Keeping You Current
February 2015 Newsletter

Please take a few minutes to get up to speed on this month's updates:
  1. Meet a New Member of our Team - Desirae Beckwith
  2. Section 6055 and 6056 Reporting Requirements
  3. Top 5 Health Care Reform FAQs
  4. OSHA Required Posts
Meet a New Member of Our Team        

Desirae Beckwith joined the BDR team in December as a Client Services Specialist. As a critical part of the internal team here, she provides our clients support with enrollment changes, COBRA eligibility, claims, and access to care support. Desirae especially enjoys helping people resolve claims issues. Prior to joining BDR, Desirae worked in medical billing. We are excited to have her as a member of our team!


Sections 6055 and 6056 Reporting Requirements*
Applies to groups with 50 or more full-time employees, including full-time equivalents

The Affordable Care Act requires insurers, self-insuring employers, and other parties that provide minimum essential health coverage to report information on this coverage to the IRS and to covered individuals (referred to as "section 6055 reporting"). Large employers (generally those with 50 or more full-time employees) are also required to report information to the IRS and to their employees about their compliance with the employer shared responsibility ("pay or play") provisions and the health care coverage they have offered (referred to as "section 6056 reporting").


Compliance Deadlines

Information reporting under sections 6055 and 6056 is voluntary for calendar year 2014. Therefore, the first section 6055 and 6056 returns required to be filed and the first statements required to be furnished are for the 2015 calendar year, as follows:


Minimum Essential Coverage (MEC) Reporting (Section 6055) Deadlines:

  • First information returns must be filed no later than February 29, 2016 (or March 31, 2016, if filed electronically).
  • First employee statements must be furnished on or before January 31, 2016.

Large Employer Reporting (Section 6056) Deadlines:

  • First information returns must be filed no later than February 29, 2016 (or March 31, 2016, if filed electronically).
  • First employee statements must be furnished on or before January 31, 2016.

For more information, please refer to the IRS Affordable Care Act Tax Provisions Questions and Answers  


Top 5 Health Care Reform FAQs*      
Next month marks the five-year anniversary of the Affordable Care Act (ACA). While many of the requirements for employers and group health plans are already in effect, the questions continue to roll in. Here's a look at five of the most common questions and answers surrounding the law:

1. Are small employers required to provide health insurance to full-time employees?
Under the ACA, small employers--generally those with fewer than 50 full-time employees, including full-time equivalents--are not penalized for choosing not to offer coverage to any employee. Effective as of January 1, 2015, large employers subject to "pay or play" may be liable for a penalty tax if they do not offer affordable health insurance that provides a minimum level of coverage to full-time employees (and their dependents, unless transition relief applies).

2. Do employers need to offer the same coverage to all employees?
Similarly situated individuals must be treated equally. Distinctions among groups of similarly situated employees may be permitted if they are based on bona-fide employment-based classifications consistent with the employer's usual business practice--for example, full- and part-time employees.

The IRS has delayed the requirement under the ACA that fully insured group plans comply with rules "similar" to the rules prohibiting discrimination in favor of highly compensated individuals that currently apply to self-insured plans. However, health benefits offered as part of a cafeteria plan (a plan which meets specific requirements to allow employees to receive certain benefits on a pre-tax basis) generally will be subject to the nondiscrimination requirements of Internal Revenue Code section 125.

3. Will an employer be liable for a "pay or play" penalty if one of its employees purchases health insurance through a Marketplace?
A large employer will only be liable for a penalty if at least one full-time employee receives a premium tax credit. In general, an employee will not be eligible for a premium tax credit if the employer has offered the employee health coverage that is affordable and that provides minimum value, even if the employee rejects the offer of coverage and instead enrolls in coverage through a Marketplace.

4. Can employers reimburse employees for premiums paid for individual health insurance policies?
No. Arrangements under which an employer reimburses an employee for some or all of the premium expenses incurred for an individual health insurance policy, or arrangements under which the employer uses funds to directly pay the premium for an individual health policy covering the employee, will violate the ACA and may be subject to a $100/day excise tax per employee. An employer-sponsored arrangement under which employees may choose either cash or an after-tax amount to be applied toward health coverage is permissible.

5. How does the law impact tax-favored accounts such as HSAs and health FSAs?
The ACA prohibits tax-favored distributions from health savings accounts (HSAs) to reimburse the cost of over-the-counter medicines or drugs that are not prescribed, except for insulin. A similar rule applies to health reimbursement arrangements (HRAs) and health flexible spending accounts (FSAs).

HRAs must be "integrated" with other group health plan coverage in order to satisfy certain ACA requirements, and may no longer be used for an employee's individual insurance policy premiums.

A health FSA must qualify as excepted benefits and be offered through a cafeteria plan to comply with the law. In addition, the ACA requires that salary reduction contributions to health FSAs be limited to $2,500 annually, indexed for inflation (for taxable years beginning in 2015, the limit is $2,550).

If your burning questions about ACA haven't been answered, please contact your Account Manger today.

OSHA Summary of Work-Related Injuries and Illnesses Must Be Posted From February 1 - April 30*    

Employers subject to the recordkeeping requirements of the federal Occupational Safety and Health Act (generally those employers with more than 10 employees, except for those in certain low-hazard industries in the retail, finance, insurance, real estate, and service sectors) are reminded to post OSHA Form 300A, Summary of Work-Related Injuries and Illnesses, from February 1 to April 30, 2015.
The Form 300A lists the total number of job-related injuries and illnesses that occurred during the previous year and must be posted even if no work-related injuries or illnesses occurred during the year. The summary must be signed and certified by a company executive, and should be displayed in a common area where notices to employees are usually posted so that employees are aware of the injuries and illnesses occurring in the workplace.

Note: As of January 1, 2015, there is a new list of industries that are partially exempt from keeping OSHA records. Establishments that are newly exempted are not required to post the 2014 Form 300A. Businesses located in states that operate their own safety and health programs should check with their state plan for the implementation date of the new recordkeeping and reporting requirements.  


*Source: HR360: The information and materials herein are provided for general information purposes only and are not intended to constitute legal or other advice or opinions on any specific matters and are not intended to replace the advice of a qualified attorney, plan provider or other professional adviser. This information has been taken from sources which we believe to be reliable, but there is no guarantee as to its accuracy. In accordance with IRS Circular 230, this communication is not intended or written to be used, and cannot be used as or considered a 'covered opinion' or other written tax advice and should not be relied upon for any purpose other than its intended purpose.


Benefits Done Right Insurance Agency, Inc.
601 University Avenue, Suite 250 / Sacramento, CA  95825
800 482 1817 / 916 568 2345 / fax: 916 564 9228

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