Maximum Individual Mandate Payment for 2017 Announced

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The IRS has released the 2017 monthly national average premium for a bronze-level health plan offered through the Health Insurance Marketplace, which is used to determine the maximum individual mandate penalty.

New Guidance
According to the new IRS guidance, the monthly national average premium for qualified health plans that have a bronze level of coverage and are offered through the Health Insurance Marketplace in 2017 is:

  • $272 per individual (up from $223); and
  • $1,360 for a family with five or more members (up from $1,115).

The guidance is effective for taxable years ending after December 31, 2016.

Calculating the Payment
The Affordable Care Act’s “individual mandate” provision requires every individual to have minimum essential health coverage for each month, qualify for an exemption, or make a penalty payment when filing his or her federal income tax return.

The annual penalty amount is either a percentage of an individual’s household income in excess of the tax return filing threshold or a flat dollar amount, whichever is greater. The maximum penalty amount is capped at the cost of the national average premium for a bronze level health plan available through the Marketplace. At this time, the 2017 inflation adjustment for the flat dollar amount penalty has not been announced.

Visit our section on the Individual Mandate (Individual Shared Responsibility) for more information on the individual mandate.

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  •  
     

    From water cooler gossip, to interminable meetings, to hours wasted scrolling through social media, the modern workplace is teeming with threats to employee productivity. These distractions are taking a toll: several recent surveys show that U.S. employees are spending a mere 40-50% of their workdays engaged in job-related tasks. Fortunately, there are simple steps you can take to help employees avoid common productivity pitfalls.

    For more employee management tips, check out our Human Resourcessection.

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  •  

    A recently released IRS letter reaffirms the agency’s view that funds from a health flexible spending arrangement (health FSA) may notbe used to reimburse health insurance premium payments or Medicare premium expenses.

    Certain Premiums May be Deducted
    The IRS letter points out that health insurance premium payments, including those for Medicare, may qualify for purposes of the itemized deduction for medical expenses. However, only premiums for which the taxpayer is not claiming a separate credit or deduction can be included as part of a medical expenses deduction. Additional restrictions apply to this deduction. For more information, please see IRS Publication 502Medical and Dental Expenses.

    Click here to read the IRS letter in its entirety.

    For additional information on health FSAs, visit our HSAs, FSAs, and Other Tax-Favored Accounts section.

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    An updated model notice for employers to provide information on eligibility for premium assistance under Medicaid or the Children’s Health Insurance Program (CHIP) is now available for download from the U.S. Department of Labor (DOL).

    Click here to download the latest employer CHIP notice in PDF format. A Microsoft Word version is also available.

    Annual Notice Requirement
    The employer CHIP notice must be provided annually before the start of each plan year to inform each employee (regardless of enrollment status) of potential opportunities for premium assistance in the state in which the employee resides. This may or may not be the same as the state in which the employer or its principal place of business is located.

    An employer can choose to provide the notice on its own or concurrently with the furnishing of:

    The updated model notice includes information on how employees can contact their state for additional information and how to apply for premium assistance, with information current as of August 10, 2017.

    Our section on CHIPRA (the Children’s Health Insurance Program Reauthorization Act) contains additional information on employer responsibilities related to the state Children’s Health Insurance Program.

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    Must Employers Still Comply with The ACAMust Employers Still Comply with The ACAEmployers may be confused with all of the bluster and proposals to “repeal and replace” or perhaps “amend” the Affordable Care Act. What parts of this complex law do employers and their employees still need to comply with?

    In offering important relief to individuals, the Internal Revenue Service has relaxed enforcement of the individual mandate and did not require taxpayers to report whether they had health insurance coverage on their 2016 tax returns.

    However, the IRS has not relaxed enforcement of the employer mandate. This has been confirmed in a release from the Department of Labor. Although the IRS has acknowledged glitches in the ACA reporting system, the IRS has confirmed that an applicable large employer is still subject to an employer shared responsibility payment if it fails to offer coverage to 95% of its full-time employees or has a full-time employee who obtains coverage on the insurance marketplace and receives premium assistance or a tax credit, and the employer’s coverage is not affordable or did not provide minimum value.

    Large employers should continue to offer minimum essential coverage to their full-time employees to avoid penalties and to track offers of coverage in order to comply with reporting requirements on IRS Forms 1094 and 1095.

    Although the individual mandate has been “non-enforced”, It’s business as usual on the compliance front for employers- especially those subject to the employer mandate and shared-responsibility payments for non-compliance.

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    The Medical Loss Ratio (MLR) rules under Health Care Reform require an issuer to provide rebates if its medical loss ratio (the amount of health insurance premiums spent on health care and activities to improve health care quality) falls short of the applicable standard during a reporting year. Each year’s rebates must be provided by issuers to policyholders (typically the employer that sponsors the plan) by September 30 of the following year.

    Employer Distribution
    The MLR rules provide that issuers must pay any rebates owed to persons covered under a group health plan to the policyholder, who is then responsible for distributing the rebate to eligible plan enrollees.

    In general, there are several ways rebates may be distributed to plan enrollees, including:

    In addition to the above methods, employers may also apply the rebate in a way that benefits employees.

    Check out our section on Medical Loss Ratio (MLR) Rebates & Employer Responsibilities to learn more.

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    With the dog days of summer under way, it is critical that employers recognize the hazards of working in hot environments and take steps to reduce the risk to workers. Consider taking the following actions that can help protect employees:

    1. Provide heat stress training. Topics you may wish to address include worker risk, prevention, symptoms, treatment, and personal protective equipment.
    2. Schedule hot jobs for the cooler part of the day. The best way to prevent heat illness is to make the work environment cooler. Monitor weather reports daily and reschedule jobs with high heat exposure to cooler times of the day. When possible, routine maintenance and repair projects should be scheduled for the cooler seasons of the year.
    3. Provide rest periods with water breaks. Provide workers with plenty of cool water in convenient, visible locations in shade or air conditioning that are close to the work area. Avoid alcohol and drinks with large amounts of caffeine or sugar.
    4. Monitor workers who are at risk of heat stress. Workers are at an increased risk of heat stress when wearing personal protective equipment, when the outside temperature exceeds 70°F, or while working at high energy levels. Establish a routine to periodically check workers for signs and symptoms of overexposure.
    5. Acclimatize workers by exposing them for progressively longer periods to hot work environments. Allow workers to get used to hot environments by gradually increasing exposure over at least a 5-day work period. The U.S. Occupational Safety and Health Administration (OSHA) suggests beginning with 50% of the normal workload and time spent in the hot environment, and then gradually building up to 100% by the fifth day.

    Our section on Safety & Wellness includes additional tips for maintaining a safe and healthy workplace.

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    Cyber attacks and resulting data breaches often begin with a spear-phishing email. Spear phishing differs from regular email phishing in its use of extensive research to target a specific audience, which allows the spear phisher to pose as a familiar and trusted entity in its email to a mark. Spear phishers seek a company’s valuable information—such as credentials providing access to customer lists, trade secrets, and confidential employee information—and some of their methods include:

    The IRS offers the following tips to protect against spear phishing:

    1. Educate all employees about phishing in general and spear phishing in particular.
    2. Use strong, unique passwords with a mix of letters, numbers, and special characters. Also, remember to use different passwords for each account.
    3. Never take an email from a familiar source at face value, especially if it asks you to open a link or attachment, or includes a threat about a dire consequence that will result if you fail to take action.
    4. If an email contains a link, hover your cursor over the link to see the web address (URL) destination. If it’s not a URL you recognize, or if it’s an abbreviated URL, don’t open it.
    5. Poor grammar and odd wording are warning signs of a spear-phishing email.
    6. Consider calling the sender to confirm the authenticity of an email you’re unsure of, but don’t use the phone number in the email.
    7. Use security software that updates automatically to help defend against malware, viruses, and known phishing sites.

    Check out our Employee Records and Files section for more on how to protect confidential employee information.

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