Your Business, Alcohol and Summer Fun

Maybe it’s served at your own company picnic or at an event you sponsor. Maybe it’s your core business as a winery or small-craft brewery. In any case, summer and alcohol go together as three-day weekends, warm weather and vacations combine to bring out the customers and the fun.

Now is the time to review your liquor liability coverage. There are two main types:

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Host Liquor: Provides protection for businesses against bodily injury or property damage lawsuits brought against you by parties injured as a result of an intoxicated guest.

Liquor Legal Liability: Provides coverage for bodily injury or property damage, for which you may become legally liable, as a result of contributing to a person becoming intoxicated.

Sounds fairly simple, right? You will need some type of coverage to ensure you, as well as your business, are clear of any liability in case of an incident. So, do you know
what type of coverage you will ultimately need?

The answer can be summed up by asking yourself: Are you in the business of serving, manufacturing, distributing, selling, or providing alcohol?

  • If the answer is “no” (for example, you are in the farming business) and providing alcohol is not part of your business, all you may need is Host Liquor coverage, which is typically included in your Commercial General Liability policy.
  • If the answer is “yes” (for example, you are hosting your event somewhere that requires you to obtain a liquor permit or you decide to charge a fee for the alcohol), you will need to purchase separate Liquor Legal Liability coverage.  In this case, the law states you are now considered to be in the business of serving, manufacturing, distributing, selling, or providing alcohol. This policy will help you stay clear of any liability.

Understandably, there is a fine and confusing line between host liquor and liquor legal liability coverage. To make certain you are properly covered, especially in today’s environment, make sure to speak to your agent prior to hosting or participating in an event with alcohol. Call 209-847-3065 for a policy review today.

Follow-up: Staying ACA Compliant and Highlights of the American Health Care Act

As we posted May 4, in the first step toward repealing and replacing the Affordable Care Act (ACA), the U.S. House of Representatives passed the American Health Care Act (AHCA). The bill is now with the U.S. Senate to begin deliberations.

Until this legislation is passed by the U.S. Senate and signed into law by President Trump, all existing ACA requirements remain in effect, including penalties for noncompliance.

If signed into law, the AHCA in its current version would change key features of the ACA over the next three years. Specifically:

  • “Pay or Play”: Penalties for noncompliance with the “pay or play” coverage requirement (where employers with 50+ full-time employees generally must offer affordable, minimum value coverage or pay a penalty tax) are zeroed out. However, Form 1094 Transmittal of Employer-Provided Health Insurance Offer & Coverage and Form 1095 Health Insurance Marketplace Statement reporting requirements are not changed.
  • Individual Mandate: Penalties for noncompliance with the individual mandate are zeroed out, effectively repealing the mandate. In its place, the bill requires issuers in the individual or small group markets to impose a 30% penalty on the health insurance premiums of individuals who do not maintain continuous health insurance coverage.
  • HSA Contribution Limits: Limits on contributions to Health Savings Accounts (HSAs) are increased to equal the inflation-adjusted annual out-of-pocket expenses limitation imposed on high deductible health plans. For 2017, this is $6,550 for self-only coverage or $13,100 for family coverage – rising in 2018 to $6,650 and $13,300, respectively.
  • Health FSA Contribution Limits: Limits on contributions to health flexible spending arrangements (a.k.a. Health FSAs) are eliminated.
  • Tax Credits for Individual Coverage: Replaces the ACA’s premium tax credits for individual market coverage with refundable tax credits adjusted for both age and income.

We will continue to provide you updates on this important legislation as it works its way through the federal government. In the meantime, call Basi Insurance Services at 209-847-3065 if you have any immediate questions.

A copy of the American Health Care Act in its entirety is available on the U.S. Congress website.

 

2018 Inflation Adjusted Amounts for HSAs

Annual inflation amounts have been released for HSAs and high deductible health plans – all limits will increase for calendar year 2018.

Annual Contribution Limitation

For calendar year 2018, the deduction limits for an individual with coverage under a high deductible health plan is:

  • Self only – $3,450 (an increase from $3,400 in 2017).
  • Family coverage – $6,900 (an increase from $6,750 in 2017).

High Deductible Health Plan

For calendar year 2018, a “high deductible health plan” (HDHP) has an annual deductible not less than:

  • Self only – $1,350, with an annual out-of-pocket expenses (e.g. deductibles, co-payments, and other amounts, but not premiums) not exceeding $6,650 (an increase from $6,550 for 2017).
  • Family coverage – $2,700, with an annual out-of-pocket expenses (e.g. deductibles, co-payments, and other amounts, but not premiums) not exceeding $13,300 (an increase from $13,100 for 2017).

In cases where the HDHP renewal date is after January 1, 2018, any required changes to the annual deductible or out-of-pocket maximum may be implemented at the next renewal date.

Catch-Up Contribution

Individuals age 55 or older and covered by a qualified high deductible health plan can make additional catch-up contributions of $1,000 each year until they enroll in Medicare.

Compliance Check-In: Are You Using the New 2017 Summary of Benefits with Employees?

For ALL groups beginning with a May 1, 2017 effective date and later, the Affordable Care Act (ACA) requires using the new federal Summary of Benefits and Coverage (SBC) template. This form replaces the version in use since 2012. Employers will notice an 8-page limit is now included as part of the form.

Standard and language-specific formats are available through the CMS Website. Your Benefits Specialist at Basi Insurance Services can also provide you with the new template and walk through specific changes. Call us at 209-847-3065.

For individual policies, a new SBC template will be used for this year’s Open Enrollment, with a January 1, 2018 effective date.

BREAKING NEWS – House Passes the American Health Care Act

About an hour ago, the House of Representatives passed H.R. 1628, the American Health Care Act, by a narrow 217 (Republican) v. 213 (Democratic) votes.

The AHCA is the bill that repeals and/or reforms multiple provisions of the Affordable Care Act (“ACA”), including all of the following:

  • “PAY OR PLAY” MANDATE:  Repealed as of 1/1/2016.
  • ACA REPORTING:  partial repeal of Employer reporting requirements for ALEs (IRC 6056 as of 1/1/16), but retains reporting on offer of MEC coverage (IRC 6055).
  • INDIVIDUAL MANDATE PENALTY:  Repealed and replaced with a 30% surcharge on premiums when individuals experience a break in coverage greater than 63 days within a 12-month period.
  • INSURANCE MARKETPLACES/EXCHANGES: Modifies rating methodologies from a 3:1 to a 5:1 ratio; modifies the provision of subsidies to individuals in exchanges as of 1/1/2019.
  • MEDICAID EXPANSION: Repeals expansion as of 2020 and grants states discretion ability to establish eligibility criteria for Medicaid eligibility.
  • MARKET REFORM CHANGES:  Provides state discretion to define essential health benefits as of 1/1/2020 and allows for the creation of high-risk pools for individuals with chronic conditions , prohibits pre-existing condition exclusions.
  • REPEALS MYRIAD OF ACA TAXES: PCORI, Health Insurance Tax, Exchange surcharge in small group coverage, medical device manufacturer tax, annual limits on health FSAs, Medicare taxes for high-income earners, etc.
  • CADILLAC TAX PLAN:  Delayed until 2026.

We are continuing to review the details of H.R.1628 and the impact to our clients. If you have any questions, contact us at 209-847-3065.