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April 2012

From the editors of CCH's BENE and BAN products, here are hot topics from recent Employee Benefits Management Directions newsletters as well as recent explanatory updates in Employee Benefits Management. Also included are recent explanatory updates to the Benefits Answers Now product.

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Hot Topics in Employee Benefits Management:

Consider how SBC disclosure fits into bigger communications picture, expert advises, Employee Benefits Management Directions newsletter, Issue No. 511, March 6, 2012 – The EBSA, IRS and HHS released final regulations providing standards on communications and model forms that health insurers and group health plans will use to provide a Summary of Benefits and Coverage to those covered. CCH conducted a follow-up interview on the final regulations with Sarah Bassler Millar, partner in the Chicago office of Drinker Biddles’ Employee Benefits and Executive Compensation Practice.

CCIIO releases FAQs on essential health benefits, Employee Benefits Management Directions newsletter, Issue No. 511, March 6, 2012 – The Center for Consumer Information & Insurance Oversight (CCIIO) has released 22 frequently-asked-questions about the essential health benefits packages required by the Patient Protection and Affordable Care Act (ACA).

HHS issues bulletin on proposed definition of actuarial value for qualified health plans, Employee Benefits Management Directions newsletter, Issue No. 512, March 20, 2012 — The Department of Health and Human Services (HHS) has issued a bulletin to provide information and solicit comments on the regulatory approach that it plans to propose to define actuarial value (AV) for qualified health plans (QHPs) and other non-grandfathered coverage in the individual and small group markets under section 1302(d)(2) of the Patient Protection and Affordable Care Act (ACA).   

IRS will defer guidance on ACA individual mandate until after Supreme Court’s decision, Chief Counsel says, Employee Benefits Management Directions newsletter, Issue No. 512, March 20, 2012 — Guidance on the individual mandate under the Patient Protection and Affordable Care Act (ACA) will wait until after the Supreme Court hands down a decision, IRS Chief Counsel William J. Wilkins said in Washington, D.C., at the Federal Bar Association Section on Taxation’s 36th Annual Tax Law Conference. The IRS is moving forward with ACA guidance for employers and also on the ACA health insurance premium tax credit, however.
What's New in Employee Benefits Management:

SBC templates and instructions — The Summary of Benefits and Coverage (SBC) templates, instructions and uniform glossary based on the final regulations can be found at ¶226,121 through ¶226,130.

IRS Notice 2012-17 — The IRS has issued a notice containing frequently-asked questions and answers with regard to the Patient Protection and Affordable Care Act’s provisions governing automatic enrollment, employer shared responsibility, and the 90-day limitation on waiting periods for health insurance coverage. The notice is discussed at ¶10,097.

SIFL rates — The Standard Industry Fare Level (SIFL) rates for the first half of 2012 are at ¶150,086.

Proposed FMLA regulations — The Department of Labor has issued proposed rules to implement new statutory amendments to the FMLA that would expand military family leave provisions and incorporate a special eligibility provision for airline flight crew employees. The proposed regulations are discussed at ¶68,054.

Domestic partner coverage — The discussion on domestic partner coverage has been updated at ¶10,110.

FMLA leave — The Eighth Circuit Court of Appeals (CA-8) has ruled that a former employee’s failure to show a causal link between her FMLA leave and her job termination kept her from establishing a prima facie case of FMLA retaliation. The case, Sisk v. Picture People, Inc., is discussed at ¶68,058.

State disability laws — The state laws at ¶30,100 have been updated.

What's New in Benefits Answers Now (BAN):

Final rule reaffirms insurers must cover contraception, accommodates religious objections. The Department of Labor, the Department of Health and Human Services and the Internal Revenue Service (the Departments) have issued a final rule that reaffirms the religious employers that are allowed an exemption for covering FDA-approved contraceptives as a part of a health plan. Regulations published in August 2011 added eight preventive services for women, which health plans must cover at no cost to patients, under Public Health Service Act Sec. 2713, as added by the Patient Protection and Affordable Care Act (ACA). One of these preventive services included recommended contraceptive services without charging a copayment, coinsurance, or a deductible. The rule does allow certain nonprofit religious employers that offer insurance to their employees the choice of whether or not to cover contraceptive services. This includes churches, but excludes religious universities and hospitals. However, beginning August 1, 2012, most new and renewed health plans will be required to provide contraceptive services for women without cost sharing. More information about the preventive services required under the ACA can be found at ¶20,051.

IRS clarifies how QJSA, QPSA rules apply to 401(k) plan participants’ investments in deferred annuity contracts. The IRS has released guidance that clarifies how the qualified joint and survivor (QJSA) and the qualified preretirement survivor annuity (QPSA) rules apply when 401(k) plan participants choose to invest their elective deferrals and matching contributions in deferred annuity contracts issued by insurance companies. The IRS presents three fact situations that explain whether and to what extent QJSAs and QPSAs must be provided and when waivers, spousal consents, and written explanations for participants are required. To find out more about this guidance, see ¶13,065.

CCIIO releases FAQs on essential health benefits. The Center for Consumer Insurance and Oversight (CCIIO) has released 22 frequently-asked-questions about the essential health benefits packages required by the Patient Protection and Affordable Care Act (ACA). On Dec. 16, 2011, the Department of Health and Human Services (HHS) released a bulletin describing the approach it plans to take in future rulemaking about essential health benefits and this FAQ addresses questions that arose from the bulletin. Find out more about essential health benefits at ¶20,052.

Mercer offers 10 ideas for a better defined contribution plan in 2012. Originally intended as supplemental savings vehicles to complement well-funded pension plans, defined contribution (DC) plans have become the ongoing and primary employer-sponsored retirement plan for most Americans. Along with participants’ need for strong performance, plan sponsors must deal with increased regulatory activity, governance requirements and fiduciary concerns. Mercer has 10 key recommendations for organizations looking to improve their DC plans in 2012. To learn more about these recommendations, see the discussion at ¶10,065.

Early Retiree Reimbursement Program benefited 13 million retiree medical plan participants in 2010-11. As of Jan. 20, 2012, the Early Retiree Reinsurance Program (ERRP) has provided $4.73 billion in reinsurance payments to more than 2,800 employers and other sponsors of retiree plans, with an average cumulative reimbursement per plan sponsor of approximately $189,700, according to the Centers for Medicare and Medicaid Services (CMS). At this time, CMS reported, the ERRP has received requests for reimbursement that exceed the $5 billion in funding appropriated. Therefore, reimbursement requests which exceed the program's $5 billion will now be held in the order of receipt, pending the availability of funds that may become available as a result of overpayment recoupment activities. CMS will continue to report the status of payments to plan sponsors periodically. In December 2011, the CMS had announced that because the ERRP allocated funds were nearly exhausted, it would deny health care claims incurred after Dec. 31, 2011. See the discussion at ¶22,875 for more information about the ERRP.

What's New in Spencer’s Benefits Reports:

Health Reform: Summary Of Benefits. Starting Sept. 23, 2012, group health plans and health insurers must provide a summary of benefits and coverage (SBC) that accurately describes the benefits and coverage under the applicable plan or coverage. The February 2012 final rules for the SBC, including model forms and a uniform glossary of health insurance terms, are reviewed in this report (Report 522.1.-1).

Wellness Programs Provisions. Wellness program provisions in HIPAA final regulations, a 2008 clarification, and the changes made by the Patient Protection and Affordable Care Act of 2010 are reviewed in this report (Report 326.-3).

Summary Plan Descriptions Guide. In light of the legal requirement that summary plan descriptions (SPDs) provide plan participants with a clear explanation of the operation of an employee benefit plan, this report provides suggestions on how to achieve that end (Report 602.11.-9).

COBRA: Health Coverage Tax Credit. This report is updated to reflect the Trade Adjustment Assistance Extension Act of 2011 provision that changed the health coverage tax credit to 72.5 percent until January 1, 2014 (Report 329.2.-27).

Medicare Secondary Payer Provisions. This report summarizes the Medicare as secondary payer provisions of the Social Security law, including the most recently enacted revisions and group health plan reporting requirements (Report 324.43.-1).

New Benefits Titles Added
Employee Benefit Plan Review (April 2012)

New Pension Titles Added
401(k) Advisor (April 2012)
Journal of Pension Benefits (Spring 2012)
Pension Benefits (April 2012)