Two Minute Blog

In Light of the COVID-19 Pandemic, the IRS Announces Mid-Year Plan Changes are Allowed to FSA Elections

The IRS Announces New Guidelines for 2020

You can read all about the new IRS guidelines regarding mid-year changes to health and dependent care Flex Spending Accounts (FSAs) here Additionally, we’ll break it down as to what it means for you and your employees who’ve already made 2020 FSA elections. Furthermore, here is another great article about this topic on Forbes.

Generally, employees make their FSA elections at the end of the previous year for the coming new year. Once these elections are made, typically they cannot be changed mid-year. In the words of Mike Barrett, we advise folks to consider the following when planning new year elections:

“A rearview mirror is the best crystal ball”

FSAs are really a use it or lose it type of account. Although, employers can elect to allow for a short grace period or a small carryover each year but not both. If employees misjudge how much healthcare they’ll consume in the coming year, they may, at worst, lose some money or miss out on some tax advantages. All in all, though, FSAs are a great way to pre-fund a tax advantage account for healthcare and dependent care expenses.

However, due to the COVID-19 pandemic, a lot of things have changed! This includes the need for dependent care and even healthcare. Fortunately, the IRS has taken FSAs into consideration.

Depending upon whether your employees now realize they are overfunded or underfunded with their health and/or dependent care FSAs, they can make the appropriate mid-year change.

What Can Be Changed?

Here are all the things that employees can change mid-year to FSAs:

  • Make a new election to employer-sponsored FSA on a prospective basis
  • Decrease FSA election on a prospective basis
  • Increase FSA election, within the 2020 FSA contribution limits, on a prospective basis
  • Revoke 2020 FSA election amounts on a prospective basis
  • Employers may amend their § 125 cafeteria plan to have an extension of time for incurring claims. This is for plans which either have the grace period ending in 2020 or a plan year ending in 2020.

The last bullet point deserves a little more of an explanation. Typically, employers may allow either, but not both, a carryover or a grace period for unused FSA funds. The current carryover limit is $550 and the current grace period is up to 2 months and 15 days. The IRS is now allowing an extension of time for incurring claims to be available to both § 125 cafeteria plans with a grace period and a carryover.

The IRS lists some practical examples in their publication (pages 10 & 11) that help clarify different scenarios.

Changes for Health Savings Accounts (HSAs)

To be eligible to contribute to an HSA, one must be enrolled on a high deductible HSA qualified plan.

We’ve all seen an increase in telemedicine appointments lately! Typically, telemedicine arrangements provide coverage before the minimum annual deductible is met which would disqualify a plan from being HSA qualified. However, section 3701 of the CARES Act amended § 223 of the code to temporarily allow HSA-eligible plans to cover telehealth and other remote services.

Closing

The COVID-19 pandemic is affecting many different aspects of the healthcare world. We will continue to write about these changes as they evolve.

 

 

 

BBG Telehealth

COVID-19 ACCELERATES USE OF VIRTUAL HEALTHCARE: WILL THIS GENIE EVER GO BACK IN THE BOTTLE?

Until now, virtual healthcare could still be described as something of a novelty utilized by “early adopters” like those consumers that traditionally are the first to use a new technology.

I bet, until now, if you asked a healthcare expert about when virtual healthcare would become truly a customary part of our national health landscape, most would have predicted a gradual increase in use and a general market acceptance over roughly the next 10 to 20 years.

Boy, with the emergence of the Coronavirus, it sure makes me think those expectations are quickly changing.

As a consequence of the Coronavirus Pandemic and the Stay-At-Home orders and other emergency responses to the pandemic that we have been living out around the country, virtual healthcare is emerging as a significant part of our health care delivery system.

Many patients and their providers who have experienced the convenience of virtual healthcare might not want to go back to a traditional in-person archetype of care that’s been the age-old norm.  At least as it relates to the blocking and tackling of our common, everyday healthcare needs.

Virtual visits have been cropping up as a covered service in many group health plans and even some Medicare Advantage plans recently.  It sure seems now, though, that as a result of this pandemic the door has been kicked wide-open for greater utilization of virtual healthcare services across our healthcare system.

Lots of employers who largely didn’t give virtual health a whole lot of thought before the Corona crisis are paying more attention and even started touting virtual office visits as an important employee benefit.  Many plans are now covering virtual visits and the like with no copays or out-of-pocket cost to employees and their dependents.  (However, please check with your specific plan regarding cost.)

And, even Medicare is making great accommodations for expanding virtual healthcare as a Medicare benefit, at least temporarily until the pandemic situation runs its course.

WILL THIS GENIE EVER GO BACK IN THE BOTTLE?

I doubt it.

 

Medicare enrollment form

How to Enroll in Medicare During the Corona Virus Emergency

Here are the latest Medicare Enrollment postings to the Social Security & Coronavirus Disease (COVID-19) website:

Can I enroll in Medicare?

Date: April 14, 2020

If you already have Medicare Part A and wish to sign up for Medicare Part B under the Special Enrollment Period (SEP), please complete form CMS 40-B, Application for Enrollment in Medicare – Part B (Medical Insurance) along with the CMS L564-Request for Employment Information and proof of employment, Group Health Plan (GHP), or Large Group Health Plan (LGHP). Return the completed forms to your Social Security office by mail or by fax to 1-833-914-2016.

Note When completing the CMS L564

  • State on the form “I want Part B coverage to begin (MM/YY)”
  • If possible, your employer should complete Section B.
  • If your employer is unable to complete Section B, please complete that portion on behalf of your employer without your employers signature and submit one of the following forms of secondary evidence:
    • income tax form that shows health insurance premiums paid;
    • W-2s reflecting pre-tax medical contributions;
    • pay stubs that reflect health insurance premium deductions;
    • health insurance cards with a policy effective date;
    • explanations of benefits paid by the GHP or LGHP; or
    • statements or receipts that reflect payment of health insurance premiums.

Can SSA help me by phone?

Date: April 14, 2020

During the COVID-19 pandemic, we are asking the public to first try to use our online services before calling us.

If you cannot use these online services, although our offices are closed to the public, employees from those offices are assisting people by telephone. You can find the phone number for your local office by using our Field Office Locator and looking under Additional Office Information. (Note, if you already had a scheduled appointment with your local office, an employee from that office will attempt to call you at your scheduled appointment time.)

If you cannot use our online services or reach your local office, you may call our National 800 Number, where you may be able to take care of your business by using one of our automated telephone services without having to wait for a telephone agent. If you need to speak with an agent, be aware that wait times are longer than usual. You may have to wait 90 minutes or longer, which is why we encourage you to try our online services or call your local office first.

Main Nationwide Phone Number — 1-800-772-1213

To Find Your Local Office Phone Number Go To Local Field Office Locator , enter your zip code and then look for the phone number at the bottom of the page.

For more information you can go here – https://www.ssa.gov/coronavirus/

Seven Tips on Working from Home

BBG has a long history of many of its employees working from home. Recently, the rest of the team has joined in this practice. As a result, some of the newbie home workers needed tips from our more veteran home workers!

This blog post is a compilation of advice from the BBG workers who have been working from home for years. I was actually surprised by some of these suggestions but as I’ve transitioned myself into this world of remote work, I’m appreciating and embracing the tips. We hope you find these useful as we all do our part to flatten the curve of this COVID-19 pandemic!

BBG’s Best Tips on Working from Home

#1 Create a Healthy Workspace at Home

This is the number one suggestion when working from home. If possible, it’s advisable that your home workspace be separate from other spaces that you typically use for relaxing. Additionally, you want it to be one that is free of distractions so that you can stay on task. Ideally, a room created as an office will provide this. However, if that’s not possible consider creating a separate space in a corner of a room.

A particular co-worker said that keeping your personal phone away from your workspace will aid in limiting distractions. While this may not be possible if you need to make work calls from your cellphone, we do advise turning off notifications from social media, email and other phone apps that may be a distraction.

Obviously, you’ll want your home workspace to be comfortable and well-lit so here are a few resources we’ve found.

A BBG colleague who has been doing this for years, recommended this large electric foot warmer heated mat if your space is cold and/or you have the tendency to be cold. This is a nice way to experience mild radiating heat.

Working in a well-lit area, especially one with natural light is helpful for mood. When natural light is not possible, having lights that are easy on the eyes and can be adjusted for brightness is useful. Many of us use this lamp we found on Amazon.

#2 Dress for Work

Working in pajamas and bathrobes is oh so tempting!! I may or may not be guilty of doing this myself.  😉

However, our colleagues with veteran experience of working from home recommend starting the morning out by getting dressed just as you would if you were going into the office. One colleague said, “yes it’s nice to be comfortable but it may also affect your work.”

If your normal office attire is highly professional such as suits and ties, you probably would want to relax it to a more business casual attire at home.

Maybe you can even relax from business casual to something a bit more comfortable but the point is to get out of those PJs, shower and get dressed!

#3 Keep Communicating with Colleagues

It’s easy to feel isolated from your co-workers while working at home. That’s why it’s more important than ever to stay in touch with them when you work remotely. One colleague said, “sometimes you get the feeling ‘they already know what I am doing.’ But, in fact, they just need to hear from you to confirm that.”

At BBG many of us have started using Microsoft teams as a way to stay in touch.

There is no water cooler talk while working remotely so it’s important to create a space for open communication. Another option, which BBG uses for client interaction, is Zoom video conferencing. Amazingly they are offering expanded support during the COVID-19 pandemic.

#4 Take Breaks & Stock up on Healthy Snacks

Long periods of sitting still and working at a desk can produce lethargic feelings. Take appropriate breaks to get up to stretch and move.

A couple of colleagues mentioned that they are snacking more while working from home because it’s available. A colleague who has been doing this for some time gave a great suggestion of stocking up on healthy snacks such as fruits and vegetables. Fuel your brain rather than draining it!

Another colleague suggested drinking more water. It’s easy to sit at a desk and not be thirsty so proactively drinking water is a good habit to build.

#5 Boundaries

Well, this one could overlap with the suggestion to not work in your PJs but BBG’s main concern here is that our remote workers actually work too much. Dedicated workers who have home offices need to practice boundaries and know when to turn off work for the day. It’s advisable to still keep normal working hours when working at home. Actually, it becomes even more important because the separation from home and office is a short walk.

One colleague stressed this point by saying, “DON’T think that just because you are home you need to work 24/7.”

Healthy boundaries between work and home life become even more important working remotely so setting up strick hours from the start is the way to build this habit.

#6 Have a Good Co-Worker

This my favorite tip and unfortunately one that I cannot embrace in my apartment, but…how precious is that face?!

The BBG colleague who made this suggestion was kind enough to supply a picture of his co-worker.

Um. if I had this face looking up at me during the day, I would be greatly comforted.

BBG wrote a post in the past about how dogs can play a role in healthcare but how about them playing a role in creating a healthy office environment?

I’m certain that pets all across the world are happy that their masters are now working from home. After all, they are pack animals and thrive when they are with people of other pets. Additionally, humans thrive in a community so enjoy this time of sharing offices.

We would love to see pictures of your office companions so please share them with us!!

#7 Practice Safety with Your Devices

Here is a great article from the Tampa Day Times about how to keep your devices safe. The number of people now working from home has grown exponentially which means we all may be vulnerable to attackers who want to take advantage of this. As this article outlines here are some ways to stay safe:

  • Update your software
  • Check your router password
  • Use strong passwords
  • Beware of Coronavirus-themed phishing emails

Again, check out this article to read more about this.

Closing Thoughts

In closing, we are discovering this takes some self-discipline. The key to building healthy habits is to start implementing them form the beginning. Stay in touch and encourage one another; we are all in this together!

Here are some other great articles we’ve read around the web on this topic:

Lastly, if BBG can further assist you with more granular details on the following, please reach out:

  • Communication software (phones, extensions, instant messaging)
  • Habits (how we keep in touch deliberately)
  • How our “work from home colleagues” set up their lives to remain engaged
  • How to be attentive to separating work/home-worlds and be able both to “plug-in” and “un-plug”
  • We can share limitations and potential pitfalls that we work to eliminate.
  • How we train our dogs not to bark while we are on the phone…just kidding on that one 😉

 

Medicare and Employer-based Coverage

BBG - Medicare and Employer-based Coverages

When you have both Medicare and employer-based coverage, Medicare will either pay primary or secondary for your medical costs. When Medicare is primary insurance, Medicare pays for your medical bills firstWhen Medicare is the secondary insurance, Medicare pays after the employer-based coverage pays . Usually, secondary insurance pays some or all of the costs left after your primary insurance has paid (for example, deductibles and copays).

This month’s Medicare Minute (courtesy of the Medicare Rights Center) addresses these and other questions:

How does Medicare work with job-based insurance?

What are the differences between primary and secondary insurance?

How does Medicare work with retiree insurance and COBRA coverage?

To read or download it, click here — Medicare and Employer-based Coverage.

Medicare Enrollment Form

UNEXPECTED MEDICARE PENALTIES AND INCOME-RELATED ADJUSTMENTS: CAN YOU APPEAL? HOW?

Medicare can be confusing and lead to unexpected costs. This is especially true if you’re not informed on the front end when you first become eligible for Medicare; or, if you delay enrollment, when you enroll that first time. The three most common surprise-cost culprits sprung on those new to Medicare include:

1.)   Medicare Income-Related Monthly Adjustment Amount (IRMAA)

2.)  Part B late enrollment penalty (LEP)

  • For each 12-month period you delay enrollment in Medicare Part B, you may have to pay a 10% Part B premium penalty, UNLESS you have other credible coverage that is compliant with Medicare rules (such as insurance based on your or your spouse’s job-based insurance).

3.)  Part D late enrollment penalty (LEP)

  • For each month you delay enrollment in Medicare Part D (Prescription Drug Plan), you may to pay a Part D late enrollment penalty unless you have creditable coverage that is as good or better than the basic Part D benefit or get “extra help” (Low Income Subsidy).

The good news, if you want to call it that, is if you get dinged for income adjustments or penalties – Yes, you can appeal.

In cases of IRMAA adjustments you can request a new initial determination right out of the chute if you have experienced a life-changing event that caused an income decrease, or if you think the income information Social Security used in making the initial determination is incorrect. If you don’t agree, you can also file for reconsideration or file an appeal.

You can also appeal your Part B and/or your Part D Late Enrollment Penalties (LEP) though the processes for doing so are different for Part B and Part D.

For Part B LEP, just follow the instructions on the notice that you received informing you of the penalty. You will need to prove that you were enrolled either in Part B or in coverage through current employment during the period of time for which you are being penalized.

For Part D LEP, you can appeal the penalty if you think you were continuously covered or if you think the amount of the penalty was calculated incorrectly. This appeal must be filed with Medicare’s contractor (MAXIMUS Federal Services) for handling appeals.

For more information on adjustments, penalties and how to file an appeal refer to this month’s Medicare Minute Newsletter courtesy of The Medicare Rights Center.

And go to:

Medicare Part B Premium Appeals | HHS.gov

Medicare IRMAA Life Changing Event Form

Late Enrollment Penalty (LEP) Appeals

If you have questions, we are happy to help:
Email: 65Plus@bbginc.net
Phone: 866-845-8600; Ext 130

Medicare Basics: 5 Things to Know About Medicare Part A

There are four basic parts of Medicare: A, B, C, and D. Each part helps pay for certain medical services. Here are 5 things to know about Part A:

#1  Part A is one of two parts of what is considered “Original Medicare”. (Part B is the other).
BBG65Plus Medicare Health Insurance

#2  Most people don’t have to pay a premium for Part A. They’ve already paid into the system in the form of the Medicare tax deductions in their paycheck if they (or their spouse) worked at least 40 calendar quarters (10 years) in the U.S.

#3  Medicare Part A helps cover the costs of inpatient care in the hospital, short-term skilled nursing facilities, home health care, and hospice care.

#4  Benefit periods apply. These benefit periods measure the use of inpatient hospital and skilled nursing facility services. Medicare will stop paying for your inpatient-related hospital or skilled nursing facility costs (such as room and board) if you run out of days during your benefit period.

#5  Most people either add a Medicare Supplement (Medigap) Plan or they opt to enroll in a Medicare Advantage Plan.  Both of these options in different ways can serve to limit liability, extend benefit periods, and cover some out of pocket costs (like deductible and coinsurance) associated with Medicare Part A.

You can read more about Medicare Part A covered services in this Medicare Minute Newsletter courtesy of the Medicare Rights Center.

 

BBG65Plus

 

FSA and HSA Contribution Limits for 2020

Every year the Internal Revenue Service (IRS) announces new contribution limits for tax-advantaged accounts. Many of these accounts are indexed for inflation so the limits rise year over year. This article is geared at educating you about the new contribution limits for two tax-advantaged accounts in relation to healthcare.

Flex Spending Account (FSA) 2020 Limits:

FSA limits have been announced for 2020. If you have health insurance through your job, you can utilize an FSA for using pre-tax money to cover your out-of-pocket healthcare expenses. FSAs are more of a use it or lose it type of account so it’s best to estimate the amount of healthcare you typically consume before making your elections.

The IRS announced on October 31, 2013, that employers would be allowed to either offer a carryover or a grace period for FSAs effective in 2014. If you have access to an FSA through your employer we advise you check with them on whether or not they offer one of the following options:

  1. Two and a half months grace period in the new year to use up the previous year’s dollars
  2. $500 carryover to use in the new year

Here are the health FSA contribution limits for 2020 compared to 2019 and 2018:

Dependent care FSA limits are not indexed for inflation and so they remain at:

Health Savings Account (HSA) 2020 Limits:

If you are on an HSA qualified plan you are able to contribute to an HSA. If you qualify, HSAs have several benefits over FSAs:

  1. The contribution limits are higher
  2. You never lose the money
  3. You can invest HSA funds in mutual funds

Here are the HSA contribution limits for 2020 in comparison to 2019 and 2018:

Closing Thoughts

We realize healthcare costs continue to increase so any opportunity to save on taxes should be considered. Please check with your employer’s human resource department to confirm which of these accounts you may be eligible for.

Theme pic by Emma Matthews Digital Content Production on Unsplash

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