Madeline Webb and Amy Webb attend the Capital Conference in Washington D.C. in February, 2017 for the National Assoc. of Health Underwriters.

Last month we had our annual Capital Conference in Washington D.C. for the National Association of Health Underwriters (NAHU). We had a great turnout – over 1000 brokers, the largest conference ever.

Our trip to Washington D.C was to participate in our annual Capital Conference for the National Association of Health Underwriters (NAHU). The biggest issue that we are most concerned about and spent our efforts lobbying against was the Employer Exclusion. This is important to many people because it allows employers to deduct their employees’ premiums as a business expense. Likewise, it allows employees to deduct their healthcare contributions as a pre-tax payroll deduction as well.

The Republicans’ ACA proposal had talked about removing the Employer Exclusion, and would use this increased tax revenue as a way to fund the ACA.

I’m happy to say that it appears this key point has been preserved.

During the conference we also met with Senator Booker, Senator Menendez and Congressman McArthur to discuss this issue as well as other healthcare-related concerns, such as stabilizing the individual market.

Here’s some infographics that explain more about employer exclusion.

Have a healthcare question? Contact Amy Webb.

Infographic_Employer_Exclusion_Stories_Final_160802.original.1486959175 Infographic_on_Employer_Exclusion_FINAL.original.1486959179

President Trump is introducing his Republican proposal for healthcare reform. What does it mean for you? Preliminary reports show some good and bad sides to the Republican proposal.  Below is a listing of the main features of the legislation:

1. Elimination of individual mandate (no more fines for not having coverage)
2. Elimination of subsidies
3. Elimination of all the laws taxes
4. Tax credits offered based on age, not income (everyone would be eligible for a $2000 or $4000 credit)
5. Ending Medicaid expansion and giving states back control
6. Providing money for states to establish high risk pools to provide coverage for people with pre-existing conditions

So how does the government pay for this plan?  One of the scary topics being discussed by Paul Ryan and others is the concept of limiting the tax deductibility of group health insurance.

Currently the employer and employee contribution to health insurance is a tax deduction for both parties.  Employee benefits are the second biggest cost for employers after payroll.  If employers lose the ability to deduct this expense it will have a huge impact to their bottom line.  In addition, employees now have the ability to have a pre-tax payroll deduction for their share of premiums as well.  If both these deductions are removed it will be a huge middle class tax increase equaling somewhere between $1,800-$3,500/year.

If this does get voted down as part of the new healthcare legislation, it still may reappear when Trump-promised comprehensive tax reform is on the agenda.

Sick Pay Laws to Date

The Affordable Care Act’s small business health care tax credit is designed to encourage small businesses and tax-exempt employers to offer health insurance coverage to their employees. In general, an employer may be eligible for the credit for tax year 2015 if it:

• Had fewer than 25 full-time equivalent employees;
• Paid an average wage of less than $51,600/year;
• Paid at least half of employee health insurance premiums; and
• Paid premiums on behalf of employees enrolled in a qualified health plan (QHP) offered through the Small Business Health Options Program (SHOP) Marketplace.

Key Facts

The IRS is providing employers with the following basic facts to help them understand the credit and how it may affect their small business or tax-exempt organization:

• Beginning in 2014, the maximum credit is 50% of employer-paid premiums and 35% of premiums paid by tax-exempt organizations.
• Small employers may claim the credit for only two consecutive taxable years beginning in tax year 2014 and beyond.
• For 2015, the credit is phased out beginning when average wages equal $25,800 and is fully phased out when average wages exceed $51,600. The average wage phase- out is adjusted annually for inflation.
• Transition relief from the eligibility requirement to purchase a QHP from the SHOP Marketplace is available to certain small employers (i.e., those that could not offer health insurance through a SHOP for the 2014 calendar year).
• Eligible small employers (other than those that are tax-exempt) will claim the credit on their annual income tax returns, with an attached Form 8941, Credit for Small Employer Health Insurance Premiums, showing the calculation of the credit.

More information on this subject or any other Benefits, HR, or Reform related matter can be found in the HR Library.