Getting Started
The basics of employer-sponsored coverage
Compliance

Determine if you are a small or large group

To determine if you are a small or large employer, you need to add the number of full time employees you have (those who work 30 or more hours per week) to the number of full time equivalent employees you have. If this number is under 50 you are considered a small employer. Multiple companies under a common ownership should be treated as one company for the purpose of determining if they are a subject to the Shared Responsibility Provision. However, each entity under common ownership should submit the required information reporting individually.

To determine the number of full time equivalent employees you multiply the number of part time employees by the average hours worked per employee per month (do not include more than 120 hours of service per employee), then divide that number by 120.

Seasonal workers should be taken into account when determining the number of full-time employees. However, if an employer employs more than 50 full-time or full-time equivalent employees for 120 days or fewer during the calendar year, and the employees in excess of 50 are considered seasonal and worked no more than 120 days, the employer would not be considered a large employer. The IRS defines seasonal workers as “workers who perform labor or services on a seasonal basis as defined by the Secretary of Labor…For this purpose, employers may apply a reasonable, good faith interpretation of the term “seasonal worker.””

For more information please visit the IRS website: Determining if an Employer is an Applicable Large Employer.

Determine if your group health insurance plan is affordable

A health plan is considered affordable if the cost of the employee portion of the employee premium is less than 9.5% of the household income. Since it is likely that an employer does not know the household income of its employees, there are three “safe harbors” an employer can take advantage of.

  1. Form W-2 wages safe harbor: the employer can calculate the affordability of the plan using the employees income only (as reported on W-2).
  2. Rate of pay safe harbor: the employer can calculate the affordability of the plan using the employee’s monthly hourly or salary income.
  3. Federal poverty line safe harbor: the employer can calculate the affordability of the plan using the federal poverty line for a single individual.

Please visit the IRS website to learn more: Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act.

Determine if your group health insurance plan meets the minimum value requirements

A health plan is considered to provide minimum value if it covers at least 60 percent of the total allowed costs that are expected to be incurred under the plan. Employers can use the IRS Minimum Value Calculator to determine if their plan meets the minimum value.

Please see the IRS website to learn more: Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act.

Additional Medicare tax reporting

In 2013 an additional Medicare tax was established under the provisions of the Affordable Care Act. The additional tax applies to those individuals who earn an income over a certain threshold. Employers are responsible for withholding the tax on wages and railroad retirement compensation in certain circumstances. The tax is an additional 0.9%. See the below chart, taken from the IRS website, on income thresholds.

Filing Status Threshold Amount
Married Filing Jointly $250,000
Married Filing Separate $125,000
Single $200,000
Head of household (with qualifying person) $200,000
Qualified widow(er) with depenndent child $200,000

Please visit the IRS website for more information: Questions and Answers for the Additional Medicare Tax.

W2 reporting

Employers that provide employer sponsored health insurance are required to report the cost of the coverage in box 12 of the W-2 form. The cost of coverage should include both the employer and employee contributions. This number is for information purposes only, so that the employee has consumer information. The below chart, taken from the IRS website lists the types of coverage the employer must report on the Form W-2 (the items listed in the optional column are based on transition relief that may be available to a group.) Please be advised this chart is only for Form W-2 box 12 reporting—it has no impact on reporting required in other boxes on the form W-2.

Form W-2 Reporting of Employer-Sponsored Health Coverage
Coverage Type Report Do Not Report Optional
Major medical X
Dental or vision plan not integrated into another medical or health plan X
Dental or vision plan which gives the choice of declining or electing and paying an additional premium X
Health Flexible Spending Arrangement (FSA) funded solely by salary-reduction amounts X
Health FSA value for the plan year in excess of employee’s cafeteria plan salary reductions for all qualified benefits X
Health Reimbursement Arrangement (HRA) contributions X
Health Savings Arrangement (HSA) contributions (employer or employee) X
Archer Medical Savings Account (Archer MSA) contributions (employer or employee) X
Hospital indemnity or specified illness (insured or self-funded), paid on after-tax basis X
Hospital indemnity or specified illness (insured or self-funded), paid through salary reduction (pre-tax) or by employer X
Employee Assistance Plan (EAP) providing applicable employer-sponsored healthcare coverage Required if employer charges COBRA premium Optional if employer does not charge COBRA premium
On-site medical clinics providing applicable employer-sponsored healthcare coverage
Wellness programs providing applicable employer-sponsored healthcare coverage
Multi-employer plans X
Domestic partner coverage included in gross income X
Governmental plans providing coverage primarily for members of the military and their families X
Federally recognized Indian tribal government plans and plans of tribally charted corporations wholly owned by a federally recognized Indian tribal government X
Self-funded plans not subject to Federal COBRA X
Accident or disability income X
Long-term care X
Liability insurance X

Please see the IRS website for more information: Form W-2 Reporting of Employer-Sponsored Health Coverage.

Forms 1094-B and 1095-B reporting

Large employers are required to file Form 1094-C (Transmittal of Employer Provided Health Insurance Offer and Coverage Information Return) in conjunction with Forms 1095-C (Employer Provided Health Insurance Offer and Coverage) with the IRS, or pay a penalty, whether they have offered health insurance coverage or not. Employers must also provide a copy of Form 1095-C to each policy holder (i.e. employee, COBRA participant, etc.) for their records no later than January 31st.

Both forms assist the IRS with determining if coverage was offered, as well as if the employer will be required to make a shared responsibility payment (or not) and in what amount. Form 1094-C provides the IRS with summative information about the employer. Form 1095-C is used to report information about each employee to the IRS (such as health coverage offered, safe harbors/relief used by the employer, individuals enrolled in minimal essential coverage, etc.).

Employers must file no later than February 28 for the proceeding calendar year (Or March 31, if filing electronically).

Large employers who offer a self-insured health plan only need to submit forms 1094-C and 1095-C, not 1094-B and 1095-B.

Please see IRS website for more information: Information Reporting by Applicable Large Employers.

Notice of Coverage to Employees

Beginning October 1, 2013 employers with 50 or more full-time/full-time equivalent employees are required to furnish a one-time notice of coverage to all employees (whether full time or part time), regardless of if coverage is provided or not. This notice should be a part of the employers new hire process moving forward.

The Notice of Coverage forms, accessible through the Department of Labor, are specific to whether or not coverage is offered:

  1. Notice of Coverage for Employers Who DO Offer Coverage
  2. Notice of Coverage for Employers Who DO NOT Offer Coverage

Patient-Centered Outcomes Research Institute (PCORI) Fee (self-funded groups only)

Employer sponsors of self-insured health plans are required to pay a PCORI fee to help fund the Patient-Centered Outcomes Research Institute. The institute is responsible for assisting in making informed health decisions by advancing evidence-based medicine. The PCORI fee is set to expire October 2019. To calculate the amount of the fee employers should take the average number of lives covered during the policy year and multiply that number by the dollar amount indicated for that year.

For plan years ending after September 30, 2013 and before October 1, 2014 the dollar amount is $2. For plan years ending after September 30, 2014 and before October 1, 2015 the dollar amount is $2.08. The dollar amount for future years will be adjusted to National Health Expenditures inflation.

Employers of self-insured sponsored plans need to file Form 720 (Quarterly Federal Excise Tax Return) to report and pay the fee.

Please see IRS website for more information: Patient-Centered Outcomes Research Trust Fund Fee (IRC 4375, 4376 and 4377): Questions and Answers.

Transitional Reinsurance Fee (self-funded groups only)

The Transitional Reinsurance Fee, which was established as a part of the Affordable Care Act, is a program established to stabilize premiums in the individual market inside and outside of the Marketplaces. Under the Transitional Reinsurance Fee program, group health plans must make contributions designed to stabilize premiums in the individual health insurance market. This fee is in effect 2014 through 2016. Groups covered by fully-insured plans do not need to make payment, as the health insurance companies include this fee in the rates, and pay the fees to the IRS directly. Employers who sponsor self-funded plans must pay this fee themselves, since it is not included in the insurance rates.

In 2014 the Transition Reinsurance fee was $5.25 per covered life, per month. In 2015 the Transition Reinsurance fee was $3.67 per covered life, per month. Sponsors (the employer) of self-funded group health insurance plans must submit an annual enrollment count of the plan's average number of covered lives to the Department of Health and Human Services (“HHS”) by November 15 of each year. Contributions will be paid in two installments, with the first installment reflecting the actual reinsurance contribution and the second reflecting payments allocated to the U.S. Treasury. The first installment will be invoiced in the fourth quarter of the calendar year, and the second installment in the fourth quarter of the following calendar year, with payment for each installment due within 30 days after the invoice date.

For more information please visit the Centers for Medicare and Medicaid Services.

Penalties for failure report required information to the IRS

On June 29, 2015 President Obama signed the Trade Preferences Extension Act of 2015, which increased the penalties for insurance companies and employers who do not comply with the Affordable Care Act (ACA) Minimum Essential Coverage (MEC) and Large Employer reporting requirements.

Penalty Amount
Failure to file/furnish an annual IRS return or provide individual statements to all full-time employees $250
Annual cap on penalties $3,000,000
Failure to file/furnish when corrected within 30 days of the required filing date $50
Annual cap on penalties when corrected within 30 days of required filing date $500,000
Failure to file/furnish when corrected by August 1 of the year in which the required filing date occurs $100
Cap on penalties when corrected by August 1 of the year in which the required filing date occurs $1,500,000
Lesser cap for entities with gross receipts of not more than $5,000,000 $1,000,000
Lesser cap for entities with gross receipts of not more than $5,000,000 when corrected within 30 days of required filing date $175,000
Lesser cap for entities with gross receipts of not more than $5,000,000 when corrected by August 1 of the year in which the required filing date occurs $500,000
Penalty per filing in case of intentional disregard. No cap applies in this case. $500

For more information please visit Informed on Reform.

Shared Responsibility Payment

There are two circumstances in which an employer can be fined under the Shared Responsibility Provision.

A large employer may owe a Shared Responsibility payment to the IRS if they do not offer affordable, minimum value, health insurance coverage to at least 95% of their employees. You can calculate this fine by multiplying $2,000 by all your full-time employees (minus 30).

Employers may also be fined if they have one or more employee who receives a tax credit through the Exchange. That fine is calculated on a monthly basis by taking 1/12 of $3,000 and multiplying it by the number of employees receiving a tax credit.

Please see the IRS website for more information: Questions and Answers on Employer Shared Responsibility Provisions Under the Affordable Care Act.

Excise Tax (Cadillac Tax) on High Cost Employer-Sponsored Health Coverage (not in effect until 2017)

Beginning December 31, 2017 an additional tax will be assessed on high costing employer sponsored health plans. If the collective cost of the coverage provided to an employee surpasses a statutory amount (revised annually), the excess will be taxed at 40%.

Everything you need to know about ACA & Erisa requirements
Services
The benefits of insuring through our agency
Quotes
Shop all of the insurance companies in Washington State

Employers should be aware of the following group health insurance contract elements:

  • Employer Contribution—employers are required to contribute a percentage amount towards employee premiums. Typically the minimum amount an employer has to contribute is between 50%-75% of the employee premium only. Employers do not have to contribute anything towards dependent premiums.
  • Participation Requirements—a certain percentage of employees are required to enroll in a group policy. Normally the requirement is at least 75% of employees, not including valid waivers. A valid waiver is someone who is enrolled in another group policy through a family member, Medicare, or Medicaid. Employees enrolled in individual policies are not considered valid waivers.
  • Probation Periods—employers are required to setup a probation period that new hires must meet before enrolling in the benefits. Employee must meet this probation period, but not exceed it, to enroll in benefits. Normally a probation period cannot be longer than the first of the month following 60 days, due to the Affordable Care Act.
  • Unilateral contracts-- employers can terminate a health insurance policy to switch to another health insurance policy at any time. There are certain rules to this:
  • Cancellations are always effective the last day of the month.
  • If an employer has already made payment for the forthcoming month, the carrier may not allow them to cancel until the end of the month they are paid up to.

I have a group health insurance policy setup, now what?

After setting up a group policy employers should be sure they are in compliance with the Employee Retirement Income Security Act (ERISA) and the Affordable Care Act (ACA). Please visit our Compliance and Frequently Asked Questions sections.

Can I offer my employees individual plans, rather than a group plan?

Employers are not able to reimburse employees with pre-tax funds to buy an individual health insurance policy. Doing so can result in a fine of $100 a day, per employee, according to section 4980D of the Internal Revenue Code. However, there is no rule against employers paying their employees extra taxable income, which their employees can use to purchase an individual health insurance policy. Please see Frequently Asked Questions for more information.

Is there a resourceful option that allows me to offer employees a health insurance plan while also saving on premiums?

Yes, there is! A great option would be setting up a Health Reimbursement Account (HRA) for employees. An HRA can be used in conjunction with a higher deductible health plan

HRAs are accounts funded solely by an employer that allow employees to be reimbursed tax free for qualified medical expenses. When offered in conjunction with a higher deductible health plan, it is a win/win for both the employer and employees.

Employers can elect higher deductible health plans, saving on premiums, and the HRA benefits the employees by absorbing some of the upfront medical costs that may be associated with a high deductible. Where employees may pay co-pays on a Gold plan, on a Silver or Bronze level, there may be benefits that are subject to the deductible, in some cases, the employee would have to pay 100% toward certain services before their deductible is met. With an HRA in place, the employee can be reimbursed for qualified expenses as a result of the higher deductible plan. Please see Frequently Asked Questions for more information.

Ready to get a QUOTE for group health insurance?

Affordable Care Act (ACA) Compliance for Large Groups

Under the Shared Responsibility Provision of the Affordable Care Act (ACA) large employers are required provide affordable health insurance coverage that meets the minimum value to their full-time employees and dependent children. They are also required to file with the IRS starting in 2016, for the 2015 calendar year. Failure to comply with the Affordable Care Act (ACA) requirements may result in the penalties.

In order to be in compliance with the ACA, employers must meet the following requirements:

For more information on any of these items, or to learn about transition relief available to large groups, please visit our Frequently Asked Questions section.

Employee Retirement Income Security Act (ERISA) Compliance

ERISA is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans. ERISA requires that plan participants are provided with plan information including; provides fiduciary responsibilities for those who manage and control plan assets; requires plans to establish a grievance and appeals process for participants to get benefits from their plans; and gives participants the right to sue for benefits and breaches of fiduciary duty.

In order to be in compliance with ERISA employers must meet the following requirements:

  • Comply with ERISA rules and regulations
  • Provide and/or file required documents and forms, including annual notices to employees.
    • Annual notices on Reporting and Disclosure; Fiduciary Responsibilities; Administration and Enforcement; COBRA and additional standards for group health plans; HIPPA, Newborn & Mothers Health Protection, Mental Health Parity Act, Woman’s Health and cancer Rights Act; etc.
    • Plan documents
    • Summary Plan Description (SPD) including any changes in plan benefits and entitlement benefits
    • Form 5500, including schedules and auditors report (if applicable)
    • Summary Annual Reports (SARs)
    • A full copy of the Fidelity Bond and/or Fiduciary liability insurance (if applicable)

We recommend a third party administrator for helping groups comply with the above ERISA requirements. Click here to link to ERISA Solutions website.

For more information on the Employee Retirement Income Security Act (ERISA) compliance, please visit our Frequently Asked Questions section.

Ready to get a QUOTE for group health insurance?

Top 10 Reasons Businesses Choose Our Agency Over Others

  1. Run Quotes to Ensure Quality Benefits at a Fair Price

    Our agency is appointed with all of the carriers in Washington State. We will take your company’s census and run quotes with all of the applicable carriers, ensuring your company receives the benefits needed without overpaying.

  2. Review Quotes for Competitiveness and Build Plan Comparison

    Once the quotes have been returned from the carriers, our agency will review the quotes and build you an simplified Plan Comparison that will allow you to see the top three rates for your group alongside the most common benefits offered by each carrier.

  3. Schedule a Time to Review Plan Comparison – Make a Recommendation

    If you would like an agent to go over the plan comparison and discuss our findings, we can schedule a time to meet with you, either in person or over the phone. During this time we will discuss our recommendation and can answer any questions you may have.

  4. Prepare and Assist with Enrollment Materials

    Because we offer a specific account manager for each of our groups, we ensure that we utilize the most up to date enrollment materials, making enrolling in your benefit plan as simple and efficient as can be.

  5. Submit Enrollment Materials to Carriers

    Our account managers handle all enrollment submissions and act as a liaison between the group administrator and the carrier. This process ensures that the group administrator is never bogged down with questions or issues that can be resolved through our office.

  6. Deductible Credit Processing

    Our Agency works behind the scenes to ensure all deductibles are credited to groups after initial enrollment. Your account manager will collect the necessary documents from employees and submit them to the new carrier. The group administrator does not need to take any additional steps, as your Account Manager will make this process seamless.

  7. Employee Benefit Orientations

    Groups are offered a benefit orientation for each enrolling employee. Your account manager can come to your office and provide clarification on plans, deductibles, networks, etc. as well as answer any questions your employees may have. Account managers offer this service during initial enrollment for the entire group, as well as with each newly enrolling employee. Educating employees at the onset of enrollment ensures less confusion and potential issues later.

  8. Track Employee Probationary Periods and Submit Employee Enrollments and Cancellations

    Throughout your benefit year there will be changes to your workforce. Our agency will track your new employee’s probationary periods and send you enrollment materials a month in advance to ensure your employee receives ID cards and other necessary benefit information in a timely manner. In the same respect, your account manager will also process any benefit terminations, creating efficiencies by allowing our agency to be the one-point of contact needed as opposed to tracking different contacts to handle enrollment issues.

  9. Rectify Billing Issues

    Our agency will also serve as the point of contact for any and all billing issues. Your account manager will contact the carrier and perform analysis in regards to overages or any other billing issue that may arise. Saving your staff the time and potential stresses involved with billing and customer service issues. We work closely with all of the carriers we are appointed with and are able to command resolutions quickly and efficiently.

  10. Process Claims

    We pride ourselves on customer service, and claims processing allows our agency to shine. Your account manager can be reached via phone or email by the group administrator, but also by any employee. We work behind the scenes with carriers and providers to ensure that employees are being billed correctly, and that claims are being processed properly. If there is ever a question or issue, your account manager should be the first person contacted to sort the issue out. You will receive a detailed explanation and a timely response from your account manager.

What Makes Us Different

Experience

The Washington Health Insurance Agency is a full service agency. We are experienced in working with large groups, and have been in the business of providing health insurance guidance for over 20 years. We know that time and efficiency are of upmost importance when running a large company.

In order to provide you with optimal customer service and efficiency, our agency provides you with access to a specific account manager who will be the main contact for all of your health insurance needs.

Competitive Options

Our agency is appointed with all of the major carriers in Washington State, ensuring that quotes are run with multiple carriers, providing you with the most competitive options.

Your account manager will run quotes for your group each year at renewal and provide you with a side by side comparison of all your health insurance options. We will go over your plan comparison together and assist you in finding quality health insurance at the best rates for your group.

Industry Leading Service

As part of our services, your account manager will also be available for employee benefit orientation presentations and meetings as well as assist your employees with all of their billing and claims needs. We also understand that ACA compliance is of upmost importance for a large group, and our team is knowledgeable in COBRA, ERISA and ACA Compliance and is here to help you navigate through ACA laws and reporting requirements.

We have an experienced team, and are focused on customer service. We will provide any service that you may require expertly and professionally.

Getting a Quote is Easy

There are several options to get you started. You can request a quote through our website, or you can email us directly at quotes@wahealthagent.com. If you would prefer to speak with an account manager contact us at (360) 464-1622.