Legislation Effective July 1, 2011

With all the talk of healthcare reform, it's easy to overlook several new laws that take effect in Maryland on July 1, 2011. Two laws in particular were passed during the most recent legislative session and may impact some of your clients. A brief overview is provided below.

Maryland HB 156: Self-Employed Coverage
Extension of the sunset provision relating to health insurance policies for self-employed individuals, through December 31, 2013. HB 156 allows, currently enrolled, self-employed individuals to maintain their small group health insurance plan through the new sunset date of December 31, 2013. No new self-employed individuals may enroll in the small group market. Contact the issuing carrier for more details, as specific criteria must be met by the self-employed individual to maintain coverage.

Maryland SB 314: Assignment of Benefits
Establishes criteria for physicians accepting assignment of benefits and requires carriers to send payment directly to physicians rather than members. Additionally, SB 314 creates a new mandate that out-of-network benefits must provide a minimum level of reimbursement. All covered services under PPO benefit policies may not differ by more than 20% for in and out-of-network coinsurance reimbursement amounts.

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Give Credit Where Credit is Due

It goes without saying that it's challenging for employers to keep track of the numerous provisions of the health care reform law. There are many provisions requiring employers to perform certain tasks or face penalties. It's these provisions that seem to be garnering the most attention. With this in mind, I thought it would be a worthwhile refresher to devote a Blog section to the small employer health insurance tax credit. Granted, the tax credit is not going to impact all employers, but it's important that we, as health insurance consultants become familiar with the credit and help small employers obtain the credit if they're eligible.

The Basics:
The credit is available to small employers that pay at least half the cost of single coverage for their employees. Eligibility rules are based in part on the number of FTEs, not the number of employees. Employers that use part-time workers may qualify even if they employ more than 25 individuals. Owners and their family members are not counted as employees when calculating the tax credit. The maximum credit goes to smaller employers (those with 10 or fewer FTEs) paying annual average wages of $25,000 or less and is phased out for employers with 25 FTEs, paying annual average wages of $50,000 or more. For tax years 2010 to 2013, the maximum credit is 35 percent of premiums paid by eligible small businesses and 25 percent of premiums paid by eligible tax-exempt organizations. For more details on the tax credit visit the IRS frequently asked questions page.

You should always recommend that an employer contact their tax advisor when determining eligibility for the tax credit. You don't need to become an expert, but we should all be doing our part to ensure that employers are educated on this important tax credit. Many of the group health insurance carriers have put together tax credit calculators, two such carriers are CareFirst and UHC.

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