2019 HSA Limits

On May 10, 2018, the IRS released Revenue Procedure 2018-30 to announce the inflation-adjusted limits for health savings accounts (HSAs) and high deductible health plans (HDHPs) for 2019.

The adjusted contribution limits for HSAs take effect as of Jan. 1, 2019. The adjusted HDHP cost-sharing limits (minimum deductible and maximum out-of-pocket) take effect for the plan year beginning on or after Jan. 1, 2019.

The following chart shows the HSA and HDHP limits for 2019 as compared to 2018. It also includes the catch-up contribution limit that applies to HSA-eligible individuals who are age 55 or older, which is not adjusted for inflation and stays the same from year to year.

Contact your NEEBCo representative with questions.

IRS Announces HSA Limits for 2019

 

2018 HSA Family Limit

Earlier this year, a tax law change for 2018 reduced the HSA contribution limit for individuals with family HDHP coverage from $6,900 to $6,850. After this change was announced, the IRS received complaints that the $50 reduction would be difficult and costly to implement.

The IRS has now decided to allow taxpayers with family HDHP coverage to use the original $6,900 limit for HSA contributions for 2018, without facing excess contribution penalties.

Refer to the below Compliance Bulletin for details and contact your NEEBCo representative with questions.

IRS Allows Taxpayers with Family Coverage To Use $6,900 HSA Limit for 2018

PCORI Fees due by July 31st

The Affordable Care Act (ACA) requires health insurance issuers and sponsors of self-insured health plans (including qualified Health Reimbursement Arrangements/HRA) to pay Patient-Centered Outcomes Research Institute fees (PCORI fees).

The PCORI fees generally apply to insurance policies providing accident and health coverage and self-insured group health plans. The fees are reported and paid annually using IRS Form 720 (Quarterly Federal Excise Tax Return).

The entity that is responsible for paying the PCORI fees depends on whether the plan is insured or self-insured.

  • For insured health plans, the issuer (insurance carrier) of the health insurance policy is required to pay the research fees.
  • For self-insured health plans (including HRAs) the research fees are to be paid by the plan sponsor (employer).

PCORI fees will be due by July 31, 2018, for plan years ending in 2017. IRS instructions for filing form 720 include information on reporting and paying the PCORI fees.

Using Part II, Number 133 of Form 720, issuers and plan sponsors will be required to report the average number of lives covered under the plan separately for specified health insurance policies and applicable self-insured health plans. That number is then multiplied by the applicable rate for that tax year, as follows:

  • $2.26 for plan years ending on or after Oct. 1, 2016, and before Oct. 1, 2017
  • $2.39 for plan years ending on or after Oct. 1, 2017, and before Oct. 1, 2018

If your HRA plan originated in 2017 but does not end until 2018, no fee is due until July 31, 2019.

Health insurance issuers have the following options for determining the average number of covered lives:

  • The Actual Count Method—This method involves calculating the sum of lives covered for each day of the plan year and dividing that sum by the number of days in the plan year.
  • The Snapshot Method—This method involves adding the total number of lives covered on a date in each quarter of the plan year, or an equal number of dates for each quarter, and dividing the total by the number of dates on which a count was made.
  • The Form Method—As an alternative to determining the average number of lives covered under each individual policy for its respective plan year, this method involves determining the average number of lives covered under all policies in effect for a calendar year based on the data included in the National Association of Insurance Commissioners Supplemental Health Care Exhibit (Exhibit) that some issuers are required to file (called the member months method). For issuers that are not required to file an Exhibit, there is a similar available method that uses data from equivalent state insurance filings (called the state form method).

Sponsors of self-insured plans (including HRAs) may determine the average number of covered lives by using the actual count method or the snapshot method.

For additional information please refer to the attached compliance bulletin and contact your NEEBCo representative.

FAQs on the PCORI Fee

2019 Benefit and Payment Parameters

The Department of Health and Human Services (HHS) has released its final Notice of Benefit and Payment Parameters for 2019. This final rule describes parameters under the Affordable Care Act (ACA) that apply for the 2019 benefit year.

Standards included in the final rule relate to:

Annual limitations on cost sharing
For 2018 plans, the out-of-pocket maximum is $7,350 for self-only coverage and $14,700 for family coverage. In 2019 the out-of-pocket maximum will increase to $7,900 for self-only coverage and $15,800 for family coverage.

The individual mandate’s affordability exemption
The Tax Cuts and Jobs Act reduced the individual mandate penalty to zero, so beginning in 2019 individuals will no longer be penalized for failing to obtain acceptable health insurance coverage. However, individuals may still need to seek the affordability exemption for 2019 and future years (for example, in order to be eligible for catastrophic coverage). For 2019, an individual qualifies for the affordability exemption if he or she must pay more than 8.3% of his or her household income for minimum essential coverage (MEC).

Special enrollment periods in the Exchange
Under the Exchanges, special enrollment periods (SEPs) are available for those who experience qualifying events. The 2019 final rule establishes a new SEP that allows pregnant women who are receiving health care services through Children’s Health Insurance Program (CHIP) coverage for their unborn child to qualify for a 60-day loss of coverage SEP upon losing access to this coverage.

Essential health benefit (EHB) benchmark plan options
ACA required non-grandfathered plans in the individual and small group markets to offer a core package of services known as essential health benefits (EHB’s), equal in scope to benefits offered by a typical employer health plan. States could select a benchmark plan based on 3 different enrollment statistics for plans in the state or based on the Federal Employees Health Benefits Program. Beginning with the 2020 plan year, the final rule allows states to select a new EHB-benchmark plan on an annual basis, and provides substantially more options for selecting a benchmark plan. In addition, the final rule allows states to maintain their current 2017 EHB-benchmark plan without taking any action.

Shop Exchange
The final rule eliminates the online enrollment process and allows employers to enroll through a SHOP plan issuer or a SHOP registered agent/broker.

Standardized Exchange Plan Options
The final rule eliminates the standardized plan options in the FFE for the 2019 plan year, due to concern that providing differential display for these plans may limit enrollment in coverage with nonstandardized option plan designs, removing incentives for issuers to offer coverage with innovative plan designs.

Refer to the attached compliance bulletin for detail and contact your NEEBCo representative with questions.

Final 2019 Notice of Benefit and Payment Parameters

Harvard Pilgrim and Guardian Partnership

Harvard Pilgrim Health Care will begin offering employers new insurance products through an arrangement with The Guardian Life Insurance Company of America® (Guardian), including dental and vision insurance, basic life and accidental death and dismemberment, life insurance, short and long-term disability and accident, cancer, critical illness and hospital indemnity coverage.

These products will be available to new and existing employer groups in the four states that Harvard Pilgrim serves:  Connecticut, Massachusetts, Maine and New Hampshire. Employers can begin selecting new insurance options on April 17, with a July 1 effective date for employee coverage. Medical premium discounts will be available to fully insured, large group employers, with 51 to 999 employees, who opt for ancillary coverages.

Contact your NEEBCo representative with questions.

NHHealthCost.org Now Offering Side-by-Side Comparisons of Health Care Costs and Quality

The New Hampshire Insurance Department announced that NHHealthCost.org launched new features that allow site visitors to simultaneously compare the cost and quality of health care facilities.

Along with a streamlined interface and updated rate information, consumers can now use side-by-side comparisons showing cost and quality results by provider for dozens of common medical procedures such as MRIs, CT scans and surgeries. Results include costs for physicians and other staff, hospital or outpatient facility fees and additional costs associated with the test or treatment.

The enhancements are the latest in a series of updates based on feedback from site users including New Hampshire consumers and employers. In late 2017, the site added a section for employers showing health plan comparisons and offering resources on health insurance to share with employees.

NHHealthCost.org uses paid claims data collected from New Hampshire’s health insurers to show insured and uninsured patients’ estimated costs on more than 100 medical services and dozens of dental procedures. Hospital quality data is provided by the Centers for Medicare and Medicaid Services. Health plan comparisons are based on insurance department data and national organizations including the National Committee on Quality Assurance.

FLSA Prohibits Employer Tip Retention

A 2018 spending bill enacted on March 23, 2018, amends the Fair Labor Standards Act (FLSA) to:

  • Prohibit employers from retaining employees’ tips, regardless of whether the tip credit is used; and
  • Eliminate prior regulations that barred tip pooling when employers pay tipped employees at least the full FLSA minimum wage and do not claim a tip credit.

In addition, employers who pay the full FLSA minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools. However, employers must continue to comply with any state or local requirements that exceed federal standards.

Refer to the attached compliance bulletin for detailed information and contact your NEEBCo representative with questions.

FLSA Amendment Prohibits Employers from Retaining Tips Allows Tip Pooling

Extended Transition for Grandmothered Plans

On April 9, 2018, the Department of Health and Human Services (HHS) extended an existing transition policy for certain health plans that do not comply with the Affordable Care Act (ACA) for an additional year, to policy years beginning on or before Oct. 1, 2019.

In states that allow it, health insurance issuers have the option of renewing current policies for current enrollees without adopting all of the ACA’s market reforms that took effect in 2014. Originally announced in 2013, the transition policy has already been extended several times.

Individuals and small businesses may be able to keep their non-ACA compliant coverage through 2019, depending on the plan or policy year.

According to HHS, the additional one-year extension is intended to smoothly bring all non-grandfathered coverage in the individual and small group markets into compliance with all applicable ACA requirements.

The extended transition relief only applies with respect to individuals and small businesses with coverage that has been continually renewed since 2014, under the previous transition guidance. It does not apply with respect to individuals and small businesses that obtained new coverage in 2014 or after. All new plans must comply with the full set of ACA reforms.

Also, as required under the previous transition policy guidance, health insurance issuers that renew coverage under this extended transitional policy must, for each policy year, provide a notice to affected individuals and small businesses.

Refer to the below compliance bulletin for additional information and contact your NEEBCo representative with questions.

HHS Extends Transition Policy for Non-ACA Compliant Health Plans

CVS New RX Savings Finder Tool

On Wednesday, April 11, 2018, CVS Health announced its new tool, CVS Pharmacy Rx Savings Finder (Rx Savings Finder), which is designed to reduce consumers’ concern over rising costs. Rx Savings Finder will enable the company’s retail pharmacists to evaluate quickly an individual’s prescription savings opportunities at the pharmacy counter.

The Rx Savings Finder will show pharmacy teams:
1. First, if the prescribed medication is on the patient’s formulary and is the lowest cost option available.
2. Second, if there are lower-cost options covered under the patient’s pharmacy benefit such as a generic medication or therapeutic alternative with equivalent efficacy of treatment.
3. Third, if the patient may be able to save money by filling a 90-day prescription rather than a 30-day prescription.
4. Finally, if neither a generic nor a lower-cost alternative is available, other potential savings options for eligible or uninsured patients where allowed by applicable laws and regulation.

CVS Caremark also provides real-time, member-specific drug costs and lower-cost alternatives to prescribers through their electronic health record system (and to CVS Caremark members through the member portal and newly updated app). According to CVS, this function resulted in prescribers switching their patient’s drug from a non-covered drug to a drug on formulary 85% of the time.

Refer to the attached news brief and press release for additional information and contact your NEEBCo representative with questions.

CVS New Tool Promises Transparency and Cost Savings

CVS Press Release

Direct Primary Care

As a means to reduce rising health care costs, innovative solutions are rising to the surface. One such solution is known as direct primary care (DPC).

What is DPC?
In this model, physicians, pediatricians and internists charge a monthly membership fee that covers most of what the average patient needs, including visits and drugs at lower prices, instead of accepting insurance for routine visits. As a result, DPC can provide substantial savings to patients. Consider the following:

  • Cost of visit—Free with monthly membership
  • Copay cost—No copays
  • Length of visit—Typically 30-60 minutes (traditional doctor’s office visits are less than 20 minutes)

Because they don’t operate under the typical fee-for-service model, many DPC providers are able to spend more time with their patients. Research shows that patients who have a good relationship with their doctor receive better care and are happier with the care they receive.

Does DPC replace the need for health insurance?
No, in fact, DPC providers recommend that their patients have some form of insurance to protect themselves in the event of an emergency. Remember, DPC is for primary care. It will not take care of catastrophic injuries, surgeries or trips to the emergency room.

How popular is DPC?
DPC is emerging as a way to combat rising health care costs and maintain a high quality of care. Those who partner with the right providers may find great success with this type of health care model. While DPC has grown steadily in the past few years, the market is still slow. Despite this, DPC providers and supporters are optimistic about its future.

What’s next?
As health care costs continue to climb and the prevalence of expensive chronic conditions increases, the importance of choosing the right doctor and type of care is exemplified. DPC presents a way for employees to receive more personalized health care while containing their health care costs. Moreover, DPC can be an attractive option for employees with high deductible health plans and health savings accounts, as it would provide them with the option of receiving care without paying high out-of-pocket costs.

It may be worth it for you to further investigate this model and evaluate if it’s right for your organization. For more information on DPC, please contact your NEEBCo rep today.