Yearly Archives: 2015

  • Are Supplemental Accident Insurance Payouts Taxable? | CA Benefits Broker

    January 26, 2015

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    By Jeannine Mancini

    moneyMost health insurance plans cover emergency treatment, hospital stays and medical exams. If you are injured in an accident, your health insurance plan might not pay for all the incurred medical expenses. Supplemental accident insurance coverage pays cash benefits for illnesses or injuries caused by an accident, including fractures and physical therapy. The coverage is designed to help alleviate the burden of unexpected costs. Depending on how the policy is paid, the payouts may be classified as taxable income.

    How it Works

    Accident insurance coverage generally covers death or injuries caused by accidents on or off the job. There are a variety of coverage options available. Some employers offer the accidental coverage as a voluntary supplemental plan. You can also purchase private accident insurance to protect yourself if the coverage is not offered through your employer.

    Self-Paid Plans

    According to the IRS, if you paid the premiums on an accident or health insurance policy, the benefits are not taxable. Payouts from an insurance policy taken out through the employer are not taxed if you paid the premiums with after-tax dollars. If you pay the premiums of an accident insurance plan through a cafeteria plan, the premium was not included as taxable income and is considered paid by the employer and therefore the benefits are taxable.

    Employer-Paid Plans

    Accidental insurance payouts are taxable if the employer paid for the insurance plan. If you paid for an accidental insurance plan through the employer using pre-tax dollars, your benefits are taxable income. Any benefits received from your employer while injured are considered salary or wages and taxable as ordinary income. Additional taxable disability benefits include income from a welfare fund, state sickness or disability fund and association of employers or employees.

    Withholding and Reporting

    Report any taxable insurance payouts as wages, salaries, tips, etc., on your taxes. If you are suffering a long-term disability and receive taxable benefits, avoid a hefty tax bill by submitting a Form W-4S, Request for Federal Income Tax Withholding From Sick Pay, to the insurance company.
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  • 5 Important Tips for Choosing a Medicare Health Plan | California Employee Benefits

    January 20, 2015

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    old_manAs baby boomers retire in record numbers — 10,000 Americans a day — more seniors than ever will be asking themselves, “How do I choose a Medicare health plan that’s right for me?”

    “Seniors should look for a high-quality health plan that has a team of doctors and specialists, who work together to coordinate your care and keep you healthy,” said Patrick Courneya, M.D., medical director, Kaiser Permanente Medicare Health Plans.

    Dr. Courneya offers these five important tips to help older adults make an informed decision for a healthy future:

    1. Know when to enroll. Anyone who first becomes eligible for Medicare as they turn 65 can enroll during the three-month period before or after their 65th birthday. Those who choose to enroll after this window of time may pay a late-enrollment penalty. Medicare-eligible members may join or change plans during open enrollment from Oct. 15 to Dec. 7 each year, or they can join a Medicare five-star quality-rated plan nearly all year long. See tip four for star ratings details.

    2. Know the difference between Medicare and Medicare Advantage. Medicare is the national health insurance program that began in 1965 and covers millions of Americans who are 65 and older, and those with certain disabilities. Medicare Advantage plans are offered by private organizations and approved by Medicare. Some Medicare Advantage plans offer extra benefits such as vision. Enrollment trends show that nearly one in three people who have Medicare are enrolled in a Medicare Advantage plan.

    3. Confirm health plan doctors accept new Medicare members. Choose a Medicare health plan that offers a network of doctors and specialists who accept new Medicare members. Some physicians are opting out of caring for Medicare members. Also, keep in mind, as Medicare members age, they may need access to more specialists who accept Medicare members.

    4. Use the Medicare 5-star Quality Ratings Tool. The Medicare Star Quality Ratings system was created by the Centers for Medicare & Medicaid Services to help beneficiaries choose high-quality Medicare health plans. Plans receive an overall rating from one to five stars, with five being the highest for quality and service. Medicare members have the benefit of joining a five-star plan nearly all year — from Dec. 8 through Nov. 30 of the next year. They must be eligible and live where a five-star plan is offered.

    5. Review your health care needs annually. A Kaiser Family Foundation survey found that many beneficiaries — once enrolled in a Medicare health plan — don’t often feel confident they made the right choice, and don’t review their plan if their health care needs change. Medicare enrollees can use the Medicare star ratings to help them feel confident about choosing a high-quality plan.

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  • We ignored it…and then it was too late…Medi-Cal cuts finally go into effect

    January 14, 2015

    As if doctors were not getting paid enough already, the Affordable Care Act promised a boost to their earnings, but with a deadline, at which time it would not only be taken away but further cuts would be applied.  Just at the time when millions more people are enrolling in Medi-Cal, a recent study by the Urban Institute estimated fee reductions will average about 40% nationwide.  In large states like California, New York, New Jersey and Illinois, the cuts could exceed 50%  The original temporary program increased fees for 2013 and 2014 but that has now been removed, and attempts to get Congress to extend it have been rebuffed.    So what happens now?  Doctors might not drop their current Medi-Cal load, but what are the expectations (and what is appropriate from a revenue standpoint) for their accepting new Medi-Cal patients?

  • Committee On The Shelterless | Arrow Benefits Group

    January 12, 2015

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    Committee On The Shelterless (COTS) is powerful blend of nurturing and structure, they have helped thousands get back under a roof of their own. They provide almost 350 beds every nightand their Petaluma Kitchen serves over 124,000 meals a year and delivers over 750,000 pounds of food annually. The award-winning programs have helped thousands to rebuild their lives. COTS is a tax-exempt 501(c)3 organization.

    900 Hopper Avenue
    Petaluma, CA 94952
    (707) 778-6380

    Serves a no-cost mid-day meal seven days a week, 365 days a year for low and very-low income men, women and children.Food donations accepted daily, 7AM to 2PM Petaluma Kitchen Food Box Program is an adjunct to the Petaluma Kitchen’s daily meal program, food is delivered each week to very-low income seniors and families in Petaluma. A lifeline to help prevent a family or senior from slipping into homelessness.In addition to providing nourishment to those in need, staff at the Kitchen are often the first contact for families or individuals who need referrals to other community resources, such as housing, clothing, or medical care.Volunteer food sorters, packers and drivers meet every Saturday morning at the Kitchen to prepare and deliver emergency food to families and seniors who are referred by local churches, social service agencies and concerned friends or family.

    Lunch served Daily 11:30am-1:00pm Food Donations 7AM to 2PM daily Sign ups for Food Box Sun to Thurs 9:30AM to 11AM

    Must meet income requirement, be a resident of Petaluma

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  • Top 2014 UBA Publications for Employers | Petaluma Employee Benefits

    January 9, 2015

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    Posted by Bill Olson

    papersUBA publishes many white papers, an executive summary of its annual Health Plan Survey, and custom reports. Below are the publications that garnered the most traffic and requests in 2014.

    1.  The Employer’s Guide to “Play or Pay”.

    With every day that goes by, the nation’s employers move a step closer to having to make “Play or Pay” decisions. The decisions are far from easy…and the clock is ticking. Download publication.

    2.  2014 Health Plan Survey Executive Summary.

    As employers consider their health insurance solutions in the face of health care reform, benefits benchmarking data is vital to accurately evaluate costs and determine if a plan is competitive. The 2014 UBA Health Plan Survey Executive Summary provides the latest trends in health plan costs, design, and plan type, plus information on wellness programs and the impact of the Patient Protection and Affordable Care Act (PPACA). Download publication.

    3.  A Business Case for Benefits Communications.

    As the cost of employer-sponsored health insurance continues to rapidly outpace wages and inflation, now more than ever employers are looking for ways to keep costs down. One way to do so (that requires very modest investment) is by improving benefits communication, a critical component of your employee engagement strategy. Download publication.

    4.  Counting Employees Under PPACA.

    As you likely know, the “employer mandate” section of the Affordable Care Act requires companies with 50 or more employees to either provide adequate and affordable coverage to their workers or pay tax penalties. But just how are those 50 to be counted? Request publication.

    5.  Custom UBA Health Plan Benchmarking Report.

    Employers are increasingly challenged to find accurate information that will help them evaluate their health plan design, manage rising costs and prepare for the future of health care. Making the right strategic business decisions starts with having all the facts. The UBA Health Plan Survey is the most comprehensive benchmarking survey of plan design and cost ever conducted, providing employers of all sizes more detailed — and therefore more meaningful — benchmarks and trends than any other source. Get a competitive edge in recruiting and retention of a superior workforce and planning for health care reform by evaluating and comparing your health plan to other companies. Request a report.

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  • Source of Injury Restrictions and Group Health Plans | CA Benefits Broker

    January 5, 2015

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    Our self-funded plan includes exclusions for hazardous activities and hobbies, including injury or illness arising from use of snowmobiles, personal aircraft, personal watercraft, four wheel recreational vehicles, etc. Does the Affordable Care Act (ACA) prohibit this type of exclusion or limitation for grandfathered and nongrandfathered plans?


    Federal regulations under the Health Insurance Portability and Accountability Act (HIPAA) pertain to these types of benefit exclusions, which are called “source of injury restrictions.” Under HIPAA, a group health plan may exclude benefits for the treatment of certain injuries based on the source of that injury, except that the plan may not exclude benefits otherwise provided for treatment of an injury if the injury results from an act of domestic violence or a medical condition. The Department of Labor guidance on this matter provides the following examples:

    • Example of a permissible source-of-injury restriction: A plan provision that provides benefits for head injuries generally, but excludes benefits for head injuries sustained while participating in bungee jumping, as long as the injuries do not result from a medical condition or domestic violence.
    • Example of an impermissible source-of-injury restriction: A plan provision that generally provides coverage for medical/surgical benefits, including hospital stays that are medically necessary, but excludes benefits for self-inflicted injuries or attempted suicide. This is impermissible because the plan provision excludes benefits for treatment of injuries that may result from a medical condition (depression).

    The next issue is whether source of injury restrictions that comply with HIPAA also comply with the Affordable Care Act (ACA) provisions for essential health benefits. Essential health benefits (EHBs) are health care items and services within 10 benefit categories, such as “emergency services” and “hospitalization.” Large group insured plans and self-funded plans are not required to cover EHBs. If an EHB is covered by the plan, however, the coverage must conform to applicable ACA provisions, including the ACA’s prohibition against lifetime and annual dollar limits (and, if nongrandfathered, the ACA’s limits on patient cost-sharing).

    The regulatory guidance currently available regarding EHBs and self-funded health plans does not specifically address source of injury restrictions. It appears that restrictions permitted under HIPAA (if designed appropriately) would also be considered compliant with the ACA, but there is no specific guidance for confirmation.

    Please note that plan provisions must be applied and administered consistently for all similarly situated individuals. Many claims administrators find source of injury restrictions very difficult to administer. You should ensure that claims can be administered effectively before deciding to implement any source of injury restrictions. Claims denied in whole or in part based on a source of injury restriction are deemed an adverse benefit determination under the Department of Labor’s claim appeal and review guidelines for group health plans.

    Please work with your benefits legal counsel and/or pose this question to one of the carriers marketing large group insured plans in your state. If the source of injury restriction would be permissible for the carrier’s insured business, then it would also be permissible for your self-funded plan.

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  • Wellness Programs Feeling the Heat as the EEOC Increases Its Efforts – Part 2, Federal Regulations | CA Employee Benefits

    January 2, 2015

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    Posted by Jennifer Kupper

    HeatAs mentioned in the first posting, wellness programs must be analyzed under a myriad of laws and regulations. This post will discuss generally the wellness program landscape in light of the Americans with Disabilities Act (ADA)/Americans with Disabilities Act Amendments Act (ADAAA), the Genetic Information Non-Discrimination Act (GINA), the Patient Protection and Affordable Care Act (PPACA), and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Nondiscrimination Regulations. This is a 30,000-foot overview of laws and regulations that are in need of microscopic scrutiny when applying them to a wellness program.


    The ADA/ADAAA generally prohibits discrimination in employment against a qualified individual on the basis of a disability in regard to employee compensation and other terms, conditions, and privileges of employment. Further is a prohibition from requiring a medical examination and making inquiries of an employee as to whether he or she has a disability, or as to the nature or severity of a disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity.

    However, there is a statutory safe harbor that exempts certain insurance plans from the ADA’s general prohibitions. The “benefit plan exception” states that the ADA shall not be construed as prohibiting an employer from establishing, sponsoring, observing, or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on, or not inconsistent with, state law or where the plan is not subject to state law (a self-funded benefit plan) so long as the exemption is not used as a subterfuge for discrimination. As such, voluntary medical examinations and/or histories, which are part of a group wellness program, are permissible so long as strict confidential processes are followed.

    What does it mean to be voluntary? There is no short answer, but the abbreviated answer is that a wellness program may be voluntary if the employer neither requires participation, nor penalizes employees who do not participate. The U.S. Equal Employment Opportunity Commission (EEOC) once posited that a health reimbursement arrangement (HRA) administered as part of a wellness program that meets the incentive limitations of HIPAA wellness regulations – no more than a (then) 20% reward – would be deemed voluntary and would not violate the ADA. Unfortunately, this portion of the opinion letter was withdrawn because it was outside the scope of the request. The position currently held by the EEOC is that an incentive is a veiled penalty, which, in essence, makes the program involuntary and, thus, violates the ADA. However, this is in conflict with the “benefit plan exception,” noted above.


    Generally, GINA prohibits both the acquisition of genetic information as well as the use of genetic information by employers in employment decisions. As it applies to group health plans, Title I prohibits discrimination in health insurance premiums based on genetic information and places limitations on genetic testing and the collection of genetic information. Title II prohibits the use of genetic information in the employment context, restricts employers from requesting, requiring, or purchasing genetic information, and strictly limits employers from disclosing genetic information.

    In general, Title II limits the conditions under which an employer might lawfully collect genetic information pursuant to an employer-sponsored wellness program and it requires those employers to follow strict privacy and confidentiality mandates. Under GINA, it is unlawful for an employer to request, require, or purchase genetic information with respect to an employee or an employee’s family member. There is an exception if the information is part of a wellness program, subject to strict adherence of the following three requirements:

    1. The employee provides prior, knowing, voluntary, and written authorization;
    2. Only the employee (or family member if the family member is receiving genetic services) and the licensed health care professional, or board certified genetic counselor involved in providing such services, receive individually identifiable information concerning the results of such services; and
    3. Any individually identifiable genetic information provided in connection with the services is only available for purposes of such services and shall not be disclosed to the employer except in aggregate terms that do not disclose the identity of specific employees.

    Again, what does it mean to be voluntary? In the preamble to the 2010 final regulations implementing Title II, the EEOC concluded that a wellness program is voluntary if the program neither requires participation, nor penalizes employees for non-participation. The EEOC concluded that it would not violate Title II for an employer to offer individuals an inducement for completing an HRA that includes questions about family medical history, or other genetic information, as long as the employer specifically identifies those questions and makes clear, in language reasonably likely to be understood by those completing the HRA, that the individual need not answer the questions that request genetic information in order to receive the inducement. The EEOC specifically declined to take the approach taken in HIPAA regulations – no more than a (then) 20% reward – and, instead, added that adherence to Title II of GINA does not guarantee adherence to Title I of GINA, ADA, or HIPAA.


    The general rule pursuant to HIPAA nondiscrimination provisions is that a plan or issuer is prohibited from charging similarly situated individuals different premiums or contributions on the basis of a “health factor.” However, there is an exception to the general rule if the reward, i.e., premium discount, is based on participation in a program reasonably designed to promote health or prevent disease, i.e., a “wellness program.”

    When analyzing a wellness program under PPACA and HIPAA, the first step is to determine whether the wellness program – or, as it may be the case, which part of the wellness program – is “participatory” or “health-contingent.” Participatory wellness programs are not required to follow HIPAA nondiscrimination provisions, discussed below. However, and to the point of this blog series, participatory (and health-contingent) wellness programs should be reviewed and scrutinized against the provisions of GINA, ADA, the Employee Retirement Income Security Act (ERISA), Internal Revenue Code (IRC), and other federal and state laws.

    Participatory wellness programs are defined under HIPAA nondiscrimination final regulations as programs that either do not provide a reward, or do not include any conditions for obtaining a reward that are based on an individual satisfying a standard that is related to a health factor. Examples include a program that reimburses employees for all or part of the cost of membership in a fitness center, a diagnostic testing program that provides a reward for participation and does not base any part of the reward on outcomes, and a program that provides a reward to employees for attending a monthly, no-cost health education seminar.

    If the wellness program, or a piece of the wellness program, is participatory, it does not have to follow HIPAA nondiscrimination regulations. However, if the wellness program, or a portion thereof, is health-contingent, then the program must be analyzed pursuant to HIPAA nondiscrimination regulations.

    HIPAA Nondiscrimination Provisions and the Wellness Program Exception

    Health-contingent wellness programs, in contrast to participatory programs, require an individual to satisfy a standard related to a health factor to obtain a reward or require an individual to undertake more than a similarly situated individual based on a health factor in order to obtain the same reward. The standard may be performing or completing an activity relating to a health factor, or it may be attaining or maintaining a specific health outcome. The final regulations further subdivided health-contingent programs into (1) activity-only wellness programs, and (2) outcome-based wellness programs. While there are some differences, both types are permissible only if the program adheres to the five prongs:

    1. Be reasonably designed to promote health or prevent disease (the same rules apply to activity-only and outcome-based programs);
    2. Give employees a chance to qualify for the incentive at least once a year (the same rules apply to activity-only and outcome-based programs);
    3. Cap the reward or penalty at 50% of the total cost of coverage for avoiding tobacco and at 30% for all other types of wellness incentives (the same rules apply to activity-only and outcome-based programs);
    4. Provide an alternative way to qualify for the incentive for those who have medical conditions (different rules apply to activity-only and outcome-based programs); and
    5. Describe the availability of the alternative method of qualifying for the incentive in written program materials (the same rules apply to activity-only and outcome-based programs).

    These rules set forth criteria for an affirmative defense that can be used by plans and issuers in response to a claim that the plan or issuer discriminated under HIPAA nondiscrimination provisions.

    This is not the end…

    The above is merely a general overview of the innate tension created by conflicting regulations, compounded by the lack of guidance from the commission, which is confronting concerned employers who have chosen to be proactive in combating the costs of health care and improving consumers’ lives. The next part of the series will discuss the movements in the courts, the backlash felt by the EEOC, and steps employers should take.

    For more data on wellness programs and other plan design trends, download the 2014 Health Plan Executive Summary. This survey – which has been conducted every year since 2005 – is the nation’s largest health plan survey and provides more accurate benchmarking data than any other source in the industry. You can contact a UBA Partner Firm for a customized benchmark report based on industry, region and business size.

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