Hamilton Headlines
February 8, 2016

Virginia Small Group Definition

On January 26, 2016, Governor McAuliffe signed into law House Bill No. 58, which formally adjusts the definitions of small and large employers for group health insurance purposes. Starting immediately, groups with 51 to 100 employees will not be considered small groups in the Commonwealth of Virginia.  As a result, the plan years beginning on or after February 1, 2016, the small group definition for fully-insured Virginia plans will remain at those with no more than 50 full-time equivalent employees during the previous calendar year.

This new law means that groups 51 to 100 employees in Virginia will not be limited to only small group "metallic level" plans that mirror those that are available on the Marketplace, and they will not be required to use member-level rating for premiums.  
Phone Scams Continue to be a Serious Threat, Remain on IRS "Dirty Dozen" List of Tax Scams for the 2016 Filing Season

WASHINGTON - Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, headlining the annual "Dirty Dozen" list of tax scams for the 2016 filing season, the Internal Revenue Service announced today.

The IRS has seen a surge of these phone scams as scam artists threaten police arrest, deportation, license revocation and other things. The IRS reminds taxpayers to guard against all sorts of con games that arise during any filing season.

"Taxpayers across the nation face a deluge of these aggressive phone scams. Don't be fooled by callers pretending to be from the IRS in an attempt to steal your money," said IRS Commissioner John Koskinen. "We continue to say if you are surprised to be hearing from us, then you're not hearing from us."

"There are many variations. The caller may threaten you with arrest or court action to trick you into making a payment," Koskinen added. "Some schemes may say you're entitled to a huge refund. These all add up to trouble. Some simple tips can help protect you."

IRS Provides Additional Guidance on Health FSA Carryovers  

The IRS recently issued Notice 2015-87 that addresses, among other things, issues affecting the administration of health FSA carryovers. The guidance clarifies how carryovers must be treated for purposes of COBRA and discusses the conditions that a plan sponsor may impose on the availability of carryovers. Employers that permit health FSA carryovers need to be aware of this guidance to ensure that they are in compliance with COBRA.


A health flexible spending account (health FSA) is an account typically funded through salary reduction that may be used to pay for health care expenses incurred by an employee, the employee's spouse and other eligible dependents. The Affordable Care Act imposes an annual limit on the amount of salary reduction contributions that an employee may make to a health FSA for a plan year. For plan years beginning in 2016, that limit is $2,550; this limit is indexed and may be increased for subsequent years.

Health FSAs are group health plans and, as such, are subject to various legal requirements, including the obligation to offer continuation coverage through COBRA. However, health FSAs that qualify as "excepted benefits" have only the following limited COBRA obligations: 
  • While other group health plans must make COBRA coverage available for the 18 (or 36) month period following the qualifying event, health FSA COBRA coverage may be terminated on the last day of the plan year in which the qualifying event occurs.

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IRS Ready to Start 2016 Tax Season; Encourages Use of IRS.gov and e-File; Works with States, Industry on Identity Theft Refund Fraud
WASHINGTON - The Internal Revenue Service announced that the nation's 2016 individual income tax filing season opens Jan. 19, with more than 150 million tax returns expected to be filed this year.

People will have several extra days to file their tax returns this year. Taxpayers have until Monday, April 18, to file their 2015 tax returns and pay any tax due because of the Emancipation Day holiday in Washington, D.C., falling on Friday, April 15. Taxpayers in Maine and Massachusetts will have until Tuesday, April 19, because of Patriot's Day observances on April 18.

The IRS expects more than 70 percent of taxpayers to again receive tax refunds this year. Last year, the IRS issued 109 million refunds, with an average refund of $ 2,797 .

"IRS employees have been working hard to get ready to help taxpayers this filing season," IRS Commissioner John Koskinen said. " As part of our Security Summit initiative, the IRS has been working closely with the tax industry and state revenue departments to provide taxpayers with stronger protections against identity theft during the tax filing season."

The IRS encouraged taxpayers to plan ahead and take advantage of the online resources available on IRS.gov.

Retirement Giant Fidelity Now Wants Workers' Health Insurance  

(Bloomberg) -- Fidelity Investments is already the U.S.'s No. 2 mutual fund company. Now, it wants to get bigger in the health insurance business.

The financial services firm is introducing a shopping website for health insurance and other employee benefits called Fidelity Health Marketplace. Targeted at businesses with as many as 2,500 workers, the site, known as a private health exchange, complements Fidelity's existing benefits products such as retirement accounts.

"The bottom line is, our customers are asking for this," Joe Laurin, who runs the health marketplace business at Fidelity, said in a telephone interview. "The real distinguishing point is this ability to bring the health and financial wellness together."

The private exchanges set up by companies like Fidelity are separate from the government-run websites created under the 2010 Patient Protection and Affordable Care Act. But they share some of the same features and goals, such as letting customers shop for the best deal by examining the cost and coverage offered by different health plans. They can also help limit the cost to employers, by giving workers a set amount to spend.

Did You Know? 

--February is American Heart Month

--UnitedHealth Group took a bigger bath on PPACA exchanges last year than even its pencil pushers projected, adding to the speculation that the company may stop selling health insurance via the exchange system.  In announcing its fourth quarter and full year 2015 financial results, the company said it lost $720 million in its exchange insurance segment - more than twice what it had been anticipating.
Company officials have said they expect losses of about $500 million on its 2016 exchange business. Overall, UnitedHealth Group is financially healthy and forecasts earnings per share of about $7.80 on $180 billion in revenue in 2016. Last year's revenue was just under $160 billion.

--An increasing number of primary care physicians are bypassing insurance companies entirely by offering direct services to patients in exchange for a flat monthly or annual fee.  Since Obamacare's passage in 2010, the number of direct primary care practices has increased from a handful to hundreds--Kaiser reports more than 400. 
--Average cost increases for global employer-funded medical plans are expected to reach 9.1% this year, according to new research by consulting firm Aon Hewitt. That's 5.5 percentage points higher than the global average projected inflation rate of 3.6%.  The report is significant as it points to rising costs and the increased prevalence of chronic conditions - including high blood pressure, obesity and high cholesterol - as chief contributors to what Aon Hewitt calls a "global phenomena."
  -- ACA Reinsurance Fee
In two separate payments for the 2015 benefit year, with the first remittance due by January 15, 2016 reflecting $33.00 per covered life, and the second remittance due by November 15, 2016 reflecting $11.00 per covered life. 

-- ACA Reporting 
Forms 1094-C and 1095-C to be filed with the IRS by May 31, 2016 (instead of February 29, 2016) or June 30, 2016 (instead of March 31, 2016), if filing electronically.

Forms 1095-C are due to employees by March 31, 2016 (instead of February 1, 2016).

--D.C. Commuter Benefit effective Jan. 1, 2016 has provided a 90-day grace period. Employers must have benefits in place by 4/1/2016.  

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Please note that Hamilton Insurance does not provide legal advice, and this does not constitute advice of any kind for any 
particular situation. Instead, this is intended as non-comprehensive general information serving as a starting point for further 
discussion. Please contact your tax and/or legal advisors for information about how these issues affect you.  
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H amilton Insurance , a top ranked independent broker in the Washington DC/Metropolitan Area and the nation, has over 35 years of experience in providing insurance brokerage, risk management and employee benefit solutions. It represents a full suite of commercial, health & welfare, and personal insurance solutions, supported by risk compliance and group benefit administrative services. 

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