Evaluating Your Medical Plan Renewal — Tips to Consider

By Tom Weatherman | Director of Insurance Services

The ever changing world of employee health benefits can make year-end planning for business owners a very hectic time of the year. Trying to balance compliance issues with doing what is best for your professional team has become increasingly complicated. Proactive planning and understanding the benefit landscape are important factors for starting off the new year on the right foot. Here are some tips to follow as we begin closing out the 2015 business calendar.

Schedule a meeting with your broker.

Your group medical renewal typically arrives between 45 and 60 days prior to the renewal deadline. That may seem like a lot of time, but depending on how complex your benefits program is, you are better off coordinating your strategy with your broker sooner rather than later.

Your broker should walk you through all relevant compliance issues, help you evaluate various carrier plan options, and ensure that your renewal submission is in order. This is also a time to talk about the big picture as it relates to your company’s growth trajectory and how that will align with the benefits you plan on offering.

Navigating and Reporting to the IRS

For employers who have more than 50 employees, your information reporting is submitted through a single form known as the 1095-C. Employers with 50 employees or less are exempt from the Affordable Care Act’s employer responsibility provision and are therefore exempt from the employer reporting provision. As an aside, for “small” business owners who are self-insured, you may be subject to IRS reporting and should communicate with your broker to determine your obligation. 

A second type of reporting is the Qualifying Offer Method. As a business owner, if you provide a qualifying offer — a bronze level or higher benefit plan where the cost to the employee for employee‐only coverage is less than about $1,100 in 2015 — you can take advantage of this reporting structure. A caveat for this type of reporting method is that the employer must also offer the plan to all members of the employee’s family.

If an employer offers qualifying benefits to an employee for all 12 months of the year, the employer is required to report only the name, addresses, and tax ID number for that particular employee. They are not subject to monthly reporting. If an employee receives a qualifying offer for fewer than 12 months of any given year, the employer will utilize a pre-defined code to report each month that a qualifying offer was made.

Getting Ahead

Now that your head is swimming with codes, qualifications and various methods of reporting, it should be abundantly clear that coordinating your benefits renewal plan requires someone who is intimately familiar with the intricacies and regulations that accompany providing health coverage for your employees. It’s a lot to digest, but not impossible to manage.

Be smart and don’t wait until the last minute to address your strategy. Getting your shop in order at the end of the year is frenzied enough without trying to make sense of the rules and regulations set forth by the IRS; not to mention that its very important that your employees feel secure that their benefit package is in order for the coming year.

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