It’s Time to Double Check Your Healthcare Subsidy Calculations
Like millions of Californians, you might be glad that you receive a subsidy that helps you to afford healthcare plan premiums. But there’s one very important reason that we should all check and double check our calculations: If your subsidy is calculated incorrectly, you could end up owing money back to the government later. That’s an unpleasant surprise no one wants to face! And it happens more often than you might think.
How does this happen? Subsidies are calculated according to your expected earnings for the year and paid through the Advance Premium Tax Credit (APTC). The APTC is paid directly to your insurance company each month, and it reduces the amount that you owe for your premiums.
But if your income is estimated too low, you will receive a larger APTC than you should have… And when this is discovered later (usually in the fall, during Open Enrollment, when you log into the system to apply for the next year), you could owe the difference between what you should have received and what you did receive.
As you might imagine, some exceptions do apply. Depending upon how you fall into income brackets, you might only owe a portion of the overage. But owing anything at all is probably a risk you don’t want to take.
That’s why double checking your income toward the middle of the year is a great idea for anyone who receives a healthcare subsidy. Just review the calculations that were originally made to determine your subsidy and compare your current income to the expected income for the year.
Sometimes income can increase due to a raise, working overtime hours, or your spouse getting a new job. If your household income has increased, it’s better to notify Covered California. Just log into the online portal and report your new income.
If you have any questions about your income and how it relates to healthcare subsides (APTC), just give us a call and we can explain how the system works.
Creating a Great Benefits Package for Your Remote Workers
So far, this decade has ushered in numerous changes to the ways we live and work. One of those is remote work, with 26 percent of the workforce now working away from the office. But location doesn’t impact worker benefits; your employees still need things like health insurance and a retirement plan.
But because managing everything can feel challenging when workers are spread apart geographically, you might need to update your methods. These six tips can help you manage benefits for remote workers.
Offer the right mix of benefits. Obviously, your benefits package must be affordable. But it also needs to be flexible enough that it is accessible and satisfies everyone. Consider a mix of traditional benefits (like health insurance and a retirement plan) and voluntary ones (like financial wellness, student loan assistance, or gym memberships).
Comply with regulations. Some group benefits are mandated by law, such as health insurance. Make sure your benefits comply with both federal and state regulations, in order to avoid penalties on your tax returns.
Created a centralized platform. Your workers can’t exactly stroll into the human resources department when they’re working from home or other locations. You’ll need an online platform to help them access their benefits. Ask us about software that is easy to use, and we’ll provide the details.
Seek insight. Utilize the data within your benefits management software to gain insight into the type of benefits your employees value. This will help you continue to fine-tune your benefits package in the future.
Bundle your benefits. Typically, bundling your benefits will allow you to obtain the lowest costs combined with the most coverage for that price.
Teach your employees how to use their benefits. They will most appreciate the benefits that they know how to access. And they will be less likely to select benefits packages that go unused.
To learn more about putting together a valuable benefits package for your workforce, give us a call. We will help you understand the different options available to you, while ensuring compliance with state and federal regulations.
Life Transitions Mean Healthcare Changes
Your healthcare plan is meant to protect your life. So, it makes sense that when your life changes, so should your insurance plan. In particular, two major transitions will mean that you need to step outside your usual comfort zone and learn about new types of healthcare plans, so that you can select one that best suits your needs.
The first transition occurs in young adulthood. Thanks to Affordable Care Act provisions, young adults can stay on their parents’ healthcare plan until they turn 26 years old. Of course, they can also enroll in their own plan earlier than that age, due to employment, marriage, or other circumstances. But once you reach age 26, you must enroll in your own plan.
The prospect can sound daunting, considering the cost of many healthcare plan premiums these days. But young people have options. If your employer provides a group benefits plan, investigate whether they offer certain provisions like a health savings plan or help with the premiums.
If you must shop for your own plan, remember that you can receive subsidies to help with the cost of premiums through Covered California. These subsidies are based on your income and family size, which is good news for young people just getting a start in life.
The other major life transition occurs when you turn 65. At this age, you’re eligible for Medicare. Most people must enroll in Medicare at this time, or else be charged higher premiums later. But in some cases, those who are still employed can remain on their employer’s group benefits plan and defer their Medicare enrollment.
Once it’s time to enroll in Medicare, you can opt for Original Medicare (Parts A and B), plus the addition of an optional Medigap (supplemental) plan or Part D (prescription) plan. Alternatively, you can enroll in a Medicare Advantage plan, which are plans offered by private insurance companies. These plans must meet basic standards set forth by Medicare, operate on a network of providers, and might include extra perks like vision or dental care. Many, but not all, Advantage plans include prescription drug coverage as well.
There’s a lot to learn at each of these life stages, but you don’t have to do the detective work yourself. Give us a call, and we’ll help you sort through your healthcare options and identify the plan that works best for you.
Can’t Get a Doctor Appointment? Try Virtual Care!
When you’re feeling under the weather, scheduling hassles are the last thing you want. But that’s what often happens, especially during busy cold and flu seasons. If you’re having trouble getting into a doctor’s office at their available times, try your healthcare provider’s virtual care benefit. It’s easier than you probably think!
The primary benefit of virtual care is that you don’t even have to leave your home or office. That means no sitting around crowded waiting rooms, potentially exposing yourself to more germs. And of course, you won’t expose anyone else, either! And since you don’t have to make the commute, you’ll save a lot of time.
Providers are loving virtual care because it allows them to see patients more conveniently. If your doctor believes you need more intensive, in-person care, they will definitely direct you to the nearest clinic or emergency room.
But for minor illnesses, virtual care just makes sense. Your provider can screen you, diagnose common conditions, and send the necessary prescriptions to your pharmacy, often in less than one hour!
First, you will fill out a short questionnaire, similar to the forms you always complete at medical appointments. Then you will speak to your provider over the phone, instant message, or video chat to discuss your symptoms.
If your provider determines that lab work is necessary, you will be directed to a nearby lab. But in many cases the next step includes a diagnosis and prescription, if necessary.
Then, all you need to do is follow your provider’s care directions and/or pick up your medication from the pharmacy of your choice. You’ll soon be feeling back to your usual self.
Virtual care isn’t right for every situation, but it does make healthcare more accessible for many of us. Call your benefits provider to inquire about how to obtain virtual care the next time you feel sick and see how easy and convenient healthcare services can be!
Health Savings Accounts Benefit Both Employees and Employers
As an employer, you might often think of things like healthcare plans and retirement accounts as “benefits” that you offer to employees. And yes, those things do quite literally benefit them. But you might be surprised to learn that a comprehensive benefits package also works in your favor, in a number of ways. This is particularly true with regard to health savings accounts.
A health savings account can be established when you participate in a low-premium, high-deductible group healthcare plan. The account helps your employees to budget and plan for large out-of-pocket healthcare expenses, such as deductibles, co-payments, and medications. And since the account is funded with pre-tax dollars, diverted from their paychecks, employees appreciate the potential income tax savings.
But that’s not all! Health savings accounts benefit employers in a number of ways, too.
It’s not exactly a raise, but functions like one. Because the money placed into a health savings account is not taxed, employees keep a bit more of their money by lowering their taxes. In 2023, individuals can contribute $3,750 and those with family coverage can contribute $7,750 to an HSA. That adds up to a significant amount of pre-tax income that is diverted toward important expenses.
HSAs serve as a back-door retirement planning tool. Retirement plans are already viewed by employees as important parts of a competitive benefits package. But because health savings accounts are portable, and because unused funds roll over year after year even into retirement, an HSA can actually function as a long-term financial planning tool.
You can make matching contributions. Employers are not required to contribute to HSAs, but they can establish a matching funds benefit if they want.
Workers who feel supported and valued are productive, loyal employees. A comprehensive benefits package is one of the most compelling reasons new employees will seek out a new company, and current employees will decide to stay. Creating a healthy, financially successful workforce helps both employers and employees alike.
For more information on establishing a health savings account, give us a call. We will help you determine whether you’re eligible to participate in this valuable benefit.
5 Things You Must Do When You Turn 65
The Baby Boomer generation has begun to head into retirement, with millions reaching retirement age every year. If you’re turning 65 soon, make sure to take these five steps to secure your Medicare coverage and prepare for retirement.
Mark the Medicare enrollment window on your calendar. You can begin enrolling in Medicare three months before your birthday month, throughout that entire month, and for three months afterward. Make sure you enroll in a Medicare plan before this window expires, because you could face higher penalties for life if you enroll too late.
Call your employer’s human resources department. If you or your spouse are still working, you might not be required to enroll in Medicare yet. It depends upon the size of your employer and the type of health insurance plan in which you’re enrolled. However, some people choose to enroll anyway, and then Medicare serves as supplementary insurance.
Make the first important choice. Will you enroll in Original Medicare (Parts A and B)? Or will you opt for a Medicare Advantage plan instead? Advantage plans roll Part A and Part B coverage into one plan that is administered via a network of providers. Many of these plans also include Part D (prescription) coverage and certain other additional benefits.
Consider additional options. If you choose Original Medicare, you should also consider additional options such as a Medicare Supplemental Plan (Medigap), which can cover out-of-pocket expenses. A Part D plan helps with the cost of prescriptions, and additional insurance such as vision or dental insurance can be a wise choice.
And since Medicare (Original or Advantage) offers very limited coverage with regard to stays in long-term care facilities, you might also consider enrolling in Long Term Care Insurance.
Call an insurance specialist. You’re entitled to free help when it’s time to enroll in Medicare. We can help you identify and compare all of your Medicare plan options when you turn 65, and each year thereafter when the Annual Election Period rolls around. And there’s never any cost to you! Just give us a call if you’re about to turn 65, and we can start helping you right away.
Understanding the 2023 Employer Mandate Penalties for Not Providing Health Insurance
Providing a group health insurance plan to your employees is one of the best ways to attract and retain top talent. And because healthier, happier workers are also more productive, providing health insurance benefits you too. But if you’re running a company with 50 or more full-time employees, health insurance is not just a benefit; it’s a requirement.
The Employer Shared Responsibility Provisions (ESRP) of the Patient Protection and Affordable Care Act, otherwise known as the employer mandate, requires businesses with 50 or more full-time employees to provide a group health insurance plan. Companies that don’t comply with the mandate can face penalties from the IRS.
For 2023, the updated penalties are detailed on the IRS website as follows:
“An applicable large employer that fails to offer minimum essential coverage to 95% of full-time employees (Section 4980H(a) penalty): 2023 penalty is $2,880 per full-time employee if only one full-time employee receives subsidized coverage through the Exchange or Marketplace, a 4.7% increase from the $2,750 amount for 2022.
An applicable large employer that fails to offer affordable or minimum value coverage (Section 4980H(b) penalty): 2023 penalty is $4,320 per full-time employee who receives subsidized coverage through the Exchange or Marketplace, a 5.2% increase from the $4,120 amount for 2020.”
Clearly, those are not consequences that any business wants to face. But you have time to comply with the law so that you don’t face this outcome when you file your taxes next year. If your company is growing and soon to surpass 50 full-time employees, call us right away to discuss your health insurance plan options. We can help you identify the plan that works best for your situation, while helping you to maintain compliance with the law.
Important ACA Deadlines for Employers and Employees to Note
The Affordable Care Act helps employers provide important healthcare benefits to their employees. But as with any large government action, the Act specifies numerous regulations and deadlines to which we must adhere. With tax season looming, there are a few important dates that both employers and employees should know.
All Applicable Large Employers (ALEs), or those with 50 or more full-time employees, must offer Minimum Essential Coverage to at least 95 percent of eligible workers and their dependents. The cost of coverage must be “affordable” according to IRS methods of calculating affordability, and information on employee coverage must then be supplied to the IRS by certain deadlines during tax season each year.
Businesses with fewer than 50 full-time employees might also choose to provide health insurance coverage to employees, either through the Small Business Health Options Program (SHOP) or via employer-sponsored plans.
These smaller businesses must provide proof of health insurance coverage to their employees with a 1095-B form. These forms will come from the insurance carrier, not the employer.
Finally, individuals who have opted to insure themselves through Covered California will also receive documentation of their coverage. This comes as a 1095-A form sent by the insurance carrier. You’ll need this form to calculate the Premium Tax Credit on your tax returns.
Here are important dates to know:
February 28, 2023. For those ALEs who choose to file paper 1095-C forms to the IRS, they must do so by February 28. This option is only available to those employers who file fewer than 250 1095-C forms, and proposed regulations will reduce that threshold to just 10 forms by the end of 2023.
March 2, 2023. 1095-B or 1095-C forms, as applicable to the business, must be given to all full-time employees by March 2 (this deadline was changed from the previous January 31). Employees who obtain coverage through Coverage California will receive their 1095-A from the insurance provider.
March 31, 2023. For ALEs who file their 1095-C forms electronically, the deadline for doing so is set on March 31. ALEs who file more than 250 1095-C forms are required to do so electronically, but there are many benefits of this method even for smaller employers who opt in. Employers receive instant acknowledgement of submission and a response indicating whether the submission was accepted or rejected.
Employers who miss the above deadlines or file their forms incorrectly can be subject to penalties under Internal Revenue Code 6721/6722. Penalties can range from thousands to millions of dollars, depending upon the size of the company and the extent of errors.
If you have any questions about the above deadlines or filing your 1095-C forms, call us right away for assistance. The earlier we address any problems you’re having, the more likely it is that we can help you meet the deadlines.
Your Health Insurance Plan Can Support Your Wellness Goals
Most of us think of health insurance in terms of treating injuries and illnesses while keeping costs affordable. But your healthcare plan can do a lot more than just help you when you’re sick or hurt; it can actually help you get healthier and stay that way through various wellness programs.
The concept is fairly simple: Health insurance providers realized that providing care for a healthy group of people is more affordable. Because promoting wellness keeps their costs down, they pass along some of those savings to you through free or discounted wellness programs.
For those of you considering your New Year’s resolutions, you might be excited to learn that your health insurance plan might cover (or offer significant savings toward) the cost of programs such as:
- Smoking cessation
- Addiction treatment
- Weight loss support
- Medical weight loss treatment or surgery
- Nutrition coaching
- Gym memberships
- … and possibly more, depending upon your plan
Of course, these programs don’t just help you live a happier, more fulfilling life. When you work to improve your health and wellness, you can also lower your out-of-pocket spending on healthcare expenses such as deductibles, copayments, and medications.
As the saying goes, an ounce of prevention is worth a pound of cure. We all know that losing weight can reduce the odds of developing diabetes, heart disease, and many other ailments. Quitting smoking, drinking alcohol, or other unhealthy habits can lower your risk of cancer. And just the simple act of eating better and exercising regularly can ward off everything from chronic disease to the common cold.
You save money, your health insurance provider saves money, and everyone is happy. But how do you know which wellness programs your healthcare plan offers? Talk to one of our licensed agents who can provide you with group or individual plan options. Remember, we’re here to help you understand your plan’s benefits so that you can make maximum use of your plan.
Retirement Contribution Limits and Medicare Premium Changes for 2023
Due to the rising cost of living and other factors, government agencies routinely assess available data and then release changes to various contribution limits and the cost of Medicare premiums. These changes are announced toward the end of each year and take effect in January of the following year. Here’s what you need to know as we approach 2023.
Changing contribution limits to retirement plans. Those saving for retirement can now contribute a bit more to their 401k, 403b, Thrift Savings Plan, or most 457 plans. The new annual limit is $22,500, plus an additional catch-up contribution of $7,500 for those over age 50.
For IRAs, the contribution limit has been raised from $6,500 to $7,500, with an additional catch-up contribution of $1,000.
New Medicare premiums. Of course, once you’ve reached retirement age, the cost of healthcare might consume a significant portion of your budget. We have good news for those of you enrolled in Medicare: The standard Part B premium will decrease just a bit, from 170.10 this year to $164.90 in 2023.
A small number (about seven percent) of Medicare beneficiaries will pay higher premiums, due to their higher annual incomes. Contact your Medicare broker to learn about your own Medicare premium amount.
Contributions to health savings accounts. For those enrolled in high-deductible healthcare plans, contributions to health savings accounts represent a valuable opportunity to save for out-of-pocket healthcare expenses. You can also enjoy certain tax benefits for doing so. The good news is that in 2023, you can now save a bit more in your HSA: Up to $3,850 for individuals and $7,750 for those on family plans.
Contributions to flexible spending accounts. You can now stash up to $3,050 in your health flexible spending account, an employer-sponsored account that allows you to pay for uncovered healthcare expenses without owing income taxes on that money.
If you have questions about any of these benefit plans, or on how the new Medicare premiums might impact you, give us a call. One of our benefits specialists will be happy to help.
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