(855) 667-4621 info@360peo.com
  • Facebook
  • Twitter
  • RSS
  • Facebook
  • Twitter
  • RSS
  • Employers
  • Individuals
  • Partners
  • Contact Us
    • Newsletter Sign-Up
    • Web Conference Info
360PEO Inc.
Menu
  • PEO EXPERTISE
    • Overview PEO
    • PEO and Employee Leasing. What’s the Difference?
    • PEO FAQ
    • Video
    • PEO Survey Top 3 SMB Challenges
    • PEO White Paper
    • Get Started
    • Close
  • EMPLOYEE BENEFITS
    • EMPLOYEE BENEFIT
      • Overview
      • Introduction to Disability
      • Consider Supplements to Primary Medical Plans
      • Communication & Enrollment
      • Executive Benefits
      • Health & Wellness
      • Life Insurance
      • Get Long Term Care
      • Private Exchange
      • Private Exchange Made Simple
      • Travel Insurance
    • HUMAN RESOURCES
      • COBRA Admin
      • Compliance Consulting
      • New FLSA Overtime Rules
      • Healthcare Reform Resource
      • PEO
      • HR 360
      • HR Benefits Portal
      • HR Management Consulting
      • HR Technology
      • Payroll Admin
    • Close
  • COMMERCIAL INSURANCE
    • Commercial Insurance
    • Property and Liability Insurance
    • Business Auto Insurance
    • Cyber Liability Insurance
    • Directors & Officers Insurance
    • Risk Management Consulting
    • Errors and Omissions Insurance
    • Close
  • ABOUT US
    • Blog
    • Careers
    • Contact Us
    • Newsletter Archive
    • Refer A Friend
    • Close
  • BLOG
  • REQUEST FREE DEMO
    • Close
Select Page

21st Century Cures Act Passed

by Alex | Dec 15, 2016 | individual health insurance | 1 comment

21st Century Cures Act Passed

21st Century Cures Act Passed

On Tuesday The 21st Century Cures Act Passed and signed by President Obama.  The ‘Act”  has numerous components but the the greatest impact on small business is the HRA ( health reimbursement arrangement) component.

The Cures Act allows  small employers to reimburse individual health coverage premiums up to a dollar limit through HRAs called “Qualified Small Employer Health Reimbursement Arrangements” (QSE HRA). This provision will go into effect on January 1, 2017.

The IRS previously limited Employer reimbursement of individual premiums in light of the requirements of the Patient Protection and Affordable Care Act (ACA). For many years, employers had been permitted to reimburse premiums paid for individual coverage on a tax-favored basis, and many smaller employers adopted this type of an arrangement instead of sponsoring a group health plan. However, these “employer payment plans” are often unable to meet all of the ACA requirements that took effect in 2014, and in a series of Notices and frequently asked questions (FAQs) the IRS made it clear that an employer may not either directly pay premiums for individual policies or reimburse employees for individual premiums on either an after-tax or pre-tax basis. This was the case whether payment or reimbursement is done through an HRA, a Section 125 plan, a Section 105 plan, or another mechanism.

Who is eligible?

The Cures Act now allows employers with less than 50 FT employees (under ACA counting methods) who do not offer group health plans to use QSE HRAs that are fully employer funded to reimburse employees for the purchase of individual health care.

What are the funding limits?

The reimbursement cannot exceed $4,950 annually for single coverage, and $10,000 annually for family coverage. The amount is prorated by month for individuals who are not covered by the arrangement for the entire year. Practically speaking, the monthly limit for single coverage reimbursement is $412, and the monthly limit for family coverage reimbursement is $833. The limits will be updated annually.

Impact on Individual Subsidy Eligibility?

For any month an individual is covered by a QSE HRA/individual policy arrangement, their subsidy eligibility would be reduced by the dollar amount provided for the month through the QSE HRA if the QSE HRA provides “unaffordable” coverage under ACA standards.

Employees applying for coverage on federal or state health insurance exchanges will need to disclose the amount that the employer is making available via the HRA. That amount will be used by the exchange in calculating whether an employee’s household income exceeds ACA affordability thresholds (2017 – 9.69 % of household income), as well as determining subsidy amounts for those that meet the eligibility requirements. Those employees eligible for a subsidy will have their monthly amount reduced by the monthly HRA amount available through their employer.

If the QSE HRA provides affordable coverage, individuals would lose subsidy eligibility entirely. Caution should be taken to fully education employees on this impact.

COBRA and ERISA Implications? 

QSE HRAs are not subject to COBRA or ERISA.

Annual Notice Requirement?

The new QSE HRA benefit has an annual notice requirement for employers who wish to implement it. Written notice must be provided to eligible employees no later than 90 days prior to the beginning of the benefit year that contains the following:

  • A statement to the employee that it is their responsibility to provide the federal or state health insurance exchange with the amount being provided in HRA funds, as this amount will be used by the exchange when calculating need based premium assistance.
  • A statement that if the employee is not covered by minimum essential coverage for any month of the tax year, they could be subject to a penalty under the Individual Mandate provisions of the ACA.

Failure to provide this notice will result in a penalty to the employer of $50 per applicable employee, up to a $2,500 maximum per calendar year.  Transition relief is available for plans starting in the first quarter 2017 – they will have until April 1, 2017 to provide notices to employees.

Record-keeping, IRS Reporting?

Because QSE HRAs can only provide reimbursement for documented healthcare expense, employers with QSE HRAs should have a method in place to obtain and retain receipts or confirmation for the premiums that are paid with the account. Employers sponsoring QSE HRAs would be subject to ACA related reporting with Form 1095-B as the sponsor of MEC. Money provided through a QSE HRA must be reported on an employee’s W-2 under the aggregate cost of employer-sponsored coverage. It is unclear if the existing safe harbor on reporting the aggregate cost of employer-sponsored coverage for employers with fewer than 250 W-2s would apply, as arguably many of the small employers eligible to offer QSE HRA’s would have fewer than 250 W-2s.

Individual Premium Reimbursement Prohibitions

Outside of the exception for small employers using QSE HRAs for reimbursement of individual premiums, all of the prior prohibitions from IRS Notice 2015-17 remain. There is no method for an employer with 50 or more full time employees to reimburse individual premiums, or for small employers with a group health plan to reimburse individual premiums. There is no mechanism for employers of any size to allow employees to use pre-tax dollars to purchase individual premiums. Reimbursing individual premiums in a non-compliant manner will subject an employer to a penalty of $100 a day per individual they provide reimbursement to, with the potential for other penalties based on the mechanism of the non-compliant reimbursement.

For analysis if this works for your small business? Please contact our payroll and reimbursement team on your HR/Payroll/Compliance needs at Millennium Medical Solutions Corp (855)667-4621 for immediate answers.


Thanks for signing up!

What Does a Trump Administration Mean for Healthcare?

Sign up to Download a Free Copy of the Presentation.






By submitting this form, you are granting: Millennium Medical Solutions, Inc., 1333A North Avenue, New Rochelle, New York, 10804, United States, https://360peo.com permission to email you. You may unsubscribe via the link found at the bottom of every email. (See our Email Privacy Policy for details.) Emails are serviced by Constant Contact.



1 Comment

  1. jayneg on January 7, 2017 at 3:23 pm

    Nice heads up

    Reply

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Recent Posts

  • Top Five Employee Wellness Program for 2019 December 17, 2018
  • IRS Extends ACA Reporting Deadline for Forms 1095 to Individuals November 29, 2018
  • 2019 NYS Paid Family Leave Rate Increase September 6, 2018
  • Time Savers Using HR and Benefits Technologies August 23, 2018
  • 2018 Top Employee Benefits and Perks August 10, 2018
  • 2018’s Top Ten Best & Worst States for Health Care August 9, 2018
  • NYS 2019 Final Rates Approved    August 7, 2018
  • PEO vs. Employee Leasing. What’s the Difference? January 11, 2018
  • HealthPass Adds Oscar June 14, 2017
  • NYS 2018 Health Insurance Rate Filing June 8, 2017
  • Here’s How Trump Will Change Obamacare February 15, 2017
  • Trump Order and ACA February 9, 2017
  • No Tax Restarts January 20, 2017
  • Medicare 2017 Deductibles Announced January 13, 2017
  • 21st Century Cures Act Passed December 15, 2016
  • Overtime Pay FLSA on HOLD November 23, 2016
  • Understanding the Labels on Your Thanksgiving Turkey November 22, 2016
  • 1095 Filing Extended to March 2, 2017 November 21, 2016
  • 2017 Election Results and ACA November 10, 2016
  • Why a Private Exchange? November 3, 2016
  • 2017 Individual Open Enrollment October 31, 2016
  • Top 10 medical innovations for 2017 October 28, 2016
  • 2017 NJ Individual Health Plans October 25, 2016
  • Empire Strikes Back – 2017 Plans September 20, 2016
  • Health Republic NJ Shutting Down September 13, 2016
  • Break Your Sugar Addiction in 10 Days (Infographic) August 30, 2016
  • NYS 2017 Final Rates Approved August 8, 2016
  • Clinton vs Trump on Healthcare July 21, 2016
  • Empire Strikes Back June 28, 2016
  • Breaking: Oxford Exits Metro Indiv & Oxford Liberty HMO 2017 June 28, 2016
  • Final 2017 Marketplace Guidance June 8, 2016
  • Updating Your Employee Handbook for Benefit Provisions June 6, 2016
  • NYS Obamacare Lost $100 Million June 2, 2016
  • NYS 2017 Rate Requests May 19, 2016
  • NYS FMLA Update May 16, 2016
  • HSA 2017 Limits May 3, 2016
  • UnitedHealthcare will drop ACA exchanges April 20, 2016
  • Mergesurance Mania April 13, 2016
  • 1095B and 6055 Reporting Requirements FAQ March 23, 2016
  • Brand Name Drugs Are a Waste of Money? March 7, 2016
  • IRS Extends 1094 and 1095 Deadlines December 28, 2015
  • Breaking: Cadillac Tax Delayed December 22, 2015
  • Aftermath of Health Republic Shut Down December 10, 2015
  • Health Republic NY Shutting Down Nov 30 October 30, 2015
  • 2016 Individual Open Enrollment Deadlines October 20, 2015
  • NEW 2016 Oxford Metro Network NY October 18, 2015
  • JEBCARE – Bush’s New Health Plan October 14, 2015
  • ACA Marketplace and Employer Health Plan Cost Comparison October 12, 2015
  • Health Republic NY is Shutting Down September 25, 2015
  • Breaking: Maimonides North Shore LIJ Partnership August 21, 2015

Join Our Newsletter

Your Email:

Get a PEO Quote


  • Request Demo

  • Login

  • Referer

Twitter Feed

  • @Alex_Miller_MMS February 14, 2019

    alex miller #HappyValentines We already love Professional Employer Organization (#PEO)– our clients do too. Today we’re counti… twitter.com/i/web/status/1…

  • @Alex_Miller_MMS February 12, 2019

    alex miller Top 10 Best Healthcare #Apps of 2019. #HealthcareTech #mobility #wellness For those of you hitting the ground run… twitter.com/i/web/status/1…

  • @Alex_Miller_MMS February 11, 2019

    alex miller #healthcare In honor of the end of football season, here is a list of seven ways NFL players, including Tom Brady,… twitter.com/i/web/status/1…

  • @Alex_Miller_MMS February 5, 2019

    alex miller Happy New Year from MMS web-extract.constantcontact.com/v1/social_anno…

Follow Us!

Visit Us On TwitterVisit Us On FacebookVisit Us On YoutubeVisit Us On LinkedinCheck Our Feed
Powered by Eventbrite

Contact Us

PTO Infographic

PTO Infographic

Pages

  • 2014 A New Year in Health Care Reform
  • 2017 REFER and EARN
  • 360PEO – PEOPLE • PRODUCTIVITY • PERKS
    • Health
      • Armadacare Executive Health
      • Bonus Card Vision
      • Consumer Driven Healthcare Plans
        • HSA-FSA-HRA: Whats the Difference?
      • Drug Formulary Search
      • Free Rx Discount Card
      • FSA – What is a Health FSA
      • Glossary of Health Terms
      • Group Health Insurance Quote Request
      • Health & Wellness
      • Health Advocate
      • Health Advocate
      • Health Insurance Carriers
      • Health Insurance FAQ
      • Health Insurance Links
      • HRA – Health Reimbursement Account
      • HSA – Health Savings Accounts
      • HSA Qualified Medical Expenses
      • HSA-FSA-HRA: Whats the Difference?
      • Individual Health Insurance Quote Request
      • Intro to Medicare
      • Introduction to Health Insurance
      • Medicare Information
      • Physician Locator
      • Self Insurance
      • Teladoc
  • About
  • About Us
    • Careers
    • Contact Us
      • Web Conference Info
    • Refer A Friend
  • AFLAC
  • AllCheck Questionnaire
    • Five ACA Penalties Employers are Facing
  • Anthem Cyber Attack FAQs
  • Baby Boomers Start Medicare
  • Benefits of Long Term Care
  • Biz Must Have – Cyber Liability
  • Blog
  • BMCC Early Childhood Center 2014
  • Business
    • Business Insurance Links
    • Intro to Business Insurance
    • Managing Worker’s Compensation
  • Business Auto Insurance
  • CareConnect NSLIJ
  • census 2
  • Census Blank
  • COBRA Admin
  • COBRA New Notice
  • Commercial Insurance
  • Communication & Enrollment
  • Compliance Consulting
    • FORM 1095-C FAQ
  • Cyber Liability Insurance
  • Defined Contribution Health Plans
  • Dental
    • Bonus Card Dental
  • Directors & Officers Insurance
  • DISABILITY INSURANCE – FAQ
  • Eckerson 2013 Health Plans
  • Empire Alternatives
  • Empire Strikes Back – 2017 Plans
  • Employer
  • Enhance Your Group Benefits Plan with LTC Insurance
  • Errors and Omissions Insurance
  • Executive Benefits
  • FAQ Business Owners Life and Disability
  • Fast & Easy Quote
  • Forms Warehouse
  • Get a Quote
    • Annuities
      • Get Annuity Quote
      • Introductions to Annuities
    • Long Term Care
      • Average Long Term Care Rates By Age
      • Top 10 Reasons LTC (long-term care insurance) Make for a Great Gift
    • Travel Insurance
    • Worker’s Comp
  • Get Disability Quote
  • Get Started
  • Getting Extra Help with Medicare Costs
  • Health & Wellness
    • Now scheduling fall flu shot events!
  • Health Care Reform Timeline
  • Health Reform Resource
    • Dependent coverage extended
    • Employer Premium Reimbursement Accounts
    • Health Care Reform Timeline
    • Health Reform Nondiscrimination Provision
    • Map of State Exchanges Status- May 2012
    • Marketplace Verification of Income Info
    • Obamacare Subsidy Calculator
    • Preventive Care Coverage
    • Small Biz Tax Credit Calculator
    • Taxes in Health Reform
    • What are MLR’s?
    • What is an Exchange?
  • Health Reform Summary
  • Health Republic
  • Healthcare Reform Resource
  • HEALTHY NY
  • Home
  • How to Reduce My Health Care Costs
  • HR 360
  • HR Benefits Portal
  • HR Client Log In
  • HR Management Consulting
  • HR Technology
  • Individual
  • Intro
  • Intro to Long Term Care
  • Introduction to Disability
    • Disability
  • Key Expired Tax Breaks
  • Life Insurance
    • Get Life Quote Request
    • Life Insurance Glossary
    • Life Insurance Links
    • LIFE INSURANCE NEEDS ANALYZER
    • Permanent Insurance
  • Life Insurance
  • Life Insurance Basics
    • Business Valuation
    • BUY-SELL AGREEMENT
  • Long-Term Care Insurance Can Be a Tax-Free Perk
    • Get Long Term Care
  • Medicare
    • Get Medicare Quote
    • Medicare A & B Guide
    • Medicare Advantage vs. Supplement Plans
    • Medicare Part D
    • Medigap Plans
  • Medicare Advantage – Part C
  • Medicare FAQ
  • Medicare Part D Employer Notice
  • Miltan 2015 Private Exchange
  • MMS Compliance Digest-Quarter Three
  • MMS Newsletter March 2015
  • MMS Newsletter October 2016
  • MMS Webinar Feedback
  • New FLSA Overtime Rules
  • New York State Statutory Disability Insurance
  • News and Links
    • Health Care Reform Updates
    • Millennium Medical Solutions Webinar Sign Up
    • MMS in the News
    • NYS Health Resource
  • Newsletter Archive
  • Newsletters Archive
  • Overview
  • Overview PEO
  • Oxford Metro FAQ
  • Partners
  • Payroll Admin
  • PEO
    • PEO and Employee Leasing. What’s the Difference?
  • PEO FAQ
  • PEO QUOTE
  • PEO Request for Proposal
  • PEO Survey Top 3 SMB Challenges
  • PEO White Paper
  • PEO: Co-Employment
  • Privacy Policy
  • Private Exchange
  • Private Exchange
  • Private Exchange 2015
  • Private Exchange Made Simple
  • Professional Employer Organization- FAQ
  • Property and Liability Insurance
  • Refer A Friend
  • Risk Management Consulting
  • Section 125 Plans
    • Cafeteria Plans – Side by Side Chart
    • HSA HRA FSA Comparison Chart
  • Send Application
  • Sign Up
  • Sitemap
  • Sitemap
  • Step 2
  • Step 3
  • Term Insurance
  • test MMS quoting
  • Travel
  • Updated Guidance for Reporting Employer-Sponsored Health Coverage on Form W-2
  • US Directory of Health Coverage
  • Video
  • What is a PEO?
  • Wrap Doc FAQ
  • Blog
  • 360PEO – PEOPLE • PRODUCTIVITY • PERKS
  • Get a Quote
  • News and Links
  • Contact Us
  • Privacy Policy
  • Sitemap
  • Facebook
  • Twitter
  • RSS

Designed by Elegant Themes | Powered by WordPress