Model Consulting, Inc. has entered an exciting new chapter in our history.

Posted by admin on March 3, 2015  |   No Comments »


Model Consulting, Inc. has entered an exciting new chapter in our history. After 25 years of building our brand, we joined CBIZ on March 1. CBIZ is the nation’s number one benefits specialist and one of the nation’s largest publicly owned property and casualty insurance brokers.

We will continue to offer you the highest level of personal service, but now we will also be able to bring to you the resources of a national organization.  As we embark on this change to our structure, we will be even stronger and more valuable to the marketplace.  That, in turn, will translate into better results for you and all of our clients as we are able to offer you an expanded suite of services including the following: HR consulting services; compensation consulting; life insurance; payroll services; online enrollment services; property and casualty insurance; and retirement plan services.

Though our name will change, our values, culture, and commitment to your needs will not. You can rest assured that you will continue to receive the same quality services from the same team of people with the same dedication to complete client satisfaction…just under a new name. The transition will be seamless, and the client-centered service we provide will remain unchanged.

We look forward to continuing our relationship with you as we evolve with the marketplace, enhance our viability, and offer an increasingly comprehensive array of services. As always, we will be available to address your questions and concerns, so please do not hesitate to contact us.

Read The Full Release Here

Supreme Court Declines to Hear Challenge to Individual Mandate

Posted by admin on February 16, 2015  |   No Comments »

On Jan. 12, 2015, the U.S. Supreme Court denied a challenge to the PPACA filed by the Association of American Physicians and Surgeons and the Alliance for Natural Health USA (Ass’n of Am. Physicians & Surgeons, Inc. v. Burwell, No. 14-350, 2015 WL 132968 (U.S. Jan. 12, 2015)). The case challenged various aspects of the law, including the individual mandate. The individual mandate is a federal tax on certain individuals for failing to purchase health insurance coverage which has previously been upheld by the Supreme Court. In this case, the plaintiffs argued that the tax violates both the Fifth Amendment’s prohibition of the taking of private property without just compensation as well as the origination clause, which requires that all bills for raising revenue must originate in the House of Representatives.

Before being denied certiorari by the Supreme Court, the plaintiff’s argument had already been rejected twice: first by a district court judge in 2012 and then by the D.C. Circuit Court of Appeals in early 2014. The D.C. Circuit, which had previously rejected this challenge in March, 2014, stated that there is already another case challenging the origination clause provision, with an appeal pending.

Supreme Court Order List Confirming Denied Cert

IRS Releases Guidance and Forms for Reporting 2014 Premium Tax Credits for Individuals

Posted by admin on February 9, 2015  |   No Comments »

To assist taxpayers in filing their 2014 returns, the IRS has issued guidance regarding tax aspects of the PPACA. Specifically, Publication 5187 explains how taxpayers will satisfy and report the individual shared responsibility provision (individual mandate) of the PPACA. It also provides information about the new premium tax credit.

The IRS also released three forms and corresponding instructions taxpayers will use to file their 2014 tax returns. Form 1095-A is an informational statement that will be sent to taxpayers who purchased health insurance through the state or federal exchanges. Form 8962 will report the taxpayer’s premium tax credits received. Lastly, taxpayers will use Form 8965 to report they did not have minimum essential coverage or to claim an exemption from the individual mandate. An article about Form 8965 was available in the Jan. 13, 2015 edition of Compliance Corner.

Although this guidance is for individuals, employers are indirectly affected as receipt of advanced premium tax credits could trigger employer mandate penalties if an employer has failed to offer a full time employee minimum essential coverage. Employers should familiarize themselves with this guidance in the event that they receive a notice of appeal; such appeals provide employers with an opportunity to clarify whether employees are eligible to receive an advanced premium tax credit.

Publication 5187
Form 1095-A
Form 1095-A Instructions
Form 8962
Form 8962 Instructions
Form 8965
Form 8965 Instructions

2016 Actuarial Value Calculator Released

Posted by admin on February 2, 2015  |   No Comments »

On Jan. 16, 2015, CMS released a bulletin announcing the availability of the Final 2016 Actuarial Value (AV) Calculator, with detailed explanations of updates made in response to comments received during the comment period. The guidance permits CMS to make periodic changes to the Actuarial Value calculator on an ongoing basis on specific areas, such as when the annual limit on cost-sharing is announced annually. For 2016, the annual limit on cost-sharing is estimated to be $6,850; however, the actual determination will not be made until the finalization of the 2016 HHS Notice of Annual Benefit and Payment Parameters Final Rule. If the finalized annual limit differs from the estimated dollar amount pre-set in the calculator, manual substitution of the correct annual limit on cost-sharing may be required.

As a reminder, this calculator is meant for use by issuers selling non-grandfathered individual and small group insurance policies both inside and outside the federal and state exchanges. The calculator determines at which level the plan will be set: bronze (AV of 60 percent), silver (AV of 70 percent), gold (AV of 80 percent), or platinum (AV of 90 percent). A de minimus variation of +/- 2 percent continues to be permitted for each tier. Employers will generally not use this calculator, since it is meant for use by issuers. However, the detailed explanations included in this bulletin for determining actuarial value and ensuring compliant plans may be of general interest to employers as they begin to structure plan designs for 2016.

2016 Actuarial Value Calculator Methodology
2016 Final Actuarial Value Calculator 

IRS Releases Guidance for Small Businesses Claiming Health Care Tax Credit

Posted by admin on January 26, 2015  |   No Comments »

On Jan. 21, 2015, the IRS released Notice 2015-08, which provides an exception allowing certain small employers in specified Iowa counties to claim the small business health care tax credit, even though a Small Business Health Options Program (SHOP) Exchange will not be operating in this area for all or part of 2015. Shortly thereafter, the IRS released Form 8941 and its related instructions, which is the tax form small employers (and their CPAs) use when claiming the small business health care tax credit. Note that there are significant changes for 2015:

  • The maximum tax credit increased to 50 percent of premiums paid for most small employers and 35 percent for tax-exempt eligible small employers.
  • The health plan must have been purchased through a SHOP exchange. An exception exists for some employers in certain Washington (2014 coverage only), Wisconsin (2014 coverage only) and Iowa counties (2015 coverage only) without SHOP coverage.
  • The tax credit is available for a maximum of two consecutive tax years.
  • Average annual wages must be less than $51,000 for 2014.

A helpful calculator is available to assist employers in determining whether to consult with their tax professional or CPA with regard to the small business tax credit. Employers should contact their advisor for access to the calculator and for more information about the small business health care tax credit.

IRS Notice 2015-08
Form 8941
Form 8941 Instructions

Proposed Regulations Make Tweaks to Existing SBC Final Regulations

Posted by admin on January 16, 2015  |   No Comments »

On Dec. 30, 2014, the IRS, DOL, and HHS issued proposed regulations relating to the summary of benefits and coverage (SBC) requirement under health care reform. In addition to the proposed regulations, the agencies also released revisions to the SBC template, instructions and uniform glossary summary.

Parts of the proposed regulations formalize previous FAQ guidance which addressed items such as contractual responsibility of SBC compliance, excluding Medicare Advantage plans from the SBC requirement, ability to provide SBCs electronically in conjunction with online enrollment and permitting a group health plan with multiple benefit packages to provide either a single or multiple SBCs.

Clarifications were made instructing that if an SBC was provided before an applicable event that would normally require an SBC distribution, a new SBC would not be required unless there were any changes to the SBC in the meantime. Each agency also addressed consequences for failure to provide the SBCs.

In terms of content, in addition to the existing requirement to provide contact information on the SBC for questions about the SBC, insurers are now required to include an internet address for obtaining a copy of the individual coverage policy or group certificate. There is no similar requirement for SBCs prepared for self-insured plans.

The 2012 final regulations regarding SBCs required the agencies to develop standard definitions of certain insurance-related terms. For this purpose, the agencies drafted a uniform glossary as a separate document that is a companion to the SBC. The uniform glossary must be provided in the format authorized by the agencies. The guidance issued in December 2014 added new terms to the uniform glossary, including ”claim,” “cost- sharing reduction,” individual responsibility requirement,” ”marketplace,” “minimum essential coverage,” ”minimum value standard” and ”specialty drug.”

Finally, there were changes made to the SBC template. The most obvious change was from four double-sided pages to two double-sided pages plus half of another page. The revised template removed two questions in the “Important Questions” section: The first about annual limits and the second about what is not covered. The SBC is also now required to include information about whether the plan provides MEC or meets minimum value requirements and what the implications of that determination are for the individual. Previously, the employer could use a separate document to report whether the plan provided MEC or met minimum value requirements. Lastly, the explanations of co-payments, co-insurance and other terms are removed, as they are addressed in the Uniform Glossary.

If finalized, the templates would apply to coverage that begins on or after Sept. 1, 2015.

Proposed Regulations
Templates, Instructions, and Related Materials
Fact Sheet

IRS Publishes Form 8965 and Instructions for Taxpayers Without MEC

Posted by admin on December 29, 2014  |   No Comments »

The IRS has published the 2014 version of Form 8965 and Instructions. This form is to be completed and filed by taxpayers who did not maintain minimum essential coverage in 2014. Individuals may claim an exemption from the requirement (also known as the individual mandate). Exemptions include unaffordable coverage (the minimum cost of coverage would have been more than 8 percent of household income), members of a health-care-sharing ministry, members of Indian tribes, incarceration, household income below 138 percent of the federal poverty line and the taxpayer lived in a state that did not expand Medicaid, general hardship and the taxpayer was eligible for coverage (but not enrolled) in an employer plan that was on a non-calendar year basis.

Taxpayers who do not qualify for one of the health coverage exemptions will use Form 8965 to calculate and report their shared responsibility payment.


IRS Amends Safe Harbor Explanations for Eligible Rollover Distributions

Posted by admin on December 22, 2014  |   No Comments »

On Nov. 24, 2014, the IRS issued Notice 2014-74, which amends the safe harbor explanations that can be used to satisfy the IRC requirement that certain information be distributed to recipients of eligible rollover distributions. The notice specifically modifies the explanations to reflect changes in the law that occurred after the explanations were released in 2009, and to make other clarifying changes.

As background, IRS Notice 2009-68 contained two safe harbor explanations. One was for payments from a designated Roth account, and the other was for payments not from a designated Roth account. Additionally, IRS Notice 2014-54 introduced proposed regulations that would allow simultaneous distributions to multiple destinations to be treated as a single distribution for allocation purposes. (See the Oct. 7 Compliance Corner article entitled “IRS Issues Guidance on Allocation of After-tax Amounts to Rollovers”). In addition to other clarifications, Notice 2014-74 specifically amends the safe harbor explanations by making them compatible with the changes found in Notice 2014-54 concerning the allocation of pre-tax and after-tax amounts.

Notice 2014-74

PBGC Releases Final Rules on the Treatment of Rollovers from Defined Contribution Plans to Defined Benefit Plans

Posted by admin on December 19, 2014  |   No Comments »

On Nov. 24, 2014, the Pension Benefit Guaranty Corporation (PBGC) released final rules concerning the treatment of benefits resulting from a rollover distribution from a defined contribution plan to a defined benefit plan, in the event that the defined benefit plan is terminated and trusteed by PBGC. As background, the PBGC administers the defined benefit plan termination insurance program under Title IV of ERISA. When a covered defined benefit plan is underfunded and terminated, the PBGC is appointed the statutory trustee of the plan and becomes responsible for paying benefits.

When a covered plan terminates, ERISA mandates that each participant’s plan benefit be assigned to one or more of six “priority categories,” which will determine the order in which benefits will be paid. Under the final regulations, benefits resulting from rollover amounts will be treated as accrued benefits derived from mandatory employee contributions, placing them in the second highest priority category (PC2).

ERISA also imposes two statutory limitations on the payment of non-forfeitable benefits provided by the plan. The first is a limitation on the maximum guaranteed benefit paid by PBGC, which is set by law and updated each calendar year. The maximum guaranteed benefit is currently $59,320 per year. The second limitation is a five-year phase-in limitation, which generally means that benefit increases from changes in the final five years of the covered plan are only partially guaranteed. However, under the final regulations, benefits resulting from rollover amounts will generally not be subject to PBGC’s maximum guaranteed benefit or phase-in limitations.

The PBGC also made some clarifications to the proposed regulations in response to public comments. Specifically, the final regulations only apply to rollovers to defined contribution plans; rollover amounts include both salary deferral contributions made by the participant, any additional employer contributions, and earnings on both; and the annuity benefit resulting from a rollover amount is a pension benefit.

The final regulations become effective Dec. 26, 2014.

Final Regulation

IRS Issues Guidance Related to Transportation Benefits and Electronic Media

Posted by admin on December 17, 2014  |   No Comments »

On Nov. 21, 2014, the IRS issued Revenue Ruling 2014-32, which outlines eight different scenarios involving employer-provided transportation benefits and electronic media and whether these benefits are excludable from gross income as a qualified transportation fringe benefit. In general, an employer’s contributions to a smartcard, terminal-restricted debit card or merchant category code (MCC) restricted debit card are excluded from an employee’s gross income as a qualified transportation fringe benefit if certain criteria are met. The card must be restricted in a way that the employee can only use the card to purchase transit fare. If the card can be used to purchase other items or services, the employer would need to implement procedures to substantiate the employee’s expenses.

With regard to vanpooling, some vendors charge a delivery fee if the employee purchases the transit pass online. The delivery fee incurred by an employee in acquiring transit benefits is included as part of the transit benefit. Thus, the fee is excluded from gross income as a qualified benefit.

In 2006, the IRS issued Revenue Ruling 2006-57, which permitted employers to provide cash reimbursement for transit passes when a terminal-restricted debit card was not available. The agency now believes such cards to be readily available. Effective Jan. 1, 2016, cash reimbursement is not permitted in geographic areas where terminal-restricted debit cards are readily available. If cash reimbursement is provided in such situations, the value would be included in the employee’s gross income.

Revenue Ruling 2014-32