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Benefits

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401(k) Contribution Limit Increased to $19,000

The IRS has announced that the amounts employees can contribute to 401(k)s and IRAs will increase in 2019. In particular: The employee contribution limit for 401(k) plans will be $19,000, up from $18,500 in 2018. The catch-up contribution limit for employees aged 50 and over remains unchanged at $6,000. The employee contribution limit for IRAs will be $6,000, up from $5,500 in 2018. The catch-up contribution limit for employees aged 50 and over remains unchanged at $1,000. The employee contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans will be $13,000, up from $12,500 in 2018. The catch-up contribution limit for employees aged...

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IRS Releases Forms 1094 and 1095 for Early 2019 Reporting

Form Instructions Also Released The IRS has released the Forms 1094-C, 1095-C, 1094-B, and 1095-B that employers will use in early 2019 to report on the group health insurance coverage they offered during the 2018 calendar year. Instructions on how to complete Forms 1094-C and 1095-C and Forms 1094-B and 1095-B have also been released. As a reminder, employers with 50 or more full-time employees (including full-time equivalent employees) generally must furnish a Form 1095-C to all full-time employees by January 31, 2019, and file Form 1094-C and all Forms 1095-C with the IRS by February 28, 2019 (or March 31, 2019,...

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Reminder: Medicare Part D Notices Due by October 15

Notices Due to Medicare-Eligible Individuals Employers who sponsor group health plans that offer prescription drug coverage to Medicare-eligible individuals are reminded that they must provide a Medicare Part D Creditable or Non-Creditable Coverage Notice to those individuals by October 15. This notice serves to inform Medicare-eligible individuals whether the prescription drug coverage offered is "creditable," meaning it is expected to pay, on average, as much as the standard Medicare prescription drug coverage. For more information on this notice requirement, including links to downloadable model notices, click here. ...

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Critical HIPAA Compliance Gaps Exposed by HHS

Over the last couple of years, the Department of Health and Human Services (HHS) conducted "desk audits" of 166 covered entities and 41 business associates. These audits focused on select HIPAA privacy, security and breach notification requirements. HHS has not released its official findings from the audits yet, but it has identified serious compliance gaps in the following areas: Security risk analysis Security risk management Right of access to protected health information (PHI) Employers that sponsor group health plans should periodically review their compliance with HIPAA rules, including whether their security analysis and risk management for electronic PHI is up to date. Employers should also...

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2018 ACA Reporting Draft Forms Now Available

The IRS released draft 2018 forms for Affordable Care Act (ACA) reporting under Internal Revenue Code (Code) Sections 6055 and 6056. Draft instructions for 2018 have not yet been released. The 2018 draft forms are substantially similar to the final 2017 versions. However, the revised version of the Form 1095-C clarifies that the “Plan Start Month” box in Part II will remain optional for 2018. The IRS previously indicated that this box may have been mandatory for the 2018 Form 1095-C. Keep in mind that the 2018 draft instructions for these forms may include additional changes or clarifications, once released. Also, the...

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New Rule Eases Formation of Association Health Plans

Rule Permits Associations Based on Industry or Geography The U.S. Department of Labor (DOL) has issued a new rule that allows employers to join together as a single group to offer group health insurance coverage to employees, working owners (including those without other employees), and their spouses and dependents as part of an "association health plan." The rule allows association health plans to be formed on the basis of industry or geography, such as by state, city, county, or multi-state metropolitan area. The new rule subjects association health plans to the nondiscrimination rules currently applicable to large group coverage under the Health...

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Overview of Employer Responsibilities for Handling MLR Rebates

The Affordable Care Act's medical loss ratio (MLR) rules require group health insurance issuers to provide rebates if their MLR—the amount of health insurance premiums spent on health care and activities to improve health care quality—falls short of the applicable standard during a reporting year. Each year's rebates must be issued to plan sponsors by September 30 of the following year. As a result, plan sponsors should be looking for these rebates to arrive in the coming weeks. Employer Distribution The MLR rules provide that issuers must pay any rebates owed to persons covered under a group health plan to the policyholder,...

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Summary Annual Reports Due Sept. 30

Health plans with 100 or more plan participants at the beginning of a plan year are generally required to furnish a Summary Annual Report (SAR) to each health plan participant within 9 months after the end of a plan year. As a result, the deadline for most calendar year plans to satisfy the SAR requirement for plan year 2017 is September 30, 2018. What Must be in a SAR? A SAR serves as a narrative summary of the group health plan's Form 5500 annual report. In general, a SAR must provide the following information on the plan year (among other things): Name of...

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Medical Loss Ratio Rebates Coming Soon to Plan Sponsors

Overview of Employer Responsibilities for Handling Rebates The Affordable Care Act's medical loss ratio (MLR) rules require group health insurance issuers to provide rebates if their MLR—the amount of health insurance premiums spent on health care and activities to improve health care quality—falls short of the applicable standard during a reporting year. Each year's rebates must be issued to plan sponsors by September 30 of the following year. As a result, plan sponsors should be looking for these rebates to arrive in the coming weeks. Employer Distribution The MLR rules provide that issuers must pay any rebates owed to persons covered under a...

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Short-Term Health Insurance Soon Available For Up to 36 Months

New Rule Loosens Current Restrictions Effective October 3, 2018, a new rule will allow individuals to purchase short-term, limited-duration health insurance coverage for a period of less than 12 months, and renew such coverage for up to 36 months. Under current law, the maximum coverage period for short-term, limited-duration health insurance is less than 3 months, and these policies cannot be renewed. Notably, short-term, limited-duration health insurance is: Not required to comply with the Affordable Care Act's ban on pre-existing condition exclusions and lifetime and annual dollar limits. Not required to comply with the Affordable Care Act's essential health benefits requirement, which requires individual...

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