Clarification on Work-related Recordkeeping and Exemptions

OSHA requires employers to keep and maintain records of work-related injuries and illnesses. However, if an employee develops an injury or illness while performing a personal task or is injured outside of his or her normal work hours, it can be difficult to determine your OSHA obligations. That’s why OSHA recently clarified the requirements necessary for an injury or illness to be exempt from recordkeeping requirements.

In the clarification, OSHA presented an example in which an employee brought a plow to work, which he intended to loan to a co-worker. After the employee’s regular shift ended, he attempted to move the plow to the co-worker’s truck. However, in the process, the employee injured his back.

OSHA stated that the injury presented in this example would not be considered work-related, and would therefore be exempt from recordkeeping regulations. This is because the injury met both of the requirements needed to fall under the personal-task exemption:

* The injury or illness must solely be the result of an employee performing a personal task at the workplace

* The injury or illness must occur outside of an employee’s assigned work hours, including during formal and informal break times.

Compliance Recap: October 2016

October was a busy month for administrative rulemaking in the employee benefits world.

The Internal Revenue Service (IRS) released final instructions for Forms 1094-C and 1095-C, guidance on the taxability of health care sharing ministry employer contributions, and health care information reporting tips. The Department of Health and Human Services (HHS) released guidance on HIPAA and cloud computing. The Department of Labor (DOL) issued final regulations governing employee retaliation and whistleblower protection. The Centers for Medicare and Medicaid Services (CMS) issued guidance on off-Marketplace enrollment periods for stand-alone dental plans. The IRS, DOL, and HHS released notice of enforcement relief extension for higher education institutions, FAQs about preventive services coverage and mental health and substance use disorder parity implementation, and final regulations regarding short-term, limited-duration insurance, excepted benefits, and lifetime and annual limits.

UBA Updates

UBA released five new advisors in October:

UBA updated existing guidance:

IRS Releases Health and Welfare Plan Inflation-Adjusted Limits for 2017

The IRS recently released its Rev. Proc. 2016-55, including these health and welfare plan inflation-adjusted limits for 2017:

  • Requirement to Maintain Minimum Essential Coverage. For calendar year 2017, the applicable dollar amount used to determine the penalty for failure to maintain minimum essential coverage is $695.
  • Employee Health Insurance Expense of Small Employers. For taxable years beginning in 2017, the dollar amount is $26,200. This amount is used for limiting the small employer health insurance credit and for determining who is an eligible small employer for purposes of the credit.
  • Cafeteria Plans. For the taxable years beginning in 2017, the annual dollar limitation on voluntary employee salary reductions for contributions to health flexible spending arrangements is $2,600.
  • Medical Savings Accounts.
    • Self-only coverage. For taxable years beginning in 2017, the term "high deductible health plan" means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,250 and not more than $3,350, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,500.
    • Family coverage. For taxable years beginning in 2017, the term "high deductible health plan" means, for family coverage, a health plan that has an annual deductible that is not less than $4,500 and not more than $6,750, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,250.

Final Instructions for Forms 1094-C and 1095-C

The IRS recently released the 2016 Forms and Instructions for 6055 and 6056 reporting. Under the Patient Protection and Affordable Care Act (ACA), individuals are required to have health insurance, while applicable large employers are required to offer health benefits to their full-time employees. In order for the IRS to verify that individuals and employers have met their requirements under the ACA, employers with 50 or more full-time or full-time equivalent employees and insurers are required to report on the health coverage they offer. UBA released an Advisor that describes the final instructions for using Forms 1094-B, 1095-B, 1094-C, and 1095-C.

HIPAA Privacy Notice Deadline

HIPAA requires health plans to distribute:

  • a notice of privacy practices (NPP) to all newly eligible participants in the health plan,
  • a new NPP within 60 days of a material change to the notice, and
  • a notice of NPP availability to all participants once every three years.

In most cases, the insurer is likely handling notice distribution if the plan is fully-insured; the plan sponsor is generally responsible for notice distribution if the health plan is self-funded.

Under the HITECH regulations, effective September 23, 2013, all plans were required to revise their NPPs by September 23, 2013. This means that many employers, who have opted not to provide the notice annually, are likely due to provide the notice again in 2016.

For a health plan that posts its notice on its website, the revised notice (or information about the material changes and how to get a copy) had to be sent to participants in the health plan's next annual mailing after September 23, 2013, the effective date of the revisions.

For a health plan without a website, the health plan had to distribute the revised notice (or information about the material change and how to get a copy) to participants within 60 days of the effective date of the material change.

Because HIPAA requires health plans to provide notice of NPP availability to all participants once every three years, if a health plan has not already send its notice of NPP availability this year, then it should do so within the three-year deadline of when it complied with the final regulations in 2013.

HHS Issues Guidance on HIPAA and Cloud Computing

HHS provided guidance that cloud services providers (CSP) are business associates under HIPAA when a covered entity engages a CSP's services to create, receive, maintain, or transmit electronic protected health information (ePHI).

Further, when a business associate subcontracts with a CSP to create, receive, maintain, or transmit ePHI on its behalf, the CSP subcontractor itself is a business associate.

HHS explains that this business associate relationship exists even if the CSP processes or stores only encrypted ePHI and lacks an encryption key for the data. According to HHS, lacking an encryption key does not exempt a CSP from business associate status and obligations under the HIPAA Rules. Practically speaking, the covered entity (or business associate) and the CSP must enter into a HIPAA-compliant business associate agreement (BAA), and the CSP is both contractually liable for meeting the terms of the BAA and directly liable for compliance with the HIPAA rules' applicable requirements.

DOL OSHA Final Regulation Regarding Employee Retaliation and Whistleblower Protection

On October 13, 2016, the Department of Labor's Occupational Safety and Health Administration (OSHA) issued final regulations governing employee retaliation and whistleblower protection under the Fair Labor Standards Act (FLSA) Section 18C, which was added under health care reform.

Section 18C protects employees who may have been subject to retaliation for receiving premium tax credits for coverage purchased on an Exchange, of for reporting potential violations of key health care reform requirements (such as the prohibition on rescission or provision of preventive services without cost-sharing). This type of FLSA compliance must be filed within 180 days of the time when the alleged violation occurs. OSHA's website has an online complaint form, although no particular form is required and a complaint may be oral or in writing.

Read about the final regulations.

IRS Information Letter 2016-0051 Regarding Taxability of Employer Contributions to Health Care Sharing Ministry

The IRS answered the question of whether an employer can contribute to the premiums of employees who decline employer group health plan coverage and instead participate in a health care sharing ministry (HCSM).

Per the IRS, because participation in an HCSM is not employer-provided coverage under an accident or health plan, the law does not exclude employer payment for the cost of employee participation from the employee's gross income. Instead, the law considers it as taxable income and wages to the employee.

CMS FAQ on Off-Marketplace Enrollment Periods for Stand-Alone Dental Plans

CMS recently released an FAQ stating that Exchange-certified stand-alone dental plans offered off-Exchange may accept enrollments outside the Exchange enrollment periods.

Enforcement Relief Extension for Higher Education Institutions Offering Student Premium Reduction Arrangements

On October 21, 2016, the Department of Labor, Department of Health and Human Services, and Department of the Treasury released an FAQ to extend enforcement relief for higher education institutions offering premium reduction arrangements to their students. Pending further guidance, the Departments will not assert that a premium reduction arrangement fails to satisfy the annual dollar limits prohibition and preventive services requirement if the arrangement is offered in connection with other student health coverage (insured or self-insured). UBA released an Advisor regarding the agencies' enforcement relief extension.

IRS Health Care Tax Tip

On October 26, 2016, the IRS released its Health Care Tax Tip 2016-75 that provides seven reporting tips.

1.     The health care law requires applicable large employers (ALEs) to report information about health insurance coverage offered to its full-time employees and their dependents as well as to the IRS.

2.     ALEs must report information about themselves, the coverage they offered - if any - and the individuals covered under the policy.

3.     ALEs are required to furnish a statement to each full-time employee that includes the same information provided to the IRS by January 31, 2017.

4.     ALEs that file 250 or more information returns during the calendar year must file the returns electronically.

5.     ALEs must file Form 1095-C Employer-Provided Health Insurance Offer and Coverage with the IRS annually, no later than February 28, 2017, or March 31, 2017, if filed electronically. Forms 1095-C are filed accompanied by the transmittal form, Form 1094-C.

6.     Self-insured employers that are applicable large employers, and therefore are also subject to the information reporting requirements for offers of employer-sponsored health insurance coverage, must combine reporting under both provisions by filing a single information return, Form 1095-C, and transmittal, Form 1094-C.

7.     The ACA Assurance Testing System opens November 7, 2016, for tax year 2016 testing. Software developers - including employers and issuers who passed AATS for tax year 2015 - will not have to retest for tax year 2016; the Tax Year Software Packages will be moved into Production status. New participants need to comply with test requirements for tax year 2016.

FAQs About Preventive Services Coverage and Mental Health and Substance Use Disorder Parity Implementation

On October 27, 2016, the Treasury, DOL, and HHS (collectively, the Departments) issued "FAQs About Affordable Act Implementation Part 34 and Mental Health and Substance Use Disorder Parity Implementation."

In their FAQs, the Departments seek public comment by January 3, 2017, on tobacco cessation coverage. The Departments intend to clarify the items and services that must be provided without cost sharing to comply with the United States Preventative Services Task Force's updated tobacco cessation interventions recommendation applicable to plan years or policy years beginning on or after September 22, 2016.

In their FAQs, the Departments also seek public comment by January 3, 2017, on potential model forms that could be used by participants and their representatives to request information on various nonquantitative treatment limitations (NQTLs). The Departments also seek public comment on the disclosure process in connection with mental health / substance use disorder (MH/SUD) benefits and on steps that could improve state market conduct examinations or federal oversight of compliance by plans and issuers, or both.

Their FAQs also answered questions about receiving help in obtaining documents and interpreting documents related to MH/SUD benefit denial. Participants may use the Parity Consumer Web Portal to connect to an agency for help.

Further, their FAQs discussed the data that a plan or issuer can use to conduct its analyses. Under the Departments' regulations pursuant to the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), group health plans and issuers must use a "reasonable method" for the MHPAEA's substantially all and predominant analyses, which includes using reasonable data to produce reasonable projections.

Group health plans and issuers should not use claims data from an issuer's or third party administrator's entire book of business in an unreasonable manner to calculate the amount of a particular group health plan's or issuer's payments under MHPAEA. The Departments clarify that, for large group market and self-insured group health plans, a group health plan or issuer must consider group health plan-level claims data to perform the substantially all and predominant analyses and must rely on such data if it is credible to perform the required projections.

The FAQs state that the MHPAEA regulations do not permit a plan or issuer to apply stricter NQTLs to all benefits for mental health conditions in a classification than those applied to all medical/surgical benefits in the same classification. Further, the Departments' regulations require that a plan or insurance issuer may not impose an NQTL with respect to MH/SUD benefits in a benefit classification unless, under the terms of the plan as written and in operation, the processes, strategies, evidentiary standards, or other factors used in applying the NQTL are comparable and applied no more stringently with respect to MH/SUD benefits than with respect to medical/surgical benefits in the same classification.

Final Regulations Regarding Short-Term Limited Duration Insurance, Excepted Benefits, and Lifetime / Annual Limits

On October 31, 2016, the Department of the Treasury, Department of Labor (DOL), and Department of Health and Human Services (HHS) (collectively, the Departments) issued final regulations regarding the definition of short-term, limited-duration insurance, standards for travel insurance and supplemental health insurance coverage to be considered excepted benefits, and an amendment relating to the prohibition on lifetime and annual dollar limits.

Read about the final regulations.

Question of the Month

Q. An employer has a United States division with fewer than 20 employees; the parent company is located in a foreign county. Can the United States division's employee count be separated from the parent company for COBRA eligibility determination?

A. The USA division cannot be treated separately from its parent company for the purpose of employee count for COBRA eligibility determination. However, be aware that if the employer has immunity under the Foreign Sovereign Immunities Act, then COBRA would not apply. The employer's attorney must determine if this immunity applies.

Most employers are obligated to follow COBRA's rules if they provide group health plans. There is also an exemption for small employers who normally employed fewer than 20 employees on a typical business day in the year preceding the year for which exemption is sought. The typical business day standard is satisfied only if the employer had fewer than 20 employees on at least 50 percent of its typical business days during the preceding calendar year.

COBRA does not address the situation of a domestic subsidiary of a foreign corporation. To resolve the issue, the courts have determined that COBRA does not apply at all to any employer that is immune from jurisdiction pursuant to the Foreign Sovereign Immunities Act (FSIA) because it is a foreign state or instrumentality of that state.

In a Ninth Circuit case, employees sued a British Columbia processing plant and its parent corporation for violating COBRA. The court determined that the parent corporation was an agent of the Alberta province and thus immune from jurisdiction so COBRA did not apply to the parent corporation. However, the court found that the British Columbia processing plan did not fall within FSIA and that the processing plan was subject to COBRA.

In a separate case, a corporation located in Puerto Rico claimed that it was an exempt small employer. It employed 27 people; the corporation argued that, under Puerto Rico law, the employer's 2 owners and 7 relatives should not be counted as employees. The court disagreed and applied COBRA's definition of employee. The court held that the corporation was subject to the COBRA continuation coverage requirements.

Further, under controlled group rules, foreign corporations are not excluded from membership in a controlled group of corporations. Controlled group analysis is complex so the employer should consult with its attorney to determine whether the group is a controlled group.


Content provided by our partner, United Benefits Advisers, (UBA)

2016 Health Plan Survey: Topline Trends at a Glance

Great review of the 2016 Health Plan Survey from our partner, United Benefit Advisors (UBA) by Jason Reeves

The 2016 UBA Health Plan Survey contains the validated responses of 19,557 health plans and 11,524 employers, who cumulatively employ over two and a half million employees and insure more than five million total lives. Our data reflects the experiences of 99% of U.S. businesses in rough proportion to their actual prevalence, not just the largest employers who are often the sole focus in other surveys. As a result, our findings are extensive, so we’ve compiled a topline list of the biggest trends below.

Cost-shifting, plan changes and other protections work to hold rates steady.

  • Increased prevalence and enrollment in lower-cost CDHP and HMO plans.
  • “Grandmothered” employers continue to have the options they need to select cheaper plans (ACA- compliant community-rated plans versus pre-ACA composite/health-rated plans) depending on the health status of their groups.
  • The Protecting Affordable Coverage for Employees (PACE) Act protects employers with 51 to 99 employees from higher-cost plans.
  • Increased out-of-network deductibles and out-of-pocket maximums, as well as prescription drug cost shifting, are among the plan design changes influencing premiums.
  • UBA Partners leverage their bargaining power.

Overall costs vary significantly by industry and geography.

  • Retail, construction and hospitality employees cost the least to cover; government employees (the historical cost leader) cost the most.
  • Plans in the Northeast cost the most; plans in the Central U.S. cost the least.
  • Retail and construction employees pay the most toward their coverage; government employees pay the least (bad news for taxpayers).

Plan design changes strain employees financially.

PPOs, CDHPs have the biggest impact.

  • Preferred provider organization (PPO) plans cost more than average, but still dominate the market.
  • Consumer-directed health plans (CDHPs) cost less than average and enrollment is increasing.

Overall, wellness program adoption holds steady, but program design is changing.

  • Health risk assessments continue to decline, while chronic condition coaching is on the rise.

Metal levels drive plan decisions.

  • Most plans are at the gold or platinum metal level. In the future, we expect this to change since it will be more difficult to meet the ACA metal level requirements and still keep rates in check.

Key trends to watch in 2017:

  • Slow, but steady: increase in self-funding for all group sizes, decrease in employees electing dependent coverage, increase in plan options, and mail order pharmaceutical programs more for convenience than cost savings.
  • Cautious trend: increased CDHP prevalence/enrollment.
  • Rapidly emerging: increase of five-tier prescription drug plans, increased out-of-pocket maximums.

See the original article Here.


Proposed Summary of Benefits and Coverage Template and Updates

Original post

A Summary of Benefits and Coverage (SBC) is four-page (double-sided) communication required by the federal government. It must contain specific information, in a specific order and with a minimum size type, about a group health benefit's coverage and limitations. In February 2016, the Department of Labor (DOL) issued proposed revisions to the template and related materials. The agency expects final templates and materials to apply to plan or policy years beginning on or after January 1, 2017. The proposal includes both a blank template and a sample completed template along with instructions for completion. The agency has also invited public commentson the proposed template, to be submitted on or before March 28, 2016. All information about current and proposed SBCs, including a proposed uniform glossary and more can be found on the DOL's website.

For fully insured plans, the insurer is responsible for providing the SBC to the plan administrator (usually this is the employer). The plan administrator and the insurer are both responsible for providing the SBC to participants, although only one of them actually has to do this.

For self-funded plans, the plan administrator is responsible for providing the SBC to participants. Assistance may be available from the plan administrator's TPA, advisor, etc., but the plan administrator is ultimately responsible. (The plan administrator is generally the employer, not the claims administrator.)

Proposed Changes

The proposed template is shorter than the original four-page (double sided) communication. It includes a new "important question" that asks "Are there services covered before you meet your deductible?" and requires family plans to disclose whether or not the plan has embedded deductibles or out-of-pocket limits. This is reported in the "why this matters" column in relation to the question "what is the overall deductible?" and plans must list "If you have other family members on the policy, they have to meet their own individual deductible until the overall family deductible has been met" or alternatively, "If you have other family members on the policy, the overall family deductible must be met before the plan begins to pay."

Tiered networks must be disclosed and the question "Will you pay less if you use a network provider" is now included. The proposed SBC also includes language that warns participants that they could receive out-of-network providers while they are in an in-network facility. The SBC also indicates a consumer could receive a "balance bill" from an out-of-network provider.

The "explanatory coverage page" was dropped from the proposed template.

The provided coverage examples provide clarification to the "having a baby" example and the "managing type 2 diabetes" example, in addition to providing a third example of "dealing with a simple fracture." The coverage example must be calculated assuming that a participant does not earn wellness credits or participate in an employer's wellness program. If the employer has a wellness program that could reduce the employee's costs, they must include the following language: "These numbers assume the patient does not participate in the plan's wellness program. If you participate in the plan's wellness program, you may be able to reduce your costs. For more information about the wellness program, please contact: [insert]."

The column for "Limitations, Exceptions, & Other Important Information" must contain core limitations, which include:

  • When a service category or a substantial portion of a service category is excluded from coverage (i.e., column should indicate "brand name drugs excluded" in health benefit plans that only cover generic drugs);
  • When cost sharing for covered in-network services does not count toward the out-of-pocket limit;
  • Limits on the number of visits or on specific dollar amounts payable under the health benefit plan; and
  • When prior authorization is required for services.

The proposed template and instructions indicate that qualified health plans (those certified and sold on the Marketplace) that cover excepted abortions (such as those in cases of rape or incest, or when a mother's life is at stake) and plans that cover non-excepted abortion services must list "abortion" in the covered services box. Plans that exclude abortion must list it in the "excluded services" box, and plans that cover only excepted abortions must list in the "excluded services" box as "abortion (except in cases of rape, incest, or when the life of the mother is endangered)." Health plans that are not qualified health plans are not required to disclose abortion coverage, but they may do so if they wish.

Compliance Recap: January 2016

Original post

January was a very quiet month for compliance, on the heels of the multitude of delays that came at the end of December 2015. The IRS updated its FAQs related to 6055 and 6056 reporting under the Affordable Care Act (ACA).

UBA Guides and Compliance Documents

UBA updated the popular "Play or Pay Penalty and Counting Employees Guide" to reflect updates to affordability percentages; indexed penalty amounts; expiration of certain transition relief; information for educational institutions; clarifications on how disability and workers' compensation is factored into full time status determination; inclusion of flex credits, HRAs, and opt-out waivers when calculating affordability; and clarification on how to factor wellness incentives or penalties into affordability.

UBA created a reference chart on the applicable 2015 and 2016 ACA affordability percentages and indexed dollar amounts.

UBA updated the previously shared template letter that employers may use to draft written communication to employees regarding what to expect in relation to IRS Forms 1095-B and 1095-C, and what employees should do with a form or forms they receive.

UBA created a template consent form that employers may provide to employees, so that employees may consent to receive their employer-provided 1095-C or 1095-B forms electronically.

UBA has updated a previously-written guide on how to handle leaves of absence under the ACA rules for applicable large employers.

IRS Updates FAQs

The long-standing IRS FAQs related to reporting under sections 6055 and 6056 on requirements provided by the Patient Protection and Affordable Care Act (ACA) have been updated in January 2016 to reflect new information. Final instructions for both the 1094-B and 1095-B and the 1094-C and 1095-C were released in September 2015, as were the final forms for 1094-B, 1095-B, 1094-C, and 1095-C. On December 28, 2015, in Notice 2016-04, the IRS extended the information reporting due dates for insurers, self-insuring employers, other health coverage providers and applicable large employers. The updated FAQs take the information from Notice 2016-04 into account.

The 6056 FAQ, which discusses information reporting for applicable large employers (ALEs), and the6055 FAQ, which discusses reporting on minimum essential coverage (MEC), clarify that the deadlines for fixing mistakes on forms has been extended due to the overall extension for information reporting. For statements furnished to individuals under sections 6055 and 6056, any failures that reporting entities correct by April 30 and October 1, 2016, respectively, will be subject to reduced penalties.

The 6056 FAQ also clarified that an employer may only issue one 1095-C per full-time employee.

Question of the Month

Q. May an ALE use wellness incentives when determining its plan's affordability?

A. When calculating affordability of employer coverage when incentives or penalties are offered through a wellness program, employers must assume each employee fails to satisfy the requirements of the wellness program, unless it is a non-discriminatory wellness program related to tobacco use. For nondiscriminatory tobacco use incentives, the affordability calculation can assume all employees earn the incentive or are not charged the penalty.

Just Say 'No' to Co-Workers' Halloween Candy

Originally posted on  October 14, 2014 by Josh Cable on

Workplace leftovers might seem like one of the perks of the job. But when co-workers try to pawn off their Halloween candy on the rest of the department, it's more of a trick than a treat.

Those seemingly generous and thoughtful co-workers often are just trying to keep temptation out of their homes.

"Not only does candy play tricks on your waistline, but it also turns productive workers into zombies," says Emily Tuerk, M.D., adult internal medicine physician at the Loyola University Health System and assistant professor in the Department of Medicine at the Loyola University Chicago Stritch School of Medicine.

"A sugar high leads to a few minutes of initial alertness and provides a short burst of energy. But beware of the scary sugar crash. When the sugar high wears off, you'll feel tired, fatigued and hungry."

Tuerk offers a few tips to help you and others on your team avoid being haunted by leftover candy:

  • Make a pact with your co-workers to not bring in leftover candy.
  • Eat breakfast, so you don't come to work hungry.
  • Bring in alternative healthy snacks, such as low-fat yogurt, small low-fat cheese sticks, carrot sticks or cucumber slices. Vegetables are a great healthy snack. You can't overdose on vegetables.
  • Be festive without being unhealthy. Blackberries and cantaloupe are a fun way to celebrate with traditional orange and black fare without packing on the holiday pounds. Bring this to the office instead of candy as a creative and candy-free way to participate in the holiday fun.
  • If you must bring in candy, put it in an out-of-the-way location. Don't put it in people's faces so they mindlessly eat it. An Eastern Illinois University study found that office workers ate an average of nine Hershey's Kisses per week when the candy was conveniently placed on top of the desk, but only six Kisses when placed in a desk drawer and three Kisses when placed 2 feet from the desk.

And if you decide to surrender to temptation and have a treat, limit yourself to a small, bite-size piece, Tuerk adds. Moderation is key.

The Comfort of a Local Advisor Backed by the Support of a National Organization

Original content from United Benefit Advisors

Navigating the world of employee benefits can be a time-consuming – even frustrating – task. Quality benefits can help retain your best employees and recruit top candidates, but ever-changing compliance requirements and the myriad of choices and decisions that companies face can bog down a company’s benefit strategy. How can you be sure you’re crafting the best benefits package that meets your goals and improves the lives and security of your workforce?

Partners of United Benefit Advisors (UBA) are uniquely prepared to serve busy employers who want the assurance that they are making informed choices that enrich the lives of their employees. UBA Partners actively collaborate with more than 2,000 experienced benefits professionals, forming a network dedicated to helping employers save time and money.

UBA Partners, like Hierl Insurance, can provide state-of-the-art tools, including the nation’s largest benchmarking survey of employer-sponsored health plans – the UBA Health Survey – and a host of other solutions that can boost your benefits and bolster your bottom line.

Because UBA is a national organization, Partner Firms can create unique benefits packages for companies that have locations in multiple states and can help employers who are relocating or expanding. As a combined group, UBA’s annual employee benefit revenues rank it as one of the five largest employee benefit brokerage organizations in the United States.

While UBA lends our firm strength and knowledge, Partners are an independent advisory firms. UBA Partners aren’t franchises or subsidiaries. They are locally owned firms that understand the local marketplace and the unique challenges that individual employers face. They can provide insightful, personalized service that our competition simply can’t match, backed by the knowledge and resources of UBA.

Specialty Areas

15  Actuaries

07 Attorneys

36 Communications/Marketing Designers

01 Compliance Officer

01 Graphic Designer

34 Human Resource Consultants

01 Physician

04 Nurses

01 Nurse Practitioners/Physician Assistant

01 Pharmacist

UBA Partners can provide a wide range of services for today’s busy employer, including:

·         Consultative and Strategic Plan Design Analysis

·         Health and Welfare Plan and Qualified Plan Brokerage

·         Renewal Pricing Evaluation and Plan Cost Forecasting

·         Medical Stop Loss, IBNR and Reserve Calculations

·         Health Care Cost-Containment Strategies

·         Medical Claims Analysis and Individual Predictive Modeling

·         Actuarial Consulting: Medical, Retiree Medical and Pension Plans

·         FSA, HRA, HSA and COBRA Administration

·         HR Consulting

·         HIPAA Compliance Solutions

·         Health Care Claims Auditing Solutions

·         Worksite Marketing Programs and Voluntary Product Placement

·         Executive Compensation and Benefits Planning

·         Personal Financial Planning and Asset Management

·         Customized Employee Benefits Website and Document Library

·         Web-Based Employee Enrollment Systems

·         Web-Based Employment Law Training for Supervisors and Managers

·         Online Compliance and HR News Resources

·         Merger and Acquisition Due Diligence

·         Compliance Webinars, Alerts and Quarterly Newsletters


Employer-Provided Health Coverage Informational Reporting Requirements: Questions and Answers


The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan. To allow employers more time to update their payroll systems, Notice 2010-69, issued in fall 2010, made this requirement optional for all employers in 2011. IRS Notice 2011-28 provided further relief by making this requirement optional for certain smaller employers for2012 Forms W-2 (meaning the Forms W-2 for calendar year 2012 generally furnished to employees in 2013). Notice 2012-9, issued in January 2012, restates and clarifies guidance in Notice 2011-28. It provides guidance for employers that are subject to this requirement for the 2012 Forms W-2 and those that choose to voluntarily comply with it for either 2011 or 2012.

The following questions and answers provide information for employers on reporting the cost of the health insurance coverage, including information on transition relief for 2012, how to report, which coverage to include, and how to determine the cost of the coverage. There are many more questions and answers included in Notice 2012-9 that cover a variety of issues.

[wpspoiler name="Does the cost of an employee’s health care benefits shown on the Form W-2 mean that the benefits are taxable to the employee?" ]No. There is nothing about the reporting requirement that causes or will cause excludable employer-provided health coverage to become taxable. The purpose of the reporting requirement is to provide employees useful and comparable consumer information on the cost of their health care coverage.[/wpspoiler]

[wpspoiler name="When will employers have to start reporting the cost of health care coverage on the Form W‑2?" ]Reporting for the 2011 calendar year (meaning the Form W-2 generally required to be furnished to employees in January 2012) was optional. For years after 2011, employers generally are required to report the cost of health benefits provided on the Form W-2. Transition relief is available for certain employers and with respect to certain types of coverage, as explained in Q&A-4, below. Reporting for the employers covered by the transition relief, and with respect to the types of coverage covered by the transition relief, is not required until future guidance is provided, and in no event will reporting by these employers and with respect to these types of coverage be required on any 2012 Forms W-2 (generally required to be furnished to employees in January 2013).[/wpspoiler]

[wpspoiler name="Which employers are subject to this reporting requirement?" ]Except as provided in the transition relief described in the next Q&A, all employers that provide "applicable employer-sponsored coverage" (see Q&A-5 below) under a group health plan are subject to the reporting requirement. This includes federal, state and local government entities (except with respect to plans maintained primarily for members of the military and their families), churches and other religious organizations, and employers that are not subject to the COBRA continuation coverage requirements, but does not include federally recognized Indian tribal governments or, until further guidance, any tribally chartered corporation wholly owned by a federally recognized Indian tribal government.[/wpspoiler]

Third-party sick-pay providers that provide the Forms W-2 to the employees of the employers with which they have contracted do not have to report the cost of coverage. However, a Form W-2 provided by the employer to the employee must report the cost of coverage regardless of whether that Form W-2 includes sick pay or whether a third-party sick pay provider is furnishing a separate Form W-2 reporting the sick pay.

[wpspoiler name=" What transition relief is being provided by Notice 2012-9? To which employers and types of coverage does it apply and how long does it last?" ]For certain employers and with respect to certain types of coverage listed below, the requirement to report the cost of coverage will not apply for the 2012 Forms W-2 (the forms required for the calendar year 2012 that employers generally are required to provide employees in January 2013) and will not apply for future calendar years until the IRS publishes guidance giving at least six months of advance notice of any change to the transition relief. However, reporting by these employers and for these types of coverages may be made on a voluntary basis.[/wpspoiler]

The transition relief applies to the following:

(1) employers filing fewer than 250 Forms W-2 for the previous calendar year (for example, employers filing fewer than 250 2011 Forms W-2 (meaning Forms W-2 for the calendar year 2011, which generally are filed with the SSA in early 2012) will not be required to report the cost of coverage on the 2012 Forms W-2 (which generally are filed with the SSA in early 2013). For purposes of this relief, the number of Forms W-2 the employer files includes any forms it files itself and any filed on its behalf by an agent under § 3504 (see Q&A-3 of Notice 2012-9 for more information). In addition, for purposes of this relief, the employer is determined without the application of any aggregation rules;

(2) multi-employer plans;

(3) Health Reimbursement Arrangements;

(4) dental and vision plans that either

  • are not integrated into another group health plan or
  • give participants the choice of declining the coverage or electing it and paying an additional premium (see Q&A-20 of Notice 2012-9 for more information);

(5) self-insured plans of employers not subject to COBRA continuation coverage or similar requirements;

(6) employee assistance programs, on-site medical clinics, or wellness programs for which the employer does not charge a premium under COBRA continuation coverage or similar requirements; and

(7) employers furnishing Forms W-2 to employees who terminate before the end of a calendar year and request a Form W-2 before the end of that year.

For more information on the additional transition relief for certain employers and with respect to types of coverage, see Section IV of Notice 2012-9.


[wpspoiler name="What types of health care coverage must be included in the amount reported on the Form W-2?" ]The chart on the Form W-2 Reporting of Employer-Sponsored Health Coverage lists many types of health care coverage and various other situations, and explains whether reporting is required, prohibited, or optional. The chart was created at the suggestion of and in collaboration with the IRS’ Information Reporting Program Advisory Committee (IRPAC). IRPAC’s members are representatives of industries responsible for providing information returns, such as Form W-2, to the IRS. IRPAC works with IRS to improve the information reporting process.[/wpspoiler]

[wpspoiler name="What amount should the employer report on the Form W-2 for health coverage? The amount the employer paid? The amount the employee paid? Or both?" ]In general, the amount reported should include both the portion paid by the employer and the portion paid by the employee. In the case of a health FSA, the amount reported should not include the amount of any salary reduction contributions. See Notice 2012-9 for more detail on the interim rules that apply to reporting contributions to a health FSA.[/wpspoiler]

[wpspoiler name="Where on the Form W-2 should the employer report the cost of these health care benefits?" ]The cost of these health care benefits will be reported in box 12 of the Form W-2, with Code DD to identify the amount.[/wpspoiler]

[wpspoiler name="What amount of health benefits should be reported on the Form W-2 for employees that terminated employment during the year and had employer-provided coverage both before and after termination?" ]Under the interim rules, the employer may use any reasonable method for inclusion of the coverage provided after termination, so long as that method is applied consistently. See Notice 2012-9, Q&A-6, for examples.[/wpspoiler]

[wpspoiler name="What amount of health benefits should be reported on the Form W-2 for an employee that leaves during the year and requests a W-2 before the end of the year?" ]If an employee makes such a request in writing, the employer must provide the W-2 within 30 days. However, under the interim rules, the employer will not be required to report any amount of health benefits in box 12, Code DD.[/wpspoiler]

[wpspoiler name="Will employers now be required to issue a Form W-2 to retirees or other former employees to whom the employer would not otherwise issue a Form W-2?" ]No.[/wpspoiler]

[wpspoiler name="Where can I get more information about the employer’s requirement to report the aggregate cost of an employee’s health care benefits on the Form W-2?" ]Detailed information about the interim rules for this reporting requirement and the additional transition rules for certain employers and with respect to certain types of coverage can be found in Notice 2012-9 and the instructions for the 2012 Form W-2.[/wpspoiler]

NCCI Changes Primary-Excess Split Point for 2013

The National Council on Compensation Insurance (NCCI) recently announced its plan to make a change in the experience rating formula. The primary-excess split point will be increased over a three-year transition period. The first stage of the transition will take effect with each state’s approved rate and loss cost filing on or after Jan. 1, 2013.

Understanding the Primary-Excess Split 

In the experience rating process, each loss is divided into a primary and excess portion. Currently, the first $5,000 of every loss is allocated as a primary loss, with everything over and above considered an excess loss. For example, a $3,000 loss has no excess value. On the other hand, a loss of $15,000 would have $5,000 in primary losses as well as $10,000 in excess losses. Primary losses are used as an indicator of frequency, and are counted in full as part of the mod calculation. Conversely, excess losses receive partial weight in the mod calculation. This means that primary losses affect the mod more than excess losses do. The rationale behind assessing primary and excess loss amounts is that “severity follows frequency,” or in other words, an organization that displays a continual pattern of loss has an increased chance of a severe loss in the future. Thus, a company with a large number of primary losses will have a higher mod than a company with the same amount of losses split between primary and excess.

Upcoming Changes

NCCI has announced a proposal to raise the split point from $5,000 to $15,000 over a three year period to better correlate with claim inflation, which affects the experience rating plan. Many states have already approved this change to take effect with their annual rate and loss cost filing in 2013; other states are still pending. The split point will also be indexed for claim inflation in the third and subsequent years of this transition. These changes will directly affect the 34 states and the District of Columbia currently using the NCCI’s rating system. The independent rating bureaus of Indiana, New York, North Carolina and Wisconsin have also adopted the change, and other independent bureaus (Massachusetts, Michigan, Minnesota, and Texas) may re-evaluate their split points as well. The rating methods used by California, Delaware, New Jersey and Pennsylvania differ widely from NCCI’s approach, so similar changes in those states are not anticipated.

How Does This Affect My Organization?

Whether your mod increases or decreases will depend on whether you have an above or below average number of losses under the split point. If most of your losses are under $5,000, you are likely to see a decrease in your mod. If many of your losses exceed $5,000, you should prepare for an increase in your mod.

Analysts expect the split point change to result in a wider range of mods across each industry. Debit mods (those over 1.0) will tend to gain points; credit mods (those under 1.0) will more than likely see a decrease in points. Furthermore, many employers will see their minimum mod, or loss-free rating, decrease.

Another minor change which will take effect with the split point change is an adjustment to the maximum debit mod formula which caps debit mods based on state and employer size. NCCI reports that the cap applies to only 2% of employers. As a result of this change, small risks who reach the cap may see their mod increase while larger risks may see their capped mod decrease.

It’s important to remember that NCCI’s goal is to have the industry-wide average modification factor be 1.00. Along with the split point change, NCCI will adjust other factors affecting the formula so that the average mod across all employers does not change.

Preparing for Change

Although no one knows exactly what a future mod will be until all payroll, losses and rates are available, we can work with you to project how your organization’s mod-and premium- may be affected by these rule changes. Preparing for the shift will be especially important for companies that are required to maintain a certain mod in order to bid on jobs or contracts. It is essential to address and control losses and become familiar with your loss profile so your organization will be prepared when the NCCI experience rating change takes effect.

Effective Dates of New Split Point Method

The following states use NCCI or very similar rating methodology and therefore may approve the split point change; if noted, the following states have announced a firm date to enact changes (as of May 8, 2012):

  • Alabama – March 1, 2013
  • Alaska – Jan. 1, 2013 (5)
  • Arizona – Jan. 1, 2013
  • Arkansas – July 1, 2013
  • Colorado  - Jan. 1, 2013
  • Connecticut – Jan. 1, 2013
  • District of Columbia – Nov. 1, 2013
  • Florida
  • Georgia – March 1, 2013 (4)
  • Hawaii – Jan. 1, 2013
  • Idaho - Jan. 1, 2013
  • Illinois – Jan. 1, 2013
  • Indiana (1) – Jan. 1, 2013
  • Iowa - Jan. 1, 2013
  • Kansas – Jan. 1, 2013
  • Kentucky – Oct. 1, 2013
  • Louisiana – May 1, 2013 (4)
  • Maine – Jan. 1, 2013
  • Maryland – Jan. 1, 2013
  • Massachusetts (1)
  • Michigan (2)
  • Minnesota (2) – Jan. 1, 2013
  • Mississippi – March 1, 2013
  • Missouri
  • Montana- July 1, 2013
  • Nebraska – Feb. 1, 2013
  • Nevada – March 1, 2013
  • New Hampshire – Jan.1, 2013
  • New Mexico – Jan. 1, 2013
  • New York (2) – Oct. 1, 2013 (3)
  • North Carolina (1) – Apr. 1, 2013
  • Oklahoma – Jan. 1, 2013
  • Oregon – Jan.1, 2013
  • Rhode Island – June 1, 2013
  • South Carolina – July 1, 2013
  • South Dakota – July 1, 2013
  • Tennessee – March 1, 2013
  • Texas (2)
  • Utah – Dec. 1, 2013
  • Vermont – Apr. 1, 2013
  • Virginia – Apr. 1, 2013
  • West Virginia – Nov. 1, 2013
  • Wisconsin (2) – Oct. 1, 2013


(1) State has independent bureau but interstate-rates under NCCI rules

(2) State has independent bureau

(3) NY has indicated the 2013 split point will be 10,000; subsequent split point changes are anticipated but to be determined

(4) As of March 29, 2012, GA and LA are expected to also implement the ERA (experience rating adjustment) of medical-only losses on their next filing date, although this is not yet officially approved.

(5) As of April 27, 2012, Alaska is expected to implement the ERA (experience rating adjustment) of medical-only losses on their next filing date, although this is not yet officially approved. Alaska will also be removing its former state rule exception to the maximum debit mod formula so that the new national formula will apply.