As 2014 comes to an end and 2015
begins the “play or pay” period begins for employers. Here is a brief checklist of what you need to
get started. Of course, the complexity
of the PPACA is astonishing and the list provided should only be used to gather
documents before consulting with Ratliff Law Firm. First, the employer needs to make a list of
employees and their status. Employers
must remember that under the PPACA full-time is considered thirty (30) hours
per week and not the traditional forty (40) hours per week. The second step the employer should take is
determining the IRS penalty if the employees are not offered coverage. Third, in most situations, the required
reporting of data is not due until 2016.
With that said, employers need to make sure they are capable of
providing such information to the IRS in 2016.
Employers would not introduce a product, skillset, etc., without prior
preparation so why would they report to the IRS without proper legal
planning? Fourth, employers must
distribute 1512 Notices to all employees.
The 1512 Notice allows employees to know whether or not they will be
receiving coverage from their employer.
Last, a combination of the other steps will adequately prepare employers
for a potential IRS assessment. This is
not intended to be legal advice and does not form an attorney-client
relationship with any reader.
Monday, December 22, 2014
Friday, December 19, 2014
Will or Trust…The (Past) Million Dollar Question
Several decades
ago only the rich and powerful used trusts to help with tax liability. While this is still done today, trusts are a
great tool for everyone not matter how large or small their estate. A Last Will and Testament does not directly
allow for the passing of items such as retirement accounts (IRA, 401K, etc.)
and life insurance policies; those items pass outside of probate. However, with a Revocable Living Trust you
can direct that your retirement accounts, life insurance policies, and any
other item you legally own pass into your trust. Other advantages include but are not limited
to: privacy of your estate, cost efficiency for your family, and the likely
avoidance of probate court. A trust document
does not become public record upon your death, but a Last Will and Testament
does once it is filed with the Clerk and Master. Don’t leave your family wasting time and
money in Probate Court. Trust us today. This is not intended to be legal advice and
does not form an attorney-client relationship with any reader.
Tuesday, December 16, 2014
Haslam announces Insure Tennessee Plan
Governor Haslam announced yesterday his Insure Tennessee plan,
a two year pilot program to provide health care coverage to Tennesseans who
currently do not have access to health insurance or have limited options. This
plan will need to be approved
by the state legislature under HB937, with a
special session expected as soon as January 2015. Insure Tennessee would offer two
main options of coverage for individuals below 138 percent of poverty ($16,100
for an individual and $27,300 for a family of three). Tennesseans 21 to 64
years old will be offered a choice of the Health Incentives Plan or the
Volunteer Plan.
The Volunteer Plan provides a health insurance voucher to
participants that would be used to participate in their employer’s health
insurance plan, valued at slightly less than the average TennCare per-enrollee
cost. The administration expects half of the newly eligible would qualify as it
is estimated that half of this population is employed but simply cannot afford
the employer’s group plan.
Participants in the Healthy Incentives Plan may choose to
receive coverage through a redesigned component of the TennCare program, which
would introduce Health Incentives for Tennesseans (HIT) accounts, modeled after
Health Reimbursement Accounts (HRAs), which can be used to pay for a portion of
required member cost-sharing. The thinking here is that having participants
contribute towards their health care costs through premiums and co-pays will
encourage more efficient use of the coverage. HIT accounts attempt to strike a
balance between off-setting costs for hospitals associated with indigent care
by expanding coverage, on the one hand, and curbing spending on the participant
side through cost-sharing measure (premiums and co-pays) on the other. Additionally, the HIT
counts will build value in correlation with preventive services received. While
the details remain unclear, essentially a participant would increase the
value of her HIT for every preventive service, such as a screening, thus
off-setting cost to that participant.
The Haslam administration has received approval from HHS for
this program. It would be the first of its kind among the states. The unique
combination of cost-sharing and incentives for preventive care is certainly a
creative solution to a difficult problem. It will be exciting to watch the
legislature debate this unique plan in 2015.
Monday, December 15, 2014
PPACA for 2014 and what to expect for 2015
It is a busy time indeed for health insurance professionals
and employee benefits attorneys! I bring to you the following as a
summary regarding PPACA for 2014 and what to expect for 2015. I believe
the article linked below is good in its entirety, however, I wanted to bring
the following especially to your attention.
First, consider the following by Jessica Waltman, senior
vice president of government affairs at the National Association of Health
Underwriters in Washington, D.C.:
“…You have some employers who are compliant and other
employers working on becoming compliant. They have to document. It's not
just ‘I don't have to do it this year’; it's ‘I have to fill out and document
it.’ A lot of employers were already offering coverage, but the new
systems in place are a compliance burden that may be as much work as offering
coverage in the first place.” [Emphasis Added]
The “documentation” Ms. Waltman speaks about is one of best
practices rather than, for example, a single IRS form. I compare the
documentation to a level above what you would retain for your income tax
records (after all, this is a tax, yet on the other hand it is also
administered by several other bureaucracies, including the Department of
Labor). Therefore, the chance for an audit is at least two-fold.
Please keep in mind too that one should not put their broker in the position of
attorney, and vice-versa. That is, certain of the documentation must be
prepared by an attorney, and certain provided by the broker. I say this
to protect the broker from giving you legal and tax advice, because their
Errors and Omissions insurance normally won’t cover that, you won’t have
compliant documents, and both parties lose. Finally, I have reviewed
several different software programs to track ACA requirements, where chain of
custody is of utmost importance, therefore if you are interested in learning
about this please contact us. We can make a recommendation.
Second, the following is also instructive:
“What's happening is PPACA is just loaded with fear-inducing
issues. So employers are freaking out,” Davis says. “Plus the law has changed
30–40 times so far, so everyone is asking if they’re in compliance. In health
care, we call it the worry well. It creates stress, so brokers use that and
deluge people with information. Within 24 hours of a change, we get the
information. We keep up on it, but clients continue to freak out because
they’re scared of missing something. The IRS went out and hired a bunch
of new auditors last year and started auditing health plans. And those
penalties can be huge. People are going to continue to peddle fear and
offer hope,” Aaron Davis, president of Next Logical Benefit Strategies in
Westminster, Maryland.
I was speaking to a well-regarded ERISA litigator friend the
other day, and we both agreed that health and welfare plans in the past were
never audited. As a matter of fact, the only plan of that type he had
ever seen audited was a Section 125 plan and that was because he felt the
government was being “aggressive.” Now, however, we both agreed the
government will begin auditing healthcare plans the same as pension plans,
which is a very active area of litigation. Remember, if you offer any
healthcare plan, you must have the documentation discussed above available to
employees on a timely basis. That is, if you have a group of 10
employees, the documentation requirements are substantially similar to if you
have 1000 employees.
Click HERE
to see the entire article.”
Wednesday, December 10, 2014
The Supreme Court will hear King v. Burwell
The Supreme Court will hear King v. Burwell. At stake in
this case is whether federally facilitated exchanges can grant subsidies to
help individuals afford premiums. If the Supreme Court denies the federal
exchanges the ability to grant subsidies, it would be a major blow to the
PPACA, effectively eliminating certain penalties under the employment mandate.
The decision is expected to come down summer of 2015. While this is a
potentially significant case, employers should continue compliance efforts in
the meantime as penalties become effective January 1, 2015. For more
information visit: http://www.scotusblog.com/2014/11/symposium-the-court-will-hear-king-thats-bad-news-for-the-aca/
Friday, December 5, 2014
Obama’s “pay or play” mandate
While
the Affordable Care Act (aka Obamacare) approval has reached an all-time low it
is important to realize that, for now, it is the law of the land. While
individuals do not face an extreme IRS penalty in 2014 the same cannot be said
for 2015. Individual penalties for 2015 are the higher of the following:
(1) two-percent of your household income or (2) $325 per person ($162.50 per
child under 18). In comparison, the individual penalties for 2014 are the
higher of: (1) one-percent of your household income or (2) $95 per person
($47.50 per child under 18).
Tuesday, November 25, 2014
EMV Migration: What it means for your business
As Americans, swiping the magnetic strip of a credit card to complete a transaction is a familiar ritual. However, shifts in industry and government will soon render swipe-and-sign transactions extinct. In short, swipe-and-sign is simply not as secure as the chip-and-PIN method, where the card is inserted and a microchip is read. For a variety of historical reasons, America has lagged behind the rest of the world in shifting to chip-and-PIN technology.
After the high-profile credit card data theft from retailers Target and Neiman Marcus, the major credit card brands have announced plans to change chargeback rules, effectively shifting liability for certain fraud to merchants and their acquirers, if they haven’t implemented EMV-secured ‘chip-and-PIN’ systems by Oct. 1, 2015. Currently, card issuers are mostly liable for counterfeit card fraud losses. The liability shift is meant to encourage merchants and card issuers to quickly adopt the more secure EMV technology. Some brands are even offering incentives like reduced chargeback fees for merchants who switch to EMV technology. Additionally, President Obama issued an executive order in October, 2014, requiring government systems to update to EMV systems by January, 2015.
What does this mean for your business? If you have not installed EMV-enabled terminal, virtual terminal, mobile device or point-of-sale system, you may be liable for fraudulent transactions beginning October 1, 2015 if an EMV card is presented but the merchant chooses to process the payment using the magnetic stripe instead. Making the switch now will prevent significant liability exposure beginning in October 2015.
Some helpful resources for businesses include:
http://www.bbt.com/bbtdotcom/business/banking/merchant-services/emv.page
http://www.youtube.com/embed/Zv1DjtBwADg
http://www.gemalto.com/emv/fraud-emv
http://blogs.wsj.com/corporate-intelligence/2014/02/06/october-2015-the-end-of-the-swipe-and-sign-credit-card/
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