Group Health Insurance

Administration Releases New Guidance on Health Reimbursement Arrangements (HRAs) and Section 1332 Waivers

By | Group Health Insurance, Health Insurance

Proposed rule would allow HRAs to be used with individual coverage

Earlier this week, federal agencies released a proposed rule for Health Reimbursement Arrangements (HRAs) and updated guidance for Section 1332 State Innovation Waivers (now called State Relief and Empowerment Waivers).

The Administration had indicated these changes are part of its ongoing efforts to increase choice and flexibility in the insurance market.HRA Victory

On Oct. 23, 2018, the Departments of Treasury, Labor, and Health and Human Services (HHS) issued proposed rules that would allow employees to use the dollars in employer-funded Health Reimbursement Arrangements (HRAs, also called Health Reimbursement Accounts) to purchase individual coverage both on and off the public Marketplace (or Exchange). These proposed rules were released in response to the Oct. 2017 Executive Order, in which the Administration directed the tri-agencies to consider ways to expand the flexibility of HRAs.

Currently, employer-funded HRAs are used exclusively with employer-sponsored coverage to reimburse employees for health care expenses not reimbursed under their base medical plan (e.g., deductibles or coinsurance). Under the proposed rule:

  • Employees would be able to use HRA funds to pay the premium for individual insurance coverage purchased either on or off the public Marketplace.
  • Employers would be required to make the HRA available to entire “classes” of employees (e.g., full-time, part-time, or seasonal workers).
  • Employers could offer eithera group health plan or an HRA that could be used to purchase individual coverage, but not both.
    • If an employer offers the HRA, employees would be able to opt out if they are eligible for premium tax credits on the public Marketplace.

In addition to offering HRAs that could be used to pay for individual coverage, the proposed rule would also allow employers that offer traditional group health coverage to offer HRAs of up to $1,800 per year to reimburse employees for certain medical expenses, including stand-alone dental or vision benefits or premiums for Short-Term Limited Duration Insurance (STLDI), which is short-term individual insurance that doesn’t have to comply with all Affordable Care Act (ACA) rules.

Tax treatment of HRAs would remain unchanged and the offering of an HRA for individual coverage would satisfy the employer mandate if it is considered “affordable.” The Treasury Department and Internal Revenue Service (IRS) are expected to release guidance in the near future on the employer mandate affordability test and potential safe harbors.

The proposed rule can be read in detail here. The tri-agencies are requesting comments by Dec. 28, 2018.

Updated Section 1332 guidance increases state flexibility

On Oct. 22, 2018, the Centers for Medicare & Medicaid Services (CMS) issued updated guidance on Section 1332 waivers, which replaces guidance published in 2015. Under the ACA, states can apply to waive key ACA provisions in order to implement innovative, alternate health coverage rules or programs while retaining basic consumer protections. The five-year waivers were available beginning in 2017 and to date, eight states have received waivers.

The new guidance makes changes to the principles that CMS will use when reviewing and approving applications. While the original “guardrails” of ensuring comprehensiveness, affordability, scope of coverage, and deficit neutrality remain in place, CMS will interpret some of them differently to loosen restrictions. For example:

  • 2015 guidance: Focused on the number of individuals estimated toreceivecomprehensive and affordable coverage
  • 2018 guidance: Focuses on the availabilityof comprehensive and affordable coverage

Beyond the basic guardrails, CMS has identified five new principles that future waiver requests should aim to achieve:

  • Provide increased access to affordable private health plan coverage (including Association Health Plansand STLDI)
  • Limit cost increases for consumers and the federal government
  • Foster state innovation
  • Support and empower those in need
  • Promote consumer-driven health care

Changes were also made to streamline the state waiver application process. This guidance is effective for waivers submitted after Oct. 24, 2018, and has a 60-day comment period. Review the complete guidance or fact sheet for more information.

Need help sorting this out and making the right decision for you and your family?  Call us 1-800-257-1723 or click here to schedule an appointment.

Small Employers Cut Health Care Costs Using Stand-Alone HRAs

By | Group Health Insurance

Qualified small employer HRAs are a low-cost alternative to group coverage

By Stephen Miller, CEBSApr 9, 2018

More than 70 percent of small businesses that used a new type of health reimbursement arrangement (HRA) last year did so to offer employee health benefits for the first time, a new study shows. These early adopters also spent less on health benefits than small employers that provide employees with group health coverage.

The qualified small employer HRA (QSEHRA), created by Congress in December 2016, is a way for small businesses with fewer than 50 full-time employees to offer nongroup health benefits. By using a stand-alone QSEHRA, small employers can offer their workers a tax-free monthly contribution to purchase their own health care policies, either through an insurance broker or on the Affordable Care Act (ACA) marketplace exchange.

If the premium is greater than the employer’s monthly contribution, however, the employee pays the difference. If the contribution is more than the monthly premium, employees can use the extra funds to pay for out-of-pocket health costs, as they would do with a traditional HRA.

Qualified Small Employer Health Reimbursement Arrangement

Employers with fewer than 50 full-time or equivalent employees are not subject to the ACA’s employer mandate, which requires large employers to provide most full-time employees with ACA-compliant group coverage. The outlook for legislation that would allow large employers to pay premiums for individual policies through a QSEHRA, or regulatory guidance that would ease HRA restrictions to allow this, remains uncertain.

Lower Employer Costs

“There are many reasons small businesses choose to offer personalized health benefits like the QSEHRA, but one of the biggest reasons is cost,” said Caitlin Bronson, a content specialist at Salt Lake City-based PeopleKeep, a benefits software company. “Thanks to rising costs and increasing government regulation, traditional group health benefits have become too expensive, too complex and too one-size-fits-all for most small businesses,” she noted.

Bronson authored The QSEHRA: Annual Report 2018, which analyzed data from more than 600 small businesses and nearly 4,000 employees who were early adopters of the QSEHRA benefit last year.

Average monthly QSEHRA employer contribution amounts, the data showed, were:

  • 38 percent smaller than the average small-employer contributions to group premium plans for single coverage.
  • 47 percent smaller than average small-employer contributions to group premium plans for family coverage.

Small employers offering a QSEHRA in 2017 gave an average monthly contribution of:

  • $280.20 per employee with self-only coverage.
  • $476.56 per employee with family coverage.

In comparison, small businesses that offered group health insurance coverage spent an average $454.67 per employee per month for single coverage and an average $900.08 per employee per month for family coverage, according to the 2017 Employer Health Benefits Survey by the nonprofit Kaiser Family Foundation.

The IRS issues annual contribution limits for QSEHRAs, and last year nearly a quarter (22 percent) of participating employees received the 2017 maximum monthly contribution of $412.50 for self-only coverage or $833.33 for family coverage, PeopleKeep found.

For 2018, the monthly maximum QSEHRA limits are $420.83 for self-only and $854.16 for family coverage.

Call us today and let’s get you and your employees covered through this terrific health insurance opportunity! 1-800-257-1723 or click here and schedule an appointment.

The Employer Mandate Penalty and Employee Eligiblility for a Premium Subsidy: Increased Enforcement Is Coming

By | Group Health Insurance, Health Reform

This month, there have been two significant announcements from the Department of Health and Human Services (HHS) regarding employee eligibility for a premium subsidy under the Affordable Care Act (ACA).

Employer Mandate Penalty and Your Health Plan

First announcement: HHS has hired a third-party contractor to perform an employer verification study. Its purpose is to call employers and determine whether applicable large employers are offering an affordable, minimum value plan (AMVP) to their employees. Please note that participating in the call is voluntary; there are no consequences if you choose not to participate. In addition, calls will only be conducted from April-June and will take 10-15 minutes.

Why this is important: In order to trigger the employer mandate penalty, a full-time employee must enroll in a health plan on an Affordable Care Act Exchange and be eligible for a premium subsidy. Although Exchange regulations require that an “electronic data source” is accessed to verify eligibility for a subsidy, in reality, no such source is available. The regulations go on to note that in the event there is a not an available electronic data source, employers may be contacted and asked if they offer an affordable, minimum value plan. This process was delayed in 2014 and 2015, but HHS seems ready now to move forward with it.

Second announcement: Besides verifying whether an employee was offered an AMVP, Exchanges must also notify employers if an employee has enrolled in an Exchange and whether or not they are eligible for subsidies. On May 13, HHS published a model notice that the Federal Exchange will send to employers. Click here to view it.

Why this is important: If an employer is offering an AMVP, and the Exchange did not discover it during the enrollment process, the employer can contact the Exchange with plan details. The Exchange then would review the employee’s eligibility and stop payment on any premium subsidies. However, if the Employer is not offering an AMVP, they could incur penalties under the employer mandate.

The Internal Revenue Service is the entity tasked with enforcing the employer mandate, but there has to be cooperation between the Exchanges and the IRS to verify if the penalty tax should be applied: the IRS won’t know unless informed by the Exchanges.

In summary, it wasn’t possible for the IRS to enforce the employer mandate until the Exchanges had a verification process, including a notice sent to employers. Employers should be on the lookout for notices from the Exchanges as well as the IRS.


Source: Self Insurance Institute of America

Don’t be a Do-It-Yourselfer and cobble together Cut-Rate Health Insurance!

By | Group Health Insurance, Health Insurance, Uncategorized

If you are like a lot of hard working Americans and have decided that paying $1,000 or more a month for family health and dental plans through your job has become an excessive burden – then listen up.Worried Mature Couple Reviewing Domestic Finances

You’ve probably searched for individual family plans on These polices are usually more expensive plus have high deductibles. They only make sense if your family’s income is low enough for subsidies.

For many people the next step has been to cobble together different policies that each provide limited coverage for you and your family: a short-term plan with a high deductible that provides up to $1 million in coverage; a critical illness plan that pays a $20,000 lump sum if one of you is diagnosed with invasive cancer, heart attack or stroke; and a dental plan that provides $1,000 in coverage. The total monthly tab for this might be around $350.

But there are a couple of catches:

  • The protection you have pieced together is not the best protection – it leaves you wide open to financial disaster. With a lump sum payout of $20,000 for an individual market critical illness plan, according to insurer Gen Re, the policy won’t come close to covering treatment for a serious illness.
  • Under the health law, most people are required to have insurance that meets minimum standards or pay a fine. Limited benefit policies such as short-term, critical illness, accident, dental and vision plans don’t qualify. (In 2016, the penaltyis $695 per adult and $347.50 per child, or 2.5 percent of household income, whichever is greater.)

Still, faced with sky-high premiums and high deductibles for traditional plans, families earning $70,000-$180,000 are looking for ways to reduce health insurance costs.

Be Warned: if not done correctly it’s a roll of the dice, and if something bad happens, you could find yourself on the hook for a very big bill.

There is a solution!

Trust us.  We’ll deliver the right coverage and help you avoid the Obamacare penalties.

Our Agents specialize in alternative health insurance programs (all from A+ rated companies) that we call the Real Life Protection Pyramid. The Real Life Protection Pyramid provides better financial protection and superior access to healthcare than Obamacare or group plans.  Our Agents understand how to steer you around the issues of penalties, place you with companies that offer superior lump-sum-payouts for critical illnesses and structure your health insurance program to minimize deductibles.  If no one in your family has had treatment for Heart Attack/Disease, Stroke, Cancer, or Diabetes in the last 5 years, needs coverage for addictions, mental health, or maternity or is taking more than $250 a month of daily medications, you’ll probably qualify and save $400-$700 per month.

How to Handle the Looming Employer Mandate

By | Group Health Insurance, Health Reform

Becoming Effective Very Soon

Sticker ShockMuch of the conversation swirling around Obamacare involves the penalty individuals will face at the end of the year if they do not pick up qualifying health insurance – a part of the law known as the individual mandate.

But there’s another mandate that’s received much less coverage and is set to kick in on January 1, 2015 – the so-called ‘employer mandate.’

Under this part of the Affordable Care Act, employers with 50 or more full-time workers must offer affordable health coverage to at least 95 percent of their full-time workforce and any dependents up to age 26, or face a penalty of $2,000 per worker – minus up to 30 workers.

Companies have complained about this part of the ACA and mid-sized companies, those with between 50 and 99 workers, will have until 2016 to comply, thanks to an executive order by President Barack Obama. While ‘large’ companies with 100 or more workers must comply starting in 2015 – they will be allowed to ramp up coverage, mandated to cover at least 70 percent in 2015 and at least 95 percent in 2016.

Employers can’t just offer any old coverage either. The ACA mandates that an employer plan must offer “minimum value” – defined as covering at least 60 percent of deductible, co-pays and other costs. Employer coverage must also be affordable – defined as not more than 9.5 percent of a worker’s household income.

If coverage does not provide “minimum value” or is not “affordable” under the law and an employee gets subsidized coverage through the health care exchanges, the company will be penalized either $3,000 per worker getting subsidized coverage or $2,000 per full-time worker, whichever is less. Once an employee is awarded subsidized coverage, their employer will receive a notice from the IRS and be allowed to contest a potential penalty.

Are There Loopholes?

There are several elements of the law that employers may be able to work around. One quirk in the law is that a “full-time” worker is considered someone who works at least 30 hours per week. This presents employers with the option of scaling down their full-time workforce and having people who used to work 40 hours cut back to 30.

However, companies should take note that that multiple part-time workers can add up to full-time workers under the ACA. For example, two employees who each work 15 hours per week would be considered one full-time, 30-hour-per-week worker under the ACA.

Another potential loophole for employers to look at would be helping their workers sign up for Medicaid, since they are not required to sign up employees who are on the federal health coverage plans.

With the law’s many attributes in a seemingly constant state of flux, these ACA loopholes may be closed up or others may open. We here at Health-Dental-Life are well-versed in the many aspects of the ACA and can let employers know their options as they presently Logo

If you’re a business owner, call us today to speak with one of our agents with decades of insurance experience: 1-800-257-1723 or view our website.

The Three Major Benefits of a Self-Funded Health Insurance Plan

By | Group Health Insurance

With its numerous taxes and requirements – the Affordable Care Act, or Obamacare, is expected to hamper small businesses when it comes to offering health insurance to their employees.

Insurance AgentsHowever, employers that insure themselves instead of turning to a large private insurer are exempted from many of the burdens of Obamacare. In fact, there are three big reasons why a small business should consider a “self-funded” plan: protection from premium increases, more plan flexibility and avoiding federal penalties.

1) Premiums for Group Plans on the Rise

While premiums are expected to rise for every type of insurance plan, one aspect of Obamacare could make the increase particularly acute for small businesses. Under the federal law, health risk can no longer be used as a factor to determine premiums for employer groups of fewer than 100 people. Since insurance companies can’t factor in risk, they will simply raise rates to hedge against the unknown – meaning employers’ costs will rise, despite the possibility of their workers staying healthy.

2) Restrictions Lower Flexibility

The federal law also places new restrictions on how insurance companies must spend their money; 85 percent on medical costs for groups with more than 100 employees and 80 percent on smaller groups. As a result, these insurers are expected to streamline their business model by reducing overhead and plan option. The net result for employers would be fewer choices and less flexibility.

3) Obamacare Adds News Taxes to Group Plans

A self-funded plan, with stop-loss insurance to guard against catastrophic medical costs, would not only avoid premium increases fostered by Obamacare and offer plan flexibility – it would also avoid the new tax Obamacare places on health insurance policies sold by insurers, which are expected to increase premiums by several percentage points.

Self-funded plans are governed by Employee Retirement Income Security Act — ERISA, which is much less restrictive than President Obama’s signature healthcare law. ERISA requires self-funded plans to give participants plan information, including features and funding. It also mandates fiduciary responsibilities for those who manage and control plan assets and offers protections for working Americans and their families who have preexisting medical conditions.

Self-funded plans used to be the domain of large employers, but an increasing number of small businesses at taking a look at this option thanks to Obamacare. It’s also important to note that a small business that tries self-funding exert can more control of their health benefits and keep any savings, but can also return to fully insured benefits if and when that makes more sense.

Health-Dental-Life-Insurance has a fully-trained team on hand for businesses considering a self-funded plan and a range of options to help implement such a plan. Give us a call at 1-800-257-1723 for your free consultation and analysis of overall savings and value added.

Taking the Obamacare Penalties Might Be Best Option for Businesses

By | Group Health Insurance

Sticker ShockWhile Obamacare’s individual mandate has individual Americans stressing out about penalties, the section of the Affordable Care Act causing the biggest concern for businesses is the Employer Shared Responsibility (ESR) provision, which mandates the “large employers” must offer coverage to its employees.

The ESR originally applied to large employers with 50 or more employees that work an average of 30 hours or more per week or 130 hours per month. Under an IRS guidance issued in February, employers with a monthly average of between 50 and 99 workers can apply for transitional relief – if the employer meets three criteria:

  • Maintain an average of 50 to 99 employees
  • The workforce cannot reduce in size or hours of service worked between February 9 and December 31, 2014.
  • Health care coverage that was offered to employees as of February 9, 2014 cannot be reduced or eliminated.

The Two Penalties

For the large employers with 100 or more employees and those large employers that do not meet the above criteria, there are two potential penalties. The first penalty is for large employers that do not choose to offer insurance. The penalty goes into effect when the first full-time worker signs up for coverage through the Health Insurance Marketplace and qualifies for a cost-sharing premium or tax credit and was not offered coverage. In this case, the employers would be penalized up to $2,000 for each full-time employee.

The second ESR penalty is for large employers that do not offer affordable coverage that includes 10 essential benefits. Affordable coverage is described as costing the employee no more than 9.5 percent of their household income. For violating this provision of the ESR, an employer will be penalized up to $3,000 per for each employee receiving an “applicable premium tax credit or cost sharing reduction with respect to that employee’s purchase of health insurance exchange.”

When Taking the Penalties is the Best Option

Despite these stiff penalties, some large employers are opting not to either offer their employees coverage – or not offer them “affordable coverage.”

Rick Levi, owner of an Iowa-based cafeteria company, told the Wall Street Journal last year that the total penalties he would absorb under the ACA is still less than the premiums he would have to pay to cover all of his 102 employees — $500,000.

“I’ve never made a profit in any year of the company that has surpassed that amount,” he said. “I don’t make enough money.”

Other companies may want to follow suit and take the penalties just so they can remain in operation. Small-businesses with less than 50 employees would not be subject to a penalty. We here at Health-Life-Dental-Insurance have a team of experienced agents who will calculate potential penalties you may face and determine what’s the best health insurance strategy given health care reform. Visit our website or give us a call at 1-800-257-1723.

Girl 4 op

How Not Offering Employees Health Insurance Is The Best Thing You Can Do For Them

By | Group Health Insurance, Health Insurance

Woman holding a $100 billWhile not offering affordable health insurance or not offering it at all may seem like a negative point for companies, some employees may actually be better off in this situation under the Affordable Care Act, also known as Obamacare.

“Our analysis suggests that employees and employers across the country should sit down and discuss the potential merits of discontinuing employer-sponsored plans,” the price comparison site said in a recently-published report. “The company would end up saving money while the employee would benefit from thousands of dollars in tax subsidies—a clear win-win for both parties.”

Affordable Coverage

Under President Barack Obama’s signature healthcare law, if a company offers subsidized health insurance that costs less than or equal to 9.5 percent of their income – they are being offered “affordable coverage.”

Workers offered so-called affordable coverage cannot reject it and buy insurance through the state-run exchanges. However, this affordability test does not pertain to the entire family. So, if the cost of the offered coverage for an employee’s family, including any employer subsidies, exceeds 9.5 percent of family income – the family is NOT eligible to reject employer-subsidized insurance and seek a better government-subsidized deal through the exchange.

In this case the family would either have to take the pricy employers plan, or have the employee get insurance through their employer and cover the rest of the family through a plan from the state exchange, possibly without government subsidies. In some cases, both of these choices may not be financially feasible. So ultimately, an employee with a family to cover may be better off if his or her employer dropped coverage and allowed them to seek a government-subsidized plan.

Are Employers and Their Workers Better Off?

These plans may also be more attractive for individuals as well. According to Abir Sen, president and co-founder of health-plan selection company Gravie, Obamacare plans might be a better deal for everyone involved.

“Individual plans can be 20 to 30 percent cheaper than comparable group plans,” Sen recently told Inc.

Shopping for individual plans also offers the consumer more options in choosing a provider network. With the federal government offering subsidies to individuals and families whose income is less than 400 percent of the poverty level, dropping coverage might be a decision that workers will thank their employers for making.

Health-Life-Dental-Insurance has representatives available for businesses thinking about making a significant change to their coverage plans to dropping their coverage all together. We also provides a range of coverage options for both groups and individuals. Call us today to see how much we can save employers and employees: 1-800-257-1723. Logo