In a previous post, we overviewed three main areas that nonprofits should consider before the 2016 healthcare renewal season begins on November 1: compliance, cost-effectiveness, and employee needs. In this post, we’ll look more closely at compliance, specifically grandfathered plans, applicable large employer (ALE) status, and new IRS reporting requirements.
As we near the halfway point of 2015, it’s a good time to look ahead to the 2016 healthcare renewal season (open enrollment begins November 1). Specifically, is your current plan 1) in compliance with ACA; 2) cost-effective; and 3) being used to its fullest capacity by employees? Below is an overview of these three topics, including specific areas to consider as you evaluate the efficacy of your current offerings and decide how to move forward for 2016.
As we approach the mid-way point of the 2015 tax year, it’s a good time to check in on health reform mandates to ensure you are in compliance with ACA. Whether your organization is fully-insured, self-insured, or partially self-insured, there are a number of mandates that are worth clarifying and confirming as you move forward with your health insurance plans.
With a looming deadline of July 1, 2015 for small businesses to make changes in their premium reimbursement plan practices, it’s a good time to review options for staying in compliance with the ACA. As background, in previous months the IRS, the Department of Labor (DOL), and Health and Human Services (HHS) all released FAQ around premium reimbursement plans for individual health coverage. Specifically, the FAQs state that premium reimbursement plans, also known as employer payment plans, are out of compliance with the ACA and therefore are subject to heavy excise taxes of up to $100/day for each employee affected. For one employee, this could mean $36,500/year in fees.
Corporate wellness programs are the norm nowadays, with many organizations implementing activities and incentives to increase employee wellbeing and save money. And the EEOC recently issued guidelines around incentives and voluntary activities, providing employers with more clarity around offerings. But a wellness program is only as good as the people who use – and benefit – from it, whether that is employees who take on a healthier lifestyle or employers who reap the financial and productivity benefits of a healthier workforce.
Despite questions around the future of employer-sponsored healthcare, American workers still rate healthcare benefits as the most important consideration when choosing a new job. A recent survey conducted by the Employee Benefit Research Institute (www.ebri.org) provides information about employees’ feelings toward current employer-sponsored healthcare offerings and what changes they would like to see in the future:
Despite the fact that the PPACA is meant to lower healthcare costs, a new report from TransUnion Healthcareshows that consumer out-of-pocket expenses have actually increased 11% from 2013 to 2014, while at the same time deductibles have risen by 7% and revolving credit has declined. Specifically, according to TransUnion the ratio of revolving credit to healthcare costs has decreased from 15.2:1 in 2013 to 13.5:1 in 2014, but out-of-pocket expenses have increased by almost $250 (from $2245 to $2491). This means that consumers have less money available to pay for ever-increasing healthcare costs.
On April 20, 2015, the Equal Employment Opportunity Commission (EEOC) proposed new rules around employee wellness programs, especially as they relate to the Americans with Disabilities Act (ADA). Specifically the proposed rules provide further clarification around what constitutes a “voluntary” program, how incentives can be used, confidentiality of medical information, and accommodations for those employees who are unable to participate in an incentivized wellness program.
In early May, the IRS released new information around 2016 eligibility and contribution limits for health savings accounts (HSAs), as well as minimum deductions for HDHPs (high deductible health plans) and caps on out-of-pocket expenses incurred with HDHPs. According to the IRS, an HSA is “a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur.”
In February 2014 David Camp (R-Mich; former chairman of the House Ways and Means Committee) authored a bill regarding tax policy changes for nonprofits. Proposed changes included executive compensation caps, tighter limits around charitable tax deductions, and mandatory five-year payouts of donor-advised funds.
