Will my medical coverage be canceled if I become sick or have high claims?
No. While the new law prohibits health plans from cancelling a participant's coverage for excessive claims, GuideStone has never canceled coverage for a participant due to the participant's claims.
As an employer offering medical plan benefits through GuideStone’s Group Plans, do the new rescission rules affect the way I terminate employee medical coverage?
Yes. Timely notification to GuideStone is more important than ever. It is vital that you notify GuideStone of terminations as soon as possible, but no later than within 31 days of decision to terminate coverage. Going forward, GuideStone will be unable to terminate coverage more than 31 days prior to the date of notification. Until notification, the employer will continue to be responsible for premiums billed for the affected employee.
The new rules also prohibit employers from retroactively terminating coverage that an employee has pre-paid for. Basically, if an employee contributes toward the cost of medical coverage, that coverage cannot be terminated prior to the date through which the coverage is paid. For example, if an employee has paid for coverage through November 30th, then we cannot terminate coverage prior to November 30th, even if you notify GuideStone of the desire to terminate coverage prior to that date (ex: November 12th).
As an individual with medical coverage through GuideStone’s Personal Plans, how can I terminate my medical coverage?
You need to notify GuideStone immediately. You will be able to terminate your coverage the day you notify us or specify a date in the future you want the change to be effective. We will not be able to terminate your coverage back to a date prior to the day you contact us.
For example, if you contact us on November 13th, we will be able to terminate your coverage effective November 13th, or effective any day you specify after that date. We will not be able to terminate coverage back to November 1st.
Will employers be required to provide health insurance?
Effective January 1, 2014, the healthcare reform law requires employers with 50 or more full-time employees to offer minimum essential health coverage to their full-time employees (and their dependents) or pay a penalty. More guidance is expected prior to the effective date to clarify how this will apply to healthcare plans and GuideStone will then determine the impact to its plans.
Employer related: Will medical benefits be taxable?
No, the medical benefits won’t be taxable but the cost of coverage must be reported on Form W-2. Employers will be required to report the “aggregate cost” of “applicable employer-sponsored coverage” on an employee’s W-2 for the 2012 tax year (issued in January of 2013). In general, “applicable employer-sponsored coverage” includes health coverage provided by an employer that is excludible from the employee’s gross income. GuideStone’s Personal Plans and Group Plans are “applicable employer-sponsored coverage.” "Applicable employer-sponsored coverage” does not include FSA and HSA contributions, stand-alone dental and vision plans and other excepted benefits.
The aggregate cost of an employee’s health benefits will not be included in the employee’s taxable income. Rather, the reporting will be a way to verify medical coverage for purposes of enforcing other provisions in the legislation.
Do churches qualify to apply for the Small Business Tax Credit?
Yes. On December 2, 2010, the IRS issued Notice 2010-82 announcing that the Small Business Health Care Tax Credit is available to churches and includes coverage purchased through self-funded denominational church health plans (including GuideStone health plans). GuideStone recommends that churches weigh all factors before determining whether to pursue the credit.
To be eligible, employers (including churches) must have fewer than 25 full-time equivalent employees whose average annual wage is less than $50,000. For 2010, employers must pay at least 50% of the insurance premiums for all enrolled employees. After 2010, employers must make uniform premium contributions of at least 50% for all enrolled employees.
The tax credit is of limited duration: from 2010 to 2013 for health insurance coverage, and from 2014 to 2016 for coverage purchased from a Health Insurance Exchange.
Additional important things to consider:
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Increased tax reporting requirements. Churches who qualify for and choose to claim the credit will be subject to some of the same enhanced tax reporting requirements now required of small businesses. It is wise for churches to take into account the additional reporting burden when evaluating whether to pursue the credit.
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The challenge of pastor tax status. Some pastors may be classified as “self-employed” for employment tax (SECA) purposes, which may present a challenge for small churches who wish to pursue the tax credit. Notice 2010-82 takes into account when clergy, who may be considered self-employed for employment tax (SECA) purposes, are to be counted as employees for purposes of the Tax Credit and how clergy compensation is to be treated for the Tax Credit’s average wage calculations. These additional requirements may add complexity to churches’ tax considerations.
For more information:
Note: This educational information is not intended as legal or tax advice. Ministers or churches with specific legal or tax questions should consult a legal or tax advisor who understands ministerial tax issues.
Employer related: Is there a subsidy for offering health coverage to early retirees? How do I apply for the subsidy?
Yes. Under the new healthcare reform law, the federal government has established a temporary reinsurance program through which a plan sponsor may receive a subsidy for a portion of the cost of healthcare coverage it provides to early retirees.
The application for the subsidy must be made by the plan sponsor. GuideStone applied for and received a portion of this subsidy which it has put toward offsetting rate increases. There is, however, only a limited amount of funding available for this subsidy and there are likely to be many entities applying for it so GuideStone does not know how much more of the subsidy it will receive; no one is guaranteed any amount of money.
As an employer offering medical plan benefits, can I choose to “grandfather” my plans?
To allow for greater flexibility for employers, GuideStone has chosen not to grandfather our health plans. Because your plans will not be grandfathered, you have the option to keep the same plan if you’d like, or you can change plans when you feel it is appropriate. Additionally, GuideStone’s health plans will be able to take advantage of enhanced benefits like preventive care services paid at 100%.
To qualify as grandfathered plans, an employer would be required to continue offering relatively the same benefits and contribute the same percentage toward the cost of the plans. This means that in the future, you would not be able to change health plans or shift more cost to employees to help moderate rate increases.
For employers participating in GuideStone health plans, grandfathering is determined at the GuideStone level, not the employer level. We have determined that the limited benefits of grandfathering don’t justify the added costs and limitations this option would place on our plans. GuideStone will put in place procedures to assure compliance with any regulations associated with non-grandfathered plans.