CalCPA ProtectPlus

Banyan Consulting LLC has been providing us with beneficial information about different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans. 

To view this article in PDF format, click here.

The following information is provided by Banyan Consulting LLC:

Another component of the Health Care Reform Act signed into law on 3/23/2010 is that beginning with the 2011 tax year, employers must report the aggregate cost of applicable employer-sponsored health insurance coverage on employees W-2 forms.  General information about this requirement has been provided, however, the Department of Labor (DOL) has not yet issued Interim Final Rules on this provision of the Health Care Reform Act.

1. When does an employer have to be ready to be in compliance with this new reporting requirement?

Employers must be prepared to accurately report this information on an employee’s 2011 W-2 form as early as February, 2011.  Although employers will be sending most of the 2011 W-2 forms to the employees in January, 2012, if an employee terminates employment in 2011, they do have the right to request an early 2011 W-2 form.  Employers must be prepared for this possibility. (continue reading…)

The following information is provided by Banyan Consulting LLC:

Banyan Consulting LLC has been providing us with beneficial information about different aspects of the Health Care Reform and how it affects us. Over the next months and years, employers will be faced with numerous changes, many of which require regulatory clarification. Banyan will continue to keep us up to date and on target with decisions that affect our plans. 

There are a few pieces of the Health Care Reform Act that take effect in the near future. The one that has garnered more headlines is the requirement to cover dependent children to age 26. Click here to read the Q&A segments that address different portions of the provision and how it impacts employers.

Recently the owner of a CalCPA-member firm contacted Banyan Administrators, LLC, managers of the CalCPA ProtectPlus health and welfare programs, about adding a new employee to his firm’s ProtectPlus medical plan. The new employee, it turned out, was a close relative, and the owner wanted to get him enrolled and covered as soon as possible—preferably, right away.

The fact that the new employee was related had, in fact, no bearing on how the matter was handled. What was relevant, however, was the firm’s written policy, clearly spelled out in its benefit plan subscription agreement (an employer’s master application and agreement with the Group Insurance Trust or other carrier), that new employees had to complete a two-month waiting period before being eligible for benefits. Naturally, the firm’s owner was disappointed that his relative would have to wait the same as any other new hire. Nevertheless, he was also appreciative that Banyan had helped him keep his firm in compliance with both HIPAA and ERISA rules. The Department of Labor (DOL) is concerned about fair treatment of employees and issues of discrimination immediately arise if employees are not treated equally.

Because Banyan service center representatives had the information at their fingertips in their computer system, they were able to provide an explanation to the firm’s owner on the phone. Even if the owner had not contacted Banyan proactively, Banyan would have flagged the employee’s enrollment form when it came in because it did not meet the employer’s established policy. An important feature of Banyan’s computerized recordkeeping is to help member firms prevent unintended regulatory violations.

At the same time, the Trust provides flexibility by offering member firms a broad range of options in setting their own policies. A firm can choose to add new hires to their existing plans on the first of the month following the day of hire or up to six months after, provided they are consistent. Existing rules are subject to change as the Patient Protection and Health Care Affordability Act (health care reform) is implemented and the specifics of the law are ironed out. The Trust and Banyan will continue to monitor evolving regulations and keep you informed as health care reforms solidify.

Generally, employers may change their benefit waiting period and other employee eligibility policies during the annual open enrollment period. It makes sense to review these policies each year to ensure that they are consistent with your firm’s hiring practices. If you are not sure about your company’s benefits eligibility policy as stated in your ProtectPlus Subscription Agreement, or if you are not sure whether the subscription agreement is consistent with your employee handbooks or other new-hire materials, call the Banyan Service Center at (877) 480-7923 or email cpaprotectplus@banyan-llc.com. A Banyan member service representative will be happy to answer your questions.

Americans have been inundated by the media’s take on the health care reform bill even before the bill passed back on March 21, 2010. Between the many amendments and all the opposing and supporting positions voiced daily in the media, who can blame the average citizen for being confused as to how it may or may not affect you, your family or your employees.

Banyan Administrators, LLC, Managers of the CalCPA ProtectPlus program, have thoughtfully put together the following presentation, which is designed to help our members understand the bill’s most significant reforms. The presentation walks you through the first two years of the bill – 2010 through 2012. However, there are many areas that still remain undefined due to the complexity of the bill. Please be assured that Banyan Administrators and the Group Insurance Trust will continue to report on the evolving impact of health care reform as clarity develops.  Please click on the link below to view the presentation.

Banyan Health Care Reform 2010 summary years 2010 -2012

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The following information is from the United States Department of Labor’s web site. Since this COBRA article (or booklet, as the article refers to it) from dol.gov has an abundance of information, we will break the article up into sections over the next several weeks. We hope that you find the information valuable.

An Employee’s Guide to Health Benefits Under COBRA -The Consolidated Omnibus Budget Reconciliation Act 

 Note: This publication contains information about the COBRA premium reduction provisions of the American Recovery and Reinvestment Act of 2009 (ARRA). This publication has not been updated for recent amendments made to ARRA. For updated information on ARRA and its amendments, please see the COBRA Premium Reduction Fact Sheet.

Introduction

Health insurance programs help workers and their families take care of their essential medical needs. These programs can be one of the most important benefits provided by an employer.

There was a time when employer-provided group health coverage was at risk if an employee was fired, changed jobs, or got divorced. That substantially changed in 1986 with the passage of the health benefit provisions in the Consolidated Omnibus Budget Reconciliation Act (COBRA). Now, many employees and their families who would lose group health coverage because of serious life events are able to continue their coverage under the employer’s group health plan, at least for limited periods of time.

This booklet explains your rights under COBRA to a temporary extension of employer-provided group health coverage, called COBRA continuation coverage.

This booklet is designed to:

• Provide a general explanation of your COBRA rights and responsibilities;
• Outline the COBRA rules that group health plans must follow;
• Highlight your rights to benefits while you are receiving COBRA continuation coverage. (continue reading…)

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The federal health care reform law will have a substantial impact on employers. Here are the main issues  that employers will want to be aware of:  

 1. Keeping the same coverage  

Employers will be able to avoid some of the law’s requirements by keeping their coverage the same after the law’s effective date (March 23, 2010). Unfortunately, it is very unclear at this time what kinds of minor changes will alter coverage, or keep it the same; this will be clarified in later regulation.  

 Changes that must be made to all plans include:  

• waiting periods for coverage must be less than 90 days; 
• no lifetime benefit maximum limits;
• dependent coverage for adult children up to age 26; and
• no annual limits on certain types of benefits (unless permitted by later-issued regulation).

2. New benefit and other plan changes If an employer does not keep its coverage the same, employers will need to make additional changes such as:  

• extending 100 percent coverage for preventive care;
• removing any prior authorization requirement or increased cost-sharing for emergency
• services (regardless of whether the services are provided in or out of network);
• no pre-existing limitation for children under age 19; and
• coverage of routine patient costs in clinical trials for life-threatening diseases.

3. FSA/HRA/HSA changes The law also will require changes to these types of accounts. In 2011, employees will no longer be able to receive pre-tax reimbursements from their FSA, HRA or HSA for non-prescribed over-the-counter medications, and the excise tax for nonqualified HSA withdrawals will increase from 10 percent to 20 percent. In 2013, employee contributions to FSAs will be capped at $2,500 annually, with the cap adjusted annually to the Consumer Price Index.  (continue reading…)

The following information is from the IRS Web site, IRS.gov:

IR-2010-38, April 1, 2010

WASHINGTON ― Many small businesses and tax-exempt organizations that provide health insurance coverage to their employees now qualify for a special tax credit, according to the Internal Revenue Service.

Included in the health care reform legislation, the Patient Protection and Affordable Care Act, approved by Congress and signed by President Obama on March 23, the credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees.

“This credit provides a real boost to eligible small businesses by helping them afford health coverage for their employees,” said IRS Commissioner Doug Shulman. “We urge small businesses and tax-exempt employers to look closely at this important tax break — which is already effective — to see if they qualify.”

The maximum credit is 35 percent of premiums paid in 2010 by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit increases to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations. (continue reading…)

Employer Eligibility
ProtectPlus is available to accounting firms and firms offering general financial services. Solo practitioners (a CPA practicing on his/her own with no other employees) are eligible to apply.

To be eligible and retain such eligibility, more than 50% of all the Employer’s owners (i.e., principals, proprietors, partners, shareholders or other owners) must be CPAs or Associate members of CalCPA in good standing.

If you are a CPA and not a member of CalCPA, see how you can join CalCPA here.

All employers deemed to be part of an affiliated group under Internal Revenue Code Sections 414 (b), (c), or (m) are considered to be a single employer. (continue reading…)

The American Recovery and Reinvestment Act of 2009 (ARRA), signed into law in February, offers significant health insurance benefits to all those who are involuntarily terminated from a job between September 1, 2008 and December 31, 2009.

If you lose or have lost work during this period, you need to know about these provisions because they can save you money. Keep in mind, however, that if you voluntarily quit your job you don’t qualify. Moreover, individuals who were fired for negligence or misconduct don’t qualify either.

If you are an employer and let employees go during these 15 months, new rules under this law require action on your part. Among its many features, ARRA provides federal subsides that reduce premiums for nine months of COBRA or Cal-COBRA coverage.

During this nine-month period eligible individuals (and their qualified beneficiaries) are responsible for only 35 percent of their premiums. For COBRA recipients the remaining 65 percent must be paid by their former employer, while for Cal-COBRA recipients, the 65 percent portion must be paid by the insurer. Employer and insurer payments, however, are fully reimbursable through a tax credit.

Another provision of the new law allows COBRA recipients to switch their health coverage to a less expensive policy if that policy is available to all active employees of their former company.

Under the previous law, an eligible employee could only elect to continue coverage under the policy they had at the time they were terminated. To comply with ARRA, employers must amend their existing COBRA notice forms and distribute additional notices that include information about these benefits. (continue reading…)

This is Part 3, of a three part article.  For Part 2, see Employers, What You Need to Know About the Federal Stimulus Package: Part 2.

This article was written by Connie Chuang and Gage C. Dungy, attorneys with the labor and employment law firm of Liebert Cassidy Whitmore.

In the beginning, some covered individuals may not become aware of the new federal subsidy and therefore continue to overpay their COBRA/Cal-COBRA premiums by paying the full premium amount.  In order to reimburse the covered employee in this situation, employers will have an initial choice of either providing a refund or a credit to be used against future premium  payments.  The credit option is only available if it is expected that the full credit will be used by the individual within 180 days of the date the full COBRA premium amount was paid. (continue reading…)

This is Part 2, of a three part article.  For Part 1, an introduction, see Employers, What You Need to Know About the Federal Stimulus Package: Part 1.

This article was written by Connie Chuang and Gage C. Dungy, attorneys with the labor and employment law firm of Liebert Cassidy Whitmore.

Qualified Individuals on COBRA/Cal-COBRA Can Now Receive a 65% Federal  Subsidy for Health Insurance Premiums for up to Nine Months.

Employees who were involuntarily terminated between September 1, 2008, through December 31, 2009, will be eligible for a 65% federal subsidy of their COBRA/Cal-COBRA health insurance premium payments.

For example, an employee who normally pays $1000/month in health insurance premiums under COBRA/Cal-COBRA, would only be required to pay $350/month (35%) because the other $650 (65%) would be covered by this federal subsidy.

The federal subsidy ends after one of the following circumstances occurs (whichever comes first):

• Nine months after the first receipt of the subsidy;
• The employee becomes eligible for coverage on another employer’s plan (or Medicare); or
• The maximum period of COBRA/Cal-COBRA coverage ends.

The subsidy plan became effective on the day the federal stimulus package was signed into law.  However, for individuals whose health insurance premium payments are paid on a monthly basis, the plan becomes effective on March 1, 2009.  Although the time period for qualification dates back to September 1, 2008, the federal subsidy does not apply retroactively before the effective date of the law. (continue reading…)

This article was written by Connie Chuang and Gage C. Dungy, attorneys with the labor and employment law firm of Liebert Cassidy Whitmore.

The Federal Stimulus Package Incorporates New Temporary Revisions to COBRA/Cal-COBRA, Including a Federal Subsidy for Qualified Individuals.

Federal law (COBRA – employers with 20 or more employees) and California law (Cal-COBRA – employers with 2-19 employees) provide individuals who have experienced a “qualifying event” the ability to continue their health insurance benefits for a period of up to 36 months by having the covered individual pay up to 102% of the full health insurance premium cost.

A “qualifying event” under COBRA/Cal-COBRA includes, among other reasons, voluntary termination of employment, involuntary termination of employment (except for gross misconduct), and a reduction in hours resulting in a loss of health benefits.

On February 17, 2009, President Barack Obama signed into law a federal stimulus package – also known as the “American Recovery and Reinvestment Act of 2009” – (or, visit Recovery.gov)in an attempt to address the current economic downturn in the United States. (continue reading…)