United Benefit Advisors Insight and Analysis Blog

Should Employers Opt Out of Their Coverage Opt-Out Program?

Posted by: Danielle Capilla    Jan 21, 2016 12:00:00 PM

According to the 2015 UBA Health Plan Survey, fewer employers are offering bonuses to waive coverage, but for those that do, the bonus amount is on the rise. Only 2.9% of employers offered a bonus to employees to waive medical coverage in 2015, a 17.1% decrease from 3.5% two years ago. The average annual single bonus in 2015 was $1,680, which is a 10% increase from 2013.

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Topics: ACA, Affordability, UBA Health Plan Survey, Danielle Capilla, coverage waiver bonus, opt-out arrangement

Question of the Month: How is PPACA's "IRS Form W-2 safe harbor" regarding affordability calculated?

Posted by: Danielle Capilla    May 21, 2015 12:00:00 PM

Answer: Under PPACA, coverage is considered affordable if it costs less than 9.5 percent of an employee's household income. Because employers are often unaware of an employee's household income, there are three safe harbors that an employer can use to determine affordability. One is the "IRS Form W-2 safe harbor," and under it coverage is affordable if the employee's contribution for self-only coverage is less than 9.5 percent of his W-2 (Box 1) income for the current year. Box 1 reports taxable income and might be artificially low for an individual with high 401(k), 403(b) or Section 125 deferrals, or who takes unpaid leave. There are no adjustments to account for this.

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Topics: health care, PPACA Affordable Care Act, Affordability, W-2 safe harbor, affordable health care

Determining Minimum Value and Affordability

Posted by: Linda Rowings    Dec 22, 2014 1:00:00 PM

The IRS has released final regulations that address how wellness incentives or penalties, contributions to a health reimbursement arrangement, and employer contributions to a Section 125 plan are applied to determine affordability. While these regulations were issued in connection with the individual shared responsibility requirement (also called the individual mandate), the agencies said that they expect to use the same approach when determining affordability for purposes of eligibility for the premium tax credit and the employer-shared responsibility/play or pay requirements.

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Topics: PPACA, UBA, Linda Rowings, Section 125, Minimum Value, Affordability