Tag Archives: New York Broker

This is How The IRS Handles Marriage and Health Tax Credits

If you’re about to tie the knot, do you know how a change in marital status could affect the credit you got toward health insurance when you were single? You could end up having to repay a big chunk of the money. Here’s the question and an answer that lays out the way the IRS handles the situation.

Last year, I had single coverage through the marketplace from January through May. Then I got married and canceled my policy because I had coverage through my husband’s job for the rest of the year. When I filed my 2014 taxes, we had to repay half of the premium tax credits for the months when I had a marketplace plan. Why? Those first five months I was single and relying on my own income. Why should my husband’s income be counted

The Internal Revenue Service has a special rule to handle situations like yours when people get married during the tax year. Though not a perfect solution, without it, chances are you would have had to repay even more of your tax credit.

First, though, here’s some background. The premium tax credits that people can qualify for if their income is under 400 percent of the federal poverty level (about $46,000 for one person) make coverage purchased on the health insurance marketplace more affordable. Like you, many people opt to receive the credit in advance and have it sent directly to their insurer, which reduces their monthly bill.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Lawmakers Are Seeking Transparency on Health Care Tax

Some lawmakers are challenging the Cuomo administration’s push for a $69 million annual tax to fund the state’s health exchange, wondering how the state spends the more than $5 billion in annual health care related taxes it already collects.
The Republican-led State Senate eliminated the proposed tax from its one-house budget.
Cuomo set up the exchange through an executive order after the Senate refused to consider creating it. The order Cuomo issued dictated that the exchange was to become self-sustaining by this coming fiscal year.But lawmakers are questioning why the tax, which would be funded through an increase in the Health Care Reform Act assessments paid by insurers, is necessary and wondering whether the money to fund the exchange can be found within the $5.5 billion the HCRA tax already generates each year.

That tax has recently come under new scrutiny with the arrest of former Assembly speaker Sheldon Silver, who allegedly used money from a slush pool funded with the tax money to make grants to a doctor who led lucrative clients to his law firm. The tax, originally intended to fund just graduate medical education and charity care, has ballooned over time into a general purpose fund that is used to prop up the state’s budget and trigger additional federal Medicaid money.

Under the HCRA law, details of how the money is collected and from whom, as well as how it is disbursed, should be easy to obtain. The details are supposed to be disseminated in quarterly reports written by Excellus Blue Cross Blue Shield, the company the state hired to manage all the HCRA money under a no-bid contract that pays Excellus $4.5 million a year.

State law requires Excellus to submit directly to the temporary president of the senate and the speaker of the assembly quarterly reports on the collection, pooling and distribution of funds in the HCRA Pool. The pool administrator is also supposed to submit reports detailing HCRA spending to the state’s comptroller. But lawmakers have said that the pool administrator hasn’t delivered any such reports for several years.

When lawmakers asked for those reports as part of this year’s budget negotiations, Cuomo administration officials gave them some numbers, a spokeswoman for Senate health committee chair Kemp Hannon said.

Reached Friday for comment, a spokesman for the Office of Pool Administration said he had no idea what the reports were. That’s something the Department of Health would handle, he said. Asked why the health department and not Excellus, would handle the reports, as required by law, the spokesman said, or one thing I don’t know what it is, and I don’t know who would be handling it. It’s something I don’t even know about.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Small Business Tasked to Tally Employee’s Health-Care Costs

Small employers are facing an unexpectedly onerous task: tallying their individual employees’ monthly health-care costs.

Starting in 2016, under the Affordable Care Act, employers with 50 or more full-time workers are required to file new tax forms laying out what individual employees are being charged for their employer-sponsored plans. The Internal Revenue Service released the new forms on Feb. 8.

Though completed forms aren’t due until next January, many employers are scrambling to get procedures in place now to collect the data. The new process entails measuring every individual full-time worker’s total monthly out-of-pocket cost for an employer health plan this year.

The IRS says tax officials will use this information to figure out whether employers are complying with the law’s requirement that businesses offer affordable health coverage to full-time employees and their dependents. Federal penalties for failing to provide an affordable health plan can run up to $3,000 an employee.

But small employers, especially those who keep their own books and prepare their own tax returns, say they’re finding the task of tracking employee costs for the plans to be confusing and time-consuming.

Rather than simply ask employers to record the price tag for a given health plan, the forms require employers to calculate the lowest-cost plan available to each full-time worker on a month-by-month basis—a figure that can vary as wages or working hours change, tax lawyers and workplace benefits consultants say.

That can be especially hard for retailers, restaurants, day-care services or other businesses where workers’ hours can vary from part-time to full-time, or so-called variable hour employees, they add. Under the law, employers aren’t required to offer coverage to part-timers.

“It’s a labor intensive process,” says Adam Okun, a senior vice president of Frenkel Benefits in New York, about completing the new IRS paperwork, Form 1095C. Employers who don’t start collecting this information today are heading for a “real nightmare next year,” he adds.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Health Insurance and Medicaid Enrollments High

About two million New Yorkers have signed up for insurance under the Affordable Care Act, with three out of every four of them poor enough to qualify for Medicaid, according to figures released Wednesday by the Cuomo administration.

While Gov. Andrew M. Cuomo heralded the overall numbers as a sign of the success of the program, having such a large proportion on Medicaid, which is funded by the government, could impose a heavy new burden on public finances.

But insurance experts said they expected the impact of the new Medicaid enrollment to be mitigated by the greater access to health care. In other words, they said, having Medicaid coverage would give people access to primary care that could keep them from developing a chronic disease or becoming catastrophically sick and ultimately costing the system even more.

“Theoretically, could these numbers of people eventually push that Medicaid number up higher? Yes,” James R. Tallon Jr., president of the United Hospital Fund, said on Wednesday.

But, he added: “Having most people insured is the key to controlling long-term cost growth because it means you can manage care in a more effective way.”

By and large, experts said, those signing up for private insurance on the state’s Affordable Care Act health exchange are people who were priced out of the market before. The law raised the income ceiling for Medicaid eligibility in New York and other states that accepted the expansion of the program; a family of four can now earn about $33,000 and still qualify. Many people who earn too much for Medicaid can get subsidies to help them buy private insurance.

Though Republicans in Congress have criticized the public costs and tried several times to repeal the law, which was passed in 2010, President Obama has vowed to veto any attempt to overturn it.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Premium Increases on Plans Have Slowed, But Employees’ Are Paying More

In New York, premiums for employer-sponsored family plans have slowed since the passage of the Affordable Care Act, but premiums and deductibles now eat up a larger share of employees’ incomes, according to a Commonwealth Fund report released Thursday.

Premiums for family coverage in the state grew 6% annually from 2010 to 2013, down from 7% in the seven years preceding the law. The average premium for a family, including an employer’s share, was $17,530 in 2013—an 86% increase from a decade earlier. New York data from the report are online here.

For single plans in New York, the annual growth rate of premiums rose slightly after the ACA’s passage, to 5.7% from 2010 to 2013, versus 5.5% from 2003 to 2010.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

U.S. Health Care Spending Capped

U.S. health care spending grew 3.6% in 2013, capping a five-year stretch of historically low growth, the Centers for Medicare and Medicaid Services said in December.

That’s good news for health care payers, but is the slowdown — which was the smallest increase since 1960 — sustainable?

What we’re seeing is “a slowing down of what was perhaps unsustainable” increases in the cost of health care, said Elise Gould, senior economist and director of health policy research at the Economic Policy Institute, a Washington-based think tank.

Health care spending rose at or below 4.1% per year from 2009 through 2013, CMS reported in the journal Health Affairs in December. That’s a far cry from the double-digit spikes of the late 1980s and early 1990s and the high-single-digit increases of the early 2000s.

Still, increases in health care spending outpaced the U.S. inflation rate of 1.3% for the 12 months that ended in November.

“We’ve talked about it being a new normal, that the days of double-digit inflation are unlikely to return soon” for health care prices, said Mike Thompson, New York-based principal and health care practice leader at PricewaterhouseCoopers L.L.P.

Mr. Thompson said the growing consumerism movement, hastened by the Patient Protection and Affordable Care Act’s upcoming 2018 excise tax on high-cost health plans, will factor into controlling future health spending.

Charles Roehrig, vice president and director of the Center for Sustainable Health Spending, a research arm of Ann Arbor, Michigan-based nonprofit health care consultant Altarum Institute, said sluggish growth in health care prices and other effects of the recession were key contributors to the five-year slowdown in health care spending.

He noted that the ACA’s productivity adjustment factor to ratchet down Medicare payment rates to hospitals is having a wider effect because commercial payers are following Medicare’s lead and negotiating lower rates, too.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary



The SHOP Falls Short on Enrollments

Remember those “other” new Obamacare exchanges—the ones that small businesses were supposed to use to sign up workers for health insurance?

Yeah, well, apparently a whole bunch of small businesses forgot about them, too.

A new Government Accountability Office report finds that a stunningly low number of workers have enrolled in insurance plans sold on small-business health exchanges run by federal and state governments.

The report suggests that the Small Business Health Options Program exchanges will fall well short of the 2 million people that had been projected to sign up by January.

As of last summer, only about 76,000 people working for about 12,000 employers had enrolled in insurance plans sold by 18 state-run SHOP exchanges, according to the GAO report released Thursday.

While the other 33 SHOP exchanges run by the federal government didn’t have enrollment data available for the GAO, officials in charge of them “do not expect major differences in enrollment trends between” the state-run SHOP exchanges and their federally run counterparts, the report noted. The federal Centers for Medicare and Medicaid Service was still compiling enrollment data from insurers and did not expect complete numbers until early 2015, the GAO said.

Obamacare’s small business health marketplaces are likely to fall well short of the 2 million enrollees projected for 2014, a GAO report suggests.

The SHOP exchanges are supposed to help small employees provide group health coverage to their workers. But most such employers clearly haven’t bothered to take the exchanges up on that offer, or aren’t aware that it’s available, raising questions about whether these exchanges can get close to the 4 million enrollees that had been projected by 2017.

One state-run SHOP—Mississippi’s—had just one person enrolled, the GAO report said. Washington state had the second-lowest enrollment with 42 people.

Two population-heavy states, California and New York, had just 9,563 and 10,023 people enrolled, respectively, in their SHOP exchanges during their first year of operation.

Vermont, the second-least populous state, had by far, the highest enrollments in a state-run SHOP: 33,696 people. That represents 44 percent of all enrollees on the state-run SHOPs.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary


Commuters May Receive The Same Tax Breaks as Drivers

Mass transit commuters should get the same tax break as people who drive to work, Sen. Charles Schumer said Tuesday.

The New York Democrat said he has high hopes for a measure that would allow bus, subway and commuter rail riders to deduct up to $250 a month from their taxable income next year.

Currently, the figure is $130. Before this year it had been as high as $245, Mr. Schumer said, matching the amount drivers are permitted to deduct from income for parking expenses.

But the figure for mass transit commuters was reduced for 2014, although the drivers’ break was extended. The tax breaks are available if employers participate in eligible programs.
Mr. Schumer’s bill “would restore parity between commuters and drivers,” the senator said at a White Plains news conference.

He predicted it would also be “a huge shot in the arm for the local economy.” He said it would also help the environment and even benefit drivers by reducing traffic.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Changes to The Small-Business Health Market

Several thousand of the nation’s smallest business owners—sole proprietors and the self-employed—were kicked off their small-business plans by carriers earlier this year. That is because new guidelines define “employers” as having at least two full-time employees, not including a spouse, in order to be eligible for group plans.

In all, more than 78% of the estimated 28 million small businesses in the U.S. have no employees, according to the Small Business Administration. These business owners must now seek coverage as individuals, or face fines.

Many consumers and small-business owners are finding affordable plans on the individual market, according to government health officials and insurance brokers. But at least some of the business owners who were excluded from group plans as a result of the health law are struggling with higher premiums, less robust benefits or uncertainty within a new, unfamiliar network, says Scott Lyon, vice president of the Small Business Association of Michigan.

In December, the association’s own group plan, which currently has 4,000 small-business members and covers about 40,000 workers and their families, was forced to kick out 700 sole proprietors, he says.

Here’s a closer look at recent changes for three different businesses with fewer than 50 employees:

Raymond Pezonella currently receives health coverage for himself and roughly 30 workers at his Reno, Nevada, engineering firm through a local builders’ association. He pays about $9,000 a month into the plan, known as an Association Health Plan, or AHP.

The plan includes 220 other local businesses, from carpenters to painters and plumbers, covering more than 5,000 workers and their families. His employees pay around $1,800 each in monthly premiums.

By pooling together with other employers, Mr. Pezonella says he was able to save nearly 14% on annual insurance costs for his company, which designs foundations for homes, schools and other buildings. “You want to do right by your team, not just to keep them around, but to keep them healthy, too,” he says, adding that his firm has been on the group plan for more than two decades.

But earlier this year, his policy, administered by the Builders’ Association of Northern Nevada, was defined as a “small group” plan under federal guidelines, because none of its members have more than 50 employees and each pay separate rates, says Mike Dillon, the builders’ group executive director.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Human Resource Professionals State Health Benefits Key to Attracting Workers

Employers have offered employees a greater variety of health and wellness benefits in the past five years, including coverage for mental health care and contraception, according to a report by the Society for Human Resource Management.

The 2014 SHRM Employee Benefits report showed that 87% of employers offer mental health coverage in 2014, down from 89% in 2013, but up from 82% in 2010. About 84% of employers reported covering prescription contraceptives for their employees in 2014, up from 82% in 2013 and 68% in 2010.

Under the health care reform law, most group health insurance plans are required to provide contraceptives without charge to the employee. Excepted are nonprofit religious organizations and, due to last week’s Supreme Court ruling, closely held for-profit companies with religious objections.

Mental health benefits also are governed by federal law. Under the 2008 Mental Health Parity and Addiction Equity Act, companies with more than 50 employees that offer mental health benefits must ensure that copayments, deductibles and limits on treatment are no more restrictive than medical or surgical benefits.

Alexandria, Virginia-based SHRM interviewed more than 500 human resource professionals for its annual survey, which was released in late June during the organization’s Annual Conference & Exposition in Orlando, Florida. Twenty-eight percent said benefits offered by their companies increased in the past 12 months, while 63% said their benefit levels remained the same.

“Offering health benefits is critical to employee recruitment and retention,” Bruce Elliott, SHRM’s manager of compensation and benefits, said in a statement. “However, the rising cost of health benefits, especially health insurance, has made it challenging for some employers to continue offering it. Because of that, employers are evaluating all their benefits and making adjustments.”

During the conference, Michael Cohen, a partner at Duane Morris L.L.P. in Philadelphia, said firms should create equal employment and anti-discrimination policies that include protections for employees based on sexual orientation and gender identity to help prevent discrimination complaints.

Employers also should address inappropriate behavior by employees that can be perceived as discriminatory against lesbian, gay, bisexual and transgender people, and can offer benefits to same-sex spouses, civil union partners and domestic partners of employees after checking with their insurer, he said.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary