Benefits Buzz – July 2018
This month’s Benefits Buzz reviews the ACA affordability percentage increase, provides the 2019 HSA limits and outlines the administration’s plan for lowering prescription drug costs.
Final Regulations Released on the 90-day Waiting Period Limit
• On Feb. 20, 2014, the Departments issued two rules on the 90-day waiting period limit.
• The rules apply for plan years beginning on or after Jan. 1, 2015.
• A one-month orientation period is a permitted eligibility condition.
• Rehired employees may be required to satisfy the waiting period again.
For plan years beginning on or after Jan. 1, 2014, the Affordable Care Act (ACA) prohibits group health plans and group health insurance issuers from applying any waiting period that exceeds 90 days.
On Feb. 20, 2014, the Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (the Departments) released final regulations
on the 90-day waiting period limit. These regulations generally finalize provisions in proposed regulations issued in March 2013, with minimal changes.
At the same time, the Departments released a separate proposed rule
regarding a new provision permitting orientation periods under the 90-day waiting period limit.
The final regulations apply for plan years beginning on or after Jan. 1, 2015. For plan years beginning in 2014, the Departments will consider compliance with either the 2013 proposed regulations or the final regulations to constitute compliance with the 90-day waiting period limit requirement.
FULL ARTICLE HERE
Pay or Play Penalty- Hours of Service Rules Clarified
The Affordable Care Act (ACA) requires large employers to offer affordable, minimum value health coverage to their full-time employees or pay a penalty. This penalty is known as the shared responsibility or pay or play penalty.
On Feb. 12, 2014, the IRS published final regulations
on the ACA’s employer shared responsibility rules. The final regulations clarify the definition of “hours of service” for purposes of the pay or play rules.
Definition of Hours of Service In general, an “hour of service” means:
- Each hour for which an employee is paid, or entitled to payment, for the performance of duties for the employer; and
- Each hour for which an employee is paid, or entitled to payment by the employer for a period of time during which no duties are performed due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.
Under the final regulations, all periods of paid leave must be taken into account; there is no limit on the hours of service that must be credited. Also, all hours of service performed for all entities treated as a single employer under the Code’s controlled group and affiliated service group rules must be taken into account.
However, if compensation for hours of service is foreign source income, those hours of service should not be included in an employee’s hours of service.
CLICK FOR FULL ARTICLE
More Pay or Play Decisions
As 2015 and the employer shared responsibility penalties approach, employers must decide whether they will offer employer-sponsored health coverage that complies with the Affordable Care Act or drop coverage and lose a valuable attraction and retention tool. The flowchart below looks at the advantages and disadvantages of three of the options available to employers: continuing to offer coverage; eliminating coverage, but increasing compensation; or eliminating coverage without offering any increase in compensation.
Flow Chart for Pay of Play Click Here