News

True or False? 2013 Hurricane Names and FSI

As of June 1st, hurricane season has officially begun. Check out NOAA’s list of the official names of the 2013 hurricane season. Can you guess how each name is related to the Full Service Insurance family? Some are true…some are not. Can you guess which ones are true?

Andrea- Blake’s wife
Barry- Nickname of current President of the USA
Chantal- Name of the perfume most of our female staff wears
Dorian-The musical scale that our phone rings when you call the office.
Erin- Name of a Personal Lines customer service agent
Fernand- The last name of our first client.
Gabrielle- Name of Kim’s Dachshund
Humberto- The name of the squirrel that lives in the pine trees behind our building.
Ingrid- What we call the person that has dish duty each week.
Jerry- Dog child of Pam Marshall
Karen- PJ’s wife
Lorenzo- Old family name in Patrick’s family
Melissa- John’s favorite Allman Brothers Song
Nestor-David’s college roommate
Olga- Name of Blake’s first girlfriend
Pablo- Pablo Picasso is a distant relative of Paul Pratt Sr.
Rebekah- Actual name of the lady whose voice you hear when you call in after hours.
Sebastien-  Boy who changed a client’s tire in the May floods. He had to use his scuba tube to breathe because the water was so deep.
Tanya- Name of our employee’s sister. Former figure skater.
Van- Was an employee in 2003. Left after his wife hit the first PowerBall Jackpot over $150 million!
Wendy- Mother of the Frosty

 

This year NOAA predicts a very active hurricane season. If you are traveling to coastal areas, be sure to stay aware of any impending hurricane activity.

See http://businessinsurance.com/article/20130523/NEWS04/130529906 for more information on the predictions for the upcoming hurricane season.

 

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What if someone doesn’t have health coverage in 2014?

If someone can afford it but doesn’t have health insurance coverage in 2014, they may have to pay a fee. They must also pay for all of their care.

When the uninsured need care

When an uninsured person requires urgent—often expensive—medical care but doesn’t pay the bill, everyone else ends up paying the price.

That’s why the health care law requires all people who can afford it to take responsibility for their own health insurance by getting coverage or paying a penalty.

People without health coverage will also have to pay the entire cost of all their medical care. They won’t be protected from the kind of very high medical bills that can sometimes lead to bankruptcy.

The fee in 2014 and beyond

The fee in 2014 is 1% of your yearly income or $95 per person for the year, whichever is higher. The fee increases every year. In 2016 it is 2.5% of income or $695 per person, whichever is higher.

In 2014 the fee for uninsured children is $47.50 per child. The most a family would have to pay in 2014 is $285.

It’s important to remember that someone who pays the fee won’t get any health insurance coverage. They still will be responsible for 100% of the cost of their medical care.

After open enrollment ends on March 31, 2014, they won’t be able to get health coverage through the Marketplace until the next annual enrollment period, unless they have a qualifying life event.

Minimum essential coverage

To avoid the fee in 2014 you need insurance that qualifies as minimum essential coverage. If you’re covered by any of the following in 2014, you’re considered covered and don’t have to pay a penalty:

  • Any Marketplace plan, or any individual insurance plan you already have
  • Any employer plan (including COBRA ), with or without “grandfathered” status. This includes retiree plans
  • Medicare
  • Medicaid
  • The Children’s Health Insurance Program (CHIP)
  • TRICARE (for veterans and veteran families)
  • Veterans health care programs
  • Peace Corps Volunteer plans

Other plans may also qualify. Ask your health coverage provider.

Who doesn’t have to pay the fee

Uninsured people won’t have to pay a fee if they:

  • are uninsured for less than 3 months of the year
  • are determined to have very low income and coverage is considered unaffordable
  • are not required to file a tax return because their income is too low
  • would qualify under the new income limits for Medicaid, but their state has chosen not to expand Medicaid eligibility
  • are a member of a federally recognized Indian tribe
  • participate in a health care sharing ministry
  • are a member of a recognized religious sect with religious objections to health insurance

If you don’t qualify for these situations, you can apply for an exemption asking not to pay a fee. You do this in the Marketplace.

What kinds of health insurance don’t qualify as coverage?

Health plans that don’t meet minimum essential coverage don’t qualify as coverage in 2014. If you have only these types of coverage, you may have to pay the fee. Examples include:

  • coverage only for vision care or dental care
  • workers’ compensation
  • coverage only for a specific disease or condition
  • plans that offer only discounts on medical services
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Retroactive Life Insurance Gift from Aviva

As an independent agency, we represent many fine carriers. One of these carriers is Aviva Life insurance Company. This video shows the recipient of one of their most recent “Retroactive Life Insurance” award gifts. From time to time, Aviva selects someone in need that has experienced the loss of a loved one and gives them the opportunity to speak with a trusted insurance adviser to complete life insurance planning as if the individual had not passed. They then award the death benefit to the family.

What a great reminder of the quality companies out there in the insurance industry that understand why we are in the insurance business.

By:Patrick Baggett- Vice President of Commercial Lines
pbaggett@fullserviceins.com 

 

 

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Questions and Answers on the Individual Shared Responsibility Provision

Basic Information

1. What is the individual shared responsibility provision?

Under the Affordable Care Act, the federal government, state governments, insurers, employers, and individuals are given shared responsibility to reform and improve the availability, quality, and affordability of health insurance coverage in the United States. Starting in 2014, the individual shared responsibility provision calls for each individual to have minimum essential health coverage (known as minimum essential coverage) for each month, qualify for an exemption, or make a payment when filing his or her federal income tax return.

2. Who is subject to the individual shared responsibility provision?

The provision applies to individuals of all ages, including children. The adult or married couple who can claim a child or another individual as a dependent for federal income tax purposes is responsible for making the payment if the dependent does not have coverage or an exemption.

3. When does the individual shared responsibility provision go into effect?

The provision goes into effect on Jan. 1, 2014. It applies to each month in the calendar year. The amount of any payment owed takes into account the number of months in a given year an individual is without coverage or an exemption.

4. What counts as minimum essential coverage?

Minimum essential coverage includes at a minimum all of the following:

  • Employer-sponsored coverage (including COBRA coverage and retiree coverage)
  • Coverage purchased in the individual market
  • Medicare coverage (including Medicare Advantage)
  • Medicaid coverage
  • Children’s Health Insurance Program (CHIP) coverage
  • Certain types of Veterans health coverage
  • TRICARE

Minimum essential coverage does not include specialized coverage, such as coverage only for vision care or dental care, workers’ compensation, disability policies, or coverage only for a specific disease or condition.

The Department of Health and Human Services (HHS) has authority to designate additional types of coverage as minimum essential coverage. Information on additional coverage that HHS has proposed to designate as minimum essential coverage, including student health plans and coverage provided by foreign governments, is available.

5. What are the statutory exemptions from the requirement to obtain minimum essential coverage?

  1. Religious conscience: You are a member of a religious sect that is recognized as conscientiously opposed to accepting any insurance benefits. The Social Security Administration administers the process for recognizing these sects according to the criteria in the law.
  2. Health care sharing ministry: You are a member of a recognized health care sharing ministry.
  3. Indian tribes: You are a member of a federally recognized Indian tribe.
  4. No filing requirement: Your household income is below the minimum threshold for filing a tax return. The requirement to file a federal tax return depends on your filing status, age, and types and amounts of income. To find out if you are required to file a federal tax return, use the IRSInteractive Tax Assistant (ITA).
  5. Short coverage gap: You went without coverage for less than three consecutive months during the year. For more information see question 21.
  6. Hardship: A Health Insurance Marketplace, also known as an Affordable Insurance Exchange, has certified that you have suffered a hardship that makes you unable to obtain coverage.
  7. Unaffordable coverage options: You can’t afford coverage because the minimum amount you must pay for the premiums is more than eight percent of your household income.
  8. Incarceration: You are in a jail, prison, or similar penal institution or correctional facility after the disposition of charges against you.
  9. Not lawfully present: You are neither a U.S. citizen, a U.S. national, nor an alien lawfully present in the U.S.

6. What do I need to do if I want to be sure I have minimum essential coverage or an exemption for 2014?

Most individuals in the United States have health coverage today that will count as minimum essential coverage and will not need to do anything more than continue the coverage that they have. For those who do not have coverage, who anticipate discontinuing the coverage they have currently, or who want to explore whether more affordable options are available, Health Insurance Marketplaces (also know as Affordable Insurance Exchanges) will open for every state and the District of Columbia in October of 2013. These Health Insurance Marketplaces will help qualified individuals find minimum essential coverage that fits their budget and potentially financial assistance to help with the costs of coverage beginning in 2014. The Health Insurance Marketplace will also be able to assess whether applicants are eligible for Medicaid or the Children’s Health Insurance Program (CHIP). For those who will become eligible for Medicare during 2013, enrolling for Medicare will also ensure that you have minimum essential coverage for 2014.

For those seeking an exemption, a Health Insurance Marketplace will be able to provide certificates of exemption for many of the exemption categories. HHS has proposed regulations on how a Health Insurance Marketplace will go about granting these exemptions. Individuals will also be able to claim exemptions for 2014 when they file their federal income tax returns in 2015. Individuals who are not required to file a federal income tax return are automatically exempt and do not need to take any further action to secure an exemption. See question 20 for further information on exemptions.

For more information about the Health Insurance Marketplace, including how to sign up for email updates and tips on how to prepare for open enrollment in October 2013, visit the Health Insurance Marketplace website.

7. Is more detailed information available about the individual shared responsibility provision?

Yes. Treasury and the IRS have proposed regulations on the new individual shared responsibility provision. Comments on the proposed regulations may be submitted by mail, electronically, or by hand-delivery, and are due by May 2, 2013.

Who is Affected?

8. Are children subject to the individual shared responsibility provision?

Yes. Each child must have minimum essential coverage or qualify for an exemption for each month in the calendar year. Otherwise, the adult or married couple who can claim the child as a dependent for federal income tax purposes will owe a payment.

9. Are senior citizens subject to the individual shared responsibility provision?

Yes. Senior citizens must have minimum essential coverage or qualify for an exemption for each month in a calendar year. Senior citizens will have minimum essential coverage for every month they are enrolled in Medicare.

10. Are all individuals living in the United States subject to the individual shared responsibility provision?

All citizens are subject to the individual shared responsibility provision as are all permanent residents and all foreign nationals who are in the United States long enough during a calendar year to qualify as resident aliens for tax purposes. Foreign nationals who live in the United States for a short enough period that they do not become resident aliens for federal income tax purposes are not subject to the individual shared responsibility payment even though they may have to file a US income tax return. The IRS has more information available on when a foreign national becomes a resident alien for federal income tax purposes.

11. Are US citizens living abroad subject to the individual shared responsibility provision?

Yes. However, US citizens who live abroad for a calendar year (or at least 330 days within a 12 month period) are treated as having minimum essential coverage for the year (or period). These are individuals who qualify for an exclusion from income under section 911 of the Code. See Publication 54 for further information on the section 911 exclusion. They need take no further action to comply with the individual shared responsibility provision.

12. Are residents of the territories subject to the individual shared responsibility provision?

All bona fide residents of the United States territories are treated by law as having minimum essential coverage. They are not required to take any action to comply with the individual shared responsibility provision.

Minimum Essential Coverage

13. If I receive my coverage from my spouse’s employer, will I have minimum essential coverage?

Yes. Employer-sponsored coverage is generally minimum essential coverage. (See question 4 for information on specialized types of coverage that are not minimum essential coverage.) If an employee enrolls in employer-sponsored coverage for himself and his family, the employee and all of the covered family members have minimum essential coverage.

14. Do my spouse and dependent children have to be covered under the same policy or plan that covers me?

No. You, your spouse and your dependent children do not have to be covered under the same policy or plan. However, you, your spouse and each dependent child for whom you may claim a personal exemption on your federal income tax return must have minimum essential coverage or qualify for an exemption, or you will owe a payment when you file.

15. My employer tells me that our company’s health plan is “grandfathered.” Does my employer’s plan provide minimum essential coverage?

Yes. Grandfathered group health plans provide minimum essential coverage.

16. I am a retiree, and I am too young to be eligible for Medicare. I receive my health coverage through a retiree plan made available by my former employer. Is the retiree plan minimum essential coverage?

Yes.  Retiree health plans are generally minimum essential coverage.

17. I work for a local government that provides me with health coverage. Is my coverage minimum essential coverage?

Yes. Employer-sponsored coverage is minimum essential coverage regardless of whether the employer is a governmental, nonprofit, or for-profit entity.

18. Do I have to be covered for an entire calendar month in order to get credit for having minimum essential coverage for that month?

No. You will be treated as having minimum essential coverage for a month as long as you have coverage for at least one day during that month.

19. If I change health coverage during the year and end up with a gap when I am not covered, will I owe a payment?

Individuals are treated as having minimum essential coverage for a calendar month if they have coverage for at least one day during that month. Additionally, as long as the gap in coverage is less than three months, you may qualify for an exemption and not owe a payment. See question 21 for more information on the exemption for short coverage gaps.

Exemptions

20. If I think I qualify for an exemption, how do I claim it?

It depends upon which exemption it is.

  • The religious conscience exemption and the hardship exemption are available only by going to a Health Insurance Marketplace, also known as an Affordable Insurance Exchange, and applying for an exemption certificate. Information on proposed rules for obtaining this exemption is available.
  • The exemptions for members of Indian tribes, members of health care sharing ministries, and individuals who are incarcerated are available either by going to a Marketplace or Exchange and applying for an exemption certificate or by claiming the exemption as part of filing a federal income tax return.
  • The exemptions for unaffordable coverage, short coverage gaps, and individuals who are not lawfully present in the United States can be claimed only as part of filing a federal income tax return. The exemption for those under the federal income tax return filing threshold is available automatically. No special action is needed.

21. What qualifies as a short coverage gap?

In general, a gap in coverage that lasts less than three months qualifies as a short coverage gap. If an individual has two short coverage gaps during a year, the short coverage gap exemption only applies to the first or earlier gap.

22. If my income is so low that I am not required to file a federal income tax return, do I need to do anything special to claim an exemption from the individual shared responsibility provision?

No. Individuals who are not required to file a tax return for a year are automatically exempt from owing a shared responsibility payment for that year and do not need to take any further action to secure an exemption.

Reporting Coverage or Exemptions or Making Payments

23. Will I have to do something on my federal income tax return to show that I had coverage or an exemption?

The individual shared responsibility provision goes into effect in 2014. You will not have to account for coverage or exemptions or to make any payments until you file your 2014 federal income tax return in 2015. Information will be made available later about how the income tax return will take account of coverage and exemptions. Insurers will be required to provide everyone that they cover each year with information that will help them demonstrate they had coverage.

24. What happens if I do not have minimum essential coverage, and I cannot afford to make the payment with my tax return?

The IRS routinely works with taxpayers who owe amounts they cannot afford to pay. The law prohibits the IRS from using liens or levies to collect any payment you owe related to the individual responsibility provision, if you, your spouse or a dependent included on your tax return does not have minimum essential coverage.

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How to determine if you are a small employer, or a large employer

The Patient Protection and Affordable Care Act (Affordable Care Act) has several requirements that apply for small employers and others that apply for large employers.  However, the way employees are counted to determine group size is not always the same among the various provisions.  Also, the number of employees that determines whether an employer is small or large is also not always the same.

The information provided in this article is general in nature.  If you have questions about employment practices, Internal Revenue Service (IRS) requirements, or compliance with the Affordable Care Act, please contact your legal counsel or tax professional.

At a Glance

The following chart provides a high-level summary of counting methods and size parameters for the Affordable Care Act provisions listed.  Additional information and details about the chart follow.

 

ACA Provision:

Counting Method

Small Employer

Large Employer

2014 -2015

2016 +

2014 -2015

2016 +

Medical Loss Ratio (MLR)

Average Employee

1-100

1-100

101 +

101 +

Market Reforms and EHB

Average Employee

1-50

1-100

51 +

101 +

Employer Responsibility Payment (Play or Pay)

FTE

NA

NA

50 +

50 +

SHOP Eligibility

FTE

1-50

1-100

NA

NA

Counting Methods

Counting method refers to the way employees are counted in order to calculate group size.  The examples provided are generalized to demonstrate the mechanics of the counting method.

Average Employee Method

In the average employee method, the number of employees is determined by taking the average of the number of employees employed on business days in the prior calendar year including full-time, part-time, and seasonal employees.  For each business day, each employee is counted as one employee – even if the employee does not work full-time.  All employees are counted regardless of their eligibility for – or enrollment in – the group health plan.

For example, assume an employer has a business that is open 250 days a year.  On all business days, the employer has 40 full-time employees.  For 200 business days during the year, there are an additional 15 part-time employees.  To determine group size based on the average employee method, the calculation is:

40 x 250 + 15 x 200 = 13,000

13,000 ÷ 250 = 52.0 (average number of employees each day)

For this method, only employees should be counted.  To the extent that sole proprietors, owners, or partners are not considered employees of the business, they should not be included in the calculation.  Contract workers should be counted if they meet the IRS standard for common-law employees.

Some employers own multiple businesses.  If the businesses are treated as a single employer under Internal Revenue Code (IRC) section 414(b), (c), (m), or (o), they should be combined for the purposes of counting employees.  This is commonly referred to as aggregation rules.

 

If you have specific questions about employment status or the aggregation rules, please contact your legal counsel or tax professional.

 

FTE Method

The method described in this section is outlined in proposed IRS regulations, section 4980H, found in the employer responsibilities proposed rule that was issued Jan. 2, 2013.  The IRS also published a Q&A on their website regarding this rule.  This rule is very complex and employers are urged to read the rule and contact their legal counsel or tax professional with specific questions.  Requirements may change when the rule is finalized.

 

In this method, full-time employees and full-time equivalents are counted.  Employees who work an average of 30 hours a week for any given month, or those who work 130 hours in a month, are counted as full-time employees for that month.

Employees working less than an average of 30 hours a week for any month are considered part-time employees for that month.  The hours of all part-time employees – up to 120 hours for an individual employee – are added together for the month.  This sum is then divided by 120 to determine the number of full-time equivalents, including fractions.

This calculation is performed for each month of the prior calendar year. In order to determine group size, each month’s result is added together, and the sum divided by 12.

Continuing the previous example, assume that all 40 full-time employees work an average of 30 hours or more a week for the entire calendar year.  The other 15 employees work a common schedule each month, where five work an average of 90 hours per month, another five work an average of 70 hours a month, and the remaining five work an average of 50 hours per month.  To determine the number of full-time equivalents for any month, the calculation is:

 

(5 x 90 + 5 x 70 + 5 x 50) ÷ 120 = 8.75

 

Adding the full-time employees and the number of full-time equivalents equals 48.75 employees per month.  Since the same number is employed in every calendar month, the group size on an FTE basis is 48.75.  Had the number of employees fluctuated from month to month, each month’s average would be added together and the resulting sum divided by 12.

Similar to the average employee method, only employees should be counted.  Leased employees as defined in IRC section 414(n)(2), a sole proprietor, a partner in a partnership, or a 2-percent S corporation shareholder should not be counted as employees.  Contract workers that meet the common-law employee standard should be counted.

The aggregation rules defined in IRC section 414(b), (c), (m), or (o) also apply.

Again, if you have specific questions about employment status or the aggregation rules – or about compliance with section 4980H – please contact your legal counsel or tax professional.

Application to Affordable Care Act Provisions

As reflected in the chart, two provisions use the average employee method, and two use the FTE method.  The number of employees that represent the threshold between small and large group is also different.

Medical Loss Ratio

The Affordable Care Act defines small group as 1-100 employees, but gives states the option to define small group as 1-50 prior to 2016.  In Tennessee, the State did not elect to exercise this option for MLR purposes and small group is defined as 1-100 employees.  Large group is 101 or more employees.  The average employee method is used to count employees to determine group size.

In the prior example, the group with an average of 52 employees would be classified as small group for MLR purposes.

Market Reforms and Essential Health Benefits

Market reforms[1] is a broad term used when discussing various Affordable Care Act changes that will be implemented in 2014.  These include changes to small group rating where only age, location, and tobacco use – in addition to plan design and network – may be used to differentiate premiums for members of small groups.  This is known as modified community rating.   In addition, the market reforms include guaranteed availability and renewability provisions.  Future update articles will provide more information about market reforms.

The Affordable Care Act Essential Health Benefits (EHB) provision also includes significant changes that will be implemented in 2014.  Coverage in the small group market will be required to cover 10 categories of benefits, and plans must have an actuarial value within certain ranges, known as metal level plans.  All plans – including large group and self-funded plans – will have limitations on cost-sharing parameters like out-of-pocket maximums.[2]

For market reform provisions and the EHB provisions, group size will be determined based on the average employee calculation method – the same method used for MLR purposes.  However, for market reforms and EHB provisions, the State of Tennessee exercised its option to define small group as 1-50 employees for 2014 and 2015.  Absent additional regulations or guidance to the contrary, the small group definition will change to 1-100 employees in 2016.

In the previous example, the group of 52 average employees would be classified as large group based on the 2014 and 2015 size thresholds.  If the size of the group is the same in 2016, it will be classified as small group due to the change in small group definition that will occur in that year.

Employer Shared Responsibility Payments

These payments – also known as play or pay penalties – are penalties imposed on applicable large employers who either do not offer coverage to their full-time employees, or offer coverage that is not affordable or does not meet the minimum value standard of 60%.  The counting method for determining if an employer is an applicable large employer is the FTE method.  Applicable large employers are those with 50 or more full-time employees plus full-time equivalents.  The 50 FTE threshold that defines an applicable large employer does not change in 2016.[3]

SHOP Eligibility

The SHOP – or Small Business Health Options Program – is the Marketplace (formerly, Exchange) that will be available in 2014 for eligible employers who wish to purchase coverage for their employees through this channel.

Only small employers may purchase coverage on the SHOP.  For SHOP eligibility purposes, the counting method used is the same FTE method used for the employer shared responsibility provision.  However, the size threshold matches the thresholds for market reforms and EHB provisions.  Therefore, in 2014 and 2015, a small employer for SHOP eligibility is one with 1-50 employees.  In 2016, the size will change to 1-100 employees.

In the previous example, the employer with 48.75 FTEs would be eligible to enroll on the SHOP in all years, assuming employment patterns do not change.

Other Provisions Where Size is a Consideration

There are still other Affordable Care Act provisions where the number of employees is an important trigger.

Small Business Health Care Tax Credit

This tax credit – which has been in place since 2010 – is available to small employers who meet various criteria, one of which is based on size.  An employer with 25 or fewer FTEs may be eligible.  However, the counting method used to determine FTEs and the size threshold is not the same as those used for SHOP eligibility.  For this tax credit, a full-time employee is one that works 40 hours per week, and full-time equivalents are determined by dividing annual hours by 2,080.

Beginning in 2014, small employers that qualify for the small business health care tax credit will only be eligible to receive it if they enroll on the SHOP.  The tax credit rate will also increase from 35 to 50 percent in 2014 for many eligible employers.

For more information, please refer to the IRS website, or contact your tax professional.

Automatic Enrollment

This provision applies to large employers, defined as those with 200 or more full-time employees.  It requires such an employer to automatically enroll new employees – and continue enrollment of current employees – into an available plan that is offered by the employer. Employees will have the opportunity to opt out of coverage.

The Affordable Care Act does not provide a specific effective date for this provision. The Internal Revenue Service issued Notice 2012-17 in February 2012, and it indicated that groups will not have to comply with the automatic enrollment provision until after regulations are issued.  It is not anticipated that regulations will be issued for a 2014 effective date.  However, the notice did not elaborate on how full-time employees will be defined, or what measurement period will be used to determine if the employer meets the 200 full-time employee threshold.

This is not intended to be an exhaustive list, but highlights some of the more prominent provisions of the Affordable Care Act.  For more information, please contact your sales or account executive.

[1] Grandfathered plans are not required to comply with the market reforms or EHB provisions listed in this section.

[2] For more information about EHB provisions, please refer to the Mar. 18 and June 3, 2013 Health Care Reform Updates.

[3] For general information about the employer shared responsibility provision, please refer to the Jan. 14, 2013 Health Care Reform Update.  Specific questions should be directed to your legal counsel or tax professional.

 

 

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Individual Mandate FAQ

Overview

Beginning in 2014, the Affordable Care Act includes a mandate for most individuals to have health insurance or potentially pay a penalty for noncompliance. Individuals will be required to maintain minimum essential coverage for themselves and their dependents. Some individuals will be exempt from the mandate or the penalty, while others may be given financial assistance to help them pay for the cost of health insurance.

What type of coverage satisfies the individual mandate?

“Minimum essential coverage”

What is minimum essential coverage?

Minimum essential coverage is defined as:

  • Coverage under certain government-sponsored plans
  • Employer-sponsored plans, with respect to any employee
  • Plans in the individual market,
  • Grandfathered health plans; and
  • Any other health benefits coverage, such as a state health benefits risk pool, as
    recognized by the HHS Secretary.

Minimum essential coverage does not include health insurance coverage consisting of excepted
benefits, such as dental-only coverage.

How does “Minimum Essential Coverage” differ from “Essential Health Benefits”?

Essential health benefits are required to be offered by certain plans starting in 2014 as a component of the essential health benefit package.  They are also the benefits that are subject to the annual and lifetime dollar limit requirements.

This is different than minimum essential coverage, which refers to the coverage needed to avoid the individual mandate penalty.  Coverage does not have to include essential benefits to be minimum essential coverage.

What is the penalty for noncompliance?

The penalty is the greater of:

  • For 2014, $95 per uninsured person or 1 percent of household income over the filing threshold,
  • For 2015, $325 per uninsured person or 2 percent of household income over the filing threshold, and
  • For 2016 and beyond, $695 per uninsured person or 2.5 percent of household income over the filing threshold.

There is a family cap on the flat dollar amount (but not the percentage of income test) of 300 percent, and the overall penalty is capped at the national average premium of a bronze level plan purchases through an exchange.  For individuals under 18 years old, the applicable per person penalty is one-half of the amounts listed above.

Beginning in 2017, the penalties will be increased by the cost-of-living adjustment.

Who will be exempt from the mandate?

Individuals who have a religious exemption, those not lawfully present in the United States, and incarcerated individuals are exempt from the minimum essential coverage requirement.

Are there other exceptions to when the penalty may apply?

Yes.  A penalty will not be assessed on individuals who:

  1. cannot afford coverage based on formulas contained in the law,
  2. have income below the federal income tax filing threshold,
  3. are members of Indian tribes,
  4. were uninsured for short coverage gaps of less than three months;
  5. have received a hardship waiver from the Secretary, or are residing outside of the United States, or are bona fide residents of any possession of the United States.
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DOL Issues Guidance on Exchange Notice Requirements

 

The Patient Protection and Affordable Care Act (Affordable Care Act) includes a provision that requires employers to notify new hires and existing employees of certain information related to the Health Insurance Marketplace (formerly referred to as the Exchange) and subsidy eligibility in the event an employer does not offer coverage that is affordable or that has a 60 percent minimum value. The original effective date of this requirement was March 1, 2013. As reported in the Jan. 28, 2013 Health Care Reform Update, the timing of this requirement was delayed until late summer or early fall of 2013 based on guidance issued in FAQ Part XI.

On May 8, 2013, the Department of Labor (DOL) issued Technical Release 2013-02. The technical release provides temporary guidance regarding the new notice that employers are required to provide to employees, called the Notice to Inform Employees of Coverage Options. The release also addresses changes to the Model COBRA Election Notice.

Notice to Inform Employees of Coverage Options

The temporary guidance states that employers who are subject to the Fair Labor Standards Act (FLSA) are required to provide the notice beginning Oct. 1, 2013 to new employees within 14 days of an employee’s start date. The notice must also be provided to all existing employees no later than Oct. 1, 2013.

This requirement applies to all employees regardless of their eligibility for or enrollment in the medical plan. It’s also required if the employer doesn’t offer a health plan. The guidance provides various alternatives for delivering the notice.

Model language that may be used to satisfy the notice requirement is also included in the guidance. Two versions are provided based on the availability of an employer-sponsored health plan.

The temporary guidance will remain in effect until regulations or other guidance is issued.

The information contained in this article is for general use. Employers with questions regarding how to comply with the new notice requirement are urged to contact their legal counsel. The DOL provides guidance relating to the applicability of the FLSA, including an internet compliance assistance tool that is available at http://www.dol.gov/elaws/esa/flsa/scope/screen24.asp.


Model COBRA Election Notice

The technical release also addresses changes to the model COBRA election notice. The notice is being revised to help make individuals who are eligible for COBRA aware of other coverage options available in the Marketplace.

No date was specified for implementing the revised COBRA notice. Absent regulations or guidance to the contrary, plan to implement the changes by Oct. 1, 2013. This date coincides with the beginning of the Marketplace open enrollment period.

To view all notices click on the link below

http://www.dol.gov/ebsa/healthreform/index.html

 

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The Risks of Saying “I do”- Wedding Insurance

wedding

In our office, we often get calls for Wedding Insurance. However, I would venture to say that a majority of “Brides to be” just don’t

 You may want to consider these liability concerns for your upcoming Big Day: consider the liability risks associated with their nuptials.

  1.  Alcohol – Many people think that because a venue or caterer is serving the alcohol, you are not liable for anything that happens as a result of serving. This is a common misconception and could be a costly one. When entertaining with alcohol, always make sure you have adequate liquor liability in place by consulting a knowledgeable insurance professional.  
  2. Certificates of Insurance – You can never be too safe in this arena. If you are hiring a caterer, band, party bus, etc… always make sure those contracted carry adequate liability insurance. Being named on their policy would also limit your exposure for any actions of those you subcontract for the wedding.
  3. Exotic Venues – Opting for a wedding in your Grandparent’s 200 year old barn seems idyllic. However, make sure to carefully consider the risks your guests might encounter at the unique and perfect venue you select.

These three items are a good way to start considering the liabilities associated with your wedding. It is your big day and we hope nothing goes wrong… but if it does, make sure you are protected with wedding insurance from a trusted insurance professional.

 

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Poll: Nearly Half of All Drivers Who Hit Parked Cars Don’t Always Leave Notes

I am sure you have had this happen to you. Go into Target to pick up a few items and come back to a ding on the side of your car. Maybe a dented bumper that you know wasn’t there before.

Surprisingly, in Portland Oregon, there is a 50/50 chance that individual did not leave a note with contact information to file a claim.

View the entire article in Claims Journal here. http://www.claimsjournal.com/news/west/2013/05/30/229820.htm

By:Patrick Baggett – Vice President Commercial Lines

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