Determining if Your Business is an ALE for Reporting & Penalty Purposes

Posted September 22, 2017 by Megan DiMartino

Unfortunately, the Affordable Care Act’s employer reporting and shared responsibility penalties have not been repealed, like many hoped. So small businesses that have grown in 2016 to fifty or more full-time/full-time equivalent employees have crossed over to an Applicable Large Employer (ALE) status and are subject to 2017 reporting and penalties.

5-step process to determine if your business is an ALE:

  1. For each month in 2016, count the number of employees who were employed to work, on average, at least thirty hours per week. This includes all full-time common law employees (including seasonal employees) who work for all entities treated as part of the same controlled group or affiliated service group.
  2. For each month in 2016, add the total number of hours for all other employees not counted in step one and divide each monthly sum by 120 – this will give you the number of full-time equivalent employees for each month.
  3. Add the monthly results of steps one and two to obtain the sums of each month of 2016.
  4. Average the monthly sums by adding them up and dividing by twelve (do not round up). If the result is less than fifty, then you’re not an ALE.
  5. If the result of step four is fifty or more, then you’re an ALE. BUT, if you had more than fifty employees for no more than four months during 2016 and you exceeded fifty in those months because you had seasonal employees, then you may not be considered an ALE.

Employer penalties to consider if you crossed the threshold status to ALE status:

  • Penalty A – if group health coverage was not offered to at least 95% of your full-time employees, and their children, and a full-time employee purchases subsidized Marketplace coverage for any given month, the employer will be subject to a penalty equal to $188.33 per full-time employee in excess of 30 for that month.
  • Penalty B – if group health coverage was offered to at least 95% of your full-time employees, and their dependents, and a full-time employee declined and instead purchased subsidized Marketplace coverage for any given month, the employer will be subject to a penalty for that month equal to the lesser of the Penalty A amount or $282.50 for each full-time employee with subsidized Marketplace coverage. An employee is able to purchase subsidized Marketplace coverage if they were not offered group health coverage that meets the minimum value and affordability tests by their employer.

Source: Jackson Lewis | Crossing the Threshold – Small Business to “ALE”

Links:
IRS Reporting Resources
Marketplace Coverage
Minimum Value & Affordability Tests

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

HRCI & SHRM Pre-approved AssuredPartners Webinar | After All of That: The ACA is Still the Law of the Land

Posted September 20, 2017 by Megan DiMartino

To the surprise of many, Congressional Republicans failed to make good on their 7-year long campaign promise to repeal and replace the Affordable Care Act (ACA). And after everything we have been through, especially since President Trump took office, we are left with not much more than a litany of questions…What went wrong? What’s going to happen next? Will Congressional Republicans resurrect an ACA repeal-replace bill? Will Republicans and Democrats put partisan politics aside and compromise on bi-partisan legislation intended to “stabilize” the ailing ACA individual insurance markets? What will the Trump Administration do? Will the IRS continue to enforce the “employer mandate?” How about the employer reporting requirements? What other administrative guidance may be issued that could be helpful – or detrimental – to employers? What about the Cadillac Tax, which is scheduled to snap into effect in 2020? Will we see Treasury guidance on the Cadillac Tax, or will Congress further delay or repeal the Tax outright in Tax Reform?

Join AssuredPartners for this complimentary, one-hour, HRCI* and SHRM** pre-approved webinar that will delve into these very questions.

Webinar Details:

  • Thursday, September 28, 2017
  • 2:00 – 3:00pm EDT
  • No Cost to Attend
  • This webinar is open to all HR and Finance Professionals – but not to brokers, agents, TPAs and PEOs.

About the Presenter: Christopher E. Condeluci is principal and sole shareholder of CC Law & Policy PLLC in Washington D.C. Chris’s practice focuses on the Patient Protection and Affordable Care Act (“ACA”) and its impact on all stakeholders. Prior to forming CC Law & Policy, Chris served as Tax and Benefits Counsel to the U.S. Senate Finance Committee. During his time in Congress, Chris participated in the development of portions of the ACA, including the Exchanges, the insurance market reforms, and all of the new taxes enacted under the law. He is one of the few senior Congressional staffers who actively participated in the health reform debate to join the private sector since the ACA’s enactment, and based on his experience as an employee benefits attorney, he possesses a unique level of expertise on matters relating to tax law, ERISA and the ACA.

*The use of this seal confirms that this activity has met HR Certification Institute’s (HRCI) criteria for recertification credit pre-approval. This activity has been approved for 1 HR (General) recertification credit hours toward aPHR, PHR, PHRca, SPHR, GPHR, PHRi, and SPHRi recertification through HRCI.

**Crawford Advisors is recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP or SHRM-SCP. This program is valid for 1 PDC for the SHRM-CP or SHRM-SCP. For more information about certification or recertification, please visit shrmcertification.org.

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

EEOC’s New Wellness Program Rules a Bust

Posted September 8, 2017 by Megan DiMartino

In May 2016, the Equal Employment Opportunity Commission (EEOC) released its final rule with regard to employer wellness programs. The rules went into effect January 1, 2017, and state that the incentive (or penalty) for participating (or not participating) in a wellness program may not exceed 30% of a group health plan. Basically, these new rules allow employers to offer a discount on insurance costs to those participating or increase costs to those not participating.

These regulations were intended to better streamline the American with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA) with the Affordable Care Act (ACA), but both groups are finding them inconsistent with the “voluntary” requirements. The American Association of Retired Persons (AARP) is also arguing (and filed suit in October 2016) that these requirements are in no way “voluntary” as employees who do not participate and can’t afford to pay the 30% penalty would be forced to disclose their protected information, when otherwise, they wouldn’t have to do so. They also argue that the EEOC never provided an adequate explanation for the changes.

The parties took the question to court to be reviewed under Chevron deference, which is when a court is to defer to interpretations of statutes by those involved, unless such interpretations are unreasonable. Since neither the ADA nor GINA had a clear definition of “voluntary” participation, the court deferred to the EEOC’s interpretation of the term, but found that they also failed to make a clear understanding. The District Court for the District of Columbia found that these new rules were ill-reasoned and could not be accepted, so the EEOC is to review and revise the new regulations or they can move forward with appealing the decision.

As of now, your company can continue on as is with your wellness programs for 2017. As for the future, it is unclear at this point. The EEOC hasn’t made it clear yet as to which approach they are taking, whether it be to appeal the decision or to rectify the new rules and regulations, so be cautious of your wellness program offerings for next year.

For questions, concerns or additional assistance with your Wellness Plans, please contact your Account Executive or Account Manager.

Links:
May 2016 | EEOC Wellness Rules Update

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Progressive Discipline Model to Correct Your Employees’ Performance Problems

Posted August 29, 2017 by Megan DiMartino

Not only does a progressive discipline model help correct your employees’ performance problems, but also helps protect you, the employer, from wrongful termination lawsuits. Having a discipline model will help ensure fair disciplinary action was taken when firing an employee due to inferior performance and that they were treated fairly according to your company’s policies.

Below are five steps to apply to your progressive discipline model:

  1. Oral reprimand – An oral reprimand should be issued as soon as a supervisor/manager views an employee’s performance or behavior as a problem. Action should also be taken to ask the employee whether there are any long-term problems or skill deficiencies that need help improving. Keep detailed notes about the conversation in case further action needs to be taken.
  2. Written warning – Should the problem continue, or if a new problem arises, then the employee needs to be issued a written warning explaining the objectionable behavior, the consequences, and the company standards which were used to come to this conclusion. Provide a time frame for which the performance needs to be improved and that a failure to comply will result in termination. Have the employee sign a copy to acknowledge receipt and place a copy of the written warning in their personnel file.
  3. Final written warning – A final written warning is necessary if performance or behavior does not improve, which could also include a probationary period for the employee. In the final warning also provide the previous warnings and just like the first written warning, indicate the areas that need improvement, a time frame for improvement and have them sign a copy for their records as well as yours.
  4. Termination review – At this point HR needs to be involved as the problem is persisting. Supervisors shouldn’t have final firing rights, so someone else of authority needs to evaluate the situation and handle the terminations.
    Before taking final action, consider these questions:
    – Does the employee claim a contractual relationship exists, and if so, does that assertion have merit?
    – Has the employee recently filed a workers’ compensation claim, complained to a government agency about alleged workplace violations or taken any other actions that might make a discharge look like unlawful retaliation on your part?
    – Is there an issue relating to a good-faith and fair dealing, especially if the termination involves a long-term employee?
    If your answer to any of these questions is “yes,” then there’s no need to panic. You can still go through the firing process without challenge if you follow a strict discipline model to prove your actions were justified.
  5. Termination – This part is never easy, but knowing you gave the employee multiple chances to succeed should make your part a little easier and also gives the court full insight to the final decision should a lawsuit arise.

Final takeaway – document everything! You’re not only saving your tail, but hopefully helping your employee get on track before having to go to the extreme of termination.

Source: Business Management Daily | The 5 steps of progressive discipline 

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Don’t Be Fooled – ACA Employer Mandate Penalties Are Still Effective

Posted August 24, 2017 by Megan DiMartino

Contrary to popular belief, the Affordable Care Act’s (ACA’s) individual and employer mandate penalties continue to apply and the IRS intends to enforce them.

Much of the confusion surrounding the ACA mandate penalties stems from President Trump’s Inauguration day Executive Order, in which he directed federal agencies to “minimize the unwarranted economic and regulatory burdens” of the ACA until the law could be repealed or replaced. However, according to the IRS website, the mandates are still in force, despite the Executive Order and the IRS’ decision not to implement a program rejecting “silent returns” that indicated non-compliance with individual mandate requirements for 2016 tax filings.

In addition, the IRS Office of Chief Counsel has issued a series of letters (Letters 2017-0010, 2017-0013, and 2017-0017) clarifying its position on the ACA’s individual and employer mandate penalties. As reiterated in each of these letters, “[t]he Executive Order does not change the law; the legislative provisions of the ACA are still in force until changed by the Congress, and taxpayers remain required to follow the law,” including the payment of any applicable penalties. The IRS has indicated that penalty notices may be issued by the end of the year to employers who failed to file their required reports with the IRS for the 2015 tax year or who filed incomplete, inaccurate or late reports.

With this in mind, it is imperative that applicable large employers (ALEs) continue to comply with the ACA’s employer mandate, which requires that every ALE offer affordable, minimum value health coverage to its full-time employees or pay a penalty. In addition, ALEs must continue to report to the IRS information on the health plan coverage they offer (or do not offer) to their employees.

Links to the 2017 DRAFT forms 1094/1095 are available below or on the IRS website. But instructions for the 2017 forms have not yet been released.

Should you have any questions or concerns, please contact your Crawford Account Manager or Executive.

Source: AssuredPartners Compliance Observer | Don’t Be Fooled! ACA Employer Mandate Penalties Are Still Effective

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Contrary to Popular Belief…Millennials Seek Learning Opportunities from Their Employers

Posted August 23, 2017 by Megan DiMartino

Impraise, a real-time feedback and performance review software company, surveyed a group of Millennials and found that 63% look for jobs at learning organizations where they are able to train, attend workshops, and have access to company-funded postgraduate schooling.

Millennials with less than 2 years of professional experience state that the top motivator to take a position is having the opportunity to grow and learn leadership skills. Of those surveyed, 55% find that leadership opportunities are a key consideration when choosing a job.

As we stated in our June 12th blog, Millennials crave feedback and recognition. Impraise found that more than three-quarters of Millennials say they perform better when managers intervene and monitor their work, as well as insisting on monthly one-on-ones and constant feedback – with 41% wanting feedback on a weekly basis and 33% wanting feedback whenever they request it. Face-to-face, real-time feedback is the most preferred, but a close second is the use of feedback tools.

So what should your company be doing for the future workforce?

  1. Be aware of Millennials’ expectations in terms of training feedback. Make sure they are aware of learning and growth opportunities within your organization.
  2. Familiarize managers and supervisors with that strategy and rationale behind it. For example, as a top motivator for this new generation of workers, in particular, training is a valuable recruiting and retention tool.
  3. Make sure managers and supervisors are held accountable for promoting training opportunities to employees and providing both real-time and structured feedback on job performance.

Source: HR Daily Advisor | Study: Millennials Seek Employer-Sponsored Learning Opportunities

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Compliance Alert | Properly Distributing ERISA Health and Welfare Plan Materials

Posted August 21, 2017 by Megan DiMartino

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

2017 Drafts of Form 1094/1095 Information Returns

Posted August 18, 2017 by Megan DiMartino

The Internal Revenue Service (IRS) has issued the 2017 drafts of the Form 1094/1095 information returns for the 2017 tax year with filing in early 2018.

  • Forms 1094-B/1095-B – used by coverage providers to report health plan enrollment required by Code § 6055
  • Forms 1094-C/1095-C – used by applicable large employers (ALEs) to report information relevant to Code § 4980H employer shared responsibility penalties required by Code § 6056

ALEs that sponsor self-insured health plans are considered coverage providers and fulfill their Code § 6055 requirement by reporting coverage information on Form 1095-C. The forms also provide information regarding the shared responsibility penalty and premium tax credits.

The new 2017 forms also have a few differences from the 2016 forms:

  • Form 1094-B – which is the transmittal for Form 1095-B, is unchanged.
  • Form 1094-C – removed line 22 box for “Section 4980H Transition Relief.” This relief was only applicable for the 2015 plan year.
  • Forms 1095-B and 1095-C – had no major changes. Although, a new paragraph was added in the instructions for recipients titled “Additional information.” This refers recipients to an IRS webpage that provides an overview of the provisions of the individual shared responsibility, employer shared responsibility, and premium tax credits along with contact information for the IRS Healthcare Hotline for questions.

Per EBIA – Draft instructions should most likely be coming out soon which provide a more complete picture of reporting for the 2017 tax year. There has been no change to the reporting requirements as we’re still under the Affordable Care Act (ACA).

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

Your Network Discount Analyses Are Useless

Posted August 16, 2017 by Megan DiMartino

Throw it in the trash. Seriously. The time we spend as insurance professionals, benefits professionals, and HR professionals analyzing insurance network discount reports might as well be time spent playing “Candy Crush” on our phones. The similarities are striking actually; they both contain bright colors, you feel like you are exercising your brain, immediately upon finishing there’s a sense of understanding and achievement, and then 5 minutes later, you question, “why did I just spend 45 minutes doing that?”

Insurance carriers and networks have done a tremendous job in promoting the value of their provider networks. We painstakingly agonize over geo-access reports, and we love taking our claims and running them through the various carriers to see if we could save a couple of percentage points with UnitedHealthcare, Cigna, Aetna, or the Blues. And why not…a 2% discount savings for most of us ends up being over $200 per employee per year. That adds up.

So why should we throw those reports out?

The answer is simple…it doesn’t matter what your discounts are when the discount is not based off of anything.

Think of the mattress store in your town that has been “going out of business” for what seems like the past four years. All of the mattresses are 80% off! What a steal! It would be a great deal, except the mattress is 80% off of a marked up price that has no basis in reality. Who would pay a $12,000 sticker price for a basic queen sized, spring mattress?

Or think about when your spouse comes home with three new outfits. It was buy one, get two free! I got two free outfits! Again, it would be a great deal if the first outfit wasn’t four times more than you might be able to get it somewhere else. You didn’t get two outfits for free, you overpaid for three outfits.

In short, a discount only means something when the price that the discount is based off of can be referenced at other locations. I’d rather pay full price for an item at $100 than get a 50% discount on that same item where the sticker price is $400…wouldn’t you?

So how do we bring this full circle back into healthcare? Consider your claims for inflammatory conditions that are run through your medical plan. Most are known as HCPCs J-Codes. J1745 is a big one, for example…you probably have quite a bunch of claims for that…Infliximab…also known as Remicade. Carrier A has negotiated with their hospitals that they will discount Remicade 50% off of their billed charges (queen-sized mattress anyone?). Carrier A has negotiated with non-hospital providers that they will reimburse ASP +15% for the same exact drug. Now we compare Carrier A with Carrier B. Carrier B only has a 45% discount on billed charges for Remicade at the hospitals, and the same ASP +15% arrangement with the non-hospital providers. So when we re-run claims through both carriers, Carrier A looks like a champ and Carrier B is the chump, right?

But let’s now assume that Carrier B also has a program that redirects members from outpatient hospital setting for Infliximab infusions to the non-hospital provider settings. Let us also assume that they can quantitatively prove a 90% conversation rate from the hospital to non-hospital setting. Are they still the chump?

Consider this: your average PEPY spend on healthcare sits around $10,000. So a 2% network savings is that $200 PEPY we mentioned before. Now consider that your average Remicade infusion at a hospital will cost a plan $9,000 per month, whereas at an office setting, the average would be closer to $4,000 per month. So a shift in that site of service can save a plan $60,000 per user per year. In other words, within a population of 300 employees, a 2% network savings has the same value as just one member changing where they receive their Remicade infusions.

Imagine what happens when you factor in other medications such as Humira, Tecfidera, HP Acthar, Cinryze, Stelara, and dozens of others? Or imagine the impact of setting a reference based price for your imaging, or having negotiated bundled pricing for orthopedic surgeries? All of a sudden, those network discounts and access fees start to look less and less significant.

Now, let’s compare John and Jane who are both requiring a knee replacement. John goes to Hospital A and Jane goes to Hospital B. Both have negotiated a 50% discount of billed charges, but Hospital A bills $80,000, so the allowed charge is $40,000, while Hospital B bills $60,000, so the allowed charge is $30,000. Your discount report will show a 50% “discount” at both, but who cares? Meanwhile, Eric is covered under a different plan that has set a bundled reimbursement with the Hospital C at $25,000. Hospital C bills that $25,000, so the discount is 0%. Yet, we’d all prefer to take that 0% discount all day long.

It has been decades since the days of the Major Medical reasonable and customary reimbursement plans, but Medicare based reimbursements for non-Medicare members, as well as other UCR style programs, are starting to make a comeback, as is the growth in concierge medicine. What’s old is new again. It may not be long before insurance networks become completely irrelevant and obsolete in this new environment.

In the meantime, look at your claims and your data from the perspective of unit cost. Compare medical drug spend to the published Part B reimbursements on the CMS website. Compare different hospital billed and allowed charges for the same exact procedures within your own populations. Evaluate where people are going for infusions, surgeries, imaging, and lab work. Look at carriers and TPAs from the standpoint of who is going to manage the efficiency of utilization as opposed to which network will offer the “deepest” discounts.

If you shift your point of view, you might see a completely different picture.

Source: Crawford Advisors’ Director of Analytics, Scott Mayer | Your Network Discount Analyses Are Useless

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

HRCI & SHRM Pre-approved Crawford Advisors Webinar Series | Voluntary Benefits: Choosing the Right Fit

Posted August 15, 2017 by Megan DiMartino

Join Crawford Advisors’ Director of Voluntary Benefits, Stephen Ivey, for this HRCI* and SHRM** pre-approved, complimentary, one-hour webinar as he explores how to design, communicate and administer voluntary plans. Listen in on how these benefits are customized specifically to an employer’s core benefits program instead of the more common one-carrier-fits-all approach in the market.

Topics include:

  • Primary vs Supplemental
  • State of the Market
  • Employer Risks/Concerns
  • Communication & Enrollment Strategies
  • Administrative Platforms

Webinar Details:

  • Thursday, August 24, 2017
  • 1:00 – 2:00pm EDT
  • No Cost to Attend
  • This webinar is open to all HR and Finance Professionals – but not to brokers, agents, TPAs and PEOs.

*The use of this seal confirms that this activity has met HR Certification Institute’s (HRCI) criteria for recertification credit pre-approval. This activity has been approved for 1 HR (General) recertification credit hours toward aPHR, PHR, PHRca, SPHR, GPHR, PHRi, and SPHRi recertification through HRCI.

**Crawford Advisors is recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP or SHRM-SCP. This program is valid for 1 PDC for the SHRM-CP or SHRM-SCP. For more information about certification or recertification, please visit shrmcertification.org.

For more information contact info@crawfordadvisors.com. The information contained in this post, and any attachments, is not intended and should not be misconstrued as legal advice. You should contact your employment, benefits or ERISA attorney for legal direction.

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