Boon Buzz: Final Forms for 2018 ACA Reporting Released

The final forms and instructions for 2018 Affordable Care Act (ACA) reporting under Sections 6055 and 6056 are now available.

Overall, these final forms are  similar to the final versions from 2017 with one major change. In the revised version of the Form 1095-C, it’s stated that the “Plan Start Month” entry in Part II will remain optional in 2018 after some discussion about possibly making it a mandatory field to complete.

What are these forms for?

Internal Revenue Service Code Sections 6055 and 6056 created the reporting requirements for the Affordable Care Act. Under the rules laid out in these sections, certain employers are required to provide information to the IRS about health plan coverage they do, or do not, offer to their employees. Forms 1094-C and 1095-C are used for reporting under Section 6056 by applicable large employers.

Each reporting employer must file the forms annually with the IRS. Specifically, the employer must file:

  • Form 1095-B or Form 1095-C: A separate statement for each individual that is provided with minimum essential coverage or each full-time employee. Section 6055 applies to employers that offer minimum essential coverage, while Section 6056 is for applicable large employers with full-time employees.
  • A transmittal form for all returns filed in a given calendar year. This is in Form 1094-B or Form 1094-C.

What do these filing forms mean for employers? 

It is important for employers to familiarize themselves with these forms in preparation for using them to report for 2018.

The IRS claims that information returns under Sections 6055 and 6056 can still be filed after the filing deadline.  They also claim that employers who miss the filing deadlines should continue to make the effort to get their returns in as soon as possible. This is true for both paper and electronic methods of filing.

Important dates to remember

On January 31, 2019, individual statements for 2018 must be furnished to employees and IRS returns for 2018 must be filed by February 28, 2019. If these forms are filed electronically, the deadline is extended to April 1, 2019.

The Boon Blog is your resource for the latest news and updates from within the healthcare industry. Follow the Boon Blog to keep up with these developing stories! You can also keep up with Boon on Facebook, Twitter, and LinkedIn.

Posted in Uncategorized | Leave a comment

Competitive and Cost-Conscious Contracting: The Importance of Fringe Benefits

This article was originally written by Boon president, Taylor Boon, and Content Marketing Specialist, Caitlin Kennedy, and published in the Professional Service Counsel’s “Service Contractor” Fall 2018 magazine.

Federal government contracting is constantly evolving and presenting new challenges for contractors competing to support government missions. There are three primary objectives that companies operating under the McNamara O’Hara Service Contract Act of 1965 and the construction-related Davis-Bacon Act of 1935 are striving for: contract compliance, cost-effectiveness that is profitable to the company bottom line, and – most importantly – being competitive to win the work.

One of the provisions in both laws provides built-in cost savings opportunity for the contractor. A contractor can provide “bona fide” fringe benefits where mandated by contract provisions, thus putting the contractor at a cost-saving advantage over the competition that is not providing fringe benefits.

However, these fringe benefit contract requirement under the Service Contract Act and the Davis-Bacon Act present contractors with a challenge. Similar to wage determinations, specific fringe benefits requirements to be paid on an hourly basis, although the fringe rates vary under both acts. Employees working under contracts governed by a particular Act that has a specified fringe rate must receive that fringe rate either as cash paid out or as the benefit equivalent, always in excess of their base wages.

For example, the contractor can pay the designated fringe rate into bona fide fringe benefits. Health and welfare benefits such as group health plans, dental plans, additional sick leave days, or retirement options are some examples of these “bona fide” fringe benefits.

A common method of properly discharging fringe dollars is the “hours worked” method. Under this mode the contractor is responsible for reporting employee hours worked and must pay the designated hourly fringe rate accordingly. Most of the time, contractors address the fringe benefit obligation by paying the fringe dollars to the employee, in cash. Seems like the right choice because it’s a simple process and calculation, right? Wrong.

The contractor that is paying the fringe into a bona fide fringe benefit maintains a competitive financial tax advantage over a contractor that is paying fringe dollars into cash. Additionally, the contractor may choose a number of different options that satisfy the federal requirements.

When contractors utilize those fringe dollars to provide employee benefits, the advantages go way beyond cost-effectiveness; employee fringe benefit plans often translate to a healthier workforce and reduced absenteeism, in addition to increased employee satisfaction and productivity.

Regardless of the method, the specific fringe benefit payments must be accounted for separately to ensure compliance.

You might ask, “Why would a contractor choose to provide benefits, instead of the more direct cash payout?” While different situations provide for different company needs, it is not uncommon for groups that pay cash in lieu of benefits do so in order to meet local wage demands. Paying the fringe into bona fide benefits plans provides a boon to the employee while also providing the contractor with a small advantage over the competition.

When the contractor elects to pay cash in lieu of benefits, the contractor takes on additional payroll tax burdens. This usually manifests in the form of increased premiums for workers compensation and an increase in FICA and state taxes. Contractors working under the Acts that decide to pay the fringe rate in cash will have an additional burden that their competitor, who pays the obligated fringe as a “bona fide” fringe benefit, simply does not.

Our recommendation? Outsource fringe benefits via a third party that provides benefits for the employees working the contract.

Contractors could always handle the administration themselves, but that would require the expertise and resources to properly track and account for those fringe dollars at the individual employee level. That level of accounting is mandatory for contractor compliance and, frankly, many employers just don’t have the juice.

But there are many companies that develop benefit plans that are designed to meet the specific needs of government contractors.

In the federal contracting world, there are clear winners and losers. What separates the two could be a very small dollar differential. In this arena, it will be the competitive and cost-conscious contractor that succeeds.

The Boon Blog is your source for the latest in industry news. You can keep up with the world of healthcare, industry updates, and all things Boon on our FacebookTwitter, and LinkedIn.

Posted in Uncategorized | Leave a comment

How the Healthcare Industry is Responding to the U.S. Opioid Crisis

The U.S. Opioid Crisis is massively impacting this country. The reach of this problem is extending well beyond health policy with greater and greater increases in opioid addiction and abuse related deaths. The issue is widespread and every corner of the nation has been impacted. The healthcare industry is reeling as a barrage of political responses rush to resolve the crisis. We previously covered the impact of the Opioid Crisis, now read on to learn more about how the nation is responding and how it may impact healthcare.

Despite a political landscape that currently has Republicans and Democrats locking horns, addressing the U.S. Opioid Crisis seems to be the issue that is uniting Congress in action. Four committees in the House and the Senate held hearings on numerous bills that were all seeking a means of battling the opioid epidemic with an ultimate goal of passing a large opioids bill by Memorial Day. A top contender for this large-and-in-charge bill was a proposal meant to improve the ability of various organizations in addressing the opioid crisis. Some of the provisions of this bill include:

  • Prioritizing the development of non-addictive painkillers
  • Clarify FDA authority to require packaging options for certain drugs that encourage responsible use
  • Authorize CDC research through grants
  • Allow hospice programs to safely and properly dispose of unnecessary controlled substances to reduce the risk of misuse and distribution

This proposal would gain traction and in October 2018 the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act was signed into law, a joint effort from parties on both sides of the aisle. While senators recognize that the opioid crisis is far from over, under this legislation there is hope for providing help to families and communities impacted by the crisis.

In his address at the National Rx Drug Abuse and Heroin Summit in April 2017, Secretary Price detailed the strategy of the U.S. Department of Health and Human Resources in addressing the opioid crisis. In particular, HHS has prioritized these five strategies:

  1. Improving access to treatment and recovery services
  2. Promoting use of overdose-reversing drugs
  3. Strengthening understanding of the epidemic through public health surveillance
  4. Providing support for research on pain and addiction
  5. Advancing better practices for pain management

Aspects of this strategy have already been implemented with $485 million in grants being sent to state governors for use in treatment and prevention facilities.

The U.S. opioid crisis is just as hotly debated at the state level. In Minnesota, a signature but controversial effort to fight back against opioids suggests a “penny-a-pill” fee. This is the latest in a string of legislation. In 2014, Steve’s Law granted immunity to persons who called 911 to help someone who was overdosing on opioids, even if they themselves were users. From this have stemmed numerous other proposals in Minnesota: funneling money into preventative measures, equipping law enforcement with an overdose-reversing drug, and more. The issue arises from the fact that the state hopes to accomplish this via fees placed on every opioid sold by a drug company; an action greatly opposed by Big Pharma.

Other states, like New York, have moved forward with measures that slap a fee on opioid manufacturers and distributors.

Whether or not such measures catch on, pharmaceutical companies are being taken to task for their role in the opioid crisis. Executives with pharmaceutical distributors accused of flooding communities with powerful prescription painkillers were summoned to testify before Congress at a hearing held on May 8, 2018. This marks a watershed moment in the healthcare industry as these companies were questioned on their practice of pushing such a high volume of highly addictive pain pills into several states. The case at hand is especially austere as disclosed data from this hearing committee showed that millions of pills were shipped to small communities in states exhibiting the highest rate of drug overdose deaths.

During that May hearing, one pharmaceutical company admitted that it had distributed  about 151 million doses  of oxycodone and hydrocodone in West Virginia between 2007 and 2012, which is a mere fraction of the totals from other companies that were distributing in the area during that time period. However, four of the five executives testified that their companies did not have a role in fueling a public health crisis, despite a committee report revealing the massive amounts of painkillers sent to the area.

The major takeaway? The efforts of the committee will continue to strive to enact new laws and new programs to combat the crisis and will continue the yearlong investigation.

Massive changes are on the horizon and The Boon Group is just as dedicated to keeping you informed as we are to keeping you competitive and compliant! Follow the Boon Blog for updates on the U.S. Opioid Crisis and other industry news.

You can also keep up with Boon on Facebook, Twitter, and LinkedIn.

Posted in Uncategorized | Leave a comment

Everything You Need to Know about Health Savings Accounts

Healthcare can be clunky and difficult to understand because there are so many options available and regulations are constantly in flux, changing from year to year. Today we’re breaking down the Health Savings Account (HSA) for you!

What is an HSA? 

A health savings account, or HSA, is an account used in conjunction with a high-deductible health insurance policy. It allows users to save money, tax-free, against medical expenses. Individuals may decide how much they would like to contribute to an HSA within certain government-mandated limits. An HSA account is employee owned and can be funded by employer dollars. The balance in an HSA can roll over from year-to-year making it portable, so employees can take the account with them from one employer to another. This is a significant value to employees.

Why choose an HSA?

Health savings accounts offer multiple tax advantages: contributions are pre-tax/tax deductible; the money is able to grow tax-free; and the money can be used for benefits tax-free. Additionally, health savings accounts can be invested in mutual funds, stocks, and other investment tools.

Why should an employer offer an HSA?

A healthy 65-year-old male retiree may require $144,000 to cover healthcare expenses throughout retirement. The estimated cost for a 65-year-old female is $156,000.

It’s also true that one-third of Americans report that they have no retirement savings. Of those that do, 23 percent have less than $10,000 saved.

Employers have the opportunity to help their valued employees combat this issue head-on!

HSAs in 2019

The Internal Revenue Service announced that the HSA limit would be increased to account for inflation. These changes are set to go into effect on January 1, 2019.

For the HSA contribution limit, self-only contributions have increased from $3,450 to $3,500; the family limit increased from $6,900 to $7,000.

Due to these changes, employers that sponsor HSA plans may adjust their plan design for 2019. Any plan changes, including the new limits, must also be communicated to employees.

The Boon Blog is your source for the latest in industry news. You can keep up with the world of healthcare, industry updates, and all things Boon on our Facebook, Twitter, and LinkedIn.

Posted in Uncategorized | Leave a comment

The Impact of the Opioid Crisis on the Healthcare Industry

The opioid crisis in the United States has reached a fever pitch. More than 115 Americans die every day after overdosing on opioids like prescription pain killers and fentanyl. Opioids are a class of drugs comprised of both illegal drugs (like heroin) and common pain relief drugs prescribed by doctors, such as hydrocodone, morphine, and codeine. These drugs have great capabilities in treating pain, but are extremely addictive.

The CDC has estimated the total cost of prescription opioid misuse alone in the U.S. to be $78.5 billion yearly, including the costs of healthcare, lost productivity, and treatment. Roughly 29% of patients that are prescribed opioids for chronic pain misuse them and eventually develop an opioid use disorder. 5% of those who misuse prescription opioids transition to heroin and there is substantial evidence to show that the majority of heroin use stems from misused prescription drugs.

This goes beyond a simple drug problem, this is a healthcare problem. The number of opioid prescriptions dispensed by doctors reached an all-time peak in 2012, topping at 282 million. This number has since declined to 236 million. Nevertheless, Americans represent about 99.7% of the world’s hydrocodone consumption; hydrocodone being a commonly prescribed opioid.

By extension, the opioid crisis has grown into an issue that is greatly impacting government contractors. Construction workers, in particular, are falling victim to the opioid crisis. In 2015, 92 Wisconsin construction workers died of opioid overdoses. Those deaths cost the state economy $524 million and the epidemic is hitting the construction industry in more states, as it spreads. Construction is one of the most dangerous and physically demanding professions out there and, as a result, construction workers are seeking relief for pain that results from worksite injuries, as well as day-to-day wear and tear on the body.

The reach of the opioid crisis goes well beyond targeting industries in which many government contractors participate. Opioid prescription use and spending has increased for several years among people with large employer coverage. While this number has tapered off following its peak in 2009, the cost of treating opioid addiction among people with large employer coverage has increased to $2.6 billion as of 2016. This trend shows that the cost of treating opioid addiction has risen even though opioid prescription use has fallen.

This comprehensive survey, from April 2018, of the trends of opioid use amongst those under employer coverage yields interesting results. For example, 53% of spending by people with large employer coverage went towards treating opioid addiction and overdose for employees’ children . Until the opioid crisis, as a whole, is resolved it will continue to have major impact on the healthcare industry and employees.

What has the response been to the U.S. Opioid Crisis? How will it impact the healthcare industry? Follow The Boon Blog for a follow-up on this topic and current discussion on all the latest industry news.

Want more Boon? Catch us on Facebook, Twitter, and LinkedIn!

Posted in Uncategorized | Leave a comment

The Boon Group Announces Mr. Taylor Boon as New President

AUSTIN, TX – October 24, 2018

The Boon Group, Inc. is happy to announce Mr. Taylor Boon as the company’s new President.

Mr. Boon has been with The Boon Group for 12 years. Recently, Mr. Boon served the company as Chief Strategy Officer. His responsibilities in that role included overseeing sales, implementation, business development, proposals and pricing, and marketing. Before that, Taylor set the highest standard as a top sales representative for numerous years.  Taylor Boon has dedicated his career in health insurance by working with the government contracting community as well as the adjacent brokerage community.

“Taylor has earned his place as President of The Boon Group, Inc. with hard work and a genuine love for this company” says, CEO Sterling Boon. “His vision for our future coupled with his fantastic work ethic makes him a perfect fit for the job.”

Mr. Boon is excited to ascend to this position during a time of great growth for The Boon Group. Taylor Boon steps into the role of President as The Boon Group moves toward our vision of increased sales and marketing focus, as well as providing an enhanced client experience.

“The government contract and limited medical markets that we service deserve an innovative and cost-conscious provider,” says Mr. Boon. “My immediate goal is to ensure we are that provider.”

Posted in Uncategorized | Leave a comment

Top Four Headlines in Healthcare

Who says that the healthcare industry is boring?! 2018 has brought about many questions, changes, and updates. We’re going into four of the big ones that everyone should know about.

Read on to learn more!

1. Model Exchange Notice Expiration Date Extension

The Department of Labor (DOL) extended the expiration date on its Model Exchange Notice through May 31, 2020. The Model Notice is used to ensure compliance with the Exchange Notice requirement of the Affordable Care Act (ACA).

The expiration date of the Model Notice is included as an administrative function of the DOL and has nothing to do with how applicable the Notices are. The content of this Model Notice does not change substantively, so the expiration date does not affect an employer’s ability to use it.

It’s advised that employers provide new hires with an exchange notice. However, according to guidance from the DOL, there is no fine or penalty under the ACA for failing to provide the Notice.

2. IRS and DOL Guidance on AHPs

The Department of Labor (DOL) published a final rule in June 2018 that expands the ability of employers to join together to form association health plans (AHPs).

An AHP is covered under ERISA and is a type of group health plan sponsored by a group of employers. We go into deeper detail on the final rule, what AHPs are, and how they work in this blog post.

If you are a small employer that is considering joining an AHP, it is important to understand the compliance obligations associated with these sorts of plans. While it’s true that AHPs do avoid some Affordable Care Act reforms for the small group market, they are still subject to many other legal requirements and regulations.

3. Limits for HSAs and HDHPs Increase for 2019

In May 2018, the Internal Revenue Services (IRS) released Revenue Procedure 2018-30 to announce the new 2019 limits for health savings accounts (HSA) and high deductible health plans (HDHP). These limits detail the maximum HSA contribution, the minimum deductible amount for HDHPs, and the maximum out-of-pocket expense limit for HDHPs. These limits vary based on whether an individual elects self-only or family coverage under an HDHP.

The HSA contribution limit increase will go into effect on January 1, 2019, and the HDHP limits will increase for plan years beginning on or after January 1, 2019.

Learn more about these limits and the specific costs and requirements here.

4. Final Rule Expands Short-term, Limited-duration Insurance

Short-term, limited-duration insurance is designed to fill any temporary gaps in coverage when an individual is transitioning from one plan or coverage to another. Short-term, limited duration insurance is exempt from the definition of individual health coverage and, therefore, not subject to the market reform requirements of the Affordable Care Act.

Originally, in 2016, the definition of short-term, limited-duration insurance was revised so that it would be excluded from the definition of individual health insurance coverage. This led to concerns that limiting the length of short-term, limited-duration insurance would reduce consumer options for affordable coverage. So in 2018, the 2018 final regulations lengthened the maximum period of short-term, limited-duration insurance, with the hope of providing more consumer choices for affordable healthcare.

As it stands, short-term, limited-duration insurance may offer a maximum coverage period of less than 12 months after the original effective date of the contract. This approach takes into account any extensions that may be elected by the policyholder without the issuer’s consent provided that the duration is less than 3 years in total.

Follow the Boon Blog for the latest in industry news and happenings at The Boon Group! You can also keep up with Boon on Facebook, Twitter, and LinkedIn.

Posted in Uncategorized | Leave a comment