The IRS Notice released today December 28, 2015 extends the due dates for the 2015 information reporting requirements (both furnishing to individuals and filing with the Internal Revenue Service) for insurers, self-insuring employers, and certain other providers of minimum essential coverage, that is, all Forms 1094 & 1095.
There is no extension for individual tax filings and individual taxpayers/employees may not receive their Forms 1095-B or 1095-C before they file their income tax returns for 2015.
Because of the delay, some employees will not receive their forms until after the April 15 tax filing deadline. The IRS indicates that these employees do not have to file an amended tax return. They should simply keep their forms in a file should they need them later.
Specifically, this notice IRS extends 1094 and 1095 deadlines to:
Form 1095-C – from employer to employees – original deadline was 2/1/16, was extended to 3/31/16
Form 1094-C and 1095-C IRS filing by the employer (paper) original deadline was 2/29/16, was extended to 5/31/16
Form 1094-C and 1095-C IRS filing by employer (electronically) original deadline was 3/31/16, was extended to 6/30/16
Resource:
For a copy of the Notice 2016-4, please click on the link:
Our payroll partners offer the ability to fill out your Forms 1094 & 1095 as well as providing copies to your employees and filing them with the IRS. For additional general Payroll Support and ACA Tax filings 1094 & 1095 please contact us at 855-667-4621.
The Cadillac Tax has been delayed for two years from 2018 to 2020 by President Obama. With this delay, a repeal could be in reach for congressional leaders and business groups who oppose the Cadillac tax. The legislation also suspends the medical device tax until December 31, 2017 and delays the health insurance tax one year.
Whats a Cadillac Tax?
The 40% excise tax applies to the cost of employer health plan coverage exceeding certain threshold amounts, which were originally set for 2018 at $10,200 for individuals or $27,500 for families. These thresholds are indexed and will be higher on the delayed effective date in 2020. The Omnibus also calls for a study on how to determine adjustments to these thresholds to reflect age and gender differences between businesses. While the tax was originally non-tax deductible, the Omnibus changes that treatment and makes the tax deductible. Originally, the Cadillac Tax was pushed back by the behest of Unions to 2018 from the original proposed 2014 date. Most Unions with generous health care packages would not be complaint within that time frame.
Bipartisanship
The bipartisan vote on the Consolidated Appropriations Act was 316 to 113 in the House, and 65 – 33 in the Senate. Many employers, unions, insurers and industry groups have opposed the tax based on concerns around administrative and financial burdens for employers and adverse outcomes for employees.
Medical Device Tax
The tax bill will place a two-year moratorium on the ACA’s 2.3% tax on the sale of medical devices. The tax imposed under this provision will not apply to sales during the period beginning on January 1, 2016, and ending on December 31, 2017. This applies to sales after December 31, 2015.
Health Insurance Industry Tax
The tax bill places a one-year moratorium on the so-called HIT tax (Health Insurance Industry Tax). If passed, the industry tax will not apply for calendar year 2017, which should result in less of an increase to group health insurance premiums for 2017.
So who said Washington bipartisanship was over? There is hope going into the New Years.
HDHP Minimum Annual Deductible (No change from calendar year 2011):
Single – $1,300 (NONE, $1,300 in 2015)
Family – $2,600 (+$100, $2,500 in 2015)
HDHP Out-of-Pocket Maximum:
Single – $6,550 (+$100, $6,450 in 2015)
Family – $13,100 (+$200, $12,900 in 2015)
Age 55 Catch Up Contribution
As in 401k and IRA contributions, you are allowed to contribute extra if you are above a certain age. If you are age 55 or older by the end of year, you can contribute additional $1,000 to your HSA. If you are married, and both of you are age 55, each of you can contribute additional $1,000.
HSA/HDHP Market Growth
HSA holders own the assets in the accounts and can build up substantial sums over time. Enrollment in HSA-compatible insurance plans has increased to 10 million earlier this year, from 1 million in March 2005, according to, America’s Health Insurance Plans (AHIP), a trade group.
HSAs were authorized starting in January 2004. Since then, AHIP has conducted a periodic census of health plans participating in the HSA/HDHP market.
The number of people with HSA/HDHP coverage rose to more than 11.4 in January 2011, up from 10.0 million in January 2010, 8.0 million in January 2009, and 6.1 million in January 2008.
30 percent of individuals covered by an HSA plan were in the small group market, 50 percent were in the large-group market, and the remaining 20 percent were in the individual market.
14% of all workers in the private sector that have access to a Health Savings Account acc. to Bureau of Labor Statistics.
States with the highest levels of HSA/HDHP enrollment were California, Ohio, Florida, Texas, Illinois and Minnesota.
HSA Advantages:
Opportunity to build savings – Unused money stays in your account from year to year and earns tax-free interest. The HSA also gives you an investment opportunity.
Tax-free contributions and earnings – You don’t pay taxes on contributions or earnings.
Tax Free Money allowed for non traditional Medical coverage– As per IRS Publication 502, unused moneys can be used for dental,vision, lasik eye surgery, acupuncture, yoga, infertility etc. Popular Examples
Portability – The funds belong to you, so you keep the funds if you change jobs or retire.
Our overall experience with HSAs have been positive when employer funding is at minimum 50% using either the HSA or an HRA (Health Reimbursement Account-employer keeps unspent money). Traditional plans trend of higher copays and new in network deductibles has also led to the popularity of an HSA.
(Note that a health plan will not fail to qualify as a high deductible health plan merely because it provides certain preventive health services without a deductible, as required under Health Care Reform.)
Is your HSA compliant? Which pre-tax qualified HSA, FSA, HRA spending card is right for you? Please contact our team at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.. Stay tuned for updates as more information gets released. Sign up for latest news updates.
HSA-FSA-HRA: Whats the Difference? Health reimbursement arrangements (HRAs), health savings accounts (HSAs) and health care flexible spending accounts (HFSAs) are generally referred to as account-based plans. That is because each participant has their own account, at least for bookkeeping purposes. Under the tax rules, amounts may be contributed to these accounts (with certain restrictions) and used for health care on a tax-favored basis.
The Patient Protection and Affordable Care Act (PPACA) has added new requirements that affect HRAs and HFSAs. Most HFSAs and HRAs will need to be amended to meet the new PPACA requirements. HSAs generally are not affected by PPACA.
The chart below describes the main characteristics of these types of accounts, and should help you decide which is the best option for your particular situation.
Any employee who is also eligible to participate in a group medical plan sponsored by the employer; retired employees are eligible if most participants are active employees.
Any employee who is covered by a group medical plan sponsored by the employer (or if the employer chooses, by the spouse’s employer); retired employees are eligible (a retiree-only plan does not have to meet the medical coverage requirement).
Any employee who is covered by a high deductible health plan (HDHP), not covered by a plan that is not an HDHP, and not covered by any part of Medicare or eligible to be claimed as a tax dependent; individuals who are receiving Medicare may not contribute to an HSA.
May the employer impose additional eligibility requirements?
Yes, the employer may design the plan to cover whom it wishes as long as it meets the non-discrimination requirements.
Yes, the employer may design the plan to cover whom it wishes as long as it meets the non-discrimination requirements.
An employer may not limit the ability of an eligible employee to contribute to an HSA, but the employer may limit its contributions to employees participating in the HSA designated by the employer.
May an employee contribute to the account?
Yes, up to the lesser of $2,500 (indexed to $2,550 for 2015) or the maximum set by the plan (any carryover does not apply toward the $2,500 cap).
No.
Yes, up to the total contribution limit ($3,350 in 2015 for self-only coverage and $6,650 in 2015 for family coverage); individuals aged 55 or greater may contribute an additional $1,000.
May an employer contribute to the account?
Yes, up to two times the employee’s contribution plus $500.
Yes.
Yes, up to the total contribution limit described above.
May another person or entity contribute to the account?
No.
No.
Yes – anyone may contribute to an HSA, up to the total contribution limit.
Does the spouse’s coverage matter?
No.
An employer may – but is not required to — integrate the HRA with coverage through the spouse’s employer.
Yes. If the employee is covered by a non-HDHP through the spouse (which may include an HFSA or an HRA), the employee will not be eligible to contribute to an HSA.
Is a formal account required?
No, a notational/ bookkeeping account is allowed.
No, a notational/ bookkeeping account is allowed.
Yes, a trust or custodial account is required. Generally this is done at a bank or credit union.
Should a Section 125 cafeteria plan be used?
Yes – the HFSA must be part of a Section 125 plan.
No – an HRA may not be part of a Section 125 plan.
An HSA may, but need not be, part of a Section 125 plan. Including in a Section 125 plan will allow the employee to contribute with pre-tax dollars and allow the employer to meet the Section 125 non-discrimination rules instead of the comparable contribution rules.
What health expenses may be reimbursed?
All medical expenses allowed by Code Section 213 (which includes dental and vision expenses), except long term care services, may be reimbursed. Premiums may not be reimbursed.
All medical expenses allowed by Code Section 213 (which includes dental and vision expenses), may be reimbursed. Health premiums may be reimbursed for group coverage if not reimbursing (directly or indirectly) employee’s pre-tax premium. The cost of premiums for individual policies may not be reimbursed.
All medical expenses allowed by Code Section 213, except premiums (unless for COBRA, long-term care insurance or Medicare supplemental, which may be reimbursed).
May non-health expenses be reimbursed?
No.
No.
Yes, but income taxes and a 20% excise tax will apply.
Are limits on reimbursable expenses allowed?
Yes. An employer may exclude specific expenses if it wishes. It also may design the plan to be a “limited purpose” FSA to interface with an HSA option. Limited purpose FSAs typically only reimburse dental, vision and/or preventive care expenses, retiree expenses, or expenses in excess of the IRS high deductible.
Yes. An employer may exclude specific expenses if it wishes. It also may design the plan to be a “limited purpose” HRA to interface with an HSA option. Limited purpose HRAs typically only reimburse dental, vision and/or preventive care expenses, retiree expenses, or expenses in excess of the IRS high deductible.
No.
Whose expenses may be reimbursed?
The employee, spouse, children under age 27 and tax dependents, if the expense was incurred during the coverage period.
The employee, spouse, children under age 27 and tax dependents, if the expense was incurred while coverage is in effect.
The employee, spouse, children under age 27 and tax dependents – even if the person is not eligible to set up their own HSA – if the expense was incurred after the HSA is established.
How are expenses reimbursed?
Employee submits substantiated expense to claims administrator. May be paper or debit card.
Employee submits substantiated expense to claims administrator. May be paper or debit card.
Employee pays expense from HSA. May be paper or debit card. Employee is responsible for maintaining record to substantiate expense.
May expenses be reimbursed after employment terminates?
COBRA may be elected, generally until the end of the plan year in which termination occurred.
COBRA may be elected. Employer may design plan to allow reimbursement after termination, but employee must be given option to decline that extended coverage.
Yes.
May unused contributions be carried over from year to year?
Generally no; however, plan may be designed to allow carryover of up to $500 into next year or a grace period to incur claims attributable to prior year for up to 2-1/2 months.
Yes, if plan allows.
Yes (the account is the individual’s).
May an employee access funds before they have been contributed?
Yes – under the HFSA rules the employee must have access to the full planned contribution for the year on the first day of the coverage period.
Not required, but plan may be written to allow full access at start of year.
Generally no, although in certain situations the employer may advance contributions.
May planned contributions be changed mid-year?
Generally no. An employee may make a mid-year change only if allowed under the Section 125 change in status rules.
Yes (may require plan amendment and participant communications).
Yes – even if employee is contributing to the HSA through a Section 125 plan.
Do non-discrimination rules apply?
Yes, the Section 125 and the Section 105(h) rules apply.
Yes, the Section 105(h) rules apply.
Yes, either the Section 125 or the comparability rules apply.
May an employee participate in multiple accounts?
May participate in an HSA if HFSA is limited purpose; pays after HRA unless plan provides differently.
May participate in an HSA if HFSA is limited purpose; pays before HFSA unless plan provides differently.
Could also participate in a limited purpose HFSA or HRA.
Are a plan document and SPD required?
Yes (unless a government or church plan).
Yes (unless a government or church plan).
Not for HSA; will need for related HDHP.
Is a 5500 required?
If 100+ participants in the HFSA unless a government or church plan.
If 100+ participants in the HFSA unless a government or church plan.
No.
Is W-2 reporting required?
No, provided the HFSA is an “excepted benefit.”
No (reporting is currently optional).
Employer contributions are reported in Box 12 with code W; do not include in “cost of coverage” reporting under code DD.
Does the PCORI fee apply?
Not if an excepted benefit (if owed, fee is only due on employees, not dependents).
Yes, if HRA is the only self-funded plan using that plan year (fee is only due on employees, not dependents).
No.
Does the health insurance provider fee apply?
No.
No.
No.
Does the TRF apply?
No.
No.
No.
Do contributions apply to Cadillac tax?
Yes (both employer and employee).
Yes.
Yes (employer; probably employee if made through a Section 125 plan).
Do contributions apply toward minimum value determinations?
No.
Yes, if may only be used for cost-sharing (deductible, coinsurance, copays).
Yes.
Do employer contributions apply to affordability determinations?
No.
Yes, if may be used for premiums and/or cost-sharing.
No.
Qualifies as “minimum essential coverage”?
No.
Yes (if provides any medical benefits).
No.
Do HIPAA privacy requirements apply?
Yes.
Yes.
Not to HSA; may apply to related HDHP.
Is a Medicare Part D notice required?
No.
Yes, unless integrated with the Rx coverage.
Not for HSA; will need for related HDHP.
To qualify as an excepted benefit, an HFSA must be offered in conjunction with a group medical plan and the employer’s contribution cannot exceed two times the employee’s pre-tax contribution to the HFSA plus $500.
Beginning in 2014, HRAs must be available only to individuals actually covered by the group medical plan (or the spouse’s group medical plan if the plan provides). Participants must be given the option to decline further HRA reimbursement annually and when their employment terminates.
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4/15/15
This information is general and is provided for educational purposes only and is subject to change. It is not intended to provide legal advice.
You should not act on this information without consulting legal counsel or other knowledgeable advisors.
The people have spoken at least for now and they are saying they are unhappy. The storm clouds over Obmacare has ushered in GOP victories: +7 Senate + 13 House. 47% of those who cast ballots in the midterms said the 2010 health care law, which opened for enrollment a year ago, went too far. On the other hand, 26 percent said the law didn’t go far enough, CNN exit polls reported. Only 22 percent said Obamacare was just about right.
How will GOP use these powerful election gains on Obamacare?
GOP still will not have the needed 60 Senate Seats to repeal the Affordable Care Act. That said, they will now be able to pass budget rules on the legislation since the Courts ruled individual mandate penalty as a “tax”. Reinsurance funds such as Risk corridors could also be on the chopping block. Other examples would be the definition of “full-time” employee taxes on employer penalties (bipartisan support), medical devices & tanning salons etc.
According to Huffington Post article GOP-Controlled Congress Expected To Try To Repeal, Weaken ACA while Republicans have been “chomping at the bit to repeal Obamacare” since it was signed into law in 2010, even a GOP-controlled Congress is unlikely to undo the law. However, that won’t stop Republicans from forcing at least one vote on repeal. President Obama “would then swiftly veto it, but not before Democratic senators were forced to cast a vote very directly in support of Obamacare, which remains generally unpopular.” Additionally, the GOP might take aim at several provisions of the ACA, such as the individual mandate, the employer mandate, the Independent Payment Advisory Board, and the medical device tax. Some Senate Democrats would likely join them in eliminating or amending some of these measures.
A Democrat President governing with both Houses going GOP may not be so bad after all. The successful Clinton Presidency had to contend with the same balancing act. Two decades later, the key question is can both branches find a common ground and a productive working relationship?
For specific details on all available health plans in 2015, contact our team at Millennium Medical Solutions Corp (855)667-4621. We work in coordination with Navigators to assist with medicaid, CHIP Child Health Plus, Family Health Plus and Medicare Dual Eligibles. We have Spanish, Russian, and Hebrew speakers available. Quotes can also be viewed on our site.
HDHP Minimum Annual Deductible (No change from calendar year 2011):
Single – $1,300 (up from $1,250 in 2014)
Family – $2,600 (up from $2,500 in 2014)
HDHP Out-of-Pocket Maximum:
Single – $6,450 (up from $6,350 in 2014)
Family – $12,900 (up from $12,900 in 2014)
HSA/HDHP Market Growth
HSA holders own the assets in the accounts and can build up substantial sums over time. Enrollment in HSA-compatible insurance plans has increased to 10 million earlier this year, from 1 million in March 2005, according to, America’s Health Insurance Plans (AHIP), a trade group.
HSAs were authorized starting in January 2004. Since then, AHIP has conducted a periodic census of health plans participating in the HSA/HDHP market.
The number of people with HSA/HDHP coverage rose to more than 11.4 in January 2011, up from 10.0 million in January 2010, 8.0 million in January 2009, and 6.1 million in January 2008.
30 percent of individuals covered by an HSA plan were in the small group market, 50 percent were in the large-group market, and the remaining 20 percent were in the individual market.
14% of all workers in the private sector that have access to a Health Savings Account acc. to Bureau of Labor Statistics.
States with the highest levels of HSA/HDHP enrollment were California, Ohio, Florida, Texas, Illinois and Minnesota.
HSA Advantages:
Opportunity to build savings – Unused money stays in your account from year to year and earns tax-free interest. The HSA also gives you an investment opportunity.
Tax-free contributions and earnings – You don’t pay taxes on contributions or earnings.
Tax Free Money allowed for non traditional Medical coverage– As per IRS Publication 502, unused moneys can be used for dental,vision, lasik eye surgery, acupuncture, yoga, infertility etc. Popular Examples
Portability – The funds belong to you, so you keep the funds if you change jobs or retire.
Our overall experience with HSAs have been positive when employer funding is at minimum 50% using either the HSA or an HRA (Health Reimbursement Account-employer keeps unspent money). Traditional plans trend of higher copays and new in network deductibles has also led to the popularity of an HSA.
Is your HSA compliant? Which pre-tax qualified HSA, FSA, HRA spending card is right is right for you? Please contact our team at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.. Stay tuned for updates as more information gets released. Sign up for latest news updates.
(Note that a health plan will not fail to qualify as a high deductible health plan merely because it provides certain preventive health services without a deductible, as required under Health Care Reform.)
