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Lake Zurich IL 60047

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Benefits to take you into the future, bottom line to keep you there!

Author: HRBSolutions

HRB Health Care Solutions Banner

As you start off the new year and plan your health care budget we wanted to pass along a couple of definitions and some considerations as you head into this new year.

First some definitions:

Cafeteria Plans

The IRS defines Cafeteria Plans as:  

A cafeteria plan is a separate written plan maintained by an employer for employees that meets the specific requirements of and regulations of section 125 of the Internal Revenue Code. It provides participants an opportunity to receive certain benefits on a pretax basis. Participants in a cafeteria plan must be permitted to choose among at least one taxable benefit (such as cash) and one qualified benefit.

A qualified benefit is a benefit that does not defer compensation and is excludable from an employee’s gross income under a specific provision of the Code, without being subject to the principles of constructive receipt. Qualified benefits include the following:

  • Accident and health benefits (but not Archer medical savings accounts or long-term care insurance)
  • Adoption assistance
  • Dependent care assistance
  • Group-term life insurance coverage
  • Health savings accounts, including distributions to pay long-term care services

Constructive receipt. 

The IRS states Constructive Receipt isIncome is constructively received when an amount is credited to your account or made available to you without restriction. You do not need to have possession of it. If you authorize someone to be your agent and receive income for you, you are considered to have received it when your agent receives it. Income is not constructively received if your control of its receipt is subject to substantial restrictions or limitations.

Why do we care?

In a recent article posted on Flexiblebenefit.com we care because at times, employers offer cash payments to their employees who choose not to sign up for employer health insurance coverage.  These cash payments are taxable to employees who waive the coverage but employees who elect the coverage may also be liable for the taxed on a cash payment that they did not receive.  This is where constructive receipt comes into play. By definition, employees may need to consider the amount of the cash payment as income because the person has control over the money even though they did not take the money. Control exists because the employee has the option to waive the coverage in return for a cash payout. That is Constructive Receipt. The money would have to be recorded as income and treated generally like a cash bonus. Employers will need to withhold the appropriate payroll taxes as if the bonus was paid. This will need to be reflected in the employee’s W2 that may have already been sent to the employees.

Can this be avoided?

Yes – This can be avoided if the employer makes the cash payment available through a Cafeteria Plan. If the employer sets up their health care coverage under a Cafeteria Plan, then the employ has a choice between taking a plan or taking the cash payout. If the employer offers a cafeteria plan then employees that take advantage of that coverage may do so tax-free according to flexiblebenefit.com.  The key to this working is to make sure that the Cafeteria Plan documentation addresses this so that the tax implications can be avoided.

Please contact our office if you have any questions or wish to inquire about Cafeteria Plans or other ways you can protect your employees and offer best practice health coverage.

Other Sources:

2019 PCORI Form Due July 31st

The Affordable Care Act (ACA) created a research institute known as the Patient- Centered Outcomes Research Institute (PCORI). The goal of PCORI is to help patients and those who care for them make better-informed decisions about healthcare choices. PCORI is funded by fees which are charged to health plans.

The following information is designed to help employers understand their upcoming payment obligations.

Fee Amount – The upcoming fee amount depends on when the plan year ended:

• Plan years ending between January 1, 2018, and September 30, 2018 – $2.39 per covered person

• Plan years ending between October 1, 2018, and December 31, 2018 – $2.45 per covered person

Plan Year Ending Date – This is the last day of the plan year. As an example, a plan that had a July 1, 2017 effective date would have a plan year ending date of June 30, 2018. Alternatively, a plan that had an effective date of January 1, 2018, would have a plan year ending date of December 31, 2018. Please note that plans with effective dates starting after January 1, 2018 would not have an end date until 2019, and therefore these plans are not subject to the fee this time around (though a fee may be due in 2020).

Due Date – The fees are due by July 31, 2019 for plan years which ended in 2018.

Fully-insured health plans – The insurance company is responsible for paying the PCORI fee, though most employers with fully-insured health plans are indirectly paying these fees through slightly higher premiums.

Self-insured health plans – The employer is responsible for paying the PCORI fee. The fee is determined based on the average number of covered lives in the plan year ending in 2018. An easy way to calculate the average number of covered lives is using a snapshot method. Under this method, an employer picks one day during each quarter of the plan year (e.g. Jan 1, Apr 1, Jul 1, Oct 1), adds the total number of covered lives (including spouses and dependents) for those days, and divides that number by 4.

Non-Integrated HRAs – These are Health Reimbursement Arrangements (HRAs) which are not tied to a traditional group health plan and will generally include Qualified Small Employer HRAs (QSEHRAs) and certain Retiree HRAs. The PCORI fee for these type of HRAs should be calculated the same way as the self-insured health plans referenced above. However, if the non-integrated HRA only reimburses dental and/or vision expenses, no PCORI fee applies to the HRA.

Special Rules for Integrated HRAs – These are HRAs that are only available to employees also enrolled in a traditional group health plan. Employers that have a fully- insured health plan coupled with an integrated HRA must pay the PCORI fee for the HRA, but they may treat each HRA participant as a single covered life. In other words, the fee generally does not apply to spouses or dependents covered under the HRA. Employers with a self-insured health plan and an integrated HRA may treat the coverage as a single plan assuming both plans have the same plan year.

FSAs – Flexible Spending Accounts (FSAs) are not subject to PCORI fees if they are excepted benefits. To be considered an excepted benefit, employees must be offered a traditional group health plan, and if the employer contributes to the FSA, the employer may not contribute more than (the greater of) $500 or a dollar-for-dollar match of the employee’s contribution.

HSAs – Health Savings Accounts (HSAs) are not subject to PCORI fees. Dental and Vision Plans – Stand-alone dental and vision plans are not subject to PCORI fees.

Making Payments – Employers should complete Form 720 for the second quarter to make payments. Form 720 and associated instructions are typically updated each April, and employers should check 2019 to see if the appropriate form version and instructions are available.

We have attached the most updated form to our website in Resources.

How Much Does a Doctor Visit Cost?


A doctor visit will be necessary whether you have a medical condition or you simply want to show up for a routine physical.

There are so many factors involved when visiting a doctor’s office and paying the bill, so it can be hard to offer an “exact” estimate.

Doctor” (CC BY 2.0) by Sole Treadmill

How much does a doctor visit cost?

In general, a regular routine appointment with a primary care doctor, without any other tests involved, can cost anywhere from $150 to $300 without insurance.  If the visit is through the hospital at an emergency room, then the fees can soar to $375 to more than $700+ without insurance.  Doctor visits at home can range anywhere from $200 to $550, depending on how far the doctor has to travel and what needs to be diagnosed.

A doctor’s visit at a pharmacy, such as CVS or Walgreens, could cost anywhere from $89 to $129 without insurance.  These visits, most of the time, will be performed by a nurse practitioner.

Ultimately, the cost of a doctor’s visit will depend on the severity of your condition, where you were cared for and the additional tests that were required.

If you have health insurance, you will more than likely be responsible for your deductible and co-pays, and this doctor’s visit should always be covered by insurance, and routine annual exams, according to Affordable Health Care Act, will be covered 100 percent.  To find out more, contact your insurance company to know what you’re responsible for.  Those who have a co-pay often find themselves paying anywhere from $5 to more than $50; again, depending on the policy. If you do not have insurance or you are looking for a new policy, consider browsing through hundreds of policies at eHealthInsurance.com.

Refer to our table below to see what you may have to pay for a doctor’s office visit without any insurance:

Type of CareAverage Cost
Routine Adult Checkup$200 to $300
Female Exam (younger than 40)$200 to $300
Female Exam (older than 40)$275 to $400
Child Exam (newborn to 24 months)$150 to $200
Child Exam (24 months to 16 years)$150 to $250
Adult office visit for illness$150 to $250
Child visit for illness$150 to $250
Adult emergency room visit for illness$550 to $800
Child emergency visit for illness$500 to $750

NOTE:  If you’re an established patient, these costs can drop by more than 50 percent, depending on your doctor’s office billing policy.

In 2015, 79 percent of uninsured callers who called a doctor’s office were offered an appointment, whereas six percent were denied due to their insurance status.  According to this John Hopkins study, the average price for a new uninsured patient was quoted for $160, with some states such as Oregon being as high as $188.  The prices were much lower than a federally qualified health center.

What are the extra costs?

Aside from the doctors’ office visit, there could be a good chance that a doctor will want to order more tests, which will add to the total estimates as noted above.  Refer to our table below to see what routine diagnostic tests and routine lab services can cost without any insurance being involved.

Type of Diagnostic Test or Lab ServiceAverage Price (without insurance)
Allergy Study$250 to $400
Blood Count$5 to $50
Blood Glucose Test$5 to $15
Cardiac Catheterization$500 to $2,500
CAT Scan$300 to $750
Cholesterol Test$50 to $125
Colonoscopy$700 to $1,100
Echocardiogram$100 to $275
Electrocardiogram$50 to $150
Hematology$15 to $40
Influenza A & B Testing$55 to $75
Lipid Panel Test$30 to $55
Mono Test$15 to $25
MRI$500 to $1,500
Pulmonary Study$25 to $100
Sleep Study$100 to $750
STD Test$55 to $150
Strep Test$20 to $40
Throat Swab$30 to $50
Ultrasound$150 to $250
Urinalysis$5 to $25
Vaccination$25 to $150

How can I save money?

Many doctor’s offices will offer a cash discount to those who don’t have health insurance.  Talk with the doctor’s office ahead of time to see if they have any discounts available.

Consider a virtual doctor’s visit if your symptoms are mild.  These visits can be less than $75 if you have no insurance.  For instance, Doctor on Demand charges $75 for those without insurance, and another company — Amwell — charges $59 for those who have no insurance.  With these services, you can either use your computer or phone and video chat with a doctor, just like you would in a waiting room, but unlike a regular doctor’s office, you won’t have to drive there or sit in a waiting room with sick people.

As mentioned, schedule your annual physical ahead of time.  As long as you have a health insurance policy, it will be 100 percent covered.

If your doctor does prescribe a prescription, ask for a generic equivalent if they have one and ask if there are any other ways to save.

Enrollees Appealed Less than 1% of Denied Claims

Healthcare.gov marketplace insurers denied nearly one out of every five claims (19%) submitted for in-network services in 2017, and enrollees only appeal a tiny share (0.5%) of those denied claims, a KFF analysis of recently released claims data finds.

The analysis finds a huge variation across insurers, with average denial rates as low as 1 percent and as high as 45 percent. Denial rates also vary across states, though individual insurers in the same state also show wide variation. For instance, Florida’s six insurers denied 11 percent of claims, though the denial rates among the six insurers reporting data in the state range from 2 percent to 32 percent.  

The Affordable Care Act requires insurers to report data about claims denials and appeals and other metrics to encourage transparency about how insurance coverage works in practice for enrollees. The analysis relies on data files released by the Centers for Medicare and Medicaid Services and compiled by KFF. It examines nearly 230 million claims submitted to 130 insurers selling individual market major medical health plans through healthcare.gov in 2017.

The CMS data do not provide information about why a claim was denied, making it difficult to assess why denial rates vary so much across insurers.  Reasons can include both administrative issues such as improperly submitted or duplicative claims and coverage issues such as denials for services that the insurer determines are not medically necessary.  Transparency data may well reflect other inconsistencies in how insurers report data, such as for duplicate claims or partially denied claims. Consumers rarely appeal denied claims. In 2017, for example, the data show consumers filed appeals on about 200,000 of more than 42 million denied claims. On average, appeals resulted in a reversal of the initial denial in 14 percent of cases, though with wide variations among individual insurers, which had reversal rates ranging from 1 percent to 88 percent.

The analysis also reviews planned changes to the ACA transparency data reporting, as well as data reporting under other programs, that could address some of the current data limitations.

Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in San Francisco, California.

Contact: Craig Palosky | (202) 347-5270 | cpalosky@kff.org

2018 ACA Reporting Deadlines are Approaching

This does not apply to all employers. Please read full article below for details.

It’s that time of year where applicable large employers (ALEs) and certain other employers need to focus on completing their reporting obligations required under the Affordable Care Act (ACA). Here are some helpful tips and reminders.

The reporting is used by the Internal Revenue Service (IRS) for three purposes:

  1. Help enforce the Individual Mandate which was still in place for the 2018 calendar year.
  2. Help enforce the Employer Mandate.
  3. Help verify eligibility for subsidies on the Health Insurance Marketplace.

While the reporting is sometimes done by the insurance carrier, employers need to be cognizant of their reporting obligations. Employers with fewer than 50

employees (based on the average number of employees in 2017) are generally exempt from the reporting requirements for the 2018 reporting year. The exception is for those employers with fewer than 50 employees who offered a self-insured medical plan. In this case, the employer must complete Form 1095-B for every covered employee and their covered dependents. Additionally, one copy of Form 1094-B must be completed for the organization.

Employers with 50 or more employees (based on the average number of employees in 2017) are subject to the reporting requirements for the 2018 reporting year. In general, the employer must complete Form 1095-C for every full-time employee (those working 30 hours per week or 130 hours per month) with information pertaining to the offer of coverage. Section III of Form 1095 -C only needs to be completed by employers with 50 or more employees who offer a self-insured medical plan. Additionally, one copy of Form 1094-C must be completed for the organization.

There are also three deadlines to be aware of:

  1. Copies of the forms must be provided to employees. Under normal circumstances, copies of the forms must be provided to employees by January 31st, however, the IRS has issued an extension and the forms must now be provided to employees by March 4th.
  2. If filing the reporting to the IRS manually, the forms must be submitted by February 28th.
  3. If filing the reporting to the IRS electronically, the forms must be submitted by April 1st. Employers who have to submit 250 or more forms must file electronically.

Flex has put together a free, 60-minute webinar to provide a thorough overview of the reporting requirements to help ease some of the confusion that many employers feel this time year.

new interactive tool from KFF estimates total household health spending for individuals and families in the U.S., including costs that are often less visible to consumers.

Users can generate scenarios based on family size, income level, insurance source, and health status. In addition to estimating direct costs like deductibles and copayments, the tool highlights indirect spending on health care, such as state and federal taxes paid to fund public programs like Medicare and Medicaid, as well as employer contributions toward health insurance premiums and Medicare payroll taxes.

The typical non-elderly family in the U.S. spends $8,200 per year, or 11% of their income, on health care – not including employer contributions – but this can vary substantially by income, type of insurance, and health status.

For example, a person with employer coverage earning $50,000 annually spends on average $5,250, or roughly 11% of her income, on health care. This includes $800 per year in out-of-pocket costs, a $1,400 premium contribution, and $3,050 in state and federal taxes to fund health programs.

Her employer contributes even more, including an additional $5,500 toward her annual premium and $750 in Medicare payroll tax. Economists generally believe that employer spending on health benefits and payroll taxes depresses wages, but workers do not directly observe that cost.

The calculator also demonstrates the variability of health spending by insurance source. If the aforementioned single person earning $50,000 annually obtains coverage on the individual market instead of through her employer, she can expect to spend 20% of her income on health care. 

Household health spending also increases significantly when health status worsens, largely due to the additional out-of-pocket costs associated with greater use of health care services. A family of four in good health with employer-sponsored coverage and earning $100,000 per year spends about 12% of their income on health care. If at least one member of the family reports worse health, household health spending increases to 15% of their income.

The Household Health Spending Calculator is available on the Peterson-Kaiser Health System Tracker, a partnership between the Peterson Center on Healthcare and KFF that monitors the U.S. health system’s performance on key quality and cost measures.

Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in San Francisco, California.


Ashley Joyce | (202) 347-5270 | ashleyj@kff.org

Recently, the IRS issued Revenue Procedure 2018-34, which increases the affordability threshold for the Affordable Care Act (ACA) employer mandate pay or play purposes to 9.86% for plan years beginning in 2019. This is a bit more of a jump than we’ve seen in recent years. These are the rates since 2015:

  • 2015: 9.56%
  • 2016: 9.66%
  • 2017: 9.69%
  • 2018: 9.56%
  • 2019: 9.86%

This latest jump is definitely noteworthy, but what does it all really mean?

The first thing we should mention here is that depending on what happens in the near future in terms of the government offering or regulating health care, all of this may become a moot point really quickly. But for now, the ACA is still intact and operating strongly in many parts of the country. So for the purposes of simplification, we’re going to break this all down as if the ACA is indeed here to stay. One detail that’s important to note here is that all this applies only to businesses with 50 or more employees.

First, it’s important to understand what this percentage actually signifies and how it’s used as a guideline for employers. The percentage most simply breaks down to a measure of affordability. The whole premise of the ACA is that health care be within financial reach of the millions of Americans that need coverage. The percentage is actually used to determine whether or not the coverage offered by the employer is indeed affordable and can be obtained without having to sacrifice too much otherwise.

When determining the affordability of coverage, that number is used as a baseline. Using the newest number for 2019, the employer mandate states that the lowest priced self-only plan offered to full-time employees cannot exceed 9.86% of those employees’ household income. This sets a threshold so that theoretically any full-time employee working in the United States should be able to find adequate health care no matter where he or she works.

When trying to understand the jump for 2019 after operating within a narrower range of fluctuation for the first few years, there are many things that people could suggest to explain the difference. Some may tell you that the allowance for higher cost health care may reflect a necessary raise to cover money lost when the employee mandate to cover insurance was dropped. Others may tell you that it reflects the tax cut that so many people got this year and may cancel itself out depending on where you work and how much you made. Depending on where you turn, there are a number of explanations that will sound plausible and figures that may seem likely to be accurate.

The important thing to most people is the impact that they may feel from day to day. So to help illustrate that we’ll apply the 2018 and 2019 rates to a fictitious example. We’ll say that John Doe makes $100,000 annually in salary and is somehow the lowest paid person at his company. In 2018, his company had to make sure that its lowest price single person plan cost no more than $9,560. In 2019, that company can now has a plan that cost up to $9,860. So from 2018 to 2019, John Doe’s employer could offer a plan that costs over $300 more a year.

In reality, most people make less than half of that. As a result, the average impact of this number changing could mean about $150 a year, or about $12 a month. When you look at it this way, it doesn’t really have a profound impact upon single employees. However, for companies with hundreds or thousands of employees, the small number could translate to big savings when it’s all added up.
In the end, this new affordability percentage could make things easier on many businesses, and for the most part isn’t going to take a huge toll on employees. The only thing left to really wonder about at this point is the fate of the ACA and the future of health care in our country. Once we have that all figured out, we’ll know if these numbers are even going to matter any more.

world with water

The folks at KFF (a nonprofit organization based in San Francisco, CA) have done a phenomenal job of collecting and posting over 300 FAQs pertaining to the 6th annual upcoming Affordable Care Act (ACA/ObamaCare) open enrollment period.  New questions and answers have been added expanding upon the already rich library of detail pertaining to the ACA and specifically open enrollment.  This set of FAQs are searchable and cover not only ACA but the health insurance marketplace in general.  The details provided will be a very valuable resource to any consumer, navigator, broker and all those that have a vested interest in the marketplace.

Search the FAQs

The database of information covers topics including eligibility, requirements and general information about State ACA marketplaces.  The collection also addresses the 2019 repeal of the individual mandate penalty and offers a totally new section on short-term health insurance policies.

Site visitors will be able to obtain information on situations that affect all people from young adults to retirees.  Immigrant situations and folks with job-based plans will also find information to help them make the important decisions needed in this next enrollment period. We were pleased to also see that over 150 of the FAQ’s are also available in Spanish.

Please note that open enrollment for the Federal and most state marketplaces begins on Thursday November 1, 2018.

The KFF website also provides many other resources including:

As always, we are here to help you navigate these waters. Many of your questions will be answered by searching through this valuable database. However, each situation is unique.  Please contact us if you would like to discuss the upcoming enrollment period or any topic related to your business’ health care solution.

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