EUCLID MANAGERS®
has served the independent agent
since 1976, offering a portfolio
of group health, professional
liability, individual life, health,
disability, annuity and long-term
care products.
We proudly represent many
fine carriers including
Group Products:
UnitedHealthcare of Illinois
Delta Dental of Illinois
MetLife
Concierge Services:
LifeLock
HealthiestYou
Individual Products:
American General Life Companies
Assurity Life Insurance Company
Delta Dental of Illinois
Fidelity Life
Genworth Financial Insurance Co.
John Hancock Life
Legal & General
(Banner and William Penn)
Lincoln National Life
MetLife
NGL
Principal Financial
Protective Life
Prudential Financial
Transamerica
UnitedHealthOne
VOYA
Contact Information
2016 To-Dos and To-Knows
The New Year often means a fresh start. This year, 2016, will require that
employers take steps in complying with the Affordable Care Act. And, as
importantly, this year may also be a time for preparing for pending changes.
This issue of Reflections provides an overview of some of the tasks and to-do’s
that employers need to address in 2016.
continued on page 2
A letter from Karen Knippen
Okay, it’s the New Year, time for New Year’s resolutions! This issue of
Reflections provides some resolutions that employers may want to add to
their lists.
The onslaught of change that we’ve seen with the ACA may finally be
abating. There’s time to take stock, update paperwork, refine decisions that
have been made and plan for the future. The biggest change coming (that
we know of) is the Cadillac Tax and from everything I’m reading, we ignore
it at our peril!
But, the New Year is also a time for renewed purpose. Our purpose at Euclid
Managers has always been – and continues to be - to provide you, the broker,
quality products at reasonable rates to meet the needs of your clients.
Sincerely yours,
234 Spring Lake Drive
Itasca, Illinois 60143
Phone: (630) 238-1900
Outside Chicagoland:
(800) 345-7868
Fax: (630) 773-8790
www.euclidmanagers.com
Karen Knippen, RHU, REBC, CLTC
Senior Vice President
EUCLID MANAGERS® has been serving the independent agent since 1976 with a portfolio of group health, professional
liability and individual life and health, annuity and long-term care products. We proudly represent UnitedHealthcare,
Delta Dental of Illinois, MetLife and Humana Individual. We encourage your feedback and suggestions. Please call
your EUCLID MANAGERS® Marketing Representative or Marcy Graefen at (630) 238-2915 for more information. Outside
Chicagoland, call (800) 345-7868. Website: www.euclidmanagers.com
End of Transition Relief
Employers that are “applicable large employers” –
ALEs - that had transition relief from employer shared
responsibility provisions – “pay or play” – will lose
this relief in 2016. Employers who qualified for any
transition relief from the penalties will have to attest
to their qualification as a part of their 1094-C reporting.
Transition relief includes the following:
• ALEs with fewer than 100 full-time and full-time
equivalent employees won’t be assessed an
employer shared responsibility payment for 2015,
provided that certain conditions are met regarding
the employer’s maintenance of workforce and
pre-existing health coverage.
• ALEs are not required to offer coverage to fulltime employees’ dependents for the 2015 plan year,
provided that they meet certain conditions,
including that they take steps to arrange for such
coverage to begin in the 2016 plan year and they
do not drop current dependent coverage.
• An ALE must offer coverage to at least 70% of
full-time employees and dependents to be deemed
to “offer coverage.” Note, the employer may still
owe the penalty that applies for each full-time
employee who receives the premium tax credit for
purchasing coverage through the exchange.
• An ALE with 100 or more full-time and full-time
quivalent employees calculates the “A” penalty by
reducing the ALE’s full-time employees by 80,
rather than 30.
• Transition relief is available for certain employers
sponsoring non-calendar year plans for the months
in 2015 prior to the beginning of the 2015 plan
year with respect to certain employees, if the
employer and plan meet various conditions.
• Rather than being required to measure its ALE
status based on the number of full-time employees,
including full-time equivalent employees, for all
twelve months of 2014, employers may instead
base their 2015 ALE status on any consecutive six
month period – as chosen by the employer –
during 2014.
Act/Employers/Understanding-2015-Transition-Reliefunder-Employer-Shared-Responsibility-Provisions.
Reporting To-Dos
Employers who are “applicable large employers”
(ALEs) and who are, therefore, subject to the employer
reporting requirements have a lot to do in the first
months of the year. First up, employers must provide
1095-C forms to employees by February 1, 2016.
As a part of completing these forms employers have to
determine:
• Who was an employee for reporting purposes
• When an employee was eligible for coverage
• When a full-time employee was hired or terminated
• Whether there were any employees who became
eligible for COBRA either due to a reduction of
hours or due to termination of employment
• Whether the social security numbers or birth
dates have been identified for all covered spouses
and dependents.
Consideration should be given to naming the “person
to contact” on form 1094-C. This is the person that the
IRS will contact with any questions regarding the
information reported on the 1094-C or 1095-C forms
filed by the employer. Employers should also anticipate
and prepare for questions from employees and
dependents regarding the 1095-C forms that employers
provide. It is likely that employees will have questions
or corrections regarding these forms as they receive
them or as they file their personal taxes and include
these forms as a part of their filings.
Employers will also want to review the completed
reports to see if there is likely exposure to any penalties.
The 1094-C and 1095-C forms will provide the IRS
much of the information they’ll need to begin the
process of determining any applicable employer penalties.
And, employers will also have to file their reports with
the IRS. Paper filings are due by February 29, 2016 or
March 31, 2016 if filing will be electronic.
Clean Up Work for the Year
Details on transition relief can be found on the IRS
website at: https://www.irs.gov/Affordable-Care-2-
Reflections
With all of the changes wrought by the ACA, employers
should take time to do some clean-up work regarding
their health plans. Chief among these would be
updating their plan documents and summary plan
descriptions (SPDs).
Among changes to consider are whether the Section
125 flexible spending account (FSA) will allow rollovers. Also, IRS Notice 2014-55 permits a cafeteria
plan to allow an employee to revoke their election,
other than in a FSA if:
• The employee has a reduction of hours that would
not cause a loss of coverage but the employee
would like to cease coverage under the employer
plan with the intention of enrolling in another
plan such as a marketplace plan
• An employee wishes to revoke the employer’s plan
to enroll in the marketplace during the marketplace
open enrollment or the employee is eligible for a
special enrollment period (SEP) to enroll in a
marketplace plan or the marketplace.
To adopt either or both of these provisions, the plan
must be amended on or before the last day of the plan
year in which the elections are allowed.
Employers should also take time to review any
independent contractor relationships. The federal
Department of Labor has gone on the record that
reviews of independent contractor status will be more
frequent and more narrowly defined than employers
had previously understood. A thorough analysis of
independent contractor versus employee determinations
is even more critical if a change to employee status
would result in an employer becoming an ALE.
Things to Know
New HSA Guidance for 2016
HSA Contribution Limit
HDHP Minimum Deductible
Annual OPX
Single
$3,350
$1,300
$6,550
Family
$6,750
$2,600
$13,100
The additional “catch up” contribution for those
age 55 years and older remains at $1,000. HSA
contributions for the 2016 tax year may be made
until April 15, 2017.
Maximum Out-of-Pocket (OPX) Limits for Health Plans
2016
2015
Self-Only
$6,850
$6,600
Other than Self-Only
$13,700
$13,200
CMS guidance published in 2015 clarified that the
out-of-pocket maximum limit for self-only coverage
applies to all individuals (regardless of whether the
individual is in self-only or family coverage). For
example, a family plan with a $13,700 family out-ofpocket limit cannot have cost sharing exceed $6,850
for any individual enrollee on the contract.
Preparing for the Future
The excise tax, commonly called the “Cadillac Tax” is
one of the last major ACA changes pending. This 40%
excise tax will take effect for tax years beginning after
December 31, 2017. Since the tax will be on a tax year
basis and not a plan year basis, the 2016 plan year
will be the last full plan year the employers have to
contemplate or enact incremental changes to prepare
for the tax.
Some employers are taking a wait-and-see attitude
toward the tax since there is bipartisan support in
Congress to repeal the tax. One of the bigger stumbling blocks for Congress is how to pay for repeal of
the tax which is projected to bring in approximately
$87 billion in tax revenue.
Many employers, however, are determining their
Cadillac Tax strategy in case the tax stands. A tax
strategy would include:
• Assessing the likelihood of whether any of the
employer’s plans or employees in the plans will hit
the tax thresholds of approximately $10,200 for
self-only and $27,500 for other than self-only
coverage
• Deciding whether the employer is comfortable
with making changes to avoid or minimize the tax
in one year or whether a multi-year strategy is
preferred
• Determining plan changes to avoid the tax such
as increased in deductibles, out-of-pocket limits,
limitations on FSA or HSAs and the like.
Reflections
-3-
A service publication for brokers from
Euclid Managers®, proudly representing
UnitedHealthcare of Illinois, Delta Dental of Illinois,
MetLife and UnitedHealthOne.
HealthiestYou and Lifelock available through Euclid Managers Concierge Services.
www.euclidmanagers.com
Legislative Review is published by Euclid Managers®, 234 Spring Lake Drive., Itasca, IL 60143. For more information, contact your Marketing Representative or Marcy
Graefen at (630) 238-2915 or marcy@euclidmanagers.com. Outside Chicagoland: (800) 345-7868, Fax (877) 444-2250. © Permission to quote with credit to source.
2016 To-Dos and To-Knows
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