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February 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.

If you have any comments/suggestions concerning the information provided or the format used, we'd like to hear from you. Please contact Tulay.Turan@wolterskluwer.com.

 

Hot Topics in Employee Benefits Management:

HHS issues essential health benefits bulletin, Employee Benefits Management Directions newsletter, Issue No. 507, January 10, 2012 – The Department of Health and Human Services (HHS) has issued a bulletin outlining the approach it intends to pursue in rulemaking to define essential health benefits. The Patient Protection and Affordable Care Act (ACA) requires health insurance plans offered in the individual and small group markets to offer a comprehensive package of items and services, known as essential health benefits.  

High Court will hear arguments on validity of health reform law in March, Employee Benefits Management Directions newsletter, Issue No. 507, January 10, 2012 – The U.S. Supreme Court will hear oral arguments on the validity of the Patient Protection and Affordable Care Act (ACA) on March 26 through March 28, 2012, according to the Court’s oral argument calendar. 

IRS issues additional interim guidance on informational reporting of health coverage, Employee Benefits Management Directions newsletter, Issue No. 508, January 24, 2012 — The IRS has issued a notice that restates and amends prior interim guidance on information reporting to employees of the cost of their employer-sponsored group health coverage.

Many states broaden leave law protections, Employee Benefits Management Directions newsletter, Issue No. 508, January 24, 2012 — In 2011, many states enacted laws related to leave from work. This article contains a summary of some of the changes.
           
What's New in Employee Benefits Management:

Sample cafeteria plan — An updated sample cafeteria plan can be found at ¶200,110.

Investment advice — Final regulations on investment advice are discussed at ¶130,650.

Health coverage reporting — IRS Notice 2012-9, regarding the reporting of the cost of employer-sponsored group health plan coverage, is discussed at ¶10,240.

Plan documents — A participant’s claim against her employer’s disability plan could not be dismissed based on the fact that her appeal for benefits to the plan had been untimely, because the time limit she had failed to meet was only set forth in the plan’s summary plan description (SPD), and not in the plan documents, according to the U.S. District Court for the District of New Hampshire. The case, Kaufmann v. Prudential Insurance Company of America, is discussed at ¶132,485.

HIPAA rules on electronic funds transfers — The Department of Health and Human Services (HHS) has released an interim final rule that requires the adoption of new standards for electronic funds transfers (EFT), as required under the Patient Protection and Affordable Care Act (ACA) and HIPAA. See ¶700,075 for the rule.

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


IRS issues additional interim guidance on informational reporting of health coverage. The IRS has issued a notice that restates and amends prior interim guidance on information reporting to employees of the cost of their employer-sponsored group health plan coverage. The Patient Protection and Affordable Care Act (ACA) requires employers to report the cost of employer-provided health care coverage on each employee's annual Form W-2. To learn more about the W-2 reporting requirements, see the discussion at ¶20,025.

HHS issues essential health benefits bulletin. The Department of Health and Human Services (HHS) has issued a bulletin outlining the approach it intends to pursue in rulemaking to define essential health benefits. The Patient Protection and Affordable Care Act (ACA) requires health insurance plans offered in the individual and small group markets, both inside and outside the Affordable Insurance Exchanges (Exchanges), to offer a comprehensive package of items and services, known as essential health benefits (EHB). The bulletin addresses only the services and items covered by a health plan, not the cost sharing, such as deductibles, copayments, and coinsurance. The cost-sharing features will be addressed in future bulletins, and cost-sharing rules will determine the actuarial value of the plan. Find out more about essential health benefits at ¶20,052.

IRS announces 2012 changes to determination letter program. The IRS has issued an announcement which describes several important changes to the Employee Plans determination letter program that take effect in 2012. These changes eliminate features of the determination letter program that are of limited utility to plan sponsors in comparison with the burdens they impose. Under these modified procedures, many employers will no longer apply for determination letters. More information about determination letters can be found at ¶10,420.

DOL proposes MEWA reporting rules to implement new ACA provisions. The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued proposed rules on reporting requirements for multiple employer welfare arrangements (MEWA) and certain other entities that offer or provide health benefits for employees of two or more employers. The proposed rule amends existing reporting rules to incorporate new provisions enacted as part of the Patient Protection and Affordable Care Act (ACA) to more clearly address the reporting obligations of MEWAs that are ERISA plans. This proposed rule implements the new provisions while preserving the filing structure and provisions of the 2003 regulations, which direct plan MEWAs and non-ERISA plan MEWAs to report annually and file upon registration or origination. See the discussion at ¶23,320 for more information about the MEWA reporting requirements.

Value of "golden parachute" payments increased by 32 percent in past two years. The average change-in-control benefit provided to CEOs has increased 32 percent over the past two years, rising to $30.2 million in 2011 from $22.9 million in 2009, according to a study by Alvarez & Marsal Taxand, the tax advisory affiliate of global professional services firm Alvarez & Marsal. The study, which analyzed current change-in-control arrangements among the top 200 publicly traded U.S. companies, revealed the increase was driven primarily by equity-based payouts and tied to a company’s performance. To find out more about golden parachute payments, see ¶15,420.

 

What's New in Spencer’s Benefits Reports:


Sec. 125 Nondiscrimination Guidance. IRS guidance on the Sec. 125 nondiscrimination rules, including the 25 percent key employee test and the benefits and contribution tests is reviewed in this report (Report 351.-35).

Individual Coverage And HIPAA Group Market Rules. Employers may reimburse for employees for individually purchased health insurance policies but these policies are subject to HIPAA group market rules, including guaranteed availability and renewal. Those requirements are the subject of this report (Report 352.-15).

Sec. 415(b) Limits For 2012. This report analyzing the Sec. 415(b) limitations for defined benefit plans reflects all of the statutory changes and guidance that the IRS has provided in notices, revenue rulings, and other forms of guidance (Report 109.1.-1).

HIPAA Portability: State Provisions. This report describes how each state complies with HIPAA’s individual market portability provisions (Report 501.-59).

Highly Compensated Dollar Threshold. This report has been updated to include the 2012 annual dollar threshold used to identify highly compensated employees (Report 113.05.-1).

New Benefits Titles Added
5500 Preparer’s Manual for 2011 Plan Years
Benefits Law Journal, Spring 2012
Employee Benefits Plan Review, February 2012

New Pension Titles Added
401(k) Advisor, February 2012
Journal of Pension Planning and Compliance, Spring 2012
Pension Benefits, February 2012