Blue Cross of Louisiana Videos
Here is an assortment of videos Blue Cross of Louisiana has posted on its website and Youtube:
Author: tomdaly
Cadillac Tax Explained
The Cadillac Tax is the next BIG provision of the Affordable Care Act to begin in 2018. That may seem like an eternity from now. But, given the potential impact to employer groups, I thought it was at least worth a closer review. Below is the most digestible information I could find (from our good friends at Cigna):
Overview
Scheduled to take effect in 2018, the “Cadillac Tax” is a 40% non-deductible excise tax on employer-sponsored health coverage that provides high-cost benefits.
On February 23, 2015, the Internal Revenue Service (IRS) issued a notice covering a number of issues concerning the Cadillac Tax, and requested comments on the possible approaches that could ultimately be incorporated into proposed regulations. No regulations have been issued to date.
| CADILLAC TAX | |
|---|---|
| What it is/fee duration | Permanent, non-deductible, annual tax beginning in 2018 on high-cost employer-sponsored health coverage. |
| Purposes |
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| Amount |
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| Who calculates and pays |
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| How a group health plan’s cost is determined |
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| How the tax will be paid | Forms and instructions for paying the tax are not yet available. |
| Tax implications | Cadillac Tax payments are not deductible for federal tax purposes. |
| Applicable types of coverage |
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| Excluded types of coverage |
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*As indicated by IRS notice issued on February 23, 2015 and subject to future regulatory clarification.
How it works: Examples based on current threshold amounts
Self-only coverage
A $12,000 individual plan would pay an excise tax of $720 per covered employee:
$12,000 – $10,200 = $1,800 above the $10,200 threshold
$1,800 x 40% = $720
Family coverage
A $32,000 family plan would pay an excise tax of $1,800 per covered employee:
$32,000 – $27,500 = $4,500 above the $27,500 threshold
$4,500 x 40% = $1,800
These charts show how the tax increases as the plan’s cost increases.
Self-only coverage
| Plan Cost | $11,000 | $12,000 | $13,000 | $14,000 | $15,000 |
| Tax | $320 | $720 | $1,120 | $1,520 | $1,920 |
Family coverage
| Plan Cost | $28,000 | $30,000 | $32,000 | $34,000 | $36,000 |
| Tax | $200 | $1,000 | $1,800 | $2,600 | $3,400 |
The Agency Players – July 2015
It looks like the appetite for deals is not just limited to medical insurers. Now, 2 of the publicly traded Insurance Brokers (technically Towers is currently categorized as Management Services instead of insurance agency – but that is splitting hairs) are talking about a merger as well – Willis-Towers Watson Merger to Insure Against Market Turmoil
Here is a snapshot of the market capitalization of these players as of today. Let’s see how this progresses:
| Marsh & McLennan Companies, Inc [MMC] | $31.3 B |
| Aon plc Class A Ordinary Shares [AON] | $28.9 B |
| Towers Watson & Co. [TW] | $8.7 B |
| Willis Group Holdings Public Li [WSH] | $8.4 B |
| Arthur J. Gallagher & Co. Commo [AJG] | $8.0 B |
| Brown & Brown, Inc. Common Stoc [BRO] | $4.7 B |
Marriage and the Affordable Care Act
Last week’s Supreme Court decisions made it a historic week for our great Country. The latest challenge to State-based subsidies in the Affordable Care Act was defeated AND the Court affirmed that the Constitution guarantees a right to same-sex marriage. That is some pretty significant ground to cover, and whether you are for or against these rulings, you cannot deny that meaningful change has come.
While change has made many things much easier (see – Ruling changes financial plans for same-sex couples), there are a few idiosyncrasies to be aware of, relative to the ACA and tying the knot:
- Eligibility for spouse’s group plan – If your spouse has access to affordable, minimum-value health coverage through his/her employer, you are NOT eligible for a subsidy through the Exchange regardless of income. This means even if you already have a subsidized health plan, when you marry someone who is able to add you to his/her policy as a spouse, you lose your subsidy. Some call this the family/marriage “glitch”. It would be nice to see this fixed at some point!
- Combined income means revised subsidy determination – When individuals get married, their definition of affordability under the law changes and so does their subsidy determination. Unfortunately, married people do not get as much help as singles at the lower income levels. To use an example, Bob and Steve are both 40 years old and both earn $25,000/year. Unmarried, they each qualify for a subsidy of $153/month (or $306/month combined). That combined subsidy reduces to $192 when the couple gets married. That is almost a 40% reduction in their subsidy. The impact is even more profound when additional dependents are in the mix, when incomes are lower AND when ages are higher.
- Qualifying life event – Do not forget that marriage is one of the triggering events for a Special Enrollment Period. This is a time outside of the open enrollment period during which you and your family have a right to sign up for health coverage. In the Marketplace, you qualify for a special enrollment period 60 days following certain life events that involve a change in family status (for example, marriage or birth of a child) or loss of other health coverage. Job-based plans must provide a special enrollment period of 30 days.
These laws were written with the intention of making life easier/better for all. But, we are responsible to know the rules and when/how they apply to us. If you need any help navigating these waters, don’t ever hesitate to ask.
The Health Insurance Players – July 2015
With the SCOTUS challenge now behind us, it looks like it is time to make a deal – Obamacare ruling greenlights Aetna-
Humana dealmaking
Since the landscape of competitors in the publicly traded health insurance industry may change as early as this weekend, I thought it was a good time to post this info and look back on it in a year or two.
Here are the health insurance players and what they are worth (market cap) today:
| UnitedHealth Group Incorporated [UNH] | $114.5 B |
| Anthem, Inc. Common Stock [ANTM] | $45.2 B |
| Aetna Inc. Common Stock [AET] | $43.3 B |
| Cigna Corporation Common Stock [CI] | $41.8 B |
| Humana Inc. Common Stock [HUM] | $28.4 B |
It will be interesting to see who is left from this list in a few years, if there are any new players, and what happens to their value over time.
Stay tuned!
Zenefits v. ADP – Round 1
Well, I guess a Benefits Administration brawl was bound to happen sooner or later – ADP Sues Zenefits for Def
amation
As an insurance broker/technology nerd who has spent the last 23 years in the trenches of HR, Benefits and Payroll struggles, I hate to say that my first reaction to this was to chuckle a bit. I am very sorry to all of the effected small businesses who are caught in the middle of this data management fight. But, you had to see this coming.
Zenefits came onto the scene about 2 years ago and instantly caught my eye. The software they built was nothing earth shattering – compared to others that had been in the space for years. But, they had packaged it up and were selling it very well. It was what I had been talking about for years – technology to support the administration swirling around HR, Benefits and Payroll. Their platform was and is very clean and intuitive, and it is flexible enough to accommodate lots of common plans and most small business structures.
It has been fascinating to watch their journey. They have become a sales machine – using every form of direct marketing available to reach the small business customer. Their sale to small businesses is basically free software in exchange for becoming the company’s insurance agent (which can be effective for the small employer that is not getting much from his existing agent). But, their biggest sales by far were to their investors (Ashton Kucher and Jared Leto among them):
- July 2013 – Zenefits Raises $2.1M
- June 2014 – Zenefits Raises $66.5M – valued at $500M
- May 2015 – Zenefits Raises $500M – valued at $4.5B
It is a good thing the company has raised this kind of money. Because they will need it to fight the fights they have picked. Payroll companies, HR Outsourcing firms, Retirement Plan Providers, Insurance Brokers and Insurance Companies (if they do not already) will all have competing platforms to manage HR data. All will want their system to be THE trusted system that an employer relies on to manage the data sharing. And all will likely give their platforms away – just as Zenefits has.
So, where does that leave Zenefits?
I think they will change the landscape of the benefits industry and the expectations of small employers related to the broker relationship for sure. I think this change will be a change for the better. But, they will not dominate that market in their current form (which they would need to do to justify this valuation – sorry Ashton and Jared).
The service of coordinating the data/document/information flow between all of these disparate entities will not be automated by a third party because these entities will not allow that – keeping the process of providing that service somewhat manual and NOT SCALE-ABLE. This is not exactly where a “technology startup” needs to be and, once that becomes clear, their valuations will be adjusted. I hope they mentioned all of this to Ashton and Jared before they cut their checks.
Regardless, this is the most excitement this industry has seen in a LONG time and it looks like it will get even more exciting as the fights continue. So, stay tuned!
BAG turns 14!
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Today marks the 14th anniversary for my agency. This has always been a great day for me to reflect (and prank family/employees for April Fools).
Since 2001, we have lived through enormous change. Back then, my wife and I were still eligible to be on the Newlywed Game (under 2 years married) and we had no kids. Since then, we have had 3 wonderful children and lived in 4 different houses (not counting the temporary evacuation spots). We have also seen 3 Presidential Elections, 9/11, Katrina, BP and the Affordable Care Act. Reviewing where we have been and what we have endured gives me a tremendous amount of optimism for the future.
Looking back on the year 2001. . .
Shockingly, companies like Facebook (2004) and Uber (2009) had not been formed yet. I truly appreciate the continued support from our clients, team members, colleagues and carrier partners. We could never have made it without you all. I look forward to the next 14 years of growth and change! |
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Sincerely,
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Individual Mandate Fee
If you can afford health insurance but choose not to buy it, you must have a health coverage exemption or pay a fee. (The fee is sometimes called the “penalty,” “fine,” “individual responsibility payment,” or “individual mandate.”)
The fee for not having coverage in 2015
If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:
- 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
- $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975.
The fee for not having coverage in 2014
If you didn’t have coverage in 2014, you’ll pay the higher of these two amounts:
- 1% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,150 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
- $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.
The fee in future years
If you don’t have coverage in 2016, you’ll pay the higher of these two amounts:
- 2.5% of your yearly household income
- $695 per person ($347.50 per child under 18)
In future years, the fee is adjusted for inflation.
How you pay the fee
You’ll pay the fee on the federal income tax return you file for the year you don’t have coverage. Most people will file their 2014 returns in early 2015 and their 2015 returns in early 2016.
Learn more about the individual shared responsibility payment from the Internal Revenue Service.
More answers
- What if I’m uncovered for just part of the year?
If you’re uninsured for just part of the year, 1/12 of the yearly penalty applies to each month you’re uninsured.
If you’re uninsured for no more than 2 months of the year, you don’t have to make a payment.
- If I’m unemployed, do I have to pay the fee?
It depends on your household income. If insurance is unaffordable to you based on your income, you may qualify for an exemption from the fee. Other exemptions are based on low income too. Learn more about exemptions and how to claim them.
- How is the penalty collected?
You’ll pay the penalty when you file the federal income tax return for the year for which you’re seeking coverage. Most people fill out their 2014 tax returns early in 2015 and their 2015 tax returns early in 2016.
- What happens if I don’t pay the fee?
The IRS will hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee.
- Are the rules the same in each state?
Yes. The rules about paying penalties are the same whether the Marketplace is run by your state or the federal government.
Exemptions from the fee for not having health coverage
Most people must have qualifying health coverage or pay a fee (also known as the “penalty,” “fine,” “individual shared responsibility payment,” or “individual mandate”). But if you qualify for a health coverage exemption you don’t have to pay the fee.
There are a variety of exemptions, many of which you can claim on your federal tax return. There are also “hardship” exemptions that you must apply for with a paper application.
- See the kinds of health coverage that qualify as “minimum essential coverage” under the health law. If you’re covered by any of these plans, you don’t have to pay the fee or have a health coverage exemption.
Find exemptions that may work for you
Select the button below. We’ll ask you a few questions and show you all health coverage exemptions that may apply to you.
Health coverage exemptions, forms and instructions
Following is a list of exemptions, including hardship exemptions. For details on each exemption, including forms you need and how to apply, follow the links below.
Income-related exemptions
- The lowest-priced coverage available to you, through either a Marketplace or job-based plan, would cost more than 8% of your household income
- You don’t have to file a tax return because your income is below the level that requires you to file
Health coverage-related exemptions
- You were uninsured for no more than 2 consecutive months of the year
- You were uninsured any number of months before May 2014, but enrolled in a plan starting no later than May 1, 2014
- You lived in a state that didn’t expand its Medicaid program but you would have qualified if it had
- You enrolled a child in the Children’s Health Insurance Program (CHIP) during the 2014 Open Enrollment period and didn’t have coverage for the child earlier in the year
- You were enrolled in a type of health coverage through Medicare or TRICARE that covers only certain limited services
- You declined an offer of a job-based health plan that started in 2013 and ended in 2014
- You had health insurance through AmeriCorps, VISTA, or the National Civilian Community Corps (NCCC)
Group membership exemptions
- You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider
- You’re a member of a recognized health care sharing ministry
- You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare
Other exemptions
- You’re incarcerated (serving a term in prison or jail)
- You’re a U.S. citizen living abroad, a certain type of non-citizen, or not lawfully present
- You experienced one of the hardships below
Hardship exemptions and forms
In addition to the exemptions above, you may qualify for a “hardship” exemption. Hardships are life situations that keep you from getting health insurance.
To claim a hardship exemption, you must fill out a paper application and mail it in to the Marketplace. For details and forms, follow the links below.
Hardships that qualify you for exemptions include:
- You were homeless
- You were evicted in the past 6 months or were facing eviction or foreclosure
- You received a shut-off notice from a utility company
- You recently experienced domestic violence
- You recently experienced the death of a close family member
- You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property
- You filed for bankruptcy in the last 6 months
- You had medical expenses you couldn’t pay in the last 24 months that resulted in substantial debt
- You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
- You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child. In this case, you don’t have the pay the penalty for the child.
- As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace
- You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act
- Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable
- If you experienced another hardship in obtaining health insurance, use this PDF form to apply for an exemption with the Marketplace.
More details about hardship exemptions
How health coverage affects your 2014 federal income tax return
Your 2014 health coverage may affect your income taxes.
- You’ll provide additional information when you file your 2014 federal income tax return
- You may have to complete one or two new tax forms
- You may have to use one or two tax tools to find 2014 Bronze or Silver premiums to complete your tax return
- If you didn’t have 2014 health coverage, you may have to get a health coverage exemption or pay a fee with your tax return.
If you had 2014 health coverage through the Health Insurance Marketplace
If anyone in your household enrolled in a health plan through the Health Insurance Marketplace in 2014:
- You’ll get a new Form 1095-A — Health Insurance Marketplace Statement.
- You’ll need Form 1095-A to file your 2014 federal income tax return. Learn more about Form 1095-A and your taxes, including what to do if you didn’t get your 1095-A.
If you had 2014 health coverage from another source
If you had health coverage from another source, like a job, Medicare, Medicaid, or a plan you bought outside the Marketplace:
- You’ll report this simply by checking a box on your federal income tax form
- You won’t have to fill out any additional tax forms
- You won’t get a Form 1095-A
Learn more about your taxes if you had 2014 health coverage from another source.
If you didn’t have 2014 health coverage
If you didn’t have health coverage for 3 months or more in 2014, one of the following will apply to you:
- You’ll qualify for a health coverage exemption.
- You’ll pay a fee when you file your 2014 federal income tax return.
Learn more about exemptions and fees if you didn’t have health coverage in 2014.
Watch this video for 3 tips about Marketplace coverage and your taxes.
Get forms and guides for health care taxes
Tax forms you may need:
- Form 8962—Premium Tax Credit (PDF)
- 8962 instructions (PDF)
- Form 8965—Health Coverage Exemptions (PDF)
- 8965 instructions (PDF)
More information:
- At a glance: The health care law and your taxes. This quick chart from the IRS shows what you need to do based on your particular situation.
- Taxes and the health care law for individuals and families from the IRS (PDF). This document contains detailed information about premium tax credits, exemptions, and links to the new Forms 8962 and 8965.
- 3 tips about health coverage and your taxes (PDF)
- No Health Coverage? What that means for your taxes (PDF)
Want to make changes for 2015 based on your 2014 tax experience?
You may want to take action for 2015 to make tax filing easier next year.
Benefits @ Work 