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January 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:

Witnesses at IRS hearing on health care credit oppose affordability standard, Employee Benefits Management Directions newsletter, Issue No. 505, December 6, 2011 – A parade of witnesses told the IRS and Treasury that proposed IRS regulations on the health insurance premium tax credit will deny the credit to eligible families and deprive them of access to family health insurance coverage. But an employer group disagreed, testifying that the government had correctly interpreted the law.   

HHS begins HIPAA pilot audit program,, Employee Benefits Management Directions newsletter, Issue No. 505, December 6, 2011 – The Department of Health and Human Services (HHS) has begun a pilot audit program to ensure covered entities are complying with the HIPAA privacy and security rules, as required by the American Recovery and Reinvestment Act. The pilot program will perform up to 150 audits of covered entities to assess privacy and security compliance from November 2011 through December 2012.

Additional guidance issued for medical loss ratio requirements, Employee Benefits Management Directions newsletter, Issue No. 506, December 20, 2011 — The Centers for Medicare and Medicaid Services (CMS) has published a final rule regarding the implementation of medical loss ratio (MLR) rules for health plans under the Patient Protection and Affordable Care Act (ACA), and an interim final rule regarding the distribution of rebates by issuers in group markets for non-federal governmental plans under the MLR rules.  

DOL proposes MEWA reporting rules to implement new ACA provisions, Employee Benefits Management Directions newsletter, Issue No. 506, December 20, 2011 — The 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.
What's New in Employee Benefits Management:

Maximum monthly benefits for 2012 — The PBGC has announced the maximum insurance benefits for participants in underfunded pension plans terminating in 2012. For the amounts, see ¶82,020.

2012 fair-market value for cars and trucks — The fair-market value amounts for cars and trucks that are used in applying the cents-per-mile rules are at ¶150,590 and ¶150,595.

Denial of benefits — An insurance plan did not arbitrarily and capriciously deny residential mental health benefits to a participant, despite his treating physician’s determination that they were required, because sufficient evidence existed to support the plan’s approval of less restrictive treatment, the U.S. Court of Appeals for the Tenth Circuit (CA-10) has held. The court’s ruling in Eugene S. Horizon Blue Cross Blue Shield of New Jersey, is discussed at ¶10,425

2012 standard mileage rates —  The IRS has released the 2012 optional standard mileage rates that employees, self-employed individuals, and other taxpayers can use to compute deductible costs of operating automobiles (including vans, pickups and panel trucks) for business, medical, moving and charitable purposes. The rates can be found at ¶150,535 and ¶150,565.

Proposed rules on MEWAs — The proposed reporting rules for MEWAs (see story above) are discussed at ¶10,020.

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

EBSA issues final rules allowing for personalized investment advice under eligible arrangements. The Employee Benefit Security Administration (EBSA) has issued final regulations implementing provisions of the Pension Protection Act of 2006 (PPA; P.L. 109-280) that authorize fiduciary advisers to provide individualized investment advice under eligible investment advice arrangements. To learn more about these final regulations, see the discussions at ¶10,025 and ¶13,670.

EBSA issues FAQS on mental health parity. In questions and answers regarding the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), EBSA makes it clear that a group health plan may not require prior authorization from the mental health plan’s utilization reviewer that a treatment is medically necessary when the plan does not require such prior authorization for any medical/surgical benefits. More information about the financial requirements of the MHPAEA can be found at ¶21,860.

Trade legislation extends health coverage tax credit. President Obama has signed trade legislation that includes an extension of a tax credit that will help defray the costs of COBRA coverage for workers displaced by the impact of international trade. Under the Trade Adjustment Assistance Extension Act of 2011 (P.L. 112-40), a credit of 72.5 percent of premiums paid for COBRA is available for displaced workers who become eligible for trade adjustment assistance, as well as for their families. The credit is available until January 1, 2014. See the discussions at ¶22,770 and ¶22,790 for more information about the ERRP program.

Small business health care credit claims low despite extensive outreach. A Treasury Inspector General for Tax Administration’s (TIGTA) audit determined that despite extensive IRS outreach, claims for the Small Business Health Care Credit (Credit) have been lower than anticipated. The volume of claims for the Credit has been low despite IRS efforts to inform 4.4 million taxpayers who could potentially qualify for it. According to the IRS, as of mid-May 2011, just more than 228,000 taxpayers had claimed the Credit for a total amount of more than $278 million. Find out more about the small employer health care credit at ¶60,310.

FMLA leave for family members up 18 percent. According to an analysis conducted by FMLASource, employers have seen an 18 percent uptick in FMLA leave related to family members’ illness within the past year. To find out more about the incidence of FMLA leave, see ¶31,290.

New Benefits Titles Added December 2011
Flexible Benefits Answer Book, 2012 Cumulative Supplement
Health Insurance Answer Book, 2012 Supplement
Mandated Benefits 2012 Compliance Guide
State by State Guide to Human Resources Law, 2012 Edition
State by State Guide to Managed Care Law, 2012 Edition

New Pension Titles Added December 2011
Executive Compensation Answer Book, 8th Edition
Qualified Domestic Relations Order Handbook, 2011 Supplement
Quick Reference to IRAs, 2012 Edition