Archive for Newsletters

HSA Family Contribution Limit Reverts Back to $6,900

A little more than a month after announcing a $50 reduction in the family health savings account (“HSA”) contribution limit, the IRS has reversed course. Citing “numerous unanticipated administrative and financial burdens” in response to the $50 reduction, the IRS has said that taxpayers can treat the limit as $6,900 for 2018, restoring the status quo before the tax reform law. The individual and catch-up limits remain unchanged.

The good news is that if you did nothing in reaction to the previously announced limit cut, then you have nothing to do now (and you can stop reading). But what if you (or your employees) took action in response to the prior announcement? There are some steps you can take now.

Re-Reprogram
If you (or your payroll vendor) reprogrammed your payroll system to reflect the $50 limit reduction, you will need to undo that and go back to $6,900. Before automatically adjusting employee elections, you should make sure that employees have not made other changes to their elections. Some of them may have reduced their family HSA contribution well below $6,850 for personal financial reasons and may not want their prior election restored.

Re-Communicate
If you communicated the $50 limit cut to your employees, you probably want to communicate this increase as well. This is especially true if you decide to automatically adjust employee elections back to the original $6,900 annual election so that employees have a chance to object or make other adjustments.

Re-Contribute (or Not)
If an employee had already hit the $6,900 limit before it was reduced, he or she may have taken a withdrawal from their family HSA to avoid an excess contribution. The IRS guidance gives them two basic options:

  • Recontribute the funds to the family HSA. This will not be considered an excess contribution subject to the 6% excise tax on excess contributions.
  • Keep the money. If it was contributed through a cafeteria plan, then it will need to be included in income. If it was contributed directly by the employee, it will not. Either way, it will not be subject to the 20% penalty for distributions that are not used to reimburse for health expenses.

If you have further questions about the HSA Family Contribution Limit, contact your Account Manager.

May 2018 TDG Newsletter

April 2018 DeChristopher Group Newsletter

Today, virtually all businesses collect and store personal information about customers, employees, and others. The frequency of data breaches — the theft, loss or mistaken release of private information — is on the rise.

The number of U.S. data breach incidents tracked in 2017 hit an all time high with 1,579 breaches reported, according to the 2017 Data Breach Year-End Review. This is an increase of 44.7 percent from the previous year.

What is a Data Breach
In a nutshell, a data breach is a cyber security failure where information falls into the wrong hands.

Data breaches can originate from a variety of methods with hacking being the most common, totaling almost 60% of all breaches.

Other types of data breach attacks include unauthorized access, insider theft, data on the move, and employee error or negligence.

Preventing a Data Breach

It’s important for businesses of every size to take steps to prevent a data breach. Here are some practical tips:

1.Keep Only What You Need. Minimize the number of places you store personal private data. Know what you keep and where you keep it.

2.Safeguard Data. Lock physical records in a secure location. Restrict access to that information to only employees who must have access. Conduct background checks.

3.Destroy Before Disposal. Cross-cut shred paper files before disposing of private information. Also destroy CDs, DVSs, and other portable media.

4.Educate and Train Employees. Establish a written policy about privacy, data security and communicate to all employees.

5.Control Computer Usage. Restrict employee usage of computers to business use. Block access to inappropriate websites and prohibit use of unapproved software on company computers.

6.Secure All Computers. Implement password protection and time-out functions. Train employees to never leave laptops or PDAs unattended.

7.Keep Security Software Up-To-Date. Use firewalls, anti-virus and anti-spyware software; update virus/spyware definitions daily.

8.Stop Unencrypted Data Transmission. Mandate encryption of all data transmissions. Also consider encrypting email within your company if personal information is transmitted.

Did you know you can provide Identity Theft Protection as an employee benefit?

Reinforce the values and culture of your company by providing Identify Theft Protection to your employees. Contact Lucia Fan, Senior Consultant, to find out more.
lucia@the-dgroup.com

703-938-7550 x 6

April 2018 TDG Newsletter

March 2018 DeChristopher Group Newsletter

How Employers Can Engage Millennials in Benefits

Who are the Millennials and why should employers engage them?

Millennials (born between 1980s to early 2000s) are now the single largest group within the work force, and will soon become the biggest consumer group.

Understanding and being able to engage with Millennials is going to help your company gain a competitive advantage in attracting and retaining a large and talented pool of resources.

10 Interesting Facts About Millennials

1. Millennials are carrying a total of $1 trillion in student debt.
2. Over 65% of Gen-Y workers have a bachelor’s degree.
3. 88% prefer a collaborative work culture than a competitive one.
4. 74% want flexible work schedules.
5. 92% believe that business success should be measured by more than just profit.
6. 56% won’t work at a company if they ban social media access.
7. 50% do not believe that Social Security will exist when they reach their retirement age.
8. Millennials are considered multitaskers extraordinaire.
9. Millennials are virtually connected via social networks; they value the role they play in these communities.
10. Millennials are the most racially diverse generation.

According to a study by a best practice insight and technology company, the average Millennial job candidate gets 12.5% more job offers than candidates from older generations.

As Millennials continue to dominate the working landscape, the importance of attracting millennials cannot be stressed enough. Organizations that understand how much Millennials matter are going to win.

Make Benefits Millennial-Friendly

Before the influx of millennials, workers valued transactional needs more than anything else. Today’s Millennials want benefits that are innovative, unique and fluid. Asking a millennial to complete a long and tedious benefit enrollment form is not going to win them over.

Millennials value training, development and flexibility at work more than financial rewards. Think yoga classes at lunch or bringing a dog to work. To win the loyalty of Millennials, employers should engage them around their unique set of priorities and continue to reach out to them throughout their tenure.

Employers should adapt their benefits strategies by offering tools that help Millennials make choices about their benefits. Given that Millennials value technology and privacy, offering telemedicine tools, wellness apps and online financial planning are just a few ways to engage Millennials.

March 2018 TDG Newsletter

February 2018 DeChristopher Group Newsletter

 

The new federal tax law, signed by President Trump in December, contains a number of provisions that will impact the workplace and employers.

As many are aware, FMLA requires employers to provide certain employees with up to 12 weeks of job-protected leave annually for specified family and medical reasons. The leave may be paid or unpaid.

Covered Employers
Generally, an employer with 50 or more employees within a 75-mile radius of the location where an employee is based is subject to the FMLA.

New Business Tax Credit
To encourage employers to provide eligible employees with paid leave under FMLA, the new tax law provides eligible employers with a new business credit equal to 12.5% of the amount of wages paid to “qualifying employees” during any period in which such employees are on FMLA as long as the rate of payment under the program is at least 50% of the employee’s normal wages.

The credit can be used to lower an employer’s taxable income, subject to limitations, and applicable alternative minimum tax. The amount of paid family and medical leave used to determine the tax credit for an employee may not exceed 12 weeks.

Eligibility for Tax Credit
To be eligible for the credit, an employer must have a written policy that provides all qualifying full-time employees with at least two weeks of annual paid family and medical leave.

Part-time employees are also to be allowed a commensurate amount of leave on a pro rata basis. Qualifying employees are those who have worked for the company for at least one year and were paid no more than 60% of the compensation threshold for highly compensated employees in the previous year. (For 2018, 60% of the compensation threshold is equal to 60% x $120,000 = $72,000.)

Who Determines Eligibility for Tax Credit The Secretary of Treasury will determine whether an employer or an employee satisfies applicable requirements for the employer to be eligible for the tax credit based on information provided by the employer as the Secretary determines to be necessary or appropriate.

If the employee takes a paid leave for other reasons, such as vacation leave, personal leave, or other medical or sick leave, this paid leave will not be considered to be family and medical leave for purposes of the credit.

The credit is effective for wages paid in taxable years starting on January 1, 2018. It is set to expire for wages paid in taxable years beginning after December 31, 2019.

February 2018 DeChristopher Group Newsletter

January 2018 DeChristopher Group Newsletter

On Dec. 20, 2017 Congress passed the Tax Cuts and Jobs Act, which makes significant changes to individual and corporate provisions of the U.S. tax code, including a reduction in the corporate tax rate to 21%, down from 35%, beginning in 2018.

Repeal of the Individual Mandate

The bill includes permanent repeal of the Affordable Care Act (ACA) individual mandate, requiring individuals to purchase and maintain health coverage, by zeroing out the penalty beginning in 2019. For 2018, most individuals are still required to maintain coverage or pay a penalty when they file their 2018 federal income tax return in 2019.

What About the Cadillac Tax?

The bill also changes how certain tax thresholds will be indexed for inflation. Affected provisions, including the ACA “Cadillac Tax” (scheduled to take effect in 2020), will now be indexed to the Chained Consumer Price Index (CPI) instead of the regular CPI (the previous metric). This change makes it likely that more employer-sponsored plans would trigger the Cadillac tax sooner.

The Cadillac Tax is a tax intended to rein in high-priced insurance policies offered through employers by placing a 40 percent tax on the portion of benefits exceeding certain price thresholds.

The tax also raises revenue (by as much as $66 billion dollars over a decade) for the ACA.

Cadillac Tax Will Hit Majority of Employer Plans

Employers should begin reviewing their group health plans in the coming year and take measures to avoid the excise tax.

The Cadillac Tax annual threshold amounts for 2020 are expected to be:

  • $10,900 for employee-only coverage
  • $29,400 for all other coverage

The excise tax brings greater pressure for employers to generate immediate cost savings through cost-shifting and other short-term fixes. It will be important to work with your trusted advisor so that short-term and long-term cost-management strategies can be considered and implemented.

It’s important to note that key elements of the ACA remain intact, including the Employer Shared Responsibility for large employers.

As always, feel free to contact us anytime to discuss your specific needs.

January 2018 TDG Newsletter

An Overview of the 2017 Tax Legislation PwC

December 2017 DeChristopher Group Newsletter

New Employee Benefit Limits for 2018

Overview

Many employee benefits are subject to annual dollar limits that are periodically increased to keep up with inflation. The IRS has issued new annual dollar limits for some welfare and retirement plans.

Employers should take note of the benefit limit changes and update their benefit plan designs and plan documents accordingly.

The chart below provides a summary of the benefit limit changes effective January 1, 2018. New Employee Benefit Limits for 2018.

2018 Employee Benefit Plan Limits

December 2017 DeChristopher Group Newsletter

November 2017 DeChristopher Group Newsletter

ACA Compliance Update

Many employers were hoping for a pass or an extension on their filing and reporting responsibility in 2018. Unfortunately, at the writing of this newsletter, we have not received any guidance regarding IRS extensions to the Affordable Care Act (ACA) filing deadlines. The current mandates continue to be the law. If any new notices are published, we will share the information with you immediately.

For employers who may be new to ACA reporting and filing, it will be important to first determine if you are considered an Applicable Large Employer (ALE). Small employers with a self-funded health plan are subject to reporting as well. Working with a trusted broker or advisor experienced in ACA compliance will greatly reduce stress and financial liability to the employer.

What are the Penalties for ACA Reporting Failures?

There are penalties for failing to file returns on time, failing to include all required information, and filing incorrect information. The penalty for not filing an information return or filing an incorrect statement with the IRS generally is $260 for each return. Since there are separate penalties for each return, filing failures could easily result in double penalties. In most case, the total penalty for all reporting failures cannot exceed $3,193,000 per calendar year. Intentional disregard can increase per failure and there is no cap to the total penalty amount for intentional failure.

Upcoming Deadlines for ACA Reporting

The filing deadlines for Tax Year 2017 are:

1095B/1095C postmark to employees by: January 31, 2018 1094/1095B,

1094/1095C postmark to the IRS by: February 28, 2018 (employers filing less than 250 information returns are eligible for mailing to the IRS)

1094/1095B 1094/1095C electronic filing to the IRS by: April 2, 2018* (employers filing 250 or more information returns must file electronically)

*The regular due date, March 31, 2018, falls on a Saturday. IRS filing instructions permit filing on the next business day.

There are many payroll companies and independent third parties that offer ACA tracking and reporting services. Some are better than others. If you need a recommendation, let us know. One of our partner companies is currently running a promotion. If you mention The DeChristopher Group, you will receive 10% off their standard pricing.

Additional questions on ACA reporting can be directed to Lucia Fan, Senior Consultant and Certified Health Care Reform Specialist ®.

lucia@the-dgroup.com 703-938-7550 x 6

November 2017 TDG Newsletter

October 2017 DeChristopher Group Newsletter

October 15 Deadline for Medicare Part D (Prescription Drugs) Creditable Coverage Notice Approaching

In preparation for the Medicare fall open enrollment period, employers sponsoring group health plans that include prescription drug coverage are required to notify all Medicare-eligible individuals whether such coverage is creditable. Creditable coverage means the coverage is expected to pay, on average, as much as the standard Medicare prescription drug coverage.

Many employers satisfy this requirement by including the notice in enrollment materials or in a separate mailing. As a reminder, the Affordable Care Act (ACA) changed the Medicare Part D annual enrollment period to October 15 through December 7.

The written notice must be provided annually, prior to October 15th, and at various other times as required under the law, to the following individuals:

  •   Medicare-eligible active working individuals and their dependents;
  •   Medicare-eligible COBRA individuals and their dependents;
  •   Medicare-eligible disabled individuals covered under an employer’s prescription drug plan; and
  •   Any retirees and their dependents covered under an employer’s prescription drug plan

Because it may be difficult to identify all Medicare Part

D participants in the group health plan, it may be prudent to provide the disclosure to all plan participants annually, prior to October 15th as well as to all new hires prior to initial enrollment in the group health plan.

Model Notice Available

If you would like to receive a sample Creditable Coverage Model Notice that you can customize, please contact Lucia Fan, lucia@the-dgroup.com

Model Notices in English and Spanish (available in PDFs only) are also available from the Centers for Medicare and Medicaid Services (CMA).

Notices can be electronically distributed. Regulations permit electronic distribution to participants “who have the ability to access electronic documents at their regular place of work as a part of their work du5es.”

Additionally, employers are required to complete an online disclosure to CMS to report the creditable coverage status of their prescription drug plans.

This disclosure is required annually, no later than 60 days from the beginning of a plan year, and at certain other 5mes.

September 2017 DeChristopher Group Newsletter

This month’s newsletter addresses the national marketplace open enrollment for individual policies.

While it’s business as usual for employers, it’s important to understand the market instability that exists in the individual insurance market due to Congress’ lack of commitment to fund cost-sharing subsidies. These subsidies (payments) to insurers are currently subject to legal challenges, and the administration has been unclear on whether it intends to continue to fund them (or ask Congress to do so legislatively).

Distinct from the subsidies that help individuals pay their premiums, the ACA’s cost-sharing reduction subsidies help individuals with incomes between 100 and 250 percent of the Federal Poverty Level pay deductibles and co-payments. Nearly three in five individuals covered on the Exchanges are eligible for these subsidies.

Although the Marketplace Open Enrollment will impact each employer differently, here’s what you need to know.

1. The Open Enrollment deadlines have changed In an effort to improve the risk pool and promote stability in the individual insurance market for 2018, the length of the 2018 open enrollment period will be reduced from three months to just 45 days.

2. You must sign up during open enrollment if you don’t have health insurance from another source

3. If you miss Open Enrollment, you may have to wait a year until you can sign up, unless you qualify for a special enrollment Here’s what might trigger a special enrollment: divorce, marriage, birth or adoption of a child, death of a spouse or partner that leaves you without health insurance, your spouse or partner who has you covered loses his/her job and health insurance, you lose your job and with it your health insurance, your hours are cut making you ineligible for your employer’s health insurance plan, or you are in an HMO and move outside its coverage area.

4. Under the Affordable Care Act (ACA), you are required to have health coverage or you may be subject to a penalty If you went without health insurance in 2017, the penalty is 2.5 percent of your income or $695 per adult (whichever is more) and the penalty for each child in the family without coverage will be up to $347.50. The maximum penalty is set at $2,085. For the 2018 tax year and beyond, the penalty will remain at 2.5 percent, but the flat and maximum amounts will adjust for inflation.

If you owe a penalty, it will be taken from your tax refund.

September 2017 DeChristopher Group Newsletter

August 2017 DeChristopher Group Newsletter

Summary of Benefits and Coverage Overview

The purpose of the Summary of Benefits and Coverage (SBC) is to provide individuals with standard information so they can compare medical plans as they make decisions about which plan to choose.

What are the Changes to the SBCs

The changes in the new SBC and instructions include, but are not limited to, the following:

▪ A new question identifying any services covered before the deductible is met
▪ A new instruction requiring the use of specific language to identify whether the plan has “embedded” or “non-embedded” deductibles or out of pocket maximums
▪ A new instruction requiring the use of specific language to identify whether the plan uses a tiered network to alert participants that costs for in-network services may vary depending on the tier of the physician or facility
▪ A new instruction requiring a list of certain “core” limitations, including when cost-sharing for in-network services does not count toward the out of pocket limit (for example, cost-sharing for in-network items or services that are not essential health benefits), prior authorization requirements, visit limits, or exclusion of a particular service category or substantial part of a service category

The new SBCs also includes a statement indicating whether the plan meets Minimum Essential Coverage (MEC) and Minimum Value (MV). However, many health insurance issuers and third-party administrators are already including these statements in the current SBCs issued to group health plans.

When do the new requirements go into effect?

The new requirements issued by the Department of Labor apply to all documents issued on or after April 1, 2017. All plans must comply with the new requirements as of the first day of open enrollment occurring on or after April 1, 2017.

What are the types of plans that must provide an SBC?

SBCs are required for Insured and self-insured group medical plans, regardless of grandfathered status.

Who issues the SBCs

The carrier or the TPA (if self-insured).

When must the SBC be provided to covered members

SBCs must be provided during each annual open enrollment.

SBC Delivery

An SBC may be provided in either paper or electronic format. It may be hand delivered or mailed. It may also be emailed or posted on the Internet after obtaining the individual’s agreement to receive the SBC electronically. If posted on the Internet, the individual must be notified about where the SBC is posted and that the SBC is available in paper form free of charge upon request.

Is there a penalty for non-compliance?

The penalty is up to $1,087 per failure to provide the SBC.

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