CONEXIS Comment: September 16, 2015

Volume 13, Issue 3

September 16, 2015

COMPLIANCE CORNER

COBRA Q&A

Your COBRA questions answered by our COBRA experts

Q. How does the "small employer exception" apply to a plan that was subject to COBRA before becoming a small employer?

A. An employer's group health plan is not subject to COBRA for any calendar year if it employed fewer than 20 employees during a majority of the preceding calendar year.

However, if a plan that was subject to COBRA becomes a small employer, the plan must honor its continuation coverage obligations for qualifying events that occurred during the period when the plan was subject to COBRA.

For example, if an employer qualifies for the small employer exception as of the first of this calendar year, it is still required to continue its COBRA obligation for any qualified beneficiaries who became eligible for COBRA prior to the beginning of the current calendar year. Furthermore, these qualified beneficiaries will remain eligible generally until the end of their maximum coverage period (18, 29, or 36 months), including any applicable extensions (second qualifying events, Social Security disability, etc.).

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

Legislation Restores Health Coverage Tax Credit

A trade bill signed into law not only restored an expired tax credit from 2013, but also modified and extended it for coverage through 2019.

The Health Coverage Tax Credit (HCTC) is a federal tax credit available to certain workers who lose their jobs due to foreign competition. For eligible individuals and their families, the credit makes health coverage more affordable by paying a substantial portion of qualified health insurance premiums, which include COBRA coverage.

The IRS is reviewing the legislation to determine the best way for taxpayers to receive the credit and how to administer it under Affordable Care Act (ACA). Look for detailed guidance on the credit from the IRS in the near future.

Final Regulations Address SBCs

The Departments of Treasury, Labor, and Health and Human Services ("Departments") issued final regulations governing the summary of benefits and coverage (SBCs) under the ACA.

The new regulations, designed to help plans and individuals better understand their health coverage and options, confirm with few changes the proposed regulations that were issued on December 30, 2014. Final regulations take effect on the first day of the first plan year beginning on or after September 1, 2015. For disclosures to plans, the regulations apply to health insurers beginning September 1, 2015.

By January 2016, the Departments anticipate finalizing the new SBC template with associated documents for coverage that begins or is renewed after January 1, 2017. Until issued, both group health plans and insurers may rely on prior guidance.

For more information, see the final regulations and other materials on Department of Labor website.

NEWS AND TRENDS

Countdown to Informational Reporting

Beginning in January 2016 (for calendar year 2015), information reporting provisions under the ACA require applicable large employers (ALEs) to report to the IRS the details of any health coverage offered to full-time employees.

Generally, an ALE is an employer that employed an average of at least 50 full-time and full-time equivalent employees during the preceding calendar year.

With the new year only months away, ALEs may want to begin their preparation for compliance. Reporting forms reflecting 2015 information are due to the IRS by February 29, 2016, or March 31, 2016, if the forms are submitted electronically. Employers filing at least 250 reporting forms are required to file electronically, although the IRS is encouraging all employers to file using this method.

Failure to file the required forms (or filing incomplete or inaccurate forms) may result in reporting penalties as well as penalties under ACA's employer-shared responsibility requirements (known as the "employer mandate" or "pay or play").

Some steps ALEs may want to take include:

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Reviewing Forms 1094-C and 1095-C (or Forms 1094-B and 1095-B) to determine what information is required on the reports.

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Appraising whether an employer's systems contain the information required on the reports, or if third-party help is necessary.

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Establishing the processes necessary to file the forms with the IRS and furnish copies of the forms to employees, or if third-party help is appropriate.

Learn more about the information reporting requirements on the IRS website.

Employers View FSA Carryover Favorably

Since IRS rules for health FSAs changed in 2013, employers have had the option to offer a carryover of up to $500 of unused funds. The Employers Council on Flexible Compensation (ECFC) revealed test survey findings showing many employers view the carryover feature favorably.

Of the ECFC members responding to the survey:

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Seventy-three percent saw an increase in FSA participation after employers switched to the carryover.

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Ninety-one percent either agreed or strongly agreed that employers saw the carryover as increasing the value of offering an FSA.

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Eighty-three percent agreed or strongly agreed that employees who were offered the carryover viewed the change as adding value to participating in an FSA.

For additional advantages of offering a health FSA carryover feature, visit our website.

BEHIND THE SCENES

Employees Pitch In to Help Out

In August, CONEXIS employees pitched in to help out those in need by raising funds for the Ronald McDonald House Charities (RMHC). Programs run by the RMHC provide comfort, housing, and care for families with sick children receiving medical treatment at local hospitals, allowing families to focus on healing together.

Fundraising events included a silent auction, penny, supply, and pop top collection drives, ice cream socials, and other food item sales. CONEXIS then donated all proceeds from these events to RMHC.

"As usual, our employees went above and beyond to support others," said Susan Prieto, senior manager, human resources. "It's truly touching to see how we work together to accomplish a goal" whether it's for our clients and brokers, our participants, or our Dallas-Fort Worth community. Our employees continue to amaze me with their generosity."

Making a Difference

As our security specialist, Steven Roberts oversees the physical protection of our people and property at CONEXIS. But that's not all he does.

Steven is also an encourager and mentor to many. "I'm passionate about giving back and making a difference in others' lives. It's something I'm committed to doing," he said.

One way he does this is by participating in a big brother-type program that helps mentor young men and prepare them for the future. "We teach them how to be respectful and respectable – the same thing my grandmother taught me as a young man. She had this saying, 'Dress for the job you want, not for the job you got.' Meaning, be the best person inside and out you can be, regardless of circumstances," said Steven.

Thanks to her guidance, living in the inner city of Milwaukee, Wisconsin didn't keep him from being the best person he could be and excelling at everything he tried. First as a student; then athlete, task force officer, security specialist, and even a vocal performer.

"I've been singing in church since I was young as a way of giving back to my community. As an adult, I also sang in a local gospel group called "Just Praise" for many years. We’d perform at various places in and out of the Dallas-Fort Worth area on weekends, and occasionally on the BET network," he said.

Another way Steven makes a difference is simply smiling and saying hello to everyone he sees. "I learned early on that this doesn't cost you a thing to do, but it could mean the world to some folks, especially during certain times in their lives."

According to Steven, "It's such a blessing to be a blessing to others. I encourage everyone to try it."

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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