HSA FAMILY CONTRIBUTIONS – IRS PROVIDES RELIEF

We just received this very timely update notice from our OCA Benefits partner and wanted to be sure that you were made aware of the HSA reversion contribution for 2018.

HSA FAMILY CONTRIBUTIONS – IRS PROVIDES RELIEF.

Late last week the IRS released Revenue Procedure 2018-27 that allows health savings account (HSA) holders to treat $6,900 (rather than the previously announced in-year decrease to $6,850) as the maximum annual family HSA contribution limit for 2018.

Why did it happen?

In response to Rev. Proc. 2018-18, stakeholders informed the Treasury Department and the IRS that implementing the $50 reduction to the limitation on deductions for individuals with family coverage would impose numerous unanticipated administrative and financial burdens. Specifically, stakeholders noted that some individuals with family coverage under an HDHP made the maximum HSA contribution for the 2018 calendar year before the issuance of Rev. Proc. 2018-18 reducing the deduction limitation, and that many other individuals made annual salary reduction elections for HSA contributions through their employers’ cafeteria plans based on the $6,900 limit for an individual with family coverage under an HDHP. In response to these concerns, the Treasury Department and the IRS have determined that it is in the best interest of sound and efficient tax administration to allow taxpayers to treat the $6,900 annual limitation originally published in Rev. Proc. 2017-37 as the 2018 inflation adjusted limitation on HSA contributions for eligible individuals with family coverage under an HDHP.

To read the  entire IRS announcement  go to: www.irs.gov/pub/irs-drop/rp-18-27.pdf

Should you have any additional questions, please contact our office.

HSA Contribution Update 2018

On March 5, 2018, the IRS released Revenue Procedure 2018-18 in Internal Revenue Bulletin 2018-10. Included in this Procedure is a reduction to the maximum contribution limit for Health Savings Account (HSA) contributions for calendar year 2018. The new limit for those with family coverage is $6,850. The previous limit had been set at $6,900. The maximum for self-only coverage did not change, and remains at $3,450 for 2018.

For further details regarding this change and HSA Information, please visit https://www.kirwanbenefits.com/health-savings-accounts/

Does Our Health Insurance System Really Provide Choices?

With the ACA falling apart at the seams, how are the carriers watching out for Our Interests and improving Our Outcomes?

The Wall Street Journal last week provided us with some insight regarding the big player’s interest in expanding their health care offerings and controlling their costs. A brief history is helpful.

Aetna unsuccessfully attempted to buy Humana (2015) for $37 Bil, CVS purchased Aetna (2017) for $70 Bil, CIGNA planning to buy Express Scripts (2018) $50 Bil, after failing to receive approval from regulators to buy Aetna (2017). Anthem to launch its own PBM (Pharmacy Benefits Manager) causing harm to its long term partner, Express Scripts, their biggest customer generating $17 Bil. in annual revenues. Seen as retaliation to their impending Anthem divorce, Express Scripts purchased eviCore Health Care (2017) for $3.6 Bil, Walgreens Boots Alliance had been attempting a takeover of AmerisourceBergen Corp, a large drug distributor, with grocer Albertsons Cos agreeing to buy what is left of the Rite Aid Corp.

Oh, did I mention that Amazon is an additional driver in this consolidation of power, as it becomes a competitor in health-care-equipment?

Simply stated, when competition becomes monopolized, who’s controlling Our Choices, maybe I can provide some direction.

As a Registered Employee Benefits Consultant and Financial Advisor, having the distinct privilege of working with the medical community for over 40 years, I recently had the opportunity to be introduced to two relatively new professional “disruptors” that could be a welcome transfer of power back to the small entrepreneur and most importantly, the patient and their choices, while providing reduced costs in the pursuit of Good Health, Better Outcomes, Lower Premiums and More Choices.

Disruptor #1-Physicians dealing with Chronic Care Management by Medicare, who would like to provide better patient care, complementing your current care plans by engaging patients in between office visits. As physicians, you are acutely aware of the studies proving better outcomes of monitored patients. Regrettably, the pressures of volume and care are conflicting, competing and persistent problems for the physician and patient. This surrogate assistant could extend your care into the homes of your patients, increase compliance and improve care and outcomes, resulting in more office visits, while providing for an additional income stream estimated to provide net revenue of $240 per patient.

Disruptor #2-We are all aware of shrinking plan options, network access and excessive and ever escalating premiums. This group will be changing the landscape with their wholly owned reinsurance carrier, allowing them the creative and necessary flexibility to be in tune with the current demands of your patients and, equally important, your Group Benefit Programs, allowing you to essentially create “your own Benefit Plan”. Referenced base pricing (RBP) and Smart Deductibles designed to meet the expanding needs and concerns of your practice, valued employees and overhead, which occupies the second most expensive item on your P&L.

Please check our website Blog for upcoming dinner meetings to introduce you to these “Disruptors”. Feel free to contact my office for any questions in the interim.

The Kirwan Companies, Ltd introduces the HSA-Transfer K

Health Care Affordability for Americans

The Kirwan Companies, Ltd. and HSA Specialist of America have been in the Employee Benefits field for over 40 years and, among our other services, we have specialized in the promotion and education of HSA’s-Health Savings Accounts since their inception as MSA’s-Medical Savings Accounts in 1997.

We have recently advanced the prospect of allowing for the “vested” portion of a Retirement Plan participants’ account to be eligible for a tax free transfer to an HSA Account, as well as for assets in an individual’s IRA Account.

In this regard, we have recently applied to the United States Patent and Trademark Office and we are proud to state that our “Intellectual Property is now Patent Pending”.

HSA Contributions-IRS Announces 2018 Limits

The Internal Revenue Service (IRS) released the 2018 inflation-adjusted amounts for Health Savings Accounts (HSAs).

We will provide our readers with any breaking news from our efforts in Washington and would certainly welcome your comments and support in raising even greater interest in our endeavor to provide “Health Care Affordability for Americans”. 2018 HSA Contribution Limits and Tax Deductible Catch Up Contributions 

Individual: $3,450                          Family: $6,900

The 2018 catch up contribution limit remains the same, at $1,000, for those 55 years of age and older.

The Kirwan Companies, Ltd has been in the vanguard of recommending and educating our clients on HSA’s since their inception as MSA’s (Medical Savings Accounts) in 1997 and we continue to advocate for the establishment and expansion of these accounts having recently applied for an received our Intellectual Personal Property Patent, “HSA-Transfer-K”, which would allow for the vested benefits of an individual’s Vested Retirement Plan Values to be transferred “tax-free” into your HSA Account.

You can review our Patent proposal, which is under review by the CBO, at our web site at:   www.kirwanbenefits.com/hsa-transfer-k/ 

If you would like additional details on our submission and patent, you can view the background at our web site at: www.kirwanbenefits.com/hsa-transfer-k/

 

Beware of Look-A-Like HSA Plans!

13025-warning-sign

Some carriers are offering plans that appear to mimic HSA plans “BUT” their:

Minimum Deductible’s or
Maximum Out-of-Pocket Expenses

exceed the HSA limits, which will then disqualify you from even having a Tax-Deductible HSA Account.

On a more optimistic note, the American Health Care Act of 2017 (AHCA) passed House on May 4 and one of the many proposed changes would allow for a doubling of the current allowable HSA Contributions, which would then exceed currently allowable IRA Contribution levels and nearly approach 401k Contributions.

*Increases the maximum allowable contribution amounts to Health Savings Accounts (HSAs) to at least $6,550 for self only and $13,100 for all other coverage. (the current limit for 2017 is $3,400/$6,750)

The bill allows the use of funds if the account is open within 60 days of the HSA compatible HDHP effective date, 

Currently the account must be open before funds can be used for qualified medical expenses.

Permits husband/wife catch up amounts to be placed into ONE account,

Currently a separate “spousal” account must be open before funds can be used for qualified medical expenses.

Repeals the increased tax penalty of 20%, returning the penalty to 10%, for using funds for non-qualified medical expenses.

The Kirwan Companies, Ltd has been in the vanguard of recommending and educating our clients on HSA’s since their inception as MSA’s (Medical Savings Accounts) in 1997 and we continue to advocate for the establishment and expansion of these accounts having recently applied for and received our Intellectual Personal Property Patent, “HSA-Transfer-K”, which would allow for the vested benefits of an individual’s Vested Retirement Plan Values to be transferred “tax-free” into your HSA Account.

You can review our Patent proposal, which is under review by the CBO, at our web site at: www.kirwanbenefits.com/hsa-transfer-k/

HSA CONTRIBUTIONS. IRS ANNOUNCES 2018 LIMITS.

On Thursday, May 4, the Internal Revenue Service (IRS) released the 2018 inflation-adjusted amounts for Health Savings Accounts (HSAs).

In addition to the chart below that compares the increases in Contribution Limits, there are two additional and very important pieces of this valued program that also increase next year and impact your Coverage in the areas of:

*Minimum Deductibles, and the
*Maximum for out-of-pocket expenses

Minimum Deductible for HDHPs
The IRS also raised the minimum deductible for qualified high deductible health plans (HDHPs). This is the first time since 2015 that the minimum deductible will go up. This also applies to stacked HRAs and FSAs.

In 2018, the individual coverage minimum deductible is $1,350, up $50; the family coverage minimum deductible goes up to $2,700, a $100 increase.

Maximum for Out-of-Pocket Expenses
The maximum limit for out-of-pocket expenses is going up in 2018, as well. The last increase was in 2016.Next year, those with individual coverage will have a $6,650 limit, a $100 increase. Account holders with family coverage see a $200 increase to $13,300.

Catch Up Contributions
The 2018 catch up contribution limit remains the same, at $1,000, for those 55 years of age and older.

2018 HSA Contribution Limits/Minimum Deductible/Out-of-Pocket Expenses

2017 2018
Contribution Limits Individual: $3,400

Family: $6,750

Individual: $3,450

Family: $6,900

Minimum Deductible for HDHPs Individual: $1,300

Family: $2,600

Individual: $1,350

Family: $2,700

Maximum Out-of-Pocket Expenses Individual: $6,550

Family: $13,100

Individual: $6,650

Family: $13,300

The Kirwan Companies, Ltd has been in the vanguard of recommending and educating our clients on HSA’s since their inception as MSA’s (Medical Savings Accounts) in 1997 and we continue to advocate for the establishment and expansion of these accounts having recently applied for and received our Intellectual Personal Property Patent, “HSA-Transfer-K”, which would allow for the vested benefits of an individual’s Vested Retirement Plan Values to be transferred “tax-free” into your HSA Account.

You can review our Patent proposal, which is under review by the CBO, at our web site at:   www.kirwanbenefits.com/hsa-transfer-k/

Employee Benefits-Size Matters

Employee Benefits-Size Matters

 

Regardless of the size of your practice or business, the ever-increasing cost of your Group Health Plan(s) is typically the second or third largest item of your expenses, next to salaries or, in certain circumstances, malpractice insurance. But this is just the “transparent” cost of being an owner.

Knowing (or NOT knowing) more about the “invisible” and multitudinous regulations that you, the employer, are responsible for can be dizzying and expensive if you are not informed. Adding or Terminating Employees from your Plan(s) is critical. If you fail to enroll an eligible employee who has satisfied the Plan(s) waiting period, the carrier has no obligation to accept that individual until your Plan(s) renewal, barring a “Qualifying Life Event”. If an individual is terminating for any reason, they “MUST” be removed from your plan and offered the opportunity to continue and pay for their own coverage, unless or until they return to work at some future date. Typically, the terminated employee would be permitted to continue their coverage for 18 months, but there are some extenuating circumstances that could allow for an extension. You are also responsible for notifying and removing your terminated employee upon the expiration of the allowable extended coverage and we recommend the implementation of Certified Mail to avoid being sued from a disgruntled employee who may make a claim of having never been notified.

Here’s just a few places where size matters:

  • Small Groups of 2-19 are mandated by State Continuation, Large Groups by Federal COBRA
  • Small Groups of 2-99 for Group Health, Large Groups are 100+ by Federal Law but the law allows states to modify that number and NJ and PA have chosen 2-49 for Small Group and 50+ for Large Group, while NY has elected to use 2-99 as Small Group and 100+ as Large Group.
  • Under the ACA, many of the penalties applicable to Large Groups are avoided if you are utilizing Level Funded* or Self-Funded Plans*, which are now available to both Large and Small Groups.

Large Groups will require:

  • ACA Compliance & Reporting                               · Forms 1094-1095 B and C
  • Form 6055                                                               · ERISA 5500 Compliance
  • ERISA SPD & Wrap Reporting                              · COBRA Continuation and Notification

The following are just a few of the many services or plans that can save you and/or your employees money and enhance your renewal experience:

  • Health Savings Accounts (HSAs)                           · Health Reimbursement Arrangements (HRAs)
  • Flexible Spending Accounts (FSAs)                       · Dependent Care FSAs
  • Self-Funded/TPA Plans*                                         · Group Life
  • Short & Long Term Disability                                · Retirement Plans
  • Transit & Parking Plans                                          · COBRA
  • Employee Wellness Programs                                · Voluntary Benefits
  • Employee Handbook                                              · Online Portals, Compliance and Reporting Tools

 

We would invite you to visit our Employee Benefits web site at www.kirwanbenefits.com and would be privileged to receive your questions or calls.

Healthcare 2017 – Where Are We Now

As we hurtle further into the unknown arena of Healthcare, and an election with the nominees having diametric objectives, we are reminded that for all enterprises to function, hospitals and physicians alike, there must be a profit incentive, which always requires competition.

The American Enterprise Institute has noted that Aetna has lost $430 million since January 2014 on insurance plans sold through Obamacare and is withdrawing from 11 of its 15 states. United Healthcare has lost $1.3 billion on the exchanges and will cut its participation to three states from 34. In 2014, McKinsey said, insurers lost money to the tune of $2.7 billion, posting a -5 percent post-tax margin. In 2015, margins plummeted, to between -9 percent and -12 percent.

This means less coverage and will inevitably result in less competition and soon could result in a third of the exchanges having only one provider and without competition, we can only anticipate higher prices. Currently the national requested increase is estimated to approach in excess of 20%.

According to the Kaiser Foundation, all employees have deductibles that are about 50 percent higher than they were five years ago. Four out of five covered employees pay a deductible, which averages about $1,500 each. Employees who get insurance through a smaller company have deductibles that now average $2,100.

More companies are opting for less choice for their employees. This year, slightly fewer than half of workers are enrolled in so-called preferred provider organization plans, or P.P.O.s, compared with 58 percent in 2014 and then there are the internal offerings from the carriers.

We recently concluded an annual renewal review for one of our NJ mid-market medical group clients (about 100 employees), who received a 14% increase from their long time provider, Aetna. Alas, longevity provides no immunity. After seeking any number of quality alternative carrier quotes, the best price offering was Horizon “BUT”. One of their new offerings has a two-Tiered Provider arrangement, resulting in what initially appears to provide a substantial savings by guiding the insured to the Tier One physician, the insured has “no deductible”. However, if you elect or need the Tier Two provider, you will be faced with a deductible, which changes the cost dynamic, depending upon the largess of the employer, who may be willing to provide an HRA-Health Reimbursement Arrangement as an incentive.

Noting that the client is a medical practice, who also happens to be a Tier Two Group, they were able to determine that while the practice reimbursement appeared to be identical for Tier One and Two Groups, you can understand their concern about the potential loss of patients not able or willing to pay for a deductible, their concern turned toward their desire to support such a program.

In retrospect, and without opining upon Horizon’s offering, they are simply confirming the aforementioned cited statistics of surviving in the market.

If you think we can assist your group and would like to know more about us, I would invite you to visit our new web site of services at www.KirwanBenefits.com or our dedicated HSA web site at www.KirwanHSA.com.

Written for the Union County Medical Society

Large Group, Small Group, IRS Codes

ACA, ALE’s, FTE, 6055, 6056, 1094C, 1095C
Are you and your Accountant Confused Yet?

As we prepare for the full effects of the 2016 ACA regulations to go into play, we will once again be faced with yet additional rules, regulations and potential penalties.

You will recall that in an effort to mobilize the country into assuring that “all Americans” would meet the requirement of having coverage, penalties were to be imposed on:

Individuals
*2015-Individuals who did not comply pay the greater of 2% of your household income or $325 per person ($162.50 per child under age 18). Certain exemptions may be available.
*2016-Individuals who did not comply pay the greater of 2.5% of your household income or $695 per person ($347.50 per child under age 18). Certain exemptions may be available.

Small Employers
*2015-For Groups with fewer than 50 fulltime employees, who offer coverage, must meet a number of minimum affordability requirements.

Large Group
*2015-Employers with 50 ALE’s-Applicable Large Employer (averaged at least 50 fulltime employees, including FTE fulltime equivalent employees) will be subject to 4980H penalties. Transitional relief will be available in determining ALE’s status, which will include 28 different ways, but we encourage our readers to begin tracking the hours of “every” individual who appears on your payroll as soon as possible, regardless of hours.

*2016-Small Group definition will be expanded to include Groups with fewer than 100 employees and, in addition to the 2015 requirements, those employers with 50 ALE’s-Applicable Large Employer (averaged at least 50 fulltime employees, including FTE fulltime equivalent employees) will be subject to 4980H penalties.

Important Information Reporting Filing Forms for 2016 under Section 6056 (6055 for self-insured/MEWA’s and consortiums) FOR 2015 are Forms 1094-C and 1095-C.

The Kirwan Companies, Ltd, and ACCA-Affordable Care Consulting Associates, Inc., are Employee Benefits Specialists uniquely positioned in working with physician groups for well over 30 years, and can assist you in maneuvering through the maze of ACA requirements, including making comparisons between your current Group Plan versus the use of either a MEWA (Multiple Employee Welfare Arrangement) or, if you are a group of at least 30 covered employees, we can prepare a Cost/Benefit Analysis by creating a specific Consortium plan specifically designed for your group. Members may call us directly for your free consultation and analysis.

The Supreme’s Hear King v. Burwell

How will the Supreme Court rule on the Obamacare “Federal Tax Subsidies”?

As you may be aware, according to the strict language of the law pertaining to subsidies, only Health Insurance purchased through an “Exchange established by the State under section 1311” of the ACA, Section 36B IRC, are eligible for subsidies.

Currently there are 34 States that have declined to establish their own exchanges and, by default, the Federal government established a Federal Exchange, which according to the language in the law, is not eligible to provide Subsidies.

This IRS Rule, allowing for Federal expansion, triggers other ACA Mandates and Penalties.

➢ For individuals, eligibility for subsidies triggers the “Individual Mandate Tax Penalty”*-, for which they would have otherwise been exempt, thereby increasing the number of people in those states subject to the tax penalty, in addition to now paying for coverage they may not otherwise be able to afford, not withstanding the High Deductibles imposed in most plans, that are likewise unaffordable.
➢ For employers, subsidies trigger the “assessable payments” of the Employer Mandate, specifically against Large Employers (currently), i.e. 100+ employees. In this case, if even one (1) employee applies for and receives a subsidy by virtue of going to the Exchange for coverage, the employer penalty is assessed. Like the case for Individuals, lacking a subsidy, there would be no employer assessment.

What results might evolve from prohibiting the Federal Exchanges from providing subsidies?

Clearly, those of modest to low/no income would incur a significant financial hardship and, perhaps even a loss of coverage, resulting in a substantial reduction of plans/insured’s and revenue to the carriers, who would then need to re-evaluate the premiums charged to their respective “book of business”.

Given the already significant reduction in revenue to both the hospitals and private practitioner(s), who are seeking sanctuary at the hospital’s, could we expect even further reimbursement reductions by the carriers, resulting in even further cutbacks in our already overburdened and under served healthcare system?

Alternatively, being an entrepreneurial country, would that well known American spirit called “competition” force carriers to be more efficient by allowing for cross state purchasing of insurance, i.e. open borders for consumer/employer purchasing of coverage. We are acutely aware of the already excessive monies expended on building and, even more frightening, maintaining our insecure Exchange.

If we were able to provide for a more realistic reimbursement to our “entrepreneurial” physicians, ACO style, would we then be able to not only reduce the number of our physicians leaving private practice, but more importantly, significantly incentivize and encourage our new physicians to entire and expand their own private practice services and negate the immediate and prospective shortages we will continue to experience. After all, what is the saturation point of absorbing physicians into the hospital mode?

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