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CPA's & Business Advisors

SHOP Exchange Program Delayed




hscompanies-SHOP-program-ppacaEmployers looking to utilize the Small Business Health Options Program (SHOP) through the health insurance exchanges will be disappointed as its full implementation until 2015. Under a proposed rule from the Department of Health & Human Services (HHS), states that are allowing the federal government to run their state exchange or are entering a federal-state partnership (such as Michigan) will only have one insurance option for 2014. Initially, the plan involved having multiple policies to choose from, and employers and employees could choose from different plans but the employer would just need to write one check. Due to administrative delays, the full implementation has been pushed back until 2015.

States that are running their own exchange can either fully implement the SHOP program for 2014 or they can enact the 1 year delay.

The delay means that many small businesses that were looking forward to having more competitive choices for health insurance either can utilize the one plan being offered, or can continue to purchase insurance on the private market.

To learn more, contact Travis Sinquefield, PHR.

Travis Sinquefield
HR Manager
616.735.3088
traviss@hscompanies.com

Government Issues Proposed Rules to Clarify 90 Day Waiting Period Requirement


Since the passage of the Affordable Care Act (ACA) in 2010, there has been quite a few questions proposed concerning the new 90 day waiting period rule. This rule limits waiting periods before coverage is to become effective to 90 days. The Department of Labor and the Internal Revenue Service have issued the following proposed rules concerning the 90 day waiting period requirement:

  • If the eligibility period is based solely on time, then the waiting period cannot be longer than 90 days
  • If eligibility is based on factors other than time, the waiting period can be longer than 90 days as long as the requirements are not designed to specifically circumvent the 90 day rule
  • Variable hour workers: the waiting period can be extended up to 13 months after the date of hire if you are reasonably uncertain that a new employee is not going to be working enough hours to be eligible for health insurance coverage
  • If eligibility requirements are based on achieving a cumulative service requirement, it is not considered to be designed to avoid the 90 day rule; after the eligibility requirements have been met in terms of service hours, then the coverage has be effective within 90 days
  • When counting days, all days including holidays and weekends are including in the 90 day requirement
  • Waiting period is defined per HIPAA rules as the time between when an employee or dependent becomes eligible for coverage and when the coverage becomes effective

 

If you questions about the 90 day rule, please give Travis Sinquefield a call at (616) 735-3088.

Travis Sinquefield
HR Manager
616.735.3088
traviss@hscompanies.com

Factoring Seasonal Employees Into the Large Employer Calculation



hscompanies-calculating-employees

The hours that any seasonal employee works during the month needs to be added to the normal part-time employee hours worked during the month, and then use that total number of hours to determine full-time equivalents.

One of the big questions concerning the large employer calculation is how seasonal employees fit into the equation. Upon initial reading of the bill, it appeared that seasonal employees would not be included in the calculation. However, this is not the case.

Remember that the large employer calculation is done on a monthly basis, and then the number is averaged over the year. Thus, any months that seasonal employees work, they must be included in the calculation to determine full-time equivalents (FTE). The hours that any seasonal employee works during the month needs to be added to the normal part-time employee hours worked during the month, and then use that total number of hours to determine full-time equivalents.

However, here is the catch: if your company averages over 50 full-time and FTE employees for 120 days or less per year, and if the reason you are over the 50 FTE threshold is because of the seasonal employees, you will not be considered a large employer.

If you employ a large number of seasonal workers, you will want to carefully manage your seasonal hiring to ensure that you do exceed 120 days of over 50 FTE employees due to seasonal employees.

If you need help in determining your full-time equivalents, please give Travis Sinquefield a call at (616) 735-3088.

Travis Sinquefield
HR Manager
616.735.3088
traviss@hscompanies.com

PPACA Educational Seminars



The Patient Protection and Affordable Care Act of 2010, also known as the PPACA, is the single largest health care bill ever passed. It has a monumental impact upon the health care and insurance industry in the United States. While several of the provisions have already taken effect, and the core provisions aren’t scheduled to become effective until 2014, this upcoming year will see some changes concerning taxes and savings accounts for health care.

Join H&S Companies for a Lunch & Learn Seminar near you to learn more about what the PPACA means for your business.

PPACA Educational Seminars

  • RockfordTuesday, March 19, 2013; 12:30 p.m. – 2 p.m.

  • Mount PleasantThursday, March 14, 2013; 12:00 p.m. – 2 p.m.

Click to download Rockford flyer

Click to download Mount Pleasant flyer


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
To learn more about the PPACA visit the H&S Companies PPACA webpage or download our February newsletter.

Have questions about how the PPACA will affect your business? Contact HR Manager Travis Sinquefield.

Travis Sinquefield
HR Manager
616.735.3088
traviss@hscompanies.com

How Are the Exchanges Funded?



hscompanies-ppaca_exchange-who-paysOne big question many people have is, “who is going to be paying for the exchanges being setup by the states and federal government”. In reality, the burden will fall upon both employees, who receive coverage through a group health insurance plan, and also those who are eligible to purchase through the exchange.

Starting in 2014, all group health insurance plans will be charged a fee of $63 per participant per year. This fee is charged to the insurance company, but the cost will be passed on to the employer, and subsequently to the employee through an increase in their health insurance deduction.

In addition, insurers who wish to participate in the new exchanges will be charged a 3.5% fee on the premium amount for policies sold through the exchange. Once again, this is a fee that will ultimately be passed on to the individuals purchasing through the exchange.

Employers, employees, and those who may be eligible to purchase through the exchange need to be aware of how these fees will increase their share of the cost of obtaining insurance coverage.

To learn more about the PPACA visit the H&S Companies PPACA webpage or download our February newsletter.

Have questions about how the exchanges will affect your business? Contact HR Manager Travis Sinquefield.

Travis Sinquefield
HR Manager
616.735.3088
traviss@hscompanies.com

PPACA Pop Quiz



hscompanies-Test

  • Question 1, C — Minimum value is defined as having an actuarial value of 60%. Each medical health insurance plan will require an actuarial valuation to determine whether the plan is paying out at least 60% of the benefits, including co-pays. Essentially, this means that the plan pays for more than 60% of covered health care expenses.
  • Question 2, False — The original deadline to publish exchange notices for employees was March 1, 2013. However, on January 24, 2013, the IRS released a notice stating that exchange notices have been pushed back until at least the fall of 2013. Individuals and employers will be able to purchase insurance on the exchange starting October 1, 2013.
  • Question 3, False — While all large employers are subject to the employer mandate rules and penalties, the key determinant is whether an employee receives a tax subsidy and purchases insurance on the exchange, and that the insurance offered meets the minimum value and affordable cost requirements. An employer can refuse to offer coverage and avoid penalties if no eligible employees receive the subsidy and purchases insurance through the exchange. Likewise, employers who offer insurance that does not meet the minimum value and affordable cost provisions can also avoid a penalty if no employee receives a subsidy. It is important to note that if you do offer insurance, in order to avoid fines, the coverage offered must meet the minimum value requirement and affordable cost requirements. If those are met, eligible employees will not be able to qualify for the subsidy for purchase of insurance on the exchanges.
  • Question 4, 50 — Per the PPACA, a large employer is defined as having 50 or more full-time and full-time equivalent employees. Employers will need to count not only the full-time employees, which under the new rules are employees that work 30 or more hours per week, but also add up the hours of all part-time individuals and calculate the number of full-time equivalents. This calculation would be done on a monthly basis, so employers will need to look at each month individually, add up the part-time hours, and divide by 120 to determine the number of full-time equivalents. Employers, however, are only required to offer insurance to full-time employees, and not to the equivalents.

Return to PPACA Page

Summary of Benefits and Coverage Due to Employees Soon



sbc_temp

You will need to provide a Summary of Benefits and Coverage (SBC) to employees with open enrollment periods beginning 9/23/12.

By Travis Sinquefield

Do you have a company sponsored health plan for your employees? If so, then under the Patient Protection and Affordable Care Act (PPACA) you will need to provide a Summary of Benefits and Coverage (SBC) to employees with open enrollment periods beginning 9/23/12. The SBC must outline, in clear language, the costs and benefits of their health plans and must also include a glossary of terms used in the health insurance coverage. As part of the PPACA, the government has provided a template to use for relaying this necessary information.

If you are fully insured, meaning that the insurance is provided by an outside provider (Blue Cross, Priority, etc.), then this document will be provided to you by the insurance company after you sign the renewal forms. If you are self-insured, then you are required to create this document yourself with the help of your third party administrator.

Useful Links

Full text of the PPACA
Summary of Benefits and Coverage Template – PDF

If you have any questions concerning the PPACA and how it affects your business, please contact Travis Sinquefield.

Travis Sinquefield
HR Manager
616.735.3088
traviss@hscompanies.com