CONEXIS Comment: March 11, 2015

Volume 13, Issue 1

March 11, 2015

COMPLIANCE CORNER

COBRA Q&A

Your COBRA questions answered by our COBRA experts

Can our retirees who enroll in Medicare continue their COBRA coverage as well?

If they already have COBRA when they enroll in Medicare, the COBRA regulations permit group health plans to terminate COBRA coverage for these individuals, usually as of the date Medicare is effective. However, this rule does not affect any COBRA coverage their qualified beneficiary spouses and dependent children may have.

Added Insight: "For active employees already on Medicare who elect COBRA, the rules differ. Qualified beneficiaries are allowed to enroll in COBRA if they already have Medicare (or other group health plan coverage) and have both coverages at the same time," said Jason Folks, senior compliance manager.

If you have a COBRA question, send it to us at cobraqa@conexis.com. You may see it answered in an upcoming CONEXIS Comment.

Adjusting FICA Tax Payments for 2014 Transit Benefits

In response to the Tax Increase Prevention Act of 2014 enacted last December, the IRS issued Notice 2015-2 outlining special administrative procedures for applying the 2014 retroactive increase in the monthly pre-tax transit limit. Employers who missed the deadline for applying special procedures may still adjust or claim a refund for overpaid FICA taxes by following IRS normal procedures, which include:

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File a Form 941-X for each quarter in 2014.

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Obtain a written statement from affected employees (including former employees) that the employee has not made any prior, and will not make any future, refund claims for the over-withheld FICA taxes.

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Repay affected employees the over-withheld FICA taxes.

Form 941-X does not need to be filed until the period of limitations for credits or refunds expires. That means within three years of the date the original Form 941 was filed or two years from the date the tax paid was reported on Form 941, whichever is later.

Additionally, employers may not repay or reimburse, make an adjustment with respect to, or seek a refund of Additional Medicare Tax or income tax deducted or withheld from employees in 2014. See IRS Notice 2015-2 for details. Employers are also encouraged to consult with their own legal and tax advisors before proceeding.

Employer’s Tax Guide to Fringe Benefits for 2015

For a handy reference to the latest tax treatment of various fringe benefits, employers can turn to Publication 15-B (Employer’s Tax Guide to Fringe Benefits). This guide is updated annually and posted on the IRS website. It contains an easy-to-read fringe benefits overview, as well as exclusion rules, valuation rules, and rules for withholding, depositing, and reporting.

Fringe benefits include many of the most popular tax-free programs, such as flexible spending accounts, health reimbursement arrangements, health savings accounts, and commuter benefits, which can help attract and retain talented employees. If you would like to add or enhance any of these within your current employee benefit package, CONEXIS has a comprehensive suite of benefit plans and programs that can be purchased separately or bundled together for a custom solution. Contact us today for more information.

NEWS AND TRENDS

Bill Seeks to Change Health FSA Contributions

A new bill recently introduced in the U.S. House of Representatives seeks to change the maximum annual contribution limit for health flexible spending accounts (FSAs) from $2,550 to $5,000.

But that’s not all the Responsible Additions and Increases to Sustain Employee (RAISE) Health Benefits Act of 2015 seeks to change.

The bill, sponsored by Reps. Steve Stivers, R-OH, and Michelle Grisham, D-NM, and backed by the American Association of Orthodontics (AAO), also states that an FSA participant with dependents (as defined by the IRS) may contribute an additional $500 for each dependent who’s not eligible for an FSA through an employer.

According to the AAO, many orthodontic patients use the pre-tax funds from FSAs to afford orthodontic care. That’s why the AAO has pushed for raising FSA contributions since the Affordable Care Act enacted a cap. The AAO even led in the process of drafting this bill.

Proposed Rules Make SBCs More User-friendly

The Departments of Treasury, Labor, and Health and Human Services issued proposed regulations modifying the summary of benefits and coverage (SBC) materials. These include revisions to the SBC template, instruction guides, uniform glossary, and other supporting documents.

The changes clarify previous guidance regarding the distribution of SBCs, incorporate FAQ guidance issued since the 2012 final regulations, and add more user-friendly features to the SBC and the uniform glossary. The SBC template is also reduced from four double-sided pages to two and a half.

If finalized, these modifications would be implemented for plan years on or after September 1, 2015. See these proposed SBC changes, the SBC template, and related materials on the Department of Labor website.

Consumers Prefer HDHPs to High Premiums

According to the latest Bankrate survey, four in 10 Americans these days prefer a high deductible health plan (HDHP) to one with a high monthly premium but a low deductible.

Specifically, the survey found:

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52 percent of Americans making $50,000 a year or more would rather have a plan with a low premium but high deductible, while just 39 percent of those earning less would make the same choice.

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46 percent of young people ages 18-29 prefer a plan with a high monthly premium and a low deductible, compared with just 33 percent of those 50 or older.

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16 percent of seniors 65 or older say they like neither option, versus just 3 percent of the youngest respondents.

Based on this data, those with higher incomes ($50,000 and up) and those ages 30-64 tend to prefer a HDHP, while those ages 18-29 tend to prefer higher premiums.

Employers may want to consider these findings, along with their cost strategies for health care, when determining a plan design that’s right for their employees. Many employers choose to offer their employees a qualified HDHP paired with a health savings account (HSA). HSAs can help employees of all incomes to cover eligible health care expenses, and employees have the freedom to choose how and when to spend and invest their HSA funds. Contact CONEXIS to learn more.

Employers Test Telehealth Kiosks

A handful of companies are currently testing a new way of delivering affordable health care to their employees. And it’s located right at their employees’ workplaces.

Enter telehealth kiosks. These private walk-in kiosks connect employees with a provider quickly and conveniently through videoconferencing and interactive, digital medical devices. Employees can walk up to the kiosk without scheduling an appointment, see a provider face-to-face, and be treated for minor, common health conditions such as colds, earaches, sore throats, sinus infections, and eye and skin conditions. And the diagnosis and treatment plan is integrated to the patient’s medical record.

Since employees are able to access health care when they need it, without leaving their work sites, proponents say the kiosks may decrease absenteeism and may even improve wellness. Although telehealth kiosk technology is still evolving along with telehealth legislation, a growing number of health insurance carriers already cover telehealth. Therefore, if initial trials go well, more employers may be lining up to test telehealth kiosks at their workplaces in the future.

BEHIND THE SCENES

A Sweet Way of Giving

At CONEXIS, the sweetest day of the year became an even sweeter way to show our hearts for giving – both to each other and our community. Through our Valentine’s Day candygram fundraiser, employees were able to purchase candygrams as tokens of appreciation and have them delivered to colleagues throughout the company.

"All the money collected during this fun fundraiser was donated to our local chapter of the American Red Cross, which depends on donations to provide food, shelter, and other support to victims of disasters," said Lynzie Duran, CONEXIS human resources and facility administrator. "It was truly heart-warming to see how our CONEXIS family generously gave in appreciation of each other as well as in helping our neighbors in need."

Art for a Cause

In Mary Hurst’s eyes, she’s come full circle. What began as a love for coloring as a child has blossomed into a passion for painting as an adult. A passion that others benefit from now as well. That’s because this CONEXIS COBRA support services administrator donates a portion of her art sale profits to those in need around her.

"I get joy out of painting and joy out of giving. It seemed natural for me to just combine the two," said Mary.

Growing up with several accomplished painters in her family, Mary chose to dabble in other artistic outlets and study commercial art instead. But the more she visited museums, art exhibits, and other creative venues of late, the more her curiosity of painting increased. "I finally just took the plunge, bought some canvases and paint, and gave it a shot. And I liked the results," she said.

Apparently, so have others. Since picking up a paint brush in her spare time two years ago, Mary has sold several of her paintings. She’s also been commissioned to do several. Her next step will be participating in art festivals in the North Texas area along with other local artists.

"It’s amazing what you can do when you just allow yourself to try. I would have never dreamed that my love for coloring as a kindergartener, sparked by winning a ribbon for my first painting at the East Texas State Fair, would eventually lead to selling my artwork today. But it has – and I’m loving every minute of it," Mary added.

Have questions, comments, or feedback regarding the CONEXIS Comment Newsletter? If so, we would love to hear from you. Please drop us a line at comment@conexis.com.

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