by admin | Jun 20, 2022 | Blog
A health FSA cannot treat employees’ premium payments for other health coverage as reimbursable expenses. Thus, for example, a health FSA cannot reimburse premiums for COBRA coverage, accidental death and dismemberment insurance, long-term or short-term disability insurance, or coverage under a plan maintained by an employer of the employee or the employee’s spouse or dependent. This rule would also prohibit the reimbursement of Medicare premiums.
Some employers are surprised by the rule that health FSAs cannot reimburse insurance premiums. A health FSA can only reimburse expenses for medical care and premiums for health coverage fall within that definition. However, IRS regulations state that insurance premiums cannot be reimbursed under a health FSA, and the IRS has repeatedly reaffirmed this rule.
Likewise, monthly retainer or similar access fees (e.g., a monthly fee that is payable whether or not the patient visits the office, perhaps accompanied by a reduction or elimination of the fees for actual office visits) generally are not reimbursable. In our view, they are like insurance because they are payable whether or not medical care is provided. Thus, they fall under the “no reimbursement of insurance premiums” rule that applies to health FSAs and should not be reimbursed. In 2020, the IRS issued proposed regulations regarding the treatment of amounts paid for direct primary care arrangements, health care sharing ministries, and certain other medical care arrangements. The preamble to the proposed regulations clarifies that payments for such arrangements typically would be viewed as payments for insurance. As such, health FSAs would be prohibited from reimbursing these fees based on the “no reimbursement of insurance premiums” rule. Payments for health care sharing ministries would also be treated as payments for insurance under the proposed regulations.
In a variation on this type of arrangement, patients receive preferential “extras” from their doctors in exchange for a fee (e.g., priority when scheduling appointments, 24-hour telephone access to the doctor, less time in the waiting area before appointments, a special waiting room, etc.). Fees for such programs generally should not be reimbursed either, because the payments would not be for medical care. The same is true of a monthly fee that a patient must pay in addition to any copays, deductibles, or other charges for office visits.
Note that there could be variations on these access fee arrangements under which some services might be reimbursable, depending on how the program is structured (for example, a fee might include payments that can be separately allocated to services that are for medical care). Additionally, health FSA administrators should not put too much stock in the particular name given to the fee (retainer fee, concierge fee, direct primary care, etc.).
These terms may mean different things for different providers. Consequently, it is important to determine exactly what services are involved before deciding whether to reimburse part of a fee—it may be necessary to ask the participant for additional substantiation. Where a fee relates solely to a specific rendered service (such as a copay) rather than being a retainer, part or all of it might qualify for reimbursement as an eligible medical care expense. For example, the preamble to the 2020 proposed regulations indicates that payments for a direct primary care arrangement that provide solely for an annual physical exam or an “anticipated course of specified treatments of an identified condition” would not be treated as insurance.
Source: Thomson Reuters
by admin | Jun 14, 2022 | Blog
The IRS recently provided a June 2022 status update announcing that it is on track to launch the new 1099 filing portal in early January 2023.
Section 2102 of the Taxpayer First Act (TFA) requires the IRS to develop an internet portal by January 1, 2023 that will allow taxpayers to electronically file 1099 forms. The portal is to be modeled after the Social Security Administration’s (SSA’s) Business Services Online (BSO) system that allows employers to electronically file W-2 forms. The new website will provide taxpayers with IRS resources and guidance, and allow them to prepare, file and distribute 1099 forms, and create and maintain tax records.
While no details were released, the IRS has discussed the plans of the 1099 filing portal which includes retiring legacy systems, like FIRE system though no termination has been announced. The new system is expected to accept all 1099 forms, including Form 1099-NEC (Nonemployee Compensation) and will permit users to key in or upload information. The system will also be compatible with the Combined Federal/State Filing (CFSF) program.
Source: Thomson Reuters
by admin | Jun 14, 2022 | Blog
NueSynergy’s smart debit card is always included at no cost and provides a convenient method to pay out-of-pocket medical expenses for you, your spouse, and/or any dependents. The card is automatically issued to all Flexible Spending Account (FSA) and Health Savings Account (HSA) participants, as well as for Health Reimbursement Arrangement (HRA) plans (when compatible with the plan design).
Here’s how the smart debit card works:
- Funds are deposited into your benefit account in real time
- When you swipe your debit card, funds are pulled directly from your benefit account to pay the service provider on site. Since it’s a smart card, swiping to pay providers is thoughtless for the user, as the funds will automatically pull from the correct account.
Here are also two important details to know about NueSynergy’s debit card:
- Allows participants to auto substantiate 80% of claims
- Any out-of-pocket expenses that require reimbursement will be paid out via direct deposit or personal check
by admin | Jun 13, 2022 | Blog
An ICHRA is an acronym for an Individual Coverage Health Reimbursement Arrangement. This is a reimbursement account set up and funded by an employer that helps pay for health insurance premiums incurred throughout the plan year. This is also designed to help offset out-of-pocket financial responsibilities associated with an employee’s healthcare. Additionally, the funds in this account can be used to pay for individual health insurance premiums each month.
by admin | Jun 13, 2022 | Blog
1. Can I combine my HSA with an FSA?
No. An employer doesn’t own an employees’ HSA, nor are they responsible for how the funds are managed by the employee. The employee fully owns the contributions to the account as soon as they are deposited.
2. Are employers responsible for an employee’s HSA?
No. An employer doesn’t own an employees’ HSA, nor are they responsible for how the funds are managed by the employee. The employee fully owns the contributions to the account as soon as they are deposited.
3. Can an employer fund an employee’s HSA?
Yes. An employer may fully fund the employee’s HSA at the beginning of the year; however, HSAs belong to the individual and not the employer and the employer has no further control over the accounts after they have been funded. As a result, many employers elect to fund employees HSAs periodically throughout the year. If the employer is contributing, the employer and employee contributions combined may not exceed the annual IRS maximum.
4. Who is eligible to enroll in an HSA?
To be eligible, you must be covered under a Qualified High-Deductible Health Plan (QHDHP), cannot be enrolled in Medicare, and cannot be claimed as a dependent on someone else’s tax return.
5. How much can I contribute to an HSA and HDHP?
This is all based on the annual contribution limits established by the U.S. Treasury Department. These limits adjust annually, however the values for 2022 are as followed:
- HSA
- $3,650 for individuals
- $7,300 for family
- For account holders over 55 years of age, they may contribute an additional $1,000 as “catch-up”
- HDHP
- $1,400 for individuals
- $2,800 for family
- HDHP Maximum Out-of-Pocket
- $7,050 for individuals
- $14,100 for family
by admin | May 25, 2022 | Blog
A group health plan is not subject to COBRA for any year if all employers maintaining the plan together employed fewer than 20 employees on a typical business day during the preceding year. Here are some general guidelines for which employees must be counted:
- Count All Employees, Not Just Plan Participants. Be sure to count the number of employees working for all employers maintaining the plan, not just the number of employees covered by the group health plan.
- Count Only Common-Law Employees. Only common-law employees are counted as “employees” for purposes of COBRA’s small employer exception. Do not count self-employed individuals, independent contractors, or members of a corporate employer’s board of directors, unless those individuals are also common-law employees of the employer. Keep in mind that common-law employee status is not determined solely by a worker’s payroll status, title, or job description but depends on various factors enumerated by the IRS and the courts, including whether the organization controls the manner in which the individual provides services.
- Count Part-Time Employees. A part-time employee counts as a fraction of an employee. The fraction is equal to the number of hours that the part-time employee works divided by the number of hours that an employee must work to be considered a full-time employee. The number of hours that must be worked for an employee to be considered full-time is determined in a manner consistent with the employer’s general employment practices (but cannot be more than eight hours a day or more than 40 hours a week). You may count employees for each typical business day, or you may count employees for a pay period and attribute the total number of employees for that pay period to each typical business day that falls within the pay period. You also may count part-time employees on an aggregate basis (rather than on an individual basis) by totaling the hours worked by part-time employees and dividing that sum by the number of hours required for one worker to be considered full-time. However, you must use the same method for all employees and for the entire year for which the small employer plan determination is made.
- Count Employees and Related Entities Outside the United States. The controlled group rules do not exclude entities outside the United States, so employees of a foreign entity must be counted if the entity otherwise qualifies as a member of the controlled group. Similarly, employees working outside the United States must be counted.
- Count Employees of Related Entities (and Successors). You must count all employees of all entities that are related to your company. If your company is related to another entity, you’ll need to determine whether employees of the related entity must be counted. If so, you’ll also need to include employees of “successors” of those entities, i.e., entities that “result from a consolidation, merger, or similar restructuring.”
The rules for counting employees are complex, and if you mistakenly rely on the small employer exception, the consequences can be significant. Noncompliance can result in lawsuits and penalties, as well as the obligation to provide COBRA coverage to former employees and others without insurance or stop-loss coverage.
Source: Thomson Reuters
