This morning I spent a few hours doing some tax training for County of San Bernardino to discuss Affordable Care Act, Covered California, and IRS. I got to share some of my knowledge with County officials, Certified Enrollment Counselors, and Community Partners.
Archives for January 2015
Yesterday, I attended an event by Covered California where some top officials flew in from Sacramento to have a discussion about Covered California and current updates, concerns, tips for the last month of open enrollment.
It really bothered me when they mention there was over 700 registered agents in the area that was notified about this event, and only about 50 actually showed up. How are you supposed to give your clients the best possible help if you do not really understand what is happening.
I learned so much in this 3 hour session it should have been mandatory for all agents, there was a lot of valuable insights, tips, and recommendation we learned.
I spent quite a bit of time speaking with the Director of Sales for Covered California, Kirk Whelan.
The highlight, was when I was honored to be asked to give my insights on the tax implications this year with IRS and Affordable Care Act.
I have a unique insight being a licensed tax preparer and Certified Covered California Insurance Agent.
After the event, I was invited by the City of San Bernardino Employment & Training Agency, to speak and educate up to 30 of their field staff and Certified Enrollment Counselors for Covered California, to discuss what to they can expect this tax season, to discuss the 1095 forms that consumer will start getting any day, and to discuss more about tax implications, tax penalties, and subsidies.
Looking forward to speaking at this event. If you have any questions about how ACA could affect your taxes gives us a call 909-570-1103
Yes, if you got premium tax credits for 2014, you have to file a federal tax return. Even if you have never filed before, starting in 2014 if you got tax credits you have to file a tax return.
Your premium tax credits are based on the income you report to the IRS. When you applied for health insurance through Covered California, you had to estimate your family income. At tax time, you have to let the IRS know what your family’s actual income was for the year.
Lots of people may not realize they got premium tax credits. If you applied when you enrolled, you don’t actually “get” the tax credit every month. The IRS pays your premium tax credit directly to your health insurance plan. Your monthly premium costs are lower as a result.
The only way to get premium tax credits is to buy from Covered California. If you bought from Covered California, it will send you a tax form, called the Form 1095‐A, by January 31, 2015. The Form 1095‐A will tell you if you already received premium tax
credits or not. It will also tell you the exact amount of the tax credits you got each month.
It’s hard to believe that the tax return filing season is just a couple of weeks away. While some of our clients are unable to complete their return until later in the year, others are ready to “get it done” as soon as possible. Regardless of which group you find yourself in, it’s very important to understand the implications of the Affordable Care Act on your tax filing process.
2014 is the first year in which the ACA truly affects the average American’s tax return. That’s because of the necessity of proving compliance with the Individual Mandate, and because of the requirement of reconciling the Premium Tax Credit (for those with who are receiving the benefits of this program).
As one of our clients we obviously don’t expect you to understand everything about the Affordable Care Act. That’s our job! But we do want to get you ready for the new landscape of healthcare and taxes. It’s important to have a general understanding of the requirements in order to be ready to have your return completed by us. In the sections below we review areas related to the ACA that you need to be aware of before having us assist you.
The Affordable Care Act introduces three new forms that many of you received in 2014, and all of you will receive in 2015. The “1095” is distributed by the Marketplace (Exchanges), health insurance companies, and large employers. These documents are required for the first group in 2014, and optional for the other two. The form will look similar to this:
The 1095 is used to provide health insurance reporting to the federal government. It lists each person who has received coverage. It details the months health insurance was in force, and the financial benefit of the policy (or credit). You should expect to receive 1095s from the Marketplace in late January, and from other entities later in the tax season. Unfortunately we expect there will be a lot of variance on when these forms arrive.
It’s very important to understand that you and your family members could receive multiple different forms. Please keep all of these documents and bring them to our office when you meet with your tax advisor. Call us today to answer any questions, Call 909-570-1103
Employer-provided health benefits are changing in America, especially for small businesses. Group healthcare costs continue to rise. Annual premiums for group policies have increased over 180 percent in the last 15 years, with the average coverage cost per family expected to reach $20,000 by 2016.
As such, many employers have stopped providing group healthcare policies entirely. The Wall Street Journal recently reported that the implementation of the Affordable Care Act prevents pre-existing conditions from being factored into policy prices, eliminating several incentives for small businesses to even offer group plans. In fact, the percentage of small to medium employers offering health benefits to their employees dropped 11 percent from 2010 to 2013.Employer-Provided Health Benefits
The drop in group coverage has led some employees to the individual market where they can select and purchase healthcare coverage that best suits their needs.
Employer-Provided Health Benefits Are Still an Option
Section 105 Healthcare Reimbursement Plans (HRPs) are available to employers to reimburse qualified health insurance premiums.
This gives small business owners an opportunity to offer employer-provided health benefits to their employees without purchasing a group health insurance plan. Employees purchase the individual insurance that best suits them, and the HRP reimburses the cost of the premium up to the specified allowance.
How Does an HRP Work?
HRPs offer tax free dollars to reimburse employees for their premium expenses. It is one of several premium reimbursement options.
Employers select the specified monthly healthcare allowance available to employees, and the plan reimburses employees when they submit documentation showing that they have paid their health insurance premiums.
Is an HRP a Compliant Form of Employer-Provided Health Benefits?
Yes. When designed and administered correctly, HRPs comply with all applicable IRS, HIPAA, COBRA, ERISA, and ACA rules.
One of the biggest questions is how HRPs comply with the ACA’s “Market Reforms.” In order to comply with the Market Reforms, HRPs must be structured to comply with PHS Act Section 2711 annual limit rules and PHS Act Section 2713 preventive care rules.
PHS Act Section 2711 requires group health plans (including HRPs) not to place annual or lifetime limits on “essential health benefits.”
PHS Act Section 2713 requires group health plans (including HPRs) to cover basic preventive care services without cost-sharing.
It is important to note that PHS Act Section 2711 allows group health plans (including HRPs) to place annual limits on benefits that are not essential health benefits. Since health insurance premiums are not essential health benefits, group health plans (including HRPs) may place a “premium-specific” annual limit on premium reimbursements.
However, group health plans (including HRPs) may not place an annual limit on the basic preventive care expenses required by PHS Act Section 2713 because preventive care expenses are considered essential health benefits.
As such, one way to structure a compliant HRP is to design the arrangement to reimburse employees for health insurance premiums up to a specified monthly healthcare allowance, and preventive care as required by PHS Act Section 2713.
Employer-provided health benefits are viable in conjunction with individual insurance, and it is important to understand the fundamentals surrounding healthcare reimbursement plans as more and more employers drop group coverage.
Original article posted by our partner, Zane Benefits: http://www.zanebenefits.com/blog/employer-provided-health-benefits-section-105-healthcare-reimbursement-plans