Anthem Blue Cross will not be participating in the California SHOP Exchange

Legacy Benefits & Insurance Benefits learned today that Anthem Blue Cross will not be participating in the California SHOP Exchange, Covered California.

In June, Covered California eliminated the requirement that Qualified Health Plans wanting to participate in the individual exchange must also apply to participate in the SHOP exchange. Because Anthem is no longer required to participate in SHOP, as a condition of being on the individual exchange and because Anthem already participates in a private small group exchange, Anthem has withdrawn its SHOP application. Anthem will, however, continue to participate in the individual exchange.

We have been informed that there are a variety of reasons that led Anthem to this decision and we will provide you with additional information as it becomes available in the coming weeks/months. Anthem remains fully committed to the off-exchange small group market and believes this decision will allow them to put the necessary attention on their off-exchange small group efforts and individual work.

Breaking News - Coverage and Income Verification Delayed

The U.S. Department of Health & Human Services, the Treasury Department, and the Obama Administration have announced another important changes to the implementation of the Affordable Care Act (ACA). 

The government announced it will move to an "honor system" in 2014 for coverage and income verification. States operating marketplaces (i.e., exchanges) will not be required to confirm a consumer's statement that he or she does not have employer-sponsored coverage, nor will states have to verify reported income, which determines a person's eligibility for a premium subsidy. Income verification has been postponed until 2015. However, consumers who misrepresent their income on the application for exchange coverage are subject to a penalty of up to $25,000.

PPACA Employer Mandate Delayed till 2015

The Obama administration unexpectedly announced Tuesday it is delaying the employer mandate under the Patient Protection and Affordable Care Act until 2015.

The mandate — which requires mid-sized and large employers to offer health insurance coverage to their workers — was one of the main requirements of the health care overhaul that was set to go into effect Jan. 1, 2014. 

This ruling does NOT change the individual mandate set to begin 1/1/2014.

You will see many articles about the reasons for this announcement, I am advising my clients that between now that the opening of the exchanges on 10/1/2014, best course of action is not to panic or make sweeping changes to their benefits. 

In September, Covered California (the CA exchange) will be providing broker training and our industry should then have better information to provide our clients. 

Till then, please stay informed but realize what you hear today could change tomorrow.

Individual Penalty Transition Relief for Those Eligible to Enroll in Employer-Sponsored Coverage with a Plan Year That Begins in 2013 and ends in 2014

Because many employer-sponsored plans have non-calendar plan years, employers have questions regarding how employees and/or dependents who waived employer-sponsored coverage but would need to have minimum essential coverage beginning January 1, 2014 might avoid the Individual Shared Responsibility Payment (i.e. individual penalty).  

IRS Notice 2013-42, issued Wednesday 6/26/2013, addresses these questions and provides an employee, or an individual with a relationship to the employee, who is eligible to enroll in a non-calendar year employer-sponsored plan with a plan year beginning in 2013 and ending in 2014 will not be liable for the individual penalty until the end of the 2013-2014 plan year. Thus, employees and dependents that choose to wait until the 2014-2015 plan year to enroll in coverage will not be subject to the individual penalty for the months in 2014 that are part of the 2013-2014 plan year.

Health Saving Accounts vs. Flexible Saving Accounts

Health Savings Accounts - HSAs are tax-advantaged medical savings accounts available to taxpayers who are enrolled in an HSA-qualified high-deductible health plan. The funds contributed to the account are not subject to federal income tax at the time of deposit. Unused amounts in one year can be carried over to following years and added to subsequent contributions.

In order to qualify for an HSA, the policyholder must be enrolled in an HSA-qualified high deductible health plan, and must not be covered by other non-HDHP health insurance or Medicare, and cannot be claimed as a dependent on someone else’s tax return.

Flexible Spending Accounts - Also known as a flexible spending arrangement, is a tax-advantaged account that allows an employee to set aside a portion of earnings to pay for qualified medical expenses.

Unlike health savings accounts FSAs are more commonly offered with traditional medical plans.

Unlike health savings accounts, funds in the account that are unused when the plan year is over are lost and cannot be carried over to the following year.
The flex spending account allows you to contribute money to the FSA for costs not covered by insurance: deductibles, co-pays, and coinsurance. In addition, you can use your FSA to pay for health care costs that health insurance doesn’t cover.

Medical Accounts                        HSA                           FSA
Contribution Limit - 2013      Individual $3,250     Per Employee $2,500
                                              Family $6,450
Catch-up Contribution (55+)          $1,000                          None
Medical Plan                          HSA-Compatible              Plan Any
                                                   HDHP
Unused Amount                           Carry Over           Cannot Carry Over


Important notes:
Effective Jan. 1, 2011, expenses incurred for over-the-counter medicines, with the exception of insulin, will not be eligible for reimbursement under a health FSA, HRA or HSA without a prescription.

The penalty for using HSA funds for ineligible expenses is 20 percent of the HSA distribution.

W-2 Reporting for 2012 & 2013

As we move closer to the end of tax year 2012 and the beginning of 2013, you may have questions regarding whether or not your company must comply with the Affordable Care Act (ACA) requirement for reporting the cost of employer-provided health care coverage on their W-2 forms.

Legacy Benefits & Insurance Services' goal is to keep you updated on health reform concerns. Here is a summary of the current Internal Revenue Service (IRS) guidance regarding W-2 reporting:

IRS transitional relief provides that only employers issuing 250 or more W-2s are required to report the cost of employer-provided health care coverage on their W-2s for tax year 2012.

This information reported in box 12 of the W-2s is for informational purposes only.

This relief applies to future calendar years until the IRS publishes additional guidance. To date, the IRS has issued no additional guidance for 2013.

Any IRS guidance that expands the reporting requirements will apply only to calendar years that start at least six months after they issue the new guidance.

To save you valuable time we have gathered these helpful resources:

1. Link to IRS website information on W-2 Reporting of Employer-Sponsored Health Coverage
2. IRS Notice 2012-9: Interim Guidance on Informational Reporting to Employees of the Cost of Their Group Health Insurance Coverage
3. 2012 General Instructions for W-2 and W-3
4. Copy of 2012 W-2

 Information provide by the Word & Brown General Agency.

What you might not know about the PPACA

Yes, you have probably heard about the individual mandate – tax. And, you may know about Medicaid (MediCal) expansion, free birth control, and the exchanges.
Here are some of the lesser known effects of the law.

1) Domestic violence help - Health care reform brings attention to a subject that usually doesn’t get much. As of Aug. 1, 2012, the law requires that all insurance plans cover screening and counseling for domestic abuse, a provision found under preventive services for women’s health. (The other women’s health benefits are more widely known and include contraceptives and routine breast and pelvic exams, pap tests and prenatal care). The law also will prevent domestic violence from being considered a “preexisting condition.”

2) Fake tanners will pay - This really has been a hot-button issue, so to speak: Since July 1, 2010, Jersey Shore wannabes have had to pay a 10 percent tax every time they visit an indoor tanning service.

3) Smokers need not apply? - Under a provision of the law, smokers can be charged up to 50 percent more than nonsmokers for health insurance beginning in 2014. Regulations now allow companies to require workers who fail to meet specific standards to pay up to 20 percent of their insurance costs.

4) Breastfeeding support - The provision states employers shall provide reasonable, unpaid break time and a private, non-bathroom location for an employee to express breast milk for her nursing child for up to one year after the child’s birth. Employers with fewer than 50 employees are excluded if it would cause “undue hardship.”

5) Caloric reality - The law requires restaurants with 20 or more locations to list calorie counts on menus, menu boards and even drive-thrus. The entire nutrition label also would have to be available in writing upon request.

6) Mental health focus - PPACA mandates coverage parity, putting mental health treatment on par with medical care, which means deductibles; copayments and doctor visits can’t be more restrictive for mental illnesses than medical and surgical coverage.

7) A pricier pizza - Papa John’s CEO John Schnatter got national attention in August when he said that health reform will cause consumers to pay more for their pizza. He estimates that the law will cost 11 to 14 cents more per pizza, or 15 to 20 cents per order. That’s because under PPACA, the company will have to offer health care coverage to more of its 16,500 total employees or pay a penalty to the government. The National Restaurant Association said the law could adversely affect restaurants’ ability to maintain already slim profit margins because it requires companies of more than 50 employees to provide affordable health insurance.

8) Your FSA (Flexible Spending Account) - A popular consumer-driven health care tactic is also changing because of the PPACA. As of Jan. 1, 2011, flexible spending accounts may no longer be used to purchase over-the-counter drugs or medicines. But the most significant change to FSAs under the law will be the implementation of the $2,500 cap on health care FSA contributions beginning in 2013. Previously there was no cap.

The information in this blog was gathered from an October 1, 2012 on-line article in benefitspro.com. Click Here to review the complete article.