If you’re enrolled in a healthcare plan through Covered California, it can be easy to enroll in the fall and then forget about your enrollment status for the rest of the year. But there’s one very important reason to double check on your basic information from time to time: You want your subsidy to be calculated correctly!
If you receive a subsidy to help with the cost of your premiums, you probably know that it is based on your income and household size. Any changes in those areas can impact the calculation of your subsidy.
In the event that your income decreases or your household size increases, you could qualify for a larger subsidy. Updating that information promptly within the system can help make your healthcare plan even more affordable for you.
But there’s another reason to regularly update your basic information: If your income increases or your household size decreases, you could qualify for a smaller subsidy. While that’s not likely to be good news to you, it’s better to receive the accurate subsidy throughout the year. Otherwise, if Covered California determines your subsidy was overpaid during the year, you could owe that money back to the government at tax time in the spring.
So you definitely want to avoid that unpleasant surprise!
If your income, household size, or address change at any point during the year, you are required to report those changes to Covered California within 30 days of the change.
Take a quick inventory of those facts now, and report any necessary changes right away. You take care of this task quickly by logging into your online portal, or by contacting our office for help.
Employers, take note: According to the Medicare Prescription Drug, Improvement, and Modernization Act in 2003, you are required to send Medicare Part D Notices of Creditable Coverage by October 15.
These notices detail whether your group-sponsored healthcare plan is expected to cover as much as the standard Medicare Part D plan regarding prescription drug costs. What is standard coverage under Medicare?
- Deductible: $480
- Initial coverage limit: $4,430
- Out-of-pocket threshold: $7,050
Your plan is considered “creditable” if:
- It provides coverage for brand and generic prescriptions
- It provides reasonable access to retail providers and mail order coverage
- It pays on average at least 60% of prescription drug expenses
You should supply these notices of creditable coverage to all employees who are eligible for Medicare, which would include:
- Retirees and their dependents
- Active Medicare-eligible employees and their dependents
- COBRA participants
As an alternative, you might wish to simply send the notice to all employees, either separately or as part of a packet of information on healthcare enrollment or other benefits. This can save you the trouble of determining which employees are Medicare-eligible.
If you wish to send electronic notices rather than paper copies, you need to follow several strict guidelines. We can help you understand these procedures or answer any other questions you have about Medicare Part D Notices of Creditable Coverage. Please call our office and we’ll be happy to assist you.
And remember: Notices must be sent by October 15, so the time to get started is now.
Healthcare plans can be complicated, and trigger confusion for consumers. In particular, many participants in healthcare plans experience difficulty detangling the details of their plans with regard to healthcare service pricing and their own out-of-pocket spending. The Transparency in Coverage rules created by the federal government in 2020 were designed to answer critical questions regarding price and quality of healthcare services, with changes rolling out through 2024. A deadline for one important milestone was set for July 1 of this year.
As of July 1, cost-sharing data must be provided to consumers via machine-readable files that shall be published on a publicly available website.
What is the purpose of the machine-readable files? These files must be provided by the health insurance company to consumers, and should detail pricing information for covered items and services according to in-network negotiated rates along with historical data on out-of-network amounts that have been allowed.
In the future, a third file must disclose prescription drug rates and historical costs. However, the requirement for release of this file has been delayed due to the need for further guidance.
Information within all applicable files must be updated monthly.
What else is required of healthcare plan providers? When publishing the required information, healthcare plan providers must pay careful attention to regulations regarding:
- The required font size, accessibility, and security settings
- Files must not be PDF or Excel format
- Published data must include negotiated rates for all covered items and services for each plan level, relating to all medical codes, and including all contracted rates and providers
- Out-of-network files must include allowed amounts for items and services, based on billed charges and historically allowed amounts
- If there are fewer than 20 out-of-network claims for a service by a provider, the information is not required to be included
What do consumers need to do? The required files must be made available on a publicly-accessible website. Consumers will not be required to establish a user account, password, or any other credentials in order to access this information. The website must not require users to submit any personal information.
Consumers should check with their health insurance provider to learn where the required files will be published, and ask their healthcare plan representative for assistance with interpreting the data when necessary.
Again, the above requirements all relate to machine-readable files which must be published by July 1, 2022. Both group plan sponsors and individuals should contact their healthcare plan representatives if they have any questions.
You enrolled in a High Deductible Healthcare Plan (HDHP) because it helps you to achieve lower monthly premiums. In addition, a Health Savings Account (HSA) or Health Reimbursement Arrangement (HRA) helps you to manage the out-of-pocket expenses associated with these types of healthcare plans. However, changes in the cost of living would render these types of plans and accounts much less useful if certain limits were not occasionally adjusted.
That’s the reasoning behind certain changes recently released by the IRS.
First, let’s review how minimum deductibles for HDHPs will change in 2023:
- The minimum deductible for individual coverage will rise from $1,400 in 2022 to $1,500 in 2023
- The minimum deductible for family coverage will rise from $2,800 in 2022 to $3,000 in 2023
Maximum annual out of pocket limits will change, too:
- For individuals, the maximum of $7,050 will climb to $7,500 next year
- For families, the maximum of $14,100 will climb to $15,000 next year
Yes, all of those changes indicate a bit more spending on your healthcare plan next year. But in response, the IRS has also changed the annual contribution limits to HSAs and HRAs accordingly:
- For individuals, the HSA contribution limit will rise from $3,650 this year to $3,850 next year
- For families, the HSA contribution limit will rise from $7,300 this year to $7,750 next year
- For HRAs, the contribution limit of $1,800 will rise to $1,950 next year
As for catch-up contributions, for those aged 55 and older, that limit remains at $1,000 per year.
If you have questions about your healthcare plan, HSA, or HSA, do call us to review your options. We can help you learn more about these plans and how they can benefit you.
Your employees utilize a High Deductible Healthcare Plan because it helps them to maintain lower premiums. Plus, a Health Savings Account or Health Reimbursement Arrangement helps them to manage the out-of-pocket expenses associated with these types of healthcare plans. But because the cost of living does change over time, these plans would lose their appeal and usefulness if we did not occasionally adjust certain limits with regard to them.
That’s exactly what the IRS has done, with regard to maximum out of pocket limits and minimum deductibles on HDHPs for next year. And likewise, the contribution limits for HRAs and HSAs will rise slightly in 2023.
Here’s what will change with regard to HDHPs:
- Individual coverage minimum deductibles will rise from $1,400 this year to $1,500 next year
- Family coverage minimum deductibles will rise from $2,800 this year to $3,000 next year
- Out of pocket maximums for individuals will rise from $7,050 this year to $7,500 next year
- Out of pocket maximums for families will rise from $14,100 to $15,000 next year
As for HSAs, the maximum annual contribution will change as follows:
- For individuals, the maximum contribution is $3,650 this year and $3,850 next year
- For families, the maximum contribution is $7,300 this year and $7,750 next year
The maximum catch-up contribution for those aged 55 and older will remain at $1,000 per year, because that limit is not subject to a cost of living adjustment.
And for HRAs, the maximum annual contribution limit will change as follows: The current limit of $1,800 for 2022 will rise to $1,950 in 2023.
Update your payroll and plan administration systems now, so that you can communicate these changes to plan participants correctly and according to regulations later this year. Materials such as open enrollment notices and summary plan descriptions should reflect the new limits as appropriate.
Call our office if you have any questions about the new limits, and we will help you access the information that pertains to your situation.
For many employees, certain benefits are more than simple “perks”. They’re extremely important, perhaps even essential, to maintaining health and job satisfaction. This is especially true of mental health care, which in the past was not always viewed as a crucial benefit by employers. These days, 42 percent of workers say they’re more likely to stay with a job that offers mental health care.
Lack of mental health care is equally impactful, with 44 percent of workers saying a lack of mental health benefits causes them to feel unsupported by their employers. We know that workers who feel unsupported often experience lower motivation and lack of company loyalty.
Aside from benefiting employees, mental health care benefits the employer, too. When common disorders like depression and anxiety strike workers, one of the first symptoms is impairment of concentration and memory. Helping employees to resolve these issues means you protect your productivity and the quality of your product or service.
In the post-pandemic era, mental health services became vastly more important. Social support goes a long way toward alleviating stress, loneliness, depression, and anxiety. But with so many employees moving to remote work, both during the pandemic and afterward, social contact has all but disappeared for many.
And while remote work became popular for numerous, understandable reasons, the lack of contact with coworkers and the outside world in general can be alienating. Hence, the increased importance of mental health benefits in this new era.
Mental health benefits can be varied and tailored to suit an employer’s needs. For example, paid counseling is the obvious way to go, but wellness programs provide more accessible, “real world” assistance. Call our benefits experts to discuss your company’s priorities, and we will help you put together a package of mental health services that fulfill your employees’ needs.
In the past, those suffering from mental health concerns often felt swept under the rug, with services difficult to obtain and health insurance coverage lacking. The good news is that a lot has changed in recent years, and all Californians should know their rights regarding mental health services.
We now recognize that mental health is just as important as physical health. And the law agrees: The Affordable Care Act defines mental and behavioral health services as “essential” and requires health insurance providers to cover them under ACA-compliant plans.
Under federal law, essential services include:
- Treatments such as counseling and psychotherapy
- Inpatient mental and behavioral health services
- Substance abuse treatment
Covered services are subject to the same standards as medical and surgical services, regarding the way care is managed and how deductibles and co-pays are applied.
Additionally, California law dovetails with federal law, requiring all health insurance plans within the state to cover treatment for the following mental health conditions:
- Major depressive disorders
- Autism or pervasive developmental disorder
- Bipolar disorder
- Panic disorder
- Schizoaffective disorder
- Obsessive-compulsive disorder
- Anorexia nervosa
- Bulimia nervosa
- Serious emotional disturbances in children under age 18
Healthcare plans must offer inpatient services when needed, outpatient diagnosis and treatment, and prescription drugs – the same as any other covered medical condition.
Finally, California law requires that mental health and substance abuse professionals offer you a return appointment within 10 business days of your initial assessment. This deadline also refers to referrals to mental health services from your primary care provider. By law, mental health conditions are taken seriously, and prompt help is not only available, but required to be provided.
If you’re in need of mental health or substance abuse services, don’t delay. Reach out for the services you need, just as you would with any other medical event, and rest assured that your rights are protected by both federal and state law.
If you have any questions about your plan coverage for mental health services, don’t hesitate to call us for help.
You want happy, healthy workers, and your workers want to be happy and healthy. That’s why offering a comprehensive benefits package is a win-win scenario. But in today’s changing landscape, both current and prospective employees are often looking for something a bit out of the box. Consider these four benefit options, and you can get ahead of the competition with regard to recruiting and retaining top talent.
Help with student loans. Student loans are one of the top challenges faced by younger to mid-level workers, with the average student loan debt approaching $40,000. Employers can make a contribution of up to $5,350 annually to help over-burdened employees, through the Consolidated Appropriations Act of 2021.
Remote work reimbursement. The rise of remote work meant the end of commuting expenses for many, but let’s be honest: Remote work comes with its own set of challenges and costs for the employee. Smart employers are recognizing the need for reimbursement of expenses related to remote work, like a secure internet connection, office supplies, and electronic devices.
Sick leave and personal leave. Burnout is one of the leading causes of job termination, with millions citing this reason each year. Offer your employees sick or personal leave to deal with illness and personal issues, and loyalty will grow.
A focus on fInancial wellness. Who can’t identify with the experience of financial stress impacting work satisfaction and productivity? Help your employees with this area of their lives, and the benefits multiply for both of you. Many employers now offer a comprehensive financial wellness package including benefits such as education and coaching, emergency savings programs, retirement savings plans, safety net insurance, financial planning, and emergency savings funds.
The key to offering lucrative employee benefits is to first talk to your workers and understand what they need. Then, give us a call to discuss that feedback, and we will help you design a benefits package that suits them perfectly.
As you probably know, contributing to a retirement plan and certain other types of accounts can not only help you prepare for the future; these contributions are tax deductible and can lower your overall income tax liability for the year. That’s why it can be so important to keep up with contribution limits, which can change from year to year. Contribute the maximum, and you’re planning for the future while saving as much as possible on your taxes.
For the 2022 year, the IRS has announced the following changes to contribution limits.
For your qualified retirement plan, such as a 401(k) or 403(b): The contribution limit has been raised to $20,500 this year. By contributing all the way up to the limit, you save that amount for retirement while also reducing your taxable income by the same amount.
For your health savings account (HSA): The contribution limit has grown to $3,650 for those with individual health insurance coverage, or $7,300 for those with family coverage. An HSA allows you to set aside pre-tax dollars to be used for healthcare expenses if you’re enrolled in a high-deductible healthcare plan.
And if you don’t use your HSA funds in any particular year, the money rolls over to the following year. In fact, you can keep rolling over those funds all the way into retirement, if you’re so lucky that you don’t incur serious out-of-pocket healthcare costs. Then the money can be used to cover qualified medical expenses such as Medicare premiums and copayments. In this way, an HSA actually functions as another way to save for retirement.
Not all contribution limits were raised, however. Traditional and Roth IRA contributions hold steady at $6,000 per year.
For more information on your benefits plan, contribution limits, or how to maximize the tax benefits, call our office and we’ll be happy to help.
According to a new law, Section 202 of the Consolidated Appropriations Act, effective January 1, 2022, all insurance agents who market or sell employee benefit plans must notify clients of their commissions earned from monthly premiums. This amount is expressed as a percentage for the premiums paid, and disclosure is similar to that required of real estate agents.
Employers who wish to provide employees with a group benefits plan can purchase a plan straight from insurance providers or use a broker to assist them. Plans and premiums are established the same, no matter how you choose to enroll in one. As for the premium amount, those are set by each insurance company, and are approved by the Department of Insurance. If you enroll directly through an insurance provider rather than through an agent, the provider simply retains the commission.
In other words, you do not pay more for using an insurance agent to help you sort through your options and choose a plan. At Bay Area Health Insurance Marketing, we accept the standard commission from all insurance providers. However, we are still required to notify you as to the amount of that commission, expressed as a percentage of your monthly premiums.
These disclosures help employers to understand the expenses associated with their group health benefits and assist them with making decisions related to insurance providers.
You should receive a notice regarding these disclosures, along with a form that we ask you to fill out and return to us. This helps us to note that you have received the required disclosures, and that all obligations have been fulfilled.
If you have any further questions about this process, please don’t hesitate to call us for assistance.