8 legislative insurance changes to know about this year

As a benefits administrator or HR manager, you’re constantly trying to get the most for your money when it comes to assembling attractive employee benefits packages.

That said, keeping up on all the regulatory changes that could affect your insurance offerings can be a challenge. Here’s a summary of some of the most important legislative shifts.

  • The individual-coverage health reimbursement arrangement (ICHRA) becomes available to employers of all sizes Jan. 1 of 2020. Companies may fund the tax-free, cap-free vehicle to reimburse employees for personal health care expenses, including health insurance if they choose. Recipients must carry health insurance and cannot receive premium tax credits.The change is expected to help employers set their own budgets for the benefit while allowing employees flexibility in health care spending.
  • Short-term health care plans that aren’t required to cover every kind of medical care can now be issued for up to a year, with the possibility of renewal for up to three years. These relatively unregulated policies are generally less expensive than standard ACA-compliant plans because they don’t cover basic care and need not be sold to those with pre-existing medical conditions. They provide an option for employers that want to provide at least emergency health care and can’t find affordable standard plans.
  • If you’ve noticed increases in your health care premiums, that’s largely because of legislative changes. The good news is that subsidies are generally rising along with premiums.
  • The previous tax penalty for consumers who fail to secure health insurance is no longer being imposed. Many analysts expect health care premiums to get more expensive as a result.
  • With a few exceptions, consumers wanting to change their health care plans in a time span outside their employer’s open enrollment period will now be limited in which plans they can switch to.
  • The Tax Cuts and Jobs Act dictates that the Cadillac tax, a 40% surcharge on health care coverage that exceeds a given threshold, will be delayed until 2022. Analysts recommend planning ahead now for possible cost-containment strategies. 
  • The Health Insurer tax, a levy placed on health insurers based on their collected premiums, has been suspended this year — good news for the employers and consumers that typically must absorb such costs.
  • The IRS now requires employers with 50 or more full-time employees to prove they’re providing compliant health coverage. Serving as proof will be year-end form 1095-C (which must be provided to employees by Jan. 31, 2020) and form 1094-C (filed with the IRS by Feb. 28, 2020). Electronic filing for those with 250 or more 1095-Cs is required by April 1, 2020. 

Need a bigger overview of the regulatory changes that could affect your employee benefits offerings this year and next? Talk to the specialists at Ochs for up-to-the-minute information on assembling your best possible benefits packages.