Impact of ICHRAs on ACA

Beginning Jan. 1, 2020, some employers will be able to offer individual coverage health reimbursement arrangements (ICHRAs) to help employees pay for health insurance.

As a result, on Sept. 30, 2019, the Internal Revenue Service (IRS) published proposed regulations on how the following federal requirements will affect ICHRAs:

  • The Section 4980H employer shared responsibility rules under the Affordable Care Act (ACA); and
  • The federal nondiscrimination requirements in Internal Revenue Code (Code) Section 105(h).

Comments on the proposed rule will be accepted until Dec. 30, 2019.  Taxpayers generally may rely on the guidance provided in the proposed rule prior to a final rule being issued.

Contact us today to learn more about the proposed rule.

Impact of ICHRAs on ACA

Flu Prevention

Even the healthiest of people can come down with the flu. In the wake of back-to-back deadly flu seasons, experts are urging people to properly prepare this year. It’s time to take action to protect your workplace as much as possible. Contact us today for all the resources you need to prevent an office-wide flu outbreak.

Flu shots – Get the Facts

2019 Employer Health Benefits Survey Summary

Knowing how your benefits—which are a major attraction and retention tool—compare to those of employers across the country is key. Don’t wait any longer to ask for your copy of a summary of the 2019 Employer Health Benefits Survey, an annual survey of employer-sponsored health benefits from the Kaiser Family Foundation and the Health Research & Educational Trust.

Summary of the 2019 Employer Health Benefits Annual Survey

Aliera Healthcare and Trinity Healthshare Ordered to Stop Selling Health Insurance

NH Insurance Commissioner John Elias ordered Aliera Healthcare, Inc. and Trinity Healthcare, Inc. to immediately stop selling or renewing illegal health insurance in New Hampshire.

Aliera, an unlicensed insurance company in New Hampshire, has been administering and marketing health coverage on behalf of Trinity Healthshare, who represents itself as a health care sharing ministry. A legal health care sharing ministry is a nonprofit organization in existence since December 31, 1999, whose members share a common set of ethical or religious beliefs and share medical expenses among members.

The Department’s Consumer Services Division received dozens of complaints and concerns from consumers.

“There are legitimate health care sharing ministries that offer coverage for their members, but Aliera and Trinity are not one of them,” said Elias. “Unfortunately, we are seeing entities in the marketplace that are misleading consumers and finding ways to try to avoid insurance regulation. It is important for consumers to be cautious when they purchase health coverage and to reach out to the Department when they have questions or concerns.”

Aliera also markets their products under the company name Ensurian.

Refer to the below press release and contact your NEEBCo representative with questions.

Press Release-Aliera

Federal Agencies Finalize Resources for Mental Health Parity Compliance

Federal agencies have finalized resources to promote compliance with the Mental Health Parity and Addiction Equity Act (MHPAEA), including final FAQs and a model disclosure request form. Employers should consider using these resources to review their group health plan’s compliance with MHPAEA.

Contact your NEEBCo representative to learn more about MHPAEA and these new compliance resources.

Mental Health Parity Compliance

Anthem Medical Loss Ratio (MLR) Rebates

The Medical Loss Ratio (MLR) provision of the Affordable Care Act (ACA) requires a health insurance carrier to refund part of the premiums it receives if it does not spend at least 80% (for individuals and small employer groups) or 85% (for large employer groups) of the premiums on health care services. These MLR requirements apply to fully insured employer and individual health plans (not self-funded employers).

Anthem NH did not meet the MLR requirement in the Individual and Large Employer markets for their Matthew Thornton Heath Plans HMO products. Therefore, Anthem is required to provide rebates to those individual plans and employer plans.

All other Anthem NH products did meet the MLR requirement, and no rebates are owed.

The rebate is calculated based on the employer’s pro-rata premiums vs. the applicable legal entity/market classification premiums, and is based on covered members (including the dependents) on the employer plan.

As rebate checks are generated by billing group numbers, some employers may receive more than one check.

Anthem has also mailed the required notice to employees of employer groups who will be receiving a rebate. This includes all employees enrolled at any point during the prior year, so this can include past employees.

Employers must follow certain rules for distributing the rebate if it qualifies as a “plan asset” under ERISA. In general, most employer plans are governed by ERISA, and the employer is the policyholder.

  • If the employer paid 100% of the premiums, the rebate is not a plan asset and the employer can retain the entire rebate amount.
  • If participants paid 100% of the premiums, the entire rebate amount is a plan asset.
  • If the employer and participants each paid a fixed percentage of the premiums, the percentage of the rebate equal to the percentage of the cost paid by participants is a plan asset.

Any rebate amount that qualifies as a plan asset under ERISA must be used for the exclusive benefit of the plan’s participants and beneficiaries. If a plan provides benefits under multiple policies, the employer must be careful to allocate the rebate for a particular policy only to the participants who were covered by that policy.

The rebate can be distributed to participants under a reasonable, fair and objective allocation method. If premiums were paid on a pre-tax basis, the rebate is considered taxable income. If the cost of distributing rebate shares to former participants approximates the amount of the proceeds, the employer may decide to limit rebates to current participants.

If distributing payments to participants is not cost-effective because the amounts are small or would cause tax consequences for the participants, the employer may utilize the rebate for other permissible plan purposes, such as applying the rebate toward future participant premium payments or benefit enhancements.

Rebates should be distributed within 3 months of their receipt to avoid the trust requirement under ERISA.

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

How Employers Should Handle MLR Rebates

Massachusetts Paid Family and Medical Leave

In 2018, Massachusetts established the Paid Family and Medical Leave Act, a statewide paid family and medical leave program financed by employer and employee contributions. In 2019, leadership agreed to delay the required contributions for three months, from July 1 to Oct. 1, 2019. The paid family and medical leave program is funded by a mandatory payroll tax of 0.75% (adjusted from .63%) on the first $132,900 of an employee’s wages, to be adjusted annually. The payroll tax will be split between employers and employees. However, for employers with fewer than 25 employees, no employer contribution is required for family or medical leave premiums.

An employer is considered a Massachusetts employer with respect to services performed by a covered individual for the employer if the service is:

Localized in Massachusetts. Service is localized in Massachusetts if the service is performed:
(1) Entirely within Massachusetts; or
(2) Both within and outside of Massachusetts, but the service performed outside of Massachusetts is incidental to the individual’s service within Massachusetts (for example, is temporary or transitory in nature, or consists of isolated transactions); or

Not localized in any state, but some part of the service is performed in Massachusetts and:
(1) The individual’s base of operations is in Massachusetts or, if there is no base of operations, then the place from which the service is directed or controlled is within Massachusetts; or
(2) The individual’s base of operations or place from which the service is directed or controlled is not in any state in which some part of the service is performed, but the individual’s residence is in Massachusetts.

Effective September 30, 2019, employers must:
1) conspicuously post a workplace notice that informs employees of benefits provided under the paid family and medical leave program. The DFML provides a model poster for employers to use.
2) provide each new hire with written notice detailing the new family and medical leave program within 30 days from the employee’s start date. The employer must obtain each new hire’s written acknowledgement of receipt of the information above, or have the employee sign a statement that he or she refused to sign the acknowledgement. The DFML provides a model notice for employers to use.

Effective October 1, 2019, employers must begin remitting contributions to the trust.

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

Massachusetts Paid Family and Medical Leave Contributions Delayed Until Oct 1 2019

Massachusetts PFML Employer FAQ’s

Harvard Pilgrim and Tufts Announce Merger

Wednesday, August 14th, Harvard Pilgrim Health Care and Tufts Health Plan announced an agreement to merge, consolidating Massachusetts’ 2nd and 3rd largest insurers. The board of directors will comprise equal representation from both directors.

“Through the combination of two strong organizations with a commitment to non-profit health care in New England, we will be able to provide even greater value to consumers, as well as improve access to care throughout the region,” said Joyce Murphy, chair of the board for Harvard Pilgrim Health Care.

“Building upon our collective synergies and strengths – which includes being among the top-rated health plans in the country for quality – will unlock value that can be immediately reinvested in our members and the communities we have the privilege of serving,” said Greg Tranter, chair of the board for Tufts Health Plan. “I am excited about the future.”

The new organization, not yet named, will serve 2.4 million members in Massachusetts, Maine, Connecticut, New Hampshire and Rhode Island. The merger will require review on both the state and federal level, including the assessment of consumer impact. During this time, both organizations will continue to operate as independent entities.

Considerations of a Harvard/Tufts merger date back to 2011.

Consolidation on the health insurer side is mirroring similar consolidation on the provider side in Massachusetts, with the Beth Israel Deaconess Medical Center and Lahey Health Hospital networks combining earlier this year.

NEEBCo will continue to monitor this consolidation and inform clients as further developments occur.

Harvard Pilgrim Press Release

Tufts Health Plan Press Release