Developments in Benefits, Ancillary Benefits
The Affordable Care Act (ACA) includes provisions to encourage the use of wellness programs related to group health coverage. Effective for plan years beginning on or after Jan. 1, 2014, ACA adopts the existing HIPAA nondiscrimination requirements for health-contingent wellness programs, while also increasing the maximum reward that can be offered under these programs.
On May 29, 2013, the Departments of Labor, Health and Human Services and the Treasury (Departments) released final regulations that implement ACA’s nondiscrimination requirements for wellness programs. The final regulations clarify and reorganize the rules outlined in previous proposed regulations. They are intended to ensure that every individual participating in a wellness program can receive the full amount of any reward or incentive, regardless of any health factor.
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The Affordable Care Act (ACA) calls for the creation of state-based competitive marketplaces, known as Affordable Health Insurance Exchanges (Exchanges), for individuals and small businesses to purchase private health insurance. According to the Department of Health and Human Services (HHS), the Exchanges will allow for direct comparisons of private health insurance options based on price, quality and other factors, and will coordinate eligibility for premium tax credits and other affordability programs.
ACA requires the Exchanges to become operational in 2014, with enrollment expected to begin on Oct. 1, 2013.
On March 29, 2013, the Department of Health and Human Services (HHS) released a set of frequently asked questions (FAQs) on the use of Exchanges for ancillary products. Although the Exchanges are prohibited from offering any health plan that is not a “qualified health plan” (QHP), Exchange resources and infrastructure, in some instances, may overlap with separate state programs that offer non-QHP ancillary plans. - View the PDF
The Affordable Care Act (ACA) made a variety of changes affecting health reimbursement arrangements (HRAs). To cover the cost of some of these changes, ACA imposed a number of fees on health insurance issuers and sponsors of self-insured health plans. These fees include:
• Patient-Centered Outcomes Research Institute fees (PCORI fees); and
• Reinsurance fees.
Both of these fees are calculated based on the average number of covered lives under the plan. For plan sponsors that maintain multiple self-insured arrangements (such as an HRA in addition to major medical coverage), this could have resulted in having to pay each fee twice for each covered life, effectively doubling the amount of these fees. To avoid this result, the IRS developed special rules for applying PCORI fees and reinsurance fees to these types of plans.
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The American Taxpayer Relief Act increased the maximum monthly transit benefit for employees from $125 per participating employee to $240 per participating employee. This change was made retroactive for the period of Jan. 1, 2012, through Dec. 31, 2012.
To address employers’ questions regarding the retroactive application of the increase, the IRS issued Notice 2013-8. This Notice clarifies how the increase applies for 2012 and provides special administrative procedures for employers to use in filing the following forms - 1) Form 941, Employer’s quarterly Federal Tax Return, for the fourth quarter of 2012 to reflect changes in the excludable amount for transit benefits provided in all quarters of 2012; and 2) Forms W-2, Wage and Tax Statement.
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Fiscal Cliff Legislation Affects Adoption and Educational Assistance Benefits, Transit Benefits, Dependent Care, and Roth Conversions
Congress has passed and the President has signed the American Taxpayer Relief Act of 2012 (ATRA), addressing the combination of tax increases and automatic spending cuts popularly known as the “fiscal cliff.” Among other things, ATRA raises the individual income tax rates and capital gains rates for high-income individuals, delays for two months automatic budget cuts under the sequestration provisions of the Balanced Budget and Emergency Deficit Control Act of 1985, temporarily extends many business tax breaks, delays cuts in Medicare reimbursement rates, and provides permanent alternative minimum tax relief. ATRA also makes several important changes affecting fringe and other benefits, which are summarized in this article. - View the PDF
A plan administrator who receives a National Medical Support Notice must review the Notice and determine whether it is appropriately completed. The administrator must complete the Plan Administrator Response (included with Part B of the Notice), indicating whether the Notice is a QMCSO, and return (more)