Showing 24 posts in Employee Benefits.
The IRS recently began enforcing the employer mandate provision of the Affordable Care Act (“ACA”) by assessing penalties on noncompliant employers for the 2015 calendar year. Read More ›
Categories: Affordable Care Act, Employee Benefits
The Internal Revenue Service recently released the 2018 cost-of-living adjusted amounts related to health savings account (“HSA”) contribution limits, out-of-pocket maximums and high deductible health plan (“HDHP”) deductibles. Each of the cost-of-living adjusted amounts is set forth below. Read More ›
Categories: Employee Benefits, Tax
In the last few days of 2015, the Internal Revenue Service ("IRS") published welcomed relief for employers who are struggling to understand their reporting obligations under the Affordable Care Act ("ACA"): extended deadlines. Read More ›
The US Supreme Court's Ruling on the Affordable Care Act will not Change Employers' Responsibilities
On June 25, 2015, the Supreme Court of the United States issued a ruling related to the Patient Protection and Affordable Care Act (the "Act") in the case of King v Burwell. The issue that the Court addressed was whether tax credits were available to individuals who purchased health insurance coverage through a Health Insurance Exchange ("Exchange") that was established by the Federal government.
An Exchange serves as a marketplace where individuals can compare various health insurance plans and ultimately purchase health insurance coverage. The Act requires an Exchange to be established in each State. If a State fails to establish its own Exchange, the Federal government is required to step in and establish the Exchange for that State. The Court's decision had the potential to preclude tax credits for individuals purchasing insurance through the Federal Exchanges in 34 States, including Michigan.
This issue was of significant importance because of its implications for the Act's Employer Mandate, which generally requires large employers to offer health insurance coverage to their full-time employees. The tax credits provided under the Act serve as the lynchpin for liability under the Employer Mandate. Despite the fact that a large employer may fail to offer health insurance coverage to its full-time employees, it will not be penalized if those employees do not obtain coverage through the Exchange and receive a tax credit. Therefore, large employers located in States that have a Federal Exchange could arguably avoid penalties for their failure to offer coverage to their full-time employees; such employees would not receive a tax credit when purchasing health insurance coverage on the Exchange and would not trigger the penalty. Read More ›
On February 18, 2015, the Internal Revenue Service (“IRS”) provided further guidance related to the issue of how certain employer health insurance reimbursement arrangements are treated under the Affordable Care Act (“ACA”).
As we explained in a previous post, after the Health Insurance Marketplace opened for business, many employers recommended that their employees use it to purchase individual health insurance policies, with the promise that the premium costs would be reimbursed by the employer. In fact, such employee reimbursement strategies were aggressively marketed to employers as a solution to reduce costs and comply with the requirements of the ACA. Little did these employers (and marketers) know, such arrangements exposed the employers to significant penalties under the ACA.
Prior guidance made clear that such arrangements – whether funded on a pre- or post-tax basis – may be subject to the ACA’s market reforms. Employers that offer reimbursement arrangements that violate the ACA are subject to a $100 per day per affected employee penalty.
Reimbursing Individual Health Insurance Policy Premiums May Result in Significant Penalties for Employers
Employers, including municipal employers, have historically struggled to develop a health insurance benefit program for their employees that provides quality benefits and is cost-effective. After the Health Insurance Marketplace opened for business, many employers recommended that their employees use it to purchase individual health insurance policies, with the promise that the premium costs would be reimbursed by the employer. In fact, such employee reimbursement strategies were aggressively marketed to employers as a solution to reduce costs and comply with the requirements of the Patient Protection and Affordable Care Act (“ACA”). Little did these employers (and marketers) know, such arrangements exposed the employers to significant penalties under the ACA.
In September 2013, the IRS issued Notice 2013-54 that made clear that an employer arrangement that paid for employees’ individual health insurance policy premiums on a pre-tax basis violated the ACA. An employer that offered such an arrangement would be subject to a $100 per day per affected employee penalty ($36,500 per year, per employee).
As is well known by now, transitional relief from the Patient Protection and Affordable Care Act's Employer Mandate in 2015 is available for certain applicable large employers that sponsor non-calendar year health plans. This transitional relief allows the employer to avoid penalties for those months of 2015 that predate the first day of the non-calendar plan year. What is not so well-known, however, are the requirements that must be met in order for the employer to be entitled to receive the transitional relief. Read More ›
On Thursday, April 3, 2014, the Obama administration announced that it was taking steps to bring its Medicare rules in line with the United States Supreme Court's ruling in US v. Windsor. Specifically, the Department of Health and Human Services (“HHS”) announced that same-sex marriages would be recognized for determining Medicare entitlement and eligibility. Read More ›
Is it the end of the Michigan Marriage Amendment?
In the court case Deboer v Snyder, a federal court judge ruled that the voter-approved Michigan Marriage Amendment prohibiting same-sex couples from marrying in Michigan was unconstitutional. However, the Sixth Circuit Court of Appeals stayed the federal trial court ruling in Deboer v Snyder as the State of Michigan prepares to appeal the decision.
So what does this mean for health care insurers? This means that the Michigan Marriage Amendment banning same-sex marriage remains the law in Michigan until the Sixth Circuit decides the State of Michigan's appeal of the Deboer ruling. However, insurers will want to keep an eye on this case to determine if they should offer same-sex health insurance benefits or change their definitions of spouse under their plans.
For information on what this ruling would mean for employers, see this article by Foster Swift.
While originally scheduled to start in 2014, now beginning in 2015, "large employers" will be required to provide adequate health care coverage to their full time employees or pay a penalty. This requirement is known as health care reform’s Employer Mandate. In order to assess whether your company is subject to the Employer Mandate, you must first determine whether your company is a "large employer." Read More ›
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