Cadillac Tax Delayed until 2020

On Friday, December 18, 2015 President Obama signed an appropriations bill that included a delay in implementation of the excise tax on high cost health plans (Cadillac Tax) and making the tax a deductible expense for tax purposes.   The delay moved  the effective date from 2018 to 2020.  This is welcome news for the benefit industry as many employers were beginning to feel the pressure of changing their benefit plan designs now for their employees.

 This delay will allow employers  more time to formulate a benefit strategy into the future and additional time to advocate for the repeal of the tax or an exemption of the Health FSA and Health Savings Account benefits.


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DOL and IRS Enforce ERISA

As of July 1st, the IRS and the DOL are beginning to enforce regulations set out in the Employee Retirement Income Security Act of 1974 (ERISA).  Does your employee benefit plan (health AND retirement) have all of the language required by both agencies of the federal government?  If not, you could be subject to a $100 per day, per plan, penalty for non-compliance.  An ERISA wrap document will satisfy the necessary language to keep your plan compliant.  Although all non-governmental and non-church businesses are subject to ERISA, most large employers are already aware of this, but most small employers, less than 50 FTE, have never had to worry about regulation enforcement.  Those days are over.  ALL employers, regardless of size, must adhere to the newly enforced “old” regulations.  Call us today to get an ERISA wrap document for your business.  Don’t leave yourself open to possible penalties in case of an IRS or DOL audit.

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IRS releases 2016 adjustments for Health Savings Accounts

For calendar year 2016, the annual deductions limits are $3,350.00 for individuals with self-only coverage under a high deductible health plan and $6,750.00 for individuals with family coverage under a high deductible health plan. For calendar year 2016, a ‘high deductible health plan’ is defined as a health plan with an annual deductible that is not les than $1,300 for self-only coverage or $2,600 for family coverage, and the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $6,550 for self-only coverage or $13,100 for family coverage. (Internal Revenue Service).

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IRS Announces Temporary Relief for Small Employers Who Reimburse Employee Individual Medical Insurance Premiums

Compliance Dangers of Arrangements that Assist Employees with the Payment of Individual Health Insurance Premiums

By this time, all advisors should be aware that the IRS considers it a violation of the provisions of the Affordable Care Act (ACA) for an employer to maintain any type of arrangement that reimburses current employees pre-tax for individual major medical premiums.

In addition, recent IRS guidance has stressed that if the reimbursement is conditional on the employee having obtained health insurance coverage, such an arrangement will violate the ACA EVEN IF  the employer adds the payment to the employee’s W-2 as taxable compensation.

The penalty for continuing to maintain such an arrangement is potentially $100 per day PER EMPLOYEE with no maximum penalty amount.  Potentially, this could mean a penalty of $36,500 per employee per year.

Temporary relief for certain small employers.

On February 18th, the IRS issued Notice 2015-17 which gives small employers (employers with fewer than 50 FT equivalent employees) through June 30th, 2015 to end all non-compliant arrangements without being subject to the penalty tax.  This relief was NOT extended to employers in the 50-100 or over 100 employee groups.

New health savings account rules for 2016

Health and Human Services recently issued a statement which indicates that beginning in 2016 a High Deductible Health Plan (HDHP) cannot impose an out-of-pocket maximum for an individual that is greater than that imposed by the law for self-only coverage, even if the policy provides other than self-only (i.e., family) coverage.

This interpretation effectively embeds an individual out-of-pocket maximum limit in all family HDHP plans that have an out-of-pocket limit greater than the self-only out-of-pocket limit.  For example:  if a person purchased a family HDHP coverage with a $10,000 out-of-pocket limit, the plan would have to begin payment of benefits when ANY individual covered under the policy has incurred $6,850 of covered expenses (the annual limit on cost-sharing for 2016 for self-only coverage).


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HSAs jump nearly 30 percent

The growth of the health savings vehicle continues to grow in popularity since its inception a decade ago.  One of the latest trends in healthcare is the increase of HSA plans.  Through the end of 2014 these plans have grown 29% with nearly 13.8M accounts containing $24.2B in assets.

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New HSA Investment Options

HealthcareBank, a division of Bell State Bank & Trust, has a new list of optional investments to choose from.  When your account reaches $2,000 you can choose to use no-load mutual funds to help your account grow faster, tax-free. Some funds have YTD (as of 11/30/2014) returns as high as 13.81% with an expense ratio as low as 0.17%.  Call us today for details on how to grow your HSA account, tax-free.

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Health Savings Account Limits

As open enrollment approaches, Fortress Benefits wants to remind everyone of the 2015 Health Savings Account contribution limits. In Revenue Procedure 2014-30, the IRS provided inflation-adjusted HSA contribution and HDHP minimum and out-of-pocket limits, effective for calendar year 2015. The higher rates realize a cost-of-living and rounding rules under IRS Code Section 223.

HSA contribution limit (employer plus employee) $3,350 single, $6,650 family
HSA catch up contribution (age 55+) $1,000
HDHP minimum deductibles $1,300 single, $2,600 family
HDHP maximum out-of-pocket amounts $ 6,450 single, $12,900 family

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Defined Contributions

It’s plain to see that the cost of employee benefits is going up while the employee satisfaction with their benefits is going down.  Employers simply cannot design one benefit plan to perfectly fit every employee’s individual needs.  The reason is because their individual needs are simply that, individual.  One size does not fit all.

So how do employers satisfy all their employee’s individual needs and still be able to manage their bottom line?  How does an employer pick one perfect benefit plan that truly is beneficial for everyone?  Employers can’t, but employees can.  It’s called a defined contribution plan.

The result is happy employees, and employers with locked in health care budgets.  Call us today to see how a defined contribution plan makes perfect sense in today’s ever changing healthcare environment.

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Life Insurance

Life insurance is the one policy that everyone should have.  Two new products that are available from Colonial Life  include an employer-paid group term life plan and a long-term care benefit rider on whole life insurance policies.  Call us today to learn more about these two new products from Colonial Life.

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Prepare for 2015 Enrollment

Amidst further roll-out of the ACA’s provisions, researchers expect more employees to enroll in their employer sponsored health plan for 2015.  We can help you prepare for the surge.  Call us today for an appointment to find our how we can help.

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