California Employers: Be Prepared for These New Workplace Laws

Updated anti-harassment policies and practices top the list for 2019

California lawmakers considered a number of workplace-related bills this session addressing sexual-harassment prevention, lactation accommodations, pay equity and more. Gov. Jerry Brown had until the end of September to sign or veto bills. Here’s what employers need to know about new laws that will take effect in 2019 and vetoed bills that may resurface.

Anti-Harassment Requirements

Employers may need to expand their sexual-harassment-prevention training to comply with new standards. Brown signed SB 1343, which requires businesses with five or more employees to provide sexual-harassment-prevention training to all workers by Jan. 1, 2020, and every two years thereafter. Currently, only businesses with 50 or more employees must provide sexual-harassment-prevention training to supervisory employees.

“While such training has always been a good practice, soon the training will become mandatory,” said Christopher Olmsted, an attorney with Ogletree Deakins in San Diego.

Continue reading California Employers: Be Prepared for These New Workplace Laws

IRS Announces HSA Limits for 2019

The IRS recently announced that limits for the HSA contributions will increase in 2019.  The HDHP (high deductible health plan) maximum out-of-pocket limits will also increase for 2019.

Effective January 1, 2019, HSA Contribution Limits:

  • Single Maximum: $3,500
  • Family Maximum: $7,000

HDHP Maximum:

  • Single: $6,750
  • Family: $13,500

ACA Affordability Percentages Will Increase for 2019

The IRS recently issued an update to determine the affordability of an employers plan under the ACA (Affordable Care Act).

These updates will be effective for the taxable years and plan years beginning January 1, 2019.

As a result, some employers may have additional flexibility with the rasped tot their employee contributions for 2019 to meet the adjusted percentage.

AFFORDABLE COVERAGE TEST                                                                                                     For plan years beginning in 2019, employer-sponsored coverage will be considered affordable if the employee’s required contribution for self-only coverage does not exceed:

  • 9.86% of the employee’s household income for the year, for purposes of both the pay or play rules and the premium tax credit eligibility.
  • 8.3% of the employees household income fo rate year, for purposes of an individual mandate exception (adjusted under separate guidance).

To read more on the IRS Revenue Procedure, click HERE.

Cigna to Buy Express Scripts in $67 Billion Deal

Health insurer Cigna Corp. announced today, March 8, 2018, that it would purchase Express Scripts Holding Co., a pharmacy benefits manager (PBM) for $67 billion in cash and stock, including $15 billion assumed for Express Scripts’ debt.

This announcement is the latest in a trend of merging health care companies and follows the December 2017 announcement of the Aetna Inc.-CVS Health merger.

What the Deal Means for the Health Care Industry

Similar to the Aetna-CVS merger, the Cigna-Express Scripts deal is a vertical merger. A vertical merger, according to Investopedia, occurs when two companies that perform separate functions within an industry merge.

The companies stated that the deal will save $600 million in administrative efficiencies, allow them to cut costs as they better coordinate pharmacy and medical claims, and could also increase their leverage in price negotiations with drugmakers. Health care industry experts have said in the past that coordination between insurers and PBMs could lower costs overall.

How this Deal Compares to Competitors’ Deals

Express Scripts is the largest U.S. PBM and is responsible for the drug plans of more than 80 million Americans. Its major competitors are CVS Health and OptumRx, which is owned by the insurance giant UnitedHealth Group.

As previously mentioned, CVS Health recently merged with Aetna, a move that could not only improve efficiency for both companies, but also increase bargaining power with hospitals and other suppliers.

On March 6, 2018, UnitedHealthcare, the parent company of UnitedHealth Group, announced its new policywhere it will share the millions of dollars in discounts it gets from drug companies with its customers. The policy was made in response to growing frustration over increasing drug prices.

The Cigna-Express Scripts merger also narrows Amazon’s entry into the health care world, as industry experts often cited Cigna as Amazon’s prime target for entry into the industry.

As demonstrated by the mergers and policymaking, industry giants are taking measures to increase their efficiencies and combat rising health care costs.

What’s next?
As with the Aetna-CVS deal, the Cigna-Express Scripts deal must be approved by federal regulators for it to stand. The fate of the merger depends on whether the government believes it will save money for consumers.

As such, its fate remains unknown. Brokers, employers and health care consumers should continue to monitor the news to keep up with the latest developments.

The content of this News Brief is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2018 Zywave, Inc. All rights reserved.

IRS reduces HSA family contribution limit retroactive to January 1, 2018

On Monday, March 5, the Internal Revenue Service (IRS) issued IRS Bulletin (2018-10), changing the Health Savings Account (HSA) 2018 family contribution limit to $6,850.
  • The original 2018 limit had been set for $6,900 and is now reduced by $50.
  • This change is retroactive to Jan. 1, 2018.
  • The individual contribution limit did not change.
  • No other HSA limits (e.g., deductibles, out-of-pocket) or plan designs were impacted by the IRS change.
  •  Employers may want to :
    • Inform their HSA members of this change.
    • If the contribution limit is currently set at $6,900, lower the HSA family annual contribution limit to $6,850.
    • Adjust the amount that can be taken out for employees who have contributed and/or spent the limit.