Friday, January 02, 2015

First Post of 2015

Happy New Year. It makes more sense to title this as the first post of 2015 rather than TGIF because yesterday was a holiday.  The FEHBlog is happy about the NCAA football championship playoffs. Good start to 2015.

The FEHBlog has been hearing a lot of H&R Block advertisements on the radio about their come talk with us about the ACA event on January 8. If you had FEHBP coverage throughout 2014, you have no tax issue at least as far as the ACA is concerned. For those without "minimum essential coverage," Federal News Radio points out that the individual shared responsibility mandate penalty increases this year:
For 2014, the fine is the greater of $95 per person or 1 percent of household income above the threshold for filing taxes. It will jump in 2015 to the greater of 2 percent of income or $325. By 2016, the average fine will be about $1,100, based on government figures.
The IRS expects health plans and employers to provide reports to enrollees and the IRS identifying which family members had the required coverage for which months of the year. These reports are knows as IRS Forms 1095-B and 1095-C. The ACA (IRC § 6055 (which the FEHBlog has discussed) requires this information in order to confirm individual taxpayer compliance with the individual mandate as most people still have employer sponsored coverage.

In order to prepared these reports, which must be distributed for the 2015 tax year (in January 2016) health plans have to collect Social Security Numbers for all members. Plans generally have Social Security Numbers for the enrollees and most spouses. Why? Federal law (known as Section 111) requires plans to gather this information in order to coordinate benefits with Medicare.  But they generally don't have Social Security Numbers for eligible children. The IRS spells out the requirements for this collection process and health plans ignore these requirements at their peril because the ACA imposes enormous penalties on health plans for non-compliance with Section 6055. has an article about Blue Cross FEP's data collection efforts which give you an idea about this mandatory undertaking. Cooperating with plans benefits members because the 1095 forms will be used to support their tax filings next year.

Fedweek has an article about the process for appealing FEHB plan claim disputes to OPM. This worthy process has been around since 1979.  Complete information about the process can be found in your FEHB plan  brochure (Sections 7 and 8). The article concludes "If you are not satisfied with the result of the OPM review, you may be able to challenge the claim in federal or state court, depending on the laws of your state." Wrong. If you are dissatisfied with OPM's decision, you must sue OPM in federal court under the Administrative Procedure Act.  State law is irrelevant / preempted.

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