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On November 29, 2018, the IRS released Notice 2018-94 to extend the due date for employers to furnish 2018 Form 1095-C or 1095-B under the Affordable Care Act’s employer reporting requirement. Employers will have an extra month to prepare and distribute the 2018 form to individuals. The due dates for filing forms with the IRS are not extended.

Background

Applicable large employers (ALEs), who generally are entities that employed 50 or more full-time and full-time-equivalent employees in 2017, are required to report information about the health coverage they offered or did not offer to certain employees in 2018. To meet this reporting requirement, the ALE will furnish Form 1095-C to the employee or former employee and file copies, along with transmittal Form 1094-C, with the IRS.

Employers, regardless of size, that sponsored a self-funded (self-insured) health plan providing minimum essential coverage in 2018 are required to report coverage information about enrollees. To meet this reporting requirement, the employer will furnish Form 1095-B to the primary enrollee and file copies, along with transmittal Form 1094-B, with the IRS. Self-funded employers who also are ALEs may use Forms 1095-C and 1094-C in lieu of Forms 1095-B and 1094-B.

Extended Due Dates

Specifically, Notice 2018-94 extends the following due dates:

  • The deadline for furnishing 2018 Form 1095-C, or Form 1095-B, if applicable, to employees and individuals is March 4, 2019 (extended from January 31, 2019).
  • The deadline for filing copies of the 2018 Forms 1095-C, along with transmittal Form 1094-C (or copies of Forms 1095-B with transmittal Form 1094-B), if applicable, remains unchanged:
    • If filing by paper, February 28, 2019.
    • If filing electronically, April 1, 2019.

The extended due date applies automatically so employers do not need to make individual requests for the extension.

More Information

Notice 2018-94 also extends transitional good-faith relief from certain penalties to the 2018 employer reporting requirements.

Lastly, the IRS encourages employers, insurers, and other reporting entities to furnish forms to individuals and file reports with the IRS as soon as they are ready.

by Kathleen Berger
Originally posted on ThinkHR.com

On November 5, 2018, the Internal Revenue Service (IRS) released Notice 2018-85 to announce that the health plan Patient-Centered Outcomes Research Institute (PCORI) fee for plan years ending between October 1, 2018 and September 30, 2019 will be $2.45 per plan participant. This is an increase from the prior year’s fee of $2.39 due to an inflation adjustment.

Background

The Affordable Care Act created the PCORI to study clinical effectiveness and health outcomes. To finance the nonprofit institute’s work, a small annual fee — commonly called the PCORI fee — is charged on group health plans.

The fee is an annual amount multiplied by the number of plan participants. The dollar amount of the fee is based on the ending date of the plan year. For instance:

  • For plan year ending between October 1, 2017 and September 30, 2018: $2.39.
  • For plan year ending between October 1, 2018 and September 30, 2019: $2.45.

Insurers are responsible for calculating and paying the fee for insured plans. For self-funded health plans, however, the employer sponsor is responsible for calculating and paying the fee. Payment is due by filing Form 720 by July 31 following the end of the calendar year in which the health plan year ends. For example, if the group health plan year ends December 31, 2018, Form 720 must be filed along with payment no later than July 31, 2019.

Certain types of health plans are exempt from the fee, such as:

  • Stand-alone dental and/or vision plans;
  • Employee assistance, disease management, and wellness programs that do not provide significant medical care benefits;
  • Stop-loss insurance policies; and
  • Health savings accounts (HSAs).

HRAs and QSERHAs

A traditional health reimbursement arrangement (HRA) is exempt from the PCORI fee, provided that it is integrated with another self-funded health plan sponsored by the same employer. In that case, the employer pays the PCORI fee with respect to its self-funded plan, but does not pay again just for the HRA component. If, however, the HRA is integrated with a group insurance health plan, the insurer will pay the PCORI fee with respect to the insured coverage and the employer pays the fee for the HRA component.

A qualified small employer health reimbursement arrangement (QSEHRA) works a little differently. A QSEHRA is a special type of tax-preferred arrangement that can only be offered by small employers (generally those with fewer than 50 employees) that do not offer any other health plan to their workers. Since the QSEHRA is not integrated with another plan, the PCORI fee applies to the QSEHRA. Small employers that sponsor a QSEHRA are responsible for reporting and paying the PCORI fee.

PCORI Nears its End

The PCORI program will sunset in 2019. The last payment will apply to plan years that end by September 30, 2019 and that payment will be due in July 2020. There will not be any PCORI fee for plan years that end on October 1, 2019 or later.

Resources

The IRS provides the following guidance to help plan sponsors calculate, report, and pay the PCORI fee:

 

Originally posted on thinkhr.com

You have a business and it is growing – Congratulations!

As your company grows and you hire more employees, there are milestones that you will hit.  Some of these milestones come with additional responsibilities that you need to attend to, such as Cobra, HCSO, FMLA, Sexual Harassment Prevention Training and the Affordability Care Act’s Large Employer Mandate.

For example, if you are a company based in California and offer an employee benefits plan that includes medical insurance, you are obligated to allow former or terminated employees and their enrolled dependents to enroll in Cal-COBRA if they are no longer eligible to be enrolled in your plan.  Once you reach 20 employees or more for an average of 50% or more of the previous calendar year, then you are obligated to start offering enrollment in Federal COBRA for those plan participants and enrolled dependents if they are no longer eligible to be enrolled in your plan.

Additionally, if you have any employees working in the City of San Francisco, you would also need to comply with the Health Care Security Ordinance (HCSO).  However, these two things would not happen at the same time because while they both require you have 20 or more employees before you have to comply, they count those employees differently, and over a different length of time.

Federal COBRA counts employees by their classification.  A full-time employee is counted as 1, and part-time employees are counted in fractions.  So you may have 15 full-time employees, and 5 part time employees and you would NOT be subject to Federal COBRA because your part time employees work an average of 20 hours per week, meaning all together they only count as 2.5 full-time equivalents which when combined with your full-time employees puts your count at 17.5.

The HCSO counts employees by head count, and they do it per quarter.  So if you have 19 employees during one quarter of the year, you don’t need to comply.  But if you have 20 employees for at least 13 weeks of the following quarter, you would need to comply.

Is your head spinning yet?

As you move further along and you reach 50 employees, there are more regulations that may now be applied to your company.  They are the Family Medical Leave Act (FMLA), Sexual Harassment Prevention Training for California businesses, and the Pay or Play provision of the Affordable Care Act.  As one might expect, each regulation counts employees in a different way.

When you have had 50 or more employees over 20 weeks during the current or previous calendar year, you are subject to FMLA.  The weeks do not have to be consecutive weeks.  Additionally, FMLA counts the employees on your payroll register even if they are not being paid.  If they are on your payroll register, they are counted.  Each person is counted as 1, regardless of the number of hours worked.

For sexual harassment prevention training in California, once you have 50 or more employees (regardless of full-time or part time status) for 20 or more consecutive weeks, you have to begin offering training for your management staff every 2 years, and within 6 months of promoting an employee to a managerial position.

The Applicable Large Employer or ALE classification under the Affordable Care Act counts employees in yet a different way.  With regards to determining ALE status, you generally count each full-time employee as 1, and for part-time, seasonal, and variable-hour employees you count the number of hours they all worked collectively during a month (do not include more than 120 hours for any employee), then divide the total hours by 120 hours to get how many Full-Time Equivalent Employees (FTEs) you have.  You then add the number of full-time employees, to your FTE’s to get your total employee count.  If you average 50 or more employees during the calendar year, you are considered an ALE the following tax year.  For example, if you average 50 or more employees during the 2018 calendar year, you would be subject to the Pay or Play Mandate and the reporting requirements associated with it for the year 2019.

If your employee count stays at 50 or above in 2019, you would continue to be an ALE with all associated requirements in 2020.  If your employee count dips below 50 in 2019, then you would not be considered an ALE in the year 2020.

The Pay or Play Mandate (Employer shared responsibility) means that as an ALE you are required to offer minimum value, affordable coverage to your full-time employees and their dependent children, or potentially face a penalty from the IRS.

No one is an expert in all things, which is likely why your business is doing well and thriving: because you fulfill a need or expertise in the area that you specialize in.  As a successful business owner you know it is advantageous to have strong partners in your corner to help lend their strengths to your areas of weakness.

Having a strong benefits advisor to assist you in navigating these hurdles, speed bumps, and curves in the road is essential.  Whether you have the resources to handle these regulations in-house, or if you need someone to recommend a trustworthy third party vendor to handle it for you, we are pleased to be able to fulfill that need for you.

 

by Elizabeth Kay

Recently, the President signed a bill repealing the Affordable Care Act’s Individual Mandate (the tax penalty imposed on individuals who are not enrolled in health insurance). While some are praising this action, there are others who are concerned with its aftermath. So how does this affect you and why should you pay attention to this change?

First, as an individual, if you do not carry health insurance, you are currently paying a penalty of $695/adult not covered and $347.50/uninsured child with penalties going even as high as $2085/household. These penalties have been the deciding factor for most uninsured Americans—go broke buying insurance but they have insurance or go broke paying a fine and still be uninsured. With the repeal signed in December 2017, these penalties are zeroed out starting January 1, 2019.  While it seems that the repeal of the tax penalty should be good news all around, it does have some ramifications. Without reform in the healthcare arena for balanced pricing, when individuals make a mass exodus in 2019, we can expect higher premiums to account for the loss of insured customers.

As a business, you are still under the Employer Mandate of the ACA. There have been no changes to the coverage guidelines and reporting requirements of this Act. However, with healthy people opt-ing out of health insurance coverage, the employer premiums can expect to be raised to cover the increased expenses of the sick. Some do predict the possibility of the repeal of some parts of the Employer Mandate —specifically PCORI fees and employment reporting. The Individual and Employer Mandates were created to compliment each other and so changes to one tend to mean changes to the other.

So, why should you pay attention to this change? Because the balance the ACA Individual Mandate was designed to help make in the health insurance marketplace is now unbalanced.

Taking one item from the scale results in instability. Both employers and employees will be affected by this tax repeal in one way or another.

 

Since the ACA was enacted eight years ago, many employers are re-examining employee benefits in an effort to manage costs, navigate changing regulations, and expand their plan options. Self-funded plans are one way that’s happening.

In 2017, the UBA Health Plan survey revealed that self-funded plans have increased by 12.8% in the past year overall, and just less than two-thirds of all large employers’ plans are self-funded.

Here are six of the reasons why employers are opting for self-funded plans:

1. Lower operating costs frequently save employers money over time.

2. Employers paying their own claims are more likely to incentivize employee health maintenance, and these practices have clear, immediate benefits for everyone.

3. Increased control over plan dynamics often results in better individual fits, and more needs met effectively overall.

4. More flexibility means designing a plan that can ideally empower employees around their own health issues and priorities.

5. Customization allows employers to incorporate wellness programs in the workplace, which often means increased overall health.

6. Risks that might otherwise make self-funded plans less attractive can be managed through quality stop loss contracts.

If you want to know more about why self-funding can keep employers nimble, how risk can be minimized, and how to incorporate wellness programs, contact us for a copy of the full white paper, “Self-Funded Plans: A Solid Option for Small Businesses.”

by Bill Olson
Originally posted on ubabenefits.com

On June 19, 2018, the U.S. Department of Labor released its Final Rule regarding Association Health Plans (AHPs). AHPs are not new, but they have not been widely available in the past and, in some cases, they have not been successful. The Final Rule is designed to make AHPs available to a greater number of small businesses as an alternative to standard ACA-compliant small group insurance policies.

This article answers common questions about AHPs under the current rules (which groups can continue to use) and the new rules.

Is group medical insurance the same for small and large employers?

Yes and no. Federal law imposes certain basic requirements on all group medical plans, regardless of the employer’s size. For instance, plans cannot exclude pre-existing conditions nor impose annual or lifetime dollar limits on basic benefits. If the plan is insured, it also is subject to the insurance laws of the state in which the policy is issued.

Small group policies, which are sold to employers with up to 50 or 100 employees, depending on the state, are subject to additional requirements. These policies must cover 10 categories of essential health benefits (EHBs), including hospitalization, maternity care, mental health and substance abuse treatment, and prescription drugs. (Some states allow certain grandfathered or grandmothered policy exceptions.) For most small employers, their options for group medical insurance are limited to small group policies that comply with the full scope of ACA requirements. On the other hand, the policies are subject to guaranteed issue and adjusted community rating rules, so carriers cannot refuse to insure a small employer nor use any past claims experience in setting rates.

Large group policies, which can only be sold to groups with at least 50 or 100 employees, depending on the state, are not required to cover all EHBs. Carriers have more flexibility in designing coverage options and developing premium rates in the large group market. This means larger employers have more options to choose from and may be able to purchase coverage at a lower cost than would apply to a small group policy. Note, however, that there is no guaranteed issue protection, so carriers can accept or reject each employer’s application or use the employer’s past claims experience in setting rates.

Lastly, self-funded plans are subject to the ACA and other federal laws, but generally are exempt from state laws. They typically are not feasible for small employers, however, due to the financial risk of uninsured programs.

What is an Association Health Plan (AHP)?

Group insurance covers the employees of an employer (or an employee organization such as a labor union). An AHP, as the name implies, covers the members of an association. Unrelated employers can obtain coverage for their employees through an AHP provided the employers form a bona fide association. Traditionally, this has meant that the employers had to have a “commonality of interest” and their primary interest had to be something other than an interest in providing benefits. For this reason, AHPs generally have been limited to associations formed by employers in the same trade, industry, or profession.

The Final Rule makes AHPs available to a wider range of businesses by expanding the meaning of “commonality of interest.” Once the Final Rule takes effect, an association may be formed by employers that are:

  • In the same trade, industry, or profession, regardless of location; or
  • In the same principal place of business; i.e., in the same state or in the same multi-state metropolitan area.

Under the new rules, the employer’s primary interest in associating may be benefits coverage, although they still will need to have at least one other substantial business purpose other than benefits. This is a key difference from the current rules.

When does the new Final Rule take effect?

The Final Rule expanding the definition of an association for purposes of an AHP will take effect on staggered dates:

  • For fully insured AHPs: September 1, 2018
  • For self-funded AHPs:
    • If in existence on or before June 19, 2018: January 1, 2019
    • If created after June 19, 2018: April 1, 2019

As noted, the new rules do not replace existing rules. Employers and associations may continue to follow the existing rules (which generally limit AHPs to employers in the same trade, industry, or profession). The new rules merely expand the opportunities for AHPs, such as making them available to employers in the same state or metropolitan area even if they are in different industries.

Are AHPs limited to employers with employees? What about sole proprietors?

Currently, sole proprietors, such as mom-and-pop shops without any W-2 employees, purchase medical insurance in the individual market. Individual policies often cost more than group policies or AHPs. The new rules will expand the availability of AHPs to include sole proprietors who work a minimum number of hours (so-called working owners).

What about state laws? Will AHPs be available nationwide?

Insurance products, including AHPs, are regulated by state law. Under both the existing and new rules, AHPs are multiple employer welfare arrangements (MEWAs). State laws on MEWAs are quite complicated. In some states, MEWAs are prohibited. In others, insured MEWAs are allowed but self-funded plans are prohibited. The laws vary from state to state, so different carriers will make different decisions about whether they want to design and market AHPs in various jurisdictions around the country.

A number of states are very concerned about AHPs and may prohibit them in their states or impose strict requirements to ensure they will provide reliable and effective coverage. Other states will view AHPs as cost-effective alternatives to ACA-compliant policies for small employers and look to encourage their expansion.

What’s next?

There is no clear answer to what’s next. Over the coming months, carriers across the country likely will review the reasons they have or have not offered AHPs in the past, and whether they want to consider new approaches in the future. Along with economic and market issues to consider, carriers also must consider the state insurance laws in different jurisdictions. At the same time, many state legislatures and insurance commissioners will be reviewing their existing rules and whether they want to promote or expand the availability of AHPs in their area.

Oh … and the lawsuits. Yes, that also is what’s next. As of this writing, attorneys general in different states are planning to join together in challenging the federal government’s Final Rule on AHPs. Their stated concern is that effective regulation is required to ensure that plans provide adequate coverage.

ThinkHR will continue to monitor developments in this area.

by Kathleen A. Berger
Originally posted on thinkhr.com

Do you offer coverage to your employees through a self-insured group health plan? Do you sponsor a Health Reimbursement Arrangement (HRA)? If so, do you know whether your plan or HRA is subject to the annual Patient-Centered Research Outcomes Institute (PCORI) fee?

This article answers frequently-asked questions about the PCORI fee, which plans are affected, and what you need to do as the employer sponsor. PCORI fees for 2017 health plans and HRAs are due July 31, 2018.

What is the PCORI fee?

The Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute to study clinical effectiveness and health outcomes. To finance the nonprofit institute’s work, a small annual fee is charged on health plans.

Most employers do not have to take any action, because most employer-sponsored health plans are provided through group insurance contracts. For insured plans, the carrier is responsible for the PCORI fee and the employer has no duties.

If, however, you are an employer that self-insures a health plan or an HRA, it is your responsibility to determine whether PCORI applies and, if so, to calculate, report, and pay the fee.

The annual PCORI fee is equal to the average number of lives covered during the health plan year, multiplied by the applicable dollar amount:

  • If the plan year end date was between January 1 and September 30, 2017: $2.26.
  • If the plan year end date was between October 1 and December 31, 2017: $2.39.

Payment is due by July 31 following the end of the calendar year in which the plan year ended. Therefore, for plan years ending in 2017, payment is due no later than July 31, 2018.

Does the PCORI fee apply to all health plans?

The fee applies to all health plans and HRAs, excluding the following:

  • Plans that primarily provide “excepted benefits” (e.g., stand-alone dental and vision plans, most health flexible spending accounts with little or no employer contributions, and certain supplemental or gap-type plans).
  • Plans that do not provide significant benefits for medical care or treatment (e.g., employee assistance, disease management, and wellness programs).
  • Stop-loss insurance policies.
  • Health savings accounts (HSAs).

The IRS provides a helpful chart indicating the types of health plans that are, or are not, subject to the PCORI fee.

If I have multiple self-insured plans, does the fee apply to each one?

Yes. For instance, if you self-insure one medical plan for active employees and another medical plan for retirees, you will need to calculate, report, and pay the fee for each plan. There is an exception, though, for “multiple self-insured arrangements” that are sponsored by the same employer, cover the same participants, and have the same plan year. For example, if you self-insure a medical plan with a self-insured prescription drug plan, you would pay the PCORI fee only once with respect to the combined plan.

Does the fee apply to HRAs?

Yes. The PCORI fee applies to HRAs, which are self-insured health plans, although the fee is waived in some cases. If you self-insure another plan, such as a major medical or high deductible plan, and the HRA is merely a component of that plan, you do not have to pay the PCORI fee separately for the HRA. In other words, when the HRA is integrated with another self-insured plan, you only pay the fee once for the combined plan.

On the other hand, if the HRA stands alone, or if the HRA is integrated with an insured plan, you are responsible for paying the fee for the HRA.

What about QSEHRAs? Does the fee apply?

Yes. A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is new type of tax-advantaged arrangement that allows small employers to reimburse certain health costs for their workers. Although a QSEHRA is not the same as an HRA, and the rules applying to each type are very different, a QSEHRA is a self-insured health plan for purposes of the PCORI fee. In late 2017, the IRS released guidance confirming that small employers that offer QSEHRAs must calculate, report and pay the PCORI fee.

Can I use ERISA plan assets or employee contributions to pay the fee?

No. The PCORI fee is an employer expense and not a plan expense, so you cannot use ERISA plan assets or employee contributions to pay the fee. An exception is allowed for certain multi-employer plans (e.g., union trusts) subject to collective bargaining. Since the fee is paid by the employer as a business expense, it is tax deductible.

How do I calculate the fee?

Multiply $2.26 or $2.39 (depending on the date the plan year ended in 2017) times the average number of lives covered during the plan year. “Covered lives” are all participants, including employees, dependents, retirees, and COBRA enrollees. You may use any one of the following counting methods to determine the average number of lives:

  • Average Count Method: Count the number of lives covered on each day of the plan year, then divide by the number of days in the plan year.
  • Snapshot Method: Count the number of lives covered on the same day each quarter, then divide by the number of quarters (e.g., four). Or count the lives covered on the first of each month, then divide by the number of months (e.g., 12). This method also allows the option — called the “snapshot factor method” — of counting each primary enrollee (e.g., employee) with single coverage as “1” and counting each primary enrollee with family coverage as “2.35.”
  • Form 5500 Method: Add together the “beginning of plan year” and “end of plan year” participant counts reported on the Form 5500 for the plan year. There is no need to count dependents using this method since the IRS assumes the sum of the beginning and ending of year counts is close enough to the total number of covered lives. If the plan is employee-only without dependent coverage, divide the sum by 2. (If Form 5500 for the plan year ending in 2017 is not filed by July 31, 2018, you cannot use this counting method.)

For an HRA, count only the number of primary participants (employees) and disregard any dependents.

How do I report and pay the fee?

Use Form 720, Quarterly Excise Tax Return, to report and pay the annual PCORI fee. Report all information for self-insured plan(s) with plan year ending dates in 2017 on the same Form 720. Do not submit more than one Form 720 for the same period with the same Employer Identification Number (EIN), unless you are filing an amended return.

The IRS provides Instructions for Form 720. Here is a quick summary of the items for PCORI:

  • Fill in the employer information at the top of the form.
  • In Part II, complete line 133(c) and/or line 133(d), as applicable, depending on the plan year ending date(s). If you are reporting multiple plans on the same line, combine the information.
  • In Part II, complete line 2 (total).
  • In Part III, complete lines 3 and 10.
  • Sign and date Form 720 where indicated.
  • If paying by check or money order, also complete the payment voucher (Form 720-V) provided on the last page of Form 720. Be sure to fill in the circle for “2nd Quarter.” Refer to the Instructions for mailing information.

Caution! Before taking any action, confirm with your tax department or controller whether your organization files Form 720 for any purposes other than the PCORI fee. For instance, some employers use Form 720 to make quarterly payments for environmental taxes, fuel taxes, or other excise taxes. In that case, do not prepare Form 720 (or the payment voucher), but instead give the PCORI fee information to your organization’s tax preparer to include with its second quarterly filing.

Summary

If you self-insure one or more health plans or sponsor an HRA, you may be responsible for calculating, reporting, and paying annual PCORI fees. The fee is based on the average number of lives covered during the health plan year. The IRS offers a choice of three different counting methods to calculate the plan’s average covered lives. Once you have determined the count, the process for reporting and paying the fee using Form 720 is fairly simple. For plan years ending in 2017, the deadline to file Form 720 and make your payment is July 31, 2018.

Originally posted on thinkhr.com

Vince Murdica, chief revenue officer at ThinkHR, discusses what it takes to become scalable and sustainably staff companies through bursts of rapid growth.

I’ve seen it in my own career: When companies go through rapid growth — quickly moving from 50 to 100+ employees — things start to get shaky. This period of acceleration can be compared to when a jet breaks through the sound barrier. The flight is smooth until that moment, then the plane rattles violently and feels like it’s going to break apart. But when it gets through to the other side, it’s smooth skies again and you’re now flying even faster and higher.

There is a loss of control as a company gets bigger, and not all leaders can handle it. Some career entrepreneurs prefer to start companies, grow them to around 50 people, then sell them because they are uncomfortable with the growing pains that inevitably happen beyond this point. They will do it again and again.

Other leaders are better at growth and mastering scalability. They have what it takes to grow their companies over the 100-person mark. I believe these leaders consistently do three key things when growing their staff:

#1 Hire People You Trust

When you scale up, the ability of senior management to be involved in every detail — to be in all the meetings, involved with every decision, leading all the major initiatives — breaks down. There is a human limit to how many one-on-one relationships you can manage, so your ability to manage as you gain more direct reports goes down. When growing from 50 to 100 employees, new layers of management must get formed.

At this point, delegation becomes critical, or productivity will come to a screeching halt. That’s why it’s crucial to hire managers and other people you can trust. This takes time and effort, but I believe the key to establishing this environment of trust is “hiring slow and firing fast.”

#2 Delegate Responsibility and Authority

Once you’ve hired great, trustworthy people, don’t ever delegate responsibility without also delegating authority. Your staff needs to keep everything moving while you are doing other things for the organization. They can’t wait around for you to make decisions. Hand them the power to innovate, solve problems, and reach the goals you’ve set out for them.

A mantra I borrowed from a mentor is, “I don’t mind giving speeding tickets, but if I need to give too many parking tickets, we have a problem.”

I would rather an employee charge ahead and make an informed, strategic decision that turns out to be a mistake instead of hold back and move too cautiously. Everyone on my team feels empowered. We get it done and we don’t wait. (Wait is a four-letter word.) The burden on leadership is to be sure that goals and strategy are clear, so people can move quickly, with confidence and creativity.

#3 Learn from Mistakes

To me, business is like a sport. It’s a competition. There is a winner and a loser and it’s a real-world game. Approaching it that way enforces a specific mindset around it. To use football as an example: On Monday you review the film from Sunday’s game and see how you can improve. You practice all week to make tweaks, try new plays, and fix what’s broken. Then your next game is a fresh opportunity to be a new team with a new opponent.

In business, like in any sport, we are going to make mistakes. That’s how we learn, but what’s important is that we don’t make those same mistakes again. We get into the mindset of always improving. Failing isn’t necessarily bad — it means your people aren’t afraid to innovate and achieve.

Smooth Skies Ahead

Do these three things — trust, delegate, and learn — which are so core to building a scalable team, and soon your company will be breaking through the sound barrier and once again flying smooth skies.

In the end, growth can be fun, and winning is really fun. Your team will be fulfilled and feel like they are making an impact. So to mix metaphors: Go let your team get some speeding tickets!

 

Originally published by www.thinkhr.com

Taking control of health care expenses is on the top of most people’s to-do list for 2018.  The average premium increase for 2018 is 18% for Affordable Care Act (ACA) plans.  So, how do you save money on health care when the costs seems to keep increasing faster than wage increases?  One way is through medical savings accounts.

Medical savings accounts are used in conjunction with High Deductible Health Plans (HDHP) and allow savers to use their pre-tax dollars to pay for qualified health care expenses.  There are three major types of medical savings accounts as defined by the IRS.  The Health Savings Account (HSA) is funded through an employer and is usually part of a salary reduction agreement.  The employer establishes this account and contributes toward it through payroll deductions.  The employee uses the balance to pay for qualified health care costs.  Money in HSA is not forfeited at the end of the year if the employee does not use it. The Health Flexible Savings Account (FSA) can be funded by the employer, employee, or any other contributor.  These pre-tax dollars are not part of a salary reduction plan and can be used for approved health care expenses.  Money in this account can be rolled over by one of two ways: 1) balance used in first 2.5 months of new year or 2) up to $500 rolled over to new year.  The third type of savings account is the Health Reimbursement Arrangement (HRA).  This account may only be contributed to by the employer and is not included in the employee’s income.  The employee then uses these contributions to pay for qualified medical expenses and the unused funds can be rolled over year to year.

There are many benefits to participating in a medical savings account.  One major benefit is the control it gives to employee when paying for health care.  As we move to a more consumer driven health plan arrangement, the individual can make informed choices on their medical expenses.  They can “shop around” to get better pricing on everything from MRIs to prescription drugs.  By placing the control of the funds back in the employee’s hands, the employer also sees a cost savings.  Reduction in premiums as well as administrative costs are attractive to employers as they look to set up these accounts for their workforce.  The ability to set aside funds pre-tax is advantageous to the savings savvy individual.  The interest earned on these accounts is also tax-free.

The federal government made adjustments to contribution limits for medical savings accounts for 2018.  For an individual purchasing single medical coverage, the yearly limit increased $50 from 2017 to a new total $3450.  Family contribution limits also increased to $6850 for this year.  Those over the age of 55 with single medical plans are now allowed to contribute $4450 and for families with the insurance provider over 55 the new limit is $7900.

Health care consumers can find ways to save money even as the cost of medical care increases.  Contributing to health savings accounts benefits both the employee as well as the employer with cost savings on premiums and better informed choices on where to spend those medical dollars.  The savings gained on these accounts even end up rewarding the consumer for making healthier lifestyle choices with lower out-of-pocket expenses for medical care.  That’s a win-win for the healthy consumer!

The ACA requires employers to report the cost of coverage under an employer-sponsored group health plan. Reporting the cost of health care coverage on Form W-2 does not mean that the coverage is taxable.

Employers that provide “applicable employer-sponsored coverage” under a group health plan are subject to the reporting requirement. This includes businesses, tax-exempt organizations, and federal, state and local government entities (except with respect to plans maintained primarily for members of the military and their families). Federally recognized Indian tribal governments are not subject to this requirement.

Employers that are subject to this requirement should report the value of the health care coverage in Box 12 of Form W-2, with Code DD to identify the amount. There is no reporting on Form W-3 of the total of these amounts for all the employer’s employees.

In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee. See the chart below from the IRS’ webpage and its questions and answers for more information.

The chart below illustrates the types of coverage that employers must report on Form W-2. Certain items are listed as “optional” based on transition relief provided by Notice 2012-9 (restating and clarifying Notice 2011-28). Future guidance may revise reporting requirements but will not be applicable until the tax year beginning at least six months after the date of issuance of such guidance.

  Form W-2, Box 12, Code DD
Coverage Type Report Do Not
Report
Optional
Major medical X    
Dental or vision plan not integrated into another medical or health plan     X
Dental or vision plan which gives the choice of declining or electing and paying an additional premium     X
Health flexible spending arrangement (FSA) funded solely by salary-reduction amounts   X  
Health FSA value for the plan year in excess of employee’s cafeteria plan salary reductions for all qualified benefits X    
Health reimbursement arrangement (HRA) contributions     X
Health savings account (HSA) contributions (employer or employee)   X  
Archer Medical Savings Account (Archer MSA) contributions (employer or employee)   X  
Hospital indemnity or specified illness (insured or self-funded), paid on after-tax basis   X  
Hospital indemnity or specified illness (insured or self-funded), paid through salary reduction (pre-tax) or by employer X    
Employee assistance plan (EAP) providing applicable employer-sponsored healthcare coverage Required if employer charges a COBRA premium   Optional if employer does not charge a COBRA premium
On-site medical clinics providing applicable employer-sponsored healthcare coverage Required if employer charges a COBRA premium   Optional if employer does not charge a COBRA premium
Wellness programs providing applicable employer-sponsored healthcare coverage Required if employer charges a COBRA premium   Optional if employer does not charge a COBRA premium
Multi-employer plans     X
Domestic partner coverage included in gross income X    
Governmental plans providing coverage primarily for members of the military and their families   X  
Federally recognized Indian tribal government plans and plans of tribally charted corporations wholly owned by a federally recognized Indian tribal government   X  
Self-funded plans not subject to federal COBRA     X
Accident or disability income   X  
Long-term care   X  
Liability insurance   X  
Supplemental liability insurance   X  
Workers’ compensation   X  
Automobile medical payment insurance   X  
Credit-only insurance   X  
Excess reimbursement to highly compensated individual, included in gross income   X  
Payment/reimbursement of health insurance premiums for 2% shareholder-employee, included in gross income   X  
Other situations Report Do Not
Report
Optional
Employers required to file fewer than 250 Forms W-2 for the preceding calendar year (determined without application of any entity aggregation rules for related employers)     X
Forms W-2 furnished to employees who terminate before the end of a calendar year and request, in writing, a Form W-2 before the end of the year     X
Forms W-2 provided by third-party sick-pay provider to employees of other employers     X

By Danielle Capilla
Originally Published By United Benefit Advisors

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