In December 2016, before President Trump took office, former President Obama signed the 21st Century Cures Act. While most of the bill covers health initiatives and focuses on finding cures and various health treatments, there are six pages that focus on small business owners and Health Reimbursement Arrangements. The bill introduced the Qualified Small Employer Health Reimbursement Arrangement or QSE HRA. As you might know, the Affordable Care Act enforced penalties for employers that utilized HRAs and employers that had these plans risked huge fines and penalties. However, these six pages have brought the HRA option back, increasing options for covering the cost of healthcare.
Market research shows 10 million stand-alone HRAs were dropped with the passage of the ACA, so BASE® is excited at the opportunity to bring this to the market. Our goal is to help make healthcare more affordable. Thanks to this legislation, employers can help their employees pay for qualified medical coverage for themselves and their families, tax-free. The employees can use the money for insurance premiums, co-pays, deductibles, eye care, dental care, or any other qualified healthcare expense. The amount provided is tax-free to the employees and 100% tax deductible to the employer.
The QSE HRA allows employees to take control of their own insurance and pick the medical coverage that best suites them, while also saving employers money. It allows employers to provide up to $4,950 in medical reimbursement per-year for individual workers who show they have individual coverage and $10,000 per year for workers who show they have family coverage.
An employer is eligible to establish a QSE HRA if:
- Employer has less than 50 Full Time Equivalents (FTEs)
- Employer does not offer a Group Health Plan to its employees
According to Chatrane Birbal, the Society for Human Resource Management’s senior advisor for government relations: “For eligible small employers, this new law is welcomed and overturns guidance previously issued by the Internal Revenue Service and the Department of Labor that stated that HRA arrangements violated the ACA insurance market reforms, subjecting small employers to a penalty for providing such arrangements. This change provides small employers greater flexibility in terms of benefit offerings and allows eligible employers to use HRAs to help employees purchase an affordable health insurance plan that fits their individual budget and health care needs.”
Now that qualifying small employers no longer have to worry about penalties from the IRS or DOL, they can offer their employees a better option for rising health costs. Contact a BASE® representative to find how to lower healthcare costs with the QSE HRA.
The beginning of March always starts my favorite time of year, March Madness. Don’t let your company be called for a penalty this season. Gear up, take charge and prevent unnecessary fouls by calling BASE®.
Did you know that without an ERISA Wrap, your company is vulnerable to a $110 per-day, per-employee fine? Employers/plan administrators are liable for serious penalties if they don't provide an SPD or have a current Plan Document. In fact:
- Failure to provide an SPD or Plan Document within 30 days of receiving a request from a plan participant or beneficiary can result in a penalty of up to $110/day per participant or beneficiary for each violation.
- Lack of an SPD could trigger a plan audit by the U.S. Department of Labor (DOL).
- The DOL has increased its audit staff and national enforcement initiatives to investigate employers' compliance with Health Care Reform, resulting in companies of all sizes being audited and being required to provide an SPD and Plan Document.
The case of Lee. ING Groep, N.V., 2016 WL 3974176 (9th Cir. July 25, 2016) is just one example of how a court can impose such penalties. In this case, the court granted summary judgement to the plaintiff and imposed a penalty of $27, 475 for failure to produce a Plan Document in a timely manner.
Group health plans must be administered in accordance with a written Plan Document, which must be made available to plan participants and beneficiaries upon request. In this case, ING North America learned that even though they couldn’t be penalized for failure to provide documents relevant to a benefit claim, penalties could be imposed for failure to provide required plan governing documents. While this case started because an employee was unhappy regarding the handling of claims, it proves that one complaint can lead to a DOL audit and put employers at risk for thousands of dollars in penalties.
Regardless of business size, almost every company needs an ERISA Wrap to stay in compliance. The BASE® staff strives to make the process as simple as possible and works with you to meet all regulations. We provide clients with a Wrap SPD and Wrap Plan Document to be handed out to plan participants that meet the regulations and requirements set by the Department of Labor and ERISA.
The BASE® staff are experts in compliance, rules and regulations. We can assure clients are on the right track by providing wrap around protection with the BASE® ERISA Wrap. A BASE® client recently stated, “My experience in setting up a BASE® ERISA Wrap has been incredible. BASE® is courteous and thorough, and their follow up is unlike any other company.”
BASE® can help clients avoid the risk of penalties and meet government requirements with the BASE® ERISA Wrap. Contact BASE® to learn more about how a customized Wrap SPD and Wrap Plan Document can provide the required ERISA provisions and information that will help achieve compliance.