This webinar has been submitted to the Human Resource Certification Institute to qualify for 1.25 recertification credit hours.
By Linda RowingsChief Compliance OfficerUnited Benefit Advisors
Many employers are uncomfortable foregoing the marketplace/exchange notice, even with the highly unusual DOL release stating that penalties would not be applied to employers that fail to p…
As PPACA standards and practices begin to take effect, business owners are considering how to keep budgets low while simultaneously offering healthcare coverage to full-time employees.
On Sept. 18, the Securities and Exchange Commission voted to propose a rule requiring companies to disclose the ratio of CEO pay to the average worker’s pay within their company.