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AHCA and the Preexisting Conditions Debate—What Employers Can Do During Uncertainty | Maryland Benefit Advisors

Preexisting conditions. While it’s no doubt this term has been a hot topic in recent months—and notably misconstrued—one thing has not changed; insurers cannot deny coverage to anyone with a preexisting condition.  Now that House Resolution 1628 has moved to the Senate floor, what can employers and individuals alike expect? If passed by the Senate as is and signed into law; some provisions will take place as early as 2019—possibly 2018 for special enrollment cases. It’s instrumental for companies to gear up now with a plan on how to tackle open enrollment; regardless of whether your company offers medical coverage or not.

Under the current proposed American Health Care Act (AHCA) insurance companies can:

  • Price premiums based on health care status/age. The AHCA will provide “continuous coverage” protections to guarantee those insured are not charged more than the standard rate as long as they do not have a break in coverage. However, insurers will be allowed to underwrite certain policies for those that do lapse—hence charging up to 30% more for a preexisting condition if coverage lapses for more than 63 days. This is more common than not, especially for those who are on a leave of absence for illness or need extensive treatment. In addition, under current law, insurers are only allowed to charge individuals 50 and older 3 times as much than those under this age threshold. This ratio will increase 5:1 under AHCA.
  • Allow states to determine what constitutes as essential healthcare coverage.  Under the ACA’s current law employers must provide coverage for 10 essential health care benefits. Under AHCA, beginning as early as 2020, insurers will allow states to mandate what they consider essential benefit requirements. This could limit coverage offered to individuals and within group plans by eliminating high cost care like mental health and substance abuse. Not that it’s likely, but large employers could eventually opt out whether they want to provide insurance and/or choose the types of coverage they will provide to their employees.

It’s important to note that states must apply for waivers to increase the ratio on insurance premiums due to age, and determine what they will cover for essential health benefits. In order to have these waivers granted, they would need to provide extensive details on how doing so will help their state and the marketplace.

So what can employers do moving forward? It’s not too soon to think about changing up your benefits package as open enrollment approaches, and educating yourself and your staff on AHCA and what resources are out there if you don’t offer health coverage.

  • Make a variety of supplemental tools available to your employees. Anticipate the coming changes by offering or adding more supplemental insurance and tools to your benefits package come open enrollment.  Voluntary worksite benefits, such as Cancer, Critical Illness, and Accident Insurance handle a variety of services at no out-of-pocket cost to the employer. HSA’s FSA’s and HRA’s are also valuable supplemental tools to provide your employees if you’re able to do so. Along with the changes listed above, the AHCA has proposed to also increase the contribution amounts in these plans and will allow these plans to cover Over-the-Counter (OTC) medications.

Keeping Your Summer Events Sunny | Maryland Benefit Advisors

With the official start of summer just around the corner, many companies are planning company picnics, barbecues, and outings to celebrate the season. The good news is that these events are a great opportunity to thank employees for hard work and to encourage them to mingle outside of the normal work setting. The less fun news is that it’s important to ensure they happen responsibly because there can be risk involved. With thoughtful planning and communication, you can have sunny summer events.

We’ve broken it down into Do’s and Don’ts for you:


Follow your stated employee policies. Keep in mind that picnics, parties, or outings are employer-sponsored, so the company may be responsible for whatever happens at the event and sometimes for events that occur after the party. Be sure to emphasize that all guidelines will apply to the event even if it is off-site or after work hours.

Consider taking steps to limit alcohol consumption. If you decide that alcohol will be served and the event is off-site and after hours, provide plenty of food rich in carbs and protein to slow the absorption of alcohol into the bloodstream. You can also have a cash bar, limit the number of drink tickets, or close the bar after a specified amount of time to deter over-consumption.

Make sure your employees get home safely. Offer incentives to employees who volunteer to be designated drivers or arrange transportation and accommodations. Thinking ahead about transportation demonstrates responsibility on the employer’s part, as well as potentially minimizing the company’s liability if an employee causes an accident while driving under the influence.

Determine how to handle pay issues in advance of the event. It’s not required to pay employees that voluntarily attend an event after hours. However, nonexempt employees need to be compensated if they are working the event or if attendance is mandatory. If the event is held during regular work hours, then all employees would be paid for attending the party.

Make it a family affair. Experts suggest that employee behavior actually improves at company events when spouses or partners and children are present. If your budget allows, it can be a giant gesture to include the entire family in the fun and one that many employees appreciate. Summer picnics especially lend themselves to games and activities suitable for children. Be sure to review your liability coverage with your broker first.


Don’t allow employees to get away with any bad behavior. Follow up on any complaints associated with the event and conduct a thorough investigation. Racial or sexual jokes, gossiping about office relationships, and unwelcome touching should not be permitted during the event just as they are not allowed in the office.

Don’t make your event work related to avoid liability for any injuries. Typically, workers’ compensation does not apply if the injury is “incurred in the pursuit of an activity, the major purpose of which is social or recreational.” If the carrier determines that the company event was truly voluntary and not related to work, then the carrier would most likely deny the claim.

Don’t penalize employees who choose not to attend. The message may be misinterpreted and could create employee relations concerns.

Don’t serve alcohol if your policies do not permit drinking either on your company’s premises or during work hours and you plan to have the event at the office as a part of the workday. Remind your supervisors to set a good example, keep an eye out for employee behavior that needs managing, and to deter employees from any informal gathering after the event that gets the alcohol flowing.

Don’t forget to reach out to your broker if you have any questions or concerns regarding insurance liability risks. Summer is a super time to enjoy the weather and give employees some well-deserved fun. Events like picnics, trips to the ballpark or barbecues sustain a positive work culture, but it’s important to be aware of potential issues that could arise and to plan accordingly. We’re here to help you along the way, as are your brokers, so be sure to leverage all your resources.

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Ask the Experts: Return-to-work Programs | Maryland Benefit Advisors

Question: What options does an employer have when an employee who had a work-related accident keeping him off work for four months and exhausting the Family and Medical Leave Act (FMLA) leave refuses to participate in a return-to-work program assignment that provides light duty work as required by the employee’s physician?

Answer: An employer may want to first explore with the employee his reason(s) for refusing the light duty work assignment that meets the physician’s light duty requirements as described. If it is due to the commute (greater distance) or any other reason that is out of the employee’s control, the employer should explore how to work with the employee, perhaps by permitting a leave extension to support the ongoing absence. If the refusal to accept the light duty position is within the employee’s control (he doesn’t like the job description, for example), the employer should review the situation with a labor attorney to ensure that the company is following the requirements for return to work accommodation as required under the Americans with Disabilities Act and the state workers’ compensation regulations. Options could include (1) allowing the employee additional time off, possibly without pay, to completely heal and return to work later and without the light duty restrictions, or (2) considering that failure to accept available light duty employment will be interpreted as a voluntary resignation.

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Health Plan PCORI Fees Are Due July 31 | Maryland Benefit Advisors

Do you offer coverage to your employees through a self-insured group health plan? Do you sponsor a Health Reimbursement Arrangement (HRA)? If so, do you know whether your plan or HRA is subject to the annual Patient-Centered Research Outcomes Institute (PCORI) fee? This article answers frequently-asked questions about the PCORI fee, which plans are affected, and what you need to do as the employer sponsor. PCORI fees for 2016 health plans and HRAs are due July 31, 2017.

What is the PCORI fee?

The Affordable Care Act (ACA) created the Patient-Centered Outcomes Research Institute to study clinical effectiveness and health outcomes. To finance the nonprofit institute’s work, a small annual fee is charged on health plans.

Most employers do not have to take any action, because most employer-sponsored health plans are provided through group insurance contracts. For insured plans, the carrier is responsible for the PCORI fee and the employer has no duties. If, however, you are an employer that self-insures a health plan or an HRA, it is your responsibility to determine whether PCORI applies and, if so, to calculate, report, and pay the fee.

The annual PCORI fee is equal to the average number of lives covered during the health plan year, multiplied by the applicable dollar amount:

  • If the plan year end date was between January 1 and September 30, 2016: $2.17.
  • If the plan year end date was between October 1 and December 31, 2016: $2.26.

Payment is due by July 31 following the end of the calendar year in which the plan year ended. Therefore, for plan years ending in 2016, payment is due no later than July 31, 2017.

Does the PCORI fee apply to all health plans?

The fee applies to all health plans and HRAs, excluding the following:

  • Plans that primarily provide “excepted benefits” (e.g., stand-alone dental and vision plans, most health flexible spending accounts with little or no employer contributions, and certain supplemental or gap-type plans).
  • Plans that do not provide significant benefits for medical care or treatment (e.g., employee assistance, disease management, and wellness programs).
  • Stop-loss insurance policies.
  • Health savings accounts (HSAs).

The IRS provides a helpful chart indicating the types of health plans that are, or are not, subject to the PCORI fee.

If I have multiple self-insured plans, does the fee apply to each one?

Yes. For instance, if you self-insure one medical plan for active employees and another medical plan for retirees, you will need to calculate, report, and pay the fee for each plan. There is an exception, though, for “multiple self-insured arrangements” that are sponsored by the same employer, cover the same participants, and have the same plan year. For example, if you self-insure a medical plan with a self-insured prescription drug plan, you would pay the PCORI fee only once with respect to the combined plan.

Does the fee apply to HRAs?

Yes, the PCORI fee applies to HRAs, which are self-insured health plans, although the fee is waived in some cases. If you self-insure another plan, such as a major medical or high deductible plan, and the HRA is merely a component of that plan, you do not have to pay the PCORI fee separately for the HRA. In other words, when the HRA is integrated with another self-insured plan, you only pay the fee once for the combined plan.

On the other hand, if the HRA stands alone, or if the HRA is integrated with an insured plan, you are responsible for paying the fee for the HRA.

Can I use ERISA plan assets or employee contribution to pay the fee?

No. The PCORI fee is an employer expense and not a plan expense, so you cannot use ERISA plan assets or employee contributions to pay the fee. (An exception is allowed for certain multi-employer plans (e.g., union trusts) subject to collective bargaining.) Since the fee is paid by the employer as a business expense, it is tax deductible.

How do I calculate the fee?

Multiply $2.17 or $2.26 (depending on the date the plan year ended in 2016) times the average number of lives covered during the plan year. “Covered lives” are all participants, including employees, dependents, retirees, and COBRA enrollees. You may use any one of the following counting methods to determine the average number of lives:

  • Average Count Method: Count the number of lives covered on each day of the plan year, then divide by the number of days in the plan year.
  • Snapshot Method: Count the number of lives covered on the same day each quarter, then divide by the number of quarters (e.g., four). Or count the lives covered on the first of each month, then divide by the number of months (e.g., 12). This method also allows the option—called the “snapshot factor method”—of counting each primary enrollee (e.g., employee) with single coverage as “1” and counting each primary enrollee with family coverage as “2.35.”
  • Form 5500 Method: Add together the “beginning of plan year” and “end of plan year” participant counts reported on the Form 5500 for the plan year. There is no need to count dependents using this method since the IRS assumes the sum of the beginning and ending of year counts is close enough to the total number of covered lives. If the plan is employee-only without dependent coverage, divide the sum by 2. (If Form 5500 for the plan year ending in 2016 is not filed by July 31, 2017, you cannot use this counting method.)

For an HRA, count only the number of primary participants (employees) and disregard any dependents.

How do I report and pay the fee?

Use Form 720, Quarterly Excise Tax Return, to report and pay the annual PCORI fee. Report all information for self-insured plan(s) with plan year ending dates in 2016 on the same Form 720. Do not submit more than one Form 720 for the same period with the same Employer Identification Number (EIN), unless you are filing an amended return.

The IRS provides Instructions for Form 720. Here is a quick summary of the items for PCORI:

  • Fill in the employer information at the top of the form.
  • In Part II, complete line 133(c) and/or line 133(d), as applicable, depending on the plan year ending date(s). If you are reporting multiple plans on the same line, combine the information.
  • In Part II, complete line 2 (total)
  • In Part III, complete lines 3 and 10.
  • Sign and date Form 720 where indicated.
  • If paying by check or money order, also complete the payment voucher (Form 720-V) provided on the last page of Form 720. Be sure to fill in the circle for “2nd Quarter.” Refer to the instructions for mailing information.

Caution! Before taking any action, confirm with your tax department or controller whether your organization files Form 720 for any purposes other than the PCORI fee. For instance, some employers use Form 720 to make quarterly payments for environmental taxes, fuel taxes, or other excise taxes. In that case, do not prepare Form 720 (or the payment voucher), but instead give the PCORI fee information to your organization’s tax preparer to include with its second quarterly filing.


If you self-insure one or more health plans or sponsor an HRA, you may be responsible for calculating, reporting, and paying annual PCORI fees. The fee is based on the average number of lives covered during the health plan year. The IRS offers a choice of three different counting methods to calculate the plan’s average covered lives. Once you have determined the count, the process for reporting and paying the fee using Form 720 is fairly simple. For plan years ending in 2016, the deadline to file Form 720 and make your payment is July 31, 2017.

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Maryland Employment Law Update – May 2017 | Maryland Benefit Advisors

Health Insurance and Required Conformity with Federal Law

On May 25, 2017, Maryland Governor Larry Hogan signed legislation (H.B. 123), which amends current law as follows:

  • Alters the length of a policy term and the information provided in the notice for short-term medical insurance procured from a non-admitted insurer.
  • Applies provisions of the federal Patient Protection and Affordable Care Act relating to preventive and wellness services and chronic disease management and alters provisions of law relating to special enrollment periods in the small employer health insurance market.
  • Authorizes dependents of domestic violence victims to enroll in a health plan outside the plan of the perpetrator of the abuse.
  • Adds a definition of short-term limited duration insurance and alters the definition of health benefit plan for the individual health insurance market.
  • Alters the scope of supplemental coverage under a group health plan.
  • Prohibits a carrier from canceling or refusing to renew an individual health benefit because an eligible individual is entitled to or enrolled in Medicare.
  • Requires an entity that leases employees from certain organizations or co-employers to be treated as a small employer to the extent permitted by federal law.
  • Provides that a carrier will not be considered as failing to renew a health benefit plan if it complies with federal regulations on guaranteed renewability.
  • Alters definitions to conform to guaranteed renewability provisions in the federal regulations.

The law is effective June 1, 2017.

Employer Exchange Notices–No Changes Needed | Maryland Benefit Advisors

Employers are required to give all new hires a Notice of Marketplace Coverage Options – often referred to as the Employer Exchange Notice. The U.S. Department of Labor (DOL) provides model notices that employers can download, customize, and distribute to workers. Although the model notices were scheduled to expire May 31, 2017, the DOL has now extended them without any changes through May 31, 2020.


Here are a few quick reminders for employers:

  • Distribute the notice to all employees within 14 days of hire:
    • Include all employees (i.e., full-time, part-time, seasonal, temporary, union, and others), regardless of whether eligible for health coverage at work.
    • Disregard dependents, retirees, former employees, or COBRA beneficiaries.
  • Model notices are posted on the DOL website (see below). There are two versions: one for employers that offer health coverage to some or all employees and the other for employers that do not have any group plans.
  • Notices are available in English and Spanish. Although non-English notices are not specifically required, general DOL guidance refers to providing notices “in a manner calculated to be understood by the average employee.”
  • Download the model notice, then fill in the blanks and variable items as needed. Links are provided below.
  • Distribute the completed notice by first-class mail to the employees’ homes. Alternatively, employers may use electronic delivery if the method meet all DOL guidelines:
  • The delivery method ensures actual receipt (such as via email directly to the employee instead of merely posting the material on the company intranet);
  • The employee regularly accesses the electronic media as an integral part of his or her regular job duties; and
  • The employer notifies the employee of the significance of the material and that a paper copy is available at no cost upon request.

Note: A small employer that is not covered by the Fair Labor Standards Act (FLSA) may be exempt from the notice requirement if it is not a hospital, care facility, school or governmental agency.

Model Notices:

The DOL model notices are available below. There are separate versions for employers that offer health coverage to some or all employees and employers that do not offer any health coverage. The model notices contain blank and variable items that must be completed by the employer before distributing to employees.

Model Notice for employers who offer a health plan to some or all employees

Model Notice for employers who do not offer a health plan

Spanish – Model Notice for employers who offer a health plan to some or all employees

Spanish – Model notice for employers that do not offer a health plan

The DOL also provides technical guidance on preparing and distributing the notice. Lastly, here is a copy of the DOL rule relating to the use of electronic delivery.

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Ask the Experts: Requiring Cybersecurity Training | Maryland Benefit Advisors

Question: We are a small company—40 employees. Are there policies we should have in place for cybersecurity? Can we make employee training on cybersecurity mandatory?

Answer: Companies of all sizes are smart to be concerned about cybersecurity, especially in light of the recent WannaCry ransomware attack. There are steps you can take to reduce the risks as the first line of defense against data breaches, malware infiltration, and various other security risks. Employees are your first line of defense and ensuring that they are trained to identify and report suspicious emails and other security threats is important. The decision on whether cybersecurity training should be mandatory is yours. You can consider assigning employees a training course and allowing them ample time to complete it or adding it to new employee onboarding activities.

It’s a good idea to train employees to:

  • Be skeptical—if they receive an email, view a webpage, or see a social media post with a too-good-to-be-true offer, they should think before clicking.
  • Report suspicious emails—give employees concrete information on how to report emails that may be phishing (attempts to get employees to share confidential or sensitive information) or fraudulent.
  • Ask questions like:
  • Do I recognize the sender’s email address?
  • Do I recognize anyone else copied on the email?
  • Is the domain in the email address spelled correctly or is it simply close to the actual URL (like versus
  • Would I normally receive an email from this individual?

Remind employees that they should never click on a link in an email or open an attachment until they are absolutely certain that the link or attachment is valid. You can consider a simple reminder like “Think! Don’t click!” that you include in informational emails about cybersecurity.

Finally, we do recommend having a published cybersecurity policy. Include it in your employee handbook and be sure to review it with current and new employees. Your policy should include guidelines for:

  • IT assets and mobile devices.
  • Access control.
  • Maintenance of antivirus software.
  • Contractors, vendors, and outsourcing.

In addition, the policy should include information about the repercussions of noncompliance.

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DOL Fiduciary Rule Takes Effect June 9 | Maryland Benefit Advisors

In an editorial in the Wall Street Journal yesterday, Department of Labor Secretary Alexander Acosta stated that the DOL’s fiduciary rule will become effective June 9, 2017. “We have carefully considered the record in this case, and the requirements of the Administrative Procedure Act, and have found no principled legal basis to change the June 9 date while we seek public input,” he wrote and added, “Respect for the rule of law leads us to the conclusion that this date cannot be postponed.”

The rule was published in April 2016 (see our blog on the original ruling) and requires those who provide retirement investment advice to adhere to a fiduciary standard and put their clients’ best interest before their own profits. The rule also prohibits fiduciaries to plans, plan participants, and individual retirement account (IRA) owners from receiving payments creating conflicts of interest unless they comply with conditions designed to minimize the potential effects of a conflict. It was initially scheduled to take effect April 10, 2017.

Prior to the effective date, President Trump directed that the rule’s implementation be delayed for 60 days until June 9, 2017 so that the DOL could assess the regulation for changes or repeal.  At the same time as Secretary Acosta’s announcement, the DOL published a field assistance bulletin and frequently asked questions to assist fiduciaries with compliance beginning on June 9 while the agency continues its final review prior to the full implementation date of January 1, 2018.

During the time between June 9, 2017 and January 1, 2018, the DOL’s temporary enforcement policy states that “the Department will not pursue claims against fiduciaries who are working diligently and in good faith to comply with the fiduciary duty rule and exemptions, or treat those fiduciaries as being in violation of the fiduciary duty rule and exemptions.” That’s good news for fiduciaries.

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ANB GovCon 2017 State of the Budget – Insights from the OMB | Maryland Benefit Advisors

EBG is proudly sponsoring the following event:

2017 State of the Budget: Get the Intel on the State of the 2017 Budget Directly from the OMB

June 13th , 730AM-930AM

The Tower Club
17th Floor Atrium
8000 Towers Crescent Dr. #1700
Vienna, VA 22182

Register Here