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.
Employer related: Does the non-profit small employer tax credit apply to us?
According to the IRS, eligible small businesses can claim a tax credit starting with the 2010 tax year. Although both taxable (for-profit) and tax-exempt (non-profit) entities qualify for the credit, the IRS is still working to provide further clarity and information on what healthcare expenses are eligible for the credit and how to claim the credit.
GuideStone is working with other denominations through the Church Alliance to determine how churches participating in the GuideStone healthcare plans might best qualify for this tax credit. We will keep you up to date as more information becomes available.
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 is required to establish a temporary reinsurance program by June 21, 2010 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 intends to apply for this subsidy. We do not know yet how much of the subsidy we will receive, or if we will receive any at all. There is only a limited amount of funding available for this subsidy and there are likely to be many entities applying for it; no one is guaranteed any amount of money.
The healthcare reform law requires that any subsidy received must be used to lower costs for the healthcare plan. GuideStone is in the process of determining the manner in which the subsidy will be used to lower costs for the plan.
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.