IRS Announces 2020 Health Insurer Fee

November 20th, 2019

How it Will Impact the Insurance Marketplace

The IRS recently released Notice 2019-50, which outlines the health insurer fee for the 2020 tax year.

Background

To help fund the creation and ongoing operation of the federal and state marketplace exchanges, the Affordable Care Act (ACA) requires that all insurers offering fully-insured health insurance programs pay an annual tax. The tax is not applicable to self-funded group health plans sponsored by an employer, but does apply to a self-funded Multiple Employer Welfare Arrangement (MEWA).

The amount of this tax, often called the health insurance tax (HIT) or fee (HIF), paid by insurers, is calculated based on each insurer’s proportionate share of the marketplace. Congress suspended this tax for 2019 due to concerns with the impact the tax was having on premiums, but without any legislative action the tax will resume next [...]

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Legislative Updates

November 8th, 2019

On Thursday, November 7th 2019, the IRS announced the new limits for 2020 with respect to Health FSAs, Transportation/Commuter Plans, and Qualified Parking Plans as listed below:

Type of Plan 2019 2020 Health FSA $2,700/annual $2,750/annual Dependent Care FSA $2,500 or $5,000*/annual No Change Transportation/Commuter Plan $265/month $270/month Parking Plan $265/month $270/month

*$2,500 for married individuals filing separate tax returns and $5,000 for married individuals filing joint tax returns or for unmarried individuals.

More details regarding the above annual adjustments can be found in the IRS Notice 2019-59 and Revenue Procedure 2019-44.

Additionally, earlier this year, the IRS had also released the new HSA contribution limits and high-deductible health plan (HDHP) amounts for 2020 as listed below:

Type of Plan 2019  2020  HSA Annual Contribution Limits (Employer + [...]

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Blue Shield Offers Assistance to Members Affected by Wildfires In California

November 4th, 2019

UPDATED: NOVEMBER 1

SAN FRANCISCO (October 14, 2019) – Blue Shield of California is closely monitoring the impact of the wildfires across the state and the nonprofit health plan is offering the following services to help ensure members in affected areas continue to have uninterrupted access to care.

Gov. Gavin Newsom has declared a statewide state of emergency.

The affected areas include:

  • The Maria Fire (Ventura County) is approximately 8,000 acres in size. Mandatory evacuations are in place for zip codes 93060, 93066.
  • The Getty Fire (LA County) is 745 acres in size and 52% contained. Mandatory evacuations are in place for zip codes 90049, 90272, 90290.  Some repopulation is being allowed.
  • The Kincade Fire (Sonoma County) is approximately 77,000 acres in size and 68% contained. Mandatory evacuations are in place for zip codes 95425, 95441, 95448, 94515, 95467,95426, 95451, 95461, 94508, 94574, 94567, 95492, 95401, [...]

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Help for Members Impacted by Wildfires in California

November 4th, 2019

We’re taking steps to help our California members and emergency personnel impacted by wild fires. Here’s what members who live anywhere in California need to know:

  • If you have an Anthem prescription drug plan you can get up to a 30-day emergency refill of their medications at any pharmacy now.
  • If you use Anthem’s mail-order pharmacy you can update your temporary mailing address information by calling us.
  • Time limits for prior authorization, pre-certification or referral requirements will be relaxed – there will be no late penalties. Please call us for an extension if you need it.
  • You can get replacement medical equipment (also called Durable Medical Equipment or DME) if yours was lost or damaged.
  • You and your doctors are being given more time to file claims, if needed. Please call us for [...]

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Proposed Rules Clarify Individual Coverage HRAs

October 28th, 2019

On September 30, 2019, the IRS published proposed regulations to clarify the application of the employer mandate under the Affordable Care Act (“ACA”) and certain nondiscrimination rules under the Internal Revenue Code (“Code”) Section 105(h) to health reimbursement arrangements (“HRAs”) integrated with individual health insurance coverage (individual coverage HRAs, or “ICHRAs”). Notably, the proposed regulations provide information on how to determine when an individual policy is “affordable” and of a “minimum value” and provide some relief under the Code Sec. 105(h) rules.

Read the full article here.

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California Enacts A “Two Notice” Requirement for FSAs

October 28th, 2019

On August 30, 2019, California Governor Gavin Newsom signed into law Assembly Bill 1554, which applies to employers with employees working in California who participate in a flexible spending arrangement (FSA), including a health FSA, dependent care FSA, or adoption assistance FSA.

The new state law requires employers to notify California employees who participate in an FSA of any deadline to withdraw funds before the end of the plan year. The notice must be made in two different forms (one of which may be electronic), including by electronic mail, telephone, text message, postal mail, or in-person.

The language of the new state law does not clearly indicate what the notification deadline is. According to the legislative history, California intended the two notices to be provided before the end of the FSA plan year, but the statutory language could be interpreted [...]

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Medicare Part D Notification Requirements

September 20th, 2019

Employers sponsoring a group health plan with prescription drug benefits are required to notify their Medicare-eligible participants and beneficiaries as to whether the drug coverage provided under the plan is “creditable” or “noncreditable.” This notification must be provided prior to October 15th each year. Also, following the plan’s annual renewal, the employer must notify the Centers for Medicare & Medicaid Services (“CMS”) of the creditable status of the
drug plan.

This information serves to summarize these requirements in more detail.

What are the Notification Requirements About?

Medicare Part D, the Medicare prescription drug program, imposes a higher premium on beneficiaries who delay enrollment in Part D after initial eligibility unless they have employer-provided coverage that is creditable (meaning equal to or better than coverage provided under Part D). Employers that provide prescription drug benefits are required to notify Medicare-eligible [...]

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California Relaxes Registration Requirements for Opposite-Sex Domestic Partners

September 17th, 2019

Effective January 1, 2020, California eliminates the requirement that at least one member of an opposite-sex couple be at least age 62 and eligible for Social Security benefits in order for the couple to register as domestic partners with the state of California. For employers who sponsor fully-insured benefit plans, this may result in more employees enrolling a registered domestic partner in an employer-sponsored health plan.

Background

Under California law, domestic partners who are registered with the state’s domestic partner registry are generally afforded the same rights, protections, and benefits as are granted to legal spouses. If an insured group health plan offers coverage to legal spouses of employees residing in California, the plan is required to also offer coverage to the registered domestic partners of employees in California. Self-insured plans are not required to treat registered domestic partners the same as legal [...]

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IRS Announces 2020 ACA Affordability Indexed Amount

August 22nd, 2019

The IRS recently announced in Revenue Procedure 2019-29 that the Affordable Care Act (ACA) affordability indexed amount under the Employer Shared Responsibility Payment (ESRP) requirements will be 9.78% for plan years that begin in 2020. This is a decrease from the 2019 percentage amount (9.86%).

Background

Rev. Proc. 2019-29 establishes the indexed “required contribution percentage” used to determine whether an individual is eligible for “affordable” employer-sponsored health coverage under Section 36B (related to qualification for premium tax credits when buying ACA Marketplace coverage). However, the IRS explained in IRS Notice 2015-87 that a percentage change under Section 36B will correspond to a similar change for affordability under section 4980H ESRP requirements.

Determining Affordability in 2020

An employer will not be subject to a penalty with respect to an ACA full-time employee (FTE) if that employee’s required contribution for 2020 for [...]

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IRS Expands Preventive Care for QDHDPs

August 6th, 2019

On June 24, 2019, the President issued an Executive Order directing the Department of the Treasury and the IRS to issue guidance that expands the ability of HSA-qualifying high-deductible health plans (QHDHPs) to cover low-cost preventive care that helps maintain health status for individuals with chronic conditions before the statutory minimum deductible for QHDHPs has been met. In response, on July 17, 2019, the Treasury Department and IRS issued Notice 2019-45 expanding the list of preventive care benefits.

Briefly, the following services and items are treated as preventive care when:

  • prescribed to treat an individual diagnosed with the associated chronic condition (as specified in the IRS guidance),

and

  • prescribed for the purpose of preventing the exacerbation of the chronic condition or the development of a secondary condition.

Preventive Care for Specified Conditions

[...]

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