The “Cadillac Tax” – IRS issues Notice on 40% Excise Tax

Posted on Aug 3, 2015 in Health Care Reform, Industry & Legislative News

On July 30, the Department of the Treasury and the Internal Revenue Service (IRS) issued a second notice regarding the 40% Excise Tax a.k.a. the Cadillac Tax. The notice provides information on possible approaches that are being considered for administering the Cadillac Tax and continues the process of gathering input that will be used to develop regulations.

This is a follow-up to the notice issued on February 23, 2015, and comments may be submitted until October 1, 2015.

The notice addresses several issues, including:

  • Who pays the tax
  • How the tax will be determined
  • How the tax will be paid

Who Pays the Tax

Each “coverage provider” must pay the tax on its share of the excess benefit. A coverage provider is:

  • The health insurer for insured coverage.
  • The employer for accounts such as Health Savings Accounts (HSAs) to which the employer contributes.
  • The plan benefits administrator – the agencies are seeking comments on whether this should be the third-party administrator or the entity that has ultimate responsibility for plan administration, typically the employer.

How the Tax will be Determined

The notice seeks comments on how to calculate and administer the tax. The following are some of the proposed approaches:

Read More

Group Life Insurance – What is Imputed Income?

Posted on Jul 31, 2015 in Industry & Legislative News, Success ideas

Many employers provide employees with employer-paid group-term life insurance benefits or arrange for employees to purchase group term life insurance benefits. But did you know that in some cases, if an employer pays for more than a $50,000 life insurance benefit, there can be tax implications for the employee?

Must the cost of employer-provided group-term life insurance be included in an employee’s gross income?

Pursuant to Internal Revenue Code (Code) Section 79, an employee may exclude up to $50,000 of employer- provided group-term life insurance from his or her income. This tax exclusion applies only to insurance on the life of the employee. It does not apply to insurance on the life of the employee’s spouse or dependent or other individual.

In addition, the employer may generally deduct the premiums it pays for the coverage as an ordinary and necessary business expense, so long as the employer is neither directly nor indirectly the beneficiary under the policy.

May the employer provide group-term life insurance for its employees in excess of $50,000?

Yes. However, the “cost” of the coverage in excess of $50,000 must be included in the employee’s gross income. “Cost” as used here does not refer to the premium paid by the employer but to the cost determined under the Uniform Premium Table contained in IRS regulations. The “cost” of the coverage added to an employee’s gross income is commonly referred to as “imputed income”.

Read More

Supreme Court rules in favor of same-sex marriage

Posted on Jun 26, 2015 in Industry & Legislative News

Today the Supreme Court released its decision in Obergefell v. Hodges, a 5-4 decision. The Court ruled in favor of same-sex marriage, holding that the Fourteenth Amendment requires states to issue marriage licenses for same-sex couples. The Court also held that states must recognize same-sex marriages that were lawfully licensed and performed out of state.

Read More

Supreme Court rules health premium subsidies legal in all States

Posted on Jun 25, 2015 in Health Care Reform, Industry & Legislative News

The Supreme Court released their ruling on King v. Burwell today. The vote was 6-3 in favor of upholding health premium subsidies in all States, including States that have a Health Plan Exchange run by the Federal Government.

Now that the decision is made, we will most likely see action in Congress to clean up parts of the Affordable Care Act.

Here is a link to the Supreme Court’s Opinion: http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf

Read More

What is a Long Term Care Partnership Program, and why should I care?

Posted on Jun 18, 2015 in Industry & Legislative News, Success ideas

Many people mistakenly believe government programs, like Medicare and Medicaid, will provide all the long-term care services they need. Unfortunately, this may not be the case. Failing to plan how you’ll pay for long-term care services may place you at serious financial risk.

Medicare

Medicare generally does not pay for long-term care services. Instead, it’s designed to help get you back on your feet following an illness or injury.

  • Medicare pays only for “skilled care” you receive in a nursing home, but only if it’s medically necessary and only for a limited period of time
  • Medicare does not pay for “custodial care” services many people receive in their homes – services like assistance with dressing, bathing and using the bathroom. Medicare also does not pay for care received in an assisted living facility

Medicaid

Medicaid provides long-term care assistance to individuals who have exhausted their personal resources.

  • Medicaid pays for both “skilled care” and “custodial care” received in a nursing home, but only after you spend down your assets to meet eligibility guidelines in your state
  • In some states, Medicaid may pay for some services received at home or in an assisted living facility

What is a long-term care partnership program?

It’s a partnership between your state government and private insurance companies. Insurance companies voluntarily agree to participate by offering long-term care insurance policies that meet specified criteria. The state agrees to provide Medicaid asset protection to people who purchase partnership-qualified policies.

How does Medicaid asset protection work?

Read More

New EEOC Ruling affects Workplace Wellness Programs

Posted on Jun 10, 2015 in Health Care Reform, Industry & Legislative News

The proposed rules on use of financial incentives within workplace wellness programs were published by the Equal Employment Opportunity Commission (EEOC) on April 16, 2015.   These rules align the wellness provisions of the Affordable Care Act (ACA) and the Health Insurance Portability and Accountability Act (HIPAA) with the nondiscrimination rules in the Americans with Disabilities Act (ADA).

Read More