Compliance Links
Millions of small businesses will receive postcards from the IRS beginning the week of April 19 that alert them to the new Small Business Health Care Tax Credit and encourage them to check their eligibility. Even if you don't receive a postcard, your business still may be eligible.
Click on this document that offers 3 simple steps in helping you determine if your business is eligible for the Tax Credit.
The DOL has created a new webpage that contains links to a variety of resources relating to the major health care reform legislation--the Patient Protection and Affordable Care Act (PPACA)--that became law in March 2010. The webpage includes links to statements by the DOL Secretary and Assistant Secretary, links to White House and HHS webpages about health reform, and a link to an IRS webpage about the new small employer tax credit. There are also links to several items under a heading "House Committees Health Insurance Reform at a Glance," three of which may be of interest for employers:
==> Summary. This three-page summary provides an easily digestible overview of the PPACA. It breaks the new law down into nine categories and then summarizes key points of interest under each subheading.
==> Implementation Timeline. This chronological journey through health care reform is a great summary of what lies ahead. Grouped by year, from 2010 through 2018, this document lists the many components of health care reform that will become effective and provides a brief description of each one.
==> Employers and Health Reform. This document is the most employer-centric of these "at-a-glance" offerings. In summary fashion, under the headings "small employers," "larger employers," and "all employers," it lists health care reform items that are relevant to the named employer group.
http://www.dol.gov/ebsa/healthreform/
Healthcare Reform March 23, 2010
As you are probably aware, Health Care Reform legislation passed the House of Representatives late Sunday night. At this time, the bill reconciliation still has to pass the Senate.
As a valued client of Kelly Insurance Agency/ Summit Insurance Services I wanted to let you know that we are working diligently to stay on top of this legislation and how it may impact you. Below is a look at how six groups will be affected:
The uninsured
The Congressional Budget Office projects that 32 million Americans will gain health insurance under the law, beginning in 2014.
The poorest adults — those below 133% of the federal poverty level, or about $29,327 for a family of four — will qualify for Medicaid, the federal-state program for the poor and people with disabilities. Children already qualify at that income level.
Currently, only seven states offer Medicaid to adults without children, says Ron Pollack of Families USA, a consumer advocacy group. The median income eligibility level for that group is 69% of poverty — less than $7,500 for a single person and about $15,200 for a family of four. Many states are significantly lower than that.
Lower-income people who don't qualify for Medicaid will get federal subsidies to help them buy coverage from new state insurance exchanges — organized marketplaces that encourage competition.
Those eligible for the subsidies could have income up to 400% of the poverty level, or $88,200 for a family of four. Those at 133% of poverty will get the most assistance, those at 400% the least, both for premium assistance and benefits.
The premiums will range from 2% to 9.5% of family income, and the poorest families will pay the least. Those families also will have the smallest co-payments — 6%, ranging up to 30% for the top of the income bracket, Pollack says.
Medicare beneficiaries
There's good news and bad news for seniors. AARP, the nation's largest seniors organization, says most should benefit from a number of provisions.
First is the notorious "doughnut hole" that affects about one in eight Medicare recipients — the coverage gap in the Medicare prescription-drug program created in 2006. Now, seniors whose total drug costs reach $2,830 must pay for all their drugs until they have spent $4,550. The new law will close that gap.
This year, seniors who reach the coverage gap will be eligible for a one-time, $250 rebate. Starting next year, brand-name drug prices will be discounted 50% during the coverage gap period. Every year until 2020, the discount will be increased, until the benefit reaches 75% of the cost.
The measure includes other benefits for seniors, including free preventive services such as cancer screenings and funding for states to improve community services for people with disabilities.
Yet seniors who use Medicare Advantage plans — private plans combining hospital, physician and drug coverage — could see their premiums increased or benefits reduced. That's because the law reduces Medicare payments to those plans. About 23% of Medicare beneficiaries are in those plans.
Upper-income taxpayers
If a law costs nearly $100 billion a year, someone has to pay. In this case, that mostly means the wealthy.
If the Senate passes the package of changes, the biggest tax increases will come in Medicare payroll taxes. Those take two forms, both starting in 2013:
• Single people earning more than $200,000 and couples starting at $250,000 will pay 0.9 percentage points more on their wages and self-employment income.
• For people at those income levels, all their investment earnings will be taxed 3.8%, marking the first time the hospital insurance tax has hit non-wage income.
The other major tax increase hits the most generous health plans. Those don't apply just to upper-income people. State employees and other union workers have won excellent health coverage in recent years rather than big pay increases.
Starting in 2018, family insurance plans valued at more than $27,500 will pay a 40% tax above that level.
The goal is for employers to reduce the "Cadillac" benefits, rather than pay the tax.
Young adults
Young adults will be among the early beneficiaries of the law, which requires insurers to extend parental coverage to children until they turn 26.
About 30% of the uninsured are between the ages of 19 and 29, the highest rate of any age group, says Tanya Schwartz, a policy analyst with the Kaiser Family Foundation.
Beginning in 2014, young adults will be required to purchase insurance or face tax penalties. Those will be phased in, reaching $695 per year by 2016 for an individual or 2.5% of household income, whichever is larger. Young adults will be eligible for subsidies, though, if they meet income.
People with health problems
Beginning later this year, insurers will no longer be able to refuse to insure children with pre-existing medical conditions, such as asthma, heart defects or cancer. The provision that allows young adults to stay on their parents' policies longer also helps those with chronic health problems
Protections for adults with pre-existing conditions won't take effect until 2014, but the legislation calls on federal health officials to create a national high-risk insurance pool program that they can buy from this year.
The legislation also prohibits insurance companies from canceling coverage for people who develop costly health problems. It eliminates lifetime caps on covered medical expenses in six months.
People with employer-sponsored insurance
People who have good health coverage through their employer can keep it, Schwartz says. Many employer plans already meet minimum federal coverage requirements.
They also will get additional protections such as the end of lifetime coverage limits.
For employees who lose their jobs, beginning in 2014 they can buy affordable insurance through the health care exchanges. The insurance will have to meet minimum coverage standards.
The law will require a percentage of health care premiums go for care and improving quality, rather than toward marketing or administrative overhead. For large group insurance plans, at least 85% of premiums must go for care or quality improvement; otherwise, money will get rebated to policyholders, according to Families USA.
Although the legislation provides the framework, many of the details still must be hashed out in the coming months and years as federal health officials write the rules needed to carry out the changes.
Please expect further information from Kelly Insurance Agency/Summit Insurance Services as the details of this legislation become more clear. We plan on holding a series of Healthcare Reform seminars as soon as the final bill is passed and details are clear. You may also find additional details on our website.
**Excerpts from Health bill spreads the pain, benefits
By Richard Wolf and Alison Young, USA Today, published March 23, 2010
COBRA Subsidy and UI Extension Signed Into Law
On March 2, 2010, the U.S. Senate passed H.R. 4691, the Temporary Extension Act of 2010 by a vote of 78-19. This Senate action follows House passage of H.R. 4691 on February 25, 2010. The President immediately signed this bill into law on March 2, 2010.
The Temporary Extension Act:
1. Extends the COBRA subsidy program that was enacted under the American Recovery and Reinvestment Act and
2. Extends unemployment benefits through April 5, 2010.
COBRA
The law’s COBRA provisions:
· Extend the eligibility period for the 15-month 65 percent premium subsidy to those involuntarily terminated from March 1 through March 31, 2010
· Allow employees to receive the subsidy if they first lost group coverage due to a reduction in hours and then were terminated after enactment of the bill.
Unemployment Insurance
The law’s unemployment insurance benefit provisions:
· Extend the period during which individuals may file applications for Federal Emergency Unemployment Compensation (EUC) from the current end date of February 28, 2010 to April 5, 2010 and the period during which individuals may claim and be paid EUC is extended from July 31, 2010 to September 4, 2010.
· Extend the period during which individuals may qualify for the Federal Additional Compensation (FAC), the extra $25 weekly benefit amount on state and federal unemployment compensation, from the current end date of February 28, 2010 to April 5, 2010 with weekly payment provided during the phase out period for weeks ending October 5, 2010 instead of August 31, 2010.
· Extend the period during which 100% federal reimbursement for weeks of regular federal extended benefit payments to April 5, 2010, with the state option to continue the extended period from July 31, 2010 to September 4, 2010.
Additional Extension
These “short-term” extensions of the COBRA subsidy and unemployment benefits are intended to give Congress more time to consider legislation to extend these programs through 2010. Under H.R. 4213, a bill the Senate is currently debating, both the COBRA subsidy program and unemployment benefits would be extended through December 31, 2010.For a full review and Fact Sheet on recent changes to COBRA and ARRA, please click on the link below which will take you directly to the Department of Labor Website:
http://www.dol.gov/ebsa/newsroom/fscobrapremiumreduction.html
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