Why is my Insurance Company asking for my Social Security Number?

Posted on Jun 9, 2015 in Health Care Reform, Industry & Legislative News

Recently, your health insurance company may have requested your Social Security number, as well as the Social Security numbers of your spouse and your qualifying dependents. Due to a new reporting requirement, you will need to report qualifying health coverage (referred to as “minimum essential coverage”) on your yearly income tax return. This new reporting requirement will begin for the 2015 tax year, and your social security number is required by the Internal Revenue Service (IRS) for Form 1095-B. Here are some common questions you may have regarding this process.

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H&R Block’s Final ACA Stats: Two Thirds of Tax Filers had to pay back Premium Subsidies

Posted on May 15, 2015 in Health Care Reform, Industry & Legislative News

Almost two-thirds of tax filers who received insurance via the state or federal insurance Marketplaces had to pay back an average of $729 of the Advance Premium Tax Credit (APTC), cutting their potential refund by almost one-third, according to analysis of filing data by H&R Block (NYSE: HRB), the world’s largest consumer tax preparation company. The Advanced Premium Tax Credit was designed to pay a portion of a person’s health insurance premium each month, the amount was based upon projected income amounts. The intent is to help make health insurance “affordable”. So, for example, if your health insurance premium on the individual exchange was $500 per month, and you got a premium tax credit, you might pay $250 and the government would pay the other $250.

However, if you projected your income incorrectly when you signed up, or it changed during the year, you might not qualify for the original subsidy amount. So you’d have to pay back part or all of the subsidy at tax time.

H&R Blocks research found that the average refund for those with an APTC who filed was $2,195. The average premium tax credit reconciliation repayment amount was $729, which equated to a 33-percent reduction from their average refund.

Here is a link to the H&R Block article: http://newsroom.hrblock.com/hr-blocks-final-aca-stats-refunds-impacted-received-advance-tax-credit/

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IRS Releases ACA Reporting Forms and Instructions

Posted on May 13, 2015 in Health Care Reform, Industry & Legislative News

The IRS recently released the final forms and instructions for Section 6055 and 6056 reporting. Additionally, the IRS released Publication 5196, Understanding Employer Reporting Requirements of the Health Care Law, in order to help employers prepare for reporting in 2016.

Forms 6055 and 6056 are not required to be filed for 2014, but employers may choose to voluntarily file in 2015 for 2014 coverage using the released forms and instructions.

For more information on the new reporting forms and instructions, see the IRS’ Q&As on Section 6055 and Q&As on Section 6056.

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New Guidance for Employer Payments of Individual Health Plan Premiums

Posted on May 13, 2015 in Health Care Reform

In late February, the Internal Revenue Service (IRS) released Notice 2015-17, which offers guidance on the prohibition of employer payment plans. These plans are arrangements that pay for or reimburse premiums for individual health plans.

The notice reiterates that employer payment plans are not compliant with the Affordable Care Act (ACA) provisions that took effect in 2014. However, the notice also states that an increase in employee compensation, not conditional on the employee’s purchase of individual health insurance, is not considered an employer payment plan.

The notice clarifies confusion caused by some employers’ interpretations of Revenue Ruling 61-146 as support for employer payment plans. To counter the misinterpretation, the notice stated that this ruling does not address the application of the ACA’s market reforms and therefore should not be read as though it does.

Violating these ACA provisions can result in an excise tax of $100 per employee for each day that an employer is out of compliance.

The notice also provides information regarding transitional relief from the fines. Employers that are not applicable large employers (ALEs) under the ACA’s employer shared responsibility rules, as well as S corporation health care arrangements for 2-percent shareholder-employees, may be eligible for transition relief. The transition relief is available to eligible employers on a temporary basis until June 30, 2015. After that date, employers that are not in compliance may be liable for the excise tax.

The relief is not included for stand-alone HRAs or arrangements that cover employees’ medical expenses other than insurance premiums.

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“If you like your plan, you can keep it”

Posted on Apr 11, 2014 in Health Care Reform, Industry & Legislative News

White House Extends Transition Policy for Canceled Health Plans

Millions of Americans received notices in late 2013 informing them that their health insurance plans were being canceled because they did not comply with the ACA’s reforms. President Obama was criticized that these cancelations went against his assurances that if consumers had a plan that they liked, they could keep it.

Responding to pressure from consumers and Congress, on Nov. 14, 2013, President Obama announced a transition relief policy for 2014 for non-grandfathered health insurance coverage in the small group and individual health insurance markets.

On March 5, 2014, the Obama Administration announced a two- year extension to the transition policy for individual and small group health plans that do not comply with the ACA’s market reforms.

Quick Facts:

  • On Nov. 14, 2013, the White House announced a transition policy for 2014 that allows issuers to continue policies that don’t meet ACA standards.
  • This transition policy has been extended to policy years beginning on or before Oct. 1, 2016.
  • Individuals and small businesses may be able to keep their non-ACA compliant coverage into 2017, depending on the policy year.
  • States have the option to extend the transition relief to certain large employers in 2016.

HHS outlined the original transition relief policy in a letter to state insurance commissioners. Under the original transitional policy, health insurance coverage in the individual or small group market that is renewed for a policy year starting between Jan. 1, 2014, and Oct. 1, 2014 (and associated group health plans of small businesses), will not be considered to be out of compliance with specified ACA reforms.

Also, to qualify for the transition relief, issuers must send a notice to all individuals and small businesses that received a cancelation or termination notice with respect to the coverage (or to all individuals and small businesses that would otherwise receive a cancelation or termination notice with respect to the coverage).

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Self Funded Medical Plans – How do they Work?

Posted on Apr 4, 2014 in Health Care Reform

Here is a video I made that explains how Self Funded Medical Plans work. I’ve used the diagram you’ll see in this video countless times to help people understand the parts of a self-funded program and how the protections help make the plan budget-able and protect claim dollars.

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