2017 was another eventful year for Employee Benefits and Compliance:
• The House passed an ACA repeal and replace bill but the Senate failed to do so – we will discuss what this means.
• Employers and health insurance carriers went through a second round of reporting of health care offers and coverage for 2016 – the reporting requirements are still “on the books.” What is the IRS doing about it?
• The ACA and HSA out-of-pocket maximums for 2018 were updated – we will review these requirements and why plans need to know how these two laws interact.
• Self-insured plans, essential health benefits (EHB) and benchmark plans are still tied to the ACA’s prohibition on lifetime and annual limits – maybe this is an area ready for a bipartisan update?
This webinar is an opportunity to get ready for 2018 and ensure you are in compliance with the laws and changes for the upcoming year.
Provided via the link below is a recorded presentation of the Hays Benefits Research and Compliance Department’s presentation Annual Review and Preparing for 2018. Feel free to watch the recorded presentation at your convenience by clicking on the link, below. The presentation is approximately 40 minutes long.
The IRS recently released the 2017 draft versions of the 1095-C, 1094-C, 1095-B and 1094-B forms for use in reporting coverage offers under the Affordable Care Act.
Generally, employers will use the Form 1095-C to report offers of health plan coverage to the individual and will also use Form 1094-C, which is then provided to the IRS.
There are a few changes to the forms and instructions from previous years, none of which are too drastic. Here is what has changed:
· Section 4980H Transition Relief. Several forms of transition relief were available to some employers under Section 4980H for the 2015 plan year (including any portion of the 2015 plan year that fell in 2016). However, no Section 4980H transition relief is available for 2017. Form 1094-C has been revised to remove references to this transition relief.
Specifically, the two sections on Form 1094-C and 1094-B related to this transition relief have been designated as “Reserved” and should not be used. They are:
Part II, in the “Certifications of Eligibility” Section on Line 22, Box C
Part III, in the “ALE Member Information – Monthly” table, column (e).
· Instructionsfor Recipient. The Form 1095-C and the 1095-B include an “Instructions for Recipient” section which states: “Additional information. For additional information about the tax provisions of the Affordable Care Act (ACA), including the individual shared responsibility provisions, the premium tax credit, and the employer shared responsibility provisions, see www.irs.gov/Affordable-Care-Act/Individuals-and-Families or call the IRS Healthcare Hotline for ACA questions (1-800-919-0452).”
· Updated Penalty Amounts. The adjusted penalty amount for 2017 is $260 per violation, with an annual maximum of $3,218,500 (up from a maximum of $3,193,000, for 2016).
· Code Series 2 (Section 4980H Safe Harbor Codes and Other Relief). The 2017 draft instructions for Forms 1094-C and 1095-C clarify that there is no specific code to enter on line 16 to indicate that a fulltime employee who was offered coverage either did not enroll or waived the coverage.
· Corrected Forms 1095-C. The 2017, the draft instructions indicate that Forms 1095-C filed with incorrect dollar amounts on line 15, Employee Required Contribution, may fall under a safe harbor for certain de minimis errors. The safe harbor generally applies if no single amount in error differs from the correct amount by more than $100.
If the safe harbor applies, employers will not have to correct Form 1095-C to avoid penalties. However, if the recipient elects for the safe harbor not to apply, the employer may have to issue a corrected Form 1095-C to avoid penalties. For more information, see Notice 2017-9.
· Formatting Returns Filed with the IRS. Both sets of 2017 draft instructions clarify that all returns filed with the IRS must be printed in landscape format.
Remember, Forms 1095-C and/or 1095-B must be provided to individuals by January 31, 2018. Form 10945-C and/or 1094-B must be filed by February 28, 2018 if filing a paper copy. If filed electronically, it must be sent no later than March 31, 2018.
Please contact your Hays Companies representative for more information on reporting under the Affordable Care Act.
MINNEAPOLIS, MN – Frank Bacon has been named as a National Pharmacy Consultant within Hays Companies. The Pharmacy Practice serves employee benefits clients to better manage the effective delivery of prescription benefits while maximizing cost efficiencies within organizations.
Bacon joined Hays Companies in 2016, bringing over ten years of pharmacy experience with him. Prior to coming aboard the Hays team, Bacon served as a PBM Network Pricing Consultant for one of the nation’s largest Pharmacy Benefit Managers. He draws on that experience while advising Hays’ clients on how to best manage and mitigate prescription related costs. Bacon’s unique insights are invaluable in navigating the complicated pharmacy benefits systems.
His new responsibilities will include advising Hays clients in PBM contracting and pharmacy benefit design.
Approximately 3,000 state and local agencies are responsible for inspecting more than one million food establishments in the United States, according to the Food and Drug Administration (FDA). Health inspectors investigate a company’s food handling, preparation and storage procedures to ensure that food is fresh and the environment in which it is prepared is sanitary. The Center for Disease Control (CDC) reports that approximately 48 million Americans get sick, 128,000 are hospitalized and 3,000 die of foodborne illness each year.
On average, state health departments conduct health inspections two to four times per year.
There are three types of inspections:
1. Routine inspections are usually unexpected. The inspector examines of all aspects of your restaurant to ensure compliance with state health codes.
2. A complaint inspection happens after customers observe unsafe food practices or complain they got sick as a result of dining at an establishment.
3. A follow-up inspection occurs after a restaurant was issued a violation and was given a certain amount of time to correct the violation.
Mandated by law, health inspections cannot be avoided. Take a proactive approach and you’ll always be prepared for an unexpected inspection. While consistent readiness may not always be feasible, it’s an important goal to work towards.
Having preventative measures in place will help you during a health inspector’s visit. Here are some ways to stay on top of inspections:
· Research your local and state laws regarding health inspections. Laws vary from state to state. Know what laws are applicable to your establishment.
· Obtain a copy of the food service inspection checklist for your state and regularly conduct your own health inspections to ensure your business is ready for the day when the real inspector shows up.
· Consult the FDA website for a current copy of the Food Code, which offers suggestions and best practices for food safety and health inspections. Many state laws have been modeled after this document.
· Join your state’s restaurant association to stay on top of state regulations regarding food safety, foodborne illness and health inspections.
· Require employees to take food safety courses and make safe food handling and preparation a priority in your company’s culture. Display food safety posters and other relevant safety information in the kitchen, at hand washing stations and in the employee break room so information is readily available to all employees.
For more information about health inspections, managing your risks and obtaining insurance for your business, please visit http://www.hayscompanies.com/contact-us/ to get in touch with your local consultant.
As of Monday, Irma has officially been downgraded to a tropical storm.
After battering its way up Florida over the weekend, Irma has moved through Georgia and South Carolina, leaving nearly fifteen million without power as flooding and winds continue to produce damage. Currently, officials are predicting that it could take up to ten days for all of the affected areas to have full power restored.
And although the storm is over, it does not mean that the danger has subsided. If you or a loved one is in an area that was affected by Irma, please follow these safety tips as provided by the Centers for Disease Control and Prevention to keep safe as rebuilding efforts begin:
Track all expenses you incur to mitigate your loss and continue business.
Exercise caution when inspecting damage. Do not try to inspect damaged utilities and appliances; contact a professional to do so.
Do what you can to prevent further damage to your property, (e.g., putting a tarp on a damaged roof), as insurance may not cover additional damage that occurs after the storm.
Secure Inventory – prior to a storm’s arrival, you should have compiled an inventory of all of your possessions at your home or business. If you did not create one, start as soon as possible.
File a Claim Immediately – it is in your best interest to file a claim as quickly as possible. Insurance adjusters may not be able to access the property right away, but it helps insurers to know where to look for damage and how to contact you in the coming weeks.
The best way to minimize damage from a hurricane is to be prepared before one strikes. To help you plan and remain safe at home during these potentially deadly storms, follow these safety tips.
During Hurricane Season:
· Plan evacuation routes and designate a contact person who family members know to call once the storm is over.
· Stock up on items such as bottled water, flashlights, battery-operated radio, nails, tarps and plywood.
When There’s A Hurricane Threat:
· Keep an up-to-date log of all of your possessions with photographs and videos, and review your home insurance policy.
· Place important, valuable papers such as your log of possessions and insurance policy in waterproof bags.
· Cover windows and doors and secure outdoor furniture.
· Refill your prescriptions, fill up your gas tank and withdraw a week’s worth of cash so you are prepared in the event of a power outage.
· Move your furniture and valuables to higher floors of your home.
· Gather emergency supplies and fill bathtubs with clean water.
· Move to higher ground away from rivers, streams, creeks and storm drains. If you are told to evacuate, do so immediately.
During a Hurricane:
• Listen to your battery-operated radio for instructions from the local authorities on evacuation and safety guidelines.
• Seek shelter in an interior room away from windows, such as a closet.
• If the electricity goes out, use a flashlight to see; do not use candles.
• If you hear the winds subside, do not assume that the storm is over. The calm may be the eye of the storm, and the worst part may still be coming.
After a hurricane is over, stay inside until you hear that an “all clear” notice has been issued. If you were told to evacuate, do not return home until you have been given permission by the authorities. Additionally, exercise extreme caution when inspecting your home for damage. Do not try to inspect damaged utilities and appliances; contact a professional to do so.
Please call Hays Companies Private Client Group with any questions or claims. You can contact us 24 hours a day at (612) 747-1095 or firstname.lastname@example.org.
With the widespread devastation of Hurricane Harvey only just being fully understood and the catastrophic threat of Hurricane Irma hanging over the Florida coast, our thoughts are with those whose lives have been affected by these unprecedented storms.
Once the fear and worry caused for those directly in the path of destruction has subsided, what will remain is an underlying current of loss as rebuilding efforts begin. The tangible damage caused by hurricanes is vast – property damage, business interruption and expense as a result of various causes, such as wind, flood, loss of power, etc.
We understand that navigating the insurance claims process in these situations is far from top of mind, but it is a necessary step. Our Hays team has developed the following three phase approach to help bring your commercial claims to a quick and successful recovery.
Phase I – Evaluation and Planning
1. Establish communication protocols both internally and externally
2. Establish a claims team (Risk Management, Adjuster, Finance, Operations, Outside Contractors, etc.)
3. Create a recovery plan for repairs and re-establishing operations
4. Establish a timeline for claim submission, audit and adjustment
5. Prepare loss estimates to enable proper reserves and initial advance payments from your insurer
6. Establish accounting procedures for capturing loss activity accurately and efficiently
Phase II – Claim Preparation and Submittal
1. Track and document all property damage claims
2. Determine direct and indirect factors that impact business affected by the claim event
3. Prepare loss analyses demonstrating business interruption
4. Determine extra expenses related to the loss event
5. Submit claim(s) to your insurer including explanatory narrative, calculations and supporting documentation
6. Monitor timelines for claim process and business recovery
Phase III – Audit, Adjustment and Settlement
1. Respond to inquiries from your insurer and their representatives
2. Complete exchange of claim documentation and insurer’s evaluations
3. Analyze insurer response to determine areas of difference and develop a strategy to address those differences
4. Prepare for final claim negotiations and settlement with insurer
As we work to with you to prepare your claim(s) for submission, loss categories involving both property damage and loss of sales (Business Interruption) must be measured. We have included a number of insurance term definitions to keep in mind as we work together through the process of submitting your claim.
· A Business Interruption claim is the sum total loss of profit to a company’s operations as a direct result of a covered loss.
· An Extra Expense claim is the necessary expenses you incur during the “period of restoration” that you would not have incurred if there had been no direct physical loss or damage to property. This is often the sum total expense incurred to mitigate or minimize the severity of a Business Interruption claim.
· A Property Damage claim is the sum total expense incurred to repair/replace/restore damaged property to its pre-loss condition.
We hope that these guidelines provide a clear path to restoring your business to what it was prior to the hurricane’s arrival. You may call our dedicated commercial claims hotline anytime at 612-373-7292, email Irmaclaims@hayscompanies.com, or contact your local Hays representative with any questions.
Business Insurance ranked Hays Companies, a consultancy firm specializing in risk management, insurance, and employee benefits, #23 among the 100 largest insurance brokers in the United States.
The list, which is compiled annually, measures the total brokerage revenues for all U.S. based clients in the previous calendar year. Hays Companies’ 2016 brokerage revenues of $193,400,000 were up 5.5% over the 2015 fiscal year, cementing them as one of the nation’s Top 25 Largest Brokers – a position they have held for over a decade.
Since 1994, Hays has remained true to the entrepreneurial spirit on which they were founded, resulting in their continued position as one of the fastest growing risk management, insurance, and employee benefits consultancy firms in the country. As a privately-held organization, Hays’ exponential organic growth has been entirely accomplished by their team of experienced professionals.
“We have continued our growth by investing in our people and building client-focused teams. Our business model encourages creative, out-of-the-box solutions that allow us to adapt quickly to the evolving needs of our clients,” said Hays Companies CEO, Jim Hays.
Hays Companies of Wisconsin has been named as one of Wisconsin’s Top Workplaces by the Milwaukee Journal Sentinel, for the seventh year in a row.
In 2017, there were 1,350 companies invited by the Journal Sentinel to participate in the survey. Employees of the surveyed companies were asked questions revolving around how the employees felt about their job, their view on organizational health, as well as employee engagement. Here are a few of the comments that helped Hays Companies of Wisconsin earn this honor in 2017:
“The people that work here are genuine, sincere and hard-working people. The people make a business and we have the best.”
“I am surrounded by people who want to be here and do their job well.”
“We employ wonderful people who make coming here easy. And if you need help, everyone is there as a resource.”
At Hays Companies, we’ve created a synergy between teams that’s unmatched in the industry. Our employees thrive within the innovative environment that our founding partners helped to cultivate, providing a rich and meaningful workplace that ultimately best benefits our clients.
Hays Companies is one of the fastest growing property and casualty and employee benefits advisers in the country. As a privately held company owned by its managing employees, there are no outside interests or agendas to distract our employees from the business of insurance and risk management. We focus exclusively on meeting the goals established by our clients. Hays Companies is built to be flexible and we collaborate with clients to find business efficient solutions that can be improved upon incrementally over time. Our 700+ team represents a dynamic, entrepreneurial assembly of the best and brightest in the industry.
As the Hays Research and Compliance team plans ahead, we want to inform our clients that there will be safe harbor changes to consider for 2018.
The affordability percentage, under the Affordable Care Act (ACA), for 2018 will be 9.56%, a decrease from the 2017 safe harbor percentage of 9.69 %.
On May 5, 2017, the Internal Revenue Service (IRS) issued Revenue Procedure 2017-36 to index the contribution percentages in 2018 for purposes of determining the affordability of an employer’s plan under the Affordable Care Act (ACA).
For plan years beginning in 2018, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:
9.56 percent of the employee’s household income for the year, for purposes of both the pay or play rules and premium tax credit eligibility; and
8.05 percent of the employee’s household income for the year, for purposes of an individual mandate exemption (adjusted under separate guidance).
Affordability, as used for compliance with the employer mandate under the Affordable Care Act (ACA), relates to the maximum amount an individual must pay for single-only coverage relative to that person’s household income without triggering a penalty for the employer. Employers may use any one of the “safe harbors” for affordability (W-2, hourly rate-of-pay or the federal poverty line) to set single-only premium contributions that are deemed affordable under the ACA.
For example, an employer can set the amount an employee pays for single-only coverage based upon 9.56% of the federal poverty line and that offer of coverage will be deemed affordable for purposes of compliance with the ACA.
Why are the Safe Harbor Percentages decreasing?
The 2018 percentage decrease is due to the projected rate of premium growth as it relates to the projected rate of personal income growth.
Issues to Consider for 2018 Renewals:
2018 ACA Maximum Out-Of-Pocket Expenses (non-grandfathered plans)
$7,350 for self-only coverage
$14,700 for family coverage
2018 HSA & HDHP Design Maximums
HDHP minimum annual deductibles:
$1,350 for self-only coverage
$2,700 for family coverage
Out of pocket maximums:
$6,650 for self-only coverage
$13,300 for family coverage
Maximum annual HSA contributions:
$3,450 for self-only coverage
$6,900 for family coverage
Catch-up contribution (Age 55 and older by the end of the tax year) $1,000
Note: DOL, HHS and IRS guidance requires group health plans to embed an individual out-of-pocket maximum in the plan’s family coverage when the family out-of-pocket maximum exceeds the ACA’s out-of-pocket maximum for self-only coverage.
These updated affordability percentages are effective for taxable years and plan years beginning Jan. 1, 2018. This is the first time since these rules were implemented that the affordability contribution percentages have been reduced. As a result, some employers may need to reduce their employee contributions for 2018 to meet the adjusted percentage.
If you have any questions, please contact your local Hays Consultant.
By: Ben Graves, J.D., Director of Research and Compliance at Hays Companies.