Monday, June 30, 2014

Supreme Court Rejects Contraceptives mandate for some Corporations


by Adam Liptak; New York Times

The Supreme Court ruled on Monday that requiring family-owned corporations to pay for insurance coverage for contraception under the Affordable Care Act violated a federal law protecting religious freedom.

 

The 5-to-4 decision, which applied to two companies owned by Christian families, opened the door to challenges from other corporations to many laws that may be said to violate their religious liberty.

Justice Samuel A. Alito Jr., writing for the court's five more conservative justices, said a federal religious-freedom law applied to for-profit corporations controlled by religious families. He added that the requirement that the companies provide contraception coverage imposed a substantial burden on the companies' religious liberty. He said the government could provide the coverage in other ways.

Justice Ruth Bader Ginsburg, writing for the court's four-member liberal wing, said the contraception coverage requirement was vital to women's health and reproductive freedom. Justices Stephen G. Breyer and Elena Kagan joined almost all of the dissent, but they said there was no need to take a position on whether corporations may bring claims under the religious liberty law.

On that point, Justice Ginsburg, joined by Justice Sonia Sotomayor, said the
court's decision "is bound to have untoward effects" in other settings.

"The court's expansive notion of corporate personhood," Justice Ginsburg wrote, "invites for-profit entities to seek religion-based exemptions from regulations they deem offensive to their faiths."

The contraception coverage requirement was challenged by two corporations whose owners say they try to run their businesses on religious principles: Hobby Lobby, a chain of crafts stores, and Conestoga Wood Specialties, which makes wood cabinets

The health care law and related regulations require many employers to provide female workers with comprehensive insurance coverage for a variety of methods of contraception. The companies objected to some of the methods, saying they are tantamount to abortion because they can prevent embryos from implanting in the womb. Providing insurance coverage for those forms of contraception would, the companies said, make them complicit in the practice.

The companies said they had no objection to other forms of contraception, including condoms, diaphragms, sponges, several kinds of birth control pills and sterilization surgery.

The court ruled that corporations controlled by religious families cannot be required to pay for contraception coverage for their female workers.

The Obama administration said it did not question the sincerity of the companies' beliefs, and it has offered exemptions to other groups on such grounds.

 

A federal judge has estimated that a third of Americans are not subject to the requirement that their employers provide coverage for contraceptives. Small employers need not offer health coverage at all; religious employers like churches are exempt; religiously affiliated groups may claim an exemption; and some insurance plans that had not previously offered the coverage are grandfathered in.

 

But the administration said that for-profit corporations like Hobby Lobby and Conestoga Wood must comply with the law or face fines.

 

The cases are Burwell v. Hobby Lobby Stores, No. 13-354, and Conestoga Wood Specialties v. Burwell, No. 13-356.

 

The companies challenged the coverage requirement under the Religious Freedom Restoration Act of 1993. The law was a response to a 1990 Supreme Court decision that declined to recognize religious exceptions under the First Amendment's free exercise clause to generally applicable laws. Congress effectively reversed that decision.

 

"What this law basically says," President Bill Clinton said before signing the bill, "is that the government should be held to a very high level of proof before it interferes with someone's free exercise of religion."

The threshold question in the new case was whether the companies were permitted to raise a claim under the law.

 

The companies argued that they were, and they said the coverage requirement imposed a "substantial burden" on religious practices by subjecting Hobby Lobby, for instance, to fines of $1.3 million a day if it chose not to offer comprehensive coverage, and to different fines of $26 million a year if it stopped offering insurance entirely.

 

Some scholars responded that the company would be better off financially if it dropped coverage, and so does not face a substantial burden.

 

The administration argued that requiring insurance plans to include comprehensive coverage for contraception promotes public health and ensures that "women have equal access to health care services." The government's briefs added that doctors, rather than employers, should decide which form of contraception is best.

 

A supporting brief from the Guttmacher Institute, a research and policy group, said that many women cannot afford the most effective means of birth control and that the law will reduce unintended

  

A copy of the Supreme Court Decision can be obtained by clicking on the link below:

Monday, June 16, 2014

Can an Employer reimburse employees for premiums pre-tax?


Question:  
Can an employer reimburse its employees for premiums on a pre-tax basis for purchasing individual market medical coverage?


Answer
No. In IRS Notice 2013-54  & Technical Release 2013-3, the IRS and DOL prohibit the reimbursement of premiums for individual medical policies from health reimbursement arrangements and premium only plans.
The IRS and DOL indicate that such arrangements that help employees to pay for individual health insurance policies on a tax-free basis fail to satisfy the Affordable Care Act's annual dollar limit and preventive health services "market reform" provisions.
Any employer payment plan will not meet these mandates unless it meets the rules pertaining to participation in a group health plan.
An employer payment plan is defined as any arrangement that facilitates the direct or indirect payment of individual market coverage.

It does not include any arrangement whereby employees may choose between cash or an after-tax amount to be applied toward health coverage, including forwarding post-tax payroll deduction to the insurer, as long as the arrangement satisfies the voluntary plan safe harbor under the DOL regulations.
The reimbursement of premiums for certain other individual coverage are exempt from these requirements.  These include premiums for:
Retiree coverage, Exempted benefits (dental and vision), and coverages that meet the voluntary benefits safe harbor.




On May 13, 2014, the IRS issued a Q & A guidance restating the conclusion in Notice 2013-54, that an employer is considered to establish a type of group health plan, called and "Employer Payment Plan," if it reimburses employees' premiums for individual health insurance policies.





Thursday, June 12, 2014

Premium Tax Credits-Tax Return Must be filed. What is Form 1095-A and Tax Form 8962 ?

A Premium tax credit is a refundable tax credit.
It is to help eligible individuals and families pay for health insurance.
The two payment options are:

  1. Get it Now-advance credit payments
  2. Get it Latter-without advance credit payments
To be eligible for a tax credit, individual must be:
  • Be an applicable taxpayer with income between 100 and 400% FPL and cannot be claimed as a dependent, and if married files a joint tax return.
  • Have a "Coverage Month" -  Be enrolled in a QHP through a Marketplace, and not eligible for other minimum essential coverage and have the policy premiums paid.

PTC (Premium Tax Credits) Key Considerations
  • Advance credit payments are optional
  • Reconciling advance credit payments is required !!
  • Differences between advance credit payments and the credit are likely
  • Changes in circumstances can affect the PTC amount
  • A Tax return must be filed!!



IRS Form 1095-A
Issued by the Health Insurance Marketplace.
It will be sent out by January 31, 2015.
This form will show:

  • Documentation of Health Coverage by month
  • Premiums
  • Advance payments of Premium Tax Credits

IRS Form 8962
This form is filed with your Form 1040 to help taxpayer reconcile your Advance Payments and calculation of PTC (Premium Tax Credit) from form #1095-A
Included on this form:
  • Part 1-Annual & Monthly Contribution
  • Part 2-Premium Tax Credit Claim & Reconciliation
  • Part 3-Repayment of Excess of Advance Payment
  • Part 4-Shared Policy Allocations
  • Part 5-Alternative Calculation for Marriage


Premium Tax Credit Summary
  • Refundable credit for only eligible individuals
  • Get it Now (advance credit payments) or Get it Latter (without advance credit payments)
  • Must report changes in Life Changing Events to change your Circumstances and credits
  • Advance credit payments must be reconciled
  • Everyone who receives this credit must file a tax return and use form 1095A, Form 8962, Form 1040


Resources for PTC
  • HealthCare.gov website

Friday, June 6, 2014

How much is that Life Insurance Policy?

In a recent poll, 45% of adults stated that they felt life insurance "Costs too Much".  According to the Life Insurance Marketing and Research Association (LIMRA), consumers believe life insurance costs nearly three times what it actually costs. 
Younger adults often overestimate the cost by nearly seven times the actual cost.


Those TV ads that show just how low prices can be, drive me crazy.  They never tell us how long the policy terms are or just how healthy you must be to qualify. 
But with some of my new, reduced rates, I can certainly compete with these TV Ads. 


Now, I know that you already have some life insurance, but I have newly lowered rates that I can now add an additional $250,000 of term coverage as an umbrella over what you already have for only about $19.00 per month. 


Why don't we get together tomorrow to take care of the paperwork??







Thursday, June 5, 2014

Double-digit premium increases predate PPACA | LifeHealthPro

This is no surprise to any of us.  Rates for health care will go up for next year. We just are not sure just how much yet.  Insurance Companies have rates approved but will not release them till latter this year.

Double-digit premium increases predate PPACA | LifeHealthPro

Wednesday, June 4, 2014

IRS Releases Revised Form 720


IRS has issued a revised Form 720 and instructions for filing the PCOR fees by July 31, 2014. Filers will enter covered-lives counts and applicable rates ($1 for plan years ending before Oct. 1, 2013; $2 for plan years ending on or after Oct. 1, 2013) in Part II of Form 720 (line 133) to calculate the amount owed. 

 

Instructions include a table for use by filers with plans or policies subject to both the $1 and $2 applicable rates. Though Form 720 is generally used for quarterly excise taxes, PCOR filers remit that fee annually - by July 31 - and complete only line 133 (unless also submitting excise taxes). 

 

Under the Affordable Care Act, the PCOR fee applies to each plan or policy year that ends after Sept. 30, 2012, and before Oct. 1, 2019.

Link to a copy of Form 720: