Although it is only spring, we now have official guidance on health savings account (HSA) and Affordable Care Act (ACA) limits for 2017 plan years. As before, these two requirements have different limits that will need to be addressed to ensure that a high deductible health plan complies with ACA requirements.
On April 27, 2016, the Internal Revenue Service (IRS) released Revenue Procedure 2016-28 showing updated annual limits for HSA contributions and high deductible health plan (HDHP) design requirements for 2017 as follows:
HDHP minimum annual deductibles:
1,300 for self-only coverage (unchanged from 2016)
2,600 for family coverage (unchanged from 2016)
Out of pocket maximums:
6,550 for self-only coverage (unchanged from 2016)
13,100 for family coverage (unchanged from 2016)
Maximum annual HSA contributions:
3,400 for self-only coverage ($50 increase from 2016)
6,750 for family coverage (no change from 2016)
On Feb. 29, 2016, the U.S. Health and Human Services (HHS), Treasury, and Labor Departments finalized rules addressing 2017 Benefit and Payment Parameters for essential health benefits impacting out-of-pocket maximums for non-grandfathered group health plans:
Annual out-of-pocket maximums for health plans (other than HDHPs with HSAs):
7,150 for individual coverage
14,300 for family coverage
In summary, a high deductible health plan with family deductibles that are higher than the ACA’s cost-sharing limit for self-only coverage must be designed to limit the maximum out-of-pocket limit to no more than $6,550 for any one individual. For example, an issuer can offer a family HDHP with a $10,000 family deductible, as long as it applies a maximum annual limitation on cost sharing of $6,850 to each individual in the plan, even if the family $10,000 deductible has not yet been satisfied. This standard does not conflict with IRS rules on HDHPs.
If you have any questions on how Hays Companies can help your business stay compliant with employee benefit laws and regulations please contact us.
Most Disrupters aren’t all that disruptive anymore. Everyone, including our children, have become quite comfortable with Disrupters and the positive impact they have on business and our everyday lives. A true Disrupter turns a product or service upside-down and inside-out.
Consider one of the biggest Disrupters in recent history — the personal computer. Think of life without Google… More recently, consider smartphones, drones, smart watches, FitBit, Netflix, Nest, Uber, and Airbnb. Since their introduction, life has not been the same. Many of these companies have been incredibly successful. Today, we’re comfortably accepting these Disrupters with open arms and we’re hungry for more.
The Disrupter mentality and Silicon Valley.
Silicon Valley is home to some of the world’s most successful Disrupters. This continues to be true as many of the most visible Disrupters are technology-oriented.
In the first three months of 2015, venture capital (VC) funds invested $13.4 billion, much of it in the tech sector. Not since the dot-com era has there been such a run in VC funding and technology. Many young start-ups seeking funds are turning to crowdfunding and smaller investors, which is disrupting the very ground VC’s used to look to fund — Disrupters.
Two of the most successful Disrupters and their business strategy.
Sir Richard Branson, founder of Virgin Records, Virgin Airlines and Virgin Mobile, and Jeff Bezos, Amazon Founder and CEO, have a similar business philosophy: Constantly strive to improve the customer experience. In fact, they have structured their companies to encourage disruptive thinking and innovation. Bezos has upended the book and publishing industry and nearly displaced electronics retailers. He continues to disrupt and reinvent online shopping and delivery by responding to changing technology.
“We innovate by starting with the customers and working backwards,” says Bezos. “That becomes the touchstone for how we invent. For Amazon, customer focus is a cultural issue.”
The “improve the experience credo” has sparked a revolution in business thinking that fuels most new Disrupter companies.
One of the biggest Disrupters of today is the smartphone. By its very nature, its features are designed to disrupt whatever we’re doing. As a mobile device they are indispensable and frustrating because we can’t seem to put them down. They have changed the way we communicate, live and do business.
Smartphones are also having a dramatic impact on many other businesses, both positively and negatively. Yet smartphones have also created a dynamic new business category — app design. They help promote shopping, banking, health and fitness, news, entertainment, restaurants and better communication between businesses and consumers, just to name a few.
Understanding how Disrupters are affecting insurance and employee benefits begins with big data.
The biggest Disrupter to date is big data and most agree that big data benefits customers by offering them tailored insurance and employee benefits programs for their specific experience, location and risk profile. Collecting this information is no easy feat: it means gathering financial, claims, risk, customer preference and sales data from multiple sources, then scrubbing and analyzing it, all while complying with protective regulations designed to safeguard the data and data-driven decisions.
IBM’s Big Data @ Work survey reported that big data’s influence in the insurance realm is strong: some 47 percent of insurers want to use it to develop customer-centric programs and another 66 percent are conducting or planning big data activities.*
Today, the use of these devices is ubiquitous. We’ve become so accustomed to formerly “disruptive” technology that it doesn’t faze us anymore.
At the heart of the trend is effectively aggregating the data … and we are doing that at Hays.
We are on the edge of the big data trend, developing innovative programs and opportunities that will benefit our customers. At Hays, we have a proprietary technology platform that pulls together data. This allows us to audit the data, provide consistency of data extracts, show continuity of data across multiple vendors, simplify access to data through one portal, and reduce fees by eliminating ad hoc reports.
We help eliminate the “silos” that come from bucketing cost centers to give our customers a data-focused assessment of the true cost of employment.
The dark side of data.
When it comes to customer and employee privacy, however, we should never be complacent about the dark side of Disrupters.
Cyber terrorism and data breaches have shadowy technical roots in the so-called Deep Web and Dark Web, which most people don’t even know exist. Your company’s data is vulnerable through email links, apps, a compromised network, or a web download. But, the threats are not always through a coding attack. Hackers are increasingly using social engineering techniques to trick people into breaking normal security procedures because they think the phone or email contact is a trusted source.
That’s just the start. The rise of the Internet of Things (IoT) means personal data could be hacked or collected by cybercriminals in a way never before possible.
Does your wellness program encourage employees to use wearable fitness trackers or apps? Sure, they can improve employee health but there’s also a risk to private information: the FitBit cloud holding this personal health data has already been hacked, raising fears about their vulnerability. And that’s not even addressing their lack of Health Insurance Portability and Accountability Act (HIPAA) compliance.
With so many ways to hack into your company and your employees’ lives, it’s a top priority to have the best cyber security as well as the best insurance and employee benefits programs that protect your company’s people, property, data, reputation, and — ultimately — your bottom line, no matter what new Disrupter comes down the pike.
Technology is expanding at an unprecedented rate; there are new Disrupters in development that offer improvements and increased risks. Hays is at the forefront, watching the development and the impact on your business. We’ve always believed in providing the best resources available for our clients, so our representatives are prepared to provide guidance in managing the evolving risks. We hope you call on us if you have any questions.
This issue is an excerpt from our quarterly FOCUS publication. If you would like to read more, you can request the full issue below.
Recently, updated guidance has been received from the Federal Government with respect to the ACA, including release of updated health plan “Benefit and Payment Parameters” for 2017. For your information, we have summarized these updates below.
2017 Benefit and Payment Parameters:
On February 29, 2016, the US Health and Human Services (HHS), Treasury and Labor Departments finalized rules addressing 2017 Benefit and Payment Parameters for essential health benefits. The guidance issued is summarized in the linked “Fact Sheet”. Highlights of the changes affecting health plans under the proposed rule include:
Annual out-of-pocket maximums for health plans (other than HDHPs with HSAs) will be indexed in 2017, to $7,150 for individual coverage and $14,300 for family coverage.
HHS proposes to “codify statutory language” defining whether a new entity that was not in existence throughout the preceding year is a “large employer” subject to the play-or-pay mandate. The statutory language, when finalized, will reflect that the determine will be based on the number of employees it expects to employ on business days in the current calendar year.
The individual cost exemption for 2017 from the individual shared responsibility requirement will index to 8.16% of adjusted gross household income.
The Exchange open enrollment period for coverage beginning in 2017 and 2018 will begin November 1 and end the following January 31. For coverage beginning in 2019 and subsequent years, Exchange open enrollment will be from November 1 through December 15.
Click here to find an ACA Compliance Bulletin that contains further details, for your reference. If you have any questions, please contact your local Hays Consultant.
The art of risk assessment requires more than just knowledge — it also requires creativity and imagination to successfully anticipate, recognize, assess and treat potential risks.
Organizations that harness these skills can develop more effective risk management strategies to bolster their strategic goals, says Bruce Lyon, Hays Companies Director of Risk Control, in the cover story for the March 2016 edition of Professional Safety magazine.
The article dives deeper by presenting the sequence of assessing risk and the tools and methodologies used in the Risk Identification, Risk Analytics and Risk Evaluation process. To read more about the financial and non-financial benefits of risk reduction measures, click here.
Professional Safety magazine is published by the American Society of Safety Engineers, a global association of safety professionals founded in 1911. The professional safety society sets the occupational safety, health and environmental community’s standards for excellence and ethics.
Hays Companies is proud to announce the launch of EventGuard, our event cancelation insurance program. EventGuard provides valuable coverage for lost revenue and expenses incurred from a delay or cancelation of an event. Whether you are planning a concert, festival, sporting event or simply a conference or convention, Hays Companies will cover you in case of:
Cancelation of Event
Non-appearance of Speaker/Entertainer
Postponement of Event
Communicable Disease Outbreak
Forced Change of Venue
Inability to Vacate Premises
As Murphy’s Law states, “Anything that can go wrong, will go wrong” – don’t let the unexpected get in the way of your next event. Learn more about what our event cancelation insurance can do for you at our website: https://eventguard.haysprograms.com/
The end of 2015 brought more Affordable Care Act (ACA) guidance. On December 16, 2015, the IRS issued IRS Notice 2015-87, providing further guidance on the application of certain ACA group health market reforms. Many of the changes are applicable to plan years beginning on or after December 16, 2015, however, some of these changes are retroactive. Some of the key areas addressed in the Notice include:
The 4980H(a) employer penalty for failure to offer minimum essential health coverage to substantially all full-time employees will be adjusted for inflation, from $2,000 to the following levels:
$2,080 for 2015 and
$2,160 for 2016
The 4980H(B) penalty (the penalty that applies if coverage offered is unaffordable, or does not meet minimum value) will be indexed as well, from $3,000 to $3,120 for 2015 and $3,240 for 2016.
The affordability safe harbor percentages for employer-sponsored health coverage will be increased, from 9.5% for purposes of the W-2, Federal Poverty Line or Rate of Pay safe harbor. The adjusted percentages will be 9.56% for 2015 and 9.66% for 2016, to mirror the individual shared responsibility affordable coverage threshold.
Notice 2015-87 supplements previous guidance addressing health reimbursement arrangements (HRAs) and employer payment plans (group health plans under which an employer pays for an employee’s individual health insurance premiums).
In addition to ACA guidance, we received further guidance regarding mass transit limits. Following an increase in the mass transit limit provided in the federal budget bill signed into law on December 18, 2015, the IRS issued Notice 2016-6 on Jan. 11, 2016 providing guidance on how the tax limit increase for mass transit applies for 2015. In summary:
The tax limit for transit benefits is now permanently equal to the limit for parking benefits; the monthly tax exclusion for transit benefits was previously $130, while the exclusion for parking benefits was $250;
Employers are not required to provide additional transit benefits to their employees for 2015 due to the retroactively increased limit;
Employees may not retroactively increase their compensation reduction for 2015 to take advantage of the increase in the excludable amount for transit benefits; and
Employees may not reduce their compensation by more than $255 per month in 2016 in order to receive any permissible reimbursement for transit expenses incurred in 2015.
Today the Internal Revenue Service presented employers with an early holiday gift.
The IRS released Notice 2016-4 to delay the due dates for the 2015 information reporting required by the Affordable Care Act (ACA). Specifically the notice extends the due dates for:
Furnishing the 2015 Forms 1095-B and 1095-C to individuals, from Feb. 1, 2016, to March 31, 2016; and
Filing the 2015 Forms 1094-B, 1095-B, 1094-C and 1095-C with the IRS, from Feb. 29, 2016, to May 31, 2016, if not filing electronically, and from March 31, 2016, to June 30, 2016, if filing electronically.
Filers are not required to submit any request or other documentation to the IRS to take advantage of the extended due dates provided by Notice 2016-4.
Despite the delay, employers and other coverage providers are encouraged to furnish statements and file information returns as soon as they are ready.
For more information on Section 6055 and 6056 reporting, penalties for reporting failures and impact on individuals, you may download our comprehensive compliance report here.
Hays Companies recently welcomed Dain Jorgenson as Vice President of Business Development in the Hays Power & Utility practice. He has over 14 years of experience in conventional utilities, merchant power, upstream energy and the renewable energy industries.
Dain has recently been elected President of the Iowa Wind Energy Association. Prior to being elected President of the Association, Dain served on the finance committee and in the role of Treasurer.
The Iowa Wind Energy Association is comprised of utilities, wind project owners, developers and suppliers supporting wind energy and its development and expansion. Current membership stands at over 150 members representing all aspects of the wind industry.
Hays Power & Utility is our national specialty practice devoted to serving the focused needs of electric, gas & water utilities, wholesale electric power generators, coal mining/fuel supply providers and other diversified energy companies.
Aviation insurance companies have worked rapidly to create policies that meet the needs of the industry. Companies such as AIG, Allianz, Global Aerospace and USAIG have been leading the market.
One of the challenges for insurers is to properly underwrite and price policies based upon a limited collection of loss data. It further complicates matters considering the wide array of uses in which drones could be utilized.
A policy can be written for the drone operator to cover both physical damage to the drone and liability exposures stemming from third-party bodily injury or property damage. If you elect to contract drone services to a third-party, a nonowned aviation liability policy to include drones should be purchased. It is also recommended to only contract with drone operators who have obtained the Section 333 exemption.
The cost of these policies can vary from a few hundred dollars to a few thousand, and depends on several factors such as; type of drone, scope of use, operator experience, and desired liability limit(s).
The non-aviation insurance industry will normally exclude all coverage for drone operations. It is vitally important to partner with an experienced insurance broker who understands the aviation industry, has direct access to the marketplace, and recommends the coverage you need.
If you have any questions about obtaining coverage for your drone or non-owned drone exposure, please contact Alison Wynne, email@example.com, or Christopher Fostiak, firstname.lastname@example.org from the Hays Aviation Practice. If you would like to learn more about drones please view our complete issue of FOCUShere.