Volume 12, Issue 3	September 17, 2014
COMPLIANCE CORNER
New Affordable Coverage Rates The Internal Revenue Service (IRS) issued sub-regulatory guidance addressing the Affordable Care Act (ACA) premium tax credit. Rev. Proc. 2014-37 set the new affordability percentage to 9.56 percent of the employee’s household income for plan years beginning in 2015, and this percentage is used to determine large employers’ health coverage affordability. Previously, the affordability rate was 9.5 percent. Rev. Proc. 2014-37 also adjusted the affordability percentage for exemption from the individual mandate, which applies to individuals who lack access to affordable minimum essential coverage. For plan years beginning in 2015, coverage is unaffordable for purposes of the individual mandate if it exceeds 8.05 percent of household income, up slightly from 8 percent. According to the IRS, these adjustments reflect the excess of premium growth over income growth for the preceding calendar year. The ACA requires the agency to make a percentage change in these instances starting in 2015. DOL Proposes Place of Celebration Rule for FMLA The Department of Labor (DOL) published a Notice of Proposed Rulemaking to revise the definition of "spouse" under the Family and Medical Leave Act of 1993 (FMLA). This proposal is in light of the U.S. Supreme Court’s decision in United States v. Windsor, which found Section 3 of the Defense of Marriage Act to be unconstitutional. FMLA’s current definition of "spouse" is a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including common law marriage in states where it is recognized. Under the proposed rule, eligibility for FMLA protections would be based on the place where the couple married, commonly known as the "place of celebration." This would allow all legally married couples — either opposite-sex or same-sex — to have consistent federal family leave rights regardless whether the state in which they currently reside recognizes such marriages. According to the DOL, the proposed definition change does not substantively alter the FMLA or change the availability of FMLA leave, but instead makes FMLA available to all eligible employees who are legally married. If the proposed rule becomes final, employers will need to immediately update their policies and procedures. See DOL’s fact sheet and frequently asked questions for more information. Small Business Health Care Tax Credit The IRS issued final regulations on the tax credit available to certain small employers that offer health insurance coverage to their employees. Effective June 30, 2014, the final regulations adopt, with certain modifications, the proposed regulations issued on August 26, 2013. For tax years beginning in 2014 or later, changes include: • The maximum credit increases to 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers. • The credit is available to eligible employers for two consecutive taxable years. • To be eligible, a small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace or qualify for an exception to this requirement. Final regulations further provide that employees (determined under the common law standard) that perform services for the employer during the taxable year, generally are taken into account in determining full-time equivalents and average annual wages. The credit is provided under section 45R of the Internal Revenue Code, enacted by the Affordable Care Act. See detailed guidance for taxable years beginning in 2014 in the final regulations and Notice 2014-06, and for taxable years beginning in 2010 through 2013, Notices 2010-44 and 2010-82. CA Small Businesses Get More Time to Comply with ACA Thanks to state legislation, California small business owners have received an additional year to comply with Affordable Care Act (ACA) minimum coverage standards. Senate Bill (SB) 1446, enacted on July 7, 2014, allows certain employers (with less than 50 employees) meeting specific criteria, the opportunity to keep their existing, non-ACA compliant health care coverage until the end of 2015. Federal law requires health plans that do not meet 10 ACA requirements to be canceled at the end of 2014. But state law now gives many of the approximately 250,000 California employers in the small group market more transitional relief in which to become compliant or offer qualified health coverage through a Small Business Health Options Program (SHOP). Bay Area Commuter Benefits Registration is September 30 A reminder for employers in the San Francisco Bay Area: Each organization with 50 or more employees has until the end of this month to register and offer its employees commuter benefits. The deadline is September 30, 2014. Under the new Bay Area Commuter Benefits Program, employers have one of four Commuter Benefit options to choose from for their "covered" employees. Covered employees are those who performed at least an average of 20 hours of work per week within the previous calendar month within the nine counties covered by the ordinance. Companies that already offer commuter benefits will only be required to file an annual report. If you would like details about our commuter benefits program, let us know.
NEWS AND TRENDS
Employers Changing Health Benefits to Curb Costs According to an annual survey by the National Business Group on Health, large employers project their health care benefits costs to rise by an average of 6.5 percent in 2015, just slightly lower than this year’s average rate of 7 percent. However, those who make changes in plan design anticipate the rise to be significantly less: only 5 percent. The survey asked 136 of the nation’s largest corporations to report their cost strategies for health care and what they plan to do to control costs in 2015. To keep increases to 5 percent for next year: • 73 percent said they are adding or expanding tools to encourage employees to be better health care consumers. • 57 percent said they are implementing or expanding a consumer driven health plan (CHDP). • 53 percent said will either add or expand wellness program incentives. Not surprisingly, CDHPs are becoming a popular option in curbing health care benefits costs. Although CDHPs come in various forms, many employers offer their employees a qualified high deductible health plan (HDHP) coupled with a health savings account (HSA). HSAs can help employees cover eligible health care expenses today, tomorrow, or even during retirement. Contact CONEXIS to learn more about this cost-saving strategy. Washington, DC Law Expands Commuter Benefits In a move that caught the attention of the benefits industry, the District of Columbia’s city government amended its Clean and Affordable Energy Act of 2008 to allow for expansion of commuter benefits. The Transit Benefits Requirement Act of the Sustainable DC Omnibus Amendment Act of 2014 is expected to reduce the cost of transit for employees across the city by requiring District employers — in medium and larger businesses — to provide access to transit benefit programs, such as a pre-tax payroll deduction. The new law, pending Congressional review, requires certain employers with 20 or more employees to provide one of three transit benefits programs beginning January 1, 2016. The three options are: • A pre-tax election transportation benefits program that provides commuter highway vehicle, transit, or bicycling benefits. • An employer-paid benefits program that supplies a transit pass requested by the covered employee or reimbursement of vanpool or bicycling costs in an amount at least equal to the purchase price of a transit pass. • Employer-provided transportation at no cost to the covered employee in a vanpool or bus operated by or for the employer. Washington, DC joins the city and county of San Francisco, which recently passed legislation that also requires companies with 20 or more employees to offer commuter benefits to their employees. For additional information, see Act 20-385 of the Sustainable DC Omnibus Amendment Act of 2014. CMS Launches Initiative to Educate Consumers Centers for Medicare and Medicaid Services (CMS) launched a national initiative called "From Coverage to Care" (C2C), which is designed to answer questions consumers may have about their health insurance coverage. The resource is geared toward individuals who have recently obtained coverage through the Health Insurance Marketplace, Medicaid, or the Children’s Health Insurance Program. However, C2C resources may also be used as by employers to help their employees make the most of their benefits. Topics such as: • Understanding health coverage • Using prevention to stay healthy • Finding the right provider • Understanding primary care vs. emergency care • Following up after appointments To view C2C resources, including an 11-part video series, visit the CMS website.
BEHIND THE SCENES
CONEXIS Assists Local Food Bank CONEXIS employees showed their hearts for our neighbors in need this summer by holding a successful food drive for a local food bank short on supply. The North Texas Food Bank supplies donations to 262 agencies in 13 North Texas counties. Yet during summertime, demand for food donations from across the region increases tremendously as students are at home instead of at school during the weekdays. "Knowing this, our employees pitched in and provided hundreds of non-perishable food items that we donated," said Rachael Carpenter, CONEXIS administrative assistant. "We were also able to deliver these items to the food bank during the height of the donation shortage to really help our neighbors in need," added Charity Hardesty, COBRA/Direct Bill client relations manager. To Bee or Not to Bee? Beekeeping may not immediately come to mind as a favorite pastime. But to Heather Ismaili, client services account manager at CONEXIS, it’s both a pastime and a passion. "I learned to love bees at an early age. My parents started a bee 'hobby' farm in the Dallas-Fort Worth area when I was 10-years old," said Heather. "We had several hives and even processed honey for several years until we had to move with my father’s job." More recently, Heather has come to realize the importance of bees to society. "When my parents moved back to DFW a few years ago, they started beekeeping again. They wanted to give my son and daughter experience with both gardening and bees to help the kids understand and appreciate where things come from," she said. "Since then, our pastime has become a passion as we see first-hand the vital contributions bees make to our food supply as well as to our communities." Heather said, "According to research, bees are responsible for pollinating one out of every three bites of food we eat, which include the majority of our nuts, fruits, and vegetables. Our food supply would be pretty slim without bees. What’s more, bees are a barometer of what’s going on in our environment if you know what to look for."
CONTACT US
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