Small Business Tax Credit extended to Dental and Vision

Small Business Tax Credit extended to Dental and Vision

Many of the key parts of the Patient Protection and Affordable Care Act (PPACA) do not go into effect until 2014.  However, one part that becomes effective as of January1, 2010 is the Small Business Federal Tax Credit of up to 35% of Employer contributions toward their employees’ health insurance premiums. 

 Details of the PPACA are slowly being released and this week, the U.S. Department of the Treasury clarified that the tax credit will be extended to the dental and vision coverage as well as medical.

 All small businesses with fewer than 25 full-time employees earning less than $50,000 average annual wages and cover at least 50% of the employee-only monthly premium are eligible for the credit (dependent costs paid by employer are NOT part of the tax credit). 

 Employers who do not currently have group insurance in place can add it any time during 2010 to receive the tax credit.

Wellness & Healthcare Mandates Part of Health Reform

Wellness & Healthcare Mandates Part of Health Reform

Health experts agree that one of the most difficult trends in the American health care system is the development of health conditions that could have been prevented or managed at the beginning, resulting in more costly methods of treatment.

 In order to promote wellness and decrease the costs associated with preventable illness, Congress has enacted the following legislation as part of the Health Reform Legislation: 

  • Starting in September of 2010, Medicare, employer‐sponsored (and other) group health  plans and  health insurance issuers are prohibited from requiring co‐pays for certain  preventive services, such as cancer and mental health screenings and immunizations; 
  • Beginning in 2014, certain most individual, employer and health insurance Exchange plans must cover “essential heath benefits”.  The Secretary of Health and Human Services (HHS) is to define the essential health benefits, however such benefits are required to include certain general categories, including: emergency services, hospitalization, maternity and newborn care, prescription drugs, laboratory services, mental health services, preventive and wellness services and chronic disease management(PPACA, Sec. 1302) 
  • Previous legislation allowed employers to reward workers who maintained a healthy lifestyle via participation in wellness programs, such as smoking cessation and fitness programs, with reductions in premium.    Starting January 1, 2014, group health plans may give reductions of up to 30% of the cost of premiums to employees who voluntarily participate in wellness programs. This may be expanded to 50% subject to the discretion of the Secretary of Health and Human Services

  For additional information on this legislation,  please refer to the Democratic Policy Committee Senate website at

Carrier announcements – extended coverage up to Age 26 dependents before the required 9/23/2010 date.

Carrier announcements – extended coverage up to Age 26 dependents before the required 9/23/2010 date.

Note: Details may not yet be available from each carrier about rates, ID cards, or items that have not been clarified by Health and Human Services Regulations.

This information is subject to additional information/clarification from a Carrier.

Note that this would not include reinstatement of dependents who previously aged out of their plan. It also does not affect dental, vision, standalone pharmacy or other benefits.

For individual and small group medical plans (as defined in state law), Aetna will continue coverage effective June 1, 2010 for dependents under age 26 currently covered on a parent’s medical plan. Aetna will not change the plan’s premium until renewal.
For fully insured larger groups, and for all self-funded medical plans, Aetna will offer the option of expanding medical coverage for dependents under the age of 26 currently covered on a parent’s medical plan, effective on or after June 1, 2010. This would include dependents who would have aged out on May 31, 2010. Aetna will provide pricing for this plan design change, as appropriate, for plans that choose this option.

Blue Shield of California will allow existing covered Blue Shield dependents up to age 26 to remain on their parents’ plan starting June 1, 2010. This applies to IFP (Individual and Family Plans) and group coverage.

The extension applies to dependents covered on a Blue Shield plan who are scheduled to age out of their parent’s plan (or no longer full time student) as of June 1st or later. Blue Shield is not offering this extension for new dependents that enroll June 1st or later. This extension of coverage applies only to those who currently have Blue Shield coverage and would lose that coverage during the gap between June 1st and the effective date of the new law.

Blue Shield will not allow re-enrollment of dependents that have already dropped off the plan. If a dependent is not currently covered (as of June 1, 2010) by Blue Shield of California, he/she is not eligible for the continuation of dependent coverage to age 26. All other dependents will be offered this coverage when the new law takes effect beginning on or after September 23, 2010.

Employers have the option of continuing coverage for adult dependents up to age 26 who are currently enrolled on their parents’ health care policies.

The option of keeping adult dependents on their parents’ policies is effective immediately.

UHC will extend health coverage that graduating college students have under their parents’ fully insured plans until the new health reform provision requiring dependent coverage up to age 26 is fully implemented.The dependent college graduate must not have access to other employer-sponsored coverage. For fully insured members, if dependent spouses of graduating college seniors are covered under an existing UnitedHealthcare policy they are eligible for continuing coverage.

This offer to extend coverage applies to students who currently are covered under their parents’ fully insured plans through UnitedHealthcare, as well as those covered under UnitedHealthcare’s Golden Rule individual family health plans. UHC will work with fully insured clients to carry out the extension of coverage and to make sure these young adults have health coverage available to them. UHC will also work with self-funded customers to determine if they are going to offer this benefit to graduating seniors. Individual health plans from Golden Rule Insurance already allow all dependents to stay on the plan until age 26, so no action is necessary for those health plan enrollees.

Following is excerpted from the the Kaiser Family Foundation about Dependent Child coverage:

The health reform law will allow qualifying young adults whose parents have private group and non-group health coverage to remain on their parents insurance policy up to age 26. Both married and unmarried young adults can qualify for the dependent coverage extension. The law also specifies that young adults can only qualify for dependent coverage through group health plans that were in place prior to the dependent coverage provision taking effect if they are not eligible for another employer sponsored insurance plan. The Secretary of Health and Human Services will issue regulations that will further define who will be considered a dependent eligible to remain on a parents health insurance policy and will answer the following questions:

  • Can working young adults qualify?
  • Do qualifying young adults have to live in the same state as the parent whose insurance will be providing the coverage?
  • Are you adults required to be students in order to qualify?
  • Can married young adults qualify for he extension for dependent coverage through their spouse’s parent’s plan?

The dependent coverage extension takes effect on September 23, 2010. At that time, when insurance plans start a new plan year, they will have to abide by the new dependent coverage rules . The law stipulates that the dependent coverage extension is effective for new plans years beginning on our after September 23, 2010. Regulations that will be issued before the provisions takes effect in September 2010 will provide further clarification regarding enrolling in extended dependent coverage.

Flexible Spending Accounts (FSA) Eligible Expenses to Change in 2011

Flexible Spending Accounts (FSA) Eligible Expenses to Change in 2011

Based on recent healthcare legislation, Congress had determined that over the counter prescription (OTC) drugs will no longer be an eligible expense under an FSA (Flexible Spending Account) plan.    This change will become effective on January 1, 2011.

 Insulin and all health related supplies (such as syringes) will continue to be an eligible expense.  Any OTC for which you have a physician’s prescription or letter of medical necessity will be covered as an exception.

According to a recent study, this change in law regarding FSA eligible expenses will not greatly impact the reimbursements for and tax advantages of FSA enrollment, as there will most likely be other expenses that could be used to fill any void. 

If you are enrolled in an  FSA or Health Savings Account, Health Reimbursment Account , please contact your health insurance broker or employee benefit advisor for information, or contact our office at (888) 474-6627.

Employers may experience higher costs and introduce Wellness programs

Employers may experience higher costs and introduce Wellness programs

With the passage of the Obama Health Reform two things are likely to occur: (1) most employers expect their health costs to rise due to PPACA; and (2) efforts to contain those costs will center largely on investment in programs for employee health and wellness, including both preventive services and disease management.

The February edition of the journal Health Affairs says:

“Amid soaring health spending, there is growing interest in workplace disease prevention and wellness programs to improve health and lower costs. In a critical meta-analysis of the literature on costs and savings associated with such programs, we found that medical costs fall by about $3.27 for every dollar spent on wellness programs and that absenteeism costs fall by about $2.73 for every dollar spent.

“Although further exploration of the mechanisms at work and broader applicability of the findings is needed, this return on investment suggests that the wider adoption of such programs could prove beneficial for budgets and productivity as well as health outcomes.”

As an insurance consultant for over 25 years, I am prepared to health my clients develop ongoing wellness programs for their workforce.  Engaging the employees to lead healthier lifestyles will result in lower health care costs.  Safeway with 200,000 employees engineered a wellness program years ago that has resulted in four years without any additional cost to the employer or employees where other companies experienced a 38% increase.