The NYS 2020 Rate Requests filings were released today. The total weighted average increases were a modest 8.4% for Individual Market and 12.0% Small Group Market. Final rate approval expected early August. The past reductions averaged 10-50%.
The lower requests reflect a stabilizing ACA market. Insurers’ financial performance improved nationwide last year to its highest level since the passage of the law. The average medical-loss ratio, which represents the portion of premiums spent on medical claims and quality improvement, was 70% last year in the individual market nationwide. That led to plans paying $800 million in rebates for failing to meet requirements on medical spending, according to the Kaiser Family Foundation.
This early filing request deadline request requirement is not an Obamacare requirement. As per NY State Law carriers are required to send out notices of rate increase filings to groups and subscribers.These are simply requests and the state’s Department of Financial Services has authority to modify the final rates. But they are the first indication of what New Yorkers can expect when shopping for health insurance on the individual marketplace at the end of this year.
Background:
By contrast last year’s NYS 2019 Rate Request early filing request were higher at 7.5% small group and an astounding 24% for individuals. The NYS final August 2020 rate approval are expected to be lower. For example, the final filing rates were approved NYS 2019 Final Rates Approved at a modest 3.8% small group and 8.6% for individuals. Using these past figures one projects a 2019 Final Rates of 5% small groups and 8% individuals.
A spokeswoman for the state Health Plan Association said insurers have worked to control costs, which have been driven up by rising prescription drug prices and state mandates that require coverage of certain services.
“Our member health plans have been committed to making health care more affordable, working hard to rein in rising health care costs and contain their own costs,” she said. “The proposed premium rate requests are reasonable, reflecting the cost of care.”
In the small-group market, insurers asked for a weighted average 12% boost in 2020 after they were granted a 3.8% bump for this year. UnitedHealthcare’s Oxford, which controls more than half of the small-group market, asked for a 15.9% increase, which was the highest among all plans. Oscar, at 15.8%, was close behind. Notably, Healthfirst has requested a 5% reduction.
Conclusion
Defined Contribution Choice: Instead, the correct approach for a small business in keeping with simplicity is a defined contribution model using a Private Exchange. This is a true defined contribution empowering employees with the choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as THE RISK OUTLINED ABOVE ARE HIGHER FOR INDIVIDUAL MARKETS THAN SMALL GROUP PLANS.
To be clear: These trends affect a small subset of the insurance market—non-group plans that cover less than 2 percent of the population. Many qualify for tax credits that lower their net costs and reduce or eliminate the impact of year-to-year rate increases.However, non-group customers with incomes above 400% of the poverty level ($48,560 for a single adult) get no subsidy—and feel the full brunt of any hikes.
Resource
You may view the NYS 2019 Rate Requests DFS press release, which includes a recap of the increases requested and approved by clicking here.
For a custom analysis detailing YOUR upcoming 2019-2020 renewal please 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.
Governor Murphy announced that the state will seek to run its own ACA marketplace in 2021 to allow greater control over its health insurance market. New Jersey took this step to “protect New Jersey from actions taken by the Trump Administration to roll back the hard-fought protections afforded by the ACA,” according to Governor Murphy.
Running a state-based exchange will give the state more control over different aspects of the market. These aspects include having control over the open enrollment period, having more access to data, the ability to conduct targeted outreach, and allowing user fees to fund exchange operations, consumer assistance, outreach and advertising.
New Jersey has already passed a few laws that have decreased average rates by 9.3% in 2019. The laws include an individual mandate, a reinsurance program, and legislation that protects consumers from surprise balance billing. The individual mandate’s penalty is related to the average cost of a bronze plan in New Jersey, and will be assessed on state tax returns. The revenue collected from this penalty will go into state funding for the reinsurance program. The reinsurance program was approved by CMS in August 2018. The reinsurance program reimburses insurers for 60 percent of the cost of claims over $40,000, up until claims reach $215,000.
New Jersey is also proposing codifying major ACA provisions into state law. The protections the Murphy Administration is looking into codifying include:
prohibiting preexisting conditions exclusions
requiring dependent coverage to age 26
requiring coverage of Essential Health Benefits
prohibiting lifetime and annual limits
requiring coverage without cost sharing for preventative services
NJ’s announcement that they will run a state-based exchange comes at a time when President Trump’s Administration has declared that it backs a full invalidation of the ACA. This position furthers the earlier decision by the administration when the Justice Department argued that there were only grounds to strike down the ACA’s consumer protections.
If you would like to know more about MMS Corp and pre-tax benefits for your company, contact us today.
NYS has approved 2019 Final Rates last Friday. Small group rates will increase 3.8% and 8.6% for individuals.
As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2019 Rate Requests. Despite only 3 months of mature claims data experience for 2018 health insurers’ original requests were noticeably below average 7.5% for small group and 24% for individuals. Ultimately NYS reduced this request substantially by approximately 50%.
Experts are concerned over the long term effects. Example, the Individual mandate was removed last December by Presidential order. Without the Mandate anyone can drop insurance without penalty. A comparable take away for similar auto insurance industry would be something like this -Drivers ought not be mandated to buy auto insurance as its a profit scheme by Insurers. While a popular decision this will hardly bend the curve long term and reduce competition. Furthermore, the new order of Selling Across State lines makes NYS most unwelcoming.
OTHER STATES
Insurers have been filing to sell Obamacare plans that will go into effect in 2019, and in some states they appear to be pricing in for the fact that the mandate is going away next year. Other states are seeing mild increases, but that is in part because they saw significant hikes for the previous year.
Insurers have concluded that fewer people will enroll without the mandate than otherwise, so in some places they are pricing their plans higher based on the assumption that sicker people will be left behind, which will increase medical costs for those left. It is well worth pointing out that in recent years the loss federal risk reinsurance corridor funds account for 5.5 percent of the rate increase.
How are neighboring States doing?
In NJ, not that bad. Last year the average increase were 5.5% for small groups and some popular plans such as Horizon Blue Cross Blue Shield’s OMINA increasing only 4.8% increase. This year the increase is only 5.2. Other insurers offering EPO and HMO plans in the individual market for 2019 include Oscar Health and Oxford Health Plans.
With individual mandate repeal fewer people will buy health insurance raising the prices for those who do. NJ Banking and Insurance Department officials said premium prices would have increased, on average, by 12.6 percent.
For CT market, on the other hand, things are much worse at least for the individual marketplace with average 25% rate increases last year. The 2019 proposed rate increases for both the individual and small group market are, on average lower, than last year: The proposed average small group rate increase request is a 10.22 percent and ranges from -5.0 percent to 21.1 percent. This compares to the average increase request of 18.06 percent requested last year.The proposed average individual rate increase request is 12.3 percent and ranges from -10.9 percent to 31.0 percent. This compares to the average increase request of 25.51 percent requested last year.
Final plan rates in New Jersey & CT will be finalized and released in the fall, state officials said. ACA open enrollment begins Nov. 1
Trend: Trend is a factor that accounts for rising health care costs, including the cost of prescription drugs, and the increased demand for medical services.
Uncertainty in Washington:
Removal of penalty for individual mandate: The elimination of the penalty means that individuals who are typically younger and healthier would have no inducement to participate in the insurance pool, which could further destabilize the market. Lack of participation shrinks the pool and increases the cost of insurance to the remaining members.
Short-duration health plans and Association Health Plans: Still pending are final federal regulations on non-ACA compliant short-duration plans, which may have implications for the ACA risk pool. Also, Connecticut along with other state insurance regulators, are awaiting clarification from the federal government on new federal regulations allowing association health plans, which could further shrink the ACA risk pool.
A bipartisan group of congressional representatives has discussed an agreement to extend and guarantee the payments, but it’s unclear whether they could do so by the new filing deadline of Sept. 5. A lawsuit filed by Congress against the Obama administration to challenge the payments is still pending. In addition, Trump has repeatedly threatened to withhold payments to insurers that reduce cost-sharing – deductibles, copays and coinsurance – paid by low-income customers. More than half of New Jersey’s marketplace customers receive that assistance, and without it, most would be unable to afford coverage.
Finally, a tax on health insurance premiums has been reinstated in 2018 after a one-year “tax holiday” approved by Congress for 2017. That contributed 2.3 percent to the rate hikes that insurers requested for 2019 and for 2019
SMALL GROUP MARKET VS. INDIVIDUAL MARKET
Importantly, small group market is still more advantageous than individual markets unless one gets a sizable low-income tax credit. Overall, about 350,000 individual plan consumers will be affected by the price hike, while more than a million users will be hit by higher small group fees. Last year, Blue Cross Blue Shield released a study showing Obamacare user costs were 22 percent higher than people with employer-sponsored health plans, while UnitedHealthplans to exit most Exchanges see – Breaking: Oxford Exits Metro Indiv & Oxford Liberty HMO 2017.
The correct approach for a small business in keeping with simplicity is a Private Exchange and with our large buying group PEO partnerships. This is a true defined contribution empowering employees with a choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as the risk are lower for small group plans than individual markets.
Learn how a Private Exchange and our PEO Partnership can help your group please contact us at info@medicalsolutionscorp.com or (855)667-4621.
Last Friday, June 1, 2018, the NYS 2019 Rate Requests filings were released. Great news for SMB! The total weighted average increases were a modest 7.5% small groups but 24% for the individual market. This early filing request deadline request requirement is not an Obamacare requirement. As per NY State Law carriers are required to send out notices of rate increase filings to groups and subscribers.
These are simply requests and the state’s Department of Financial Services has authority to modify the final rates. But they are the first indication of what New Yorkers can expect when shopping for health insurance on the individual marketplace at the end of this year. The news comes as insurance companies across the country brace consumers for another year of large rate hikes, owing in part to the composition of the individual market, and in part to the uncertainty over the future of the law under the Trump administration.
Background:
By contrast last year’s NYS 2018 Rate Request early filing request were higher at 11.5% small group but much lower 16.6% for individuals. The NYS final August 2018 rate approval are expected to be lower. For example, the final filing rates were aproved NYS 2018 Final Rates at 9.3% small group and 13.9% for individuals. Incidentally, the NYS 2017 Rates final rates were 8.3% small group and 12.3% for individuals. Using these past figures one projects a 2019 Final Rates of 6.5% small groups and 19% individuals.
With only 3 months of mature claims in 2018 to work of off Insurance Actuaries have little experience to predict accurate projections. Simply put the less credible information presented to actuarial the higher the uncertainty and higher than the expected rate increase. The national rate trend, however, has been much higher than in past years due to higher health care costs and the loss of Federal reinsurance fund known as risk reinsurance corridor.
Summary of 2019 Requested Rate Actions
Individuals:
Individual rates are expected to be higher than the small group market. The national rate trend, however, has been much higher than in past years due to higher health care costs Like other states throughout the nation, the 2019 rate of increase for individuals in New York is higher than in past years partly due to the termination of the federal reinsurance program. The loss of the program’s aka federal risk reinsurance corridor funds accounts for 5.5 percent of the rate increase.
The single biggest justification offered by insurers for the requested increases is the recent repeal of the individual mandate penalty –Tax Reform Bill Includes Repeal of Individual Mandate Beginning in 2019. The individual mandate, a key component of the Affordable Care Act, helped mitigate against dramatic price increases by ensuring healthier insurance pools. Insurers have attributed approximately half of their requested rate increases to the risks they see resulting from its repeal. Without the federal action, the average requested rate increase would be 12.1%. As DFS reviews all of the submissions, we will continue to ensure that any rate increases are fully and actuarially justified by appropriate medical cost increases and are not inadequate, excessive or unfairly discriminatory, in accordance with New York law.
Small Groups:
Most encouraging to see the average rate requests for the small group market reflect the increased stability of that market in New York State. The combination of 2-50 and 51-100 market underscores the stability for msall bsuinesses under 50 employees. Prior to the NYS regulatory combination, the 2-50 market was running an average 12-13% trend.
The Obamacare health insurance tax, aka The HIT, is responsible for approximately 2.5%. Whiel the HIT moratorium was approved it had indeed come back last year. The total projection is $14 Billion. Notably, Empire Blue Cross has filed a modest 6% increase as their portfoliio is running stable. Additionaly, Oscar’s inbdustry low 3% filing is practially at break-even considering the HIT.
THE THREE R – RISK CORRIDOR, RISK ADJUSTMENT & REINSURANCE designed to mitigate the adverse selection and risk selection. The problem, according to many insurance companies, is that the formula is flawed, and CareConnect executives have consistently complained that they are at an unfair disadvantage. The Cuomo administration has taken steps to ameliorate some of those problems, giving the DFS the authority to essentially overrule the federal numbers. In its first-quarter financial report, executives made clear that the risk adjustment penalty was a threat to its business.
Company Name
2019 Requested Rate Change
Aetna Life
16.2%
CDPHP
6.7%
CDPHP UBI
6.1%
Crystal Run Health Insurance Company
11.5%
Crystal Run Health Plan, LLC
12.5%
Emblem
12.0%
Empire Healthchoice Assurance
6.0%
EmpireHealthchoice HMO
5.2%
Excellus*
3.8%
Healthfirst Health Plan, Inc.
21.0%
Healthfirst Insurance Company, Inc.
7.0%
Healthnow New York
-0.1%
IHBC*
3.8%
MetroPlus*
4.7%
MVP Health Plan
7.0%
MVP Health Service Corp*
10.3%
Oscar
3.0%
Oxford Health Insurance Inc*
8.3%
UnitedHealthcare Ins Company of New York
7.2%
Weighted average:
7.5%
Conclusion
Defined Contribution Choice: Instead, the correct approach for a small business in keeping with simplicity is a defined contribution model using a PrivateExchange. This is a true defined contribution empowering employees with the choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as THE RISK OUTLINED ABOVE ARE HIGHER FOR INDIVIDUAL MARKETS THAN SMALL GROUP PLANS.
To be clear: These trends affect a small subset of the insurance market—non-group plans that cover less than 2 percent of the population. Many qualify for tax credits that lower their net costs and reduce or eliminate the impact of year-to-year rate increases.However, non-group customers with incomes above 400% of the poverty level ($48,560 for a single adult) get no subsidy—and feel the full brunt of any hikes.
Resource
You may view the NYS 2019 Rate Requests DFS press release, which includes a recap of the increases requested and approved by clicking here.
For a custom analysis detailing YOUR upcoming 2018-2019 renewal please 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 onour site.
NYS has approved 2018 Final Rates last week. Small group rates will increase 9.3% while the individual rate average increase will be 13.9%.
As per NY State Law carriers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2018 Rate Requests. With only 3 months of mature claims, experience for 2017 health insurers’ requests are historically above average. Ultimately the State reduces this request substantially. This year, however, NYS acknowledged that medical costs increased, citing a 7-percent average increase on the individual market and an 8.5-percent increase on the small group market. The administration also acknowledged drug prices have impacted insurers, pointing specifically to blockbuster drugs for Hepatitis C.
OTHER STATES
The national rate trend, however, has been much higher than in past years due to higher health care costs Like other states throughout the nation, the 2017 rate of increase for individuals in New York is higher than in past years partly due to the termination of the federal reinsurance program. The loss of the program’s a.k.a. federal risk reinsurance corridor funds account for 5.5 percent of the rate increase.
How are neighboring States doing? In NJ, not that bad. According to a review of filings made public last week the expected rate increase will likely be half. Example: Horizon Blue Cross Blue Shield requested a 4.8% increase on their OMINA Plans. For CT market, on the other hand, things are much worse at least for the individual marketplace with average 25% rate increases.
While the individual mandate is still the law, Washington has made it clear that they aren’t going to enforce the mandate. That means fewer people will buy health insurance raising the prices for those who do.
A bipartisan group of congressional representatives has discussed an agreement to extend and guarantee the payments, but it’s unclear whether they could do so by the new filing deadline of Sept. 5. A lawsuit filed by Congress against the Obama administration to challenge the payments is still pending. In addition, Trump has repeatedly threatened to withhold payments to insurers that reduce cost-sharing – deductibles, copays and coinsurance – paid by low-income customers. More than half of New Jersey’s marketplace customers receive that assistance, and without it, most would be unable to afford coverage.
Finally, a tax on health insurance premiums is due to be reinstated in 2018 after a one-year “tax holiday” approved by Congress for 2017. That contributed 2.3 percent to the rate hikes that insurers requested last year.
SMALL GROUP MARKET VS. INDIVIDUAL MARKET
The new premium hikes ranged from as little as .8% percent for Hudson Valley’s Crystal Run Health Insurance Company to a whopping 20.4% percent increase for Albany region’s CDHP. Importantly, small group market is still more advantageous than individual markets unless one gets a sizable low-income tax credit.
Overall, about 350,000 individual plan consumers will be affected by the price hike, while more than a million users will be hit by higher small group fees. Last year, Blue Cross Blue Shield released a study showing Obamacare user costs were 22 percent higher than people with employer-sponsored health plans, while UnitedHealthplans to exit most Exchanges see – Breaking: Oxford Exits Metro Indiv & Oxford Liberty HMO 2017.
The correct approach for a small business in keeping with simplicity is a Private Exchange and with our large buying group PEO partnerships. This is a true defined contribution empowering employees with a choice of leading insurers offering paperless technologies integrating HRIS/Benefits/Payroll. Both employee and employers still gain tax advantage benefits under the business. Also, the benefits, rates and network size are superior under a group plan as the risk are lower for small group plans than individual markets.
* All amounts are rounded to the nearest 1/10.
**Indicates that the company makes products available on the “New York State of Health” marketplace.
Learn how a Private Exchange and our PEO Partnership can help your group please contact us at info@medicalsolutionscorp.com or (855)667-4621.
President Trump signed an Executive Order on Jan 20 Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal. As a practical matter, he can’t repeal it “line-by-line on day one” of his Presidency. So he did the next best thing: sign an Executive Order.
While lawmakers work on a repeal and replacement plan, here are 5 things you should know. The executive order will:
End the individual mandate.
Expand Medicaid waivers and provide states more flexibility to implement healthcare programs.
Encourage the creation of interstate insurance markets to “the maximum extent permitted by the law.”
Remove ACA taxes, including some placed on health insurance and pharmaceutical companies, in addition to waiving PPACA taxes, fees, and penalties.
Grant leaders of the Department of Health and Human Services (HHS) and other agencies to exercise greater discretion. This includes the ability to waive, defer, or grant an exception to any provision that would impose a fiscal burden on a state or place a financial or regulatory burden (cost, fee tax, penalty) on individuals, families, healthcare providers, and patients.
We will soon know whether the Executive Order is more symbolic or has practical effects. Employers should continue to comply with the provisions in current law, until official guidance provides otherwise.
On Tuesday The 21st Century Cures Act Passed and signed by President Obama. The ‘Act” has numerous components but the the greatest impact on small business is the HRA ( health reimbursement arrangement) component.
The Cures Act allows small employers to reimburse individual health coverage premiums up to a dollar limit through HRAs called “Qualified Small Employer Health Reimbursement Arrangements” (QSE HRA). This provision will go into effect on January 1, 2017.
The IRS previously limited Employer reimbursement of individual premiums in light of the requirements of the Patient Protection and Affordable Care Act (ACA). For many years, employers had been permitted to reimburse premiums paid for individual coverage on a tax-favored basis, and many smaller employers adopted this type of an arrangement instead of sponsoring a group health plan. However, these “employer payment plans” are often unable to meet all of the ACA requirements that took effect in 2014, and in a series of Notices and frequently asked questions (FAQs) the IRS made it clear that an employer may not either directly pay premiums for individual policies or reimburse employees for individual premiums on either an after-tax or pre-tax basis. This was the case whether payment or reimbursement is done through an HRA, a Section 125 plan, a Section 105 plan, or another mechanism.
Who is eligible?
The Cures Act now allows employers with less than 50 FT employees (under ACA counting methods) who do not offer group health plans to use QSE HRAs that are fully employer funded to reimburse employees for the purchase of individual health care.
What are the funding limits?
The reimbursement cannot exceed $4,950 annually for single coverage, and $10,000 annually for family coverage. The amount is prorated by month for individuals who are not covered by the arrangement for the entire year. Practically speaking, the monthly limit for single coverage reimbursement is $412, and the monthly limit for family coverage reimbursement is $833. The limits will be updated annually.
Impact on Individual Subsidy Eligibility?
For any month an individual is covered by a QSE HRA/individual policy arrangement, their subsidy eligibility would be reduced by the dollar amount provided for the month through the QSE HRA if the QSE HRA provides “unaffordable” coverage under ACA standards.
Employees applying for coverage on federal or state health insurance exchanges will need to disclose the amount that the employer is making available via the HRA. That amount will be used by the exchange in calculating whether an employee’s household income exceeds ACA affordability thresholds (2017 – 9.69 % of household income), as well as determining subsidy amounts for those that meet the eligibility requirements. Those employees eligible for a subsidy will have their monthly amount reduced by the monthly HRA amount available through their employer.
If the QSE HRA provides affordable coverage, individuals would lose subsidy eligibility entirely. Caution should be taken to fully education employees on this impact.
COBRA and ERISA Implications?
QSE HRAs are not subject to COBRA or ERISA.
Annual Notice Requirement?
The new QSE HRA benefit has an annual notice requirement for employers who wish to implement it. Written notice must be provided to eligible employees no later than 90 days prior to the beginning of the benefit year that contains the following:
A statement to the employee that it is their responsibility to provide the federal or state health insurance exchangewith the amount being provided in HRA funds, as this amount will be used by the exchange when calculating need based premium assistance.
A statement that if the employee is not covered by minimum essential coverage for any month of the tax year, they could be subject to a penalty under the Individual Mandate provisions of the ACA.
Failure to provide this notice will result in a penalty to the employer of $50 per applicable employee, up to a $2,500 maximum per calendar year. Transition relief is available for plans starting in the first quarter 2017 – they will have until April 1, 2017 to provide notices to employees.
Record-keeping, IRS Reporting?
Because QSE HRAs can only provide reimbursement for documented healthcare expense, employers with QSE HRAs should have a method in place to obtain and retain receipts or confirmation for the premiums that are paid with the account. Employers sponsoring QSE HRAs would be subject to ACA related reporting with Form 1095-B as the sponsor of MEC. Money provided through a QSE HRA must be reported on an employee’s W-2 under the aggregate cost of employer-sponsored coverage. It is unclear if the existing safe harbor on reporting the aggregate cost of employer-sponsored coverage for employers with fewer than 250 W-2s would apply, as arguably many of the small employers eligible to offer QSE HRA’s would have fewer than 250 W-2s.
Individual Premium Reimbursement Prohibitions
Outside of the exception for small employers using QSE HRAs for reimbursement of individual premiums, all of the prior prohibitions from IRS Notice 2015-17 remain. There is no method for an employer with 50 or more full time employees to reimburse individual premiums, or for small employers with a group health plan to reimburse individual premiums. There is no mechanism for employers of any size to allow employees to use pre-tax dollars to purchase individual premiums. Reimbursing individual premiums in a non-compliant manner will subject an employer to a penalty of $100 a day per individual they provide reimbursement to, with the potential for other penalties based on the mechanism of the non-compliant reimbursement.
Contact Us Now For analysis if this works for your small business? Please contact our payroll and reimbursement team on your HR/Payroll/Compliance needs at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.
DEADLINE IS FAST APPROACHING Day(s) : Hour(s) : Minute(s) : Second(s) FLSA Background New FLSA Overtime Rules. The DOL issued final rules under the Fair Labor Standards Act (FLSA) that will substantially increase the minimum salary requirement for certain exempt...
•Change in tax treatment for over-age dependent coverage •Accounting impact of change in Medicare retiree drug subsidy tax treatment •Early retiree medical reinsurance •Medicare prescription drug “donut hole” beneficiary rebate •Break time/private room for nursing moms
•No lifetime dollar limits on essential health benefits
•Restricted annual dollar limits on essentail health benefits, phased amounts until 2014
•No pre-existing condition limitations for enrollees up to age 19 and no rescissions
•No health FSA/HRA/HSA reimbursement for non-prescribed drugs
•Increased penalties for non-qualified HSA distributions
•Additional standards for new or “non-grandfathered” health plans, including preventive care in network with no cost-sharing appeal and external review, provider choice and non-discrimination provisions for insured plans
•Income-based Medicare Part D premiums Pharmaceutical importers and manufacturers’ fees start
•Medicare, Medicare Advantage benefit and payment reforms
•Insurers subject to medical loss ratio rules
•Employers to distribute uniform summary of benefits and coverage (SBC) to participants (deadlines vary with group of recipients)
•60-day advance notice of mid-year material modifications to SBC content
•Form W-2 reporting for health coverage (track in 2012 for W-2 form provided in early 2013)
•Coverage for additional women’s preventive care services
•$2,500 per plan year health FSA contribution cap (plan years on or after January 1, 2013)
•Comparative effectiveness group health plan fees first due
•Annual dollar limits on essential health benefits cannot be lower than $2 million
•Employers notify employees about exchanges •Medical device manufacturers’ fees start •Higher Medicare payroll tax on wages exceeding $200,000/individual; $250,000/couples
•Change in Medicare retiree drug subsidy tax treatment takes effect •Health Insurance exchanges initial open enrollment period
•Health insurance exchanges
•Individual coverage mandate
•Financial assistance for exchange coverage of lower-income individuals
•States Medicaid expansion (possibly only some states)
•Employer shared responsibility
•Dependent coverage to age 26 for any covered employee’s child
•No annual dollar limits on essential health benefits
•No pre-existing condition limits
•No waiting period over 90 days
•Wellness limit increase allowed
•Health insurance industry fees
•Additional standards for non-grandfathered health plans, including limits on out-of-pocket maximums, provider nondiscrimination, and coverage of routine medical costs of clinical trial participants
•Small market, non-grandfathered insured plans must cover essential health benefits with limited deductibles (initially $2,000/individual, $4,000/family), using a form of community rating
•Insurers must apply guaranteed issue and renewability to non-grandfathered plans of all sizes
•Auto enrollment sometime after 2014
•Temporary reinsurance fees first due in late 2014/early 2015
•Additional employee-specific reporting and disclosure of 2014 coverage
•40% excise tax on “high cost” or Cadillac coverage
A fun visual transit infographic highlighting the benefits of public transportation by Credit Donkey. With NYC Transit Benefit Mandate for 2016 Employers with 20 or more full-time employees in New
York City must sponsor for full-time employees a pre-tax qualified transportation benefit program (excluding parking subsidies). It would mean that an estimated 450,000 more New York City-based employees will have access to the commuter tax break. That’s in addition to the 700,000 who already get the break.
Despite the requirement this visual highlights the inherent win-win of riding public transit. Furthermore, Employers exempt form the mandate such as smaller Employer or outside NYC ought to consider this as a benefit per at work. IMPORTANT: The popularity of the benefit for Employers have been a budget neutral perk that is offset by payroll tax savings. After all, the Employer is not required to fund the Transit/Parking only sponsor the plan.
Tax Savings:
The way the pretax commuter tax break works is employees exclude their transit commuting costs from their taxable wages up to the $130 monthly limit (there’s a separate $250 monthly limit for parking). If you’re in the 40% combined federal and state bracket and you put away $130 a month pretax salary to use for transit, you save $624 a year. This also saves the employer money because the employer doesn’t pay payroll taxes of 7.65% on every dollar set aside by employees pre-tax.
$130 transit maximum
EE Savings @ 40% tax bracket = $624/year
ER Savings (FICA) = $119/year
$250 parking maximum
EE Savings @ 40% tax bracket = $1,200/year
ER Savings (FICA) = $230/year
Next Step:
If you want your employer to add commuter benefits—so you’re eligible for the tax break–petition your HR department, and specifically ask for the pretax commuter benefits program (why wait until 2016?). To learn more about the NYC Transit Mandate, please visit the official website of the City of New York.
To start a Transit benefit within 24 hours contact us today (855) 667-4621 or info@medicalsolutionscorp.com. Ask us about our enterprise payroll.
the pretax commuter tax break works is employees exclude their transit commuting costs from their taxable wages up to the $130 monthly limit (there’s a separate $250 monthly limit for parking). If you’re in the 40% combined federal and state bracket and you put away $130 a month pretax salary to use for transit, you save $624 a year. This also saves the employer money because the employer doesn’t pay payroll taxes of 7.65% on every dollar set aside by employees pre-tax.