Tag Archives: Social Security

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

IRS issues guidance on the “use-or-lose” rules for health FSAs
The Internal Revenue Service (IRS) has issued Notice 2013-71, announcing that employers can allow participants in health flexible spending arrangements (FSAs) to carry over up to $500 of unused health FSA balances at the end of a plan year.

Notice 2013-71 updates guidance on the “use-or-lose” rule to add flexibility and help FSAs meet consumers’ needs. For the first time, participants will be able to carry over, instead of forfeit, up to $500 of unused amounts remaining at year-end, said the Treasury Department in a fact sheet issued with the notice.

To read the entire notice, click here. Also, for a copy of the Treasury fact sheet, click here.

IRS issues revenue procedure with certain adjusted tax table and section 132(f)(2) fringe benefits
The IRS has issued Revenue Procedure 2013-35 providing the 2014 cost-of-living adjustments for inflation for certain items, including the tax tables; of special interest to employee benefit practitioners are:

• Qualified transportation fringe benefit:
For taxable years beginning in 2014, the monthly limitation under Section 132(f)(2)(A) regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $130. The monthly limitation under Section 132(f)(2)(B) regarding the fringe benefit exclusion amount for qualified parking is $250.
• Employee health insurance expense for small employers:
For calendar year 2014, the dollar amount in effect under Section 45R(d)(B) is $25,400. This amount is used under Section 45R(c) for limiting the small employer health insurance credit and under Section 45R9D)(1)(B) for determining who is an eligible small employer for purposes of the credit.
• Limitation on health flexible spending arrangements (FSAs):
For the taxable years beginning in 2014, the dollar limitation under Section 125(i) on voluntary employee salary reductions for contributions to health FSAs is $2,500.

Also provided are the eligible long-term care premiums and the amounts permitted under medical savings accounts (MSAs).

A temporary copy of Revenue Procedure 2013-35 is available here. For a copy of the news release issued along with Revenue Procedure 2013-35, click here.

Social Security announces 1.5% benefit increase for 2014
The Social Security Administration (SSA) has announced a 1.5% cost-of-living adjustment for 2014. For 2014, the Social Security taxable wage base will increase to $117,000. The Social Security Old-Age, Survivors, and Disability Insurance (OASDI) tax rate will be 6.2% on wages up to the $117,000 wage base.

The Medicare Hospital Insurance (HI) tax rate generally will remain at 1.45% on all wages. However, the employee portion of the Medicare HI tax increases by 0.9% on wages paid to an individual exceeding $200,000 ($250,000 for married couples filing jointly).

An individual who attains Social Security normal retirement age 66 in 2014 (born in 1948) will be eligible to commence unreduced Social Security benefits. Most individuals born in earlier years have a lower normal retirement age, and those born later will have a higher normal retirement age, with a maximum age of 67 for those born in 1960 and later.

For a copy of the SSA’s fact sheet, click here.

Medicare Part A and Part B COLAs for 2014
The Centers for Medicare and Medicaid Services (CMS) has issued the cost-of-living adjustments (COLAs) applicable to components in the Medicare program. For 2014, the rates will be as follows:

• Medicare Part A (hospital insurance) payroll tax remains at 1.45% (paid by employers and employees) on all wages, plus an additional 0.9% (for a total of 2.35%) for high-income individuals (earnings over $200,000 for an individual or over $250,000 for joint filers), to be assessed only on the employees.
• Medicare Part A inpatient hospital deductible increases to $1,216 (up from $1,184 in 2013).
• Medicare Part A daily coinsurance amounts: $304 for the 61st through 90th days of hospitalization in a benefit period (up from $296), $608 for lifetime reserve days (up from $592), and $152 for the 21st through 100th day of extended care services in a skilled nursing facility in a benefit period (up from $148).
• Medicare Part A premium to purchase coverage: $426 (down from $441 in 2013), and for those entitled to a reduced monthly premium, $234 (down from $243 in 2013).
• Medicare Part B deductible: $147.00 (unchanged from 2013).
• Medicare Part B standard monthly premium: $104.90 (unchanged from 2013).

For more information, click here.

CMS releases steps for employers to apply for coverage in the SHOP marketplace
CMS has released a chart with the five steps employers need to apply for coverage under the Small Business Health Options Program (SHOP) marketplace. The steps include:

1. Create an account at healthcare.gov.
2. Download the SHOP application; mail your application. CMS will notify you about your eligibility to buy coverage through the SHOP marketplace.
3. Log in to healthcare.gov and fill out the employee worksheet. This will be used to estimate your SHOP coverage costs and eligibility for your business.
4. Choose a health plan that meets your needs.
5. Come back to the online SHOP application and review which of your employees accepted coverage.

For more information, click here.

Regulatory roundup

More healthcare-related regulatory news for plan sponsors, including links to detailed information.

CMS updates process for opening, deciding, or reconsidering national coverage determinations
A new Centers for Medicare and Medicaid Services (CMS) notice updates the process used for opening, deciding, or reconsidering national coverage determinations (NCDs) under the Social Security Act (the Act). It addresses external requests and internal reviews for new NCDs or for reconsideration of existing NCDs. The notice further outlines an expedited administrative process to remove certain NCDs, thereby enabling local Medicare contractors to determine coverage under the Act. This notice does not alter or amend regulations that establish rules related to the administrative review of NCDs.

To read the entire notice, click here.

CMS issues notice of computer matching program (CMP)
In accordance with the requirements of the Privacy Act of 1974, as amended, CMS issued a notice announcing the establishment of a computer matching program (CMP) that CMS plans to conduct with the Social Security Administration (SSA).

The purpose of the Computer Matching Agreement (CMA) is to establish the terms, conditions, safeguards, and procedures under which SSA will disclose information to CMS in connection with the administration of insurance affordability programs under the Patient Protection and Affordable Care Act (ACA) and its implementing regulations. SSA will provide data to CMS and CMS will use SSA as needed to make initial eligibility determinations, eligibility redeterminations, and renewal decisions, including appeal determinations, for insurance affordability programs and certifications of exemption. Insurance affordability programs include:

  • Qualified health plan through an exchange established under the ACA
  • Advance payments of the premium tax credit and cost-sharing reductions
  • Medicaid
  • Children’s Health Insurance Program
  • Basic Health Program

Comments are invited on all portions of this notice. To read the entire notice at the Federal Register, click here.

CMS issues FAQ on health insurance marketplaces and income verification
The CMS has issued a frequently asked questions (FAQ) memorandum regarding health insurance marketplaces and income verification. The entire memo can be read here.

COLAs for retirement, Social Security, and health benefits

With the release of the September 2012 Consumer Price Index (CPI) the Bureau of Labor Statistics, the Social Security Administration (SSA), and the Internal Revenue Service (IRS) have announced cost-of-living adjusted figures for Social Security and retirement plan benefits, respectively, for 2013.

The 2013 adjusted figures for high-deductible health plans (HDHPs) and health savings accounts (HSAs) included in this Client Action Bulletin were released by the IRS earlier this year and are provided here for convenience.

This post was also published at RetirementTownHall.com.

Medicare Trustees’ report predicts 2024 insolvency date

The Medicare and Social Security Trustees released their reports on the programs’ financial solvency on April 23. The Social Security report is here, and the Medicare report is here. The Trustees summarized the results on the SSA Web site:

The long-run actuarial deficits of the Social Security and Medicare programs worsened in 2012, though in each case for different reasons. The actuarial deficit in the Medicare Hospital Insurance program increased primarily because the Trustees incorporated recommendations of the 2010-11 Medicare Technical Panel that long-run health cost growth rate assumptions be somewhat increased. The actuarial deficit in Social Security increased largely because of the incorporation of updated economic data and assumptions. Both Medicare and Social Security cannot sustain projected long-run program costs under currently scheduled financing, and legislative modifications are necessary to avoid disruptive consequences for beneficiaries and taxpayers.

These results are not very surprising as they are similar to previous reports. The Trustees strongly recommend action sooner than later:

Lawmakers should not delay addressing the long-run financial challenges facing Social Security and Medicare. If they take action sooner rather than later, more options and more time will be available to phase in changes so that the public has adequate time to prepare. Earlier action will also help elected officials minimize adverse impacts on vulnerable populations, including lower-income workers and people already dependent on program benefits.

As in past years, the Medicare actuary stated that cost projections based on current law may be unrealistic:

While the Part B projections in this report are reasonable in their portrayal of future costs under current law, they are not reasonable as an indication of actual future costs. Current law would require a physician fee reduction of an estimated 30.9 percent on January 1, 2013—an implausible expectation.

Further, while the Affordable Care Act makes important changes to the Medicare program and substantially improves its financial outlook, there is a strong likelihood that certain of these changes will not be viable in the long range. Specifically, the annual price updates for most categories of non-physician health services will be adjusted downward each year by the growth in economy-wide productivity. The best available evidence indicates that most health care providers cannot improve their productivity to this degree—or even approach such a level—as a result of the labor-intensive nature of these services.

Social Security and modified adjusted gross income

The Patient Protection and Affordable Care Act (PPACA) provides for an expansion of Medicaid eligibility for individuals who have an annual household income at or below 138% (including the 5% income exclusion) of the federal poverty level (FPL). Recent discussion has turned to individuals who may qualify for Medicaid even though their households have significant Social Security or Supplemental Security Income (SSI).

Using the 2009 American Community Survey (ACS) data published by the U.S. Census Bureau, this paper explores the potential number of individuals receiving Social Security or SSI and other family members within the household who may have been excluded from the Medicaid population expansion analyses because of the differences between defining household income under the public surveys and the modified adjusted gross income (MAGI). The MAGI methodology will be used to determine eligibility for Medicaid and exchange subsidies under the PPACA.

State-by-state results are provided in the appendices to this paper.

UPDATE: Here’s the Managed Care Online story on the analysis.