Find Out More About Aetna’s Apple iWatch Offer

In case you missed it when enrolling a new employer group in an Aetna Funding Advantage plan by having members enroll within the Springboard system, they receive an offer for an Apple iWatch at a significantly reduced price—$25 plus tax.

Click here for more information on how this works!

 

This document is also located on Broker Centric. Find out more here.

Aetna Small Group (ACA 1–50 only) Broker Commission Changes Effective January 1, 2018

Small group (1–50) ACA broker commissions for medical cases sold in Ohio and Kentucky are changing. The new ACA commission structure applies to those new and renewal business sales effective January 1, 2018. Brokers will continue to earn commissions on a per employee, per month (PEPM) basis.

The current commission level for 51–100 of $30 PEPM will not change, and the default service fee of $30 for AFA business will not be changing. These commission changes apply to small group ACA business only, and the change in existing small group ACA business will occur upon the group’s renewal date.

For ACA new and renewal medical business sold with an effective date of January 1, 2018, or later, the commission will be:

Number of eligible employees enrolled Commission per employee, per month (PEPM)
1 – 50 employees ACA small group 1 – 50 $15 (new and renewal business)

 

To view ACA, fully insured, and AFA broker commissions, please click here.

ACA Reporting for 2017 Filings: Coding Cues for 1095

NAHU, the National Association of Health Underwriters, recently did a webinar on this topic presented by Trey Tompkins of AdminAmerica. This article is a summary of the key points related to the forms themselves. NAHU members can access the recorded presentation at www.NAHU.org.

What changed for 2017 filings?

  • 1094-C – any references to “Section 4980H Transitional Relief” because it no longer applies.
  • No more Penalty Relief protections for GOOD FAITH COMPLIANCE. This is where penalties were waived for incomplete or incorrect filings if employers could show they made a good faith effort to comply.

Tips for the Tricky Parts on 1095 Forms

  • Line 14
COBRA – For terminated employees (and their dependents), use CODE 1H with Code 2A on line 16

– For current employees eligible for COBRA (and COBRA eligible dependents) use the appropriate code for the offer (i.e., who was actually eligible to elect COBRA for those months)

Retiree – Retiree coverage is not reported as an offer of coverage (1H on Line 14 and 2A on Line 16)
  • Line 15 considerations
    • Only completed if Line 14 response is: 1B, 1C, 1D, 1E, 1J, or 1K
    • Rules allow for smoothing reported premiums evenly across months for employees paying weekly or biweekly premiums.
  • Line 16 Safe Harbor Codes and considerations
Priority – Use the first that applies in this order: 2A, 2B, 2E, 2C, then whichever others apply
2A – Employee not employed during month
2B – Employee not a full-time employee
2C – Employee enrolled in health coverage offered

– Do not use for EX-employee COBRA continuants

– Do not use if coverage was not for the entire month

2D – Employee in a Limited Non-Assessment Period

– For use in Waiting Periods (90 days) and Variable Hour Employees in Measurement Period

– Do not use for employees to which Code 2E applies (union)

2E – Multiemployer interim rule relief (Union employees)
2F – W-2 Safe Harbor

– Can’t be used for months employer didn’t offer MEC to 95% of FTEs and dependents

– If used, must be used for each month the employee was offered coverage

– For partial year employees, can be applied using a fraction of the employee’s W-2 wages versus cost of coverage for the eligible months

2G

2H

– Federal Poverty Line Safe Harbor

– Rate of Pay Safe Harbor

– Can’t be used for months employer didn’t offer MEC to 95% of FTEs and dependents

blank – Sometimes applies, but it predicts a potential penalty assessment for employer
Waivers – There is no specific code for a waiver of offered coverage, but one of the affordability safe harbor codes will usually apply
    • Affordability Thresholds

 

YEAR Affordability %
2016 9.66%
2017 9.69%
2018 9.56%

IRS NOTICE 2015-87 has some real gems to remember when calculating affordability. Here are few:

  • Employer HRA contributions can count towards an employer’s required contribution in certain instances.
  • Wellness Program Incentives – Discounted contributions for participating are generally not In other words, you report the contribution as if the wellness incentive was NOT earned unless the program was designed to prevent tobacco use.
  • Flex Credits may reduce the reported cost of coverage unless: the credits can be used to purchase non-health coverage or can be cashed out or contributed to HSAs. Flex Credits do not apply to plan years that began prior to January 1, 2017 (Flex Credits in the IRS notice relates to a cafeteria plan or defined contribution plan—not necessarily a Flexible Spending Account, although FSAs can be one of the offerings).
  • Opt Out Payments increase the reported cost of coverage unless:
    • They are conditioned on providing proof of other coverage
    • They are part of a Collective Bargaining Agreement (CBA) entered into before December 16, 2015
    • The unconditional arrangement began before December 16, 2015
  • Amounts paid to satisfy Prevailing Wage Laws reduce the cost of coverage even if they are paid in cash to employees who waive coverage.

If your customers are struggling with the requirements of ACA reporting, there are several other tools, software, and outsourcing solutions that can help employers needing more support. Employers with high turnover and lots of different kinds of employee populations (e.g., seasonal, variable hour, part-timers, etc.) often need much more help. If you need to review some of the tools available, please contact your Cornerstone Employee Benefits Advisors.

 

This article is provided for informational purposes and should not be construed as legal or tax advice. Please consult with your tax advisor, CPA, or legal counsel for details specific to your group.

Important Health Coverage Reporting Information Required on 2017 Federal Tax Returns

Beginning in 2018, the Internal Revenue Service (IRS) will require that individuals indicate specific information about health coverage on their 2017 federal tax return. On the federal tax return, they must indicate if they and others on the return…

  • Had minimum essential coverage for the year, or
  • Qualified for an exemption from having health coverage, or
  • Are paying the individual shared responsibility payment.

The 2017 tax year is the first time the IRS will not accept tax returns that do not include this information.

Click here for more information.

 

Questions? Contact your Cornerstone representative for details.

 

Exploring ACA Alternatives

Gregg Amato

Gregg Amato | Director of Employee Benefits (Cleveland)

Since the inception of the Affordable Care Act (ACA), many small group employers and brokers alike have experienced constant change and confusion. Premiums continue to rise and many feel there are limited options available to them. Small groups with fewer than 50 employers are not mandated to provide health insurance, but many would like to offer it as a way to fill full-time positions and attract talented employees. Before health care reform, health insurers were allowed to rate up or charge higher premiums to small groups based on their medical history, age, and gender. This made it difficult for unhealthy groups to find affordable coverage.

Healthcare.gov defines community rating as: “A rule that prevents health insurers from varying premiums without a geographic area based on age, gender, health status, or other factors.” Community rating means that all enrollees pay the same premium amount regardless of their health status. The cost is pooled or spread out over a large number of insured people. For groups with fewer than 50 employees, ACA community rating benefitted some and hurt others. Small groups with multiple health conditions or an aging population benefitted from lower rates, while younger healthier groups pay more.

Under ACA guidelines, the “Adjusted Community Rating” methodology is being used. Health insurers aren’t allowed to charge higher premiums based on health conditions, medical claims, or gender. However, they are allowed to charge higher premiums based on the number of employees enrolled in the plan and where the group is located within areas that have higher costs of care. Insurers can consider an employee’s age and whether they use tobacco products. The age ratio of 3:1 means that an older adult cannot be charged more than three times the rate of a younger adult. The tobacco ratio of 1.5:1 means that a person using tobacco cannot be charged more than 1.5 times the non-tobacco user rate.

The ACA’s Health Insurance Tax is due to return in 2018 and threatens to increase already high insurance premiums even more. According to America’s Health Insurance Plans (AHIP), “The health insurance tax (HIT) is a $100 billion+ tax on health coverage for individuals, small businesses, seniors, states, and tax payers. For example families in the small-employer market could see their premiums go up an additional $7,000 over the next 10 years because of this tax. AHIP will continue to push for a full repeal of the health insurance tax because it makes health care less affordable for the very people who need the most help affording health care.”

ACA-compliant plans are fully insured plans. All the risk is passed on to the insurance carrier. These small group plans offer a wide variety of plan designs that can benefit the small employer, however many factors continue to threaten additional premium hikes in the upcoming years. Small business owners are faced with controlling their costs. It’s not surprising that over half of small group employers do not offer health insurance coverage. As ACA premiums continue to rise, so does the need for ACA alternatives. When ACA plans arrived, small employers were allowed to keep their coverage with only minor changes to their plan or risked losing their transitional (grand-mothered status). Now, as these small group employers consider moving to ACA plans, some may see a premium reduction, while others will see significant increases. The employer groups that can’t find a reduction will stay on their transitional plans to avoid ACA as long as possible. However, with transitional plans soon to expire, employers need alternative options.

Level-Funding Options

Many of the health insurers have already provided alternatives to ACA plans and are currently available to small businesses. Historically, self-funding has been a viable option for large group employer with 100 or more employees. The introduction of level-funding has created an alternative for groups in the small group market. Level-funded plans are self-insured plans with predictable premiums and are available to groups down to 10 employees. These plans have a low specific attachment point. The healthier groups usually receive the more attractive rates since they are medically underwritten. Groups that select a level-funded product option will have level or fixed monthly premiums. To be considered for coverage, groups must be healthy and approved by the underwriters. Lower risk groups may pay premium rates lower than ACA rates, while higher risk groups will pay premium rates higher than ACA rates. Many of the small groups that qualify for level-funding options will not be familiar with the concept and will rely heavily on their broker for expertise.

Level-Funding Cost components:

  • Administrative Expenses
  • Stop loss (Specific and Aggregate)
  • Claims fund (paid by the level-funded entity). At the end of the coverage period, a shared savings opportunity exists for groups with claims surplus.

At renewal and if the group had a low claims year, there should be minimal rate increase. In a bad claims year, the employer never has to pay more than the level premium amount because the stop loss coverage protects them. However, they should expect to see a rate increase and now have the option of moving to a community-rated ACA plan if premium savings exists.

Multiple Employer Welfare Arrangements (MEWA)

A Multiple Employer Welfare Arrangement (MEWA) is another popular alternative to ACA plans. MEWAs were created several years ago and can benefit small groups down to two employees. They are a self-funded insurance plan where multiple employers pool their financial resources and share their risk. MEWAs are member-owned profits that stay within the group and can be dispersed among the member companies. Much like the level funding, employer groups must qualify medically.

Typically a board of trustees is formed to manage the MEWA, enabling greater flexibility in selecting plan designs and meeting the overall needs of the group. MEWAs can implement programs that promote wellness and can save overall claims costs of the group, which ultimately lower premiums. Since the group is in control within the MEWA, there is increased stability and lower tax rates for the member companies that don’t exist with fully insured plans.

Small group employers, along with their brokers, are facing a dilemma. Many employers want to offer coverage for their employees while attracting talented future employees. Premiums are on the rise and options were limited, but adversity breeds solutions. The insurance industry has answered and created alternatives for the small group market by providing level funding and MEWA plans.

Please contact your Cornerstone sales representative to learn more about our partner carriers that offer MEWA and level funded alternatives now available to your small group clients.

Dental Care Plus Group New Auto-Renewal Process for Shelf Rate Groups

Beginning with March 2018 effective dates, Dental Care Plus Group shelf rate dental plans will automatically renew on the group’s renewal effective date. This means:

  • Shelf rate groups that want to keep their current plan do not need to take any action other than pay the new premium when it is due.
  • Groups that want to make a change to their plan must contact their broker or DCPG by the 10th of the month prior to the renewal date in order to ensure their next invoice reflects the appropriate rates.
  • There is no change to the renewal process for non-shelf rate groups.

 

To learn more, click here.

QSEHRA Updates

The IRS has issued Notice 2017-67, which contains 59 pages of guidance related to Qualified Small Employer Health Reimbursement Arrangements. The guidance covers the following topics:

  1. Eligible employer
  2. Eligible employee
  3. Same terms requirement
  4. Statutory dollar limits
  5. Written notice requirement
  6. MEC requirement
  7. Proof of MEC requirement
  8. Substantiation requirement
  9. Reimbursement of medical expenses
  10. Reporting requirement
  11. Coordination with PTC
  12. Failure to satisfy the requirements to be a QSEHRA
  13. Interaction with HSA requirements
  14. Effective date

Additionally, the Notice also includes model attestations. Cornerstone will provide updates on what the latest guidance means for brokers as we unpack this new information.

Register for Aetna’s AFA Springboard Renewal Training

Ready to complete your Aetna Funding Advantage (AFA) renewals or accept an AFA offer in Springboard Marketplace? Aetna’s short 30-minute training session provides an overview of everything you need to know from selecting a plan to kicking off enrollment. To attend one of these mini sessions, select a date/time below and complete the online registration form:

Monday, October 30, 2017 at 4:30pm EST Tuesday, October 31, 2017 at 11:30am EST Thursday, November 2, 2017 at 12:30pm EST Friday, November 3, 2017 at 3:30pm EST
Monday, November 6, 2017 at 12:30pm EST Tuesday, November 7, 2017 at 12:30pm EST Thursday, November 9, 2017 at 12:30pm EST Monday, November 13, 2017 at 12:30pm EST
Tuesday, November 14, 2017 at 12:30pm EST Thursday, November 16, 2017 at 12:30pm EST Monday, November 20, 2017 at 12:30pm EST Tuesday, November 21, 2017 at 12:30pm EST

 

TransAmerica TransConnect Supplmental Medical Expense Insurance

If you’ve been searching for group GAP plans to cover deductible expenses, contact your Cornerstone representative about TransAmerica’s TransConnect Supplemental Medical Expense Insurance. Plans are fully customizable. They are a fully insured alternative to Health Reimbursement Arrangements.

 

RESOURCES

Claims Express

Help with your out-of-pocket medical costs

IRS Adjusts PCOR Fee

The IRS released the adjusted applicable dollar amount for determining the Patient-Centered Outcomes Reasearch (PCOR) fee. The new fee amount is $2.39 and applies to plan years ending on or after October 1, 2017 and ending before October 1, 2018.

This fee is updated using the projected amount of HHS National Health Expenditures and is intended to fund research about patient outcomes and to improve the quality of health care in the U.S. It is due each year by July 31.

Click here to read more.