Benefits Blog: HSA 2022 Compliance Limits

A clear understanding of the rules up-front helps to avoid problems down the road. This can be especially true when it comes to government programs and the tax implications they represent. For example – Health Savings Accounts (HSA), a popular type of tax-advantaged medical savings account available to individuals enrolled in high deductible health plans (HDHPs).

Individuals can use HSAs to pay for expenses covered under the HDHP until their deductible has been met, or they can use their HSAs to pay for qualified medical expenses that are not covered under the HDHP, such as dental or vision expenses.

HSAs provide a triple tax advantage—contributions, interest and earnings, and amounts distributed for qualified medical expenses are all exempt from federal income tax, Social Security/Medicare tax and most state income taxes. But because of an HSA’s potential tax savings, federal tax law includes strict rules for HSAs, including limits on annual contributions and HDHP cost sharing. These limits, which can vary based on whether an individual has self- only or family coverage under an HDHP, include:

  • The maximum HSA contribution limit;
  • The minimum deductible amount for HDHPs; and
  • The maximum out-of-pocket expense limit for HDHPs.

Eligible individuals with self-only HDHP coverage will be able to contribute $3,650 to their HSAs for 2022, up from $3,600 for 2021. Eligible individuals with family HDHP coverage will be able to contribute $7,300 to their HSAs for 2022, up from $7,200 for 2021. Individuals who are age 55 or older are permitted to make an additional $1,000 “catch-up” contribution to their HSAs. The minimum deductible amount for HDHPs remains the same for 2022 plan years ($1,400 for self-only coverage and $2,800 for family coverage). However, the HDHP maximum out-of- pocket expense limit increases to $7,050 for self-only coverage and $14,100 for family coverage.

Employers that sponsor HDHPs should review their plan’s cost-sharing limits (minimum deductibles and maximum out-of-pocket expense limit) for 2022. Also, employers that allow employees to make pre-tax HSA contributions should update their plan communications for the increased contribution limits.

Contact the Benefits Team at The Reschini Group for more information.


Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Benefits Blog: Health FSAs Feature Carry-Over Option

Sometimes, leftovers can be more satisfying than when the meal was first served. You somehow appreciate it more, when you can enjoy something that wasn’t used up the first time.

Now, that satisfying carry-over feeling extends to Health Flexible Spending Accounts (FSA).

A Health FSA is an employer-sponsored account that employees can use to pay for or reimburse their qualifying medical expenses on a tax-free basis, up to the amount contributed for the plan year. Typically, Health FSAs are subject to a “use-or-lose” rule that generally requires any unused funds at the end of the plan year (plus any applicable grace period) to be forfeited.

As an exception to this use-or-lose rule, however, employers may allow participants to carry over up to $500 in unused funds into the next year to pay or reimburse medical expenses incurred during the entire plan year to which it is carried over. Also, the carry-over amount does not count toward the Affordable Care Act’s (ACA) limit on employees’ salary reduction contributions to a health FSA.

For this purpose, the remaining unused amount as of the end of the plan year is the amount unused after medical expenses have been reimbursed at the end of the plan’s run-out period for the plan year. For plan years beginning on or after Jan. 1, 2022, the limit on Health FSA carryovers increases from $500 to $570.

The IRS has provided the following rules for Health FSA carryovers:

  • A Health FSA may:
    • Specify a lower amount as the maximum (and has the option of not permitting any carryover at all);
    • Permit carryovers only if it does not also incorporate the grace period rule. The carryover may be used to pay or reimburse medical expenses incurred during the entire plan year to which it is carried over;
    • Limit the ability to carry over unused amounts to a maximum period (for example, a health FSA can limit the ability to carry over unused amounts to one year); and
  • A cafeteria plan is not permitted to allow unused amounts relating to a health FSA to be cashed out or converted to any other taxable or nontaxable benefit.

See how the Health FSA carry-over option can apply to your business and provide an added benefit for your employees. Contact the Benefits Team at The Reschini Group for more information.


Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Restricting the Flow: Cyber Attacks Impact Supply Chain

Cyber threats have the potential to impact all facets of the supply chain.

An attack against the Colonial Pipeline in the U.S. in May 2020 illustrated how vulnerable critical infrastructure can be as an attractive target for cybercriminals and even other nations hostile to the American economy. The attack – made possible through a single password breach, as disclosed later – shut key conduits delivering fuel from Gulf Coast refineries to major East Coast markets.

According to industry sources, shipping and logistics companies saw three times as many ransomware attacks in 2020 as in 2019. A spike in malware, ransomware, and phishing emails during the pandemic helped drive a 400% increase in attempted cyberattacks against shipping companies through the first months of 2020, as well.

While shipping represents a major element of overall supply chain operations, the looming threat of cyber attacks remains just as present and prevalent in every other link of that chain.

As the world economy continues to regain its footing in the wake of the coronavirus pandemic, supply chain issues have contributed to inflationary pressures and the less-than-rapid recovery many had hoped to see. Preventing malicious actors from further disrupting the supply chain remains a key priority.

Cybersecurity impacts every business, regardless of size or location or industry. Make sure your business deploys all preventative measures possible, and have regular reviews of your cybersecurity insurance coverage to protect against potential losses.

Contact the professionals at The Reschini Group for more information.

Copyright 2022 The Reschini Group

Waiver of Subrogation: Added Protection, Added Costs

Subrogation occurs when an insurer pays their insured for a loss caused by a third- party, and then attempts to recoup their payout by making a claim against the responsible third party.

For instance, if you’re in a car accident and it was the other party’s fault, your insurer pays for repairs to your vehicle and then pursues the other person’s insurance company for the loss. In your insurance policy, which is a contract between you and your insurance carrier, you agreed to allow the carrier to subrogate for any paid loss.

In a typical business contract, one business may ask another business to waive its rights of subrogation because the first business doesn’t want to be held responsible for a loss. When agreed to in such a contract, it prevents the business, and its insurer, who has agreed to waive their right, from seeking a share of the damages paid from the other party, even if they are at fault.

But be aware that when a business gives up its right to recover any losses, it increases the insurer’s risk and transfers responsibility to the insured and its insurer for sometimes uncontrollable losses. This can lead to unnecessary loss history and potentially increased insurance costs.

Conducting regular contractual reviews with your insurer agent can easily point out these exposures and help to you to understand and sometimes negotiate this requirement out of your risk profile.

Contact the professionals at The Reschini Group for more information.

Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Rates Held Ransom: Increased Breaches Impacting Coverage Terms

As instances and the scope of ransomware events, and losses associated with them, continue to increase, some insurers are tightening their standards in providing cybersecurity coverage.

According to industry experts, insurers are restricting capacity and implementing increases in premiums to accommodate for businesses not keeping pace with the threat of malware and other online attacks.

Ransomware events began to climb in 2019, leading to the continuing response by insurers. On average, insurance rates have doubled since the surge in attacks began, with rising reinsurance costs expected to drive those rates higher.

Insurers certainly are not abandoning cyber liability coverage, but recognize the underlying issue is that while coverage may be adequate today, the rapidly evolving risk means it may not be adequate tomorrow.

Business owners can help their own cause by implementing as many precautions against online attacks as they can, which can contribute to keeping their insurance costs manageable under the circumstances.

The digital universe has opened a world of opportunity for businesses to grow, expand, and succeed. But the flip side of all that openness poses a threat that continues to grow, expand, and succeed as well.

Managing that risk will be a challenge for business owners and their insurers for the foreseeable future. Eternal vigilance may be the price of liberty, but it’s also the price of keeping your data protected online.

Contact the professionals at The Reschini Group for more information.

Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Contractual Review: Ensuring that Your Coverage is Enough

Interesting how commitments can accumulate when you’re not looking, isn’t it?

You click on a subscription, you agree to get regular updates from a retailer, you cite a preference for a particular brand. And before you know it, funds have been deducted from your checking account, your email inbox gets choked with nuisance messages, and you can’t seem to escape online ads for something for which you are rapidly losing interest.

What began innocently can end up causing issues that can cost time, money, and patience. The same principle applies to insurance coverage, as a business enters into contracts with partners, suppliers, and vendors.

These agreements are recognized as necessary to conduct, expand, and protect a business’ interests. They make complete sense, and can serve a vital purpose. But caution must be taken when entering these arrangements, to make sure that the business’ insurance policies extend to the terms of any new contracts.

Terms and conditions of insurance coverages are written to specific situations – situations that may take on new wrinkles and specifics under new contractual agreements. The last thing any business owner needs or wants is to discover down the road that a partnership or other agreement under contract with another entity means an existing policy does not offer sufficient coverage.

Working with your insurance provider to conduct a contractual review represents an easy way to safeguard against getting caught in such a scenario.

Contracts and agreements accumulate over time. That’s smart business, typically. Benign, even. Just make sure that your insurance coverage keeps up with the terms of any new situation, to avoid costing you time, money, and patience.

Contact the professionals at The Reschini Group for more information.


Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice. To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Benefits Blog: ACA Affordability Percentages Down for 2022

The federal Affordable Care Act (ACA), through Internal Revenue Service (IRS) guidelines, has adjusted its affordability percentages downward in 2022, meaning that employers may need to change some of their employee contribution levels.

On August 20, 2021, the IRS issued Revenue Procedure 2021-36 to index the contribution percentages in 2022 for determining affordability of an employer’s plan under the ACA.

For plan years beginning in 2022, employer-sponsored coverage will be considered affordable if the employee’s required contributions for self-only coverage does not exceed the following:

  • 61% of the employee’s household income for the year for purposes of both the pay-or-play rules and premium tax credit eligibility; and
  • 09% of the employee’s household income for the year for purposes of an individual mandate exemption (adjusted under separate guidance). Although this penalty was reduced to zero in 2019, some individuals may need to claim an exemption for other purposes.

The updated affordability percentages are effective for taxable years and plan years beginning on Jan. 1, 2022.

This is a significant decrease from the affordability contribution percentages for 2021, which had been set at 9.83% and 8.27%.  As a result, some employers may have to lower their employee contributions for 2022 to meet the adjusted percentage.

Under the ACA, the affordability of an employer’s plan may be assessed in the following three contexts:

  • The employer shared responsibility penalty for applicable large employers (also known as the pay-or-play rules, or employer mandate).
  • An exemption from the individual mandate tax penalty for individuals who fail to obtain health coverage.
  • The premium tax credit for low-income individuals to purchase health coverage through an Exchange.

Although all of these provisions involved an affordability determination, the test for determining a plan’s affordability varies for each provision.

Understand where your organization falls within these ACA guidelines.  Contact the Benefits Team at The Reschini Group for more information.


Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Benefits Blog: Protecting Your Online Identity

When are you not you?

When hackers and other malicious parties steal your identity online, that’s when.  Identity theft occurs when others obtain and use your personal information without your permission.  Once this information has been acquired, thieves can use your existing credit cards or open new ones in your name, write bad checks, take out loans, and generally ruin your credit and reputation.

Once the theft has been spotted and reported, significant damage may – and most likely will – have been done.

Beyond taking the obvious precautions, another way to safeguard yourself from the impact of identity theft is to secure the proper identity theft insurance coverage.

Identity theft insurance can be purchased as a standalone policy or added as endorsement to existing homeowners or automobile insurance coverage.  Even though identity theft insurance does not protect against the cost of the actual theft, it offers a relatively inexpensive option that will cover the cost of reclaiming your identity, to include such items as:

  • Phone call charges, photocopying costs, and postage fees.
  • Salary loss due to uncompensated time off from work.
  • Legal fees.

Another attractive feature of this special coverage is that you can gain access to a fraud specialist who can provide valuable assistance in restoring your good name and protecting your identity.  This service is part of the reimbursement offer for expenses associated with credit restoration, as well.

Make sure you are always you.  Protect yourself from identity theft and the financial fallout it wreaks.  Contact the Benefits Team at The Reschini Group for more information.


Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Unsafe at Home: The Heightened Cyber Risk of At-Home Workers

Two years ago, employees across the country and around the world collaborated with their employers to establish ways they could perform their job duties while working from home.  Today, the urgent need for home-based workers has receded, but the popularity of this option remains high.

And while certain trends point to an actual increase in productivity, job satisfaction, and a better work-life balance from working at home, the choice does also come with a few risks, some quite disturbing and potentially very costly.

The Cost of a Data Breach Report, conducted by the Ponemon Institute and IBM Security, reports that 76% of respondents whose organizations have shifted to remote work expect that working from home could increase the time required to identify and contain a data breach.  What’s more, 70% of respondents expect remote working to increase the cost of a data breach.

Those results should cause business leaders to pause, at least for a moment, to think about what remote work represents regarding risks to your organization’s cybersecurity status.  With the geopolitical upheaval emanating from Eastern Europe currently, the world is getting a first-hand lesson in the power of benign cyber systems to damage economies, influence migration of populations, even wage war.  Just imagine the wreckage a malignant cyber attack could create.

Are your remote employees following strict cybersecurity protocols regarding password control?  Tracking and protecting the physical location of their laptops and smartphones?  Accessing only approved downloads and avoiding personal usage or inappropriate personal apps on company equipment?

Keep in mind that three out of four business leaders have concerns about cybersecurity regarding remote work.  Being concerned is one thing.  Acting on those concerns by clearly stating acceptable and unacceptable cyber behavior, and enforcing those standards, is what can make a real difference.

Contact the professionals at The Reschini Group for more information.


Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

 

Control the Variables: Keeping Workers Comp Costs In Line

Workers Compensation sounds pretty cut-and-dried, right?  Your rate – determined by the state where your company is located and the type of business – gets multiplied by your total payroll and then divided by 100.

But then modifiers enter the picture, which can raise or lower your costs, based on your loss history, or the record of measurably reducing the risk of injury to employees.  Naturally, you want a modifier that drives your workers comp costs down.  Here are some ideas on how to do just that.

  1. Save Money on Workers’ Comp Insurance – The same as selecting car or health insurance, it’s important to shop around for the best workers’ compensation insurance policies.
  2. Ensure You’re Following Workers’ Comp Claims Management Best Practices – By making sure your claims adjuster always follows best practices associated with claims management, payouts can be reduced by up to 50%.
  3. Focus on Safety – Create and embed a true safety culture, continually providing information on safe processes and procedures, instituting regular safety checks, and characterizing safety less in terms of statistics and more by how injuries impact people and their families.
  4. Have an injury procedure in place – It is essential to manage any injuries quickly and effectively before they become worse, and for managers and employees to know their roles and responsibilities when someone is hurt at work.
  5. Start an Incentive Program for New Hires – Employees, especially new hires, often benefit from incentive programs that reward them for learning the safety protocol. Older employees can also be encouraged to help the newer hires learn about the culture of safety through group incentives.
  6. Implement a Return-to-Work Program – Maintaining ongoing communication with injured employees leads to them returning to the job faster, which means returning to a regular paycheck for them and lower overall costs to the company.
  7. Check With Your State – Some states offer discounts if a company implements a program that promotes safety, so it’s worth checking on your state’s policies.
  8. Review Your Employee Classifications – The simple act of ensuring that each employee is classified correctly regarding his or her current job can represent substantial savings.

When you understand and control the variables surrounding workers comp coverage, you can achieve the modifier level that leads to better control of those costs.  Plus, in virtually every example cited here, it’s the proper, practical, and ethical thing to do, as well.  Contact the workers comp professionals at The Reschini Group today to learn more.


Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.

Source: https://news.briotix.com/9-workers-compensation-cost-reduction-strategies