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GoGetCovered: Insurance for Businesses and Individuals

Colorado Paid Leave Obligations Continue for Employers

In addition to the new Paid Sick Leave Law that went into effect in January 2022, all employers in Colorado have also been obligated to provide public health emergency leave since January 1, 2021. Under state law, all Colorado employers must provide this leave if there is a federal, state, or local declaration of emergency. Even though the state declaration of an emergency has been lifted, the federal public health emergency is still in place and therefore so is the obligation to provide leave.

Recently, Health and Human Services (HHS) Secretary Xavier Becerra extended the public health emergency declaration effective July 15, 2022 through at least October 13, 2022. Under Colorado’s Healthy Workplaces and Families Act (HFWA), paid leave for COVID-19 circumstances must be provided for the duration of the public health emergency, and for an additional four weeks after the public health emergency expires, unless an employee has already exhausted his public health emergency leave balance.

As a reminder, employees are allowed two weeks (up to 80 hours) total of paid sick leave to care for themselves or family members due to a COVID-related illness. Employees do not have to use it all at once. For example, if they used 40 hours of leave in 2021, they have 40 hours remaining until the end of the public health emergency period.

Employers should make sure they have updated their Paid Leave and COMPS posters and are providing COMPS Order #38 to employees with any handbook updates. The Paid Leave poster and notice provides employees with a written notice of their rights under HFWA. Employers should ensure policies are up to date.

The Colorado Department of Labor and Employment’s HFWA page contains a notice as to whether paid COVID-19 leave remains in effect.

Updates on COBRA subsidy and COBRA election periods

We’re continuing to navigate the challenges from COVID-19, and we want to ensure you are up to date on changes that impact you and your employees.

Deadline Suspensions

Last year the Department of Labor (DOL) and Internal Revenue Service (IRS) announced that during the COVID “Outbreak Period” (the National Emergency period plus 60 days), the following deadlines will be suspended:

The date by which a member would need to:

  • File benefit claims
  • File appeals and requests for external review
  • Request enrollment following a HIPAA Special Enrollment event (birth, adoption, placement for adoption of a child, marriage, loss of other health coverage or eligibility for a state premium assistance subsidy)
  • Elect COBRA coverage
  • Pay COBRA premiums
  • Notify the plan of certain COBRA Qualifying life Events (e.g., divorce or legal separation, a dependent child ceasing to be a dependent under the terms of the plan) or a disability determination

At the time, the DOL and IRS probably did not envision the Outbreak Period lasting as long as it has. Unfortunately, there is a complicating factor that has only recently come into play. ERISA does not allow these types of deadline suspensions to continue for more than 12 months. Since the suspension first took effect March 1, 2020, this 12-month limitation is now relevant. There was some uncertainty how the 12-month limitation would be applied, so the DOL and IRS recently announced that it should be applied on a member-by-member basis. This means that for any given member, for any given deadline, the suspension will continue for no longer than 12 months or until the end of the Outbreak Period, whichever period is shorter.

As a result, some individuals started reaching their one-year maximum suspension period on March 1, 2021. Once their maximum suspension period is reached, individuals must take action to avoid missing their deadlines.

Employers may want to consider responding to this development by taking certain actions, including alerting their membership to the changes, updating employee facing communications, and updating plan documents.

COBRA Subsidy and new COBRA Election Period

The American Rescue Plan Act (ARPA) was signed into law on March 11, 2021. Under ARPA, individuals and their dependents who are eligible for COBRA or state COBRA (sometimes referred to as state continuation benefits or mini-COBRA), due to involuntary termination or reduction of work hours may be eligible for a 100% COBRA premium subsidy, beginning April 1, 2021 through to September 30, 2021. They may also be eligible for a new COBRA Election period. The DOL will issue a Model Notice mid-April, explaining the subsidy and election period in detail. The Plan Administrator must distribute this notice to impacted individuals. Stay tuned for more updates as we move forward this Spring.

We are here to support you with any questions you might have.

Final Regulations – 2019 Notice of Benefit and Payment Parameters

On April 9, 2018, the Department of Health and Human Services (HHS) issued final regulations and related guidance on Affordable Care Act (ACA) provisions including Essential Health Benefits (EHBs), out-of-pocket (OOP) maximums, and Marketplace updates and reforms. These regulations, generally effective for plans and plan years beginning on and after Jan. 1, 2019, largely mirror the proposed regulations issued Oct. 27, 2017.

The final rule affords greater flexibility to states for determining EHBs, reduces some regulatory requirements in the individual and small group markets and provides annual benefit provision updates. Additional guidance expands the individual mandate hardship exemptions available for 2018 for people living in states with federally-facilitated Marketplaces.

While the EHB benchmark plan changes most directly impact individual and small group plans, they will affect large group health plans as well. Otherwise, the final regulations are primarily focused on individual and small group Marketplace updates and reforms.

Essential Health Benefits (EHBs)
For plan years beginning on and after Jan. 1, 2020, the final rule allows states greater flexibility in selecting EHB benchmark plans. States are allowed to follow current rules and maintain 2017 benchmark plans, or they may select a new EHB benchmark plan annually from one of the following three options:

  • Choose another state’s 2017 benchmark plan – allows states to select another state’s 2017 benchmark plan, and implement the plan benefits and limits to their own EHB standards, such as changing benefits with dollar limits to non-dollar limits.
  • Replace one or more of the 10 required EHB categories of benefits under its current 2017 benchmark plan with the same categories from another state’s 2017 benchmark plan – giving states the ability to make precise changes to their 2017 benchmark plans at the coverage detail level. For example, State A may select the prescription drug coverage EHB from State B, which uses a different drug formulary.
  • Otherwise, select a new set of benefits to become its benchmark plan – provided the plan meets other specified requirements.

The three options are subject to additional requirements, including two scope of benefits conditions. States must affirm that their new/modified benchmark plan provides a scope of benefits that are equal to, or greater than, the scope of benefits provided under a “typical employer plan,” and is no more generous than the most generous of a set of comparison plans. HHS released final guidance with the methodology states can use for comparing benefits. States have until July 2, 2018, to submit their 2020 EHB benchmark plan to the Centers for Medicare and Medicaid Services (CMS). 

As a reminder, any health plan that covers EHBs must cover these benefits with no annual or lifetime dollar maximums. This includes both fully-insured and self-funded employer-sponsored plans.

2019 out-of-pocket (OOP) maximums
The 2019 OOP maximums increase to $7,900 for individual coverage and $15,800 for family coverage. These coverage limits apply to all non-grandfathered plans, regardless of size or funding type.

Marketplace regulations
The final rule also includes a number of provisions (effective Jan. 1, 2019) intended to strengthen the Health Insurance Marketplace, including:

  • Deferring the network adequacy reviews for qualified health plan (QHP) certification to the states
  • Loosening the audit process for agents, brokers, and issuers who participate in the direct enrollment process
  • Updating the risk adjustment model for insurers with high-cost enrollees
  • Modifying the requirements for Marketplaces to verify eligibility for, and enrollment in, qualifying employer-sponsored coverage
  • Not specifying 2019 standardized plan options (known as simple choice plans)
  • Updating special enrollment period (SEP) rules for coverage effective dates specific to SEPs that allow adding or changing dependents
  • Adding a new SEP for pregnant women who were receiving coverage through the Children’s Health Insurance Program (CHIP) but lose that access
  • Allowing Marketplaces to determine individual affordability exemptions based on affordability of the lowest-cost metal level plan available
  • Allowing enrollees to request same-day termination of coverage
  • Removing several Small Business Health Options Program (SHOP) requirements for online enrollment 

Other market reforms
In addition to Marketplace updates, the final rules also modify other ACA provisions, including:

  • Streamlining the rate review process for states and issuers, including when rates are posted by the states, increasing the threshold at which rate increases require review from 10% to 15%, and establishing a process for states to request a higher threshold
  • Modifying the Medical Loss Ratio (MLR) rules, including simplifying quality improvement activity reporting requirements for issuers and establishing a process for states to use to request adjustments to the 80% MLR standard in the individual market

Review the information at these links for additional details:

Expanded individual mandate hardships
On April 9, 2018, HHS also issued guidance that expands individual mandate hardships. These additional circumstances are available to individuals who live in states that have federally-facilitated Marketplaces. While the individual mandate is effectively repealed beginning Jan. 1, 2019 due to the zeroing out of the penalty, eligible individuals may claim these hardships for the current calendar year or up to two years prior. 

New hardship exemptions include people who:

  • Live in a county, borough, or parish in which no QHP is offered 
  • Live in a county, borough, or parish in which there is only one issuer offering coverage and can show that the lack of choice resulted in them failing to obtain coverage under a QHP

What 2018 IRS Publication 15-B says about Commuter Benefits

Each year the IRS releases Publication 15-B, an Employer’s Tax Guide to Fringe Benefits. In recent years, there have been small adjustments to Publication 15-B but the annual release goes largely unnoticed. The passage of Tax Reform has however prompted some significant changes in 2018. Among other things, the 2018 release of Publication 15-B includes important information regarding changes to the tax treatment of commuter benefits and the suspension of qualified bicycle commute.

Tax Treatment of Commuter Benefits

What are the details?

The Tax Reform Bill eliminated the employer deduction for qualified transportation benefits. However, it maintained the pre-tax benefit for employees. This quickly led to questions regarding the employer’s tax treatment of employee pre-tax deductions for qualified transportation benefits. With Publication 15-B released, we now have answers.

Qualified transportation benefits can be provided either directly by employers or through a bona fide reimbursement arrangement. A bona fide reimbursement arrangement can also be used with a Compensation Reduction Agreement. A Compensation Reduction Agreement is a way to provide qualified transportation benefits on a pre-tax basis. Employees are offered a choice between cash compensation (AKA their pay) or a qualified transportation benefit. Publication 15-B clarified that the employer deduction for qualified transportation benefits is not available whether provided directly by the employer or through a Compensation Reduction Arrangement.

Great, so what does that mean?

Employees continue to receive the full tax savings for any pre-tax deductions for qualified transportation. There are however a few changes that occur from the employer perspective. First, employers must reduce their wage expense by the amount of the pre-tax employee deductions. The amount of the qualified transportation benefit is not eligible for deduction by the employer. The employer however continues to receive the payroll tax savings on the reduced payroll expense.

Gross business revenue = $100,000
Gross wage expense = $20,000
Employee Pre-tax Transit/Parking Deductions = $1,000
Adjusted wage expense = $19,000
Taxable revenue = $100,000 – $19,000 = $81,000
Employer pays taxes on $81,000 at 21% (previously 35%)

Employer saves 7.65% in FICA on $1,000 or $76.50.
Employee saves average of 30% on $1,000 or $300.

Suspension of Qualified Bicycle Commuting Reimbursements

What are the details?

Beginning January 1, 2018, employers must include the value of bicycle commuting reimbursements in an employee’s income. If employers continue to offer the benefit, it will be taxable to employees. This however may not be a permanent change as the suspension is currently only applicable for tax years 2018 through 2025.

So, is bicycle commute dead?

In short, no. In fact, there might be a bright side to it. As a taxable benefit, the restrictions that were in place for bicycle commute reimbursements are no longer applicable. Employers now have more freedom to design the program to meet their population’s needs. Some possible opportunities:

  • Bicycle commute could be offered at the same time as commuter benefits.
  • Employers could set a different monthly limit which better addresses the population’s expenses.
  • Bike-share programs could be included as an eligible expense type.

Still have questions?

Check out the full details from Publication 15-B, the Employer’s Tax Guide to Fringe Benefits.

How Does Health Insurance Work for Small Business Companies

For many folks, health care can be a mixed bag. Long appointments, cold waiting rooms, and unexpected bills. But once you dig a little deeper, you’ll find a lot of great things swirling inside. In this article, we’ll walk you through everything from Obamacare requirements to data on which benefits employees want most.

Do I need to offer health insurance?

This is where it all begins. To get your answer, you first need to see if the Affordable Care Act, or ACA, requires you to offer your employees Health Insurance. The ACA is a piece of legislation that helps people get their hands on more affordable medical coverage. It explains how carriers, employers, individuals, and other entities can help make health insurance happen.

Specifically, the employer mandate is where companies can find out what they have to do. The mandate tells employers they need to offer comprehensive and affordable health insurance if they have 50 or more people on staff. If companies don’t follow the rules, they’ll have to pay the IRS a penalty called the shared responsibility payment. Complying is way better than getting socked with fines.

Does the employer mandate apply to you?

To find out if the rule applies to you, you first have to figure out how many full-time equivalent (FTE) employees you have on your team. Use the formula below to crack the code.

(Total hours worked by part-time employees each week / 30) + # of full-time employees = Your FTE number)

If you need a little more help, you can also jump through the steps below:

  1. How many hours do each of your part-time employees work each week? Add them all up.
  2. Divide the result you get by 30.
  3. Round down to the nearest whole number.
  4. How many full-time employees do you have?
  5. Add this number to what you got above.
  6. Bravo — you’ve just successfully figured out your FTE number!

The number you just got is your formula for figuring out your ACA requirements. Now, use it to find where you fit on this chart:

I have 49 or fewer FTE employees:

Nope, you don’t have to provide health coverage. That being said, many companies proudly offer insurance to their teams even though the ACA doesn’t explicitly require them to.

I have 50 or more FTE employees:

Yep, you do have to offer health coverage! Ninety-five percent of your full-time employees have to be covered.

Think back to how big your team was in the previous year. That number will help you find out if you’re required to offer insurance today.

Should I offer health insurance?

Keeping your team healthy is one of the most important ways to show them that you appreciate everything they do. Even if companies aren’t required to provide coverage under the Affordable Care Act, many do so regardless. A little over one in four companies with fewer than 50 employees provide health insurance and a promising 22 percent plan on rolling it out next year.

Here are a few reasons why offering benefits is such a great decision:

It’s what your team wants

Glassdoor recently surveyed employees on how 54 benefits influenced their satisfaction. They found that health insurance was, by far, the most important of all the benefits that exist. The top three benefits that make employees feel satisfied? Health insurance, paid time off, and retirement plans.

It helps keep you compliant

If you have 50 or more full-time equivalent employees, then the ACA requires you to offer health coverage. It’s a clear-cut rule that makes everything clearer. All you have to do is figure out how many FTE employees you have.

It makes your culture shine

When someone starts a new job, fussing with all the intricacies of health insurance can feel overwhelming. If an employer handles that part, new employees can focus their time on getting used to their new role instead.

Saves you money on taxes

Do you have 24 people or less on your team? Then you may be eligible for hidden money through the small business health care tax credit. The credit equals up to half of your premium contributions if you’re a small employer, and for tax-exempt companies, it covers up to 35 percent.

If you can safely check off each box below, then the tax credit could be in your future.

  • You buy your plan through the Small Business Health Options Program, called SHOP
  • Your team has an average salary of $50,000 or less
  • You pay at least half of everyone’s premiums

Be sure to check with your accountant or broker to get a final call on your eligibility status. They’ll also be able to help you take advantage of any retroactive tax credits you’re be entitled to.

How do I get health insurance?

Once you know you’re ready to offer insurance, you sign up for a small business plan in a few different places:

  1. The SHOP federal or state marketplace (if you live in a state that offers it)
  2. Call GoGetCovered!
  3. Directly through your insurance carrier

Your setup checklist

To streamline your setup process (or just get a quote), you’ll want to have a few bits of information handy:

  • Company tax information (federal EIN)
  • Current and appropriate levels of workers’ compensation coverage
  • North American Industry Classification (NAICS) code
  • Proof of payroll
  • Number of employees eligible for health insurance
  • Details for each employee: name, address, age, and number of dependents to insure

Whether you’re a health insurance beginner or a bonafide master, you’ll now be able to decide if you should offer health insurance once and for all. And then, you can see what you should consider if you move ahead with that decision. Visit this cheat sheet as much as you want, and then watch as you’re magically guided to the best possible choice to make your employees feel their best!