ChamberChoice Offers Free Three-Part Webinar on Health Insurance Cost Reduction Strategies

ChamberChoice will offer a special three-part webinar series titled “Health Insurance Cost Reduction Strategies” on the second Thursday of July-September. This service is available free-of-charge to all Chamber members as a benefit of membership through the Chamber’s affinity programs through ChamberChoice

The schedule and topics of the webinar series are listed below. For more information or to register for the webinar, visit here.

Thursday, July 13, 10 a.m. – Risk analysis: Understand health conditions and costs within your workforce to reduce future costs.

Thursday, August 10, 10 a.m. – Employee contribution strategies: Reduce employer expense and increase employee take-home pay (PSA, HRA, HSA).

Thursday, September 14, 10 a.m. – Healthcare cost transparency

IRS Announces HSA/HDHP Limits

From ChamberChoice

Health Savings Accounts (HSAs) have become one of the more popular spending accounts for both employees and employers. HSAs are tax-favored IRA-type trust or custodial accounts that can be contributed to by, or on behalf of, “eligible individuals” who are covered by certain High-Deductible Health Plans (HDHPs). The HSA can be used to pay for certain qualified medical expenses of the eligible individuals and their spouses and tax dependents.

Only an “eligible individual” can establish an HSA and make HSA contributions or have them made on his or her behalf. There are two groups of individuals who are ineligible for HSA contributions: those who can be claimed as tax dependents, and those who are entitled to Medicare. As a side note, “entitled to Medicare” means enrolled in and receiving Medicare benefits. Thus, mere eligibility for Medicare benefits (without enrollment) will not disqualify an individual from HSA eligibility.

An HSA-eligible individual can make contributions (up to statutory limits) to an HSA and get an “above-the-line” tax deduction, which means that the contributions reduce the individual’s adjusted gross income before itemized or standard deductions are considered. On the other hand, instead of an “above the line” deduction, many employers permit employees to contribute to an HSA on a pre-tax basis through the employer’s cafeteria plan [Note: An employee having deductions done pretax through an employer cannot also take an above the line deduction on tax forms]. Any investment earnings generated on HSA funds are also generally tax-free. HSA funds withdrawn for qualified medical expenses escape federal taxation entirely.

In order to be eligible to establish an HSA, an individual must be covered under an HDHP for the months for which contributions are made to the HSA. In addition, an eligible individual cannot have coverage under any non-HDHP that provides coverage for any benefit covered by the HDHP. IRS guidance interprets this coverage restriction to mean that any other health coverage, that is not a HDHP would disqualify an otherwise eligible individual unless it only constitutes preventive care, certain permitted coverage, or certain permitted insurance. As a reminder, this prohibition on having other non-HDHP coverage includes health plans such as health Flexible Spending Accounts (health FSAs) or Health Reimbursement Arrangements (HRAs).

Recently, the IRS issued the inflation adjusted amounts applicable to HSAs and HDHPs. The following chart compares the 2017 and 2018 limitations.

It’s not too early to start reviewing current employee benefits offered and planning on what to provide in 2018. An employer currently offering a HDHP in conjunction with an HSA needs to ensure that any health plan limitations will meet the IRS requirements. 

As a benefit to Chamber members, JRG Advisors, the management team behind ChamberChoice, are available on a consultative basis to assist members in planning their healthcare benefits offerings. They can be reached at 1-800-377-3539 or visit their website for more information. 

Budget Discussions Enter Final Month

From PA Chamber of Business & Industry

With the last month of the fiscal year officially underway, House and Senate lawmakers return to session for what are sure to be several busy weeks with a focus on the budget and related policy items. The House has even extended its week by scheduling Thursday, June 8 as a voting session day.

Much attention will be paid to the General Assembly’s efforts to pass and send to the governor’s desk S.B. 1, a comprehensive public pension reform measure that would offer different retirement options to new state and public school employees, as opposed to the current, defined benefit pension plan that has proven to be unsustainable. The PA Chamber is advocating for this measure to rein in the steady growth of the public pension systems and ensure that they can remain intact for future generations of workers. Gov. Wolf has indicated that he would sign the legislation. According to a Pennlive story, the governor has confirmed that he has worked with legislative leaders toward the “matrix of a good pension reform bill,” adding, “I’m happy to sign a pension reform bill that makes it to my desk.”

In the House, business-related bills on the calendar include: H.B. 1213, which would provide much-needed limitations on the practice of taxing districts spot appealing individual property assessments.

It is possible the Senate may consider bills of interest to members that have already received committee approval: S.B.128, which would ban municipalities from passing leave and sick-day requirements stronger than those mandated by the state and federal government; S.B. 586, which would provide much-needed limitations on the practice of taxing districts spot appealing individual property assessments; and S.B. 725, which would require approval of the General Assembly before implementation of a state plan under the federal Every Student Succeeds Act.

Addressing Flood Insurance Affordability

Bill Seigel, Chief of SEDA-COG’s Community Development program, provided an overview of the Biggert-Waters Insurance Reform Act of 2012 and its impacts on flood insurance at a recent public meeting in Danville.

SEDA-Council of Governments (SEDA-COG) has begun an education and training process that helps municipalities and residents in the region find solutions to flood-related issues.

SEDA-COG received funding for the completion of a planning process to develop a Self-Help Assessment Tool for several central Pennsylvania riverine communities. The assessment is aimed at assisting the municipality and its citizens in defining and designing flood resiliency strategies and to better implement those strategies. The planning process has been tested in the pilot community of Selinsgrove and are proposed to be replicated in five additional communities to include the boroughs of Milton, Danville, Newport, and Lewisburg; and the Town of Bloomsburg

Specific project activities include public meetings to educate and increase awareness about flood-impacts and flood insurance reform. A meeting was held in Danville on May 18 and the Bloomsburg meeting is Tuesday, May 30, at 6 p.m. at Town Hall. Residents learn how to develop a response to these threats through a series of community working groups and data analysis. The community teams identify appropriate flood-mitigation options, match structures with best-suited options to mitigate flood impacts, and identify means of financing those options. Additionally, SEDA-COG will assist each community with the creation of a Flood Task Force Committee, and members of this Task Force will be recommended to Council for approval. The Task Force Committee members will vary from community to community, but may be comprised of a combination of citizens, insurance agents, real estate agents, and Council members. 

SEDA-COG has also entered into a contractual agreement with a professional services provider to provide discounted Elevation Certificates for citizens in these communities. The need for Elevation Certificates has become increasing important with the increase in flood insurance, particularly for Pre-FIRM structures with the enactment of the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Affordability Act of 2014. 

The completion of this initiative will allow SEDA-COG to examine legislative solutions to flood insurance reform with local, state, and federal officials.  For more information, or to participate in either the Danville or Bloomsburg working group, contact Teri Provost at SEDA-COG at 1-800-332-6701.

Legislation to Pay Down Pension Debt Earns Support from IFO

From PA Chamber of Business & Industry

It’s been relatively quiet over the last several weeks on lawmakers’ plans to address Pennsylvania’s bloated and unsustainable public pension systems. However, earlier this month the state’s Independent Fiscal Office filed an actuarial note to a bill (H.B. 778) that would tackle the pension crisis in part by paying off the current unfunded liabilities of the State Employees Retirement System ($19.5 billion) and the Public School Employees’ Retirement System ($42.7 billion) within about 20 years.

The actuarial report projects increased costs in the short-term with the potential for “significant” long-term savings. It indicates that under H.B. 778, PSERS contributions would initially increase by 17 percent, and then by approximately 35 percent until the unfunded liability is satisfied. SERS initial contribution would be about $90 million lower for the first five years, after which they would be higher than the estimated contribution rates under current law until the SERS unfunded liability is satisfied. All told, these provisions could save as much as $18 billion.

The IFO notes in its report: “The projections show that the savings over the entire projection period are much more significant on a cash flow basis than when they are measured on a present value basis. This occurs because the bill shifts the timing of employer contributions to pay down the unfunded accrued liabilities, and the savings that occur at the back of the projection period are valued much lower when measured by current dollars.”

In its review of H.B. 778, Milliman – the actuarial firm used by the IFO – voiced support for the bill’s reduction of the amortization period (the length of time it will take to pay down the unfunded liability) because it would help to improve security, protection from adverse experience and intergenerational equity.

Lawmakers on both sides of the aisle offered some level of praise for the bill, with House Majority Leader Dave Reed, R-Indiana, saying, “I think John [Rep. John McGinnis, R-Blair, who sponsored the legislation] has done an excellent job of putting together half a proposal, on the accelerated payments, but, obviously, we’ve got to see the other half of his proposal of how we would make those additional payments up front.” In a Capitolwire story, House Democratic spokesman Bill Patton praised McGinnis for his focus in paying down the pension debt. “The 2010 law that it’s in place now [Act 120] has a schedule for paying the pension debt, but it could be done faster if larger chunks of taxpayer funds are redirected …. House Democrats are open to workable ideas that use sustainable revenue sources to pay off the pension debt.”