Your Monthly
Newsletter from Integrated Benefit Solutions
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July 2019
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IRS Releases Inflation-adjusted Limits for HSAs and
HDHPs for 2020
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On
May 28, 2019, the IRS released Revenue Procedure
2019-25 to announce the inflation-adjusted limits for
health savings accounts (HSAs) and high deductible health plans
(HDHPs) for 2020. These limits include:
- The maximum HSA contribution
limit
- The minimum deductible
amount for HDHPs
- The maximum out-of-pocket
expense limit for HDHPs
These
limits vary based on whether an individual has self-only or
family coverage under an HDHP.
HSA
Contribution Limits for 2020
The IRS limits for HSA contributions increase for 2020. Eligible individuals
with self-only HDHP coverage will be able to contribute up to
$3,550 for 2020, while eligible individuals with family HDHP
coverage will be able to contribute up to $7,100 for 2020. The
$1,000 catch-up contribution limit that applies to HSA-eligible
individuals who are age 55 or older will remain unchanged.
HDHP
Cost-sharing Limits for 2020
For self-only coverage in 2020, the HDHP minimum deductible will
increase to $1,400 and the out-of-pocket maximum will increase to
$6,900. For family coverage, these limits will increase to $2,800
and $13,800, respectively.
Action Steps
Because these limits change for 2020, employers that sponsor
these plans may need to make plan design changes for plan years
beginning in 2020.
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Making Emotional Intelligence Work for You
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Emotional
intelligence (EQ) is the ability to understand and manage your
emotions, as well as others’. It’s similar to empathy, but the
ability to manage the emotions effectively is key.
Many businesses are flocking to high-EQ individuals for their
attractive leadership style.
Leaders with high EQ are able to communicate their feelings
effectively, look at a situation from all perspectives and
maintain a positive outlook regardless of the situation.
Do We Need
EQ Here?
Effective managers tend to have higher EQ than others, so you may
already have leaders like them on board. They have good people
skills, can self-regulate and lead by example.
Managers who operate by more authoritarian practices get a much
different view of their workplaces than high-EQ leaders.
Authoritarian managers are identified by their lack of
self-awareness, making them hard to confide in. You want
employees to feel comfortable talking to their managers.
If your managers have high EQ, they will likely have a better
rapport with employees and be able to manage their needs more
effectively.
Most importantly, fostering high EQ invites more democratic
corporate management, which is critical for effectively managing
differences in opinion. You don’t have a shouting match when your
leaders are able to have a mature discourse.
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Don’t Forget About PCORI Fees
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The
Affordable Care Act (ACA) imposes a fee on health insurance
issuers and self-insured plan sponsors in order to fund
comparative effectiveness research. These fees are widely known
as Patient-Centered Outcomes Research Institute (PCORI) fees.
The PCORI fees were created to help patients, clinicians, payers
and the public make informed health decisions by advancing
comparative effectiveness research. Fees paid by health insurance
issuers and sponsors of self-insured health plans fund the
institute’s research, in part. The PCORI fees apply for plan
years ending on or after Oct. 1, 2012, but do not apply for plan
years ending on or after Oct. 1, 2019. For calendar year plans,
the fees will be effective for the 2012 through 2018 plan years.
Therefore, the 2018 plan year is the last plan year that these
fees will be effective, for calendar year plans.
Issuers and plan sponsors must pay PCORI fees annually on IRS Form 720 by
July 31 of each year. The fee will generally cover plan years
that end during the preceding calendar year. For the 2018 plan
year, PCORI fees are due by July 31, 2019.
How Much Are
the PCORI Fees?
On Nov. 5, 2018, the IRS published Notice 2018-85,
which increased the PCORI fee amount for plan years ending on or
after Oct. 1, 2018, and before Oct. 1, 2019 (that is, 2018 for
calendar year plans), to $2.45 multiplied by the average number
of lives covered under the plan.
Who Must Pay
the PCORI Fees?
The entity responsible for paying the PCORI fees depends on
whether the plan is insured or self-insured.
- For insured health plans,
the issuer of the health insurance policy is required to pay
the fees.
- For self-insured health
plans, the fees are to be paid by the plan sponsor.
Although
sponsors of fully insured plans are not responsible for paying
PCORI fees, issuers may shift the fee cost to sponsors through a
modest premium increase.
The Department of Labor (DOL) has advised that, because the PCORI
fees are imposed on the plan sponsor under the ACA, it is not
permissible to pay the fees from plan assets under ERISA,
although special circumstances may exist in limited situations.
On Jan. 24, 2013, the DOL issued a set of frequently asked
questions regarding ACA implementation that include a
limited exception allowing multiemployer plans to use plan assets
to pay PCORI fees (unless the plan document specifies another
source of payment for the fees).
What’s Next?
PCORI fees are reported and paid annually using IRS Form 720
(Quarterly Federal Excise Tax Return). These fees are due each
year by July 31 of the year following the last day of the plan
year. This means that, for plan years ending in 2018, the PCORI
fees are due by July 31, 2019. Covered employers should have
reported and paid PCORI fees for 2017 by July 31, 2018.
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HR Action Steps for Employee Name Changes
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With the summer wedding season underway, many
employees may soon be changing their names. As a result, in the
coming months, it is critical for employers to ensure that each
employee's name is accurately reflected on required forms and
internal records. Watch the video below to learn how to stay
compliant.
For additional HR guidance, visit our Human
Resources section.
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