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Mid-Year Elections Permitted to Change Health Plan Enrollment or FSA Contributions

In response to the COVID-19 pandemic, the IRS has relaxed the irrevocable election rule and strict list of permitted election change events normally accompanying a Section 125 plan, which are required when a group takes employee pretax contributions for health care or provides an employee cash option.  The new guidance allows employees to make five additional prospective mid-year election changes during the 2020 calendar year. 1.    Mid-Year Health Plan Enrollment for Waived Employees Employers may amend their Section 125 cafeteria plan to allow employees who originally waived health plan coverage to make a new election, in calendar year 2020, for employer-sponsored health...

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Coronavirus Bill Requiring Paid Employee Leave Signed Into Law, Tax Credits for Employers

On March 18, 2020, President Trump signed the Families First Coronavirus Response Act (the Act) into law. The Act requires employers to provide paid leave for some employees related to the coronavirus (COVID-19) pandemic, among other measures and also provides for a series of tax credits to employers and self-employed individuals to help cover lost income due to the COVID-19 crisis. The Act takes effect no later than 15 days after it is signed by the president. Emergency Paid Sick Leave The Act requires two weeks of paid sick leave for government workers and employees of companies with fewer than 500 employees....

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Navigating Unemployment Claims Due to Office Closures Related to the Coronavirus

Per the Virginia Employment Commission: "If you are a worker who has been totally or partially separated from your job due to Coronavirus, please note that no claim for unemployment insurance may be filed or processed until an actual lay off from employment has occurred, or until there has been an actual reduction in hours. When filing your claim for unemployment benefits, please be sure to check the reason for separation as Lack of Work/Lay off.  If you will be filing because of a reduction in hours, you will not receive benefits unless your gross earnings are less than your weekly...

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Please be advised: SIMA Response to COVID-19

In response to COVID-19 we will be transitioning our team to a remote working policy for the foreseeable future. At this time a limited staff will remain at our office to provide essential operations. Our service to you as well as the health and safety of our team is our primary concern throughout this time. Our team has the technology and resources required to effectively work remotely and will continue to provide you the service you need. Our Accounting team plans to remain at the office until further guidance is provided by the Internal Revenue Service (IRS) on the possible extension...

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HHS Increases Civil Penalties for HIPAA Violations

The Department of Health and Human Services (HHS) recently published a final rule increasing the civil monetary penalties for violations of laws enforced by HHS, including the HIPAA privacy and security rules. HHS is required to adjust these penalties for inflation each year to improve their effectiveness and maintain their deterrent effect. The new penalty amounts are effective for penalties assessed on or after Jan. 17, 2020. 2020 HIPAA Civil Penalties HHS may assess civil penalties when it discovers a HIPAA violation. The penalty amount depends on the facts involved. For violations where the covered entity does not know about the violation (and...

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Cadillac Tax and Other Key ACA Taxes Repealed

The federal spending bill signed into law at the end of 2019 repealed three taxes and fees under the Affordable Care Act (ACA): The Cadillac tax The medical devices excise tax The health insurance providers fee The Cadillac Tax The Cadillac tax is a 40% excise tax on high-cost group health coverage. Its effective date was previously delayed several times. This tax is now fully repealed, beginning with the 2020 tax year. The Medical Devices Excise Tax The medical devices tax is a 2.3% excise tax on the sales price of certain medical devices. This tax is fully repealed beginning in 2020. Health Insurance Providers...

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PCORI Fees Extended for 10 Years

The same spending bill that repealed the Cadillac tax, the medical devices excise tax and the health insurance providers fee reinstated the annual Patient-Centered Outcomes Research Institute (PCORI) fees for the 2020-2029 fiscal years. As a result, specified health insurance policies and applicable self-insured health plans must continue to pay these fees through 2029. What Are the PCORI Fees? The PCORI fees were created to help patients, clinicians, payers and the public make informed health decisions by advancing comparative effectiveness research. Fees paid by health insurance issuers and sponsors of self-insured health plans fund the institute’s research, in part. Who Must Pay the PCORI...

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Section 6056 Employer Reporting Guide

Section 6056 reporting is the required reporting to the IRS of information relating to offers of health insurance coverage by employers that sponsor group health plans. A statement disclosing information about the offer of coverage must also be furnished to full-time employees. This guide is intended to provide information for employers on the Internal Revenue Code (Code) Section 6056 reporting requirements. Topics covered in this guide include: Applicable large employers (ALEs) that are responsible for reporting under Section 6056 The forms that are used to accomplish the Section 6056 reporting The information an ALE must provide to its full-time employees and...

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Background Information Regarding Section 6056

The Affordable Care Act (ACA) created reporting requirements under Code Sections 6055 and 6056. Under these rules, certain employers must provide information to the IRS about the health plan coverage they offer (or do not offer) or provide to their employees. Each reporting entity must annually file all of the following with the IRS: A separate statement (Form 1095-B or Form 1095-C) for each individual who is provided with minimum essential coverage (for providers reporting under Section 6055), or for each full-time employee (for ALEs reporting under Section 6056); and A transmittal form (Form 1094-B or Form 1094-C) for all...

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Wellness 101 – What is a Company Wellness Program?

A wellness program is an organized program intended to assist employees and family members in making voluntary behavior changes that reduce their health risks and enhance their individual productivity. Wellness programs vary widely in design and may offer opportunities or incentives for improving health and wellness, such as increasing fitness, losing weight, managing chronic health conditions or quitting smoking. Why Offer a Wellness Program? Investing in a wellness program may save money over time by reducing health care costs. Plan sponsors will have to determine whether the value expected to be derived from offering a wellness program is worth the cost. Depending...

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