Are Your QDRO Practices Costing Your Plan Money?

Complying with qualified domestic relations orders (QDROs) can be complicated.  This article covers the basics of QDRO administration and points out the common mistakes plans make.

Are Your QDRO Practices Costing Your Plan Money?

Jim McKeogh and Mandy Notaristefano published this article in the October 2016 issue of Benefits Magazine.

 

 

American Health Care Act Passes the House

The U.S. House of Representatives passed HR 1628, the American Health Care Act (AHCA), by a vote of 217-213 on May 4, 2017.  This bill is the first step in the Trump Administration’s process to repeal and replace the Affordable Care Act, also known as the ACA or Obamacare.

The AHCA, as written, eliminates the individual mandate to buy health insurance, changes subsidies from income-based to age-based, ends Medicaid expansion, lessens coverage requirements for insurance companies and eliminates taxes on high-earners.  The AHCA retains coverage for those with pre-existing conditions, but allows insurers to charge higher premiums to such individuals.

The bill will now head to the Senate.  The GOP has a much narrower majority in the Senate (52-48) than in the House (238-193) and many Senate Republicans have already stated that they will likely rewrite the legislation or start over completely.

PCORI Fees Due July 31st

The ACA established the Patient Centered Outcomes Research Institute (PCORI) to fund research that can help patients and those who care for them make better-informed decisions about the healthcare choices they face every day, guided by those who will use that information.  The research is funded in part by health insurers and sponsors of self-insured plans through PCORI fees.

Generally, the PCORI fees apply to group health plans (including self-insured plans).  The IRS chart found HERE describes which health plans are subject to the fee.  Those health plans are required to report and pay fees annually using IRS form 720.  Form 720 is due July 31, 2017 for plan years ending in 2016 along with payment in the following amount:

  • $2.17 per covered life for plan years ending between January 1, 2016 and September 30, 2016
  • $2.26 per covered life for plan years ending between October 1, 2016 and December 31, 2016

There are three methods for calculating the number of covered lives:

  1. Actual Count Method – Calculate the lives covered for each day of the plan year and divide by the number of days in the plan year.
  2. Snapshot Method – Add the lives covered on a date during the first, second, or third month in each quarter, or an equal number of dates for each quarter, and divide the total by the number of dates on which a count was used. There are two methods for counting family members: Count the actual lives covered on the designated date; or Count the participants on the designated date and multiply by 2.35.
  3. Form 5500 Method – Add the participants at beginning of year and end of year as reported on the Form 5500 for the plan year (this method may be used only if the Form 5500 is filed no later than the due date for the fee imposed for that plan year).

For more information, click HERE for a question and answer page provided by the IRS.

IRS Proposes Individual Mandate Regulations

The Internal Revenue Service (IRS) issued proposed regulations addressing the individual shared responsibility payment provisions of the Affordable Care Act. Beginning January 1, 2014, individuals are required to maintain minimum essential health coverage or pay a penalty known as a shared responsibility payment unless the individual qualifies for an exemption. Continue reading