Wednesday, June 6, 2018

New Jersey Enacts Individual Mandate

On May 30, 2018 Governor Phil Murphy signed the “shared responsibility tax” bill into law. The law is similar to the ACA’s Individual Mandate, takes effect on January 1, 2019, and requires New Jersey residents to maintain health insurance coverage with minimum essential coverage.

New Jersey’s new mandate will assess an annual penalty for non-compliance of 2.5% of a  household’s income, or $2,085, whichever is greater. A hardship exception will be announced later this year.

Monday, June 4, 2018

2019 ACA Affordability Threshold Increased to 9.86%

On May 22nd the IRS announced the adjusted affordability contribution percentage for all plans starting after December 31, 2018. Up from 9.56% in 2018, an employee’s required contribution to a benefit plan cannot exceed 9.86% of their annual household income for the plan to be considered “affordable” under the ACA. Since employers don’t know their employees’ household incomes, the following three safe harbors were put in place by the ACA to be used in lieu of household income: 

Form W-2 Wages Safe Harbor
 The employee’s W-2 wages, as reported in Box 1, as of the first day of the plan year. Example: Under the W-2 Wages Safe Harbor, in 2019, if an employee’s Box 1 wages are $30,000 then that employee’s required monthly contribution for the lowest individual coverage that meets minimum value can be no more than $246.50 ($30,000 X .0986 divided by 12) for the offer to be considered “affordable”. This calculation assumes the employee was employed with the company for the entire year and offered coverage for all 12 months. Note: If an employee is not employed for the entire year or there is a waiting period, an adjustment is made to the W-2 wages to account for this as follows: W-2 wages X (calendar months offered coverage / months of employment)

 Rate of Pay Safe Harbor
The employee’s hourly rate of pay x 130 hours, as of the first day of the plan year, regardless of how many hours the employee actually worked. Example: Under the Rate of Pay Safe Harbor, in 2019, if an hourly employee earns $15 an hour then that employee’s required monthly contribution for the lowest individual coverage that meets minimum value can be no more than $192.27 ($15 X 130 X .0986) for the offer to be considered “affordable”. 

Federal Poverty Level Safe Harbor 
Since the individual Federal Poverty Level (FPL) isn’t officially published until January, employers can use the FPL in effect six months prior to the beginning of the plan year. Example: Under the Federal Poverty Level Safe Harbor, for January 2019, the maximum monthly employee contribution for the lowest individual coverage offered that meets minimum value can be no more than $99.75 to be considered “affordable” ($12,140 (2018 FPL) X .0986 divided by 12). 

Monday, October 30, 2017

**New Proposed Regulations**

On October 27, 2017, the Department of Health and Human Services (HHS) issued proposals which reflect the current administrator’s desire to improve access to plans on the Exchange, increase competition, and reduce some of the premium increases affected by the ACA provisions.
Most notably, the proposal allows states to select a benchmark plan from among these three sources:
  • Choose another state’s 2017 benchmark plan. This allows state’s with a more generous benchmark to choose from among benchmark plans in every state, and apply those benefits to their own state’s plans.
  • Replace one or more EHB categories of benefits under its current 2017 benchmark plan with another state’s benefits of the same category. This allows states to cherry-pick their benefit standards.
  •  Select a new benchmark plan from among a set of ‘typical employer plans’. The new benchmark plan need be no more generous than the most generous of a set of comparison plans. The proposal defines ‘typical employer plan’ as a product with substantial enrollment, with at least 5,000 enrollees, or a self insured group health plan with 5,000 or more enrollees. The state is required to demonstrate the value of each benefit in the benchmark plan by providing an actuarial analysis to the HHS. This specific provision may have the greatest impact on the plans offered through the exchange where states have selected this method of determining their benchmark plans, as many large group and self insured plans provide less of the essential health benefits than those of the state exchanges.
As a reminder, the ACA is still law, and employers are required to deliver 1095 C forms to employees by January 31, 2018. E-filing with the IRS is due by March 31, 2018. Please contact your dedicated service associated for assistance and advice when completing the forms.

Wednesday, March 15, 2017

House Republicans Unveil Plan to Replace Health Law

On Monday, the GOP introduced the highly anticipated American Health Care Act (AHCA).  Instead of completely dismantling former President Barack Obama’s landmark legislation, the AHCA repealed former’s mandates and funding sources (i.e. taxes), and focuses on expanding health insurance options for those that felt that their choices were limited.
Below is a summary of the central ideas of the AHCA. While positioned as a “Repeal and Replace” effort, the proposed law does leave certain aspects of the Affordable Care Act untouched. We capture the summary in each area below under the headings Repealed, Replaced, and Remains.

Say goodbye to the mandates
  • Repealed: Individuals will no longer be required to buy an insurance policy, and employers (with over 50 full-time equivalent employees) are no longer mandated to offer affordable coverage, that meets minimum value.
  • Replaced: “Continuous Coverage” is required to receive standard market premiums.  Individuals who forego health insurance for greater than 63 days can be charged up to a 30% increase to their premiums for a period of up to 12 months. 
  • Remains: Nothing remains of these major components to the ACA - providing significant relief to employers in their tracking and administration of the Section 4980H requirements. 

Product enhancements, market stabilization, and consumer coverage protections.  
  • Repealed: Small Group and Individual market products will sunset the actuarial-value defined “metal tiers”, effective December 31, 2019. This would mark the end of the Bronze, Silver, Gold, and Platinum plan design designations.
  • Replaced:  Age rated premium caps for individual and small group premiums will be increased from 3:1 to 5:1.  A $100 billion fund will be created and dispersed over a decade to help states stabilize insurance markets, maintain preventative services, and pay for those in high-risk pools.
  • Remains:  Essential Health Benefits, as defined in the ACA, remain mandatory for all individual and small group plans. Caps on deductibles and out of pocket limits also were left intact.  Pre-existing conditions still have to be covered by insurers. Dependents can still remain on their parents’ policy until the age of 26.  Caps and guidance on insurer premium rating factors - such geographic boundaries (community rating areas), age band structures, and tobacco use permitted adjustments, have not been changed.
Nearly all taxes from the ACA will be repealed.

Favorable Treatment to Account Based Health Plans
  • Repealed:  The annual FSA contribution limit of $2,500 is removed.
  • Replaced:  HSA early distribution penalty tax will be lowered from 20% to 10% (pre-ACA rate).  Furthermore, the maximum contribution limit for HSAs will be increased to match the deductible and out-of-pocket limits.  This means that the basic limit to contribute tax-free will be $6,550 / year for individuals and $13,100 for families.  Spouses will now be allowed to contribute catch-up contributions to HSAs. Over-the-counter medications can also be purchased pre-tax with HSA dollars.
  • Remains: There was little in the ACA to support and strengthen Account Based Health Plans (ABHP). The GOP has taken the opportunity with the AHCA to promote and strengthen these options - a welcome advantage for employers offering these plan structures.
Reporting and Administration
  • Repealed: Reconciliation rules limit the ability of Congress to repeal current reporting requirements. The proposed regulations call for the Secretary of the Treasury to “phase out” old reporting, as new reporting takes effect.
  • Replaced: Eligibility for employer sponsored insurance will remain a determining factor in tax credit eligibility. Therefore, it is possible the IRS will still require forms 1094/1095 - though with modifications to the form and format.  However, according to the Ways And Means Chairman Rep. Kevin Brady (R-Texas) they are calling for a “simplified reporting of an offer of coverage on the W-2 by employers.” This is not a legislative mandate - rather, instructions to relevant Department heads. 
  • Remains: At this point, the requirement for plan sponsors and issuers to furnish a Summary of Benefits and Coverage (SBC) appears to remains in place.  

Tuesday, December 29, 2015

ACA Reporting Deadlines Delayed

Yesterday, the IRS announced it will delay the deadlines of the 1094 and 1095 form submissions.
·         The deadline to provide employees with 1095-C Forms has been extended to March 31, 2016.
·         The deadline to file paper 1094-C and 1095-C forms with the IRS has been extended to May 31, 2016.
·         The deadline to e-File electronic 1094-C and 1095-C forms has been extended to June 30, 2016.
Because of the delay, no other extensions will be granted to employers. Within the notice of delay, the IRS requests that employers submit the forms to employees as soon as they are ready, and advised employees that they do not need to provide the forms with their 2015 tax filing as proof of coverage. Employees who received premium subsidies from the exchange may need to amend their returns once they receive the form.
Please contact us with any questions.
For more details, reference the official notice from the IRS.

Friday, December 18, 2015

Cadillac Tax Delayed for Two Years

Lobbyists in Congress have succeeded in raising concern regarding the uniform application of the Cadillac Tax throughout the nation. As a result, a recent law introduces several significant changes to the "Cadillac Tax" section of the Affordable Care Act.  
Here are the highlights:
·         The effective date of the Cadillac Tax has been delayed until January 1, 2020
·         Any excise tax levied will now be fully tax deductible for employers

·         The government will fund an official study by the comptroller on appropriate age and gender premium adjustments in consultation with the National Association of Insurance Commissioners (NAIC)

Wednesday, November 11, 2015


 Update from 4D Pharmacy Below:

As you may be aware of the unfortunate announcement that The Great Atlantic & Pacific Tea Company A&P, which are owners of the Live Better Mail Order facility where your members receive their prescriptions through mail order, has filed for bankruptcy and will be closing their doors 11/14/2015.  This was very sad news to us all and we have worked diligently to make the transition to the new mail order pharmacy, Magellan RX Mail as smooth as possible for your members.  All members utilizing mail order have had a personal letter mailed to them with clear instructions of what they need to do including the dedicated 4D/Magellan RX Mail phone number where customer service representatives will assist your members in a smooth transition.  We are monitoring this on a daily basis as this is our highest priority and have the resources in place to be able address any issues very quickly.

Members will be required to obtain new prescriptions for either mail order or specialty as part of this transition and will need to follow the below instructions:

Mail Order

·         Mail the prescription to Magellan Rx Home, PO Box 620968, Orlando FL 32862. (We are including mail order forms and instructions in our member communication.)
·         Have the physician either E-prescribe MagellanRx Home Delivery, Orlando, FL 32812 or Fax to 1.888.282.1349.
·         For prompt delivery, members will need to provide payment information and registration by completing the order form or by calling 1.800.424.1771.

Specialty Pharmacy
·         E-prescribe MagellanRx Specialty, Orlando, FL 32812 or Fax to 1.866.364.2673. Make sure the form includes member contact inofrmation. Fax prescriptions may only be sent by a doctor’s office and must include patient informaiton and diagnosis for timely processing. If a prior authorization is required, your doctor may need to take extra steps to submit your prescription.
·         Magellan Rx Specialty will call the member to get important information and schedule the first delivery
·         The prescription will arrive when and where the member has requested.

Please feel free to contact us at Friedman Associates for the updated forms or with any questions.

Thursday, September 24, 2015

Compliance Update

LifeCare Links - Cobble Hill Health Center

With summer behind us, and 2016 fast approaching, we’d like to remind our clients of recent regulations which were passed on both the state and federal levels which are worthy of notice.
NYC Transit Ordinance

SubwayNYC Transit Ordinance, Local Law 53, requires New York City employers with 20 or more full time employees, located within the 5 boroughs, to offer employees the opportunity to redirect up to $130 a month of their pretax paytowards transit benefits.  The law defines ‘full time’ as employees who work 30 or more hours per week, and exempts employees subject to a collective bargaining agreement.  The law takes effect on January 1, 2016, and allows employers a six-month grace period to comply. This mandate applies to employers who have locations with 20 or more full time employees in one of the five boroughs of New York City, and includes all employees regardless of their residence.  Penalties for non-compliance will range from $100 to $250 per month.
6055 & 6056 Filing Requirements - Update

Last November, we notified clients of the IRS Code 6055 and 6056 filing requirements. As a reminder, employers with 50 or more full time or full time equivalent employees are required to complete forms 1094 and 1095. Self insured plan sponsors are required to provide all employees who worked 30 or more hours per week, and waived coverage, with a 1095B, and employees who have been covered during any portion of 2015 with a 1095C by January 31, 2016. The 1094 and 1095 forms must be submitted to the IRS by February 28, 2016 if filed by paper, or by March 31, 2016 if filed electronically. Electronic transmittal is required for employers filing at least 250 forms. Penalties for non-compliance will be assessed at $250 per violation. The IRS released final forms and instructions on September 17, 2015. Although there have been several changes recently, they are minimal.

› Instructions for Form 1094-C and 1095-C
› Form 1095-C to both the IRS and individuals
› Instructions for Forms 1094-B and 1095-B
› Form 1094-B (a transmittal /cover sheet) to the IRS
› Form 1095-B to both the IRS and individuals
We know that this is a significant undertaking, and are ready to assist with information-gathering necessary to complete the documents. Reports intended to capture missing dependent social security numbers will be sent to all human resources personnel by their Friedman Associates account manager. The information will be used to provide our clients with the data necessary to complete Part III of Form 1095C.
Out of Pocket Maximum – New Regulation Regarding Individual Assessment of Out of Pocket

Non-grandfathered plans are required to include an in network maximum out of pocket, which reflect the maximum cost share a covered individual may be responsible for in a given plan year, and should include the plan’s deductible, coinsurance, and all copayments. In 2016, this amount will increase to $6,850 per individual, and $13,700 for family coverage. We expect the out of pocket to increase annually, however, clarification regarding family out of pocket assessment is recent. Notably, the regulation now applies the individual out of pocket to each member of a family unit, and requires plans to pay 100% of covered expenses once an individual, whether enrolled in a single or family unit, has met the individual out of pocket. Additionally, once a family’s out of pocket has been met, all covered expenses must be paid in full, regardless of whether or not all of the individuals of the family unit have met their maximum out of pocket.
Preventive Care Benefits Expanded

 Non-grandfathered plans are required to include benefits for all:
  • Evidence based items or services that have in effect a rating of ‘A’ or ‘B’ in the current recommendations of the USPSTF for preventive purposes.
  • Routine immunizations for children and adults as recommended by the ACIP of the Centers for Disease Control and Prevention
  • Childhood and adolescent screening and preventive services recommended by the Health Resources and Services Administration
  • Preventive care and screening for women, as advised by the Health Resources and Services Administration
Included in the expanded preventive care guidelines is a requirement to cover all forms of contraception, including sterilization, BRCA testing, and dependent prenatal care. These services must be implemented upon a plan’s renewal on or after August 1, 2015.
 › Read the FAQ released by the DOL
Transitional Reinsurance Fee

The Transitional Reinsurance Fee is assessed annually, and paid by all health plans, whether insured or self-funded. The fee for 2015 plan years is $44 per covered person, and is due by January 15, 2016. Plans have an option to pay the fee in installments, with the first installment of $33 due by January 15, 2016, and the balance payable by November 15, 2016. This fee is paid through accessing ‘ACA Transitional Reinsurance Program Annual Enrollment and Contributions Submission Form’ on Look out for our reminder email with membership counts in mid-November.

Feel free to contact your Account Administrator with any questions.

Monday, September 22, 2014

Reporting Requirements

In anticipation of the large-employer reporting requirements outlined in Code 6056 of the Healthcare Reform law, the IRS published draft forms.  The reports are intended to confirm an employer’s compliance with the Employer Mandate, enforce the Individual Mandate, and  confirm employees’ and family members’ eligibility for subsidies related to health insurance premiums on plans purchased on an Exchange.   
Initial reporting is required in January 2016.  We’ve attached copies of the forms, Form, 1094-C , which will be submitted to the IRS, and Form 1095-C, which will be distributed to each employee, for informational purposes.  At this point, the forms are in draft form, and may change somewhat.  It is important to note that the reports will require information not previously collected from employees, such as their spouse and dependent social security numbers. We highly recommend that our clients use the ensuing months to develop methods of collecting and maintaining the necessary data, and transferring the information to the applicable format.

 FORM 1095

Tuesday, July 22, 2014

HPID identifiers FAQ

In response to client inquiries regarding HPID identifiers, our attorneys have compiled a list of frequently asked questions. Please feel free to contact your account representative at Friedman Associates to discuss your issues or questions.
Who iconsidered  a CHP?
 Armost self insured plans CHP's?

Short Answer:

A self-funded health plan could be a CHP if the self-funded health plan controls its own policies and is not controlled by another health plan or the self-funded health plan is controlled by an entity that is not a health plan (such as the employer sponsor).  Self-funded health plans that are controlling health plans will need to obtain an HPID in accordance with the compliance dates described below.  It is our understanding that most self-funded health plans will need to obtain an HPID.  Please see the remainder of this memorandum for a more detailed explanation of health plan identifiers.


On September 5, 2012, the Department of Health and Human Services (HHS) and its Center for Medicare & Medicaid Services (CMS) released a final rule regarding HIPAA Administrative Simplification.  Included in this rule is a mandate that all health plans and other entities (such as third party administrators) will obtain an identification number to be used in electronic health care transactions.  These identifiers will be used in HIPAA standard transactions where health plans and other entities need to be identified.  HIPAA standard transactions include medical and dental claims and encounter information, payment remittance advice, claim status requests and responses, eligibility and benefit inquiries and responses, enrollment and disenrollment, referrals and authorizations, and premium payments.   For example, these identifiers will be needed in electronic data interchanges (EDI).  An EDI is used to send claims electronically between the entity that processes claims, the clearinghouse, and the health care provider.

The cumulative set of rules that HHS and CMS are producing will include additional topics including electronic funds transfers (EFTs), ICD-10, and further administrative simplification rules creating standards for claims attachments, operating rules for claims attachments, and requirements for health plans to certify compliance with the HIPAA standards and operating rules.

HHS determined the need for health plan identifiers (HPIDs) and potentially the need for other entity identifiers (OEIDs) to streamline health care administrative transactions and make the existing standards more efficient. The rule is intended to make it easier for health care providers to determine participant eligibility and obtain status information on claims that have been submitted.  As there is currently no standard for health plans identification numbers, each health plan and third party administrator creates their own identifiers for electronitransactions.  These identifiers differ in length and format and create issues for health care providers with the routing of transactions, rejections of transactions, and difficulty in determining eligibility.

Who Must Obtain an Identifier:

HIPPA defines the term health plan in 45 CFR 160.103 which includes self-funded health plans. A controlling health plan (CHP) is required to obtain an HPID.  A controlling health plan is defined in 45 CFR 162.103:
Controlling health plan (CHP) means a health plan that
(1) Controls its own business activities, actions, or policies; or
(2)        (i) Is controlled by an entity that is not a health plan; and
(ii) If it has a subhealth plan(s) (as defined in this section), exercises sufficient control over the subhealth plan(s) to direct its/their business activities, actions, or policies.

A subhealth plan (SHP) is a health plan whose business activities, actions, or policies are directed by a controlling health plan.

A self-funded health plan that is a CHP will need to obtain an HPID.  Fully insured health plans will not need to obtain HPIDs as the insurance carrier will be required to obtain an HPID.

A subhealth Plan (SHP) is nto required to obtain an HPID, but may obtain an HPID at teh direction of its CHP or on its own. CHP's may obtain HPIDS for its SHPs.

Third party administrators and other entities (such as repricers) that perform certain health plan functions will have the option of obtaining an OEIDs as they are not health plans and are not eligible to obtain an HPID. Health plan clients of third party administrators may require the third party administrator to obtain an OEID for plan administration purposes.  It is possible that OEIDS may be mandated in the future.

Required and Permitted Uses:
A covered entity is required to use an HPID when it identifies a health plan in a standard transaction (standard transactions are described in the Background section above).  Business associates of the covered entities will be required to use the HPIDs to identify the health plans in standard transactions.

HPIDs may also be used in the following manners (but it is not required):
1.   In internal files;
2.   On an enrollees health plan identification card;
3.   As a cross-reference in health care fraud and abuse files and other program integrity files;
4.   In patient medical records to help identify health care benefit packages;
5.   In electronic health records to identify the health plan;
6.   In federal and state health insurance exchanges to identify health plans; and
7.   For public health date reporting purposes.

Compliance Date:

Health plans, with the exception of small health plans, must obtain an HPID by November 5, 2014.   Small health plans are defined as those whose annual receipts total $5 million or less.  Small health plans must obtaian HPID by November 5, 2015.  Health care providers and clearinghouses must be able to implement the use oHPIDs in standard transactions by November 7, 2016.

Additional Resources:

CMSs website offers a multitude of resources including presentations, videos, and a HPID user manual that can offer additional guidance on HPIDs, OEIDs, including a step-by-step process to obtain an HPID and OEID.  The application process takes place through the CMS Health Plan and Other Entity Enumeration System (HPOES). New users must register themselves and their organization prior to gaining access to the HPOES.  After registration, the organization would then apply for an HPID (See Guidance/HIPAA-Administrative-Simplification/Affordable-Care-Act/Health-Plan-Identifier.html).


In 2010, HHS started the process of standardizing and simplifying the way health care providers, health plans, and other entities assisting health plans transmit electronic information.  A series of rules has been issued by HHS over the last several years to guide the process.   One of the rules contains the creation of HPIDs and OEIDs Health plans and other entities that participate in health care transactions may need to obtain a standardized identifier that will be used to streamline HIPAA standard transactions as described in this memorandum.


Simplification/TransactionCodeSetsStands/index.html?redirect=/transactioncodesetsstands/02_transactionsandc odesetsregulations.asp

Disclaimer: This opinion is based on the facts as presented and re-stated above, and our research. It is a consulting opinion only, and does not purport to offer legal advice or fiduciary guidance as to the denial or acceptance of claims. This opinion is based upon our interpretation of the relevant materials and may not conform to official interpretations of statutes, regulations, contracts, or other materials. Ultimately the Plan Administrator has the discretionary authority to interpret the terms of the Plan Document and accept or deny claims for benefits.